Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, Just One Percent Went To Wages

Sean Savett Jun 30, 2011 

After the longest recession since WWII, many Americans are still struggling while S&P 500 corporations are sitting on $800 billion in cash and making massive profits. Now, economists from Northeastern University have released a study that finds our sluggish economic recovery has almost solely benefited corporations. According to the study:

“Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”

The New York Times adds, “According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.”
So as average wages fall, and nearly 14 million people remain unemployed, America’s economic recovery has almost entirely benefited corporations. This development adds another chapter to the decline of the middle class, whose incomes are shrinking and wages are stagnating. Last year, top executives’ salaries increased 27 percent, while workers’ salaries increased only 2 percent. At the moment, income inequality in America is the worst it’s been since the 1920s, as the richest 1 percent make nearly 25 percent of the country’s income.
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JPMorgan Scores Victory for Repeat Offenders:

By Jonathan Weil Jun 29, 2011 

Read just about any article in the financial press about a Securities and Exchange Commission settlement with some accused fraudster, and you probably will see two lines bound to get a lot of eyes rolling.
One is that the defendant neither admitted nor denied the SEC’s claims. The other is that the penalties include a court injunction or SEC order barring the alleged crook from breaking the securities laws in the future, as if it had been perfectly legal to violate them beforehand. No one, it seems, ever gets nailed for anything.
As if that weren’t maddening enough, here’s an open secret: The SEC hardly ever enforces these obey-the-law orders. This brings us to last week’s headline-grabbing settlement between the SEC and JPMorgan Chase & Co. (JPM)’s securities arm over a toxic bond deal four years ago called Squared CDO 2007-1.
First, the prologue: In 2006, the SEC fined the same JPMorgan unit $1.5 million after determining it had defrauded customers who bought something called auction-rate securities from the company. Specifically, the SEC accused it of violating section 17(a)(2) of the Securities Act of 1933, under which the SEC need only show negligence to establish a fraud claim. The SEC also ordered the company not to violate that section of the law in the future.
So what would be the penalty for disobeying that order? Nothing, it turns out.

One More Time

As part of last week’s settlement, the SEC accused the same JPMorgan subsidiary of again violating the same section of the law. However, the commission’s complaint didn’t include any allegation that the company had breached its 2006 cease-and- desist order. An SEC spokesman, John Nester, didn’t offer an answer when asked why not. A JPMorgan spokesman, Joseph Evangelisti, declined to comment.
“This is inexcusable on the part of the SEC not to push this, and it shows how pathetically eager it is to hang up part of the scalp, close an investigation, point to a remedy, and then move on,” says James Cox, a securities-law professor at Duke University School of Law. “They’re just indicating that these orders don’t have any future impact. That’s too bad for the public interest.”
Here’s what the SEC should have done, for appearances’ sake if nothing else. It should have added a claim for violating the 2006 order and fined the company for that infraction separately, even if it kept the total settlement amount the same. Instead, the SEC acted as if the cease-and-desist order never existed, which makes you wonder why the commission bothered to issue it in the first place.

No Names

Under last week’s settlement, which was approved yesterday by a federal judge in New York, JPMorgan will pay $153.6 million. No individuals who worked for JPMorgan were named as defendants, as if the fraud just happened of its own volition. The company also consented to an injunction barring future violations.
Technically, the infractions cited in the 2006 complaint should have disqualified the company from participating in certain kinds of securities offerings. So, back in 2006, JPMorgan asked the SEC’s staff for a waiver that would let it go about its business as usual. (This, too, is standard operating procedure whenever a big securities firm settles an SEC fraud complaint.)
The company got what it wanted, with one catch. The staff wrote that its decision was based on the assumption that JPMorgan “will continue to comply with” the SEC’s cease-and- desist order. The company received two similar waivers from the five-member commission, as well. Don’t count on the SEC to revoke any of those waivers now, though.

Read More: Here

Greece Is a Kleptocracy

Charles Hugh Smith  (June 28, 2011)


Strip away the bailouts and the bogus austerity plans, and the truth is revealed: Greece is a kleptocracy, and the banks and the ECB Eurocrats are both complicit.
 
Despite a veritable flood of financial and political analysis about Greece, nobody seems to have noticed the obvious: Greece is a kleptocracy. Just as a refresher, here is the definition of kleptocracy. Ask yourself is this doesn't fit Greece like a supple leather glove:

Kleptocracy, alternatively cleptocracy or kleptarchy, from the Ancient Greek for "thief" and "rule," is a term applied to a government subject to control fraud that takes advantage of governmental corruption to extend the personal wealth and political power of government officials and the ruling class (collectively, kleptocrats), via the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service. The term means "rule by thieves".

Here is a quote from a first-person report (via Zero Hedge) titled The Ugly Truth:

What angers me and most hard working Greeks is that the common workers are bearing the brunt of the austerity measures while the rich get off scot free. In Greece, if you want to strike it rich, become a specialist dealing with critical life and death decisions, tax collector or a high profile minister in the government. The scandalous stories that are coming out now of doctors, tax collectors, and ministers with millions of euros in their bank accounts and villas in Santorini and Mykonos are no surprise to regular hard-working Greeks.

