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The 20% solution

8:07 pm in Uncategorized by cmaukonen

Walmart World - Patrick Hoesly/flickr Creative Commons

It would seem that Hillary Clinton is going to run for president in 2016. Pretty much a given really. Having her run will lock up the soccer mom vote for the most part and if she can lay it on thick like Bill, most of the Latino, Black and other non whites as well.

With a large part of the white males going for the republican. Most likely Jeb Bush. Politics as usual in the USA. And the vast majority of the populace will go along for the ride. Grover Norquist is saying that TP2.0 will be better than the previous version. Sounding like an IBM software add.

It all sounds so much like some first year comp sci program written in LISP to calculate N Factorial recursively. Just shuffle the card deck and re-submit the program if it doesn’t work the first time.

So why do we – or rather the public – put up with this ? Even after all that has been going on for the last 30 years or so. The criminality on Wall Street, in Congress. The imperialistic foreign policy and continuous military actions that get us even deeper in dept and accomplish nothing.

For one thing, the economy and the government is working just good enough for enough people to keep them from wanting to make any major change. This is not pre-revolutionary France or Russia where only a very small percentage of people – generally in the big cities – were doing well or at least managing some how. Where the vast majority were starving and still working in horrendous conditions, if they could work at all. Where most of what they did get was taxed or appropriated by those at the top.

Nor is this some Nazi occupied country where there was a common enemy and common goal that bound the majority together. Where even if the people were not actively involved with the resistance, were supportive of it and would turn their backs and not see or report anything the resistance did. Quite often helping in small ways as well.

Nor is it this country during the depression of the 1930s where the official unemployment was 25% of the populace. But that did not include all those who lost everything in the dust bowl as well. People who were driven off their farms and land with the same vigor and those who were driven from unions and strikes.

None of those conditions exist here at this time.

I would say that there is maybe around 20% who would really want to see any major change in the government or economic system. And of that 20% only about 1% who would support any direct action to do so. And even those 20% cannot agree on what needs to be done first. Jobs ? Global warming ? Economic and social equality ? Take one from from column A and one from column B.

The rest are still OK as long as they can still have roof over their heads, food in their stomachs, something to watch on their idiot boxes and get good and drunk at some bar.  Distracted by some trivial item (religious, moral, financial, or entertainment related) or the next gadget from Apple or Microsoft.

Even Greece and Spain – who are an order of magnitude worse off than we are – are not to the point of replacing their PTB with some coup or another.

As anyone who has been in AA or any other 12 step program can tell you, human beings are very reluctant to make any kind of change in their lives even when their lives are pure torture. Even when they have lost everything. They will put an unbelievable amount of effort into forcing a bad, unworkable situation to work some way or another or quite literally die trying.. They will deny and blame others for their misfortune and the failure of their situation.

The right wing will continually wine and throw a temper tantrum like some spoiled brat. Maybe even be diagnosed with some psychiatric disorder.

The pseudo-left will feign support for any progressive agenda that does not interfere with the status quo. Their SUV, McMansion or defense related carrier.

Change will come only when the majority of people are willing to own and accept that the system has failed and the continued support will get them nowhere. This will only happen when they themselves are starving and those at the top tell them TFB while their enforcers are clubbing them to death.

Progressives in America – No Place at the Inn

8:39 pm in Uncategorized by cmaukonen

Joe Hill Ashes - flickr

In every American community, there are varying shades of political opinion. One of the shadiest of these is the liberals. An outspoken group on many subjects, ten degrees to the left of center in good times, ten degrees to the right of center if it affects them personally. -Phil Ochs

Progressivism in The United States has had a very rocky road historically, never with a place to actually call home. The history of Progressivism is also the political history of this country and the political history has as many twists and turns as the back roads of Northern PA. and just about as many different kinds of characters.

First one has to accept that unlike Europe or Asia this country from the first has been made up of a conglomeration of different cultures, ethnics, religious followers and economic and social classes. All of whom came here either to escape religious and/or political persecution, poverty, legal issues or famine. A good number could only be described as malcontents, trouble makers, ne’er do wells and out right crooks.

The Federalist Party was the first political party followed closely by the Democratic Republicans. They pretty much ran things until 1800 when they fell out of power and popularity. They were the party of the monied and financiers. Wanted a strong union, a strong federal government, fiscal responsibility, good relations with Briton and high tariffs. Their champion was Alexander Hamilton.

