Tuesday, July 19, 2011

Middle-Man and the Debt Ceiling Debacle

The Nation's Purpose

The Nation's Purpose


I rejoin you here today to propose that the Debt Ceiling "talks" have been viewed almost entirely through the wrong end of the telescope. We - this President included - have nuanced ourselves to death about Chained Colas and 14th Amendment remedies, while burying the macro viewpoint: What is the purpose of this or any other nation if not to defend its people?

The illusion promulgated by the fearful and the exploitative on the Right is that "defense" means militaristic expenditures and adventures, or, at least, spies and Homeland Security and often suppression of dissent.

In fact, defending the people of a nation is, at its heart, about keeping them alive and, in whatever economic system they find themselves, at least afloat. It is not only the primary responsibility of any government, but it is also the only true rationalization for any government.

I hope to expand the view even a little more: that the only true mark any of us leaves on this earth is whether we improved or hurt the lives of the others around us.

That goes for a President as well.
And that is why the social safety net that this country has stitched together, piece by iece, over 75 years, against the unceasing protests of the greedy and the ensconced and the divisive and the xenophobic, that is why the social safety net is this country's greatest accomplishment, and the greatest evidence that every once in awhile "American Exceptionalism" is based not in flag-waving but in reality.
This is not a Comment going into intricate, "Krugmanesque" analysis of the impact of the proposed "trimming" of Social Security on those who are now 70 but will later be 95 (valuable though that is). Although Sam Stein's chilling report about a possible increase in the minimum age for Medicare eligibility is a component, this is about what we are supposed to be doing, and what a President - a President of a government (to turn to a cliche in hopes that its real meaning will fight its way to the surface) of the people, by the people - is supposed to be doing.

This is addressed to President Obama directly:
And if this deal with the Republicans takes a dollar away from those people who do not have a dollar to spare, while preserving the millions for those who have millions more if this deal keeps intact funding the mechanisms we have for killing people while cutting the mechanisms we have for keeping people alive and healthy, then it is a betrayal of everything that makes this country great.
This is, obviously, something that should be in the hearts of all of us, all the time. Just as obviously, it is not, and I feel it is the time it be said, loudly and clearly. It is also obviously more than a mere American issue. This is about the world, and our species.

But we have to start somewhere, and I suspect the place we need to start is by reminding President Obama of these truths - and right now.

How to Liberate America from Wall Street Rule

Tuesday, July 19, 2011 by YES! Magazine
How is it that our nation is awash in money, but too broke to provide jobs and services?
 
The dominant story of the current political debate is that the government is broke. We can’t afford to pay for public services, put people to work, or service the public debt. Yet as a nation, we are awash in money. A defective system of money, banking, and finance just puts it in the wrong places.



Raising taxes on the rich and implementing financial reforms are essential elements of the solution to our seemingly intractable fiscal and economic crisis. Yet proposals currently on the table fall far short of the need.

A newly released report of the New Economy Working Group, coordinated by the Institute for Policy Studies in Washington, DC, goes beyond the current debate  to call for a deep restructuring of the institutions to which we as a society give the power to create and allocate money. How to Liberate America from Wall Street Rule spells out the steps required to rebuild a system of community-based and accountable institutions devoted to financing productive activities that create good jobs for Americans and generate real community wealth.

Over the past 30 years, virtually all the benefit of U.S. economic growth has gone to the richest 1 percent of Americans. Effective tax rates for the very rich are at historic lows and many of the most profitable corporations pay no taxes at all.

Despite the financial crash of 2008, the financial assets of America’s billionaires and the idle cash of the most profitable corporations are now at historic highs. Their biggest challenge is figuring out where to park all their cash.

Unfortunately, most of those who hold the cash and the corporations they control have lost interest in long-term investments that build and expand strong enterprises. The substantial majority of trades in financial markets are made by high-speed computers in securities held for fractions of a second. Business pundits still refer to this trading as investment. It bears no resemblance, however, to the investment required to put people to work rebuilding a strong America.

Corporations are using their stores of cash primarily to buy back their own stock, acquire control of other companies, invest in off-shoring yet more American jobs, and pay generous dividends to shareholders and outsized bonuses to management.

It was not always so. In response to the Great Depression, our country enacted financial reforms that put in place a system of money, banking, and investment based on community banks, mutual savings and loans, and credit unions. These institutions provided financial services to local Main Street economies that employed Americans to produce and trade real goods and services in response to community needs and opportunities.

This system, which Wall Street interests dismiss as quaint and antiquated, financed the U.S. victory in World War II, the creation of a strong American middle class, an unprecedented period of economic stability and prosperity, and the investments that made America the world’s undisputed industrial and technological leader.

We can’t afford to pay for public services, put people to work, or service the public debt. Yet as a nation, we are awash in money.
In the 1970’s Wall Street interests began pushing a deregulation agenda that led to a transfer of financial power from Main Street to Wall Street. Wall Street’s mega-banks lost interest in real investment and developed a new business model. They now specialize in charging excessive fees and usurious interest rates, providing leverage to speculators, speculating for their own accounts, luring the unwary into mortgages they cannot afford, bundling junk mortgages to sell them as triple-A securities, betting against the clients to whom they sell the overrated securities, extracting subsidies and bailouts from government, laundering money from drug and arms traders, and offshoring their profits to avoid taxes.

The consequences include the erosion of the middle class, an extreme concentration of wealth and power, a costly financial collapse, persistent high unemployment, housing foreclosures, collapsing environmental systems, the hollowing out of U.S. industrial, technological, and research capacity, huge public and international trade deficits, and the corruption of our political institutions.

Wall Street profited at every step and declared its experiment with deregulation and tax cuts for the wealthy a great success. It now argues for extending the same measures even further.

How to Liberate America from Wall Street Rule spells out details of a six-part policy agenda to rebuild a sensible system of community-based and accountable financial services institutions.
  1. Break up the mega-banks and implement tax and regulatory policies that favor community financial institutions, with a preference for those organized as cooperatives or as for-profits owned by nonprofit foundations.
  2. Establish state-owned partnership banks in each of the 50 states, patterned after the Bank of North Dakota. These would serve as depositories for state financial assets to use in partnership with community financial institutions to fund local farms and businesses.
  3. Restructure the Federal Reserve to function under strict standards of transparency and public scrutiny, with General Accounting Office audits and Congressional oversight.
  4. Direct all new money created by the Federal Reserve to a Federal Recovery and Reconstruction Bank rather than the current practice of directing it as a subsidy to Wall Street banks. The FRRB would have a mandate to fund essential green infrastructure projects as designated by Congress.
  5. Rewrite international trade and investment rules to support national ownership, economic self-reliance, and economic self-determination.
  6. Implement appropriate regulatory and fiscal measures to secure the integrity of financial markets and the money/banking system.
How to Liberate America from Wall Street Rule is the product of extended discussions among representatives of a diverse group of organizations committed to deepening and reframing the conversation on financial reform to focus attention on the serious financial system restructuring required to build a strong new American economy adequate to the social and environmental challenges of the 21st century. It may be freely shared, reproduced and distributed with appropriate citations.

Read the report: How to Liberate America from Wall Street Rule

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07.19.11
U.S. Treasury Just About As Flush As Google
 
 


Amidst the debt ceiling crisis, Zero Hedge publishes numbers showing that 29 public companies - including Bank of America, Goldman Sachs and JP Morgan Stanley - have more cash than the U.S. Treasury Department, which thanks to Geithner ties with Google at just $39 billion. So much for GOP claims that government has plenty of money and what they need are bigger tax breaks.

