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In Case You Were Wondering What Folks Who Rate Subprime MBS as AAA Think of the Creditworthiness of the U.S. Government

By: Dean Baker Friday October 31, 2014 5:53 am

The Washington Post has the answer. It devotes an article to Moody’s assessment of the financial situation of the U.S. government.

Most people probably know of Moody’s as one of the credit rating agencies that were paid tens of millions of dollars to rate mortgage backed securities as investment grade during the housing bubble years. It’s not clear when its assessment of creditworthiness supposedly became more credible.

Anyhow, the ostensible good news is that Moody’s says we don’t have anything to immediately worry about, the debt to GDP ratio is coming down for now.

“But — and you knew this was coming — there are dark clouds on the horizon. By 2018, the ratings agency expects annual deficits once again to surpass 3 percent of the size of the economy and to keep getting bigger. By 2030, debt held by outside investors is on track to rise from the current 75 percent of the size of the economy to 88 percent, an alarming increase that ‘likely would bring negative pressure’ on the nation’s sterling AAA credit rating.”

Moody’s then gives us a number of suggestions that include cutting Social Security and Medicare benefits in order to avert this rise in the debt to GDP ratio to 88 percent. If you were wondering how bad it is to have a debt to GDP ratio of 88 percent, it is not a difficult question to answer. It turns out that there are many countries who already have debt to GDP ratios that are higher than the ratio that Moody’s is warning we could hit in 2030 if we’re not good.

There is Italy with a debt to GDP ratio of 136.7 percent and Spain with a debt to GDP ratio of 98.6 percent, according to the I.M.F. Even worse, we have Japan with a debt to GDP ratio of 245.1 percent. Even our good friends across the pond in the United Kingdom have a debt to GDP ratio of 92.0 percent.

Needless to say the markets are punishing these countries for their fiscal recklessness. As of October 30th, Spain had to pay an interest rate of 2.16 percent on its 10-year bonds, profligate Italy paid 2.46 percent. The United Kingdom had to pay 2.23 percent and Japan, hold your breath, had to pay 0.47 percent interest.

Look, we have real problems. Millions of people still can’t find jobs and the weak labor market is redistributing income upward. And we should be worried about global warming. This stuff about long-term budgets is just brought to you by Jeff Bezos and his Wall Street friends because they want to cut Social Security and Medicare.

No one should be taking economic advice from folks who rate subprime mortgage backed securities AAA.


#FixEurope Autumn Campus: Nourishing Ideas

By: GREYDOG Friday October 31, 2014 5:50 am

Written by Turkish political analyst / blogger, Gürkan Özturan:

Activists and young intellectuals from across Europe came from all directions and gathered in the heart of Europe, at a centuries-old castle near Berlin, Schloss Wartin, for the #FixEurope Autumn Campus. European Alternatives, who organized the meeting, set up the agenda to discuss problems that Europe faces and find possible “solutions” that might bring about a better future for all of us. We shared, we learned, we explored, and most importantly, we discussed all kinds of issues that Europe is facing today.

Dozens of people gathered around a table of vegetarian grill raised their glasses to a better future in the hopes of a more complete Europe. People seemed eager to discuss matters that they think are vital for the future of the continent, and suddenly it seemed to become much easier to solve any problem the old continent might have. Once the path to discussion and dialogue is open, rational people should be able to find a way to overcome whatever problems are affecting the whole area and be able to give an answer to those who claim that there can never be an answer.

When participants were asked to simply note down the things they think need fixing in Europe, the list just went on and on. The list was getting almost as long as the history of the castle. Yet in fact this should not discourage any Europhile. It is merely an opportunity to see what happens when there is a very unilateral understanding of integration and of the European unification plan.

Our delightful host’s food was served in the main hall, and as we waited impatiently while enjoying tunes from the piano, one wondered at how many new ideas were popping up in everyone’s head at that moment. Every single minute was inspirational among this group of creative and impressive people in a calm and quiet atmosphere, without an Internet connection. Ideas actually got jotted down and new ones spread around on the tables – faster than the circulation of the food, I must say.

Issues that are swept from attention, things that people perhaps had not paid enough attention to previously, were brought up on the agenda. For once we could spare all the time in the world for a few days, as there was no WiFi zone to bring us the distraction of the “unread 666 messages.” Glasses and bottles clinked, new ideas kept popping up right in the middle of the sounds of nature. Much-needed peace and tranquility surrounded the activists. In the darkness and cold of the night, old projects were talked of, bringing about new project proposals.

The premiere of the Transeuropa Caravan took place at the castle with the participation of all the activists on the campus. There’s no need to add that it was inspirational, revealing certain local problems that parts of Europe experience and that most other parts would not even hear of were it not for such initiatives for bringing Europe closer to all its citizens.

