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Today's Top News
Countdown to Collapse: The Recovery is Not Recovering
Financial journalist Charles Gasparino whose career trajectory took him from Newsweek to CNBC to Fox News was on with Bill O' Reilly doing what the host of the factless Factor likes to do the most: promote Fox News. In the course of their self-promotional banter, Gasparino let sip an unverifiable story about a meeting of top CEOs speculating about whether President Obama really is a secret Socialist.
Stories like this, invented or not, freak a White House ever eager to reassure the business world of their loyalties. That is no doubt why Robert Gibbs, the President's Press Secretary took a whack at the "professional left," a statement he later said had been "inartful" but did not withdraw.
Writing on OpEd News, Kevin Gosztola was not surprised:
"While circumstantial, the best evidence for why Gibbs would feel like uttering the aforementioned remarks is the shift of money from Wall Street to Republicans ahead of the election... The Democrats earned 57 percent of campaign contributions from securities and investment industries.
The situation compels the Obama Administration, especially White House press secretary Gibbs, to whip the left and the sections that are most listened to by voters into line not only because money from business interests needs to swing back the other way but because disappointed and disillusioned voters will likely stay home, not donate to Democratic Party campaigns, not make phone calls, and refuse to go door-to-door canvassing prior to Election Day if they do not fall in line."
According to a preliminary analysis, the Center for Responsive Politics reports that "individuals and political action committees linked to the financial and real estate sectors swung hard to the Republicans with their giving since last year....
In March 2009, 70 percent of money from the sector went to the governing party, but by this summer, 68 percent was going to the opposition, as Democrats fought to pass some version of a financial overhaul."
The motivation for Gibbs' remarks may or may not be tied to signaling Wall Street but the deeper truth is that everyone, right and left alike, seem frustrated and at the same time powerless to check the continuing economic decline.
The private sector is not creating jobs. The GOP is blocking the government from doing more stimulus programs while the system seems to be unraveling. All the talk of cutting deficits by conservatives or ending tax cuts by liberals will not give the economy the boost it needs. There is a paralysis of analysis and a stalemate.
The markets were more freaked by the recent pessimism oozing from the Fed than any partisan punditry. The slowdown they are worried about has already doomed any heavily-hyped "recovery."
And the public knows it, according to the recent polls.
What's worse is the tea leaves offer few signs of a turnaround any time soon even if General Motors is selling more cars-many, may we be reminded, in China. (The GM CEO who last week took a nasty ingrate smack at GM being perceived as "Government Motors," demanding the government sell all of its shares, has just announced he is leaving! I wonder why?)
The Carlyle Group is taking over while the automaker launches a new program of subprime lending, the very predatory dealmaking that got them in trouble in the first place.
Does anyone ever learn from history, or care about how communities are being destroyed as a financial crisis becomes a social crisis at the grass roots level?
Check out what happened at that mall in Atlanta where thousands of people nearly rioted to get on a public housing waiting list. The Congress returned from its recess to pass new monies to keep teachers teaching and cops patrolling. They did so by slashing food stamps so the unemployed and poor -some 41 people who rely on them---will have to cut back further.
What a trade-off.
As for insuring the stability of an increasingly volatile system, will the new financial reforms make any difference? It doesn't look like it. The New York Times reported, "As Wall Street scrambles to find the best and most profitable way to operate under the new financial reform law, Goldman Sachs Group Inc. - the firm that was expected to suffer the most under the legislation - could emerge practically unscathed...
"...we think we are well positioned to be a market leader under the new rules," said Jack McCabe, co-head of Goldman's derivatives clearing service business.
Richard Bove, a bank analyst at Rochdale Securities, said he had changed his view of the law's effect on Goldman.
"I thought this company was going to be really harmed by this bill; now I've figured out that it's not going to happen," he said. "They should win big here."
That's Goldman's reason to celebrate its "big win" What about the others? The truth is we will not know for a awhile, for a long while, for many, many years. So much for any sense of urgency even after former Fed Head Paul Volcker said we are running out of time.
Bloomberg News explained why,
"Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world's banks until 2018 to comply with limits on how much they can borrow. Parts of the Volcker rule, a provision of the new Dodd-Frank Act that would force firms to cut stakes in in-house hedge funds and private-equity units, may not go into effect for a dozen years..."
"Based on our experience of government's ability to execute these things effectively and in a timely way, we are almost uncovered now from any future financial risk for at least another 8 or 10 years, and that's a little scary," said Roy Smith, finance professor at New York University's Stern School of Business and a former banker at Goldman Sachs Group Inc
Economist Nouriel Roubini, one of the first to forecast our crisis, worries that major economies in Europe are at risk and could fall. At the same time I am reading articles that contend, "The US is more bankrupt than Greece." Another reports the IMF saying the US is bankrupt but most Americans don't know it.
