Part 2 WWE Christmas Weekend "Do You See What I See?" December 26-27, 2009

[Demeter]

Link back to Part One:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x505263

Pulling more goodies out of my inbox for all the good boys and girls, who want to know what the Bad Boys and Girls are up to.

I'm having a hard time coming up with women fraudsters (although if you Google women in fraud, you come up with many, they are for minuscule amounts) aside from Rebecca S. Parrett, whose rap sheet can be found here:

http://www.amw.com/fugitives/brief.cfm?id=55267

Sic transit gloria mundi.

That's depressing enough for the end of the year, I think. Especially when coupled with 133 more emails to wade through...

[Demeter]

1. American Fascism: By political definition the US is now fascist, not a constitutional republic

I guess it's official...

http://www.informationclearinghouse.info/article24181.htm

http://www.examiner.com/x-18425-LA-County-Nonpartisan-Examiner~y2009m12d14-American-fascism-by-political-definition-the-US-is-now-fascist-not-a-constitutional-republic

Look in any textbook or encyclopedia and compare US policy (not rhetoric) to the definitions of fascism and constitutional republic. I’ll explain it here, but check my work. If at the end of your consideration, you agree that the United States of America is now a fascist state, please speak-up about it. Also, consider the policy requests at the end of the article.

Please read this article like a prima facie legal argument; that means unless you can refute the facts, they stand as our best understanding of the issue. Here, if you can’t refute the evidence that the US is now a fascist state, then accept this as your best understanding. As time passes, if evidence is brought forward to further the case for fascism or refute it, your comprehensive understanding improves. Here we go:

Definitions:
The definition of “fascism” has some academic variance, but is essentially collusion among corporatocracy, authoritarian government, and controlled media and education. This “leadership” is only possible with a nationalistic public accepting policies of war, empire, and limited civil and political rights.

“Constitutional republic” is a political philosophy of limited government, separated powers with checks and balances to ensure the federal government’s power stays limited within the Constitution, protected civil liberties, and elected representatives responsible to the people who retain the most political power. In the US we also embrace inalienable rights of the Declaration of Independence, and creative independence to cooperatively compete for our nation’s best ideas to move forward and be rewarded.

History:
The United States was structured as a constitutional republic. Before we consider the US present condition, let us contextualize our concern from the nation’s Founders’ grave admonishments and doubts as to Americans’ ability to retain it. If you honor America at all, give their most serious warnings your full attention for the next 1,000 words spanning from Ben Franklin to Abraham Lincoln.

On September 18, 1787, just after signing the US Constitution, Benjamin Franklin met with members of the press. He was asked what kind of government America would have. Franklin: “A republic, if you can keep it.” In his speech to the Constitutional Convention, Franklin admonished: “This is likely to be administered for a course of years and then end in despotism... when the people shall become so corrupted as to need despotic government, being incapable of any other.” The Quotable Founding Fathers, pg. 39

“The right of a nation to kill a tyrant, in cases of necessity, can no more be doubted, than to hang a robber, or kill a flea. But killing one tyrant only makes way for worse, unless the people have sense, spirit and honesty enough to establish and support a constitution guarded at all points against the tyranny of the one, the few, and the many. Let it be the study, therefore, of lawgivers and philosophers, to enlighten the people's understandings and improve their morals, by good and general education; to enable them to comprehend the scheme of government, and to know upon what points their liberties depend; to dissipate those vulgar prejudices and popular superstitions that oppose themselves to good government; and to teach them that obedience to the laws is as indispensable in them as in lords and kings.” - John Adams, A Defence of the Constitutions of Government (1787), Ch. 18.

“A mere demarcation on parchment of the constitutional limits (of government) is not a sufficient guard against those encroachments which lead to a tyrannical concentration of all the powers of government in the same hands.” - James Madison, Federalist Paper #48, 1788.

“Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. In war, too, the discretionary power of the Executive is extended; its influence in dealing out offices, honors, and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force, of the people. The same malignant aspect in republicanism may be traced in the inequality of fortunes, and the opportunities of fraud, growing out of a state of war, and in the degeneracy of manners and of morals engendered by both. No nation could preserve its freedom in the midst of continual warfare.” – James Madison, "Political Observations" (1795-04-20); also in Letters and Other Writings of James Madison (1865), Vol. IV, p. 491.

“It is jealousy and not confidence which prescribes limited constitutions, to bind down those whom we are obliged to trust with power... Our Constitution has accordingly fixed the limits to which, and no further, our confidence may go... In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”
- Thomas Jefferson, Draft Kentucky Resolution (1798. ME 17:388)

“A popular Government without popular information, or the means of acquiring, it is but a Prologue to a Farce or a Tragedy, or perhaps both. Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.” – James Madison, Letter to W.T. Barry (1822-08-04)

Washington made the topic of the Farewell Address he had printed and distributed as the culmination of his advice to Americans to “guard against the impostures of pretended patriotism.”

“All obstructions to the execution of the laws, all combinations and associations, under whatever plausible character, with the real design to direct, control, counteract, or awe the regular deliberation and action of the constituted authorities, are destructive of this fundamental principle, and of fatal tendency. They serve to organize faction, to give it an artificial and extraordinary force; to put, in the place of the delegated will of the nation the will of a party, often a small but artful and enterprising minority of the community; and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill-concerted and incongruous projects of faction, rather than the organ of consistent and wholesome plans digested by common counsels and modified by mutual interests.

However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion…

Lincoln spoke in honor of the few still-living veterans of the Revolutionary War in the concise power we ascribe as one of history’s most powerful.

The following six paragraphs are from Abraham Lincoln in his Lyceum Address, January 27 1838.

“At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide...

I know the American People are much attached to their Government;--I know they would suffer much for its sake;--I know they would endure evils long and patiently, before they would ever think of exchanging it for another. Yet, notwithstanding all this, if the laws be continually despised and disregarded, if their rights to be secure in their persons and property, are held by no better tenure than the caprice of a mob, the alienation of their affections from the Government is the natural consequence; and to that, sooner or later, it must come.

Here then, is one point at which danger may be expected.

The question recurs, "how shall we fortify against it?" The answer is simple. Let every American, every lover of liberty, every well wisher to his posterity, swear by the blood of the Revolution, never to violate in the least particular, the laws of the country; and never to tolerate their violation by others. As the patriots of seventy-six did to the support of the Declaration of Independence, so to the support of the Constitution and Laws, let every American pledge his life, his property, and his sacred honor;--let every man remember that to violate the law, is to trample on the blood of his father, and to tear the character of his own, and his children's liberty. Let reverence for the laws, be breathed by every American mother, to the lisping babe, that prattles on her lap--let it be taught in schools, in seminaries, and in colleges; let it be written in Primers, spelling books, and in Almanacs;--let it be preached from the pulpit, proclaimed in legislative halls, and enforced in courts of justice. And, in short, let it become the political religion of the nation; and let the old and the young, the rich and the poor, the grave and the gay, of all sexes and tongues, and colors and conditions, sacrifice unceasingly upon its altars.

While ever a state of feeling, such as this, shall universally, or even, very generally prevail throughout the nation, vain will be every effort, and fruitless every attempt, to subvert our national freedom.

…Passion has helped us; but can do so no more. It will in future be our enemy. Reason, cold, calculating, unimpassioned reason, must furnish all the materials for our future support and defence.--Let those materials be moulded into general intelligence, sound morality, and in particular, a reverence for the constitution and laws.”

What is the evidence for American fascism in the present?
The US brazenly violates our laws of war, both demanded by the Constitution and the UN Charter, with open invasion of Afghanistan in abject violation of UN Security Council Resolution 1373 and their government’s agreement to help extradite Osama bin Laden upon US presentment of evidence that he was involved in any crime of UN and/or international law. The US refused both the Afghan standard legal requirement of extradition and the UN resolution for cooperation under law and attacked. The new administration of Obama does not acknowledge this illegal history, but expands the invasion and attacks Pakistan. This policy is fascist, not limited by US law.

The US openly lied about reasons to justify an attack upon Iraq, destroying any semblance of argument of “self-defense.” The Obama administration won’t acknowledge the disclosed history from our own House and Senate investigations, and violates his oath of office to prosecute clear crimes. This policy is authoritarian, fascist, and does not hold equality under just laws. It is an un-American policy by definition.

The US tortured, with Obama refusing to prosecute and giving empty rhetoric to end it. The destruction of civil liberties to enforce authoritarian government is fascist, not American.

The US lies for more war with Iran, rejecting inalienable and legal rights for Iranians. Obama continues this policy of unlawful aggression, including official policy for first-strike nuclear weapons upon conclusion that Iran poses a possible future threat to the US and/or our allies. Political leaders and corporate media ignore the ignoble history of US vicious domination of Iranian government through coup and backed invasion. Fascist policy; un-American.

The US violates numerous treaty law with WMD, and hypocritically asserts our war targets' alleged violations justify US armed attack. This rejection of limited government under the law is a fascist empire on the loose, not a law-abiding neighbor. Added hypocrisy is the psychopathic front of American political leaders as Christians.

American corporatocracy is dominated by Enron-like cartels, headed by banks receiving the transfer of TRILLIONS of our tax dollars to pay-off their gambling debts in exotic derivative markets the federal government regulates only in more empty rhetoric. This socialization of corporate-insiders’ losses is fascist, and fundamentally in opposition of the American ideal of cooperative competition on a level playing field. Obvious financial solutions for the public good are ignored in their corporate and not public policy commitment.

While our government's official line is respect for Islam, their wars betray this analysis. If extremists were the small minority, why not peacefully cooperate to marginalize and arrest those in violation of just laws? Muslims as a group are often demonized in US media, and often the entire group is branded as terrorists. For example, consider this segment from the radio talk show of Michael Savage.

The corporate media will not present such disturbing facts and analysis. Their outright lies of commission and omission are prima facie evidence of a controlled media, supported by revealed documentation from whistle-blowers. American freedom of the press is left to independent websites and those few media outlets who tolerate reporting such as you read now.

Yeah, but we’re not totally fascist! Saying the US is fascist is just not right!!!
Yes, I’ve made the case for fascism only in the area of tens of trillions of our tax dollars in the economy, Wars of Aggression based on objective lies, authoritarian disregard for crucial laws and treaties of war and moral conduct, expansion of new unlawful war into Pakistan with rhetoric leading to more war with Iran, and a corporate press who won’t communicate these “emperor has no clothes” facts until the public breaks free of their cognitive blindness to clearly embrace our new American political reality.

We still vote for Republicans and Democrats in elections, yes, in a monied system with a virtual lock against 3rd party candidates given the costs of advertising and breaking the inertia of a two-party system.

We still have Internet press where authors such as I can point to the obvious, but with documented government-organized opposition in PSYOPS to ridicule challenging voices while counting of public cognitive blindness to keep the fascism unconcealed.

Policy response: Gandhi and Martin Luther King advocated public understanding of the facts and non-cooperation with evil. I’m among hundreds who advocate:

1. Understand the laws of war. These were legislated after WW2 and are crystal-clear that only self-defense, in a narrow legal meaning, can justify war. This investment of your time takes less than an hour and empowers you to legally stand for ending these Wars of Aggression.
2. Communicate. Trust your unique, beautiful, and powerful self-expression to share powerful information as you feel appropriate. Understand that while many people are ready to embrace difficult facts, many are not. Anticipate your virtuous response to being attacked and give it in the spirit of competition, just as you do in other fields.
3. Refuse and end all orders and acts associated with these unlawful wars and constant violation of treaties. Those involved with US military, government, and law enforcement have an oath to protect and defend the US Constitution. Unlawful acts only move forward with sufficient cooperation and public tolerance. Stop cooperating with the most vicious crime a nation can commit: war.
4. Prosecute the war leaders for obvious violation of the letter and spirit of US war laws. You can only understand how these wars are specifically unlawful by investing the time to do so. Because the crimes are so broad and deep, I recommend Truth and Reconciliation (T&R) to exchange full truth and return of stolen US assets for non-prosecution. This is the most expeditious way to understand and end all unlawful and harmful acts. Those who reject T&R either by volunteering their name and/or responding when named are subject to prosecution after the window of T&R closes.


I conclude with the 5-minute powerful video from PuppetGov: Had enough?

Please share this article with all who can benefit. If you appreciate my work, please subscribe by clicking under the article title (it’s free). Please use my archive of work to help build a brighter future.


Had Enough? from PuppetGov on Vimeo.

<object width="400" height="300"><param name="allowfullscreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="movie" value="http://vimeo.com/moogaloop.swf?clip_id=5341266&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1" /><embed src="http://vimeo.com/moogaloop.swf?clip_id=5341266&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1" type="application/x-shockwave-flash" allowfullscreen="true" allowscriptaccess="always" width="400" height="300"></embed></object><p><a href="http://vimeo.com/5341266">Had Enough?</a> from <a href="http://vimeo.com/user1959725">PuppetGov</a> on <a href="http://vimeo.com">Vimeo</a>.</p>

Please share this article with all who can benefit. Please use my archive of work to help build a brighter future.

[Demeter]

2. "Melissa Hughes" Is a Character from a "Boston Legal" Episode

for those (like me) who thought a real person had made the case....

Many supporting links in original articles...

[DemReadingDU]

46. thanks for the articles and videos

much to think about. many people don't think nowadays, sad.

[Demeter]

7. Are Americans a Broken People? Why We've Stopped Fighting Back Against the Forces of Oppression

http://www.alternet.org/story/144529/are_americans_a_broken_people_why_we%27ve_stopped_fighting_back_against_the_forces_of_oppression?page=entire

Can people become so broken that truths of how they are being screwed do not "set them free" but instead further demoralize them? Has such a demoralization happened in the United States?

Do some totalitarians actually want us to hear how we have been screwed because they know that humiliating passivity in the face of obvious oppression will demoralize us even further?

What forces have created a demoralized, passive, dis-couraged U.S. population?

Can anything be done to turn this around?

Can people become so broken that truths of how they are being screwed do not "set them free" but instead further demoralize them?

Yes. It is called the "abuse syndrome." How do abusive pimps, spouses, bosses, corporations, and governments stay in control? They shove lies, emotional and physical abuses, and injustices in their victims' faces, and when victims are afraid to exit from these relationships, they get weaker. So the abuser then makes their victims eat even more lies, abuses, and injustices, resulting in victims even weaker as they remain in these relationships.

Does knowing the truth of their abuse set people free when they are deep in these abuse syndromes?

No. For victims of the abuse syndrome, the truth of their passive submission to humiliating oppression is more than embarrassing; it can feel shameful -- and there is nothing more painful than shame. When one already feels beaten down and demoralized, the likely response to the pain of shame is not constructive action, but more attempts to shut down or divert oneself from this pain. It is not likely that the truth of one's humiliating oppression is going to energize one to constructive actions.

Has such a demoralization happened in the U.S.?

In the United States, 47 million people are without health insurance, and many millions more are underinsured or a job layoff away from losing their coverage. But despite the current sellout by their elected officials to the insurance industry, there is no outpouring of millions of U.S. citizens on the streets of Washington, D.C., protesting this betrayal.

Polls show that the majority of Americans oppose U.S. wars in Afghanistan and Iraq as well as the taxpayer bailout of the financial industry, yet only a handful of U.S. citizens have protested these circumstances.

Remember the 2000 U.S. presidential election? That's the one in which Al Gore received 500,000 more votes than George W. Bush. That's also the one that the Florida Supreme Court's order for a recount of the disputed Florida vote was overruled by the U.S. Supreme Court in a politicized 5-4 decision, of which dissenting Justice John Paul Stevens remarked: "Although we may never know with complete certainty the identity of the winner of this year's presidential election, the identity of the loser is perfectly clear. It is the nation's confidence in the judge as an impartial guardian of the rule of law." Yet, even this provoked few demonstrators.

When people become broken, they cannot act on truths of injustice. Furthermore, when people have become broken, more truths about how they have been victimized can lead to shame about how they have allowed it. And shame, like fear, is one more way we become even more psychologically broken.

U.S. citizens do not actively protest obvious injustices for the same reasons that people cannot leave their abusive spouses: They feel helpless to effect change. The more we don't act, the weaker we get. And ultimately to deal with the painful humiliation over inaction in the face of an oppressor, we move to shut-down mode and use escape strategies such as depression, substance abuse, and other diversions, which further keep us from acting. This is the vicious cycle of all abuse syndromes.

Do some totalitarians actually want us to hear how we have been screwed because they know that humiliating passivity in the face of obvious oppression will demoralize us even further?

Maybe.

Shortly before the 2000 U.S. presidential election, millions of Americans saw a clip of George W. Bush joking to a wealthy group of people, "What a crowd tonight: the haves and the haves-more. Some people call you the elite; I call you my base." Yet, even with these kind of inflammatory remarks, the tens of millions of U.S. citizens who had come to despise Bush and his arrogance remained passive in the face of the 2000 non-democratic presidential elections.

Perhaps the "political genius" of the Bush-Cheney regime was in their full realization that Americans were so broken that the regime could get away with damn near anything. And the more people did nothing about the boot slamming on their faces, the weaker people became.

What forces have created a demoralized, passive, dis-couraged U.S. population?

The U.S. government-corporate partnership has used its share of guns and terror to break Native Americans, labor union organizers, and other dissidents and activists. But today, most U.S. citizens are broken by financial fears. There is potential legal debt if we speak out against a powerful authority, and all kinds of other debt if we do not comply on the job. Young people are broken by college-loan debts and fear of having no health insurance.

The U.S. population is increasingly broken by the social isolation created by corporate-governmental policies. A 2006 American Sociological Review study ("Social Isolation in America: Changes in Core Discussion Networks over Two Decades") reported that, in 2004, 25 percent of Americans did not have a single confidant. (In 1985, 10 percent of Americans reported not having a single confidant.) Sociologist Robert Putnam, in his 2000 book, Bowling Alone, describes how social connectedness is disappearing in virtually every aspect of U.S. life. For example, there has been a significant decrease in face-to-face contact with neighbors and friends due to suburbanization, commuting, electronic entertainment, time and money pressures and other variables created by governmental-corporate policies. And union activities and other formal or informal ways that people give each other the support necessary to resist oppression have also decreased.

We are also broken by a corporate-government partnership that has rendered most of us out of control when it comes to the basic necessities of life, including our food supply. And we, like many other people in the world, are broken by socializing institutions that alienate us from our basic humanity. A few examples:

Schools and Universities: Do most schools teach young people to be action-oriented -- or to be passive? Do most schools teach young people that they can affect their surroundings -- or not to bother? Do schools provide examples of democratic institutions -- or examples of authoritarian ones?

A long list of school critics from Henry David Thoreau to John Dewey, John Holt, Paul Goodman, Jonathan Kozol, Alfie Kohn, Ivan Illich, and John Taylor Gatto have pointed out that a school is nothing less than a miniature society: what young people experience in schools is the chief means of creating our future society. Schools are routinely places where kids -- through fear -- learn to comply to authorities for whom they often have no respect, and to regurgitate material they often find meaningless. These are great ways of breaking someone.

Today, U.S. colleges and universities have increasingly become places where young people are merely acquiring degree credentials -- badges of compliance for corporate employers -- in exchange for learning to accept bureaucratic domination and enslaving debt.

Mental Health Institutions: Aldous Huxley predicted today's pharmaceutical societyl "t seems to me perfectly in the cards," he said, "that there will be within the next generation or so a pharmacological method of making people love their servitude."

Today, increasing numbers of people in the U.S. who do not comply with authority are being diagnosed with mental illnesses and medicated with psychiatric drugs that make them less pained about their boredom, resentments, and other negative emotions, thus rendering them more compliant and manageable.

Oppositional defiant disorder (ODD) is an increasingly popular diagnosis for children and teenagers. The official symptoms of ODD include, "often actively defies or refuses to comply with adult requests or rules," and "often argues with adults." An even more common reaction to oppressive authorities than the overt defiance of ODD is some type of passive defiance -- for example, attention deficit hyperactivity disorder (ADHD). Studies show that virtually all children diagnosed with ADHD will pay attention to activities that they actually enjoy or that they have chosen. In other words, when ADHD-labeled kids are having a good time and in control, the "disease" goes away.

When human beings feel too terrified and broken to actively protest, they may stage a "passive-aggressive revolution" by simply getting depressed, staying drunk, and not doing anything -- this is one reason why the Soviet empire crumbled. However, the diseasing/medicalizing of rebellion and drug "treatments" have weakened the power of even this passive-aggressive revolution.

Television: In his book Four Arguments for the Elimination of Television (1978), Jerry Mander (after reviewing totalitarian critics such as George Orwell, Aldous Huxley, Jacques Ellul, and Ivan Illich) compiled a list of the "Eight Ideal Conditions for the Flowering of Autocracy."

Mander claimed that television helps create all eight conditions for breaking a population. Television, he explained, (1) occupies people so that they don't know themselves -- and what a human being is; (2) separates people from one another; (3) creates sensory deprivation; (4) occupies the mind and fills the brain with prearranged experience and thought; (5) encourages drug use to dampen dissatisfaction (while TV itself produces a drug-like effect, this was compounded in 1997 the U.S. Food and Drug Administration relaxing the rules of prescription-drug advertising); (6) centralizes knowledge and information; (7) eliminates or "museumize" other cultures to eliminate comparisons; and (8) redefines happiness and the meaning of life.

Commericalism of Damn Near Everything: While spirituality, music, and cinema can be revolutionary forces, the gross commercialization of all of these has deadened their capacity to energize rebellion. So now, damn near everything – not just organized religion -- has become "opiates of the masses."

The primary societal role of U.S. citizens is no longer that of "citizen" but that of "consumer." While citizens know that buying and selling within community strengthens that community and that this strengthens democracy, consumers care only about the best deal. While citizens understand that dependency on an impersonal creditor is a kind of slavery, consumers get excited with credit cards that offer a temporarily low APR.

Consumerism breaks people by devaluing human connectedness, socializing self-absorption, obliterating self-reliance, alienating people from normal human emotional reactions, and by selling the idea that purchased products -- not themselves and their community -- are their salvation.

Can anything be done to turn this around?

When people get caught up in humiliating abuse syndromes, more truths about their oppressive humiliations don't set them free. What sets them free is morale.

What gives people morale? Encouragement. Small victories. Models of courageous behaviors. And anything that helps them break out of the vicious cycle of pain, shut down, immobilization, shame over immobilization, more pain, and more shut down.

