Monday, July 26, 2010

The Aztecs Are US - Called Out by China - Trading in Death: Rapacious Bankers Are Making Enormous Fortunes (Still) & "No!" To Oligarchy

Not really a surprise to hear is it? My guess (as a history student of long standing) used to be that the end of civilizations must have crept up on those poor, overwhelmed people, who had become used to the abuses of their leadership so thoroughly that they never saw it coming until they heard the conquistadores at the door. And then they opened it hopefully. Still doing as they had been carefully instructed. I wonder sometimes, when I get down pretty low, if the last 30 years (since that horrendous "Morning In America" moment for the lower classes came to pass (when they/we began to lose everything)) hasn't compressed the U.S.'s time sufficiently. What took hundreds of years for the Romans and a century for the British, among others, is here present day. Surprise! After all, you gotta admit that China will have no problem collecting as it exposes the truth about what it's owed by those who sold US out. Get ready to read this kind of headline every few days from now on. China Calls Our Bluff: The US is Insolvent and Faces Bankruptcy as a Pure Debtor Nation

America's biggest creditor - China - has called our bluff. As the Financial Times notes, the head of China's biggest credit rating agency has said America is insolvent and that U.S. credit ratings are a joke:

The head of China’s largest credit rating agency has slammed his western counterparts for causing the global financial crisis and said that as the world’s largest creditor nation China should have a bigger say in how governments and their debt are rated.
“The western rating agencies are politicised and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, chairman of Dagong Global Credit Rating, told the Financial Times in an interview.

It's just the start, friends. And it will get much worse. Feeling some sympathy with those poor Aztecs yet?

Mark Crispin Miller documents what we have in store for the nasty upcoming ending, and how the Dems just weren't organized enough to even give the 'thugs a run for their money (emphasis marks added - Ed.):

On Wednesday morning, Politico reported that American Crossroads GPS, the organization formed by operatives Karl Rove and Ed Gillespie, hauled in an impressive $5.1 million in June. A separate legal entity from its parent shop, American Crossroads (a distinction that allows it to hide the names of its donors), GPS was poised to use that money for the ostensible purpose of wreaking havoc on behalf of Republican candidates.

It’s the type of secretive electioneering that has Democrats publicly crying foul — the Democratic National Committee sent out the story on Wednesday morning. In private, however, party operatives expressed anxiety with the development. During the 2008 campaign, a group of Democratic operatives essentially tried to create its own version of American Crossroads GPS. Progressive Media was formed in 2007 as an independent opposition research arm for the presidential campaign. The organization, structured then as a 527 group, produced notable hits, including footage of John McCain saying he would be comfortable if U.S. forces were in Iraq for 100 years as well as the first mention of the Arizona Republican’s numerous homes.

And then there's this, which should make us all sit up and take notice before the next Fox-inspired lying brigade takes wing. Talk about foxes and henhouses.

Changing the rules again - How the Bush/Cheney Deregulation F*ucked Up Everything? (Emphasis marks added - Ed.)

Trading in Death: Rapacious Bankers are Making Fortunes by Forcing Up the Price of Food and Leaving Millions to Starve

By Zoe Brennan 20th July 2010 The women crouch in the dust, hacking into the hard African dirt. They are looking for food. This is Chad, West Africa. Sedoisa, a 71-year-old grandmother, sifts through the soil, searching an anthill for grains. On the brink: There are fears that the current situation in West Africa will develop into a famine.

Bringing a wrinkled hand to her mouth, she gestures that she is looking for something to eat. It is 7 AM. Along with a team of 'termitieres', she searches all day long.

The villagers, among them heavily pregnant women and small children, are looking for the nest containing the queen ant. This is the prize, where the worker ants have stored their hoard. If they find it, the villagers will raid the ants' small stock of grain, collected from the barren, windswept plain. On good days, the termitires might find 2.5 kg of precious food. It is hard work, and each day the number of women searching increases. The country stands on the brink of famine. The rains have failed, and - crucially, imported food is too expensive for Chad's people to buy. In neighbouring Niger, the situation is even worse. Trading in life and death? Workers on the floor of the New York Stock Exchange have become used to buying and selling food derivatives. One woman describes the crisis. She says: 'Soon the day will come when there will no longer be enough anthills for everyone.'

The people of West Africa are starving. Almost 10 million people in the region are facing a food crisis.


In order to answer that question, we need to visit Manhattan's financial district - although no one is starving there.

