Friday, May 10, 2013

Ignoring risks, Shell gears up for production of world's deepest offshore well

Well, fuck the residents of the Gulf of Mexico, the wildlife and sea life there. More deepwater drilling, deeper than before despite the risks. We never learn from our history, we always repeat the same mistakes.

Thursday, May 9, 2013 by Common Dreams
Deeper Than Deepwater: Shell Plans World's Riskiest Offshore Well 
- Jacob Chamberlain, staff writer


Oil giant Royal Dutch Shell announced Wednesday that it will soon begin development of the world's deepest off-shore oil well, in the body of water that is home to the world's largest oil spill—BP's Deepwater Horizon oil disaster of 2010—the Gulf of Mexico.
 
 The well will be drilled almost two miles underwater in the Gulf, which is still reeling from the aftermath of the BP Deepwater disaster that spewed 4.9 million barrels (210 million gallons) of oil from the busted Macondo well over the span of three months. (reports are that it's still spewing oil)

In comparison to BP's Macondo well that began at about 5,100 feet below the water—a precarious operation that ended in catastrophe—Shell's new well will begin at almost twice that depth: 9,500 feet under water. The site of the well, the "Stones field", is 200 miles south-west of New Orleans. Shell's other deep water project, Perdido, at 8,000 feet below the surface, is the well's only rival.

In addition, as the Guardian reports, although Shell's new well is unparallelled, it is not without company:
It comes a day after ExxonMobil said it would start work on a $4bn (£2.6bn) project to develop the Julia oilfield, also in the North American ocean basin, and weeks after BP delayed development of its biggest Gulf of Mexico project – Mad Dog Phase 2 – citing rising costs. [...]
[Shel] has several other projects nearby, including its 900 meter-deep Mars field, where it is adding new infrastructure, plus its Appomattox and Vito discoveries.
Shell is expected to begin production at Stones by 2016.

Local Fights Against Austerity are Growing

A Movement is Afoot
by MARK VORPAHL


Between sequestration, with its damaging impact on workers and the economy, and the billions of dollars in cuts to Social Security, Medicare and other necessary social programs that President Obama is pushing, it is evident that the economic policies of both major parties are not intended to promote a recovery for working people.

You cannot lift up a nation’s economy while slashing away at its consumers’ pocketbooks. In order to justify their defiance of this elementary law, both Republicans and Democrats start talking the language of “austerity,” that is, the notion that economic policy must be guided by reducing budgetary deficits first and foremost, and that workers exclusively must be made to pay the cost.

Policies associated with austerity include the cutting of public programs, privatizing existing government assets, mass layoffs of public workers and wage freezes for those who remain, union busting in the public sector and the revising of labor laws to further enhance the power of employers at the expense of employees.

Enforcing these policies during a recession prevents a recovery. Economic theory predicts this and history demonstrates it. Why, then, would the politicians promote austerity? Because these policies assure that the 1% will be let off the hook from paying their fair share of taxes that help subsidize the social safety net, and will have vast pools of public capital opened up for their private investment.

Why worry about the overall economy when the real power brokers from the corporations and banks are making out just fine with austerity? The message seems clear: As long as Wall Street is enjoying the “recovery,” no one else gets to. Wall Street has used its vast wealth to lobby politicians for policies that are in its interests. In order for working people to climb out of the recession, they will have to organize in order to create their own power base.
Local Struggles

As already noted, austerity is being enforced on a national scale. Below the radar of news headlines, for the most part, the policies of austerity are spreading on a local level as well with even more devastating immediate impact. Along with this, there has been a growing grassroots opposition to austerity starting locally.

This is most visibly the case in Chicago where Mayor Rahm Emanuel plans to sacrifice 54 public schools on the alter of austerity and Obama’s “Race to the Top.” Thirty thousand students from primarily low-income black and Latino neighborhoods will be affected. Rising to confront Mayor Emanuel’s threats has been a grassroots opposition that was built from previous battles linking the Chicago Teachers’ Union’s interests with those of the working class communities at large. This was most evident at a large rally against the school closures on March 27.

In Detroit the movers behind austerity have taken their most politically extreme measures yet, putting the city ahead of the curve for what is likely to develop across the country. Michigan Governor Rick Synder has appointed Kevyn Orr, of Jones Day Law firm, as Detroit’s Emergency Financial Manager. Orr has the power to dismiss elected officials, tear up union contracts, privatize public assets and impose new taxes without a vote. He will use this power to enforce austerity. Though Orr has yet to unveil his plans, there have already been numerous protests and rallies, and the actions are likely to increase.

On the West coast at the end of April, hundreds rallied outside the San Jose City Hall to protest proposed cuts to neighborhood services and Mayor Chuck Reed’s threat to declare a fiscal emergency.

On April 11 in Oregon, a public budget hearing in which the Portland City Council intended to sell $21.5 million in cuts attracted over 400 Portland residents, overwhelming city staff. Many citizens spoke to the need to prevent the cuts and instead raise revenue from corporations rather than handing out taxpayer subsidies to them, an idea that received overwhelming support from attendees.

And at an Oakland City Council budget talk, a packed Chamber booed and jeered a presentation on Oakland’s fiscal future, chanting “Enough is enough!” The City Council is projecting a deficit ranging from $19 million to $26 million. Considering that there has already been a 20 percent reduction in the city’s full-time work force and that the city’s three major non-public safety unions are negotiating new contracts, there was no mood to accept the City Council’s austerity story.

In Newark, Illinois, around 1,000 high school students walked out of class last month to protest deep cuts to the district’s budget. Newark Superintendent Cami Anderson claims the district faces a $57 million deficit. Newark’s high school students, correctly, refuse to accept that they must sacrifice their education in order to fill this hole.

Growing Potential

This list over protests in the last two months is not complete. It does display some patterns, however. It shows how education, public workers and the communities they serve are the primary targets of austerity. That means a lot of people are taking hits.

The list also demonstrates how people become empowered when these constituencies work together in solidarity. Austerity promoters prefer to pit communities and/or unions against each other in a scramble to grab what remains of a shrinking budget pie. The events reported above show that a different reaction is possible — one that will strengthen people’s ability to powerfully confront their local governments.

Finally, these developments show it is necessary to go beyond the budget claims of the city government. Budget deficits are the product of allowing big business tax loopholes, obscenely low tax rates, and subsidies paid for by taxpayers. Those expected to bear the burden of cuts are not responsible for this.

In a time of high unemployment it is necessary to stimulate the economy by creating jobs. This stimulus should be paid for by the 1%.

Those uniting against austerity cuts could also demand what they stand for, that is, a budget that puts jobs, education and neighborhoods first rather than corporate profit. To effectively do so the unions and community groups fighting austerity can work together to build their own budget assembly to counter city governments’ “we are broke” excuses and popularize an alternative.

These local struggles and many more are a confirmation that austerity in the U.S. will be met with a fight. Though they are disconnected in terms of their organizing, they are a response to a national problem. This wave of local grassroots organizing shows the potential exists to galvanize a national movement against austerity.

When Truth and Integrity are Dead-Letter Words

Why are we fucking with Venezuela now? Leave them alone! If they have problems, let them deal with it--oh, but they're an oil rich country. God, our bullshit is SO transparent!


Washington’s Presumption
by PAUL CRAIG ROBERTS


The new president of Venezuela, Nicolas Maduro, is cast in Chavez’s mold. On May 4, he called US president Obama the “grand chief of devils.”

Obama, who has betrayed democracy in America, unleashing execution on American citizens without due process of law and war without the consent of Congress, provoked Maduro’s response by suggesting that Maduro’s newly elected government might be fraudulent. Obviously, Obama is piqued that the millions of dollars his administration spent trying to elect an American puppet instead of Maduro failed to do the job.

If anyone has accurately summed up Washington, it is the Venezuelans.

