The De-Americanization Of The World? Worse Than Watergate! (The End . . . Beautiful Friends?)

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Again, a judgment with no help for the defrauded homeowners.

Justice in America. You can't make the ending of this melodrama up any more tragically.

JPMorgan, a Record Penalty But No Relief for Homeowners

Reuters

"The ongoing criminal investigation underscores how even if this settlement takes some heat off JPMorgan Chief Executive Jamie Dimon, he still has myriad regulatory issues to deal with."

NY Jury: Bank of America Liable in Mortgage Fraud

If you thought ex-Assistant Treasury Secretary under Ronald Reagan, Paul Craig Roberts, was through making comments on the Obama Administration's personnel choices (and other outre political comments galore), you might want to rethink that one (and he would never say "I told you so").

Paul Craig Roberts

The Man Who Usurped The Constitution

Just as you think the Republicans have destroyed themselves with their government shutdown/default antics, along comes Obama and appoints a fascist murderer head of Homeland Security.

RT reports that Jeh Johnson, a drone proponent and the Pentagon General Counsel who authorized the unconstitutional extrajudicial murder of American citizen Anwar al-Awlaki, has been nominated to head Homeland Security. Jeh Johnson is also the Pentagon lawyer who accused WikiLeaks of “illegal and irresponsible actions” and of giving aid to terrorists. Will Congress confirm this tyrant to police state power?

According to an Obama spokesperson, Jeh Johnson was picked to head Homeland Security because “during his tenure at the Department of Defense, he was known for his sound judgment and counsel” and “because he is one of the most highly qualified and respected national security leaders.”

So now we know what it takes to have “sound judgment and counsel” and to be a
“highly respected national security leader.”

De-Americanization Of The World

GlobalEurope  agrees with my conclusion that the power and prestige of the US government are on the wane. In public announcement GEAB # 78 on October 16 echoing the Chinese government, GlobalEurope reports: “Everyone is trying to free itself from American influence and let go of a United States permanently discredited by recent events over Syria, tapering, shutdown and now the debt ceiling. The legendary US power is now no more than a nuisance and the world has understood that it’s time to de-Americanize.”

Further indication of Washington’s declining influence comes from last month’s rulings by the European Court of Justice overturning EU sanctions against Iranian corporations and financial institutions that were pushed into implementation by Washington. 

As Lawrence Stratton and I show in our book, The Tyranny Of Good Intentions, for a number of years the US has been abandoning “innocent until proven guilty” and adopting Jeremy Bentham’s totalitarian formulation of “pre-emptive arrest,” the arrest of people in the absence of a crime on the supposition that they might possibly commit a crime in the future. The European Court of Justice ruled that sanctions could not be imposed on Iranian business entities simply on the presumption that there was a risk that a business entity might provide support for nuclear proliferation in the future. In other words, punishment requires a crime, not the possibility that one might be committed in the future.

Washington, still overflowing with hubris and arrogance, will pay no attention to the EU court’s rulings. If the EU countries follow their court’s rulings, does this mean that Washington will sanction the EU countries for not obeying Washington’s sanctions?

Are EU governments now caught between Washington and their own court?

Worse Is To Come

Matt Taibbi’s report on the looting of state and municipal pension funds in behalf of Wall Street’s financial gangsters heralds what is in store for our private pensions. American conservatives who are so pleased that “those damned bureaucrats who live on the public tit” are getting their comeuppance fail to see the precedent for their own private pensions.

As long ago as the Clinton regime, Alicia Munnell, an economist at the Federal Reserve Bank of Boston who was appointed Assistant Secretary of the Treasury for Economic Policy, the position I had held in the Reagan administration, advocated confiscating 15 percent of private pension funds on the basis of the argument that the pensions had accumulated tax free.

The writing is on the wall for private pensions. Once the dollar becomes too weakened by the printing of vast amounts of them in order to finance Washington’s budget deficit and to support the solvency of “banks too big too fail,” QE will have to end. Desperate for money to fill the gap, Washington will turn to confiscation of private assets should any be left after the coming economic collapse.

