Thursday, May 31, 2012

John Edwards Finally (After Two Years of Sensationalism) Not Guilty On Only Determinable Count; Judge Rules Mistrial On Rest of Counts

Whew. The Republican (Jesse Helms' machine appointees funded by Scaife/Mellon/Koch/who knows the most current? money) stalking of John Edwards has been momentarily stymied.

I'm guessing if he never raises his head again (and particularly doesn't mention the words "inequality" or "poor people" again on a national stage) that he will probably be left alone, but having just seen him on the local news, his words indicate that he may be more difficult for them to get rid of than that.

So, join the ranks of Gary Hart, John Kerry and all the rest of the progressive candidates ground up under the vast right-wing money wheels of injustice, John.

John Edwards Not Guilty On One of Six Counts

By Dylan Stableford | The Ticket

After nearly two weeks of deliberations, the jury in the John Edwards corruption trial in Greensboro, N.C., said on Thursday that it could agree on a verdict for just one of six counts but remained deadlocked on the others--and U.S. District Judge Catherine Eagles declared a mistrial.

Earlier Thursday, Eagles asked the 12-member jury to continue deliberations and come to a decision on the remaining five counts, but the jury returned without one.

The one count the jury agreed on, count three, was related to money given to Edwards by Rachel "Bunny" Mellon, a wealthy heiress. According to ABC News, the jury found Edwards not guilty of that count.

Edwards had been charged with conspiracy, four counts of receiving illegal campaign contributions and one count of making false statements for allegedly soliciting and secretly spending over $925,000 to cover up his affair with Rielle Hunter, a campaign videographer, during the 2008 presidential election. He faced up to 30 years in prison and $1.5 million in fines if he had been convicted on all counts.


The jury began deliberations on May 18 after a month of testimony that covered the sordid details of Edwards' affair with Hunter, the elaborate cover-up and campaign finance law.

Prosecutors said Edwards knew exactly what he was doing in 2008 when he used nearly $1 million in campaign funds to cover up his affair with Hunter.

Lawyers for the former presidential candidate claimed the payments from Mellon and trial lawyer Fred Baron were intended as personal gifts, not political contributions, to shield Edwards' wife from learning of Hunter's pregnancy with his child. Elizabeth Edwards, who was battling cancer at the time, died in 2010.

The defense argued that while he may have been a "bad husband," he did not violate any federal laws.
Edwards did not testify during the trial, nor did Hunter, who lives in Charlotte, N.C., with Frances Quinn, her four-year-old daughter with Edwards.

Wednesday, May 30, 2012

We've Learned the Truth (Painfully) About the Job Destroyers - Now We Learn How the “Job Creators” REALLY Spend Their Money

I have a weakness for quoting from the best. This has become my raison d’être in doing the research for this blog every day.

Please forgive me.

The following short essay is from the Comment section attached to the Paul Krugman essay on the egos and illogical vanity of the financial crime crowd. I'm running this because I think it's about the most instructive short treatment of this very long, problematical history.

Someone should be paying attention to those who know the history of this bad lot because it is getting ready to bite us hard again. (As the essay below it shows all too clearly.)

And as I've said dozens of times on this blog, big money stolen doesn't disappear (no matter how the scoundrels try to obfuscate). It goes into hiding . . . until it finds another sucker.

And the USA has been played for the ultimate suckers. At least since it was "Morning in America" in the early 80's public fantasy.

I mean, really. What did you think those trips to China by Bush and Kissinger were all about?

And Bush the 1st running the CIA? And Bush the 2nd being found eligible for any job at all.

Come onnnnnnn. Think!


David Underwood, Citrus Heights

There was a time when Wall Street financed industries and capitalist ventures. The firms that did this were owned by partners. They shared in the losses and profits. Then Solomon Brothers conceived the idea of taking the company public. As an investment bank, they could not engage in commercial banking. On the other side was Citibank, one of the banks that led the country in fraud in 1929. Citibank then known as National City Bank of New York, led by their president Charles Mitchell had been selling worthless stock it owned, to its customers.Smiling Charlie as he was known was one of the most trusted people in the country. By the time Ferdinand Pecora finished with him, he was shown to be just another charlatan. That brought us the Glass-Steagal Act.

When Soloman Brothers went public the financial community was well on its way to convincing congress that times had changed, that the market was self regulating. They and Alan Greenspan convinced congress to nullify Glass-Steagal. The next step was collateralizing debt, which led to what we can call Financial Engineering, a new way to harvest money. To make this palatable to the public, it was labeled Capitalism.

These manipulations of the financial market are not Capitalism. They are closer to the control exercised by the European Banks that financed wars for hundreds of years. They do not build anything, or create anything, they just accumulate money for those who can convince others to buy their financial instruments.

It's no secret that there have been no jobs created by those so-called "job creators" with the billions (several  trillion, actually) given to them by the taxpayers after they crashed the system. What is known by even small children is that they have had no compunction (that's morality for the rest of us) in awarding and accepting even more bribes, which they called bonuses.

And we call laugh-in-our-faces corruption.

It's amazing to me every time it crosses my mind that children can look at their parents today with anything but contempt.  And loathing.

How the “Job Creators” REALLY Spend Their Money

Paul Buchheit

In his "Gospel of Wealth," Andrew Carnegie argued that average Americans should welcome the concentration of wealth in the hands of a few, because the "superior wisdom, experience, and ability" of the rich would ensure benefits for all of us.
More recently, Edward Conard, the author of "Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong, said: "As a society, we're not offering our talented few large enough rewards. We're underpaying our 'risk takers.'"

Does wealthy America have a point, that giving them all the money will ensure it's disbursed properly, and that it will create jobs and stimulate small business investment while ultimately benefiting society? Big business CEOs certainly think so, claiming in a letter to Treasury Secretary Timothy Geithner that an increase in the capital gains tax would reduce investment "when we need capital formation here in America to create jobs and expand our economy."

