Thursday, October 16, 2008

Nearly 30 percent of US families subsist on poverty wages

Nearly 30 percent of US families subsist on poverty wages

By Tom Eley
Go To Original

A report released Tuesday by the Working Poor Families Project reveals that more than 28 percent of American families with one or both parents employed are living in poverty.

The report, “Still Working Hard, Still Falling Short,” is based on data for the period from 2004 through 2006 gathered from the US Bureau of Labor Statistics, the US Census Bureau’s American Community Survey and the Census Bureau’s Current Population Survey.

The report finds that 9.6 million households can be described as low-income or “working poor”—defined as families that earn less than 200 percent of the official poverty level. There were 350,000 more such families in 2006 than in 2002. More than 21 million children now live in low-income working families—an increase of 800,000 in four years.

In 2006 there were more than 29 million jobs in the US that paid below the official poverty level—defined as $9.91 an hour for full-time labor—an increase of nearly 5 million poverty-wage jobs from 2002.

Family income inequality also increased rapidly between 2002 and 2006, the report says. In 2006, the top 20 percent of US households earned on average 9.2 times as much as the bottom quintile.

The report notes that working poor families “lack the earnings necessary to meet their basic needs—a struggle exacerbated by soaring prices for food, gas, health and education.” About 60 percent of low-income working families are forced to spend more than one-third of their income on housing, and nearly 40 percent lack health insurance for one or both parents.

These families struggle under poverty conditions despite parents working long hours. According to the report, “Adults in low-income working families worked on average 2,552 hours per year in 2006, the equivalent of almost one-and-a-quarter full-time workers.”

This total is about one third of all the hours that pass in a year. It is nearly twice the total yearly work hours of the average German worker, who works 1,362 hours per week, and 162 hours more per year than the average South Korean worker, according to statistics from the Organization for Economic Cooperation and Development.

The report documents the sharp decline in living standards for wide layers of the working class, the result of decades of corporate downsizing and wage-cutting presided over by Democratic and well as Republican administrations. It shows that poverty-level jobs are increasingly common and are held by broad sections of the population. Contrary to certain stereotypes promoted by the media, the majority of families living on poverty wages are neither immigrants, minorities or families with a single parent.

Some 72 percent of poor families, according to the report, hold jobs. More than half are headed by married couples, 69 percent have only American-born parents, 89 percent have a parent between the ages of 25 and 54, and 43 percent have white non-Hispanic parents. Only 25 percent receive food stamp assistance.

The study breaks its statistics down to the state level. In general, the conditions of working families are worst in the South and the non-Pacific West. Texas, for example, has the fourth highest number of working families defined as low-income, the second lowest percentage of low-income families who have a high school diploma or its equivalent, the second highest number with no post-secondary school experience, the fewest with health insurance, and the third highest family income inequality.

New York has the highest family income inequality in the nation, California the fourth highest.

The impoverishment of ever-larger sections of the working class population is the outcome of a number of processes: the dismantling of large sections of basic industry, the wave of union-busting and strike-breaking in the 1980s, the gutting of social welfare programs, the betrayal of the working class by the trade union organizations.

The other side of this process is the vast enrichment of the top 10 percent of the US population and the ever-greater concentration of wealth in the hands of the financial elite.

A survey carried out in March by Equilar and reported by the New York Times revealed that the CEOs of the 200 largest publicly traded companies earned an average of $11.7 million in 2007.

In 2005, the top 1 percent of US households accounted for 21.8 percent of all pre-tax income, twice the figure in 1970s. This represented the greatest concentration of income since the year before the onset of the Great Depression, 1928, when about 24 percent of national income went to the top percentile.

It should be noted that the “Still Working Hard, Still Falling Short” report reflects conditions that existed prior to the eruption of the financial crisis in August of 2007 and the subsequent slide into recession.

How the financial aristocracy laid down the law

How the financial aristocracy laid down the law

By Alex Lantier
Go To Original

Accounts of the October 13 meeting between US Treasury Secretary Henry Paulson and top bank CEOs on the government’s bailout of Wall Street—now estimated at $2.5 trillion—paint an extraordinary portrait of class relations in America. Though they were to receive hundreds of billions of dollars from the Treasury to stave off a credit collapse of their own making, the bankers arrogantly refused to accept the slightest limits on their prerogatives.

Instead, the Treasury approached the bankers as a supplicant, agreeing that if they accepted the bailout, it would place no real caps on exorbitant CEO pay and exercise no effective oversight of bank operations.

On the evening of the 12th and morning of the 13th, Paulson telephoned the CEOs of major banks who had gathered in Washington for the annual meeting of the International Monetary Fund. At the time, the US media was predicting a deal along the lines of the European bailout arranged over the weekend: the Treasury would pump money directly into the banks by buying shares and guarantee inter-bank loans.

When one CEO, John Mack of Morgan Stanley, asked Paulson the reason for the meeting, he replied: “Come on down, we’ll tell everyone at the same time. I think you’ll be pleased.”

The bankers’ response to the initial presentation of the bailout was for the most part one of furious opposition. Wells Fargo CEO Richard Kovacevich objected to limits on executive pay—he is currently entitled to $43 million in retirement benefits and $140 million in stock and options. The New York Times, in its account of the meeting, reassuringly noted, “Pay experts say the new Treasury limits would probably not affect his exit package.”

Kovacevich also worried that the Treasury might demand high returns and shareholder voting rights, cutting into large private shareholders’ profits and power.

These objections were echoed by Goldman Sachs CEO Lloyd Blankfein, Citigroup CEO Vikram Pandit, Merrill Lynch CEO John Thain and JPMorgan Chase CEO Jamie Dimon.

The Times wrote, “With the discussion becoming heated, [US Federal Reserve Chairman Ben] Bernanke interceded. He told the bankers that the session need not be combative, since both the banks and the broader economy stood to benefit from the program.”

At this point, Timothy Geithner of the Federal Reserve Bank of New York began explaining the specifics of the program. “As they heard more of the details,” the Times reported, “some of the bankers began to realize how attractive the program was for them.”

They learned that the Treasury would give banks $250 billion in exchange for preferred shares paying a 5 percent dividend, rising to 9 percent after five years. It would also receive the right to purchase common shares, worth 15 percent of the initial investment. To deal with concerns that it would receive substantial control over shareholder decisions, the Times wrote, “the Treasury said it would not exercise its right to vote those common shares.”

When he invested in Goldman Sachs last month, private investor Warren Buffett arranged for far better terms than the Treasury. In exchange for $5 billion, Buffett will receive perpetual interest payments of 10 percent.

Paulson gave the Treasury no means of enforcing even those payments it is supposedly requiring: banks will have the right to skip a year and a half of quarterly dividend payments. If a bank skips more payments, the Treasury will only have the right to name two directors to the bank’s board.

Such conditions, one need hardly point out, are never granted to ordinary mortals. Working class mortgage holders typically face foreclosure after missing three monthly payments. A small business receiving a loan from a bank must make all interest payments and can typically operate at a loss for at most two quarters before the bank places it in workout, effectively taking over its operations.

The Treasury also committed itself to guaranteeing $1.5 trillion in bank debt and $500 billion in non-interest-bearing bank accounts, used mainly by businesses. In total, and despite massive popular opposition to the initial $700 billion bailout passed earlier this month, the Treasury increased US liabilities by $2.25 trillion, without any Congressional vote or semblance of democratic consultation with the American people.

The bailout deal underscores a powerful social reality: There is a ruling class in America, whose interests the government is dedicated to defend, by blatantly unequal treatment if necessary. Despite ritual invocations of democracy, the American ruling class will not allow any popular interference in matters affecting its fundamental interests.

