Fomenting a Revolution: Extreme Acts of Greed Against the American People | Common Dreams

Economics could well be the ground on which a new American revolution will stand……..the gap widens every year between the “haves and the have nots”…..and that has been the battlefield for centuries…….could it be?

 

Fomenting a Revolution: Extreme Acts of Greed Against the American People | Common Dreams.

They Nationalized The Banks!

File this under the heading……Can’t Fix Stupid!

This is the cry from the right wing…..I read a bunch of these pieces of crap on Twitter today…..all were railing that the new “Volcker Rule” will, in essence, nationalize the banks and in turn bring down the whole economic system in the US….

For those with addled brains let me help with the definition of the term…….nationalization……it means the transfer of private assets  into public ownership……see how simple that was and has NOTHING to do with the new “Volcker Rule”………

Let me say here and now…If you believe that this will nationalize the banks then you are sadly mistaken…it will try to prevent the gambling by banks that caused the collapse in 2008…..I am guessing here but NO one wants to revisit the crippling effect that the banksters caused back then…..but do not take my word for it……

(Newser) – The FDIC and Federal Reserve both unanimously approved the long-debated Volcker Rule today, and three other regulatory agencies plan to before the day is out, making it official. The rule, named for and originally proposed by Paul Volcker, aims to ban proprietary trading, “or in plain English,” as the Washington Post puts it, “it removes the parts of banks that gamble and act like hedge funds, because those parts can blow up.” Or at least, that’s what it was supposed to do.

But big banks like JPMorgan Chase and Goldman Sachs have been lobbying against the law for more than three years, Bloomberg points out, and their “lobbying efforts paid off” in easing some provisions. On the other hand, recent weeks have seen a charge from regulators favoring a tougher version, and they’ve scored points, too, the New York Times reports. Here’s what each side won:

The Tough Side:

  • When JPMorgan lost $6 billion on the London Whale trade, it said the position was a “hedge.” The rule still allows hedging, but banks will now have to name a specific, quantifiable risk that each such trade is hedging against.
  • Bonuses and compensation must be structured in a manner that doesn’t encourage “prohibited proprietary trading.”
  • Chief executives will have to personally “attest” every year that the bank has measures in place to comply with the rule.

The Not-So-Tough Side:

  • Banks have until July of 2015 to implement the rule, though they must make a “good faith effort” to do so before that.
  • Banks are still allowed to “make markets,” meaning to act as middle men for clients who want to buy and sell stock. Under this guise, banks could buy and hold a stock, arguing that a client might someday want to buy it. The rule mandates that banks buy only enough to meet the “reasonably expected near-term demands of clients,” but leaves it up to banks to decide what’s reasonable.
  • Banks can still make proprietary trades in bonds issued by governments.
  • Many banks tell the Wall Street Journal that they think they’re already in compliance with the law, while some business groups say they intend to challenge the rule in court. Reform advocates, meanwhile, are starting to call again for a return to Glass-Steagall.

There you have it….this is NO one’s idea of nationalization.  If possibly do then I suggest that you spend less time on World of Warcraft and more time educating yourself on the issues….

Personally, I do not think that this piece of legislation goes far enough to prevent banks from doing the gambling that they have come accustomed to in the past……they are still allowed to gamble and that will cause yet more economic problems in the future…..

Is There Compassionate Capitalism?

Okay sports fans, I have laid off the subject of economics for long enough……when someone mentions economics all eyes glaze over and the people get a far away look in their eye……here goes….

I have had many exchanges with people about capitalism…..I think it could be more compassionate toward the worker/consumer……I understand that profit is everything to these people….but there has to be a line that should NOT be crossed…kinda like the red line in the sand thingy…….

I can imagine that not many of my conserv friends will have anything good to say about labor……of course they would be talking about unions….while I would be talking about the work it takes to produce the service or item…..you may demonize labor all you want but without it there would have been NO middle class to destroy……..

We may argue that point later….today I want to ask if anyone see a problem with these couple of stories…..

