Monday, December 5, 2011

Shhhhh! IT'S A SECRET!!! Comfortably Numb (and Dumb) & The Secret Audience: Unemployed, Rich Youth Dither Literarily


Sometimes I think that my favorite man is Neil Garfield.

This is one of those times. And he possesses all of the data (and then some) that we need to define our economic times precisely (and sickeningly).

He reminds me again why the educational system was changed from teaching all children to read by phonics to sight reading and then to not reading or writing properly at all. And how math first became the modern math of set theory and number systems, which I understood and did well in (in the early 60's when school children were fairly well-versed (and rehearsed!) in mathematics). Most of the rest of my less-math-inclined classmates were moved to remedial math and shop classes, where most of them lost interest completely in pursuing math and science curricula (and I helped many of the still curious smarter ones to figure out the logic of the systems in our "advanced" classes) as fewer and fewer continued on to college math. So much for the future leaders being enabled to figure out what the economic data and the continuing rightwing story line in the media meant amid the constant reporting about how the war economy was "benefitting" them (not).

Also, we get another dose of exactly what Zbigniew Brzezinski, Henry Kissinger, and the PNAC were meant to achieve for the 1% (with the 99% taking the hindmost). Oh, and they better have a continent-worth of police when the millions of the left-out (left behind?) get the true scent and start to mobilize as alienation metamorphosizes from being a winning tactic of the 1% to being a non-passive defense of the 99%. (Some editing has been performed to ensure clarity.)

Hello?
Is there anybody in there?
Just nod if you can hear me.
Is there anyone at home?
Come on, now,
I hear you’re feeling down.
Well I can ease your pain
And get you on your feet again.
Relax.
I need some information first.
Just the basic facts
Can you show me where it hurts?



Pink Floyd – Comfortably Numb




As I observe the zombie-like reactions of Americans to our catastrophic economic highway to collapse, the continued plundering and pillaging of the national treasury by criminal Wall Street bankers, non-enforcement of existing laws against those who committed the largest crime in history, and reaction to young people across the country getting beaten, bludgeoned, shot with tear gas and pepper-sprayed by police, I can’t help but wonder whether there is anyone home.

Why are most Americans so passively accepting of these calamitous conditions? How did we become so comfortably numb? I’ve concluded Americans have chosen willful ignorance over thoughtful critical thinking due to their own intellectual laziness and overpowering mind manipulation by the elite through their propaganda emitting media machines. Some people are awakening from their trance, but the vast majority is still slumbering or fuming at erroneous perpetrators.


Both the Tea Party movement and the Occupy Wall Street movement are a reflection of the mood change in the country, which is a result of government overreach, political corruption, dysfunctional economic policies, and a financial system designed to enrich the few while defrauding the many. The common theme is anger, frustration and disillusionment with a system so badly broken it appears unfixable through the existing supposedly democratic methods.

The system has been captured by an oligarchy of moneyed interests from the financial industry, mega-corporations, and military industrial complex, protected by their captured puppets in Washington DC and sustained by the propaganda peddling corporate media. The differences in political parties are meaningless as they each advocate big government solutions to all social, economic, foreign relations, and monetary issues.


There is confusion and misunderstanding regarding the culprits in this drama.
It was plain to me last week when I read about a small group of concerned citizens in the next town over who decided to support the Occupy movement by holding a nightly peaceful march to protest the criminal syndicate that is Wall Street and a political system designed to protect them. My local paper asked for people’s reaction to this Constitutional exercising of freedom of speech and freedom of assembly. Here is a sampling of the comments:
“What are those Occupy people thinking?! The whole concept is foreign to me. There are always going to be the haves and the have nots. Get over it. Blame yourself for not paying more attention in school or not working hard enough. Just wish people would take responsibility.”
“If they worked half as hard actually working as they do being a pain in everyone else’s ass, they’d be rich! Being born does not guarantee success or wealth. Only hard work does. Maybe we should let them all occupy a jail cell or two.”
“If the goal is to irritate hardworking suburban commuters on their way home, that sounds like the perfect time and location.”
“Let’s hope they don’t pitch tents and trash Lansdale. They need to look for a job, not occupy the streets.”
“I work, and even if I wasn’t working I wouldn’t (march); I would be out looking for a JOB!”
I was dumbfounded at the rage directed towards mostly young people who haven’t even begun their working careers and have played no part in the destruction of our economic system underway for the last 30 years. The people making these statements are middle-aged, middle-class suburbanites. They seem to be just as livid as the OWS protestors, but their ire is being directed towards the only people who have taken a stand against Wall Street greed and Washington D.C. malfeasance.
I’m left scratching my head trying to understand their animosity towards people drawing attention to the enormous debt based ponzi scheme that is our country, versus their silent acquiescence to the transfer of trillions in taxpayer dollars to the criminal bankers that have destroyed the worldwide financial system.
I can only come to the conclusion the average American has become so apathetic, willfully ignorant of facts and reality, distracted by the techno-gadgets that run their lives, uninterested in anything beyond next week’s episode of Dancing with the Stars or Jersey Shore, and willing to let the corporate media moguls form their opinions for them through relentless propaganda, the only thing that will get their attention is an absolute collapse of our economic scheme.
Uninformed, unconcerned, intellectually vacant Americans will get exactly that in the not too distant future.

Greater Depression Hidden from View

“Look at the orators in our republics; as long as they are poor, both state and people can only praise their uprightness; but once they are fattened on the public funds, they conceive a hatred for justice, plan intrigues against the people and attack the democracy.” – Aristophanes, Plutus

 
The anger and vitriol directed at OWS protestors by middle class Americans is a misdirected reaction to a quandary they can’t quite comprehend. They know their lives are getting more difficult but aren’t sure why. They are paying more for energy, food, tuition, and real estate taxes, while the price of their houses decline and their wages stagnate. More than a quarter of all homeowners are underwater on their mortgage and many are drowning in credit card and student loan debt. At the same time, government drones tell them the economy is in its second year of recovery and corporate profits are at all-time highs.
Government statistics, false storylines, and entitlement programs are designed to confuse the public and obscure the fact we are in the midst of another Depression.
Everyone has seen the pictures of the Great Depression breadlines, farmers forced off their land during the dustbowl, and downtrodden Americans in soup kitchens. The economic conditions today are as bad as or worse than the Great Depression. This Depression is hidden from plain view because there are no unemployment lines, bread lines, or soup lines. We are experiencing an electronic Great Depression, as food stamps, unemployment compensation, Social security payments and welfare benefits are electronically delivered to millions of recipients.
There have been over 12 million foreclosure actions since 2007, with millions of Americans losing their homes. Another 16 million homeowners are underwater on their mortgages as home prices continue to fall and the economy sinks further by the day. The value of household real estate has fallen from $22.7 trillion in 2006 to $16.2 trillion today, a loss of $6.5 trillion concentrated among the middle class. In contrast, mortgage debt has only decreased by $600 billion mostly due to write-offs by the banks that created fraudulent mortgage products to lure Americans into debt.

The unemployment rate in the United States reached 25% during the Great Depression.
The government manipulated fictional unemployment rate reported to the public by drones at the BLS is currently 9.0%. They conveniently ignore the millions of people who have given up looking for work and those who have taken jobs as part-time pickle ploppers at McDonalds, when they previously assembled automobiles at GM. The true number of unemployed/underemployed is 23%.

Since 2007, unemployment has officially gone up by 7 million. In reality, the same percentage of the working age population should be employed today as in 2007 (63%). Since only 58.4% of the working age population is employed today (lowest since 1983), another 4 million needs to be added to the official unemployment tally.
The fact is there are 240 million working age Americans and only 140 million are employed. This means there are 100 million working age Americans not working, but our government only classifies 14 million of them as unemployed. There are certainly millions of stay-at-home moms, students, and legitimately disabled among the 86 million people classified as not in the labor force, but you can’t tell me that another 20 to 30 million of these people couldn’t or wouldn’t work if given the opportunity.
The deception in government reported figures is borne out by the most successful government program of the Obama administration, which has been adding participants at an astounding rate. The Food Stamp program has been a smashing success as we’ve added 13.8 million Americans to this fine program since Obama’s inauguration, a mere 43% increase in less than three years.
There are now 45.8 million Americans dependent upon food stamps for survival, 14.7% of the U.S. population. This program began in 1969 and enrollment always surges during recessions and declines during recoveries. But a funny thing happened during our current “recovery”. The government reported our recession over in December 2009. It was certainly over for the Wall Street psychopaths as they rewarded themselves with $43 billion of bonuses in 2009/2010.
The number of Americans on food stamps has risen by 6.8 million during this government sponsored “recovery”. You’ll be happy to know that Obama’s good buddy – Jamie Dimon – and his well run machine at JP Morgan earns hundreds of millions administering the SNAP program.