Who can forget Chevez standing at the podium of the UN General Assembly in New York City speaking of George W. Bush? Quoting from memory: “Right here, yesterday, at this very podium stood Satan himself, speaking as if he owned the world. You can still smell the sulphur.”

Hegemonic Washington threw countless amounts of money into the last Venezuelan election, doing its best to deliver the governance of that country to a Washington puppet called Henrique Capriles, in my opinion a traitor to Venezuela. Why isn’t this American puppet arrested for treason? Why are not the Washington operatives against an independent country–the US ambassador, the counsels, the USAID/CIA personnel, the Washington funded NGOs–ordered to leave Venezuela immediately or arrested and tried for spying and high treason? Why allow any presence of Washington in Venezuela when it is clear that Washington’s intention is to make Venezuela a puppet state like the UK, Germany, Canada, Australia, Turkey, Japan, and on and on.

There was a time, such as in the Allende-Pinochet era, when the American left-wing and a no longer extant liberal media would have been all over Washington for its illegal interference in the internal affairs of an independent country. But no more. As CounterPunch’s Jeffrey St. Clair has recently made clear, the American left-wing remains “insensate to the moral and constitutional transgressions being committed by their champion”–the first black, or half-black, US president– leaving Rand Paul to offer official denunciations against [Washington’s] malignant operations” against independent countries.

Against the Obama regime’s acts of international and domestic violence, “the professional Left, from the progressive caucus to the robotic minions of Moveon.org, lodge no objections and launch no protests.” St. Clair has written a powerful article. Read it for yourself.

I think the American left-wing lost its confidence when the Soviet Union collapsed and the Chinese communists and Indian socialists turned capitalist. Everyone misread the situation, especially the “end of history” idiots. The consequence is a world without strong protests of Washington’s and its puppet states’ war criminal military aggressions, murder, destruction of civil liberty and human rights, and transparent propaganda: “Last night Polish forces crossed the frontier and attacked Germany,” or so declared Adolf Hitler. Washington’s charges of “weapons of mass destruction” are even more transparent lies.

But hardly any care. The Western governments and Japan are all paid off and bought, and those that are not bought are begging to be bought because they want the money too. Truth, integrity, these are all dead-letter words. No one any longer knows what they mean.

The moronic George W. Bush said, in Orwellian double-speak, they hate us for our freedom and democracy. They don’t hate us because we bomb them, invade them, kill them, destroy their way of life, culture, and infrastructure. They hate us because we are so good. How stupid does a person have to be to believe this BS?

Washington and Israel present the world with unmistakable evil. I don’t need to stand at the UN podium after Bush or Obama. I can smell Washington’s evil as far away as Florida. Jeffrey St. Clair can smell it in Oregon. Nicolas Maduro can smell it in Venezuela. Evo Morales can smell it in Bolivia from where he cast out CIA-infiltrated USAID. Putin can smell it in Russia, although he still permits the treasonous “Russian opposition” funded by US money to operate against Russia’s government. The Iranians can smell it in the Persian Gulf. The Chinese can smell it as far away as Beijing.

Homeland Security, a gestapo institution, has “crisis actors” to help it deceive the public in its false flag operations.

The Obama regime has drones with which to silence American citizens without due process of law.

Homeland Security has more than a billion rounds of ammunition, tanks, a para-military force. Detention camps have been built.

Are Americans so completely stupid that they believe this is all for “terrorists” whose sparse numbers require the FBI to manufacture “terrorists” in so-called “sting operations” in order to justify the FBI’s $3 billion special fund from Congress to combat domestic terrorism?

Congress has taxpayers paying the FBI to frame up innocents and send them to prison.

This is the kind of country American has become. This is the kind of “security” agencies it has, filling their pockets by destroying the lives of the innocent and downtrodden.

“In God we trust,” reads the coinage. It should read: “In Satan we follow.”

Wednesday, May 8, 2013

The Secret of the Weak Recovery: We Had a Fucking Housing Bubble with Nothing to Fill the Gap It Created

Monday, May 6, 2013 by Beat the Press / CEPR
by Dean Baker


The problem with economics is not that it's too complicated; the problem is that it's too damn simple. This problem is amply demonstrated by all the heroic efforts made by economists to explain the weakness of the current recovery.

We've had economists tell us that the problem is that we are now a service sector economy rather than a manufacturing economy. The story is that inventory fluctuations explain much of the cycle. Since we don't inventory services, we will have a slower bounceback in terms of production and employment. (There is a simple problem, since we don't inventory services, the downturn should also be less severe in a service dominated economy. How does this story fit with the worst downturn since the Great Depression?)

We've also been told that the problem is underwater homeowners who can't spend like the good old days because they are underwater in their mortgages. The problem with this one is that we only have around 10 million underwater homeowners, the vast majority of whom have relatively modest incomes. The emphasis is on "only" because, while 10 million is a lot of people to be underwater, it is not a lot of people to move the economy.

The median income for homeowners is $70,000. (Median is probably appropriate here rather than average, since it is unlikely that many wealthy people are underwater.) Suppose that being above water would increase consumption by each of these homeowners by $5,000 a year. This is a huge jump in consumption for people with income of $70k. (Do we think these homeowners are saving an average of $5,000 a year now?) This would lead to an increase in annual consumption of $50 billion a year or less than 0.3 percent of GDP. This would be a nice boost to output, but it would not qualitatively change the nature of the recovery.

Today we have Robert Samuelson telling us that the reason employers are not hiring is uncertainty:
"Businesses have become more risk-averse. They’re more reluctant to hire. They’ve raised standards. For many reasons, they’ve become more demanding and discriminating. These reasons could include (a) doubts about the recovery; (b) government policies raising labor costs (example: the Affordable Care Act’s insurance mandates); (c) unwillingness to pay for training; and (d) fear of squeezed profits."

Hmmm, they're worried about squeezed profits when the profit share of income is at its highest level in more than 60 years? The story of the Affordable Care Act raising costs could at best only explain the behavior of a small group of businesses (firms with close to 50 employees who do not currently provide health care insurance).

But there is a simple way to test the idea that firms would otherwise be hiring but are deterred due to uncertainty about the future: look at the length of workweeks. The logic is simple; increasing hours per worker and hiring more workers are alternative ways to meeting increased demand for labor. Adding work hours involves none of the commitments that apply to hiring addtional workers. If uncertainty, as opposed to lack of demand, is keeping businesses from hiring, then we should be seeing a big increase in the length of the average workweek.

We don't. The length of the average workweek fell by 0.2 hours to 34.4 hours in April. This compares to an average of more than 34.5 hours in the 2006 and 2007. In short there is no evidence that employers are seeing the sort of demand that would justify increasing the size of the workforce but are being kept from doing so because of the concerns raised by Samuelson.

If none of these stories, or any of the others that economists develop to stay employed, explain the length of the downturn, what does? Well, it's pretty damn simple, we had a housing bubble driving the economy before the collapse and there is nothing to fill the gap created. The bubble led residential construction to soar to more than 6.0 percent of GDP at the peak of the boom in 2005. It is now a bit over 2 percent of GDP implying a loss in annual demand of more than $600 billion. The $8 trillion in housing wealth created by the bubble led the saving rate to fall to almost zero due to the housing wealth effect (people increase annual spending by 5-7 cents for each dollar in housing wealth). With the saving rate hovering near 4 percent, we have lost close to $400 billion in annual consumption demand.

The cumulative loss of annual demand is more than $1 trillion. What did we think would replace this demand? Investment in equipment and software is actually close to its pre-recession level measured as a share of GDP. Furthermore, this component of investment has never been a much larger share of GDP, even in the Internet bubble years. Why would anyone expect it to expand rapidly at a time when many firms still have large amounts of excess capacity? (Structure investment is depressed because there was a bubble in non-residential construction as well, leading to large amounts of excess capacity in most areas of non-residential construction.)

