Saturday, September 12, 2009

Florida1926, Deja vu all over again OR volcanos should be monitored

Unregulated lending led to the real-estate collapse of 1926 that exposed the fraud of laissez-faire Republican policies. This led directly into the first Republican Great Depression and today banks are failing right and right from the very same failed policies. Corus Bank was one of the big players in the Florida condo speculation bubble and was seized Friday by the FDIC. This will cost the taxpayers a minimum 1.7 billion Dollars as the bulk of its assets remain on the FDIC books . Ninety-one banks have failed this year for the same reason and another 1800 banks are expected to follow. Last week they closed five banks at a cost of 401 million. Keep this in mind when the Republicans whine about volcano monitoring, we should have had Republican monitoring.

The Federal Reserve was the biggest coconspirator with the Bush Crime Family in the deregulation that created the recently burst real estate bubble that had been driven by cheap money from the Fed. This bubble was produced in order to create a trillion in sub prime loans in order to create 40 plus trillion in credit derivatives which drove an estimated quadrillion in international trading in these worthless instruments (this estimate from the Bank of International Settlements (BIS) the clearinghouse for central banks. Now Treasury Sec. Tim Giethner was on their board at the time). Greenspan created this bubble to maintain the fiction that all of the big US banks were not insolvent. The credit freeze of a year ago was from the BIS raising the capital requirements on these banks to make up for all the credit derivatives they were using to pad their balance sheets, effectively declaring them insolvent.

Allan Greenspan resigned in disgrace as Fed Chairman (although you wouldn’t know it from the corporate media) for his active participation in this fraud. Greenspan wrote his doctoral thesis on the 1926 crash and knew fully well what he was doing. Of course no one should be surprised since it was Greenspan who wrote an expert opinion that John McCain used to keep Federal regulators off the back of Lincoln Savings and Loan for two years costing the taxpayers and the victims of all S&Ls at least a trillion dollars (back in the eighties a trillion was still a lot of money).

Remember that Greenspan was the expert on real estate bubbles and his scholarly paper provided to Republicans was that what the S&L’s were doing was a perfectly sound business plan. Federal regulators were just being sticks in the mud since they didn’t have a Ph.D. in real-estate bubbles. They were still operating under New Deal laws and regulations. These would be repealed or ignored by later administrations.

George W. Bush (Jr.) was the only brother who didn’t have a S&L rip-off going at that time. Daddy kept them out of prison but it ruined their prospects of being President hence we got W. The expert paper from Greenspan provided a fig leaf to help in their defense, after all if such a learned expert was wrong how could the Bushes have known? The reward for the learned expert being wrong was to be appointed Chairman of the Federal Reserve where he set about creating a succession of bubbles leading to the second Republican Great Depression.

Speaking of the current Great Depression; the trade deficit is up dramatically and can only be expected to continue to skyrocket as the USD heads toward the basement and the continued exporting of jobs makes this worse. We have lost so much manufacturing that we have no choice but to import goods or the stores will be empty. And, it’s not just lead painted toys that we are dependent on China to supply. Eighty percent of pharmaceuticals come from China or India. Medical supplies, car parts, military computer chips and on and on. You can’t name something that will no longer be available or will be in crippling short supply with the collapse of the USD.

The collapse of the Dollar is inevitable unless Obama is able to reverse the trend and this requires the cooperation of countries like the People’s Republic of China (the only country to threaten to nuke us in this century). Republicans can be counted on to obstruct any and all attempts to fix the economy. If you don’t know the fable about the fox and the scorpion crossing the river, look it up.

Off Shoring Jobs

FROM JAUN in response to yesterday's post: "WTF? Where do you get the idea that it's solely 'Republicans' pushing to off shore jobs? Everyone is involved, from big industry to the little consumer, regardless of race, ethnicity, gender, or political affiliation. You must have heard that crap from the mainstream media and really believe the shit they tell you. Its true that unemployment begets more unemployment in the current US economy, precisely because it's a service based industry that values spending money rather than saving and manufacturing, so you are inevitably outsourcing all jobs by trying to support and prop up the current system. Drawing unfounded conclusions unsupported by fundamental economic principles, and ignoring the history of the US govt's economic policies can only lead superficial 'solutions'."

Praire2 response: Let's start with this; "You must have heard that crap from the mainstream media and really believe the shit they tell you." You have got to be kidding Jaun, like the Republican owned and controlled media will ever blame Republicans for anything. They pretend it's all "natural" market forces, just as when you say "Everyone is involved, from big industry to the little consumer, regardless of race, ethnicity, gender, or political affiliation." --- Policy is not set by the little guy.

Economic policy has been driven for the last 40 years by right wing think tanks funded by guess who, Republicans. There are "Democrats" from the DLC that push the same crap but they are paid by guess who, Republican corporations. There are also people who have heard this crap all their life and don't know anything else. I can remember when the average Republican had the same views on this as I do but they have all either died, drank the koolaid or have become Democrats, independents and libertarians. Remember Ross Perot? A bit crazy but absolutely right when he said, "You can't have an economy by giving each other haircuts". He left the Republican Party.

You can argue that the people pulling the strings are apolitical. They have bought about a third of Democrats but they own a 100% of Republicans.