What else don't we know?
At the same time, the folks who brought us this crisis are still riding high, making multi-million dollar "settlements' to cover up fraudulent practices. In recent weeks, Goldman Sachs, Countrywide and, now, Wells Fargo have just done that in part to avoid prosecutions.
Their CEOS are going on vacation to spend their ill-gotten gains, not to jail to pay for their crimes. And the "professional left"-whatever that is supposed to be---is more pissed at Robert Gibbs blathering at that podium than the banksters maneuvering behind the scenes.
Can anyone tell me what's wrong with this picture?
Just one footnote: In this week of growing economic despair, an 81-year old senior citizen named Bernard Stone stood outside the unemployment office in Harlem with a flyer of his own making calling on President Obama to issue an executive order closing all American-owned factories outsourcing jobs. If they don't do it, their executives should, he suggests, lose their citizenship and be deported to the countries to which they exported American jobs.
"The hundred or so people who read my leaflet liked that part," he told me.
Comments
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46 Comments so far
Show AllOn the one side we have Obama cheerleaders like Ed Shultz telling us how important it is to back existing Democratic leadership and on the other side we guys like Gibbs telling us what a bunch of ingrates we are if we don't. Good cop-bad cop. If that's all Obama's got it's not going to work. Get ready for the finger pointing. Get ready for the split.
I've got a finger for 'em.
I was reading the comments on Salon last night to get the idea of how people there were responding. There was a blog piece by a guy named Lyons, whose basic premise was Gibbs was right and we should all be grateful for Obama, and we must back him or the Repubs will come back and, well, you know, the sky will fall down.
On any given day the comments on Salon are fairly diverse, but that was not the case here. Comment after comment -- I didn't read all 18 pages of them, but a sizable chunk -- of real, tangible anger. You had a couple here and there who said, well, I'll just hold my nose and vote Dem because what choice do I have? But for most this was the utter last straw. One can only hope.
Similar sentiments over at HuffPo. I don't know about Kos, because I have had no desire to go near the site since the Kucinich betrayal, and I just generally can't stand Obamabots -- which is why I'll read certain things on HuffPo but comment very little over there, because I don't see the point.
"That's Goldman's reason to celebrate its "big win" What about the others? The truth is we will not know for a awhile, for a long while, for many, many years. So much for any sense of urgency even after former Fed Head Paul Volcker said we are running out of time."
I wish there were a way that this was highlighted every single day. This is the key problem. The can being kicked down the road and the pain that will result, and the amount of power and money that will be amassed in those years, plus the likelihood that what "good elements" there are may never come to pass. First with the health insurance companies and now with the financial sector companies, and the same will happen with climate change. Volcker said we're running out of time. I would say on all these issues we're past out of time.
samalabear: Thanks for what passes for good news these days.
It is amazing that anyone, especially people like Danny Schecter, would have thought you could recover the economy by supporting and subsidizing the very people and institutions that helped create this mess. That includes the federal gov't which has been subsidizing itself by printing money.
Paul Volcker is one of the criminals in crass violation of the Constitution ushering in the beginning of the end of the dollar.
http://www.globalresearch.ca/index.php?context=va&aid=7813
Well, we finally made it. Welcome to the worlds biggest banana republic! It only took 30 years of good 'ole American stupidity to put us here, and look what we did for Red China & India along the way! Enjoy that McMansion, fancy car, Harley, boat, RV, etc., at least until the repo man comes to take them all away. And come on now, you didn't really like that job anyway (look at all the free time you will have to find that perfect bridge for you & your family to live under). Last one out of the middle class, please turn off the lights ....
gnken
Gee can I keep my State Pension which Im suppose to be eligable in 2 months? Maybe I can live on that and hop a freight like folks did in the 30's. I guess now you would be arrested for violation of homeland security.
Although I hopped freights all over the US back in the 70s, the railroads that were willing to overlook non-revenue passengers have all been acquired by 5 too big to fail railroads that prefer that you ride public passenger trains.
We have outsourced our manufacturing sector to foreign countries. What should we expect from becoming a country of bankers and paper-pushers??? . . . Exactly what we're getting.
That's why we're a bankrupt country!
The idea of a Third Party is looking better and better all the time.
You are right and we know it. You'll be hearing more from us. Its time to put boots on the ground and boot out all politicians who are destroying our country and the welfare of honest, patriotic and hardworking Americans. We have been betrayed. We are no longer represented.