Do we somehow think that consumers will spend at the same rate after they have lost $8 trillion in housing wealth as when they had this wealth? Why? Net exports could fill the gap, but the dollar has to fall. Net exports could fill the gap, but the dollar has to fall. (I repeated that one in case any economists are reading.) The value of the dollar is the main determinant of our trade deficit, if we want a lower deficit then we will need a sharp decline in the dollar, which has not happened.

This only leaves the government sector to fill the gap with deficits, which our Serious People types have demanded that we hold down. So, based on the good old intro econo that tens of millions have been subjected to, we know that this recovery will be slow and weak. We simply lack a component of demand to fill the gap created by the housing bubble.
If it seems absurd that economists can't see something this simple, readers should realize that this is a common problem. Just last Friday Robert Samuelson had a useful column that pointed out the huge imbalances that persist in the euro zone and pointed out that the region's crisis is far from over. While he is exactly right, the amazing part of the story is that competent economists somehow did not see these imbalances developing.

As I pointed out, several of the current crisis countries already had incredible trade deficits long before the crash as the world's leading economists were celebrating the "Great Moderation."


Current Account Balance as a Percent of GDP
Country 2003 2004 2005 2006 2007 2008
Greece -6.533 -5.785 -7.637 -11.388 -14.609 -14.922
Portugal -6.433 -8.327 -10.323 -10.685 -10.102 -12.638
Spain -3.508 -5.248 -7.353 -8.961 -9.995 -9.623
                                           Source: International Monetary Fund.


How did the folks at the European Central Bank think that these deficits would fall to a sustainable level without some sort of disastrous crisis? This one should have been simple, but the world's leading economists all missed it.

I recall back in the 1990s and the last decade when both Republican and Democratic economists wanted to invest Social Security funds in the stock market. (Democrats generally wanted to invest the fund collectively rather through individual accounts.) I tried to point out that both were assuming impossible rates of return given the fact that the stock market was at price to earnings ratios that were far higher than historic averages.

When this issue was highlighted in the debate over President Bush's privatization plan (see the No Economist Left Behind test) Brad DeLong suggested that we do a paper on it for Brookings conference. I didn't think that this simple arithmetic could warrant a Brookings paper, even though the issue was hugely important. To get it in Brad (along with Paul Krugman) added a model of optimal consumption paths given a declining rate of labor force growth. While the model was fine, it had nothing to do with the basic issue that the stock market was over-valued at the time that people were thinking of investing workers' Social Security money in it. The model did add sufficient complexity so that we get the Brookings crew to take the simple argument seriously.

The same story held during the housing bubble years. I had many people ask me why I didn't publish anything in journals on the bubble in the years 2002-2007 when I was writing for CEPR's website and popular publications. The reason is that it was too simple a story for any serious journal.

The basic story was that house prices had diverged sharply from their long-term trend and there was no plausible story rooted in the fundamentals of the housing market that could explain this divergence. While this was certainly compelling in my view, the American Economic Review is not going to publish an article that shows house prices just keeping pace with inflation for 100 years and then suddenly rising by 70 percent in real terms from 1996-2006. It would be necessary to somehow make the story complicated to get economists to take it seriously.

To my view this is the fundamental problem of economics. There is a need to find ways to make economic issues complex even when they can be explained by the simple economics that we teach in econ 101. This is not a pretty picture.

And Then There Was One: Imperial Gigantism and the Decline of Planet Earth

Tuesday, May 7, 2013 by TomDispatch.com
by Tom Engelhardt



It stretched from the Caspian to the Baltic Sea, from the middle of Europe to the Kurile Islands in the Pacific, from Siberia to Central Asia. Its nuclear arsenal held 45,000 warheads, and its military had five million troops under arms. There had been nothing like it in Eurasia since the Mongols conquered China, took parts of Central Asia and the Iranian plateau, and rode into the Middle East, looting Baghdad. Yet when the Soviet Union collapsed in December 1991, by far the poorer, weaker imperial power disappeared.(Artist: Christopher Zacharow)

And then there was one. There had never been such a moment: a single nation astride the globe without a competitor in sight. There wasn’t even a name for such a state (or state of mind). “Superpower” had already been used when there were two of them. “Hyperpower” was tried briefly but didn’t stick. “Sole superpower” stood in for a while but didn’t satisfy. “Great Power,” once the zenith of appellations, was by then a lesser phrase, left over from the centuries when various European nations and Japan were expanding their empires. Some started speaking about a “unipolar” world in which all roads led... well, to Washington.

To this day, we’ve never quite taken in that moment when Soviet imperial rot unexpectedly -- above all, to Washington -- became imperial crash-and-burn. Left standing, the Cold War's victor seemed, then, like an empire of everything under the sun. It was as if humanity had always been traveling toward this spot. It seemed like the end of the line.

The Last Empire?

After the rise and fall of the Assyrians and the Romans, the Persians, the Chinese, the Mongols, the Spanish, the Portuguese, the Dutch, the French, the English, the Germans, and the Japanese, some process seemed over. The United States was dominant in a previously unimaginable way -- except in Hollywood films where villains cackled about their evil plans to dominate the world.

As a start, the U.S. was an empire of global capital. With the fall of Soviet-style communism (and the transformation of a communist regime in China into a crew of authoritarian “capitalist roaders”), there was no other model for how to do anything, economically speaking. There was Washington’s way -- and that of the International Monetary Fund and the World Bank (both controlled by Washington) -- or there was the highway, and the Soviet Union had already made it all too clear where that led: to obsolescence and ruin.

In addition, the U.S. had unprecedented military power. By the time the Soviet Union began to totter, America's leaders had for nearly a decade been consciously using “the arms race” to spend its opponent into an early grave. And here was the curious thing after centuries of arms races: when there was no one left to race, the U.S. continued an arms race of one.

In the years that followed, it would outpace all other countries or combinations of countries in military spending by staggering amounts. It housed the world’s most powerful weapons makers, was technologically light years ahead of any other state, and was continuing to develop future weaponry for 2020, 2040, 2060, even as it established a near monopoly on the global arms trade (and so, control over who would be well-armed and who wouldn’t).

It had an empire of bases abroad, more than 1,000 of them spanning the globe, also an unprecedented phenomenon. And it was culturally dominant, again in a way that made comparisons with other moments ludicrous. Like American weapons makers producing things that went boom in the night for an international audience, Hollywood's action and fantasy films took the world by storm. From those movies to the golden arches, the swoosh, and the personal computer, there was no other culture that could come close to claiming such a global cachet.

The key non-U.S. economic powerhouses of the moment -- Europe and Japan -- maintained militaries dependent on Washington, had U.S. bases littering their territories, and continued to nestle under Washington’s “nuclear umbrella.” No wonder that, in the U.S., the post-Soviet moment was soon proclaimed “the end of history,” and the victory of “liberal democracy” or “freedom” was celebrated as if there really were no tomorrow, except more of what today had to offer.

No wonder that, in the new century, neocons and supporting pundits would begin to claim that the British and Roman empires had been second-raters by comparison. No wonder that key figures in and around the George W. Bush administration dreamed of establishing a Pax Americana in the Greater Middle East and possibly over the globe itself (as well as a Pax Republicana at home). They imagined that they might actually prevent another competitor or bloc of competitors from arising to challenge American power. Ever.

No wonder they had remarkably few hesitations about launching their incomparably powerful military on wars of choice in the Greater Middle East. What could possibly go wrong? What could stand in the way of the greatest power history had ever seen?

Assessing the Imperial Moment, Twenty-First-Century-Style

Almost a quarter of a century after the Soviet Union disappeared, what’s remarkable is how much -- and how little -- has changed.

On the how-much front: Washington’s dreams of military glory ran aground with remarkable speed in Afghanistan and Iraq. Then, in 2007, the transcendent empire of capital came close to imploding as well, as a unipolar financial disaster spread across the planet. It led people to begin to wonder whether the globe’s greatest power might not, in fact, be too big to fail, and we were suddenly -- so everyone said -- plunged into a “multipolar world.”

