Thursday, December 29, 2011

Pizza in 30 minutes at 5.5% yield

Okay pizza is really American, but if Italy was a pizza shop, the good news is they were able to refinance their debt at lower rates than they've been paying. The bad news is they weren't able to sell all of their pizzas (bonds). The ten year rate was still almost 7% while 3 year notes are down to 5.5%. These rates are still way too high.

The really bad news is the dough supplier (European banks) were given a big pile of dough by the European Central Bank to buy sovereign debt with, and they aren't really stepping up to the plate. The ECB could have simply bought the debt directly at a negligible rate (they simply printed the money anyway). But the ECB, like the Fed, is run by bankers, for bankers, forever and ever, amen. They get all the pizza, the rest of us can eat cake.

From the right wingers don't get it file: Foreign manufacturers are threatening to leave Alabama after a German car company executive was jailed by local police for not having his papers on him. He made the mistake of thinking the Stasi were gone with East Germany. Even the Red Chinese are thinking of leaving. Alabama legislators responsible for these unconstitutional laws aren't backing down. The stupid never admit they're wrong.

Wednesday, December 28, 2011

The price of the free market continues to surge

The stock market took a big dip today on reports that the European banks are hoarding the cash they were recently provided by the European Central Bank to keep them solvent. A failure to loan money will reinforce the austerity death spiral that Europe is already undertaking. If these reports are accurate then Wall Street took it rather calmly, it should be raining stock brokers. Oh wait, they only lose your money.

Threats from Iran to block the Strait of Hormuz cutting off 20% of the world’s oil supply came in response to new sanctions against anyone who trades with Iran. The oil market hasn’t reacted to the threat yet but the US corporate media is talking it up on one hand and dismissing it on the other, but they’re talking $5 gasoline by summer just the same. Under the new sanctions, it could in theory become difficult for any country to buy oil from Iran.

It was a year of records for gasoline in the US: record low demand; record high consumer expenditures for gas; and record high exports of gasoline and diesel out of the United States. That’s the so-called “free market” for you, it’s only free for billionaires who are free to take as much as they can gouge out of you.

For those of you too young to remember before the unchecked spree of the Bush Crime Family: gasoline was under a dollar; the ten year embargo on Iraq oil exports was about to end, potentially flooding an already glutted world market with really cheap oil; and Al Gore was elected President.

Under Bush we saw oil go from $18/barrel to $140/barrel. It did fall to half that when the Wall Street banks were temporarily forced from the market, but has since reclaimed the $100/barrel level, and could surge again with the Iran war. The Dodd-Frank Act specifically bans banks from this sort of trading but the Republicans dominate the Federal commissions that are effectively gutting the law. Obama is being blocked from making appointments by the Senate, and from making recess appointments by the House whose permission is required by the Senate to adjourn.

When will the 99% stop giving everything to the one percent on the “free” market, and then letting the one percent charge us for it?

Tuesday, December 27, 2011

Are there no workhouses?

As solid as Sears? Well not so much. Sears announced today that it close one hundred Sears and Kmart stores after a dismal Christmas season. They still have 3500 stores and 3 billion available on their credit line so the dancing isn’t over just yet. Their real problem is that the middle class doesn’t have any money to spend. Even as the economy seems to be perking up the middle class continues to decline.

Sears used to be where the middle class went to pretend they were shopping at a big classy department store, they could feel like the carriage trade who shopped at the real high end stores. Now Sears looks kind of run down and can’t compete on price with the Big Box companies that dominate the China trade. Meanwhile the former middle class are shopping at dollar stores and those chains can’t expand fast enough.

The top 10% now account for nearly 40% of retail sales and the stores that cater to them are doing fantastic business. Increasingly the people doing the marketing don’t even consider anyone below the 80% line. Walmart does cater to the middle class, but their business plan doesn’t involve marketing so much as simply driving out the local competition. Even Walmart isn’t immune to declining sales however. As they spruce up their stores to attract former middle-class people who are on their way down to working poor status, Walmart‘s traditional base are going to the dollar stores to spend what little money they have.

What this economy needs is a 50% increase in the minimum wage, but the Republicans in Congress would burn the Capitol before allowing such a thing to happen. Before the colonists rebelled against the British East India Company (that’s how they spelled “Walmart” in olde English) the British had maximum wage laws, yes maximum wage laws.

Republicans aren’t shy about advocating for a zero minimum wage, they don’t need a maximum as they’ve learned how to keep wages from rising. By not enforcing the anti-trust laws for the last 30 years the Republicans have concentrated so much economic power that they already exceed the corporate brutality that the patriots shed their blood in order to drive it from America.

A lot of people will say that I’m over stating this corporate power and the danger is presents. Once the last social safety nets are done away with, making the poor really desperate, and the last regulations holding corporations back are voided you will see things that you only read about in Dickens or the dystopian writers of the 40’s. Once power is concentrated, those who did the concentrating never give it up willingly, and in fact are compelled to become ever more brutal to maintain the status quo. We have to “concentrate” the power with the 99% while we still can.

Sunday, December 25, 2011

On the way to Oz, Iowa is not Kansas anymore

On Fox News Sunday, they trotted out Mike Huckabee as an expert on the Iowa Caucus, since he won four years ago, on the Republican side that is. Somebody else came from nowhere and won the big prize. Huckabee proceeded to detail the pitfalls of the caucus system where voters show up at a precinct location and proclaim their choice in front of their neighbors without the anonymity of the secret ballot, then must pick a second choice if their guy doesn't get enough votes to claim at least one delegate. A small problem with this razor sharp analysis is that he is completely wrong. The Republicans use a secret ballot and don't meet in precinct groups to caucus. Unlike the Democrats, Republicans vote at a central voting location on pre-printed ballots.

Further more, the Iowa Republicans' votes don't really count for anything. The actual delegates for the Republican national convention are elected at the Iowa state convention. The upcoming vote is just for show as it doesn't pick delegates at any level. This will become a factor if the candidate isn't selected until the convention. I suspect this isn't that unusual with the Republican primaries. Democracy is something only those socialist Democrats do.  

The following is a critique of Ron Paul and his Libertarian mindset. "I've got mine, you can eat sand"

Thursday, December 22, 2011

Rinse and Repeat

All and all, it was a pretty good day. Obama and Harry Reid showed a little spine and the Tea Baggers blinked, or at least Speaker Boner did. The Tea Bag caucus could refuse to sign off on unanimous consent, and then the House would need to come back for a vote. This would likely require Democrats to support the Speaker for the Senate bill to pass the House.

Unemployment claims fell again this week and are getting low enough to start seeing serious jobs gains. There were over 2400 Federal workers applying for initial unemployment benefits, about the same as the week before. Considering the right insists Obama is growing government at a fantastic rate, how do they explain the continuous layoffs? Oh, that’s right, we live in different universes. In their universe, facts are just opinion and don‘t matter.

Housing starts were up sharply in November, part of this was from the relocation of workers. They can’t build houses fast enough in Minot North Dakota, but ND’s total population is smaller than any of the top 200 cities. Home values continue to sag and economists that pontificate on the housing market optimistically predict prices will bottom out in a year or so. They do admit now that the fall in market prices has been 14% worse than previously reported.

Also the new housing starts are almost all apartment units. The population continues to grow and fully half of college grads do have jobs in their field. For them ever owning a house is a dim prospect however, so affordable apartments are in demand. For the other half of young college grads who don’t have jobs or are working at Best Buy, the prospects of even affording an apartment are dimming.

A growing trend in college towns is for the banks who own Mc-Mansions to rent to students at bargain prices. Some money is better than none and it keeps the scavengers away. In many rust belt cities the banks are foreclosing on homeowners, but they never going to Sheriffs Sale as this would force the bank to take possession. Instead they simply abandon the property, and since the foreclosures are posted on line, the scavengers are there waiting at the curb.

The bank could have kept the people in the houses and got something, but Bush era laws allow the banks to make more money by foreclosing. Then they simply leave the house to be demolished by the city after it’s stripped. This activity drives down the value of the surrounding property encouraging people to walk away from their underwater mortgage. Rinse and repeat.

Wednesday, December 21, 2011

The talking points were ready in advance

It’s inappropriate to characterize the unconscionable behavior of Republicans as simply racism toward the President or even as low ball politics. They don’t really care if Obama is black, white or green, and of course they like being in power, but the billionaires who pay the lobbyists spend even more money on them when they are on the out. Their goals are more basic and well reasoned, Republicans do nothing that isn’t planned out for them.

Yesterday it appeared that House Republicans had really stepped in it by rejecting the bill signed off on by nearly all of the Senate Republicans. But the talking points were all ready, and everyone had them memorized including all the corporate news writers. All of a sudden it was the Senate Democrats who were abusing not only the jobless by making them live month to month, but the Democrats are abusing the job creators as well with all this “uncertainty“. It seems the job creators need to know just exactly how desperate the potential serfs are going to be in the coming year.

It’s incredible that a six figure salary will so easily get people to commit treason. What Republicans are about might not technically be called treason (unless you count transnational corporations as a foreign power), but it is certainly insurrection, or to use a phrase from the Red Scare era, “conspiracy to overthrow the government of the United States“. Republicans would say they are the government and represent the people. Capturing the government by fraud doesn’t make you the legitimate government of the people. They do the opposite of what they are saying at every turn to the benefit of a handful of billionaires. These people are bent on making the 99% into serfs and ending democracy forever, and they call themselves patriots. Real patriots spilled their blood to rid us of these same people.