The deference paid to this financial aristocracy, amid predictions of a global economic depression, recalls nothing more than the dying days of the Ancien RĂ©gime monarchy before the French Revolution. One can imagine similar meetings as Louis XVI’s last finance minister, Viscount Charles Alexandre de Calonne—whose role is now played by Paulson, the multimillionaire ex-CEO of Goldman Sachs—drew up doomed plans attempting to stave off state bankruptcy, while preserving the nobility’s privileges.

All that is missing from this week’s bailout negotiations are the silk stockings and powdered wigs.

Stock markets fall as global recession takes hold

Stock markets fall as global recession takes hold

By Patrick O’Connor
Go To Original

Stock markets in the US and Europe fell sharply yesterday amid mounting evidence that the US economy is entering into a severe recession.

On Wall Street yesterday, the Dow Jones Industrial Average declined by 7.8 percent, or 733 points, the index’s second largest one-day point drop. Of the 30 Dow industrials, only Coca-Cola finished marginally higher after it released better than expected profit figures.

The Standard & Poor’s 500 Index fell even more sharply, by 9 percent, while the technology-based Nasdaq declined 8.4 percent. Shares on these indexes were almost uniformly lower, with declining stocks outnumbering advancing ones by 8 to 1 on the Nasdaq.

Yesterday’s Dow Jones decline largely erased Monday’s one-day rise of 936 points, which followed the previous week’s unprecedented 18 percent fall. Monday’s rebound had been driven by the Bush administration’s announced extension of the $700 billion bailout of Wall Street, with up to $2.25 trillion in public money allocated to prop up the major banks and financial firms.

Yesterday’s downturn on the markets indicates a growing awareness that the bailout will not prevent the US from sliding into recession. Consumer spending is sharply down, job losses are mounting, business confidence remains low and critical US export markets in Europe and other regions are under threat as world growth stalls. None of the Bush administration’s measures addresses the underlying crisis of American capitalism.

“Everything the government has done is not going to prevent further deterioration in the economy,” Stuart Hoffman, chief economist at PNC Bank, told the New York Times.

“To some degree, we’ve moved on from the old crisis to the new crisis,” said Howard Silverblatt, a senior index analyst at Standard & Poor’s. “The credit crisis has been addressed to some extent, but now there’s the recession, unemployment, and rising manufacturing costs in the pike.”

The US Commerce Department’s report on September retail sales, released yesterday, found that sales had decreased by 1.2 percent. This was nearly twice the decline anticipated by economists and marked the third consecutive month in which consumer spending decreased.

Indicating the extent to which the financial crisis has hit working people, the fall in consumer sales especially affected auto retailers, with car sales down 3.8 percent, as well as department stores and shopping malls. In response, shares values yesterday declined for Wal-Mart (6.3 percent), Target (8 percent) and Staples (7.7 percent).

The Federal Reserve also released its “beige book,” a regular survey of businesses around the country, which found that spending has declined in all 12 metropolitan areas covered in the report. Retailing, auto sales and tourism declined in most districts, while housing and construction “weakened or remained low,” the report stated. Businesses said they “had become more pessimistic about the economic outlook.”

Other negative indicators included a measure of New York manufacturing, which recorded its lowest level since the index commenced in 2001.

In a separate announcement, New York’s chief financial officer, Comptroller William Thompson, estimated that the financial crisis could see 165,000 jobs lost in the city, including 35,000 in the financial sector alone. The forecast of 165,000 job cuts is more than double the amount Thompson anticipated in July. He said the revised estimate reflected “the spread of the economic troubles to other industry sectors as the nation slips into a general recession.”

Thompson’s statement was one of several which warned of an imminent rise in the level of unemployment. On Monday, Bill Gates of Microsoft said he expected a “fairly significant recession,” leading to a jobless rate of 9 percent. Gates issued this statement even before the value of his company’s shares declined by a total of 11 percent on Tuesday and Wednesday. Other tech stocks also fell sharply yesterday, including EBay (14 percent) and Dell (11 percent).

The specter of the Great Depression

Janet Yellen, president of the Federal Reserve of San Francisco, acknowledged in an address delivered to Silicon Valley executives that the US was officially in recession. She cited recent Fed data showing the economy was weaker than expected in the third quarter, “probably showing essentially no growth at all,” while for the fourth quarter “an outright contraction [is] quite likely.” She concluded, “Indeed, the US economy appears to be in a recession,” adding that she thought this was “not a controversial view.”

Notably, Yellen’s speech was not publicized on the Fed’s central web site. Federal Reserve Chairman Ben Bernanke struck a somewhat different note in a speech yesterday before the Economic Club of New York. Trying to reassure the markets, Bernanke again promoted the bailout, hinted that interest rates may be cut further later this month, and insisted that policy makers have learned from the Great Depression and have avoided the “critical errors” made by their counterparts in the 1930s.

These platitudes fell flat, however, with many on Wall Street unnerved by the fact that the Fed chief was now openly discussing the Great Depression.

Peter Cardillo, chief market analyst at Avalon Partners in New York, told the Wall Street Journal that he found Bernanke’s comparison of the current crisis with the 1930s “particularly worrisome.” “How can the market not react to that?” he declared. “Look at what he’s saying!”

While Bernanke insisted that he was confident the economy would emerge from the crisis with “renewed vigor,” his speech presented a dire prognosis. “Stabilization of the financial markets is a critical first step, but even if they stabilize, as we hope they will, broader economic recovery will not happen right away,” he said. “Economic activity has been decelerating even before the recent intensification of the crisis... Ultimately, the trajectory of economic activity beyond the next few quarters will depend greatly on the extent to which financial and credit markets return to more normal functioning.”

It remains to be seen whether the Bush administration’s measures manage to revive the “normal” financial parasitism that has come to dominate the US economy.

“Blue chip” financial stocks were among those sharply down on Wall Street yesterday, with Citigroup and American Express each declining by about 13 percent. An influential bank analyst at Oppenheimer & Co contributed to the sell-off by warning that US banks were not “out of the woods” despite Bush’s bailout.

A significant factor in yesterday’s Wall Street sell-off was the activity of hedge funds, which were forced to sell stock to raise cash to meet margin calls from their brokers. Such forced selling by major investors further depresses share prices, in turn lowering the value of the collateral that backs the outstanding loans of financial firms, thereby precipitating more margin calls from their creditors. The result is an accelerating downward spiral on financial markets.

There is also the outstanding question as to how the bailout is to be paid for. On Tuesday, the Treasury reported that the federal government ran a budget deficit of $454.8 billion in the 2008 fiscal year, up from $161.5 billion in 2007. According to Bloomberg.com, Morgan Stanley chief economist David Greenlaw has predicted the shortfall may increase to about $2 trillion once the full extent of the bailout is realised. This would be the equivalent of approximately 15 percent of US gross domestic product—more than twice as large as the post-World War II record deficit of 6 percent of GDP recorded in 1983.

In his speech in New York, Fed Chairman Bernanke pointed to another serious danger to the US economy—slowing economic growth in major trading partners, which will almost certainly result in lower US exports.

Developments in Europe yesterday confirmed these fears. The major share markets suffered sharp declines, with the London FTSE 100 index down 7.2 percent, the French CAC-40 6.8 percent lower, and the German DAX down 6.4 percent.

The fall in British markets was triggered in part by the release of unemployment figures showing the official jobless rate for the three months from June to August at 5.7 percent, up from 5.2 percent in the previous quarter. An additional 164,000 people joined the ranks of the officially unemployed, the biggest quarterly increase in 17 years. According to the Financial Times, many forecasters expect the jobless rate in Britain to rise above 7 percent in the coming year.

