Wednesday, January 28, 2015

(Middle Class Terminated (Finally!))  Goldman-Sacked, Trojan-Hearsed Greece Ready To Rise or Die In Euro Chains? (Sleeper Cells Historical Lies)

Mr. Union-Buster Goes to Washington? Scott Walker Forms Committee for 2016 Run

Wisconsin governor makes first big step toward seeking the presidency. Why his chances may be better than you think

And now ex-Secretary of Labor, Robert Reich, joins ex-Assistant Secretary of the Treasury, Paul Craig Roberts, as a truth-teller (a truthie?) about the power games being played on American citizens by those connected to great newly-created sources of non-regulated, undeserved wealth.

It's been a pretty simple plan for them.

Some say the plan (the one in place since the initial financial deregulatory moves by the Reagan Contras in the early '80s) has been to rid the rich of the nuisance of having a U.S. middle class that was prosperous enough to "steal" a lot of their wealth through the sins of having reliable jobs (read that union-driven) with good pay and guaranteed benefits/retirements.

Whether this is true enough in retrospect or not, it's worth considering when we see the Koch-type moves ensuring that the middle class will never again be as strong as it was in the 60's and 70's (and why the unions will never ever again be allowed to thrive by those in charge).

It's good having these guys on our team.

Maybe it's a movement.

For us.

The Movement to Save America?

Jan 28, 2015 04:45 AM EST

Wall Street Is Choking the Middle Class

The former secretary of labor reflects on the single biggest threat to the continued health of the U.S. economy

This originally appeared on Robert Reich's blog.

Presidential aspirants in both parties are talking about saving the middle class. But the middle class can’t be saved unless Wall Street is tamed.

The Street’s excesses pose a continuing danger to average Americans. And its ongoing use of confidential corporate information is defrauding millions of middle-class investors.

Yet most presidential aspirants don’t want to talk about taming the Street because Wall Street is one of their largest sources of campaign money.

Do we really need reminding about what happened six years ago? The financial collapse crippled the middle class and poor — consuming the savings of millions of average Americans, and causing 23 million to lose their jobs, 9.3 million to lose their health insurance, and some 1 million to lose their homes.

A repeat performance is not unlikely. Wall Street’s biggest banks are much larger now than they were then. Five of them hold about 45 percent of America’s banking assets. In 2000, they held 25 percent.

And money is cheaper than ever. The Fed continues to hold the prime interest rate near zero.

This has fueled the Street’s eagerness to borrow money at rock-bottom rates and use it to make risky bets that will pay off big if they succeed, but will cause big problems if they go bad.

We learned last week that Goldman Sachs has been on a shopping binge, buying cheap real estate stretching from Utah to Spain, and a variety of companies.

If not technically a violation of the new Dodd-Frank banking law, Goldman’s binge surely violates its spirit.

Meanwhile, the Street’s lobbyists have gotten Congress to repeal a provision of Dodd-Frank curbing excessive speculation by the big banks.

The language was drafted by Citigroup and personally pushed by Jamie Dimon, CEO of JPMorgan Chase.

Not incidentally, Dimon recently complained of being “under assault” by bank regulators.

Last year JPMorgan’s board voted to boost Dimon’s pay to $20 million, despite the bank paying out more than $20 billion to settle various legal problems going back to financial crisis.

The American middle class needs stronger bank regulations, not weaker ones.

Last summer, bank regulators told the big banks their plans for orderly bankruptcies were “unrealistic.” In other words, if the banks collapsed, they’d bring the economy down with them.

Dodd-Frank doesn’t even cover bank bets on foreign exchanges. Yet recent turbulence in the foreign exchange market has caused huge losses at hedge funds and brokerages.

This comes on top of revelations of widespread manipulation by the big banks of the foreign-exchange market.

Wall Street is also awash in inside information unavailable to average investors.

Just weeks ago a three- judge panel of the U.S. court of appeals that oversees Wall Street reversed an insider-trading conviction, saying guilt requires proof a trader knows the tip was leaked in exchange for some “personal benefit” that’s “of some consequence.”