Their opposition was the Democratic Republican Party whose head was Thomas Jefferson. They were against every thing the Federalist implemented and wanted. Primarily the party of the southern farmers and plantation owns as wells as the small merchants, they liked small government, low tariffs, states rights, yeoman farmers. They feared what they felt were the authoritarian policies of the Federalists and giving too much power to the bankers and financiers. In a highly contested election of 1800 that resulted in a tie – only to be broken by Alexander Hamilton – Thomas Jefferson became president and the Democratic Republican Party took both houses of congress. This also spelled the end of the Federalist Party.

Out of the ashes of all of this came the first real progressive cause. Slavery. And the first political party to embrace such a cause, The Whig Party.

Read the rest of this entry →

Where the Left and the Right get it wrong on Obama….mostly

8:57 am in Uncategorized by cmaukonen

Bean Bag Obama - Donkey Hotey/flickr

Another conspiracy theory from republicans…now it’s the jobs report. At the same time the apologies from the democratic regulars and Obama supporters  at at a fever pitch and those further left are as convinced as ever that Obama is a closet Nixon or Reagan or both. Whatever. The right want to see him as a socialist or extremest or Muslim lover or …… And the democratic followers as some new born savior.

They are all wrong. What you see is an illusion.

To me now the answer to the question Obama is fairly simple, though I will admit it was not always thus.  Like David Seaton I was pretty certain he was a question mark with multiple choice answers.  Not what he wanted us to see him as.

A very good clue came from the first of the debates – and I use the term very loosely.  One of the best analysis of which is given by Doug Henwood on his blog

Unlike Franklin Roosevelt, who famously said that he welcomed the hatred of the rich, Obama wants to flatter them. He made the mistake of calling them “fatcats” once, so his former fans on Wall Street turned on him. That has something to do with why he didn’t mention the 47% thing, or tar Romney as the candidate of the 0.1%. That would be divisive and offend the people whose admiration he craves. FDR came out of the aristocracy, and had the confidence to step on the fancy toes of the rich now and then. Obama came out of nowhere, was groomed for success by elite institutions throughout his impressive rise, and no doubt wants some of those nice shoes for himself.

I do not agree however with Doug’s assertion that Obama is a narcissist. I have personally known people like that and Obama does not really fit the mold. What he does fit is that of a “people pleaser“. People Pleasers are not necessarily narcissist nor are they totally sociopathic.  What they are – if I may use the vernacular – are suck ups.  Constantly wanting and  needing the approval of those they deem to be higher up.  Afraid of rejection and confrontation, especially face to face – they will do or say whatever they think is wanted by those above them.

I know I have worked for them and was more than a bit of a people pleaser myself for a while. But old age and some professional help cured me of it for the most part.

But this is not all that surprising when one considers his background. A child of mixed race not really fitting in on either side. Whose father left him at an early age and moving around quite a bit.  I would almost bet he had few, if any, real close friends but constantly seeking the approval of those around him. Becoming the first black president of the Harvard law Review and chumming around with those of similar ilk.  But never actually seeing himself as an equal. Needing to be the best to get any approval at all.

So his performance during the debate with Romney – possibly expecting Lehrer to come to his defense and be the assertive one – so not confronting Romney directly but only after the debates from a safe distance is no real surprise to me. It fits the pattern to a tee.

The democrats themselves have been the corporatist party from the get go. Unlike the republicans who worship money and those who have it, the democrats are envious of it.   Not bowing down with praise but sucking up and wanting it. So Obama in a lot of ways fits right in.

This is not to apologize for Obama or even a heavy critique.   He is what he is. He is a con but for his own self worth unlike Romney who is a con for money and property. Romney will steel your bank account. Obama your sanity.  He will appear as whatever he thinks you want him to be and is very good at it. And as Doug Henwood notes.

Romney believes in money. Obama believes in nothing.

Most liberals want to write off Obama’s bad performance as a bad night. It’s not just that. It’s a structural problem.

 

Politics is Politics and Parties is Parties.

8:25 am in Uncategorized by cmaukonen

I would guess that most here watched at least a bit of the two political circuses that have been put on for our amusement. Of the two I think the democratic circus was much better produced with tighter production values, a more creative script and better jokes. The also did a better job of casting, though in some cases seemed a bit cast against type.