Slowing world growth is reflected in falling demand for commodities, leading to lower prices. The Reuters-Jefferies CRB index, an index of world commodity prices, fell to a two-year low yesterday, down almost 40 percent from July’s record high. Over the past three months, the prices of crude oil, platinum, steel, copper and zinc have slid by 35-45 percent, while agricultural commodities including soy and corn have declined by more than 50 percent.

Rio Tinto has announced it is cutting production at some of its aluminum smelters in response to slowing Chinese growth. Rio Tinto chief executive Tom Albanese declared that the Chinese economy “is pausing for breath after spectacular GDP growth.” Shares in the mining giant plummeted by 16 percent in response to the announcement. Other energy and commodity firms’ stock also fell yesterday, including Alcoa (down 12.8 percent) and Exxon Mobil (14 percent).

The financial crisis has brought to a head the underlying contradictions which have been wracking the capitalist system over an entire period. Notwithstanding the desperate hopes of policy makers in Europe, Asia, and other regions, a severe and protracted recession in the US will inevitably trigger a major downturn in the world economy.

Why the Bailout Won't Do Anything for the Root of the Problem

Confidence Trick

By John Miller

Go To Original

Hyman Minsky, the theorist of financial fragility whose work has enjoyed a revival as U.S. financial institutions crumble, always maintained that “there is nothing wrong with macroeconomics that another depression wouldn’t cure.”

Whatever salutary effects today’s financial crisis, undoubtedly the worst since the Great Depression, might be having on macroeconomics, it has yet to improve economic policymaking. The Bush administration exploited a financial panic, vastly exaggerating its dangers for the broader economy, to extort $700 billion from a Congress only too willing to open taxpayer’s wallets to bail out those who benefited from the speculative excesses of an $8 trillion housing bubble.

Whatever this massive public purchase of bad debt will do to patch up the credit system, the bailout will not counteract the downward spiral in housing prices that brought on the credit crisis and will undoubtedly continue. The bailout will do little to make bad mortgage debt more viable or to provide relief to homeowners behind in their mortgage payments or facing foreclosure. Nor does the bailout place effective limits on CEOs’ pay or their golden parachutes, erect the regulatory safeguards that will curb future financial excesses, or counteract the worsening recession. Worse yet, the bailout swells the federal budget deficit and for that reason will likely sap whatever political will could have been mustered to make the massive public investments necessary to prevent the economy from falling into a prolonged depression.

For the policy maestros to do better than this disgraceful, already-failed, confidence trick of a bailout package that entirely ignores the elephant in the room (as economists Nouriel Roubini, Paul Krugman, Joseph Stiglitz, and Glen Hubbard have described it), the crisis will have to put an end to the illusion of self-regulating markets, much as Minsky envisioned a depression might.

But neoliberal prestidigitation continues. Even as the Wall Street Journal reports that the financial system has been “shaken to the core,” its editors steadfastly maintain that the “sins of deregulation” are “a political fairy tale” in an attempt to absolve the market from blame for the crisis. The government-sponsored enterprises Fannie Mae and Freddie Mac, complain the editors, “turbo-charged the credit mania” by subsidizing rates of return for mortgage-backed securities and increasing the number of mortgages available to risky low-income borrowers. (For an accurate portrayal of Fannie’s and Freddie’s role in the crisis, see page Fred Moseley’s article in the current issue.)

The Journal editors’ latest free-market sleight of hand notwithstanding, unregulated and deregulated financial markets combined with new, harder-to-regulate financial instruments and ever-present greed to unleash today’s pernicious economic instability. As the economy teeters, we must challenge the antidemocratic dictates of an inflation-phobic Wall Street to demand that government effectively regulate the entire range of financial institutions through strict capital requirements and a tax on speculative turnover intended to encourage long-term productive investment. We must build institutions of regulatory enforcement that will remain strong when the next bubble comes and its beneficiaries pour buckets of money into the political system to move their deregulatory agenda forward. Likewise, massive public spending is needed to put the nearly one million people who will have lost their jobs this year back to work and to jump-start the economy. Public policy must also be dedicated to spreading the benefits of renewed economic growth widely through progressive taxes and by putting the interests of people before the profits of those who have recklessly polluted the economy with toxic debt.

Without those measures, Wall Street will continue to be, as Woody Guthrie put it in the midst of the Great Depression, the street that keeps the rest of us off Easy Street.

Final looting of America by outlaws in D.C.

FINAL LOOTING OF AMERICA BY OUTLAWS IN DC

Go To Original

Outlaw is defined as: a person, group, or thing excluded from the benefits and protection of the law. Americans who care about freedom and liberty have known for a long time that Congress has simply become a lawless group of political animals who care nothing for the supreme law of the land. For decades they have turned a blind eye to other outlaws operating on their behalf: non elected officials in the various cabinets and agencies who have been destroying a free market system and the Bill of Rights. The list is so long, it would fill ten columns.

For weeks, Americans have been in agony over the financial meltdown millions of us knew was coming, we just didn't know when the numbers would catch up to the lies. The timing played just right with the normally scheduled adjournment of Congress for the year. For over a week, the massive ACORN vote fraud scandal has exposed what millions of us have known for a long time: our elections are being stolen by corruption. Corporate media has concentrated on voter registration cards, but continues to ignore the massive fraud via electronic machines and scanners; short video. The timing of the ACORN scandal plays right into the hands of the shadow government. Too little, too late with the "big day" looming. Another night of serious boob tube commentators analyzing a hoax.

The unconstitutional, immoral invasion of Iraq and Afghanistan continues because the number one issue with Americans today is how will they put food on the table tomorrow? Obama has come out with more ideas to tax you into poverty. McCain is promoting his ideas about keeping the income tax alive and well with more unconstitutional hair brained ideas; his latest idiocy carries a price tag of $52 billion dollars. Yesterday, Sarah Palin, shouted at a rally, "We will balance the budget in our first term." What hogwash.

Obama's so-called proposals will simply drive the final stake through the heart of the middle class. His so called economic plan, redistribution of wealth, is raw communism. Obama's ideas to "stabilize" the economy is the classic goo sold by snake oil salesmen. Obama and McCain deliberately stay away from any mention of abolishing the IRS and the privately owned, unconstitutional Federal Reserve Banking System. What both of these political animals are doing is shameful and sadly, too many Americans who have little or no understanding of the markets and fiat currency are buying it out of desperation.

Or, they aren't buying it, but will hold their nose and vote for no one. Translated, that means they will cast their vote for McCain to keep Obama out and visa versa. By doing so, the individual votes for no one. Those who believe what Obama is selling have no understanding of constitutional government, economics nor do they care whether Obama is legally eligible to run for the presidency. Never mind Obama is little better than a thug out of Chicago in an expensive suit, living in a $1.3 million dollar house, who has spent his adult life around despicable people like the Rev. Jeremiah Wright and Bill Ayers. Hell, I don't care - just give me health care! McCain is little better with his mob connections, limited intelligence, steadfast support of endless wars, the illegals invasion and his worst crime: selling out our POW/MIAs to rot in commie prison camps until they die in a foreign land, forgotten by the American people.

Americans who have taken the time to understand the monetary system in this country and how this massive meltdown was fostered and dropped like bomb into America's households, also realize that the so-called bail out or rescue plan hasn't worked and will not work. We know that the $700bn bail out was a fake, which by the way has now turned into $2.3 TRILLION pieces of worthless paper being passed off as "dollars" with no end in sight. The mission by those who own Congress wanted the complete take over of our financial system and institutions as they work it into a global nightmare. The fait accompli is almost completed.