The Tea Party, Ron Paul and the libertarians appeal to the people who grew up in the thirty years since Ron Reagan and his cult ended education in history, civics and critical thinking in general. These young people know something is wrong but they don’t really know what. They’ve been “educated” with an entirely made up version of history, and taught a kind of economics that doesn’t really work.

They think that America was built by rugged individuals, when the reality is that nothing was ever done that way. They believe the myths of Daniel Boone and Davy Crockett while the real men with those names depended on the cooperation of all the people around them. Nobody has ever made it on their own, but libertarians are sure if all the rules were done away with, then they can reach their full potential. People will flock to them, shower them with money (gold only please) and finally accept the wisdom they have been delivering from the stool at the end of the bar.

They just don’t grasp that their real enemy has been robbing them of their potential, their wealth and their heritage as an American. Their real enemy is capitalism, they don’t get that capitalism is not the opposite of socialism. Capitalism is just form of totalitarianism based on economic fraud. If a foreign enemy landed in their town, burned every business district for 40 miles in every direction and forced them to work at starvation wages they would be calling for revolution. Walmart does this with every store they open, but the libertarians like the “low” prices and will shop there faithfully, even if it costs him everything.

Tuesday, December 20, 2011

Everything ancient is new again

Only three states showed increased unemployment in November with 44 showing improvement. Basically the Red State Republicans are running out of teachers, cops and firefighters to lay off. These states have been falling behind the blue states that maintained government jobs, but now even most red states are showing job growth. Partly this is pent up demand, but also stimulus from extended unemployment, and the continued government spending on stimulus projects has had an effect that Republicans have not been able to inhibit completely.

These numbers aren’t all that great, but they are positive and seem to be working to President Obama’s advantage with his approval rating moving up sharply, again approaching 50%. We are really living 1995 over again. Clinton’s numbers were terrible and the Republicans were beating him up in Congress. Then Speaker Newt Gingrich shut the government down over the holidays rather than accept a balanced budget. Clinton was perceived as the adult in the room and easily won re-election. Unfortunately this didn’t extend to Democrats in Congress and Republicans continued to destroy America until 2007.

Newt is back, and again angling to be President (he thought he could impeach his way into the job in the 90s, now he thinks he can do it on arrogance alone). House Republicans are again making the President look good by their repeated attempts to shut down the government if not the nation itself.

Republicans do understand Keynesian economics even if they deny it like global warming, evolution and the Round Earth Theory. They of course use Reverse Keynesian economics, where they slash spending, cut wages and eliminate government jobs to reach their goal of Neo-Feudalism.

Let’s be clear, this little bright spot in jobs numbers could be shut off quicker than an efficient light bulb at tea bag convention. If Republicans are successful in killing Federal unemployment benefits extensions then some 2.2 million people will immediately fall into poverty with another 4 million in the rest of 2012. Ad to this the impact of a 2% tax increase on all working people from Republicans ending the Fica tax holiday and you are looking at a fast slide toward the bottom.

There will be millions more people collecting unemployment benefits who now have jobs so the cost savings are of course just right wing fantasy. You don’t get out of economic trouble by cutting costs, it has never worked anywhere, ever. The grandiose building projects of ancient civilizations weren’t just to stroke the ego of a foolish king. It was the kings who did these things to put their people to work that survived. The ancient equivalent of tea bag governments did not.

The Romans did a lot of this but concentrated on heavily stimulus projects for the public good. They did have their decadent one percent however, and by the time the Roman Empire started to decline they had captured 18% of all wealth. Our decadent one percent have captured 40% of our wealth and have their sights set on 100%.

We have made strides compared to the Romans, we can watch the circus from the comfort of our home (those who have one) and we don’t need to go to the forum, except to shop for bread and trinkets from the east. Christians are no longer fed to the lions, they do the feeding. Nascar provides the thrills and spills of chariot racing. This just in: the Senate wants to invade Persia now that our Legions have left Mesopotamia. There is nothing new under the sun.

Saturday, December 17, 2011

Tar baby

Senate Democrats caved to Republican demands and allowed the Tar Sands pipeline to remain in the budget bill. Obama had vowed to veto this, but has relented because the compromise doesn't force the construction to go ahead. The bill only requires Obama to decide the issue in 60 days instead of waiting until 2013. Republicans think they can't lose, Obama is damaged if he does or he doesn't. His safest move is to approve it, unless the liberal base makes enough of the right kind of noise about it, so that Obama benefits from killing it.

Update: Obama is now suggesting that putting a sixty day time limit on his deliberative process may force him to reject the pipeline.

Some pipeline facts: There are lots of pipelines although this is a large one, in itself the pipeline is not the problem. The company that is buying the oil has its refineries in a tax free "trade zone", the US will get no revenue, just the pollution. They are only going to make diesel fuel as the sour crude isn't good for anything else, this means very few refinery jobs and there is no need for the diesel in the US anyway. There is the small matter of burning four times as much Natural Gas equivalent to the oil being extracted to separate the oil from the sand. Why do this? There is no demand for more natural gas and it's available on site for practically free. It's like killing buffalo for the tongues.

Thursday, December 15, 2011

We are worth 58% and are being marked down for clearance

Initial unemployment claims were down again for last week by 19,000 and the raw numbers unadjusted for seasonal factors dropped 95,000. Now that claims are “only” 366,000/week we should see the hiring trend pick up. This improvement wasn’t simply because of seasonal hiring, remember it’s adjusted for the season and major retailers did not do a lot of temp hiring this year. Retail sales aren’t really up much and it appears the Black Friday hype has also generated a huge number returns especially in big ticket items. Buyers are realizing they really can’t afford to spend the money, and this is going to impact final sales figures.

Some new numbers have come out from the conservative Financial Times pointing to why the US isn’t recovering. During normal times since WWII the worker share of business income has been 63% with 37% going to investors and management. This has been eroding since Reagan of course, but has dropped sharply in the last ten years.

During past recessions the workers’ share of income has always risen as profits were curtailed and would decline after recovery. During the current Depression however the exact opposite happened with worker share falling sharply in 2008. When the companies recovered back to normal operations the workers’ share continued to fall and is now down to 58%.

The difference between the historical norm and today is $740 billion or about $5000/worker per year. This is five percent of GDP and doesn’t take into account any multiplier effect from workers spending this money.

The new numbers on CEO pay at the top companies show a 37% jump for last year, and across a broader survey of 3000 companies the number was up “only” 27% on average. This is where the trillions are going and really I don’t think the numbers from the FT are adequate to describe what the 0.1% are really doing. They have become very skilled at hiding profits overseas that don’t  show up in these statistics.

The long term damage to the country isn’t counted either. Crumbling infrastructure and the exporting of our manufacturing base are the things you can easily see. We are losing our skilled labor as they grow old and aren’t replaced, and all across the spectrum the educated people needed to have a first world country we are losing skills. All manner of engineers, medical researchers, architects and anything else you care to name is being outsourced, or the jobs simply disappear as demand shrinks.

More importantly our young people aren’t being trained or educated but are left to languish. American universities are granting half of their advanced degrees to foreign students to keep their own cash flow up. Republicans constantly harp that we should give all these graduates green cards so they would stay here and build America. This is just another hollow talking point, there are no jobs for them here, American professionals with decades of experience are going overseas to find work if they can.

The so-called skills shortfall talked about in media is simply a fabricated excuse to bring in more foreign educated workers who can afford to work for less as they don‘t have student loans. This in turn forces American graduates with student loans to take much less than adequate pay. That is if they can find work, half of recent grads are unemployed or working a jobs that don’t require any college.

New Census numbers show that nearly half of Americans now live below 200% of the official poverty rate. Republicans point to Census data that shows that a high percentage of these people own cars, have TVs and many own homes. No matter that they acquired these things when they made twice as much money as they do now and can never replace them as they have little chance of ever earning that much again. Their cars are essential as mass transit is cut back further to “save money”, and their house is under water. College for the kids is out of reach, and the near poor in this group don’t qualify for food stamps or Medicaid even if Republicans aren‘t successful in further cutting the safety net programs.

For the working poor, that $5000 per worker ($10,000 for a couple, maybe more for multi-generation households), that money being hoarded by corporate American and the greedy bastards that control everything would go a long ways. This is even without the economic boost putting the money into circulation would give. This would drive wages up still more as America became productive again, but that’s not the plan.

Wednesday, December 14, 2011

Follow the money

The Federal Reserve came out again this week saying they are committed to keeping interest rates near zero until at least 2013. It doesn’t seem like much of a commitment if they need to reassure us after every Fed meeting that they haven’t changed their minds. The problem is that the Republicans and their own flat earth economists keep screaming about run away inflation being just around corner (be afraid, be very afraid and buy our gold). They don’t get it, or choose not to get that since we are de-leveraging a couple of trillion dollars of debt each year, and will for years to come, inflation just can‘t happen.

Speaking of the gold you bought on the advice of Glenn Beck or Ron Paul, it’s down about $150/oz since Friday. Gold funds are dumping their holdings to raise cash in order to cover margin calls. Most other non-food commodities fell more than 5% today as well, the stock markets were down for the third straight day.

European banks with branches in the US are experiencing a good old fashioned bank run as the Euro problem is not being solved. Bank of America has been hemorrhaging depositors as well. Some 99% protesters have been transferring their accounts to credit unions, but any large depositor would be nuts to stay with BoA with its $75 trillion of exposure to derivatives.

