Thursday, May 29, 2014

Has The Next Recession Already Begun For America’s Middle Class

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Has the next major economic downturn already started?  The way that you would answer that question would probably depend on where you live.  If you live in New York City, or the suburbs of Washington D.C., or you work for one of the big tech firms in the San Francisco area, you would probably respond to such a question by saying of course not.  In those areas, the economy is doing great and prices for high end homes are still booming.  But in most of the rest of the nation, evidence continues to mount that the next recession has already begun for the poor and the middle class.  As you will read about below, major retailers had an absolutely dreadful start to 2014 and home sales are declining just as they did back in 2007 before the last financial crisis.  Meanwhile, the U.S. economy continues to lose more good jobs and 20 percent of all U.S. families do not have a single member that is employed at this point.  2014 is turning out to be eerily similar to 2007 in so many ways, but most people are not paying attention.

During the first quarter of 2014, earnings by major U.S. retailers missed estimates by the biggest margin in 13 years.  The "retail apocalypse" continues to escalate, and the biggest reason for this is the fact that middle class consumers in the U.S. are tapped out.  And this is not just happening to a few retailers - this is something that is happening across the board.  The following is a summary of how major U.S. retailers performed in the first quarter of 2014 that was put together by Jim Quinn...

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

That is quite a startling list.

But plummeting retail sales are not the only sign that the U.S. middle class is really struggling right now.  Home sales have also been extremely disappointing for quite a few months.  This is how Wolf Richter described what we have been witnessing...

This is precisely what shouldn’t have happened but was destined to happen: Sales of existing homes have gotten clobbered since last fall. At first, the Fiscal Cliff and the threat of a US government default – remember those zany times? – were blamed, then polar vortices were blamed even while home sales in California, where the weather had been gorgeous all winter, plunged more than elsewhere.

Then it spread to new-home sales: in April, they dropped 4.7% from a year ago, after March's year-over-year decline of 4.9%, and February's 2.8%. Not a good sign: the April hit was worse than February's, when it was the weather’s fault. Yet April should be the busiest month of the year (excellent brief video by Lee Adler on this debacle).

We have already seen that in some markets, in California for example, sales have collapsed at the lower two-thirds of the price range, with the upper third thriving. People who earn median incomes are increasingly priced out of the market, and many potential first-time buyers have little chance of getting in. In San Diego, for example, sales of homes below $200,000 plunged 46% while the upper end is doing just fine.

As Richter noted, sales of upper end homes are still doing fine in many areas.

But how long will that be able to continue if things continue to get even worse for the poor and the middle class?  Traditionally, the U.S. economy has greatly depended upon consumer spending by the middle class.  If that continues to dry up, how long can we avoid falling into a recession?  For even more numbers that seem to indicate economic trouble for the middle class, please see my previous article entitled "27 Huge Red Flags For The U.S. Economy".

Other analysts are expressing similar concerns.  For example, check out what John Williams of shadowstats.com had to say during one recent interview...

We’re turning down anew. The first quarter should revise into negative territory… and I believe the second quarter will report negative as well.

That will all happen by July 30 when you have the annual revisions to the GDP. In reality the economy is much weaker than that. Economic growth is overstated with the GDP because they understate inflation, which is used in deflating the number…

What we’re seeing now is just… we’ve been barely stagnant and bottomed out… but we’re turning down again.

The reason for this is that the consumer is strapped… doesn’t have the liquidity to fuel the growth in consumption.

Income… the median household income, net of inflation, is as low as it was in 1967. The average guy is not staying ahead of inflation…

This has been a problem now for decades… You were able to buy consumption from the future by borrowing more money, expanding your debt. Greenspan saw the problem was income, so he encouraged debt expansion.

That all blew apart in 2007/2008… the income problems have continued, but now you don’t have the ability to borrow money the way you used to. Without that and the income problems remaining, there’s no way that consumption can grow faster than inflation if income isn’t.

As a result – personal consumption is more than two thirds of the economy – there’s no way you can have positive sustainable growth in the U.S. economy without the consumer being healthy.