What has been done the past ten days is so horrific, most of us have been stunned at the hubris and outright commandeering of America's private lending institutions, the outright stealing from the American people to reward incompetence and likely criminal behavior. There is no money to pay for all these "rescues." Paper the country with confetti or cut up newspapers because that's the "worth" of what's being handed out like candy at Halloween.

Not only did a majority of Congress participate in giving Paulson, Bush and Bernanke authority to begin the final looting of America, Pelosi and her band of bandits are proposing to slap even more debt on our backs:

October 8, 2008: "House Speaker Nancy Pelosi said the nation needs a $150 billion economic stimulus package that "can't wait," and Congress may need to return this year. "We have some harsh decisions to make. Some of them can't wait until January," she told media in Denver today. "What we can't wait for is a stimulus package," she said. "We may have to go back into session before the next Congress."

Would someone ask this nitwit where she's going to get $150 billion dollars when the people's treasury is overdrawn $10.3 TRILLION as I write this column, plus the off sheet debts of social security and medicare in the doubt digit TRILLIONS. More hot checks as Americans sink further into debt to the U.S. government for the inept and criminal behavior of the U.S. Congress. But, wait! Pelosi now wants $300 billion to stimulate a corpse that's already gone to the morgue.

There are several things that would immediately stimulate the economy and put Americans on the road to putting food on the table and keeping their heads above water. Other than Congressman Ron Paul, not a single member of Congress will do what has to be done; note the same bills can be introduced with the new number for the new session. It goes without saying the current Congress will not get it done before the fake elections next month.

Get rid of the withholding taxing scheme. Please take the time to read this column of mine over the weekend and make it available to family and friends.

Congressman Ron Paul has introduced legislation twice to get this done; here and here. Of course, there has been no support from his party or the Democrats who care so much about "Main Street."

Pass H.R. 3664 to stop federal income and payroll roll taxes for our service workers in America. See. Dr. Paul's statement here.

Pass H.R. 2755 and begin the systematic elimination of the Federal Reserve Banking System. Return to honest monetary policy in a responsible and timely manner.

These meetings going on in Washington, DC, spell death for this country economically and for our sovereignty. The final looting is going on as the big money boys save their backsides. The only thing that will be left is a dead carcass and if you think that's hyperbole, you will be mistaken.

The Quadrillion Dollar Powder Keg Waiting To Blow

"It is this powder keg that has everyone trembling with fear and foreboding, because the inevitable losses will be catastrophic, with losses which may exceed the entire world's GDP, thus obliterating the balance sheets of every major Wall Street commercial bank, including the Fed itself, while virtually every major bank and financial institution in nations throughout the world join them on the receiving end of a destructive juggernaut of loss, insolvency, failure and bankruptcy. In the aftermath, most will be nationalized. All of Western Civilization is about to become a smoldering collection of fascist police states.

"The entire world financial system is headed for oblivion, and there is nothing on earth that can stop it. All they can do currently is try to delay and hide the destruction so that they can continue to milk their Ponzi system dry, ripping off the sheople in one final orgy of fraud and profligacy before the government and financial system are merged into an all-powerful super-entity that will rule all non-insider institutions with an iron fist. Frankly, from what we have seen lately, we are already there. The final step to nationalization of our financial system will be little more than a formality. Their intention is to take total control, to make markets do whatever pleases them, thus creating their own reality.

"The Paulson Ponzi Plunder Plan is the first installment of their final attempt to bankrupt the sheople, who they hope to beat into submission by hyper-inflating and Weimarizing them with bailout after bailout, ad nauseam, knowing full well that these bailouts are futile and useless."

October 13, 2008: "The General Accounting Office (GAO) has issued a sobering picture of the future economic condition of the United States, a scenario where a full economic collapse is inevitable, with the only remaining questions being "how and when the nation's current imprudent and unsustainable path will end." The faster the US begins to address this problem the easier it will be to correct it, says the GAO report. The present course of the "ship of state" is to ignore warnings that "economic icebergs lie ahead," a course which will result in unprecedented tax increases (37–78%). (Emphasis mine)

"The 14-page GAO report, which reveals a disconnect between politicians and economic reality (and can be read online), is written in government-speak and is more easily understood when translated into plain language."

The trickle down of these horrific events will really begin to be felt not only for retailers during the Christmas season, but look out early in 2009. We will see the fruits of the treachery and treason underway right now. Before then we will see states go closer to bankruptcy, if not complete bankruptcy. With people's credit dried up, retail will suffer, charities will suffer --- especially food banks. I went to a meeting the other night in my small town. The churches and food banks are desperate for donations to feed people who are going hungry. As people tighten their pennies, the first to go will be entertainment and non-essentials; tens of thousands of jobs. Crime will increase as people become more desperate. The shadow government is anticipating societal breakdown as Americans fall further and further behind in their obligations and can't even pay the power company to keep the heat on:

October 13, 2008, Chicago: "On the brink of the cold-weather months, more than 56,000 natural-gas customers in the Chicago area remain disconnected for lack of payment. That's up 36% from last year, putting pressure on utilities and local officials to get disconnected households back online before winter begins in earnest."

Tampa, Florida: "Power companies in the bay area say they're disconnecting more people because those folks aren't paying their electric bills. The numbers are up substantially. The Tampa Electric division of TECO says disconnections because of non-payment went up 19 percent in the first half of this year, compared to last year. Progress Energy says statewide, they're up 13 percent. For Progress Energy, that's about 20,000 customers a month in Florida....Jerrie Smith has stretched her fixed income right to its limit. "I've had to make the choice and the sacrifice to whether I buy my heart medication [or] pay the electric bill, pay the water bill. And it hurts," she said, sitting on the doorstep in front of the home she rents in Tampa."

Two things that need to get done

One: A money bill for the states. Dr. Edwin Vieira's scholarly tome, Pieces of Eight, which everyone wants and is out of print, should be ready within a few weeks to obtain via the Internet. In this blueprint for financial rebuilding, Edwin lays out how the states must set up a system or they will go down. You can get a general idea of what this involves from the first attempt in New Hampshire (click here). The minute the states go into session in January, 2009, people must demand they take this action. While Edwin has written many columns on fiat currency, I hope you will take the time to read this one because he really explains the problem, along with the solution.

Two. I have written many columns devoted to the constitutional militia and why our survival depends on it. Empty bellies make for angry mobs and Americans are angry. Not just angry, but the rage is building. The situation is getting incendiary and the state legislators in this country had better wake the hell up and understand what they're facing is very real. Americans are enraged over Congress giving we the people the finger, handing over the sweat of our labor, our retirement and our future to "save" private corporations and make sure their banking buddies get theirs before the bubble bursts.

Dr. Edwin Vieira has laid out the history and the plan for revitalizing "the Militia of the several States." There are already many legal militias throughout the states, but, we need a couple of states like Montana, Utah or Wyoming to get a bill passed and signed into law. Not only does the Second Amendment require it, but as Edwin writes: "By bringing the issue of revitalizing "the Militia of the several States" to State Legislatures, patriots could also provide their fellow Americans with a much-needed education. Millions upon millions of Americans are members of "the Militia of the several States". But how many are aware of that fact, or of the vital role the Constitution expects the Militia—that is, common Americans--to play in "homeland security"? Heated legislative battles would open eyes and minds on these matters."

