Tag: Economic Woes

In Those Declining Days

Today I would like to focus on some of our more pressing domestic problems……and there are many……and we have NO one working to solve those problems….we are so fortunate to be living in these days (sarcasm)…..

Remember when you started to work the thoughts you had?  First, I am getting a regular pay check and second you started thinking about what it would be like to retire in some years and live the Life of Riley (a sitcom from the 1950’s)…….you could lay around in the sun on a beach in Tahiti….or kick back and do all the things that time just would not let you do while employed….remember those days?

And then came the crash and burn of most everyone’s 401k and their retirement funds……and now you are trying to scratch back to having those dreams…..sadly I saw a report that just made me feel sorry for those approaching retirement……

(Newser) – Here’s a scary stat for you, spotted by the Washington Post: About 1 in 5 people nearing retirement have no money for retirement. It comes from a newly released survey by the Federal Reserve of about 4,100 Americans. In total, 31% had saved no money for retirement, though the figure improved to 19% for those ages 55 to 64. What’s more, 20% of people over 60 said retirement planning hadn’t even crossed their minds, which probably explains why 24/7 Wall St. calls this “the next crisis.” Another depressing find: Some 40% of non-retirees 45 and over have had to delay their pre-recession retirement plans.

The problem doesn’t just boil down to poor planning. “Many respondents, particularly those with limited incomes, indicated that they simply have few or no financial resources available for retirement,” researchers say. In particular, a quarter of respondents said they were “just getting by,” while 13% said they were struggling, CBS News reports. About 45% of people said they planned to rely on Social Security to pay the bills in retirement, while 25% gave the following answer: “I don’t know.” Just as many said they expected to work as long as they could, and another 18% planned to get a part-time job after retiring.

To me it is just wrong!  Work your entire adult life and in an instance you are screwed from having any type of retirement dream other than praying you will be able to meet your bills.  Is it just me, or does something need to change and change soon?

Wanna Beer After Work?

If you are not watching the Sochi Olympics (congrats of 2 Americans with Gold in Snowboarding and NO the “flying tomato” is not one of them) then you have either watched the mind numbing crap they call reality TV….or you watched the news…..and I use the term loosely….nothing I saw on the tube was interesting enough to keep my attention…..with that said…let’s talk about something that will be tossed around the web in the next month or so……MINIMUM WAGE!

I know that economics is NO one’s fave topic……most Americans have NO idea what the science is all about other than how much they have to spend on the essentials like food, shelter, utilities, etc……but I apologize if this bores you….but somethings needed to be talked about….and economics is one of those subjects.

There has been so much chatter about the minimum wage…..some want to see a rise in it and others spin it as a jobs killer and a small business killer……all that is just ducky….but if you are having to work for minimum then it is a different story…..those against it are millionaires or just plain STUPID!

From an purely economic perspective……a rise in the minimum will do well for the economy….but of course that is NOT good enough for it to happen….there will be an endless debate, especially by idiots that dash to the nearest camera, on the pros and cons……

I read a report a few days ago that stated that a minimum wage worker would have to work an hour to afford a couple of Starbucks……and that got me to thinking…..most of us working stiffs enjoy a cold one after work…..so after a little research I found a piece along those lines…….

For a minimum-wage worker in Bangladesh, grabbing a cold one after work amounts to a serious investment. To afford a beer, that employee must toil for 13.4 hours, according to an analysis by Quartz. The report compares the price of a half-liter of beer in a country’s bars with that country’s minimum wage. Among the results:

  • Beer-seekers will have the hardest time in Georgia, where it takes 15.1 hours of minimum-wage work to earn a drink.
  • Puerto Rico is at the opposite end of the spectrum: Work for 12 minutes on minimum wage, and you can pay for a beer.
  • US workers have to work for twice as long as those in Puerto Rico; at 24 minutes, the US rate matches those of Canada, Spain, Taiwan, Germany, and Japan, among others.
  • After Georgia and Bangladesh, the countries facing the most work per beer are Libya (7.5 hours) and Ethiopia (6.6 hours).
  • Luxembourg, Australia, and Cyprus are runners-up for the briefest periods of toil, at 18 minutes per beer.

There you have the break down.  NO wonder Aussie like their brew.

Anything to add?

Why Is This Not “Insider Trading”?

From the VOMITORIUM

We hear all about the woes of the congress people….how they have to live in their office to save money….but there seems they are finding ways to make ends meet……

This from an article in the HuffPo…….

Four university researchers examined 16,000 common stock transactions made by approximately 300 House representatives from 1985 to 2001, and found what they call “significant positive abnormal returns,” with portfolios based on congressional trades beating the market by about 6 percent annually.

What’s their secret? The report speculates, but does not conclude, it could have something to do with the ability members of Congress have to trade on non-public information or to vote their own pocketbooks — or both.