We had gathered in Berlin with one major aim: to target and tackle problems that affect Europe in general. We left Schloss Wartin with thousands of new ideas and a great deal of inspiration and motivation to get to work. The end of the Campus was a joyful ride back to the Berlin city center, where we had the chance to attend a conference at the Heinrich Böll Stiftung, which opened with a keynote speech by Saskia Sassen. She talked about all the crisis moments that we can see very clearly all around us, especially the housing bubble and gentrification tactics in most major cities. Sustainability has become one of the primary topics for us all.

After all the talks and discussions, we the activists of European Alternatives at the #FixEurope Campus meeting, can agree with the slogans of the streets “this is still the beginning…”

More stories by Gürkan Özturan

More stories about Turkey @

Over Easy: The “War” over Apple Pay

By: msmolly Friday October 31, 2014 4:55 am

Apple Pay is a mobile payment service that lets a shopper use the newest iPhone 6 or 6 Plus, iPad Air, iPad Mini 3, and (in early 2015) the Apple Watch, to make payments both at brick-and-mortar stores and online checkout systems. Using Apple Pay, these devices communicate wirelessly with point of sale systems, using a near field communication (NFC) antenna and a “Secure Element” internal chip that stores encrypted payment information, together with Apple’s Touch ID and Passbook. Apple Pay keeps customer payment information private from the retailer, and creates a dynamic security code that is generated for each transaction. Apple says they will not track usage, which will occur privately between customers, vendors, and banks.

Here’s how it works: You add a credit card from your iTunes account, or add a different card using the iPhone’s built-in iSight camera. Once your credit card is on file with Apple Pay, you can use your phone to check out at participating vendors — both brick and mortar and online — by authenticating with the Touch ID fingerprint reader on the iPhone. In a store, you’ll hold your iPhone in front of a reader and place your finger over the fingerprint sensor to confirm the payment. Within an app, you’ll select Apple Pay as your payment method and confirm with Touch ID.

No, this is not an Apple commercial, although I am dying to get my geeky hands on it! Since the introduction of Apple Pay, a “war” of sorts has broken out, and it has implications for how stores use our information to track our purchases.

We all are aware that retailers track us relentlessly, both online and in person, using all sorts of mechanisms, from those pesky loyalty cards to the enticements to provide our email addresses. I’m sure you remember the father who learned his unmarried daughter was pregnant from the junk mail Target sent to her based on her purchases. Now some retailers have actually shut off the ability of their NFC readers to accept Apple Pay in their stores, specifically because it detours around their ability to track us.

Last weekend, drugstore chains Rite Aid and CVS stopped accepting Apple Pay, although they had done so for a week. Rite Aid offered a vague explanation that, “We’re still in the process of evaluating our mobile payment options.” CVS refused to comment. But the truth is that a Walmart-led group of retailers (that includes CVS and Rite Aid) has been busily creating their own mobile payment system called CurrentC, which cuts out the credit card companies and their fees AND builds in all the tracking and spying features of store loyalty cards, making the data available to all of the merchant partners. Apple Pay, by contrast, lets people remain anonymous.

An article in the NYT explains, (emphasis mine)

[D]isabling acceptance of Apple Pay was a way to favor a rival system that is not yet available but is being developed by a consortium of merchants known as Merchant Customer Exchange, or MCX. Rite Aid and CVS are part of that consortium, not part of the group of retailers that had teamed up with Apple on its payment system.
A great deal is at stake. MCX’s payments system helps merchants keep track of customer shopping habits across the dozens of merchants who plan to accept the payment product. That is a potential treasure trove of data for retailers, who wish to better target consumers with deals and loyalty programs.

This also gives retailers the potential ability to cut credit card companies out of the payments process entirely. MCX’s system, CurrentC, will be linked to a consumer’s debit account, according to the company’s description of the product. By bypassing credit card companies, MCX merchants could potentially save money on the fees they pay per transaction.

So CurrentC lets merchants eliminate credit card transaction fees all while scooping up even more and more data on our shopping habits. And MCX tries, and fails, to explain why its merchants are blocking Apple Pay.

On Apple Pay’s first day, seven times more people added Chase cards to Apple Pay than signed up for new credit cards, according to a Bloomberg interview with Avin Arumugam, Chase’s digital executive director. Ed McLaughlin, chief emerging payments officer at MasterCard — which teamed with Apple on its new system — said Rite Aid and CVS made the wrong decision. “We think consumers should have the ability to pay any way they want.”