Since 2007, Federal government transfer payments have increased from $1.7 trillion annually to $2.3 trillion, a 35% increase in four years. This is surely a sign of a recovering economy.
Bernanke’s zero interest rate policy has stolen $400 billion per year from senior citizens and savers and handed it to the very bankers who caused the pain and suffering of millions. Personal interest income has declined from $1.4 trillion to $1.0 trillion, while Wall Street faux profits have soared.
The game plan of the oligarchy has been to transfer hundreds of billions from taxpayers to bankers, report profits through accounting entries reducing loan loss reserves, pump up their stock prices and convince clueless lemming investors to buy newly issued shares at inflated valuations. The plan has failed. The zero interest rate policy’s unintended consequences have caused revolutions throughout the Middle East and massive food inflation across the developing world.
The single biggest reason the middle class feel frustrated, angry and like they are falling behind is due to the Federal Reserve and the relentless never-ending inflation they produce in order to support their masters on Wall Street and provide cover for the trillions in debt spending by politicians in Washington DC. It is no surprise that beginning in 1980 when government spending began to accelerate much more rapidly than government revenues, the government decided to “tweak” how it measured inflation. The government reports inflation at 3.5% today. The truth is inflation is running in excess of 10% if measured exactly as it was in 1980. That’s right, we have a recession and we have inflation in double digits. No wonder the masses are restless.
  
The reason middle-class Americans are being methodically exterminated and driven into poverty is the monetary policies of the Federal Reserve. Since 1971, when Nixon extinguished the last vestiges of the gold standard and unleashed politicians to spend borrowed money without immediate consequence, the U.S. dollar has lost 82% of its purchasing power using the government manipulated CPI. In reality, it has lost over 90% of its purchasing power. The average American, after decades of being dumbed-down by government-sanctioned education, is incapable of understanding the impact of inflation on their lives.
As their wages rise 2% to 3% per year and inflation rises 5% to 10% per year, they get poorer day by day. The Wall Street banks, who own the Federal Reserve, step in and convince the average American to substitute debt for real wealth in order to keep living the modern techno-lifestyle sold to them by mainstream corporate media.

The oligarchy of moneyed interests have done a spectacular job convincing the working middle class they should be angry at 20-year-old OWS protestors, illegal immigrants and the inner-city welfare class, rather than the true culprits – the Federal Reserve, Wall Street banks and mega-corporations. This is a testament to the power of propaganda and the intellectual slothfulness of the average American.
U.S. based mega-corporations fired 864,000 higher wage American workers between 2000 and 2010, while hiring almost 3 million workers in low wage foreign countries, using their billions in cash to buy back their own stocks, and paying corporate executives shamefully excessive compensation.
The corporate mainstream media treats corporate CEO’s like rock stars as if they deserve to be compensated at a level 243 times the average worker. The S&P 500 consists of the 500 biggest companies in America and while the executives of these companies have reaped millions in compensation, the stock index for these companies is at the exact level it was on July 9, 1998. Over the last thirteen years workers were fired by the thousands, shareholders earned 0% (negative 39% on an inflation adjusted basis), and executives got fabulously rich.

Man-made inflation has stealthily devastated millions of lives over the last four decades. When the weekly wages of the average worker are adjusted for inflation, they are making 12% less than they did in 1971. Using a real non-manipulated measure of inflation, the average worker is making 30% less than they did in 1971.
Sadly, our math-challenged populace only comprehend their wages have doubled in the last forty years, without understanding the true impact of inflation. Thankfully, the Wall Street debt dealers with a helping hand from Madison Avenue propaganda peddlers stepped up to the plate and imprisoned the middle class with the shackles of $2.5 trillion in consumer debt. So, while real wages have fallen 30% since 1971, consumer debt has increased by 1,700%.
 

Americans have been snookered into renouncing their citizenship and converting to being mindless consumers. Citizenship requires a person to be actively engaged in the community with obligations to fellow citizens and future generations. Consumerism requires people to love things, embrace debt, worry about what others have, and become driven by the accumulation of possessions and the appearance of wealth. 
The disgusting exhibition that Madison Avenue maggots have coined Black Friday is the ultimate display of consumerism. In a nauseating display of senseless spending driven by retail conglomerates, Americans act like Pavlov’s salivating dogs by lining up for hours to stampede over and pepper spray other consumers to get the ultimate deal on that Chinese-made toaster oven, Vietnamese-made laptop, Korean-made HDTV, or Mexican-made tortilla maker. 
They don’t seem to grasp the irony of going deeper into debt buying cheap crap made in foreign countries by the workers who took their jobs. 
The mainstream media proclaims a hugely successful Black Friday as millions bought crap they didn’t need with money they don’t have, while millions more ate their Thanksgiving meals in food shelters – unreported by the media.This repulsive manifestation of consumerism is applauded and encouraged by our government, as described by George Monbiot:
“Governments are deemed to succeed or fail by how well they make money go round, regardless of whether it serves any useful purpose. They regard it as a sacred duty to encourage the country’s most revolting spectacle: the annual feeding frenzy in which shoppers queue all night, then stampede into the shops, elbow, trample and sometimes fight to be the first to carry off some designer junk which will go into landfill before the sales next year. The madder the orgy, the greater the triumph of economic management.”
The masses have been brainwashed by those in power into thinking consumer spending utilizing debt is essential for a strong economy, when the exact opposite is the truth. Saving and investment are the essential ingredients to a strong economy. Debt-based spending only benefits bankers, mega-corporations, and politicians.

Mass Manipulation through Propaganda

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country . . . .  We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.
This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons . . . who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
 –  Edward Bernays, Propaganda, 1928
Edward Bernays, the father of propaganda to control the masses, would be so proud of his disciples running our country today. He clearly believed only an elite few were intellectually capable of running the show. Essentially, he hit upon the concept of the 1% telling the 99% what they should think and believe over eighty years ago. The mechanisms for controlling the thoughts, beliefs, and actions of the population are so much more efficient today.
The conditioning begins when we are children, as every child will be bombarded with at least 30,000 hours of propaganda broadcast by media corporations by the time they reach adulthood. Their minds are molded and they are instructed what to believe and what to value. Those in control of society want to keep the masses entertained at an infantile level, with instant gratification and satisfying desires as their only considerations.
The elite have achieved their Alpha status through intellectual superiority, control of the money system, and control of the political process. Their power emanates from eliminating choices, while giving the illusion of choice to the masses. People think they are free, when in reality they are slaves to a two party political system, a few Wall Street banks, and whatever our TVs tell us to buy.
Our entire system is designed to control the thoughts and actions of the masses. In many ways it is done subtly, while recently it has become more bold and blatant. It is essential for the ruling elite to keep control of our minds through media messages and the educational system.
It is not a surprise that our public education system has methodically deteriorated over the last four decades. The government gained control over education and purposely teaches our children selected historical myths, social engineering gibberish and only the bare essentials of math and science. The government creates the standardized tests and approves the textbooks.
We are left with millions of functionally illiterate children that grow into non-critical thinking adults. This is the exact result desired by the 1%. If too many of the 99% were able to ignore the media propaganda and think for themselves, revolution would result.
This is why the moneyed interests have circled the wagons, invoked police state thug tactics, and used all the powers of their media machine to squash the OWS movement. It threatens their power and control.
“Experience has shown that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.” – Thomas Jefferson
A highly educated engaged citizenry would be a danger to the existing social order. The 1%, educated at our finest universities, does not want average Americans to obtain a great education for a reasonable price. They want them to get a worthless diploma at an excessively high price tag and become debt slaves to the Wall Street 1%. They want uneducated, indebted consumers, not educated productive citizens.
Our republic has been slowly perverted since the time of its inception. The insidious process had been slow and methodical until 1913. The establishment of the Federal Reserve by an elite group of bankers and their politician friends and the establishment of a personal income tax created the conditions that have allowed a small cabal of powerful men to dictate the course of our economic, political, social, and military policies for the last 98 years.
Anyone that chooses to open their eyes and awake from the propaganda induced stupor can see the result of allowing a small group of corrupt authoritarian men using their power to pervert our government into tyranny. The majority remains oppressed, buried under trillions of debt, while the shysters reap obscene profits, poison the worldwide economic system, and walk away unscathed in the aftermath of their crimes.