The last people I would turn to for help in remobilizing a demoralized population are mental health professionals -- at least those who have not rebelled against their professional socialization. Much of the craft of relighting the pilot light requires talents that mental health professionals simply are not selected for nor are they trained in. Specifically, the talents required are a fearlessness around image, spontaneity, and definitely anti-authoritarianism. But these are not the traits that medical schools or graduate schools select for or encourage.

Mental health professionals' focus on symptoms and feelings often create patients who take themselves and their moods far too seriously. In contrast, people talented in the craft of maintaining morale resist this kind of self-absorption. For example, in the question-and-answer session that followed a Noam Chomsky talk (reported in Understanding Power: The Indispensable Chomsky, 2002), a somewhat demoralized man in the audience asked Chomsky if he too ever went through a phase of hopelessness. Chomsky responded, "Yeah, every evening . . ."

If you want to feel hopeless, there are a lot of things you could feel hopeless about. If you want to sort of work out objectively what's the chance that the human species will survive for another century, probably not very high. But I mean, what's the point? . . . First of all, those predictions don't mean anything -- they're more just a reflection of your mood or your personality than anything else. And if you act on that assumption, then you're guaranteeing that'll happen. If you act on the assumption that things can change, well, maybe they will. Okay, the only rational choice, given those alternatives, is to forget pessimism."

A major component of the craft of maintaining morale is not taking the advertised reality too seriously. In the early 1960s, when the overwhelming majority in the U.S. supported military intervention in Vietnam, Chomsky was one of a minority of U.S. citizens actively opposing it. Looking back at this era, Chomsky reflected, "When I got involved in the anti-Vietnam War movement, it seemed to me impossible that we would ever have any effect. . . So looking back, I think my evaluation of the 'hope' was much too pessimistic: it was based on a complete misunderstanding. I was sort of believing what I read."

An elitist assumption is that people don't change because they are either ignorant of their problems or ignorant of solutions. Elitist "helpers" think they have done something useful by informing overweight people that they are obese and that they must reduce their caloric intake and increase exercise. An elitist who has never been broken by his or her circumstances does not know that people who have become demoralized do not need analyses and pontifications. Rather the immobilized need a shot of morale.

[bread_and_roses]

15. I vividly remember that "haves and have-mores" clip...and a nod to Yeats

although, with the tricks memory plays, I had transposed it to just prior to the 'o4 election (some years ago I read a book titled "White Gloves" and several other non-fiction books about the then-current understanding of how memory works, including for example then-recent studies on how memories can be artificially created - they permanently altered my understanding of myself, my family, and our collective memory as a society).

I also vividly remember the clip of Commander Codpiece searching under his desk for the "missing" WMD. I wondered then, and still do to this day, why "our" candidates did not use those clips in their campaigns? Why? Why? Surely the "have-mores" clip, even if from '00, would still have had the power to shock and anger in '04? And the outrageous, infantile "joking" about WMD...????

Those eight years have left permanent scars - I'm sure I'm not the only one that's true of... As for our demoralized state, we came out of it in '08, did we not? Thinking we were changing the paradigm by electing Obama? Whatever his apologists here come up with from the minutiae of exactly what he said when, he campaigned as an agent of transformation. Change. The blow of his many betrayals on the fronts that matter most - money and militarism - is about as demoralizing as anything I've encountered in a long life of activism. Even cynical I had allowed myself "hope." Now, I find it hard to do even the things that are so routine for me and people like me - pick up the phone and call my congress-critter, for example.

For years and years I struggled to understand a line in "The Second Coming:"
"The best lack all conviction, while the worst
Are full of passionate intensity."
Being a passionate sort, it disturbed me greatly, for how could I - non-violent, committed to working for the common good - be among "the worst?"
I understand it now.

So here, for its deep truth, the wonder of its language, and its seasonal timliness, is Yeats, speaking to our times.

The Second Coming

TURNING and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

William Butler Yeats

[Demeter]

16. This is Why I'm Putting Money on Bloody Revolution

When everything else fails, but the pain grows, what is left?

[bread_and_roses]

42. "Riding on a Death Train full-throttle toward the abyss"

http://www.commondreams.org/view/2009/12/26-0

Beyond the Darkest Hours, Grassroots Rising
by Ronnie Cummins

Is This What Democracy Looks Like?

A critical mass of food and farm activists, North and South, are becoming aware that the second decade of the 21st Century likely marks the end of the road for chemical, energy, and water-intensive food and agriculture. And, as the energy, climate, and economic crises converge, a growing corps of climate activists understand that we are witnessing the beginning of the end for fossil fuel-based industry and transportation, energy-intensive housing and suburban sprawl, and a "profit-at-any-cost" economy based upon over-consumption, war, and commercial conquest.

...In 2009, indentured politicians, bought and sold by the corporate elite, crushed our hopes for peace and prosperity by spending trillions of our tax dollars on war, Wall Street, and corporate welfare. As a critical mass now understand, these trillions could and should have gone toward financing organic transitions, public health, and a Green New Deal. Given the fact that just over a year ago we drove the warmongers and corporate criminals of the Bush Administration out of office, and replaced them with a new set of so-called liberal Democrats, we should already be well on our way to changing course, averting economic meltdown and climate catastrophe. Instead Obama and his pompous cohorts have disillusioned an entire generation and stabbed the living Earth in the back. Riding on a Death Train full-throttle toward the abyss, it matters little whether the Commander in Chief is an outright fascist, like Bush, or merely a coward and a fraud, like Obama. Circumstances leave us no choice but to organize a mutiny and stop the Death Train.
...
Global Warming: An Organic Future, or No Future

One way or another, either planned or through necessity, humanity will return to organic and traditional agriculture, because it is the only farming system that can supply the world with sufficient quantities of healthy food in the emerging era of global warming, erratic weather, declining fossil fuels, and water scarcity. There is no other way.
...
Organic Transitions: Taking on the Fertilizer, Garbage and Sludge Industries

... Corporate agribusiness, industrial forestry, the garbage and sewage industry and agricultural biotechnology have literally killed the climate stabilizing, carbon sink capacity of the Earth's living soil. Industrial agriculture and forestry have eroded and depleted the soil food web, annihilating soil microorganisms and destroying plants, trees, and soil's natural capacity to clean the atmosphere and sequester CO2. This climate-disrupting ecocide is a direct result of the suicidal use of billions of pounds of synthetic nitrogen fertilizers, soil destroying pesticides, herbicides and fungicides, insecticidal GMO crops, factory farm waste, and toxic sewage sludge--instead of feeding the soil and maintaining soil vitality (and its ability to sequester carbon) with organic compost and fertilizers and cover crops....

Zero waste recycling and the creation of an abundant, affordable supply of organic compost is an essential part of our organic future. This means taking apart the profit at any cost garbage industry and the toxic sewage sludge cartel.

The High Costs of So-Called Cheap Food

Over the past 65 years, chemical agriculture, factory farms, and now genetic engineering have devastated public health, wrecked the environment, and destabilized the climate. The U.S. public now spends $2.4 trillion dollars a year on health care, $800 billion of which is directly attributable to consuming chemical-laden, nutritionally deficient processed food...

...After poisoning us with cheap food and destroying the environment, Big Food Inc. turns us over to Big Pharma and the Industrial Health Complex to repair the damage, or rather to keep us alive long enough to extract maximum profits. But from the warped perspective of the for-profit health insurance industry, overweight and diseased people aren't very profitable. That's why health insurance corporations spend $350 billion per year trying to avoid coverage and deny claims. The vast, paper-pushing bureaucracy the for-profit insurance industry has created to help them avoid providing services soaks up 31% of all health care spending!

If we shifted the 31% of health care spending taken up by the administrative costs of the for-profit health insurance industry to a single-payer, universal health care system, we could cover the uninsured without increasing total health-care spending. ...

...However:

IF PRESIDENT OBAMA SIGNS A BILL THAT TAKES AWAY OUR HEALTH RIGHTS, THAT FORCES AMERICANS TO BUY OVERPRICED, INADEQUATE COVERAGE FROM THE FOR-PROFIT HEALTH INSURANCE INDUSTRY, OCA WILL LAUNCH A BOYCOTT!

Forced health insurance is not health care reform, it's corporate welfare and it is a direct result of the nearly one billion dollars that the health care industry is projected to have spent to lobby and bribe the politicians who voted for the bill.

Most of our citizens are utterly unaware of the devastation to the ecosystem brought about by Big Agra. Once again, the combination of Capitalism and the subversion of anything like "news" by the Profiteers and their pod-people descendants of Bernays have engineered ignorance, apathy, and delusion in the face of our mass suicide. I am reminded of someone on "Fresh Air" telling the story of the "economist" in US who made the case that a 50% reduction in our agricultural output would not much matter, since AG was "only 3% of our GDP anyway, and a drop to 1.5% would hardly matter to our GDP and could easily be made up elesewhere in the economy. Our "economics" have become nothing but recipes for corporate profit, ignoring, for instance, that when millions need work, perhaps the labor-intensive hands-on earth-healing non-corporate farming may have benefits. (And there is no reason at all that agricultural work has to be brutal, slavery-like opprssion. Like our shortage of doctors, that is a construct we've chosen, and one we could change. It is always fascinating to me to see all the Christmas cards portraying traditional farm-scapes while our elite tell us that farming is lowly, brutal, stupid work, fit only for pennies per hour and the labor of those willing to work like mistreated mules.)

I posted this because evidently the writer still has hope and energy - talking of a boycott, yeah! There's also a link to an interesting, post-climate-meltdown short story "Diary of an Interesting Year" http://www.newyorker.com/fiction/features/2009/12/21/091221fi_fiction_simpson published in the New Yorker last week. It's well-done, but nothing remarkable for those of us familiar with dystopian science-fiction. (It is always interesting to me the respect accorded this sort of fiction on the rare occasions it gets published in "mainstream" fiction outlets - like reviewers swooning over Margaret Atwood's rather pedestrian "Handmaid's Tale" because it was by Margaret Atwood even though it recycled elements that have been standard fare in dystopian Sci-Fi for half a century or more.)
(edit for spacing)

[DemReadingDU]

44. "Diary of an Interesting Year"

I am not sure whether this is really fiction, or a foreshadowing of the future. Truly frightening, not for me as I will be dead by then, but that could be my grandbabies way of life.
:scared:

[Demeter]

31. What Is Totalitarianism? By Michael Kleen

http://www.informationclearinghouse.info/article24073.htm

If the United States came under the control of a totalitarian regime, would we recognize it? This question is of utmost importance today, when many of us harbor fears that some time in the near future ideas such as freedom, liberty, and privacy will be alien to our society. But as we witness the regular passage of legislation designed to restrict and regulate, and the tendency of the Federal government to increase rather than decrease its power (with a handful of exceptions), we are struck by the uninterrupted routine of life in the USA. As the central government brings more and more of private society under its control, we continue to watch cable TV, shop at supermarkets overflowing with products, and eat at our favorite restaurants. Could it be that we have already passed that dreaded threshold and missed it?

The trouble with diagnosing our condition is that most people are unaware of what totalitarianism actually is. Among even the most politically astute, there is little mental room for the possibility that a state in the process of becoming totalitarian might lack the most brutal and outward signs of oppressive regimes portrayed in popular culture. Because of our rather simplistic frame of reference—picture black and white images of National Socialist Germany or the Soviet Union —we recognize a country as either being in the advanced stages of totalitarianism or not at all. But just because a state maintains the structures and language of democracy and continues to have elections, for instance, that does not preclude it from being totalitarian.

In fact, North Korea has a constitution and holds regular elections with three competing political parties—the Workers' Party of Korea , the Korean Social Democratic Party, and the Chondoist Chongu Party—all united under an organization called the Democratic Front for the Reunification of the Fatherland. In April 2009, North Korea revised its constitution to include Article 8, which reads, “The State respects and protects the human rights of the workers, peasants and working intellectuals who have been previously freed from exploitation and oppression and have become masters of the State and society.” Yet North Korea is recognized as being one of the most oppressive totalitarian states in the world.

Totalitarianism and authoritarianism do not necessarily go hand in hand. Throughout human history, most governments have been authoritarian, but totalitarianism didn’t appear until the 20th Century. That is because until the birth of mass society, governments lacked the means to exercise total control over a large population. Tribes and municipalities may have sworn fealty to an overlord or emperor, for example, but beyond collecting taxes or levying armies, the monarch took very little interest in the personal lives of his or her subjects. Personal behavior was left to be governed by custom or religion. Totalitarianism is therefore not specifically a system of government, but a way of organizing society by means of a powerful, centralized modern state. It requires a mass media, education, and political culture in which the state—that is to say a class of bureaucrats and officials governing a large geographic area—takes over every aspect of civil society.

Totalitarianism, as succinctly defined by former Italian dictator Benito Mussolini, is “Everything within the state, nothing outside the state, nothing against the state.” The totalitarian mind views individuals not as citizens with their own interests, but as dependents with only one interest, and as such, it attempts to organize these masses around a particular ideology. Any thoughts, words, or actions that do not conform to this dominant ideology are made criminal or driven underground. In short, the state seeks total control over the people living within its jurisdiction. Totalitarian regimes attempt to achieve this control through personality cults, by mobilizing the population into national organizations, by censoring the media, through mass surveillance, and through various levels of state ownership of commerce and the means of production.

Traditionally, though with some exceptions, governments have recognized a distinction between public and private life. The earliest civil laws governed interactions between individuals that could result in material or physical harm. The totalitarian state, on the other hand, seeks to extend its authority not just over the public actions of a person, but to his or her own private associations, family life, and possessions as well. The individual interest thereby dissolves into the public interest, or in the words of radical leftist Carol Hanisch, “the personal is political.” Ultimately, the totalitarian goal is not just legal control over our actions, but our thoughts as well.

Finally, totalitarianism is a teleological worldview, meaning that the totalitarian mind sees all of history as unfolding toward an inevitable end—whether it be a communist state, a world government, or some other utopia. This end result, though never really achieved (thus the need for a “perpetual revolution”), is held up as a justification for every possible abuse, including mass murder. After all, opponents of the regime are simply getting in the way of historical progress.

Therefore, totalitarianism requires not only a belief in the power of the centralized state to eliminate all of humanity’s woes, but a belief in the inevitable victory of that state over private interests. As Mussolini inferred, there is nothing the totalitarian fears more than an individual acting outside the state. It is vitally important to understand that totalitarianism is not an exotic or abstract idea, but a reality of the contemporary world. It is something that we do not often recognize in our society, but is nevertheless an ever-present and growing danger.

What Is Totalitarianism? - Part II

By Michael Kleen

November 27, 2009 -- "STR" -- November 19, 2009 -- In the first part of this essay, we defined totalitarianism as the state-orchestrated dissolution of the private sphere, initiated by an ideologically-driven political organization with the goal of exercising total control over the population of a country. In the words of the father of Italian fascism, Giovanni Gentile, the totalitarian state seeks “total representation of the nation and total guidance of national goals.” While this control is most obvious and pronounced under a dictatorship, it is not entirely absent in democratic republics. A legislature may vote in favor of a totalitarian state just as easily as a dictator may impose one.

This is totalitarianism in theory, but in order to fully understand what totalitarianism is, we must recognize it in practice. In practice, totalitarianism is expressed in the mass surveillance of the public, in laws that criminalize a broad range of activities usually reserved for individual discretion, as well as in direct government interference in matters of business and religion. These laws are enacted with the purpose of organizing a country around a particular social, political, and economic ideology—such as Marxist-Leninism, Islamism, State Corporatism, etc.—and to restrict dissent against that ideology. There are several areas that have become fertile ground for the growth of totalitarianism in recent years: the Internet, electronic surveillance, and thoughtcrime.

The Internet, as the most obvious symbol of the free exchange of ideas in the contemporary world, has routinely come under attack by totalitarians of all stripes. The People’s Republic of China , for instance, maintains a force of over 30,000 “Internet police,” who monitor the country’s estimated 338 million Internet users. Among other restrictions, no one in China may use the Internet to “incite to overthrow the government or the socialist system,” “injure the reputation of state organs,” or “promote feudal superstitions.” Most of these regulations can be broadly interpreted to shut down any dissent—or even discussion to that effect—against the state or its official ideology. China ’s Internet police monitor discussion groups and chat rooms and erase comments that are deemed unsympathetic to the government. Keywords such as “Falun Gong” and “Red Terror” are blocked on search engines.

China is not the only totalitarian state to target the Internet. Use of the Internet in Cuba , North Korea , and Burma requires official permission, and even then its users are heavily scrutinized.

Those are, of course, the most extreme examples of Internet censorship in the world, utilizing the least sophisticated means of regulation. By attempting to erase online privacy, many democratic governments have embraced mass surveillance—another hallmark of totalitarianism—to attack the free flow of information on the World Wide Web. At the beginning of November, the Daily Telegraph reported that the British Home Office established new rules for telecom companies and Internet Service Providers requiring them to “keep a record of every customer’s personal communications, showing who they are contacting, when, where, and which websites they are visiting.” This information is now accessible to 653 public bodies, including police and the Financial Services Authority, without permission from a judge or magistrate. In June 2008, the Swedish parliament, led by the Swedish Social Democratic Party, approved a similar law that allowed a government agency called the National Defence Radio Establishment to tap its citizens’ cross-border Internet and phone communication, meaning that all digital information coming into Sweden is now carefully monitored.

The mass surveillance of communication is only one way totalitarians threaten privacy through electronic means. In recent years, closed circuit cameras have sprung up all over urban areas. While we in the West are quick to criticize the Chinese government for its surveillance programs, London , England has one of the highest number of street-corner cameras in the world; 10,524 to be exact, or roughly 16 cameras for every square mile. The United States is not far behind. Washington , DC has led the country with its network of over 5,200 cameras (or roughly 76 per square mile), recently linked together by the Video Interoperability for Public Safety program. Mayor Adrian Fenty has cheerfully noted that his video monitoring system will have an “all-hazards” approach, rather than just focusing on crime. According to the Mayor’s own news release, phase two of his project will see “all remaining CCTV user agencies…integrated into a central facility and a new common monitoring facility will be established.”

Totalitarianism is further characterized by a government’s desire to go beyond regulating behavior into regulating thought and its expression in the form of speech and the written word. In George Orwell’s novel 1984, this was called “thoughtcrime.” Thoughtcrimes were committed when an individual deviated from official state ideology. Many left-leaning governments have adopted this approach in order to criminalize unfavorable opinions toward officially protected groups or associations. The Canadian Human Rights Act, for instance, “forbids the posting of hateful or contemptuous messages” on the Internet, and while expressing hatred or “possessing hate propaganda” is prohibited, it is allowed if the person’s intent is to illustrate said hatred “for the purpose of removal.” Hate propaganda has been defined by the Supreme Court of Canada as any expression that is “intended or likely to circulate extreme feelings of opprobrium and enmity against a racial or religious group.” Laws against feelings such as hatred are a direct attack on individual opinion and imply that the only appropriate emotions are those approved of by the government.

While all of these restrictions are common under totalitarian regimes, they do not in and of themselves constitute totalitarianism. A totalitarian state requires both the tools and a political class who employs those tools in the service of a national ideology. The United States certainly possesses the infrastructure to support a totalitarian state, and various ideologues who would readily embrace totalitarianism, but it lacks a cohesive, dominant ideology. Unlike the three political parties of North Korea , political parties in the United States are not united in a common front. The danger we face in the United States today is that if a particular ideology were to ever gain predominance, a totalitarian state would not be difficult to impose.

Since we now know what totalitarianism is and how it operates, we are that much closer to defending ourselves against it. If we wish to prevent a future reminiscent of 1984, our task is threefold: to dismantle the state apparatus that consolidates power into the hands of the Federal government, to expose the agenda behind mass surveillance, censorship, and thought crimes, and to prevent the nationalization of private industry. While we cannot force the totalitarian-minded to give up their designs, we can make it difficult for them to force those designs upon us. Educating ourselves in the what and how of totalitarianism is just the first step in that battle.

Michael Kleen is the publisher of Black Oak Presents, a quarterly digital magazine of Middle American art and culture and proprietor of Black Oak Media. His columns have appeared in the Rock River Times, Daily Eastern News, World Net Daily, and Strike The Root. He is also the author of One Voice, a collection of columns regarding issues in contemporary America .

[Demeter]

3. I am Changing my mind on Fractional Reserve Banking By Martin Carbone

http://www.opednews.com/articles/I-am-Changing-my-mind-on-F-by-Martin-Carbone-091212-201.html


After at least 2 years of intensive study, I am changing my opinion
on Fractional Reserve Banking.

The writing on this page has been rewritten today -- 12/12/09. It will be found to contradict much of what I had written previously. I plan to change everything I have previously written to match what is written here. That does not mean I guarantee everything written here is true -- I can only offer what my thoughts tell me after a considerable amount of study of real life and the most logical information I could find.

An explanation is in order as to why I am changing my position. Where do my ideas come from? I am not formally trained as an economist. Everything I learned about money and banking is based on (A) one college course in Economics at Newark College Of Engineering in 1955, (B) what I picked up over about 50 years in casually reading Forbes Magazine Weekly and The Wall Street Journal Daily for 13 years from 1973 to 1986, and (C) serious independent study of Money and Banking from about 2005 to 2009. What I have written here is my more-or-less up-to-date opinions on how our money and banking systems work. If there is a conflict between what is written here and what I have written previously -- what is here is to be considered correct -- as far as I know. In any event, follow Buddha's dictum -- Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense. / Buddha.

Virtually nothing that is written about money can be accepted as the absolute truth. Even the Constitution can't be believed -- what follows, in blue, at (A) & (B) in the next sentence -- is from the Constitution -- but is no longer followed. Certainly, (A) Congress does not create money and regulate the value thereof and certainly (B) the President does not sign monetary treaties with foreign countries with the advice and consent of Congress. The best we can do is observe what seems to be happening and do our best to suss out the underlying rules according to our own good sense. Even Congress does not declare War any longer -- it hasn't since 1942 and we have had any number of Wars since then.

In my opinion, The Federal Reserve lies regularly. Take the little test at http://www.primeronmoney.com/arewebeingliedto.html

In my humble opinion, the seven links found at the following link will be just about, but not quite, the equivalent of a college education in Banking for a student who reads and absorbs the essence of these laws.

http://www.primeronmoney.com/bankinglaws.html -- Laws, rules and regulations regarding money and banking (7 links)

Fractional Reserve Banking -- when paper money was falsely backed by gold -- is an antiquated system that has evolved into a Sovereign-created paper money that is absolutely reliable and completely backed by by the laws and wealth of our nation.