They don't cite evidence for their claims, because the evidence proves them wrong. Here are the facts:
1. The Very Rich Don't Like Making Risky Investments

Marketwatch estimates that over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, and real estate. According to economist Richard Wolff, about half of the assets of the richest 1% are held in unincorporated business equity (personal business accounts). The Wall Street Journal notes that over three-quarters of individuals worth over $20 million are invested in hedge funds.

Angel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011.

The Mendelsohn Affluent Survey confirmed that the very rich spend less than two percent of their money on new business startups. The last thing most of them want, apparently, is the risky business of hiring people for new innovation.

2. The Very Rich Don't Like Taking On Risky Jobs

CEOs, upper management, and financial professionals made up about 60 percent of the richest 1% of Americans in 2005. Only 3 percent were entrepreneurs. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds.

In fact, the very rich may not care about U.S. jobs in any form. Surveys reveal that 60 percent of investors worth $25 million or more are investing up to a third of their total assets overseas. Back home, the extra wealth created by the Bush tax cuts led to "worst track record" for jobs in recorded history. The true American job creator, as venture capitalist Nick Hanauer would agree, is the middle-class consumer.

3. The Very Rich Corporations Don't Like Spending On America

How do corporations spend their money? To a good extent, they don't. According to Moody's, cash holdings for U.S. non-financial firms rose 3 percent to $1.24 trillion in 2011. The corporate cash-to-assets ratio nearly tripled between 1980 and 2010. It has been estimated that the corporate stash of cash reserves held in America could employ 3.5 million more people for five years at an annual salary of $40,000.

The top holders of cash, including Apple and Google and Intel and Coca Cola and Chevron, are spending their money on stock buybacks (which increase stock option prices), dividends to investors, and subsidiary acquisitions. According to Bloomberg, share repurchasing is at one of its highest levels in 25 years.

Apple claims to have added 500,000 jobs to the economy, but that includes app-building tech enthusiasts and Fedex drivers delivering iPhones. The company actually has 47,000 U.S. employees, about one-tenth of General Motors' workforce in the 1990s.

The biggest investment by corporations is overseas, where they keep 57 percent of their cash and fill their factories with low-wage workers.
Commerce Department figures show that U.S. companies cut their work forces by 2.9 million from 2000 to 2009 while increasing overseas employment by 2.4 million. They also tap into a "brain drain" of foreign entrepreneurs, scientists, and medical professionals rather than supporting education in America.

One last way corporations see fit to spend their money: executive bonuses. Especially at the banks, where the extra stipends are often paid for with zero interest loans from the Federal Reserve.

The richest individuals and corporations are really good at building up fortunes. They're even better at building up their "job creator" myth.

And on a serious person note, if anyone could contribute a few bucks to the further operation of this blog, it will be wholeheartedly appreciated. Thank you for reading and for your support.

Stocks plummet as outlook in Europe dims

China rolls out mini-stimulus to fight slump 

Kevin Tillman Remembers His Brother Pat

Tuesday, May 29, 2012

(It's Real War!) Fiscal and Other Type Phonies and Liars (In the War Against Democracy - Stateside): Questions the Wheeler-Dealers Don't Want Asked

Poor poor rich people.

Do I need to say it one more time?

Seems like I do.

Big Fiscal Phonies

Paul Krugman

May 27, 2012

Quick quiz: What’s a good five-letter description of Chris Christie, the Republican governor of New Jersey, that ends in “y”?

The obvious choice is, of course, “bully.” But as a recent debate over the state’s budget reveals, “phony” is an equally valid answer. And as Mr. Christie goes, so goes his party.

Until now the attack of the fiscal phonies has been mainly a national rather than a state issue, with Paul Ryan, the chairman of the House Budget Committee, as the prime example. As regular readers of this column know, Mr. Ryan has somehow acquired a reputation as a stern fiscal hawk despite offering budget proposals that, far from being focused on deficit reduction, are mainly about cutting taxes for the rich while slashing aid to the poor and unlucky.

In fact, once you strip out Mr. Ryan’s “magic asterisks” — claims that he will somehow increase revenues and cut spending in ways that he refuses to specify — what you’re left with are plans that would increase, not reduce, federal debt.

The same can be said of Mitt Romney, who claims that he will balance the budget but whose actual proposals consist mainly of huge tax cuts (for corporations and the wealthy, of course) plus a promise not to cut defense spending.

Both Mr. Ryan and Mr. Romney, then, are fake deficit hawks. And the evidence for their fakery isn’t just their bad arithmetic; it’s the fact that for all their alleged deep concern over budget gaps, that concern isn’t sufficient to induce them to give up anything — anything at all — that they and their financial backers want

They’re willing to snatch food from the mouths of babes (literally, via cuts in crucial nutritional aid programs), but that’s a positive from their point of view — the social safety net, says Mr. Ryan, should not become “a hammock that lulls able-bodied people to lives of dependency and complacency.”