The ruling oligarchy has become so brazen in the last few years that it has attracted the attention of the critical thinking minority. The advent of the internet has allowed these critical thinking few to analyze the un-sanitized facts, discuss the issues, and provide truth amidst a blizzard of lies. The proliferation of truth-telling websites (Zero Hedge, Mish, Financial Sense, Naked Capitalism) has allowed truth seekers to bypass the government sanctioned corporate media. The pillaging of society by the politically powerful, corrupt 1% is plain to see in the graphs below.
 
The divergence in household income was not the result of hard work, superior intellectual firepower, or the media-touted entrepreneurial spirit of the rich. It was the result of the 1% capturing the economic and political system of the United States and using it to ransack the wealth of the formerly working middle class.
The fatal flaw which will ultimately result in a fitting end for the powerful elitists is their egos. They are psychopaths, unable to feel empathy for their fellow man. Enough is never enough. They always want more. Life is a game to them. They truly believe they can pull the right strings and continue to accumulate more riches. But they are wrong.
They are blinded by their hubris. There are limits to growth based solely on debt and we’ve reached that limit. The world is crumbling under the weight of crippling debt created by these Wall Street psychopaths, while the corrupted bought off politicians try to shift the losses from the bankers who incurred them to the citizens who have already been fleeced.
Nomi Prins captures the essence of our current situation:
“Today, the stock prices of the largest US banks are about as low as they were in the early part of 2009, not because of euro-contagion or Super-committee super-incompetence (a useless distraction anyway) but because of the ongoing transparency void surrounding the biggest banks amidst their central-bank-covered risks, and the political hot potato of how many emergency loans are required to keep them afloat at any given moment.
Because investors don’t know their true exposures, any more than in early 2009. Because US banks catalyzed the global crisis that is currently manifesting itself in Europe. Because there never was a separate US housing crisis and European debt crisis.
Instead, there is a worldwide, systemic, unregulated, uncontained, rapacious need for the most powerful banks and financial institutions to leverage whatever could be leveraged in whatever forms it could be leveraged in. So, now we’re just barely in the second quarter of the game of thrones, where the big banks are the kings, the ECB, IMF and the Fed are the money supply, and the populations are the powerless serfs. Yeah, let’s play the ECB inflation game, while the world crumbles.”
Those in power are beginning to lose control. You can sense their desperation. Their propaganda is losing its impact as the pain for millions of Americans has become acute. The outrage and anger flaring across the country on a daily basis, reflected in the OWS movement, is just the beginning of a revolutionary period descending upon this nation. The existing social order will be swept away, but they will not go without a fight. They will use their control of the police, military and media to try and crush the coming rebellion.

 The Dream is Gone

“The more corrupt the state, the more numerous the laws.”
– Tacitus, The Annals of Imperial Rome
In addition to controlling the monetary system and brainwashing the inhabitants with relentless propaganda, the ruling class has used their control of the political process to impose thousands of laws, statutes, rules, and regulations upon the citizens. Again, an apathetic, distracted, trusting populace has been easily convinced that more laws will make them safe and secure. They have willingly sacrificed liberty, freedom and self reliance for the façade of safety, security and protection.
The overwhelming number of government rules and regulations are designed to control you and insure your compliance and obedience to those in power. In a non-corrupt society inhabited by citizens willing to honor their obligations, government’s function is to insure property rights and defend the country from foreign invaders. Citizens don’t need to be herded like sheep with threats of imprisonment to do what is right. We don’t need 90,000 pages of regulations telling us the difference between right and wrong.
  
There were 400 pages of Federal Tax rules when the 1% personal income tax was implemented in 1913. Did the 18,000% increase in tax rules since 1913 benefit the average American or did they benefit the 1% who hires the lobbyists to write the rules which are passed into law by the politicians who receive their campaign contributions from the 1%?
Do you ever wonder why you pay more taxes than a billionaire Wall Street hedge fund manager? Do you think our tax system is designed to benefit billionaires and mega-corporations when corporations with billions of income pay little or no taxes? Complexity and confusion benefits those who can create and take advantage of the complexity and confusion. Corporations and special interests have used their wealth to bribe politicians to design loopholes, credits, and exemptions that benefit their interests. The corruption of the system is terminal.
 
“The mistake you make, don’t you see, is in thinking one can live in a corrupt society without being corrupt oneself. After all, what do you achieve by refusing to make money? You’re trying to behave as though one could stand right outside our economic system. But one can’t. One’s got to change the system, or one changes nothing. One can’t put things right in a hole-and-corner way, if you take my meaning.” – George Orwell
The American people are paying the price for allowing a few evil men to gain control of our government. The American people cowered in fear as the 342 page Patriot Act was somehow written in a few weeks after 9/11, introduced in Congress on October 23, passed the House on October 24 with no debate, passed the Senate on October 25 with no debate, and signed into law on October 26 by George Bush.
A law passed by the ruling elite that stripped Americans of their freedoms and liberties was passed using fear-mongering, false-patriotism propaganda to squelch dissent and the American people had no say in the matter.
The government has used fear to keep the American people under control. We now unquestioningly accept being molested in airports. We shrug as our intelligence agencies eavesdrop on our telephone conversations and emails without the need for a court order.
It is now taken for granted that we imprison people without charging them with a crime and assassinate suspected terrorists in foreign countries with predator drones. Invading countries and going to war no longer requires a declaration of war by Congress as required by the Constitution. The State grows ever more powerful.
Therefore, it is no surprise that Americans sit idly by, watching their 52 inch HDTVs,  as young people across the country are beaten, pepper-sprayed, shot with rubber bullets and tear gas, and scorned and ridiculed by corporate media pundits for exercising their free speech rights to peacefully protest our corrupt system. The American tradition of civil disobedience is considered domestic terrorism by those in authority.
Our beloved protectors in the Orwellian named Department of Homeland Security write reports classifying Ron Paul supporters and returning Iraq veterans as potential terrorists. If the powers-that-be get their way, the internet will be locked down and controlled, as it poses a huge threat to their thought-control endeavors.
Freedom to think, learn, question and organize resistance is unacceptable in the eyes of the elite. The country has reached a tipping point. Will enough right-thinking Americans stand up and fight to bring down this corrupt system, or will we be herded silently to slaughter.
The truth is there is something terribly wrong in this country. We are facing a myriad of problems that will require courage and common sense to overcome. We need only look in the mirror to find the guilty party. It is time to stop letting fear dictate our actions. Conflict is coming to this country due to the evil sanctioned by our corrupt leaders and the upright men and women who will bear the burden of destroying that evil.
Our civilization has adopted the worst aspects of the two most famous dystopian novels in history – Orwell’s 1984 and Huxley’s Brave New World. The question is whether the population of this country is too far gone to recover. The answer to that question will determine whether the country chooses authoritarian dictatorship or a renewal of our founding principles. Aldous Huxley understood the three pillars of Western civilization fifty years ago and that their destruction would result in a collapse of our economic system:
“Armaments, universal debt, and planned obsolescence – those are the three pillars of Western prosperity. If war, waste, and moneylenders were abolished, you’d collapse. And while you people are over-consuming the rest of the world sinks more and more deeply into chronic disaster.”
The three pillars sustaining the American empire edifice of never-ending war, ever-accumulating debt and excessive consumerism are crumbling. The growing corruption and weight of un-payable debt have weakened the very foundation of our grand experiment. The existing structure will surely collapse. My entire adult life has tracked the decline of the American empire.
I had become comfortably numb. I came to my senses and began to question all the Federal government/Wall Street/Corporate Media sponsored truths about eight years ago. Many others have also awoken and begun to challenge the false storylines dictated by those in power.

The young people leading the protests across this land are showing tremendous courage and a tenacity of spirit that has been dormant for decades among the lethargic, distracted, over-medicated public. Despite being subjected to government education conditioning, these young people have zeroed in on the enemy.
They may not have all the solutions, but they have correctly identified the corrupt banking system as the central nervous system of this vampire squid sucking the life out of our nation. I will support any effort to shine a light on our crooked system. My three young sons deserve a chance at a better life than they will get under the thumb of this oligarchic criminal enterprise. As a child I caught a fleeting glimpse of the American Dream. I turned to look, but it was gone. I choose not to become comfortably numb. I choose to do whatever it will take to renew the opportunity for my sons to achieve the American Dream.
When I was a child
I caught a fleeting glimpse
Out of the corner of my eye
I turned to look but it was gone
I cannot put my finger on it now
The child is grown,
The dream is gone.
I have become comfortably numb.

