Friday, August 12, 2011

Job Creators (Whom Are They Kidding?) Won't Hire The Unemployed: U.S. Has Priorities/Accountability Problem Not A Debt/Deficit Problem - Sand Tarred?

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Did I mention how long I've been unemployed, and how long it's been since I've even had any interest at all shown by an employer in one of the thousands of applications I've sent out? Oh yes, I do get calls from recruiters from time to time, but mainly to ask where I worked in the last few months or for my Social Security number - no, these are not real recruiters, you know. (Yeah, there was that Bank of America scare two weeks ago, but they're dead meat according to the latest news so that hardly counts now, does it.) This nice, young, fresh-faced guy has a few more facts with which to flesh out what I've been saying for the last decade. And he's (we're) not try to kid you.
[Desperately seeking donations (even as little as $5.00, please) for gas for this blog's continuation!]
'Job Creators' Who Won't Hire The Unemployed
Nathan Birnbaum's picture
Nomi Prins always calls the tune. And she knows all the chords.
Defiance, Denial and Downgrades Won’t Help Our Economy Nomi Prins Yes, the US has a debt problem. But, more than that, it has a priorities and accountability problem. Yet, rather than giving Washington a pause for reflection, the S&P downgrade of US debt from ‘AAA’ to ‘AA+” merely gave Capitol politicians renewed opportunity for elaborately orchestrated hissy fits that won't lead to introspection or policy change.

First, let’s again acknowledge the irony that this rating agency rubberstamped $14 trillion of toxic assets in the five years leading up to the crisis of 2008, thereby enabling the Wall Street manufacturing and global dispersion machine to thrive. Then, let’s sign that Washington still doesn't get it.

We racked up debt predominantly, but not exclusively (less revenue due to fewer jobs and an antiquated system where not everyone pays a comparative share contributed, as did the cost of three wars) because of the choice to subsidize Wall Street.

Nearly 80% of the new debt created by the Treasury since the financial crisis was either sold through the banks, is sitting on the Fed's books doing nothing productive, or was used to bolster various elements of the banking system through cheap loans, guarantees for faulty assets, and other methods.

Chances are near one hundred percent, that this next round of debt will exhibit the same pattern. The Treasury will issue bonds and a big portion will wind up on the Fed’s books, doing zero for the greater population. More bi-partisan squabbling over why the economy isn’t growing quickly enough will eschew.

A few months ago, Treasury Secretary, Tim Geithner made the talk show rounds to declare empathically that there was ‘no chance’ of a downgrade of US debt. After the downgrade, with the stock market plummeting, President Obama took to the airwaves to explain that the US was ‘AAA’ no matter what ‘some rating agency says’.

As Obama opined that ‘there will always be economic factors we can’t control,’ the stock market kept dropping. Some of that fall was for ‘technical reasons.’ People and firms borrow money to bet on the market, and put down collateral (or margin) in order to do so. When the value of their purchases (stocks) falls beneath a certain amount, they are required to put up more margin to continue to participate in the market. If they don’t have the cash, they have to sell stocks to come up with it, thereby pushing the market down further. These ‘margin calls’ were the technical cause of the Great Crash of 1929.

The other reason for the drop was uncertainty, precipitating cashing out stocks to buy bonds, and reaction to the fact that no matter what anyone says, we’re not in an economic recovery, and things are getting worse. In all, the Dow Jones Index dropped 633 points during the first post-downgrade trading day, regaining a third of it the next day.

The bond market shrugged off the downgrade, meaning global investors were buying, not selling, Treasury bonds. This puts the debt cap drama and catastrophic consequence threats into scary perspective. Recall, the sky was going to fall if we didn’t bail out and subsidize the banks, too. The political fear-mongering would be laughable if it didn’t have dire consequences for the rest of us – an anemic economy unable to add jobs effectively and a banking sector floated on debt.