I wonder how long it will take the MCX retailers to cave in? They won’t do it without a fight, but they’re picking on the wrong giant. A record 10 million iPhone 6 and iPhone 6 Plus units were sold in the first three days of launch. I, for one, will be delighted to use Apple Pay instead of handing over my Chase credit card to the retailers’ tracking.

Hmmmm….now where do I get the money for that new iPhone 6?

12 Ways Jim Crow Is Winning In 2014

By: solartopia Thursday October 30, 2014 11:37 pm

Twelve Ways Jim Crow is Winning in 2014

by Bob Fitrakis and Harvey Wasserman

Jim Crow is already the big winner in this year’s election.

The corporate elite needs him to gouge the planet, wage perpetual imperial war and rule the rest of us.

So the voting rights of millions of student, elderly, black, Hispanic and other citizens are being lynched.

Which may now decide control of the US Senate, many state legislatures…and the White House in 2016.

The corporate-Christian right has long used the drug war to disenfranchise millions of citizens of youth and color. Gay and reproductive rights, feminism and the politics of hate have mobilized Christian crusaders to flood the polls for the GOP.

But we have turned the corner on the culture war.  With the winding down of marijuana prohibition, widespread gay rights victories and more, Republicans now need the outright destruction of democracy itself to win an election:

1.        The Corporate Cash Tsunami: The Supreme Court’s Citizens United decision allows gargantuan sums of corporate money to shape this election. It’s now the norm for unlimited cash to buy air time, fake “news” reports, billboards, phony astro-turf campaigns, and key election officials in charge of counting the ballots.

2.        Killing Voter Registration: With a wide range of tactics, corporate/GOP functionaries are restricting access to the polls. In Ohio and elsewhere millions of citizens have been stripped of their voter registration rights, almost all in dense-packed urban areas that lean heavily Democratic. “Golden Days” when voters can both register and vote have been eliminated. Voter registration organizations like ACORN have been destroyed and strict restraints have been placed on others, all with the focused agenda of making it increasingly difficult for grassroots, non-millionaire citizens to vote.

3.        Denying and Destroying Absentee Ballots: More than 40,000 absentee ballots are now “missing” in Georgia, as they were in Ohio 2004. Georgia’s critical US Senate race may well be decided by fewer votes than were “lost” in the mail, and we expect parallel outcomes elsewhere.

4.        New Poll Taxes: Despite the 24th Amendment abolishing the poll tax, voter ID and other requirements put targeted restrictions on who can vote. Citizens registered at the same address for decades are being turned away at the polls. At least 500,000 Texas voters may be disenfranchised by ID laws aimed at students, the elderly and people of color, more than enough to turn most key elections in the state, including the widely watched governor’s race.

5.        Discriminatory ID Demands: Student IDs are being rejected in Texas and elsewhere, with the obvious impact of denying young people the vote. Gun owners’ permits are being accepted as valid voter ID.

6.        Electronic Vote Theft: Easily manipulated electronic voting machines were key to Florida 2000 and Ohio 2004 victories for George W. Bush. They have spread far and wide.  The easy electronic flipping of entire elections has obvious appeal to hugely funded corporate players throughout the US.

7.        Suppressing Electronic Dialog: But the Democratic Party generally refuses to even discuss electronic vote theft, apparently fearful the mere dialog will scare away voters. The Daily Kos website has banned numerous election protection bloggers (us included), apparently for just that reason. But without hand-counted paper ballots, anti-corporate campaigns are mere exercises in futility.

Reflections on Halloween

By: Ohio Barbarian Thursday October 30, 2014 4:54 pm

When I was a little kid in San Antonio in the 1960′s, Halloween was a huge holiday. Scores of kids would dress up in costumes, walk around local neighborhood blocks, and trick or treat, with the emphasis always on the treat part. Just about everybody participated, and those who didn’t were thought of as antisocial tightwads, too cheap to give candy to the kids.

After the kids got home, many adults would pawn them off on babysitters who had to endure sugar-high kids while they went to costumed Halloween parties where alcohol and all kinds of food flowed freely. Many took off work the next day if it was a weekday. Then, in the 1970′s, at least in Texas, things began to change.

Southern Baptist and Pentecostal ministers railed against “The Devil’s Holiday,” fueled by reaction to New Age paganism and movies showing that the Devil might just be real, such as The Exorcist, Rosemary’s Baby, and The Omen. Wild rumors circulated about evil people putting razor blades in apples and poisoning candy. There were a couple of such incidents nationwide, but really few and far between, and always between family members, not between strangers. But much of the media jumped on board, whipping up fear for higher ratings and newspaper sales.