This is a classic description of a kleptocracy: a financial and political Elite which skims and concentrates the wealth of the nation via corruption and embezzlement while being protected by the winking complicity of their fellow plunderers who hold civil and financial authority.
Here's the real dynamic in Greece: The Kleptocracy--broadly, the political and financial Elites of the nation--saw a stupendous opportunity to embezzle hundreds of billions of euros from greed-blinded European banks at super-low rates of interest.
Being kleptocrats, they sniffed out the basics of the bezzle right away, and have been playing it ever since: we're not paying any of these loans back, so go get the money from the European Central Bank (ECB) and the German taxpayers, or declare bankruptcy. Your choice.
The Greek kleptocrats knew all along that the German, Dutch, French and Finnish taxpayers were easy marks, just as they knew the European Union Power Elites would fall all over themselves to "save the euro" which was the centerpiece of their "one Europe" strategy of domination.
Only the Greek kleptocrats just beat them at their own game. The entire game plan of the "one Europe" Elites depends on nation-states actually complying with non-enforceable codes of conduct and on European banks making prudent loans.
Neither condition held: Greece's Elites reckoned they could game the system and string along the Eurocrats, if not forever, then certainly long enough to engorge their Swiss accounts with euros skimmed from the banks, and they've played that hand to perfection.
Their performance is truly a thing of beauty, a masterful display of the Big Con. Yes, we will agree to austerity, but of course that is only for "the little people." Then, we'll renege on that, and demand another bailout. The Eurocrats will of course comply, lest their own plans for domination crumble along with the euro and the Eurozone edifice.
Meanwhile, the European banks were playing a similiar bezzle. They knew Greece had a history of defaulting on a regular basis, and any employee of the bank who lived in Greece could have briefed them on the kleptocracy's hold on that nation. But the banks knew they could play the Eurocrats and the ECB, too, as the Eurozone had what amounted to a "German Put": if any bad bank loans to Greece ever threatened the Eurozone, the German-led European Central Bank would make them whole.
Once again, the Eurocrats responded as expected, quickly massing hundreds of billions of euros to backstop the impaired loans to Greece and promising that bondholders would not suffer any losses.
The banks and the Greek kleptocracy are like the wife and the mistress of a prominent conservative socialite who absolutely needs to preserve a facade of conventional propriety. The kleptocrats, like the mistress, know they can blow down the entire charade, and so when they demand some baubles (bailouts) from their "Sugar Daddy" European Central Bank, the bank whimpers and complains but forks over the cash, lest the whole shaky facade collapses in a heap, along with the ECB's dominance.
The wife, meanwhile, also gets her demand met. Now that the European banks have leveraged themselves up to pre-implosion Lehman Brothers levels of 30-to-1, they need a bailout, too, and so they tell the ECB, don't even think about saying "no" because massive bank insolvency would also shatter the Euroland's thin veneer of permanence.
The euro system is already broken, but the ECB and its Eurocrats are desperate to maintain the facade. The game is untenable, however, because the Greek kleptocrats and the European banks have all the leverage and the ECB is the bleating mark trying to satisfy the dualing demands of its wife and mistress.
"But you promised." Ah yes, Dearie, but I changed my mind.
It is almost laughable to see the Eurocrats desperately trying to get another "austerity deal" approved, even as everyone involved knows it's as phony as passing off your mistress as your "private secretary." The austerity plan will not actually be put in place, none of the line-in-the-sand fiscal targets will be met, and the Greek kleptocrats will be smirking as the frantic ECB marks scrounge up another bailout and another face-saving "austerity program."
The wild card here is the oppressed Greek citizenry, who might just spoil the fun by overthrowing their corrupt Overlords. They could also spoil the game by simply refusing to play any more, as a General Strike of any length would quash the fantasy of rising taxes and all the rest of the absurd assumptions at the heart of the "austerity program."
If the Eurocrats and the ECB really want to save the euro, then they should help the Greek citizenry evict their kleptocratic Elites. But that would take genuine courage and insight, and alas, the Eurocrats, like all bureaucrats seeking to protect their fiefdom at any cost, don't really care about the oppressed Greeks. They just want to play for time, and hope that a miracle will occur. Even as their fat, sweaty fingers hold a jumble of worthless cards--not even a pair of deuces--they persist in a laughably transparent charade of holding four aces.
The game is over for the ECB, the Greek kleptocracy and the european banks. All that needs to happen now is for the players to reveal their miserable cards and fold. The losses will be stupendous, but they will only get more horrendous the longer the game is allowed to go on.

Govs; Perry and Scott Sneak Off to Vail to Get Their Marching Orders From the Kock Brothers

Govs. Rick Perry And Rick Scott Go AWOL During State Emergencies To Attend Secret Koch Event

By Marie Diamond and Alex Seitz-Wald on Jun 29, 2011 at 4:15 pm

As Texas faced some of the worst wildfires in its history and a severe drought crisis that has caused the federal government to declare the entire state a disaster area, its governor was schmoozing with well-heeled conservative donors in Vail, Colorado at a retreat organized by the right-wing industrialist Koch brothers. Gov. Rick Perry (R) left his state without notifying constituents or the press and dodged inquiries into his whereabouts. The media had to resort to tracking the tail number of a private plane owned by one of Perry’s major campaign donors. “This was an opportunity to talk about the economic success in Texas,” a spokesperson said, denying that the trip had anything to do with a potential presidential run.
Perry has spent the past two months complaining that the Obama administration has not been paying enough attention to his state’s fires.
Meanwhile, in Florida, days after declaring a state of emergency for his state’s own climate crisis, Gov. Rick Scott (R) disappeared over the weekend, failing to disclose his whereabouts in his public schedule and refusing to respond to numerous press inquiries. Yesterday, Scott finally admitted he left the state without informing his constituents to attend the the Koch summit. Florida press spent most of the past few days trying to track down the rogue governor while more than 300 wildfires continue to burn in the state:

​We finally have an answer as to where Gov. Rick Scott was this weekend, and it confirms our suspicion: at the billionaire Koch brothers’ secret conference outside Vail, Colorado.
St. Petersburg Times reporter Alex Leary got the information out of him, a day after the governor’s spokesman wouldn’t confirm or deny whether Scott was there.
“I told anybody who asked me,” the governor told the Times, apparently ignoring the fact that he spends most of his days playing hide-and-seek from the media.

For the first time since he took office, Scott’s public schedule was empty this past weekend, leading most to assume he was trying to conceal his attendance at the Koch event. Scott eventually admitted that he addressed attendees at the retreat, but was vague about what he said.
The Koch brothers host a few of these gatherings each year to bring together conservative lawmakers and corporate titans to discuss their agenda and raise money for political groups, such as Americans for Prosperity and other Koch-funded enterprises. A January retreat in California reportedly raised $49 million for conservative campaigns.
Koch Industries spent $1.2 million helping elect Republican governors in 2010 alone, and have spent millions more pushing their radical anti-union, anti-health care agenda in the states. In response, the AFL-CIO published a guide called “8 Signs Your Governor Has A Koch Problem.” Virginia Gov. Bob McDonnell (R) and Attorney General Ken Cuccinelli (R) also attended the Koch event.

Eric Cantor's glaring conflict of interest

He's the GOP's chief debt ceiling negotiator. He's also invested in a fund that will skyrocket if there's a default

By Jonathan Easley

AP/J. Scott Applewhite

Eric Cantor

When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

Read More: Here

Cost of war at least $3.7 trillion and counting

New report delves into the costs of war

 