Pink Floyd – Comfortably Numb

Take a break from the woes of the world for a minute or two and enjoy the news about asses braying amidst the ensuing economic calamity from Mark Crispin Miller (from the far, far underground). (WARNING: MAY CAUSE VIOLENT GAGGING!)
Obviously, these kids are really annoying. But who cares? They're just pretentious, literary 25-year-olds who want to spend time with similarly pretentious, literary 25-year-olds. There's nothing wrong with that! For hundreds of years, unbearable young people have tried to hang out with other unbearable young people. The problem is that these kids, well-meaning as they are, let themselves be written about by the Style section.
See, the secret of the Style section is that it's intended for two audiences. The first audience is its "official," explicit audience: people who see nothing problematic with being told by The New YorkTimes what's cool, and think of the Style section is a straight-ahead, unironic record of hip trends and cool people. This is the audience that most people imagine when they okay a Style section profile.

But there is the second audience. A secret audience. This audience, of which you are a member, is both mesmerized and repelled by the Style section. This audience reads the Style section, week after week, and thinks "what the fuck is wrong with rich people?" This audience regards the Style section as a collection of dispatches from a different universe; a universe where some of the most horrible and insufferable people on the planet are treated as visionaries and geniuses. A rich universe.

The Times is aware of this. It reads the comments. And it understands that as a strategy to drive pageviews, trolling has a long and time-honored history. Articles like this are designed to elicit head shakes and eye rolls. Look at its tactics:

  * *Breathless descriptions:* "[S]helves of yellowing volumes of Dostoyevsky and Camus reaching to the ceiling and air thick with the musty smell of stale tobacco and old paperbacks" 

  * *Frequent references to clothes and and other cultural signifiers: * "[D]ressed in untucked oxford shirts and off-brand jeans, mingled around a rickety table packed with half-empty Jim Beam bottles"

  * *Required mention of Ivy League degrees:* "REBECCA CHAPMAN, who has a master of arts in English and comparative literature from Columbia University"; "Willie Osterweil, 25, an aspiring novelist who graduated magna cum laude from Cornell in 2009"
  * *Concern about attractiveness of subjects:* "Despite the fact that everyone was young and attractive, no one seemed to flirt"
  * *Name-dropping like crazy http://jessicacoen.tumblr.com/post/13589731606/names-words-and-phrase...
*
Read it and think: this could happen to you too, if you got caught at your most pretentious, or most style-conscious, or most snobby, and all of a sudden you, too, would become a symbol of everything that is wrong with everything. Think about every annoying thing you've ever said and done, written about in the Style style. Spooky, right? Never talk to a Style reporter! Fuck the Style section! All these kids wanted to do was "talk of Edmund Wilson and poststructuralism."
Actually, maybe fuck them, too.

Nah. They're just kids. They'll learn.

Fraudulent Deficit Panic? Another Scam In Works? British Debt History & Debt Moratorium In the Cards? History Calls Them Con Artists


I just love Paul Krugman. Not only is he witty with a great sense of humor about the ignoramuses and assholes he collides with daily, but he has the historical charts to dismiss their fraudulent politico-ing completely.

December 4, 2011

British Debt History

I’ve been playing around with the IMF’s historical public debt database, which has long-term information on ratios of debt to GDP. And you really have to marvel, given that historical record, at the deficit panic now so widespread. Here’s debt as a percentage of GDP in Britain, back to 1830:

That uptick at the end — you’ll see it if you squint — is what’s driving the Cameron government’s insistence on slashing spending in a liquidity trap.

It’s also interesting to note — contrary to what you often hear — that at the time Keynes was writing, and calling for fiscal stimulus, Britain was substantially deeper in debt than Britain or the United States are now.
  • Zeb  Manchester, UK
Aye Prof, similar point been made a number of times about the current situation over here. Thing is though that everyone now knows that austerity is needed to keep the bond markets happy (Osbourne keeps saying so, so it must be true...) and both the main political parties ran the last election saying that the debt must come down (albeit the whys, hows and whens are conveniently overlooked in debate).

Course, cynics of the current policy might point out that even if Osbourne were right on cause and effect, saving £22 billion in interest payments doesn't seem such a good trade when there's a £100 billion hole to be filled from tanking the economy. But press on regardless - the beatings will continue until morale improves. It's good for the soul and moral fibre of the country or something . . .
Yes, as others in London for the last while have noted, this Cameron debt and deficit preoccupation has killed the economy. The reason was supposed to be the bond vigilantes, or whatever else was dreamed up. Just a lack of backbone to make independent decisions as far as I can see, and strong voices to say, "c'mon, cutting now is bonkers, daft". Many talk about how the Canadian banking system was spared, but a refusal to go along with crazy ideas and let mob thinking rule was a part of that success. Or are bankers and regulators elsewhere prone to the vice of teenagers? I'm starting to wonder. Please let's use peer pressure now to turn things around. Anyway, great graph that goes back to 1830 - awesome Paul.
  • mancuroc Rochester, NY
This, seemingly global, austerity movement is nothing but culmination of the coup that's been taking place since the time of Thatcher and Reagan. Wealthy interests are taking advantage of the financial crisis (as in Naomi Klein's "Shock Doctrine") to cement their advantages in place and keep the peasants in their place. Fortunately, the peasants are starting to fight back with the push-back in Wisconsin and Michigan, and the Occupy movement just about everywhere.
Cameron and his party, just like the right in this country, wants to privatize public services so his cronies can profit from them rather than have to pay taxes for them. The national debt is just an excuse to do this, by gutting public services and handing them over to private operators, in the name of austerity.
Crazy interwar governments and their spending habits - like them we're gonna need war bonds to stop these shortages! Remember those?

Politics these days, it's like starve the beast met a project for a new American century just to destroy the Federal government - this is what we got; it was obviously a foreign conspiracy to begin with, since all business is global.
  • Steve Ann Arbor, Michigan
I think the main message is that we've seen debt as high as 200% of GDP without imploding, yet today all the discussion seems to suggest the US is becoming Greece - with a Fed.

We have 15T debt now which is near 100% GDP, and yet can borrow all the money we want at near zero interest rates. Yet after 10 years of unfunded wars, somehow we need to layoff all the teachers, firemen, SEC regulators, and all public employees, and reign in entitlements NOW.
 
  •  IU:
I think I understand what happened.

1) USA: it has always been the Republican agenda that the government is spending too much. Whene the recession hit and the deficit went up they started to scream: "Look how Obama is spending! That is why we are in recession. We have to get the deficit under control"

2) Europe: Italy had a large debt and when the recession hit they also started to have deficits. Greece was even a worse case. The Germans and the ECB became obsessed with the Italian debt reduction. They think that the PIIGS have to be disciplined. It is probably all a misperception, but that is how they think. Some of us first think in terms of countercyclical measures, but it is not even on their radar screen. Ironically it seems that the Italians themselves believe that. First they ridiculed those among themselves who actually did pay taxes, and now they feel collectively guilty for being a nation of tax avoiders and law breakers. Furthermore the ECB does not have the mandate to increase the money supply.

So when everybody was screaming "austerity, austerity", everyone else also started to scream the same, e.g. the OECD and the Brits. Who will put end to this madness?
As far as I can see, only an informed electorate can. And every one of these con artist politicos should be swept out the door (and then, for gods' sake, bolt it).



Case?

Rested.

Let the arrests begin!

And as to debt forgiveness? Don't forget that the "bad guys" have always been  thinking up reasons for others to incur debt (to them, of course) - thus my bad opinion of the Greenspan Gaspers - (while they used the money they had accumulated by sometimes terrible means to consolidate political power). Michael Hudson takes us through history's lessons. Pay attention, class! Lots to absorb.

In Egypt, the pharaoh Bakenranef (c. 720-715 BC, “Bocchoris” in Greek) proclaimed a debt amnesty and abolished debt-servitude when faced with a military threat from Ethiopia. According to Diodorus of Sicily (I, 79, writing in 40-30 BC), he ruled that if a debtor contested the claim, the debt was nullified if the creditor could not back up his claim by producing a written contract. (It seems that creditors always have been prone to exaggerate the balances due.) The pharaoh reasoned that “the bodies of citizens should belong to the state, to the end that it might avail itself of the services which its citizens owed it, in times of both war and peace. For he felt that it would be absurd for a soldier … to be haled to prison by his creditor for an unpaid loan, and that the greed of private citizens should in this way endanger the safety of all.”

The fact that the main Near Eastern creditors were the palace, temples and their collectors made it politically easy to cancel the debts. It always is easy to annul debts owed to oneself. Even Roman emperors burned the tax records to prevent a crisis. But it was much harder to cancel debts owed to private creditors as the practice of charging interest spread westward to Mediterranean chiefdoms after about 750 BC. Instead of enabling families to bridge gaps between income and outgo, debt became the major lever of land expropriation, polarizing communities between creditor oligarchies and indebted clients.