I urge every gun owner in this country to get Edwin's book, 'Constitutional Homeland Security: A Call for Americans to Revitalize the Militia of the Several States. Volume I, The Nation in Arms.' Read his columns on the militia. If you don't have time to read them, I've put a couple key ones on audio; click here. This is a top priority when the state legislatures open their new sessions in January; earlier this year I sent a half dozen copies to state legislators in different states. No one wants to see civil unrest, although the shadow government wants it to subdue the people and put the fear of paramilitarized law enforcement and active military into the American landscape. Only we the people are going to save this country, not mother government under a police state. This will not happen with the same players in Congress and the state legislatures. Vote out every incumbent in Congress except Ron Paul. Go read the web site of your state rep and senator. Look at their voting record and if they don't stand on the right side of the issues plaguing this nation, vote them out and spread the word.

This weekend, go rent the movie, The Patriot. Appreciate what we have and the blood that was spilled to give us the right to oust bad public servants and live as a free people. Remember: Silence is surrender.

Must watch short videos:

1 - Martial law & military dictatorship in America - NSPD 51
2 - The ghost of Thomas Paine and the second revolution (short video)

Important Links:

1 - Officials: Financial crisis can lead to violence
2 - As Jobs Vanish and Prices Rise, Food Stamp Use Nears Record
3 - The Next Derivatives Bloodbath: Insurance and Auto Makers
4 - Just stop paying your mortgage
5 - Sickness Unto Debt The Treasury bailout will only exacerbate red ink and inflation
6 - Chicago mayor to shut down government for six days
7 - Smaller Banks Resist Federal Cash Infusions
8 - Will Lehman bankruptcy drop a $400 billion shoe on October 21st?
9 - WaMu Insiders Claim Execs Ignored Warnings, Encouraged Reckless Lending

Returning to a limited form of Republican government

1 - Why an income tax is not necessary to fund the federal goverment Text or Audio
2 - Taxation: The right argument

Report Details Bush Officials' Partisan Trips

Report Details Bush Officials' Partisan Trips

House Panel Finds Federal Appointees Attended Many Events on Taxpayers' Dime

By R. Jeffrey Smith

Go To Original

When Karl Rove's office requested special help for beleaguered Republican congressional candidates in the months before the 2006 elections, the head of the Office of National Drug Control Policy jumped to the task. Director John Walters was called a "superstar" by a Rove aide after carrying half-million-dollar grants to news conferences with two congressmen and a senator.

Walters's visits to Utah, Missouri and Nevada were among at least 303 out-of-town trips by senior Bush appointees meant to lend prestige or bring federal grants to 99 politically endangered Republicans that year, in a White House campaign that House Democratic investigators yesterday called unprecedented in scope and scale.

Federal law prohibits the use of public funds or resources for partisan activities -- and specifically barred Walters's office from any involvement in a federal election campaign -- but the agencies involved said most of the trips were paid for by taxpayer funds, according to the draft report released by the Democratic majority of the House Committee on Oversight and Government Reform.

The report said that since the Rove aide and many others involved in organizing the trips are no longer in office, "there is no effective remedy" for any related violations of the 1939 Hatch Act, which restricts the use of public funds for partisan gain.

The report said the trips were freely described as political in subpoenaed e-mails and interviews. A list prepared at the White House two weeks before the election gave the names and dates of appearances by Cabinet secretaries in 73 key congressional districts, all under the heading "Final Push Surrogate Matrix."

"This is," the report said, "a gross abuse of the public trust."

The existence of the White House effort to turn federal officials into instruments of the 2006 Republican campaign effort is already well known. But the House report, based on a review of more than 63,000 pages of internal documents, includes fresh details about which Cabinet members participated and who benefited.

The committee, chaired by Rep. Henry A. Waxman (D-Calif.), makes clear in the report that Bush is hardly the first president to squeeze reelection support from the federal bureaucracy. It notes that one of President Bill Clinton's White House aides met with Cabinet secretaries and other senior appointees to brief them on tough races before the 1994 election.

The House committee probed the Clinton effort in the 1990s at the behest of its then-Republican chairman, but it "received no evidence of practices . . . resembling the coordinated and comprehensive strategy the Bush White House employed to use taxpayer resources to support Republican candidates for office," the report states.

The committee's senior Republican, Rep. Tom Davis (Va.), disputed this statement, however. "The same kind of things [were] done by every administration since Eisenhower," he said, and he compared the Democrats' "angry swooning" to the scene in "Casablanca" when the police captain feigns shock at finding gambling in Humphrey Bogart's nightclub. Not since then, he said, has "righteous indignation seemed quite so contrived."

In a separate report four times longer than the Democrats', Davis and his Republican colleagues said that in a few cases, Democratic politicians appeared at events tallied by Waxman's staff as partisan. They also said some trips occurred at lawmakers' request, not merely at White House insistence.

White House spokesman Scott Stanzel said in a statement that the Democratic report was merely "an attempt to score political points."

The report details the activities of Sara Taylor, a Rove aide who ran the White House political office until last year and coordinated the effort. During the first 10 months of 2006, she sent periodic updates to the White House scheduling director, as well as White House liaisons at each agency, about which candidates deserved federal agency support.

White House e-mails to agencies urged officials to pay attention to "our top priorities going into November" in order to achieve "a good result on 11/7." Trips by Cabinet officials became so routine that Taylor's office developed a standard form to send around, titled "Secretary _____ Suggested Event Participation."

A July 2006 White House e-mail said that as the elections got closer, officials would have to participate in at least five "recommended events" per month. The message went to the appointed liaisons at 18 departments and agencies, who sometimes functioned like political commissars, enforcing discipline and rallying top appointees to the cause.

Taylor's office also ensured that orders were carried out, and e-mailed the liaisons when agency or department heads shirked their responsibilities or went to events with lawmakers who were not on the office's priority list of beleaguered Republicans.

In all, senior administration officials participated in 425 suggested events, according to the committee's tally, including 92 Republican Party events and 326 appearances with Republican candidates. Secretary of Commerce Carlos M. Gutierrez was the most enthusiastic recruit, showing up at 59 events. Four other Cabinet secretaries -- of agriculture, housing and urban development, labor, and veterans affairs -- attended more than 20 apiece.

Walters made it to 19 events in 2006, while then-Attorney General Alberto R. Gonzales went to two. Walters's office did not reply to a request for comment, but his aides have previously said the trips had legitimate, official purposes.

Agencies and departments questioned by investigators said that 185 of the 303 out-of-town trips urged by the political office were justifiably to attend what were considered official events, and were paid by tax dollars. The agencies could not determine whether another 59 trips were paid by tax dollars and did not say whether the events were "official."

Despite all the energy poured into the effort, it was hardly a sterling success. The report lists Sen. Rick Santorum (Pa.) as the target of 20 visits by Bush officials, and he was overwhelmingly defeated. Rep. Heather A. Wilson (N.M.) got 12 visits, and she held onto her seat by only 875 votes. Rep. Steve Chabot (Ohio), who got 10 visits, won a healthy 53 percent of the vote in his district, but Rep. Nancy L. Johnson (Conn.) collected just 44 percent after getting 10 visits herself.

In a contentious deposition, Taylor characterized all the out-of-town trips as efforts to "be helpful" to members of Congress who requested assistance, but she said she could not recall more precisely why some members were aided and others were not.

The committee judged her remarks during the deposition "evasive" and misleading, a conclusion that her lawyer W. Neil Eggleston said was an unwarranted "partisan slap." He said Taylor's testimony was "honest and forthright."

The committee report urged that the Hatch Act be amended to eliminate the political affairs office at the White House or to force it to serve "the interests of the taxpayer rather than the political party of the President."