By Daniel Trotta

NEW YORK | Wed Jun 29, 2011 4:28pm EDT

(Reuters) - When President Barack Obama cited cost as a reason to bring troops home from Afghanistan, he referred to a $1 trillion price tag for America's wars.
Staggering as it is, that figure grossly underestimates the total cost of wars in Iraq, Afghanistan and Pakistan to the U.S. Treasury and ignores more imposing costs yet to come, according to a study released on Wednesday.
The final bill will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project "Costs of War" by Brown University's Watson Institute for International Studies. (www.costsofwar.org)
In the 10 years since U.S. troops went into Afghanistan to root out the al Qaeda leaders behind the September 11, 2001, attacks, spending on the conflicts totaled $2.3 trillion to $2.7 trillion.
Those numbers will continue to soar when considering often overlooked costs such as long-term obligations to wounded veterans and projected war spending from 2012 through 2020. The estimates do not include at least $1 trillion more in interest payments coming due and many billions more in expenses that cannot be counted, according to the study.
The White House says the total amount appropriated for war-related activities of the Department of Defense, intelligence and State Department since 2001 is about $1.3 trillion, and that would rise to nearly $1.4 trillion in 2012.
Researchers with the Watson Institute say that type of accounting is common but too narrow to measure the real costs.
In human terms, 224,000 to 258,000 people have died directly from warfare, including 125,000 civilians in Iraq. Many more have died indirectly, from the loss of clean drinking water, healthcare, and nutrition. An additional 365,000 have been wounded and 7.8 million people -- equal to the combined population of Connecticut and Kentucky -- have been displaced.
"Costs of War" brought together more than 20 academics to uncover the expense of war in lives and dollars, a daunting task given the inconsistent recording of lives lost and what the report called opaque and sloppy accounting by the U.S. Congress and the Pentagon.
The report underlines the extent to which war will continue to stretch the U.S. federal budget, which is already on an unsustainable course due to an aging American population and skyrocketing healthcare costs.
It also raises the question of what the United States gained from its multitrillion-dollar investment.

Read More: Here

CHART: States That Cut The Most Spending Have Lost The Most Jobs

Adam Hersh, an economist at the Center for American Progress Action Fund.

Govs. John Kasich (R-OH), Rick Snyder (R-MI), and Scott Walker (R-WI)

There’s a new cult of economic thought sweeping the nation — or at least many Republican (and even some Democratic) political circles. Its adherents cling to the erroneous belief that sharp government spending cuts will revitalize economic growth and create much needed new jobs
Speaker of the House John Boehner (R-OH) is an ardent follower of this Cut-Grow cult, as are a number of high profile governors. For instance, Gov. John Kasich (R-OH) declared, “We’re going to have to reduce spending…to create a platform for economic growth.” When Gov. Chris Christie (R-NJ) delivered his budget to the state Legislature he argued, “We must continue to cut government spending” to create jobs and prosperity for New Jersey families. Gov. Scott Walker (R-WI) vowed his budget “lays [the] foundation to create jobs.”
Now these Republicans want the American public to drink a giant glass of their Cut-Grow Kool-Aid. But the data actually show the opposite of their claims to be true: steep spending cuts are hampering economic recovery in some states, while other states that resisted cuts or increased spending are now seeing declining unemployment rates, faster private-sector job creation, and stronger economic growth.
From the start of the Great Recession in December 2007 through the end of 2010, 24 states have cut government spending by an average of 7.5 percent after adjusting for inflation. Another 25 states have expanded government outlays by an average of 11 percent. (The analysis excludes Alabama due to data problems reported by the National Association of State Budget Offices). And the differences in these states’ economic performance could not be more self-evident. Relative to national economic trends, states that increased spending enjoyed on average:

• 0.2 percentage point decrease in the unemployment rate

• 1.4 percent increase in private employment

• 0.5 percent real economic growth since the start of the recession

In contrast, states that cut spending saw on average

• 1 percentage point increase in the unemployment rate

• 2.1 percent loss of private employment

• 2.9 percent real economic contraction relative to the national economic trend

Steep state spending cuts have gone hand-in-hand with rising unemployment rates, falling private-sector payroll employment, and lower growth in state’s gross domestic product, or GDP — the sum of all goods and services produced by labor and equipment in each state, less imports.
Take private sector jobs, for example. This graph shows that state spending is not just about jobs for public service workers, but also has far reaching consequences for private businesses and their workers. The downward sloping red line shows the relationship between cuts to state spending and changes in private sector employment relative to the national average since the start of the Great Recession. States that cut spending are seeing significantly more job losses in the private sector than states maintaining or increasing spending levels. For every 10 percent cut in state spending, state economies lost 1.6 percent of their private-sector jobs.
Certainly policymakers should seize every opportunity to eliminate waste and improve the efficiency of delivering government functions. But spending cuts achieved or championed by conservatives are aiming much deeper at public services and public investments critical to economic recovery now as well as the future of U.S. economic growth and competitiveness.

Whither Greece

June 24, 2011

By Michael Hudson

Without a national referendum Iceland-style, EU dictates cannot be binding. David Kelley likes to cite Molly Ivins’ quip: “It’s hard to convince people that you are killing them for their own good.” The EU’s attempt to do this didn’t succeed in Iceland.

The fight for Europe’s future is being waged in Athens and other Greek cities to resist financial demands that are the 21st century’s version of an outright military attack. The threat of bank overlordship is not the kind of economy-killing policy that affords opportunities for heroism in armed battle, to be sure. Destructive financial policies are more like an exercise in the banality of evil – in this case, the pro-creditor assumptions of the European Central Bank (ECB), EU and IMF (egged on by the U.S. Treasury).
As Vladimir Putin pointed out some years ago, the neoliberal reforms put in Boris Yeltsin’s hands by the Harvard Boys in the 1990s caused Russia to suffer lower birth rates, shortening life spans and emigration – the greatest loss in population growth since World War II. Capital flight is another consequence of financial austerity. The ECB’s proposed “solution” to Greece’s debt problem is thus self-defeating. It only buys time for the ECB to take on yet more Greek government debt, leaving all EU taxpayers to get the bill. It is to avoid this shift of bank losses onto taxpayers that Angela Merkel in Germany has insisted that private bondholders must absorb some of the loss resulting from their bad investments.
The bankers are trying to get a windfall by using the debt hammer to achieve what warfare did in times past. They are demanding privatization of public assets (on credit, with tax deductibility for interest so as to leave more cash flow to pay the bankers). This transfer of land, public utilities and interest as financial booty and tribute to creditor economies is what makes financial austerity like war in its effect.
Socrates said that ignorance must be the root of all evil, because no one deliberately sets out to be bad. But the economic “medicine” of driving debtors into poverty and forcing the selloff of their public domain has become socially accepted wisdom taught in today’s business schools. One would think that after fifty years of austerity programs and privatization selloffs to pay bad debts, the world had learned enough about causes and consequences. The banking profession chooses deliberately to be ignorant. “Good accepted practice” is bolstered by Nobel Economics Prizes to provide a cloak of plausible deniability when markets “unexpectedly” are hollowed out and new investment slows as a result of financially bleeding economies, medieval-style, while wealth is siphoned up to the top of the economic pyramid.
My friend David Kelley likes to cite Molly Ivins’ quip: “It’s hard to convince people that you are killing them for their own good.” The EU’s attempt to do this didn’t succeed in Iceland. And like the Icelanders, the Greek protesters have had their fill of neoliberal learned ignorance that austerity, unemployment and shrinking markets are the path to prosperity, not deeper poverty. So we must ask what motivates central banks to promote tunnel-visioned managers who follow the orders and logic of a system that imposes needless suffering and waste – all to pursue the banal obsession that banks must not lose money?
One must conclude that the EU’s new central planners (isn’t that what Hayek said was the Road to Serfdom?) are acting as class warriors by demanding that all losses are to be suffered by economies imposing debt deflation and permitting creditors to grab assets – as if this won’t make the problem worse. This ECB hard line is backed by U.S. Treasury Secretary Geithner, evidently so that U.S. institutions not lose their bets on derivative plays they have written up.