Darth Vader In The White House

Meanwhile, rest assured. The US is not an empire and does not behave as one, so Obama assured the United Nations. The US, Obama said, is simply the one dominant power that can bring order to the world and prevent “a vacuum of leadership.”

Bin Laden’s “Killing”

Seymour Hersh, America’s famous investigative reporter, joins me in the ranks of “conspiracy theorist,” that is, a person who tells the truth. Hersh says that the dramatic story of the murder of Osama bin Laden by US Navy SEALs in 2011 is “one big lie, not one word of truth in it.”

I told you so, and so did Mohammad Bashir.

(Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.)

We know now that when people ask "worse than Watergate?" it's not a rhetorical question. It just requires a minor facility with mathematics.

Sunday, October 20, 2013

OtherWords

Worse than Watergate

A new Supreme Court campaign finance case could unleash unprecedented political corruption.

by Sam Pizzigati

The U.S. Supreme Court is mulling a case that could end up giving America’s wealthy a perpetual green light to contribute as much as they want directly to politicians and political parties.



(Photo: tonynetone/cc/Flickr)

Credit Shaun McCutcheon, an Alabama businessman who owns an electrical engineering company, for getting this ball rolling. In the 2012 election cycle, McCutcheon contributed heavily to conservative candidates and Republican Party committees. But the experience left the mega millionaire feeling terribly aggrieved.

Federal campaign finance reform legislation enacted four decades ago in the wake of the Watergate scandal limits how much individuals can give directly to candidates and political parties. In 2012, McCutcheon ran up against those limits, then sitting at about $46,000 for candidates and $70,000 for party committees.

McCutcheon had wanted to give candidates and party panels much more. Under the law, he couldn’t then — and he can’t now either. The current, inflation-adjusted aggregate limit for the 2014 congressional elections: $123,000.

But wealthy individuals like McCutcheon, thanks to previous court decisions, can spend on their own, independently of candidate and party campaigns, as much as they want to influence a federal election’s impact.

In other words, a billionaire can’t currently give a particular congressional candidate a $1 million check. But the same billionaire can legally hand a TV station $1 million to run 30-second ads that extol that candidate’s virtues — or attack that candidate’s opponent.

This sort of “independent expenditure” can make a major impact as campaigns play out. Independent expenditures can also complicate campaigns, especially when deep-pockets go “off-message” in the advertising they finance. In most situations, candidates and political parties would much rather have billionaires contribute directly to them and not go off and spend independently.

If the Supreme Court uses the McCutcheon case to erase our last remaining Watergate-era campaign funding limits, these political insiders will get their way. For the first time in years, they would be able to solicit unlimited contributions from America’s wealthy.

That turn of events, public interest groups point out, would leave political candidates and party officials even more eager to grant wealthy donors improper influence.

Fred Wertheimer, America’s elder statesman of campaign finance reform, is imparting a particularly dire warning. Repealing limits on direct contributions to candidates and parties, he contends, would take us right back to the same political corruption that led to the Watergate scandals.

But Wertheimer may actually be understating the danger. Repealing limits on direct contributions to candidates and parties would likely create a political environment far more toxic than anything we experienced before Watergate.

Back before Watergate, in the mid 20th century, America’s rich didn’t have nearly as much wealth.

Some numbers: In 1972, the year of the Watergate burglary, the nation’s top 0.1 percent averaged, in today’s dollars, the equivalent of $1.48 million in income. In 2012, America’s top 0.1 percent averaged $6.4 million. That’s more than a four-fold increase.

But the gap between rich then and rich now becomes even greater when you take taxes into effect. In 1972, taxpayers averaging $1.48 million in today’s dollars paid 40.7 percent of their total incomes in federal income tax. In 2012, note Tax Policy Center estimates, taxpayers in the top 0.1 percent paid federal income taxes at about half that rate.

The bottom line: America’s really rich in 2012 had over six times more after-tax dollars in their pockets, after inflation, than their counterparts in 1972.