At 200 West Street, another type of anthill exists. It is the gleaming New York headquarters of Goldman Sachs investment bank. The £1.5 billion 43-storey building, which opened this year, houses 11,000 staff - who reaped a staggering $20.2 billion in bonuses in 2007. Market leaders: Goldman Sachs have led the way in food derivatives. Just as in the African anthill, there is a strict hierarchy in this house of Mammon. Vice-Presidents sit at shared workbenches. Managing directors get windowless offices. The 300 elite partners get a room with a view. High above are the executive suites, with panoramic vistas of New York Harbour. Here, Goldman's Masters of the Universe - each worth many millions of pounds - set the bank's strategy.

As it became clear there were problems in the U.S. mortgage market, this band of select bankers decided to switch a large number of Goldman Sachs's investments to other commodities - namely rice, wheat, corn, cattle, coffee and cocoa. Such investments had been going on for some time, but this marked a major shift towards them. Goldman Sachs was not alone. Other investment houses such as Merrill Lynch, Deutsche Bank and Lehman Brothers followed a similar strategy. Indeed, it was recently reported that British financier Anthony Ward, dubbed ChocFinger, has amassed 214,000 tons of cocoa beans, worth £658 million.

Some suspect he wants to exert a stranglehold over the market and force prices higher. Admittedly, cocoa beans are not a basic foodstuff, but it does illustrate how one individual or corporation can affect the market. Either way, the investment houses' momentous decision to move into food investments has had tragic consequences. The strategy has caused world food prices to soar, leading to riots, famine and many deaths.

At the end of 2006, food prices across the world started to rise sharply. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent.

Around the world, 200 million people - mostly children - who relied on cheaply imported foodstuffs sank into malnutrition or starvation. There were riots in more than 30 countries. The crisis continues today.

'A herd of market traders, speculators and financial bandits have turned wild and constructed a world of inequality and horror.' And indirectly, through a pension, shares or other investment, it could be your money which is being used to make others go hungry.

Jean Ziegler, former UN chief food expert, says this speculation has led to 'silent mass murder'.

. . . And yesterday, the World Development Movement spoke out against this trend. Its director, Deborah Doane, said: 'Investment banks like Goldman Sachs are making huge profits by gambling on the price of everyday foods.' Nobody benefits from this kind of reckless gambling except a few City wheeler-dealers.

. . . When this process was tightly regulated, and only those companies with a direct interest in the field could get involved, it worked.

Then the big investment banks turned their interest to agriculture, and decided they wanted to trade in futures.

'This isn't just any commodity. It is food, and people need to eat.'

Goldman Sachs and others lobbied for the rules to be changed. Eventually, the regulations were abolished. Suddenly, the simple risk-management deals with farmers were turned into 'derivatives' - or contracts - that could be bought and sold among traders who had nothing to do with farming. A market in speculation on the price of food was born.

. . . Investment banks needed fertile new ground for growth, of course because they had left scorched earth behind in their previous areas of interest. The mortgage market had collapsed, and money managers had to find new places to invest. Commodities became the latest hot thing in investment banking circles. In 2003, commodity index holdings amounted to $13 billion. By 2008, $317 billion had poured into the funds investing in this area. The bank's money was not at risk, of course. Putting food on the table: Goldman Sachs chief Lloyd Blankfein awarded himself a record bonus at the height of the food derivatives boom. It was investing in a price index - little more than gambling - using other people's money: the savings accounts, pension funds and life insurance policies of the general public.

Soon, the prices of foods being traded on this index went up. The banks' investors were, of course, delighted.

Take the case of wheat. American grain prices had long been set by the Minneapolis Grain Exchange. For more than a century, prices had steadily declined. Then, in 2005 - as banks became involved in trading it, the price of wheat began to rise. So did the cost of rice, corn, soy, oats and cooking oil.

. . . There were a few voices of sanity. One old-fashioned grain seller said: 'This isn't just any commodity. It is food, and people need to eat.'

There were huge profits to be made, however. It is no coincidence that Goldman Sachs chief Lloyd Blankfein rewarded himself with the highest payouts in Wall Street history in these years.

He gave himself $53 million in 2006, and $68 million in 2007. Quite simply, making money is the foremost principle at Goldman Sachs.

The global speculative frenzy over food prices sparked riots and helped drive the number of people going hungry in the world to more than a billion. The price of basic foodstuffs rose by 80 per cent between 2005 and 2008.

. . . Back in West Africa, the poor reap the fall-out from this crisis. Oxfam warns that the region stands on the very brink of a devastating famine. Oxfam' s food policy adviser, Chris Leather, told the Mail: 'West Africa is suffering a very real crisis.

. . . 'This has pushed world food prices up, and it is the poorest and most vulnerable in the world who suffer most. We are very concerned by the situation.' Jean Ziegler of the UN says: 'In a world overflowing with riches, it is an outrageous scandal that more than one billion people suffer from hunger and malnutrition and that every year over six million children die of starvation and related causes.'