So, does the downgrade matter? In terms of infusing the market with more uncertainty as to whether it might lead to another one – sort of. But, in terms of Washington, it means nothing. The GOP will blame Obama for causing it by not cutting spending further. President Obama and the Democrats will act defensive and dismissive about it.

Beneath the banter, remains the stark fact that the extra debt wasn’t created to help the economy, it was created to help Wall Street. Any future political fights (and there will be many) about debt, missing that point, will therefore be unable to tackle the most important economic problem we face – lack of job and real (not paper) growth in the US and throughout the globe. Political denial and finger-pointing is not productive growth policy, no matter which party is doing what.

S&P’s downgrade got a bit of this right when it labeled Washington dysfunctional, yet, by denying there’s more to the downgrade, S&P continues to shield its own actions in the crisis build-up and Washington’s reaction to it - massive bank subsidies and a tepid bank regulation bill that didn't even break up the too big to fail banks as Glass-Steagall did in the wake of the pain banks caused leading up to the Great Depression.

A one notch ratings drop from AAA to AA+ makes no difference to the US production capacity. Indeed, with all the scaremongering about how much more expensive it would be to borrow at a higher rate (reflecting the lower credit rating), the bond market rose in a sigh of relief that the downgrade was ‘over’ rendering the cost of the downgrade minor. As for other countries dumping our bonds, though they should because our policy remains financial market subsidization through debt creation, as long as the dollar remains the dominant global currency, other countries will lend to us though buying our Treasury bonds. They don’t want their own portfolio of US Treasuries to decline in value.

Obama stated that, “we need jobs and growth.” Absolutely. But austerity compromises won’t get us there. A reality check might. He said that Americans have come through (more denial, as we haven’t come through anything, we’re still in it) the biggest financial crisis since the 1930s with grace. He made no mention of the dual DC-banks role at all.

In the 1930s, the government made a bi-partisan decision to smack the banking system into place and separate bank trading and commercial functions so banks couldn’t take risks with other people’s money; it didn’t lavish Wall Street with cheap loans and debt at the public’s expense.

All Americans should be deeply concerned that our government supported, and continues to support, banks over people. The Treasury Department and Fed continue to mislead us over this. And we all pay the price.

This article was published at NationofChange.

And did you know you lived in Bizarro World? YES! USA USA USA!!!!
Welcome to Bizarro World Stephen Leahy Thursday, 11 August 2011 Canada and the United States are now the cen­tre of Bizarro World. This is where lead­ers promise to re­duce car­bon emis­sions but en­sure a new, su­per­sized oil pipeline called Key­stone XL is built, guar­an­tee­ing fur­ther ex­pan­sion of the Al­berta tar sands that pro­duce the world's most car­bon-laden oil.

"It's im­per­a­tive that we move quickly to al­ter­nate forms of en­ergy - and that we leave the tar sands in the ground," the U.S.'s lead­ing cli­mate sci­en­tists urged Pres­i­dent Barack Obama in an open let­ter Aug. 3.

"As sci­en­tists... we can say cat­e­gor­i­cally that it's [the Key­stone XL pipeline] not only not in the na­tional in­ter­est, it's also not in the planet's best in­ter­est."

The let­ter was signed by 20 world-renowned sci­en­tists, in­clud­ing NASA's James Hansen, Ken Caldeira of the Carnegie In­sti­tu­tion, Ralph Keel­ing of the Scripps In­sti­tu­tion of Oceanog­ra­phy, and George Wood­well, founder of the Woods Hole Re­search Cen­ter.

The pro­posed seven-bil­lion-dol­lar Key­stone XL pipeline would carry 700,000 to 800,000 bar­rels of tarry, un­re­fined oil every day from the north­ern Al­berta tar sands 2,400 kilo­me­tres south through the U.S. heart­land to re­finer­ies in Ok­la­homa and Texas.