I came across this site from the Pew Research Center on ones political leanings. A bit of a test or poll as it were.  Here is where I fit in.
As you can see, I’m nearly off the charts. (Click to view larger)

Here however is a site that gives a more nuanced view, in my opinion. From political compass.

As you can see I am out there and I have taken this test a number of times and it has turned out pretty much the same. For a heads up here is the 2012 election and the EU Member states.

2012 Election Political Compass

EU Member states

Now my gut impression is that there are a fair number of people here at FDL whose politics are similar to mine.

However here are a few stats. In the last general election, 60% of the eligible  voters actually voted. This is up from the 2000 election when 50% voted.  (United States Elections Project)

Only around 25% of the electorate are actively involved with politics. Most of those who do vote do not know or even care about the issues and policies of the candidates and vote on their emotional response to them in some way. IE their hair style or personality etc.

There are probably more Asians in this country than far leftists.  So do I think that we are likely to enact any of the current progressive policies that are heralded on this and other progressive sites ? Not in what’s left of my life time.    So love them Liberals

http://www.youtube.com/watch?v=u52Oz-54VYw

Wall Street’s Groupies…..

6:58 am in Uncategorized by cmaukonen

Wall Street Trekkers - flickr

Groupies. If you have ever been to a concert, you can spot them. They hang around the groups there. Wangle to get the best seats. First up with the autographs and defend them to the death. The groups music is always the best and the members can do no wrong.

Wall Street has it’s own groupies as well.  They play the market like they are part of the elites. Defend all that Wall Street does. The hang around them and wish they could be one of them but have not the talent or resources. The live in gated communities and drive imported cars and vacation just outside the Hamptons.

They are what Chris Hedges calls The Careerists..

These systems managers believe nothing. They have no loyalty. They are rootless. They do not think beyond their tiny, insignificant roles. They are blind and deaf. They are, at least regarding the great ideas and patterns of human civilization and history, utterly illiterate. And we churn them out of universities. Lawyers. Technocrats. Business majors. Financial managers. IT specialists. Consultants. Petroleum engineers. Positive psychologists.” Communications majors. Cadets. Sales representatives. Computer programmers. Men and women who know no history, know no ideas. They live and think in an intellectual vacuum, a world of stultifying minutia. They are T.S. Eliot’s “the hollow men,” “the stuffed men.” “Shape without form, shade without colour,” the poet wrote. “Paralysed force, gesture without motion.”

Like the musical groupies they have no creativity of their own. No imagination, compassion or passion. They are the Uriah Heeps of society.   The cockroaches, the maggots and the leaches. In the past they were the bourgeois and petite bourgeousie. The enablers and supporters of all that the elites did.

They really have no politics. Some are republicans ,some tea party,  some democrat. What ever suites their purpose at the time since all they really care about is furthering their own agendas.   They will be at the republican and democratic conventions cheering on their favorite performers.  Caring not one bit about what the lyrics say or whether or not they can actually play.

Just as long as they can keep their big fortified houses with their BMWs and indoor swimming pools. Shop at Whole Foods or Macys and attend self help seminars and focus on self actualization.

They will support Romney or Obama – whatever suits their fancy.

Cold War – Hot Profits

5:43 pm in Uncategorized by cmaukonen

"I've found the job where I fit best!" - Artist: George Roppe

Anyone who was here state side during WWII can tell you of the rationing that went on. Everything was rationed. From bread to tires. They can also tell you that no matter what industry you were in, you were doing defense work. WWII took this country from nearly 30% unemployment to 0 unemployment over night. New businesses formed overnight to meet the demands. Struggling businesses like Willys Motors became major contractors.

There were factories and corporations making each other’s products to meet the demand of the military. RCA, Stromberg Carlson, and Bendix all making the same radios. Willys and Ford made the Jeeps. Whole towns grew up from nothing to support new ship and arms factories. One could say that nearly every corporation became a wholly owned subsidiary of USA Inc. The technology of the time expanded at a breakneck pace and the war paid for nearly all of it.

When WWII came to an end in 1945 the so called Cold War against what was called Communism began as well as a new war to fight it. Korea and the cold war kept many of these plants humming right along. And new defense systems needed new advances which meant lots of dollars for research and development and nearly all of it paid for by Uncle Sam. Working for a defense contractor – and at that time nearly all the major corporations were defense contractors – meant you could get whatever new and necessary equipment you needed to advance your project. And a lot of this R&D made its way to the products that were sold to the general public as well.