The researchers, Alan J. Ziobrowski of Georgia State University, James W. Boyd of Lindenwood University, Ping Cheng of Florida Atlantic University and Brigitte J. Ziobrowski of Augusta State University, noted that the circumstances are ripe for abuse.

“In the course of performing their normal duties, members of Congress have access to non-public information that could have a substantial impact on certain businesses, industries or the economy as a whole. If used as the basis for common stock transactions, such information could yield significant personal trading profits,” they wrote.

That smacks of “insider trading” in my mind……let us go to the approved definition….

Insider trading is the trading  by individuals with potential access to non-public information about the company.  However, the term is frequently used to refer to a practice in which an insider or a related party trades based on info of  non-public information obtained during the performance of the insider’s duties at the corporation, or otherwise in breach of a fiduciary or other relationship of trust and confidence or where the non-public information was misappropriated from the company…….

Sorry and I feel for the poor abused Congress people (and yes…that is sarcasm)…..They are PIGS…….but if they are trading on info that they got while serving in Congress….then they are criminals and guilty of inside trading…..this should be turned over to the DoJ immediately!

Porno Wants Bailout Cash

Is the porn industry up next for a bailout?  If porn titans Joe Francis and Larry Flynt have anything to do with it, it will.

Yes, ladies and gentleman, the titans of pornography are begging for a bailout.

Joe Francis, creator of the “Girl’s Gone Wild” video series, and Larry Flynt, founder of Hustler, will ask Congress for a $5 billion bailout, according to TMZ.

Why does the porn industry need a bailout?  Because apparently even porn is getting smacked by the recession.

XXX DVD sales have taken a hit – about a 22% hit, according to TMZ.

“With all this economic misery and people losing all that money, sex is the farthest thing from their mind,” Flynt is quoted as saying on TMZ. “It’s time for Congress to rejuvenate the sexual appetite of America.”

Francis thinks that the porn industry deserves a bailout just like the auto and financial industries got, and he said he’ll go to DC to get it, according to TMZ.

2009 Economic Forecast

An analysis written by John Case.
The economic outcomes of 2009 for working people, one year from now, is in the hands of the acutest political struggle which is emerging over how exactly government should intervene in the US economy to avert a depression? How much more, or what different kinds of, intervention will be required for recovery? And, what is Recovery?

On one wing conservatives still intoxicated with free-market-fundamentalism, or unprepared Republican Party organizers desperate to hold on to the crumbling remains of their “Reagan coalition” will, use every diversion to avert another 40 year long Democratic Party congressional supremacy, as followed the election of FDR, the passage of social security, the NLRA, unemployment insurance, etc. Already, blatant racism and immigrant bashing within the Republican Party leadership are reflecting the desperation. Expect to hear strong demands for protectionism, racist, nativist and isolationist ideas and provocations, from this group in response to the crisis. In addition this wing has yet to confront its numbness over finding that military might alone, or even in the main, will not meet the challenges globalization demands be solved: inequality, development, energy, democracy, climate change, universal labor and human rights. So far it does not appear as if any of Obama’s appointees are from this wing. However, to the extent these forces are able to block, distort, waste or significantly blunt the Obama stimulus campaign they shall remain the most dangerous threat to halting the current and dramatic economic free-fall and bringing the economy under effective control and management.

Another wing – lets call them the “formerly-neo-liberal-now-leaning-more-liberal” (FNLNLML) financial sector with allies throughout the real estate, insurance, manufacturing and defense sectors. Obama has several of these in his cabinet: Geithner, Summers, Volker, and for a while – Gates. On the economic side these forces represent the most powerful institutions of finance capital. They are prepared to spend as many dollars as it takes to stimulate the economy according to the advice of Keynesian economists. To varying degrees they embrace universal health coverage, liberalization of labor law, major public infrastructure and education investments, and restructuring of the financial, real estate, energy, transportaion and manufacturing sectors of the economy – pretty much the commanding heights of the economy.

Yet this wing’s chief weakness in democratic reforms or nationalizations is already evident in the US Treadury takeovers/bailouts of A.I.G, GMAC, and scores of banks and reborn-over-night-as-banks institutions scrambling to get a piece of the $700 Billion TARP funds passed last month by Congress. That weakness is spinelessness and feebleness when it comes to actually exerting its legal power to place the public interests over private ones in the execution of its duty – which is to restore confidence, liquidity and lending at adequate rates to financial markets, effect full employment and moderate inflation. In part this weakness is currently so pronounced because the government may have the legal authority to takeover management of the “too-big-to-fail” financial institutions, but not the ability or tools with which to really perform management functions.
The third wing are the millions of ordinary working people, notably organized labor, retirees, professionals, small business, the large majorities of African American, Latino, Asian, Women and Youth that became mobilized and activated in the grass-roots campaigns of the election season – especially the Obama campaign. This is the wing, the only one, that can remain consistent and insure the stimulus, revitalization and recovery promises of the Obama campaign can become real. This is the wing that understands stupid when it sees a failed car company management being bailed out for (now) over 20 billion dollars, when the government could have bought the company for $3 billion. This is the wing that must go to war with corporate and defense lobbying corruptions that left to their own half-hearted beneficence will divert a lions share of the stimulus support into futile and self-serving kickbacks.