See you in the trenches.
Green Party of Mercer County
Trenton, NJ
http://www.gpmercercounty.org/
I envy your enthusiasim. But I'm afraid it's to late. Washington DC is occupied Israeli territory. The whole system needs to be revamped. We need to do away wiyh redundant laws and redundant taxes. We need congresscritters that put the livelyhoods of Americans before their pocket books. Things have been steadily getting worse for at least 30 years, and this is where we find ourselves today. We need real reform, not just empty promises. Glad to see people see through the falisy (pun intended) of the fake 2 party system. Thats a start.
The states of California and Washington already have "top two primaries" that prevent third party candidates from ever making it to a general election. It won't be long before all 50 states follow suit with this defacto outlawing of third parties.
Has Washington been hanging out with bad boys again? Can't think up enough trouble by himself?
Amen. And direct action. What else is there?
"Another reports the IMF saying the US is bankrupt but most Americans don't know it.
What else don't we know?"
Hah!
Sorry, man, space limits. Go seek.
Its no big secret, most Amnericans simply have a terminal case of denial. Who wants to admit that they will soon be living in a third world nation?
>>The Democrats earned 57 percent of campaign contributions from securities and investment industries.
Earned?
You know...earned! Thats where I give you money and you pay me back by passing any law I want. :)
Damn right they earned it!! They sold their souls and their integrity and their ethics for a couple of coins and a cushy job. I for one, and I hope one of many, will not donate to the Democratic party, will not phone people, will not walk precincts, will not go to speeches or meetings of Democratic candidates. I've been a Democrat for decades; but I'm smarter than that now! I will never vote for a Democrat or a Republican.
All this talk about Democrats and Republicans receiving this and doing that only obscures the truth (indeed, is intended to obscure the truth): we live in a fascist corporatocracy. Period. By definition, this means there is only one political party, the Demopublicans. (I realize "fascist corporatocracy" is redundant, but corporatocracy alone sounds inappropriately benign and we would do better to remind ourselves that it's really fascism, pure and simple).
crime is so simple...
the intricacies and complexities of politics are theater to distract and mollify the people being stilettoed...
when the people arise, and stiletto the criminals, that will be the day...
"Does anyone ever learn from history, or care about how communities are being destroyed as a financial crisis becomes a social crisis at the grass roots level?"
Apparently not many do. Not in any quarter.
"As for insuring the stability of an increasingly volatile system, will the new financial reforms make any difference? It doesn't look like it."
Financial reforms? There weren't any. There was no change in the areas that caused these problems and no protections added to repair the damage. And it is indeed a "big win" for the Corps and another veil of shame for this corrupt Congress and this pitiful President.
"The GOP is blocking the government from doing more stimulus programs while the system seems to be unraveling."
Speaking of asininie statements and dishonest hyprerbole, heres a DOOZY! The republicans can't block anything you iddiot. This democratic propaganda makes anyone with any intelligence want to throw up.
I'm reminded of a noteworthy editorial by Charlie Reese. He wrote two or three different versions of the same editorial which reflected different times and political personalities. Since its last publication, we're about 309 million people now, not 235 million:
www.snopes.com/politics/soapbox/reese.asp
Let it collapse. And, no, we will NEVER "give back" the house or anything else. It will all be utterly destroyed first.
It's time for some heads to be separated from shoulders.
The East Point, Georgia mob of 30,000 is a canary in the coal mine. I'm 50 miles NW of Atlanta and know it's a major forewarning as natural & contrived food shortages come to fruition. Any possibility of hungry and desperate people showing up at your door??
"the shift of money from Wall Street to Republicans ahead of the election..." Whose money is that?
Mostly finance industry, but most of the transnationals will be going the same way. They bet heavily on 0 in '08, but they're betting Republican in '10 and presumably will again in '12, since the Dems have managed to adopt this depression as their own as well as betray their base even more extremely than is usual for pols.
Under the current circumstances, money rules. I believe the majority of people are corrupt. What chance is there of mitigating action? None! It's too late. The coming hardships will not spare you. It's over. If you care about survival the hour is late, get busy now. Many if not most will not make it. Find your center and follow your path. Keep an open mind.
Uh huh, its all been on the verge of collapse since the 1980's. All liberals know how to do is yell DOOM all day. No ones talking about bringing the WPA back or giving the military contractors some hummanitarin work( food packets instead of bombs say-howard zinn suggested this).
Feeling defeated is easy, being an opitimist and looking for some real solutions is hard. I'm going to be real, I'd rather have some constructive federal job then just an unemployment handout. But is anyone in congress talking about that, NO instead the left is on its constant "the sky is falling " rant while the right is trying to convice us that a higher tax on billionaires will lead me getting poorer.
