Subscribe to Common Dreams News Updates
Most Popular This Week
Popular content
Today's Top News
'One More Bubble!'
When I took an editing job at Bloomberg News in March 2000, my arrival coincided with the bursting of the Internet bubble. As once-hot IPOs tanked and the Nasdaq crashed. I would joke to other editors that what the U.S. economy needed was "to build a better bubble."
Then, to my amazement that was pretty much what happened, except that the bubble moved from the peripheral world of dot.com startups to a cornerstone of the economy, the real-estate sector. Low interest rates, exotic financial instruments and speculation pumped up the economy again, with Wall Street operatives enriching themselves as never before.
Now, as the housing bubble has burst and taken with it trillions of dollars in wealth, President Barack Obama may be right that the future U.S. economy cannot be built on another bubble, that America must get back to manufacturing products that people need.
However, that goal is endangered not only by Republicans, who seem determined to sink whatever Obama proposes, but by the fact that speculative bubbles are what make possible the obscene levels of compensation - and Wall Street is not about to give up on the golden payday.
Without bubbles, Wall Street bankers and their many cohorts could make solid salaries - as they have historically - but not bonuses in the millions of dollars a year. So, there is a powerful incentive for Wall Street to push for a continuation of the bubble economy. Perhaps the new slogan could be, "One more bubble!"
The corrupting influence of the bubble economy also is not confined to Wall Street. While it's true that Wall Street bigwigs have sipped at this giant champagne glass of riches the most, some wealth has trickled down - not to the average Americans, of course, but to other insiders from the worlds of politics and media.
In that way, former President Bill Clinton could leave office in 2001 - having overseen the expansion of "free trade" agreements and banking deregulation - and then make millions of dollars from speaking to corporate and leadership groups, plus millions more for serving as a front man for billionaire investor Ronald Burkle and other super-rich financiers.
Wall Street analysts for CNBC and other news outlets also can duck in and out of the banking and hedge fund worlds, a la Jim Cramer, sometimes leveraging their on-air advice to the benefit of their investments or their clients. CNBC often behaves more like a booster of Wall Street interests (and a defender of lucrative compensation) than a public watchdog.
Corrosive Effects
This insider world of the big bonuses, fat salaries and hot stock tips has other corrosive effects, as financial regulators and political advisers are tempted by the princely sums that might become available to them if they play their cards the right way.
Much like Pentagon bureaucrats who sign off on unnecessary weapons systems waiting for retirement day and a seat on the corporate board of a grateful military contractor, government overseers of the financial industry have similar - and arguably greater - temptations.
In recent weeks, for instance, the public has learned that key figures in devising Obama's strategy for combating the financial crisis have been offered - or have received - enticements from this grand world of big money.
Chief economic adviser Lawrence Summers, who as Clinton's Treasury Secretary helped implement key deregulation of the banks, made $5.2 million in 2008 for a one-day-a-week job at the D.E. Shaw hedge fund, while also pulling in $2.7 million in speaking fees from Citigroup, Goldman Sachs and other Wall Street titans.
Even more shocking to some observers, Summers strayed from his fulltime job as president of Harvard University to do moonlighting from 2004 to 2006 as a consultant for another hedge fund, Taconic Capital Advisers.
The case of Treasury Secretary Tim Geithner is a bit different, since he has spent his career in government-related agencies as a "public servant," including Clinton's Treasury Department, the International Monetary Fund, and the New York Federal Reserve.
But Geithner appears to have had his head turned by the pleasant luxuries of the super-rich, too.
According to a New York Times article by Jo Becker and Gretchen Morgenson, his calendars from 2007 and 2008 were chocked full of professional and private contacts with executives of banks - Citigroup, Goldman Sachs and Morgan Stanley - whose activities were regulated by Geithner's New York Fed.
The article reported that Geithner was especially tight with executives of Citigroup and that he met frequently with Sanford Weill, a major shareholder and former chairman.
"As the bank was entering a financial tailspin, Mr. Weill approached Mr. Geithner about taking over as Citi's chief executive," the Times said, adding:
"But for all his ties to Citi, Mr. Geithner repeatedly missed or overlooked signs that the bank - along with the rest of the financial system - was falling apart. When he did spot trouble, analysts say, his responses [as head of the New York Fed] were too measured, or too late."
Given the magnitude of compensation available to top executives, Weill was not just offering Geithner a job as CEO, but rather was dangling the keys to the jewelry vault at the castle, assuming that Citi did not collapse first.
Now, as Treasury secretary, Geithner is the point man for arranging massive infusions of taxpayer dollars into Citi and other major Wall Street banks to ensure that they don't go under, that the old financial system survives.
Throwing Off the TARP
Geithner's strategy for salvaging the banks has been criticized by some economists and many citizens as too generous with the taxpayers' money and too lenient toward the chief culprits of the financial debacle.
But - combined with the Federal Reserve's decision to lend the banks money at nearly zero percent interest and other emergency measures - the bailouts have put some banks in a strong enough position that they already are chafing under the federal government's demand that they cut their compensation.
Some banks are offering to pay back the direct federal bailout money to evade the compensation constraints, while their media allies - from CNBC and Fox to the Wall Street Journal and the Washington Post's editorial page - have complained about excessive government interference in the private sector.
By escaping from the Troubled Asset Relief Program, the bankers could return to the party-on days when they viewed themselves as "masters of the universe" who could buy pretty much anything or anyone they wanted.
The pressing question about Geithner is whether his personal contacts with Weill and other banking executives - and the prospect of landing a future job as CEO of Citi or some other major bank - influenced his policy decisions.
Given the staggering sums of money, it's hard to believe that it wouldn't have.
After four years as a Bloomberg News editor reading proxy filings that disclose executive compensation, I came away with a profound sense that the sums had gotten so crazy that almost everyone who could grab a piece would do whatever it took to get one.
Another one of my sayings became: "The closer you are to the money, the more you get to keep."
The balance between integrity and compensation had gotten so far out of whack that it would require a saint to put doing the right thing over taking oodles of dough, so much money that it would mean you'd never have to worry about your personal finances again.
That's why I disagree with some analysts - such as the editorial-page editors of the Washington Post - who keep insisting that compensation is only a small part of the problem and that the public is foolish to be so outraged about bailed-out companies like AIG continuing to dole out bonuses.