In Judah, the prophet Isaiah (5:8-9) decried foreclosing creditors who “add house to house and join field to field till no space is left and you live alone in the land.”

Creditor power and stable growth rarely have gone together. Most personal debts in this classical period were the product of small amounts of money lent to individuals living on the edge of subsistence and who could not make ends meet. Forfeiture of land and assets – and personal liberty – forced debtors into bondage that became irreversible. By the 7th century BC, “tyrants” (popular leaders) emerged to overthrow the aristocracies in Corinth and other wealthy Greek cities, gaining support by canceling the debts. In a less tyrannical manner, Solon founded the Athenian democracy in 594 BC by banning debt bondage.

But oligarchies re-emerged and called in Rome when Sparta’s kings Agis, Cleomenes and their successor Nabis sought to cancel debts late in the third century BC. They were killed and their supporters driven out. It has been a political constant of history since antiquity that creditor interests opposed both popular democracy and royal power able to limit the financial conquest of society – a conquest aimed at attaching interest-bearing debt claims for payment on as much of the economic surplus as possible.

When the Gracchi brothers and their followers tried to reform the credit laws in 133 BC, the dominant Senatorial class acted with violence, killing them and inaugurating a century of Social War, resolved by the ascension of Augustus as emperor in 29 BC.

Rome’s creditor oligarchy wins the Social War, enserfs the population and brings on a Dark Age

Matters were more bloody abroad. Aristotle did not mention empire building as part of his political schema, but foreign conquest always has been a major factor in imposing debts, and war debts have been the major cause of public debt in modern times.

Antiquity’s harshest debt levy was by Rome, whose creditors spread out to plague Asia Minor, its most prosperous province. The rule of law all but disappeared when the publican creditor “knights” arrived. Mithridates of Pontus led three popular revolts, and local populations in Ephesus and other cities rose up and killed a reported 80,000 Romans in 88 BC. The Roman army retaliated, and Sulla imposed war tribute of 20,000 talents in 84 BC. Charges for back interest multiplied this sum six-fold by 70 BC.

Among Rome’s leading historians, Livy, Plutarch and Diodorus blamed the fall of the Republic on creditor intransigence in waging the century-long Social War marked by political murder from 133 to 29 BC. Populist leaders sought to gain a following by advocating debt cancellations (e.g., the Catiline conspiracy in 63-62 BC). They were killed. By the second century AD about a quarter of the population was reduced to bondage. By the fifth century Rome’s economy collapsed, stripped of money. Subsistence life reverted to the countryside as a Dark Age descended.

Creditors find a legalistic reason to support parliamentary democracy

When banking recovered after the Crusades looted Byzantium and infused silver and gold to review Western European commerce, Christian opposition to charging interest was overcome by the combination of prestigious lenders (the Knights Templars and Hospitallers providing credit during the Crusades) and their major clients – kings, at first to pay the Church and increasingly to wage war. But royal debts went bad when kings died. The Bardi and Peruzzi went bankrupt in 1345 when Edward III repudiated his war debts. Banking families lost more on loans to the Habsburg and Bourbon despots on the thrones of Spain, Austria and France.

Matters changed with the Dutch democracy, seeking to win and secure its liberty from Habsburg Spain. The fact that their parliament was to contract permanent public debts on behalf of the state enabled the Low Countries to raise loans to employ mercenaries in an epoch when money and credit were the sinews of war. Access to credit “was accordingly their most powerful weapon in the struggle for their freedom,” notes Ehrenberg: “Anyone who gave credit to a prince knew that the repayment of the debt depended only on his debtor’s capacity and will to pay. The case was very different for the cities, which had power as overlords, but were also corporations, associations of individuals held in common bond. According to the generally accepted law each individual burgher was liable for the debts of the city both with his person and his property.”[2]


The financial achievement of parliamentary government was thus to establish debts that were not merely the personal obligations of princes, but were truly public and binding regardless of who occupied the throne. This is why the first two democratic nations, the Netherlands and Britain after its 1688 revolution, developed the most active capital markets and proceeded to become leading military powers. What is ironic is that it was the need for war financing that promoted democracy, forming a symbiotic trinity between war making, credit and parliamentary democracy in an epoch when money was still the sinews of war.

At this time “the legal position of the King qua borrower was obscure, and it was still doubtful whether his creditors had any remedy against him in case of default.”[3] The more despotic Spain, Austria and France became, the greater the difficulty they found in financing their military adventures. By the end of the eighteenth century Austria was left “without credit, and consequently without much debt” the least credit-worthy and worst armed country in Europe (as Steuart 1767:373 noted), fully dependent on British subsidies and loan guarantees by the time of the Napoleonic Wars.

Finance accommodates itself to democracy, but then pushes for oligarchy

While the nineteenth century’s democratic reforms reduced the power of landed aristocracies to control parliaments, bankers moved flexibly to achieve a symbiotic relationship with nearly every form of government. In France, followers of Saint-Simon promoted the idea of banks acting like mutual funds, extending credit against equity shares in profit. The German state made an alliance with large banking and heavy industry. Marx wrote optimistically about how socialism would make finance productive rather than parasitic. In the United States, regulation of public utilities went hand in hand with guaranteed returns. In China, Sun-Yat-Sen wrote in 1922: “I intend to make all the national industries of China into a Great Trust owned by the Chinese people, and financed with international capital for mutual benefit.”[4]


World War I saw the United States replace Britain as the major creditor nation, and by the end of World War II it had cornered some 80 percent of the world’s monetary gold. Its diplomats shaped the IMF and World Bank along creditor-oriented lines that financed trade dependency, mainly on the United States. Loans to finance trade and payments deficits were subject to “conditionalities” that shifted economic planning to client oligarchies and military dictatorships. The democratic response to resulting austerity plans squeezing out debt service was unable to go much beyond “IMF riots,” until Argentina rejected its foreign debt.

A similar creditor-oriented austerity is now being imposed on Europe by the European Central Bank (ECB) and EU bureaucracy. Ostensibly social democratic governments have been directed to save the banks rather than reviving economic growth and employment. Losses on bad bank loans and speculations are taken onto the public balance sheet while scaling back public spending and even selling off infrastructure. The response of taxpayers stuck with the resulting debt has been to mount popular protests starting in Iceland and Latvia in January 2009, and more widespread demonstrations in Greece and Spain this autumn to protest their governments’ refusal to hold referendums on these fateful bailouts of foreign bondholders.

Shifting planning away from elected public representatives to bankers

Every economy is planned. This traditionally has been the function of government. Relinquishing this role under the slogan of “free markets” leaves it in the hands of banks. Yet the planning privilege of credit creation and allocation turns out to be even more centralized than that of elected public officials. And to make matters worse, the financial time frame is short-term hit-and-run, ending up as asset stripping. By seeking their own gains, the banks tend to destroy the economy. The surplus ends up being consumed by interest and other financial charges, leaving no revenue for new capital investment or basic social spending.


This is why relinquishing policy control to a creditor class rarely has gone together with economic growth and rising living standards. The tendency for debts to grow faster than the population’s ability to pay has been a basic constant throughout all recorded history. Debts mount up exponentially, absorbing the surplus and reducing much of the population to the equivalent of debt peonage. To restore economic balance, antiquity’s cry for debt cancellation sought what the Bronze Age Near East achieved by royal fiat: to cancel the overgrowth of debts.

In more modern times, democracies have urged a strong state to tax rentier income and wealth, and when called for, to write down debts. This is done most readily when the state itself creates money and credit. It is done least easily when banks translate their gains into political power. When banks are permitted to be self-regulating and given veto power over government regulators, the economy is distorted to permit creditors to indulge in the speculative gambles and outright fraud that have marked the past decade. The fall of the Roman Empire demonstrates what happens when creditor demands are unchecked. Under these conditions the alternative to government planning and regulation of the financial sector becomes a road to debt peonage.

Finance vs. government; oligarchy vs. democracy

Democracy involves subordinating financial dynamics to serve economic balance and growth – and taxing rentier income or keeping basic monopolies in the public domain. Untaxing or privatizing property income “frees” it to be pledged to the banks, to be capitalized into larger loans. Financed by debt leveraging, asset-price inflation increases rentier wealth while indebting the economy at large. The economy shrinks, falling into negative equity.


