Wednesday, July 22, 2009

"and that’s the way it is"

Did you win the lottery today? Get a multi-million dollar sports contract? Get rich selling Scamway or buying real-estate with no money down? Has your 401k made you part of the ownership society? Living the lifestyles of the Rich and Famous? It is no coincidence that ALL of these things were created early in the Reagan crime spree, they didn’t exist before. These false hopes were created to replace the American Dream with the American Fantasy.

It’s no coincidence that Uncle Walter was forced to retire in 1981. Originally CBS said he would be producing news specials of his choosing but within weeks they created a scandal and fired him for taking advisory board positions at major corporations. They claimed he violated the separation between the "news" and corporate America, they made it sound like he had broken the law.

Looking back at what was going on with Reagan and how the "news" would cease to be anything but right-wing corporate propaganda, it is no surprise they needed to disgrace and silence him forever. Can you imagine if the newsman who ended the careers of LBJ and Nixon had run a special about Iran-Contra?

We could be living in a different world today. Dick Cheney and company would just be getting out of prison. Millions need not have died. We would be the leading economy in the world today instead of third or fourth and fading fast. But news became propaganda, "and that’s the way it is".

Tuesday, July 21, 2009

Bread and Circuses Until the Credit Runs Out

Fed Chairman Bernanke appeared before Congress today and again pushed back the predicted date of any "positive job growth". Banker speak for "we will continue to hemorrhage jobs and spiral down toward the abyss". Not unreasonable with nothing being done about the causes of job loss. So as more jobs leave the country we are left with fewer and fewer people that live a middle class lifestyle and provide business for all the people pushed into service jobs because their jobs have left the country.

More twenty something's are living with their parents and thirty something’s are returning to do the same when their homes are gone. But as the parents lose their homes in health insurance bankruptcies the places of refuge are disappearing and soon you will see multiple generations homeless.

State job counselors are telling men who make up 80% of the newly jobless to forget about ever getting a job like they had and to go after a women’s job. The catch phrase is "this is not a economic downturn but a fundamental restructuring". The obvious question is what do the women do who find themselves competing with men for fewer and fewer jobs as their jobless rate starts to climb. If they have kids maybe and I stress "maybe" they can get welfare for a time, but thanks to Clinton welfare has strict lifetime limits and a benefit rate that guarantees slow starvation.

Where do the homeless go when all options run out? In the Sci-fi movies the food wafer plant are used as a metaphor for the deathtrap slum, the fascist work camp, unchecked disease outbreaks and on and on. Or we could see a new dark ages where control is maintained through fanatic religion where the Sabbath is observed with executions of the so-called sinner and crusades are launched to further world domination. With a willfully ignorant population fixated on the circus and unaware how close they are to running out of bread, democracy is becoming a wistful dream.

An update on the banking collapse: four more banks were seized by the FDIC over the weekend and the 18th largest bank, CIT, who specializes in financing small and medium businesses, is again likely to file bankruptcy. They had announced a deal with bond holders yesterday but as of today the deal appears to have fallen through. A few billion would reportedly turn things around for CIT and the thousands of businesses that will fail with them.

The Inspector General for the TARP program now estimates the risk the Government has assumed to bail out the really large banks like Goldman Sachs to be 23.7 Trillion. How exactly do the Republicans plan on paying for the bread and circuses?

Monday, July 20, 2009

CIT, the 18th largest bank in the US, announced today that it has obtained emergency financing from its bond holders that will keep them in business for the short term. The Obama Adm. refused to intervene with additional TARP money despite CIT’s domination of loan market for small and medium businesses. The real economy seems to be of no concern to the former Goldman Sach’s executives in the Treasury Dept. that keep the paper economy churning. Even with CIT taking a small step back from the brink, the thousands of companies that depend on them for operating loans are still in a perilous position, most of which would find it difficult or impossible to find financing should CIT fail.

Today’s news was dominated by reports of the private/non-government Conference Board of Leading Economic Indicators that does on average show the economy is not collapsing at the previous rate. These indicators are heavily dependent on polls of business leaders. Meanwhile the Obama Adm. is delaying the release of a key economic report that is mandated by Congress. The Office of Management and Budget will delay by several weeks the annual report, which takes the measure of economic growth, job creation and budget deficits. Intended to update assumptions that were used to create the administration's budget for next year, the updated report is expected to be filled with dire economic news.

Out in the real world, things are only getting worse. In Goldman Sach’s world, they are planning record bonuses. The bubble is well on its way to recovery, the rest of us should make other plans.