Maintaining low taxes on profits and capital gains, and indeed cutting those taxes further, are, however, sacrosanct.
Still, Mr. Ryan and Mr. Romney are playing to a national audience. Are Republican governors, who have to deal with real budget constraints, different? Well, there have been many claims to that effect; Mr. Christie, in particular, has been widely held up, not least by himself, as an example of a politician willing to make tough choices. 
But last week we got to see him facing an actual tough choice — and aside from the yelling-at-people thing, he proved himself just another standard fiscal phony.
Here’s the story: For some time now Mr. Christie has been touting what he calls the “Jersey comeback.” Even before his latest outburst, it was hard to see what he was talking about: yes, there have been some job gains in the McMansion State since Mr. Christie took office, but they have lagged gains both in the nation as a whole and in New York and Connecticut, the obvious points of comparison.
Yet Mr. Christie has been adamant that New Jersey is on the way back, and that this makes room for, you guessed it, tax cuts that would disproportionately benefit the wealthy.
Last week reality hit: David Rosen, the state’s independent, nonpartisan budget analyst, told legislators that the state faces a $1.3 billion shortfall. How did the governor respond?  
First, by attacking the messenger. According to Mr. Christie, Mr. Rosen — a veteran public servant whose office usually makes more accurate budget forecasts than the state’s governor — is “the Dr. Kevorkian of the numbers.” Civility!
By the way, even Mr. Christie’s own officials are predicting a major budget shortfall, just not quite as big. And the two big credit-rating agencies, Moody’s and Standard & Poor’s, have recently issued warnings about New Jersey’s budget situation, which S.& P. called “structurally unbalanced” because of the governor’s optimistic revenue assumptions.
New Jersey, then, is still in dire fiscal shape. So is our tough-talking governor willing to reconsider his pet tax cut? Fuhgeddaboudit. 
Instead, he wants to fill the hole with one-shot budget gimmicks, including reneging on a promise to reduce borrowing for transportation investment and diverting funds from clean-energy programs. So much for fiscal responsibility.
Will Mr. Christie’s budget temper tantrum end speculation that he might become Mr. Romney’s running mate? I have no idea. But it really doesn’t matter: whoever Mr. Romney picks, he or she will cheerfully go along with the budget-busting, reverse Robin Hood policies that you know are coming if the former governor wins.
For the modern American right doesn’t care about deficits, and never did. All that talk about debt was just an excuse for attacking Medicare, Medicaid, Social Security and food stamps. And as for Mr. Christie, well, he’s just another fiscal phony, distinguished only by his fondness for invective.

May 28, 2012

New York, NY

This is finally it. With these 771 words of Krugman's we can finally stop forever the charitable and false assumption that takes the Right at its word that they care about fiscal responsibility. It is about power,it is about dominant power, it is about total power.

The curtain of neoliberal economics is pulled back now, to reveal the true machinations of its 'we are the grown ups here, because there is no such thing as a free lunch ' rhetoric .

What is revealed is something much less than the bumbling old man in the Wizard of Oz. Rather, it is a tiny set of cruel and vicious white frat boys who never became real men. Their misogyny, cruelty, and brutality has to be channeled into the only acceptable public arena left, economic policy. Because they are supposedly supported by economic 'science', they can claim they are just doing what is necessary for the economy.

They are thugs, bullies, and the are killing democracy. They must be trounced in the ballot box, again and again, if we are to prevent America from declining even further. They must be taught that there is no free lunch, that they can not just dine on the lives of the poorest among us to meet their grotesque and voracious appetites. We must stop them.
_ _ _ _ _ _ _

May 27, 2012

The Jersey Comeback

One real problem with living in New Jersey is that the state’s two major cities are, of course, New York and Philadelphia — which means that even if you live here, policy and politics reporting tends to be sparse. So it wasn’t until the latest budget fiasco surfaced that I even knew that Christie was running on the theme of the “Jersey Comeback”.

And now that I know, I wonder what on earth he’s talking about. Here’s job growth in three mid-Atlantic states since Christie took office. We’re the blue line at the bottom:

I’m actually not sure why NJ is doing so much worse than New York or Pennsylvania, and I doubt that Christie has much to do with it, but he’s the one trying to claim credit for … what?

Of course, his response to this chart would probably be to yell insults at the Bureau of Labor Statistics.


 pneogy, California

Professor, cease and desist. By making your point with numbers and charts like these, you are threatening to put vast swaths of the right wing, the VSP, and centrists right out of business.
May 27, 2012
_ _ _ _ _ _ _

Egos and Immorality

Paul Krugman

May 24, 2012

In the wake of a devastating financial crisis, President Obama has enacted some modest and obviously needed regulation; he has proposed closing a few outrageous tax loopholes; and he has suggested that Mitt Romney’s history of buying and selling companies, often firing workers and gutting their pensions along the way, doesn’t make him the right man to run America’s economy.

Wall Street has responded — predictably, I suppose — by whining and throwing temper tantrums. And it has, in a way, been funny to see how childish and thin-skinned the Masters of the Universe turn out to be.
Remember when Stephen Schwarzman of the Blackstone Group compared a proposal to limit his tax breaks to Hitler’s invasion of Poland? Remember when Jamie Dimon of JPMorgan Chase characterized any discussion of income inequality as an attack on the very notion of success?
But here’s the thing: If Wall Streeters are spoiled brats, they are spoiled brats with immense power and wealth at their disposal. And what they’re trying to do with that power and wealth right now is buy themselves not just policies that serve their interests, but immunity from criticism.
Actually, before I get to that, let me take a moment to debunk a fairy tale that we’ve been hearing a lot from Wall Street and its reliable defenders — a tale in which the incredible damage runaway finance inflicted on the U.S. economy gets flushed down the memory hole, and financiers instead become the heroes who saved America.

Once upon a time, this fairy tale tells us, America was a land of lazy managers and slacker workers. Productivity languished, and American industry was fading away in the face of foreign competition.
Then square-jawed, tough-minded buyout kings like Mitt Romney and the fictional Gordon Gekko came to the rescue, imposing financial and work discipline.