It's true that the bonuses pale when viewed next to the total scope of the financial meltdown, but the compensation is the principal motive for the extraordinary risk-taking that started the meltdown.
The compensation also influences the policymakers and regulators whose job it is to stop the high-rollers from putting the economy in jeopardy. If some government bureaucrat sees the chance for a mammoth payday in the future, who'd be surprised if the money didn't limit acts on the people's behalf?
And there are also the campaign checks that financial industry PACs write to helpful legislators of both parties.
In short, the multi-million-dollar bonuses and all the other fat compensation packages have distorted the American system in big ways and small.
All that Wall Street money also has left many Americans wondering if anyone - in business, politics or media - cares about the larger fate of the nation or if the primary goal right now is to inflate "one more bubble."
- Posted in
52 Comments so far
Show AllSioux Rose
Elliot Spitzer--the man who knew too much--took a hit, but the question is, who's really sleeping with prostitutes? Those that have prostituted the global economy for their own temporal pleasures have more to answer for. Their breaches of decency are beyond the pale.
Yea, Spitzer's sin sure pale by comparison to some of these guys and, you know, probably a whole lot of them carry on just like he did- I mean, he wasn't that gal's only customer for sure! But, thanks be that N.Y. has still got a guy like Andrew Cuomo. There;'s alot that could be done with these C.E.O' in the legal department. I hear there are some new prosecutions getting going on those derivative and credit-swap tradings. I mean, like, "nobody really knew what these new financial instruments were" is a really thin excuse.
We may not be able to get a refund on those bonuses but we sure could get them to spend it defending themselves in court In the end, they should be begging to get back to the old regulatory system, like lobster back into the ocean!
Right, Rose, in a sexually charged culture and ersatz morality, a sex scandal makes a wonderful cover for criminality, a smokescreen to hide or distract us from what's really going on. While being fleeced naked (economically speaking), we tune in to catch a predator, or want the low down on who's sleeping with whom (see John Edwards). Sex and sex scandal have become our favored way of escape--objects of titillation we love to hate in our self-righteousness indignation.
SiouxRose -- EVERY word that has ever come from you - in all my readings for years here -- have always been SPOT ON. thank you so much.
here is an article - in the face of what the US "authorities" are now trying to assuage "america" that everything is on a "recovery" path -- that says OTHERWISE.
note: for years - UNsavvy as I am about the sophistications of economics, politics etc...-- for years i had always told friends that were more knowledgeable about these things that:
"see that wall street of yours? that is a next of PHANTOM VALUE...it's probably not even worth a small fraction of what the Masters SAY your economy is worth........and probably all or most of it is based on debt piling on debt that will never or is never INTENDED to be repayed to its real creditors abroad.....like countries that are actually POORER but , for the MOMENT CAN'T DO a thing about it because the USA dictates "world policy".......it's probably representing what everyone in accepted norms as wealth which is really just made up , make believe, and is used as the foundation of what you call 'building' stuff, like all these tall buildings and airplanes and stuff....but in reality -- that is PROBABLY based on accounting practices since long ago that NO ONE questions today ...but really is fraudulent...but everyone accepts it because that's the culture you have.....but ONE DAY that will all come tumbling down and there will be NO END to the patch-work, band-aid, attempts to try to prop it up..while the masters that created it will go laughing all the way to the bank at YOUR and EVERYONE else's expense..."....
they laughed at me -- economics and ":capitalism" majors from well-known universities and all.......
i guess this nobody at least saw right through the facade better than they. lol.
May 7, 2009
US debt on default path
By W Joseph Stroupe
Big government rescues on Wall Street and elsewhere, domestic stimulus plans, toxic asset replacement plans, and new government programs to address a wide range of other longstanding problems are causing the United States budget deficit to skyrocket.
More than US$12 trillion has already been committed and/or spent in this crisis, with the current year's budget deficit projected to reach, or exceed, nearly $2 trillion. The US Treasury is flooding the market with new issuance of debt, while the chances appear increasingly slim that the huge and ballooning deficit will be brought under control anytime soon. With all this spending, we're guaranteeing that huge and persistent tax increases will be
enacted down the line to pay for it all. That will trounce economic growth and is an enormously ugly prospect.
The US dollar will inevitably bear the full and ferocious brunt of the decidedly hyper-inflationary policies of Washington, notwithstanding the Federal Reserve's empty promises to reverse such policies swiftly to protect the currency when inflation inevitably rears its ugly head again.
All the while, the strongest evidence indicates that when economic recovery finally arrives, it will be feeble at best for years to come. So the financial and economic sectors won't be able to withstand any promised rapid reversal of Washington's hyper-inflationary policies. But nor will the dollar be able to withstand the option of leaving such policies in place. Washington is therefore setting up the most colossal catch-22 imaginable for the dollar and for the US economy. With the Fed then hamstrung by its own shortsighted and reckless policies, we could well see the arrival of hyper-stagflation. The dollar cannot survive such a scenario intact.
Unless you've been hiding out in a cave somewhere, you know that the big financiers of the US Treasury, namely China and its Eastern partners in Asia and the Middle East, have soured on the dollar's future beyond the short to medium term. They've entirely lost faith in the ability of the US to really get its monetary, financial and economic houses in order before the repercussions of shortsighted policy come home to roost with a vengeance. They're preparing new solutions that will take two or three more years to fully enact but which will shove the dollar aside toward the margins of international finance and international monetary policy. The handwriting is therefore on the wall for dollar-denominated financial assets.
This grim assessment for such assets, including even those considered the safest, namely sovereign US debt, is no surprise to the savvy and informed investor. This fact is borne out by taking a look at the skyrocketing costs of insuring US sovereign debt. The market for credit default swaps (CDS), a form of derivative that insures against default, has seen these costs escalate very rapidly as the government pours money into the spending plans mentioned above, buying toxic assets, non-performing assets, troubled assets, and otherwise questionable assets and shares in collapsing "zombie" banks on Wall Street.
In taking on an ever-greater mountain of such assets with extremely problematic creditworthiness and dubious value, sovereign debt is increasingly tainted as well. That is especially so when one also considers the stark facts, noted above, with respect to the virtually impossible position in which Washington is placing itself, the Fed, the Treasury, the economy and the dollar.