Pretty sweet deal wouldn’t you say? Putting a good part of your research staff’s overhead on the government’s bill. And if the US military stopped being interested, you could also sell it to France or Egypt or Iran or Iraq or Israel or some South American country. And nearly every technical advance we saw had its origin or was advanced in some way through military material need – and I include NASA here . From television – improved for WWII, to computers – ENIAC for WWII became IBM.

Very few people complained about the merger of government and industry except President Eisenhower who used the euphemistic term Military Industrial Complex. Actually a form of codependency, where the US needed this arrangement just as much as industry did.

Reagan attempted to break it up after the fall of the Soviet Union but it was by then far to ingrained and in fact still flourishes as can be seen by this list of the top 20 contractors. Here is a PDF that goes into even greater detail.

And by what we have learned from Matt Taibbi and Yves Smith and others, this compact has been expanded to include the finance arena as well. With the Federal Reserve and Treasury’s union with Wall Street.

To look on this as separate entities to me seems just a but naive. We complain about the revolving door in Washington but to me it simply looks like intra-office advancement. Is it any wonder that there is little interest in Washington to change any of this ? That both parties like the idea of a corporate/government arrangement.

A Piece of The Action. The Rise of Gangster Capitalism in the Face of Systemic Collapse.

5:43 pm in Uncategorized by cmaukonen

Gangsters - flickr

We have heard a lot over the last four years on how those responsible for the economic/financial crisis of 2008-2009 have gotten away scot-free.  That the policies of Bush have been not only replicated by Obama, but enhanced and refined.

How the same people in charge of the economy under Bush were kept on and that nothing has been done to prevent a repeat of these events.  The right claiming too much regulation and calling the administration fascist or socialist or what not and the left accusing it of similar political evil.  All of whom are in my opinion missing the boat.

The events of the last couple of decades suggest another explanation to what is going on.   Some say since the Reagan administration and some say even Nixon.

Like a person with an incurable decease, when an empire begins to fall apart, it becomes desperate and is willing to try anything to forestall the inevitable.     Rules and morals and ethics that were once sacrosanct,  begin to be discarded and like Matt Taibbi and Ives Smith say, it begins to look and behave like an organized crime family.

BILL MOYERS: You’re describing a corrupt financial and political system. And both of you in recent writings, your current article in “Rolling Stone,” which is devastating on the scam that the “Wall Street learned from the Mafia,” and a recent column you wrote about the mafia state, you’re both using that metaphor to apply to our financial and political system. When I read your pieces, you’re not playing with words there. You mean it.

YVES SMITH: Yeah.

BILL MOYERS: Why do you mean it?

YVES SMITH: Well, the mafia, when it gets to be big enough, first thing it has services that people feel they need if they’re in a difficult situation. So, for example, loan sharking. If you really need money, they do have the money. And people enter into these loan shark deals even though they know it’s going to be very difficult to pay 20 percent or more interest and they’ll have their legs broken if they don’t pay back.

And the banks actually behave very much in that manner when they find people who really need money. So you see this with credit cards, you know, that, or, and with mortgages. That if you hit– it’s not this if you hit any tripwire, that, you know, become in arrears, the banks basically act in this very extortionate manner and don’t cut any breaks.

NOTE: Diary edited to comply with fair use guidelines. -MyFDL Editor

Those with the most to lose begin stop playing by the old rules and begin to make up new ones to fit their current situation as Dmitry Orlov suggests in his Reinventing Collapse.  What he did not expect, I think is that the government itself would fail to follow it’s own rules and would – along with the corporate and financial sector – evolve into what is in a sense a criminal organization. Using national security as the primary pretext to ignoring or completely eliminating any law that proved to be in the way. Or the way this country “removes” bosses of other countries that prove to be “bad for business”.

It wasn’t long after the bank and corporate bail outs that article upon article began to appear in The Washington Post, The New York Times and even That Wall Street Journal stating or questioning whether capitalism was dead. Some very harshly indeed.

Now nearly all of those voices are resolutely silent on the subject and those that still speak out tip toe around it. Even as more and more evidence surfaces of the complicity of government in the criminal behavior of the financial and business sector.