Obama's Big Deal: Cuts for Social Security, but No Taxes for Wall Street

Monday 18 July 2011
by: Dean Baker, Truthout | News Analysis 

The ability of Washington to turn everything on its head has no limits. We are in the midst of the worst economic downturn since the Great Depression. Even though the recession officially ended two years ago, there are still more than 25 million people who are unemployed, can only find part-time work or who have given up looking for work altogether. This is an outrage and a tragedy. These people's lives are being ruined due to the mismanagement of the economy.

And we know the cause of this mismanagement. The folks who get paid to manage and regulate the economy were unable to see an $8 trillion housing bubble. They weren't bothered by the doubling of house prices in many areas, nor the dodgy mortgages that were sold to finance these purchases. Somehow, people like former Federal Reserve Board Chairman Alan Greenspan and his sidekick and successor Ben Bernanke thought everything was fine as the Wall Street financiers made billions selling junk mortgage and derivative instruments around the world.

When the bubble burst, one of the consequences was an increased budget deficit. This is kind of like two plus two equals four. The collapsing bubble tanked the economy. Tax revenue plummets and we spend more on programs like unemployment insurance and foods stamps. We did also have some tax cuts and stimulus spending to boost the economy. The result is a larger budget deficit.

All of this is about as clear as it can possibly be. The large deficit came about because the housing bubble, which was fueled by Wall Street excesses, crashed the economy. Yet, we are constantly being told by politicians from President Obama to Tea Party Republicans that we have a problem of out-of-control spending.

The claim of out-of-control spending is simply not true. It is an invention, a fabrication, a falsehood with no basis in reality that politicians are pushing to advance their agenda. And that agenda is not pretty.

According to numerous reports in the media, President Obama wants a "big deal" on the budget, which will involve cuts to Medicaid, Medicare and Social Security. The last is especially ironic, since Social Security is financed by its own designated tax. Therefore, it does not contribute to the deficit. If there is no money in the Social Security trust fund, then benefits will not be paid.

The plans to cut to Social Security also seem perverse since we know that the vast majority of retirees are not living especially well right now and the benefits already are not especially generous. If we exclude their Social Security income, more than 80 percent of people over the age of 65 get by on less than $20,000 per year.

The average Social Security check is about $1,100 a month. This would be less than an hour's pay for many of the Wall Street honchos whose greed and incompetence brought down the economy.

Yet, when President Obama preaches equality of sacrifice, it is the elderly and the poor who are supposed to do most of the sacrificing. His plan to change the annual cost-of-living adjustment formula for Social Security would reduce benefits for someone in their seventies by 3 percent, in their eighties by 6 percent and in their nineties by 9 percent.

These are huge cuts. The Republicans are screaming bloody murder because President Obama wants to raise the top tax rate by 4.6 percentage points. Imagine that he proposed raising taxes on the wealthy by twice as much. That is effectively what he is proposing for people in their nineties who are entirely dependent on Social Security.

And he is proposing to impose this tax on seniors who had nothing to do with the crisis, while leaving Wall Street untouched. A modest tax on financial speculation could raise more than $150 billion a year or $1.5 trillion over the course of a decade.

It is striking that a financial speculation tax (FST) has not been mentioned in the debt discussions. The European Union has been actively debating the imposition of a FST ever since the crisis. The European Parliament voted for such a tax by a margin of more than 3 to 1. The United Kingdom has had an FST for decades. It raises the equivalent, relative to the size of its economy, of almost $40 billion a year just by taxing stock trades. Even the International Monetary Fund has come out in support of increased taxes on the financial sector.

Presumably, the continuing power of the financial industry explains why few in Washington are discussing an FST. After all, a director of Morgan Stanley, Erskine Bowles, was the head of President Obama's deficit commission.

And this explains why we are looking to gut Social Security and Medicare in response to Wall Street's wreckage of the economy. The basic story is that the average worker and retiree will have to sacrifice because of the damage that the Wall Street crew did to the economy. That is what democracy in America's looks like now.

Enemies Await Consumer Financial Protection


 
This is a big week for the Consumer Financial Protection Bureau (CFPB). Today, the President will announce his intent to nominate Richard Cordray to serve as the first Director of the Consumer Financial Protection Bureau. On Thursday, the CFPB makes its transition from a start-up to a real, live agency with the authority to write rules and to supervise the activities of America's largest banks.

Rich will be a strong leader for this agency. He has a proven track record of fighting for families during his time as head of the CFPB enforcement division, as Attorney General of Ohio, and throughout his career. He was one of the first senior executives I recruited for the agency, and his hard work and deep commitment make it clear he can make many important contributions in leading it. Rich is smart, he is tough, and he will make a stellar Director. I am very pleased for him and very pleased for the CFPB.

The DNA of the new consumer agency is well established. Our mission is clear: No one should be tricked in any financial transaction. Prices and risks should be clear. People should be able to make apples-to-apples comparisons. Fine print should be mowed down, not used to hide nasty surprises. And, everyone -- even trillion dollar banks -- should follow the law.

We're underway. We are working through a much-simplified mortgage disclosure form. We are designing a new consumer complaint process, with the first piece coming on line this week. We have set up a strong Office of Servicemember Affairs that reaches out to military families and is already working on problems they face. And, on Thursday, we will have cops on the beat -- making our first contacts with the 111 largest financial institutions in the country so we can monitor their compliance with the law. We have hired the people and built the systems to make all this work. And, to cap it all off, we got a strong evaluation from the Inspector General last Friday about our efficient and drama-free set up period.

There's lots of good news, but make no mistake: this agency still has enemies in Washington, D.C. And they have a plan.

In May, forty-four Republican Senators wrote a letter saying that they will block anyone from serving as CFPB Director. Many of them don't like the agency or the ideas that led to its creation. They lost that fight last summer in a straight-up vote, but they say they will use a filibuster over a Director nomination to undercut the agency. Without a Director, however, the agency's authority over payday lenders, debt collectors and other non-bank financial companies can be challenged. The Republicans say that they will permit a Director only if the agency is amended to make it less independent and less likely to act.

I remain hopeful that those who want to cripple this consumer bureau will think again and remember that the financial crisis -- and the recession and job losses that it sparked -- began one lousy mortgage at a time. I also hope that when those Senators next go home, they ask their constituents how they feel about fine print, about signing contracts with terms that are incomprehensible, and about learning the true costs of a financial transaction only later when fees are piled on or interest rates are reset. I hope they will ask the people in their districts if they are opposed to an agency that is working to make prices clear or if they think budgets should be cut for an agency that is trying to make sure that trillion-dollar banks follow the law. I hope they will ask their constituents if they are opposed to the confirmation of someone who saved $2 billion for retirees, investors, and business owners as Ohio Attorney General and who has worked hard on the front lines fighting against fraudulent foreclosures and abusive lending practices.

This week is the culmination of two years of hard battles. The President put the consumer agency in his first outline of financial regulatory reform, and he never wavered in his support for it. The agency was declared dead several times, and weak versions and lousy bargains were offered again and again, but he stood fast. When he signed Dodd-Frank into law, creating the new agency, he offered me the chance to stand it up -- something for which I will always be grateful. The fights continued, and again, the President never wavered in his support. In fact, just last week he issued a veto threat if the Republicans try to move the agency's funding to the political process, and I know that in the future he won't allow opponents of reform to succeed in weakening the CFPB.