“Only” $47 trillion of BoA’s derivatives have been transferred to its banking division from Merrill Lynch, but this is putting the FDIC on the hook to cover the insured portion of depositors accounts. A big depositor would take a loss on the balance of his account not covered by the FDIC. Every time BoA gets a credit downgrade it has to post more collateral on those $75 trillion in derivatives. Their banking division has a higher credit rating than Merrill so this has held creditors at bay, but another downgrade will likely do in the bank. That is unless the Fed intervenes, they can and have simply printed money to bail out the big zombie banks in the past.

Remember the Bankruptcy “Reform” Act that Republicans passed a few years back? Besides screwing consumers, it moved derivative contract holders to the very top of the list to be paid from any bankruptcy filing, customer deposit accounts are far down the list. This explains why a bank with a sixth of all US deposits would be able to cover the margin call on $47 trillion in derivative contracts, at least for now. This may well be where the $1.2 billion “missing” from Jon Corzine’s MF Global went, but they’re “still looking”. A Republican member of the Commodity Futures Trading Commission said today that its auditors have know where the money went, but they aren’t saying just yet.

The Census Bureau has come out with some numbers: homelessness among children continues to increase, up nearly 40% from three years ago; the Census also reports November retail sales were up 6.7% from last year. This is the sixth straight month of increased retail activity, but the increase from October was only 0.2%. Black Friday, as I predicted, turned out to be largely hype. We are seeing some pent up demand released as consumers are spending on things they have been putting off, and the rest is price inflation from fuel cost increases as well as food commodity speculation. Realistically, the trend in actual goods being sold is probably flat at best.

China is about to put a 21% tariff on the importation of cars from America. No matter that a large share of the parts came from China, or maybe the tariff would be higher except for the credit we receive for “domestic content”. Keep in mind that we are already at a 40% price disadvantage from the undervaluing of the Renminbi enforced by China. Remember how “free trade” was going to open up a huge market in China?

The USD dipped to under a $1.30 per euro today as the specter of austerity creeps across Europe’s economy. Hard right political parties are gaining new traction in some countries even to the point of creating paramilitary wings reminiscent of early in the last century. Of course their uniforms are probably made in China just like American flags.

Sunday, December 11, 2011

Frat boy

Mitt Romney showed Rick Perry whose class is in charge. When Perry threw out a "fact" from Romney's book that was somewhat mangled (Perry likely doesn't read his 3\5 cards, let alone books), Romney responded like a frat boy putting down the rube. Mitt offering to bet $10,000 to shut up the hick wasn't just a rhetorical flourish as corporate media is willing to call it, but a Freudian slip. That's the amount of money it take's to get Mitt's attention. In a recent campaign stop a small boy wanted to trade dollar bills with Mitt in order to get a personal souvenir, but Mitt didn't have anything smaller than a hundred. That's tip money for Mitt, he probably can't remember what a dollar bill looks like.

A guy like Mitt has servants to do the shopping and never sees the check when he goes out. Contrast this to the real America where the median worker's pay is barely 25,000 per YEAR. Two thirds of Americans don't have a $1000 cash to cover an emergency. Mitt's footman probably puts more than that in his $3000 suit when he lays it out.

It looks increasingly likely we won't have Mitt as a candidate, but instead a corrupt politician that had to disclose having a $500,000 tab at Tiffany's.  Newt left the House in disgrace after paying $300,000 fine to avoid criminal charges. He was able to bounce back though, taking $2 million from Freddie Mac and something on the order $8 million from health insurance companies as an historian. Nancy Pelosi is rumored to have all the dirt on Newt that we haven't heard yet. Maybe Ron Paul will be the last man standing.

Friday, December 9, 2011

The rich like socialism so much that they don't want to share

The EU is moving toward a Federal system with today’s vote in favor the Fiscal Discipline Treaty by all 17 Euro zone countries, and the likely acceptance by the rest of the EU nations except the UK. The British PM said the treaty wasn’t in the best interest of the London banks. It’s pretty obvious who David Cameron works for. This begs the question of whether this means the EU intends to rein in its banks, or are the banks reining in the EU? With Greece and Italy already being run by un-elected bankers instead of elected prime ministers, I guess we know.

More cynical observers are saying that German Chancellor Angela Merkel has accomplished with bankers what Chancellor Hitler could not do with Panzer tanks. Since the European Central Bank thinks this new stranglehold on the weaker EU countries is a grand idea, it would appear the cynical view would be the correct one. Now that the peripheral European countries are under the thumb of the German banks, and are being forced to accept grinding austerity, you can look for low wage manufacturing jobs to move to these countries from China.

Here at home the number of Initial Unemployment claims dropped sharply by 23,000 last week to 381,000. This is well below the magic 400,000 number indicating jobs are being created. BUT, this was a so-called “seasonally adjusted” number. The real number jumped by 150,000 to 525,000. Still this is 60,000 less than a comparable week this time last year. Since we are living in those proverbial “interesting times” it’s hard to know what to make of these numbers.

For the good news: Obamacare had one of its most important features kick in a week ago today. From now on insurance companies must spend 80% to 85% of premiums on healthcare instead of the common 60% with the rest going to profits, multi-million dollar salaries and corporate bureaucrats to kill you with neglect. The 85% rate applies to large group plans the 80% rate to individuals and small groups. They can no longer refuse adults for pre-existing conditions but individuals not in a group can be charged more until the “mandate” kicks in.

The Republicans have been screeching about the mandate as if it were a tax increase or your that rights are being taken away. It’s neither. You will simply get a tax deduction if you have insurance the same way you get a tax deduction for having a home mortgage. What the Republicans are actually upset about is something else entirely. Remember the whole idea of mandating insurance was originally a Republican idea (a gravy train for the insurance industry).

What they are really upset about (besides limiting profits) is how the Obama plan is to be paid for; by a 3.75% tax on income in excess of $250,000. That income level puts you in the top 2% of earners. But what really frosts them is there are no exceptions for how the money is “earned”. Wall Street pirates can’t get out of paying it, those billionaires that Obama spoke of who are only paying one percent will have their taxes quintupled. (oh the humanity!)

Now for the best part of all this: under the requirement to spend 80-85% on patient care, there is no longer any incentive to withhold treatment. Any leftover money must rebated to policy holders, so the more healthcare the companies provide the more dollars they get to keep. No more having a clerk in India poring over your records to find an excuse to dump you. Need an expensive procedure? The more the merrier.

There is of course the problem of bill padding and the practice of unnecessary medical procedures that this would create an incentive for. This is the reason for government regulations on the quality of care and determining the effectiveness of medical procedures, what the Republicans call death panels. They never mention that rich Republicans all go to the few hospitals like the Mayo Clinic that don’t do “fee for service” care.  These hospitals pay all of their Doctors the same salary with bonuses for successful outcomes.

It seems the rich don’t like having unnecessary, painful and ultimately life shortening procedures done to them. They’re just fine with that being done to you and making you pay through the nose for it. We peasants live and die under the capitalist system while they go to the “socialist” hospitals. Now we get some of that socialism, and the rich through their Republican shills will do anything possible to take it away.

Tuesday, December 6, 2011

Then it can happen, then it will happen

President Obama journeyed to Osawatomie, Kansas on Air Force One to essentially repeat a speech made by another President who traveled there by steam train. Actually, by 1910 Teddy Roosevelt had been voted out of office for being socialist. While many things have changed since then, the first powered flight happened during Roosevelt’s term and it covered less ground than the foot print of Presidential plane, we find ourselves in many ways worse off than the gilded age TRR railed against in his speech.

Roosevelt demanded the end of child labor, higher wages for men and even a minimum wage for women. He wanted laws to protect workers from injury and sickness. After a century we are on the verge of this all being reversed by a President Newt who now leads Romney 2 to 1 in Iowa. TRR wanted a living wage for every man, something the majority of Americans no longer have and soon this will be a luxury exclusively for the one percent.

You could say Obama is simply trying to define himself as a Progressive to win the votes of the middle class, and he mentioned them 25 times in his speech today. Contrast this with the advice of right wing propagandist Frank Luntz to Republicans to never mention the “middle class, call them hard working Americans instead“; never say “capitalism”; never talk about “taxing the rich”; Wall Street’s hundreds of billions in bonuses are now “pay for performance”. Calling it pirate booty would be more accurate.

If you want to make the argument that Obama is just another shill for Wall Street then why would he say such dangerous things out loud from the “bully pulpit” that TRR had a penchant for breaking up monopolies. No US President has spoken openly of such a thing in decades. It’s true that Obama didn’t actually call for this, but he did lay out the part of the Dodd - Frank Act that will break up any large bank or corporation that threatens the financial stability of the nation instead of bailing them out.

Obama talked about billionaires who only pay one percent income tax and this is something you never hear on the corporate news. About CEOs that make 110 times the pay of workers. Remember Frank Luntz calls this “pay for performance”, that wasn’t the tone of Obama’s speech but from the President tone matters.

To be sure, a speech is just words but when the POTUS says things like this it shapes the public discourse and can inspire voters to look for candidates that might make this happen. Republicans brought us the Cold War this way, and hot wars around the world as well. They brought us trickle down economics, free trade and the endless war on terror this way.