The key to the health of the middle class is having plenty of good jobs.

But the U.S. economy continues to lose more good paying jobs.

For example, Hewlett-Packard has just announced that it plans to eliminate 16,000 more jobs in addition to the 34,000 job cuts that have already been announced.

Today, there are 27 million more working age Americans that do not have a job than there were in 2000, and the quality of our jobs continues to decline.

This is absolutely destroying the middle class.  Unless the employment situation in this country starts to turn around, there does not seem to be much hope that the middle class will recover any time soon.

Meanwhile, there are emerging signs of trouble for the wealthy as well.

For instance, just like we witnessed back in 2007, things are starting to look a bit shaky at the "too big to fail" banks.  The following is an excerpt from a recent CNBC report...

Citigroup has joined the ranks of those with trading troubles, as a high-ranking official told the Deutsche Bank 2014 Global Financial Services Investor Conference Tuesday that adjusted trading revenue probably will decline 20 percent to 25 percent in the second quarter on an annualized basis.

"People are uncertain," Chief Financial Officer John Gerspach said of investor behavior, according to an account from the Wall Street Journal. "There just isn't a lot of movement."

In recent weeks, officials at JPMorgan Chase and Barclays also both reported likely drops in trading revenue. JPMorgan said it expected a decline of 20 percent of the quarter, while Barclays anticipates a 41 percent drop, prompting it to announce mass layoffs that will pare 19,000 jobs by the end of 2016.

Remember, very few people expected a recession the last time around either.  In fact, Federal Reserve Chairman Ben Bernanke repeatedly promised us that we would not have a recession and then we went on to experience the worst economic downturn since the Great Depression.

It will be the same this time as well.  Just like in 2007, we will continue to get an endless supply of "hopetimism" from our politicians and the mainstream media, and they will continue to fill our heads with visions of rainbows, unicorns and economic prosperity for as far as the eyes can see.

But then the next recession will strike and most Americans will be completely blindsided by it.

Tuesday, May 27, 2014

Report: US targets poor and working class with mass imprisonment

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A new report from the National Research Council titled “The Growth of Incarceration in the United States” details the devastating impact of the American prison system on increasingly wide sections of society.

The report depicts a society in which nearly one percent of the adult population is locked up in prison or jail, and where the immediate and residual effects of mass incarceration mean that the most exploited sections of the population face a relentless cycle of hunger, homelessness, disease, poverty and violence.

“In communities of concentrated disadvantage—characterized by high rates of poverty, violent crime, mental illness and drug addiction—the United States embarked on a massive and unique intensification of criminal punishment” over the past fifty years, the study explained. “Although many questions remain unanswered, the greatest significance of the era of high incarceration rates may lie in that simple descriptive fact.”

The facts enumerated in the study are a damning indictment of the American ruling class, which has no progressive role to play in society. Today, the American elite relies on an elaborate network of gulags to keep large sections of the population constantly moving through the turnstiles of the criminal system. The impact on the population at large is devastating.

According to the report, 2.1 million children—three percent of the total—had a father in prison in 2000. The period of 1991 to 2007 saw a 77 percent increase in the number of children with a father in prison. Over the same period, there was a 131 percent increase in the number of children with a mother in prison.

For the first time in US history, male high school dropouts are almost more likely to go to prison than not. One third of white male high school dropouts born in the late 1970s have served time by their mid-30s. The figure rises to two thirds for black men of the same background.

As the report notes, “the pervasiveness of imprisonment among men with very little schooling is historically unprecedented, emerging only in the past two decades.”

The American prison system is unmatched globally in terms of size. US prisons now hold 2.2 million adults, and more than five million Americans are also on parole or probation, putting the number of people under some form of state punishment at over seven million.

The US imprisons more people than any other country in the world, including countries like China and India with much larger populations. Roughly a quarter of all prisoners worldwide are kept in American prisons, this despite the fact that the US accounts for only five percent of the world’s population.

The US also has the dubious distinction of imprisoning a higher ratio of the general population—707 per 100,000—than any other country. The ratio of Americans in prison is 50 percent higher than the next worst country, Russia, with a ratio of 474 per 100,000.