After the fall of The Soviet Union, Russia and a number of its former states plunged into almost total lawlessness where anyone who could,  got as much as they could and then left the people to fend for themselves. (A situation Putin has at least tried to correct, to his credit) We can see that happening here.

With less and less being done on the federal, state and local level to help those who are not part of the upper echelons of power.  And with the treatment of those who challenge these powers – such as OWS – feeling the wrath of the “Dons” for daring to question them.  The police behaving more like gangsters and protectors of the mob than anything else.

And you wind up with a multi faced economy. One official. One unofficial. Such as the underground economy here, which incidentally is valued in excess of 2 trillion dollars.  I knew a fellow who up until recently lived in Moscow and he would tell my friends and I about this – unofficial economy.

The real tragedy and danger is that the government sees nothing wrong, the right still thinks that everyone will play by the rules – even though they plainly are not, and the left still thinks it can be saved or resurrected somehow.  All of whom refuse to accept that the country is far beyond this.

How this will all play out in the end is anybodies guess. It surely cannot continue as it is though.  But expect it to get much worse before it gets better.

 

Remembering Nixon

9:44 am in Uncategorized by cmaukonen

Richard Nixon - Flickr

Bernstein and Woodward have a very good retrospective of Nixon and Watergate in the Washington Post. For most here – those much younger than I – the whole era is but a small chapter in history.  However I believe it is good to reflect on how close the country came to not only a constitutional crisis but a total break down in our democratic form of government.

The piece outlines quite well the atrocities committed by and proposed by Nixon himself in order to remain in power.  We have not had anyone with the pure insanity and megalomania in the Whitehouse before and thank heaven since. Not even Reagan or Bush could compare and certainly no republican – despite the hubris spewed by some – can come close.

Totally bent on destroying all and any who apposed him and his actions by what ever means available, legal or not.

From kidnapping of protestors to break ins and burglary to even targeted killings. Some so insane that they were rejected not only by his own justice department but by his own supreme court appointed justices as well.

Wishing to destroy the Democratic party and even the media. Enraged by the pentagon papers and Daniel Ellsberg.  Furious when Dick Cavett had John Kerry on debating Vietnam with John O’Neill. And Kerry completely ripping the war to pieces. Conspiring with Ohio Governor Rhodes to put down the Kent State protests which eventually ended with the shooting deaths four of students and the wounding of nine others.

Finally rejected by a large part of his own party in the Senate and The House.

So when we focus on the abuses of power by Bush and Obama and Romney lets us bar in mind that they are not the aberration of the system but rather the very epitome of it. They are what our social/economic/political system produce.

Economy on a precipice

1:21 pm in Uncategorized by cmaukonen

Train Wreck - Flickr Creative Commons

Train Wreck - Flickr Creative Commons

Editor’s Note: Please avoid using overly long excerpts in MyFDL posts, just a few paragraphs maximum from any source. The excerpts here are excessive. -MyFDL Editor

 

We’ve all seem them. The iconic scenes of the train wreck or car wreck with the cars hanging off a cliff. Nobody dares move else they cause the whole thing to plummet into the abyss below. This is where the economy stands today according to Dr. Paul Craig Roberts in his current analysis.

And why nobody dare change the equation lest the whole thing comes apart at the seams. Why the FED has kept interest rates at zero or near zero for so long and dares not change this any time soon.

US banks also have a strong interest in preserving the status quo. They are holders of US Treasuries and potentially even larger holders. They can borrow from the Federal Reserve at zero interest rates and purchase 10-year Treasuries at 2%, thus earning a nominal profit of 2% to offset derivative losses. The banks can borrow dollars from the Fed for free and leverage them in derivative transactions.

As Nomi Prins puts it, the US banks don’t want to trade against themselves and their free source of funding by selling their bond holdings. Moreover, in the event of foreign flight from dollars, the Fed could boost the foreign demand for dollars by requiring foreign banks that want to operate in the US to increase their reserve amounts, which are dollar based. . . . . .

The very process of slowly getting out can bring the American house down. The BRICS–Brazil, the largest economy in South America, Russia, the nuclear armed and energy independent economy on which Western Europe ( Washington’s NATO puppets) are dependent for energy, India, nuclear armed and one of Asia’s two rising giants, China, nuclear armed, Washington’s largest creditor (except for the Fed), supplier of America’s manufactured and advanced technology products, and the new bogyman for the military-security complex’s next profitable cold war, and South Africa, the largest economy in Africa–are in the process of forming a new bank.