This President is talking the talk of the 99%. If he’s doing it only to get re-elected, so what? It only matters that the 99%, the real 99%, not just a handful of protesters at the Occupy sites start talking this way. Then it can happen, then it will happen.  [full text of the speech at]

THE PRESIDENT: Well, I want to start by thanking a few folks who’ve joined us today. We’ve got the mayor of Osawatomie, Phil Dudley is here. (Applause.) We have your superintendent Gary French in the house. (Applause.) And we have the principal of Osawatomie High, Doug Chisam. (Applause.) And I have brought your former governor, who is doing now an outstanding job as Secretary of Health and Human Services -- Kathleen Sebelius is in the house. (Applause.) We love Kathleen.

Well, it is great to be back in the state of Tex -- (laughter) -- state of Kansas. I was giving Bill Self a hard time, he was here a while back. As many of you know, I have roots here. (Applause.) I’m sure you’re all familiar with the Obamas of Osawatomie. (Laughter.) Actually, I like to say that I got my name from my father, but I got my accent -- and my values -- from my mother. (Applause.) She was born in Wichita. (Applause.) Her mother grew up in Augusta. Her father was from El Dorado. So my Kansas roots run deep.

My grandparents served during World War II. He was a soldier in Patton’s Army; she was a worker on a bomber assembly line. And together, they shared the optimism of a nation that triumphed over the Great Depression and over fascism. They believed in an America where hard work paid off, and responsibility was rewarded, and anyone could make it if they tried -- no matter who you were, no matter where you came from, no matter how you started out. (Applause.)

And these values gave rise to the largest middle class and the strongest economy that the world has ever known. It was here in America that the most productive workers, the most innovative companies turned out the best products on Earth. And you know what? Every American shared in that pride and in that success -- from those in the executive suites to those in middle management to those on the factory floor. (Applause.) So you could have some confidence that if you gave it your all, you’d take enough home to raise your family and send your kids to school and have your health care covered, put a little away for retirement.

Sunday, December 4, 2011

Ever wonder how the Republicans destroyed the economy? Some numbers

It seems a mystery as to why the economy is so sluggish (other than the Republicans like it that way) but there are actual numbers available now to show how they are doing it. First the history: we were really destined to drop into a really serious depression after Reagan's massive tax cuts and the huge downward pressure on wages that he created. The stock market crash and the collapse of commercial real estate after the S&L looting nearly did us in, but Reagan held it all at bay by spending trillions of borrowed dollars. Money borrowed from the very same rich people who were no longer paying taxes, it’s what conservatives like to call “wealth transfer” except when it’s going from the poor and middle class to the already wealthy, then it’s called “fiscal conservatism“.

The reason we didn't have the Republican Great Depression in the 90s was that Allan Greenspan set about creating a series of bubbles: dot com and such crap as that, Clinton raising taxes helped but that wasn’t really enough. Then Greenspan and GW Bush created the housing bubble, Greenspan made the cash available and Bush killed all regulations on lending.

This scheme also took advantage of  so-called investment “deregulation and modernization” done by the Republicans under Bill Clinton’s signature. This allowed them to securitize the debt that was created so that they could bilk investors on the debt itself, and sell derivatives that allowed the banks to bet against their own securities. This wasn't the only thing they were doing but is relevant to this point.

We really need about $18 trillion/year in GDP just to maintain our middle class based economy. Under Bush this was achieved with 14 trillion in actual GDP plus another 4 trillion a year in new consumer debt for an effective $18 trillion GDP. Currently this debt is being de-leveraged (either paid down or defaulted on) at about 2 trillion a year. So instead of an $18 trillion economy we now have a 14 trillion minus 2 trillion or a $12 trillion economy. This is what has created 14 million permanently unemployed people.

This economic strategy works just fine for everybody, except the 99.9% who are screwed. To get the debt down a point where the economy stabilizes at this rate will take about 10 years. This doesn’t take into account anything else the Republicans might do. The austerity they have been pushing at the state and local levels is just making it all worse of course. If they are able to do that at the Federal level things will go down hill fast.

Speaking of things going downhill, the number of students receiving subsidized lunches rose to 21 million last school year from 18 million in 2006-7, a 17 percent increase in the USDA meals program. Eleven states, including Florida, Nevada, New Jersey and Tennessee, had four-year increases of 25 percent or more. Over the previous 30 years as we saw the gradual decline of the middle class, the program had only incremental growth from year to year. These new numbers are only for the last school year ending in June, and don’t reflect the worsening situation this fall.

So even as some Americans go back to work their wages are being cut drastically, and this also cuts into the GDP as 70% of the economy is consumer spending. Traditionally when consumer spending lags, the government steps in to make up the difference. Even in ancient times if there were an excess of beggars outside the castle the king would launch some sort of building project to put coin of the realm into circulation, or just start a war if he was a conservative king.

We are currently in the midst of a war with a slight twist, I mean besides the ones overseas. The rich are making war on the rest of us to loot and pillage the wealth of 99.9%. We were supposed to be distracted by the endless war on Terror but people are starting to notice. The Republicans think it might work for them to start a war with Iran to keep us busy, “we’ve always been at war with South Asia”.

Friday, December 2, 2011

The good news and the bad news

Initial jobless claims went back up over the magic 400,000 mark last week that indicates no job growth, but today’s employer survey showed the private sector hired 140,000 workers in November, but Republicans eliminated 20,000 government jobs for a net gain of 120,000 jobs. The Unemployment rate surprisingly fell to 8.6% from 9% as determined by household phone surveys. The Republicans are unhappy with this news and cling to the workforce participation rate of 64% as proof of Obama's failure (this number isn't as bad as it sounds, but has been trending down). There were 315,000 people who left the workforce last quarter. (conservatives conveniently “misspeak” and say it all happened last month). 

The number of jobs created was revised up for the months of September and October showing a total 278,000 jobs added for the 3rd quarter. Unfortunately this is less than needed to absorb the population growth. There is however something strange about another more obscure labor survey the government does. The Adjusted Household Survey of Employment actually asks people if they are working, in contrast to the employer survey that is widely reported in the media. 

Historically the two surveys track pretty closely, but over the past year the two graphs have begun diverging. Last month it went nuts, the difference was 498,000 jobs to the positive with an overall total of 2.5 million new jobs created this year compared to the official numbers of 1.6 million jobs created. If the grain got lost in all that chaff, the kernel is:  HALF MILLION NEW JOBS in one month. 

If there isn’t something wrong with the survey (they’ve been doing this for decades so it should work) things are really picking up, but not with the big “job creators” that heavily weight the Employer Survey. That survey did place half of the new growth with small business, but they tend to completely miss certain types of small businesses, as well as start up companies and people who create their own job.

This would explain the general improvement in the economic numbers that we have been seeing despite the continued high unemployment rate and that rate’s sudden drop last month. It’s not time to start singing “Happy Days Are Here Again” for a number of reasons. For one thing we need to see this improvement sustained over time, and contrary to the conservative talking point that says, “a job is a job, take what we give you or we‘ll let you starve”, that is not how an economy recovers nor does it produce the American Dream.

A long term study of the unemployed by Rutgers University has been following people who lost their jobs in the first year of the Bush Great Depression. Only 7% have found a comparable job that allowed them to escape relatively unharmed. A third are in varying degrees of poverty having had their lives “totally wrecked” by their job loss, and 21% see this change as permanent. The middle third see themselves recovering, at least so far. 

Nationwide 25% of all full time workers make wages that keep them below the poverty rate. Companies like Walmart can’t operate without government programs to support the bulk of their workers. Food Stamps, Medicaid, housing assistance as well as Food Banks and support from worker’s families keep Walmart in business. As Red states continue to cut programs and drive down wages the pressure builds for a shift to a Mexico style economy or simply a not quite “failed state” existence. Don’t kid yourself right winger,  the Republicans have economists that explain these things to them. They just don’t care. We need to care for ourselves, we are the 99%.

Thursday, December 1, 2011

Cue the Twilight Zone music

Presented for your approval… a Rick Perry campaign ad in Iowa; video bookends of Jimmy Carter and President Obama calling for the end to our dependency on foreign oil. Perry complains there has been no change over this entire period as if no Republicans ran things in the interim. As an “outsider” he will make American energy independent again. Another man like George Bush but lacking his intellect or humility... Rod Sterling could never create such terror, (I think I may have peed myself, oh wait, it‘s just beer)

Never mind that the thinking that dominated the period between Jimmy Carter and Barrack Obama was entirely Republican. Ronald Reagan took office after Carter and immediately tore down, not the Berlin Wall, but the solar collectors on the White House. More importantly he ended the tax credits and Federal programs to make solar power 20% of our energy by the year 2000. This bankrupted almost all of the mushrooming solar energy business.

If Carter’s policies had been followed, we would not need any Middle East oil, not one drop. No Iraq war, no 4500 dead Americans, no 100,000 to 1,000,000 dead Iraqis (depending on who you believe), no 75,000 permanently disabled Americans, no 500,000 Iraqi orphans, no 500,000 new VA patients with chronic health problems, no 5,000,000 Iraqi refugees, no 2 million Iraqi Christians that are dead, dying or hiding in fear of their lives, and on and on.

Rick Perry will fix all that (except for the Iraqis, they‘re not Christians, at least not the “right kind“), not because he’ll get us off of oil, but because he’ll free up the oil companies to drill where ever they want. No matter that the oil companies have only tapped 10% of the leases that Clinton gave them 15 years ago. The fact is that we have plenty of oil, there is no shortage and there never has been. This is why Rick Perry fights so hard to keep us dependant on oil. If we shifted away from oil, give the surplus, the price would go back to $18/barrel as it was before the Iraq war. Rick Perry’s masters prefer the $101/barrel they get now.