Meaning that if a CEO tells his Wall Street golfing buddy about a pending merger, the buddy and his friends can make a bundle — to the detriment of small, typically middle-class, investors.

That three-judge panel was composed entirely of appointees of Ronald Reagan and George W. Bush.

But both parties have been drinking at the Wall Street trough.

In the 2008 presidential campaign, the financial sector ranked fourth among all industry groups giving to then candidate Barack Obama and the Democratic National Committee. In fact, Obama reaped far more in contributions from the Street than did his Republican opponent.

Wall Street also supplies both administrations with key economic officials. The treasury secretaries under Bill Clinton and George W. Bush – Robert Rubin and Henry Paulson, respectfully, had both chaired Goldman Sachs before coming to Washington.

And before becoming Obama’s treasury secretary, Timothy Geithner had been handpicked by Rubin to become president of Federal Reserve Bank of New York. (Geithner is now back on the Street as president of the private-equity firm Warburg Pincus.)

It’s nice that presidential aspirants are talking about rebuilding America’s middle class.

But to be credible, he (or she) has to take clear aim at the Street.

That means proposing to limit the size of the biggest Wall Street banks;  resurrect the Glass-Steagall Act (which used to separate investment from commercial banking); define insider trading the way most other countries do – using information any reasonable person would know is unavailable to most investors; and close the revolving door between the Street and the U.S. Treasury.

It also means not depending on the Street to finance their campaigns.

(Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations, which has been translated into 22 languages; and his newest, an e-book, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the "American Prospect" magazine, and Chairman of the citizen’s group Common Cause. His new movie "Inequality for All" is in theaters. His widely-read blog can be found at

It seems that a country is not dead economically (to the "financiers" anyway) until the last rich person in the country is dead.

Then the money will start to flow (again).


Trojan Hearse:
Greek Elections and the Euro Leper Colony

Tuesday, January 20, 2015

By Greg Palast for το χωνί (Greece)

[updated January 26, 2015]

Europe is stunned, and bankers aghast, that the new party of the Left, Syriza, won Sunday's parliamentary elections in Greece.

Syriza won on the promise that it will cure Greece of leprosy.

Oddly, Syriza also promises that it will remain in the leper colony. That is, Syriza wants to rid Greece of the cruelty of austerity imposed by the European Central Bank but insists on staying in the euro zone.

The problem is, austerity run wild is merely a symptom of an illness. The underlying disease is the euro itself.

For the last five years, Greeks have been told that, if you cure your disease — that is, if you dump the euro — the sky will fall.  I guess Greeks haven’t noticed, the sky has fallen already.  With unemployment at 25%, with doctors and teachers eating out of garbage cans, there is no further to fall.

In 2010, when unemployment was a terrible 10%, a year into the crisis, the “Troika” (the European Central Bank, European Commission and the International Monetary Fund) told the Greeks that brutal austerity measures would restore their economy by 2012.

Ask yourself, Was the Troika right?

There is a saying in America:  Fool me once, shame on you.  Fool me twice, shame on me.

Can Greece survive without the euro?  Greece is already dead, but the Germans won’t even bother to bury the corpse.  Greeks are told that if they leave the euro and renounce its debts, the nation will not be able to access world capital markets.  The reality is, Greece can’t access world markets now:  no one lends to a corpse.

There’s a way back across the River Styx.  But it’s not by paddling on a euro.

There’s Life after Euro

Many nations do quite well without the euro.  Sweden, Denmark and India do just fine without the euro — and so does Turkey, which had the luck to be excluded from the euro-zone.  As long as Turks stick to the lira, even Turkey’s brain-damaged Islamo-fascist President Tayyip Erdoğan cannot destroy their economy.

Can Greece just dump the euro?  They have happy precedents to follow.

Argentina was once pegged to the US dollar much as Greece is tied to the euro today. In 2000, Argentines, hungry and angry, revolted. Argentina ultimately overthrew the dollar dictatorship, the IMF diktats and the threats of creditors, and defaulted on its dollar bonds. Free at last!

In the decade since, the Argentine economy soared.  Yes, today, Argentina is under attack by financial vultures, but that is only because the nation became so temptingly wealthy.