Sure, some people didn’t like it, and, sure, they made a lot of money for themselves along the way. But the result was a great economic revival, whose benefits trickled down to everyone.
You can see why Wall Street likes this story. But none of it — except the bit about the Gekkos and the Romneys making lots of money — is true.
For the alleged productivity surge never actually happened. In fact, overall business productivity in America grew faster in the postwar generation, an era in which banks were tightly regulated and private equity barely existed, than it has since our political system decided that greed was good.
What about international competition? We now think of America as a nation doomed to perpetual trade deficits, but it was not always thus. From the 1950s through the 1970s, we generally had more or less balanced trade, exporting about as much as we imported. The big trade deficits only started in the Reagan years, that is, during the era of runaway finance.
And what about that trickle-down? It never took place. There have been significant productivity gains these past three decades, although not on the scale that Wall Street’s self-serving legend would have you believe. However, only a small part of those gains got passed on to American workers.
So, no, financial wheeling and dealing did not do wonders for the American economy, and there are real questions about why, exactly, the wheeler-dealers have made so much money while generating such dubious results.
Those are, however, questions that the wheeler-dealers don’t want asked — and not, I think, just because they want to defend their tax breaks and other privileges. It’s also an ego thing.
Vast wealth isn’t enough; they want deference, too, and they’re doing their best to buy it. It has been amazing to read about erstwhile Democrats on Wall Street going all in for Mitt Romney, not because they believe that he has good policy ideas, but because they’re taking President Obama’s very mild criticism of financial excesses as a personal insult.
And it has been especially sad to see some Democratic politicians with ties to Wall Street, like Newark’s mayor, Cory Booker, dutifully rise to the defense of their friends’ surprisingly fragile egos.
As I said at the beginning, in a way Wall Street’s self-centered, self-absorbed behavior has been kind of funny. But while this behavior may be funny, it is also deeply immoral.
Think about where we are right now, in the fifth year of a slump brought on by irresponsible bankers. The bankers themselves have been bailed out, but the rest of the nation continues to suffer terribly, with long-term unemployment still at levels not seen since the Great Depression, with a whole cohort of young Americans graduating into an abysmal job market.
And in the midst of this national nightmare, all too many members of the economic elite seem mainly concerned with the way the president apparently hurt their feelings. That isn’t funny. It’s shameful.


 You tell'em, Dr. K.

William LeGro
Los Angeles
The worst thing about these people is this: They serve no useful purpose in our economy. What they make is money - that's it. They use that money to make more money, ad nauseam, and they buy themselves nice stuff - like that creep Stephen Schwarzman and his $3-million birthday party and his $37-million Park Avenue apartment.

Y'know what? These people are not only sociopathic - i.e., me-me-me is the extent of their entire world. They are also parasites on the rest of us. Whatever they claim is their crucial value to our economy, the truth is that we were doing fine before they ever came along.

And when they came along, they didn't even pretend to make anything of value except money, and that money was for themselves. This is a profound character flaw that should not be allowed to dominate the financial system of any nation, let alone ours with our 312 million normal people.

Frankly speaking - if I haven't been frank enough already - what they do should be illegal. That is the only way to control such anti-social behavior.

Sunday, May 27, 2012

Happy Memorial Day Weekend! Prepare For Country's Fiscal Health Going Off Cliff In 2013 (Will Happen Automatically If Congress Does Nothing (Which It Seems Designed To Do))

[BREAKING NEWS:   NC Businessman's Principled Stand Against Amendment One Has Cost Him Let's give this gentleman some business at Replacements, Ltd.]

With the withdrawal of troops from Afghanistan, the cost of fighting wars is projected to drop – but the “base” defense budget (the annual cost of paying troops and buying planes, ships, and tanks – not including the costs of actually fighting wars) is scheduled to rise. The base budget is already about 25 percent higher than it was a decade ago, adjusted for inflation.
One big reason: It’s almost impossible to terminate large defense contracts. Defense contractors have cultivated sponsors on Capitol Hill and located their plants and facilities in politically important congressional districts. Lockheed Martin, Raytheon, and others have made spending on national defense into America’s biggest jobs program.
So we keep spending billions on Cold War weapons systems like nuclear attack submarines, aircraft carriers, and manned combat fighters that pump up the bottom lines of defense contractors but have nothing to do with 21st-century combat.

Robert Reich | Memorial Day Thoughts on National Defense


“We can best honor those who have given their lives for this nation in combat by making sure our military might is proportional to what America needs. The United States spends more on our military than do China, Russia, Britain, France, Japan, and Germany put together. With the withdrawal of troops from Afghanistan, the cost of fighting wars is projected to drop – but the ‘base’ defense budget (the annual cost of paying troops and buying planes, ships, and tanks – not including the costs of actually fighting wars) is scheduled to rise.” 

Read on for a better understanding of exactly what our military has prepared for the U.S.'s continued decline.

As readers of this blog understand from my past essays, I do not believe that the leadership in the Congress has necessarily tried to do the best job for the citizens by whom they were voted into office; more likely they have tried to do a really good job for their financial backers, with any benefits actually occurring to the taxpayers being the "trickle down" effect that they hope we believe in.