You are close but no cigar with this Jaun: "Its true that unemployment begets more unemployment in the current US economy, precisely because it's a service based industry that values spending money rather than saving and manufacturing, so you are inevitably outsourcing all jobs by trying to support and prop up the current system." --- It is imports that masks how bad things really are but outsourcing more jobs does not prop up the system, as the trade deficit grows it only hastens the end. Savings is not as important in itself but rather an indicator of the condition of workers. Debt has become a substitute for adequate wages. Instead of paying according to productivity they convince people to create debt to use up the extra production otherwise the economy would have collapsed twenty years ago.

In short I blame the "Republicans" because they started the collapse with the "Reagan revolution" and it doesn't matter the some Democrats have bought in (Clinton did especially). The "Republicans" have been behind every bank panic and bad government policy back to the 1880's when the railroad tycoons took over the party.

Friday, September 11, 2009

The nanny has TB but but I got her cheap

More Americans than ever are below the poverty level now at 16% and climbing fast. This is producing a feedback effect as the poor have less money to spend putting a further drag on the economy causing more layoffs, pushing more into poverty, causing more layoffs, on and on, down and down. Any jobs gained or retained by the stimulus are being more than offset by the Republican push to off shore jobs and this is also driving down the economy. Cash strapped local and state governments are cutting wages and eliminating jobs which puts more downward pressure on the economy. The number of people on unemployment continues to decline as benefits run out. Large corporations are using the high unemployment numbers to force lower wages and longer hours for salaried workers.

Despite the standard Republican chant that people on unemployment won’t look for work, the number of job openings in July hit a ten year low. Where are the jobs? A third of every health care dollar that goes to doctors and hospitals is spent dealing with insurance company paper work. Collection agencies that work for hospitals are also a growth industry. Hospitals will typically charge an individual without insurance three times what the insurance company will pay and then turn the victim (I mean patient) immediately over to the collection agency. Insurance companies now pay on average less for a procedure than Medicare.

Insurance companies employ a fair number of bureaucrats to maintain their 40% cut by denying payment but most of those jobs are in India. It is no wonder that we pay anywhere from double to 4 times what other major developed countries for health care on average and yet rank right at the bottom in life expectancy, infant mortality (50th) and any other metric you look at. The Konservative Klan-ers claim this is because of all the brown people we have here. If you only count white people the numbers don’t change that much despite a considerably higher income average. Many of the countries we rank behind only have brown people.

Best health care in the world? More Americans leave to get affordable medical care than others who come here and most who come here are Canadians that are paid for by their government plan. Canada is such a spread out country with a small population that a major hospital is often closer in the US and let me repeat; the patient is not charged for it, Canada pays.

The Republicans continue to claim "Obamacare" would cover illegal immigrants (you know their maid). Nobody is going to come here just to get medical care, they all have it at home and the Republicans should be forced to provide health care for the people they bring here to work. If the nanny is carrying drug resistant TB maybe she should get treatment.

Did you catch the Klan rally the handful of Republicans left in Congress were holding during the President’s speech? Want to put the unapologetic Grand Dragon wannabe Joe Wilson back in the South Carolina swamp he crawled out of ? Go to Democratic candidate and give him ten bucks. More if you are really pissed.

Tuesday, September 8, 2009

What do you wear to a food riot?

Welcome back from Labor Day. Still have a job? Count yourself lucky, close to twenty percent of Americans don’t have one and tens of millions more have a job but need two or three to get by. The Republicans continue to ship jobs out of the country just as fast as capacity can be found and as demand for goods continues to decline, more capacity becomes available. They learned from their grandfathers’ mistakes in the last Republican Great Depression. This time they aren’t just closing the factories, they are crating them up and shipping them out so they can’t be reopened.

When the dollar finally collapses, imports will stop, the store shelves will empty overnight, the rest of the jobs will disappear and it will look like 1932 times ten. With no goods available, printing money and handing it out won’t do anything but increase the scarcity of goods. They used to call depressions panics and that will be a more accurate word. In 1930 sixty percent of Americans either lived on farms or were directly supported by them. Today it’s one percent. Do you have a garden, can you feed your neighbors too? If you think you don’t need to worry about this in the land of plenty, remember that agriculture is now firmly in the strangle hold of the same corporations that are shipping out your jobs and have cut off health care as soon as anybody needs life saving treatment.

They have proven that they will kill you for a dollar so you better believe that they will let you starve. What do you wear to a food riot? (baggy clothes) Why? (because that’s all you have anymore)

Gold passed a 1000 dollars an ounce today despite weak demand. The price is being driven by the decline of the USD reaching an 11 month low. Let’s see, what was happening eleven months ago? Bush was threatening martial law if Congress didn’t give him a 600 billion dollar blank check. The resulting international panic drove the USD up dramatically and stopped its collapse. This time around the we are not likely to be so lucky.

In 1973 Nixon took us off the international gold standard negotiated by FDR. This was only one of many things that he did to wreck the economy in the long term. Bad farm policy, bad trade policy, bad energy policy, borrowing huge amounts of money to pay for the Vietnam war, on and on. He was continuing the bad policies of the LBJ Adm. but on steroids. This precipitated the economic turbulence of the 70’s that led to Reagan and his voodoo economics.

Nixon was pardoned on this date by Ford.