Thursday, December 31, 2009
"Here’s the opportunity, Wall Street’s newest and bestest gamble: there is a huge untapped market of some 50 million people who are not paying insurance premiums—and the number grows every year because employers drop coverage and people can’t afford premiums. Solution? Health insurance “reform” that requires everyone to turn over their pay to Wall Street. Can’t afford the premiums? That is OK—Uncle Sam will kick in a few hundred billion to help out the insurers. Of course, do not expect more health care or better health outcomes because that has nothing to do with “reform” ... Wall Street’s insurers... see a missed opportunity. They’ll collect the extra premiums and deny the claims. This is just another bailout of the financial system, because the tens of trillions of dollars already committed are not nearly enough." (Wray, cited on Washington's Blog)
I have been very concerned about how authentic health care reform has been dropped. The big insurance giants have much to gain with mandated care and no public option.
I fail to understand why some people would prefer that a corporation make health care decisions over a government.
I work in government and know how the social-welfare-education government system works. Government is often slow and could be more efficient at times but it does not deny coverage on the basis of profit margins. Social-welfare types of government bureaucracies operate by rules.
In contrast, my experience with health care corporations is that cost is the deciding factor, always. Coverage will be denied, even when pre-authorized, in order to postpone payment. How many times have I had to call to get the insurers to pay as contracted?
Tuesday, December 29, 2009
This is an interesting, well-worth-the-read analysis of where the U.S. and the global economy stand.
His observations are macro in nature and address the fantasy extend and pretend game being played by the banks and U.S. Government. They also explore pressing but little-talked-about issues such as peak oil. His observations parallel those made by Perkins, but are very different in tone. Here is a sample passage:
"The past 20 years we've seen the institutions of capital finance pretend to create growth where there is no growth by expanding financial casino games of chance and extracting profits, commissions, and bonuses from the management of these games - mortgage backed securities, collateralized debt obligations, credit default swaps, and all the rest of the tricks dreamed up as America's industrial economy was shipped off to the Third World. But that set of rackets had a limited life span and they ran into a wall in October 2008. Since then it's all come down to a shell game: hide the giant pea of defaulted debt under a giant walnut shell....
....Meanwhile President Obama has given next-to-zero money or attention to public transit, to repairing the passenger railroad system in particular. I maintain that if we don't repair this system, Americans will not be traveling very far from home in a decade or so.
Nations that failed to go along with the plan were subject to CIA engineered coups.
Perkins also discusses the current economic crisis and what reforms are needed in this must see video interview
Perkins concludes by proposing a variety of macro and micro solutions and alternatives to produce a healthier, fairer, global economy.
He observes that making missles and trinkets are destructive. Instead, those same companies that produce arms and GMO seeds that benefit the corporations alone might be incentivized to create technologies that actually help people and clean up our poisoned planet.
Monday, December 28, 2009
Robert Reich has a thoughtful post on the decline of the working and middle classes. Here is an excerpt:
"The real locus of the problem was never the financial economy to begin with, and the bailout of Wall Street was a sideshow. The real problem was on Main Street, in the real economy. Before the crash, much of America had fallen deeply into unsustainable debt because it had no other way to maintain its standard of living. That's because for so many years almost all the gains of economic growth had been going to a relatively small number of people at the top."
Sunday, December 27, 2009
Wednesday, December 23, 2009
The U.S. Armed Forces uses more oil than just about any other institutional user. Quoting Sara Flounders, Washington's Blog reports:
"By every measure, the Pentagon is the largest institutional user of petroleum products and energy in general. Yet the Pentagon has a blanket exemption in all international climate agreements"
"Even according to rankings in the 2006 CIA World Factbook, only 35 countries (out of 210 in the world) consume more oil per day than the Pentagon..."
The logic here seems to be that we wage war to "secure" energy that will allow us to wage war. The snake swallows its tail.
Monday, December 21, 2009
This list of censored stories is definitely a reading must.
One story is particularly disturbing. Apparently the ocean off the coast of Somalia has been used for 10 years as a dumpting ground for industrial waste, including radioactive materials, lead, etc. Here is an excerpt:
"Nuttall also said that since the containers came ashore, hundreds of residents have fallen ill, suffering from mouth and abdominal bleeding, skin infections and other ailments. 'What is most alarming here is that nuclear waste is being dumped. Radioactive uranium waste that is potentially killing Somalis and completely destroying the ocean,' he said"
Sunday, December 20, 2009
Naked Capitalism has an article describing a new Supreme Court Decision that purportedly strips all rights, including it seems habeas corpus, of individuals decreed by the president to be "enemy combatants."
This is very, very disturbing if true. I'll try and track down information.
Friday, December 18, 2009
Here is the story: The too-big-to-fail banks, investment banks, and insurance gians made risky bets, enabled by the de-regulatory environment. They obviously got in trouble. So, the U.S. Federal Reserve and the Treasury bailed them out with zero percent interest loans and government guarantees.
The "real" economy kept diving with lower consumption, no credit, and more job losses. Since "real" losses kept growing, the bailouts continued. Now, government bailout excesses and very high military spending are creating an unprecedented government debt bubble (in Treasuries).
Government bailout out money to the banks has created a speculative bubble in securities and commodities in the U.S. and also in other countries (e.g., China). This bubble in financial assets is in danger of popping. When it does, it will endanger the U.S. federal bubble because, the assumption is, only so much gov debt can be manufactured without precipating a currency crisis.
Other nations' bubbles that are deflating could cause a wave of sovereign defaults, which would cause central banks everywhere to have to issue more bailouts
The upshot is this recession is far from over and it looks like it is going to get rough...
Thursday, December 17, 2009
Truth out covers a report out recently on the scope of government military contracting. Here is an excerpt:
"According to a new government report, more than 50 percent of the Department of Defense workforces are military contractors and the Obama administration's troop surge in Afghanistan is set to only increase these numbers.
The report, prepared by the Congressional Research Service (CRS), the investigative arm of Congress, and released Monday, highlights the internal dealings of the Defense Department with that of the 218,000 contractors, compared to 190,000 uniformed personnel, it employs, and the logistical and administrative issues inherent in dealing with a military campaign through outsourcing. "
"Drug money saved banks in global crisis, claims UN advisorDrugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions"
"Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result "...
Calcuated Risk reports: "From Bloomberg: ‘Shadow Inventory’ of U.S. Homes Climbs, Report Says'"
"The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic.
“While the visible month’s supply has decreased and is beginning to approach more normal levels, adding in the pending supply reveals there is still quite a bit of inventory that will impact the housing market for the next few years,” First American said.