U.S. Congressional Leadership

Congress Ignores Obvious Policy Solution To Major Economic Threat

If Congress passed legislation to fund the federal government for a year, then scattered to the four winds, the United States would find itself in recession sometime in 2013.
That’s what the non-partisan Congressional Budget Office concluded in a Tuesday report, meant to alert elected officials to the dangers of allowing the country to fall off the “fiscal cliff.” That’s shorthand for allowing all of the Bush tax cuts and the payroll tax holiday, extended unemployment benefits, and Medicare physician reimbursement rates to expire; and to allow spending on domestic and defense programs to be cut indiscriminately. All of these things will happen automatically at the beginning of the year if Congress does nothing.
Budget deficits would fall dramatically, but at the expense of hundreds of thousands or millions of jobs at a time when the country’s current economic maladies are just beginning to heal. By contrast, protecting the recovery likely means large budget deficits will persist for quite some time.
If there were an obvious way around this conundrum you’d think Congress would’ve taken it. In reality, according to policy experts and economists of a wide range of ideological leanings there is an obvious way around this conundrum — and yet Congress isn’t taking it.
You can summarize the easy approach as “stimulus now, fiscal restraint later.” CBO hinted at this approach in its report.
“[I]f lawmakers changed fiscal policy in late 2012 to remove or offset all of the policies that are scheduled to reduce the federal budget deficit by 5.1 percent of GDP between calendar years 2012 and 2013…CBO estimates, the growth of real GDP in calendar year 2013 would lie in a broad range around 4.4 percent, well above the 0.5 percent projected for 2013 under current law,” the report reads.
“However, eliminating or reducing the fiscal restraint scheduled to occur next year without imposing comparable restraint in future years would reduce output and income in the longer run relative to what would occur if the scheduled fiscal restraint remained in place.”
In other words Congress could promote real growth by keeping deficits high now, and avoid the future downside risks of large, structural budget deficits by enacting sequential legislation to reduce deficits that won’t take effect until the economy’s growing at a decent clip.
“I think we should pass a very tough deficit reduction plan now and provide for it to trigger when the economy has reached like three percent growth for a few quarters,” Bill Clinton told guests at the Pete Peterson Fiscal Summit a week ago.
Even Fed Chairman Ben Bernanke — a Republican, who for institutional reasons is constrained from providing specific policy recommendations — has outlined a similar approach.
“[T]he two goals of achieving fiscal sustainability—which is the result of responsible policies set in place for the longer term—and avoiding the creation of fiscal headwinds for the current recovery are not incompatible,” he said in a speech last August.
“Acting now to put in place a credible plan for reducing future deficits over the longer term, while being attentive to the implications of fiscal choices for the recovery in the near term, can help serve both objectives. Fiscal policymakers can also promote stronger economic performance through the design of tax policies and spending programs.
To the fullest extent possible, our nation’s tax and spending policies should increase incentives to work and to save, encourage investments in the skills of our workforce, stimulate private capital formation, promote research and development, and provide necessary public infrastructure. We cannot expect our economy to grow its way out of our fiscal imbalances, but a more productive economy will ease the tradeoffs that we face.”
Just because it’s obvious, doesn’t mean it’s easy. There are a lot of members of Congress, and they all have different spending and tax priorities. And, of course, there’s an election coming. But members aren’t even bickering within the framework Clinton, Bernanke and the CBO have outlined.
A lot of Democrats are sympathetic to this approach, but Republicans are only on board if the future deficit reduction comes only from massive cuts to government services. They might be willing to defer the budget consolidation, but only if Democrats agree to use the country’s budget deficits as a forcing mechanism to shrink the government’s role in providing social insurance to the poor, middle class, and elderly.
The parties can’t even agree on the broadest contours of a strategy to nurture the recovery and then phase out the remnant structural deficits. Which is why this week’s CBO report rattled policy makers so much.

Saturday, May 26, 2012

It's Not Creeping Fascism (You Know) When the Fascists Are In Charge: Jaime (Legs) Di(a)mon(d) Exposed

Jamie Dimon Banking CEO's Testify Before House On Use Of TARP Funds

Everyone who still thinks "creeping" is the correct adjective, needs to read this concise essay. And then think up some new arguments.

The Creeping Fascism of American Politics

Juan Cole, Informed Comment

20 May 12

wo congressmen are attempting to insert a provision in the National Defense Authorization act that would allow the Department of Defense to subject the US domestic public to propaganda. The bipartisan amendment was introduced by Rep. Mac Thornberry from Texas and Rep. Adam Smith from Washington State.

Nothing speaks more urgently to the creeping fascism of American politics than the assertion by our representatives, who apparently have never read a book on Germany in the 1930s-1940s or on the Soviet Union in the Stalin period, that forbidding DoD and the State Department from subjecting us to government propaganda "ties the hands of America's diplomatic officials, military, and others by inhibiting our ability to effectively communicate in a credible way." And mind you, they want to use our own money to wash our brains!
As Will Rogers observed, "This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer."

I love our guys and gals in uniform, but they can be extremely obnoxious in any discussion about US government policy that 'gets off point' or 'doesn't serve the mission.' At Washington think tank events, I've seen them repeatedly close down discussions among e.g. State Department foreign service officers. You don't want most of the DoD types providing information to us, because it won't be in any way balanced.

Of course, having a Pentagon propaganda unit at all is highly anti-democratic. The best defense of the truth is a free press. It should also be remembered that nowadays everything in Washington is outsourced, so government propaganda is often being turned over to Booz Allen or the American Enterprise Institute, which have a rightwing bias.

Doing propaganda abroad has the difficulty that it doesn't stay abroad. False articles placed in the Arabic press in Iraq were translated into English by wire services, who got stung.

Then, another problem is that the Defense Intelligence Agency analysts *also* read the false articles placed in the Arabic press by *another* Pentagon office, which they did not know about. So the analysts were passing up to the White House false information provided by their own colleagues!

I was told by an insider that one reason Washington analysts often read my blog in the Bush years was that I had a reputation for having an accurate bull crap meter, and thus my judgments on what was likely to be true helped them fight the tendency to believe our own propaganda!

Not only should this amendment be gotten rid of quick, but their constituents should please vote out of office Reps. Thornberry and Smith next November.

