Tuesday, February 16, 2016

A Perfect Storm  (Help!!! Latest Economic Moves Cause Opposite Effects to What Is Intended?)  Stalking Hillary - How Trump's Fascists Thrive  (Michael Moore Invades Even More Sacred Space)

Stocks Dive as Confidence in Fed Fades
We've piddled-away seven-long years on radical monetary experiments that have achieved nothing and led us right back to where we began.

If you want to know why stocks have been taking it on the chin lately, . . . the Central Banks have lost their touch which is why investors are cashing in and heading for the exits. This has nothing to do with the slowdown in China, bank troubles in Europe, capital flight in the emerging markets, droopy oil prices, or the deceleration in the global economy. Forget about that stuff. The real problem is that investors have lost confidence in the Fed. And for good reason.

. . . every report that showed the economy was underperforming or getting worse was greeted with cheers from Wall Street because they knew the Fed would promise additional accommodation (QE) or continue to maintain zero rates into the future. The Fed conditioned investors to ignore fundamentals and merely respond to the Pavlovian promise of more cheap money. That cheap money helped fuel a rally that tripled the value of the S&P 500 while inflating asset bubbles across the spectrum. But now the impact of low rates appears to be wearing thin which has investors concerned that the Fed has run out of bullets.

. . . In the last couple of weeks, the second and third biggest central banks (The European Central Bank and the Bank of Japan) either announced or launched additional easing programs, but to no effect. The BOJ implemented negative rates (NIRP) expecting the yen to weaken and stocks to rally. Instead, stocks fell off a cliff losing an astonishing 7.6 percent on the Nikkei while the yen strengthened by nearly 10 percent against the dollar. In other words, the results were the opposite of what the BOJ wanted.

. . . Keep in mind, QE has not increased inflation in any of the countries where it’s been implemented. Nor has it boosted lending, triggered a credit expansion or strengthened growth. It’s a total fraud. But it has had a big impact on stock prices, which is why central banks love it.

But now that’s changed. Now QE is backfiring and zero rates have lost their potency. Investors know this. They know that monetary policy has run-out-the-clock and that overpriced stocks – which have been outpacing flagging earnings for years – are going to return earth with a thud. This is why the sell-off could continue for some time to come.

Of course, now the focus has shifted to “negative interest rates,” the latest fad in central banking that is supposed to boost lending by charging banks a small fee on excess reserves. It’s another nutty attempt to prove that if you put money on sale, people will borrow. But what we’ve seen over the last seven years is that there are times when people won’t borrow no matter how cheap money is. The Fed can’t seem to grasp this. They can’t see to wrap their minds around the simple fact that reducing the cost of borrowing, does not always make it more desirable. Households that are trying to pay down their debts, increase their equity or save for retirement might not want to borrow regardless of how cheap the rates might be.

Richard Koo summed up the phenom in his recent newsletter:

“In my view, the adoption of negative interest rates is an act of desperation born out of despair over the inability of quantitative easing and inflation targeting to produce the desired results. That monetary policy has come this far is a clear indication that both ECB President Mario Draghi and BOJ Governor Haruhiko Kuroda have fundamentally misunderstood the ongoing recession …..”

William White:

The truth is, nobody really knows. The thing about these experiments, is that they’re experiments. We have no historic precedence for this kind of behavior by central banks at all. EVER. So the answer is:  We don’t know. The general idea is that if you charge negative interest rates on the reserves that the banks hold at the central banks that somehow this will translate into lower lending rate and more stimulus for the economy. But you have to realize that these negative rates will actually squeeze the banks margins, squeezing bank profits. This is something we actually don’t want because we want them to make more money so they can build up capital buffers. So what are the banks going to do?

RBHoughton · 3 hours ago

I suspect Europe and Japan have recognised the failure of the American experiment with unregulated free markets and are quietly removing support for the indispensible country's financial and commercial policies in as non-confrontational a way as possible.

Japan has always kept us out and only in the last two decades did we force a way in – the consequent domestic instability speaks for itself.