The new bank will permit the five large economies to conduct their trade without use of the US dollar.

In addition, Japan, an American puppet state since WW II, is on the verge of entering into an agreement with China in which the Japanese yen and the Chinese yuan will be directly exchanged. The trade between the two Asian countries would be conducted in their own currencies without the use of the US dollar. This reduces the cost of foreign trade between the two countries, because it eliminates payments for foreign exchange commissions to convert from yen and yuan into dollars and back into yen and yuan.
Moreover, this official explanation for the new direct relationship avoiding the US dollar is simply diplomacy speaking. The Japanese are hoping, like the Chinese, to get out of the practice of accumulating ever more dollars by having to park their trade surpluses in US Treasuries. The Japanese US puppet government hopes that the Washington hegemon does not require the Japanese government to nix the deal with China.

Now we have arrived at the nitty and gritty.

The small percentage of Americans who are aware and informed are puzzled why the banksters have escaped with their financial crimes without prosecution. The answer might be that the banks “too big to fail” are adjuncts of Washington and the Federal Reserve in maintaining the stability of the dollar and Treasury bond markets in the face of an untenable Fed policy.

In other words they are all in it together. Yes I know this in not news to most here but this relationship has a lot to do with why there has been little if any movement to get to the heart of the matter.
Let us first look at how the big banks can keep the interest rates on Treasuries low, below the rate of inflation, despite the constant increase in US debt as a percent of GDP–thus preserving the Treasury’s ability to service the debt. The imperiled banks too big to fail have a huge stake in low interest rates and the success of the Fed’s policy.

The big banks are positioned to make the Fed’s policy a success. JPMorganChase and other giant-sized banks can drive down Treasury interest rates and, thereby, drive up the prices of bonds, producing a rally, by selling Interest Rate Swaps (IRSwaps). A financial company that sells IRSwaps is selling an agreement to pay floating interest rates for fixed interest rates. The buyer is purchasing an agreement that requires him to pay a fixed rate of interest in exchange for receiving a floating rate.

The reason for a seller to take the short side of the IRSwap, that is, to pay a floating rate for a fixed rate, is his belief that rates are going to fall. Short-selling can make the rates fall, and thus drive up the prices of Treasuries. When this happens, as the charts at
http://www.marketoracle.co.uk/Article34819.html illustrate, there is a rally in the Treasury bond market that the presstitute financial media attributes to “flight to the safe haven of the US dollar and Treasury bonds.” In fact, the circumstantial evidence (see the charts in the link above) is that the swaps are sold by Wall Street whenever the Federal Reserve needs to prevent a rise in interest rates in order to protect its otherwise untenable policy.

The swap sales create the impression of a flight to the dollar, but no actual flight occurs. As the IRSwaps require no exchange of any principal or real asset, and are only a bet on interest rate movements, there is no limit to the volume of IRSwaps.

So it is in the interest of the banks to keep the interest rates low. And Paul also shows how this also benefits the government by making servicing the debt a whole lot easier and can in fact hide – to an extent – how big it really is.
He also goes into how the banks do naked short sales on gold and silver to keep themselves afloat in all of this. There by manipulating that market as well. Good work if you can get it.
But like all good scams it can easily unravel.
How long can the manipulations continue? When will the proverbial hit the fan?

If we knew precisely the date, we would be the next mega-billionaires.

Here are some of the catalysts waiting to ignite the conflagration that burns up the Treasury bond market and the US dollar:

A war, demanded by the Israeli government, with Iran, beginning with Syria, that disrupts the oil flow and thereby the stability of the Western economies or brings the US and its weak NATO puppets into armed conflict with Russia and China.

The oil spikes would degrade further the US and EU economies, but Wall Street would make money on the trades.

An unfavorable economic statistic that wakes up investors as to the true state of the US economy, a statistic that the presstitute media cannot deflect.

An affront to China, whose government decides that knocking the US down a few pegs into third world status is worth a trillion dollars.

More derivate mistakes, such as JPMorganChase’s recent one, that send the US financial system again reeling and reminds us that nothing has changed.
The list is long. There is a limit to how many stupid mistakes and corrupt financial policies the rest of the world is willing to accept from the US. When that limit is reached, it is all over for “the world’s sole superpower” and for holders of dollar-denominated instruments.
. . . . .

