Robert Reich Calls Out In The Wilderness For Support Of Middle Class Kids.

Stop Starving Public Universities and Shrinking the Middle Class
Robert Reich
February 29, 2012

Last week Rick Santorum called the President “a snob” for wanting everyone to get a college education (in fact, Obama never actually called for universal college education but only for a year or more of training after high school).

Santorum needn’t worry. America is already making it harder for young people of modest means to attend college. Public higher education is being starved, and the middle class will shrink even more as a result.

Over just the last year 41 states have cut spending for public higher education. That’s on top of deep cuts in 2009 and 2010. Some public universities, such as the University of New Hampshire, have lost over 40 percent of their state funding; the University of Washington, 26 percent; Florida’s public university system, 25 percent.

Rising tuition and fees are making up the shortfall. This year, the average hike is 8.3 percent. New York’s state university system is increasing tuition 14 percent; Arizona, 17 percent; Washington state, 16 percent. Students in California’s public universities and colleges are facing an average increase of 21 percent, the highest in the nation.

The children of middle and lower-income families are hardest hit. Remember: The median wage has been dropping since 2000, adjusted for inflation.

Pell Grants for students from poor families are falling further behind; they now cover only about a third of tuition and fees. (In the 1980s, they covered about half; in the 1970s, more than 70 percent.)
Student debt is skyrocketing – the New York Federal Reserve Bank estimates it at $550 billion. Punitive laws enforce repayment, and it’s almost impossible to shed student loans in bankruptcy. There is no statue of limitations for non-repayment.

And yet, Santorum’s rant notwithstanding, good-paying jobs in America are coming to require a college degree. Globalization and rapid technological change are putting a premium on the ability to identify and solve new problems. A college degree is also a signal to prospective employers that a young person has what it takes to succeed.

That’s why the median annual pay of people with a bachelor’s degree was 70 percent higher than those with a high school diploma in 2009 (the latest Census data available).

But public higher education isn’t just a private investment. It’s a public good. Our young people — their capacities to think, understand, investigate, and innovate — are America’s future.

We used to understand this. During the great expansion of public higher education from the 1950s to the 1970s, tuition at public universities averaged about 4 percent of median family income (compared to around 20 percent at private universities).

Young Americans received college degrees in record numbers – creating a cohort of scientists, engineers, managers, and professionals that propelled the economy forward and dramatically expanded the middle class.

But starting in the 1980s, as in so many other areas of American life, we took a U-turn. Tuition at public universities began climbing. By 2005, it was more than 10 percent of median annual family income. Now it’s approaching 25 percent – still a good deal relative to private universities (where it’s nearly 70 percent), but high enough to discourage many qualified young people from attending.
Public higher education has been the gateway to the middle class but that gate is shutting – just when income and wealth are more concentrated at the top than they’ve been since the 1920s, and when America needs the brainpower of its young people more than ever.

This is nuts.

What’s the answer? Partly to make public universities more efficient. Every bureaucracy I’ve ever been associated with (and I’ve been in some very big ones) has some fat to be trimmed. Yet universities are necessarily labor-intensive enterprises; research and teaching can’t be outsourced abroad or turned over to computerized machine tools.

Another part of the answer is to raise tuition and fees for students from higher-income families and use the extra money to subsidize medium and lower-income kids. Even now relatively few pay the official sticker price; many receive some discount proportional to family income. But this won’t solve the underlying problem, ether.

A big part of the answer has to be more government support for public education at all levels. This requires more tax revenues – especially from Americans who are best able to pay.

Most Americans still believe in the ideal of equal opportunity. And most harbor the patriotic notion that we have responsibilities to one another as members of the same society.

The two principles lead to an obvious conclusion: America’s richest citizens have a duty to pay more taxes so kids from middle and lower-income families have chance to make it in America.

A pending initiative in California would raise taxes on millionaires and use the proceeds to fund public education at all levels. It’s a good idea, and it comes at the right time. Other states should follow.

Ya Gotta Love Anonymous, Fridays Target, For Profit Prisons. Wall Street Is Investing In Private Prisons, Just For You.

Anonymous Hacks Private Prison Company Website 

 02/24/12 

Chris Kirkham

 

A protester wearing an Anonymous Guy Fawkes mask takes part in a demonstration against the Anti-Counterfeiting Trade Agreement as part of an international day of action against the increasingly-contested anti-piracy accord.

After high-profile takeovers of recording industry and Justice Department websites last month, hackers affiliated with the Anonymous movement had a new target Friday: the for-profit prison industry.

Hackers defaced the website for the Florida-based GEO Group, the nation's second-largest operator of private prisons, calling the attack "part of our ongoing efforts to dismantle the prison industrial complex."

The domain www.geogroup.com was replaced Friday morning with a black screen headlined by the symbol "#antisec," a term for the Anti-Security Movement, which is affiliated with the online coalition known as Anonymous.

The hacked site also featured a photo of Mumia Abu-Jamal, a former Black Panther whose death sentence for the 1981 murder of a Philadelphia police officer has since been converted to life imprisonment. Abu-Jamal's case has received international attention from opponents of the death penalty.

"While most folks are suffering under the economy, many billions of dollars are being funneled into this sinister conniving alliance of capitalist and statist forces," stated a message on the hacked site. "What they did not figure into their plans was a determined effort to shut them down."

As of early Friday evening, the company had removed the messages, but the website was still down. A blue screen told viewers "This domain is under construction and will be available soon." A spokesman for the GEO Group did not return an email seeking comment.