Thin man in a dark suit talking, “The American citizen has found their fate has been decided. Not by logic, or from events beyond their control, but from believing the lies that prey on their prejudice and that take advantage of their ignorance”. Fade to stars on a black, cold screen.

Perry alternates this bit of insanity with an ad slamming liberals for equating faith with weakness. How about blind faith combined with ignorance and stupidity?

In global warming news: California experienced record Santa Anna winds of 140 mph today. Iowa experienced straight line winds of over 140 mph last summer. That was straight line, not a tornado. Rick Perry’s Texas has now entered its worst drought on record with no end in sight. Texas now qualifies as the world’s 4th largest desert. Extremes of weather is consistent with Global Warming Theory and it's worse than predicted. Why can’t we have Jimmy Carter again?

Jimmy Carter wasn't only a Christian (never mind the Baptists excommunicated him), he was an Annapolis graduate with a degree in nuclear engineering. He served as an aide to Admiral Hyman Rickover (the father of nuclear propulsion), Carter understood energy of all types. He could do the math, unlike any Republican, he understands how his toaster works. He didn't want to build nuclear plants or drill more oil wells. He wanted to build solar plants on every roof top. There are thousands of those installations built under Carter's policies, they are still operating, generating energy and having been paid for decades ago, they operate for free. This doesn't make any money for billionaire bankers or oil executives, and that's the problem with that.

Tuesday, November 29, 2011

Tomorrow could be one of those days

The British are experiencing an economic disaster driven by austerity and corporate tax evasion, but their PM announced today that there will be five more years of the same only worse in his budget. He’s also setting them up for even harsher measures if the Euro collapses.

According to people who claim to be informed on the subject, the Euro has weeks or months to live at best. Reports are that businesses are already laying plans for operating in a post Euro environment. With the European Central Bank refusing to step in, this is certainly the outcome to be expected.

It’s impossible to predict the fallout from ending the Euro. It could actually be a good thing, allowing for the smaller countries to control their own debt by inflation. Only with the bankers moving to grab power it definitely won’t be a good thing at all. How this will all shake out with the big zombie banks in the US is anybody’s guess. Doubtless they will use it as an opportunity to grab more power. However, some people seem to be concerned about resistance from the peasants.

The US Senate has retained a provision in the Defense Authorization Bill to allow indefinite detention of Americans taken prisoner anywhere in the world (including your house). Prisoners can be taken secretly at anytime with no more cause than their say so that you might be whatever they choose to define as terrorist. No evidence is required, no probable cause to get a warrant, no hearing, no trial, no public disclosure that you are a prisoner, not where you held, nor whether you are dead or alive; forever.

The Udall amendment to strip this blatant repeal of the Constitution from the Defense bill failed today with 61 votes against including 13 Democrats plus Leiberman. This law will end the concept of  habeas corpus after 800 years. President Obama has vowed to veto the law if it reaches his desk. I would say that would be a defining moment if he doesn’t.

A similar repeal of Constitutional rights during the reign of the Bush Crime Family was itself repealed the following year by Congress.  I suspect that bank lobbyists maybe the real impetus behind this amendment, but only four of the Democrats serve on the Banking Committee voted in favor of. Still that is a third of the Democrats who voted on the dark side.

In other news, American Airlines became the last legacy carrier to file for Chapter 11 protection from creditors. It’s not even pretending this about anything but breaking its unions. It claims it has a 900 million dollar annual disadvantage from its competition because it pays decent wages. AA isn’t in any real trouble however, since it has 3 billion in the bank.

Standard & Poors downgraded six of the biggest zombie banks today. We’ll see in the next couple of days if this triggers some sort of disaster involving that unimaginable mountain of derivatives these banks are involved in.  A credit downgrade can easily trigger a margin call on Credit Default Swaps used to insure the bonds of banks. This was what brought down Lehman Brothers and AIG triggering the credit collapse of 2008 and confirming we are in fact in a Great Depression.

Bank of America recently moved 47 trillion in derivatives to its banking division from Merrill Lynch in order to cover a margin call. This came after a credit downgrade in September putting the taxpayer on the hook to cover 17% of all US bank deposits if the BoA fails because of it. Bank of America along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co all were downgraded after hours today. Tomorrow might be one of those days you tell the grandchildren about around the campfire, under bridge where they live.

President Hoover (I mean Obama) continues to claim we are climbing slowly out of our current difficulties. I guess you can’t blame Obama for cheerleading, Herbert Hoover could have did something since he had a willing Congress. If Obama acknowledged our current predicament, it would only make it worse, and it wouldn’t affect the death cult in control of Congress. They would blame him for “talking down” the economy while continuing to do everything they can to seal our fate. Our fate is really in our hands, you just need to stay one step ahead of the military’s terrorist round up.

Monday, black and blue

The stock market was way up Monday after the worst Thanksgiving week since 1932, the gains were mostly on the strength of the retail sector that is claiming (by estimates from its lobbying group) a 16% increase in Black Friday weekend sales. These numbers are probably just hype and even if Friday was banner day it won’t be sustainable. Increased retail sales aren’t even very simulative anymore since the money drains away immediately to China and the corporate profits are skimmed to Caribbean tax havens. (something that would get you or me into Federal Prison)

Sales numbers are probably up some as they were up in October, but the dollar amount increases come from higher prices and not from any real increase in business activity. The mob scenes they show on TV are “staged”, by that I mean they are created by the same sort of unsafe practices in marketing and crowd control that desperate retailers engaged in during the Reagan recession.

Stores were then pressured by local fire authorities to stop doing these things at the time but they are at it again. Resorting to these tactics probably indicates that the retailers are in worse shape than we have been led to believe. There is a lot of corporate paper coming due next year and you will probably start seeing major bankruptcies.

Bank stocks were up Monday morning but a Federal Judge has thrown out the SEC settlement with Citigroup over its massive securitized mortgage fraud case. This likely means a real trial and major revelations of the corrupt banking industry’s practices. Citigroup won’t go quietly to the gallows however, as they have more lawyers than 2 of the 3 inner circles of Hell.

The big Wall Street banks led by Goldman Sachs put the fear of god into the German government last week by organizing a strike against the German bund (bond) auction. After failing to sell even 2/3 of its offering on Wednesday, the German government was by Friday backing down from its position over the Greek crisis. They had demanded that the banks take responsibility for the debt crisis by taking a 50% haircut on the Greek bonds. You see bankers “make” money anyway they can and never take responsibility for the damage. That’s what taxpayers are for.

Italy and Greece are now both under the control of Prime Ministers that were not elected but picked by bankers. That’s how Hitler became Chancellor in the 30s with the help of Prescott Bush and his banking friends. While the Nazi’s had a small minority in the parliament, they were sold to the public as being able to bring economic order that would end the rioting.

While the current crop of bankers and corporate oligarchs may not be planning to commit genocide, they aren’t shy about wholesale murder if you get in their way. You could die by getting in the way of them taking your country’s resources, or simply by them poisoning your air and water. If they control your economy then death can come by them denying you access to affordable food, healthcare or a job.

It’s simple math, the world economy is a closed system. The one percent can’t increase or even maintain the lifestyle to which it has become accustomed without either growth of the economy, or by taking money from the 99%. Since their goal is to capture all of the wealth, they can’t very well allow any real growth as that would dilute their power. The Occupy Movement is really just holding a beachhead under fire, get in the fight yourself or lose everything.

Sunday, November 27, 2011

Why Europe and the middle class here are in so much trouble

During the 90s de-regulation, or really the de-decriminalization of corrupt banking practices including the "Modernization" of Commodities Trading Act allowed Wall Street and big banking in Europe to load everybody up with over leveraged debt. Then they created derivatives to "insure" against the risk. Creating the bubble to end all bubbles, the end of us all bubble. A quadrillion dollar bubble in a 60 trillion dollar world economy (and a lot of that is just paper).

There were people who sounded the alarm on this, they were by and large silenced by anyway necessary (Eliot Spitzer for example) or just ignored if they could be portrayed as cranks or (gasp) socialists. Huge salaries, perks and bribes were available to anybody in a position of power who would look the other way.  Bill Clinton left office millions in debt and facing possible prison time for any number of trumped up charges. In a few short years he was worth more than $200 million. That's couch cushion change compared to what the people who paid him off are raking in. But remember Clinton only signed laws that Republicans passed, that's where the real treason is.

Saturday, November 26, 2011

Black Friday, and not the good kind

The stock market had its worst Thanksgiving week since 1932.

Interest on Italian bonds topped 8% at a time when the US and Germany are paying less than 2%. Italy is the 8th largest economy in the world and was operating with a budget surplus.

Germany's bond auction Wednesday failed to sell even 2/3 of its offering at any price, and Germany is one of the strongest economies in world. Italy has no problem selling bonds even if the prices are outrageous. Why would this happen? The big banks who purchase the bonds wanted to let the dog know that the tail is in charge. Germany has been insisting that the banks take a haircut on the Greek debt. The banks don't like that arrangement, no matter that they are entirely to blame for this mess and continue to profit from it. They don't pay for their mistakes, that's the job of the taxpayer. When I say "mistakes", I really mean their deliberate fraud and corruption.

By Friday the Rottweiler had gotten the message and the German Fiance Minster was saying that Germany may reconsider its position on Greek debt. Greece and Italy both have un-elected bankers as Prime Minister and Germany doesn't want to be next.

It's often said that he who has the gold, rules. In this case rule is by they who control the mountain of interlocked derivative contracts.   $1,200,000,000,000,000 give or take a few hundred trillion.