Lets be straigtforward in defining exactly how to determine the minimum economic conditions by which a stimulus program may be judged successful: a) when full employment is restored; and b) when universal health coverage is enacted. Both are eminently doable, but both will require “a new birth of freedom” of association and mobilization by working people of the United States, and efective public instruments serving their will – to fufill all the social and economic tasks subordinate to this historic effort.

Its either going to be a breakthrough year for the peoples movements and organizations, or its going to be very bad.

Is The Consumer Running Sacred?

The U.S. consumer is in a foul mood, and the effects on investors and the economy are likely to be harsh.

The Conference Board said on Oct. 28 that its consumer confidence index has dropped to an all-time low, from 61.4 in September to 38 in October. Americans were partly reacting to what they saw on the news in the past month: A plunge in the stock market, the dysfunctional credit markets, the failure of major financial firms, passage of a $700-billion bailout package in Washington, and a Presidential campaign focused on the economic crisis.

The impact on the economy from this crisis of confidence may be even more doom and gloom. “When people believe there will be a recession, there will be a recession,” says Jerry Webman, chief economist for OppenheimerFunds.

Americans can be expected to cut back on spending and to augment their savings accounts for tough times ahead. But that saving, however virtuous, will rob the rest of the economy of important revenue. That’s a phenomenon economist John Maynard Keynes called the “paradox of thrift.”

But because of declining confidence and other factors such as the tough job market, many economists say they expect consumer spending to fall by 3% or more in the third quarter of 2008. That would be the worst drop in consumption since 1981.

The timing of the recent market turmoil couldn’t be worse for U.S. retailers, which are highly dependent on the holiday season. “It’s going to be a tough holiday season,” Hembre says. “Every indication is that people are not inclined to spend,” Webman adds. The stocks of department stores Macy’s and Nordstrom  have lost nearly half their value in the past month, partly reflecting those holiday worries.

Discount stores such as Wal-Mart and Target also have taken their lumps, with Wal-Mart down about 9% in the past month and Target off 25%. “We continue to expect consumers to migrate toward discounters, off-price, and mass-merchant retailers during the upcoming holiday spending season. However, we believe that even these retail segments will experience slower trends relative to recent month run-rates,” wrote Brian S. Postol, senior retail analyst at Jesup & Lamont earlier this month.

NO! To Wall Street Bailout

Sorry guys but the money will not last much longer.  Eventually the government is going to have to just let one of these large speculation firms fail.

There was Goldman-Sachs, Fannie and Freddie, Lehman Bros, Bear-Stearns and the list will most likely continue and at some point we will have to stop the bailouts.  Unfortunately, there is NO limitless supply of funds.  The question is, when will the American voter decide enough is enough?

The plan, which is being rushed through Congress for passage this week, is the response of the government and the entire political establishment to what is acknowledged to be the greatest economic crisis since the Wall Street crash of 1929. It calls for an unprecedented transfer of public funds to the major banks and the American financial elite at the expense of the broad mass of the people.

Both the plan itself and the manner in which it is being imposed are deeply undemocratic. Exploiting the breakdown in US and global financial markets, the financial aristocracy, which is responsible for the crisis, is exercising its control over the government, both political parties, and the media to implement policies of the most far-reaching character without any genuine debate or discussion. As in the aftermath of 9/11, it is seeking to utilize the crisis to push through policies that would otherwise be considered entirely unacceptable.

None of the measures being carried out changes the underlying causes of the financial meltdown, nor will they resolve the crisis. At most, they will only postpone the day of reckoning.

This flagrantly unconstitutional provision establishes the unelected Treasury secretary as a law unto himself, beyond the control or oversight of Congress, other executive agencies or the courts. Two things need to be said of this provision: It makes overt what is normally hidden behind the trappings of American democracy—that is, the dictatorship of finance capital—and it implicitly acknowledges that what is being proposed is a violation of law. Why else insist that no one be allowed to challenge it in court?

Without some sort of oversight—then I say no to this attempt to just help the speculators that put us in this crisis.

Who Is Henry Paulson?

Soon to be King Henry!

Does anyone really know who he is?