Wednesday, December 16, 2009
Johnson writes "Volcker has three main points, with which we whole-heartedly agree:
1. “[Financial engineering] moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”
2. “I have found very little evidence that vast amounts of innovation in financial markets in recent years have had a visible effect on the productivity of the economy”
and most important:
3. “I am probably going to win in the end”.
Monday, December 14, 2009
Here are the 3 stories.
1. Silent Epidemic of Hunger Among America's Kids
2. Extreme Crisis in Youth Prisons
3. Poor Kids More Likely to be Zombified with Antipsychotics
These titles caught my attention because they point to the deteriorating conditions facing so many of America's kids. This topic is the focus of my most recent book. I'm working on the copy editor's corrections now. It will be out in April 2010.
Friday, December 11, 2009
In this excerpt, Taibbi describes what happened to Obama's advisors immediately after his election:
"What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside..."
Thursday, December 10, 2009
Why is the US in Afghanistan, the place where the Soviet Union died? Why does the Pentagon think it can succeed? What is the "agenda" for US in the Middle East? What roles do China and Russia play in this new incantation of the "Great Game"?
Check out the video at the link.
Financial Reform is Being Gutted. See Washington's Blog
I am becoming increasingly pessimistic. Obama lacks either the strength or desire to address the serious issues facing the nation.
Monday, December 7, 2009
Active Thermitic Material Discovered in Dust from the 9/11 World Trade Center Catastrophe. The Open Chemics Physics Journal pp.7-31 (25) Authors: Niels H. Harrit, Jeffrey Farrer, Steven E. Jones, Kevin R. Ryan, Frank M. Legge, Daniel Farnsworth, Gregg Roberts, James R. Gourley, Bradley R. Larsen
Here is an excerpt from the article:
"Based on these observations, we conclude that the red
layer of the red/gray chips we have discovered in the WTC
dust is active, unreacted thermitic material, incorporating
nanotechnology, and is a highly energetic pyrotechnic or
"Thus, the energetic nano-composite can be sprayed or
even “painted” onto surfaces, effectively forming an energetic
or even explosive paint. The red chips we found in the
WTC dust conform to their description of “thin films” of
“hybrid inorganic/organic energetic nanocomposite”. Indeed,
the descriptive terms “energetic coating” and “nice adherent
film” fit very well with our observations of the red-chips
which survived the WTC destruction..."
Sunday, December 6, 2009
Nicholas Kristof has a great editorial column in today's NYT where he examines the politics of cancer.
He points out that debates about screening (and I would add genetics) dominate mainstream media accounts of cancer. What is left out of this discussion is the role of synthetic chemicals in increasing cancer risks. Here are a couple of excerpts from his column:
"What if breast cancer in the United States has less to do with insurance or mammograms and more to do with contaminants in our water or air -- or in certain plastic containers in our kitchens? What if the surge in asthma and childhood leukemia reflect, in part, the poisons we impose upon ourselves?...
"Dr. Philip Landrigan, the chairman of the department of preventive medicine at Mount Sinai, said that the risk that a 50-year-old white woman will develop breast cancer has soared to 12 percent today, from 1 percent in 1975. (Some of that is probably a result of better detection.)"....
Saturday, December 5, 2009
"The average duration of unemployment grew by about two weeks, to 28.5 weeks in November--the highest on record. Some 38% of the jobless were deemed long term unemployed, meaning they had been without work for about 6 months or more. The ranks of discouraged workers--those who have left the labor force for lack of job prospects--swelled by nearly 60,000 to 357,000 last month"
separate WSJ article, same date:
"Adjusting for seasonal swings in hiring, the Labor Department said retailers shed 14,500 workers last month."
Friday, December 4, 2009
The Internet is buzzing with analyses of the real unemployment numbers. I like this article at Seeking Alpha by "Trader Mark":
"You see, as the weekly claims figure has dropped from 462,000 Americans last week to 457,000 this week (green shoots, a 5000 person drop!) the (hidden in dark corners where only mushrooms grow) Emergency Unemployment Compensation exploded up by 265,000 Americans. Yes you heard me, a quarter million people... in a week. Shhhh... not so loud."
"So if you are not following what is happening... people are falling off the traditional claims as they have exhausted "traditional" lengths of stay, and our EUC (all our extensions combined) are exploding higher..."
Thursday, December 3, 2009
Credit Writedowns has a good article discussing Gallup data on the national job situation.
The west is getting worse. Anecdotal evidence illustrates the trend across the nation. Yesterday, Open Text, a technology company, eliminated 8% of their national workforce. Open Text is doing well. Why are they eliminating such a significant percentage of their workforce?
Today on the radio I heard that the state of Arizona has depleted its line of credit from Bank of America. The state drew down the last of its credit line making a payment to k-12 education in the state. The state is insolvent. Government jobs are going to be eliminated.
We are in a deflationary spiral, headed for collapse.
What if the U.S. were to re-deploy all U.S. soldiers in Afghanistan and Iraq in the U.S. to repair roads, bridges, schools, and parks. There would still be plenty of money left to hire unemployed Americans to clean up and repair the nation.
Matt Taibbi, the Rolling Stone reporter who describes Goldman Sachs as a giant vampire squid, argues that Obama is captured, as evidenced by his reliance on Robert Rubin. I agree. I also think Obama is powerless with respect to the U.S. military.
Wall Street controls our economic policy and the Pentagon controls our foreign policy.
It is sickening to watch the U.S. be destroyed by the corruption within.
Wednesday, December 2, 2009
Here is a passage written by Taggart with quotes from Brenner:
"One has therefore witnessed for the last dozen years or so the extraordinary spectacle of a world economy in which the continuation of capital accumulation has come literally to depend upon historic waves of speculation, carefully nurtured and publicly rationalized by state policy makers and regulators – first in equities between 1995 and 2000, then in housing and leveraged lending between 2000 and 2007. What is good for Goldman Sachs – no longer GM – is what is good for America.” (emphasis in the original).
"If this is correct, there is no easy fix for our problems. The blowing of asset bubbles is not an unfortunate side effect of regulatory capture or Wall Street's greed. It was the only way governments could keep economic growth from falling below politically dangerous levels once traditional Keynesian methods of fiscal stimulus through deficit spending were no longer adequate to compensate for the sclerosis at the heart of the advanced capitalist economies: “worsening difficulties with profitability and capital accumulation.”
Monday, November 30, 2009
The world economy is spiralling down as one bubble after another collapses. Zero Hedge describes the situation as a "controlled collapse."
A new world order is defintely needed but I worry about what is going to happen to use plebs as our economies collapse.
Sunday, November 29, 2009
Try searching for Operation Garden Plot, which describes the military procedures/policies for use of US military forces domestically.