ECB and BoJ are leaving it to the markets America so dearly loves to reveal the truth of failure to Washington and Wall Street – its the only safe way.

So imo a crash is just what we need to force reality into the attention of US policy-makers as, if they cannot profit from the debt-based system, they will consider an alternative.

The important thing right now for all of us is to deliberate on what sort of world we want to live in, what policies are most important to us and our families, what policies increase happiness.

For example it is in the interests of the whole population to have money created by the government and no-one else. It is probably wise to allow government the power to target that money at those parts of the economy that need it.

That would never be the stock market or land and buildings. If the former returned 5% pa to investors that's enough. Land and buildings are our homes and are necessary for life, they may not be made expensive by speculators.

I remember when I was the first person in blogtopia (okay, at least the first person I was aware of) to say that the Sanders candidacy would probably only be a stalking horse used to gather the currently alienated (purposely alienated) liberal troops together as a committed team for later allocation (originally, that was a horse which preceded the real horse, or something that tests a concept or mounts a challenge against someone on behalf of another - also, sometimes used for a sham candidate put forward to conceal the candidacy of another or to divide the opposition) to the Democratic Party's pre-choice:  Hillary. Sad to say, Chris Hedges agrees (and just when I was hoping for something more salutary to arise from the campaign hubbub (madness)).

No movement or political revolution will ever be built within the confines of the Democratic Party. And the repeated failure of the American left to grasp the duplicitous game being played by the political elites has effectively neutered it as a political force. History, after all, should count for something.

The Democrats, like the Republicans, have no interest in genuine reform. They are wedded to corporate power. They are about appearance, not substance. They speak in the language of democracy, even liberal reform and populism, but doggedly block campaign finance reform and promote an array of policies, including new trade agreements, that disempower workers. They rig the elections, not only with money but also with so-called "superdelegates" — more than 700 delegates who are unbound among a total of more than 4,700 at the Democratic convention. Sanders may have received 60 percent of the vote in New Hampshire, but he came away with fewer of the state’s delegates than Clinton. This is a harbinger of the campaign to come.

If Sanders is denied the nomination — the Clinton machine and the Democratic Party establishment, along with their corporate puppet masters, will use every dirty trick to ensure he loses — his so-called movement and political revolution will evaporate. His mobilized base, as was true with the Obama campaign, will be fossilized into donor and volunteer lists. The curtain will come down with a thunderclap until the next election carnival.

The Democratic Party is a full partner in the corporate state. Yet Sanders, while critical of Hillary Clinton’s exorbitant speaking fees from firms such as Goldman Sachs, refuses to call out the party and — as Robert Scheer pointed out in a column in October — the Clintons for their role as handmaidens of Wall Street. For Sanders, it is a lie of omission, which is still a lie. And it is a lie that makes the Vermont senator complicit in the con game being played on the American electorate by the Democratic Party establishment.

Do Sanders’ supporters believe they can wrest power from the Democratic establishment and transform the party? Do they think the forces where real power lies — the military-industrial complex, Wall Street, corporations, the security and surveillance state — can be toppled by a Sanders campaign? Do they think the Democratic Party will allow itself to be ruled by democratic procedures?

Do they not accept that with the destruction of organized labor and anti-war, civil rights and progressive movements — a destruction often orchestrated by security organs such as the FBI — the party has lurched so far to the right that it has remade itself into the old Republican Party?

The elites use money, along with their control of the media, the courts and legislatures, their armies of lobbyists and “think tanks,” to invalidate the vote. We have undergone, as John Ralston Saul has written, a corporate coup d’état. There are no institutions left within civil society that can be accurately described as democratic. We do not live in a capitalist democracy. We live in what the political philosopher Sheldon Wolin calls a system of “inverted totalitarianism.”

In Europe, America’s Democratic Party would be a far-right party. The Republican Party would be extremist. There is no liberal — much less left or progressive — organized political class in the United States. The growth of proto-fascists will be halted only when a movement on the left embraces an unequivocal militancy to defend the rights of workers and move toward the destruction of corporate power.