Meanwhile, the Greater Middle East descended into protest, rebellion, civil war, and chaos without a Pax Americana in sight, as a Washington-controlled Cold War system in the region shuddered without (yet) collapsing. The ability of Washington to impose its will on the planet looked ever more like the wildest of fantasies, while every sign, including the hemorrhaging of national treasure into losing trillion-dollar wars, reflected not ascendancy but possible decline.

And yet, in the how-little category: the Europeans and Japanese remained nestled under that American “umbrella,” their territories still filled with U.S. bases. In the Euro Zone, governments continued to cut back on their investments in both NATO and their own militaries. Russia remained a country with a sizeable nuclear arsenal and a reduced but still large military. Yet it showed no signs of “superpower” pretensions. Other regional powers challenged unipolarity economically -- Turkey and Brazil, to name two -- but not militarily, and none showed an urge either singly or in blocs to compete in an imperial sense with the U.S.

Washington’s enemies in the world remained remarkably modest-sized (though blown to enormous proportions in the American media echo-chamber). They included a couple of rickety regional powers (Iran and North Korea), a minority insurgency or two, and relatively small groups of Islamist “terrorists.” Otherwise, as one gauge of power on the planet, no more than a handful of other countries had even a handful of military bases outside their territory.

Under the circumstances, nothing could have been stranger than this: in its moment of total ascendancy, the Earth’s sole superpower with a military of staggering destructive potential and technological sophistication couldn’t win a war against minimally armed guerillas. Even more strikingly, despite having no serious opponents anywhere, it seemed not on the rise but on the decline, its infrastructure rotting out, its populace economically depressed, its wealth ever more unequally divided, its Congress seemingly beyond repair, while the great sucking sound that could be heard was money and power heading toward the national security state. Sooner or later, all empires fall, but this moment was proving curious indeed.

And then, of course, there was China. On the planet that humanity has inhabited these last several thousand years, can there be any question that China would have been the obvious pick to challenge, sooner or later, the dominion of the reigning great power of the moment? Estimates are that it will surpass the U.S. as the globe’s number one economy by perhaps 2030.

Right now, the Obama administration seems to be working on just that assumption. With its well-publicized “pivot” (or “rebalancing”) to Asia, it has been moving to “contain” what it fears might be the next great power. However, while the Chinese are indeed expanding their military and challenging their neighbors in the waters of the Pacific, there is no sign that the country’s leadership is ready to embark on anything like a global challenge to the U.S., nor that it could do so in any conceivable future. Its domestic problems, from pollution to unrest, remain staggering enough that it’s hard to imagine a China not absorbed with domestic issues through 2030 and beyond.

And Then There Was One (Planet)

Militarily, culturally, and even to some extent economically, the U.S. remains surprisingly alone on planet Earth in imperial terms, even if little has worked out as planned in Washington. The story of the years since the Soviet Union fell may prove to be a tale of how American domination and decline went hand-in-hand, with the decline part of the equation being strikingly self-generated.

And yet here’s a genuine, even confounding, possibility: that moment of “unipolarity” in the 1990s may really have been the end point of history as human beings had known it for millennia -- the history, that is, of the rise and fall of empires. Could the United States actually be the last empire? Is it possible that there will be no successor because something has profoundly changed in the realm of empire building? One thing is increasingly clear: whatever the state of imperial America, something significantly more crucial to the fate of humanity (and of empires) is in decline. I’m talking, of course, about the planet itself.

The present capitalist model (the only one available) for a rising power, whether China, India, or Brazil, is also a model for planetary decline, possibly of a precipitous nature. The very definition of success -- more middle-class consumers, more car owners, more shoppers, which means more energy used, more fossil fuels burned, more greenhouse gases entering the atmosphere -- is also, as it never would have been before, the definition of failure. The greater the “success,” the more intense the droughts, the stronger the storms, the more extreme the weather, the higher the rise in sea levels, the hotter the temperatures, the greater the chaos in low-lying or tropical lands, the more profound the failure. The question is: Will this put an end to the previous patterns of history, including the until-now-predictable rise of the next great power, the next empire? On a devolving planet, is it even possible to imagine the next stage in imperial gigantism?

Every factor that would normally lead toward “greatness” now also leads toward global decline. This process -- which couldn’t be more unfair to countries having their industrial and consumer revolutions late -- gives a new meaning to the phrase “disaster capitalism.”

Take the Chinese, whose leaders, on leaving the Maoist model behind, did the most natural thing in the world at the time: they patterned their future economy on the United States -- on, that is, success as it was then defined. Despite both traditional and revolutionary communal traditions, for instance, they decided that to be a power in the world, you needed to make the car (which meant the individual driver) a pillar of any future state-capitalist China. If it worked for the U.S., it would work for them, and in the short run, it worked like a dream, a capitalist miracle -- and China rose.

It was, however, also a formula for massive pollution, environmental degradation, and the pouring of ever more fossil fuels into the atmosphere in record amounts. And it's not just China. It doesn’t matter whether you’re talking about that country's ravenous energy use, including its possible future “carbon bombs,” or the potential for American decline to be halted by new extreme methods of producing energy (fracking, tar-sands extraction, deep-water drilling). Such methods, however much they hurt local environments, might indeed turn the U.S. into a “new Saudi Arabia.” Yet that, in turn, would only contribute further to the degradation of the planet, to decline on an ever-larger scale.

What if, in the twenty-first century, going up means declining? What if the unipolar moment turns out to be a planetary moment in which previously distinct imperial events -- the rise and fall of empires -- fuse into a single disastrous system?

What if the story of our times is this: And then there was one planet, and it was going down.

ALEC's Latest "Transparency" Move: Asserting Immunity From Freedom of Information Laws



by Brendan Fischer 
 





Shortly after the American Legislative Exchange Council (ALEC) told the press "we really believe in transparency," new documents show the organization directing legislators to hide ALEC meeting agendas and model legislation from the public. This effort to circumvent state freedom of information laws is being called "shocking" and "disturbing" by transparency advocates.

ALEC disclaimer

A disclaimer published at the bottom of meeting agendas and model bills from ALEC's most recent meeting in Oklahoma City, obtained by the Center for Media and Democracy, reads: "Because this is an internal ALEC document, ALEC believes it is not subject to disclosure under any state Freedom of Information or Public Records Act."

"If you receive a request for disclosure of this or any other ALEC document under your state's Freedom of Information or Public Records Act, please contact Michael Bowman, Senior Director, Policy and Strategic Initiatives," it says.

For a private organization to assert that its interactions with state legislators are not subject to public records laws is "shocking," says Mark Caramanica, Freedom of Information Director at the Reporters Committee for Freedom of the Press.
"Private individuals or organizations cannot simply label a document private and say it is private on their own. It is not their decision to make."

Legislators attend ALEC meetings in their official capacity, and ALEC has claimed that they do so "on behalf of and for the benefit of the state." Under almost every state’s public records law, all documents related to official business are considered public unless there is a specific exemption, defined and passed by the legislature, and embodied in the statutes. "ALEC cannot create exemptions of [its] own imagination," Caramanica told the Center for Media and Democracy.

The disclaimer is "disturbing," says Christa Westerberg, Wisconsin Freedom of Information Council Vice President, particularly because it "suggests legislators will contact ALEC first when they get a request for records and may be advised by ALEC on what to do."

"Courts and other entities with authority to interpret state sunshine laws, and not ALEC, should determine whether ALEC documents are subject to disclosure under any state’s public records law," she told CMD.

ALEC boasts that over 1,000 of its model bills are introduced each year and at least 1 in 5 become law. But despite its significant influence over state law and policy, ALEC conferences are closed to the press and public, and the only way Americans have had any notion of what happens in those meetings is through public records requests for the agendas and model bills.