Saturday, November 28, 2009
"Pollution Brings Worrying Signs for Fish Populations; Worse, Most U.S. Drinking Water Comes from the Same Sources"
"Something strange is happening to the fish in America's rivers, lakes and ponds. Chemical pollution seems to be disrupting their hormones, blurring the line between male and female.
"And as CBS News national correspondent Dean Reynolds reports, those fish swim where millions get their drinking water."
It is believed that the Dubai government will and is able to back Dubai World. Still, this default is raising concerns about the possibilities for sovereign defaults by emerging nations and the contagion such defaults might pose.
Washington's Blog has a good discussion:
Wednesday, November 25, 2009
The Public Interest Research Group found the following, as reported in the Washington Post:
"U.S. PIRG sent 15 children's products to an independent laboratory for testing. Four were found to have excessive lead levels, and two contained phthalates. For example, a charm made by Claire's boutiques was 71 percent lead by weight, when the legal limit is .03 percent. A cloth book for toddlers, "Big Rex and Friends," which was purchased at Toys R Us, contained 0.19 percent lead. After being notified by U.S. PIRG, Toys R Us stopped selling the book, but it is still available through other retailers."
Tuesday, November 24, 2009
I find it interesting to read the arguments made by capitalists against contemporary capitalism. Many "entrepreneurial" capitalists strongly dislike the type of "crony" capitalism they see operating.
Naomi Klein describes this contemporary crony capitalism as authoritarianism capitalism and observes that the distinctions between Chinese capitalism and U.S. capitalism are slowly dissipating.
Galbraith describes this contemporary capitalism as "predatory capitalism." In his account, corporate interests loot the state and subordinate the state to corporate interests.
Each of these accounts describe a system that is authoritarian, exploitative, and corrupt. Goldman Sachs's relationship with the US illustrates these characteristics.
Monday, November 23, 2009
Today, it appears that the most important reforms are not going to occur.
Those most important reforms include the following:
Break Up the Too Big to Fails
Implement a transaction tax on securities transactions. This tax would not hurt average investors but would halt the High Frequency Trading Scam that allows the biggest investment banks to make money using technology and proximity to beat the market unfairly.
Reform the SEC's program of relying on self-regulation by the financial industry
These reforms are not excessive and do not undermine "free" markets. Rather, they help ensure that the market is not biased toward particular agents whose moral hazzard endangers the entire system.
Sadly, it appears that these necessary reforms are not going to happen. See Dean Baker's post today, "Vampire Banks Rise Again"
Sunday, November 22, 2009
Two of my favorite economic commentators, Naomi Kline and Joseph Stiglitz, are interviewed on the subject of economic power. I highly recommend viewing this interview.
Saturday, November 21, 2009
The US federal government is sovereign and therefore does not have to sell debt to finance deficits, counter to popular opinion.
Recently Obama said that the US faced a double-dip recession if the country does not reign in deficit spending.
Quite a few economists responded by explaining the error in his logic.
Today at Naked Capitalism Edward Harrison has a post explaining both the deficit hawk's errors and the different policy options available.
Thursday, November 19, 2009
Societe General, the French Bank, has published a report titled "The Worst Case Debt Scenario: Protecting Yourself Against Economic Collapse"
The report does not actually calculate the risk of "economic collapse" but does offer investors strategies for preserving their wealth in the event of a collapse.
I printed it but haven't yet read it. It should prove to be interesting reading.
"Deutsche Bank expects 70 percent of CRE loans to not qualify for refinancing. That comes out to about $2 trillion in commercial real estate that will mature from now until 2013.
"The Fed through TALF has tried to take some of this debt out of the system but now their books are over burdened. Also, many of the commercial real estate loans are junior and don’t even qualify for TALF and these are the real problems. Either way, the reality of the situation is many of these commercial loans are now imploding and many banks are failing on Friday’s like flies running into the light. Unlike the residential real estate bubble, most commercial real estate loans are backed by shorter term financing that is based on 5 to 7 year terms. If prices have fallen by 40 to 45 percent, refinancing becomes impossible"
check out the full article
From Calculated Risk:
"The MBA reports a record 14.4 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q3 2009. This is an increase from 13.2% in Q2 2009."
It is hard to see how the recession has ended when residential delinquencies and foreclosures continue to grow and when commercial real estate has just begun its (likely to be) catastrophic collapse...
Wednesday, November 18, 2009
Today's Market Ticker links to a site with some graphic and sobering images of pollution in China. China is suicidal. However, the U.S. is assisting this suicide. US corporations have closed down or re-located into regions of the world with few environmental restrictions.
The downsizing of US based industry hampers our nation's "recovery" and produced the conditions of possibility for China's suicidal pollution (and other nations' as well) as we are the major consumers of China's goods.
Planet earth will endure but humanity is poisoning the resources necessary for its survival...
Tuesday, November 17, 2009
Today's Washington Post has a very sad article about rising hunger in America. In 2008, 14.6% of households experienced low or very low "food security." The government no longer calls it "hunger."
From the article:
"Among Americans of all ages, more than 16 percent -- or 49 million people -- sometimes ran short of nutritious food, compared with about 12 percent the year before. The deterioration in access to food during 2008 among both children and adults far eclipses that of any other single year in the report's history."
I imagine 2009 data will be even worse.
Monday, November 16, 2009
Monday, November 9, 2009
"We Rescued The Top Of The System, Left The Bottom To Fend For Itself" at Huffington Post (VIDEO)
Exerpt from the article, accompanying the video:
"Elizabeth Warren, the chair of the Congressional Oversight Panel charged with monitoring the bank bailout, was on Morning Joe Friday morning to dig in to the newly released unemployment report. The numbers are bleak -- unemployment has surpassed 10 percent for the first time since 1983 -- and Warren is not surprised.
"'Let's face it,' Warren said, 'This is sort of how we went about the rescue -- we rescued at the top and we left the bottom to kind of fend for itself -- and that's showing up in the unemployment numbers.'
Warren went on to explain that the report is really about the guarantees the Government made to protect banks' assets while leaving the public out to dry."
Sunday, November 8, 2009
Here is an excerpt:
"The US Air Force calls this “full spectrum dominance”. More than 800 American bases are ready for war.
"These bases protect a system that allows one per cent of humanity to control 40 per cent of wealth: a system that bails out just one bank with $180 billion – that’s enough to eliminate malnutrition in the world, and provide education for every child, and water and sanitation for all, and to reverse the spread of malaria. On September 11th, 2001, the United Nations reported that on that day 36,615 children had died from poverty. But that was not news."
Tim Iacono has an article at seeking alpha addressing the emergence of Anglo day laborers at Home Depot and other such locales formerly inhabited exclusively by immigrant day laborers.