Fractional Reserve Banking was a banking system in which a fraction of the sum of (a) a private bank's invested capital and (b) the deposits of gold by the private bank's customers at the bank had to be kept on hand at the bank, in gold, to (a) meet routine expenditures of the bank and (b) to return deposits to the depositors when the depositors wanted their gold deposits back.<1> In that sense, when a private bank loaned paper money to a borrower, it guaranteed, falsely, that that paper money was backed by whatever amount of gold was written or printed on the money. That guarantee was a sham -- the bank never had more that a fraction of the gold on hand. See

http://www.primeronmoney.com/chapters/chapter3.html

We still have private banks but they now deal only in official, sanctioned, lawful money, backed for all purposes by U.S. Government law.

Bear in mind that many (most? all?) people think the reserves are somehow still needed by the bank to back loans that the bank makes. That is a simple fallacy. Banks do not back loans -- they never have since questionable gold backed paper money was stopped.

When a bank gives a customer a loan now -- it gives the customer cash or a check based on the customer having enough collateral in the form of assets or income to pay the loan back in accordance with the terms of the loan contract. The cash is also, by a legal tender law, guaranteed to be legal by an official government action and every citizen is compelled by that law to accept that money in payment of all debts. Remember --- (1) BANKS NO LONGER BACK LOANS. THE MONEY THAT A BANK NOW GIVES WHEN MAKING A LOAN IS GUARANTEED TO BE GOOD BECAUSE IT IS MONEY THAT WAS LEGALLY MADE BY LAW UNDER THE CONSTITUTION.

Also bear in mind that many (most?) people think "Reserves" have something to do with loans made by the bank. THEY DON'T. The money for loans is created for the borrower based on the fact that the bank is acting as an agent of the government, acting to exercise the government's sovereign right to create whatever money it needs to run the money supply in accordance with its Constitutional mandate to coin money and regulate the value thereof. Remember -- (2) RESERVES HAVE NOTHING TO DO WITH LOANS SINCE WE WENT OFF THE GOLD STANDARD. Isn't it kind of dumb to think we somehow have Paper Money Reserves for Paper money like we once had Gold reserves for Paper money?

The money used NOW for bank loans does not originate with the bank: it was NOT the bank's money before it was created for the loan. The fact that the borrower pays interest on that money and apparently the bank keeps that interest does not alter the fact that the bank has none of its money in the loan. I have never seen the paperwork that spells out the responsibilities of (a) the government, (b) the Fed. and (c) the bank as to what happens to the interest paid by the borrower -- but I assume the bank keeps that interest even though it did not lend its money to the borrower. It seems logical to assume that the bank keeps the interest -- because in the event of a default by the borrower we know that the bank (not the Government and not the Fed.) forecloses, exercising the bank's right to the interest due on the loan contract. We also understand that when I made interest payments on a mortgage in the past -- those payments (capital and interest) went to the bank and was kept by the bank. The capital part of those payments had been made previously, in full, to the seller of the house.

It would be more correct to say we are now using a Sovereign Money Banking System wherein all money in the system is created by the government (or its agents -- now, the Fed. and its banks).

The Sovereign Money Banking System is actually simple -- but it is so counter-intuitive that it is very difficult to understand. It certainly does not seem possible that (a) the bank can lend money that it never had and (b) the banks have an endless amount of money to draw from that it can lend or spend into the economy. The fact that the private bank keeps all the interest seems at first glance to be somehow excessive, and perhaps it is, but the bank seems to be the entity responsible to the Fed. and to the Government that the loan is paid back by the borrower. The bank is responsible for making sure that the borrower is responsible and the borrower's plan to use the money is legitimate and sensible. Neither the Fed nor the Government seems to bear a loss if a borrower does not pay back a loan -- simply because the borrower has no contractual obligation to the Fed. or the Government. It is possible that I am wrong on this and the bank has a contract or agreement with the Fed or the Government that the bank will share all profit and loss on loans the bank makes on money created for a loan it makes. I have never heard or read of such a contract or agreement so I think I am justified in believing no such contract or agreement exists (I have read through most of the law at http://www.primeronmoney.com/bankinglaws.html -- Laws, rules and regulations regarding money and banking -- 7 links)

Most of the following material is based on A Primer On Money, a 141 page book by Wright Patman - a Democratic member of the United States House of Representatives from Texas. Patman was also Chairman of the Banking Committee of the House of Representatives.

In this writer's opinion, Patman's book was the first clear and honest exposition of the Fractional Reserve System of banking in the United States. It clearly tells the American public that money was, and is, in fact, created by banks when they lend money to their customers. This is not a metaphor or a figure of speech -- the bank literally creates the money -- the money did not exist in any other account before the bank created the money specifically for that loan. The idea is that the borrower will take that money and create wealth with it. When the borrower pays the loan back, I am assuming the loan money is removed from the banking system -- but whatever wealth was generated stays in the economy for the benefit of us all.

I have never seen the books kept by the bank or the Federal Reserve -- but it is logical that it is a simple matter to take the loan money out of the system once it is paid back. Taking the money out of the system would eliminate the possibility of that money contributing to inflation.

The book was written in a Question and Answer format. The book was Published in 1964 by The Government Printing Office.<1>

When I first came across a discussion of Fractional Reserve Banking in Patman's book in 1964, I thought it was an outrageous system and some sort of a scam or rip-off designed to enrich bankers at the expense of the public by allowing the bankers to magically multiply their money. However, when I closely read the laws and studied the system in about 2003 (I intended to open a bank specializing in reverse mortgages -- because no banks would make such loans in my community) I realized that the system has built-in controls and safeguards that make it perfectly safe for everyone; the bank, the depositors. the borrower, the banking system, the Government and the public. The only thing wrong with the system is that aside from Patman's book, there is no honest information that explains the system fairly. And even Patman's book has lots of errors that Patman picked up from Federal Reserve Publications. Remember -- you can't believe anything the Fed. writes. They are habitual liars. It turns out that the United States is so wealthy that all the stealing and lies can't really hurt our economy. Ultimately, the Plutocrats and Bureaucrats that run this country need the common Worker Bees to do all the work -- so those "crats" can't take everything for their own.

Overview

The fractional reserve method of banking originated with the goldsmiths -- the predecessors of our present bankers. It is not the method of banking in use today.

Briefly, it was a system whereby bankers maintained as reserves of gold only a fraction of the amount needed to meet all the claims for gold against them. (The vast bulk of the claims against the banks were and still are are the deposits of their customers. These are obligations which the bank must pay upon our demand.) The goldsmiths struck upon this fractional method by noticing that the people who deposited gold with them for safekeeping only claimed (redeemed) a small portion of this gold at any one time. The goldsmiths realized that they could lend out a good portion of the gold left with them (and collect interest on those loans) and they would not get caught with a shortage of gold.

Subsequently the goldsmiths switched to making loans which in fact were not of (a) gold but were of (b) warehouse receipts for gold. These receipts circulated as money. Notice, the gold -- actually the certificates of ownership -- being loaned by the goldsmith was not his to lend. He did not own the gold that was supposedly backing the gold receipts. In other words, the goldsmith wrote receipts to people who were not depositing gold, i.e., to borrowers. So receipts for more gold than the goldsmith actually had in his vaults were circulating. The goldsmith had only a fraction of the amount of gold needed to meet the claims against him. This was the fractional reserve system. When the banks of the United States kept their reserves in gold, their reserves amounted to only a small fraction of the amount of money they had issued, all of which was guaranteed to be redeemable in gold.

Advantages of the Goldsmith Fractional Reserve System and its present-day offshoot, The Sovereign Money Banking System

1. Both create real wealth and is the basic foundation for our economic system. Nobody has ever figured out a better way to create money and wealth.

2. The goldsmith's 10 to 1 fractional reserve ratio meant that the goldsmith bankers were operating with enormous leverage. For every $1 dollar they lost to bad debts, they had to reduce their loans by $10. This means they must have been very conservative and must have been careful to only make loans that are safe. This probably kept inflation in check. Because the created money has to be paid back. It forced borrowers to create wealth with their borrowed money -- so they could pay off the loan and the interest. If the government were able to create money without the obligation to pay it back, most people think that would probably lead to runaway inflation to the detriment of us all.

3. Since we have essentially abandoned "reserves" in modern banking (we still use the word "reserves" -- but it no longer has any power or reason for being -- it has no meaningful, enforceable force of law. It is, we think an obsolete sterile force of antiquity). Our present system would work as well if the required-reserve ratio was anywhere from zero % to 100% -- in fact, it is zero for banks with deposits up to about $10 million. See --PART 204RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS (REGULATION D)
<<http://www.fdic.gov/regulations/laws/rules/7500-500.html#7500204.9>>

4. Under State laws, virtually anyone who is reliable and a good citizen can open a bank. You simply apply to the State and fill out some forms telling (A) why the community needs a bank where you intend to put yours, (B) that your plan is financially feasible and (C) the Federal Reserve system that you are honest and a good citizen. Once you deposit your starting capital, you have the right to operate as a bank and lend money to independent borrowers of your choice in accordance with the Federal Reserve rules.

5. Banking is a good job for people who would otherwise be trying to show their worth by subjugating others. Banking allows these people to show their worth and power by accumulating money and the things they can buy with money. Running a bank is a relatively safe outlet for alpha-male behavior.

6. Banking keeps a lot of people busy who might otherwise be causing trouble.

7. Sovereign Money Banking provides banks with a source of funds over and above their invested capital and their customer's deposits. The banks can then lend that additional money to worthwhile borrowers.

8. The following advantage of the fractional reserve system was overlooked by Patman. That point should be made to establish the concept that whoever runs the money system should bear the losses for bad loans. If that were well known, we probably would not have gotten into the money problem of 2008: the bankers would have been more cautious.

9. One good but often overlooked thing about having the bankers run the system is that if they lose money on bad loans -- that money theoretically comes out of the banker's pockets (because the bankers own the banks). If the government ran the system and owned the banks -- all losses would come out of the pockets of the taxpayers.

10. Most people do not realize that the Sovereign Money Banking System (the underlying system we use now) gives the managing or owning institution -- whether the Fed or Congress -- a system that has enormous leverage built into it. Banks essentially have no limit on how much money they can lend and that can OBVIOUSLY lead to terrible problems if the lending is mismanaged.

11. I know that sounds impossible -- but it is the way the system works as far as I can figure.

12. The downside leverage comes into play when, for instance, a $1,000 loan goes bad -- a borrower does not pay back the loan and -- collateral can't be seized. In that case, the bank must call back $10,000 in loans and lose the income on the $10,000/ In that case the loss of a $1,000 loan costs the bank $400 / year -- or 40% every year on that bad loan.

13. Originally, it must have been thought that the enormous leverage would work to keep the Bankers prudent, conservative and cautious. It appears that this was not a conscious decision of any group. As far as I can tell, it never appeared in print as a goal of the Fractional Reserve System. Patman points out that everyone in the know tries to keep the actual mechanism a secret -- but in any case, the downside leverage built into the Fractional Reserve System, naturally and organically forced that prudent, conservative, cautious and very important behavior on the bankers -- because for every dollar of bad loans they made, they would have to call back TEN dollars of loans and they would therefore lose the interest on that 10 dollars. That loss was painful.

Disadvantages of the fractional reserve system as it evolved into a Sovereign Money Banking System

1. Somewhere along the line, it appears, and I believe, that four major things can and have happened that messed up the system. The system was not, and probably is not now, protected against those problems -- see (A) to (D) below.

(A) Bankers forgot the downside of the system's leverage and thereby took chances that were not prudent.

(B) The Government allowed, and even encouraged, (by setting up Fannie Mae and Freddie Mac) the banks to sell-off the loans they placed, thinking that would free up money and would allow the banks to make new loans. Whoever did that did not understand how the Sovereign Money Banking System works -- the banks do not now need existing money to make loans. They can prudently create whatever money is needed if they have a trustworthy lender with good collateral who has a reasonable plan to create new wealth with the money in the loan. And why should it be otherwise?

(C) The Government did not know that the inherent downside leverage built into the Fractional Reserve System was important. They simply did not understand the ramifications of the system. They did not realize that an unintended benevolent consequence (that leverage of the previous sentence) was built into the system. Unintended consequences do not always have to harmful -- lots of times (in evolution for instance) they are very valuable. Any good scientist, investigator, explorer or engineer knows this instinctively -- they are always on the alert for benevolent, unplanned results. Serendipity and fortuitous accidents are very important (think of Christopher Columbus and Isaac Newton's apple). They may have led to more great discoveries than planned action.

(D) Laws became anachronistic. Primarily because Congress writes the laws and Congress does not understand how the Money and Banking System works. That is because the people running the Fed. don't tell Congress what is going on -- and the Fed. is not audited by a reliable independent agency

2. The system is very counter-intuitive and difficult to understand unless the details of the system are studied carefully.

3. Hardly anyone understood or understands how the system worked or works. This is not a healthy situation.

4. Most of the information about the systems originate with the Federal Reserve System and that information is very unreliable. In fact, it would not be a mistake to say that most of the information put out by the Fed. is self-serving and designed to confuse the subject of money and banking, so as to make the public very insecure about money and banking.

5. It can be safely assumed that many authors take information by the Fed as gospel and put that unquestioned information into their books and on their websites. Students then are exposed to that information in the classroom and generally believe what they are told. Those student than fill the internet discussion groups with that incorrect information. The result is that even people who have formally studied economics have no clue as to how the banking system really works. A good example of misleading information about how much a given bank can lend follows. 5.1 to 5.4 gives the written law for all banks. 5.5 gives a Wikipedia explanation which is contradictory to the law.

5.1. At <<http://www.fdic.gov/regulations/laws/rules/7500-500.html#7500204.9>> -- under 204.9 Reserve requirement ratios, You will find the following words The following reserve requirement ratios are prescribed for all depository institutions ... : You will also find a table there that shows a bank with any amount of transaction accounts up to $44.4 Million, is required to have only 3% of that $44.4 Million as Reserves. In other words, a bank in that category can lend out 33.3 times as much money as it has in "reserves".

5.2 Definition of: Transaction account -- At Definitions. (same URL as 5.1 above) 204.2(e) "Transaction account means a deposit or account from which the depositor or account holder is permitted to make transfers or withdrawals by negotiable or transferable instrument, payment order of withdrawal, telephone transfer, or other similar device for the purpose of making payments or transfers to third persons or others or from which the depositor may make third party payments at an automated teller machine (ATM) or a remote service unit, or other electronic device, including by debit card, but the term does not include savings deposits or accounts described in 204.2(d)(2) even though such accounts permit third party transfers."

5.3 Together, 5.1 and 5.2 above means that any bank with transaction accounts up to $44.4 Million can lend out up to 33 times its "Reserves".

5.4 Because a bank's invested capital can also serve as a reserve, any bank up to that $44.4 Million in transaction accounts can lend 33 times the amount of its invested capital. In summary, on the day any bank opens, it can lend out 33 times its invested capital.

5.5 The following link is from Wikipedia in their attempt to explain how multiple banks ... practice fractional reserve banking which has a cumulative effect of money creation by banks ... It is from: <<http://en.wikipedia.org/wiki/Fractional_reserve_banking>> Note that Wikipedia's explanation comes from Reference #12 and #13 which both originated as Federal Reserve publications. I consider that explanation to be total nonsense.

5.6 This sentence from reference 13: If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. is obviously a direct contradiction to the following remark by President Obama in a recent speech at Georgetown University the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses ... .

5.7 The sentence from reference 13 is also in direct conflict with the conclusion at 5.4 above, which is absolutely authoritative because it comes directly from the law.

5.8 Check out << http://www.primeronmoney.com/wikipediaattackon.html >> where we attack Wikipedia directly and the Fed, indirectly.

6. I can find no authoritative or official mention of what I consider to be the fact that the Federal Reserve System, as enacted, is set up in such a way so as to rely on bankers being very cautious when making loans. There are no explicit words to that effect anywhere in the law as far as I know -- but the obvious result of the Federal Reserve mechanism shows that bankers must be cautious -- or they will wind up going bankrupt. There is enormous leverage built into the system and the result of that leverage is that losses are magnified by the system. Any intelligent banker must know this when he signs up to operate under the Federal Reserve system -- it is fairly obvious. This is an important reason why the Federal Reserve system can work and has worked for years. If however that point is not clearly re-stated -- over time the bankers may forget that they are under enormous pressure to be conservative and they may take chances that have the potential to cause them great financial harm. In fact, I think the present (2008) money and credit problems in the U.S. are a direct result of bad loans and those bad loans are a direct result of the bankers simply not being careful when making loans.

6. The Central Bank lends money to the Government of the United States and collects interest on that debt. Many see that as an unnecessary expense of the Government.

7. Many people also claim the Constitution demands Congress directly supervise and control the creation of our money. The Constitution says Congress shall have the power to coin money and regulate the value thereof. In 1913, Congress transferred the management of the banking system to the Federal Reserve System which is privately owned and operated corporation or group of corporations. That transfer may very well be unconstitutional. Until the point is argued definitively in court by a competent team of lawyers, in my opinion, that point will not be settled.

8. In my opinion -- if you do not understand the words in this text-block, you can't understand Fractional Reserve Banking or Sovereign Money Banking. On the other hand -- if I am wrong on this -- I do not understand Fractional Reserve Banking. That is a possibility. Call me on it if I am wrong.

-------------------- end ------------

by Martin R. Carbone -------- updated 12/12/09 --------------------




Author's Website: http://www.primeronmoney.com

Author's Bio: Retired engineer, product and business developer, inventor (six patents). Currently (a) trying to completely understand our money and banking systems and (b) planning to pass that information to the American public. http://www.primeronmoney.com/backgroundmrc.htmlBACKGROUND

[mbperrin]

33. Actually, anyone can create money in the same way. We haven't banked

for 32 years (note: I worked for banks from 1968-78, in various roles from purchasing agent to comptroller).

For example, when we bought a house for our daughter, the owner financed it for us for 10 years @ 7% with nothing down and the property as is. $50,000 was created during that transaction by the owner and transferred to us, which was then used to purchase the house.

This money plus interest was returned to the owner over a ten year period.

This money was as real as any other, because it was used to buy a house, which is now paid for and being lived in by our daughter and grandchildren.

What we saved were: points for applications, all kinds of inspection fees, and the usual robbery committed at the closing of a loan. The only administrative cost was $150 to an attorney to draw up and file the contract and deed with the county.

We have financed our own home, a dozen rental properties, a home for our daughter, and half a dozen vehicles in the same way during the last 30 years, all very satisfactorily to us and to the sellers. For instance, see how many CDs pay 7% guaranteed for the next 10 years, and you'll see why he was smiling.

(I did my economics training at Texas A&M in the early 70s with folks like Robert Ekelund, Ray Battalio, and a host of others, including Wendy Gramm.)

[bread_and_roses]

37. Our Corporate Masters solved the problem of how to have totalitarianism without brutal oppression

Have you read Alex Carey? From Wiki:

Alex Carey (1922-1988) was an Australian writer and social psychologist who pioneered the study of corporate propaganda.<1> Much of Carey's work in this area remained unpublished and was cut short by his death. In 1995, a collection of his essays (several of them previously unpublished) was published under the title Taking the Risk Out of Democracy: Propaganda in the US and Australia (University of New South Wales Press; reissued in 1997 by University of Illinois Press under the title Taking the Risk Out of Democracy: Corporate Propaganda versus Freedom and Liberty). In 1988, Noam Chomsky and Edward Herman published their Manufacturing Consent: The Political Economy of the Mass Media in dedication to the memory of Carey, claiming that Carey would have written the definitive history of propaganda in the United States had he lived to complete his work.

From 1958 until his death, Carey was a lecturer in psychology at the University of New South Wales. The main subjects of his lectures and research were industrial psychology, industrial relations, and the psychology of nationalism and propaganda. He was one of the founding members of the Australian Humanist Society in 1960.

I won't try to summarize, but essentially lays out how we've been turned into nothing but consumers for our Corporate Masters, consumers willingly complicit in our own and our ecosystem's destruction. And they've done it so well that media viewers, when disturbed by some change in programming of favorite shows or whatever, think that THEY are the customers and THEY matter and that THEY should be attended to, not the advertisers who pay the bills and who are, of course, the "real" customers.

I've read long excerpts but not the whole thing - I keep meaning to order it and putting it off - I tell you, I was so unnerved - so demoralized, if you will - by what I DID read that I think I'm practicing avoidance....

It's unbearable, and probably the reason that no real change will occur until people are starving - which has always been my SO's take.

[Demeter]

4. Was Organized and Systemic Fraud Perpetrated by Banksters? By Richard Clark

http://www.opednews.com/articles/Was-organized-and-systemic-by-Richard-Clark-091215-130.html

December 15, 2009



Were some of our most successful banks the victims, or the architects, of a scam?

The question of Goldman Sachs being a victim of this crisis can perhaps best be explained by the story posted in Market Trends in which it quotes the Wall Street Journal in their investigation showing Goldman not only a willing participant but as the "architect" of the scam that broke the world's economies. The claim is that Goldman Sachs played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American International Group (AIG).

In Goldman's biggest deal, it acted as a middleman between AIG and banks, taking on the risk of as much as $14 billion of mortgage-related investments. Then Goldman insured that risk with one trading partner AIG, according to the Journal's analysis and people familiar with the trades. http://market-ticker.denninger.net/archives/1726-The-Architecture-Of-The-Scam-Goldman-.et.al..html

According to the Wall Street Journal, Goldman Sachs was fueling AIG's bad mortgage bets http://www.huffingtonpost.com/2009/12/12/goldman-sachs-fueled-aigs_n_389766.html and knew that AIG was a house of cards. Why was Goldman doing this? According to Dylan Ratigan, it was because it (Goldman) "sought to blow up AIG, in order to benefit itself." You see, the biggest participant in AIG's reckless gambling operation (i.e. the operation of insuring the reckless bets of banks, even though they didn't have anywhere near the capital necessary to back up all these insurance policies, the fees for which were so very profitable) was Goldman, which bought double the amount of protection (insurance) from AIG as compared to any other bank, and, as a result, received double the amount of "benefits" from the American taxpayer, by way of backdoor government bailouts, when AIG fell apart (with Goldman's help), totally unable to honor all these ‘reckless gambling' insurance claims.