The Wall Street Journal examined the issue of skyrocketing costs to insure US government debt, in its April 30 article entitled, "Volatility in the Markets is Down but Not Out". The author makes the insightful observation that fear and volatility have been transferred from the equity markets to sovereign debt via the government purchases of the wide array of dubious assets referred to above.
As a result, we've seen this recent rally on Wall Street, but we've also seen the creditworthiness of US sovereign debt taking a big hit from the perspective of investor psychology and risk assessment. The closely-watched VIX index, the markets' "fear" gauge produced by Credit Derivatives Research, shows the credit default swap premiums index for seven large sovereign borrowers including the US, the UK and Japan, at present stands at 75, compared with the pre-boom level of 3.
Therefore, the markets are increasingly fear-struck over the prospect of holding for too long dollar-denominated financial assets in particular.
When the catch-22 alluded to above soon becomes fully set in place and irreversible, say in the next few months when sufficient new sovereign debt is actually racked up, and then a short distance farther down the road when Washington, the Fed and the Treasury try to withdraw the present hyper-inflationary policies and find themselves fully trapped in that catch-22 bind, with no viable way out - say within the next 12 to 24 months - then Washington may have no choice but to let the Treasury default on some flavors of sovereign debt, while simultaneously inflating away some other flavors.
From an investor standpoint, though, both policies look like a default. Those investors still holding too large a percentage of dollar-denominated financial assets at that time will be hit hard by such developments.
Unless the most rosy and unrealistic scenario comes about wherein vibrant US economic growth returns very soon, unless the government toxic asset and bailout plans become renowned successes, unless securitization gets a new lease on life and America is able to quickly get its house in order in the next three to four years, the dire forecasts here for US sovereign debt defaults and a dollar crisis, with all their colossal implications and repercussions, are unavoidable in the next 24 to 36 months at most. The UK and Japan face a similar outcome.
W Joseph Stroupe is a strategic forecasting expert and editor of Global Events Magazine online at www.globaleventsmagazine.com
(Copyright 2009 Global Events Magazine, All Rights Reserved.)
this is another reason that i've been telling those close to me that if they have "investments" denominated in DOLLAR - they BETTER start thinking of moving them elsewhere...or go to other currencies ...or move away from US treasury stocks or bonds related investments...and move into REAL material such as minerals, gold, copper, oil, whatever...just GET the HELL OUT of US "invented" derivaties and "added value" nonsense. or they'll surely see themselves WORRYING about their holdings the way the Chinese are now worrying about what the value of their 2.5 TRILLION dollar US bonds holdings are going to be worth 3 years from now.
i've always told them "if you really want long-term value -- GO EAST...the us economy WILL implode in due time because it has a BLIND EYE that keeps it from avoiding the VERY things that LEAD to RUIN..and keeps forcing the USA to do the 'corrections' that are THEMSELVES DERIVATIVES of RUINOUS policies of many , many decades".
IMO-- the ONLY reason China as well as other regions that are trying to develop and develop AWAY from the US dictated structure is that they are NOT YET READY to FULLY IMPLEMENT the COMPLETE ISOLATION of the USA .
once that happens - and it WILL --
watch out. americans have NO idea what the tidal wave is REALLY going to be like once the underpinnings :the global DEBT of the USA that other countries were forced to UNDERWRITE for decades which the USA has gotten away with --
is PULLED OUT like a rug from under the "US ECONOMY".
THEN americans will really SEE just what the US economy is REALLY worth....a FRACTION of what they BELIEVED it to be!
just watch.
if i DID turn out right since years ago telling friends:
"this bush? he is up to no good, if he wins, he WILL look for an excuse to make himself a WAR president ...and he is just waiting for SOME national tragedy of great proportions, and secrets will be revealed, and lies, and people most are not aware of will come out of the shadows as pulling the strings...etc. and the economy WILL suffer...but not only BECAUSE of wars he will initiate but because the economy is REALLY based on phantom wealth...etc."........
I believe I will turn out CORRECT also regarding these developments on the global "balance" of power.
Sioux Rose
TEDDY: Thank you for the powerful endorsement! Last night when I was drinking my single glass of red wine, and eating a small piece of salmon with brocolli, the thought occured to me... that just as we see Wall St as the vultures helping themselves to the carcass of America's bodily assets, I realized that America, as a whole is that Wall St equivalent to the rest of the world, especially the 3rd world. I still drink my morning coffee, and even if it's from "Fair Trade," the bottom line is, it's grown on someone else's land, land that could be used to feed the indigenous. From an ecological perspective, I keep a very low footprint, but nonetheless, being a citizen of THE nation that uses 25% of the world's fossil fuel and who knows how much of every other resource, to the impoverished third world mother struggling to pay for rice for her children, I am not much different from the Wall ST coterie that allots itself the rites of free passage to all the goodies.
The Buddhists believe that karma comes by degrees. Certainly the average citizen of modest means who buys recycled items and keeps their AC at 80, their winter heat at 67, eats little... is not in the same camp as the one with one or more yachts and several homes of embarassingly large square footage. Still, I realized something poignant with my dinner last night. I know I try to "give back" in a variety of ways, and believe the US could (and the current economic mess may inevitably lead to this) show far more consideration towards other lands, their populations and natural resources. Guilt is not a worthy place to identify with, positive remedial action, of course, is better. We all can probably give a little more and do a little better... myself, included.