Fed chairman Bernanke has spoken of an “exit strategy” and said that when inflation threatens, he can prevent the inflation by taking the money back out of the banking system. However, he can do that only by selling Treasury bonds, which means interest rates would rise. A rise in interest rates would threaten the derivative structure, cause bond losses, and raise the cost of both private and public debt service. In other words, to prevent inflation from debt monetization would bring on more immediate problems than inflation. Rather than collapse the system, wouldn’t the Fed be more likely to inflate away the massive debts?Eventually, inflation would erode the dollar’s purchasing power and use as the reserve currency, and the US government’s credit worthiness would waste away. However, the Fed, the politicians, and the financial gangsters would prefer a crisis later rather than sooner. Passing the sinking ship on to the next watch is preferable to going down with the ship oneself. As long as interest rate swaps can be used to boost Treasury bond prices, and as long as naked shorts of bullion can be used to keep silver and gold from rising in price, the false image of the US as a safe haven for investors can be perpetuated. 

However, the $230,000,000,000,000 in derivative bets by US banks might bring its own surprises. JPMorganChase has had to admit that its recently announced derivative loss of $2 billion is more than that. How much more remains to be seen. According to the Comptroller of the Currency the five largest banks hold 95.7% of all derivatives. The five banks holding $226 trillion in derivative bets are highly leveraged gamblers. For example, JPMorganChase has total assets of $1.8 trillion but holds $70 trillion in derivative bets, a ratio of $39 in derivative bets for every dollar of assets. Such a bank doesn’t have to lose very many bets before it is busted.

 

Assets, of course, are not risk-based capital. According to the Comptroller of the Currency report, as of December 31, 2011, JPMorganChase held $70.2 trillion in derivatives and only $136 billion in risk-based capital. In other words, the bank’s derivative bets are 516 times larger than the capital that covers the bets.

So if anyone moves, over the rocks she goes.Now for the sixty four dollar question ? How much does anyone know of this in Washington ? I’ll bet the next (secret) bail out that just about everyone knows. Even – and maybe especially – the tea party republicans. But no one is talking. Because if anyone lets the cat out of the bag, it tips over the train.

All this talk of austerity is simply a feeble attempt to keep the train from going over the side. And to make damn sure the dollar remains the reserve currency. So now we are at the point where we switch seats in the train every four years and try to make sure nobody goes forward or backward in the train.

 

The GOP and the right wing (nutz) hate urban America.

9:49 am in Uncategorized by cmaukonen

Red Hook Gated Community - Flicker

Red Hook Gated Community - Flicker

Thank gaud someone else sees what I have been saying for quite some time.  Daniel Denvir in Salon point out why the GOP continuously votes down anything for urban programs.

There are some oblique references, like Newt Gingrich’s suggestion that child labor laws be modified so that poor children can work as school janitors. “Really poor children in really poor neighborhoods,” mused Gingrich, “have no habits of working and have nobody around them who works … They have no habit of ‘I do this and you give me cash,’ unless it’s illegal.”

Gingrich’s comment is an example of surviving remnant of dog-whistle politics that demonize urban residents; recent examples include new state laws to drug-test those on public assistance and the ongoing effort to cut food stamps (and Gingrich did call Obama the “food stamp president”). The specter of the black ghetto still scripts urban dwellers as villains (often as thieves robbing the citizen either directly, or as in this Rick Santorum comment, indirectly: “I don’t want to make black people’s lives better by giving them other people’s money”). But unlike the era of Ronald Reagan’s welfare queen, today cities are more ignored than attacked. And this goes well beyond Iowa.

“The core of the Republican constituency in metropolitan America are the growing, racially and economically exclusive ‘outer suburbs’ whose privileged status Republicans seek to protect at all costs,” says former mayor of Albuquerque David Rusk, now a consultant. He cited New Jersey Gov. Chris Christie as an exemplar of the trend.

And not just the GOP but also a good number of Democrats as well. It’s White Flight taken to the Southern Segregationists extremes. Keep the good paying jobs and positions to ones self and price the poor and minorities out of any chance to moving next store.

And historically it was these liberal people in the 1950s and 1960s that made the trends of Nixon and Reagan possible.  Urban renewal they called it. Bulldozing and trashing old (often black) neighborhoods to “save them”.