Billions of dollars then issued from the back door of the Fed, $13 billion of which went to Goldman, which was paid 100 cents for every dollar they had lost in their reckless gambling on CDOs, derivatives etc. And why was Goldman so privileged to get such a sweet deal? It was because Tim Geithner, a ‘Goldmanite' (i.e. former high-level Goldman exec) had been installed as U.S. Treasury Secretary. It's also why 30,000 Goldman employees will split up $33 billion in taxpayer booty (bonuses of $160,000 each, on average) http://online.wsj.com/article/SB124896891815094085.html, thanks to the suckered American taxpayer. Meanwhile the top Goldman execs will take their share of the booty/bonuses in stock dividends, which could well ultimately be worth far more than any cash bonus they might have received -- thanks again to generous help, in a time of need, from the suckered US taxpayers.

Total estimated cost for bailing out all the reckless-gambling banks in the US -- $24 trillion. http://www.washingtontimes.com/news/2009/jul/21/watchdog-says-tarp-tab-could-hit-24-trillion/.

In a very real sense, this is stolen money, stolen from the American taxpayer, by way of a government that is in a sense owned by Wall Street and the big banks. Proof of this relationship is provided by the fact that the big banks are now using some of this stolen (bailout) money to lobby (bribe) Congress to stop any legislation that would, if passed, make it difficult for them to get bailed out with public money next time their reckless gambling goes bad.

Is there really a chance, under the new legislation, that what happened to AIG could happen again?! Aren't there enough members of Congress free from the big campaign money contributions coming from Wall Street and the big banks, to make sure that any future bailout money will be tied to rules and regulations about how that money will be used by these big banks? (Hopefully a good portion of it would next time be used to provide loans to small businesses and would-be home owners.) That remains to be seen.

Obama and his administration can scold the bankers all they want, but until Congress passes meaningful financial regulation, the bankers will continue to perpetrate the mass fraud and theft that got our country into this situation in the first place. Problem is, when you have as much money to buy politicians as the big banks have, how realistic is it to expect bought-and-paid-for members of Congress to enact strict financial regulations that will rein in the banksters?





Author's Website: http://groups.google.com/groups/profile?enc_user=JCpLDBUAAAC

Author's Bio: Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've always been more interested in political economics and what's going on behind the scenes in politics, than in mechanical engineering, and because of that I've rarely worked more than 6 months a year, devoting much of the rest of the year to reading and writing about that which interests me most.

[Demeter]

5. Federal Reserve: Are You Listening To Your Own Data? By Eric Lotke

OpEdNews

http://www.opednews.com/articles/Federal-Reserve-Are-You-L-by-Eric-Lotke-091215-163.html

December 15, 2009



The Federal Reserve today releases industrial production data with good news. Will it draw the right conclusions?

First the good news. Industrial production increased 0.8 percent in November, and capacity utilization for total industry moved up 0.7 percentage points to 71.3 percent. Reuters used the data to describe the economy as "rebounding" It's more proof that the dramatic government interventions in recent months especially cash for clunkers and the "heavy dose of government stimulus" in the Recovery Act worked according to plan.

It's good news but it's a very small step. The hole is very deep. Even if utilization rose to 71.3 percent, more than a quarter of our nation's productive capacity is still lying idle. Our utilization rates in recent months are lower than any time since this data started to be collected in 1967. Moreover, the increased utilization might simply paper over decreased capacity. After all, killing a factory and increasing the workload at remaining factories would increase the utilization rate but it's not good news for all the factory workers who lost their jobs or the future of the industry that's closing those factories.

Our economy has been eroding for a long time. Manufacturing has declined as a percent of GDP from 25 percent in 1960 to 11 percent today. One in three factory workers has lost work since the elections of 2000. That's not a story of natural economic evolution from buggy whips to high end services. That's a story of economic decline, as other countries race ahead of us building cars and computers in the 1990s, and solar cells and wind turbines in the 2000s. There's a limit to how long we can live off past wealth generated by our ancestors and foreign borrowing against our remaining assets. We need to turn things around.



Source: Bureau of Labor Statistics

The question for the Federal Reserve now is which way it is going to push. The Open Market Committee is meeting today to discuss interest rates. Will it also discuss ways to support President Obama's push to get banks to lend money to businesses that want to hire? On Thursday, the Senate Banking Committee is scheduled to vote on the re-appointment of Ben Bernanke as Chairman. Part of his mandate is the creation of jobs. Will Bernanke support the dramatic government interventions that led to today's little uptick? Will the Senators voting for on his confirmation hold him accountable for his results? Hopefully, today's data will help push the Fed in the right direction.

---------------
This article originally appeared at the Campaign for America's Future.






Author's Bio: Eric Lotke is Research Director at the Campaign for America's Future. He is also the author of 2044, an update of George Orwell's 1984. In 2044, the problem isn't Big Brother, it's Big Brother, Inc. In years past, Mr. Lotke worked in and around the criminal justice system. He has authored path breaking research, brought landmark lawsuits, helped develop programs for troubled youth and flushed every toilet in the Washington, DC jail.

Back

[Demeter]

6. Rumination on Taxation By Siegfried Othmer

http://www.opednews.com/articles/Rumination-on-Taxation-by-Siegfried-Othmer-091215-77.html

December 15, 2009



What has been happening in California may be a harbinger for what's in store at the national level. For some years now, Republicans have taken advantage of a two-thirds vote requirement for the budget and all new taxes to impose an effective no-new-taxes policy on majority Democrats. California's financial situation has grown increasingly desperate. No matter how high the misery quotient rises, there shall be no more taxes by Republican edict.

Privately, Republican legislators even admitted that California's financial problems could not be resolved through cuts alone. But they were just not going to be party to a tax increase. This is likely to happen at the national level as well, with Senate Republicans opposing any tax increase for social spending. For this reason, the Administration should take the opportunity to increase taxes to pay for the war in Afghanistan and Iraq, because it may represent the only viable opportunity they have.

There are very few opportunities in this politically divisive era to get both parties on board with any proposition, least of all on taxation. By asking for a tax increase to support the war effort, President Obama would serve the dual purpose of securing Congressional support for his Afghanistan policy while also easing his budgetary concerns. This may be the only chance in his term of office, unless filibuster rules are changed.

Even though opportunities of working on a bipartisan basis are diminishing, the ideal should still be kept in mind. Beyond the "no-new-taxes" inclination of Republicans, now that they no longer have their own guy in the White House, they have contributed two key ideas to the tax debate over the years: the flat tax, and the consumption tax. The flat tax has the ostensible advantage of simplicity in administration, and the consumption tax is deemed preferable to a tax on productive labor. The proposals at least need to be considered.

Whither the Flat Tax?

If tax flatness is a virtue, presumably the principle should be applied first to the tax that is least flat. That just happens to be the Social Security tax. Now when it comes to Social Security, Republicans argue that this is not really a tax, but rather a premium for an insurance program. If benefits are limited according to income, then the fees to support it should be also. But about thirty percent of Social Security payments are made to widows, widowers, and minor dependents. This is a welfare burden, which should be borne by everyone in the society, not just by those who make a family income of around $110K or less. Fairness would argue that at least the welfare portion of the Social Security tax burden should be applied to all incomes.

If as little as 2% of higher income brackets are committed to Social Security, fairness in this basic sense would be essentially achieved. Moreover, the financial future of Social Security would be assured indefinitely. We will have made the Social Security tax a little more flat, so the flat taxers should be pleased. If we moved to a totally flat Social Security tax, on the basis that a secure retirement income is a broad societal interest, then the base rate could even go down substantially, which would be a boon to hiring at the lower income levels.

Taxing Consumption

Now when it comes to taxing consumption, the first item of business should be to remove tax deductions that promote consumption. If consumption taxes are an absolute good, then negative income taxes on consumption must be a detriment. And so they are. The best case in point is the deduction for mortgage interest payments. The British Economist Magazine calls such deductions "daft." And these are dyed-in-the-wool capitalists speaking. Even if there is a political argument in favor of promoting home ownership, there is surely no reason to extend the tax deduction beyond a family's first mortgage. There should be no extension to home equity loans and to second homes.

The fairness argument, however, goes against any such deduction at all. Why should the renter subsidize the homeowner? There is no good reason. It would be yet another case of the relatively less well-off Americans supporting the better-off. As a practical matter, however, it is difficult to cut off any government ‘benefit,' so the right approach may simply be to cap the benefit, and to phase it out over time.

Wealth as Consumption

The larger argument may come as a bit of a shock, but it needs to be put on the table: We need to tax wealth as consumption. Even Alan Greenspan shares this perspective: wealth represents the ability to consume. Wealth is also the beneficiary of vast government expenditures; hence the holders of wealth are ‘consumers' of government services, both directly and indirectly; hence there should be taxes due for services rendered. The entire effort by the Federal Reserve Board and of the Treasury Department to rescue our economy was based on preservation of wealth as the driving principle. More correctly, they acted to preserve asset values, the valuation we place on the actual wealth in our economy. Wealth was deemed to be the source of investment to fund development. Hence it had to be preserved at all costs. More broadly, the Fed sought to prevent deflation overall, which would sharply constrain its policy options.

Let there be no doubt that our whole financial system sat at the edge of the precipice last year, and that only government intervention saved it from the abyss. At Goldman Sachs it was said that if Morgan Stanley went south, the life expectancy of Goldman was about thirty seconds. No one was safe from what was engulfing us. Our government staked literally trillions of dollars on the rescue effort, and thus managed to pull the bacon out of the fire. It's true that they salvaged the whole economy thereby, but in first order they preserved wealth all around. In justice, then, holders of wealth now need to pay the tab. They benefited from an insurance policy on which they had not paid any premiums.

The rhetoric in which capitalism shrouds itself is invariably self-serving. Malcolm Forbes famously claimed that no one is so innocently employed as when he is making money. A more realistic view is that capitalism never pays its bills. The externalities never appear on its books. That was never as clear as in the run-up to our financial catastrophe. The heart of the matter was that financial risk was assumed to be managed. It was managed by being out-boarded to others. In this manner, micro-scale risk was indeed managed at every step. Macro-risk, however, was no one's problem in particular.

Macro-risk was effectively out-boarded to the society at large by default. If the whole system crashes, then no one in particular can be blamed. It would be a matter of ‘systemic risk.' It was not part of anyone's computer models. It was not, however, unexpected. A code was operative on Wall Street during the halcyon days: "IBG,YBG." "I'll be gone; you'll be gone." You and I will be the first to know when the punch bowl runs low, said the fast-money guys to each other, and we'll be out the door before the collapse. This is why the collapse happened so extraordinarily fast once it got under way. The whole fraudulent enterprise was momentum-driven. Once momentum flagged, the end was sure to be nigh. Once confidence in the institutions was called seriously into question, it was all over.

The econometric models on which investment strategies were based explicitly assumed that markets were ‘well-behaved.' There was no way to predict large excursions, so they were not in the models. The strategy has been described as a matter of ‘picking up dimes in front of a steamroller.' This strategy is defensible only if the chance of getting run over by the steamroller does not have to be factored in. The financial wizards trusted their own alacrity to protect their hides from the steamroller. The threat that the steamroller would flatten not only a particular institution but rather the whole world of finance was not in their calculations.

Consider an example out of the past. In 1927 Republicans made it illegal for the Agriculture Department to provide weather forecasts to farmers. This made speculative bubbles in agricultural goods more likely, which suited the financial gunslingers. There was no concern about the health of the economy. The concern was about the opportunity for the speculators themselves. Things haven't changed. (See Atul Gawande, Testing, Testing, The New Yorker, Dec. 14 issue)

The Path to Economic Recovery

It is axiomatic that we need a functioning banking system to sustain the economy. It should be equally obvious that we need a viable and robust financial underpinning for our central government. The tax strategy needs to be for the government to pick up pennies wherever the speculators pick up the dimes. Every transaction now needs to pay tribute to Washington to restore the treasury that was plundered on their behalf. This will now go on indefinitely, because we own them. All of them. They all owe their continued viability to the American taxpayer. And now it's time to pay us back. In perpetuity.

There is reluctance, of course, to increase taxes now while the recovery is yet fragile. We need not worry. Our Treasury needs the money to apply to infrastructure to return our economy to health. This will not happen through Wall Street. On a net basis, both Wall Street and Washington are still draining resources out of the economy, slowing down its healthy recovery. Large corporations have some $750B sitting in their bank accounts. They are not spending; they are not investing. And to the extent that they are investing, it is not in the United States. The corporate cash hoard just happens to be equal to the entire US Government's stimulus package. Additionally, banks are socking it to credit card holders like bandits, to the tune of tens of billions annually. They are doing this by raising interest rates even though Washington is reducing their own cost of money virtually to zero. This is worse than shameful. It ought to be illegal.

As for Washington, consider that there are some $10 Trillion sitting in ordinary savings and money market accounts around the country. Most of this money is owned by people who are not in a good position to take risks. Their effective interest rate has gone down from about 4% two years ago to less than 1% now. This drains some $300B out of the hands of ordinary Americans and puts them in the hands of the bankers every year. No wonder the banks are healthy again and sporting huge profits. The Fed policy of reducing interest rates to near zero has been a net cost to nearly all Americans----except for the favored ones on Wall Street.

As for the $750B stimulus, it is more than half compensated for by decreases in State expenditures around the country. In effect, then, there has been no net stimulus of the economy at all when everything is taken into account. The best thing that can be said is that we would be even worse off without it. We are on our own, folks. There is no point in waiting for rainmakers from Wall Street. So they might as well be taxed. Nothing would be lost at all. We would just be taxing idle money.

Just recently Amgen announced that it would put $5B into stock repurchase. Amgen is not an old-line company. It is at the frontier of biomedical research. What does it say to us that a company at the forefront of innovation has nothing better to do with $5B than to repurchase its own stock?

It is only with better inflows to the Treasury that more stimulus would become politically palatable. Given that Wall Street is sitting on its hands as far as investment is concerned, taxation is now the best way to increase the velocity of money in the economy. Think of the velocity of money by analogy to blood flow in the body. There are always two issues to deal with: the quantity of money, and its effective velocity in trade. Wall Street is not recycling money back into the economy through sponsoring development. Wall Street is doing just fine lunching on zero interest rates, courtesy of the Fed, and stoking the business of mergers and acquisitions as in the old days two years ago, churning money internally.

It is helpful to think in network terms. Consider a financial transaction as a link between two nodes of a network---a network of some 360M Americans. Imagine, then, just how many such links it might take for an arbitrary dollar bill in the hands of a resident of Compton here in Southern California to get into the pockets of Wall Street. Surely it would not take many links before the dollar would show up at Wal-Mart, and thus end up in the pocket of one of the richest families on the planet.

Now consider the opposite: How many links would be required for a dollar changing hands in Wall Street to benefit the person in Compton? Hmmmmm. Let me think. Give me a minute. Surely I can think of a pathway.... It is no longer necessary to make the case that economic affairs are stacked in favor of those who are already favored. As the Yiddish saying goes, "God loves the poor; but he helps the rich." Actually, they help themselves. By now they make the laws, and they form a solid phalanx of advisers around Obama, just as they did around Clinton.

Restoring a Rational Tax Policy

So it is also time to address taxation of the economically favored. This is not more actively discussed only because the well-to-do own the media. In 2007, some 6% of all personal income went to the top 0.01% of earners. That's a mere 15,000 families. These entities are competing against each other for income---we're dealing with corporate CEOs, titans of finance, and sports figures here---in a way that is largely decoupled from other economic realities. So salaries continue to escalate beyond all reason. Attempts to limit their incomes directly has distorting effects, and for that reason should be avoided. But we can tax these incomes as necessary to sustain our economy. In the days of Eisenhower, the highest marginal tax rate was 92%. We don't have to go that far, but it shows what is possible.

We have to dig back into some history on this point. The Laffer curve came in with President Reagan. This was the doctrine that reducing taxes actually helped the economy, and ultimately led to higher tax income than would have been garnered with the original higher tax rates. The ‘theory' wasn't worth the paper napkin it was originally sketched on, but it was certainly politically serviceable. It is now possible to see the outcome of an extended ‘trial' of the theory across the reigns of Reagan and Bush I and II. As it happens, the Federal debt doubled under Reagan-Bush, and it doubled again under George W. Bush.

What really counts, however, is the ratio of the Federal debt to GNP. In that regard, the accounting is not yet complete. Surely we must assign the costs of recovery from the economic debacle also to the laissez-faire model of Reagan-Bush. Theirs was the notion that government was the problem, and that any interference of government with capitalism was counter-productive. By the time normalcy is restored to our economic affairs, the ratio of Federal debt to GNP will have multiplied by a factor of two to even three from the time Reagan came into office. The whole experiment has been a disaster for the country, and the real economists have known this all along.

So one way to look at the past three decades is to say that we, as a society, spotted the wealthy our inheritance, to see what they could do with it on our behalf in terms of increasing the general welfare. The evidence is now in. The vast majority of our citizens have lost ground vis-à-vis other developed societies in this time frame. The bottom half is seeing life more like it is experienced in a Third World country than how it is lived in other developed countries. Meanwhile our government debt continued to mount. And after that came the deluge.... The bottom 40% saw its total net worth go negative during the Reagan years, and it is surely negative again now after the real estate bubble burst. The full damage has yet to be calculated.

Taxing Wealth

So now it is time for us to return to sanity, to turn to our rich uncles and say to them that it is their duty to pay the society back. Consider that in Germany a large group of wealthy individuals came together to petition the government for higher taxes on themselves. More than anyone else, they see the disconnect between their own extreme wealth and of society's penury. Consider that the British government just doubled the taxes on its own bankers that benefited so richly from government bailouts (to the tune of $1.75 trillion dollars). We too need to put increased taxation on the well-to-do onto the table.

It is only occasionally that one gets a glimpse into the lives of the super-rich. One such opportunity came with the divorce papers filed by Jamie McCourt. She asked her ex for some $490,000 per month in spousal support. Would a little more taxation really be anything more than an inconvenience here? At a time of nearly Depression-level unemployment rates, we need to provide for our own society's needs again after three decades of neglect. From the bottom up this time. Top-down did not work.

Wealth is much more concentrated than income in this country. Whereas the top 1% garner 17% of gross national income, they hold over 34% of tangible wealth. Whereas the top 10% garner some 42% of national income, they hold more than 70% of all such wealth. Guess where we need to go to restore our national finances? Total tangible wealth in this country is calculated to be about $55 Trillion. Some of that now needs to be paid back to the Treasury. This is where both good sense and economic justice converge. How nice that there is also a convergence with the best of conservative thinking on taxation.

Clearly what is most needed is a flat tax on tangible wealth. A mere 1% tax would provide $550B toward the deficit. Surely a 1% tax will be seen a worthwhile insurance policy by wealth holders, when the alternative is a sinking dollar. Combined with the addition of a 2% flat tax to support Social Security, we will then be in a position to flatten income tax rates so that incentives are properly maintained. Conservatives should be pleased.




Author's Website: www.eeginfo.com

Author's Bio: Siegfried Othmer is a physicist currently engaged in the development of neurofeedback as a brain-training strategy for mental dysfunctions and for enhanced cognitive and emotional functioning.

[Demeter]

8. Some top donors to Obama campaign say they're not getting perks

www.chicagotribune.com/news/chi-talk-white-house-donorsdec14,0,5720357.story
chicagotribune.com


December 14, 2009

WASHINGTON -- Some of President Barack Obama's wealthiest supporters are becoming a bit whiny, and it has nothing to do with policy.

Tickets for tours of the presidential residence are scarce, even for those who raised hundreds of thousands of dollars for last year's campaign. Private fundraisers tend to be brief, businesslike affairs. And there have been no sleepovers in the Lincoln Bedroom, weekends at Camp David or intimate lunches with the first couple.

Nearly a year into his presidency, that pattern has led some top Democratic donors across the country to grumble that they aren't getting the kind of personal attention from Obama and special access to the White House that they became used to during the eight years of the Bill Clinton presidency.

"I've had almost no communication with the White House," said Chris Korge, who collected $5.5 million for Obama, making him one of the president's biggest fundraisers.

Korge said his only visit to 1600 Pennsylvania Ave. was a St. Patrick's Day event.

"There is no connection between the administration and money people," he said. "If they do have any connection ... it is very limited as far as the fun stuff is concerned."

"You don't have the hang time with Obama," said Andy Spahn, a Hollywood consultant who joined with Steven Spielberg, Jeffrey Katzenberg and David Geffen to become one of Obama's biggest bundlers. Spielberg and Geffen made their first visit to the White House at last month's state dinner for the Indian prime minister; Spahn was not on the list.

"Obama is clearly not appointing bundlers to the same extent as the Bush administration did," said Craig Holman, a lobbyist for Public Citizen, a group that monitors ethics in government.

"Under Clinton, we did spend time in the White House. We did spend time in Camp David. We did spend time with the president in Los Angeles," Spahn said. "There has been real frustration in the donor community in general. There is so much less of that than I think ever occurred in the past."

-- Washington Post

I DON'T KNOW WHETHER TO BE AMUSED, APPALLED, OR ADMIRING OF THIS

[Demeter]

9. A Bit of Humor--To Clear the Palate, or Maybe the Sinuses

http://www.opednews.com/articles/I-m-Joseph-Stalin-and-I-m-by-John-Blumenthal-091213-334.html

December 13, 2009

I'm Joseph Stalin and I'm Feeling Neglected

By John Blumenthal

Remember me? Joe Stalin? If you recall, I was maybe the most brutal dictator ever. So why are you Americans so obsessed with Hitler? What's so great about Hitler? I was a lot worse than Hitler, but nobody even mentions my name anymore. What am I, chopped liver?

How many times do I have to hear Rush Limbaugh comparing everybody to Hitler? Or watch these Fox News nut cases ranting on about him? (Granted, our TV reception isn't that good in Hell and we don't get HDTV.) And how many times do I have to see Hitler's lousy excuse for a mustache painted on Obama posters? What's wrong with my mustache? I have a better mustache than Adolf. I have better hair too. Thicker and not as greasy.

But it's not about his mustache or his hair. Sure, Hitler killed a lot of people, but I killed more. A lot more. Millions more. I may even hold the record. I was a big time louse. I was major league scum. Hitler was an amateur compared to me. Also, you might remember that I was the guy who started the goddamn Cold War, which lasted about 50 years, a lot longer than Hitler's pathetic little war. My successors and I scared the heck out of you Americans for a long time. I should get a lot more credit for that.