Jamie Dimon And The Legitimacy Of The Federal Reserve System

There are two diametrically opposed views of how the largest financial companies in our economy operate. On the one hand, there are those like Charles Ferguson, director of the Academy Award-winning documentary “Inside Job” and author of the new book, “Predator Nation.” Mr. Ferguson takes the view that greed and immorality now prevail to an excessive degree at the heart of Wall Street.
Academics and other experts have become corrupted, the responsible regulators have been intellectually captured, and law enforcement officials refuse to act – despite the accumulation of evidence before their eyes.
“Inside Job” was gripping and emotional; “Predator Nation” contains many more specific details and evidence, as this excerpt dealing with academics (one Republican and one Democrat) makes clear.
The second view is that the people in charge of large banks and bank holding companies have done nothing wrong. To see this view in action, look no further than this week’s debate about whether Jamie Dimon, chief executive of JPMorgan Chase, should resign from the board of the Federal Reserve Bank of New York. The New York Fed oversees his organization, including assessing whether it is taking dangerous risks, so there are reasonable questions about whether this creates a potential conflict of interest.
A balanced account of this debate appeared in American Banker, which kindly agreed to bring the entire article out from behind its paywall. The strongest statement from the pro-Dimon corner comes from Ernest Patrikis, a partner with White & Case L.L.P. and former general counsel of the New York Federal Reserve:

“I don’t see Jamie Dimon’s conflict of interest. What’s the conflict? He’s expected to represent the banks’ view, the lenders’ view.”
Yet even people who are generally sympathetic to banks feel that there is a perception problem with Mr. Dimon’s position. Treasury Secretary Timothy Geithner said exactly that to the “PBS NewsHour” last week.
Kenneth Guenther, the former head of the Independent Community Bankers of America, told American Banker:
“I do think there is a public perception problem when the head of the largest bank gets into a massive highly publicized trading loss, which he articulately condemns, when he’s tied to the Federal Reserve Bank of New York, and the president of the Federal Reserve Bank is vice chair of the Federal Open Market Committee. There is a perception problem. I don’t think there’s any way around it.”
What exactly is a conflict of interest? Narrowly defined, an actual conflict of interest would involve using public office for personal financial gain – and would be a matter for criminal prosecution.
There is only one case that I am aware of in which a director of the New York Fed went to prison for such a violation – Robert A. Rough was indicted in December 1988, on charges that he leaked sensitive interest-rate information to a brokerage firm. He was sentenced to six months in prison.
More broadly, however, in modern America we use the term “conflict of interest” when we believe someone may be promoting private interests while acting in a public role.
Allowing big bankers to become too influential is an important part of what Mr. Ferguson writes about. If you don’t understand the channels through which influence actually works in the United States today, you need to see “Inside Job,” which touched a nerve and won an Oscar precisely because it is profoundly undemocratic when powerful people are able behave in this way.
Elizabeth Warren, a Democratic candidate for the Senate in Massachusetts, said Mr. Dimon should resign from the board of the New York Fed. The recent spectacular trading losses at his company require a full investigation, which should include an examination of how the supervision process broke down. How can this be anything other than awkward for the New York Fed while Mr. Dimon – hardly known as a shrinking violet – sits on its board?
Senator Bernie Sanders, independent of Vermont, would go further, proposing legislation that would remove any bankers from the boards of Federal Reserve banks. For more background, you may want to consult Page 65 and other parts of this report from the Government Accountability Office, which deal with potential conflicts of interest in the Federal Reserve System, or at least read Senator Sanders’s summary of the report.
To be clear, directors of the New York Fed are in principle kept away from bank-supervision matters – a point that was codified in December 2010, following the passage of the Dodd-Frank financial reform legislation.
Under the current bylaws, directors are not involved in appointing, monitoring or compensating the head of supervision, although they have input into the selection and remuneration of the head of research (an important position, as this person helps to shape the Fed’s view on bank capital and all technical matters relative to risk management), and they oversee other management issues. Bill Dudley, the president of the New York Fed, interacts with the board at least several times a month, as you can see from his schedule.
Mr. Dudley, a former Goldman Sachs executive, was originally appointed president of the New York Fed by a board that included Mr. Dimon as a voting member.  The Dodd-Frank legislation stripped so-called “Class A” directors, of which Mr. Dimon is one, from voting on such appointments.  Mr. Dudley was subsequently reappointed by the Class B and Class C directors of the board.  (For more on the different classes of directors, see this page)
Mr. Dimon has also been an outspoken opponent of financial reform of late – including the Volcker Rule (on proprietary trading) and attempts to strengthen capital requirements.
He is an intensely political figure, despite the fact that an important footnote in the Board of Governors’ policy on political activity by Reserve Bank Directors says,

In all instances, directors should avoid any political activity that would publicly identify the director as being associated with the Federal Reserve System or would embarrass the System or raise questions about the independence of the director or the ability to perform Federal Reserve duties.
Directors are allowed to lobby and engage in other specific activities. The issue is whether these actions undermine the effectiveness of the New York Fed.
There is recent precedent for New York Fed board members resigning when there is a perceived conflict of interest – and when the legitimacy of the Federal Reserve System would undoubtedly have been undermined if they had refused to resign.
Dick Fuld, the chief executive of Lehman Brothers, resigned (on Thursday, September 11, 2008) shortly before his firm collapsed (on September 15, but its last day of business was Friday, September 12) – and presumably because the New York Fed was at the center of intense discussions about who should suffer what kind of losses or get rescued. Did he resign of his own volition or was he encouraged to resign?
Stephen Friedman, then the former chief executive of Goldman Sachs, resigned in early 2009 when it became clear that he had bought Goldman stock after Goldman became a bank and therefore fell under the supervision of the New York Fed.
Mr. Friedman was chairman of the New York Fed at that time. (To be clear, Mr. Friedman was not involved in any of the decisions that saved Goldman in fall 2008, and I am not accusing him of using his public position for personal financial gain.)
For those of you keeping score at home, Mr. Fuld was a Class B director and Mr. Friedman was a Class C director.
If you think Mr. Dimon should resign from the New York Fed, you can express your opinion by signing this on-line petition, which I drafted. (For more background on why he should resign, see this blog post.)
If Mr. Dimon refuses to resign – as seems likely – he can removed by the Board of Governors of the Federal Reserve System (not by his fellow directors at the New York Fed). The petition is therefore addressed to the Board of Governors.
There is an undeniable perception problem. It is damaging the legitimacy of the Federal Reserve. As Treasury Secretary Geithner implied, this must be “addressed” – a great Washington euphemism – by Mr. Dimon leaving the board of the New York Fed.