Read More: Here

Stocks Of Socialized Countries Have Outperformed U.S. Since Reagan Era

Alex Wagner alex.wagner@huffingtonpost.com 

First Posted: 06/22/11 02:49 PM ET Updated: 06/22/11 03:35 PM ET

American traders aren't likely to take kindly to the suggestion that big government might be good for the stock market. But data from a paper on the job- and income-growth of top earners shows that stock prices in some socialized countries, relative to themselves and adjusted for inflation, have done considerably better than those in the U.S over the last two and a half decades.
Specifically, during the twenty five years after Ronald Reagan took office -- a pro-market honeymoon that Ryan Chittum of the Columbia Journalism Review this week termed "the ascent of laissez-faire economic policies" -- French stock prices have performed significantly better than Americans ones, according to the report by Jon Bakija, Adam Cole, and Bradley Heim.
A further examination of the 39-year period extending from the end of the Nixon administration until 2008 shows the Swedish economy, known for its high taxes and heavy regulation, growing at a significantly higher rate than the US.
The authors conclude that big government might not actually stand in contradiction to a productive economy: "Countries with typically high levels of government involvement in the economy, such as Sweden, Denmark and Canada, do not appear to have experienced stifled economic growth relative to countries where government involvement is more limited, like the US," the report says.
With bastions of socialism -- Sweden Canada and France -- outpacing American market prices, does this mean it's time for Wall Streeters to start calling croissants "Freedom bagels?" Probably not.

Read More : Here

If Only Greece Were AIG

Robert Kuttner | June 17, 2011

The struggling country hasn’t been bailed out because it’s not a bank—it’s just a country with suffering people.

Here comes Financial Crisis 2.0. Like its predecessor, it was caused by the banks.

(AP Photo/Lefteris Pitarakis)

Protesters gesture and wave flags in front of the Parliament during a rally against plans for new austerity measures in central Athens.

The first crisis was the result of banks inventing toxic financial products and then promoting bets on different kinds of securities with borrowed money. When the speculative bubble popped, tens of trillions of dollars in financial and housing assets vanished. At that point, governments and central banks stepped in and rescued the banks. The only thing that suffered was the rest of the economy.

On all policy fronts, banks called the shots. The supposed cure for the large public deficits caused by the financial crisis and resulting recession was belt tightening—for everyone but the banks. Yet voters were oddly passive because the issues seemed technical, elected leaders sided with bankers, and citizens were not quite sure whom to blame.

Now, the worm is turning. Austerity itself is creating a second crisis, and this time it has some political bite.

The epicenter of the new crisis is Greece, which epitomizes the folly of banker rule.

Greece has large public deficits, partly caused by bad accounting and tax evasion, but mostly by the recession itself. It’s obvious that Greece cannot afford to pay its current debts, so money markets expect a default. As speculative global markets decide Greece’s fate, the cost of Greek government borrowing has been pushed up to nearly 30 percent.

The world’s finance ministries and central banks, which sprang into action when AIG or Citibank needed help, are not rescuing Greece. After all, Greece is only a country with suffering citizens. AIG is a corporation! Citi is a bank!


Instead, the European authorities and the International Monetary Fund have pressed the Greeks to pursue more and more painful austerity policies as a condition for any relief. But austerity doesn’t work: As belt tightening pushes Greece deeper and deeper into depression, markets lose even more confidence in its capacity to pay its debts.

There is an easy solution, one similar to the restructuring of Latin American and other third world debts nearly two decades ago: Trade Greek short-term debt for longer-term debt. In addition, give Greece some debt relief at the expense of its bondholders, who are mainly the European Central Bank (ECB) and various commercial banks. When Latin American debt was restructured, bondholders lost about 30 cents on the dollar, but Latin countries were freed to resume growth.

This solution has been off the table because of the political power of creditors. The European Central Bank in particular has acted as the agent of Greece’s creditors, and without ECB support, no restructuring of Greek debt is possible. Even the German finance ministry—not exactly a hotbed of profligacy—has been pressing for bondholders to share in the losses so that restructuring can go forward. But their effort has been stymied by the bankers.

Read More: Here

Fathers Day

It's Fathers Day and I lay here in bed listening to my wife and kids scurrying around in the kitchen making a big breakfast. They hope it will bring joy to my heart and a smile to my lips, for it is my special day. I am left in bed to rest and enjoy the solitude of a "quiet and care free morning".

I will do my best, to do my duty, to not think of those things that cause a father to lay awake at night worrying about the world his children will inherit from the likes of his fellow fathers. I will stifle the seething contempt and anger that I have for the greedy sociopath CEOs, the lazy thinkers and corrupt corporate politicians that have threatened the future of my children and destroyed the country I love. I will smile, kiss and hug my wife and kids revel in the love of my family. For to day is Fathers Day, and I will do my part to make my family feel loved and appreciated as they deserve.

But come Monday .......

CD
LGMC

Ayn Rand's Poison: GOP Faces Backlash for Their Obsessive Worship of a Psycho

By David Johnson

It's dangerous for a political party to think of the public as "parasites," and people with tons of cash as "producers" who should govern.

  

Photo Credit: Creative Commons

Some say that maybe it is a bad idea to base a political party's ideology on a belief that altruism, democracy and Christianity are "evil." Others say that maybe it is a bad idea to base a country's policies on fictional novels rather than science and history. Still others say is it a bad idea for national leaders to think of most of the public as "parasites" while saying people with tons of cash are "producers" who should govern. I am talking about the Republican Party's embrace of Ayn Rand and her cruel philosophy.

Disciples of Ayn Rand's philosophy of selfishness now dominate the thinking of the leadership of the conservative movement and the Republican Party. There is no way around it. Republican budget leader Rep. Paul Ryan says Rand is his guide. Senator Ron Johnson (R-WI) says Rand's Atlas Shrugged is his "foundation book." Senator Rand Paul is named after her. Clarence Thomas requires his law clerks to watch The Fountainhead. Fox News promotes Rand. Conservative blogs promote Rand. Glenn Beck has been promoting Rand for years. So has Rush. This isn't recent, Alan Greenspan lived with the Rand cult and promoted and implemented her ideas.