The Republicans' report was less sanguine. No statute, it said, "can repeal the laws of political gravity."

Mark Shapiro's "Exposed": Deregulating Chemicals

Mark Shapiro's "Exposed": Deregulating Chemicals

Leslie Thatcher

Go To Original

"Exposed": The Toxic Chemistry of Everyday Life and What's at Stake for American Power, by Mark Schapiro, Chelsea Green Publishing, White River Junction, Vermont: 2007.

Leslie Thatcher reviews Mark Schapiro's book, "Exposed," which describes how US corporatist ideology trumps common sense, providing US citizens with second-class, third-world protections against toxins, while slashing America's competitive edge in the global marketplace.

Mark Schapiro, editorial director for San Francisco's Center for Investigative Reporting, has written a book about America's chemical industries from an international relations perspective that vividly illuminates the - possibly inevitable - consequences of a corporate-dominated, anti-regulatory regime in one sector of the economy, just when people are beginning to realize the consequences of this type of regime in the financial sector. This valuable, lucidly written, well-documented and blessedly concise examination of how the US has lost its competitive edge in key industries through its protection of corporate rather than citizens' interests could serve as a textbook case of how deregulation has backfired on the very corporations which have spent so much time, energy and money lobbying for it. Schapiro's book is sparingly polemical, so he does not explicitly assert that the very time, energy and money spent wriggling out of regulation could more profitably have been spent on innovation, product research and development: instead, Schapiro satisfies himself with proving that case.

The book starts with a meeting of US engineers in early 2006. They have just learned they have less than six months to redesign all electronic devices for export to Europe to comply with the European Union's "RoHS," the directive "on the restriction of the use of certain hazardous substances in electrical and electronic equipment." Six highly toxic substances commonly used in electronics - mercury, cadmium, lead, chromium and two polybrominated biphenyl flame retardants - had been banned. The engineers would have to completely rethink the ingredients of all the electronic products their companies sold or they'd lose access to the largest and most affluent economy in the world: the European Union, with its population of 450 million, a GDP exceeding that of the US, and a pattern of international commerce that makes it the largest single trading partner for every continent but Australia.

As Truthout has reported (1) over the years, Europe has adopted the precautionary principle (2) with respect to its chemical industries, a far more aggressive standard to protect its citizens' health than that applied in the US, where conclusive evidence of a chemical's toxicity is required before it is banned. As Schapiro documents, "conclusive" is an extremely elusive standard, especially when industry controls the scientific data, funds election campaigns and makes intensive use of lobbyists. As the history of the tobacco industry illustrates, it can take years - years during which much irreversible harm is done - to conclusively prove harm.

With my own background in economics, I am frequently surprised at how rarely "free market" proponents promote the perfect information that is a necessary precondition for free markets to function. Schapiro, however, highlights the inequality of knowledge between consumers and producers that Joseph Stiglitz calls "information asymmetry" and invokes as a central flaw of market capitalism. (3) As we have seen with tobacco - industry knowledge about the impact of products is shrouded in "trade secrecy" and "proprietary information," although consumers cannot possibly be construed as making free choices when they are unaware of the potential impacts of the products they buy and use. Now smart European regulation is revealing new or previously private information about chemical health and environmental impacts and "European 'life-cycle analysis' is revealing how much the profits of US-manufactured goods are inflated by hiding the real costs of production and 'end of life' disposal." (4)

"Exposed" details how the differential regulation of various key segments of the chemical industry - cosmetics, plastics (phthalates, specifically), Persistent Organic Pollutants (also known as POPS), GMOs, electronic and vehicular waste disposal - have, in each instance, made Americans less safe than Europeans and made American industry less competitive as it struggles to catch up to European standards or looks for dumping grounds for products that are no longer state-of-the-art.

Those dumping grounds are all too often the US domestic market, where, as Schapiro describes in a subsequent chapter on the US regulatory regime, not even asbestos has been banned: thirty million pounds of it are still used annually "in an array of products." (5) After explaining how the 1976 US Toxic Substances Control Act controls very few substances - only five are banned by the EPA - Schapiro reports on how the US chemical industry and the American Chamber of Commerce, both directly and through the United States government, attempted to bring the kinds of pressure that shapes US legislation and regulation to bear on the European Union to oppose the European REACH legislation that "places the burden of proof on manufacturers to demonstrate that their products could be used safely. And ... proposed to limit the amount of health-related data that companies could claim was 'proprietary,' and to release that information on the European Chemical Agency's Web site ..." (6) This intrusion into Europe's affairs - an intrusion, moreover, that so flagrantly demonstrated the moral and imaginative bankruptcy of US industry as well as the Bush administration's position as industry's handmaid and enabler - was widely resented and backfired. Almost as a footnote to that story, Schapiro describes how industry in the US has been promoting the nomination of "industry-friendly" judges, creating a US judiciary ever less concerned to protect either the citizenry or the environment.

Schapiro's overarching argument is that a more rigorous regulatory regime ultimately costs industry less and is more realpolitik than Utopian as demand for Europe's safer, greener products and more transparent approach grows. It is difficult not to read his story with disgust for an American system that coddles the status quo and discourages innovation, that rewards investment in lobbying rather than investment in progress, and that, ostrich-like, ignores chemical hazards rather than entrepreneurially confronting them, discovering green replacements and improvements. As we are seeing in the financial system, our "free-marketeers" are mere freebooters who run to the nanny state for protection when their own greed, complacency and laziness come home to roost.

Schapiro is outraged that US industry - formerly a pace-setter for innovation and safety - should engineer its own relegation to second - or worst - place. He is astounded that the same companies that have successfully adapted their products to meet European requirements continue to use products Europe has identified as hazardous for US consumption - and to argue in the US that replacing them would be "too costly." He successfully documents how ideology and short-termism have worked not only against the American consumer and environment, but also against the global competitiveness and long-term viability of the very companies they supposedly "protect."

If there is to be a silver lining in the current crisis in finance, perhaps it will be the recognition that intelligent regulation pragmatically protecting the health and well-being of the citizens and the air, earth and water that are the foundation of any country's true wealth is a prerequisite for this country's return not even to leadership, but to membership of the world's "developed" countries. Mark Schapiro's book is a convincing argument for beginning that regulation of the American chemical industry.

Grim outlook on U.S. profits and jobs

Grim outlook on U.S. profits and jobs

Go To Original

The euphoria that swept Wall Street on Monday gave way to a sober reality on Tuesday: a recession, perhaps the deepest one in decades, may be unavoidable.

A day after the stock market staged one of its biggest rallies in history, buoyed by the government's plan to rescue banks, investors retreated once again. Worries about the economy came to the fore. Many people fear that corporations — and by extension their workers and shareholders — will face harder times in the months ahead.

"Everything the government has done is not going to prevent further deterioration in the economy," said Stuart Hoffman, chief economist at PNC Bank. "At the end of all this, what matters is what the economy does."

The flow of credit, which has been choked for weeks, began to trickle through the financial system on Tuesday. But the credit markets remained shut to many companies and municipalities. Home mortgage rates, which some had hoped might decline once the government's plans became clear, rose instead. The fear is that the financial rescue will add to an already-swelling U.S. budget deficit and force the Treasury to borrow heavily in the capital markets.

Beaten-down financial shares soared, but shares of many big blue-chip corporations sank as the outlook for profits and employment darkened. PepsiCo, the soft drink maker, said it would cut 3,300 jobs and close six plants.