I was in Brazil when its President Luiz Inácio Lula da Silva told the IMF to go to hell — and rejected privatization of the state banks and the state oil company, rejected cutting pensions and thumbed his nose at the rest of the austerity nonsense.

Instead, Lula created the bolsa familia, a massive pay-out to the nation’s poor.  The result:  Brazil not only survived but thrived during the 2008-10 world financial crisis. Despite pressure, Brazil never ceded control of its currency. (It is a sad irony that Brazil is only now faltering.  That’s the fault entirely of Lula’s successor, President Dilma Rousseff,  who is beginning to dance the austerity samba.)

Austerity:  Religion, Not Economics

The euro is simply the deutschmark with little stars on it. Greece cannot adopt Germany’s currency without adopting Germany’s finance minister, Wolfgang Schäuble, as its own.

And Schäuble has determined that Greece must be punished. As my homey Paul Krugman points out, there is no credible economic theory that says that austerity — that is, cutting government spending, cutting wages, cutting consumer demand — can in any way help a nation in recession, in deflation. That’s why, in 2009, Obama ordered up stimulus, not a sleeping pill.

But austerity has nothing to do with economics.  It is religion:  the belief by the stern Lutheran Germans that Greeks have had too much fun, spent too much money, and spent too much lazy time in the sun — and now Greeks must pay a price for their sins.

Oddly, I hear this self-flagellating nonsense from Greeks themselves:  we are lazy.  We deserve our punishment.  Nonsense.  The average Greek works more hours in a year than any other worker in the 34 nations of the OECD; Germans the least.

The Euro’s Father Describes his Little Bastard

Alexis Tsipras, the leader of Syriza, would like to pretend that austerity and the euro are two different things, that you can marry the pretty girl but not invite her ugly sister to the wedding.

Apparently, the Syriza chief is blissfully ignorant of the history of the euro. The horror of austerity is not the consequence of Greek profligacy:  it was designed into the euro’s plan from the beginning.

This was explained to me by the father of the euro himself, economist Robert Mundell of Columbia University.  (I studied economics with Mundell’s buddy, Milton Friedman.)  Mundell not only invented the euro, he also fathered the misery-making policies of Thatcher and Reagan, known as “supply-side economics” – or, as George Bush Sr. called it, “voodoo economics.”

Supply-side voodoo is the long-discredited belief that if a nation demolishes the power of unions, cuts business taxes, eliminates government regulation and public ownership of utilities, economic prosperity will follow.

The euro is simply the other side of the supply-side coin. As Mundell explained it, the euro is the way in which congresses and parliaments can be stripped of all power over monetary and fiscal policy. Bothersome democracy is removed from the economic system.

“Without fiscal policy,” Mundell told me, “the only way nations can keep jobs is by the competitive reduction of rules on business.”

Greece, to survive in a euro economy, can only revive employment by reducing wages. Indeed, the recent tiny reduction in unemployment is the sign that Greeks are slowly accepting a permanent future of low wages serving piña coladas to Germans on holiday cruises.

It is argued that Greece owes Germany, the IMF and the European Central Bank for bail-out-billions. Nonsense.  None of the billions in bail-out funds went into Greek pockets.  It all went to bail out Deutsche Bank and other foreign creditors.

The EU treasuries swallowed 90% of its private bankers’ bonds.  Germany bailed out Germany, not Greece.

Nevertheless, Greece must pay Germany back, Mr. Tsipras, if you want to continue to use Germany’s currency, that is.

Greece:  Goldman Sacked

Greece’s ruin began with secret, fraudulent currency swaps, designed a decade ago by Goldman Sachs, to conceal Greek deficits that exceeded the euro zone’s 3%-of-GDP limit.

In 2009, when the truth came out, Greek debt holders realized they had been cheated.

These debt buyers then demanded usurious levels of interest (or, if you prefer, a high “spread”) to insure themselves against future fraud.

The compounding of this interest premium brought the Greek nation to its knees. In other words, the crimes committed to join and stay in the euro, not Greek profligacy, caused the crisis.

The USA, Brazil and China escaped from depression by increasing their money supply and government spending and taking control of currency exchange rates — crucial tools Greece gave up in return for the euro.