A Philosophy Based On Admiring A Psychopath

Rand believed that a lot of things most of us use as our moral base are "evil." But Rand's writings are the origins of modern Republican philosophy. In Alan Greenspan And Things Forgotten I wrote about the origins of this philosophy:

Rand's work is very popular among conservatives now. It forms a core justification for their "on your own" philosophy praising the wealthy and discarding the rest. So it is useful to explore the formation and core of this philosophy. Early in her writings Rand became fascinated with a serial killer named William Hickman. Rand wrote that the serial killer was an "ideal man," a superior form of human because he didn't let society impose their morals on him. He didn't worry about what others thought and just did as he pleased.

"Other people do not exist for him, and he does not see why they should," Rand wrote. Hickman had "no regard whatsoever for all that society holds sacred, and with a consciousness all his own. He has the true, innate psychology of a Superman. He can never realize and feel 'other people.'" She considered these to be good qualities! And so does her cult.

This is the foundation of the modern "tea party" conservative thinking. So when you look at the modern capitalism that has grown up around Rand's philosophy and the big corporations that are chewing up the planet to enrich a very few at the expense of the rest of us, and think it seems sort of psychopathic, maybe that's because it literally is.

Mitt Romney: Federal Disaster Relief For Tornado And Flood Victims Is ‘Immoral,’ ‘Makes No Sense At All’

By Brad Johnson on Jun 14, 2011 at 12:40 pm

Obama meets victims of the Joplin tornado.

Asked about federal disaster relief for recent tornado and flood victims at last night’s GOP debate, candidate Mitt Romney called the spending “immoral” and said the Federal Emergency Management Agency should be privatized. With greenhouse pollution on the rise, the United States has been struck by a “punishing series of billion-dollar disasters.” Embracing a radical anti-government ideology from the most extreme elements of the Tea Party, Romney said that the victims in Mississippi, Louisiana, Tennessee, Massachusetts, and other communities hit by tornadoes and flooding should not receive governmental assistance. He argued it is “simply immoral” for there to be deficit spending that could harm future generations:

Every time you have an occasion to take something from the federal government and send it back to the states, that’s the right direction. And if you can go even further and send it back to the private sector, that’s even better. [...] We cannot — we cannot afford to do those things without jeopardizing the future for our kids. It is simply immoral, in my view, for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we’ll all be dead and gone before it’s paid off. It makes no sense at all.

Watch it here:http://www.youtube.com/watch?feature=player_embedded&v=OhXyJeKaj8E

Read more: http://thinkprogress.org/green/2011/06/14/244973/mitt-romney-federal-disaster-relief-for-tornado-and-flood-victims-is-immoral-makes-no-sense-at-all/

FDR's proposed Second Bill of Rights (filmed after State of the Union Address on January 11, 1944)

Nearly 70 years ago, President Franklin D. Roosevelt made the following speech.  The basic rights of the middle class are timeless as you will hear. 

Take a few minutes and reflect on this revolutionary President's thoughts on what is truly important to people.  If we had a strong leader like this, our economy and country might be heading in a different direction.

The Truth About The Economy In 2 Minutes (Reich)

Former Labor Secretary Robert Reich said he could explain the problems with the economy in less than 2 minutes, 15 seconds—and he did it (with illustrations to boot).

Thank you Mr. Reich.



View this video here if you cannot view above.

America for Sale: Is Goldman Sachs Buying Your City?

By Dylan Ratigan

Introducing America for Sale, a new Huffington Post-Dylan Ratigan Show collaboration.
In Chicago, it’s the sale of parking meters to the sovereign wealth fund of Abu Dhabi. In Indiana, it’s the sale of the northern toll road to a Spanish and Australian joint venture. In Wisconsin it’s public health and food programs, in California it’s libraries. It’s water treatment plants, schools, toll roads, airports, and power plants. It’s Amtrak. There are revolving doors of corrupt politicians, big banks, and rating agencies. There are conflicts of interest. It’s bipartisan.

And it’s coming to a city near you — it may already be there. We’re talking about the sale of public assets to private investors. You may have heard of one-off deals, but what we’ll be exploring with the Huffington Post is the scale and scope of what is a national and organized campaign to shift the way we govern. In an era of increasingly stretched local and state budgets, privatization of public assets may be so tempting to local politicians that the trend seems unstoppable. Yet, public outrage has stopped and slowed a number of initiatives.

While there are no televised debates around this issue, there is no polling, and there are no elections, who wins it will determine the literal shape of modern America. The Dylan Ratigan show is teaming up with the Huffington Post to do a three part series called “America for Sale”, showing the pros and cons, and the politics and economics, of a new and far more privatized government.

Read more here:

Do any of our political leaders realize that kissing rich peoples' asses won't magically restore prosperity?

By Brad Reed

Barack Obama's presidency certainly hasn't been an all-out bust -- repealing Don't Ask, Don't Tell, taking out Osama bin Laden and getting some form of universal health coverage passed are real achievements -- but he's completely crapped the bed when it comes to jobs. And I'm not just talking about the high unemployment rate, either -- I'm talking about the continued collapse in workers' income. Check out this chart from David Frum:

enlarge

Workers' share of national income started steadily dropping under Reagan and Bush I, saw a brief rebound during the late '90s tech boom, and then fell off a cliff during the Bush II and Obama administrations.
Of course, not everyone is hurting. As Felix Salmon pointed out earlier this year, the financial services industry has weathered this recession just fine:

enlarge

There are lots of reasons this has occurred, but broadly speaking this trend started in the 1980s when we collectively decided that rich people were magical wealth leprechauns who must be kept happy at all costs lest they take their pots of gold elsewhere. So we got huge tax cuts for the wealthy, free trade agreements, financial deregulation and a government that turned a blind eye toward businesses that broke the law by employing illegal labor at below the minimum wage.
But sadly, that just isn't enough for our Galtian overlords. See, they don't just want us to change the law for their own benefit anymore. Indeed, they want to flat-out plunder people without facing any sort of legal consequences. "But how the hell can they justify that?" you sanely ask. The answer is, the same way they've justified giant tax cuts: By arguing that they're just Too Special and Important to be held accountable. Brad Hintz, an analyst at Sanford C. Bernstein & Co, starting floating this cute little idea the other week when he declared that Goldman Sachs was too systemically important to face criminal prosecution:

The U.S. Department of Justice, which is reviewing a Senate subcommittee report that alleged Goldman Sachs misled clients before the financial crisis, will avoid jeopardizing the fifth- largest U.S. bank by assets because it’s viewed as “too big to fail,” Hintz wrote in note to clients today.
“If an alleged violation is identified during a Goldman investigation, we expect a reasoned response from the Justice Department,” Hintz wrote. “In a worst case environment, we would expect a ‘too big to fail’ bank such as Goldman to be offered a deferred-prosecution agreement, pay a significant fine and submit to a federal monitor in lieu of a criminal charge.”