Even before the "disclaimer" was discovered ALEC and its member legislators had been taking pains to avoid public records requests. Last year, CMD prevailed in a lawsuit against Wisconsin legislators who had tried evading the public records law by shifting their ALEC correspondence to a personal email account (like Gmail or Yahoo), which they erroneously asserted meant the emails were not subject to public records requests. And ALEC has begun sending legislators advance agendas and model bills via a link, which expires within 72 hours, to an Internet drop box where they can access the relevant documents; in many cases, when legislators respond to a request for ALEC records, they only release a scanned copy of the email invitation, rather than the contents of the folder available via the link. It is not known whether legislators refused to release these documents because ALEC asserted its immunity from public records law.

In March, ALEC published some of its model bills online in a move the organization claimed showed its commitment to transparency. "We really believe in transparency," alleged ALEC spokesperson Bill Meierling. But its public records "disclaimer" and other actions indicate the organization is far more interested in maintaining secrecy.

"This certainly raises the question," asks Caramanica, “what are their motives for trying to keep their documents secret?”

ALEC legislators cannot have it both ways. They cannot use public money to attend ALEC meetings -- as the Republican-led South Dakota legislature recently approved -- or claim that accepting corporate-funded flights and hotel rooms for ALEC travel are part of their legitimate work responsibilities, then conspire with ALEC to hide documents and information from their constituents that should be accessible under freedom of information laws.

New survey shows almost a third of bee colonies in the US died last winter

Tuesday, May 7, 2013 by Common Dreams
Buzz! Buzz! Silence
by Andrea Germanos, staff writer

Results of a new survey released Tuesday paint another dire picture of the population of bees in the United States.

Nearly a third of managed honey bee colonies were lost this past winter, the United States Department of Agriculture (USDA), the Bee Informed Partnership and the Apiary Inspectors of America (AIA) found, a 42% increase in loss over the previous winter.

But USDA bee expert Dr. Jeff Pettis, who worked on the study, also noted that "the 31 percent figure likely under-represents the losses, as we saw many weak colonies that were not actually dead."

Rather than showing evidence of colony collapse disorder (CCD), Pettis said most colonies "dwindled away rather than suffering from the sudden onset of CCD."

70% of the survey respondents reported a loss over 15% — a loss percentage deemed "acceptable."

The 6 year average total loss is also far above that "acceptable" level, averaging 30.5%.

The analysis was done by a team of 11 researchers led by Dennis vanEngelsdorp, an entomologist at the University of Maryland and director of the Bee Informed Partnership.

“We are one poor weather event or high winter bee loss away from a pollination disaster.”

Dr. Jeff PettisVanEngelsdorp pointed to the Midwest's drought as being one of the possible factors, as the bees may have been forced to look to flowering crops for nectar rather than wildflowers, and those crops may have had "unusually high" levels of pesticides.

Also a potential factor, stated vanEngelsdorp, is the fact that high corn prices lead to cornfields replacing some prairie and shrubs.

In a separate report released last week by the USDA and EPA on honey bee health, multiple factors were cited as responsible for the declining bee population, including pesticides.

The study highlighted the need for bees for the nation's food security. With bee populations declining year after year, Pettis said, “We are one poor weather event or high winter bee loss away from a pollination disaster.”

Following the study, Paul Towers, media director with the Pesticide Action Network, told IPS that the EPA/USDA study shows that action does need to happen, and fast:
“The report makes a compelling case that multiple factors are at play and that we do need to take action, but this needs to be done far more quickly,” Paul Towers, media director with the Pesticide Action Network, an advocacy group, told IPS.

“The five-to-ten-year timeframe these agencies are now saying they will follow is not fast enough. In fact, there is great imperative here: bees are a clear indicator of the overall health of our agricultural system, so if we’re unable to protect the pollinators we’ll put our entire agricultural system at risk.”
++++++++++

If this trend continues, we are clearly seeing our own extinction event, unraveling in slow motion. 5 years after most of the bees are dead, we will die. Humanity ceases to exist because it killed the bees.--jef

The Double Bed of Business and Government

Interpenetration in the Obama Administration
by NORMAN POLLACK


Oh Mary Jo, we eagerly awaited your cleaning up of the stench, crud, dreck of SEC—all, and obviously, in vain, as your appointment to head the Commission once more reveals the Obama Administration’s mighty efforts on behalf of the American Business System, especially its most problematic, exploitative, illegal features, i.e., those which create the greatest unearned profits for the perpetrators of economic skullduggery and sleight-of-hand, now, as the latest attraction, derivatives trading. Obama has found his soul mate in regulation in Mary Jo White, just as in paramilitary operations in John O. Brennan. Government, at its finest hour of political treachery in serving the American people.

Let’s get serious. The United States throughout its historical development has interiorized the structure and values of capitalism, a puristic capitalist-institutional formation, still more greatly accelerated since the aftermath of World War II, to a far more intensified expression than any advanced industrial nation, thereby making America and capitalism itself synonomous, identical, indistinguishable one from the other—a synchronism of the two transcending party, and with thorough bipartisan support, creating clear boundaries to social change and political protest. Obama is merely the latest spear carrier in a continuous line—with few notable exceptions in the nation’s past—of presidents ministering to the needs of dominant groups and attempting, sometimes unsuccessfully (witness the latest financial crisis and its still unfolding consequences), to satisfy the imperative needs of the economic system. Rather than seek, even within capitalism, the moderation of its war-prone, imperialist, underconsumptionist tendencies and societal class differentials, thereby adding some degree of justice and melioration to its execution and operations, America, now particularly under Obama, is going for broke to liberate its oppressive, even nightmarish, inner reason and potential, in which militarism, deregulation, and an economic freefall for working people become increasingly evident.

In this light, Mary Jo White at SEC, rather than a disappointment (for those who still hold out hope of Obama’s essential honesty as dedicated to social welfare and structural democracy), is par for the course, one that started off with the appointments of Geithner, Summers, and Robert Rubin’s policies, ideas, and confederates under Clinton, the placation of and support for Big Pharma and health insurers under Obamacare, the more pointed assistance to the defense, nuclear, and oil industries, and the heartfelt embrace of Wall Street, and continues in a sophisticated corporatism—the real definition of liberalism—far more dangerous for its realization of a social order founded on monopolism and wealth concentration than is the unsystematic business favoritism and chisling mindset, the penny ante mode of capitalist development, which fails to marshall the full resources of the State, of the Republicans.

Obama has a step up on his predecessors—for reasons still difficult to determine, given that his personal acumen and brightness have been grossly exaggerated. Perhaps he simply has allowed the gathering historical forces inhering in the US’s global posture, in which America can no longer dictate the course of world events, to coalesce in his administration: an aggressive defensiveness against the very democratization his candidacy supposedly represented. Capitalism serves as the battering ram for the restoration of American world power. Its helpmate, more than previously, is naked force displayed as the doctrine of permanent war, the military juggernaut adjusted to the specific theaters of concern from naval power in the Pacific to drones for targeted killing, intervention, CIA activities of regime change, the JSOC paramilitary operations, springing up throughout the globe.

Interpenetration, the integrative, instead of merely parallel, structures, values, relations of mutual dependence and inspiration, of business and government, has in America since the time of Theodore Roosevelt (Gabriel Kolko’s Triumph of Conservatism, after more than a half-century, still has not been assimilated into the collective realization that REFORM is largely big-business inspired, to achieve the consolidation of wealth and, relatedly, the security of capitalism at home and in the world, free from radical challenges, and even that of lesser-capitalist competitors), provided the foundations designed to ensure that capitalism in America, because inseparable from the State, could rely on government for its stabilization and global expansion. Now, under Obama, there is no longer any question (one muted or nonapplicable for long stretches of the past, frequently embodied in the strategy of the Open Door) that a mainspring of capitalism is the reliance on the military, for purposes of counterrevolution abroad, economic stimulation at home, and in both arenas, a system of power fusing national and international purpose to create Fortress Capitalism as an eternal source of wealth and leadership.