By the time Reagan took office, in my part of the world back then Halloween was essentially dead. Fewer and fewer people displayed any Halloween decorations, and fewer and fewer kids went trick-or-treating. A couple of weeks before Halloween, solemn local newscasters would start warning of the dangers of allowing one’s children to trick-or-treat. It was sad. Years later, I moved to Colorado and found much the same thing going on there and more. Once church in Arvada even went so far as to have a haunted house where they graphically pantomimed abortions and the Devil gleefully waiting in hell to torment women who had them for All Eternity. I understand that eventually Children’s Services got it shut down because they found the Bible-thumping parents who dragged their kids to it every year guilty of psychological child abuse.

Then we moved to northeast Ohio. Halloween’s HUGE here. Weather permitting, hordes of kids flock through the streets trick-or-treating and there are Halloween parties all over the place. It’s great fun, like it should be, IMHO. Maybe it’s Ohioans’ love of celebrating seasons, or of feasting, or both. Maybe it’s something cultural. Whatever, I like it. I have yet to see any fearmongering on local news, or hear many  Christian types railing against Halloween because it’s the Devil’s Holiday, though there is a smidgeon of the latter. Most people here dismiss them as being handicapped by having no sense of fun.

There are haunted cornfields and mazes in the country. There are haunted houses aplenty, complete with costumed folks brandishing chainsaws. There are lots of parties. It’s nice to see what was probably once a Celtic harvest festival with deep religious meaning millennia ago still living on, no matter what form it takes. For that matter, there are real, live pagans and Wiccans here who try to celebrate old Samhain in their best approximation of the ancient rites. There’s ceremony and music and dancing and a lot of fun.

It’s a pity that there are still plenty of people in this country who take after the Puritans and try to ban what is for most just a chance to have some fun, eat some sweets, and maybe swill a bit o’ brew. Funny, you never see them call for a boycott of commercialized Christmas.

Anyway, Happy Halloween! I just finished carving my now traditional Vampire Jack o’ Lantern. Gives the little kids a fun fright, it does. What do you do for Halloween?

Give me your huddled masses yearning to breathe free…

By: wendydavis Thursday October 30, 2014 3:37 pm

(from Creative Resistance, CC)

but mainly those with an H1-B-eee 

(Yes, this post is long, but I consider it a  Labor of Love, and I hope you will, too, and read it.  These are things I believe we need to know.)

‘A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.

Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!

~ Emma Lazarus

No, no; not so much those nameless deportees that came here to escape the depredations and murderous dangers in the global south, so many of which were aided and abetted by US policies and activities.  They might be carrying ebola.leprosy.drugs.alqaedacards.unbornbabbies.bedbugs.lice.whathaveyou.  writes that Obama deported a record 438,421 people last year, the highest number of annual deportations in US history, and that number is on track to escalate, of course, especially with the reported 60 or 70,000 unaccompanied minors that came over the summer and created the ‘crisis on the border’.  I know you remember reading about it; it was the talk of the nation for a few news cycles.

A Quick Whirl Around The Fracking World: 30 Oct 2014

By: KateCA Thursday October 30, 2014 2:31 pm

A Quick Whirl Around The Fracking World:

*US.  Fracking has resulted in the “highest level in at least three decades” of US crude oil production, with  379.7 million barrels of oil now stored.  An industry spokesperson, however, said, while they’re “still optimistic about shale growth”,  2014 is likely to be a peak year.

*US.  Scientists have found about 30% (roughly 2 million barrels) of the oil BP’s Macondo Well blowout spewed into the Gulf of Mexico.  Much of the oil is southwest of the well, deep down on the sea floor.  Maps and pics. More.  A recent BP pr effort.

*US.  “The Great Invisible”, a film documentary, records the impacts of BP’s blowout on regular folks along the Gulf.  BP did provide compensation to 100,000+ residents, “but hundreds of thousands of others were refused any compensation.”

*US.  BP and Chevron have struck oil “at a key exploration site in the deepwater Gulf of Mexico.  This is BP’s second major discovery in the deepwater Gulf since the 2010 oil spill.”

*AR/CO/PA/OH/WY.  According to a University of Albany-State University of New York study, 8 “poisonous chemicals were found near wells and fracking sites” in AR, CO, PA, OH and WY at levels that far exceeded recommended federal limits.”  Gases included benzene and hydrogen sulfide.  One site’s benzene levels were “Five orders of magnitude over federal limits”.

*AK.  Fellow followed a bull moose walking across his property, only to discover “the deepening piles of ashy cement powder coating the trees and running off into a gravel pit”.  Workers from fracking company Baker Hughes had  dumped what remained of cement mixtures into the woods, reportedly including “a foul-smelling, oily liquid”.