And this is what America has become, then: A nation where the rich and powerful can trample the poor and middle class with impunity and face zero repercussions for their crimes. The fact that this trend has not only continued under Barack Obama's watch but has actually accelerated is about as damning an indictment of him and his administration as I can fathom. And it's not just him either, as some of our progressive "heroes" like Barney Frank are still happily allowing Wall Street to organize campaign fundraisers in their names.
There's going to be a breaking point sometime in the future where people will actually vote for a political candidate who refuses to kiss rich peoples' asses as a matter of policy. The question is, how bad will things have to get before people reach this threshold of revelation? Hopefully it'll happen before Paul Ryan starts floating the idea of reviving the poll tax.

Obama Hits Up Wall Street 'Fat Cats' For Reelection Funds, But What About Jobs?

By Sarah Jaffe

As Barack Obama gears up for his reelection fight, Wall Street donors are leery of handing over the cash--and former advisers warn about jobs.

June 13, 2011  |  

 

 

 

 

It's not a surprise, really, that Barack Obama is courting Wall Street donors (again) for his reelection campaign.

Still, the bold, black New York Times headline is a bit jarring. “Obama Seeks to Win Back Wall Street Cash.”

We knew it was coming, but still.

It's not just that there have been no prosecutions of anyone responsible for the financial crisis. It's not just the extension of the Bush tax cuts, overwhelmingly benefiting the rich. It's not just the lack of any meaningful jobs program, or the appointment of banker buddy William Daley as White House Chief of Staff.

This latest report stings because while unemployment hovers just above 9 percent, the administration is more concerned with giving the appearance, to the people who created the crisis, that it's on their side.

A couple of weeks before officially kicking off his reelection campaign, President Obama met with two dozen Wall Street executives at the White House, and asked them for their thoughts on how to bring the economy back to life. Apparently the topics included hedge fund regulation and the deficit. No word if putting people back to work, or paying them a living wage, was on the itinerary.

Read More: http://www.alternet.org/news/151282/obama_hits_up_wall_street_%27fat_cats%27_for_reelection_funds%2C_but_what_about_jobs_

America's lost trillions

By Chris Isidore @CNNMoney June 9, 2011: 1:03 PM ET

Household wealth has only recovered about half the $16.4 trillion lost in the Great Recession.

NEW YORK (CNNMoney) -- One reason that the U.S. economy still struggles to achieve sustained growth is that Americans are a long way from recovering the trillions of dollars of household wealth lost during the Great Recession.

U.S. household wealth fell by about $16.4 trillion of net worth from its peak in spring 2007, about six months before the start of the recession, to when things hit bottom in the first quarter of 2009, according to figures from the Federal Reserve.

While a rebound in the stock market, an improved savings rate and consumer steps to reduce debt resulted in net worth gains since 2009, only a little more than half of that lost wealth - $8.7 trillion -- is back on household balance sheets.

That leaves American household wealth $7.7 trillion less than it was before the recession.


Read full article HERE

Average Job Seeker Gives Up After 5 Months

Unemployment at 9+% and over 15% if PT workers seeking FT jobs are included:

By Sara Murray, WSJ

Jobless Americans who dropped out of the work force typically searched for work for five months before ultimately giving up last year.

Bloomberg News

Job seekers look for work.

The amount of time the unemployed spent hunting for jobs rose sharply last year. Those out of work tended to search for about 20 weeks before quitting in 2010, compared to 8.5 weeks in 2007, according to a recent Labor Department report. The report studied how long unemployed workers took to either find a new job or quit looking.

Labor-force participation, the share of Americans who are working or looking for jobs, has fallen to its lowest percentage since the mid-1980s. That’s partly because people have grown discouraged about their ability to find jobs and have given up looking. With those workers on the sidelines, the unemployment rate has been lower than it otherwise would be.

The official unemployment rate hit 9.1% in May. Including all of those who had part-time jobs but wanted to work full-time as well as those who want to work but had given up searching, the rate was 15.8%.
 
Read full article here

The housing crash sequel in California-Forecosure sales made up to 45 percent of sales in Q1 2011 with an average discount of 33%. 431,000 jobless Californians have exahuasted unemployment insurance.

From doctorhousingbubble.com 6/7/2011:

     Subjects under hypnosis are susceptible to the powers of suggestion.  If that is the case, a large part of our nation has been in full slumber when it comes to housing propaganda.  If the nation is facing a double dip in regards to housing prices California will face a double housing crash. Let us be clear that many areas in California like Riverside, San Bernardino, and the Central Valley have seen home prices absolutely collapse.  Take for example Riverside County.  Riverside County is home to over 2,200,000 people and is part of the Inland Empire, an area devastated by the housing crash.  In June of 2006 Riverside County hit a median home price peak of $422,000.  Today the median price is $190,000 or what amounts to a 54 percent drop.  That is a crash.  Yet other areas have seen prices adjust lower on a more controlled basis for a couple of reasons including the shadow inventory being held back by banks and a touch of delusion brought on by financial self-hypnosis.  Yet market sentiment is fickle and is turning.  One of the many reasons the economics and financial field has failed miserably in predicting this crisis is that it was largely one of consumer behavior and manic psychology.   Incomes are certainly not supporting current prices and the Federal Reserve is dangerously overheating its own balance sheet trying to prop up inflated real estate values to keep the dream-state going.  California is in for a very long haul moving forward and this is hitting just in time for the typically hot summer selling season.


Read full article here .

I Was Right, the “Experts” Were Wrong, So Why Am I the Underemployed?

« It’s Not the Bad Economic News that Surprises Me

By: dakine01

Yesterday in this post, I predicted today’s Jobs Report from the BLS would show a far smaller increase in jobs for May than was being predicted by the ‘economists’ interviewed by the various media organizations. The ‘experts’ were predicting 170k private sector jobs with 150k increase overall. My prediction was for 42.5K jobs overall. Guess who was closer to being correct? (via Reuters):

The U.S. economy may be in for a prolonged period of soft growth as employers hired the fewest number of workers in eight months in May and the unemployment rate rose to 9.1 percent. Nonfarm payrolls increased 54,000 last month, the Labor Department said, fewer than the most pessimistic forecast in the Reuters survey and just over a third of what economists had expected.
…snip…
The private sector, which has shouldered the burden of job creation added just 83,000 jobs, the least since last June, while government payrolls dropped 29,000.
Adding to the gloomy labor market picture, about 39,000 fewer jobs were created in March and April than previously estimated.
…snip…
Payrolls had been expected to rise 150,000, with private employment gaining 175,000.

This is not the first time I have been more accurate than the “experts”. How is it possible for someone like me to be more accurate in predicting the numbers than the so-called expert economists? Well, I’ll take a WAG and say it might be because I’m not trying to force reality into a pre-conceived computer model designed to reinforce an ideological position based as much on wishful thinking as anything else. Plus, I am actually living the life of the long term un and underemployed.