The financial sector has gained sufficient influence to use such emergencies as an opportunity to convince governments that that the economy will collapse they it do not “save the banks.” In practice this means consolidating their control over policy, which they use in ways that further polarize economies. The basic model is what occurred in ancient Rome, moving from democracy to oligarchy. In fact, giving priority to bankers and leaving economic planning to be dictated by the EU, ECB and IMF threatens to strip the nation-state of the power to coin or print money and levy taxes.

The resulting conflict is pitting financial interests against national self-determination. The idea of an independent central bank being “the hallmark of democracy” is a euphemism for relinquishing the most important policy decision – the ability to create money and credit – to the financial sector. Rather than leaving the policy choice to popular referendums, the rescue of banks organized by the EU and ECB now represents the largest category of rising national debt. The private bank debts taken onto government balance sheets in Ireland and Greece have been turned into taxpayer obligations. The same is true for America’s $13 trillion added since September 2008 (including $5.3 trillion in Fannie Mae and Freddie Mac bad mortgages taken onto the government’s balance sheet, and $2 trillion of Federal Reserve “cash-for-trash” swaps).

This is being dictated by financial proxies euphemized as technocrats. Designated by creditor lobbyists, their role is to calculate just how much unemployment and depression is needed to squeeze out a surplus to pay creditors for debts now on the books. What makes this calculation self-defeating is the fact that economic shrinkage – debt deflation – makes the debt burden even more unpayable.

Neither banks nor public authorities (or mainstream academics, for that matter) calculated the economy’s realistic ability to pay – that is, to pay without shrinking the economy. Through their media and think tanks, they have convinced populations that the way to get rich most rapidly is to borrow money to buy real estate, stocks and bonds rising in price – being inflated by bank credit – and to reverse the past century’s progressive taxation of wealth.

To put matters bluntly, the result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation. Government planning and taxation is accused of being “the road to serfdom,” as if “free markets” controlled by bankers given leeway to act recklessly is not planned by special interests in ways that are oligarchic, not democratic.
Governments are told to pay bailout debts taken on not to defend countries in military warfare as in times past, but to benefit the wealthiest layer of the population by shifting its losses onto taxpayers.

The failure to take the wishes of voters into consideration leaves the resulting national debts on shaky ground politically and even legally. Debts imposed by fiat, by governments or foreign financial agencies in the face of strong popular opposition may be as tenuous as those of the Habsburgs and other despots in past epochs. Lacking popular validation, they may die with the regime that contracted them. New governments may act democratically to subordinate the banking and financial sector to serve the economy, not the other way around.

At the very least, they may seek to pay by re-introducing progressive taxation of wealth and income, shifting the fiscal burden onto rentier wealth and property. Re-regulation of banking and providing a public option for credit and banking services would renew the social democratic program that seemed well underway a century ago.

Iceland and Argentina are most recent examples, but one may look back to the moratorium on Inter-Ally arms debts and German reparations in 1931. A basic mathematical as well as political principle is at work: Debts that can’t be paid, won’t be.

The Newt Truth? Our Federal Govt Running Amok? Wreck­ing Ball Aimed At So­cial Se­cu­rity NOT Stimulus: Rout of Wolves Needed to Evict the Stench of Skunks In D.C.


I continue to give a good portion of my time currently to trying to fathom how we (the USA, land of my birth and ex-home of the free) got this far down the rabbit hole. I'd swear (if I did swear, of course) that someone was pulling my leg in exactly the same way they fooled the German people prior to World War II when they were told by the very-serious Powers-That-Be that "if they agreed to such-and-such losses of their liberty, that very soon Germany would be back on its feet financially! Oh, and lots of funny-acting/looking Germans would also have to go to prison and concentration camps, of course, but . . . relax . . . don't think about that right now as it's best for everyone to just play along until we get this country back on the road to prosperity!"

So what's got me freshly hot under the collar?

They've figured out how to secretly deny us (f*ck with, in plain words) the benefits we all should receive from our already-paid-in Social Security (FICA) taxes, while not taxing the b/millionaires or stopping the war spending to decrease those much-touted scary deficit figures. And it hasn't even had to be a closely-kept secret from an inattentive and/or ignorant population that doesn't know (any longer) what the meaning of words in a bill signifies (let alone know how Social Security withholding has historically been calculated and why).

Good grief, Charlie Brown. Your grandparents could figure out these thieves faster than you or your parents can. I used to like this President (for a few weeks anyway, until he appointed all those Goldman Sachs alumni who have continued to run the Treasury like it's their personal bank). Now I wonder if his affirmative action (and you know he was catered to, right?) didn't hamper his mathematical education. Or maybe it's just his judgment I'm now getting familiar with. (Some editing was inserted into the following article to ensure clarity - Ed.)

This theft from the pub­lic is being de­ceit­fully pre­sented as a tax break, as if So­cial Se­cu­rity “taxes” were just like the "in­come" tax we pay. It’s not at all that.

First of all, the em­ployer’s share of the pay­roll tax is just like the em­ployer con­tri­bu­tion to a worker’s pen­sion or 401(k). It’s your money they are con­tribut­ing, be­cause it is used to cal­cu­late your re­tire­ment ben­e­fit amount. If they pay less, you are get­ting less.

The same is true of the pay­roll tax you see de­ducted from your pay­check. It might hurt just as much as the in­come tax that is with­held when you look at how it re­duces your take-home pay, but while the in­come tax mostly ends up to pay for end­less wars, for tax give­aways to cor­po­ra­tions, and for things like oil-de­ple­tion al­lowance sub­si­dies to the oil com­pa­nies, the pay­roll tax is your money and is put into the Trust Fund to cal­cu­late your re­tire­ment ben­e­fit!

Cut­ting the amount de­ducted from your check may or may not re­duce the amount of your ben­e­fit (that’s un­clear), but if Con­gress does this with­out com­pen­sat­ing for the cut by tak­ing money from some other tax, such as a sup­ple­men­tal tax on the rich, to com­pen­sate for the loss of funds in the Trust Fund - and that is what the Re­pub­li­cans in Con­gress are de­mand­ing with their re­fusal to pass any new taxes on the wealthy - then it just strength­ens the hand of those who are claim­ing that So­cial Se­cu­rity is going “bank­rupt,” and that the sys­tem needs to be “re­formed” by re­duc­ing ben­e­fits or de­lay­ing the re­tire­ment age.

You can place the facts about this Congressional leadership in any framework that you like, but the stench has gotten so high this week that you cannot fail to identify the source. Dave Lindorff reports from Nation of Change:

The US Con­gress is such a craven bunch that you re­ally have to turn to Olde Eng­lish to aptly de­scribe them.

Con­sider that on Thurs­day, by a vote of 93-7, the Sen­ate ap­proved a Na­tional De­fense Au­tho­riza­tion Bill that ef­fec­tively de­fines the US “home­land” as a war zone, and that al­lows for the in­def­i­nite in­car­cer­a­tion with­out trial of any­one, in­clud­ing US cit­i­zens and Green Card hold­ers, with­out trial, in bla­tant vi­o­la­tion of the Sixth Amend­ment of the US Con­sti­tu­tion and of fun­da­men­tal in­ter­na­tional ju­di­cial stan­dards.

These elected rep­re­sen­ta­tives, so ready to sell out the fun­da­men­tal rights of the peo­ple and the na­tion’s her­itage, can be best de­scribed, using Olde Eng­lish usage, as a “con­gress” of ba­boons, or a “cow­ardice” of curs, a “sneak” of weasels” or per­haps just a “stench” of skunks.

And it’s not over. Both houses of Con­gress are also con­sid­er­ing a pro­posal by Pres­i­dent Obama of a mea­sure that will se­ri­ously un­der­mine So­cial Se­cu­rity - a fur­ther cut in the So­cial Se­cu­rity 12.4% pay­roll tax by 3.1% for work­ers and a match­ing 3.1% cut in the 40% share of that tax paid by em­ploy­ers - mea­sures which taken to­gether would gut the So­cial Se­cu­rity Trust Fund by more than $350 bil­lion in one year.

This theft from the pub­lic is being de­ceit­fully pre­sented as a tax break, as if So­cial Se­cu­rity “taxes” were just like the in­come tax we pay. It’s not at all that. First of all, the em­ployer’s share of the pay­roll tax is just like the em­ployer con­tri­bu­tion to a worker’s pen­sion or 401(k). It’s your money they are con­tribut­ing, be­cause it is used to cal­cu­late your re­tire­ment ben­e­fit amount. If they pay less, you are get­ting less.