What this trend illustrates is that working class populations of all origins have been utterly impoverished by the contemporary depression.
I have seen homeless Anglo men on roads and by grocery stores. These men are clearly not substance abusers, but rather are individuals whose marginal attachment to the labor force has been severed. Never before have I witnessed this spectacle of dispossession.
I have also seen Hispanic men and families parked on the side of trafficked roads selling tiny potted plants and small numbers of pepper wreaths. Their desperation reminds me of the shoe-lace sellers during the Great Depression. Xenophobic attitudes toward Hispanic immigrant populations are no doubt exacerbating their desperation.
I wonder how many people are depending on food banks for their survival?
Why have we allowed this situation to arise? America still contains vast wealth. The federal government has bailed out financial institutions using trillions of dollars. And yet we allow living standards to deteriorate so much that vulnerable populations have become utterly impoverished and desperate.
The recent mediated spectacles of violence enacted by adolescents (rape, murder, torture) and by military members demonstrate the strain and degradation of humanity that is occurring as our broken (financial and military) empire wages war directly against foreign populations and indirectly against vulnerable domestic populations.
The anger and desperation produced by the assaults of empire are easily subject to manipulation so that rage is directed inward rather than outwards at the true sources of imperial exploitation.
The time has come to demand an end to the financial looting of this nation by elite interests and to demand the end of a failed project of empire that is looting America's wealth and destroying the lives of its citizens and the lives of citizens abroad.
Friday, November 6, 2009
Credit Writedowns argues that the administration is captured by financial interests when it comes to the economic governance of the nation. I agree.
The first video is Max Keiser's interview with Ellen Brown. Ellen Brown explains how modern money is created. It is created by banks and financial institutions rather than by government. Governments do create money but they are not the major player in that game.
The second video, of the economist Steve Keen, is long but worth watching if you want an in-depth understanding of the current crisis.
From my point of view, what is most significant about Keen's video is his argument that the government ought to have bailed out consumers, rather than the banks. Keen is not sentimental. Rather, his argument is that a bailout of, or debt forgiveness for, consumers is the only effective way forward and out of the current crisis.
"Baghdad--the Iraqi Oil Ministry has awarded an Exxon-Mobil Corp. consortium the right to develop one of the world's largest oil fields, marking the first time an American-led group has been allowed into the Iraqi oil patch since the U.S.-led invasion began."
Wednesday, November 4, 2009
"The CIA relied on intelligence based on torture in prisons in Uzbekistan, a place where widespread torture practices include raping suspects with broken bottles and boiling them alive, says a former British ambassador to the central Asian country..."
BRINGING DEMOCRACY ONE DEAD BODY AT A TIME...
Tuesday, November 3, 2009
This link is for a video interview with Larry Wilkerson on the Military-Industrial Complex. He is a former military officer and has served in government as well.
His comments echo a conversation I had recently with my class about the use of propaganda to legitimize wars in Iraq and Afghanistan.
Wilkerson argues that energy policy needs to be publicly debated, not cloaked in propaganda used to manipulate the public to support what are fundamentally energy wars.
Wilkerson's interview also echoes Eisenhower's warnings about an entrenched and self-serving military industrial complex.
Monday, November 2, 2009
"Darrell Issa's Letter To The NY Fed's Bill Dudley Demanding AIG Bailout Disclosure"
Darrell Issa is the ranking member of the Committee on Oversight and Governmental Reform. His letter to AIG demands disclosure of financial information from AIG on additional and backdoor public funding AIG may have received from the Federal Reserve Bank of New York. Here is what Issa says:
"Thus, behind closed doors and with no approval from Congress, the FRBNY [Federal Reserve Bank of N.Y.] may have added an additional $13 billion of debt on the backs of taxpayers. These allegations, if true, amount to NOTHING LESS THAN A BACKDOOR BAILOUT OF AIG'S CREDITORS, including Goldman Sachs, Merrill Lynch, Societe Generale, and Deutsche Bank."
When will the ransacking of the U.S. public end? Why is it allowed to continue? I cannot believe this is happening.
Saturday, October 31, 2009
The Association of American Railroads reports that average weekly container loads were down 15% from 2008 and 17% from 2007. "To get back fo a prerecession level, traffic would need to jump more than a fifth"
From Calculated Risk:
"Fannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.45% in August, up from 4.17% in July - and up from 1.57% in August 2008."
Friday, October 30, 2009
"Even though the global economy is staging a modest recovery, mainly on inventory restocking and fiscal stimuli, the overall economic situation is still difficult. Unemployment rates in OECD countries are at record highs. Global trade is still at one-fifth its peak level. The small- and medium-sized economies that employ most of the world's people are struggling. We see a contrast – unprecedented in modern times -- between the asset market boom and real economic difficulties..."
Thursday, October 29, 2009
"ArcelorMittal, the world' largest steelmaker by volume and revenue, Wed. said its third-quarter net profit improved from earlier quarters but fell 76% to $903 million over the previous year, because of weak steel demand."
A 76% fall in revenue due to weak demand in steel, the metal of industry and infrastructure, points to continuing economic contraction.
Wednesday, October 28, 2009
I went through "Subtitle A-Authorization of Appropriations" of the bill and added up all of the procurements.
I came up with the figure of $99,738,563,000. This figure includes aircraft, missiles, weapons, and amunition. It also inlcudes "other procurements."
I am fairly certain "other procurement" does not include salaries. And nowhere are logistics and support covered.
Also missing is data about spending on the veterans whose health, bodies, and sanity have been compromised by military imperialism.
That means that approximately 100 billion is being spent on military equipment. This is an obscene figure, particularly when hunger and homelessnes in America are growing daily.
The US military empire has brought death and destruction to Iraq and has won the US enemies around the world.
Diplomacy and foreign aid would further our interests; military force simply produces hatred and resistance.
More importantly, foreclosures continue to rise and bank inventories of foreclosed properties are growing. Banks are not attempting to sell foreclosed properties because that would require them to take the losses on their books.
However, if one looks carefully at the data, it is easy to discern the negative trends in the housing market. My favorite blogs that analyze housing are Dr. Housing Bubble and Calculated Risk.
Today in the WSJ (pC11) there is an article titled "S&P Puts Mortgage Insurers on Watch." The article explains that the S&P noted with respect to 3rd quarter earnings by mortgage insurers that they "are experiencing a sharper and more rapid transition of delinquencies into prime books of business than we expected." The article continues, "Mortgage insurers have seen claims continue to rise along with home delinquencies and defaults."
The upshot is that with higher unemployment and declining wages, more and more individuals are going to lose their houses. Foreclosures are going to keep the banks and insurers in trouble for some time. That means lending to individuals will remain tight. It also means that the recession is far from over.