SiouxRose ....thank you as well..it's individuals LIKE YOu - among americans that daily make me OPTIMISTIC - despite everything that CLEARLY show MUCH of what ails the world -- is NOT that other nations or cultures are "backward" (according to the western , us point -- mere 300 year old point of view) -- but from the MEDDLING towards the OBJECTIVE of global dominance that COMES from the USA itself.
it is individuals like you, americans, that I just as often , literally shed tears when I think about these things...because i see SO MUCH DECENCY -- so much HUMANITY - no different from other people = who ACHE for social and economic justice for everyone --
that I feel DO NOT DESERVE being "americans" being FORCED to "become PART" of what John Perkins - the former CIA "economic hitman" revealed:
"we are just able to live our lifestyles BECAUSE it is ONLY PART of a VERY , VERY VICIOUS system of exploitation that Dehumanizes and Enslaves people everywhere".
americans like you ALWAYS remind me that they DESERVE BETTER - a more ethical , just system . ...rather than one that
as the brilliant writer, and historian and architect , for Asiatimesonline, Henry CK Liu defined so brilliantly:
"the USA is really a protectionist nation, rather than a true, free and fair trade nation....PRETENDING to be 'free-market'".
you see that in every interstice of the US system:
where the BANKING, FINANCE masters EXHORT and LECTURE and THREATEN everyone about "accountability" and responsibility about their "debts and obligations" and the ENTIRE justice system is built to IMPOSE and ENACT that exhortation....
they THEMSELVES are UNaccountable and FRAUDULENT while SUCKING BLOOD out of the american people and the rest of the world
AND at the same time through their power and control of media and politics - making americans believe that THIS is what "america is all about" and that it is IN THE INTEREST of americans!
when in reality -- the interest of the american people in general -- which are the SAME as the interests of people EVERYWHERE -- a decent life, a life of happiness at what you DO ...rather than be ENSLAVED and in FEAR for your future security when you are old and can't work anymore...and to see your next generations also be happy ...and NOT be overworked and USED UP for MONEY......are VASTLY the OPPOSITE of what their masters TELL THEM it IS!
i mean -- what the HELL is going on?!
what kind of culture and society is this?
and believe me, SiouxRose..whenever i walk the streets and look at americans -- and i see, in all their colors and variety ..the look in their eyes....i can't help but sense that there is an unspoken sense of "fear" or "concern" or sheeplike attitude of being "cowered" and beaten to submission...and i feel so SORRY for that....i keep telling myself -- :
"how can this be? these are PEOPLE , individuals, who each have lives and futures but they move about as if they are empty of any really meaningful sense to their lives".
they move about, most of them, looking at shoppin windows. maybe hoping to buy something they like, but KNOWING they CAN'T because they are now becoming mostly poorer and poorer and poorer....they smile but behidn the smiles -- even the younger ones ...most LIKELY have medical problems they could only "fix" at HOME with make-do medication that isn't good for them because they don't have insurance....or maybe "that young man walking over there is so thin because he hasn't really eaten properly for 2 weeks because his rent is so high while he's trying to finish some college courses"......
i mean - HOW CAN THIS BE in the world's most powerful and wealthy country?
and IT CONTINUES to want to EXPORT THIS VERY SYSTEM EVERYWHERE across the globe -- and the RESULTS - have ALWAYS been RUIN to the economies of other nations?
case in point:
IRELAND and ICELAND, ESTONIA and LATVIA, GEORGIA, UKRAINE
to name ONLY the most RECENT ONES RAPED by the US model of economy and social order?
i mean -- it's not ENOUGh that the USA built itself as an "empire" in the North American CONTINENT -- by the evil , unforgivable extermination of Native Indians...the importation of "extraordinary renditioned" 20 million AFRICANS to build its power and wealth...the abrogation of treaties with mexico , spain, etc...and theft of land from mexico etc...?
it is STILL NOT ENOUGH:
welll---- NOT ENOUGH -- the capitalists say:
because we come to the CENTRAL REALITY of capitalism:
it can only exist if it ENDLESSLY "grows" -- and "growth" means
ENDLESS EXPLOITATION of others for the sake of MONEY , PROFIT and POWER.
and THAT is what the USA has become.
and its own people are suffering for it in addition to the suffering, NEEDLESSLY, it has imposed on the rest of the globe for what it calls "progress and development".
but it is only "progress and development" == as General Smedley Butler , US MARINE, 1933 speeches , said:
"ALWAYS has been geared towards gathering as much of the world's resources unto ourselves AT the expense of OTHERS".
and ,imo, UNLESS americans get to know the TRUE NATURE of their own nation as the "PREDATOR NATION" that it is - according to General Butler --
they will NEVER fully realize that THEY TOO are the VICTIMS of their own nation's PREDATOR policies -- because a predator ALSO will EAT ITS OWN if it is forced by circumstance to do so.
and americans will NEVER escape that destiny so long as they THINK that as "americans" they are "different" from OTHERS whom their own nation - which THEIR lifestyles is part OF --
continues to "hunt" as its victims.
so long as americans do NOT ADMIT that the problems of their LOW wages and loss of personal wealth - is TIED to the LOW wages of other nations IMPOSED by the US dominated global "finance" structure
they will never understand why THEY are also suffering as a result.
what goes around, comes around. as they say. the world is NOT flat -- it is round.
Sioux Rose
TEDDY: You are astute in your observations. I noticed that same vacuous expression, but I have associated it with two groups: the fundamentalist church goers, for all their conformist rallying round the rules that confine their existences the way a tight pointy heeled shoe confines a foot; and the jaded nouveau riche, who upon each and every purchase expects the pursuit of happiness will reveal a new dose of satisfaction; but that sated state never comes.
Some rant at us in this forum for being in a sense prisoners of a locked-down new America, the Petri-dish of all these Orwellian Homeland Security high tech incentives. You maintain your humanity in recognizing, as did Ann Frank, that most persons are essentially good. Studies suggest that about 70-80% of general populations carry traits consistent with conformity, sometimes even to authoritarian style regimes. This is why the Bahai faith places such emphasis on the role of the teacher, that how persons are conditioned by the belief systems around them impacts who they ultimately grow up to become. If our media wasn't awash in so much fortuitous violence, and a style of comedy that makes persons feel less-than, it could be used to exalt a population and serve its more Divine purpose: that of lifting minds resulting in a new state of shared awareness. Instead, we have the pox of dis-information on a celluloid version of steroids.
What baffles me is that so few are doing anything about this. Everyone sees what's going on but seem to sit dumbfounded in hand wringing anxiety with hope and belief in magic tricks.
Immanuel Kant in his treatise "What is Enlightenment" admonishes that we
"Have the courage to use your own understanding."
Sadly, so many are cowered into thinking that the experts will fix things. They won't. It's all about them, their wealth and their power, with Obama as their servant robbing the people with a smile and the soothing rhetoric of deceit.