Oil Production Up, Demand Down, US Net Fuel Exporter. Prices Higher?

Blame Oil Speculators, Not Obama, For Rising Oil Prices

By Alex Seitz-Wald 

As the improving economy has robbed conservatives of their chief talking point against President Obama, they’ve turned to rising gas prices as the next problem to pin on the president.

Speaker John Boehner (R-OH) “instructed fellow Republicans to embrace the gas-pump anger,” while Rick Santorum conspiratorially claimed Obama is intentionally pushing up prices to cut carbon emissions. Not to be outdone, Newt Gingrich released a 30-minute video today about how “the Obama administration is so anti‑oil” that they’ve forced the price of gas to go up.

But there’s little truth to claims that Obama has curbed U.S. oil production and driven up gas prices in the process. As NPR noted this morning, the number of drilling rigs in U.S. oil fields has quadrupled under Obama and domestic oil production hit an 8-year high in 2011. For the first time in 60 years, the U.S. is now a net fuel exporter.

Oil demand was actually down 4.6 percent last week over last year, while the supply of gasoline has actually increased slightly since a year ago. So why are gas prices so high? As McClatchy’s Kevin Hall explains today, there is a systemic problem: speculation.

Energy futures markets serve a legitimate role in helping producers (like oil companies) and big end users (like airlines) hedge against price volatility, but lately, they’ve been taken over by Wall Street speculators who never intend to actually use the fuel they’re betting on. As Hall reports:

Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.

A McClatchy review of the latest Commitment of Traders report from the Commodity Futures Trading Commission, which regulates oil trading, shows that producers and merchants made up just 36 percent of all contracts traded in the week ending Feb. 14 while speculators who will never take delivery of the oil made up 64 percent.

Many experts, lawmakers (Democratic and Republican), and government regulators have expressed similar warnings.

Finally, after many delays, the government board responsible for regulating commodity futures markets finalized a rule in October to limit speculation, a power it was given by the Dodd-Frank Wall street reform law. However, the rule won’t go into effect until next October, as the Commodity Futures Trading Commission (CFTC) needs to collect “one year of interest data” first. The financial industry is fighting the new rule, but just today, the CFTC took action against a company in different market, providing an example of how the energy regulation can effectively work.

It Appears That Schneiderman Was PWND By The White House And Wall Street.

Tom Miller, HUD Officials Laugh at Schneiderman Publicly
By: David Dayen 2, 22, 2012

Whether you believe in Eric Schneiderman’s ability to deliver a legitimate investigation on mortgage securitization fraud or not, you have to admit that the united front on opposition to a settlement on foreclosure fraud collapsed the moment that he agreed to helm that federal investigatory task force. He immediately separated “pre-bubble” and “post-bubble” conduct, allowing for a settlement on the latter while he joined the investigation on the former. And eventually, every other AG on the Democratic side fell in line, as they didn’t have New York as an anchor to stay out of a settlement.

That’s just what happened. And now we have HUD Secretary Shaun Donovan and Iowa AG Tom Miller, head of the executive committee that settled on foreclosure fraud, clowning Schneiderman on the record, saying that he got next to nothing in exchange for his holdout.

Schneiderman, by the way, PARTICIPATED in this story. The story by Glenn Thrush frames a battle between Donovan and Treasury Secretary Timothy Geithner on whether to force banks to reduce principal on loans as part of the settlement:

In fact, Donovan’s preferred approach to solving the worst housing meltdown in U.S. history — forcing banks to write down a relatively modest amount in mortgage principal to help out homeowners — won out over initial objections of Treasury Secretary Timothy Geithner, a boogeyman to many liberals who think he’s been too soft to punish the One Percent.

“Something really changed [in the White House] after ‘Occupy.’… Shaun was a lot more empowered to make a deal,” said New York Attorney General Eric Schneiderman, who wrangled with Donovan during months of negotiations between 50 state law enforcement agencies, HUD, the Justice Department and five of the nation’s largest banks.

Schneiderman — who repeatedly prodded Donovan to take a tougher line with lenders — said he noticed Donovan gaining “more leverage” over Geithner last fall, as the White House political message morphed from compromise and deficit reduction to economic equality and helping out the middle class.

Geithner, of course, took the “moral hazard” line, saying that bailing out homeowners would set a dangerous precedent. This must have never come up with respect to Citi and BofA and AIG.

But the entire frame of this is a bit lopsided. There is no guarantee that the settlement will lead to the maximum amount of $32 billion in principal reduction that Donovan hypes. In fact, the government’s own press release only guarantees “at least $10 billion” in principal reduction. Needless to say, even the high-end amount is next to nothing relative to the scale of the problem for underwater borrowers. And according to this article, Geithner was won over when he learned that the program would not be “overly punitive.” We’ve chronicled the numerous ways in which the banks make out very easy on the deal, and can even profit off it.

But the interesting part of the story concerns Donovan’s work on Schneiderman. After a New York Times article about Schneiderman coming under pressure to settle, Donovan went to work:

That did it for Donovan, according to people close to him. Worried that the settlement was in danger of falling apart, he woke up at 5 a.m. the next morning and sketched the outline of what would emerge as the final compromise plan.

A bit later he called Schneiderman, who immediately began re-arguing his case for holding banks accountable.

Donovan stopped him: “Look, hear me out, I want to get past this,” he said, and proposed creating a special panel to probe wrongdoing by banks, to be co-chaired by Schneiderman. He also promised to limit the scope of any releases granted to the banks and rewrote his draft.