Tuesday, October 27, 2009
Link for an analysis of a Treasury "stealth" plan for a bailout of the imploding commercial mortgage market.
I find it outrageous that nearly every major commercial industry/sector in the economy is eligible for a tax payer funded bailout but the states are allowed to collapse as their tax revenue decreases.
The government is bailing out banks, investment banks, AIG, and various insurance companies. Now it plans to bail out commercial real estate.
But the states are offered nothing and are forced to cut funds for education, domestic violence shelters, programs for poor families, etc.
Sunday, October 25, 2009
Saturday, October 24, 2009
Zweig claims that high frequency trading "have helped cut costs for everyone." However, Zero hedege has posted quite a few articles debunking that propaganda.
The upshot is there is no such thing as a "free market."
Friday, October 23, 2009
Paul Craig Roberts, former Secretary Treasury under Reagan, offers a critical take on the U.S. as declining empire.
I think his points about the US reliance on force over diplomacy abroad and at home are particularly noteble.
I expect to see more use of force as the US's economic power deteriorates further.
I read today that Japan's new leadership is questioning the use of its ports for US nuclear armed ships. (WSJ 10/23/09 p. 15). I believe this illustrates the growing disillusionment with US military-style diplomacy in the world.
Wednesday, October 21, 2009
Max Keiser, whose work I admire, interviews Michael Hudson (who I also admire) about the debt peonage system being directed at Latvia. Hudson is helping Latvia resist this debt peonage.
The IMF is demanding that Latvia cut social spending, hospitals, etc in order to "service" the nation's debt.
This debt was accumulated as individuals in Latvia purchased homes using foreign currency. Hungary has the same problem. Individuals in former USSR nations were encouraged to take out loans from western European banks. When nations such as Hungary and Latvia experienced currency collapses due to the financial crisis (hot money outflows helped crash their currencies), it became impossible for Latvians and Hungarians to repay mortgages denominated in foreign currencies.
Forcing individuals in nations such as Latvia and Hungary to cannabilize their nations in order to pay back debt inflated by the financial crisis is absolutely disgusting.
Frontline ran a must-see program last night on the efforts of one woman, Brooksley Born, to regulate the over-the-counter derivatives trade.
She ran into very strong opposition from the "free market" trio of Greenspan, Rubin, and Summers.
The Frontline story is a saga of arrogance, sexism, and self-interested commitments to the now-failed laissez-faire neoliberal ideology.
Monday, October 19, 2009
I suppose there are other terms to use, such as "regulatory capture," but the basic point is that a wide variety of economic observers agree that the US Government is making decisions about the banks and investment agents (e.g., hedge funds) that are counter to the interests of the public.
The financial interests are looting the country.
Saturday, October 17, 2009
Bailout Helps Fuel a New Era of Wall Street Wealth
By GRAHAM BOWLEY NYT
"Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses..."
SIMON JOHNSON of Baseline Scenario:
"The US increasingly displays characteristics that we have seen many times in middle-income “emerging markets” – new dimensions of vast inequality, forms of financial instability that benefit the best connected, and consistently easy credit for the privileged. But this raises the question: who exactly is going to dominate our economic and political landscape moving forward?"
Friday, October 16, 2009
Dylan Ratigan on MSNBC provides the following data in order to support his case for "clawbacks" for the government from the investment banks.
Goldman Sachs received the following from the US Government since October 2008:
$10 billion from TARP
$11 billion from Federal Reserve Bank
$30 billion from FDIC
$13 billion from AIG
$70 billion total received from US Government to Goldman.
Goldman used this money to purchase assets in the US at the bottom of the market.
Now those assets have inflated because of the huge injections of capital into the economy by the US Government.
Goldman reaps $10 billion in trading and principle investments from the inflation of assets purchased at the bottom of the market with US Government supplied funds.
CONCLUSION: The US Government should demand that $10 billion be handed over.
IMPLICATION: The financial crisis and the bank bailouts enabled Goldman and other investment banks to rape America.
California's official unemployment number exceeds 12.3%. This figure understates the unemployment problem because it does not include those who were self-employed, those whose benefits have expired, and those working part-time although needing full time.
The states' rising unemployment creates a deflationary cycle.
As states/cities/counties cut state workers' hours and lay off workers unemployment grows in precisely that sector of the economy that Keynes argued must replace collapse of private sector demand.
There is no way the economy can recover when it suffers from a deflationary collapse caused by rising unemployment and underemployment.
Wall Street banks' recovery is a mirage enabled by fraudulent accounting that allows banks to avoid writing down losses.
It seems to me that the bankers are pillaging through bonuses while they can because they know at some point the game will be up as the losses become too large to hide.
Thursday, October 15, 2009
Danny Weil has a great article at Counterpunch on diploma mill "professional" colleges and universities.
I believe strongly in public education. I find it sickening that public dollars are supporting--in the form of hefty student loans--diploma mills that end up robbing the unfortunate students who pay upward of 30,000 for useless degrees.
Why are these degrees useless? They are useless because students do not learn to write, to read, to think critically, to reason, etc at these fraudulent "universities." Moreover, students do not find the jobs or wages promised by the "university" recruiters. That is how the students end up in debt peonage.
How do I know? I know because I have had many students recount their experiences at these places before transferring to ASU.
Federal and state dollars should not support loans for students at "universities" or "colleges" that lack formal professional/academic certification.
Wednesday, October 14, 2009
I AM FURIOUS THAT AIG PLANS ON USING TAX PAYER MONEY TO PAY OUT MORE BONUSES
I AM FURIOUS THAT WALL STREET BANKS AND THE TOO BIG TO FAIL CLUB ARE USING FEDERAL FUNDS AND ILL-EARNED GAINES TO PAY BONUSES!
HOW LONG ARE THESE RAIDS GOING TO CONTINUE?
WHY IS OBAMA ALLOWING THIS TO OCCUR?
THERE HAS INDEED BEEN A FINANCIAL COUP!
Tuesday, October 13, 2009
Jeff Faux of the economic policy institute has a nice speech about what crumbled and what needs to be done (minimally) to stabilize the global economy.
He has some important observations. Here are a few of his remarks:
"In my country, we talk of competition with Mexico. But what we call the Mexican economy is dominated by Americans and Mexicans corporate investors who use that competition to maintain low wages in both labor markets. And what we call the American economy is dominated by corporations who no longer consider themselves American.
So it is a great mistake to think of this cross-border economic relationship simply as competition between the people of Mexico and the people of the United States. In the global marketplace the interests workers in Mexico and the US – and in Chile and the rest of the world -- have increasingly more in common with each other, and less in common with the managers of global corporations who share their nationality. That the people of our countries understand this point is essential for organizing a politics to support social justice in the global economy...."