Sioux Rose
REBEL: What things are THIS bad and the channels for redress blocked, the scene that happens to come into my mind as remedy is taken from the Indiana Jones movie, "Raiders of the Lost Arc." When our charismatic, and much tested Dr. Jones confronts a very tall fellow in an open market place who has a way with machetes, he merely pulls out his pistol. As a general advocate of non-violence, I have to say, there ARE times that call for exceptions. (ON a personal note, I do not own a gun nor intend to. Let's call this a fantasy approach.)
The most powerful tool we have is non violent civil disobedience. It can take a multitude of forms, from refusing to pay taxes to stopping traffic or disrupting the proceeding at corporate or Congressional meetings, or camping out on Congress persons lawns and making lots of noise. The key is in numbers, more need to be galvanized to act and stay committed. It's not about a paltry vote every four years, nor is it about a violent uprising. It's about putting ourselves on the line and saying enough already.
Civil disobedience is very effective, and it comes in many forms, BUT-
A sad truth is that many people cannot afford to go to jail (and jail is increasingly the cost for your actions- especially if you are not white).
If you have children, who will care for them while you are in jail for 6 months?
If you have a job, what are the chances it be there when you get out?
Who will pay your rent or mortgage while you're gone?
What about the time it takes just to plan an effective cd campaign?
I guess you could respond that most of us have nothing left to lose these days. Though if you are caring for a family member- an elderly parent or child, say, cd is difficult to participate in.
(I'm here speaking as one who has done it)
there is of course one BIG problem ...the american people are, generally , SHEEPLE.
rebelnow -- because americans subscribe as a CULTURE - it is a matter of CULTURE -- to the MYTH of "american rugged individualism"
which really has become the TOOL which powers-that-be: namely the BANKING , Financier, Rich families, system as the "cattle call" to americans -- to render them "individually" INCAPABLE of coming TOGETHER as a society to demand TRUE democracy...and therefore -- makes it all the easier to ISOLATE "rebels" - such as your screename reflects.
the history of the USA after all is replete with SUPPRESSION , VIOLENT suppression , of what is promoted as "threats" and "insurrection" because they question the PREFERED political/economic system of .....what General Smedley Butler, US Marine revealed as "OUR BIG BOSS -- our supernationalistic Capitalism".
remember -- the MAY 1 - 5 Worker's day globally actually BEGAN as a commemoration of a "rebellion" by workers IN the USA - chicago , i believe, which caused deaths when police were ordered to stamp it out -- more than a century ago.
THAT ALONE should tell you what the US "system" is all about -- the SUPPRESSION of worker rights, PERIOD........
but out of which comes the SUPPRESSION of PROPER , LIVABLE, DECENT, JUST WAGES and recognition of LABOR as the EQUAL and even the SUPERIOR of Money Capital which latter ONLY EXISTS because of where IT is derived FROM - LABOR and the produce from labor.
the great contrast is:
IN FRANCE - for several weeks - even months now :
every single time the government that is right-oriented or "conservative" under Sarkozy (although HE has led the description that "laissez-faire economics is DEAD" and basically has made a calculated RETREAT from his attempt to copy US model "liberalization capitalism") --
everytime they attempt to "fix" or "reform" the french SOCIAL WELFARE system -- the population ERUPTS instantly in OUTRIGHT REBELLION.
they don't REPORT that in the main pages of US media -- because it MIGHT give americans "dangerous ideas"....
such AS:
the workers in france recently have begun practicing what THEY consider as a NATURAL right and to DICTATE to THEIR government and industries rather than the other way around...and show the "leaders" that they are there ONLY AT THE TOLERANCE of the people......
and what they have been doing is what the french consider a TRADITION of protest and rebellion:
and they have actually , countrywide , "imprisoned" or "incarcerated" THE CEO's themselves in their offices, fed them properly, give them safety, and all that, barricaded them....UNTIL they come out BEGGING the people that they would now AGREE to "reconsider" their "policies' such as "cutting jobs" and "wages", and "benefits"....etc.
and it TURNS OUT -- they can MANAGE to keep those industries AFTER ALL!!!
in other words -- the french people CALL THE BLUFF of the capitalist overlords about the need for "cuts" -- and FORCE them to OBEY the people.
they've been doing that for WEEKS and months now and france ISN"T exactly collapsing , is it?
americans meanwhile are now so SHEEPLIKE - they can't tell the difference between being glorified slaves and masters....
they THINK they are "free"
but they're ABSOLUTELY NOT!
there is a famous tennis legend -0- Martina Navratilova - who of course became an american citizen after leaving her communist country czechoslovakia but is back in europe .
saying:
"I never imagined that I would leave MY czechoslovakia because it was a communist dictatorship---to be free in the USA...only to see the day when I have to leave because the USA has become what communist dictatorships were....and that the 'land of the free' has become the 'land of the frightened' ".
We The People are so screwed.
"...America must get back to manufacturing products that people need."
Let's take, say, washing machines. And let's say we pay 5 people $10/hr to build a washing machine. That's $50/hr, and it takes 2 hours to build. Plus materials and expenses, that machine cost $200 to build. The manufacturer wholesales it for $400, the retailer sells it at $800.
Or - 5 people in China are paid $1/hr to build the same machine. Plus materials and fewer expenses, that machine cost $75 to build... eventually retails for $300.
Pick the product - same story.
We ain't manufacturing our way out of this one...
What has the Retailer done to merit more money than the people who build the washers?
Spike, I agree with you 100%.
Your understanding of how capitalism works is wrong. Surplus value is created at the source of production and then that surplus value is shared later with the rest of the supply chain through the process of selling the commodity. Read Marx. It is true that more surplus value can be obtained by basing production in an area where wages are low. But the fundamental contradiction of surplus value production is that the working class is exploited to keep surplus values high, while at the same time, the cost of the commodities sold include this surplus value. Hence the working class cannot afford to buy back the products it produces. This results in overproduction and forces the capitalists to slow down production. A lack of profitable investments in production also forces the capitalists to invest outside of the productive economy, ie. the financial economy.