Jamie Dimon Should Resign From the Board Of The New York Fed

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The Need For An Independent Investigation Into JP Morgan Chase

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Friday, May 25, 2012

It's All A Fraud and All About the Maintenance of Power (See Watergate, Iran-Contra, and the Social Security Lie Fest) Until We Regain Public Control of the Airwaves

[News from all over proving my point]

Members of New GOP Women's Caucus Voted Against Equality for Women

he 24 Republican Congresswomen in the U.S. House announced yesterday that they have joined to form the Women’s Policy Committee, a caucus aimed at “raising the profile of GOP women in their roles as lawmakers, highlighting their diverse achievements and providing a unique, unified voice on a wide range of critically important issues.”

But a ThinkProgress review of their voting records shows that the two dozen women have been fairly consistent in their legislative opposition to women’s rights . . . .

We’re Killing Civilians While Al Qaeda Is Trying To Turn On The Electricity

(Because the people we supposedly hired to do this task were too inept and/or corrupt.)

The United States drone program is killing civilians simply for traveling in large groups while the ‘terrorists’ are trying to provide humanitarian services

On Democracy Now! investigative blogger Marcy Wheeler who has been covering the so-called “War on Terror” over at Empty Wheel discusses some key points about the US assassination program that the corporate media does not dare inform the public about.

The interview discusses several things Americans should be made aware of including the shady background and history of lies of Obama’s newly appointed Assassination Czar and some shocking details about the secret war the U.S. is waging in across the middle east.

For starters, Marcy explains how Al-Qaeda operatives in the area are struggling to provide humanitarian services to people in the Middle East’s poorest country while the US funnels $300 million plus into the region, most of which is used to conduct a covert war.

She goes on to explain how the so-called enemy is struggling to provide food and turn on electricity for people in the area while the United States is running around murdering civilians.

Then she makings some stunning revelations about America’s assassination program and the two methods used to decide how drone strikes will be carried out.

. . . another look behind the Matrix, this time at the Facebook IPO lawsuit (do click) and what it says about the "markets."
Matt Taibbi sums things perfectly in this Taibblog post . . . . As always, you can look at the Matrix or behind it. The "markets" are not your friend.

And in other news, Facebook is also not your friend. Who'da guessed?
The Facebook IPO: Shareholders Weren't Invited to the Real Party

Neocons Assail Possible Compromise on Iran Talks 

“Given the Iranian regime’s long-standing pattern of deceptive and illicit conduct, we believe that it cannot be trusted to maintain enrichment or reprocessing activities on its territory for the foreseeable future — at least until the international community has been fully convinced that Iran has decided to abandon any nuclear-weapons ambitions,” wrote three prominent pro-Israel senators in the Wall Street Journal Thursday.

“We are very far from that point,” according to Republican Sens. John McCain and Lindsay Graham and independent Democrat Joseph Lieberman, the so-called “Three Amigos,” who often travel overseas together and have long argued that U.S. military action will likely be the only way to prevent Tehran from acquiring nuclear weapons.
_ _ _ _ _ _ _

From the pen of the fabulous Dean Baker we learn the truth (for a change).

Author pic

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is the author of several books, including
Social Security: The Phony Crisis, Plunder & Blunder: The Rise and Fall of the Bubble Economy, False Profits: Recovering from the Bubble Economy, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer and The United States Since 1980.*

He was the editor of Getting Prices Right: The Debate Over the Consumer Price Index, which was a winner of a Choice Book Award as one of the outstanding academic books of the year. He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio. His blog, Beat the Press, features commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in economics from the University of Michigan.

The wealth that these people command was not created out of thin air. It came from suckers who bought the hype. With Steve Case, the big suckers were the top management at Time-Warner. They effectively sold the largest media company in the world for almost nothing, giving away most of the company’s shares in exchange for AOL stock. Shareholders who took the deal and did not immediately dump their AOL shares lost more than half of the value of their holdings.
If Facebook shares plunge we don’t know yet who the big losers will be. Insofar as it is individual investors who knowingly took risks in the hope that Facebook will look more like Google than Webvan, the loss is part of the game. This is like buying a lottery ticket.
But if the list of losers ends up including pension funds, university endowments and other institutional investors, then the public should ask some serious questions of the people who manage these funds. Typically they get paychecks that are many hundreds of thousands or even millions of dollars a year. They should know better than to be suckered by an over-hyped startup.
It will be a while yet before we can tally up the winners and losers. But if Facebook turns out to be mostly a media darling and not a hugely profitable company then the genius of Zuckerberg and crew will be in running a successful scam, not creating anything of great value to society.
_ _ _ _ _ _ _

It is way too early to tell whether Facebook shares will end up being a good buy, but the reaction to the initial public offering (IPO) on the first day of trading should serve as a serious warning. While the website may have hundreds of millions of users worldwide, it is not clear that this will translate into profits for the company.  Facebook could follow in the footsteps of, Webvan and other end-of-the-century start-ups that quickly collapsed following multi-billion dollar IPOs.

Of course Facebook is unlikely to go out of business, but it is certainly possible that its business model is not sufficiently robust to justify a position among corporate America’s elite in market capitalization. A year or two down the road it may well turn out that its share price ends up at half or less of its IPO price.