Thursday, November 24, 2011

Euro collapse edges closer

The rate on sovereign bonds in Europe continues to climb, even in Germany which has the strongest non-communist economy in the world. Things are so bad that the British Pound is starting to look good.

US 3rd quarter GDP was revised down to only 2% growth this week. Given years of stagnation while the population continued to grow, this could be viewed as negative growth since wages for the 99% continue to fall. Last week's initial unemployment claims were up slightly, still close to 400,000/week, so there is no good news there.

The declining standard of living is reflected in the higher cost of the traditional Thanksgiving dinner that rose 13% over last year. Wall Street speculators controlling the price of commodities such as grain and fuel are driving up production costs. With the food supply firmly under the control of large transnational corporations you can bet the increased costs are passed along. Throw in the cost of new packaging to make the prices look the same, you have an added increase in the real cost that consumers don't "see" but must pay.  Well at least we aren't turkeys, even if the billionaires don't see us any different.

Wednesday, November 23, 2011

B of A swirls toward the drain

The cost to insure Bank of America debt through credit default swaps has set a new high as it appears that BoA won't be allowed by banking regulators to transfer additional derivatives from its Merrill Lynch division to its banking arm. After a credit downgrade in September they have been effectively using  FDIC insured deposits as collateral to keep the counter parties on their $75 trillion in derivatives from demanding bankruptcy. The Federal Reserve that regulates the big zombie banks was okay with this, the FDIC who would need to cover all the insured deposits was not.

Even BoA says that they are in much worse shape than they thought. Another significant downgrade by the rating agencies require another 8 billion in collateral and will likely mean the end of BoA. This will be a crisis for the FDIC. With BoA holding 17% of all US deposits the cost could run several trillion. The tea baggers in Congress will need to decide if they are willing to pay for it or crash the banking system.

Germany was only able to sell 2/3 of the bonds that it tried to auction today and this does not bode well for the survival of the Euro. A collapse of the Euro could cascade into total economic collapse. News from China hasn't been all that good lately and given their Communist government, it's hard to gauge how well they would weather such a collapse either.

The need for help from food pantries has tripled as millions of former middle class workers burn through the last of their resources and have no choice but to start living the life of the extreme poor. Take those canned goods you've been hoarding down to donate before they expire and buy new ones.

Monday, November 21, 2011

There was bad news today but it wasn't from Congress

The markets tanked today, but not by more than the high-frequency traders drive it up or down in a given day. Nobody on Wall Street expected Congress to do anything but kick the can down the road. The next Congress will be making the decisions. Either President Newt and Speaker Cantor will plunge us into the age of Charles Dickens, or Obama and Nancy Pelosi will do it instead (okay, I mean fix 30 years of Reaganomics, no really they might).

I'm not sure the Republicans want to be in power during the next four years. Things are likely to get ugly even with a Progressive government. We can get through this mess if enough people catch on to what is really going on.

Today's bad news is that the predator banks are going after France with their corrupt credit ratings agencies trying to work up a panic. France was supposed to be the only country besides Germany that could hold the line on the Euro. Given that the European Central Bank is either run by insane people or that they are in on the "big steal", the collapse of the Euro and probably Europe seems inevitable.

The other bad news is that a senior Chinese official came right out and said we are all screwed, the world economy is in for a long term "recession". He really means Depression, or perhaps the end of civilization, that's anybody's guess. China is looking to save itself and he basically said so out loud. Nobody is really trying to save us, in fact the real power around here wants to do us in. Knowledge is the only effective weapon we have, pick it up and use it.   

Sunday, November 20, 2011

The Super Committee, killed by Kryptonite

Actually they were killed by a dose of reality when Democrats called the Republican's bluff. Democrats put everything on the table (far more than they should have) but Republicans refused to agree to any real cuts let alone to tax the rich even at Clinton era levels.

The Republicans refuse to cut spending in any serious way. Remember, they were in complete control for 14 years. The current budget is still entirely a Republican construct, they've blocked every reform possible since Democrats regained tacit control of Congress in 2006, as Republicans have maintained control by filibuster in the Senate.  If Republicans were to agree to any cuts, they would have to answer to either the voters (tea bag protest sign: "keep your Government hands off my Medicare") and on anything else they answer to the lobbyists who own the Congress. Sure they're happy to screw with poor people and school kids, neither constituency votes or gives bribes, but make real budget cuts? No way.

The Republicans are still chanting that we are borrowing from China and sticking our grandchildren with the bill. The fact is that China has not increased its US Treasury Bond holdings in years. Even when they did, they paid for them in USD. Have you gotten a Government check payable in Yuan? All those dollars they have to throw around are not from their own profits, China spends those buying up African copper mines and Texas oil fields. This is really extra money US companies are keeping offshore in Chinese banks to avoid US taxes. Those same companies pay far more corporate taxes in China than they do in the US.

The bulk of US Treasury bonds are in fact held by rich Americans who are wallowing in cash after three decades of being grossly under taxed. The rich see these bonds as the only safe investment since all the extra cash has created bubbles in everything else. The rich are really banking on a deflationary spiral like the one their grandfathers created in the early 30s. This will allow them to grab off the last of the middle class wealth.

As a point of history, it's not true that Hitler was brought to power by the runaway inflation of the Weirmar Republic in the early 20s, but from the real suffering brought on by the deflationary spiral of the late 20s. Despite Prescott Bush and his Wall Street banker friends' best efforts to repeat their successes in Italy and Germany, the Progressives in the US elected FDR instead. That didn't keep them from an immediate coup attempt. Things have been worse, but we continue to rush headlong toward a repeat of the events engineered by the descendants of the same people the New Deal tried to defeat. It is class warfare, and we're losing.

The latest bid has come in for domestic terrorism

Is anyone really surprised that bankers would go after anybody that opposes their looting and pillaging of the country?

U.S. banks should "undermine" Occupy protesters: memo

More news you won't see on the "Lame Stream Media" (it's not like 2 dozen teabaggers got together). 
The crowd estimate comes from the State and is probably understated.

Friday, November 18, 2011

Republican Voter Suppression in Wisconsin-stan

The Government Accountability Board (GAB) in Wisconsin is made up of retired Circuit Court judges and are supposed to be an independent agency. Criminals don't like having judges watch them.

Thursday, November 17, 2011

Conservatives all think they are David Koch, David Koch knows better the way a shark knows he's not a halibut

It was a little odd that the price of gold had that big rebound after the large drop in price caused by big hedge funds selling gold and other assets in September to meet margin calls. We now know that it was caused by unprecedented buying of bullion by so-called emerging market countries’ central banks. This news caused gold to drop 3% today.

This will likely put the total amount of gold purchased this year in excess of the record set 40 years ago after Nixon ended the Bretton Woods Agreement. Named after a hotel in New Hampshire known for its Alpine skiing, this agreement was put in place in 1944 as the Allies looked toward the aftermath of WWII. It fixed the price of gold at $32/oz and the US pledged to back world trade using a USD that could be converted to gold at this fixed price by any government.

While this approach had its good points, the real reason for doing it was to allow the big Wall Street banks to horn in on international banking previously dominated by Great Britain. You see, FDR had forced the Brits to turn over their gold reserves to pay for the War, and Bretton Woods made the USD the new world currency instead of the Pound Sterling. Oil was also required to be traded in USD and the US was the only big exporter.

This plan worked pretty well until the early 70s when all those dollars thatNixon had been spending on the Vietnam war started to inflate the USD and the Brits, among others, started demanding gold by the hundreds of tons. Nixon closed the gold window and inflation really took off. By then the US was for the first time ever a net importer of oil, although by today’s standards the trade deficit from oil was inconsequential. Still, the oil companies were able to create an artificial shortage and drive up the price drastically. This allowed the big companies in all industries to muscle out the smaller competitors who saw their own capital eroded by inflation. The big companies could sell corporate bonds.

President Carter started drinking the Maggie Thatcher kool-aid about the “deregulation” of basic industries. This really meant the slow death of unions which were blamed for the stag-flation of the 70s. It really was from the printing of money that was then put in the hands of big banks and corporations to fund the mergers and acquisitions craze under the new “deregulation” wisdom.

Reagan didn’t start the War on the Middle Class; he just made it into a Holy Crusade. Bigger was better, merging companies was more efficient, factories should be moved to lower wage states and that would supposedly make goods cheaper eliminating 90% of the farmers would make food cheaper. Everyone was enamored with the Lifestyles of the Rich and Famous, and Reagan made them think this was within their reach. These were just a few of the conservative talking points of the time. None of them were new, but for the first time middle class Americans (even Democrats) started to actually believe them when coming from the Great Communicator.  They didn’t realize it, but the New Deal was slowly being dismantled around them.

Reagan used massive government spending to hide much of the economic damage, his strategy doubled the National Debt his first term and doubled it again in his second. Consumer credit went from just a way to buy a house to the way people paid for everything. They didn’t notice that their kids were only getting half pay and slowly it got to where everybody was getting half pay.

Well not everybody; the One Percent saw their incomes skyrocket and never stop going up. But more importantly, they now control the bulk of American wealth. More over, to quote David Koch when asked why he would steal oil from Native American wells, replied on tape, “I want what I’m entitled to: everything”.  This sense of entitlement is not an unusual belief among the One Percent. Rank and file Republicans don’t disagree with this either as they think they are the same as David Koch. David Koch knows better.