Miller, who clashed with Schneiderman over the releases, said Donovan didn’t make many changes but was artful enough to sell it as a compromise to the New York attorney general, who wanted to seal the deal.

“Essentially what Shaun did was let Eric take credit for shaping the release,” Miller said, “credit that wasn’t factually correct.”

Wow. This is on the record, with Miller saying that the release only looks like it was tailored to Schneiderman’s specifications. Miller, by the way, was announced today as one of President Obama’s re-election campaign co-chairs.

Schneiderman has promised that he would walk away from the task force if he found it insufficient, with his co-chairs slow-walking the investigation. With the task force barely begun, here’s the head of the state settlement and insiders close to Donovan just out-and-out clowning him, alleging that Donovan bait-and-switched him. We’re waiting for that walk-away any time now.

The Vikings In Iceland Grow Their Economy. Take Over Banks, Default On Vampire Debt, Jail The Banksters, And Save Peoples Homes

Icelandic Anger Brings Debt Forgiveness

By Omar R. Valdimarsson - Feb 19, 2012 4:01 PM PT

A cyclist passes an Icelandic national flag hanging in a popular shopping street in Reykjavik, Iceland. Photographer: Paul Taggart/Bloomberg

Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.
Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.

“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”

The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year.

The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.

Crisis Lessons

“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”

Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said.

Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates.

Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”

People Vs Markets

Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

Activists say the banks should go even further in their debt relief. Andrea J. Olafsdottir, chairman of the Icelandic Homes Coalition, said she doubts the numbers provided by the banks are reliable.
“There are indications that some of the financial institutions in question haven’t lost a penny with the measures that they’ve undertaken,” she said.

Fresh Demands

According to Kristjan Kristjansson, a spokesman for Landsbankinn hf, the amount written off by the banks is probably larger than the 196.4 billion kronur ($1.6 billion) that the Financial Services Association estimates, since that figure only includes debt relief required by the courts or the government.

“There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine,” Kristjansson said. “It’s nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action.”

As a precursor to the global Occupy Wall Street movement and austerity protests across Europe, Icelanders took to the streets after the economic collapse in 2008. Protests escalated in early 2009, forcing police to use teargas to disperse crowds throwing rocks at parliament and the offices of then Prime Minister Geir Haarde. Parliament is still deciding whether to press ahead with an indictment that was brought against him in September 2009 for his role in the crisis.

A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.

Legal Aftermath

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.
Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.

That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.

The U.S. subprime crisis sent home prices plunging 33 percent from a 2006 peak. While households there don’t face the same degree of debt relief as that pushed through in Iceland, President Barack Obama this month proposed plans to expand loan modifications, including some principal reductions.
According to Christensen at Danske Bank, “the bottom line is that if households are insolvent, then the banks just have to go along with it, regardless of the interests of the banks.”

Santorum Calls The Judeo-Christian Teachings Of The Bible, Phoney Theology.

What Bible is Santorum Reading?

By Mike Lux

When conservative Congressman Todd Akin a few months back suggested that liberalism was a “hatred of God,” I postulated that given the overwhelming support for liberal and progressive values in the Judeo-Christian Bible, perhaps he had never bothered to actually read the Bible. With Rick Santorum's recent comment that Obama's agenda is "Some phony theology. Oh, not a theology based on the Bible. A different theology,” I am now beginning to wonder if Santorum, Akin, and other conservatives are just reading a different Bible entirely than the one I read.

Because here's the thing: while you can — if you really work hard to do it — find verses here and there supporting a more conservative political point of view on certain specific issues, there is simply no way to read the Bible I read and not come to the conclusion that it is overwhelmingly supportive of helping the poor, showing mercy to the weak, refraining from judging, treating others as you would treat yourself, calling on the wealthy to give their money to the poor, and all kinds of other liberal, lefty, progressive values. You would have to ignore a great deal of Genesis and Exodus, with their talk of being our brother's keeper and bringing justice to the poor, oppressed slaves in Egypt; you would have to skip over a great many of the verses of Psalms with its poetry about justice and mercy for the poor and the widow; you would have to avoid the books of the Prophets almost entirely since so much of what they are angry about is the Israelite society's mistreatment of poor people and immigrants in their midst. Then there is the New Testament, where between St. Paul, the relatives of Jesus, and the big guy himself, there are so many verses on these subjects that it is virtually impossible to ignore them.

In fact, as I noted in my piece about Todd Akin, Jesus talks about mercy to those in trouble in 24 verses of the Gospels, tells people not to judge in 34 verses, tells people to love and forgive even their enemies in 53 verses, tells people to love their neighbors as themselves and treat others as they would want to be treated in 19 verses, and specifically tells people to help the poor and/or spurn riches and the wealthy in 128 verses.

That is a lot of verses, 258 by my count, where Rick Santorum's savior and George W. Bush's favorite philosopher sounds like a tried and true, solid to the core, far-out, lefty liberal. And all those where Jesus sounds like a conservative? I couldn't find a single one. He never once condemns abortion, even though it was very common in ancient times. He never speaks against homosexuality, even though the ancient Greeks before him and the Romans living in those times openly practiced and celebrated it. He called on the Romans and the Jewish establishment to treat the poor better, not condemn an adulteress to death, and to take the moneychangers out of the temple, but he never once asked the Romans to lower their taxes or lessen their regulations on over-burdened businesses. He never celebrated the greatness of the invisible hand of the market, and never discussed the virtues of selfishness, as conservatives today are so fond of doing.