Welcome Mary Jo; do your mischief with respect to derivatives, themselves already mischievous enough, knowing that you will sleep soundly in the knowledge that, if your Boss can sleep soundly after personally selecting targets for assassination, you too deserve restful slumber for participating in the wreckage of an economy whose victims are all but assassinated in their despair, loss of employment, and for some, foraging in the ash cans as in days of yore—under your counterpart servants of wealth.

Here follows my New York Times Comment (May 6) on its editorial disappointment on Ms. White’s record as the newly-installed head of the SEC. My fond wish is that Times disappointment will turn into forthright and fundamental criticism of the whole shebang (but I’m not holding my breath):

The Times’ analysis of SEC partiality to banks and their role in the dervatives trade is wise, sound, and timely, but lacking fuller context: Obama’s wider posture of deregulation, exemplified by the appointment of White but actually running through the regulatory apparatus. SEC, FDA, EPA, in areas crucial to the welfare of the American public, we are being left to hang out to dry. The issue of derivatives cannot be treated in isolation: In all respects, internal corporate-banking hegemony defines the American scene, suitably disguised in liberal rhetoric.

When will the con game stop? Probably not for a long time, as both major parties contribute to the widening of economic and class differentials, accompanied by the weakening of the social safety net. Symbolically, derivatives signify the splitting apart of America–not the 1% vs. the 99%, too simplistic by far, but a structural cleavage sufficiently acute to result in underconsumption, unemployment, and the need to rectify domestic hardship through greater militarism, both as distraction and as the source of further enrichment for America’s wealthy.

Yes, we are witnessing the financialization of the US economy, introducing basic distortions across the board, from loss of manufactures to further financial crises. As a nation, we seem not to learn, possibly even incapable of learning. But I’m glad The Times in this editorial helps to open the can of worms.

Financial Institutions Admit Austerity Failed

The Market Giveth and Taketh Away
by KEN KLIPPENSTEIN


The first part of 2013 has been something of a confessional period for the economic managerial class. The IMF’s chief economist, Olivier Blanchard, conceded that “forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation.” (‘Fiscal consolidation’ is a polite way of saying ‘austerity’.) U.S. Treasury Secretary Jack Lew admitted that “there has to be a focus on what the impact on unemployment is” of austerity policies; also, that “you cannot be in the world where austerity just leads to more austerity”; and finally, that “the rush to do all the [austerity] front-end has actually made the problem harder in some countries.” He even suggested that “Europeans need to look as well what they can do to generate more demand in their economy.”

Managing Director of the IMF, Christine Lagarde, confessed that “we don’t see the need to do upfront, heavy duty fiscal consolidation as was initially planned”; and “the best way to create jobs is through growth.” EU Economic and Monetary Affairs Commissioner Olli Rehn said that the IMF and the US’ recent calls for less austerity “are preaching to the converted.”

Meanwhile, Carmen Reinhart and Kenneth Rogoff, the Harvard economists responsible for one of the more influential studies used to defend austerity, have admitted that “austerity is not the only answer to a debt problem.” This came after three economists at the University of Massachusetts accused them of “selective exclusion” of data. Reinhart and Rogoff have since admitted that their critics “correctly identified a spreadsheet coding error.” In my view, their most striking error is being ignored: the failure to recognize that austerity didn’t work during the Great Depression and won’t work now, during the Great Recession. Anyone can make a spreadsheet error. It takes a Harvard professor to forget basic history.

It’s not particularly interesting when doctrinal managers like Reinhart and Rogoff change positions. The ability to turn on one’s heel and switch from one ideological conviction to its opposite, like a schoolchild running the pacer test, is probably the ideological manager’s main duty. The ones who collapse from exhaustion are weeded out long before they become IMF chiefs. What’s more interesting is why the coach is having them run in the opposite direction now.

In a correspondence I had with economist Jack Rasmus, he explained the economic managerial class’ reversal:
First, it may signal a future shift to business-investor tax cuts as a preferred ‘stimulus’ (which doesn’t work either). However, since tax cuts will raise the deficit, they have to justify an increase in the deficit if they’re going to move ahead with the tax cuts. Thus, the attack on ‘austerity’ (stimulus in reverse) as not as productive as they thought is first necessary. On the other hand, it’s important to note that the shift to ‘stimulus’ doesn’t mean a shift from social spending cuts; it means a shift to more deficit via corporate tax cuts.

Second, the abandonment of austerity may represent a prelude to a still greater reliance on monetary policy. Let the central bank bear all the burden (and blame) and take the heat off politicians more visibly responsible for spending cut austerity. Monetary policy (i.e. increasing liquidity to banks, investors and businesses) has in turn two prime goals. One: to boost the stock and financial securities markets and ensure more profits for speculators, and, second, to lower their currency’s exchange value to allow competition with other currency centers…A sure sign that capitalist policymakers are getting more desperate and trying to grow by beggaring their competitors. It’s competitive devaluations—not by fiat as in the 1930s—but by liquidity-exchange rate manipulation.

Whatever the case may be, the financial institutions’ current ideological inflection should probably be regarded with suspicion. It is much too sharp an inflection to indicate any sort of honest change in thinking.

The solutions that the economic managers are advocating demonstrate a useful point. They simultaneously demand stimulus and deficit reduction. As Treasury Secretary Jack Lew put it, “We shouldn’t choose between growth and job creation and getting our fiscal house in order.” This is like a child wishing he could stay up all night and get a good night’s sleep: either choice negates the other. These mental exercises in self-contradiction further illustrate the way in which the elite must accept mutually conflicting views. Orwell called this ‘doublethink.’

Today we call it things like ‘nuance.’ Example: Reinhart and Rogoff said that “the recent debate about the global economy has taken a distressingly simplistic turn,” by which they mean austerity is finally being firmly rejected. In elite circles, ‘simplistic’ explanations are any which involve elementary truths: that authentic stimulus increases the deficit, as do corporate tax cuts; that privatization makes things unaccountable to the public; that a middle and under-class recovery requires an upper-class tax. (These simple facts are incomprehensible to the elite because they suggest a world in which extreme wealth causes injustice rather than eradicates it.) Derivatives and credit default swaps, on the other hand, are ‘nuanced’ tools which anyone without an advanced degree in finance shouldn’t comment on.

An outgrowth of this tendency toward ‘nuance’ is the peculiarly mystical tone that the economics profession has taken on. For example, the view that the business cycle will inevitably restore us to prosperity, and that the present downturn is just some sort of random misfortune. I recall a friend in university remarking that he planned to enter a PhD program in hopes of “waiting out the recession,” as though it were a spell of rain or some other act of god. The market giveth and taketh away. To suggest any sort of human agency behind these downturns—namely, a relationship between the wealth and poverty—is to commit the dreaded error of viewing economics as a zero-sum game. This of course is a fallacy, because economics is a magical process by which the concentrated wealth simultaneously diffuses its wealth (i.e. trickle-down theory).

Delusions of Economic Recovery

Inside the Latest Jobs Report
by PAUL CRAIG ROBERTS


Dave Kranzler of Golden Returns Capital declares the April payroll jobs report that was released on May 3 by the Bureau of Labor Statistics to be “fictitious.”

Statistician John Williams, of shadowstats.com, says both the jobs report and unemployment rate are “nonsense.”

I agree with both. But don’t expect the financial press to report the facts.

Let’s take a walk through the BLS report and you can arrive at your own conclusion.

The BLS report says that the private sector created 185,000 service jobs in April. Even if this report were true, it would have negligible effect on the unemployment rate as about 127,000 new jobs are needed each month just to stay even with population growth and current unemployment rate.

But is the BLS report true?

We can answer that question by examining the areas where the jobs reportedly materialized:

  • 29,300 in retail trade with general merchandise stores accounting for about half of that number,
  • 73,000 in professional and business services with temporary help services accounting for 42 percent of that number,
  • 26,100 in health care and social assistance with ambulatory health care services accounting for 52 percent of that number,
  • 45,100 in accommodation and food services with waitresses and bartenders accounting for 84 percent of the jobs,
  • and 8,600 jobs created for bill collectors.