I'm at the point where i might change my poli sci major to something constructive since politics definitely isn't
Yes, change your major to appropriate technologies, or sustainable ag, or folk arts or drop out and start taking vocational classes at your local community college. Learn how to build, fix, make and grow things. Stay aware, stay informed, but if you are in a place in your life where you can devote yourself to learning stuff, by all means learn something useful. We are not facing the End of Days, but shit is only going to get worse in the good ol' USA.
Check out "Crash Course" on Youtube if you want to understand what time it is for the US Empire. Tick, tick, tick...
"Countdown to Collapse: The Recovery is Not Recovering"
...no shit Sherlock.
Buy gold and guns.
You might also consider moving to the country, making friends with your neighbors, learning useful skills, planting fruit and nut trees, buying books on traditional crafts and gardening, leasing some solar panels (who knows if the company that leases them will be able to get them back in the ensuing chaos), selling all your unnecessary crap and there are probably lots of other things one could do. Just get started. Don't let fear, uncertainty and depression paralyze you. A better world is possible and this is definitely an example of living the changes you want to see in the world.
"A better world is possible"....
You are so right! Too many citizen "fools" have drunk the consumer society kool-aid and are going to pay dearly.......
Another world is possible; one that involves INDIVIDUAL RESPONSIBILITY to conserve both personal and environmental assets...not squander just because it is what most others are doing...
Understanding that there is a responsibility beyond outright maniacal consumer greed (for all stratus of society) and that means respecting the world we live in a making your government respect that world also.....
Buy ONLY what you truly need.....forget 10 pair of shoes, or 10 suits, or 10 whatever...or the newest gadget that you can glue to your outsize cranium to soak up every tiny bit of useless garbage gossip on the planet.
Get real...get responsible! Don't play the capitalist game!
I am finally in progress on exactly this and could not be happier - but about as inexperienced as anyone could be.
Friends warn that it is well to homestead property and construct ownership so as to debt-proof one's hold on the land as well: the predator institutions are still out there feeding.
Pretty good advice for the affluent. Not very useful for people struggling to buy groceries, pay the rent and electricity (already given up the phone), and have no "crap," necessary or otherwise. Yeah, live those changes, and ignore those who cannot live at all.
People can't feed their kids bullets or gold...to eat.....
It is becoming stunningly evident that all of the so-called "proven" medications for recovering from a depression and returning to "full employment" are not working this time and that includes the applied Democratic medications, the proposed Republican medications, and Guru Krugman's medications, at least in our country. Is it conceivable that the capitalist economy as we know it has crashed and died?
Hmmm... a system based on year on year exponential growth of basically every economic metric you can conceive on a finite planet, operated for a few hundred years- how could such a system ever fail?
Check out: "Crash Course" or "Capitalism Hits the Fan" or "the most important video you'll ever see" on the Youtubes. All are fascinating and worth your time. One age ends and another begins...
Get ready.
This is not evident at all. "Our" capitalist country may well crash and die, but if it does, it will not do so because proven methods have failed, but because they are not employed.
The "proven method" I assume you refer to is WPA-style Federal deficit spending to stimulate the economy. The WPA went in under F D Roosevelt, and the steep downward spiral that the economy had been on since 1929 stopped abruptly.
When I studied this in the 60's and 70's, people spoke as though the spending could have been on just about anything. This is a gross distortion of Keynes, and it is a falsehood.
We have plenty of Federal deficit spending these days, but little spending, government or otherwise, to create jobs or solve actual problems. Bribing Pashtuns and Talibs to not shoot soldiers for a week or so certainly does constitute deficit spending, but it does not constitute stimulus for the American economy. The military spending through the Mideast brings some back into the States - the $ that goes to the arms contractors, but little else. Most of those transnationals have little motive to bring those dollars back into the States, where they might be taxed.
When I studied in the 1960's and 1970's, I studied in buildings built during the 1930's by the WPA. If the US has tried the proven methods, where are the schools, roads, hospitals, housing, and soup kitchens built by an 0bama WPA?
The federal deficit spending that worked, the proven method, was not and is not a trickle-down economy with massive federal spending of the Ronald Reagan sort (RR was the biggest spender before Cheney and 0).
Just because both methods involve the Fed issuing money does not make them equal. In case it's useful to simplify, the WPA was like a poor family borrowing money for food and transport to get to work; the current spending is like one member of the family borrowing money, hoarding some of it, and using the rest to get drunk and shoot up the barn of the Afghan family across town.