In this case there will have been an enormous transfer of wealth from the purchasers of Facebook stock to those able to cash out following the IPO. This will make many of those on the inside of the company fantastically wealthy. However, much of their wealth would not result from making a good product that society valued; rather it came from being part of a successfully hyped company.

These insiders benefitted from the ability of Mark Zuckerberg and his colleagues to convince investors that Facebook had much more profit potential than in fact was true. This ability to hype a product, in this case company stock, can be an incredibly valuable skill, but it provides nothing of value to society. In that way it is similar to the skills of Fabrice Tourre (a.k.a. "Fabulous Fab"), who was apparently very skilled in putting together complex mortgage derivatives for Goldman Sachs that were designed to fail.

In the last two decades the economy seems to have created many openings for people whose primary skill is lifting money out of other people’s pockets, not in doing anything productive. Wall Street is the center of such practices. Many of the country’s biggest earners run hedge funds that specialize in computer algorithms that allow them to front-run large trades. This means that if a major investor is about to buy a large amount of a company’s stock, these high-speed traders can buy shares ahead of them and then resell the shares second later for a profit.

Article image
In effect, this is a form of insider trading. It is very profitable for those who can do it successfully, but it provides no benefit to society. It actually harms society and the economy since it reduces the return to honest investors, making them less willing to put their money in the stock market.

Wall Street has many other tricks, most notably being able to rely on the no-cost government insurance provided by the implicit too-big-to-fail guarantee. But today’s story is not Wall Street, or at least not directly Wall Street, today’s story is over-hyped technology companies. Even if Facebook ends up losing much of its value in the years ahead, it is virtually certain that Mark Zuckerberg and other inside players will remain incredibly wealthy individuals. After all, Steve Case is still one of the country’s richest people even though his former company, AOL, could be purchased for pocket change today.
The wealth that these people command was not created out of thin air. It came from suckers who bought the hype. With Steve Case, the big suckers were the top management at Time-Warner. They effectively sold the largest media company in the world for almost nothing, giving away most of the company’s shares in exchange for AOL stock. Shareholders who took the deal and did not immediately dump their AOL shares lost more than half of the value of their holdings. 
If Facebook shares plunge we don’t know yet who the big losers will be. Insofar as it is individual investors who knowingly took risks in the hope that Facebook will look more like Google than Webvan, the loss is part of the game. This is like buying a lottery ticket.

But if the list of losers ends up including pension funds, university endowments and other institutional investors, then the public should ask some serious questions of the people who manage these funds. Typically they get paychecks that are many hundreds of thousands or even millions of dollars a year. They should know better than to be suckered by an over-hyped startup.
It will be a while yet before we can tally up the winners and losers. But if Facebook turns out to be mostly a media darling and not a hugely profitable company then the genius of Zuckerberg and crew will be in running a successful scam, not creating anything of great value to society. 
Of course it may turn out that Facebook is actually worth its market value in which case none of this discussion is relevant. We will have to wait to know for sure, but until then, don’t believe the hype.

About anything.

Thank you, Dean.

* The United States from 1980

This provocative book describes the sharp right turn the United States has taken following the election of Ronald Reagan as president in 1980. The treatment details how the policies pursued by the Reagan administration were a break from both the policies pursued by prior administrations and those pursued in other wealthy countries.

The Reagan administration policies had the effect of redistributing both before- and after-tax income upward, creating a situation in which the bulk of the economic gains over the last quarter century were directed to a small segment of the population. The analysis explains how both political parties have come largely to accept the main tenets of Reaganism, putting the United States on a path that is at odds with most of the rest of the world and is not sustainable.

Oh, about that Arab (American-CIA-led) Spring?

President Mursi from California?

Thursday, May 24, 2012

Shame IS Due! The "Liberal?" Media Loves To Sink Liberals - Something Stinks: John Edwards and a Thirty Year Jail Term?

Just try mentioning the inequality obviousness. It'll get you 30 years.

And you didn't even murder anyone.

Russ Baker strikes again!

Something Stinks: John Edwards and a Thirty Year Jail Term?


Does no one else find the very fact of John Edwards being on trial curious? Does no one else wonder about the criminal basis for the prosecution? About who in politics does and does not end up being destroyed by matters related to sexual behavior? Let me preface my take on the Edwards trial with one general observation: Not all politicians are created equal. And not all are treated equally. Therein lies an issue deserving a much, much closer look: whether vulnerable Democrats, chiefly of the liberal persuasion, are targeted for destruction.  Or at least helped along to their doom by a double standard.

But first, the specifics of the Edwards case
. He faces a potential $1.5 million fine, but, far more seriously, up to thirty years imprisonment. Thirty years. His crime? Not murder, not torture, not armed robbery, not stealing money from clients. No, his crime was his failure to report campaign contributions. While preparing for his second presidential bid, in 2006, he got caught up in an extramarital affair that produced a child. And, not exactly able to announce that fact or ask his sick wife to sign off, the wealthy Edwards turned to some wealthy backers to take care of the woman and the baby and hide the whole thing from Elizabeth Edwards and presumably everyone else. Two people gave him a total of $900,000.

So much for the notion of a “liberal” media showing favoritism to its own.  My experience is that the “liberal” label when applied to journalists is a red herring which distracts us from the fundamentally accommodationist nature of the corporate-owned media.

But the liberal label is effective in pressuring journalists to prove they do not coddle liberals — by doing the exact opposite.

No coward Russ.

(Now will you read his book,

Family of Secrets: The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years?)

And although I campaigned for John and knew Elizabeth, it never occurred to me after seeing the facts and knowing the law surrounding these charges, that they were anything but politically inspired. And not by true liberals. (If there are any still in existence.)

You can laugh at me if you like, but it seems crystal clear from Pottersville that the fascists are triumphing as the fascism fans are not prosecuted and the democrats are.