The anti-immigrant conservative has to ignore Leviticus, which says: "Don't mistreat any foreigners who live in your land. Instead treat them as well as you treat citizens and love them as much as you love yourself." The pro-death penalty conservative has to ignore Jesus who told the Pharisees that he who is without sin should cast the first stone. The anti-labor conservatives have to not worry about Jesus' brother James (the undisputed first leader of the early Christian church according to most historians) saying "Now an answer for the rich. Start crying, weep for the miseries coming to you ... Laborers plowed your field and you cheated them: listen to the wages you kept back, they are calling out: realize the cries of the workers have reached the ears of the Lord." Conservative anti-class warriors have to pretend that Jesus' mother Mary never said about her son: "The hungry he has filled with good things, the rich sent empty away." Conservatives like Mitt Romney who say the housing market has to hit bottom need to avoid thinking about Jesus very first sermon, where he called for a year where all debts would be forgiven. And the anti-welfare conservatives? You guys are in big trouble, as verse after verse condemns you. The one time Jesus specifically talks about how the last judgment will go down, he says, "All the nations will be assembled before him and he will separate them one from another as the shepherds separates sheep from goats." Who gets to go to Heaven in this story? The nations and people who fed the hungry and welcomed the stranger. The ones who didn't go straight to Hell.

These are not isolated verses: there are thousands of examples of them, and they are in every book in the Bible.

Now, look: people have every right to believe whatever they want to believe about God, Heaven and Hell, sin and salvation, the soul, and all sorts of theology. Adherents of multiple religions believe the founder of their religion ascended physically to a heaven somewhere in the sky. Fundamentalist Christians of many varieties believe that God created the world in six days about 6,000 years ago, and that there really were talking snakes and donkeys. Mormons believe the founder of their religion discovered special glasses sent by God that allowed him to read and memorize sacred texts that no one else could read. Just because I don't personally think those things happened doesn't mean I have anything against the faith of those who do; they are welcome to believe whatever they want to. And if you want to believe in a God who doesn't care about the poor, loves the wealthy more than anyone else, and wants you to be selfish, feel free. But when you claim to fervently believe in the holy words of the Judeo-Christian Bible, and your political philosophy is violently opposed to most of what is actually in that Bible, I have to call you out on that. When Rick Santorum says that Obama follows a theology not based on the Bible, I have to say this: either he is not reading the same Bible I do, or he is not reading the Bible at all, because Rick Santorum's political views are in direct, fundamental opposition to the Bible he claims to follow.

I will go so far as to say that the modern conservative faith is the direct opposite of what the Judeo-Christian Bible teaches: modern conservatives argue that everyone should take what they want and devil take the hindmost, that we are all on our own, and that if you are rich it means that a Darwinian selection process allowed you to succeed, and that you owe nothing to anyone else. Modern conservatives are far more faithful to Ayn Rand, who openly rejected Christianity because of its values of helping the poor and caring for others. Give her credit for one thing: at least she was honest. Conservatives like Romney, Santorum, and Gingrich celebrate we're all on our own selfishness, and are happy to let the poor starve and the ill die from lack of health care, yet they proclaim their Christian holiness and denounce Obama's theology. As Jesus would have put it: you have to take the log out of your own eye before you can take the speck out of your brother's, you hypocrite. Mr. Santorum, if you don't know the Bible any better than you do, you should be careful calling other people anti-Biblical.

When Debt is More Important Than People, The System Is Evil

The Empire of Debt has only one end-point: a death spiral. It is evil and must be dismantled.

Charles Hugh Smith

Ethics has no place in the Empire of Debt. The financialized Status Quo is careful to limit the language used to describe the situation in Greece to the subtexts of "obligations" and "avoiding chaos."

The reality being masked is that debt is now more important than people. The suffering of the people of Greece is presented as a footnote to the financial play being staged; when the suffering is noted, it is presented with a peculiar set of unspoken subtexts:

 

1. Looky-loo detachment of the "gosh, look at that wrecked car, are there any bodies?" sort. People slow down to look at car crashes, and they revel in videos of riots with the same detached fascination with mayhem that doesn't involve them. Tsk tsk, how awful, etc.

 

2. They're reaping what they sowed, "they made their bed, now they have to sleep in it," i.e. the suffering of Greek non-Elites is the richly deserved consequences of their government overborrowing.

 

This begs further investigation. In the normal course of affairs in corrupt kleptocracies, various Elites siphon off most of the swag and the commoners get just enough shreds to buy their complicity. In other words, it may well be that the entire populace of Greece benefitted handsomely from the massive State borrowing, but it also may well be that the private-sector Greeks received little of the swag. In this case, they don't "deserve" to be forced into debt-serfdom by their Euroland overlords.

 

The ethics of debt, at least in the officially sanctioned media, boils down to: nobody made them borrow all those euros, and so their suffering is just desserts.

What's lost in this subtext is the responsibility of the lender. Yes, nobody forced Greece to borrow 200 billion euros (or whatever the true total may be), but then nobody forced the lenders to extend the credit in the first place.

Consider an individual who is a visibly poor credit risk. He would like to borrow money to blow on consumption and then stiff the lender, but since he cannot create credit, he has to live within his means.

 

Now a lender comes along who can create credit out of thin air (via fractional reserve banking) and offers this poor credit risk $100,000 in collateral-free debt at low rates of interest. Who is responsible for the creation and extension of credit? The borrower or the lender? Answer: the lender.