Em­bed­ded in all that bi­tu­men - the tar sands form of crude oil - will be an es­ti­mated 150 mil­lion tonnes of car­bon diox­ide (CO2) emis­sions every year. That's more CO2 than the an­nual emis­sions of 85 per­cent of the world's coun­tries. Oil-rich Nor­way emits a mere 50 mil­lion tonnes.

"That extra car­bon diox­ide is going to warm the planet for hun­dreds and thou­sands of years, caus­ing sea level rise, more pro­nounced droughts and floods," said Ger­man cli­mate sci­en­tist Malte Mein­shausen of the Pots­dam In­sti­tute for Cli­mate Im­pact Re­search.

Mein­shausen was not in­volved in the let­ter to Obama.

Emis­sions at­trib­uted to the pro­ject are "enor­mous" and of­fi­cials must take into ac­count how it will add to cli­mate change, Mein­shausen told IPS.

Pres­i­dent Obama and Canada's Prime Min­is­ter Stephen Harper say they are wor­ried about cli­mate change and have promised to make major CO2 re­duc­tions by 2020. Both coun­tries are par­ties to the U.N. Frame­work Con­ven­tion on Cli­mate Change, whose mem­ber­ship unan­i­mously swore to keep the rise in global tem­per­a­tures to less than two de­grees C to avoid dan­ger­ous lev­els of cli­mate change.

Any hope of reach­ing that goal re­quires Canada, the U.S. and other in­dus­tri­alised na­tions to cut emis­sions 25 to 40 per­cent com­pared to their 1990 lev­els by 2020. And be­cause CO2 lasts for­ever, the ul­ti­mate goal has to be net zero car­bon emis­sions.

Both the U.S. and Canada have failed to cut their emis­sions, but at least U.S. emis­sions have stopped grow­ing. It's not well known, but Canada has be­come a com­pul­sive overeater of car­bon. Its emis­sions "weight" bal­looned from 590 mil­lion tonnes in 1990 to 734 mil­lion tonnes in 2008, ac­cord­ing to U.N. sta­tis­tics.

In the early 1990s, Canada promised to lose weight and even signed the 1997 Kyoto Pro­to­col swear­ing to the world com­mu­nity that it would be a fit and trim 550 mil­lion tonnes by 2010 or 2012 at the lat­est. Gov­ern­ment es­ti­mates put Canada at sub­stan­tial 710 mil­lion tonnes (Mt) in 2010, 28 per­cent above its tar­get weight. That leaves the coun­try in sev­enth place amongst the big boys, just be­hind Ger­many, a coun­try with more than twice the pop­u­la­tion.

In Copen­hagen at the end of 2009, Harper him­self promised other global lead­ers that Canada would do bet­ter and trim down to 607 Mt by 2020. How­ever, an of­fi­cial gov­ern­ment re­port called "Canada's Emis­sions Trends" qui­etly re­leased last month pro­jects a con­tin­u­ing car­bon binge, pil­ing on the weight to a whop­ping 775 to 850 Mt by 2020. Most of that extra car­bon lard is from the tar sands.

In Bizarro World, every­thing is the op­po­site of what it should be: lose weight by eat­ing more, avoid dan­ger­ous cli­mate change by guar­an­tee­ing it. And so enor­mous sums of money, in­clud­ing in­cen­tives and sub­si­dies from both gov­ern­ments, are being spent to put ever more tar sands' CO2 into the at­mos­phere.

In fact, an in­cred­i­ble 2.077 tril­lion dol­lars is ex­pected to be in­vested ex­pand­ing and main­tain­ing the tar sands over the next 25 years, ac­cord­ing to the Cana­dian En­ergy Re­search In­sti­tute.

The tar sands are the world's sec­ond largest de­posit of oil, al­beit in the form of tar, with an es­ti­mated 300 bil­lion bar­rels of re­cov­er­able oil. There is so much car­bon in the tar sands that if much of it is burned, there is no chance of sta­bil­is­ing the cli­mate, ac­cord­ing to Hansen and other cli­mate ex­perts.