The same is true of the pay­roll tax you see de­ducted from your pay­check. It might hurt just as much as the in­come tax that is with­held when you look at how it re­duces your take-home pay, but while the in­come tax mostly ends up to pay for end­less wars, for tax give­aways to cor­po­ra­tions, and for things like oil-de­ple­tion al­lowance sub­si­dies to the oil com­pa­nies, the pay­roll tax is your money and is put into the Trust Fund to cal­cu­late your re­tire­ment ben­e­fit!

Cut­ting the amount de­ducted from your check may or may not re­duce the amount of your ben­e­fit (that’s un­clear), but if Con­gress does this with­out com­pen­sat­ing for the cut by tak­ing money from some other tax, such as a sup­ple­men­tal tax on the rich, to com­pen­sate for the loss of funds in the Trust Fund - and that is what the Re­pub­li­cans in Con­gress are de­mand­ing with their re­fusal to pass any new taxes on the wealthy - then it just strength­ens the hand of those who are claim­ing that So­cial Se­cu­rity is going “bank­rupt,” and that the sys­tem needs to be “re­formed” by re­duc­ing ben­e­fits or de­lay­ing the re­tire­ment age.

This is sup­posed to be our Con­gress, but it is close to pass­ing leg­is­la­tion that is a huge prepara­tory step to­wards fas­cism, turn­ing the mil­i­tary into a do­mes­tic po­lice force within the coun­try’s bor­ders, and re­turn­ing the US to a pre-Rev­o­lu­tion­ary era when po­lice and sol­diers could grab peo­ple, charge them with trea­son, sedi­tion or ter­ror­ism, and just lock them up or even ex­e­cute them with­out trial.

In­deed, that kind of be­hav­ior is why we had a rev­o­lu­tion back in 1776!
And this same Con­gress is stealth­ily un­der­min­ing So­cial Se­cu­rity and Medicare, the two most im­por­tant lega­cies of the New Deal and the Great So­ci­ety eras, and unar­guably the two most pop­u­lar pro­grams run by the fed­eral gov­ern­ment.

Article image

And it’s not just Con­gress. Pres­i­dent Obama started this prob­lem off when he re­neged, once elected, on his cam­paign promise to close the mil­i­tary prison camps at Guan­tanamo and to run a gov­ern­ment that re­spected the Con­sti­tu­tion.

He did nei­ther, con­tin­u­ing to en­dorse de­ten­tion with­out trial, and ac­tu­ally ex­pand­ing on the Con­sti­tu­tional crimes of his pre­de­ces­sor, Pres­i­dent George W. Bush, by or­der­ing the sum­mary ex­tra-ju­di­cial ex­e­cu­tion of at least two Amer­i­can cit­i­zens, who are as­sured the right to a trial by a jury of their peers under the Bill of Rights of the US Con­sti­tu­tion.

He also came up with the truly lousy idea, passed by Con­gress last year, of cut­ting the So­cial Se­cu­rity pay­roll tax by 2% from it’s nor­mal 6.2% level. Now he’s tripled down on the same scam by propos­ing in­creas­ing that cut to 3.1% for work­ers and an­other 3.1% for em­ploy­ers!


This wreck­ing ball aimed at the So­cial Se­cu­rity pro­gram is being sold as an “eco­nomic stim­u­lus” pro­gram, when al­most any econ­o­mist will read­ily ex­plain that it won’t work.

First of all, since the pay­roll tax re­duc­tion goes to every per­son who pays the FICA tax, it means not just low in­come work­ers will get it, but also wealthy “work­ers.” And while the sav­ings for a per­son earn­ing min­i­mum wage would be just $500, and would cer­tainly be spent on some­thing (though not nec­es­sar­ily on Amer­i­can goods, since half of the things peo­ple buy are im­ported!), the sav­ings for a wealthy per­son earn­ing above the So­cial Se­cu­rity tax­able max­i­mum of $106,000 would be $3300, and would likely not be spent, but rather saved, doing noth­ing to boost eco­nomic ac­tiv­ity
.
Fur­ther­more, the 3.1% re­duc­tion in pay­roll taxes paid by em­ploy­ers would not likely lead to any ad­di­tional hir­ing - the sup­posed jus­ti­fi­ca­tion for giv­ing them the same re­duc­tion - but would just be used to in­crease prof­its and div­i­dends to wealthy in­vestors. In fact, this scheme was tried once back in the 1970s dur­ing the Carter ad­min­is­tra­tion, and has been heav­ily re­searched, with econ­o­mists find­ing no ev­i­dence that the pay­roll tax “hol­i­day” led to any new jobs. The best char­ac­ter­i­za­tion of this whole idea is not an old Eng­lish word, but an old Amer­i­can one: cocka­mamie.

Clearly, on the ev­i­dence of these two mea­sures work­ing their way through Con­gress now, we have a fed­eral gov­ern­ment that has run amok, that is re­spond­ing not to the peo­ple but to nar­row cor­po­rate in­ter­ests that seek to both im­pov­er­ish the cit­i­zens and to pre­pare for greater lev­els of pub­lic un­rest and re­bel­lion by putting into place the tools of a po­lice state.

Any­one who doubts this need only look at the co­or­di­nated at­tacks on the Oc­cupy Move­ment, with SWAT-style para­mil­i­tary po­lice sweep­ing through en­camp­ments in cities across the coun­try, tear­ing down tents and bru­tally ar­rest­ing the young ac­tivists bold enough to chal­lenge the cor­po­ratist fed­eral gov­ern­ment’s poli­cies and to frontally crit­i­cize the work­ings of Amer­ica’s vaunted cap­i­tal­ist sys­tem.

The 2012 elec­tion is going to be a wa­ter­shed, but it is not much of a choice on offer. We have two cor­po­ratist par­ties vying for the spoils of gov­ern­ment, nei­ther of which is re­motely try­ing to re­sist the bur­geon­ing power of the cor­po­rate oli­garchy, and both of which are mov­ing ahead to cre­ate a po­lice state and to vi­ti­ate two key so­cial pro­grams

Where to turn?
Per­haps the can­di­dacy of Rocky An­der­son, the for­mer mayor of Salt Lake City, who has an­nounced the for­ma­tion of a new Jus­tice Party, and who has said he in­tends to run for pres­i­dent on its ticket. An­der­son is quoted in Utah’s De­seret News as forth­rightly say­ing that the Amer­i­can peo­ple “want to see an al­ter­na­tive party. They rec­og­nize that these two mil­i­tarist, cor­po­ratist par­ties have brought us to this dis­as­trous place to where we are today."


Let’s hope he’s right! It’s going to take a “rout of wolves” to oust the ba­boons, curs, weasels and skunks from Wash­ing­ton and turn this dis­as­ter around.
(Dave Lindorff is an investigative reporter, a columnist for CounterPunch, and a contributor to Businessweek, The Nation, Extra! and Salon.com. He received a Project Censored award in 2004. Dave is also a founding member of the online newspaper ThisCantBeHappening!)

Weasels? Thieves?

Those are complimentary terms for what these con artists really are.

Organizing is the only solution to get rid of these traitors!

And here's the Newt Truth (coming via The Angry Bear):

The Numbers Behind Newt's Plan to Balance the Budget

by Mike Kimel


Newt Gingrich's website provides information on The Gingrich Jobs and Prosperity Plan. It starts with this:

America only works when Americans are working. Newt has a pro-growth strategy similar to the proven policies used when he was Speaker to balance the budget, pay down the debt, and create jobs.
Excellent. That statement should be enough to get an idea of what the program will look like. I want to focus on the first piece: balancing the budget. (You can't pay down the debt unless you run a surplus, so balancing the budget also deals with that issue.)

Here's what the surplus/GDP looks like for the years from 1988 to 2004. The gray bar covers the years from 1995 (the Republican Revolution took office, and Newt Gingrich became speaker in 1995) to 1998 (Gingrich resigned as speaker in November 1998.)

(Incidentally - the surplus is simply Total Federal Receipts less Total Federal Expenditures, which come from lines 37 and 40 of the BEA's National Income and Product Accounts Table 3.2. GDP comes also comes from the BEA.)

Figure 1.

As you can see, the deficit did indeed turn into a surplus when Gingrich was in office. However, the chart makes it clear the trend began before Newt took office and continued after Newt left office. In fact, it seems that the deficit started falling in 1993. The surplus, on the other hand, peaked in the year 2000, fell, and the budget returned to a deficit. So what defined the years from 1993-2000? Oh yeah, they were the years Clinton was President. So Newt is basically saying he would support the policies that produced success in the Clinton years.

That is wonderful . . . those were years of great prosperity. You have to go back to the JFK & LBJ years to find presidents who oversaw faster growth rates in real GDP. But let's stay focused on the deficit and surplus issue. In fact, let's deconstruct the number into its constituent parts. Figure 2 shows Total Federal Receipts/GDP and Total Federal Expenditures/GDP.