*CA. Drill now, deal with the consequences later”—that has led one man, a former military and aerospace engineer, to run for the Monterey County Board of Supervisors.  Pivotal time, since frackers are trying to get permits from the US Bureau of Land Management to exploit the San Ardo Oil Field, which lies underneath much of “America’s Salad Bowl”.

*CA.  Chevron reportedly  ”greases local elections with [a geyser of] dark money”, including the elections in Richmond.

*CA.  Also up against big oil and gas, Santa Barbara backers of Measure P, designed to protect the county from “under-regulated” fracking, continue their fight.

*CO.  See UT & CO.

*MT.  “Tribal chiefs and leaders” of the Blackfoot Confederacy (one tribe from Montana, three from  Canada) issued a “joint proclamation insisting that the U.S. Department of Interior cancel . . . illegal oil and gas leases in the Badger-Two Medicine area”.  They also want Interior to “vigorously defend” against a developer’s lawsuit and to establish, with the Blackfeet Nation, protections for Badger-Two Medicine.  (Just three paragraphs down for Badger-Two Medicine info.)

*ND.  A measure on the November ballot would “divert 5% of future oil revenue to fund clean-water projects, wildlife preservation and parks.”  Backed by conservationists and hunters, it’s opposed by the “agriculture industry, oil producers, education groups, builders and business organizations.”

*OH.  Good grief! 400 families evacuated after a natural-gas fracking well blew out in Jefferson County, “spewing natural gas and methane into the air.”

*PA.  A first-term state Congressman, Matt Cartwright (D), has reportedly “just launched an investigation into how his state deals with fracking waste”!

*SD. Keystone XL pipeline opponents in Nebraska will be given “intervenor status” before the South Dakota Public Utilities Commission—but “All evidence and testimony must pertain to the project in South Dakota only”.  TransCanada, Keystone XL’s builder, objected, but lost.  Many fear contamination of the Ogallala Aquifer which underlies eight states (see map).

*TX.  Denton has become a major hot spot with a fracking ban on the ballot.  It’s atop the Barnett Shale, and “money has been pouring into Denton from oil and gas companies anxious to stop [the ban] before it spreads to other towns.”

*TX.  Another grassroots effort, this one in Mansfield, to restrict fracking by “enhanced regulation at fracking sites within city limits”, such as imposing a limit of 1500 feet from homes or schools, rather than the 600 feet currently in the city ordinance.

*TX.  Superior Crude Gathering will be paying $1.6 million for “at least 2,200 barrels from two tanks at its facility” that spilled in Ingleside  in 2010.  That’s a civil penalty; the payment will become part of the federal Oil Spill Liability Trust Fund.

People-Powered Reporting In Action: Jon Walker Testifies at DC City Council, Thanks to You

By: Elliott Thursday October 30, 2014 12:29 pm

Heartfelt thanks to everyone who’s contributed during our fundraising week. If you haven’t contributed yet, please do. The money goes for tech upgrades and security improvements, site redesign (!), in addition to funding our writers.

We are grateful for your support, you keep us operating.

Your gift makes it possible for Jon Walker’s influential work on marijuana legalization and drug policy rationalization; we’ve come a long way baby, thanks to you. Just today he testified in front of the Council of the District of Columbia to help them establish the best marijuana legalization plan for the city.

From his prepared remarks:

The D.C. Council has the unique chance to make history. It could be the first legislative body in the country to adopt a law approving the taxation and regulation of recreational marijuana use, and it could serve as a model for other states.

While I support marijuana legalization, I will leave it to others here today to make the arguments in favor of it. Instead, I want highlight six specific policy considerations the Council should keep in mind when drafting the final version of the legislation.

And you are the people who make this happen! You’re doing this.

It’s you who make it possible for Kevin Gosztola to report from Ferguson MO. Not to mention all the other civil rights efforts he covers — Chelsea Manning, John Kiriakou, James Risen, to drop a few names.

And Dan Wright’s work as well, he’s got a sharp tongue he wields where it’s needed as he covers the follies of our government’s policy for us.

Don’t forget our pride and joy, FDL’s Book Salon. What a fabulous place to discuss the most influential books new to the market. And I don’t think anyone anywhere else comes close to BevW’s scheduling crystal ball!

No one else has weekends with Phoenix Woman, Peterr and Masaccio. And BrandonJ’s news Roundup all week long; mornings at Over Easy, and Late Late Nights with Suzanne and CTuttle. New and interesting films every Monday with Jane, you make it happen. This is your community.

So, please give generously. Give what you can. Five dollars here, ten dollars there, it adds up, it matters. You make us possible, and we thank you for that.