Hell, Hitler wasn't even a real socialist. I was (sort of.) I was a Communist, for God's sake. I invented all this. (Well, Karl Marx actually did.) But how can you Americans all be so stupid? Hitler was a right-winger. I was a left-winger. So why aren't you moronic wing nuts putting my face on your posters? Don't you dumb Americans know anything about history?

So I'm very angry. I'm feeling ignored. Adolf kids me about it all the time. He struts around like a rooster, thumping his chest, like he's a big shot. Frankly, he's getting on my nerves, and things are bad enough down here. I don't need that little Austrian pipsqueak rubbing my face in it every time we watch TV. Attila, Genghis and Pol Pot are all laughing at me too. Even that inept dilettante Saddam Hussein is getting a kick out of it. It's depressing. You have no idea how oppressive this is for me. I may have to go on Paxil.

So do me a favor, Americans. Forget that little pansy, Hitler. The next time you want to compare somebody to a real scum-sucking pig, compare him to me. I need the attention. I have an ego too, you know.





Author's Bio: John Blumenthal has been a professional comedy writer for 25 years. A former associate editor and columnist at Playboy Magazine (following a short stint at Esquire), he's written 8 books and 2 produced movies. His films include "Short Time," (major flop), and "Blue Streak" (huge hit, no idea why.) His last two novels, both published by St. Martin's Press, were "What's Wrong With Dorfman?" and "Millard Fillmore, Mon Amour," (only available online now). They were both huge bestsellers among the members of his immediate family.

ONE WONDERS, WHO MIGHT BE COMPARED TO STALIN? MAYBE WE ARE SAVING HIM FOR THE NEXT EVIL PRESIDENT....

AFTER ALL, NOBODY DEFEATED STALIN.

[Demeter]

18. And for A Bit of Lighter Humor:10 Political Lessons for the New Year

http://www.prospect.org/cs/articles?article=ten_political_lessons_for_the_new_year

[Demeter]

30. My Favorite Cartoon--for a Christmas "Miracle"

[Demeter]

10. Good News 2009 By William Fisher

http://www.opednews.com/articles/Good-News-2009-by-William-Fisher-091213-620.html



OK, OK. I know. It's time for my annual good news column.

It's a deal I made with a friend to make up for all the depressing news stories I had to write this year.

This was no easy task. Aside from the end of the Bush era, and the election of Barack Obama, there wasn't all that much good news to be had. But perseverance paid off: My discovery of a fitting subject came during a session of the U.S. Senate on C-SPAN, that exciting channel sponsored by the cable industry.

Amidst the hollow echo of a totally empty Senate chamber (did you know the C-SPAN cameras are only allowed to focus on whoever is speaking, and never allowed to pan the whole chamber, full of empty seats?) stood a Republican senator, voice quivering, arms flailing, face reddening, railing against our National Security Enemy Number One, the American Civil Liberties Union.

Now, what was this legislative grandstander getting so apoplectic about? The ACLU's activities in coordinating defense teams for detainees at Guantanamo.

But why he should have been surprised - or acting surprised - is a mystery. The ACLU has been doing this kind of unpopular stuff for almost a century.

Let's go all the way back to World War I. Then, the National Civil Liberties Bureau, the ACLU's predecessor, defended the First Amendment rights of antiwar dissidents in the face of massive government repression. The administration of President Woodrow Wilson (winner of the Nobel Peace Prize!) banned anti-war literature from the mails and prosecuted individuals for merely expressing opposition to the war, or criticizing the President. Just like some Third World dictatorship!

People were convicted and sentenced to ten-year prison terms for allegedly interfering with the draft, even though they had said nothing about the draft itself.

These prosecutions were initially upheld by the U.S. Supreme Court. But later the Court affirmed the principle that the First Amendment protects the right to criticize the government - even during wartime.

A generation later, the ACLU was the only national organization to challenge the government's World War Two evacuation and internment of the Japanese-Americans while organizations of every political stripe, fearful of alienating the government, pretended not to notice.

Today all of us except the truly delusional acknowledge that this was one of the darkest chapters in American civil rights history.

Then, just a few years after the war, in 1949, an ex-Catholic priest named Arthur Terminiello delivered a racist and anti-Semitic speech to the Christian Veterans of America. The Chicago Police Department was present, but was unable to completely maintain order. Terminiello was charged with violating Chicago's breach of peace ordinance and fined a hundred dollars.

Terminiello appealed and the ACLU successfully defended him before the U.S. Supreme Court. The case, known as Terminiello v. Chicago, established the legal precedent for the ACLU's successful defense of the civil rights demonstrators in the 1960s and '70s.

Many other unsavory characters have been defended by the ACLU. Like the Neo-Nazis who claimed the right to march in Skokie, Illinois, in 1979. At the time, the ACLU's Executive Director was Aryeh Neier, whose relatives had died in Hitler's concentration camps during World War II. Neier said: "Keeping a few Nazis off the streets of Skokie will serve Jews poorly if it means that the freedoms to speak, publish or assemble any place in the United States are thereby weakened."

I wish the folks we send to Congress to represent us knew more American history - or chose to remember it. But, after ACORN, there is arguably no easier target for a rabble-rousing, demagogic lawmaker than the ACLU.

And these icons of good governance lose no opportunity to go the floor of the House and Senate to inveigh against it.

But they might be well advised to remember that the ACLU is an outfit to which they might one day find themselves having to reach out to defend their First Amendment rights to speak their mind - including the right to say stupid things.







Author's Website: http://billfisher.blogspot.com

Author's Bio: William Fisher has managed economic development programs in the Middle East and elsewhere for the US State Department and the US Agency for International Development. He served in the international affairs area in the Kennedy Administration and now writes on subjects ranging from human rights to foreign affairs for a number of newspapers ond online journals.

[Demeter]

11. In borrowing from China, we created our own economic ‘China syndrome' By Mary MacElveen

http://www.opednews.com/articles/In-borrowing-from-China-w-by-Mary-MacElveen-091213-563.html

December 13, 2009




For a few days, I have been reading several key articles dealing with China, but today a Washington Post article titled, U.S. firms lag in bids for Iraqi oil was the icing on the cake. In Twittering this article, I called it a blow-back to the U.S.

Let's get real: Our invasion into Iraq was to control this oil and not because of WMDs. It was not about terrorism, but greed. Soldiers as well as innocent Iraqis lost their lives and we have spent over $700 billion to fight the war in Iraq. A large sum we borrowed from China to keep this war going. Who stands to profit in these oil bids? You guessed it; China. The excerpts from this WP article will simply blow your mind:

“Chinese diplomats in Baghdad have kept a low profile in recent years, working out of a hotel and drawing little public attention. But Iraqi officials say they have been struck by the caliber of Chinese diplomats, many of whom speak flawless Arabic and have developed a nuanced understanding of Iraqi politics.”

This eye-opening article goes onto report: "We all know that China is on track to become a major economic as well as technological power," said Assam Jihad, a spokesman for the Oil Ministry.”

Do not get angry at the Iraqis since it was their oil to begin with; it was our foolishness for believing in the Bush/Cheney administration on why we needed to invade Iraq in the first place. For two oil-men, they look pretty silly in light of this story.

These wars have sunk our economy into a sink-hole period! In borrowing handily from China, we created our own economic ‘China syndrome'. These U.S. oil firms must be facing their own ‘Shock and Awe'. China out-gunned them without launching one single rocket or sending troops into Iraq. They did so with brains instead of brawn.

To further prove China's economic dominance in the world, one only has to read this explosive article published in the NY Times this past week: Recession Elsewhere, but It's Booming in China There you will read where their rate of consumption has surpassed ours on goods such as flat-screen televisions, washers, dryers as Americans hold back on their purchases.

In fact as this article points out: "China is pulling ahead at this particular moment partly because Americans, debt-laden and worried about their jobs, are pulling back. After decades of gorging on consumption, Americans are saving."

What should be a wake-up call to those in Washington D.C. who control our economic destinies is where this article points out: "For the first time, China, not the United States, is a locomotive helping to pull the global economy out of a slump. But China's tiny appetite for American exports means that the main benefit has gone to commodity exporters and to businesses in China."

As some free-market thinkers here in the United States rail against any regulation targeted at banks and Wall Street in particular, please pay close attention to this smart move coming from the Chinese government: "China's Banking Regulatory Commission recently told banks to show restraint in lending for the rest of the year, fearful that some of this year's loans could become bad debts in the next several years, as happened with the mortgage lending spree in the United States.”

China is acting like the grown-up here where the free-market thinkers here in our own country are acting like petulant children demanding they get their way. And who will suffer? All of us. In fact we have already been hit hard when so many continue to lose their jobs and as one reads where Homeless are Wherever Jobs Vanish as reported in today's New York Times. I called people's attention to this important story via my Twitter and Facebook.com pages. It sickened me as I continued to read it.

As China surged ahead of the United States becoming an economic behemoth and where their citizens are buying up a storm, one only has to read the sad facts here: "On Long Island, Nassau County officials have seen the number of people seeking shelter rise by 40 percent compared with this time last year, while in Suffolk, the number of families seeking shelter for the first time rose by 20 percent. In Connecticut, in an annual one-day survey taken in January, the number of people in emergency shelters was 33 percent higher than the year before."

As citizens tire of the finger-pointing going on in Washington D.C. between Republicans and Democrats where both at times refuse to speak with each other, this opinion by far is a salient point opined by Irvan K. Hakim, a co-chairman of the Indonesian Iron and Steel Industry Association: "Even the U.S. cannot talk to China.” One can read yet another eye-opening article relating to China's economic dominance: China's Economic Power Unsettles the Neighbors.

We as Americans allowed for this to happen without any accountability demanded of those in Washington, D.C., Wall Street and those who thought going to war was for our benefit. Yet, what are folks talking about or the MSM reporting on? You guessed it: Tiger Woods. Pathetic if you ask me.

Author's email address is, [e-mail]



Author's Bio: I am a writer who currently writes pieces for my own blog http://www.mary-macelveen.blogspot.com I have been published by Buzzflash.com, Legitgov.org, TheLiberalPatriot.org and MikeHersh.com. I was a guest on the Jay Diamond Radio Show on WRKO in Boston and have appeared on CNN. I have done numerous web broadcasts for sites such as RadioLeft.com, TVNewsLies.org and FranklySpeakingRadio.com. Please take time to visit my Facebook.com page as well as my Twitter page.

Back

[Demeter]

12. What We Have is Pottersville, and What We Need is a Better Bedford Falls By Arthur Avalon

http://www.opednews.com/populum/diarypage.php?did=15263

December 13, 2009



We watch the movie, It's a Wonderful Life, but when will we learn its lessons?

::::::::

Frank Capra's movie, It's a Wonderful Life, has become a traditional Christmas time favorite because it portrays truths that we all know are true, that touch our heart.

It has two main themes, one personal and one societal, and one is just as important as the other.

One is that when personal tragedy strikes, when all seems hopeless and we think we'd be better off dead, we need to count our blessings, see the silver lining in the dark cloud that hangs over us, and take a new tack and a new perspective so that we may proceed forward with faith and good will.

The other is that we can fight the greedy, wealthy, power-hungry robber barons only by providing an alternative to those who otherwise may fall victim to them.

Of course, we can and should update and expand our rights and laws so that the robber barons can no longer legally cheat and exploit people. But, in the meantime, we should realize that only good can overcome evil. Only love can overcome hate. Only truth can prevail over lies and falsehoods. And two wrongs don't make a right.

Those are the lessons of It's a Wonderful Life. Will we learn them?





Author's Bio: I'm a long time seeker of truth, and I suppose some would say I'm now an old man. I've seen a thing or two, and I'd like to think I recognize a genuine article when I see it. Don't talk about it much, though. I figure people learn at their own speed, find what they seek, and have their own muse. But I do like to write down what I think and what I've learned, to share it with anyone who cares.

Back

[Demeter]

13. Monsanto seed business role revealed

http://news.yahoo.com/s/ap/20091213/ap_on_bi_ge/us_seed_giant

Confidential contracts detailing Monsanto Co.'s business practices reveal how the world's biggest seed developer is squeezing competitors, controlling smaller seed companies and protecting its dominance over the multibillion-dollar market for genetically altered crops, an Associated Press investigation has found.

With Monsanto's patented genes being inserted into roughly 95 percent of all soybeans and 80 percent of all corn grown in the U.S., the company also is using its wide reach to control the ability of new biotech firms to get wide distribution for their products, according to a review of several Monsanto licensing agreements and dozens of interviews with seed industry participants, agriculture and legal experts.

Declining competition in the seed business could lead to price hikes that ripple out to every family's dinner table. That's because the corn flakes you had for breakfast, soda you drank at lunch and beef stew you ate for dinner likely were produced from crops grown with Monsanto's patented genes.

Monsanto's methods are spelled out in a series of confidential commercial licensing agreements obtained by the AP. The contracts, as long as 30 pages, include basic terms for the selling of engineered crops resistant to Monsanto's Roundup herbicide, along with shorter supplementary agreements that address new Monsanto traits or other contract amendments.

The company has used the agreements to spread its technology — giving some 200 smaller companies the right to insert Monsanto's genes in their separate strains of corn and soybean plants. But, the AP found, access to Monsanto's genes comes at a cost, and with plenty of strings attached.

For example, one contract provision bans independent companies from breeding plants that contain both Monsanto's genes and the genes of any of its competitors, unless Monsanto gives prior written permission — giving Monsanto the ability to effectively lock out competitors from inserting their patented traits into the vast share of U.S. crops that already contain Monsanto's genes.

Monsanto's business strategies and licensing agreements are being investigated by the U.S. Department of Justice and at least two state attorneys general, who are trying to determine if the practices violate U.S. antitrust laws. The practices also are at the heart of civil antitrust suits filed against Monsanto by its competitors, including a 2004 suit filed by Syngenta AG that was settled with an agreement and ongoing litigation filed this summer by DuPont in response to a Monsanto lawsuit.

The suburban St. Louis-based agricultural giant said it's done nothing wrong...

ARTICLE GOES ON AT LENGTH TO COUNTER THAT CLAIM...

?x=400&y=265&q=85&sig=L.ZZRBpefu6PXI8j2mmJPw--

[Demeter]

20. When Hating Monsanto Isn't Enough

http://www.prospect.org/csnc/blogs/tapped_archive?month=12&year=2009&base_name=when_hating_monsanto_isnt_enou

[Demeter]

14. HOLLYWOOD'S XMAS PRESENT TO US

Hollywood’s Brilliant Coda to America’s Dark Year BY FRANK RICH

http://www.nytimes.com/2009/12/13/opinion/13rich.html?_r=5&th&emc=th



ON Christmas Day, Hollywood will blanket America with a most unlikely holiday entertainment. That’s when “Up in the Air,” the acclaimed new movie starring George Clooney, will spread from its big-city engagements to more than 2,000 screens. Clooney plays Ryan Bingham, a corporate road warrior for a small, Omaha-based contractor hired to lay off employees for companies that prefer to outsource that unpleasant task. Ryan has fired so many people in so many cities that he is approaching a frequent-flier status unknown to all but a few Americans.

How could a film with that premise be a Christmas hit in a country reeling from the highest unemployment rate in decades? By using the power of pop culture to salve national wounds that continue to fester in the real world.

“Up in the Air” is not a political movie. It won’t be mistaken for either a Michael Moore or Ayn Rand polemic on capitalism. What makes it tick is Ryan’s struggle to reclaim his own humanity, a story that will not be described or spoiled here. But the film’s backdrop is just as primal — and these days perhaps more universal — than the personal drama so movingly atomized by Clooney in the foreground.

Here is an America whose battered inhabitants realize that the economic deck is stacked against them, gamed by distant, powerful figures they can’t see or know. “Up in the Air” may be a glossy production sprinkled with laughter and sex, but it captures the distinctive topography of our Great Recession as vividly as a far more dour Hollywood product of 70 years ago, “The Grapes of Wrath,” did the vastly different landscape of the Great Depression.

While “Up in the Air” opens with a remix of Woody Guthrie’s Depression-spawned “This Land Is Your Land,” its dispossessed Americans don’t resemble those in a black-and-white Dorothea Lange photograph. They’re not the familiar contemporary blue-collar factory workers in our devastated manufacturing economy. They are instead mostly middle-class refugees from the suburban good life depicted in credit card ads. Their correlative to the Dust Bowl is a coast-to-coast wasteland of foreclosed office spaces where desk chairs and knots of dead phones lie abandoned in a fluorescent half-light. “Up in the Air” taps into the desperation, fear and anger that both the populist left and right are trying to articulate right now, and that leaders of both parties have failed to address.

“Retailers are down 20 percent,” Ryan’s boss tells his troops in a conference room. “Auto industry is in the dump. Housing market doesn’t have a heartbeat. It is one of the worst times on record for America. This is our moment.” And so it is. In constant flight from hub to hub, his staff parachutes into troubled companies to lay off dozens of workers with impressive assembly-line efficiency. The genial Ryan and his fellow “transition specialists” never use the word “fired,” of course. They tell employees they are being “let go” and not to “take it personally.” They hand their prey slick-looking severance packets and, with a doctor’s bedside manner, intone that “we’re here to talk about the future.” Soon it’s time to send the discarded employee to collect his personal effects on the way to the exit.

A new colleague of Ryan’s, a “dynamite young woman” from Cornell, comes up with an innovative strategy for downsizing the downsizers. To eliminate travel costs, she proposes that in-person firings instead be executed long-distance by teleconference, with ranks of “termination engineers” at computer screens reciting from a script titled “Employee Termination Workflow.” In a dry run, the guinea pig is a burly 57-year-old office worker who refuses to stay in the camera frame and staggers off in a paroxysm of anger and sobs. It’s like watching a man being assassinated by a predator drone. But this is Detroit, not Waziristan.

The fictional doings in “Up in the Air,” adapted from a 2001 novel by Walter Kirn, are bookended by brief montages culled from interviews that the director, Jason Reitman, conducted with real-life laid-off workers while shooting in Detroit and St. Louis. He asked the interviewees what they had told — or wished they had told — the H.R. bureaucrats who let them go. “On the stress level, I’ve heard that losing your job is like a death in the family,” says one man. “But personally I feel more like the people I worked with were my family, and I died.”

In rolling out his latest jobs initiative last week, President Obama said, “Sometimes it’s hard to break out of the bubble here in Washington and remind ourselves that behind these statistics are people’s lives, their capacity to do right by their families.” True enough, and in this movie you see a few of the lives behind the statistics, however fleetingly. But the point of “Up in the Air” is not to deliver the message that mass unemployment is a terrible tragedy. We hardly need a movie — or a politician — to deliver that news at this late date.

What gives our Great Recession its particular darkness — and gives this film its haunting afterlife — is the disconnect between the corporate culture that is dictating the firing and the rest of us. In the shorthand of the day, it’s the dichotomy between Wall Street and Main Street, though that oversimplifies the divide. This disconnect isn’t just about the huge gap in income between the financial sector and the rest of America. Nor is it just about the inequities of a government bailout that rescued the irresponsible bankers who helped crash the economy while shortchanging the innocent victims of their reckless gambles. What “Up in the Air” captures is less didactic. It makes palpable the cultural and even physical chasm that opened up between the two Americas for years before the financial collapse.

The private-equity deal makers who bought and sold once-solid companies like trading cards, saddling them with debt, never saw the workers whose jobs were shredded by their cunning games of financial looting. The geniuses in Washington and on Wall Street who invented junk mortgages and then bundled and sold them as securities didn’t live in the same neighborhoods as the mortgagees, small investors and retirees left holding the bag once the housing bubble burst.

Those at the top are separated from the consequences of their actions. They are exemplified by Robert Rubin, formerly of Citigroup and a mentor to both Obama’s Treasury secretary and chief economic adviser. He looked the other way when his bank made ruinous high-risk bets, and then cashed out and split, leaving taxpayers to pay for the wreckage while he escaped any accountability. Such economic wise men peer down at the country from a hermetically sealed bubble of privilege and self-interest, much as Ryan does from the plane flying him to his next mass firing. And they tend to think, as Lloyd Blankfein of Goldman Sachs notoriously put it, that they are doing “God’s work” to sustain our free-market system.

“Mad Men” literally whacked one such executive this season. Its fans loved watching a drunken office-party accident maim a visiting overseer from the British corporation that had swallowed and downsized Sterling Cooper, the show’s fictional Madison Avenue ad agency. The episode was set in 1963, but “Mad Men” resonates in part because it prefigures today’s corporate culture. One recent plot line dealt with the mercurial machinations of the hotel tycoon Conrad Hilton, a potential client of Sterling Cooper. As coincidental thematic synergy would have it, “Up in the Air” portrays Ryan as an elite cardholder in a “Hilton Honors” program that defines brand “loyalty” with a mercenary zeal the Connie Hilton of “Mad Men” would relish.

Last week Goldman Sachs announced it would grant some of this year’s bonuses in stock, not cash, to try to stanch the public backlash to the record profits it piled up thanks to government largess. But Washington remains strangely oblivious to the mood out there. Financial reform has been embattled on Capitol Hill, where the financial industry has spent $344 million on lobbying in the first three quarters of 2009. The big ratings agencies that gave triple-A stamps of approval to Wall Street’s junk are back to business as usual. Bank of America and Citi are racing to return TARP money to Washington not because they have necessarily recovered but because they want to shower rewards on their executives with impunity.

The rage engendered by this status quo is across the political map. As unlikely as it sounds, Ron Paul and Jim DeMint, political heroes of the tea party right, and Bernie Sanders and Alan Grayson, similarly revered on the left, have found a common cause in vilifying the Federal Reserve Bank and its chairman, Ben Bernanke. The Fed is hardly the root of all evil, but you can see why it is a handy scapegoat. Like the institutions it failed to police during the boom, it wields its power from on high with little transparency to those below.

Meanwhile, at the company where I work, as at many others, the latest round of layoffs will be completed by Christmas. Even for the survivors it feels a little like serial deaths in the family. And who believes we’re near the end of this story? For all of Wall Street’s and Washington’s rumors of a recovery, the fate of Americans on the ground remains very much up in the air.

IT'S A WONDERFUL LIFE, AIN'T IT?