We can certainly manufacture our way out of this, but it would require a new economic system where surplus value is no longer privately accumulated but shared by all. Only socialism can end this never ending plunge down into crisis.
there IS a SIMPLE, the most ELEGANT and the most EFFICIENT and NATURAL and PERPETUALLY SUSTAINABLE solution. but THAT solution is EXACTLY what the USA dominated "global structure" of capitalism MOST FEARS and ALWAYS will try to murder:
what THAT is is:
GLOBAL WAGE CARTEL.
where workers are internationally supported by governments FORCED to abide by treaties that WAGES should have INTERNATIONAL STANDARDS of livability in order to PUT LABOR BACK on its RIGHTFUL place as the SUPERIOR and SOURCE of "money capital" and ALL capital.
the only reason that has NOT come around - is precisely BECAUSE the USA led consensus as used its POWER - and manipulated "finance" system to create OBSTACLES to that realization.
SHORTER WORKING HOURS at RISING WAGES, SPREADING the LABOR for production among ALL populations
IS the answer.
PERIOD.
you do that -- UNEMPLOYMENT will NOT exist and will NEVER again be USED as an EXCUSE by the capitalists to "suppress" labor and wages
THEREBY allowing every human being a DECENT livable wage or earnings and thereby creating a human society where practically EVERY individual is WeALTHY
and "wealth" will CEASE to exist as a CONCEPT!
it is SIMPLE, ELEGANT and REALLY was the TRUE destiny of humanity
and ALREADY was beginning to happen through even just the OLD ways of trade between societies and nations
UNTIL CAPITALISM came around to create an ABERRATION in the natural function of societies -- the proper division of labor
given livable "wages"..
there are enough humans to do everything we can possibly DREAM of having ....and giving humans their PROPER VALUE as laborers - by DENYING MONEY CAPITAL its power OVER them through its MISLEADING system of "ARTIFICAL SCARCITY" (it is the CENTRAL tenet of capitalism).
THAT is why the USA and "capitalism" FIGHTS to the death AGAINST that basic human right to LIFE and HAPPINESS and JUSTICE that is really humanity's NATURAL EVOLUTION.
if anything -- Capitalism
is history's GREATEST ABERRATION like a CANCER.
I said it before and I say it again:
Do YOURSELF and the country a favor and slog through two lengthy documents. They will change the way you look at history, politics, finance, war and terrorism. You will find out about real terrorism. Many persons in these documents are well known; many are right now in pivotal positions of politics and finance. These people do shape YOUR life and that of our children right now. The details are researched and referenced. The consequences are beyond belief.
www.scribd.com/people/documents/2169400-ep-heidner
Read 'Collateral Damage' part I and II.
Keep these going Yachtie....the more that know what's behind 9/11, the more the chance of re-opening a new 9/11 investigation.
And, check this site out...one of the best....http://www.ae911truth.org/
Thank you angryoldman. You are right, these two docus ought to be public knowledge. They will hopefully not only reopen 9/11 investigations but they will change how citizens think about politics, finance, the terrorism business and who the real terrorists are.
The architecs and engineers for 9/11 truth is a great website. However, they deal with the technology of how the buildings were brought down. E.P.Heidner explains WHY the were destroyed. And THAT is truly STUNNING.
So far there is frighteningly little emphasis on prosecution of banksters, corrupt politicians, corporate mafia and enemies of the state. I am looking forward to when the critical mass of public opinion is reached and these parasites, terrorists (the real ones) and criminals die of more than just suicides.
A very good article, but I am surprised it got only 8 commnents.
It seems that the only subjects that get comments are any critisism of Obama
or Israel, then all hell will break loose.!!
Much like Pentagon bureaucrats who sign off on unnecessary weapons systems waiting for retirement day and a seat on the corporate board of a grateful military contractor, government overseers of the financial industry have similar - and arguably greater - temptations.
Goodbye, USA. This is how you decline and fall, one grafter and autocannibal at a time.
Money for Nothing
Parry writes; "All that Wall Street money also has left many Americans wondering if anyone – in business, politics or media – cares about the larger fate of the nation or if the primary goal right now is to inflate “one more bubble."
There is another much darker explanation for what is happening to the economy of the United States. With the middle class and blue collar sectors of the economy destroyed, with the real estate market destroyed, with the stock market destroyed,* with the manufacturing sector destroyed, with the retail sales sector destroyed and with the financial sector destroyed** the current actions of the masters of the universe are the financial equivalent looters carrying TV’s out of a burning store during a riot. Instead of the old adage that it’s best to get yours when the getting is good what we are now seeing is to “get yours while there is still something good to get.”
*(The current 30% rally in stocks is primarily due to the Fed acting as a bottomless money pit for big finance and the financial industry’s ability, under new accounting rules, to place unrealistic “future values” on toxic assets instead of their market value.
**(the economic model where the Fed acts as a bottomless pit ever pumping endless dollars to prop up the unviable financial sector simply can’t function... unless the value of the dollar falls in proportion to the spirit dollars that are maintaining the pulse of the otherwise dead financial sector)
Just as was the case of the Bankster’s invalid business model that assumed that real estate prices would never fall, the economy of the United States is based on several assumptions that simply can’t exist over the long run.
First is the assumption that the world at large will always be willing to finance the massive American debt created by the balance of trade deficit and the massive debt created by Federal deficits. Today trillions of American dollars are held by foreign governments and investors. With the Fed in position to pump untold trillions of dollars into the world’s supply of dollars to prop up the unviable financial sector, the idea that the dollar of tomorrow will have the same purchasing power of the dollar of today, is absurd.
Secondly with the several segments of the American economy that have been intentionally destroyed for the benefit of the banksters the idea that a robust American economy will be able to rally the world economy like the American economy eventually did after the Great Depression is false. Just as the set of economic players changed during the last great Depression the cast of economic players after the current economic crisis passes will be different than the countries that dominate the world economy today.
With major sectors of the economy hamstrung by the economic policies of the last generation and the end of the endless credit flowing toward Uncle Sugar things just aren’t going to be near as sweet as they used to be. As the purchasing power of the dollar plummets prices for imports will rise accordingly with energy and food leading the way. The standard of living for the majority of Americans will decline...probably a lot.
Beyond that it all becomes guess work, chaos theory, crystal ball gazing, reading the tea leafs… How bad? How long? How far? How ugly? How many? There’s only one thing I’m sure of, how we will look back and ask, Why? Why? Why?