(Newser) – An Ohio Walmart store wants to make sure its workers can enjoy a Thanksgiving dinner—so it’s asking them to give each other enough food to do so. The Canton store has set up bins in an employee-only area under a sign that reads, “Please donate food items here so Associates in Need can enjoy Thanksgiving Dinner.” One employee, apparently not appreciating this generous holiday effort, snapped a photo and sent it to the labor group OUR Walmart, the Cleveland Plain Dealer reports.

The photo has sparked outrage, but Walmart isn’t denying its legitimacy. A spokesman for the chain said it was a store-level program, but that the larger corporation applauded. “This is part of the company’s culture to rally around associates and take care of them,” a spokesman for the chain said. At least one worker at the Canton store agreed, saying the drive had helped her in the past. But the associate who shot the picture called it a “demoralizing” and “kind of depressing” admission that the company understands workers are struggling, but won’t expend its own resources to help.

Really?  A food drive for the people you employ?  And no one sees the problem here?

Embedded image permalink

Let’s move on to Macky D…….

Newser) – More handy financial advice from McDonald’s, which recently suggested its workers might want to get second jobs: The chain’s McResource tip website says readers can make money in a pinch by selling “unwanted possessions on eBay or Craigslist.” The advice comes in a section on “Digging Out From Holiday Debt,” ThinkProgress reports. A separate suggestion from the site on how to “avoid hunger & stretch food budget”: “Breaking food into pieces often results in eating less and still feeling full.” This comes shortly after it emerged that McDonald’s was advising workers to get on food stamps, the Wire notes.

CNNMoney, meanwhile, compares the budgets of real McDonald’s workers to the sample budget the company recently issued. The differences are drastic; for instance, food is reportedly the top monthly cost for most workers CNNMoney interviewed, and it doesn’t appear at all on the sample budget. (Meanwhile, Mickey Dee’s isn’t the only corporation getting kicked for hamfisted efforts at helping workers.)

I can only say one thing….Are You kidding me?

Sorry….I can understand why some think that capitalism cares about NOTHING but profit…..they feel they have NO responsibility to the society that made them money……IMO that is sadly ALL wrong!

Let’s Talk Middle Class

I have written enough about Syria, Cruz, scandals, NSA, and shootings…..so let me change subjects for awhile…..change to economics.   Okay this is where I turn my back on the class and some give me the finger, others act out choking and still others just roll their eyes and drift off…….yeah, economics is not a subject that many willing write about or talk about……and that is why I am here!

Let us begin with a look at some economic data…….

As Congress prepares for yet another fiscal showdown, new data released today by the U.S. Census Bureau should be a wake-up call that it is time to move away from a wrong-headed austerity agenda and pivot to a focus on creating jobs, boosting wages, and investing in family economic security.

The new data on poverty and income show that despite economic growth, there was no statistically significant improvement in the poverty rate or median household income in 2012.

Behind these topline numbers are data that contain real warning signs for American families and the overall economy if Congress continues down its current path.

Here are three things you need to know about the new data and how they affect the budget and policy choices before us:

  1. Income inequality has widened since the end of the Great Recession.
  2. Our safety net is working overtime to compensate for rising income inequality and the proliferation of low-wage work.
  3. High poverty rates among young children of color have long-term implications for our economic competitiveness.

And all that data is pointing to the Middle Class slowly disappearing….even if one does not want to admit it…..just look at any income data you like…..you can chart what is happening to the Middle Class.

The Middle Class?  We could make a case that the Middle Class was an accident….that it was never intended to be a characteristic of capitalism……….

It’s a sign of Edward McClelland’s age that he remembers the middle class. He grew up in an automaking town in the 1970s, where even high school dropouts could get jobs that would support a family and a mortgage payment. Everyone assumed this was capitalism’s triumphant endpoint, that it “had produced the worker’s paradise to which Communism unsuccessfully aspired,” McClelland writes at Salon. Now, that prosperity looks like a “historical fluke,” a brief denial of normal economic trends made possible because the US emerged from World War II with its manufacturing base unharmed. “For the majority of human history … there have been two classes; aristocracy and peasantry,” McClelland observes. Left unfettered, capitalism will tend to reinforce that trend, “concentrating wealth in the ownership class.” This drift “can only be arrested by an activist government that chooses to step in as a referee.” But the US has been on a 40-year deregulation kick, running through Democratic and Republican administrations alike. The result: “The greatest disparity between the top earners and the middle earners in nearly a century.” Click for McClelland’s full column.