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17. The Health Care Ultimatum

A reasoned discussion concerning the legislative process (and an erroneous bunch of conclusions, IMO)

http://www.prospect.org/cs/articles?article=the_health_care_ultimatum

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19. Loss of Innocence: Coming of Age in the Aughts

http://www.prospect.org/cs/articles?article=coming_of_age_in_the_aughts

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21. Despite U.S. laws, thousands still virtual slaves in America

http://www.mcclatchydc.com/251/story/80576.html

"Neither slavery nor involuntary servitude…shall exist within the United States, or any place subject to their jurisdiction." — 13th Amendment to the U.S. Constitution, ratified Dec. 6, 1865

KANSAS CITY — Sebastian Pereria told a friend last year about his life in America.

How he wanted to see his wife and children in India, but his boss kept his identification papers and wouldn’t let him go.

Other waiters who worked with him at a restaurant in Topeka, Kan., told of how they were forced to work 13-hour days, six days a week. They talked of how the boss underpaid them and pocketed their tips.

In the end, Pereria, 46, got his wish. He finally arrived home last year.

In a coffin.

The U.S. government could not help Pereria, even though they said he fit the criteria for being a human trafficking victim. Other waiters he worked with got help and were rescued from the Globe Indian Restaurant. But for Pereria, even in death, a judge remained unconvinced....

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22. The Great Oil Grab! How the Major Powers are Dividing the World's Resources

http://www.oilprice.com/article-the-great-oil-grab-how-the-major-powers-are-dividing-the-worlds-resources.html

China and Russia will stay on tenterhooks for decades to come, on the question of sufficiency of energy supplies, notwithstanding the oil grab they have indulged in over the past years. According to energy security pundits, both China and Russia have unique problems and are unable to shake off the shackles of the modern open energy market.

“Even though China seems to be rushing to buy oil resources and production supplies, it still has to buy its oil in open markets.

A rough calculation of its production and consumption units in bpd show it would not be using more than one-third of its total consumption from its own productions in the coming decades,” said John Roberts, energy security specialist with Platts. Roberts predicted, “even though China will end up with one-fourth of Kazakhstan production, the rest of Kazak production will head West.”

According to media reports China is amassing oil and gas reserves in Nigeria, Libya, Angola, Iran, Iraq, Venezuela and other available resources around the world leaving no stone unturned anywhere and there is a panic in the Western media about it.

A backlash of sorts is already evident from Libya's recent veto of a $462 million bid by China National Petroleum Corp.

The Chinese invasion news is compounded by Russian claims on untapped gas reserves in the Arctic and the U.S. is getting accused of oil grab in the Middle East, especially in Iraq for now.

In the West there is an open question about security of the western oil supplies vis-a-vis expansion programs of Russian state-owned groups such as Gazprom ready to threaten those supply lines. Russia is the world's second-largest producer of petroleum - about 8 million barrels of crude per day - which accounts for nearly 40 percent of the country's GDP.

Sky-rocketing global oil prices over the past five years have wafted state budgets into the black, fueled a modest economic boom, and enabled the Russian Central Bank to rack up reserves of $170 billion. But far beyond taxing windfall energy profits, the Kremlin moved to take over the industry.

Prime Minister Vladimir Putin, the former president and his over-inflated but shrewd ego is going all-out to get back the super-power glory resulting in the assembly of a vast state-run energy conglomerate. Russian authorities have - by hook or by crook - regained state control of the formerly private oil-and-gas sector with increasing state ambitions to spread its domain now to the Arctic areas. But this oil grab may have damaged Russia's energy prospects, according to sector observers.

A Russian energy expert speaking on conditions of anonymity told Oilprice.com today that exploration has come to a halt while a sustained growth of 9% in oil production a few years ago has dried to just 3% this year.

Platts energy pundit Roberts told Oilprice.com: “The Russian companies are keen to invest outside Russia because it is difficult to make that much money inside as Russian terms are not very good.”

On the question of the Arctic oil and gas grab, Roberts said: “That area promises further major resources because we know that Yamal Peninsula has vast volumes of gas to be developed.”

Citing the Russian estimates of “300 billion cubic meters a year,” Roberts pointed at the need for developing the production. “To develop giant field resources, Russia needs capital and also to maintain the present status quo of production, huge investments are needed between 2010 -2030 as gas production otherwise will be halved,” he said.

Russia, however, has two advantages, Roberts pointed out: First, having resources and second, most profligate user of energy.

“If it could learn to save or conserve energy and become energy efficient, it may hope to free up cash for the transformation of existing resources into actual production,” he said. “Russia needs anywhere between $2.4 and $2.8 trillion for energy development between now and 2030,” Roberts added. “It’s worth looking up at Russian GDP and that is a lot of money for Russia.”

“Russians are planning to tap into FDI (Foreign Direct Investment) but we have never seen anything like that,” he said, questioning where would Moscow find $15 bln per year in FDI.

With the fear of looming energy crisis and impending need for security for hungry industrial giants, there is no doubt that the developing countries like China and India are giving the advanced nations like the U.S. a run for their life in the energy fields.

The energy gurus, however, feel that there will stay an equation of sharing depending on basic principles of give-and-take.

Sarah O. Ladislaw, a Fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington DC, said at a recent forum how “consumer feelings of insecurity increased when the price of oil went up,” as she addressed the issue of the intersection of security and sustainability.

Michael Mandel, former chief economist for BusinessWeek, “was optimistic, long-term” despite projections about the industry in the face of a global population crisis and global warming prospects that will exacerbate energy supply.

On the question of sustainability of supply, Roberta Bowman, senior vice president and chief sustainability officer, Duke Energy Technology, maintained that “sustainability, on an industry basis, will only come about through dedication to efficiency, collaboration and capacity-building.”

Curt L. Hebert, Jr., executive vice president, external affairs, Entergy Corp., approached sustainability from the perspective of “conduct,” as well as creating proper incentives and price signals while Pedro Azagra, chief development officer, Iberdola, tied sustainability policy to the proper servicing of clients and communities.

All these augur well for the United States as its crude oil production for 2009 is on target to have its biggest one-year jump since 1970, according to a Platts analysis of industry data.

With U.S. oil production averaging 5.268 million barrels per day (b/d) through October, the gain in U.S. output will be the most since the country produced 9.637-million b/d in 1970, which turned out to be the peak year of U.S. crude output, according to Platts’ analysis of data published by the U.S. Energy Information Administration (EIA).

This article was written by Tejinder Singh of Oilprice.com

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23. The Spending Wars How did military spending become sacrosanct?

http://www.prospect.org/cs/articles?article=the_spending_wars

When Rep. David Obey, chair of the House Appropriations Committee, recently proposed a surtax that would pay for the Afghanistan War, the collective response from most of his colleagues on both sides of the aisle was, "Are you nuts?" Nancy Pelosi quickly put the kibosh on Obey's "Share the Sacrifice Act," and all talk of funding the war has been banished. Meanwhile, Democrats have spent untold hours debating how to finance health-care reform, all while Republicans carp about how doing so is just too darn expensive, what with our ever-climbing deficit.

We've become used to this contradiction in Washington. Wars just need to be fought; the defense budget just needs to keep growing; and we don't really care what it costs. The idea that we might ask each other to pay for war through our taxes is so ridiculous as to barely merit discussion. Domestic initiatives meant to improve Americans' lives, on the other hand, are deeply offensive to any notion of responsibility unless every penny is paid for in advance (and maybe not even then).

It wasn't always this way. In fact, prior to the last few decades, the ebb and flow of federal taxation was largely dictated by war. As this handy "History of the U.S. Tax System" from the U.S. Treasury -- funded with your taxes! -- explains, we raised taxes to pay for wars over and over again. A sampling:

To pay the debts of the Revolutionary War, Congress levied excise taxes. ... During the confrontation with France in the late 1790s, the Federal Government imposed the first direct taxes. ... To raise money for the War of 1812, Congress imposed additional excise taxes. ... When the Civil War erupted, the Congress passed the Revenue Act of 1861. ... The War Revenue Act of 1899 sought to raise funds for the Spanish-American War through ... doubled taxes on beer and tobacco. A tax was even imposed on chewing gum. ... The entry of the United States into World War I greatly increased the need for revenue and Congress responded by passing the 1916 Revenue Act. ... Even before the United States entered the Second World War, increasing defense spending and the need for monies to support the opponents of Axis aggression led to the passage in 1940 of two tax laws that increased individual and corporate taxes.

So what happened in the years since? Lots of things. For one, the federal government simply did far less during the 19th century than it does today. And since the 1960s, Republicans have driven our rhetoric about government spending and taxes. They successfully defined taxation as the taking of money from honest, hardworking Americans and giving it to undeserving, shiftless leeches (we could discuss the racial element to this argument at length).

Republicans have also managed to ensure that military spending isn't really considered spending at all, something that becomes evident whenever they start talking budgets. In a recent piece for Politico decrying President Barack Obama's fiscal stewardship, Republican Party Chair Michael Steele called for tax cuts (surprise, surprise) and suggested that we "freeze domestic discretionary spending" as a way to help the economy. Why just "domestic" spending? Because it doesn't include the military, of course. Meanwhile, Mitt Romney took to the pages of USA Today to propose "adopting limits on non-military discretionary spending and reforming our unsustainable, unfunded entitlements." In other words, we should cut funding for everything except the military. Meanwhile, we regularly hear the term "non-defense discretionary spending" used, as though defense spending weren't discretionary. And certainly, defense spending shouldn't ever be discussed except to debate whether it should be increased or increased hugely.

In case you're wondering, according to the Congressional Research Service, we've spent $683 billion in Iraq and $227 billion in Afghanistan between 2001 and the fiscal year that just ended, with another $139 billion requested for next year, for a total of over $1 trillion. Add in things like restocking equipment and caring for veterans, and the eventual costs will probably be double that. The Iraq War alone has now cost more than Vietnam did in inflation-adjusted terms. But when we consider whether to start or expand a war, the debate revolves around non-financial questions, which are presented as so consequential that it is almost absurd to allow the question of cost to weigh in our decision.

So why is it that, with 45,000 Americans dying every year from lack of health insurance, we don't say the same thing about health-care reform? Why aren't we saying, "We just have to do this, no matter what it costs"? Just as a point of comparison, if that figure is accurate, then over 350,000 Americans have died since September 11 because they were uninsured. Imagine what our foreign and defense policies would look like today if 350,000 Americans had been killed by terrorists in the last eight years. One thing we can be sure of is that we wouldn't be talking about how much measures to combat terrorism will cost us.

It's commonly said among responsible people that we as a polity have lost our sense of responsibility when it comes to spending. This is why we get things like the disaster that is California's government, where the public demands more and more services, yet it is nearly impossible to raise the taxes necessary to fund them. But that isn't really the problem on the federal level. When the debate turns to things like health care, infrastructure, and education, the green eyeshades are donned and the budget knives wielded without mercy. Yet the typical "fiscal conservative" in Washington is an enthusiastic supporter of various wars and ever-ballooning defense spending...

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24. Racing the Clock on Jobs by Terence Samuel

http://www.prospect.org/cs/articles?article=racing_the_clock_on_jobs

While Afghanistan and health care dominate the news, Obama still needs to address the troubling job market.

THIS ARTICLE SHOWS JUST HOW EMPTY OBAMA'S JOBS PROGRAM IS, AND HOW UNLIKELY, THEREFORE, HIS SECOND TERM PROSPECTS HAVE BECOME.

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26. Jobs! Can They Not Hear and See? By James Brett

http://www.opednews.com/articles/Jobs--Can-They-Not-Hear-a-by-James-Brett-091125-959.html



Statistics can be deceiving. Statistics can mask truth and disguise falsehoods. Presenting statistics is an art form, for the manner of presentation, down to the color palette used can imply much that the numbers cannot.

Take for instance this "unemployment map" provided by The American Observer. Look at it now; play it through to the end.

http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html

Did you notice that 8.5% and 10+% unemployment is represented in the most somber dark purple and black? Did you follow your own county and miss what was happening elsewhere? Did you wonder about the wide open spaces shown out west? Did you remember that we now have an average national unemployment of 10.2%? Do you still think the map was biased or slanted one way or another?

Of course it is biased. Its colors are intended to give you a "worst case" impression of the relentless loss of jobs across America. It is as if darkness falls across the face of the land. But has it? What about the real statistics that indicate pockets and regions of 17% unemployment and 30% unemployment among Black American males? What color is left to show the despair in these precincts? And what do these statistics mean? Do they show a two pound roast chicken on the Thanksgiving table instead of a twenty pound golden brown turkey? Do they show what will happen at Christmas?

The sad fact is that unemployment, however unpleasant it is to conceive and behold, is increasing and Obama's government is doing precious little at the bully pulpit or through Congress to turn this around. Yes, I know the economic stimulus package has brought about new optimism in housing and automobile sales, but you cannot eat optimism or wrap it up and put it under the Christmas tree.

Paul Krugman and a host of others are quite clear that we are not only headed in the wrong policy direction, but that it is already too late to prevent agonizing years of continued unemployment. It seems that Advisor Summers and Secretary Geithner believe that the market will produce the needed jobs and that their duties as stimulus wielders are over. They are obviously wrong.

But, disaffection with Obama and his crew is beginning to get down close to the bone. Maureen Dowd is beginning to call it like she has been seeing it for the past few months. There seems to be a serious problem at the very top. Yes, of course, Larry Summers is an arrogant person, and Tim Geithner a conspicuously opportunistic parasite, and Rahm Emanuel a profane, cynical, arrogant martinet and bully, but Barack Obama is beginning to be discerned among the shadows of this cave, and the apparition is not pleasant.

Both Dowd and Frank Rich let loose this past Sunday with columns about the tone-deafness of the Obama administration and indeed the Washington punditocracy. Palin and by extension Beck, Limbaugh, O'Reilly and the rest of the Fox propaganda machine represent a reality in American life, a reality not far removed from the unemployment map you saw. Dowd and Rich wrote about Sarah, and truthfully, Sarah is the graceful side of a pure seething anger right now. She appeals to every wound—real and imagined—suffered since the Great Society, since Rowe v. Wade, since Vietnam, since 9/11, since Affirimative Action, ... you name it. Change came and people were jostled, hurt, maimed, and soldiers killed ... and the anger about this is very, very real.

Obama will soon present his "plan" for Afghanistan and we all know that 30,000 more troops will be sent into that country to ... what? ... defeat the Taliban for once and for all? Is that really possible? Where are these troops going to come from without a draft? How many deployments and how long can we and our troops stand this?

These are not the jobs we want and need. Main Street jobs is the key, but Obama and his crew have done virtually nothing directly to create jobs. I am telling you now that this will back up on him and us, and the devil take the hindmost!

JB




Author's Bio: James R. Brett, Ph.D. taught Russian History before becoming an academic administrator in faculty research administration. His academic interests are the modern period of Russian History since Peter the Great, Chinese History, the history of science, and the history of ideas, including psychology and consciousness studies.

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25. GEITHNER HAS AN APOLOGIST! WHAT DO YOU ALL THINK?

http://www.opednews.com/articles/Rewriting-History-to-Blame-by-David-Fiderer-091127-426.html

November 27, 2009

Rewriting History to Blame Tim Geithner: An Incomplete Story of the AIG Bailout

By David Fiderer

Elliott Spitzergot it wrong, as did Paul Krugman, and countless bloggers. The popular narrative – that Tim Geithner needlessly favored the interests of banks over those of taxpayers – does not withstand close scrutiny. No one noticed that Inspector General Neil Barofsky's report on the AIG bailout excluded key facts that explained why Geithner's options were forestalled.

Everyone agrees that Geithner's decision to pay certain banks 100 cents on the dollar for their toxic assets was distasteful, if not enraging. The banks who benefited very possibly did not have clean hands. Most likely they underwrote the same collateralized debt obligations, or CDOs, that AIG insured through credit default swaps. And those same banks probably ignored signs that the CDO investments, which were repackaged subprime mortgages, were fatally flawed. (It's too bad Barofsky never investigated those CDOs.) But the law gave the banks the upper hand, and a continued stalemate in negotiations would have exacerbated AIG's liquidity crisis. So, for the same reasons that politicians cut deals with Kim Jong-Il or Joe Lieberman, Geithner held his nose and paid money to make the problem go away.

Credit Ratings and Financial Weapons of Mass Destruction

Warren Buffet presciently anticipated the Hobson's Choice back in 2003, when he characterized all derivatives as financial weapons of mass destruction. As Buffet explained, whenever a derivative obligation goes out of the money, that company's liquidity may harmed by margin calls, or calls to post cash collateral. In October 2008, one month after the U.S. government signaled it would do whatever it took to keep AIG afloat, the insurance behemoth continued to hemorrhage cash, precisely because of collateral calls on its credit default swaps. That's when the New York Federal Reserve, then headed by Geithner, was brought in to staunch the bleeding.

The cash drain was accelerated by downgrades from the rating agencies. Many of AIG's swaps were subject to ratings triggers, which increased the level of mandatory cash collateral whenever AIG's ratings went down. Prior to March 2007, when AIG entered into these deals, its AAA rating exempted it from collateral posting requirements. Right after September 15, 2008, when Standard and Poor's downgraded AIG from AA- to A-, the company turned over$14.5 billion in cash to its trading partners. By the end of that quarter, the downgrades caused a $32.8 million loss of liquidity. If the rating agencies had imposed further downgrades, AIG's cash collateral calls could have exploded. Barofsky's report, which notes that Geithner's concern about ratings downgrades, fails to mention the cash impact of those potential downgrades.

Geithner's bottom line was that he wanted to preempt further downgrades by S&P and Moody's. A long protracted dispute with the banks would have created fear in the marketplace and at the rating agencies. Geithner had no leverage over the rating agencies. The cash downside from a ratings slide was much bigger than the $27 billion that might be paid out to the banks, who were already holding $35 billion in cash collateral.

Why Bankruptcy Was Never A Viable Threat

Of course, by October 2008, AIG's ratings were, for all intents and purposes, a fiction. Without the support of the U.S. government, AIG was probably insolvent. But the company's value in a bankruptcy scenario was hard to discern, because of a 2005 change in the law that made derivatives even more dangerous. Spitzer overlooks this change when he argues that the government could have used the threat of bankruptcy against the banks. He writes:

The counterparties had the contractual right to refuse the terms, throw AIG into bankruptcy, and suffer the consequences. In a workout context, the entity with cash—here, the government—can set the terms, and the other parties can either accept those terms or walk over to bankruptcy court.

The bankruptcy code was designed so that no single creditor can jump to the head of the line. Once a company files in court, everyone – trade creditors, landlords, bondholders - must wait for an orderly resolution of all debt obligations. Even if a bank extends a cash-secured loan, that cash security is held by the bankruptcy estate. But creditors who holding derivative contracts get special treatment. They can immediately liquidate their contracts and move against any collateral outside of bankruptcy. This inconsistency in the law was a major reason why the Lehman bankruptcy turned out to be such a disaster. And it's why everyone knew that an AIG bankruptcy was never a viable option.

It's also why Geithner could never impose the threat of bankruptcy against the banks who held the credit default swaps. Even if AIG were to file for Chapter 11, the bankruptcy judge could not easily go after the cash collateral that the banks were already holding.

Spitzer overlooks this point in his fiery admonition of Geithner:

Geithner suggested he could not use the threat of AIG's default in the absence of a federal bailout to get concessions from AIG's creditors. Why not?

That is exactly what the government did with the auto industry, and rightly so. The entity providing financing to a near-bankrupt institution must always seek contributions from everyone else at risk. The fact that the Fed had a strong predisposition against letting AIG go into bankruptcy didn't mean the Fed shouldn't have used every opportunity to wrangle concessions from the other parties.

Except the government was able to attain concessions from GM's and Chrysler's creditors precisely because those companies were going into bankruptcy. The essential element for an expeditious bankruptcy plan is that all the creditors of a certain class get equal treatment. But it's almost impossible to get quick agreement on the fair value of CDOs protected by credit default swaps because there's no cash market for CDOs. It's easy to figure out the value of an oil swap or a euro swap, because oil and euros are bought and sold every day. But there is no active market for exotic CDOs. The valuation is done by analogy. The banks would have litigated the amounts of their claims for years.

Geithner Had No Sway Over the Shadow Banking System

It wasn't simply the banks who dug in their heels, it was also the French government. The Commission Bancaire, acting on behalf of Societe Generale and Calyon, said that French banks could not legally be compelled to reduce their claims against AIG outside of a formal bankruptcy. Again, bank regulators can act swiftly and decisively on insolvent banks like Washington Mutual, but Geithner lacked any comparable authority to impose his will on the creditors of an insurance company.

That's why Spitzer's insinuation, that Geithner deserves some blame for creating the predicament faced by AIG, doesn't hold water. Spitzer writes that Geithner and others “grievously damaged the nation and capitulated to the very banks they should have been supervising.” But Geithner's job was to regulate New York banks, not the shadow banking system, which is the multitude of non-bank entities – including AIG, hedge funds, brokerage firms, and mortgage lenders – that relied on short-term credit to fund their long-term investments. It was the shadow banking system that had collapsed in the fall of 2008. Prior to September 2008, Geithner's regulators could only know that the banks had credit derivatives with a big insurance company rated AA-; they did not have access to AIG's books. Everyone knew that the unregulated shadow banking system dominated the traditional banking system. But everyone also knew that any attempt to expand regulatory oversight while Bush was in office was a fool's errand.

“For Geithner to say it would have been ‘unethical' to negotiate for concessions is sheer silliness,” writes Spitzer. Actually, Geithner said that it was unethical to threaten actions that he couldn't possibly enforce. But at the end of the day it wasn't a matter of being ethical or unethical. Everyone knew what the endgame was, and Geithner knew he couldn't fool the banks into thinking otherwise.

LTCM was Different

Krugman frames the situation somewhat differently, suggesting that Geithner could have strong-armed the banks, who are all members of the same Wall Street club, to do the right thing. But he cites the bailout of a hedge fund, Long Term Capital Management as a controlling precedent. The comparison is off base. The deal proposed by the New York Fed in 1998 was that all the major U.S. banks could contribute funds to acquire equity in LTCM. The offer was not compulsory, and Bear Stearns refused to participate. To bank executives, it's one thing to say that you should provide emergency financing to invest in a hedge fund with some upside potential, and quite another to say that you should write off your legal claim to several billion dollars. In October 2008 Wall Street executives knew that when the dust settled, a lot of finger pointing would ensue and a lot of people were going to get fired, so no one was willing to stick his neck out. (If you think that foreboding was unwarranted, ask Ken Lewis or John Thain.) Whether or not you find that attitude morally repellant, you should not be shocked. Look at how politicians respond to the crises in health care and climate change. “Major financial firms are a small club, with a shared interest in sustaining the system,” wrote Krugman. That's what they used to say about the U.S. Senate.