Wednesday, November 16, 2011

A Few Good Men... any war starts with one shot

The stock market fell sharply today, supposedly because of the exposure the US banks have to the evolving Euro collapse. In reality you are seeing the big US banks skim money from your 401(k). High frequency trading drives the market up and drives the market down. A fraction of a cent on every trade adds up when you do billions of trades. That may make you poor; the really big news today will make you dead.

Barrack Obama, President of the United States of America (a former Super Power) has kicked off the first cold war of the 21st century by stationing a single company of Marines in Australia. This will ultimately lead to, according to the joint press release, a 2500 man brigade that will occupy the Australian territories for “international cooperation and training purposes”.

While the Obama Adm. refused to link this force deployment to the only remaining super power, China, the 3rd world war implications didn’t escape many observers.  Much of this wasn’t spelled out clearly and among things not mentioned out loud was the stationing of strategic nuclear bombers under cover of having access to training at desert target ranges in Australia. The official version is that the planes using Australian airspace will be short range fighter-bombers, but what would be the purpose of that? F-35 or B-1B, it’s all just letters and numbers.

As the next cold war heats up you can expect to see the re-opening of USN bases in the People’s Republic of Vietnam. They have hinted at such cooperation in the past as Vietnam is the only country to have been invaded repeatedly by the People’s Republic of China. They can expect to fall shortly after the Democratic Republic of China (Taiwan) disappears in a fireball. That could happen any day now, or perhaps China will be satisfied with world economic domination for a time.

I’ve used that Chinese curse, “may you live in interesting times” over and over again but nothing better applies. Richard Nixon started the ball rolling with his trip to China on behalf of Coca Cola, and that well-known Republican Bill Clinton made free trade with China a reality. Free trade means domination by the biggest, most ruthless competitor. The Neo-Con Republicans thought that meant them, but when the conquests of Iraq, Syria, Iran and so on, didn’t go their way, all of a sudden that meant that China was the dominant force on the planet.

The times are getting more interesting every day and if the Republicans have their way the next President will be unable to find China on a map, let alone be one that will have a policy that favors the peasants of the former United States of America. The impotence of the United State was brought to the forefront today as NASA announced the recruiting of the next Astronaut class. In reality, they will be the very first Amerikan Cosmonaut class as no American spacecraft exists, nor are there plans to build any. In the future, Americans will hitchhike with the Russians. The Chinese are getting close to launching their own space station.  Interesting times indeed.

Tuesday, November 15, 2011

Congress shall make no law... abridging... the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Euro denominated bonds sold off big today and this drove the price down and interest rates up. Even in the northern European countries where the Right Wing wisdom holds that the people are hard working, tax paying, frugal and (shhh), white. The only exception was Germany which is considered the last safe haven for the Euro and there interest rates fell on high demand for bonds.

US stocks were up in late trading despite the gloom and doom in Europe and the potential risk to US banks, as the basic economic news in the US remains positive. Consumer sales were up in October and manufacturing surveys suggest significant growth which was the opposite of the conventional wisdom of surveyed economists.

It wasn’t all good news, hourly wages adjusted for inflation have fallen nearly 2% in the past 12 months. Declining wages are indicated by the continuing high weekly jobless claims as better paid workers are fired in favor of minimum wage workers. In Texas many of almost forgotten Rick Perry’s jobs are less than minimum wage.

Speaking of the forgotten Governor of Texas, Iowa’s Republican primary is only 49 days away. It has become a four clowns in a pie fight, circus. Herman Cain leads at 20% having locked in the misogynist vote, he’s followed by Ron Paul with the Libertarian fantasy vote at 19%. Then you have Mitt Romney with the “we’re okay with Mormons, if they have money, vote” at 18%. Bringing up the rear is Newt Gingrich at 17%, coasting along on the “Definitely a corrupt politician but maybe he’s not crazy”, vote.  This leaves 26% that doesn’t want to vote for any of them. (it’s called a caucus like the Democrats, but that process is too complicated for Republicans, they just vote like any other primary)

The less than bright Mayor of Oakland has let slip that there is in deed a conspiracy to evict the Occupy Movement from public spaces. The refrain from the supposed representatives of the people is that the First Amendment allows free speech but no camping. That “Right of Assembly” phrase that follows in the same sentence, is strangely absent from their talking points.

In deed, in the days of the Constitution’s founders when traveling to New York could take weeks on horseback, the decree that The People wouldn’t be allowed to camp on public land in order to Petition Their Government, wouldn’t have been considered as legitimate. That would have been the position of the Crown and the British East India Company that they rebelled against. It’s time to rebel while you still can still do so peaceably.

Monday, November 14, 2011

Mitt's 11-11-11 plan

 The stock market trailed off today with the realization starting to sink in that just putting lackeys of the bankers in charge in Greece and Italy isn’t really going to help. The new nails in that coffin are that Italy is still paying above 6% to sell bonds and now Spain is above 6% as well. The right wing continues to decry the Welfare States of Europe but the numbers don’t show that to be the problem. There are countries in northern Europe with much stronger social programs that are doing just fine as they aren’t trapped by the Euro. The Euro zone rules allowed excessive amounts of capital to flow into certain countries where the return was larger and now bond traders are looting and pillaging these countries as they must pay these debts back in a currency that doesn’t match the output on their economies but rather that of the German powerhouse.

The right, when faced with such facts falls back on racism, southern Europeans are lazy, corrupt and don’t pay their taxes, of course. The Irish too, you know what they’re like (free college education is a sin to the right). Spain is of course is full of Mexicans and Portugal is… where is Portugal? They speak Portuguese in Brazil, it must be another South American Commie country, somewhere near Venezuela.

The only Euro zone country with any real problems is Greece and its only real problem is that corporations don’t pay their taxes, otherwise they could cope. The rest of this mess is entirely a result of bankers and hedge funds. These countries do bear responsibility in that they don’t throw the pirates out like Iceland did. I mean Iceland, the entire population wouldn’t make a good sized town anywhere else and they stood up to them. That’s a hint that we don’t have to give into them either.

Mitt Romney came out Friday with his 11-11-11 plan, its not a tax plan like Cain’s but that was the date he commemorated so eloquently by announcing his intention to throw all the Military Veterans under the bus. He has seriously proposed doing away with VA Medical and replacing it with vouchers to buy private insurance. In other words only Veterans who are wealthy enough to meet the co-pay required to get insurance will get healthcare.

It will be a big money maker for Republican crony insurance companies and a knife in the back for those who paid for freedom with their bodies. Already 500,000 Iraq/Afghanistan Vets have gotten VA care out of 2.5 million who have been deployed so far. Mitt is only following the Republican Party line. The sick should pay for their own care and only then at huge profit for other Republicans.

You can forgive Mitt, or not, for his lack of understanding and empathy for the plight of Veterans, he did his service during the Vietnam War with several years of missionary work in the Provence wine region of France, also known as the French Riviera. In the 2008 primary season he basically lost Iowa by telling a Veteran who challenged his support for the Iraq war while nobody in his family has ever served, Romney said he was in fact a real patriot. His response to the Vet’s challenge was that “none of my [five] sons need to serve in the military as they were doing their patriotic duty by working on my campaign“.

Holding a French Chateau against the onslaught of communism is as close as most modern Republicans ever got to serving their country anyway. Avoiding war shouldn’t be held against them except that they are more than willing to sacrifice your children for the very profitable racket of war.

Saturday, November 12, 2011

My new Hero, Mario Batali

Friday, November 11, 2011

The odds favor sunrise in the morning, or maybe not

The weekly survey of economists shows that they now believe we are significantly less likely to see a double-dip recession next year with the majority shifting from 1 in 3 odds down to 1 in 4 odds. The only problem with this bit of cheery news (we are living in time where only 1 in 4 odds that civilization will end is now “good news”), the big problem with this news is that this is the same bunch of guys that always get it wrong. I wouldn’t bet on the sun coming up based on the majority thinking of these corporate agenda driven nit-wits.

The trend line on jobless claims continues to move in the right direction with “only” 390,000 workers filing initial claims last week. But, here again the numbers are so distorted by corporations churning the workforce to drive down wages that the numbers don’t mean much.

The stock markets closed the week up significantly based on the capture of both Greece and Italy by the Forces of Darkness. So-called Techno-crats will lead both countries with “everybody” (that’s what the corporate media says) “everybody” buying into it on the assumption that this will take the politics out of political decision making, it also takes out the democracy. Here again you have a couple guys who have been profoundly wrong about economics for decades, and they have not changed their tune by one single note. Now they will now run these two countries on the basis of what is good for the one percent. The rumor is that Portugal is poised to fall next week as the dark conquest marches across Europe.

The rational for throwing the smaller Euro countries to the wolves is that it will lighten the sleigh and the rest of us will survive, or more specifically the banks won’t crash. But the harsh level of austerity they are imposing will suck the life out of these economies so collapse remains inevitable. One can surmise that the plan is to keep repeating the cycle over and over again with a crash or close to it, and follow this with another bailout for the banks. Then the wholesale transfer of assets to pay the interest to the creditors. Basically, ever more printed money will finance the acquisition of the planet for the one percent.

With every cycle more and more real tangible wealth is transferred to the one percent based on the fact that they hold our massive debt. Debt that was only run up in the first place because the one percent weren’t paying their taxes, nor paying high enough wages to the middleclass so that workers and the government had to borrow money. Money that never should have been in the hands of the one percent to begin with.