Worse, once the Trojan hearse of the euro entered Athens, tourism, Greece’s main industry, drained to Turkey where hotels and souvenirs are priced in cheap lira.

This allowed Dr. Mundell’s remorseless wage-lowering machine, the euro, to do its work, to force Greece to strip all its workers of pensions and power.

Greece fell to its knees, with no choice but to beg Germany for mercy.

But there is no mercy. As Germany’s Schäuble insists, democracy, this week’s vote, means nothing. "New elections change nothing in the accords struck with the Greek government,” he says.  “[Greeks] have no alternative.”

Ah, but they do, Mr. Schäuble.  They can tell you to take your euro and shove it up your Merkel.
*    *    *    *    *    *

Investigative reporter Greg Palast's book, Vultures' Picnic, with the no-BS inside story of the financial collapse, will soon be released in a Greek edition by Livanis.

Support the Palast Investigative fund with a tax-deductible donation and get a signed copy Vultures' Picnic or or simply make a tax-deductible contribution to keep our work alive!

Greg Palast is also the author of several "New York Times" bestsellers including The Best Democracy Money Can Buy andBillionaires & Ballot Bandits.

Palast is a Puffin Foundation Fellow for Investigative Reporting.

Subscribe to Palast's Newsletter and podcasts.

Sleeper cells?

Oh boy. Do we have a really secret sleeper cell in the U.S.

I remember one of my first "WTF" moments occurring (and I had no idea that that's what they would come to be known as) when Richard Rehnquist, lawyer to under-fire Attorney General John Mitchell, was named to the SCOTUS by Richard Milhaus (Watergate-fearing) Nixon in 1971, and then again when incredibly, unexpectedly elevated to the position of Chief Justice of the SCOTUS by Ronald Reagan.

Those weren't the days.

And they still aren't.

From our keeping-it-real source, The Green Eagle, we learn:

January 27, 2015

Sleeper Cell

The notion of the "sleeper cell," a group of subversives planted in a country with orders to live anonymously like normal citizens until called on to do their damage, really grew into a popular idea during the cold war, promoted by the same sort of people who now talk about Sharia law in the United States, and Al Qaida troops coming across the Mexican border, to sow fear and panic among the American people.

We've heard such utterly unsubstantiated talk a lot, the last few years, about Muslims in the United States and Europe. But curiously enough, the most malignant sleeper cell in the country, which has done damage so immense to the American people that Al Qaida or ISIS could never dream of such accomplishments, continues on its course of destruction with essentially no opposition.

This sleeper cell consists of the five corrupt "Conservative" Justices, carefully implanted on the Supreme Court by a concerted Republican campaign going back to Nixon's elevation of William Rehnquist to the Court.

The appointment of George W. Bush to the Presidency in defiance of the real national vote was the first major blow to our country from the Conservative bloc of justices. It succeeded in devastating our economy and our standing in the world through aggressive war and economic collapse, all the product of a patently fallacious and unjustified decision.

The second blow to the United States was the infamous Citizens United decision, again decided by the five Conservative Justices on the basis of clearly fallacious reasoning.

We were assured by these Justices (among other falsehoods) that their decision was fine because it could never lead to any sort of abuse of our democratic system by the rich.

Well, here is the result:  it is now the intent of two people - of course, the Koch Brothers - to spend nine hundred million dollars in the next campaign. To understand what that means, look at this chart, cribbed from "Mother Jones:"

What you can see here is that, thanks to the Citizens United decision, we have the phenomenon that two rich brothers can now spend more on a Presidential campaign than both parties combined spent on any Presidential campaign in our nation's entire history before 2008.

I'm not going to go on to rail about the destructive effects of such a cancerous growth in the political power of the super-rich; we all can see that.  But I will say that, if this is not stopped, this single Supreme Court decision, made by five corrupt Justices, will destroy this country in short order. That's all it will have taken:  no armies, no nuclear weapons, no suicide bombers, just five corrupt people put into the right place at the right time, by a party that has run off the tracks and now cares nothing for the fate of our nation.

America’s Billion-Dollar Mess:  How Koch Bros Are Trying To Buy a Right-Wing Future

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