Simon Johnson and James Kwak have an article in today's Washington Post that reinforces my position that debt hawks risk extending and exacerbating the recession.
This position does not endorse frivolous government spending, nor does it support the pursuit of endless military expenditures.
However, debt spending is necessary to compensate for the collapse of private sector demand. Well targeted debt spending can help repair America's crumbling infrastructure and improve its education system. It can support small business lacking access to credit and it can improve the health and vitality of the population.
Debt spending does not necessarily impoverish future generations. Read the article and my previous post about this subject.
Monday, October 12, 2009
Excellent interview. It is rather long but every minute is worth watching!
Much of the developing world has been ruled through debt servitude for decades. The developing nations have had to restructure their economies around neoliberal principles--liberalization of finance, domestic austerity, privatization--in order to receive loans. The net effect of neoliberal reforms is that the world's population is increasingly impoverished.
Ellen Brown's analysis suggests the IMF has found a new tactic in the battle to govern the developing world through debt. This new tactic further enriches the few financial agents who increasingly govern the world with their values, their policies, and their interests.
Thomas Palley discusses some key reasons why the economy may continue to contract and/or stagnate.
I personally feel that all the talk about the recession being "over" is harmful for the vast numbers of people and small businesses that are still suffering so significantly.
Sunday, October 11, 2009
This is a great article by Alan Nasser that explains why the bailout (not stimulus) is mis-directed by unpacking how money and credit are created.
The issue of money creation may seem arcane and not particularly interesting. However, understanding money creation is critical to understanding whether the deficit matters or not. It is also critical to evaluating the relative effectiveness of different forms of government spending.
The problem with the current government approach is too much money is being directed at banks, which are not lending. Commercial banks are investing their money in stock markets and are paying their execs outrageous bonsues. Calculated risk and credit writedowns (2 internet sites) have chart after chart showing that banks are cutting consumer credit, rather than lending.
Households are abruptly being forced to repay debt under increasingly onerous repayment conditions. Banks are raising rates on credit cards before new rules regulating their behavior go into effect in 2010. Individuals are seeing their interest rates double on outstanding balances.
The lack of credit and the deteriorating repayment conditions are enriching banks and financial interests. They are also directly undermining the living conditions of middle-class and lower-class households.
The economy cannot "recover" under these conditions. Small businesses cannot get credit and individuals cannot consume enough to stabilize the collapse of retail products and services.
I highly recommend reading the article. Here is one of the conclusions derived from the analysis of credit creation and circulation:
"The state is now transparently -dare I say it- the executive committee of the ruling class, and is no longer governing in the interests of the industrial elite. It is the financial elite that conceives and often executes policy, and these fellows don’t depend on production and employment to make their fortune. They sell not widgets but debt, the most fitting product for a population consigned to perpetual austerity."
Nice breakdown of the difficulty of maintaining a middle-class lifestyle.
America seems to be headed in the direction of a Mexico-style class distribution.
Friday, October 9, 2009
Krugman explains in an article in the WSJ:
“When it comes to international trade, actually it’s not the Great Depression, it’s worse,” he said, presenting charts showing the decline in global trade activity falling much more steeply in the current downturn than during the Depression.
“The scale of the collapse of world trade has been so large that it has produced a degree of international linkage that surpasses what even the pessimists imagined,” he said. “World trade acted as a transmission mechanism,” spreading economic distress “even to those countries that had relatively healthy financial systems,” such as Germany.
According to a study posted at Economist's View 25% of all US jobs are offshorable. Moreover, "In terms of major substantive results, we found that more educated workers appear to hold somewhat more offshorable jobs."
The study claims that offshoring was not found to affect wages. Right!
Thursday, October 8, 2009
George Washington's blog, a well respected blog cited frequently on the blogosphere, has a posting today examining conspiracies.
"The US Air Force Shot Down Flight 93"
"If We Don't Learn Our History, We're Doomed to Repeat It"
With regard to the second posting, I think it important to keep in mind that U.S. Freedom of Information Access requests that are honored reveal, time and time again, outrageous covert and illegal activities perpetrated by the CIA and other clandestine agencies.
Wednesday, October 7, 2009
Inflationists argue that the increase in money supply will eventually trigger Weimer like inflation.
For an excellent, intelligible analysis of how the economy can be both inflationary and deflationary, check out this webpage:
Tuesday, October 6, 2009
However, it appears the discussion is underway now about using SDRs or some other basket of currency to purchase OPEC oil.
The story that kicked up today's speculation can be found here:
Max Keiser was interviewed about the story and his comments can be found in short taped interview here:
Nearly every financial blog I frequent has analyses of the story that either dismiss it or ponder the death of the dollar as the world's currency reserve.
I find the article here to be a nice summary:
I am personally agnostic. I think the practical, logistical implications of trying to replace the dollar quickly defy the imagination. However, I also understand why many nations would like to speed up that time table.
Monday, October 5, 2009
SPECIFIC UNEMPLOYEMNT DATA provided by the Economic Policy Institute:
"Other demographic breakdowns in unemployment show that while all major groups have experienced large increases, racial and ethnic minorities, men, and workers with lower levels of schooling are getting hit particularly hard.
—In September, unemployment was 15.4% among black workers, 12.7% among Hispanic workers, and 9.0% among white workers (increases of 6.5, 6.5, and 4.6 percentage points, respectively, since the start of the recession).
—Unemployment was 11.0% for men, compared to 8.4% for women (increases of 6.0 and 3.6 percentage points since the start of the recession).
—For workers age 25 or older, unemployment reached 10.8% for high school educated workers and 4.9% for those with a college degree (increases of 6.2 and 2.8 percentage points, respectively, since the start of the recession). "
The Washington Post reports the DHS is helping local police buy military style sonic equipment.
I believe it was precisely this equipment used recently against peacefully protesting university students and faculty in Pittsburgh.
It is sad to see that the Department of Homeland Security defines security in terms of repressive state apparatuses rather than in terms of Constitutionally defined rights.
Sunday, October 4, 2009
The point of her comments mirrors remarks made by Steve Keen, the Australian economist. The financial system and the economy cannot recover until the debt choking the system is eliminated. Citizens cannot pay down their debt while their wages decline.
Debt forgiveness is the only viable way forward for a quick and robust recovery.
Friday, October 2, 2009
Only one of the sites I've seen today takes into account the role of women entering the workforce. The fact that the percentage of civilian workforce participation today is still slightly above that of the 70s era recession does not mean that the 70s era recession was worse.
The mere fact that today's workforce participation rate is close to the 70s recession era level is scary given the fact that women were not widely represented in the workforce then.