Read More:
http://my.firedoglake.com/dakine01/2011/06/03/i-was-right-the-experts-were-wrong-so-why-am-i-the-underemployed/http://my.firedoglake.com/dakine01/2011/06/03/i-was-right-the-experts-were-wrong-so-why-am-i-the-underemployed/

God Doesn’t Like Poor People

God doesn’t like poor people.

Do we have your attention? Good. No, I am not channeling Sean Hannity. However, his statements mirror what some in this country believe. It started off as wealthy Americans feeling like "we deserved only the best. It is our God given right". And has now filtered down into every neighborhood in our country.

In times of trouble, financial, marital or medical turmoil, we reach out to others via our digital social
networks for advice, encouragement, or just solace and understanding. And then…you see it, “I am so blessed to have a husband who makes enough money for me to have a good life, stay home with my kids and have a beautiful house. I couldn’t be any happier! I thank God for everything we have"! Yes, this is the same person who writes how blessed they are, to have their house end up being the only one standing on their block, after a natural disaster. As if God, somehow chose them, out of thousands of others to keep their lives and livelihood. After all, God doesn't have anything else to do.  It seems to infect everyone’s home page at one point or another. It is like a virus, we just can’t get rid of.

You know what I am talking about. The posts that make you cringe. The status updates, that make you want to delete these people from your friends list. If only life could be that easy. Just press “de-friend” and they are gone.

The problem with this statement isn’t that the person who posted their gratitude isn’t worthy of the good things in life. It’s that it implies the rest of us aren’t blessed, worthy or maybe not praying, to the right God or higher being to have or deserve the same good things in life. We are told, “just be thankful for what you have!”. I should be thankful for being allowed to breathe and work 3 jobs to make my ends meet? Don’t get me wrong, in comparison to the majority of the world, we are better off.

A friend of mine is living in India. He is helping people in the slums get healthcare, education and just basic necessities in life. The level of poverty he sees is not something we can even begin to comprehend in this country. He just wrote how a wealthy Indian girl said to him “I know God is good, because MY life is Blessed!”. He asked her to use that line on any of the women who can’t feed their kids in the slums or get medical care for their dying. Is God good to them? Don’t they deserve more than what has been given in their lives? Of course, she refused to speak to these people. When things are going great, we thank God, when it isn’t we chalk it up to life and we turn our backs on people. Human nature can be a beautiful thing and an evil thing, all at once.

Something seems wrong here, very wrong.

As times have gotten harder in this country. As the economic divide has gotten greater. I find we fall into two groups of people.

1. The people who stay or become even more faithful through the bad times. These are the people who even when they lose their jobs, homes, savings, etc. will say, they are somehow blessed it isn’t worse. These are the people that will continue to pray and have “faith” and then when something finally turns around for them, they will thank God. These are the people who will say all those years of praying for something, even if it took a lifetime of praying, has finally paid off when they get their wish. God has listened. This same group of people will thank God for the great things in life: a trip to Italy, a six figure income, etc. As if God has nothing else to do except give these people useless toys, trips and money. These are the people that will then look at neighbor and say “what were you thinking taking that camping trip in June? No wonder you lost your house! You shouldn’t spend money, you don’t really have!”…as if poor people don’t deserve some relief from some of the unfortunate circumstances in life. Apparently if you are poor, you don’t deserve anything and just need to keep working and stop being so human. Basically, just shut up.

2. The second group of people, aka “the of rest of us”, have grown more cynical and started to lose faith, with every pay cut, lost job and or turn of bad luck. We are seen as the angry liberals. Sure, we had a moment in 2008, when we thought, this is IT! Our big moment, the moment a revolution is happening. We had hope, we had strength and we had a president who could help us do it all. Well, I have news for you people, it’s over. That ship has sailed and we were left standing at the docks. We are the group who wonder, why me? Why us? Why now? What did I do? What did I not do? How could I have prevented the worst economic disaster to hit us, since the Great Depression? Should I listen to that anchor (and I use the term loosely) that I saw on Fox News who said, it is my fault, I blew it, own up to it, you don’t get a free ride? You get my point. We are feeling screwed. The American dream is not real, not for us.

This has led to the great divide. The divide between the “real Americans” and the rest of us. It started with the lies that we have been fed since birth. If we just pray enough, follow all the rules and be good; we can succeed, we will succeed! The lie that if we just get any job and work hard, we can make all of our dreams come true.

A recent poll asked Americans, if they thought they could be rich in the near future or anytime soon. 54% of young people polled said yes. A majority overestimated their income status when asked where they ranked on an income scale. What is wrong with this picture? It shows, that we continue to believe the lies and to tell them to ourselves and others. The divide between the rich and the poor is getting wider, each day. The middle class is disappearing and somehow most people are o.k. with it. They think somehow, with enough faith and hard work, it will all be o.k.

Most of us followed the rules laid down before us. We went to school, found a nice corporate job, bought homes and made babies. It all seemed so easy in college. Our lives lay ahead of us, glistening with hope and promise. What happened? Keep reading our blog and you will see what happened and what is happening to people just like you. God doesn’t like poor people. Maybe that's why Lloyd Blankfein CEO of Goldman Sachs said he "was doing God's work". We think not.


A.M
LGMC

Debunking the myth of Prop. 13 (By Steve Lopez, LA Times)

Debunking the myth of Prop. 13

A USC professor says young people who think the revered measure is a good thing really don't know much about it. 'Renters don't benefit and the majority of new home buyers don't benefit,' he points out.

While the number of seniors grew, the number of children between the ages of 5 and 9 fell by a staggering 21% between 2000 and 2010. And at the same time, immigration has leveled off and begun to decline.

As a result, home prices will stagnate for years to come, Myers said, and for-sale signs will petrify.

"There are too many sellers and not enough buyers coming up," said Myers. "And it's going to get worse."

So we can't afford high dropout rates, and we can't afford devastating cuts in higher education. And if that means that we have to rethink how we pay for those institutions, which were devastated in part by Proposition 13, now is the hour.

"We need all hands on board," said Myers.

As for Prop. 13, Myers said its popularity was roughly the same in 2008 as it was in 1978, when homeowners feared being thrown out of their houses by rapidly rising taxes. But that's because of the myth of Prop. 13. In fact, Myers said, young people who think the proposition is a good thing really don't know much about it.

They don't realize, for instance, that Prop. 13 works for a homeowner only if the value of the house keeps going up. It's protection in that case, thanks to a strict limit on how much property taxes can increase. But anyone who bought after 2002 isn't getting any benefit at this point, because prices have crashed since then.