The US is starting to look a lot like the UK…….that is if you start in a certain strata of the economy you and your will never leave that strata…….in other words there will be two classes……the aristocracy and the peasantry……….once you are in one you will forever remain there with little chance of mobility…….

GOP Math Is Just Plain Wrong!

Now that I have the Syrian stuff out of my system I will return to righting the wrongs put forth by the lunatics on the Right…..and now I bet you think this will be some rambling about the IRS or the DOJ and AP…..SURPRISE!  I will those for lesser minds!

Later this year the circus will return to the budget and the deficit and there is something you need to know………

This is an economic post….I give warning because when it is talked about too many people glaze over and move on…..why?  They get all their info from BS sources……but to pretend that one knows all about politics without a knowledge of economics is just plain stupid…..and there are those that will not let facts change their position.

If you are smart enough to turn on your TV then you know all about the budget deficit and the debate around the issue…….if you are paying attention then you have heard all the flap about the debt as percent of GDP….how this is killing jobs and bankrupting the country……right?  But there is a problem with this rhetoric……with all this choking debt the nation’s GDP is still rising, slowly but rising, 2.5% for the 1st quarter of 2013….now if the toilet math of the GOP were correct would not the GDP be dropping?

Well the GOP talking point that debt is 90% of GDP and economic growth will cease and may even start to decline…….they got this information from a report by two economists, Reinhart and Rogoff……..a good piece was written and cited on any given day but Repubs time after time…….the problem is…..it is WRONG!

Yes I said WRONG!  Not mistaken but outright WRONG!

I will bet you think since you believe me a liberal that I will go about quoting economists like Krugman…..am I right?

Well, just like the Reinhart/Rogoff paper, you and your friends in the conserv movement…..would be WRONG!  Yes, I emphasized the word WRONG!

Why?

………….the most recent period of 2000-2009, which in almost all cases will be the most relevant set of experiences with respect to current policy debates, average GDP growth when public debt is above 90 percent of GDP is higher than when the public debt/GDP ratio  is between 60 and 90 percent.    The findings in our paper are clearly not consistent with the notion that we consistently observe a sharp fall-off in economic growth when the public debt/GDP ratio exceeds 90 percent.   As for the misconceptions concerning causality, I encourage people to read the contribution by my professor Arin Dube. His treatment of the topic is highly readable and offers strong evidence that causality runs from slow growth to high debt.

There is not one word in our paper which suggests that a high level of government indebtedness is never a problem.  It would be absurd to think that governments never have to worry about their level of indebtedness.  The aim of our paper was much more narrowly focused.  We show that, contrary to R&R, there is no definitive threshold for the public debt/GDP ratio, beyond which countries will invariably suffer a major decline in GDP growth. The implication for policy is that, under particular circumstances, public debt can play a key role in overcoming a recession. The current historical moment, with historically high rates of mass unemployment in both the U.S. and Europe   and with interest rates on U.S. Treasury bonds at historic lows,   is precisely the set of circumstances under which we would expect public borrowing to have large positive effects, with comparably fewer costs. Moreover, it is precisely the set of circumstances under which we expect austerity to have substantial negative effects.

Click here to read Herndon’s full paper >

But do not take my word for this……..the PhD candidate’s findings are linked above……read it and decide……..I will also post this article in full in a latter post today….read it……

I realize that the mindless regurgitation on the right will not read this or embrace it….and most likely will not understand anything that is not boiled down to a slogan….I would like to believe that Conservs are not idiots just misinformed…..I said I would like to believe it….but I have seen nothing about them that would lead me to think better of them…..

The Economy Sucks!?!

We hear this daily……small businesses do not know what to do, the deficit will drown us, spending is out of control….I am sure you have heard all this before, possibly just yesterday and you will hear it all over and over and over….to the point that fear and paranoia will take hold and mistakes will be made….

Let’s look at a few things that so many people are missing in all this chest thumping and demands…..from an article by Paul Rosenberg…..