As long as the left keeps surrendering to a Democratic Party that mouths liberal values while serving corporate interests, it will destroy itself and the values it claims to represent. It will stoke the justifiable rage of the underclass, especially the white underclass, and empower the most racist and retrograde political forces in the country. Fascism thrives not only on despair, betrayal and anger but a bankrupt liberalism.

The political system, as many Sanders supporters are about to discover, is immune to reform. The only effective resistance will be achieved through acts of sustained, mass civil disobedience. The Democrats, like the Republicans, have no intention of halting the assault on our civil liberties, the expansion of imperial wars, the coddling of Wall Street, the destruction of the ecosystem by the fossil fuel industry and the impoverishment of workings. As long as the Democrats and the Republicans remain in power we are doomed.

The Democratic establishment’s response to any internal insurgency is to crush it, co-opt it and rewrite the rules to make a future insurgency impossible. This was true in 1948 with Henry Wallace and in 1972 with George McGovern — ,u>two politicians who, unlike Sanders, took on the war industry — and in the 1984 and 1988 insurgencies led by Jackson.

Corey Robin in Salon explained how the Clintons rose to power on this reactionary agenda. The Clintons, and the Democratic establishment, he wrote, repudiated the progressive agenda of the Jackson campaign and used coded language, especially regarding law and order, to appeal to the racism of white voters. The Clintons and the party mandarins ruthlessly disenfranchised those Jackson had mobilized.

Sanders’ supporters can expect a similar reception. That Hillary Clinton can run a campaign that defies her long and sordid political record is one of the miracles of modern mass propaganda and a testament to the effectiveness of our political theater.

Sanders said that if he does not receive the nomination he will support the party nominee; he will not be a “spoiler.” If that happens, Sanders will become an obstacle to change. He will recite the mantra of the “least worst.” He will become part of the Democratic establishment’s campaign to neutralize the left.

Sanders is, in all but title, a Democrat. He is a member of the Democratic caucus. He votes 98 percent of the time with the Democrats. He routinely backs appropriations for imperial wars, the corporate scam of Obamacare, wholesale surveillance and bloated defense budgets. He campaigned for Bill Clinton in the 1992 presidential race and again in 1996 — after Clinton had rammed through the North American Free Trade Agreement (NAFTA), vastly expanded the system of mass incarceration and destroyed welfare — and for John Kerry in 2004. He called on Ralph Nader in 2004 to abandon his presidential campaign. The Democrats recognize his value. They have long rewarded Sanders for his role as a sheepherder.

Kshama Sawant and I privately asked Sanders at a New York City event where we appeared with him the night before the 2014 climate march why he would not run for president as an independent. “I don’t want to end up like Ralph Nader,” he told us.

Sanders had a point. The Democratic power structure made a quid pro quo arrangement with Sanders. It does not run a serious candidate against him in Vermont for his U.S. Senate seat. Sanders, as part of this Faustian deal, serves one of the main impediments to building a viable third party in Vermont. If Sanders defies the Democratic Party he will be stripped of his seniority in the Senate. He will lose his committee chairmanships. The party machine will turn him, as it did Nader, into a pariah. It will push him outside the political establishment. Sanders probably saw his answer as a practical response to political reality. But it was also an admission of cowardice. Nader paid a heavy price for his courage and his honesty, but he was not a failure.

Sanders, I suspect, is acutely aware that the left is broken and disorganized. The two parties have created innumerable obstacles to third parties, from locking them out of the debates to challenging voter lists and keeping them off the ballot. The Green Party is internally crippled by endemic factionalism and dysfunction. It is dominated in many states by an older, white demographic that is trapped in the nostalgia of the 1960s and narcissistically self-referential.

I spoke three years ago to the sparsely attended state gathering of the Green Party in New Jersey. I felt as if I was a character in Mario Vargas Llosa’s novel “The Real Life of Alejandro Mayta.” In the novel, Mayta, a naive idealist, endures the indignities of the tiny and irrelevant warring sects of the Peruvian left. He is reduced to meeting in a garage with seven self-described revolutionaries who make up the RWP(T) — the Revolutionary Workers’ Party (Trotskyist) — a splinter group of the marginal Revolutionary Worker’s Party. “Stacked against the walls,” Llosa writes, “were piles of "Workers Voice" and handbills, manifestos and statements favoring strikes or denouncing them which they had never got around to handing out.”