 

In other words, if the lender is foolish enough to extend huge quantities of credit to a poor credit risk, then it's the lender who should suffer the losses when the borrower defaults.

This is the basis of bankruptcy laws--or used to be the basis. When an over-extended borrower defaults, the debt is cleared, the lender takes the loss/writedown, and the borrower loses whatever collateral was pledged. He is left with the basics to carry on: his auto, clothing, his job, and so on. His credit rating is impaired, and it is now his responsibility to earn back a credible credit rating.

The debt is discharged and the borrower must live within his means without relying on credit. But he is also free of the burdens of servicing the debt.

 

If the lender is forced into insolvency due to the losses, then so be it: lenders that cannot differentiate between good and bad credit risks should go under and disappear: that's what happens in a competitive, transparent capitalist economy. Fools who create credit and extend it to poor credit risks must be eliminated from the system as quickly as possible lest they destroy more capital in the future.

The potential for loss and actually bearing the consequences from irresponsible extensions of credit was unacceptable to the banking cartel, so they rewrote the laws. Now student loans in America cannot be discharged in bankruptcy court; they are permanent and must be carried and serviced until death. This is the acme of debt-serfdom.

The global banking cartel has declared Greece's debts to be permanent and its people debt-serfs. More precisely, some privately held debt will be written down, but certainly not all of it, and the debt owed to the European Central Bank cannot be written down a single euro: Greece must pay the interest on the full debt, whatever the costs to its people.

 

We might ask why the fully-financialized Status Quo of financial and political Elites so carefully insures no shadow of ethics passes over the Greek debt crisis: If they did, it would become obvious that when debt becomes more important than people, the system is evil and should be dismantled.

 

Yes, evil, as in evil empire: the Empire of Debt that now dominates the global economy is intrinsically evil and cannot be salvaged; the only way to rid the planet of its parasitic, pervasive evil is to dismantle it, all of it, everywhere.

Europe is a good place to start. The only way to dismantle the evil Empire of Debt is to stop obeying its commands: Greece should not pay a single euro on any of its debts, starting with debt owed to the Evil Empire of Debt's favorite tool, the Troika of the EU(European Union), the ECB and the IMF.

We are constantly told default and exit from the debtors' prison of the euro would lead to chaos. Unfortunately for the Evil Empire of Debt and its Eurozone army of lackeys, toadies and apparatchiks, this claim is demonstrably false. Thanks to Pater Tenebrarum of the always excellent Acting Man financial blog, we have access to a 53-page report from Variant Perception that completely dismantles the fear-mongering claims of Apocalypse for the Greeks should their government default on its debts.

   

A PRIMER ON THE EURO BREAKUP (Variant Perception)
The only way forward is default and exit from the debtors' prison of the euro.

 

Once the debt has been renounced, Greece will have to live within its means, i.e. the goods and services produced by their economy. I think a critically important point has been lost in all the fear-mongering: the value of the goods and services produced by an economy remain the same whether they are valued in euros, gold, dollars, bat guano or any other open-market measure of value.

What will impoverish Greece is paying interest on the mountain of debt. If we value total Greek output of goods and services at 100 quatloos, and this economic activity generates a surplus of 10 quatloos, the Greek people can decide to consume that 10 quatloos, invest it or some mix of the two.

If they have to pay 10 quatloos in interest, then there is no capital left to invest in productive assets. As the existing productive assets degrade, wear out and become obsolete, then the goods and services produced will decline, along with the surplus generated. This sets up a positive feedback loop, i.e. a death spiral: as production of value declines, so too does the surplus available to invest in productive assets.

 

This is why the only way forward is default and exit from the debtors' prison of the euro. The only way forward is to value people more than debt, and to dismantle the evil Empire of Debt.

Gallup In The Bag For Big Corporations & The.01%

Gallup Aids GOP by Misrepresenting Poll on Small Business Hiring

By Jon Perr

In a new Gallup poll released Wednesday, small business owners revealed that the lack of need for new employees (76 percent), worries over revenue (71 percent) and concern about the state of the U.S. economy (66 percent) were the top three reasons for not hiring new workers. But you'd never know that if you just glanced at Gallup's headline, which instead warned, "Health Costs, Gov't Regulations Curb Small Business Hiring." Predictably, and despite a mountain of surveys and analyses showing that weak customer demand and not "job-crushing regulations" tops small businesses' concerns, Speaker John Boehner and the conservative blogosphere are touting Gallup's misleading headline.

On Wednesday, Gallup published this table summing up the results of its latest Wells Fargo/Small Business Index survey:

Interestingly, Gallup's headline and subhead included none of the top four factors small businesses cited as reason for not hiring. Instead, the pollsters led with the fifth and sixth items found well down the list:

While Gallup has done Americans no favors by misrepresenting its own poll results, it has done a great service for Republican propagators of long-debunked talking points. As a quick glance at Republican debate transcripts shows, the 2012 GOP presidential candidates fight each other to out-repeal regulations "off the throat of small business operators." Dire warnings about "job-destroying regulations" are regularly regurgitated by Republican leaders including Mitch McConnell, John Boehner and Eric Cantor.

Read More : Here

Anonymous True To Their Word To Strike Every Friday, Today's Strike Was Successful.

Anonymous Protests ACTA, Attacks FTC And Other U.S. Agencies' Sites

By RAPHAEL SATTER and VANESSA GERA   02/17/12 01:02 PM ET  

LONDON -- Opponents of a controversial global copyright treaty counted three victories Friday as American government websites were hacked and the Eastern European nations of Poland and Slovenia distanced themselves from the deal.