(1) The deficit is already shrinking rapidly. Writing for the uber-socialist rag, investors.com (“powered by Investors Business Daily”), in November, Jed Graham noted:

Believe it or not, the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilisation from World War II.

In fact, outside of that post-WWII era, the only time the deficit has fallen faster was when the economy relapsed in 1937, turning the Great Depression into a decade-long affair.

(Of course, the history on this is quite clear: The 1937/38 recession was caused by FDR’s misguided policy shift to prematurely cutting back on government spending. FDR learned, reversed course, and recovery accelerated again.)

(2) Rather than being “out of control”, government spending growth is already historically slow. Under President Obama, government spending has grown less than 1.5 percent per year, compared to more than 2 percent under Nixon/Ford, Reagan and Bush II – all three two-year GOP presidential terms in the last 50 years.

[Thinkprogress.org]

(3) The US short-term deficit is overwhelmingly due to the Great Recession. The structural deficit – that part not due to the recession – is low enough that we can grow our way out of it: Once we’ve recovered from the recession, which is still our top priority from an economic perspective  This was all explained recently at yet another “bastion of socialism”, Bloomberg View’s The Ticker blog. Long-term health care costs are a different matter – but they’re not due to Medicare per se, they’re due to the wildly inefficient nature of the US health care system, which spends far more per capita than other countries with better health outcomes. Obamacare has improved the efficiency, extending the life of Medicare, but much more remains to be done.

(4) Because interest rates are so low, government can now borrow at negative rates (adjusted for inflation), meaning that it’s actually very sensible to borrow more now to increase the speed that we get back to a full employment economy. It’s utterly misleading to compare a money-printing national economy to a household, but if we must, it’s like taking out a zero-percent loan to buy a home, and stop paying rent. In the right circumstances, more of the right kind of debt is exactly what you need to get out of debt. The 30-year rates are somewhat higher, but economist Brad DeLong has explained how government borrowing at those rates still amounts to that rarest of things for an economist – a free lunch.

The economy could be a lot better but it also is not in the crapper as too many people would have you believe……..the key is to look at ALL economic data not just the stuff that feeds your belief….I know that will be difficult but at least give it a try…..

What Do You Really Know About The Fiscal Cliff?

All the negotiations are finished and no one is really happy with the deal made by our asshat politicians……but what do you really know about the deal that ended the hoopla?  Not the talking points that your favorite politician or media outlet has told you……what is the end deal?

Time to learn………

There is good, bad and ugly in the deal……Michael Synder has summed it up very well…….

The Good

-One of the best things about the fiscal cliff deal is that income tax rates did not rise on the poor and the middle class.  This is great news for millions of families that are struggling to make ends meet each month.  A significant rise in income tax rates would have been crippling.

-The Alternative Minimum Tax will now be permanently adjusted for inflation.  This is something that I had screamed about in previous articles.  If an AMT fix had not been passed, approximately 28 million households would have been hammered with the Alternative Minimum Tax on their 2012 earnings.

-Millions of unemployed workers will continue to receive extended federal unemployment benefits.  We probably cannot really afford to keep doing this, but at least now there won’t be millions of unemployed workers that suddenly have their only source of income shut off.  The next trick will be to find jobs for all of those workers.  Unfortunately, millions of our jobs continue to be shipped to the other side of the world.

The Bad

-Payroll taxes are going up for every American worker.  The fiscal cliff deal allows the 2 percent payroll tax cut to expire, and so now the average U.S. household bringing in about $50,000 a year will pay approximately $1,000 more per year in payroll taxes.  As a result, it is being projected that U.S. consumers will have $115 billionless in disposable income to spend in 2013.  Happy New Year American workers!

-The fiscal cliff deal did nothing about the new Obamacare taxes that went into effect on January 1st.  Many of these taxes will hurt the middle class.  To see an example of a receipt where a consumer was charged the new “medical excise tax” in Obamacare, just check out this article.