Of course, there's still the most obvious question: Isn't this the government? Can't the government that bailed out these banks demand something in return? Yes it could have, at one time.

Hank Paulson's Preemptive Policy: Throw Money, Don't Ask Questions, Don't Negotiate

Every negotiation is a game of chicken. Geithner's ability to say to the banks, “You'd better make some concessions on behalf of the taxpayer, or else!” was undercut by the actions of Hank Paulson. Two weeks before Geithner tried to resolve the problems of AIG's credit default swaps, Hank Paulson announced that he was throwing money at the banks indiscriminately. OnOctober 13, 2008he told the nine largest U.S. banks that they must take $125 billion in government funds, with no strings attached, whether they wanted to or not. Paulson's modus operandi was consistent throughout the crisis and afterwards. He pushed everyone into a corner to preempt any good faith negotiation or problem solving, he used threats to emasculate normal standards of government accountability and corporate governance, and heliedabout his actions afterwards.

After October 13, 2008, Geithner and the banks knew that the Paulson's Treasury did not care about protecting the taxpayers' money, only about making problems go away. He could not withhold government aid, because the money was already out the door.

As with any complex financial transaction, if you overlook an important detail, you don't understand what's really going on. That's why the conventional wisdom about Geithner's role in the AIG bailout is wrong.

Finally, none of the foregoing is a slam on anything else written by Spitzer and Krugman, whose writings are almost always perceptive and illuminating.




Author's Bio: For over 20 years, David has been a banker covering the energy industry for several global banks in New York. Currently, he is working on several journalism projects dealing with corporate and political corruption that, so far, have escaped serious scrutiny by mainstream media. He is trained as a lawyer.

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27. Bailed-Out AIG Forcing Poor to Choose Between Running Water and Food

http://www.alternet.org/workplace/144203/bailed-out_aig_forcing_poor_to_choose_between_running_water_and_food

What are we getting in return for the bailout? So far, predatory credit card rates, exorbitant bank fees and obscene Wall Street bonuses. But we're being robbed in other, sneakier ways, too. It seems that taxpayers in the poorest, most vulnerable parts of the county are getting plundered by the same institutions they bailed out. One example is AIG's underhanded fleecing of residents of rural Kentucky.

Middlesboro and Clinton are two tiny, impoverished towns in southern Kentucky with a combined population of 12,000. In 2008, Middlesboro's per capita income was $13,189 a year, only a few hundred dollars more than the average worker earned in third-world Mexico. That is if they were lucky to even get a job. Real unemployment hovers somewhere around 30%, and the state is so broke that half the people eligible for unemployment benefits can't receive them. Life may be tough and most people live in poverty, but that doesn't mean they can't be made a little poorer. That's the lesson locals learned after bailed-out insurance villain AIG took over their water utility and instantly raised rates to squeeze an extra $1 million in profits out of its new customers, forcing some to consider choosing between running water and food.

The towns are so rural, their residents have yet to be touched by the Internet revolution. Forget comment sections or forum threads. In Clinton, you have to track down actual hand-written notes that residents filed with city hall to read their complaints about the rate increase. Luckily, city officials were nice enough to scan some of them.

Here's one, dated August 8, 2009:

My husband and I are on a fixed income and with everything going up in price this would be very a very large burden on us as well as most of the citizens of Clinton. Our town is mostly of people like us and this would be such a hardship for us. A 50.8% raise is outrageous on anything. Please do not let this happen. It would mean the difference in bringing buying food and medicine or paying a high water bill to make someone else's life easier.

Here is how the AIG takeover went down: In 2005, flush with cash from its shady dealings in the mortgage derivatives market, AIG announced that it was in the process of acquiring Utilities Inc., a holding company that controlled scores of small water utilities across 17 different states. With just 300,000 customers, the company wasn't huge, but it boasted of being the largest privately held water utility in the country.

"We have long considered water infrastructure as an attractive investment opportunity and an excellent complement to existing energy infrastructure portfolio. Utilities Inc. is a leader in this industry and we are pleased that the opportunity to acquire this business,” AIG Chairman and CEO Win J. Neuger gloated in a press release.

AIG had reason to be pleased with its purchase. Water utilities are one hell of a profitable business, with international corporations easily making a 20 to 30% profit margin, according to a 2007 report by Food and Water Watch. In the US, federal regulations limit profits to 10%, a pesky rule that companies easily subvert by shuffling their income around and “investing” it in side businesses. These kinds of returns would be the envy of the pharmaceutical and oil industries. How do water companies do it? According to Food and Water Watch, they charge 50% more for services than public utilities and pocket the difference, thereby unleashing the potential of the free market.

People who have been ripped off by bailed-out banks' schemes to trick late fees out of their customers will recognize what Utilities Inc. did to the people of Middlesboro and Clinton. In the summer of 2008, as AIG was teetering and desperate for funds, it "upgraded" its billing system, and suddenly a slew of late fee charges hit the struggling locals.

Residents had been getting their water bills like clockwork for as long as anyone could remember, but confusion and disorder set in as soon as Utilities rolled out its new and improved billing system. Monthly statements started coming late or didn't come in for months at a time. People were double-billed and double-penalized for bills that never arrived. One month, a bill would include sewer fees, the next month it wouldn't—and you'd be charged if didn't catch the omission. It's obvious the new invoice system was designed for pure harassment, creating chaos and reaping the rewards of the late fees it generated.

Internally, Utilities referred to their revamp of the billing system as "Project Phoenix." It sounded eerily similar to the CIA's "Phoenix Program," which was designed to terrorize, kill and torture uppity Vietnamese villagers into submission during the Vietnam War. One month after Project Phoenix started wreaking havoc on locals, AIG collapsed and took the first of over $150 billion in taxpayer bailout funds. That meant Project Phoenix could still go on terrorizing locals—which it did.

Here is how a local newspaper described the new billing program in Clinton in March, 2008:

It wasn’t until the summer of 2008 that the new bills began to arrive and from Day One, they were messed up. Few customers here in Clinton the water company because they got multiple bills. One business thought it got a break when its bill went down somewhat, only to discover that the bill hadn’t included sewer costs. This went on for several months. Finally, the showed up – due in full – on one bill. Requests to spread out the payment fell on deaf ears. . . . Some of us were so confused by the bills, we paid them every time they came in. . . . Fears of bad credit reports and shut offs kept most customers paying whenever a bill arrived.

To make it harder for Clinton residents to file complaints, AIG closed the utility's local office as soon as it took over the company. Pleas made by phone were rejected.

Local citizens are angry, upset and fearful. Many senior citizens on fixed incomes are already stretched past the breaking point. Others living below the poverty line without hope of getting a job are worried about how to pay another rising utility bill.

Customers we’ve talked to “want to do something,” but say they cannot afford to file to intervene in the case. The trip to Frankfort is daunting and expensive. Some dare not leave the jobs or businesses they have for the time it would take to travel and attend a hearing in Frankfort.

In November 2008, right as AIG was recieving the second installment of its bailout and the economy was in a free-fall, AIG's water utility notified Middlesbro and Clinton residents that it would be raising rates by 51%. It would mean more than $750,000 in additional revenue a year, just from 8,000 customers. The money wouldn't be used to fund infrastructure improvements—none had been made and none were planned. No, according to a company spokesman, the utility was trying to recoup money it had invested in its "improved" billing system, in effect forcing the victims of the billing system to pay for their own fleecing.

It seems Utilities was quite honest about explaining that a good chunk of the $750,000 would be transferred straight into the pockets of its investors, according to the West Kentucky Journal of Politics and Issues.

reason came from company's financial expert, Pauline M. Ahern, who opined that a rate increase will allow to “earn a range of common equity cost ratio of 11.60% to 12.10%.” In the present market, that is an attractive return on investment.

One million dollars may not seem like much these days, but it sure meant a lot to the poverty-stricken residents of Middlesbro and Clinton. There were quite a few bleak handwritten statements filed with Clinton's city hall during a public hearing on the water rates increase. It makes sense to quote them to get a feel for the level of despair that exists in rural communities like this all over the United States.

Here's one from August 8, 2009:

I get $675.00 a month, if they raise the water, or utilities, I can't pay them. I would have to go without water, etc. or gas. I'm disabled and I can't walk. Raising the utilities hurt a lot of people here in Clinton. Not just me but everyone. As it is I can't pay the water bills because its high. But I pay what I can.

And here is another from August 12, 2009:

I feel that a rate increase of 50.8% will add a heavy burden on our small rural community. Our citizin that lives in our city are on Social Security, have full time jobs that pay barely minimum wage or are working as many as 3 part time jobs to make their monthly budget.

And another from May, 2009:

“I always have a high bills to pay. I pay what I can. I am on disable. I try not to use too much water. But yet I have a high water bill. If the bill goes up, I will be lucky to pay them $10.00 instead of $80.00.

In the end, Kentucky's regulatory commission reduced the water rate increase from 50.1% to 30%. How long before they try raise the rate again? Or until the energy company decides to follow suit? It's hard to say. But one thing is for certain: AIG's takeover shows again that the American people were screwed by the bailed-out billionaires, who, instead of showing gratitude or willingness to reciprocate, have been preying upon the most vulnerable Americans like they are 15th century barons soaking the peasants.

And as our cities and states start leasing out and selling public infrastructure to pay off their municipal debts, we can expect banks to gain more control of public wealth. Middlesbro and Clinton are a glimpse into the future of post-privatized America.

[bread_and_roses]

47. words fail me

I'd read about this, actually, but this particular example disappeared into the vast endlessness of these examples I read about....I had not recalled it specifically, yet it is perfect, perfect. I am glad you revived it, and am bookmarking this for it and some of the other reads.

What the hell is wrong with us that we put up with this? And what the hell is wrong with Obama's administration, that due to their silence and complicity and lies and inability to tell the truth about these ghouls, these zombies, to the American people these very people would probably be among those railing at "Big Gub't" and longing for a Palin Presidency and "de-regulation" to cure their ills?

How long can we play with fire and not get burned?

[KoKo]

32. hmmf.....Sounds like David Fiderer could be angling for job

at a More MSM publication...perhaps Forbes?

That's my take.

[Demeter]

28. A Simple Plan to Screw Big Banking. Use Cash. By Chaz Valenza

http://www.opednews.com/articles/A-Simple-Plan-to-Screw-the-by-Chaz-Valenza-091127-741.html

November 28, 2009



Here's a simple plan that will bring Big Banking to its feet: Use Cash.

For decades Big Greed has been selling us the idea that markets are just perfecto! Don't regulate them. Don't even bother chasing down fraud. “The Market” (Angelic Voices: Ahhhhh!) is so beautifully simple even scams cannot long survive.

Let's take the “Wisdom of The Market” stick it up Big Banking's rectum, twist, turn and otherwise shove vigorously and often.

Face it, the cavalry is not coming to the rescue if your name is not Goldman Sachs.

Government of the people, by the people, and for the people is temporarily out-of-order, like a soda machine that is taking dollar bills from customer after customer but relinquishes not one quenching 12 oz. can.

No legislation or regulations are in the offing to cap the rising tide of usury interest rates, curb punishing banking fees on debit cards or curtail demonic payday loans.

Here's the bill of fare:


Credit Card Interest: 30%
Merchant Credit Card Fees: 3.5 - 5%
Merchant Credit Card Receivables Loan: 36 – 97%
Payday Loans: 100 – 500%
Debit Card Overdraft Fees,
Over limit Fees, Late Payment Fees, etc:
Interest Equivalent to 12% - 300% and otherwise unlimited

Throw stones – millions of them. Every plastic transaction denied is a slice in the skin of Big Banking.

As a buyer: Use Cash. It's going to save you money versus paying with credit card or making a mistake with a debit card.

As a merchant: Discount 5% for Cash. It's going to save you money in reduced merchant charges and days waiting for credit card receivables. It's also an advantage against the Big Box stores and Big Food restaurants.

Think about it. Who would you rather have that 3.5% you give to Big Plastic on every credit or debit card transaction: Your customer or Big Banking? Isn't that worth the extra 1.5% in the discount?


But it gets better. It's guerilla warfare. It's a simple insurgency. Avoid the banking system to bring it to its knees. Use Cash.

How low-tech is this? How unstoppable? How inconvenient? Yes. But worth it!

Put it on bumper stickers. Make it your email signature. Pass the word in whispers to everyone who works for a living. Write it in magic marker on T-shirts. Design a flag and boldly embroider. Print up window signs. Post it on every blog you visit. Tweet it from the highest mountain. Two simple words: Use Cash.

Will they fight back? Of course they will. They will end Absolutely Free* Checking that is costing us all billions. They may lower their rates and switch up the penalty fee structure. They might even lobby for the end of printed dollars. That's how we'll know it's working!

Here's the future and the future is now. Personal loans? Small business lines of credit? Only to those who don't need them or at a killer rates of interest.

Use Cash.

Every cash transaction snatches a dime, a dollar, thirty-five dollars, a hundred dollars or more out of the greedy, blood soaked hands of Big Banking. Each transaction denied is a cut. Together it's death by a billion cuts daily.

5% Discount for Cash.

You'll be shooting at Big Plastic's feet. Smile as you watch ‘em dance. They have us hooked on plastic. They claim it's faster, quicker, better. People spend more. Yes, they do. Until the abusive fees take your customers' last penny of discretionary cash and they're broke.

Debit or Credit, plastic is really just one thing: a cash substitute provided by a commission taking broker who charges you a fee at every cash register. They intend to milk it for all it's worth. Cut up your cards, today, right now.

And here's the beauty part: We don't need no stinking badges to fight back. Just: Use Cash. Wow! I'm starting to agree: The Market Rules!

Don't worry about freeing up credit or ending the banking abuse, etc. This is action you can take right now, and again and again, day after day after day.

Sure, there are bigger fish to fry: End the Fed, local currency, non-profit banking, total monetary reform, but this is something we can do right now.

It's easy, fast, effective: Don't give Big Banking any small change.

Yes we can nickel and dime the banks to death! Spread the word: Use Cash.





Author's Bio: Chaz Valenza is writer and small business owner in New Jersey. He earned his MBA from New York University's Stern School of Business. His current feature film project is "Single Point Failure" an insider's account of how the Reagan Administration caused the greatest tragedy of the space age based on Richard C. Cook's book "Challenger Revealed." He is a former Director of Public Information for Planned Parenthood of NYC. His website is: www.WordsWillNever.com

I'M IN, BEEN DOING THIS SINCE 1998.

[mbperrin]

34. Good for you! We've been at it since 1978.

Had an epiphany, quit my banking job, got a whole lot more free than I had ever been.

[Demeter]

29. Wall Street Meets Its Match BY Robert Kuttner

http://prospect.org/cs/articles?article=wall_street_meets_its_match

If Congress ends up with effective financial regulation, Sen. Maria Cantwell will deserve a lot of the credit.




(AP Photo/Ted S. Warren)


In the showdown over the regulation of potentially toxic securities like credit-default swaps, the savviest and toughest battler for effective legislation turns out to be not Barney Frank or Chris Dodd, who chair the key House and Senate financial committees. Surprisingly, the best informed and most relentless crusader is a back-bench senator from Washington state, Maria Cantwell. If you want to see how one determined junior legislator can make a difference, Cantwell is your woman.

Cantwell, a big booster of Barack Obama, is determined to push his administration to deliver on fundamental reforms to the financial system -- and dismayed by what she's seen to date from Obama's staff. "If there are people at the Treasury and the White House who think that the way to get the economy going again is not to close these loopholes," she told me in an interview, "that's disgusting."

Cantwell, who just turned 51, is a former tech executive who won a squeaker of an election in 2000 by less than one-tenth of 1 percent of the vote. She is the kind of senator who is even better informed on the details of a complex issue than her highly competent staff. Washingtonian magazine once dubbed her a "Hill hottie," but in her efforts to reform the black holes of the financial system, and in her little-known but critical role in health reform, her undeniable charm is far less important than her tenacity and brains.

She tends to win arguments not with bluster or horse-trading but with deep knowledge of her subject and a refusal to be bluffed or to back down. For example, during the October markup of health-reform legislation in the Senate Finance Committee, Cantwell crafted an amendment, modeled on a Washington state program, that would allow states to negotiate with insurance companies on the terms of coverage for those eligible for subsidies and for other citizens buying in. By giving the government bargaining power, her amendment salvages some of the cost-containment goals of the more contentious "public option." And the committee adopted it by consent. "Senator Cantwell has done amazing work," her colleague Sen. Charles Schumer of New York told the committee. "The unsung hero of this bill is her amendment on costs." Moves like this are the hallmark of the truly effective legislator.

But the most lasting impact of her diligent approach to public policy is likely to come from her crusade for financial reform, particularly the fight over regulation of derivatives. Derivatives are securities at one or more layers of abstraction from real economic transactions. A mortgage loan, for example, is a real transaction. A bond backed by a sub-prime mortgage loan is a derivative. A package of such bonds is an even more abstract derivative. And a credit-default swap, which is an insurance policy against such packages of bonds going bad, is four levels removed from financial reality. At each stage of abstraction, derivatives invite pyramids of leverage and huge speculative profits for insiders -- as long as the bubble keeps inflating. When the bubble bursts, the losses can be as infinite as the capital is infinitesimal.

"Maria knows the complex issues pertaining to financial regulatory reform like the back of her hand, and she courageously uses that knowledge to combat the high-pressure lobbying by Wall Street," says Michael Greenberger, a former deputy to Brooksley Born, the Clinton-era regulator who tried to sound alarm bells about derivatives as early as 1998. Born, however, was ostracized by the rest of Clinton's economic team -- which included Larry Summers, now the top White House economic official. One of Summers' current deputies, Gary Gensler, was part of the team that boxed in Born's proposals suggesting the need for tighter government monitoring and regulation of swaps and other derivatives.

"There's a few people in the administration who still can't say that it was a mistake, and those are the same people, I think, who are slow-walking, thinking we're all going to forget about this regulatory reform that is needed," Cantwell said at a hearing in May. "I can assure you that we're not going to forget."

***

When cantwell was running for Senate in 2000, derivatives were about the furthest thing from her mind. Her issues were defending Social Security, expanding Medicare, ensuring computer privacy, and reforming campaign finance. She was also a free-trader who supported the North American Free Trade Agreement. A senior executive at Seattle's RealNetworks, the company that pioneered Internet streaming of audio and video, Cantwell was billed in some quarters as a "multimillionaire business Democrat."

But that image missed who she really was. Cantwell grew up in a political family in Indiana. Her father, Paul Cantwell, held a number of political posts, including chief of staff to Andy Jacobs, one of the most progressive congressmen ever to represent the state. Not long after college, Cantwell moved from Indiana to Seattle and immediately got into politics, winning a seat in the state legislature at the age of 28.

In 1992, she won an upset victory for a U.S. House seat that hadn't gone Democratic in 40 years. As a freshman, she argued down Vice President Al Gore and killed his proposal for a "clipper chip," a sliver of computer hardware designed to facilitate government backdoor snooping. On that fight, she worked closely with the Electronic Frontier Foundation and got to know one of its leaders, Rob Glaser, the billionaire founder of RealNetworks. When Cantwell lost her seat in the 1994 Republican landslide, Glaser offered her the company's top marketing job, soon promoting her to executive vice president. When she resigned in 2000 to make her Senate run, she was able to draw on the value of her 110,000 shares of company stock at the peak of the market.

Winning by just 2,229 votes, to oust incumbent Slade Gorton, Cantwell immediately found herself thrown into the top issue then afflicting Washingtonians -- soaring electricity rates. Washington state, heavily dependent on hydropower, was suffering a drought. Utilities had to purchase electricity on the newly deregulated open market, making Washington one of the worst casualties of Enron's manipulation of electricity markets. In Seattle, electricity rates rose 60 percent. Washington state's Snohomish County Public Utility District found that market manipulation in the deregulated environment had cost consumers $1.1 billion.

Cantwell, serving on the Senate Energy and Natural Resources Committee, immersed herself in the details of electric-power regulation, which led her directly to derivatives abuses. Championing relief for Washington state ratepayers and sponsoring a bill voiding Enron's fraudulent contracts helped her win re-election in 2006 with 57 percent of the vote. She also authored a successful measure giving the Securities and Exchange Commission (SEC) and the Federal Trade Commission increased powers to combat market manipulation.

In 2007 and 2008, when oil prices were spiking, Cantwell led the effort to have the Federal Energy Regulatory Commission and the Commodity Futures Trading Commission (CFTC, the agency charged with regulating derivatives) investigate market-rigging. Many economists and most in the financial industry scoffed at the idea, contending that oil futures rising to more than $140 a barrel was simply the result of supply and demand. India and China, the story went, were increasing their purchases of oil. Markets, in their genius, were discerning the coming scarcity and were pricing petroleum accordingly. By bidding up the price, they were actually doing the world a service, since high-priced oil would signal investors to pursue development of other energy sources.

But as the CTFC and other agencies belatedly concluded in 2009, Cantwell had it right. Traders had manipulated energy derivatives, pushing up the price far beyond levels dictated by supply and demand. Far from playing their advertised role of smoothing out market movements, they increased price volatility. The exorbitant profits they took came directly out of the pockets of consumers. When the financial crash hit, and speculators headed for the exits, oil prices fell back down to a range of $40 to $60 a barrel.

Throughout all of this, where was the CFTC? The commission had been deliberately crippled by legislation passed in 2000 as a favor to Enron and to big trading houses such as Goldman Sachs. The legislation, with the Orwellian name the Commodity Futures Modernization Act, was initially sponsored by Sen. Phil Gramm, a Republican from Texas, but it had the backing of the Clinton administration and its allies among big financial houses. Among other things, the bill prohibited the SEC, CFTC, and state regulators from regulating swaps either as insurance or as securities -- or even as gambling!

Despite Cantwell's relentless investigations, the CFTC in 2007 and 2008 was still dominated by Bush appointees. The agency refused to issue regulations discouraging excessive speculation or requiring disclosure of trading positions, which would have allowed the commission to detect and head off such market manipulation. That challenge would fall to Bush's successor.