Sites belonging to the U.S. Federal Trade Commission and the National Consumer Protection Week were vandalized by Anonymous, a loose collection of cyber rebels who have helped lead the charge against the Anti-Counterfeiting Trade Agreement, or ACTA.
The hackers replaced the sites with profanity-laced statements and a violent German-language video satirizing the treaty.

At the same time, Polish Prime Minister Donald Tusk said Friday the country was abandoning plans to ratify the deal. He said he now sees his earlier support for ACTA as a mistake. "I was wrong," he said at a news conference.

His announcement came after Slovenia's government also said Friday that it is halting the ratification of ACTA.

"This agreement is obviously not a matter of understanding, but of major misunderstanding," Slovenian Education Minister Radovan Zerjav said.

The developments are bad news for industrialized countries such as the United States, which have pushed ACTA as a way of defending the entertainment industry and luxury goods manufacturers from pirates and counterfeiters. American officials spent years negotiating ACTA in an effort to harmonize intellectual property protection across different countries.

The goal is to help countries fight everything from fake pharmaceuticals to pirated music, but grass-roots activists – many of them in Eastern Europe – have been waging weeks of protests against what they see as moves intended to clamp down on free expression and Internet privacy.

So far around 20 countries have signed up to the deal, a key step before ratification. Four EU countries have now backed away from it – Poland, Slovenia, Bulgaria and the Czech Republic – and its approval at the European Union level appears increasingly uncertain.

Tusk also said Friday that he sent a letter to the European People's Party, a center-right group in the European Parliament to which his Civic Platform belongs, urging it not to back ACTA in its current form.

Back in the United States, the Trade Commission confirmed that the sites had been compromised, saying in an email that they had been taken down and wouldn't be brought back "until we're satisfied that any vulnerability has been addressed."

Anonymous boasted of stealing a large amount of personal data from Trade Commission employees – including everything from banking statements to dating website information.

The Trade Commission said that while it was still investigating the hack, "the nature of the site limits information that could have been accessed."

Over a 1,000 Felony Convictions By Reagan Administration For S&L Crisis. Zero For Obama For The Greatest Robbery, Con Job, And Destruction Of The World Economy.

CitiGroup Whistleblower: 'Brute Force' Used To Hide Bad Loans

By Susie Madrak

I find it hard to believe that after the serious consequences that CitiBank suffered (oh wait, they didn't, did they?) and all the regulations that were tightened up and carefully enforced (oh wait, they weren't, were they?), that this bank would dare to do such things. Boy, you just know something really, really bad will happen to them now. Right?

Four years after rotten mortgages helped trigger a global financial crisis, Sherry Hunt said her Citigroup Inc. quality-control team was still finding flaws in new loans that included altered tax forms, straw buyers and borrowers who listed fictitious employers.

Instead of reporting the defects to the Federal Housing Administration, the bank saddled the agency with losses by falsely declaring the loans fit for its federal insurance program, according to a complaint filed yesterday by the U.S. Attorney’s Office in Manhattan. Citigroup agreed to pay $158.3 million to settle the claims, and admitted that it certified loans for FHA backing that didn’t qualify.

A whole $158.3 million? There goes the annual hookers-and-blow budget!

Hunt, who filed a sealed lawsuit against New York-based Citigroup in August that the government joined, will collect $31 million of that sum -- before taxes and attorney’s fees -- as a whistle-blower, she said in an interview yesterday. The settlement, which encompassed misconduct spanning 2004 to the present, indicates Citigroup has lingering problems in its O’Fallon, Missouri-based CitiMortgage unit.

“Citigroup in particular received government funding, taxpayer dollars, because of its risky operations,” said Peter Henning, a law professor at Wayne State University in Detroit. “It shows that they hadn’t really learned much of a lesson from the financial crisis.”

Well, sure they did! They learned that the people who are allegedly looking out for the public interest will accept just about any cover story for their bad behavior, however ludicrous it is.

The inspector general for the U.S. Department of Housing and Urban Development faulted Citigroup’s quality-control program during a 2008 audit, according to the complaint. Taxpayers rescued the bank with a $45 billion bailout that same year and guaranteed more than $300 billion of its risky assets after the lender’s stability was threatened by mounting costs on soured loans. The bank lost a total of $29.3 billion in 2008 and 2009.

Hunt’s co-workers, instead of checking for fraud or making reports about underwriting defects to the FHA as required, argued with her over the soundness of the loans, she said. Employees who acted as “gatekeepers” applied “what they describe as ‘brute force’ to pressure Citi’s quality control managers” into downplaying defects, according to the government’s complaint.

Some colleagues had pay incentives tied to reducing the number of reported problems, and they spent hours trying to get her to relax her warnings, including those about the most basic deficiencies, Hunt said.

I can't remember how long ago this happened, but they used to have these things call "jail sentences" that reduced such shenanigans. But hey, bygones!

Now We Can See Why Cal AG Harris And Obama Were Pushing For A Deal With Bank Immunity.

Audit Uncovers Extensive Flaws in Foreclosures

By GRETCHEN MORGENSON

Published: February 15, 2012

An audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation, according to a report released Wednesday.

Annie Tritt for The New York Times

Phil Ting, the San Francisco assessor-recorder, found widespread violations or irregularities in files of properties subject to foreclosure sales.