The Dow Jones industrial average fell 76.62 points, or 0.8 percent, to 9,310.99 points. Earlier in the day, the Dow surged 4.3 percent after the Bush administration confirmed that it would invest $250 billion in banks, with about half going to nine large national companies.

In addition, the government said it would insure more bank deposits and debt issued by big financial firms. But worries about profits at technology companies sent the Nasdaq composite index down 3.5 percent, to 1,779.01. The decline, however, came before the Intel Corporation, the world's largest semiconductor maker, issued a strong earnings report after the market closed, easing some of the concern that an economic slowdown had hurt its sales. The broader Standard & Poor's 500 stock index fell 0.5 percent, to 998.01.

Asian stocks were down in trading on Wednesday morning. The Nikkei 225 index fell 1.5 percent, while the Hang Seng index in Hong Kong was off 2.3 percent.

Investors said the United States government intervention should help avert a crisis in the financial system by preventing cataclysmic bank failures like the recent bankruptcy of Lehman Brothers. But they added that even if the effort were successful at getting banks to lend more freely than they had in recent months, the initiative would not avert a recession.

"Everybody expects the government to do something and have the economy pick up in a quarter or two," said Ira Jersey, an interest rate strategist at Credit Suisse. "All of this will stabilize the markets, but the real economic issues remain."

The questions now are how weak the economy will get and how far corporate profits will fall. Economists estimate that the gross domestic product — the broadest measure of the nation's economic output — barely grew in the third quarter. The Commerce Department will release that number on Oct. 30, just before the election.

Companies are just starting to report about their performance in the third quarter, and so far, many blue-chip names have delivered bad news.

PepsiCo said on Tuesday that its North American beverage sales fell during the quarter, hurting its profit. Shares of the company fell nearly 12 percent, to $54.40. Shares of other companies that cater to consumers also fell.

Concerns about technology spending hurt stocks like Microsoft, Intel and Dell, the computer maker. On Monday, Bill Gates, the chairman of Microsoft, warned of a "fairly significant recession" that might drive the unemployment rate to 9 percent, from its current 6.1 percent.

But on Tuesday after the market closed, Intel reported quarterly earnings that were higher than analysts had expected. Still, the company said demand was weakening in some places. Shares of Intel recouped much of its 6 percent loss for the day in after-market trading.

Analysts see a long, tough slog for the economy, because credit will remain harder to get and more expensive for businesses and consumers, relative to the recent years of easy money.

Conditions have improved in some parts of the credit market with interbank lending rates and yields on corporate bonds falling from near-record levels.

But in other areas of the market, new concerns surfaced. As investors focused on the prospect of more borrowing by the U.S. government, they drove down the price of Treasuries and mortgage-backed securities, the biggest source of financing for home loans. On Tuesday, the Treasury said the U.S. government ran a budget deficit of $454.8 billion in the 2008 fiscal year, up from $161.5 billion in 2007.

The yield on the 10-year Treasury note, which moves in the opposite direction from the price, jumped to 4.08 percent, from 3.87 on Friday. Yields on Fannie Mae mortgage securities increased to 6.09 percent, from 5.92 on Friday. (Bond markets were closed on Monday.) If sustained, that rise in yields could significantly increase the interest rates on home loans.

The average rate 30-year fixed-rate mortgages on Tuesday was 6.6 percent, up from 6.06 percent a week ago, according to HSH Associates, a publisher of data.

Those rates might come down once some new policies kick in. Regulators have said Fannie Mae and Freddie Mac, the mortgage finance giants that the government took over in September, will buy more mortgages and lower fees on loans. And the government investment in banks should prompt them to lend more.

Another corner of the market, municipal finance, was also struggling on Tuesday. Several borrowers like the Metropolitan Transportation Authority in New York and the states of Ohio and Hawaii put off debt sales because they could not lure enough investors. Municipal bonds have struggled since Lehman's bankruptcy caused a panic among investors and led to forced selling.

California has had difficulty raising the short-term debt that it needs to tide the state government over until tax receipts come in this spring. The state is raising $4 billion and is offering interest rates as high as 4.5 percent. The state's big offering, which the state plans for Thursday, has made it difficult for other states and cities to raise money.

"Other than that special situation the market is closed," said John Miller, chief investment officer at Nuveen Asset Management, an investment firm that specializes in municipal debt.

Yields on municipal bonds jumped to 6.74 percent on Tuesday, up from 5.44 percent a month earlier, according to the Bond Buyer. Because interest payments on most municipal debt is tax free, Miller and others are hoping retail investors will jump into the market to buy state and local debt for the higher returns they can now earn.

On Tuesday afternoon, California officials said they had secured commitments from retail investors for $1.84 billion.

Fed Opens Cash Spigot to Overseas Credit Markets

Fed Opens Cash Spigot to Overseas Credit Markets

Go To Original

The Federal Reserve threw open its coffers to strained overseas credit markets, taking further steps to stem the global financial crisis.

The U.S. central bank said Monday it would provide unlimited dollars to the European Central Bank, Bank of England and Swiss National Bank, allowing them to relieve pressure on commercial banks across their regions. Dollars have become elusive in recent weeks as short-term money markets around the world deteriorate. Domestic and foreign banks largely have been frozen out of loans beyond a day as institutions hoard resources amid concerns about the health of trading partners.

The U.S. previously had extended $620 billion in currency swaps with foreign central banks, which provide the funds in exchange for collateral from commercial banks. Removing the limits should provide assurance for foreign commercial banks in the affected regions to get funds to support their dollar-denominated investments. The Fed authorized the swap lines through April.

"This is big stuff, as bold a move as I could imagine," said Ray Stone of Stone & McCarthy Research Associates.

European banks have increased their dollar-denominated investments, such as U.S. mortgage securities, by $499 billion since 2000, according to the Bank for International Settlements

The Fed and ECB have steadily expanded their swap line since opening it in December. Last month, the ECB and Bank of England began auctioning dollars daily. Those overnight funds helped to overcome a time-zone hurdle that left European banks scrambling for dollars when U.S. markets were closed.

Monday's move permits European central banks to lend as many dollars as banks request, for terms of a week, a month, or 84 days. The scaling up from piecemeal actions to limitless supplies should ease tensions in dollar-denominated interbank lending markets.

"The central banks here are providing a market that simply doesn't exist any more in the private sector," said Julian Callow, European economist with Barclays Capital in London. "Particularly for European banks, which have been so dependent on U.S. dollar funding, I think it's very important."

The U.S. central bank received authority this month to start paying interest in reserves that commercial banks deposit at the Fed, offering vastly more room to expand its liquidity facilities during the financial crisis.

The announcement came early Monday morning from the four participating central banks and the Bank of Japan, which is considering similar measures. Last Wednesday, six central banks -- including the four from Monday's action along with central banks in Canada and Sweden -- jointly announced a half-percentage-point cut in interest rates.

Before the Fed's announcement, European central banks had to dole out their dollars in relatively small amounts. At the ECB's most recent auction of 84-day dollar funds, for example, 70 banks bid $88.6 billion for the $20 billion on offer.

No Dog in this Fight

No Dog in this Fight

By P Jerome

Go To Original

For those of us who are antiwar, anti-government spying, anti-torture/rendition, and in favor of improving the lives of working people, this election season has been a nightmare. Most presidential elections are awful -- months/years of commericials, punditry, and lying -- but this year is particularly terrible.

Contrary to the accepted "wisdom" of the electoral experts, Americans are not so divided as we might seem. More than 80 percent of us oppose the war in Iraq, with the majority wanting immediate withdrawl (not "redeployment"). Larger majorities want an end to government wiretapping (and vociferously opposed the wiretapping immunity bill), a scaled-back military budget, and universal health care that excludes the insurance industry. Further, almost no one outside the beltway or the NY financial district bought into the "crisis" that mandated a $850 billion bailout for Wall Street.