"Prop. 13 is toast," said Myers, because it relies on ever-rising home prices to maintain its political support, and he doesn't see home prices rising significantly in California for many, many years. That's due in part to a housing glut caused by a shortage of new buyers.

"Renters don't benefit and the majority of new home buyers don't benefit, but they don't know that because of the myth of Proposition 13," said Myers.

For those whose property taxes are among the lowest in the nation because of Prop. 13, Myers said, it's not the government they're getting the best of.

It's their grandchildren, who may be driven to another state, where they can more easily afford a house because they don't have to make up for their grandparents' super-low property taxes.

Or it's their neighbor.

The neighbor who bought later and pays higher property taxes essentially subsidizes the longtime owner. That's why we've got examples, throughout the state, of people paying several times as much in annual property taxes as the folks next door, even if the houses are worth the same on the market.

Myers isn't naive, but he'd like to believe that if more people understood all this, as well as the fact that commercial property owners have benefited from Prop. 13 even more than homeowners have, there might be more public pressure on legislators to rewrite the state's tax structure in more equitable ways. And if that miracle ever happens, California could become less reliant on sales and income taxes that rise and fall each year based on economic trends.

As I've said before, Prop. 13 brought needed relief in 1978, but it went too far. It shouldn't be wiped out now, but it can be tinkered with, so long as there are protections for long-term owners so people don't get thrown out of their houses.

The logical person to lead the way is Gov. Jerry Brown, who sat in the same chair in 1978 as he does now, and shouldn't have bothered to run again if he wasn't serious about fixing a broken state.

steve.lopez@latimes.com

 

 

Read full article here.

Two months ago, I violated a cardinal sin with an unholy, unforgivable suggestion. I quoted an economist who said it was time to redo Proposition 13.

What Can I Do?

There is a wide variety of things people can do to change the path our country is on and help to steer it back toward a more equitable and ethical future.

Make noise. As we have seen in the past the squeaky wheel gets the grease. The republican party understands this and they whip their members and followers to too a public frenzy about what ever issue they want implemented, and they get their payoff. The democrats make weak statements from time to time in soft accommodating tones and get zip, nothing, not even a thank you from the republicans when they finally cave to great republican noise machine. So if you want a change in way things are going then speak up. The next time some dimwit starts to regurgitate some plutocratic talking points like "lower taxes for the rich creates jobs" don't meekly sit there and listen, get in their face and give them the facts. Lower taxes have never created jobs, demand for goods creates jobs. In the conservative's halcyon days of the 1950s to 1970s the tax rate on the wealthy ranged from 90% to 75%. The effective tax rate for the wealthy now stands at about 15% and many pay even less. In recent times Clinton raised taxes on the wealthy and created jobs, Bush lowered taxes on the wealthy and lost jobs. As taxes for the wealthy goes down so does economic activity it's a fact. Set them straight, and Get Vocal in Public.

Don't give your money to people who want to steal it. No one should be supporting the wall street "banksters" and their desire to rob the American people blind. If you have money in any of the "too big to fail banks" move it! There are plenty of community banks that will provide all the financial services you need. Check out the Move Your Money Project ( moveyourmoneyproject.org ) they can help you find an honest local bank.

Join others of like mind. There are true grass roots organizations who are looking for ways to preserve the middle class and hold accountable those who have looted the American economy, US Uncut ( usuncut.org ) comes to mind. But beware of wolves in sheep's clothing. The monied elite have founded many astroturf organizations that pretend to advance the goals of the middle class but are really just there to push for cuts in programs that aid the vast majority of Americans, so that they can free up money to lower taxes for the rich. The tea party comes to mind. Why is it they scream about taxes but are completely silent about wall street bailouts, unlimited corporate political spending and the revolving-door between Congress and K street lobbyist? It is because they unwittingly and wittingly take orders from front groups like Americans for Prosperity, etc. These organizations were started and supported by the likes of the Koch brothers and other uber rich fanatics. Remember "it's all about the money Lobowski".

The next time your congress critter or senator calls for a donation, inform them that you only donate to those that represent your interests not those of corporations. And if they change their actions ( not just their rhetoric ) you may be inclined to reconsider a donation. Remember money talks and BS walks.

We all have a natural desire to work together with others while at the same time advance our own particular self interest. These two desires may at some time be in conflict or in concert. We do know intuitively that when people have money to spend the economy grows and we all get richer. But when just a few have money to spend the economy slows and we all get poorer.

There is something you can do, so just do it.

Billion Dollar Fund Managers Agree: The Government Never Fixed the Underlying Economic Problems, So We'll Have Another Crash

Tuesday, May 31, 2011

While the snake oil salespeople at the retail investing level and the bobble heads on the kool aid selling financial channels have been saying for years that we're in a "recovery" (albeit a slow one), billion dollar fund managers say that nothing has changed and we'll have another crash.
As Bloomerg reports:

Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said ...“Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.
The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008.

Jeffrey Gundlach notes that we've still got a quadrillion dollar derivative overhang which dwarfs the size the of real global economy, the government hasn't done anything to fix the basic problems in our economy, and so we'll have another crash:

Pimco co-CEO Bill Gross has repeatedly said that the U.S. is running a Ponzi scheme and says:

Ultimately creditors and investors are at the behest of a central bank and policymakers that will rob them of their money.

Pimco co-CEO Mohamed El-Erian predicts that "financial repression" in the form of a negative real rate of return for savers is coming to America.
The New York Times reports:

Even some senior Wall Street executives acknowledge the lack of change surprises them, given how poorly the industry performed last fall and the degree of government support necessary to keep it from collapsing.
“There was a general feeling that an enormous amount of additional regulation should be put in place to prevent what happened that weekend from happening again,” said Byron Wien, vice chairman of Blackstone Advisory Services and the former chief investment strategist for Morgan Stanley and Pequot Capital. “So far, we haven’t seen a lot of action.”
Robert J. Shiller, the Yale University economics professor who predicted the dot-com crash and the housing bust, said the window for change may be closing. “People will accept change at a time of crisis, but we haven’t managed to do much, and maybe complacency is coming back,” Professor Shiller said. “We seem to be losing momentum.”
Kenneth C. Griffin, founder and chief executive of the Citadel Investment Group, a Chicago-based hedge fund that manages $13 billion, said that regulators and lawmakers needed to impose rules so failing banks could be shut, rather than allowed to operate indefinitely with taxpayer support.

“We’ve taken a lot of steps for the worse, and not for the better, in terms of the structural underpinnings of our capital markets,” Mr. Griffin said. “We have to change the rules and correct the fundamental flaws in the financial system.”

While the big boys try to sell the "dumb money" on a recovery under a "greater fool" theory, the smart money knows the score

Mo re articles;
http://georgewashington2.blogspot.com/2011/05/billion-dollar-fund-managers-agree.html