There are problems in the latter approach that do not reflect problems with spending itself - though I would love to see Krugman attend to the difference.
Great analysis and metaphors. The New Deal delivered meaningful, purposeful commonwealth investment in enormous wealth-creating capacity --- electrification and utility networks, dams, roads, bridges, schools, libraries, national parks, etc. with an enduring legacy of priceless cultural treasures and iconic architecture, things Wal-Mart and McDonald's can never do. It also re-created an immeasurable foundation in human can-do spirit, uplifting the dignity of millions with memaningful work, as well as Social Security in old age (which Obama now seems intent on dismantling for Wall Street). The New Deal was not a program of pointless hole-digging and hole-filling or imperial war, but a concerted program of leveraged stimulus, with political and financial reform that revolutionized society and created a properous and dynamic middle class for the benefit of all, including the very rich.
The Neo-classical economists argue that it was not FDR's New Deal, but war that lifted us out of the Great Depression. A more convincing argument is that without the New Deal, the community spirit and sense of shared sacrifice it rekindled, or the industrial capacity it enabled, we would be speaking German today.
The collapse under way is more general than that of capitalism: what is in irreversible decline is industrial civilization, whether socialist, communist, or capitalist.
We have hit the limit of the fossil fuel aided carrying capacity of the Earth. From now on, nature will gradually and at times catastrophically (when tipping points are reached) return the planet to its solar carrying capacity.
Excuse me? Which "Democratic medications"? The anemic "stimulus fund"? Which was cut because Obama didn't have the guts to demand what is necessary. Which "Krugman medications"? Which things that Krugman has suggested have been adopted? Do you even really read Krugman? I do, so let me tell you that virtually nothing he suggests has been put into practice, altho he did endorse the useless financial reform bill. Nothing has been done about too big to fail. Wall St bonuses are are up this year while small business loans remain nowhere to be seen. Nothing is being done about the rapidly eroding infrastructure. Nothing has been done for the relief of the states that are returning roads to gravel, cutting school hours, firing police and firefolk. The "proven" medications, the ones that worked in the thirties until they were pulled back in 1937: massive infrastructure development, safety net measures like unemployment insurance and Social Security, restoration of the National Labor Relations act gutted by Bush, TVA, the Civilian Conservation Corps, etc. -- nothing like this has even been suggested by the Democrat/Republican axis of corporate evil. So yeah, they haven't been tried; ergo, they "are not working."
Does anyone ever learn from history, or care about how communities are being destroyed as a financial crisis becomes a social crisis at the grass roots level?
No. These people are all sociopaths. They love no one and nothing but themselves.
Countdown to Collapse?
I suspect we are well on our way!
"The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil... Right now, the rest of the world owns $3 trillion more of us than we own of them." – Warren Buffett
"For a quarter of a century since the late 1970s, both right-wing and center-left governments have reduced taxes on income and property for the rich, depressed wages through structural unemployment as a tool to fight inflation and have abdicated government responsibility in maintaining economic justice." Henry c.k. Liu, Economist
The Associated Press recently reported that of the 630,000 jobs created in 2010, "81 percent are low-paying service-sector positions."
"When you add long-term discouraged workers back into the jobless count, you find that the real unemployment rate in the U.S. is actually 21.6 percent!" -Martin Weiss
"As you and I have emphasized, the basic problem with the U.S. economy is the off shoring that is destroying U.S. jobs, diverting U.S. income flows to foreigners, and enlarging the trade deficit, thus threatening the dollar. No one in Washington is paying any attention to this problem. They are using a "crisis" which might be contrived to rip off the taxpayers for the sake of the big banks, who have controlled the U.S. Treasury since Clinton." – Paul Craig Roberts....
You can read the rest of the Roberts' article here if it is still available.. http://www.economyincrisis.org/content/interview-paul-craig-roberts-one-americas-most-respected-economists....enjoy!
So moribund is the labor market that the economic boosters now cling to the oxymoronic hope of a "jobless recovery.” - John Browne
Welcome to the jobless recovery!
Given the title, I thought this article would shed some light on the real reasons the recovery is not recovering. Instead, we got more of the same phony politics and a few anecdotal notes that neither illustrate nor illuminate.
In a world of diminishing resources, greed will lead to a war between US (5%) of the world's population and Them (the entire third world). Once the precious American Way of LIfe is threatened, we will respond as we have done at every perceived threat. It's just a question of where our bombs start falling first. It's obvious by now that Obama has no problem dropping bombs (or aiming Predators) at any other dark-skinned people.
And the majority of Americans (notwithstanding a handful of Liberals and Progressives) will be waving the flag and chanting USA! USA!.