-The carried-interest deduction loophole remains intact, so incredibly wealthy hedge fund managers will continue to get away with paying very little in taxes.  If the rest of us are being taxed into oblivion, then they should share in the pain with the rest of us.  Of course I personally believe that the income tax should be abolished entirely, but none of our politicians seem interested in that idea at all.

-Income tax rates will increase for high earners.  This will hurt a lot of small businesses.  Many small businesses that earn more than $400,000 a year will now be faced with making some really tough choices.  Some may have to lay off workers.  The top rate will now be 39.6 percent, but when other federal and state taxes are factored in, many small businesses will now be paying a top marginal rate of well over 50 percent.  That is absolutely obscene.

-A compromise was reached on the estate tax.  The exemption was scheduled to fall to just $1 million and the rate was scheduled to go up to 55 percent, and fortunately Congress decided to do something about that.  As I have written about previously, that would have been a disaster for many small businesses and family farms.  As a result of the fiscal cliff deal, the estate tax will only rise from 35 percent to 40 percent.  The exemption for individuals will be about 5 million dollars and for couples it will be about 10 million dollars, and those figures will now be indexed for inflation.  A tax increase is never a good thing, but if Congress had done nothing things would have been far worse.

-The fiscal cliff deal contains a lot of pork.  In particular, it contains provisions that extend specific tax breaks related to Puerto Rican rum, electric motorcycles, biodiesel and renewable diesel fuel, the film and television business, and motorsports entertainment complexes.

The Ugly

According to the Congressional Budget Office, as a result of this deal the U.S. national debt will be about $4 trillion higher a decade from now than it would have been if Congress had done nothing.

The deficit for fiscal year 2013 alone will be about $330 billion higher than it would have been if Congress had done nothing.

So this deal has made our debt problems even worse.

Right now, the U.S. has a debt to GDP ratio of about 103 percent.  We are already well into the “danger zone”, yet most Americans still don’t seem very concerned about all of this debt.

The fiscal cliff deal contained hardly any spending cuts at all.  In fact, there was a 41 to 1 ratio of tax increases to spending cuts in the deal.  The Democrats definitely won this round.  But of course they had most of the leverage.  If Congress had done nothing, the middle class would have been absolutely devastated by all of the tax increases, and the Republicans were desperate to prevent that.

SCHOOLED!

Now there is your deal……..and now we will be bombarded with the crap on the debt fight to come…….

Let’s make one thing clear at this point……..the debt debate is about money already spent….not money to be spent…..let them play you like a cheap drum…Hell, they have been playing you for years and you just smile and let them get away with it…….

Do You Know Where The Money Goes?

Americans hear a lot about the taxpayers money and where it goes….Dems want it to go to infrastructure to try and create some jobs….Repubs want it to………thinking……thinking…..I am not sure where they want our money to go…..but according to them it is being wasted and at an alarming rate……but do you know, I mean really know where your money goes and for what?

The Center For Budget and Policy Priorities was broken it down for us mere mortals…..us unknowing peasants…….

  • Defense and international security assistance: In 2011, 20 percent of the budget, or $718 billion, paid for defense and security-related international activities. The bulk of the spending in this category reflects the underlying costs of the Department of Defense and other security-related activities. The total also includes the cost of supporting operations in Iraq and Afghanistan, funding for which totaled $159 billion in 2011.
  • Social Security: Another 20 percent of the budget, or $731 billion, paid for Social Security, which provided retirement benefits averaging $1,229 per month to 35.6 million retired workers in December 2011. Social Security also provided benefits to 2.9 million spouses and children of retired workers, 6.3 million surviving children and spouses of deceased workers, and 10.6 million disabled workers and their eligible dependents in December 2011.

Medicare, Medicaid, and CHIP: Three health insurance programs – Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) – together accounted for 21 percent of the budget in 2011, or $769 billion. Nearly two-thirds of this amount, or $486 billion, went to Medicare, which provides health coverage to around 48 million people who are over the age of 65 or have disabilities. The remainder of this category funds Medicaid and CHIP, which in a typical month in 2011 provided health care or long-term care to about 60 million low-income children, parents, elderly people, and people with disabilities. Both Medicaid and CHIP require matching payments from the states.