That’s it. The federal government lost 8,000 jobs, the postal service lost 4,900 jobs, state government lost 1,000 jobs and local government lost 2,000 jobs.

There were zero jobs created in manufacturing.

Considering the credit-restrained and hard pressed consumer, the jobs figure for bill collectors is likely correct. But why would there be 29,000 new jobs in retail trade when real retail sales are falling? Why would there be new professional service jobs when large consulting companies such as IBM are reducing the hours of their contract employees? How can 38,000 waitress and bartenders be hired in one month when consumers have so little discretionary income?

Notice, too, that the BLS reports that 6,000 construction jobs were lost in April. Yet, the financial press is full of reports of “housing recovery.”

You know those thousands and thousands of fracking jobs that the fracking industry has been hyping so that communities, desperate for jobs, ignore the destruction of their surface and ground waters? Well the BLS report shows that oil and gas extraction jobs, which includes normal oil and gas recovery, peaked in February. Only 900 jobs were created in April, a small reward for destroyed aquifers and surface streams. People who live in fracking areas have been warned to open their windows when showering to avoid being asphyxiated because of the methane in the water and to not be surprised if their water actually burns. There is no doubt that fracking because of its enormous external costs produces a net economic loss.
In America everything is hype for a buck. They will sell you any lie. And the bulk of the population, of course, can be counted on for falling for every lie.

In my opinion, the March BLS jobs report of only 88,000 new jobs, only 69 percent of those needed to stay even with population growth, undermined the Obama regime’s recovery hype and the stock market’s confidence in “recovery.” Even brainwashed Americans have learned that “jobless recovery” is an oxymoron. So the word was passed to the political appointee overseeing the BLS to avoid further embarrassments. However, like the old Soviet press, the professional staff delivered the required report in a way that undermined it. Goods-producing jobs are reported to have dropped by 9,000 and retail stores are being closed, so why are 100,000 new jobs needed in retail trade and professional and business services?

John Williams explains the deception in the unemployment rate reporting. The 7.5 percent reported rate (U3)is not the product of new jobs generated by a recovering economy. It is the result of discouraged workers who, unable to find jobs, give up looking and, thus, cease being counted in the work force. The real rate of unemployment when discouraged workers are counted as unemployed is 23 percent. You can see the truth of this in the collapsing labor force participation rate. The collapse in the participation rate is not the result of a return to the prosperity of my youth when one-earner families were the norm. It is the result of millions of Americans unable to find employment and no longer being counted in the labor force.

Just as the government lied about weapons of mass destruction in Iraq and is now repeating the lie about weapons of mass destruction in Syria, the government lies about jobs and the unemployment rate. What doesn’t the government lie about?

Anyone who thinks an economic recovery has been ongoing since June 2009 can cure themselves of the delusion by looking at this chart:

Threat Assessment


Sunday, May 5, 2013

Shrinking Expectations in the New / Old America

The Great Restructuring
by DAVID ROSEN


A series of recent reports from the Bureau of Labor Statistics (BLS), the Pew Foundation and Urban Institute detail how more and more Americans are adjusting to the new old America.

The BLS report for March 2013 was pretty bleak. Nearly 12 million (11.7 million) Americans were unemployed, roughly the same as in February. It distinguishes between a “broader” measure (at 13.8%) and a “standard” measure (at 7.6%) of unemployment. The unemployment rates were as follows: for blacks, 13.3 percent; Hispanics, 9.2 percent; whites, 6.7 percent; and Asians, 5.0 percent; and for adult women, 7.0 percent;adult men, 6.9 percent; and teenagers, 24.2 percent.

More telling, it reported that the number of people classified as “long-term unemployed” (i.e., jobless for over 27 weeks) is 4.6 million, thus accounting for approximately 4 out of 10 ten unemployed persons. Adding to this, it noted that 7.6 million people are underemployed. These are people taking part-time positions because they can’t get full-time work.

Adding these three categories, 23.9 working-age Americans are less-than-full employed. The BLS estimates the total U.S. workforce of those 16-years and older at 154 million. These people illustrate how the Great Recession is becoming a way-of-life.

Much of the media discussion about the BLS findings focused on whether the current “economic revival” has stalled or reversed. Stepping back from the immediacy of the findings suggests a more pessimistic caution, one that suggests that the U.S. may well be witness an historic restructuring.

A recent report from Pew Research, A Rise in Wealth for the Wealthy; Declines for the Lower 93%: An Uneven Recovery, 2009-2011, begins to place the BLS data in a larger context. Its findings are pretty damning with regard to current “revival”: “During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%.” Pew’s findings are based on recently released Census Bureau data.

Pew goes further and details the financial consequences of restructuring of “wealth distribution”: “the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.”

Making matters structurally worse, the wealth-gap divide is only getting greater. Pew reports: “the 8 million households in the U.S. with a net worth above $836,033 saw their aggregate wealth rise by an estimated $5.6 trillion, while the 111 million households with a net worth at or below that level saw their aggregate wealth decline by an estimated $0.6 trillion.” (Household wealth is calculated by adding up personal assets like a home, car, real property, a 401(k), stocks and other financial holdings and subtracting all debts, including mortgage, car loan, credit card debt and student loans.)

The Urban Institute’s study, Less Than Equal: Racial Disparities in Wealth Accumulation, adds further resonance to the Pew findings. It warns, “in 2010, whites on average had two times the income of blacks and Hispanics, but six times the wealth.” It found, “wealth disparities have worsened over the past 30 years.” “High-wealth families (the top 20 percent by net worth) saw their average wealth increase by nearly 120 percent between 1983 and 2010, while middle-wealth families saw their average wealth go up by only 13 percent. The lowest-wealth families— those in the bottom 20 percent—saw their average wealth fall well below zero, meaning their average debts exceed their assets.”

In no uncertain terms, the Urban Institute’s argues, “there is extraordinary wealth inequality between the races. In 2010, whites on average had six times the wealth of blacks and Hispanics. So for every $6.00 whites had in wealth, blacks and Hispanics had $1.00 (or average wealth of $632,000 versus $103,000).” Making matters worse, it point out “the racial wealth gap grows sharply with age.” The older a person, the poorer s/he will likely be, especially a person of color.

And the big losers in the Great Recession? “Between 2007 and 2010, Hispanic families saw their wealth cut by over 40 percent, and black families saw their wealth fall by 31 percent,” it reflects. “By comparison, the wealth of white families fell by 11 percent.”

* * *

The Great Recession of 2008-2010 fulfilled its historic mission. It legitimized the restructuring of social and economic relations, sanctioning the unquestioned rule of the corporate plutocrats. In response, a sense of doom seeps through America not unlike that spreading through much of Europe.

The 2008 and 2012 elections of a corporatist moderate enshrined the tyranny of global financial capital and the militarist policies of a failing imperialist power. Pres. Obama’s elections formally ended the American Century.

Over the last quarter-century, the U.S. has been witness to the systematic destruction of the grand liberal moment. This was the half-century or so known as “the American Century,” from the New Deal thru the Great Society that shaped the U.S. during much of the mid-20th century. Ironically, both saw domestic “progress” intimately linked to foreign military engagement.

This period shared a kind of quasi-utopian fervor not unlike that found during the Revolution and the Civil War eras. For all their respective shortcomings, these were historical moments defined by a moral sensibility that defined the country as seeking to be a more egalitarian, more inclusive nation. As Lincoln would have said, these moments demonstrated America’s better angles. One can’t say that of Obama’s America.