Karl Denninger's post at seeking alpha gives us a better sense of how significant September's unemployment numbers are:
"... the Household Data is VASTLY worse than reported. Here are the month-over-month changes, and they're in the realm of frightening. (all numbers in thousands)
Civilian Labor Force: 154,879 to 153,617 this month.
Employed: 140,074 down to 139,079 this month.
That's a loss of 995,000 jobs, not 263,000, and the labor force contracted by 1,262,000 people!
The participation rate was absolutely decimated, down 0.6% this last month alone. The people "not in the labor force" rose by a staggering 1,516,000 in the last month."
"Weekly earnings are also down by $1.54, which is bad news too."
The basic point of his analysis is that federal budgets are NOT the same as household budgets. Government deficits are necessary for private spending and do not in fact compete with private spending.
This view on money does not mean that governments should spend money without concern.
However, it does mean that a contraction of private money supply and spending must be met with government deficit spending.
To cut deficits when private spending is collapsing ensures deflation
Robert Reich today argues for the necessity for more government spending to assist those without work and to promote public works projects. His article is persuasive, especially when one loses the fear of deficits as the demolisher of civiliations
Thursday, October 1, 2009
Interesting article. I agree.
Wednesday, September 30, 2009
The biggest source in drops in state revenue was from state income tax, which was down 28% from a year ago. State sales tax revenue fell 9%
WSJ 9/30/09 page A4.
Tuesday, September 29, 2009
Marshall Auerback has a provocative and interesting article at Creditwritdowns.
Auberback's position is that curtailing deficit spending at this point would amplify deflation. His approach to deficits and GDP is starkly different than the position held by monetarists.
I don't have enough info to evaluate but it certainly is an interesting argument.
Monday, September 28, 2009
Andy Xie is a well respected analyst. His article is a sobering look at the most recent bubble. Follow the link to his article. His summary points include the following:
"The basic conclusion is that financial sector debt is the same as it was a year ago, and the reduction in leverage is due to equity base expansion, partly due to government funding..."
"Second, financial institutions are operating as before....What's occurring now is another bubble that is again redistributing income from the masses to the few...."
"Third, financial supervision has not changed....The developments in the past year have actually made financial supervision worse. To support financial institutions, the U.S. government suspended mark-to-market accounting rules for assets on the books of financial institutions, which has allowed them to report profits...."
"The U.S. government sent many more to prison in the 1980s after the junk bond bubble burst. This bubble is 10 times bigger..."
"The lesson from the Lehman collapse seems to be, 'Take whatever you can and, when it crashes, you get to keep it.'"
"Only a multiplier effect from the current bubble is stopping financial institutions from going under...Essentially, the main short-term impact of the current bubble is preventing the financial system from collapsing. It won't lead to substantial demand creation."
"The environment for tolerating such a loose monetary environment ends when inflation surges in emerging economies first and developed economies second.
When inflation becomes a political problem and policymakers are forced to respond, money supplies will be cut. After that, no more bubbles."
Sunday, September 27, 2009
The list is reviewed for accuracy. This is worth reading....
This is a scary number and it is likely to grow.
Wednesday, September 23, 2009
Greg Palast has copies of memos sent between Europe and the U.S. covering policy responses to the recession.
Palast's article and the memos are worth reading because they illustrate very different takes on the significance of the recession. For Europe, the recession is ongoing. For the US, it's over.
I find the US response disturbing but wonder whether China is playing a role in the US decision to cut back on its monetary stimulus. One thing is clear, the US response prioritizes Wall Street over Main Street.
Tuesday, September 22, 2009
Ellen Brown cites Sean Olender's argument that the mortgage bailout programs were aimed at protecting banks from lawsuits rather than being aimed at helping homeowners. Here is an excerpt from her analysis:
"Following the Boyko decision, in December 2007 attorney Sean Olender suggested in an article in The San Francisco Chronicle that the real reason for the bailout schemes being proposed by then-Treasury Secretary Henry Paulson was not to keep strapped borrowers in their homes so much as to stave off a spate of lawsuits against the banks. Olender wrote:
“The sole goal of the [bailout schemes] is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
“. . . The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC . . . .
“What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back.”
Needless to say, however, the banks did not buy back their toxic waste, and no bank officials went to jail. As Olender predicted, in the fall of 2008, massive taxpayer-funded bailouts of Fannie and Freddie were pushed through by Henry Paulson, whose former firm Goldman Sachs was an active player in creating CDOs when he was at its helm as CEO. Paulson also hastily engineered the $85 billion bailout of insurer American International Group (AIG), a major counterparty to Goldmans’ massive holdings of CDOs. The insolvency of AIG was a huge crisis for Goldman, a principal beneficiary of the AIG bailout."
Paul Craig Robert's analysis of the economy. Check out Chris Hedges recent essay on the global reearch site as well.
Both essays address deteriorating standards of living for most Americans.
Every week I have young, talented, hard working students in my office who want to have the same opportunities afforded previously to college graduates. It breaks my heart to think how few opportunities exist presently for these students.
The U.S. needs to invest in providing opportunities for its human capital, instead of bailing out its corrupt financial capitalists.
Monday, September 21, 2009
Steve Keen, an Australian academic economist, argues for a debt jubilee. He also argues that banks should be nationalized (temporarily) in order to get rid of debt.
His recent remarks add to the remarkable amount of economic analyses claiming that the recession will not end until debt is removed from the financial system. This position has been argued from the left and the right.
Scary read if you happen to be employed by state governments.
Free market, neoliberal style capitalism has NOT worked for the vast majority of the world's population, including the majority of workers in industrialized nations such as the U.S.
It is beyond sickening that 45% of the world's labor force exists on less than $2 a day.
Having travelled to Indonesia and Thailand, I can tell you that $2 a day is not survivable, even in relatively poor nations.
Sunday, September 20, 2009
"As many as 222 million workers run the risk of joining the ranks of the working poor, earning less than $1.25 a day, according to an estimate by the International Labor Organization.
¶Remittance flows, which reached $328 billion in 2008, will drop by 7.3 percent in 2009, the World Bank predicts.
¶Hunger rates are up in every region in the world, according to the Food and Agriculture Organization.
There are also figures for how many people would be viewed as living below the poverty line, with the report suggesting it will be more than 1.3 billion people, up by more than 100 million in 2009...."
By NEIL MacFARQUHAR
Published: September 17, 2009 New York Times
Automation, Globalization, the Decline in Union Jobs all explain what is going on in this report.
Dennis Cauchon of USA Today reports:
"The incomes of the young and middle-aged — especially men — have fallen off a cliff since 2000, leaving many age groups poorer than they were even in the 1970s, a USA TODAY analysis of new Census data found.