We shouldn’t fear a wave of Watergate corruption. If the Supreme Court ends all limits on the campaign cash the super rich can throw at their candidates, American politics faces dangers far more troubling than anything Richard Nixon ever imposed upon us.
____________________

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License



Sam Pizzigati edits Too Much, the Institute for Policy Study's online weekly newsletter on excess and inequality.

7 Horrifying Things About the Chicken You Eat

Nor is arsenic the only unwanted chemical guest. Looking at feathers of factory farmed birds, researchers have also found evidence of caffeine and the active ingredients in Tylenol, Benadryl and Prozac reports the New York Times' Nicholas Kristof. The caffeine is supposed to keep chickens awake so they eat more, while Benadryl, Tylenol and Prozac are supposed to reduce their anxiety so their meat doesn't get tough, says Kristof.

_ _ _ _ _ _ _

Seems like Jim Morrison did a better job on this theme than I could ever do.

Although Dr. P.C. Roberts does it pretty well too, bringing a perspective on current international events that has either eluded or just been ignored by the U.S. mainstream media.

As Ye Sow, So Shall Ye Reap

October 23, 2013

Dear readers: This is not the quarterly request for donations. It is a reminder that this is your site, and it will stay up as long as you support it.

Paul Craig Roberts

The year 2014 could be shaping up as the year that the chickens come home to roost.

Americans, even well-informed ones, don’t know all of the mistakes made by neoconized and corrupted Washington in the past two decades. However, enough is known to see that the US has lost economic and political power, and that the loss is irreversible.

The economic cost of this lost will be born by what remains of the middle class and the increasingly poverty-stricken lower class. The one percent will have offshore gold holdings and large sums of money in foreign currencies and other foreign assets to see them through.

In the political arena, the collapse of the Soviet Union presented Washington with the grand opportunity to reallocate the Pentagon budget to other uses. Part of the reduction could have been returned to taxpayers for their own use. Another part could have been used to improve worn out infrastructure. And another part could have been used to repair and improve the social safety net, thus insuring domestic tranquility. A final, but perhaps most important part, could have been used to begin repaying the Treasury IOUs in the Social Security Trust Fund from which Washington has borrowed and spent $2 trillion, leaving non-marketable IOUs in the place of the Social Security payroll tax revenues that Washington raided in order to fund its wars and current operations.

Instead, influenced by neoconservative warmongers who advocated America using its “sole superpower” status to establish hegemony over the world, Washington let hubris and arrogance run away with it. The consequence was that Washington destroyed its soft power with lies and war crimes, only to find that its military power was insufficient to support its occupation of Iraq, its conquest of Afghanistan, and its financial imperialism.

Now seen universally as a lawless warmonger and a nuisance, Washington’s soft power has been squandered. With its influence on the wane, Washington has become more of a bully. In response, the rest of the world is isolating Washington.

The prime minister of India, Manmohan Singh, recently declared China and Russia to be India’s “most important partners” with whom India shares “common strategic interests.” Prime Minister Singh said: “ India and Russia have always had a convergence of views on global and regional issues, and we value Russia’s perspective on international developments of mutual interest.”

India joined China in expressing concerns about the Federal Reserve’s practice of printing money in order to cover Washington’s vast red ink. The BRICS (Brazil, Russia, India, China, South Africa) are taking steps to create their own method of settling trade accounts in order to protect themselves from the looming dollar implosion.

China has forcefully called for a “de-Americanized world.” After watching the “superpower” offshore a large part of its GDP to China and then add to the diminished tax base the burden of $6 trillion in wars that brought no booty and served no US interest, China has concluded that American power is spent. The London Telegraph thinks “it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources.”

The Obama regime attempted to attack Syria based on the sort of lies that the Bush regime used to invade Iraq, only to be slapped down by the British Parliament and Russian government. This rebuke was followed by the childishness of the government shutdown and threat of default. Consequently, the Washington morons have lost their monopoly on economic and political leadership. A few days ago the British government announced a historic agreement that permits British investors direct access to China’s markets and allows Chinese banks to expand their operations in Great Britain.

In Australia, the US dollar will no longer be used as the currency in which to settle the Australian trade accounts with China. Instead of dollars, trade will be settled in the Chinese currency.