  • Safety net programs: About 13 percent of the federal budget in 2011, or $466 billion, went to support programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship. Spending on safety programs declined in both nominal and real terms between 2010 and 2011 as the economy continued to improve and initiatives funded by the 2009 Recovery Act began to expire.These programs include: the refundable portion of the earned-income and child tax credits, which assist low- and moderate-income working families through the tax code; programs that provide cash payments to eligible individuals or households, including Supplemental Security Income for the elderly or disabled poor and unemployment insurance; various forms of in-kind assistance for low-income families and individuals, including food stamps, school meals, low-income housing assistance, child-care assistance, and assistance in meeting home energy bills; and various other programs such as those that aid abused and neglected children.Such programs keep millions of people out of poverty each year. A Center analysis shows that government safety net programs kept some 25 million people out of poverty in 2010. Without any government income assistance, either from safety net programs or other income supports like Social Security, the poverty rate would have been nearly double in 2010 (28.6 rather than 15.5 percent).
  • Interest on the national debt: The federal government must make regular interest payments on the money it has borrowed to finance past deficits – that is, on the national debt held by the public, which reached $10 trillion by the end of fiscal 2011. In 2011, these interest payments claimed $230 billion, or about 6 percent of the budget.

There you have an overview of where your money goes….now use this to help you decide where to place your vote….if the you need help, that is……

That Special Place

Inkwell Institute

Subject:  Europe

We all have that special place…the place we lived as a child or that place of the first kiss or our first sexual encounter or…..well a place that holds a special place in our hearts…..Mine is Spain…..I lived there twice in my life…once as a young teenager and then as an adult…..a place of great food, wine and beauty….and yes my first adventure in love and sexuality……..her name was Charlotte a French girl from Paris and a red head….in retrospect….that could explain my obsession with red heads…..whatcha think?  I also worked as a researcher for a Spanish newspaper….so I guess Spain is a place that I watch fondly…….

Sorry I digress into my past……but Spain is a source of concern in the existing economic upheaval around the world, but especially in the ailing European Union.

You may remember all the hub-bub over the situation in Greece….well Spain is reaching that point, as we speak……observations of Gonzalo Lira…….

Spain’s jobs-scarce economy plunged back into recession in the first quarter of 2012 as employment slumped even further, the Bank of Spain said Monday.

Barely two years after emerging from the last downturn, Spain slid into recession again with two consecutive quarters of economic contraction, the central bank said in a report.

Gross domestic product fell by an estimated 0.4-percent in the first quarter of 2012 after a 0.3-percent decline in the last three months of 2011, the bank said.

Spain, whose unemployment rate at the end of 2011 was already the highest in the industrialised world at 22.85 percent overall and nearly 50 percent for the young, suffered a further sharp jobs decline.

The government forecasts the jobless rate will rise to 24.3 percent this year as the sagging economy struggles to absorb millions of jobs destroyed in the collapse of a property boom in 2008.

The European Central Bank had helped to ease market tensions, Spain’s bank said, alluding to the ECB’s decision to extend more than one trillion euros in low-interest, three-year loans to the region’s banks.

Spain’s economic woes are just the beginning…..and with their propensity for protests and not always the calmest of situations….. I look for rising violence and the new government, elected last year, to fall and chaos will reign…..kind of like Greece……

If this happens and I think it will what will happen to the country?

An opinion is that they will exit the Euro on a dead run……..

With a 24% unemployment rate that is rising, and over half of the young people unemployed, no politician in his right mind—especially a nationalist—will decide that even more austerity is the cure for the disease. One thing is cutting off the fat—it’s quite another to be cutting to the bone.

For Rajoy and de Guindos, it will be simpler to exit the eurozone, go back to the peseta, and devalue by 20% to 30% right off.

It is always easier for a politician to cut expenditures via devaluation than via nominal spending cuts. Since the Eurocrats won’t allow a 20-30% devaluation of the euro, and since Spain cannot really cut any more or find any more money in the bond markets, then the only thing left for it to do is devalue a currency that it controls.

On a personal note…..I would not cry over Spain leaving the EU….I remember it from my youth and would like to see a Spain that can be enjoyed and not feel like I was held at gunpoint by the EU.