I know that you have heard the name and you mat possibly know who he is, the Sec. of Treasury, but what else do you know about the guy that will have unlimited control of almost a trillion dollars?  I will bet not much.  That is about to change and you may thank the Professor for his diligence.

The plan to rescue the US financial industry arrogates virtually unlimited money and power over the financial affairs of the state to the office of Treasury Secretary Henry Paulson. Paulson is a figure with a long history of intimate connections to the political and financial elite.

In 1970, fresh from the Masters program of the Harvard Business School, Paulson entered the Nixon administration, working first as staff assistant to the assistant secretary of defense. In 1972-73, Paulson worked as office assistant to John Erlichman, assistant to the president for domestic affairs. Erlichman was one of the key figures involved in organizing President Richard Nixon’s notorious “plumbers” unit that carried out illegal covert operations against the president’s political opponents, including espionage, blackmail, and revenge. Ehlichman resigned in 1973, and in 1975 he was convicted of obstruction of justice, perjury, and conspiracy, and was imprisoned for 18 months.

Utilizing his connections, Paulson went to work for Goldman Sachs in 1974. In a 2007 feature, the British newspaper the Guardian wrote, “Not only was he well connected enough to get the job [in the Nixon White House], but well connected enough to resign in the thick of the Watergate scandal without ever getting caught up in the fallout. He went straight to Goldman back home in Illinois.”

Paulson rose through the ranks of Goldman Sachs, becoming a partner in 1982, co-head of investment banking in 1990, chief operating officer in 1994. In 1998 he forced out his co-chairman Jon Corzine “in what amounted to a coup,” according to New York Times economics correspondent Floyd Norris, and took over the post of CEO.

Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March, Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.

In the months leading up to his proposed $700 billion bailout of the financial industry, Paulson had already used his office to dole out hundreds of billions of dollars. After his July 2008 proposal for $70 billion to resolve the insolvency of Fannie Mae and Freddie Mac failed, Paulson organized the government takeover of the two mortgage-lending giants for an immediate $200 billion price tag, while making the government potentially liable for hundreds of billions more in bad debt. He then organized a federal purchase of an 80 percent stake in the giant insurer American International Group (AIG) at a cost of $85 billion.

There you are sports fans, I am sure that there is something I missed, but this is as much as I could find on short notice.  Now you decide if a trillion dollars should be controlled by one person, in essence.

What Does The Bailout Really Say?

We are listening to the news and see that Wall Street is set to be bailed out of there current problems, but what does the plan really say?  Just thought, for those who want to know, here is the wording:

The text of the four-page “Legislative Proposal for Treasury Authority to Purchase Mortgage-Related Assets,” published Saturday by the New York Times, reveals the profoundly anti-democratic and open-ended nature of the scheme.

The first provision establishes the unlimited and unilateral authority of the Treasury secretary, an unelected official, to order the use of taxpayer funds to purchase whatever “mortgage-related” securities, at whatever price, at whatever amount and from whatever financial institutions he chooses.

It states that the secretary—currently Henry Paulson, the multi-millionaire former CEO of Goldman Sachs—is “authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the secretary, mortgage-related assets from any financial institution…”

This is followed by a provision stipulating that the Treasury secretary’s authority under the act is “without limitation.”

A further provision authorizes the Treasury secretary to enter into contracts with the banks “without regard to any other provision of law regarding public contracts.” In other words, to ignore established law concerning public contracts.

The proposal states that the government will designate “financial institutions” to operate the bailout program. This means that the government will hand over management of the program to some of the very corporations that are responsible for the crisis and which stand to profit directly or indirectly from the bailout.

Congress, under the proposal, will be relegated to receiving semi-annual reports from the Treasury Department. It will have no real power of oversight or control.

The proposal gives the Treasury secretary unchecked authority to resell assets the department has taken off of the hands of the banks. This means that the banks will profit on both ends of the deal—they will be relieved of massive debts and will then be able to buy back the securities at fire-sale prices after the housing market has restabilized.

The text states that the Treasury secretary’s authority to purchase mortgage-related assets will be limited to $700 billion “at any one time.” In other words, he will be able to buy more worthless assets after having sold back some of those previously purchased—rendering the supposed $700 billion limit fictitious.

Under “Termination of Authority,” the proposal declares a two-year limit, but includes certain exemptions that will, in practice, enable the Treasury to extend the duration of the program indefinitely.

The proposal calls for a $700 billion increase in the statutory limit on the national debt, raising it to $11.315 trillion.

It then defines “mortgage-related assets” so broadly as to potentially cover everything from trillions of dollars in bonds to the estimated $62 trillion unregulated market in so-called “credit default swaps.”

Perhaps the most extraordinary provision reads as follows: “Decisions by the secretary pursuant to the authority of this act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Now you have the wording of the plan….you decide who it benefits and who it screws.