"Money for Nothing"
Now look at them yo-yos thats the way you do it
When you’re the bankster on TV
That aint workin thats the way you do it
Money for nothin and chicks for free
Now that aint workin thats the way you do it
Lemme tell ya them guys aint dumb
Bankster gets his bonus ain’t none bigger
Bankster gets the last crumb
We gotta sell those toxic assets
Derivatives and CDO’s
We gotta hide this toxic paper
We going to give them a dose
See the little people in the burbs with their cars
See the little people in despair
Them little people can’t make their payments
Them little people I don’t care
We gotta sell those toxic assets
Derivatives and CDO’s
We gotta hide this toxic paper
We going to give them a dose
They could'a learned to pay the piper
They should'a learned to be a bum...
Very well put and a nice update on Dire Straits to boot. Mark Knopfler must be informed!!
Is it possible that the bankster bailout is being done on behalf of your item 1? Banksters overleveraged American real-estate into huge investments, most of them overseas. Is it possible that the 'status quo' Obama etal are trying to maintain is the status quo of these half-finished investments in China, inc? I.E. if they can come to completion and begin to pay off, those CDO's may begin to actually be worth their face value? (in which case, as others have noted, the wealthy owners take the profit and joe taxpayer is spared the loss).
If this is the case, the administration is obliged to tell us, but so far is not doing so. In the absence of information, we are obliged to assume the worst (that the banksters own Wash DC, including Obama etal, and this is just more piracy). If this IS the case, and these 'socialized bets on globalization' pay off, then joe taxpayer deserves more than the avoidance of destruction of our credit markets (and his next paycheck). He, and we, deserve a cut of the profits.
The banksters overleveraged some mortgage debt into a huge investment pie. What did they invest in?? Something worthwhile?? If so, that would explain Geitners actions. But, we are not being levelled with. We deserve to know if these banks are being caught mid-investment in globalized assets that MAY pay off in a few years, or if this was the ponzi scheme everyone is beginning to assume it was, in which case, Geitner etal should be first in line for the guillotine for shamelessly protecting the status quo.
Thanks, with the Fed lending money to the banksters at nearly zero percent interest I couldn't resist a re-work of "Money for Nothing"
Given the many severe problems with the American economy I do not see real estate regaining levels of profitability of three years ago…but as the value of the dollar tanks inflation may bring real estate price levels back to where they were. The key is the difference between value and price. A home that sold for half a million dollars three years ago may once again sell for a half a million dollars at some point in the future, but when compared to other costs for energy, imports or health care, housing will still be very cheap compared to other sectors of the economy. If this is how things unfold I doubt that mortgage backed securities will regain profitability when inflation is factored into the equation.
To put it another way, if an investment gains 5% a year but inflation is 10% the investment is actually loosing value.
You are correct to notice that we are not being leveled with by the Obama administration. To their credit the part that they understand (and they’re not talking about) would not be a winning point; and that is that vast sums of wealth are being transferred from ordinary Americans to the banksters. The part that they don’t understand is that the business model of the banksters was to suck the life from the other sectors of the economy for the benefit of the banksters.
Since we are now at the point where the lifeblood of the rest of the economy has been consumed by the banksters, like the parasite that kills its’ host, when there is no more blood to feed the parasite it too must die.
ubrew12,
You wrote:
"Is it possible that the 'status quo' Obama etal are trying to maintain is the status quo of these half-finished investments in China, inc? I.E. if they can come to completion and begin to pay off, those CDO's may begin to actually be worth their face value? "
What are you talking about? I smell PR bull-shitting mixed with hog wash.!
What are those have-finished investments in China you are talking about?
How these investments will make the CDOs whole again??!!
Those CDOs are based on bundling many mortgages together in ever bigger
pyramids of complex mathematical formulaes and further bundling.
Some of these mortgages are performing and some are not, but all this
bundling, pyramiding and mathematics make all these CDO of very questionable
value. Some are good and some are bad, but nobody, now, knows which is which!!
So again, how finishing these investments in China will make thesee CDOs whole again??!!
And some CDOs have been determined to have much lower values than their face
values and this bring us to the second stage of this disaster which is CDSs.
CDSs (credit default swap) are insurance policies to insure against financial papers defaults and you don't have to be a party to the transaction.
Which is weird and strange. It is like the whole neighborhood is isnuring a car
driven by a reckless 17 years old kid. If there is an accident, then the insurance
company will have to pay, maybe, for hundreds of policies instead of one policy
Many people used these CDSs to insure CDOs whose values eventually went way way
down.
Also, many of those who bought the these CDSs have the power and means to affect
the financial markets and the value of financial instruments insured by these
CDSs. That opened the gate of unlimited amount of fraud and shenanigans.
That is the primary source of trouble for AIG and many of the banks and financial
houses who sold those CDSs and made , for the moment, hefty profits and got hefty
bonuses!!!
Why? Why? Why?
You find all the answers in:
www.scribd.com/people/documents/2169400-ep-heidner
Read Collateral Damage part I and II.
GREAT!!
But, can we update the "chicks for free" line, too? (ouch!!)
Ther will be a great shock when the world changes to another currency.
the Amero is coming and the dollar will not be worth the paper it's printed on.
America is sold by a 'Few Good Men'.
Part of the problem is the widespread financialization of American business- underwriting the value of their stocks with money market manipulations and derivative trading rather than building sound products efficiently and paying their workers enough to participate adequately in consumption without piling up alot of debt.This is why the collapse of the bubble in banking has such a huge effect on the economy as a whole-because it strike directly at the profit base of every other sector of the economy.
We can't afford to rebuild our economy on the same old pile of sand- a GDP growth constructed entirely on various ponzi and pyramid schemes plus privatization of essential public services like health care- as Obama has said.
But the "the bail-out" is trying to do exactly that. Better to let Cit-corp and Bank of America take the hit and then search around for investments that that produce real growth, good wages at reasonable returns on a long term basis. Let "globalization" stand for fairness and social improvement instead of just more opportunities for the finance, insurance and real estate sectors to live like blood-sucking parasites on the backs of the American people... even if that means eating potatoes for a few years.
Renewing public transportation, medicare for all, investments in renewable energy, efficiency in conventional energy, improvements in agricultural practices are some suggestions.
There's alot of "old wood" out there- very destructive subsidies to both farm and fisheries- which could be redirected in very positive ways.