That means dan­ger­ous cli­mate change where bil­lions suf­fer the ef­fects of an ever-hot­ter world, with mega-droughts, mega-flood­ing, and mega- storms. It bears re­peat­ing that the undis­puted cause of this will be the at­mos­phere's thick blan­ket of CO2 from the tar sands and other sources of fos­sil fuel that trap much more of the sun's en­ergy - ef­fec­tively for­ever. That is the night­mar­ish fu­ture Hansen and thou­sands of other sci­en­tists have been warn­ing gov­ern­ments about for over 20 years.

For some, the cli­mate night­mare has al­ready begun. The U.S. ex­pe­ri­enced the most ex­treme weather in its his­tory this past July, in­clud­ing an un­prece­dented area of ex­cep­tional drought, ac­cord­ing to the Na­tional Cli­matic Data Cen­ter.

It had al­ready been a record break­ing year for weather dis­as­ters, to­tal­ing 32 bil­lion dol­lars in eco­nomic losses - five times the yearly av­er­age - and that's only the dam­ages up to June. It doesn't in­clude any­thing from the hur­ri­cane sea­son that's just get­ting started.

Canada ex­pe­ri­enced its hottest year ever in 2010, a whop­ping three de­grees C above nor­mal over the en­tire year, ac­cord­ing to En­vi­ron­ment Canada. Last win­ter, tem­per­a­tures were 21 de­grees C above nor­mal for an en­tire month in the high Arc­tic. Yes, 21.0 de­grees C or 37.8 de­grees F above nor­mal for a month. That's never hap­pened be­fore.

In Bizarro World, the right re­sponse is to jack up the odds of hav­ing tril­lion-dol­lar weather dis­as­ters and more ex­treme weather by build­ing a pipeline that will dump an­other 150 Mt of CO2 an­nu­ally into at­mos­phere start­ing in 2015.

That's why the Harper gov­ern­ment, at the ap­par­ent be­hest of tar sand oil com­pa­nies Shell, Valero, Cono­coPhillips, Cana­dian Nat­ural Re­sources Lim­ited and Cen­ovus En­ergy, has lob­bied the Obama ad­min­is­tra­tion to ap­prove the pipeline "tout suite" as the Cana­di­ans say.

Sec­re­tary of State Hillary Clin­ton has promised to wrap up a re­view of the Key­stone XL pro­ject be­fore the end of the year. The State De­part­ment promised to issue the final en­vi­ron­men­tal im­pact state­ment this month, and hold a sec­ond round of pub­lic hear­ings along the six- state route in Sep­tem­ber.

In­dus­try in­sid­ers say this is all pro forma and that the Obama ad­min­is­tra­tion will not lis­ten to its own cli­mate ex­perts and will ap­prove Key­stone XL, jus­ti­fy­ing it as "en­hanc­ing Amer­ica's en­ergy se­cu­rity".

For clear-headed cit­i­zens who find them­selves in Bizarro World, there is lit­tle choice but protest and civil dis­obe­di­ence to force their gov­ern­ments to pro­tect the fu­ture in­ter­ests of today's chil­dren. Start­ing Aug. 20, thou­sands of peo­ple will de­scend on the White House in Wash­ing­ton DC as part of a two-week long sit in. They hope to pres­sure the Obama ad­min­is­tra­tion to deny the "pres­i­den­tial per­mit" nec­es­sary for con­struc­tion on the pipeline.

"We hope those so in­clined will join protests sched­uled for Au­gust and de­scribed at tarsandsaction.​org," con­cludes the let­ter from the U.S.'s fore­most sci­en­tists - fully aware their ex­pert ad­vice will most likely be ig­nored in Bizarro World.

(Help us speak truth to power. Do­nate what you can af­ford to sup­port Na­tionofChange.)

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