These are not complicated positions, but we are given the "choice" between John "Bomb, bomb, bomb Iran" McCain and Barack "Threats in 100 different countries" Obama. McCain is beyond the pale for any but the proto-fascists among us, and even they have reservations about his health and sanity. But to question whether the potential ascension of "Saint Barack" is a good thing, to put into the play of questions of his militarism and support for authoritarianism at home, or to outright oppose his candidacy based on lies and war-mongering, is to invite the wrath of the "good liberal" majority.

Beginning with his 2004 convention speech when he called for "missile strikes" against Iran and Pakistan, through his 2008 convention speech imploring America to recognize the "threats of tomorrow," Mr. Obama has based his candidacy no less on fear and militarism than the dreaded Republicans. After explaining to a liberal friend that Mr. Obama called for an additional 92,000 troops for the military, for expansion of the genocide in Afghanistan into Pakistan, and an accelerated war on terror in 100 countries (up from Cheney's 60-country target list), she simply nodded and said, "This is what you have to say to get elected." Say what?

I see. To appeal to the mass of the electorate, you have to take positions they oppose. This twisted "logic" would also seem to include supporting the Wall Street bailout and the wiretapping bill, in which Obama invested significant time and energy. In my naivete, I thought that any compromise geared toward "winning the election" by this logic meant taking populist positions that a candidate might otherwise not adopt. Yet here, Mr. Obama takes anti-populist positions to...win the election?

A candidate for office can only be judged on what he/she says he believes and says he will do, and on his/her track recrod. We have nothing else. In the case of Obama, we are supposed to believe he says and acts on motives other than his core beliefs for unstated other reasons. This is, I respectfully submit, nonsense.

When he voted for the wiretap bill, he said he wanted to have all "necessary tools" at his disposal for an Obama presidency. When he calls for more "boots on the ground" in Afghanistan, or for "missile strikes" in Pakistan, or "keeping the nuclear option on the table" in Iran, he means what he is saying. His vision is of an imperial America on the march, waging war in pursuit of unspecified "threats" with a bigger, better managed military. That vision includes domestic spying and austerity budgets for the foreseeable future.

So where does this leave that part of America that opposes wars of aggression, torture, extraordinary rendition, and the war on terror? Where does it leave people who want to resist domestic wiretapping or oppose sacrificing our futures for Wall Street profits? I know the drill: hold your nose and vote Democratic ...again.

No, not this time, and never again. The majority of us do not have a dog in this billion-dollar electoral fight, and the majority will not vote at all, and why should they? If McCain wins, more war and more austerity. If Obama wins, even more war and even more austerity, but with no political opposition. By November 5, the same people will be controlling our lives, regardless of the election outcome. Real power never gets voted out of office. It must be confronted and overturned.

P Jerome is a civil rights attorney in Washington, DC

When the Federal Government Fails the People

When the Federal Government Fails the People

By Joel S. Hirschhorn

Go To Original

The hardest thing for Americans to do right now in this presidential election season is to fight distraction and, instead, focus on the failure of all three branches of the federal government. And also to resist the propaganda masquerading as patriotic obligation that voting will fundamentally fix the federal government. The real lesson of American history is that things have turned so ugly that electing a new president and many new members of Congress will at best provide band-aids when what is needed is nothing less than what Thomas Jefferson wisely said our nation would need periodically: a political revolution.

The basis for this view is that the institutions of the three branches have been so corrupted and perverted that they no longer meet the hopes and aspirations embedded in our Constitution.

It is easy to condemn George W. Bush as the worst president in history. The larger truth is that the presidency has accumulated far too much power over the past half century. This has resulted from the weakening of the Congress that no longer, in any way, has the power of an equal branch of government, not that any recent Congress has shown any commitment or capability to execute its constitutional authorities. Concurrently, we have become accepting of a politicized Supreme Court that has not shown the courage to stop the unconstitutional grabbing of power by the presidency and in 2000 showed its own root failure in choosing to select the new president.

Worst of all, modern history has vividly shown Americans that the federal government has usurped the sovereignty of the "we the people" and of the states, and has even sold out national sovereignty to a set of international organizations and the greed of corporate-crazed globalization.

The current economic and financial sector meltdown is just another symptom of deep seated, cancerous disease of government that has sold out the public because of the moneyed influence of the corporate and wealthy classes of special interests. The serious disease is a long festering unraveling of the constitutional design of our government. Each of the three branches of the federal government is totally unequal to each other and completely incapable of ensuring the constitutional functioning of each other. Checks and balances have become a fiction.

These sad historic realities have been produced because of an all too powerful and corrupt two-party political machine that has prevented true political competition and real choices for voters. This two-party system has thrived because of corruption from money provided for Democrats and Republicans to maintain the status quo that is the ruination of our constitutional Republic.

Yet the hidden genius of the Founders and Framers was to anticipate how the Republic would most likely unravel under the pressures of money and corruption. Unknown to nearly all Americans is a part of the Constitution that all established political forces have worked hard to denigrate over our entire history. They fear using what is provided as a kind of escape clause in the Constitution, something to use when the three branches of the federal government fail their constitutional responsibilities. What is this ultimate solution that those who love and respect our Constitution should be clamoring for?

It is the provision in Article V to create a temporary fourth branch of the government – in the form of a convention of state delegates – that operates outside the control of Congress, the President and the Supreme Court, and that has only one single function: to consider proposals for constitutional amendments, just like Congress has done over our history, but that must also be ratified by three-quarters of the states. One of the most perplexing questions in American history that has received too little attention is simple: Why have we never had an Article V convention?

One possible answer might be that what the Constitution requires to launch a convention has never been satisfied. But this is not the case. The one and only requirement is that two-thirds of state legislatures apply to Congress for a convention. With over 600 such state applications from all 50 states that single requirement has long been satisfied. So why no convention?

Because Congress has refused to honor the exact constitutional mandate that it "shall" call a convention when that requirement has been met. Simply put, Congress has long broken the supreme law of the land by not calling a convention, and virtually every political force on the left and right likes it that way. Why? Because they have learned to corrupt the government and fear an independent convention of state delegates that could propose serious constitutional amendments that would truly reform our government and political system to remove the power of special interests and compel all three branches to follow the letter and spirit of the Constitution.

With great irony, the public has been brainwashed to fear an Article V convention despite many hundreds of state constitutional conventions that have never wrecked state governments, and that in countless cases have provided much needed forms of direct democracy that have empowered citizens and limited powers of state governments.

There is only one national, nonpartisan organization with the single mission of educating the public about the Article V convention option and building demand for Congress to convene a convention. It is the Friends of the Article V Convention group that has done something that neither the government nor any other group has ever done; it has been collecting all the hundreds of state applications for a convention and making them available to the public at www.foavc.org.

With a new president and many new members of Congress, now is the ideal time for Americans that see the need for obeying the Constitution and seek root reforms to rally behind this mission of obtaining the nation's first Article V convention. The new Congress in 2009 should give the public what the Constitution says we have a right to have and what Congress has a legal obligation to provide. Always remember that the convention cannot by itself change the Constitution, but operating in the public limelight it could revitalize what has become our delusional and fake democracy. The main thing to fear is not a convention, but continuation of the two-party plutocracy status quo. Sadly, no presidential candidate, not even third-party ones, has spoken out in support of Congress obeying the Constitution and giving us the first Article V convention.