I am all for a revolution, a word Sanders likes to throw around, but one that is truly socialist and destroys the corporate establishment, including the Democratic Party. I am for a revolution that demands the return of the rule of law, and not just for Wall Street, but those who wage pre-emptive war, order the assassination of U.S. citizens, allow the military to carry out domestic policing and then indefinitely hold citizens without due process, who empower the wholesale surveillance of the citizenry by the government.

I am for a revolution that brings under strict civilian control the military, the security and surveillance apparatus including the CIA, the FBI, Homeland Security and police and drastically reduces their budgets and power. I am for a revolution that abandons imperial expansion, especially in the Middle East, and makes it impossible to profit from war.

I am for a revolution that nationalizes banks, the arms industry, energy companies and utilities, breaks up monopolies, destroys the fossil fuel industry, funds the arts and public broadcasting, provides full employment and free education including university education, forgives all student debt, blocks bank repossessions and foreclosures of homes, guarantees universal and free health care and provides a living wage to those unable to work, especially single parents, the disabled and the elderly. Half the country, after all, now lives in poverty. None of us live in freedom.

This will be a long and desperate struggle. It will require open confrontation. The billionaire class and corporate oligarchs cannot be tamed. They must be overthrown.

Michael Moore also lives under no such illusions.

And it's becoming more and more necessary for the rest of us to weigh seriously what we expect the next election to bring.

Readers of "Wall Street On Parade" will find Moore’s trip to Iceland of particular note. Iceland was also devastated by the financial crisis of 2008 and called upon an American, Professor Bill Black, to gain insights into how we prosecuted those to blame for the U.S. Savings and Loan crisis of the mid 1980s to early 90s. (Black was litigation director of the Federal Home Loan Bank Board, Deputy Director of the Federal Savings and Loan Insurance Corporation, Senior Vice President and General Counsel of the Federal Home Loan Bank of San Francisco and Senior Deputy Chief Counsel of the Office of Thrift Supervision.)

Unlike the U.S. Justice Department, which did not send one Wall Street banker to prison for his role in the greatest financial collapse since the Great Depression, Iceland meted out prison sentences to many of its bankers. The movie also shows that the one bank in Iceland that was run by women did not collapse.

Michael Moore’s New Movie Tries to Restore the American Dream by Showing Us What We’ve Lost

By Pam Martens and Russ Martens
February 15, 2016

Millions of Americans would have trouble defining even one of the amendments to the U.S. Constitution known as the Bill of Rights — which set forth the individual freedoms we gained through bloody street protests and wars waged by our ancestors. Millions of Americans have never participated in a street protest or marched for a cause they care about passionately. Many Americans have lost the ability to even care – believing the system is hopelessly corrupted beyond cure.

We sat in a small local theatre this past Saturday with friends to watch the new Michael Moore movie, “Where to Invade Next.” Coming in the midst of the presidential debates where one candidate is running on a platform to make America great again while continually insulting women and minorities and another is promising to reform campaign finance while raking in boatloads of corporate dough, the movie had an extra tug of poignancy.

The title, “Where to Invade Next,” is a subtle reminder of how America has practiced its diplomacy in recent years: through bombs and drone strikes on civilians. But there are only fleeting references to war in the movie. The actual story line is to send Michael Moore on a fact-finding mission (our “invader”) to European countries and bring back their best ideas to restore American democracy and the humane treatment of our citizens.

The movie is a powerful visual triumph that shakes us out of our denial of the statistics we’ve been reading for years: The decline in our educational standing in the world; the brutality of our police and prisons; the poverty level and food insecurity of more than 46 million Americans; the lack of affordable health care; the longest working hours in the industrialized world; and crippling college debt. Clearly, it doesn’t have to be this way and Moore shows us, in country after country, just how lagging America has become in the developed world.