The agency has stepped out in the right direction. The work is good. But this agency needs to have its full powers right now, and that means we need Rich in place as Director. Today, I'm celebrating -- but I'm not taking my eye off those who want to cripple this agency. We got this agency by fighting, we stood it up by fighting, and, if takes more fighting to keep it strong and independent, then we can do it.

Sitting Atop Trillions: What Would Corporations Do with Another Tax Break?

(Come on! You're still not pissed off to do anything about all this? What's it going to take for Americans to say they've had enough? It's acceptable for you to be really mad at this point. But it's like watching someone commit suicide by holding their breath.--jef)

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Conservatives routinely declare that businesses can’t hire anyone because tax burdens are too high (or "uncertain"—the bĂȘte noir of the day) and the way to create jobs is to give business more money. Among other things, corporations have launched a new campaign in Washington for a tax repatriation holiday that would allow businesses to bring home as much as $1 trillion in offshore profits at a very low-tax rate, cash they say could be used to create jobs and boost the economy.

But business already has plenty of cash, and if you look at what corporate America is actually doing with this money, it’s not pretty.

In 2010, businesses in the U.S. were sitting on $2 trillion in cash (a record high percentage of assets) and when we look at the global picture we see that the top 1,000 non-financial companies in the world are still sitting on more than $3.4 trillion in cash. In case you were wondering what happens with that cash, cash does not create jobs—investments do and investments don't happen without consumer demand. Thus, giving business more money leads to bigger numbers in checking accounts, not jobs.

Maybe things have changed in 2011? As the economy inches back to health, how are these companies deciding to spend all this pent up cash? The Federal Flow of Funds reports that the ratio of nonfinancial corporate cash assets to total assets has actually continued to grow through the second quarter of 2011. The biggest growth is in checkable deposits and currency which has risen 51% since the second quarter of 2010.  So not only are businesses refusing to hire workers, they’re buying currency in a bet against America in the hope that the dollar will fall.

But aren’t businesses doing something productive with that cash? Well, yes. Not only is corporate America using cash to fill space in bank boxes and stuff speculative mattresses overseas, they have decided to use some of it to pad the salaries of their CEOs. In 2010, the S&P 500 companies paid their CEOs an average of $11.4 million—an increase in CEO total compensation by 23%! This collective raise could have hired nearly 32,000 median earning workers instead (or 63 workers per company).

Using the public purse to give even more tax break cash to businesses is exactly the wrong move.  This country needs investments such as that called for in Conyers’ jobs bill, not cash hoarding, asset speculation, and CEO raises. The best investment the public purse can make right now is jobs.

The So-Called Texas Miracle: Smoke and Mirrors and Stampedes for Housing

07.18.11
by Abby Zimet

Gov. Rick Perry has stooped to slimy smoke-and-mirror accounting tricks to deal with Texas' biggest budget shortfall in history, but that hasn't stopped him from feeling he's been called by God to run for President, declaring, "This is what America needs." Actually, it seems to need housing and a living wage. Over 5,000 people turned up in Dallas just to get on a two-year wait list for 100 housing vouchers, forming a mile-long line and charging the building when it finally opened. What a sorry sign of the mislaid-priority times.



Monday, July 18, 2011

10 Banks Own 77 Percent Of All U.S. Banking Assets

Too Big To Fail?
July 18, 2011
By Michael Snyder - BLN Contributing Writer
Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were “too big to fail” and that was why it was necessary for the federal government to step in and bail them out.  The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill.  Congress was told that if the “too big to fail” banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression.  Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system. 

Instead, the “too big to fail” banks just keep getting larger and larger and larger.  Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets.  Today, the top 10 banks control 77 percent of all U.S. banking assets.  Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage.  They are incredibly unstable and they could start coming apart again at any time.  None of the major problems that caused the crash of 2008 have been fixed.  In fact, the U.S. banking system is more centralized and more vulnerable today than it ever has been before.

It really is difficult for ordinary Americans to get a handle on just how large these financial institutions are.  For example, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.
These huge banks are giant financial vacuum cleaners.  Over the past couple of decades we have witnessed a financial consolidation in this country that is absolutely unprecedented.

This trend accelerated during the recent financial crisis.  While the big boys were receiving massive bailouts, the hundreds of small banks that were failing were either allowed to collapse or they were told that they should find a big bank that was willing to buy them.

As a group, Citigroup, JPMorgan Chase, Bank of America and Wells Fargo held approximately 22 percent of all banking deposits in FDIC-insured institutions back in 2000.

By the middle of 2009 that figure was up to 39 percent.

That is not just a trend – that is a landslide.

Sadly, smaller banks continue to fail in large numbers and the big banks just keep growing and getting more power.

Today, there are more than 1,000 U.S. banks that are on the “unofficial list” of problem banking institutions.

In the absence of fundamental changes, the consolidation of the banking industry is going to continue.

Meanwhile, the “too big to fail” banks are flush with cash and they are getting serious about expanding.  The Federal Reserve has been extremely good to the big boys and they are eager to grow.

For example, Citigroup is becoming extremely aggressive about expanding….
Citigroup has been hiring dozens of investment bankers, dialing up advertising and drawing up plans to add several hundred branches worldwide, including more than 200 in major cities across the United States.
Hopefully the big banks will start lending again.  The whole idea behind the bailouts and all of the “quantitative easing” that the Federal Reserve did was to get money into the hands of the big banks so that they would lend it out to ordinary Americans and get the economy rolling again.

Well, a funny thing happened.  The big banks just sat on a lot of that money.

In particular, what they did was they deposited much of it at the Fed and drew interest on it.
Since 2008, excess reserves parked at the Fed have grown by nearly 1.7 trillion dollars.  Just check out the chart posted below….


Too Big To Fail?: 10 Banks Own 77 Percent Of All U.S. Banking Assets  Reserve Balances With Federal Reserve Banks


The American people were promised that TARP and all of the other bailouts would enable the big banks to lend out lots of money which would help get the economy going for ordinary Americans again.

Well, it turns out that in 2009 (the first full year after Congress passed the bailout legislation) U.S. banks posted their sharpest decline in lending since 1942.

Lending has never fully recovered since the crash of 2008.  The big financial institutions like Goldman Sachs, Morgan Stanley and JPMorgan Chase have been able to get all the cash that they need, but they have not passed that generosity along to ordinary Americans.

In fact, the biggest U.S. banks have actually reduced small business lending by about 50 percent since the crash of 2008.

That doesn’t sound like what we were promised.

These “too big to fail” banks have been able to borrow gigantic amounts of money from the Fed for next to nothing and yet they still refuse to let credit flow to local communities.  Instead, the big banks have found other purposes for all of the super cheap money that they have been getting from the Fed as Ellen Brown recently explained….
It can be very profitable indeed for the big Wall Street banks, but the purpose of the near-zero interest rates was supposed to be to get banks to lend again. Instead, they are, indeed, paying “outrageous bonuses to their top executives;” using the money to engage in the same sort of unregulated speculation that nearly brought down the economy in 2008; buying up smaller banks; or investing this virtually interest-free money in risk-free government bonds, on which taxpayers are paying 2.5 percent interest (more for longer-term securities).
What makes things even worse is that these big banks often pay next to nothing in taxes.