Anecdotal evidence indicating foreclosure abuse has been plentiful since the mortgage boom turned to bust in 2008. But the detailed and comprehensive nature of the San Francisco findings suggest how pervasive foreclosure irregularities may be across the nation.

The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.

Commissioned by Phil Ting, the San Francisco assessor-recorder, the report examined files of properties subject to foreclosure sales in the county from January 2009 to November 2011. About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.

Kathleen Engel, a professor at Suffolk University Law School in Boston said: “If there were any lingering doubts about whether the problems with loan documents in foreclosures were isolated, this study puts the question to rest.”

The report comes just days after the $26 billion settlement over foreclosure improprieties between five major banks and 49 state attorneys general, including California’s. Among other things, that settlement requires participating banks to reduce mortgage amounts outstanding on a wide array of loans and provide $1.5 billion in reparations for borrowers who were improperly removed from their homes.

But the precise terms of the states’ deal have not yet been disclosed. As the San Francisco analysis points out, “the settlement does not resolve most of the issues this report identifies nor immunizes lenders and servicers from a host of potential liabilities.” For example, it is a felony to knowingly file false documents with any public office in California.

In an interview late Tuesday, Mr. Ting said he would forward his findings and foreclosure files to the attorney general’s office and to local law enforcement officials. Kamala D. Harris, the California attorney general, announced a joint investigation into foreclosure abuses last December with the Nevada attorney general, Catherine Cortez Masto. The joint investigation spans both civil and criminal matters.

The depth of the problem raises questions about whether at least some foreclosures should be considered void, Mr. Ting said. “We’re not saying that every consumer should not have been foreclosed on or every lender is a bad actor, but there are significant and troubling issues,” he said.

California has been among the states hurt the most by the mortgage crisis. Because its laws, like those of 29 other states, do not require a judge to oversee foreclosures, the conduct of banks in the process is rarely scrutinized. Mr. Ting said his report was the first rigorous analysis of foreclosure improprieties in California and that it cast doubt on the validity of almost every foreclosure it examined.

“Clearly, we need to set up a process where lenders are following every part of the law,” Mr. Ting said in the interview. “It is very apparent that the system is broken from many different vantage points.” 

Read More: Here

I Hope None Of You Are Heavily Invested In Greek Debt.

The First Dominoes: Greece, Reality, and Cascading Default 

Charles Hugh Smith

 
I asked frequent contributor Zeus Yiamouyiannis to comment on the coming Greek default. Here is his insightful response.

Greece is the epicenter of a drama that threatens to unwind with all the intrigue and subterfuge of ancient Greek myths and tragedies. As with the legend of Icarus, big, and now bigger, transnational banks provoked the gods with their wax-and-feather financial fabrications to create the appearance of soaring wealth. Now that they have flown too close to the sun and their wings have melted, these banks are being brought to earth by the obligations and consequences imposed by their fabrications.

Rather than take responsibility, these banks seek to appease the gods by sacrificing taxpayers. In fact, if one looks closely, these banks aspire to be gods themselves. They clothe themselves in their indispensability and shield themselves from accountability with tales about how many innocent citizens will be hurt if they don’t get their next bailout. It is as if they say, “We are above the law… We are the law.” Mathematics, legal enforcement, restraint, humility all must fall under the sword of their hubris.

In the end, just as with a Greek tragedy or a Yeats poem, this center cannot hold and things fall apart. When one abuses the laws and principles of mathematics and capitalism, claiming to be a faithful servant, consequence and accountability eventually catch up. The breaking point inexorably nears. Citizens are beginning to think, voice, and act: “We can do without the false idols that call themselves banks. In fact, we need them to be dissolved for us to survive and thrive.”

Reality is the revenge of the gods.

Read More: Here

Thanks To Cognitive Dissonance Conservative 99%'ers Will Still Vote Against Their Own Best Interest, and Transfer The Money They Paid For Their Retirement To Romney's .01% Cronies.

Mitt Romney Tells CPAC He'll Cut Social Security Benefits, Begin Privatizing Medicare

By Kenneth Quinnell

Echoing what he told a Koch Brothers audience in November, Republican presidential front-runner Mitt Romney told the audience at the Conservative Political Action Conference that he would cut Social Security benefits and that he would make changes to Medicare that would effectively begin the privatization of the program. While Romney was a little more vague about privatizing Medicare, he made no mistake about his proposal to cut Social Security:

"We're going to have to recognize that Social Security and Medicare are unsustainable, not for the current group of retirees, but for coming generations," Romney told the 2012 Conservative Political Action Conference. "And we can't afford to avoid these entitlement challenges any longer."

Romney said: "We are going to slowly and gradually raise the retirement age for Social Security" from the current 66 for full benefits. "And we'll slow the growth rate in benefits for higher-income retirees."

As for Medicare, "tomorrow's seniors should have the freedom to choose between Medicare and a range of private plans," Romney said to applause. "And if these future seniors want a more expensive plan, then they will have to pay the additional cost."

Romney's proposed "solutions" are, of course, designed to solve a problem that doesn't exist. Both programs are sustainable for generations to come and the proposals that Romney and other Republicans are making for the programs would be more likely to create the problem they say they are trying to save.

GOP Willing To Spend Your Money To Punish The The Poor For Being Poor.