Herman Cain is right about one thing, it is our own damn fault. We could have stopped this from happening. We could stop it now but too few realize we have the power. The 99% bought into 40 years worth of corporate lies because too few of us read anything but the sports scores and even if you do the lies are everywhere. There’s no real shame in being hoodwinked until you know better and then don’t fight back.

Thursday, November 10, 2011

The new feudalism isn't new and is really the norm

Greece fell to the control of the bankers today as on of their own, former European Central Bank VP Lucas Papademos has become the new “unity” PM replacing the former PM that had suggested letting the people vote on the austerity measures. “We’ll have none of that” sniffed the bankers, the ECB bankers make ours look like a bunch of saints. Iceland gave them the bums rush after bankers destroyed their economy and so far Iceland is doing just fine. The bankers can’t let that contagion spread.

Italy is next in line for take over as they are expected to appoint an economist to replace PM Berlusconi. Mario Monti is known as a technocrat who favors tough austerity measures and that would of course play directly into the hands of the banksters. As austerity is applied, the economy shrinks, making it more and more difficult to repay the massive debt. This causes deflation which makes the debt impossible to repay.

It doesn’t seem to occur to anybody that debt is just paper. For governments the debt represents borrowing money from rich people who haven’t been paying taxes. Government shouldn’t need to borrow money, that’s what taxes are for. For the middleclass, debt represents a replacement for substandard wages (also so the middle class can pay the cost of services that should be free such as education). The middleclass shouldn’t need to borrow from rich people either, they should be paid on the basis of how productive the economy is. Rich people shouldn’t have enough money to do that kind of lending and in fact they don’t really, they’ve simply been stealing the money and loaning it out at a steep vig in order to steal more.

Under Reaganomics the economy would collapse if consumers weren’t given money to spend through debt as their wages don’t create sufficient demand in the economy for the supply being produced. Sure spending by the rich is making up an ever growing share of the retail sector, but it just isn’t enough. But if you think that will be the undoing of the rich, you are wrong, feudalism isn’t just a medieval concept. The days of the Antebellum South were great times for the one percent even as the majority of the population were slaves, and most everybody else was dirt poor.

In short the one percent know what they are doing as they begin setting up their feudal states. We can’t sit back hoping the “natural order” will work in our favor. A significant middleclass has never been the natural order of things throughout history. A fabulously wealthy one percent (or less) has been the norm with everybody else in poverty. The rich see this as their birthright and the way things “should be” as god ordained it. Fight back now, we won’t get a second chance at this.

Wednesday, November 9, 2011

The Pale Horse makes money as the market goes up and as the market goes down, you get Death

The Dow fell almost 400 points today and the European markets faired worse as bond rates in Italy shot past 7% and into death spiral territory. The high interest rates trigger margin calls among bond traders forcing sales regardless of the losses. This could also start the derivative avalanche where somewhere in excess of a quadrillion dollars in contracts that were designed as bets on future events start unwinding.

All of this didn’t happen from chance or nature or even incompetence, it was planned to happen all along. You see the talking point stressed in the corporate media today is that Italy has been living the “good life” with much wine and little work, and they tick off all the benefits that Italians enjoy, from maternity leave, to healthcare, to early retirement (in Republican terms that means retiring “before” you die). How absurd that the peasants should expect the things reserved for the 1%.

In reality Italy is not Greece, their economy has been healthy, profits up, and the budget has been in surplus for years. They do have a lot of bonds out but they aren’t in debt the way that many countries are that are still considered healthy. Their crime is that the total amount of their bonds being traded is small enough to be captured by Wall Street bond traders, and this is simply as irresistible as Death on a Pale Horse.

A big part of this problem is that much of the debt is held in long term bonds, and while this should be a sign of stability this does ironically make Italy more vulnerable to capture by the bond traders, who can take advantage of the relative small number of bonds that need to be reissued. Five billion dollars to be sold this week and ten billion next week could end Italian democracy once and for all.

Interest rates are climbing fast to levels where it simply becomes impossible to refinance debt. Bonds are sold by auction at a price that reflects the interest rate as if it is paid up front. If the interest rate accrued over a number of years gets high enough, then the sale price of the bond produces too little money to cover the needs of government. In fact the issue of bonds simply creates more debt and little else.

In case you haven’t guessed, the big US banks are making out like bandits from all of this. Or should I say the bankers are, the banks themselves will ultimately fail or be bailed out from the pockets of the middle class even if there is no appropriation from Congress. After all we are talking about the people who “create” the money and determine its value, and I’m not talking about Congress as called for in the Constitution. As warned against by the founding fathers, the creation of money is firmly in the hands of bankers and corporations.

Today’s drop in the stock market cost the average 401(k) holder a bit over $4000. Before Reagan, people had pensions for retirement but people bought into the “capitalism” of the 401(k) instead. You put the money in and Wall Street bleeds it out. It happens everyday as the market goes up and down and the “wisdom” reported in the news today was the we can expect to see these wild swings on a daily basis. Everyday thousands drain from your retirement account and from the reserve accounts invested by local governments.

You see the real truth, the one they won’t tell you ever on the news, is that when the market goes back up after one of the regular falls is that you aren’t making back any money. The Wall Street banks and hedge funds make money going up or down, but you have nothing until you sell, and you will always get less than you put in, if you get any thing at all.

Monday, November 7, 2011

Everybody all at once scream, BOO!

The current Depression has been going so long that the majority of the unemployed are no longer receiving benefits. Eighteen months ago, 75% were still getting benefits and now only 48% remain eligible. This doesn’t include people who weren’t eligible for benefits to begin with, like people who hadn‘t worked enough since depleting their benefits after their last job was outsourced , those people simply aren’t counted. Teenagers entering the workforce or recent college grads, and those looking for work after re-training at for the 2nd, 3rd or 4th time following the outsourcing of their middle class job don’t count either.

In the olden days, before Clinton ended “Welfare as we know it” in 1996 these people would get welfare, not today as this would lessen the pressure to drive down wages if people weren’t willing to work for food (and not enough of that).

Nearly five million Americans have been out of work for more than a year, and again that’s just the ones that are being counted. Besides people who have simply fallen through the non-existent safety net, there are millions that took early retirement or disability payments that would still work if they could. Still more millions have gone back to school to live on student loans with little chance finding a job when they enter the job market. Fully half of recent college grads either have no job or work at a job they didn’t need a college degree for. The majority of new corporate lawyers each year are in India, medical researchers, accountants, engineers, architects and on and on are all being out sourced.

By the end of the year Congress must extend the 99 weeks program or another million people will have their benefits end suddenly and this number will grow steadily. By February it will 2.2 million cut off from benefits, but 45 billion dollars for the extension is a lot of money for Tea Baggers to agree to. No admission from them that they are the ones who caused this mess.  They bought into the magic of Reaganomics and free trade, tax cuts for the rich that didn’t trickle down, wars that would pay for themselves, free trade would make everything more affordable and create high tech, high finance and high wage jobs that never happened.  The Tea Baggers made these mistakes despite our warnings, but they won’t pay for them. The children, the old, the helpless will pay with their lives.

Even if Congress does the right thing, this one small “right thing” and renews the unemployment benefit program, this won’t help the “99ers” who have already fallen off the rolls.  The Census Bureau says unemployment benefits kept 3.2 million people from stepping over the edge into the abyss of poverty last year. The threshold for poverty is far too low of course, defined as annual income below $22,314 for a family of four.

The cost of raising child in America with a middle class lifestyle until age 18 is estimated to half a million dollars (and with no frills like piano lessons or cell phones) . For a family of four with two kids this would be $55,000/year which is more than the median family income in the United States. You can make do on a fraction of this by giving up luxuries like good nutrition or healthcare, and the numbers make it clear that the majority of American families are giving up a lot of things to get by.

The reality is that millions of American families in the most powerful, most wealthy nation on the planet aren’t getting by. The leader of the most powerful institution in the world, the Speaker of the House in the Congress of the United States of America says we are broke, he says it everyday on his way to a thousand dollar dinner. The poor, the weak, the sick, the children and the elderly must fend for themselves in this land that this evil man calls “exceptional”. It’s only exceptional for him and his cronies.

A new record number of people got Food Stamps in August, more than 46 million and the benefits are enough to feed a family and food banks can’t begin to serve the needy. The longest people have been on unemployment set a record during the first Reagan Recession of 1983 at 21 weeks, the current average is twice that. Reagan fixed his economic problems which were much less then (we still had a manufacturing base) with trillions in deficit spending (back when a trillion was real money) and he deregulated banking to pump out trillions in consumer credit. Don’t mind the Savings and Loan crash from deregulation.

Weekly unemployment checks average about $300 nationwide, the Congressional Budget Office has estimated that each $1 spent on unemployment benefits generates up to $1.90 in GDP growth. Still you are talking about the equivalent of a minimum wage job that in itself doesn’t produce anything. A modest increase in the minimum wage would have much more significant effects, especially when you consider that such an increase would combat the falling wage trend we have now.

When unemployment benefits expire around Christmas time, the Congress will decide to extend benefits for people out of work for less than 99 weeks or cast them into the gutter. This will be the first time the measure has come up with the House under the control of Republicans. The safe bet is those “out of work by no fault of their own” (to quote the benefit rules) will be heading for that slushy place beyond the curb. Even most Democrats aren’t considering any help for the millions already past 99 weeks of eligibility as they are treated like ghosts. They may haunt the Occupy Wall Street sites but Republicans don’t believe they really exist. Tell them “Boo”, everybody all at once. BOO!