For example, between 2008 and 2010, Wells Fargo made a total profit of 49.37 billion dollars.
Over that same time period, their tax bill was negative 681 million dollars.

Do you understand what that means?  Over that 3 year time period, Wells Fargo actually got 681 million dollars back from the U.S. government.

Isn’t that just peachy?

Meanwhile, the big financial giants have not learned their lessons and they continue to do business pretty much as they did it prior to 2008.

The big banks continue to roll up massive amounts of risk, debt and leverage.

Today, Wall Street has become one giant financial casino.  More money is made on Wall Street by making side bets (commonly referred to as “derivatives“) than on the investments themselves.

If the bets pay off for the big financial institutions, mind blowing profits can be made.  But if the bets go against the big financial institutions (as we saw in 2008), firms can collapse almost overnight.

In fact, it was derivatives that almost brought down AIG.  The biggest insurance company in the world almost folded in 2008 because of a whole bunch of really bad bets.

The danger from derivatives is so great that Warren Buffet once called them“financial weapons of mass destruction”.  It has been estimated that the notional value of the worldwide derivatives market is somewhere in the neighborhood of a quadrillion dollars.

The largest banks have tens of trillions of dollars of exposure to derivatives.  When the next great financial collapse happens, derivatives will almost certainly be at the center of it once again.  These side bets do not create anything real for the economy – they just make and lose huge amounts of money.  We never know when the next great derivatives crisis will strike.  Derivatives are essentially like a “sword of Damocles” that perpetually hangs over the U.S. financial system.

When I start talking about derivatives I get a lot of people in the financial community mad at me.  On Wall Street today you can bet on just about anything you can imagine.  Almost everyone in the financial world has gotten so used to making wild bets that they couldn’t even imagine a world without them.  If anyone even tried to put significant limits on futures, options and swaps it would cause Wall Street to throw a hissy fit.

But someday the dominoes are going to start to fall and the house of cards is going to come crashing down.  It is an open secret that our financial system is fundamentally unsound.  Even a lot of people working on Wall Street will admit that.  It is just that people are so busy making such big piles of money that nobody wants the party to stop.

It is only a matter of time until some of these big banks get into a huge amount of trouble again.  When that happens, we might really find out whether they are “too big to fail” or whether we could get along just fine without them.

The Corporate Supreme Court


 
Five Supreme Court Justices--Scalia, Thomas, Roberts, Alito and Kennedy are entrenching, in a whirlwind of judicial dictates, judicial legislating and sheer ideological judgments, a mega-corporate supremacy over the rights and remedies of individuals. The artificial entity called "the corporation" has no mention in our Constitution whose preamble starts with "We the People," not "We the Corporation."

Taken together the decisions are brazenly over-riding sensible precedents, tearing apart the state common law of torts and blocking class actions, shoving aside jury verdicts, limiting people's "standing to sue", pre-empting state jurisdictions--anything that serves to centralize power and hand it over to the corporate conquistadores.

Here are some examples. (For more see thecorporatecourt.com). Remember the disastrous Exxon Valdez oil spill in Alaska's Prince William Sound twenty two years ago? It destroyed marine life and the livelihoods of many landowners, fishermen and native Alaskans. Its toxic effects continue to this day.

Well, after years of litigation by Alaskan fishermen, the Supreme Court took the case to review a $5 billion award the trial court had assessed in punitive damages. A 5 to 3 decision lowered the sum to $507.5 million which is less than what Exxon made in interest by delaying the case for twenty years. Moreover, the drunken Exxon captain's oil tanker calamity raised the price of gasoline at the pump for awhile. Exxon actually made a profit despite its discharge of 50 million gallons.

The unelected, life-tenured corporate court was just getting started and every year they tighten the noose of corporatism around the American people.

In Bush v. Gore (5-4 decision), the Court picked the more corporate president of the United States in 2000, leaving constitutional scholars thunderstruck at this breathtaking seizure of the electoral process, stopping the Florida Supreme Court's ongoing state-wide recount. The five Republican Justices behaved as political hacks conducting a judicial coup d'etat.

But then what do you expect from justices like Thomas and Scalia who participate in a Koch brothers' political retreat or engage in extrajudicial activities that shake the public confidence in the highest court of the land.

Last year came the Citizens United v. FEC case where the Republican majority went out of its way to decide a question that the parties to the appeal never asked. In a predatory "frolic and detour," the 5 justices declared that corporations (including foreign companies) no longer have to obey the prohibitory federal law and their own court's precedents.

Corporations like Pfizer, Aetna, Chevron, GM, Citigroup, Monsanto the devil can spend unlimited funds (without asking their shareholders) in independent expenditures to oppose or support candidates for public office from a local city council election to federal Congressional and Presidential elections.

Once again our judicial dictatorship has spoken for corporate privilege and power overriding the rights of individual voters.

Eighty percent of the American people, reported a Washington Post poll, reject the Court's view that a business corporation is entitled to the same free speech rights as citizens.

Chances are very high that in cases between workers and companies, consumers and companies, communities and corporations, tax payers and military contractors--big business wins.

Inanimate corporations created by state government charters have risen as Frankensteins to control the people through one judicial activist decision after another. It was the Supreme Court in 1886 that started treating a corporation as a "person" for purposes of the equal protection right in the fourteenth amendment. Actually the scribe manufactured that conclusion in the headnotes even though the Court's opinion did not go that far. But then it was off to the races. These inanimate giants, astride the globe, have privileges and immunities that "We the People" can only dream about, yet they have equal constitutional rights with us (except for the right against self-incrimination (Fifth Amendment) and more limited privacy rights.)

What is behind these five corporate Justices' decisions is a commercial philosophy that big business knows best for you and your children. These Justices intend to drive this political jurisprudence to further extremes, so long as they are in command, to twist our founders clear writings that the Constitution was for the supremacy of human beings.

To see how extreme the five corporate justices are, consider the strong contrary view of one of their conservative heroes, the late Chief Justice William Rehnquist in a case where a plurality of justices threw out a California regulation requiring an insert in utility bills inviting residential ratepayers to band together to advance their interests against Pacific Gas and Electric. The prevailing justices said--get this--that it violated the electric company monopoly's first amendment right to remain silent and not respond to the insert's message.

Conservative Justice Rehnquist's dissent contained these words--so totally rejected by the present-day usurpers: "Extension of the individual freedom of conscience decisions to business corporations strains the rationale of those cases beyond the breaking point. To ascribe to such artificial entities an "intellect" or "mind" for freedom of conscience purposes is to confuse metaphor with reality."

It was left to another conservative jurist, the late Justice Byron White, dissenting in the corporatist decision First Nat'l Bank v. Bellotti (1978) to recognize the essential principle.

Corporations, Justice White wrote, are "in a position to control vast amounts of economic power which may, if not regulated, dominate not only the economy but also the very heart of our democracy, the electoral process." The state, he continued, has a compelling interest in "preventing institutions which have been permitted to amass wealth as a result of special advantages extended by the State for certain economic purposes from using that wealth to acquire an unfair advantage in the political process... The state need not permit its own creation to consume it." (emphasis added)

Never have I urged impeachment of Supreme Court justices. I do so now, for the sake of ending the Supreme Court's corporate-judicial dictatorship that is not accountable under our system of checks and balance in any other way.

BP Pipeline Leaks Oily Mixture Onto Alaskan Tundra


by Tom Bergin and Yereth Rosen 
 
LONDON/ANCHORAGE - BP reported yet another pipeline leak at its Alaskan oilfields, frustrating the oil giant's attempts to rebuild its reputation after the Gulf of Mexico oil spill.