It seems that the big shots of Goldman Sachs feel very little outrage, however. They have weathered a series of storms in recent months, including being charged with a £650 million fraud in the U.S. Emails from executives boasted they were making 'serious money' while millions of homeowners were plunged into misery by the housing crash. Famously known as 'the haves and the have-yachts' for their amazing bonus-fuelled lifestyles, executives have seen a series of record profits since inventing the Goldman Sachs Commodity Index.

Indeed, 2009 was the most profitable year in the bank's history.

Do they care if Africa starves? It appears not.

One Democratic member of Congress (one of the leading intellectual Senators - and there are only a few of these left now) cares a lot - enough to try to make a difference. Let's see how many others jump on board. This is a movement for which we should be marching on D.C. (Can you understand now why Bill Gates and Warren Buffett made so much noise about funding charities? Not that they were guilty enough to turn the extra moolah down though.) (Emphasis marks added - Ed.)

In 2009, Exxon Mobil, the most profitable corporation in history made $19 billion in profits and not only paid no federal income tax — they actually received a $156 million refund from the government.

No To Oligarchy

Bernie Sanders July 24, 2010 The American people are hurting. As a result of the greed, recklessness and illegal behavior on Wall Street, millions of Americans have lost their jobs, homes, life savings and their ability to get a higher education.

Today, some 22 percent of our children live in poverty, and millions more have become dependent on food stamps for their food.

And while the Great Wall Street Recession has devastated the middle class, the truth is that working families have been experiencing a decline for decades. During the Bush years alone, from 2000-2008, median family income dropped by nearly $2,200 and millions lost their health insurance. Today, because of stagnating wages and higher costs for basic necessities, the average two-wage-earner family has less disposable income than a one-wage-earner family did a generation ago. The average American today is underpaid, overworked and stressed out as to what the future will bring for his or her children. For many, the American dream has become a nightmare. But, not everybody is hurting.

While the middle class disappears and poverty increases the wealthiest people in our country are not only doing extremely well, they are using their wealth and political power to protect and expand their very privileged status at the expense of everyone else.

This upper-crust of extremely wealthy families are hell-bent on destroying the democratic vision of a strong middle-class which has made the United States the envy of the world.

In its place they are determined to create an oligarchy in which a small number of families control the economic and political life of our country.

The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families! During the last fifteen years, while these enormously rich people became much richer their effective tax rates were slashed almost in half.

While the highest-paid 400 Americans had an average income of $345 million in 2007, as a result of Bush tax policy they now pay an effective tax rate of 16.6 percent, the lowest on record.

Last year, the top twenty-five hedge fund managers made a combined $25 billion but because of tax policy their lobbyists helped write, they pay a lower effective tax rate than many teachers, nurses and police officers. As a result of tax havens in the Cayman Islands, Bermuda and elsewhere, the wealthy and large corporations are evading some $100 billion a year in U.S. taxes.

Warren Buffett, one of the richest people on earth, has often commented that he pays a lower effective tax rate than his secretary. But it's not just wealthy individuals who grotesquely manipulate the system for their benefit. It's the multinational corporations they own and control.

In 2009, Exxon Mobil, the most profitable corporation in history made $19 billion in profits and not only paid no federal income tax — they actually received a $156 million refund from the government.

In 2005, one out of every four large corporations in the United States paid no federal income taxes while earning $1.1 trillion in revenue.

But, perhaps the most outrageous tax break given to multi-millionaires and billionaires happened this January when the estate tax, established in 1916, was repealed for one year as a result of President Bush's 2001 tax legislation.

This tax applies only to the wealthiest three-tenths of 1 percent of our population. This is what Teddy Roosevelt, a leading proponent of the estate tax, said in 1910.

"The absence of effective state, and, especially, national restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise . . . . Therefore, I believe in a . . . graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate."

And that's what we've had for the last ninety-five years—until 2010. Today, not content with huge tax breaks on their income; not content with massive corporate tax loopholes; not content with trade laws enabling them to outsource the jobs of millions of American workers to low-wage countries and not content with tax havens around the world, the ruling elite and their lobbyists are working feverishly to either eliminate the estate tax or substantially lower it.

If they are successful at wiping out the estate tax, as they came close to doing in 2006 with every Republican but two voting to do, it would increase the national debt by over $1 trillion during a ten-year period. At a time when we already have a $13 trillion debt, enormous unmet needs and the highest level of wealth inequality in the industrialized world, it is simply obscene to provide more tax breaks to multi-millionaires and billionaires.

Read on for rest.

Suzan _______________

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