Figure 2.

As is evident from Figure 2, Total Federal Receipts/GDP hit a low point in 1992 and started to rise in 1993, eventually peaking in the year 2000 and then falling. Total Federal Expenditures/GDP hit a high point in 1992, then began falling in 1993, eventually hitting a local nadir in 2000 and then starting to rise again. The trend during the Newt Gingrich years looks like the rest of Clinton years... well, except for a slight slowing in the rate at which expenditures were dropping.

Now, you might be thinking that Newt's comments about deficit reduction speak more to his views on expenditures than on taxes. After all, few Republicans talk about increasing the tax burden these days and it would take a lot of guts for Newt to break with his party on this one. But looking once more at the numbers its obvious Newt really does want Americans to pay more.

Consider . . . in 1995, Gingrich's first year as speaker, federal expenditures were 22% of GDP. In 1998, they were 20% of GDP. But . . . revenues in 1995 were 19.2% of GDP. That is to say, had revenues remained at the 1995 level, they would have been less than expenditures and the budget would have still been deficit Newt's last year in office (and in fact, in 1999 as well). But Newt takes credit for balancing the budget.

Thus . . . by necessity he is taking credit for raising the tax burden on the American people.
Granted, there were no hikes in the marginal rate while he was speaker, but the increase in the tax burden came about with increased enforcement and regulation. This is a man with political courage! This is a man who puts doing the right thing above any thoughts of personal gain!

Now, I'd like to put the tax hikes that Newt seems to be advocating in context. For this, I'm going to steal a graph from Presimetrics, the book I coauthored with Michael Kanell. In it, we used a slightly different version of the tax burden: instead of Federal Revenues/GDP, we looked at the percentage of people's income that went to taxes. We looked at the annualized rate of change of this version of the tax burden for each Congressional administration from 1952 to 2008.

Here's what we found:


Figure 3.

As Figure 3 shows, the Republican Revolution (which granted, extended a few years beyond Newt) oversaw the largest (by far!!!) annualized increase in the tax burden of any Congress in several decades!

Because taxes aren't that popular with Republicans these days, Newt is downplaying the issue, but he seems to be dogwhistling it for those of with some familiarity with the numbers. The only alternatives are that he is ignorant of the numbers, or that he is will to obfuscate the facts, but hopefully we can expect more than that from someone running for the highest office in the land.


Comment:

kharris
The latest cleverness regarding Newt is that he has two modes of speech - attack and brag. He claims to be a thinker, and he is, but his thoughts are not the thoughts he wants us to think he is thinking. His smarts are all put into attacking and bragging, not coming up with good answers. And certainly not with relating facts.

Newt is bragging about deficit reduction and growth, but the sources of deficit reduction and the sources of growth are of little interest to him. They don't help him brag and they don't help him attack, so there aren't worth mentioning.

The fun will come when (if) Clinton gets involved. He is far more popular than Gringrich. He left office with very high approval ratings, unlike Gringrich. If Gingrich wants to claim credit for balancing the budget and spurring growth, he'll have to tussle with Clinton for credit. Worth watching, I'd say.

And now, on to the South Carolina primary! And the coming Newtonian disintegration.
________________________

Sunday, December 4, 2011

Meh. And (We) Say That With Feeling & How the Recent Data Belie the 1%'s Fraudulent Debt Solutions


December 2, 2011, 8:21 pm

Meh. And I Say That With Feeling


A belated reaction to today’s employment report (I’ve been closeted in a room with a bunch of men in suits, myself included, talking about the depressed and depressing world.) In a word: meh.

It could have been worse, but the basic story remains the same as it has been for 2 1/2 years: an economy that’s growing, but not enough to feel anything like a real recovery. The measured unemployment rate has trended down for a while, but it’s all basically reduced numbers of people actively searching.

My favorite measure these days is the employment-population ratio for prime-age workers, which isn’t affected by changing demography. Here it is for the past decade; see the trend since the recession officially ended? Neither do I.



Of course, my meh corresponds to enormous and continuing waste, vast hardship, and millions of ruined lives. Maybe someone should do something.

RJ at Global Glass Onion tells us what the recent data were and why:
. . . let's start with the news Wednesday that the Fed coordinated with 5 other central banks (BofJ, BofE, Swiss, Canadian & ECB) to lower the price of dollar-denominated currency swaps in order to ease worldwide bank funding strains that had developed in light of the euro mess, because that's been widely misunderstood as meaning "the Fed just bailed out Europe"...so we should start by noting that this isnt costing the taxpayers anything, and the action the Fed has taken is actually closer to a temporary loan rather than anything close to a gratis bailout...and the Fed doesnt really give a damn about the euro or the governments of europe, either; the Fed is only interested in saving the banking system, everything & everyone else is secondary.
...lets start by explaining what they're doing; ie, lowering the cost of swaps from 1% + the overnight index swap rate to a half percent; for any given swap, a central bank sells a given amount of its currency to the Fed in exchange for dollars; the swap agreement specifies that the swap will be reversed at a specified future date at the same exchange rate, so essentially the entire action is unwound at that time, and there is no risk in dealing with other central banks
...this is not unprecedented, the same thing was done after the Lehman collapse, & after 9-11.
...so why did they need to do this now? well, by virtue of the current high interest rates on sovereign debt issued by the peripheral european states, bonds in those countries that were purchased earlier by european banks have gone down in value considerably; hence, most of the european banks had grown suspicious of the solvency of the others, and they either stopped lending to each other, or charged ever higher premiums for their interbank loans; the same became true of their transactions with banks in the US & elsewhere around the world.
...as suspicion & apprehension mounted, their only alternative became to borrow from the ECB & deposit funds overnight at the ECB; normal interbank transactions started freezing up...by temporarily providing safe dollars cheaply to the ECB which they could lend to the euro-zone banks, the Fed is delaying their day of reckoning, when those banks, unable to rollover their funds, would be forced to sell their bonds in the peripheral countries at loss, likely causing cascading bank failures
...but most of those who've followed the European situation closely think its still far from being out of the woods, because of continued intransigence by the Germans & the ECB...if the ECB would announce a commitment to buy as much spanish & italian debt as would be necessary to drive their interest rates to say 3%, the crisis would be over tomorrow; but they wont "print money"; their bond purchases have been sterilized because the germans still have their historical, deep seated fear of inflation, even though the underlying trends in europe are now contractionary.
...more details about the Fed's involvement in the bailout of the banking system during the crisis in 2008 were also revealed this week as a result of a bloomberg FOIA lawsuit & ongoing investigation, and compared to the $700 billion treasury TARP bailout that we knew about, the Fed bailout at $7.7 trillion was over 10 times as large, including $1.2 trillion on one day alone; and what did the banks do with this money? Nothing for us; they sat on it & collected $13 billion in interest from the Fed before paying it back
...former Treasury economist Brad Delong took a look at the details & opined that "without the Fed and the Treasury, the shareholders of every single money-center bank and shadow bank in the United States would have gone bust"...a few links to this story and the coordinated central banks action described above are included below, but links to around 2 dozen on these Fed related stories are included right at the beginning of this week's blog post, if you want more details, opinions & analysis
. . . we havent seen much progress from Congress this week on the extension of unemployment rations and the payroll tax cut which expire at year end; for the unemployment extension, most of the news was was that the parties were far apart & still debating how long, what size, and what strings should be attached to an extension; both parties have introduced bills to extend them; the Democrats continue most of the provisions currently in effect; while the Republicans would tie the extension to repealing some "job killing" regulations, possibly even taking away the Presidents authority to rule on projects such as the Keystone XL pipeline
...the news on the payroll tax cut was on again, off again all week until Friday when two bills, one introduced by each party, both failed to pass in the Senate; the Democrat(ic) plan proposed to "pay for" the tax cuts by a surtax on those making over a million; the republicans planned to "pay for" the tax cut with a federal staff reduction & a pay freeze for federal workers; surprisingly, more even republicans voted against the republican plan than voted for it, which suggests it will be hard to get them on board on any compromise
...economist Karl Smith suggested an interesting way to "pay for" it; issue 10 year TIPS at their current 0.2% percent real interest rate; after 10 years the $119 billion cost would have risen to $120.4 billion, but that could be paid for then off what should be a much bigger tax base; & if the economy hadnt grown by that time, TIPS rates would likely be negative reflecting deflation, so the can could be kicked further down the road by issuing more TIPS at a profit...
Who says economists aren't thinking all the time?