BP said on Monday that a pipeline at its 30,000 barrel per day Lisburne field, which is currently closed for maintenance, ruptured during testing and spilled a mixture of methanol and oily water onto the tundra.

The London-based company has a long history of oil spills at its Alaskan pipelines - accidents which have hurt its public image in the U.S., where around 40 percent of its assets are based.
The Alaska Department of Environmental Conservation said the spill occurred on Saturday and amounted to 2,100 to 4,200 gallons.

A BP spokesman said the cleanup was under way and the company would determine the cause "in due course."

Lisburne, which is managed as part of the Greater Prudhoe Bay Unit, has produced no oil since June 18, according to Alaska Oil and Gas Conservation Commission records, suggesting maintenance work requiring a prolonged shutdown.

The spokesman said the field had been undergoing "its annual maintenance."

BP's blown out Macondo well caused the worst offshore oil spill in U.S. history, spewing almost 5 million barrels of oil into the Gulf and putting BP's future in the U.S. at risk.

Previous problems including leaks from corroded pipelines in Alaska and the fatal Texas City refinery blast in 2005 had already earned the company a poor reputation for safety, something analysts say it needs to address if it is to continue to grow in North America.
BP shares were down 1.089 percent at 454 pence at 0919 GMT.

Production from the entire Lisburne field remains shut off while the spill is addressed, Alaska officials said.

Immediate efforts are focused on containment and cleanup, said Tom DeRuyter, state on-scene coordinator for the Department of Environmental Conservation.

The methanol-produced water mix has spread into wet tundra as well as onto a gravel pad, bringing risks to slow-growing vegetation, DeRuyter said.

"You have actively growing plants and they're very susceptible to the contaminants," he said.
The pipeline will also have to be dug up to allow for an investigation into why it failed, he said.
Resumption of normal operations at that part of the field may require a relatively long wait, DeRuyter said.

"I think they're looking at trying to get that pad back up before freeze-up," he said.

Is Time Speeding Up?

(Again, I'm posting this because it's an interesting concept, not because I support it or believe it. I do find the reaction/anticipation of 2012 by various people very interesting. Personally, I don't think anything horrible is going to happen in Dec of 2012. But I'm not closed off to the possibility that something cool might happen. --jef)

John Hill
More and more frequently people are suggesting that time is speeding up. We hear people saying things like “I never seem to have enough time to get everything done anymore” or “where has the time gone to”. The years are certainly flying by faster than ever and there is a scientific reason why time is speeding up. There are also a number of reasons why we are changing so rapidly and it is all related to time speeding up. Human beings are becoming more consciously aware and people are being drawn towards spirituality and personal development in greater numbers than ever before. Why is this happening? 

Scientists discovered many years ago that the earth gives off a pulse. This pulse or frequency which has been likened to a heartbeat has been stable at approximately 7.8 cycles per second for thousands of years. However, since around the year 1980 the earth’s heartbeat began to speed up. It has currently been measured at 12 cycles per second but the most incredible thing is some scientists believe the earth will actually stop rotating when this pulse reaches 13 cycles per second. When the earth stops rotating on its axis it is believed that it will remain still for around 3 days and then start spinning in the other direction. This will cause a reversal in the magnetic field around the earth but what will happen after this point is unclear. At this point you are thinking one of two things. Either you are thinking this sounds pretty amazing or you simply cannot believe it. I’m kind of in the middle myself, I think it’s hard to believe but I’m prepared to keep an open mind. Since I have become interested in spirituality I have seen wonderful things happen in my life and because of this I believe almost anything is possible.

It is due to this increasing pulse rate that we feel as though time is speeding up. Why do we “feel” as though time is moving faster than it used to be? The reason is what we once perceived to be a period of 24 hours now feels like only 16 hours. Our clocks still move in seconds, minutes and hours and still click over a full day in 24 hours but due to the earths increased heartbeat, we perceive it to be only two thirds as long or a perception period of merely 16 hours. 

As far fetched as all this may seem, a number of reports suggest that we will reach this critical mass or zero point when the earth stops rotating, very soon. It could well be in the next 5 years which happens to be at the end of the well documented and controversial Mayan Calendar which ends in the year 2012. Everything that is happening to people and our planet has been predicted in the Mayan Calendar. From my research into this phenomena and the changes I can see happening in my body and mind as well as what I see happening around the globe, I believe as do many others that we are now moving into the 4th dimension. The fourth dimension is where our thoughts will manifest almost instantly. This period of life on earth is where our good and bad karma will come back to us almost immediately. This is why so many people, although perhaps unaware as to why, are becoming consciously aware and turning towards spirituality and away from materialism and greed. We are feeling the urge to not only do the right thing for our own body and mind but we are more willing to help others than ever before in history. 

The growth rate in awareness is off the charts. What once took years of reading, learning and watching to become more spiritually aware may now only take a year or even months. There is so much more information than ever before on spirituality available in books and on the internet that is serving to accelerate our learning and helping us move away from the darkness of fear and towards the light of love. As we feel the need to change our direction in life and release our bad habits we are starting to meet others who feel the same way and collectively we are helping each other. We are realizing that we are part of something greater than our individual self and this further accelerates our spiritual evolution. 

As time continues to speed up and as we move through the 4th dimension into the 5th dimension, when the earth stops rotating, our karma will come back to us in an instant. Those of us still not aware of this changing world or not prepared to accept it and who feel they can get away with treating others, themselves or nature unjustly will receive their due karma. This will mean before we move into a better world and a period of love there will be much chaos as all the negative karma comes back to those individuals or collective groups. 

We are leaving the Age of Pieces, a destructive and oppressive period and moving into the Age of Aquarius, a period of love and peace. This is a difficult time for many people as they struggle to come to terms with what is happening around them and what is happening to their mind and feelings. The key is to let go and trust in this natural process of change and not to fight your feelings. As we move closer to the fifth dimension and as time speeds to an all time high, our thoughts, feelings and intentions will manifest into our reality in the twinkling of an eye. What this means effectively is that those of us living with thoughts of fear and trepidation, will manifest just that into their lives causing untold pain. However, those of us feeling happy and positive will manifest only love and joy into their lives. It’s all about choice, and it’s your choice to make, nobody can make it for you.

How has this information changed my life? It hasn’t really, although maybe in some ways it has. I’m usually a pretty positive person and this only serves to enforce the idea that I should remain positive at all times. I try and take more notice of the people and events around me, this has made the relationships with the people I care about even stronger. I give more of my time and money to help those less fortunate than me. I have started this website and thoroughly enjoy sharing information with others and receiving mostly positive feedback on the articles I write. Although, I still get up and go to work each day to earn, spend and save money and I still think about my plans for the future no matter what dimension I will be in.

As we continue through this exciting period of history the entire world will change along with everyone in it. Eventually we will be forced to release our fears, there is no other way. Fear will cease to exist and the greatest causes of fear, being time and money, will no longer be a part of our existence. Can you imagine reality in a place without time and money? I must say it’s most definitely a concept I find hard to fathom. It’s an exciting period to be alive so I’m going to go with the flow and enjoy the ride, I hope you’ll join me.