People 54 or younger are losing ground financially at an unprecedented rate in this recession, widening a gap between young and old that had been expanding for years.
While the young have lost ground, older people have grown more prosperous over the years and the decades. Older women have done best of all.
The dividing line between those getting richer or poorer: the year 1955. If you were born before that, you're part of a generation enjoying a four-decade run of historic income growth. Every generation after that is now sinking economically.
Household income for people in their peak earning years — between ages 45 and 54 — plunged $7,700 to $64,349 from 2000 through 2008, after adjusting for inflation. People in their 20s and 30s suffered similar drops. Older people enjoyed all the gains...."
Friday, September 18, 2009
The question is, "Why aren't the banks lending with all the $$$$ pumped into their operations by the Fed?"
The answer must be that the banks are (a) either still insolvent or (b) are quite concerned about further debt defaults on mortgages, credit cards, etc.
Thursday, September 17, 2009
The Guardian reports on how the UK oil company Trafigura knowingly dumped toxic pollution, killing a number of people and injuring tens of thousands more.
"How UK oil company Trafigura tried to cover up African pollution disaster"
• Trafigura offers payout to 31,000 victims of toxic dumping
• Secret email trail exposes truth behind £100m legal battle
"The Guardian can reveal evidence today of a massive cover-up by the British oil trader Trafigura, in one of the worst pollution disasters in recent history.
Internal emails show that Trafigura, which yesterday suddenly announced an offer to pay compensation to 31,000 west African victims, was fully aware that its waste dumped in Ivory Coast was so toxic that it was banned in Europe.
Thousands of west Africans besieged local hospitals in 2006, and a number died, after the dumping of hundreds of tonnes of highly toxic oil waste around the country's capital, Abidjan. Official local autopsy reports on 12 alleged victims appeared to show fatal levels of the poisonous gas hydrogen sulphide, one of the waste's lethal byproducts..."
"Foreign demand for long-term U.S. financial assets fell in July from a month earlier... Overall, net foreign sales of long-term maturity US securities totaled $7.4 billion in July, following purchases of $70.7 billion the month before."
I think this trend--if it is a trend--reflects growing pessimism about the mid-term prospects for the U.S. economy...
I have recently read in the WSJ that the U.S. Government is guaranteeing the vast majority of new mortgages because banks would not otherwise lend.
I have also read that FHA mortgages are defaulting left and right.
Credit delinquencies continue to rise on both mortgages and credit cards as citizens have lost jobs and lost income.
It seems to me that the preoccupation with housing numbers reflects the misguided assumption that housing must recover in order for the economy to recover.
Reich comments that the U.S. economy should not simply be re-inflated. He argues it must be re-invented.
Housing is not the solution to the US economic woes...
Tuesday, September 15, 2009
This is from Matt Taibi at Smirking Chimp. I believe he was the person who wrote the great Goldman critique in Rolling Stone. Anyway, here is an excerpt:
"After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over. Beck pointedly compared the AIG protesters to Bolsheviks: “[The Communists] basically said ‘Eat the rich, they did this to you, get ‘em, kill ‘em!’” He then said the AIG and G20 protesters were identical: “It’s a different style, but the sentiments are exactly the same: Find ‘em, get ‘em, kill ‘em!’” Beck has an audience that’s been trained that the rich are not appropriate targets for anger, unless of course they’re Hollywood liberals, or George Soros, or in some other way linked to some acceptable class of villain, to liberals, immigrants, atheists, etc. — Ted Turner, say, married to Jane Fonda.
But actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board..."
Glenn Greenwall of Salon has a very insightful analysis of how working and middle class populist rage is skillfully manipulated. Here is an exerpt from his must-read essay:
"This is the paradox of the tea-party movement and other right-wing protests fueled by genuine citizen anger and fear. It is true that the federal government embraces redistributive policies and that middle-class income is seized in order that "someone else benefits." But so obviously, that "someone else" who is benefiting is not the poor and lower classes -- who continue to get poorer as the numbers living below the poverty line expand and the rich-poor gap grows in the U.S. to unprecedented proportions. The "someone else" that is benefiting from Washington policies are -- as usual -- the super-rich, the tiny number of huge corporations which literally own and control the Government. The premise of these citizen protests is not wrong: Washington politicians are in thrall to special interests and are, in essence, corruptly stealing the country's economic security in order to provide increasing benefits to a small and undeserving minority. But the "minority" here isn't what Fox News means by that term, but is the tiny sliver of corporate power which literally writes our laws and, in every case, ends up benefiting.
It wasn't the poor or illegal immigrants who were the beneficiaries of the Wall St. bailout; it was the investment banks which, not even a year later, are wallowing in record profits and bonuses thanks to massive taxpayer-funded welfare. ..."
In journalism studies it is common to say that the media don't tell people what to think, but rather tell them what to think about.
On the other hand, the media play a powerful role in shaping how people think about issues through their "framing" devices.
See this blog for a good example of prejudicial media framing of growing inequality.
The American Prospect has a good article on racial discrimination against Obama. I feel strongly that blatant forms of disrespect and outright violence directed against Obama have less to do with his policies and more to do with white angst about economic insecurity and latent feelings of racial superiority.
This is not to say that all who disagree with Obama's policies are racist.
Civil disagreement is part of the democratic process.
However, we are witnessing a degree of disrespect and symbolic violence that is truly unprecedented and hints at fascism.
I am not happy with many of Obama's policies so my position that he is subject to such violence is not based on blind allegiance.
Monday, September 14, 2009
Sunday, September 13, 2009
This links to an explanation of why Adam Smith was wrong about the invisible hand. I don't think one needs a mathematical explanation to see that beneficent results do not necessarily stem from the pursuit of individual self interest. Still, the article is interesting.
Saturday, September 12, 2009
"Urinary Levels Rise with Use of Drinking Bottles
Public and scientific concerns about exposure to bisphenol A (BPA) have risen in the last few years, with Canada and some U.S. states and cities banning BPA from polycarbonate baby bottles and other products sold for use by infants and children. Despite these concerns, little is known about whether the use of polycarbonate food or beverage containers actually contributes to BPA body burden in people. A new study of human exposure to BPA from drinking containers now shows that study participants’ urinary concentrations of the molecule increased by two-thirds after they used polycarbonate drinking bottles for 1 week [EHP 117:1368–1372; Carwile et al.]."
We have already switched to aluminum.
Emmanuel Saez of U.C. Berkeley has just made available his latest analysis of income inequality in the U.S. He is an authority on the subject and is widely respected by economic critics representing diverse viewpoints. Scroll down his page to "Striking it Richer...."