Moore’s first stop is Italy where a couple explains how they receive a total of eight weeks of paid vacation each year, including their paid holidays. The couple tells Moore that this is standard policy in Italy, as is accumulating the paid days and rolling them forward if you don’t use them. Next up is France where Moore interviews the chef of a French school and sits with the children to have the nutritious multi-course meal that is prepared from scratch each day.

Moore moves on to Finland to learn how their education techniques are producing the best results in the world – with almost no homework assigned and much shorter school hours. The Finnish experts suggest to Moore that our teaching to the standardized test is what is killing our education system – that students need time to experience childhood and be happy.

In Slovenia, Moore finds that American students are actually moving there to obtain free higher education and avoid the fate of becoming student debt-slaves in America. Moore interviews a few young people who are even unfamiliar with the concept of “debt.”

One of the most emotional episodes for the audience comes with Moore’s tour of Germany. Instead of hiding from their Nazi past, the citizens have decided to confront their shame daily so that it can never happen again. Lamppost-style signs show where the atrocities occurred and memorial markings in the streets show the names of the citizens who were forced from their homes. A school teacher is pictured in the movie with a suitcase on the classroom floor, allowing the students to experience what it would feel like to be told you must leave your home. She asks them to bring the one most treasured thing they would place in the collective suitcase.

Moore shows what America’s signs might look like on lampposts if we were so brave as to confront our cruel past: for example, a sign on Wall Street showing where blacks were auctioned as slaves.

A trip by Moore to Portugal demonstrates how decriminalizing drug use has reduced levels of addition in the country. In Norway, Moore learns how the country has reduced recidivism by humane treatment of its prisoners. Scenes from America of blacks being beaten and degraded by police are interspersed into the Norway scenes of calm and compassion.

A trip to Tunisia in North Africa shows how women there were able to achieve the equal rights amendment to their constitution that American women have struggled to achieve for decades without success.

Readers of "Wall Street On Parade" will find Moore’s trip to Iceland of particular note. Iceland was also devastated by the financial crisis of 2008 and called upon an American, Professor Bill Black, to gain insights into how we prosecuted those to blame for the U.S. Savings and Loan crisis of the mid 1980s to early 90s. (Black was litigation director of the Federal Home Loan Bank Board, Deputy Director of the Federal Savings and Loan Insurance Corporation, Senior Vice President and General Counsel of the Federal Home Loan Bank of San Francisco and Senior Deputy Chief Counsel of the Office of Thrift Supervision.)

Unlike the U.S. Justice Department, which did not send one Wall Street banker to prison for his role in the greatest financial collapse since the Great Depression, Iceland meted out prison sentences to many of its bankers. The movie also shows that the one bank in Iceland that was run by women did not collapse. 

The right wing, of course, was quick to deride the movie as an exaggerated love fest with socialism. In reality, it is a deeply intellectual dialogue that Moore has been engaging in with the American people through his documentary continuum that began in 1989 with “Roger and Me,” showing the devastation to the city of Flint, Michigan when General Motors closed its plants to tap into cheap labor in Mexico.

By ignoring the rights of human beings and, instead, bestowing ever greater rights on corporations (to ban workers from the nation’s courts, to reap profit windfalls from worker deaths, to effectively steal from workers’ 401(k) plans and create new slave labor in corporate prisons), America has unleashed a far worse tyranny than it ever experienced under King George III – for which the Declaration of Independence was drafted.

There are basic human programs – like free higher education and universal health care and retirement security and food security — that differentiate a compassionate country from one under corporate dictatorship. That’s not socialism. These are basic human rights. The only reason these rights do not currently co-exist alongside America’s brand of capitalism is that the brand has evolved into an orgy of greed, political corruption and rule by the one percent.

Glancing at the baby boomers and elderly in the theatre on Saturday, there were many tears streaming down their faces. It’s one thing to know how far down the ladder of humanity we’ve come as a nation; it’s exponentially more painful to know it happened on your watch; that this is the legacy we leave to our children and grandchildren.

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