The Radical Privatization of Warfare

Sunday, July 17, 2011 by Cultures of Resistance
Coalition of the Billing


When the Bush administration chose to invade Iraq, it assumed that the war would be short and decisive. Yet by early 2010 the war had already cost over $700 billion, much of which went to corporations that profit from the conflict. Jeremy Scahill, best-selling author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army, has been a leading voice in opposing the war and in denouncing the radical privatization of the military. According to Scahill, at the time of this interview there were 630 companies on the U.S. government’s payroll in Iraq. More shocking are the 170 mercenary corporations operating in Iraq. Despite repeatedly committing criminal violations, these companies have been immune from prosecution and have repeatedly been rewarded no-bid contracts. Cultures of Resistance sat down for an exclusive interview with Scahill, in which he discusses the most recent stage of the corporate military-industrial complex's evolution.


Coalition of the Billing: An Interview with Jeremy Scahill from Cultures of Resistance on Vimeo.

Colbert on Fracking


How Big Pharma Hooked Americans on Drugs

Saturday, July 16, 2011 by Al-Jazeera-English
Mass Psychosis in the US:
by James Ridgeway
 
Has America become a nation of psychotics? You would certainly think so, based on the explosion in the use of antipsychotic medications. In 2008, with over $14 billion in sales, antipsychotics became the single top-selling therapeutic class of prescription drugs in the United States, surpassing drugs used to treat high cholesterol and acid reflux.

Once upon a time, antipsychotics were reserved for a relatively small number of patients with hard-core psychiatric diagnoses - primarily schizophrenia and bipolar disorder - to treat such symptoms as delusions, hallucinations, or formal thought disorder. Today, it seems, everyone is taking antipsychotics. Parents are told that their unruly kids are in fact bipolar, and in need of anti-psychotics, while old people with dementia are dosed, in large numbers, with drugs once reserved largely for schizophrenics. Americans with symptoms ranging from chronic depression to anxiety to insomnia are now being prescribed anti-psychotics at rates that seem to indicate a national mass psychosis.

It is anything but a coincidence that the explosion in antipsychotic use coincides with the pharmaceutical industry's development of a new class of medications known as "atypical antipsychotics." Beginning with Zyprexa, Risperdal, and Seroquel in the 1990s, followed by Abilify in the early 2000s, these drugs were touted as being more effective than older antipsychotics like Haldol and Thorazine. More importantly, they lacked the most noxious side effects of the older drugs - in particular, the tremors and other motor control problems.

The atypical anti-psychotics were the bright new stars in the pharmaceutical industry's roster of psychotropic drugs - costly, patented medications that made people feel and behave better without any shaking or drooling. Sales grew steadily, until by 2009 Seroquel and Abilify numbered fifth and sixth in annual drug sales, and prescriptions written for the top three atypical antipsychotics totaled more than 20 million.  Suddenly, antipsychotics weren't just for psychotics any more.

Not just for psychotics anymore
By now, just about everyone knows how the drug industry works to influence the minds of American doctors, plying them with gifts, junkets, ego-tripping awards, and research funding in exchange for endorsing or prescribing the latest and most lucrative drugs. "Psychiatrists are particularly targeted by Big Pharma because psychiatric diagnoses are very subjective," says Dr. Adriane Fugh-Berman, whose PharmedOut project tracks the industry's influence on American medicine, and who last month hosted a conference on the subject at Georgetown. A shrink can't give you a blood test or an MRI to figure out precisely what's wrong with you. So it's often a case of diagnosis by prescription. (If you feel better after you take an anti-depressant, it's assumed that you were depressed.) As the researchers in one study of the drug industry's influence put it, "the lack of biological tests for mental disorders renders psychiatry especially vulnerable to industry influence." For this reason, they argue, it's particularly important that the guidelines for diagnosing and treating mental illness be compiled "on the basis of an objective review of the scientific evidence" - and not on whether the doctors writing them got a big grant from Merck or own stock in AstraZeneca.

Marcia Angell, former editor of the New England Journal of Medicine and a leading critic of the Big Pharma, puts it more bluntly: "Psychiatrists are in the pocket of industry." Angell has pointed out that most of the Diagnostic and Statistical Manual of Mental Disorders (DSM), the bible of mental health clinicians, have ties to the drug industry. Likewise, a 2009 study showed that 18 out of 20 of the shrinks who wrote the American Psychiatric Association's most recent clinical guidelines for treating depression, bipolar disorders, and schizophrenia had financial ties to drug companies.

In a recent article in The New York Review of Books, Angell deconstructs what she calls an apparent "raging epidemic of mental illness" among Americans. The use of psychoactive drugs—including both antidepressants and antipsychotics—has exploded, and if the new drugs are so effective, Angell points out, we should "expect the prevalence of mental illness to be declining, not rising." Instead, "the tally of those who are so disabled by mental disorders that they qualify for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) increased nearly two and a half times between 1987 and 2007 - from one in 184 Americans to one in seventy-six. For children, the rise is even more startling - a thirty-five-fold increase in the same two decades. Mental illness is now the leading cause of disability in children." Under the tutelage of Big Pharma, we are "simply expanding the criteria for mental illness so that nearly everyone has one." Fugh-Berman agrees: In the age of aggressive drug marketing, she says, "Psychiatric diagnoses have expanded to include many perfectly normal people."

Cost benefit analysis
What's especially troubling about the over-prescription of the new antipsychotics is its prevalence among the very young and the very old - vulnerable groups who often do not make their own choices when it comes to what medications they take. Investigations into antipsychotic use suggests that their purpose, in these cases, may be to subdue and tranquilize rather than to treat any genuine psychosis.

Carl Elliott reports in Mother Jones magazine: "Once bipolar disorder could be treated with atypicals, rates of diagnoses rose dramatically, especially in children. According to a recent Columbia University study, the number of children and adolescents treated for bipolar disorder rose 40-fold between 1994 and 2003." And according to another study, "one in five children who visited a psychiatrist came away with a prescription for an antipsychotic drug."

A remarkable series published in the Palm Beach Post in May true revealed that the state of  Florida's juvenile justice department has literally been pouring these drugs into juvenile facilities, "routinely" doling them out "for reasons that never were approved by federal regulators." The numbers are staggering: "In 2007, for example, the Department of Juvenile Justice bought more than twice as much Seroquel as ibuprofen. Overall, in 24 months, the department bought 326,081 tablets of Seroquel, Abilify, Risperdal and other antipsychotic drugs for use in state-operated jails and homes for children…That's enough to hand out 446 pills a day, seven days a week, for two years in a row, to kids in jails and programs that can hold no more than 2,300 boys and girls on a given day." Further, the paper discovered that "One in three of the psychiatrists who have contracted with the state Department of Juvenile Justice in the past five years has taken speaker fees or gifts from companies that make antipsychotic medications."

In addition to expanding the diagnoses of serious mental illness, drug companies have encouraged doctors to prescribe atypical anti-psychotics for a host of off-label uses. In one particularly notorious episode, the drugmaker Eli Lilly pushed Zyprexa on the caregivers of old people with Alzheimer's and other forms of dementia, as well as agitation, anxiety, and insomnia. In selling to nursing home doctors, sales reps reportedly used the slogan "five at five"—meaning that five milligrams of Zyprexa at 5 pm would sedate their more difficult charges. The practice persisted even after FDA had warned Lilly that the drug was not approved for such uses, and that it could lead to obesity and even diabetes in elderly patients.