Washington served as cheerleader, as did most economists and libertarians, while US corporations, greedy for short-term profits and executive bonuses, offshored US industry and manufacturing, calling it free trade. The obvious and predicted result is that China’s demand for resources needed to fuel its industrial and manufacturing power now dominates markets. This means that the US dollar is being displaced as world currency. The only market that America dominates is the market for financial fraud.

When industrial, manufacturing, and tradeable professional service jobs are offshored, they take US GDP and tax base with them. The foreign country gets the benefit of the relocated economic activity. Due to the revenues lost from jobs offshoring, there is a large gap between federal revenues and federal expenditures. As Washington’s irresponsible behavior has raised so many doubts about the dollar’s value and the government’s commitment to stand behind its massive debt, foreign countries with trade surpluses with the US are less and less willing to recycle those surpluses into the purchase of US Treasury debt.

Today the two largest holders of US Treasury debt are not investors or even foreign central banks. The two largest holders are the Federal Reserve and the Social Security Trust Fund.

As for those $6 trillion wars, that’s to pay for national defense to protect us from women, children, and village elders in far away countries devoid of air forces and navies, and to provide those recycled taxpayer monies from the military/security complex that find their way into political contributions.

The Wall Street gangsters sighed for relief over the last minute debt ceiling agreement. This shows how short-term Wall Street’s outlook is. All the October agreement did was to push off the crisis to January and February. The “debt ceiling agreement” did not produce a new debt ceiling that would last beyond February, and it did not resolve the large difference between federal revenues and expenditures. In other words, the can was again kicked down the road. A repeat of the October fiasco won’t play well.

Obamacare is causing the premiums on private insurance polices to rise substantially, almost doubling in some situations unless people move to the uncertain exchanges, and Obamacare’s raid on Medicare payroll tax revenues has resulted in a cut in Medicare payments to health care providers. The result is a further reduction in consumer discretionary income and a further drop in the economy.

This in turn means a larger federal budget deficit and the need for the Federal Reserve to purchase more debt.

Another reason the Federal Reserve is faced with increasing, not tapering, quantitative easing (money printing) is the decline in foreign purchases of US Treasury bills, notes, and bonds. As the instruments pay interest that is less than the rate of inflation, holding Treasury debt makes no sense when the dollar’s value and the potential of default are open questions.

According to reports, not only are foreign governments, such as China, ceasing to buy US Treasury debt, China has started to sell off its holdings, substituting gold in the place of US Treasury debt.

This means that the bonds must be purchased by the Fed or interest rates will rise as the increased supply of bonds on the market drives down bond prices. The only way the Fed can purchase a larger supply of bonds is by printing more money, that is, by more quantitative easing.

With the world moving away from using the dollar to settle international accounts, as the Fed prints more dollars the rate at which foreign holders of dollar assets sell off their holdings will rise.

To get out of dollars requires that the dollar proceeds from selling Treasuries, US stocks and US real estate be sold in the currency markets. The selling of dollars drives down the exchange value of the US dollar and results in rising US inflation. The Fed can print money with which to purchase Treasury debt, but it cannot print foreign currencies with which to purchase dollars.

The decline in the dollar’s exchange value and the domestic inflation that results will force the Fed to stop printing. What then covers the gap between revenues and expenditures? The likely answer is private pensions and any other asset that Washington can get its hands on.

Initially, private pensions will be taxed at a rate to recover the tax-free accumulation in the pensions. The second year a national emergency will be used to confiscate some share of pensions. Those relying on the pensions will find themselves with less income. Consumer spending will decline. The economy will worsen. The deficit will widen.

You can see where this is going, and there seems to be no way out. Policymakers, economists, and corporation executives are in denial about the adverse effects of offshoring, which they still, despite all the evidence, maintain is good for the economy. So nothing will be done about offshoring. Republicans will blame the budget deficit on welfare and entitlements, and if those are cut consumer spending will decline further, widening the budget deficit.

Inflation will rise as incomes fall, and social cohesion will break down.