Plus, we could spend alot more on regulations and their enforcement, in programs like OSHA, CDC, EPA, FDA which would cut costs in the long run and provide alot of jobs. Neither should we neglect pressing needs in education.
Wall Street makes money when markets explode and when markets implode.
The run up in oil prices meant huge profits for Wall Street
The run down in oil pirces meant huge profits for short-sellers (Wall St)
Wall Street made money when the market dropped 60% between 8/08 and 3/09
Wall Street is making money with the current 38% bounce
When the market tanks agin - more profit for Wall Street.
And, the average American gets screwed
He, the writer, may have been who he wuz.
Now, he reads like a shill, paid by the word.
This is who/what "society", ie: you ,have become.
It's so over.
According to Mr. Parry, the great American experiment in representative democracy has ended due to the unrelenting power of corruption. George W. Bush robbed from the federal treasury and the American taxpayer to give no-bid contracts to his inner circle of supporters in the military industrial complex and the oil industry. Obama has followed by robbing the American treasury and the taxpayer to prop up the big moneyed interests of Wall Street and the American banking community.(Doesn't the fact that their big moneyed mean that they don't need us to prop them up?)
The most important person in any market place is the consumer. Ask your local grocer, the man who owns the hardware store, or your local auto dealer, what does he need? He needs a customer who walks through his door with the power to buy. It was about this time last year the candidate Hillary Clinton proposed a one-year moratorium on all foreclosures to enable all consumers a chance to regain control of their finances. Instead, Mr. Obama is advocating the advancement of new credit lines for the American consumer, who is already upside down in debt through the use of excessive fees and interest rates that border on or exceed the boundaries of usery.
Can we manufacture our way out of this recession/depression? Can we retain our economic supremacy/affluence if we don't in fact make something tangible, valuable, essential? It seems today the only thing we make is war, and war goods. Is that an essential enough product for us to manufacture that economically, not politically or militarily, will give this country the sturdy spine it needs to support healthy and dominant economy?
Globalization has hurt the country more than it has helped. There is an apocryphal story of Walter Reuther negotiating in the upper floors of FOMOCO world headquarters, a.k.a. The Glass House. At one point, the negotiations have stalled. The representative from Ford states that soon all the work will be automated, and none of his union workers will have jobs. Reuther stands up from the table and walks to the window, where as far as the eye can see there are parking lots. Reuther says,"Then who will buy all of these cars?" Globalization has led us to Reuther's and Ford's dilemma. When will the bankers realize that unless their depositors have money they will not leave any in the bank nor pay their bills in an adequate fashion? The American consumer needs to consume something other than "credit" to make this economy work!
What Mr. Parry suggests is that we have no reasonable hope that either Democrats or Republicans will ever achieve any action in the consumer's interest, they are too bought off and self interested in the great financial bonanza of the American system of quid pro quo politics. If we were the French, we'd hold a nationwide strike and bring down the government, as they did with DeGaulle in '68. I doubt that we Americans have that kind of unity or resolve. These are times that try our economic souls. The rugged individualist, the great manufacturing powerhouse will become in this crisis ... what? If nothing else about this foreclosure crisis has taught us anything, it is that our neighbor matters. His financial health affects our own and we need to stick together.
There IS NO reasonable hope.
It doesn't matter who governs, Democrats or Republicans, because they feed both the same hand, are both subverted by the same 'Few Good Men'.
Dare to realize the unthinkable? Dare to look behind the curtain?
Read >>> www.scribd.com/people/documents/2169400-ep-heidner <<<
Read Collateral Damage part I and II
It will turn your stomach and your mind.
Despite the saying that "power corrupts," money beats power every time when it comes to corruption.
Keep in mind that Republican campaign coffers tend to be 5-10 times bigger than those for Democrats. While Democrats are clearly not angels, this differential strongly suggests that the parties are not equally corrupt.
Hmmmmm . . . . the "pleasant luxuries of the super-rich".
Wonder if that includes stepping over the homeless as you jump into your limo?
"The Wall Street oligarchs are now utilizing trillions in US taxpayer bailout money and government guarantees to bolster their balance sheets and generate profits, and speculating in turbulent financial markets."
Beware of the suckers' stock market rally!
We've been sold out: http://www.financialsense.com/fsu/editorials/wilson/2009/0504.html
Yes, we have been sold.
But the fraud and treason go far beyond your wildest nightmares. Let's have a deeper look with different angle. What you will read WILL SHATTER YOUR PEACE:
www.scribd.com/people/documents/2169400-ep-heidner
Read Collateral Damage part I and II
which one was it -- jefferson or washington? that warned:
if the CORPORATIONS and BANKS are NOT CONTROLLED -- and "we MUST regulate wealth for surely the growth in wealth among the people will be the death of freedom"?
it's possible that the reason the jeffersonians fought hard (and lost) against the Hamiltonians for creating a "money system" by private banking was because they felt it would come to this.
of course they themselves were merely generators of the "adam smith" principles of Monetizing everything under the sun, anyway.
the irony of MONEY;
it was originally created by societies as a CONVENIENCE to be a representation of labor and produce and resources in trade...and merely as an instrument of exchange through representation...
then , under the capitalist system was transformed into becoming "wealth unto itself"...that detached itself from the REAL economy which it was supposed to just be a public utility ....
and THEN -- with wall street and the US "invention of financial PRODUCTS" - it became "money-LIKE" products
which are many degrees removed from REALITY.
THUS:
PHANTOM WEALTH. NON-EXISTENT wealth PRETENDING to be existent.
THUS -- the BUBBLE and all that is attached to IT -- the "real economy" COLLAPSING.
ironic.
one day the USA will be known as the land of ACRONYMS that don't really mean much....
something akin to "land of the free" which really represents "land of the frightened"...
or "land of opportunity" which really means "opportunity to be enslaved"...
or "christian -based" which really means "torture loving christians".
or "land of the rule of law" which really means "whenever it's convenient for the powerful".
or "richest nation on earth" which really means "richest INDEBTED nation on earth"
or "land of accountability" which really means "land where accountability is for the losers".
or "land where justice , fairness and freedom reigns from sea to shining sea" which really means "so long as no one takes it seriously"