In a video interview conducted in 2006, Sharham Ahari, who sold Zyprexa for two years at the beginning of the decade, described to me how the sales people would wangle the doctors into prescribing it. At the time, he recalled, his doctor clients were giving him a lot of grief over patients who were "flipping out" over the weight gain associated with the drug, along with the diabetes. "We were instructed to downplay side effects and focus on the efficacy of drug…to recommend the patient drink a glass a water before taking a pill before the  meal and then after the meal in hopes the stomach would expand" and provide an easy way out of this obstacle to increased sales. When docs complained, he recalled, "I told them, ‘Our drug is state of the art. What's more important? You want them to get better or do you want them to stay the same--a thin psychotic patient or a fat stable patient.'"

For the drug companies, Shahrman says, the decision to continue pushing the drug despite side effects is matter of cost benefit analysis: Whether you will make more money by continuing to market the drug for off-label use, and perhaps defending against lawsuits, than you would otherwise. In the case of Zyprexa, in January 2009, Lilly settled a lawsuit brought by with the US Justice Department, agreeing to pay $1.4 billion, including "a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind,''the Department of Justice said in announcing the settlement." But Lilly's sale of Zyprexa in that year alone were over $1.8 billion.

Making patients worse
As it turns out, the atypical antipsychotics may not even be the best choice for people with genuine, undisputed psychosis.

A growing number of health professionals have come to think these drugs are not really as effective as older, less expensive medicines which they have replaced, that they themselves produce side effects that cause other sorts of diseases such as diabetes and plunge the patient deeper into the gloomy world of serious mental disorder. Along with stories of success comes reports of people turned into virtual zombies.

Elliott reports in Mother Jones: "After another large analysis in The Lancet found that most atypicals actually performed worse than older drugs, two senior British psychiatrists penned a damning editorial that ran in the same issue. Dr. Peter Tyrer, the editor of the British Journal of Psychiatry, and Dr. Tim Kendall of the Royal College of Psychiatrists wrote: "The spurious invention of the atypicals can now be regarded as invention only, cleverly manipulated by the drug industry for marketing purposes and only now being exposed."

Bottom line: Stop Big Pharma and the parasitic shrink community from wantonly pushing these pills across the population.

Blowing It: Democrats, Unable to Be a Party of the People, are Sinking Themselves

(The Republicans have nothing to offer the people at all except for more bad economic theories that equate to a longer downturn and depression, but they will still win the 2012 elections in a landslide because the Democrats are the most spineless and ineffectual bunch of losers ever assembled. They deserve to be thrashed, but it's to our detriment when the Republicans control govt and stick it to the poor and middle class like they never been stuck before. When history looks back at the period of time from 1900-2020 or so, the Great Depression in the 1930s will be known to them as the Second Greatest Depression because the one that started in 2008 as a recession will really fall down on top of us because there is no one in government capable of legislating us out of this mess. 

We can't trust the market to correct itself because it is controlled by corrupt executives who have bought the politicians we vote into office, who only do the bidding of their corporate masters. The whole system is fucked and has to be rebuilt from the ground up. It will suck, and it will be painful, but it will be necessary, or else corruption becomes ingrained--if it isn't already--and once that takes place, only a total collapse of society can overcome it--a scorched earth, if you will. The disease only dies when the body dies. 

Before we reach that point, we (as in "we the people") have to flex the little power we have left by voting for independent or 3rd party candidates. No Democrats, no Republicans. And we protest peacefully. The only revolution that will work is a peaceful and bloodless one. The first time a drop of blood is spilled in the coming revolution, it's over because the corporate govt. has the really hardcore weapons and an army of foreign mercenaries ready to take on the people and those soldiers of the armed forces who refuse to fight against their fellow citizens and/or who support the revolution. 

We would lose an armed and bloody revolution and things would get even worse. It has to be peaceful, it has to be widespread. It only has to be more than 6% of the population to be effective, too. That's all it took to win the Revolutionary War--6% of the Colonial population stood against the British and won.--jef)

+++

Sunday, July 17, 2011 by CommonDreams.org
by Dave Lindorff

The smoking ruin that is the the Obama White House, and the rotting corpse that is the Democratic Party, have, incredibly, together been boxed into a corner by, of all things, the certifiably insane Republican Party.

Military vs. Education spending around the globe
(US in company of Iran, China, Russia, UAE and India)
This amazing situation has resulted not through any brilliant strategy on the part of the Republicans, but by the self-inflicted wounds of the Democrats.

Faced with a collapsing economy that is at serious risk of performing a reprise of the Great Depression, Congressional Democrats and President Obama were in a perfect position to grab the flag and run home with it by declaring war on unemployment and on the party that has unequivocally declared itself openly to be the standard bearer of the wealthy and powerful.

All the president and Congressional Democrats had to do was announce that Social Security, Medicare, education and programs to protect the poor were all off limits in any discussion of the federal budget, and to declare an immediate 25% cut in military spending, as called for earlier by Rep. Barney Frank (D-MA), the ranking member of the House Financial Services Committee.

How hard would that have been to do? The polls show it’s what the public wants. Any elected official who did this, particularly someone elected and re-elected as a Democrat, would have been hailed by voters for such a bold action.

According to a Pew Research Center poll conducted in late May and released June 11, 60% of Americans correctly attribute the nation’s enormous deficit primarily to military spending, which eats up 52% of every tax dollar (Social Security and Medicare are entirely funded by separate payroll taxes, and not only have not contributed a single dollar to the federal deficit, but have been routinely borrowed from by the government to finance the deficit in the government’s operating budget caused by military spending). Only 24% blame the deficit on domestic spending other than military (and probably every one of those is a Republican or right-wing independent who likely believes that the earth was created 6000 years ago, and is flat, and who will never vote Democratic no matter what).

That same poll showed that the vast majority of Americans (73%) object to proposals to cut the budget by reducing federal funding for social programs, or federal funding to the states for education, or by reducing Social Security benefits (59%), for example by raising the retirement age.

What the Pew poll finds Americans do support is raising the cap on income subject to the Social Security Tax (FICA), from its current meager level of $106,000, to cover all income (66% in favor). They also favor raising taxes on those households that earn more than $250,000 a year (65% in favor), and they favor getting rid of tax deductions for corporations, which have allowed many wildly profitable companies like Exxon, GE and News Corp to pay no corporate taxes despite earning billions of dollars in profits (62% in favor). They also overwhelmingly favor reducing America’s military operations overseas, where the US currently maintains over 800 bases in countries all over the world, including wealthy allies such as Europe and Japan (62% in favor).

After being deluged with poorly written, simplistic and often ideologically-driven news stories all year hyping the supposed budget “crisis,” the percentage of Americans who say they are worried about the budget deficit has crept up from 24% to 28%, but far more Americans say they are worried about the jobs crisis (38%, up from 34% in March).

If you were a political advisor in the White House, or in the Democratic Congressional Committee or the Democratic National Committee, one would think that seeing those numbers, the strategy going forward would be obvious: declare the country to be facing New Depression, call the Republican Party out as a bunch of know-nothings, end the wars, bring the troops home, slash military spending, call for higher taxes on the rich, and, in Congress, introduce a public jobs program every day of every week, forcing the Republicans to vote them down, one after another through the next election day.

But the Democratic Party, as I said, is a rotting corpse, and it certainly is not an organization that sees itself as fighting for the common man and woman.

As for the White House political team, and the president himself, they seem to have long since lost their grip on reality.