Now you know why Homeland Security purchased 1.6 billion rounds of ammunition, enough ammunition to fight the Iraq war for 12 years, has its own para-military force and 2,700 tanks. If you think the “terrorist threat” in America warrants a domestic armed force of this size, you are out of your mind. This force has been assembled to deal with starving and homeless people in the streets of America.

September employment report: According to the Bureau of Labor Statistics (BLS), September brought 148,000 new jobs, enough to keep up with population growth but not reduce the unemployment rate.

Moreover, John Williams (www.shadowstats.com) says that one-third of these jobs, or 50,000 per month on average, are phantom jobs produced by the birth-death model that during difficult economic times overestimates the number of new jobs from business startups and underestimates job losses from business failures.

The BLS reports that 22,000 of September’s jobs were new hires by state governments, which seems odd in view of the ongoing state budgetary difficulties.

In the private sector, wholesale and retail trade produced 36,900 new jobs, which seems odd in light of the absence of growth in real median family income and real retail sales.

Transportation and warehousing produced 23,400 new jobs, concentrated in transit and ground passenger transportation. This also seems odd unless the price of gasoline and pinched budgets are forcing people onto public transportation.

Professional and business services accounted for 32,000 jobs of which 63% are temporary help jobs.

So here you have the job picture that the presstitutes, hyping “the jobs gain,” don’t tell you. The scary part of the September job report is that the usual standby, the category of waitresses and bartenders, which has accounted for a large part of every reported jobs gain since I began reporting the monthly statistics, shows job loss. Seven thousand one hundred waitresses and bartenders lost their jobs in September. If this figure is not a fluke, it is bad news. It signals that fewer Americans can afford to eat and drink out.

The unemployment rate that is reported is the rate that does not count as unemployed discouraged workers who are unable to find jobs and cease to look. This favored rate, the darling of the regime in power, the presstitutes, and Wall Street, also is not adjusted for the category of “involuntary part-time workers,” those whose hours have been cut back or because they are unable to find a full-time job. Obamacare, as is widely reported, is causing employers to shift their work forces from full time to part time in order to avoid costs associated with Obamacare. The BLS places the number of involuntary part-time workers at 7,900,000.

The announced 7.2% unemployment rate is a meaningless number. The rate can decline for no other reason than people unable to find jobs drop out of the work force. You are not counted in the work force if you are discouraged about finding a job and no longer look for a job.

The phenomena of discouraged workers shows up in the measure of the labor force participation rate, which has declined in the 21st century. The opportunities for American labor are so restricted that a rising percentage of the working age population have given up looking for jobs.

Yet, the Obama regime, the Wall Street gangsters, and the pressitute media tell us how much better the economic situation is becoming as more small businesses close, as memberships decline in golf clubs, as more university graduates return home to live with their parents, who are drawing down their savings to live, as Fed Chairman Bernanke has made it impossible for them to live on interest payments on their savings.

According to the US census bureau, real median household income in 2012 was $51,017, down 9% from $56,080 in 1999, 13 years ago. In contrast, annual compensation in 2012 for US CEOs broke all records. Two CEOs were paid more than $1 billion, and the worst paid among the top ten took home $100 million. When the presstitutes speak of economic recovery, they mean recovery for the one percent.

America is in the toilet, and the rest of the world knows it. But the neocons who rule in Washington and their Israeli ally are determined that Washington start yet more wars to create lebensraum for Israel.

Early in the 21st century the liberal Democrat Senator from New York, Chuck Schumer, and I coauthored an article in the New York Times about the adverse effects on the US economy of jobs offshoring. The article caused a sensation. The Brookings Institution in Washington quickly convened a conference which was covered by C-SPAN. C-SPAN rebroadcast the conference several times. During the conference I said that if jobs offshoring continued, the US would be a third world economy in 20 years.

Wall Street quickly shut up Senator Schumer, but I am sticking by my forecast. Indeed, I think we are already there.

Bravo, PCR.

(How about that Chinese (if not international) raspberry for all the good jobs we've shipped their way? Haven't they heard of drones?)