Monday, November 2, 2009

HELP! Going Down for the Count! & After the Billionaires Plundered Alabama Town, Troops Were Called in ... Illegally

Bob Chapman is not sugarcoating it for us. No. Not at all. (Emphasis marks added - Ed.)

The G-20 finance ministers meet in Scotland on November 6th and 7th, and they will all be bleating about the fall in the dollar. France started this week, and the others will follow. Their currencies are rising in value and they do not like it. We expect other nations to follow Mexico and Brazil in imposing a 2% tax on incoming funds and others will print their currencies and buy dollars to reduce the value of their currencies and at the same time buy US Treasuries that are decreasing in value. That will neutralize any benefit from the exercise. In addition, they will all scream for a strong dollar policy. By the time the meeting begins the dollar should be between 71 and 72 on the USDX, the dollar index. The weaker dollar means dollar debt will be cheaper to pay back. The big question is how long will it take for the dollar to fall to 40 to 55? We are often asked how does today compare with the 1930s in tax revenue and government spending? In 1930-31 tax revenue fell almost 53%. It increased 250% in 1932 and tripled in 1938. Yet, growth during the 30s went nowhere.

In spite of an increase of 45% in government spending during those years by 1940 GDP had not returned to the levels of 1930. In 1939 unemployment was still 17.2% and in 1940, 16.4%. This is the same monetary policy being used today that was used during the 1930s. Keynesian monetization that does not work. The only reason the depression did not continue is that FDR arranged another war, otherwise the depression could have continued indefinitely. The debt bubble of the 1920s only lasted seven years. Our present debt bubble actually began in 1978, was purged in 1982-83 and began again in 1986. It was killed in 1989 and resurrected in 1994. The bubble of 2000-2001 was replaced by our current real estate bubble in 2003, which is now in the process of deflating. The privately owned Federal Reserve engineered all this. The current fiasco was accompanied by a shortfall in tax collections to government spending from 2003 to 2007. 2008 held its own due to cooking the books and 2009 fell almost 18%. Unless further tax increases are implemented you can expect 2009 to fall short as well. Thus, if taxes are not increased the American economy will collapse. This is harsh and tax increases will come at just the wrong time. It can in part by temporarily covered by hyperinflation, but that would be a transitory solution. 62.8% of foreign reserves are in US dollars, so as the dollar depreciates foreign debt decreases.

The flip side is that there is major imported inflation, particularly in the cost of goods and services. Present government stimulation is not going to work. It didn’t work in the 1930s and Japan has found out to its dismay that since 1992 it didn’t work for them either. Why should it work in America?

The debt that has been so wantonly created is still going to be there and if taxes are not raised or costs cut, it will be even larger. Our government, Wall Street and many Americans are basing their future on stimulation and recovery and it isn’t going to happen. This supposedly is how government is going to generate its tax revenue. All we can say is good luck.

Is this the future? And is this? See below for the real-life consequences of this wholesale sell-off of America's assets policy. No funds for local police, so Halliburton gets another emergency call? Shudder. And can anyone say that favorite fat-cat fraudulent phrase "tort reform" with a straight face anymore? (Emphasis marks added - Ed.)

After the Billionaires Plundered Alabama Town, Troops Were Called in . . . Illegally

Editor's Note: The shocking transfer of public wealth to Wall Street's pockets is illustrated vividly in Mark Ames' article below, which covers some very disturbing recent events in Alabama, where billionaires and banks are squeezing the locals so hard that they're literally going bankrupt just for flushing their toilets, where violence and the threat of violence are reaching a boiling point and where even the Posse Comitatus Act is under threat. "We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all," said one Goldman Sachs vice-chairman recently. Well, here's a tale of the kind of inequality the finance industry expects citizens to tolerate. "Alternet" One of this year's more disturbing stories that were ignored was the illegal Army occupation of Samson, Alabama, in March following a shooting spree that raged across two towns by a disgruntled worker, leaving 11 people dead.

As I wrote at the time, Michael McLendon, 27, went on a killing rampage following years of relentless corporate exploitation and harassment against him, his mother (whom he mercy-killed), and the entire rural Alabama region, which suffered like so many parts of rural America at the hands of billionaire goons like chicken oligarch Bo Pilgrim of Pilgrim's Pride notoriety.

One of the creepiest details to emerge in the shooting rampage were reports that troops from nearby Fort Rucker were brought into Samson and other surrounding areas to patrol the streets. This is a clear violation of the Posse Comitatus Act, every freedom-loving American's worst nightmare.

And now, finally, the Army officially agrees that its occupation of the Alabama streets was illegal, according to an internal report the Associated Press got a hold of, following a Freedom of Information Act filing:

An Army investigation found that soldiers should not have been sent to man traffic stops in a small Alabama town after 11 people were killed in March during a shooting spree.

An Army report released to the Associated Press on Monday in response to a Freedom of Information Act request said the decision to dispatch military police to Samson from nearby Fort Rucker broke the law. But an Army spokesman said no charges have been filed following the Aug. 10 report.

The report from the Department of Army Inspector General found the use of military personnel in Samson violated the Posse Comitatus Act, which prohibits federal troops from performing law-enforcement actions. The names of those involved were redacted from the report.

According to the report, the officer's "intent was to be a good Army neighbor and help local civilian authorities facing a difficult, unique tragedy affecting the local community. There were no apparent adverse collateral effects to the support provided."

Indeed. For a lot of Americans, the sight of troops occupying their towns is their worst nightmare come true -- part of the reason that America came into existence was to create a country where this sort of thing would never happen, even if the Army's sole intent was to be a good neighbor and help old ladies cross the streets.

Strangely enough, there was almost no media coverage of the occupation -- you had to rely on various right-wing outlets like, whose article I blogged at the time, or the left-wing Democratic Underground.