The neglect of the cities can be traced back a half-century to the apogee of mid-20th-century American liberalism. In the 1950s and 1960s, the captains of municipal state, flush with federal funds and armed with great confidence in modern planning and architecture, bulldozed miles of “blighted” neighborhoods (often non-white) and rammed highways through the centers of many American cities. The feverish remaking of the cities was a desperate attempt to compete against the suburbs and woo back the middle class, which had departed thanks to the federal dollars propping up millions of (whites only) mortgages and miles of highways. Tragically, it was the liberal federal government’s funding of suburban homes and highways, and bulldozer-heavy urban renewal programs, that paved the way for Nixon and Reagan’s abandonment. Black people and the left were suspicious, the rising conservative tide was contemptuous, and politicians changed the subject. So, then, went the neighborhood.

Add to that during the build up to the housing bubble, there was the gentrification of a number of urban and close in suburban areas by upper crust whites.  Buying up houses and buildings in poor areas and putting in high priced real estate. There by raising the property values all through the areas as well as the taxes. Driving out the poor and minorities in the process.  I saw this happen a number times in Florida and the results here in NE Ohio.

So where are these citadels of mostly white suburban living ? Well here in Cleveland they are mostly on the east side now.  With vast new interstates put in during the 1970s through the 199os. Taking the residents safely to their upscale employment in the banks and offices.  The Gated Gentry. These are the people the GOP is wooing and the Big Zero in the Whites House panders too.  And this is also where the vast majority of our senators and representatives dwell as well. Is it any wonder that few – if any – seem concerned for the welfare of the middle class and the poor ?

One reason that cities don’t figure in today’s campaigns is simply because fewer people live in them: America is now a primarily suburban nation. But America’s suburban majority, which has also diminished urban clout in Congress and statehouses, distracts from something bigger and more important. As older suburbs decline and lose population to further sprawl, the line between urban and suburban issues blurs. The American electoral system obscures the shared conditions facing cities and older post-World War II suburbs.

“If the U.S. had a popular vote election, candidates would focus on saturating the major metropolitan media markets, a race to collect 51 percent of the votes by adding up the biggest population centers,” says George Washington University historian Christopher Klemek, author of “The Transatlantic Collapse of Urban Renewal.” “We wouldn’t be talking about swing states; in fact, we wouldn’t be talking about states at all. Cities — or at least the broad, decentralized (sometimes tri-state) metropolitan urbanized regions that most Americans now inhabit — would be at the center of the campaigns.”

Yet the political debate is dominated by the exurbs, the pell-mell ribbons of home and office development that snake along the nation’s highways. While the original postwar suburbs were built for well-to-do commuters to the city, today’s exurbanites commute from gated home to office park.

Letting the older suburbs rot and decay and be ignored.  Once the bastion of middle class America to left to be picked apart.  But urban America is where most of our domestic product and growth comes from.

“Cities and metropolitan areas are the engines of our economy,” says Robert Puentes, senior fellow at the Brookings Institution’s Metro Program. “The top 100 metropolitan areas alone claim only 12 percent of our land mass but harbor more than 65 percent of our population, 74 percent of our most educated citizens, 77 percent of our knowledge economy jobs, and 84 percent of our most recent immigrants. They also generate 75 percent of the nation’s gross domestic product.”

Rick Perry, for all of his thickly lacquered rural charm, in reality rules over one of the nation’s largest metropolitan conglomerates. “Growth in Texas,” Ryan Avent notes in “The Atlantic Cities,” “has really been about growth in its biggest cities,” Austin, Houston, Dallas and San Antonio. Texas is the most urbanized state per capita.

Those cities have labor forces that are powered by immigrants. But on the campaign trail, the perception that cities are harboring Mexicans is a great liability. Gingrich has declared that he will block federal funding to any “sanctuary city.” Romney has gone after bleeding-heart municipalities since 2007 when he ran ads criticizing Rudy Giuliani’s tenure in New York. In response, Giuliani noted that Cambridge, Mass., Somerville, Mass., and Orleans, Mass., had declared themselves sanctuaries. Cities, by virtue of progressive leadership or brown skin, still have the power to attract conservative opprobrium. Think about what Republicans mean to convey when they say “San Francisco.”

So yes. Economic and racial bigotry is alive and well in this country. But now it lives in gated McMansions and speaks not with a southern drawl, but a midwest and eastern accent.