Since Pres. Nixon, and with the collusion of both Republican and Democratic presidents, the utopian pendulum has steadily moved to the right, giving way to the increased tyranny of those with privilege. Pres. Obama is putting the final nails in the coffin of the vision of an egalitarian America. He is returning the nation to the worst impulses that characterized the Gilded Age, the last grand era of corporatist tyranny. On one side is the gluttony and elitism regally displayed by the well-to-do and, on the other side, a deepening hopelessness among a growing number of Americans.

As the BLS, Pew and Urban Institute reports remind us, a growing proportion of the new underclass lives a furtive existence. They can be broadly dubbed the lost souls of America, those who have essentially given up on the American dream. Many are among the new dispossessed if not homeless and have essential lost all hope. What keeps them going is one of the unasked questions of today. Among them is the growing army of vets, throw-a-ways of the military-industrial complex.

But these lost souls of America also include a growing segment of the U.S. population. A recent Associated Press-GfK poll found, for the third year in a row, only 1 in 4 Americans now expects his/her financial situation to improve over the next year.

The deeper, darker questions that these and similar reports fail to raise is: (i) what will it take to turn personal despair into political rage? and (ii) can Americans reclaim the once-inspired utopian legacy of its past for a better 21st century?

The Housing Shell Game: Prices Up, Ownership Down

Wall Street Owns Obama
by MIKE WHITNEY


Why are housing prices rising when the homeownership rate has dropped to its lowest level in 18 years?

Actually, it’s not as confusing as it sounds. The Fed’s low interest rates have triggered a flurry of homebuying by Private Equity firms and other speculators which has reduced already-tight supply and pushed up prices. Of course, there is a downside to all this speculation, which is that real, “organic” demand from ordinary working people looking for a place to live, has dropped off sharply. That’s why the homeownership rate is in the dumps. It’s also why existing homes sales declined 0.6 percent in March and “the volume of purchase applications is at levels last seen in 1998″, because as prices edge higher, more people are opting to rent rather than own. Who can blame them?

Five Star Institute economist Mark Lieberman’s has done considerable research on the homeownership rate by combing through the US Census Bureau report. He found that:
“The number of housing units held off the market in the first quarter though was 7,609,000 up from 7,299,000 in the fourth quarter and but down from 7,633,000 a year ago.” (“Homeownership Rate Drops to 18-Year Low” DS News)

Can you believe it? So the banks are keeping more than 7 million homes off the market to reduce listings, create the illusion of ”scarcity”, and push up prices. And just look at the numbers. They haven’t budged in the last year, which means that things aren’t really getting better at all. It’s a complete hoax, in fact, it might be the biggest charade of all time.

That’s why I still think the housing rebound is fake and that eventually prices will return to earth. Ultimately, a sustainable housing recovery depends on 3 things: Solid wage growth, low unemployment, and easy access to credit. Presently, all three of these are weak, which means the current surge in prices won’t last.

Surprisingly, Fitch Ratings Agency agrees with me, or so it would seem judging by a recent article in DS News titled “Fitch: Recent Price Gains May Not Be Here to Stay.” Here’s a clip:
“While some might be rejoicing at the recent rising home prices and rising home sales seen across the nation, Fitch Ratings “still views these gains cautiously.” In fact, the agency predicts price gains will slow and perhaps even reverse over the next year. …

“While rising prices and sales volumes suggest a recovery, they are not moving in sync with key economic indicators that would otherwise support a sustainable price level”…

Persistent low interest rates, little new construction, and formerly-reluctant buyers are bringing action to the market, but Fitch warns this burst in demand will not last.” (“Fitch: Recent Price Gains May Not Be Here to Stay“, DS News)

And Fitch isn’t the only naysayer, Yale professor Robert Shiller is skeptical, too. Shiller maintains that “we might not see a really major turnaround in our lifetimes”. Shiller’s reaction may surprise many readers since his own Case-Shiller home price index showed (just this week) that prices rose a stunning 9.3 percent in the last year. That’s hardly reason for pessimism, is it? Even so, just hours after the report was released, Shiller appeared on the Daily Ticker where he said he thought that, “Home prices will remain relatively stagnant for the next 10 years”. Here’s more from the same interview:
“Shiller says the housing market is operating in an “abnormal economy” where the Federal Reserve is buying $40 billion worth of mortgage securities and $45 billion worth of Treasury notes each month. This has driven mortgage rates to record lows.

The Fed will eventually stop buying these securities, says Shiller, and mortgage rates will rise…

When asked where this all leaves the housing market 10 years from now, Shiller says home prices will be “about where they are now” after adjusting for inflation.” (See the whole interview here: “Home Prices Will Remain Relatively Stagnant For Next 10 Years“, Daily Ticker)

So, yes, the vast majority of analysts and experts say the housing recovery is real, but there are still a few contrarians, and their reasoning is sound. The fundamentals are weak, and they could get weaker still as the budget cuts take hold and the economy shifts into low-gear.

For the last year or so, prices have been driven by low rates, inventory suppression, and a surge in investment. In the hotter markets, investors have accounted for more than 30 percent of all sales. But that won’t continue through 2013, mainly because yield-seeking speculators are not making the money they figured they would buying up bank-owned properties (REOs) and renting them out. As analysts at Goldman Sachs recently pointed out:

“Rental yields on single-family homes, conditional on the current market prices, are compressed. Even among the 10 metro areas where our estimated 2013 rental yields are the highest, the average rental yield is only 5%.”

So, even the best deals are only netting 5 percent. That’s not enough to wet the beak of the big players who thought they’d be raking in the moolah. Now that the price of distressed properties has skyrocketed, the Wall street guys are going to make even less, which means they’ll probably reduce their spending on housing and move on to more lucrative areas of investment. It might not happen tomorrow, but–as prices go up and profit margins narrow–it will happen. And that will leave the banks in the same situation they find themselves today, with millions of distressed homes in the pipeline and a dwindling pool of buyers.

Now take a look at this blurb from Moody’s Ratings agency that conflicts with the Census Bureau report, but sheds a little light on what’s going on behind the scenes:
“Nationally, the market holds about 3 million homes in serious delinquency or foreclosure—which is about 3 times the normal level, according to Moody’s.
…..
Almost 40 percent of delinquent loans have been delinquent for three or more years, which translates to much greater losses than on loans in delinquency for shorter time periods.” (“Moody’s: Home Prices to Increase, Loss Severities to Remain High“, DS News)

See? It’s all a big shell game. Nearly half of ”the delinquent loans have been delinquent for three or more years”, and yet, the banks haven’t foreclosed. Why is that? It’s because they want to suppress inventory to prop up prices.

On top of that, the banks have enlisted Obama to provide them with a stealth bailout via home modification programs to keep underwater homeowners out of foreclosure until the banks are ready to take action. Take a look at this eye-popper from DS News:
“Starting July 1, large numbers of non-paying borrowers will have the opportunity to modify existing mortgages through a more streamlined process….

According to the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac will offer “a new, simplified loan modification initiative” to borrowers who are at least 90 days late with their mortgage payments. Modifications can include a lower rate, a loan term stretched to 40 years and principal forbearance in some cases.

“The loan,” says FHFA, “must be owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners must be 90 days to 24 months delinquent, and have a first-lien mortgage that is at least 12 months old….

FHFA says the “key difference is that borrowers will not be required to document their hardship or financial situation, but will be able to accept a Streamlined Modification Offer by simply making the trial period payments and agreeing to the terms of the modification…. the bottom line is that documentation is no longer required.” (“DeMarco Disappoints with New Streamlined Mod Program”, DS News)

Doesn’t this prove that Wall Street “owns” Obama? Just think about it: ”No doc” refis for underwater borrowers who have not made a mortgage payment for 2 years? And President Dumbass wants the US gov to guarantee these loans? Have you ever heard of anything more ridiculous in your life?

This is why housing prices are going up, because corrupt, carpetbagging public officials and their price-fixing allies at the Fed have moved heaven and earth to do the banks’ bidding and to make sure they don’t lose one red cent on their garbage stockpile of distressed homes.

The whole system is a joke.