The president has been hanging around with Wall Street bankers, taking their money and their self-serving ideas, for so long now he actually thinks like them. Congressional Democrats, like their Republican colleagues, are so covetous of corporate campaign cash and lobbyist perks that, with a few exceptions, they can’t imagine crossing any corporate interests.

This is not a case of Democrats being stupid. You’d have to be far worse than stupid not to see the correct political strategy to adopt at this point.

What has happened is that the Democratic Party is no more. It is, at this point, all about current incumbents gaining the favor of the corporate elite, lulling the public into a non-voting torpor or stupor, and of course, arguing that people worried about the nation’s future should vote for them yet again because “the Republicans are worse.”

In a press conference on Friday, President Obama made some incredible statements, all demonstrably untrue. He said “We are all part of the same country,” and yet he surely knows that when it comes to the leaders of America’s biggest corporations, including GE, whose chairman Jeffrey Immelt he appointed to head his Jobs Council, this is demonstrably false.

While many of these leaders may be Americans by birth, the companies they run and represent earn the majority of their revenues and profits from operations abroad, and are thus, technically speaking, foreign enterprises, with foreign interests that trump any US interests. Obama said, “We are all in this together,” speaking of the supposed debt “crisis,” but of course, he has announced himself ready to cut Social Security and Medicare and Medicaid programs, upon which poor and working class families depend, while leaving the rich largely unscathed. He has said it is the “will of the people” to cut the budget, but to the extent that that is even true, which is highly debatable, the will of the people is actually to cut military spending, not to cut Social Security or Medicare or even budgets for education or Medicaid.

The good news is that an increasing number of Americans appear to be finally realizing that this president is a fraud--a shill for bankers, the corporate interests and the neo-con military establishment who has just been posing as a man of the people.

The bad news is that there is little likelihood of any Third Party arising before 2012 that could seriously contest the national election, meaning that we are probably headed for either more of the same or a for Republican-led government.

The hope has to be that the blatant sell-out of the public interest and the national interest by both parties and by the president is becoming so self-evident that the American public will actually wake up from its media-induced somnolence and will abandon them both.

The institutional obstacles to such an unprecedented rebellion are of course enormous, but then, these are unprecedented times.

No Class Warfare Here!

(So you don't think the banks and financial sector are out to fuck the working man in the ass? Here, read this, shut up!--jef)

+++++


 
Whenever liberals note that the rich are getting richer while everyone else is either treading water or sinking, or that profits are up while wages are down, or, worse yet, that profits are up because wages are down, those liberals are invariably accused by conservatives of fomenting class warfare.

Well, goodness knows, we at the Prospect would never stoop so low. We would, however, refer our readers to the July 11 “Eye on the Market” report by J.P. Morgan Chase Chief Investment Officer Michael Cembalest, which demonstrates conclusively that, well, profits are up because wages are down. (“Eye on the Market” is a newsletter that Chase circulates to its large investors.)

The subject of the July 11 report is corporate profits, in particular, the pre-tax profit margins of the S&P 500, the 500 largest publicly-traded companies based in the U.S. Those profit margins, you’ll be glad to know, are close to record highs, nearing 13 percent of company revenues - their highest levels since the mid-1960s. And since medical costs are far higher today than they were back then, how, you may wonder, have those companies climbed back to the profit margins of those earlier, lest costly, more innocent times?

To answer that question, Cembalest looked at the rise in profit margins “from peak to peak” - that is, from their highpoint in 2000, just before the dot-com bust, to their highpoint in 2007, just before the financial crisis. In those seven years, profit margins rose by roughly 1.3 percent - from just under 11 percent of the S&P 500’s revenues to just over 12 percent. (Today, after dipping in the months after the crash, they’re up to near 13 percent, as we noted above.)

Why did they increase from 2000 to 2007? “There are a lot of moving parts in the margin equation,” Cembalest notes, but “reductions in wages and benefits explain the majority of the net improvement in margins. [Emphasis is Cembalest’s.] This trend has continued; as we have shown several times over the last two years, U.S. labor compensation is now at a 50-year low relative to both company sales and U.S. GDP.”

According to Cembalest’s calculations, the reduction in wages and benefits as a percentage of company revenue is responsible for about 75 percent of the increase in those companies’ profit margins. You can read the report, complete with graphs and charts, here.



In other words, medical costs may be rising, but companies are passing those cost increases on to their workers - that is, if they covering their workers’ medical expenses at all. And wages increases? What are they?

Cembalest notes that bringing 2 billion Asians into the global labor force has had a downward effect on American workers’ wages. He neglects to note that the virtual elimination of unions from the private-sector economy has had a negative effect on wage and benefit levels, too. If no one represents workers when it comes time to divide up company revenues, those workers don’t come out very well. Wealth is redistributed from labor to capital.

I realize we’re getting dangerously close to fomenting class warfare here, but don’t blame us. We’re just reporting the view from J.P. Morgan Chase.

‘Let ‘Em Eat Peas’: An Elitist Mantra for Our Age



The elite of this nation have largely forgotten the rest of us. Wall Street was bailed out; Main Street was sold out.

It has been a challenging week for many people.  While our elected officials have been broadly reported to be at odds about exactly how to raise the debt ceiling or not, millions of Americans have no work, are running out of ways to keep their homes – rented or owned, and struggle even to keep the basic necessities for themselves and their families.

Nurses served soup to hungry folks in Lansing, Michigan. There was a stampede of people hoping to secure low-cost housing in Dallas.

Yet in a glaring display of the inability of this nation’s elected leaders to publicly recognize and address the suffering happening across the country – in every Congressional District and in every state – those who have the power to alleviate some of that suffering have decided it’s time to cut the social safety nets of Medicaid, Medicare and Social Security rather than protect and enhance it.  How that will help the economy is unclear to me.  No one has yet explained to me how allowing more people to go belly up helps us now or in the longer term.

People who are not working, who don’t have homes, who don’t have a weekly paycheck – no matter how meager, who don’t have adequate retirement protection and income, who don’t have healthcare, who don’t have access to healthy foods,  and who may not have a health environment , have a very hard time contributing much at all to their local economies.  It is common sense to me that tax revenues fall ever lower, local and state governments are having budget difficulties unlike those ever seen before, and the entities least able to absorb large losses and a weakened economy are hurting most.

Earlier this week, while chastising the Republicans for not agreeing to a debt ceiling deal that would include his suggestions to cut Medicare and Social Security benefits, President Obama said Congressional members needed to do their work, reach a deal and just “eat their peas.”    That’s insulting not only to the peas but to every one of us who worries that both Republicans and Democrats have so lost their way that cutting benefits that will harm real people in very real ways has now become just another “man up” photo-op moment in a political struggle instead of the horrific and damaging action that it really is.  It was a diminishment of the seriousness of the actions both parties are about to take that will cause great and terrible harm to millions.

While no one knows for sure if Marie Antoinette ever really said, “Let them eat cake,” we do know the elite in France all those years ago in the 1700s were clueless to the cries of people who couldn’t afford bread much less the cake they had been admonished to eat.  It appears that in 2011 in the United States of America, we can now replace that admonition with our own:  “Let them eat their peas.”    That’s just about the size of things from Washington, DC, from my view.

The elite of this nation have largely forgotten the rest of us.   We’ve already sacrificed.  There was no sharing of peas or anything else.  Wall Street was bailed out; Main Street was sold out. And the march goes on to call for “shared sacrifice.”  It’s a ruse of the most horrible kind, and it dishonors those who have gone before us.