But what even the right-wing anti-government people won't report is the true reason why the Army was called out in the first place, something that goes right back to the cause of the shooting rampage:

billionaire exploitation of the local Alabamans, not just by the chicken oligarch, but from higher up the predator food chain - Wall Street banking behemoth JP Morgan Chase.

You see, thanks to a combination of corporate-tax holidays (which reduce local revenues), billionaire greed like the sort that bankrupted Pilgrim's Pride, and Wall Street investment-banking scams on places like Alabama that result in corrupted local officials and bankrupted municipalities, counties and states -- now, there's no money left to fund local police forces, as the U.S. Army report reveals:

The soldiers arrived in the hours after the shootings, which stretched the town's tiny police force and county officers to the limit with several different crime scenes. The report said troops were dispatched after the Geneva County Sheriff's Office and Samson Police requested assistance from Fort Rucker to relieve law enforcement at traffic checkpoints around the crime-scene area.

As I wrote earlier this year, Pilgrim's Pride hooked up with Wall Street to leverage itself into bankruptcy while enriching the executives' family and a handful of insiders at the expense of tens of thousands of Americans workers:

In 2006, Pilgrim's Pride, then the second-largest chicken processor in the world, made a huge gamble that will seem familiar to anyone who's been following the financial crash: the company borrowed hundreds of millions of dollars, leveraging itself well beyond its means, in order to acquire a rival company and become the nation's No. 1 chicken processor, slaughtering 45 million chickens per week.

That might have given the executives a nice, big hard-on, but it also meant they would have to come up with more money to pay for all that debt. So the company did do what every post-Reagan company has done and gotten away with: it made the workforce pay for the executives' bonuses.

That meant squeezing lower-middle-class workers for more work for less pay, or in Pilgrim's case, more work for no pay: In August 2007, the U.S. Department of Labor filed a lawsuit against Pilgrim's Pride accusing it of grossly undercompensating its employees. That same year, 10,000 Pilgrim's Pride employees launched a class-action lawsuit demanding compensation for their work.

The damage extended well beyond Pilgrim's Pride's plants. With bankruptcy came huge unpaid local tax bills, leading to further layoffs and reduced services for the already-beleaguered locals:

Suwannee County could be out about $2 million if Pilgrim's Pride doesn't pay its property-tax bill, according to property appraiser Lamar Jenkins.

The biggest taxpayer in the county filed for bankruptcy protection Dec. 1. Now it's not clear when - or if - the bill will be paid.

"It's certainly going to put a hurt on the budget of the county," Jenkins told the [Suwanee] Democrat by phone Thursday. Jenkins said the unpaid bill represents 7.4 percent of the money local schools get from property taxes; 5.3 percent of county funds from that source; and 8 percent of the money the Suwannee River Water Management District receives from local property-tax revenues.

A spokesman for Pilgrim's did not respond to a request for comment.

Bo Pilgrim, the head of Pilgrim's Pride, once told his Texas church that he was worth over $1 billion before the market crash, and he's still worth hundreds of millions. His rapacity was boundless, and in the end it was the undoing of Pilgrim's Pride - not the Pilgrim family, mind you, which is still filthy disgusting rich, but the company is through.

Last month, 64 percent of Pilgrim's Pride was sold to JBS, a Brazilian beef giant, making it the largest meat company in the world, topping America's Tyson.

The American cattle industry tried to block the deal, which it says could result in the destruction of the American beef industry, but the Justice Department already approved JBS' takeover.

In the billionaires' Third World model for America, it makes awful sense that a Brazilian meat company would take control of a bankrupt, corrupt American chicken company. For Wall Street and the billionaires, the more they destroy in America, the richer they get, consequences be damned. And anyway, it's not like Pilgrim's Pride was a model of corporate responsibility while under American ownership; just read some of the comments on this recent Reuters article.

. . . In light of all of this, the Army's brief, illegal occupation of a string of towns in Alabama this past spring no longer looks like a freak one-off, but rather a logical progression in the ongoing billionaire plunder of America.

It gives new meaning to what MSNBC host Dylan Ratigan is calling "corporate communism." Not only are banking billionaires on permanent state wealthfare, but even worse, as the wealth available becomes increasingly scarce and there isn't enough left to satisfy the billionaires' grotesque appetites and regular citizens' needs to flush their toilets or heat their homes, we're heading to the point that all Third World countries come to - calling out the troops to ensure that the peasants pay their tithes to their absentee masters in New York and Connecticut and don't get all uppity like those Europeans.

Now you can see why Alabamans are loading up on so many weapons. That makes sense. Now they need to understand who the real enemy is. Not the make-believe liberal bogeymen of their nightmares.

Rather, Alabamans should focus their anger on the real-world billionaires who are making this country a living hell.

Imagine that. Suzan ________________


rjs said...

despite a couple non sequitors, chapman pretty much lays it out; id say our current problems started with with the commodity futures modernization act and the gramm-leach-bliley act, which made way for this: the formula that killed wall street
which resulted in this: the quadrillion dollar derivatives bubble
of course, greenspan made for easy money, which helped inflate the housing bubble; but otherwise, the correct fiscal policy should be to run deficits to stimulate during a downturn; but this normal option has turned suicidal because of the massive debt that was accumulated before the bubble burst because of the voodoo economics of supply side tax cuts...

rjs said...

i shoulda tested those links before i posted: here are the urls:


Lisa G. said...

I loved how you have punked JP! You are a fine writer - keep it up!

Suzan said...


Girl. Is my face red now!

How kind you must be.



Liberality said...

He sure didn't shrink from telling the truth. Rich is wrong in so many ways.

Suzan said...

Hi Stella!

Thanks for the comment. Hope you are doing well.