***

It came as a shock to Cantwell when Obama's nominee to head the CFTC turned out to be none other than Gary Gensler. "My reaction was, 'Oh my God, not again,'" Cantwell told me. Gensler was not only opposed to Born's proposals to regulate derivatives, he had been a senior trader at Goldman Sachs. And although he acknowledged the conflict of interest and kept away from derivatives policy during his first year at the Clinton Treasury in 1997?1998, he subsequently became an active participant.

Cantwell immediately put a hold on Gensler's nomination. After a lengthy meeting with Gensler on Jan. 15, Cantwell sent him a letter soliciting commitments on several regulatory issues involving derivatives. His reply, dated Feb. 11, was detailed, but it deftly fudged key questions. For example, would all derivatives contracts be required to be traded on exchanges regulated directly by the CFTC or only "cleared" in industry-sponsored clearinghouses, a softer remedy being promoted by the industry?

Little by little, however, Gensler came around to Cantwell's demands. He went on a charm offensive, meeting with consumer groups, speaking with the press, and promising a total change of heart. I was startled to get a phone call, out of the blue, from a White House handler saying that Gensler was eager to meet with me. (Due to scheduling problems, the meeting never took place.) However, Gensler sounded like such an ardent, born-again regulator that even Public Citizen, the consumer group founded by Ralph Nader, put out a press release supporting his confirmation. Remarkably enough, Gensler's conversion turned out to be the real deal.

One of the problems with derivatives is that the ones most prone to abuse are not traded on exchanges. They are sold directly from their originator to the customer, "over the counter." Therefore, there is no daily "price discovery" as in the case of an ordinary stock or bond, no transparency, and no competition. Derivatives are a bonanza for Wall Street, and over 90 percent are originated by the top four banks. The cure for this is to have all such derivatives traded on exchanges. A second problem is that derivatives lend themselves to market manipulation. The cure for that is to empower the CFTC to monitor and limit the trades and positions taken by major players. "They say that the insiders will always come up with new things, new ways of defeating regulation, new kinds of off-the-books games," Cantwell says. "That's why you need really bright lines." As negotiations over Gensler's confirmation dragged out from February to mid-May, Gensler ultimately agreed to most of Cantwell's positions. But Cantwell was taking no chances. She pressed Treasury Secretary Timothy Geithner to put these commitments in writing. In a key conversation in early May, Geithner balked. But moments after Cantwell got off the phone with Geithner, her phone rang. It was Larry Summers. After marathon negotiation sessions, Summers agreed to a letter committing in detail to fundamental reform. This is the kind of hardball seldom played by liberals, and it seemed to work. "We knew," Cantwell told me, "that if we ever were going to get something passed, we had to exert some leverage."

The letter, written by Geithner May 13, made explicit commitments about exchange trading, position limits, and new anti-manipulation powers for the CFTC.

A jubilant Cantwell took the Senate floor May 14. "For months," she said, "I have been urging the administration to move quickly to propose strong regulatory controls on these markets, require transparency in derivatives trading, and restrict market manipulation. With the announcement yesterday by Treasury Secretary Geithner, in a letter he sent to Senate and House leaders, the administration has come down decisively on the side of imposing order on a marketplace whose collapse made this current recession so much deeper and more painful for the average American than it needed to be."

She waived her hold on Gensler, but her suspicions were not entirely allayed. She still voted against confirming him. As Cantwell dryly said to me in an interview not long afterward, "It's not unheard of in D.C. to feign a commitment and then not fight hard to have the legislation pass."

That skepticism understated what was coming. Though Gensler fought inside the administration to keep his word to Cantwell, the Treasury Department released a white paper on June 17 that was weaker than the commitments in Geithner's May 13 letter. And the financial-reform legislation that Geithner sent to Congress in August was even weaker than the white paper. The loopholes were widened further by the House Financial Services Committee after an industry lobbying offensive that was supported by the 15 members of the New Democrat Coalition on the committee -- and these loopholes were not resisted by the administration.

The working draft of the House bill does not require all derivatives to be traded on exchanges. It completely exempts many categories of derivatives, such as those involving foreign exchange and trades in which one party is not a swap dealer or major swap participant. And it widens the loopholes allowing trades to be executed off exchanges, beyond the scrutiny of regulators.

"The Treasury Department should be ashamed of themselves," Cantwell told MSNBC in mid-October. She added, "What is moving through on the House side is a bill that supposedly has a new rule but it has so many loopholes that the loophole actually eats the rule. ... Current law with its loopholes would actually be better than these loopholes."

cantwell now finds herself closely allied with the man whose nomination she opposed, Gensler -- who really is a born-again regulator. He is at risk of becoming the Obama administration's own Brooksley Born. In a letter Aug. 17, Gensler bravely and explicitly criticized Geithner for weakening reform. In the case of exclusions for foreign-currency transactions, he wrote, "These exceptions could swallow up the regulation that the Proposed OTC Act otherwise provides for currency and interest rate swaps." He also criticized the proposed exclusion for transactions where one of the parties was not a swaps dealer. "This excludes a significant class of end users from the clearing and mandatory trading requirement," he wrote.

Cantwell is more blunt. "Under this provision," she says, "Enron could be an end user." She hopes that the Senate, which will take up derivatives later this winter, can undo some of the damage wrought by the House. Although in recent years the House has been more able than the Senate to produce strong consumer legislation, financial issues are quirky. Three House committees have jurisdiction over derivatives: Agriculture (when options and futures began, they were for products like winter wheat and pork bellies), Financial Services, and Energy and Commerce (since many derivatives involved energy trading). Agriculture Committee Chair Collin Peterson, one of the most conservative Democrats in the House, was nearly denied his chairmanship for voting too frequently with the Republicans. On the Financial Services Committee, pro-industry New Democrats added amendments to weaken the bill, and Chair Barney Frank has wavered on key issues.

By contrast, in the Senate, where Cantwell serves on the Energy and Natural Resources Committee, Banking Committee Chair Chris Dodd has a tougher view of derivatives regulation, as do the key Democrats on Energy and Natural Resources and on Agriculture. The new Ag Chair, Blanche Lincoln of Arkansas, has hired as staff director Rob Holifield, a close associate of Gensler.

Like Federal Deposit Insurance Corporation Chair Sheila Bair, another improbable crusader for stronger financial reform, Gensler enjoys a term appointment. Like Born, he cannot be fired, only isolated. The whispering campaign from the Treasury and the White House is that Gensler is a bit "utopian," meaning that he, unlike Summers and Geithner, is serious about reform. It strengthens his hand enormously to have an ally like Maria Cantwell.

"They seem to think that if Wall Street gets healthy again making all this money, some of it will wash through to the rest of the economy," Cantwell says. "Treasury has gone back on their original commitment to us. Gensler called Geithner on it. He's decided that he's going to be David to their Goliath. The battle lines have been drawn."

[Hugin]

35. Sorry I wasn't by to do a K-R earlier, but...

I just couldn't get my mind around the fact today is Sat. :/

P.S. It looks like the unrecce crowd already stopped by... :crazy:

[Demeter]

36. It Makes no Never Mind--Glad You Could Stop In!

and Merry Christmas to the Grinches out there, too.

[DemReadingDU]

38. WEE part 2, wow

I'll look around and see if there is anything to post, after I finish part 1. Demeter you have outdone yourself this holiday weekend!

[Demeter]

39. Whatever Happened to Nazi Synthetic Gas and Oil Technology? Scarcity Scams Examined By Grant Lawren

http://www.opednews.com/articles/Whatever-Happened-to-Nazi-by-Grant-Lawrence-091207-70.html


As we continue to talk about Peak Oil and the claim that the world is running out of oil, some might recall that Nazi Germany during World War 2 ran it's war machine on synthetic gas and oil.

Today scientific studies have demonstrated that the earth forms its own oil, abiotic oil, from a process that appears to involve methane deep within the earth. Unfortunately, we don't know how much of this oil the earth produces and whether it is possible to economically extract it. But we do know that the 19th century Russian scientist was correct in his belief that oil was created within the earth from other than fossil material.

For an excellent understanding on abiotic oil read, "Project Savior's What We Know Wednesday: Abiotic Oil, Myths and Facts.

Still even if abiotic oil has little potential for future needs, there was the technology that existed in the early 1930s that allowed the Germans to produce its own synthetic gas and oil.

What happened to it?

Before World War 2, Germany had little natural oil reserves to call upon to run its massive war machine. The solution was to come up with the technology to run the equipment needed for war.

The Nazi's had to come up with a way to create synthetic fuels if they were to be able to engage their enemies in battle. When it comes to war, humans can often exceed perceived technological limitations and the Germans did.

It wouldn't be much of a stretch to assume Germany's brilliant scientists came up with the process alone. But, in reality the Germans had a little help from Standard Oil.

"....The Standard Oil group of companies, in which the Rockefeller family owned a one-quarter (and controlling) interest,1 was of critical assistance in helping Nazi Germany prepare for World War II. This assistance in military preparation came about because Germany's relatively insignificant supplies of crude petroleum were quite insufficient for modern mechanized warfare; in 1934 for instance about 85 percent of German finished petroleum products were imported. The solution adopted by Nazi Germany was to manufacture synthetic gasoline from its plentiful domestic coal supplies. It was the hydrogenation process of producing synthetic gasoline and iso-octane properties in gasoline that enabled Germany to go to war in 1940 and this hydrogenation process was developed and financed by the Standard Oil laboratories in the United States in partnership with I.G. Farben.....Source: Standard Oil Fuels World War 2
Although Americans were soon to be fighting and dying against the evils of Nazism, Multinational American corporations, like Standard oil, were ready to make a buck helping the Nazis no matter what the ethical considerations were.

But the history of Corporate America helping the Nazi war machine is well documented. What is not as well known is that the technology that created Nazi synthetic gas and oil is still around today and in use.

In South Africa, there is a company called Sosol that utilizes the same technology the Nazi's used to create synthetic oil.

"...In 1948, the newly elected National Party regime formally instituted apartheid. Two years later, it created Sasol. Aside from mining and manufacturing chemicals, Sasol set out to develop a domestic gasoline-production capability, a goal that became more urgent when many oil-producing nations refused to sell oil to the apartheid regime. In the late 1970s, using government loans, the firm built a huge complex at Secunda, where it has produced some 1.5 billion gallons of gasoline that is functionally no different than the gas produced from Texas crude.

Since the end of apartheid, Sasol has prospered, finding new markets and customers outside its borders. But with the spike in oil prices of the last few years, it has really caught fire. (Note this five-year chart of Sasol, whose shares were listed on the New York Stock Exchange in 2003, against ExxonMobil.) And that has much to do with the company's technological promise....." Source: Slate

Evidently, the South African company finds it economically feasible to produce this synthetic gas.

So it is an interesting factoid that synthetic fuels utilizing Nazi technology from the 1930s is still being used.

But the larger point is that if there was 1930s technology that was efficient and sufficient enough to fuel the massive German war machine with synthetic gas and oil, we are likely capable of utilizing our advanced technology to move past our dependence on oil (biotic or abiotic).

I am not advocating that the world continue to run on fossil fuels. It is a dirty form of energy that kills a lot of life with the pollution that arises from it. It is also clear that it contributes to global climate change. But I am pointing out that our energy sources and technology are likely much more advanced and capable of meeting present and future energy needs than the public realizes.

After all, large profits are made from a perceived lack or scarcity. Look at the massive profits Enron generated out of creating a supposed scarcity of electricity in California. Most of us may recall the rolling blackouts that occurred in California from a supposed energy crisis. Later it was revealed that those blackouts were manufactured by Enron for maximum profits.

"...The traders also said that Enron's retail unit, Enron Energy Services, or EES, used the fear created by the blackouts to push large California businesses into more than $1 billion in long-term energy contracts...." Source: Market Watch

It is also known that the exorbitantly high prices Americans paid for gasoline over the last several years occurred because speculators made a fortune creating the price hikes in oil.

"....A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades. " Round-trip trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple...." Source: Seekingalpha.com

So scarcity, lack, and fear, make for big profits. That is why we need to understand that we really know little of what we have in technology to meet our energy needs because we can't trust the power structure that controls that information and that technology.

But we do know that America is the Saudi Arabia of coal and the technology exists from the 1930s to create synthetic oil if we need it.

Still I believe that if Americans were to actually take control of their government and their economic system, we would soon find that we can move beyond oil dependency.
Or Americans can continue to live in a tightly controlled reality created and maintained by the Military Industrial Complex that pumps Americans full of lies and distortions for maximum manipulation and profit.

[Demeter]

40. Bacteria Engineered to Turn Carbon Dioxide Into Liquid Fuel

http://www.sciencedaily.com/releases/2009/12/091210162222.htm

In a new approach, researchers from the UCLA Henry Samueli School of Engineering and Applied Science have genetically modified a cyanobacterium to consume carbon dioxide and produce the liquid fuel isobutanol, which holds great potential as a gasoline alternative. The reaction is powered directly by energy from sunlight, through photosynthesis.

The research appears in the Dec. 9 print edition of the journal Nature Biotechnology and is available online.

This new method has two advantages for the long-term, global-scale goal of achieving a cleaner and greener energy economy, the researchers say. First, it recycles carbon dioxide, reducing greenhouse gas emissions resulting from the burning of fossil fuels. Second, it uses solar energy to convert the carbon dioxide into a liquid fuel that can be used in the existing energy infrastructure, including in most automobiles.

While other alternatives to gasoline include deriving biofuels from plants or from algae, both of these processes require several intermediate steps before refinement into usable fuels.

"This new approach avoids the need for biomass deconstruction, either in the case of cellulosic biomass or algal biomass, which is a major economic barrier for biofuel production," said team leader James C. Liao, Chancellor's Professor of Chemical and Biomolecular Engineering at UCLA and associate director of the UCLA-Department of Energy Institute for Genomics and Proteomics. "Therefore, this is potentially much more efficient and less expensive than the current approach."

Using the cyanobacterium Synechoccus elongatus, researchers first genetically increased the quantity of the carbon dioxide-fixing enzyme RuBisCO. Then they spliced genes from other microorganisms to engineer a strain that intakes carbon dioxide and sunlight and produces isobutyraldehyde gas. The low boiling point and high vapor pressure of the gas allows it to easily be stripped from the system.

The engineered bacteria can produce isobutanol directly, but researchers say it is currently easier to use an existing and relatively inexpensive chemical catalysis process to convert isobutyraldehyde gas to isobutanol, as well as other useful petroleum-based products.

In addition to Liao, the research team included lead author Shota Atsumi, a former UCLA postdoctoral scholar now on the UC Davis faculty, and UCLA postdoctoral scholar Wendy Higashide.

An ideal place for this system would be next to existing power plants that emit carbon dioxide, the researchers say, potentially allowing the greenhouse gas to be captured and directly recycled into liquid fuel.

"We are continuing to improve the rate and yield of the production," Liao said. "Other obstacles include the efficiency of light distribution and reduction of bioreactor cost. We are working on solutions to these problems."

The research was supported in part by a grant from the U.S. Department of Energy.

[Demeter]

41. The Reason for 15 Million Unemployed: Poor Thinking at the Top By Dean Baker

http://www.alternet.org/story/144456/the_reason_for_15_million_unemployed%3A_poor_thinking_at_the_top?page=entire

The United States has more than 15 million people unemployed. This is not their fault. It is the fault of really bad policy decisions by people who get paid more than almost all of the unemployed ever did or ever will. The failure of economic policymakers to recognize and attack an $8 trillion housing bubble led to the downturn. The continuing failure of economic policymakers to think creatively is why 15 million people remain unemployed.

The basic problem of unemployment is in fact a very simple one; we don't have enough demand in the economy. The collapse of bubbles in both residential and nonresidential construction led to a falloff in annual construction of close to $700 billion. The disappearance of more than $6 trillion in housing bubble wealth has forced consumers to pare consumption by approximately $500 billion a year. This creates a total shortfall in annual demand of $1.2 trillion.

In the face of inadequate demand, people lose their jobs. There is not enough demand for houses, cars, restaurant meals and thousands of other goods and services to keep everyone employed.

One way to fix the problem is to create more demand. That was the point of the stimulus package passed last February. This helped, but it was nowhere near big enough.

Subtracting out tax accounting measures (the alternative minimum tax fix) and spending to come in 2011 and later, the stimulus was about $300 billion for both 2009 and 2010. The federal stimulus is also being offset by approximately $150 billion in annual budget cuts at the state and local level. This leaves a net stimulus from the government sector of around $150 billion a year. This will not offset a loss in annual demand of $1.2 trillion; it's like trying to fill a swimming pool with five buckets of water.

In principle, the federal government could spend much money on stimulus until it has generated enough demand to get the unemployed back to work. For political reasons, this doesn't seem possible. The deficit fixation in Washington is preventing effective action, just as a balanced budget craze in the '30s forced Roosevelt to cutback the deficit in 1937, throwing the economy into another recession.

If politics makes it impossible to increase the demand for labor, an alternative way to create jobs is through decreasing the supply of labor. Specifically, employers can be given an incentive to cut the hours of their current workforce, while keeping their pay constant. This should then cause them to hire more workers. This is not an untested idea. Germany has used work sharing tax credits to keep its unemployment rate from rising in this downturn, even though its recession has been more severe than ours.

There are proposals for using this sort of work sharing being considered in both houses of Congress at the moment. Sen. Jack Reed (D-Rhode Island) and Rep. Rosa DeLauro have both introduced bills that would build upon work-share programs that already exist in 17 states. These programs allow employers to use unemployment insurance funds to keep workers employed at shorter hours, rather than laying them off and collecting unemployment benefits. These bills would provide additional funding to the existing programs so that they would be more widely used and help the other states establish work-share programs.

Rep. John Conyers has proposed a tax credit that would allow employers to reduce work time, while still maintaining their pay, and thereby creating the demand for more workers. This route has the benefit of allowing employers to try to innovate at their workplace, even if they are not currently planning layoffs, so it could have a much broader impact.

However, it is important to remember that nearly two million workers are still losing their job each month. The jobs' figure that is reported each month is a net figure. It shows how many jobs the economy has gained or loss after adding up all the workers hired or fired. If we reduce the gross monthly job loss figure by 10 percent, or 200,000 workers, it has the same impact on employment as adding 2.4 million jobs. This means that even though the Conyers bill would have a broader impact, even the Reed-DeLauro bills could lead to many more jobs being created.

It is important to realize that work sharing can also have a lasting impact on the structure of work. There have been major efforts by labor unions and women's organizations to make the workplace more family friendly through paid family leave, paid sick days and paid vacation. These work-share programs offer an opportunity to both quickly reduce unemployment and lay a basis for lasting change in this area. Companies can take advantage of these programs to experiment with paid sick days or family leave. If they work, they are likely to leave these policies in place even after the public funding is no longer there.

It is absolutely unacceptable to have 15 million people unemployed just because the people who call the shots are too dumb to figure out how to get them back to work. We got into this mess because the people on top didn't know what they were doing. We shouldn't have to stay here because they still can't figure things out.

In Germany, they are experiencing the recession through short workweeks and longer vacations, rather than mass unemployment. We should be doing the same here.

Dean Baker is co-director of the Center for Economic and Policy Research.

[Tansy_Gold]

43. Baker misses the point completely

"Creating demand" is worthless and useless if all it does is fuel jobs in other economies, such as China.

Germany has a much more "possessive" attitude toward its manufacturing base, and that's why its economy is able to withstand worksharing and work-hour cutbacks.

The people on the top know EXACTLY what they're doing: they're looking at a global economy that benefits themselves and others like them. They don't give a rat's ass about the American worker and never have. They are quite happy that there are 15 million Americans without jobs, because that drives the cost of labor down and their own profits up.

Throwing money into the economy is like throwing money into schools: If the money is only spent on carpetted hallways and bigger student parking lots instead of on teacher salaries and educational materials, nothing is going to change. Throwing money into make-work jobs will only create greater demand for plastic made in China crap. Unless and until there are policy changes at the top that alter consumer attitudes at the bottom, there will continue to be more and more and more unemployed, and the rich will get richer and richer and richer.

Tansy Gold

[DemReadingDU]

45. Out-FOXed: Bill O'Reilly bites the RT bullet

12/24/09 Out-FOXed: Bill O'Reilly bites the RT bullet
RT came under attack from Fox News talk show host Bill O'Reilly last week. He lashed out at an interview with former radical anti-war activist, now professor, Bill Ayers who was speaking to RT's Anastasia ChUrkina. She now puts American mainstream television in the spotlight to see if its spinning too far from the truth.
http://www.youtube.com/watch?v=rAlV5QFGUjw

appx 3.5 minutes

[Demeter]

48. Folks, I'm Sorry

I wanted to get a little bit more posted this weekend.

But to tell the truth, so much of this material made me tired and queasy that I couldn't continue. I think there's a natural limit to how much abuse the mind and soul can take from Reality. There isn't any good news...there's just bad and worse.

The Younger Kid got me this Snuggly blanket-sack thing. It's silky, soft and WARM! I wrap up in it and sleep like the dead. Perhaps even with the new attic insulation, the humidifier, the Roman shades to stop the drafts, I was still not warm enough until the blanket bag came into my life. Of course, if I had the Roman shades up in my own room, it might be different, but I haven't gotten that far yet, although I have found that last little piece of hardware needed to put them up...being a homeowner is an education. Being a hardware junkie is genetic, I think.

Sis and I cooked and ate a lot. Brie, strudel, pie, bread, wine, and beef--I think I've gained 20 pounds in two weeks. But it's so cold, there doesn't seem to be any alternative to eating large quantities of butter and cheese and such, except Florida and I hate Florida (sorry, Dr. Phool).

We Michiganders are going to be staying below freezing for several more days, it appears. At least there isn't a ton of snow outside like last year at this time. It rained like Noah's Flood for Christmas.

I had a hard time believing that anyone would think blowing up anything in Detroit would be significant. Detroit today is rather like that obscure building in Oklahoma, as far as a significant target goes. Rather convenient, don't you think? When you've screwed the people six ways past Sunday by reneging on the peace movement, canning the war crimes prosecutions, ignoring the big holes in civil liberties like habeus corpus, rendition, torture and illegal searches, continuing the profligate corporate giveaways, scuttling universal health care, and refusing to do anthing meaningful about jobs, then it's time to rachet up the terror levels to cow the populace.

I refuse to be cowed. There's no turning back, we can only go through this to go forward. Here's my New Year's wish for you:

May your enemies find they have hurt themselves more than they will ever hurt you, and may the American vision be restored.

[kickysnana]

49. Interesting crosspost but I know I am late to the party.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x73838