New Study: Health Care Costs Fall When Poor Get Health Care Coverage

By Susie Madrak

I know so many people who need medical care right this minute and aren't getting it that I literally can't keep track anymore. Let's put it this way: By the time a TV network is holding a sweepstakes where the grand prize is a trip to New York for ... a colonoscopy, , you know paying for tests and treatment is on everyone's minds. That's why it's just so crazy that the GOP and their mindless minions are so fixated on ripping away the Affordable Health Care Act. It's not only needed, it will save a lot of money:

The concept of support for universal health care is taboo among Republicans who scrutinize the Affordable Care Act -- dubbing it the "Job-Killing Health Care Law Act" -- and call for its repeal. But a new UC Irvine study challenges the GOP argument that the health care law is too costly, with data illustrating that health care costs on the whole fall when poorer, uninsured patients are provided with insurance.

"In a case study involving low-income people enrolled in a community-based health insurance program, we found that use of primary care increased but use of emergency services fell, and -- over time -- total health care costs declined," David Neumark, a co-author of the study, said in a release accompanying the findings.

The study -- which focused on uninsured people in Richmond, Virginia who fell 200 percent below the poverty line -- found that over three years, health care costs fell by almost 50 percent per participant, from $8,899 in the first year to $4,569 in the third after they received insurance. Participants who enrolled in health coverage made fewer trips to the emergency room, which are notorious for running up patient bills. Instead, insured participants went for more primary care visits.

"A lot of the debate about health care reform surrounds the issue of whether we're setting up something that's going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services," Neumark said in the release. "[O]ver time, costs can be reduced through increased use of primary care and reductions in emergency-department visits and hospital admissions, but it may take several years of coverage for substantive savings to occur."
Health care spending in the U.S. has been on the rise for years. Americans spent more than three times on health care in 2008 than they spent in the 18 years before, according to a Kaiser report.

Low-income, uninsured individuals tend to rack up exorbitant health-care bills because they often rely on emergency room visits instead of primary care. In the long run, these bills are paid by taxpayers. The Affordable Care Act "is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014," according to the study.

Banks Commit Fraud, Steal Trillions, Destroy Economy. Penalty? A Few Billion In Restitution, And They Get A Immunity As A Bonus. Must Be Great To Own The Government.

The Foreclosure Fraud Settlement, By The Numbers

By Pat Garofalo on Feb 9, 2012 at 9:20 am

Federal and state officials today will finally announce that they’ve reached a settlement with the nation’s biggest banks over the banks’ various foreclosure fraud abuses, such as “robo-signing” foreclosure documents and submitting falsely notarized documents to courts. The settlement has been in the works for several months, as a few key states — most notably California and New York — were holding out for tougher terms against the banks.
 Here are some of the key numbers in the settlement, which is being officially announced at 10 a.m.:

49: States that have reportedly signed onto the settlement. The lone holdout is Oklahoma, as Attorney General Scott Pruitt (R) feels that the terms are too hard on the banks. Attorneys General Eric Schneidermann (D-NY), Kamala Harris (D-CA), and Beau Biden (D-DE) have thrown their support to the agreement, after opposing earlier versions for being too easy on the banks.

5: Banks covered by the settlement: Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial.

$26 billion: The amount of the settlement. About $5 billion will be direct cash penalties, $1.5 billion of which will go directly to homeowners foreclosed upon between September 2008 and December 2011.

$17 billion: The amount of settlement money going toward reducing loan principal (the amount homeowners have outstanding on their mortgages) and mortgage modifications. Banks will not get dollar-for-dollar credit for every principal reduction, so HUD Secretary Shaun Donovan believes the deal will ultimately result in $30-$40 billion in real principal reduction.

$1,800 to $2,000: The amount going to homeowners who qualify for direct cash payments.

1 to 2 million: Homeowners expected to be aided by the settlement money, with one million receiving reduced loan balances or loan modifications and 750,000 receiving direct payments.

4 million: Americans who have been foreclosed upon since 2007.

The deal protects banks from state and federal lawsuits pertaining to some foreclosure fraud abuses, including robo-signing. However, Schneidermann’s lawsuit against three big banks for allegedly fraudulent use of a mortgage database will go forward. In addition, “individual homeowners retain private rights of action to sue over foreclosure fraud and other abuses.”

One Reason Conservatives Hate Science.

Intelligence Study Links Low I.Q. To Prejudice, Racism, Conservatism

The Huffington Post   Rebecca Searles  02/ 1/2012 

Are racists dumb? Do conservatives tend to be less intelligent than liberals? A provocative new study from Brock University in Ontario suggests the answer to both questions may be a qualified yes.

The study, published in Psychological Science, showed that people who score low on I.Q. tests in childhood are more likely to develop prejudiced beliefs and socially conservative politics in adulthood.

I.Q., or intelligence quotient, is a score determined by standardized tests, but whether the tests truly reveal intelligence remains a topic of hot debate among psychologists.

Dr. Gordon Hodson, a professor of psychology at the university and the study's lead author, said the finding represented evidence of a vicious cycle: People of low intelligence gravitate toward socially conservative ideologies, which stress resistance to change and, in turn, prejudice, he told LiveScience.

Why might less intelligent people be drawn to conservative ideologies? Because such ideologies feature "structure and order" that make it easier to comprehend a complicated world, Dodson said. "Unfortunately, many of these features can also contribute to prejudice," he added.

Dr. Brian Nosek, a University of Virginia psychologist, echoed those sentiments.
"Reality is complicated and messy," he told The Huffington Post in an email. "Ideologies get rid of the messiness and impose a simpler solution. So, it may not be surprising that people with less cognitive capacity will be attracted to simplifying ideologies."