The current state of the American prison system is the culmination of a decades-long process whereby criminal codes, sentencing rules, and constitutional guidelines have been rewritten to provide a legal cover for the imprisonment of large swaths of the population, both juvenile and adult.

The report explains that “across all branches and levels of government, criminal processing and sentencing expanded the use of incarceration in a number of ways: prison time was increasingly required for lesser offenses; time served has significantly increased for violent crimes and for repeat offenders; and drug crimes, particularly street dealing in urban areas, became more severely policed and punished.”

During the 1970s, “the numbers of arrests and court caseloads increased, and prosecutors and judges became harsher in their charging and sentencing. In the 1980s, convicted defendants became more likely to serve prison time.”

Mandatory minimum sentencing laws, “three strikes” laws mandating life sentences for a third criminal offense, no matter how trivial, and “truth-in-sentencing” laws requiring that offenders serve a minimum of 85 percent of their sentences, were increasingly adopted by states and by Congress in the 1970s, 1980s, and 1990s.

The development of harsher laws and policing is inextricably bound up with the policies of social counterrevolution that have dominated the period from 1970 to the present day.

Over the past decades, the growth in prison population has taken place alongside deindustrialization, massive wage and benefit cuts, the slashing of programs like welfare, food stamps, unemployment benefits and other social services, cuts to mental health programs, housing assistance programs, and unprecedented hikes in the cost of living.

Neither the growth of mass incarceration nor the intensified attacks on the rights and living standards of the working class are accidental developments. Rather, both are conscious policies of the ruling class: the mantras of “belt-tightening” and “getting tough on crime” are different sides of the same coin.

Through cuts to wages, benefits, and social programs, the ruling class has overseen a massive transfer of wealth from the broad masses of workers into the coffers of the financial aristocracy. The resulting growth of social misery is handled with increasing brutality by police thugs and reactionary prosecutors, judges, and probation officers.

The report calls for “a systematic review” of penal policies in order to reduce crime and prison populations. However, appeals to the American ruling class to “review” their own prison system will prove as fruitless as asking Louis XVI to “review” conditions in the Bastille. The needs of the millions whose lives are impacted by mass incarceration can only be met through the development of a mass revolutionary movement of the international working class aimed at reorganizing society on a genuinely egalitarian basis.

Retail sales slump points to dismal conditions for US workers

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The S&P 500 stock index hit a new record Friday, closing above 1900 for the first time, having more than doubled in value since 2008. Corporate profits are booming, and economic pundits are proclaiming that the economic “recovery” is in full swing.

The flip side of the unprecedented growth in the wealth of the ruling class are the dismal economic conditions facing the vast majority. Six years after the economic crash, unemployment, poverty, stagnant wages, and increasingly precarious employment continue to be defining realities of life for broad sections of the population.

This reality was starkly expressed in a report on retail sales released Friday by Retail Metrics, which found that earnings in the first quarter fell below estimates by the largest level in thirteen years. The 87 major retailers surveyed saw their earnings fall by 4.1 percent, compared to January estimates of a 13 percent increase.

While the colder-than-average winter likely had an impact on the sales figures, the real culprit is the disastrous financial position of American households. “The American consumer is not fully back and remains cautious,” wrote Ken Perkins, Retail Metrics’ president, in the report.

Wal-Mart, the discount retailer, posted its worst quarterly same-store performance in five years, and its profits fell by five percent for the quarter. Twenty percent of the retailer’s customers rely on food stamps, and the retailer said the two successive cuts to the program over the past year impacted sales.

Stores that target the affluent and wealthy were the exceptions. The upscale department stores Nordstrom and Dillard’s reported sales increases; Nordstrom’s sales grew by 6.8 percent, while those of Dillard’s grew by two percent.

The disparity between the phenomenal growth of the stock market and corporate profits on one hand, and worsening conditions for the great majority of the population on the other, expresses the basic character of the economic “recovery.” Stock markets have been fueled by an infusion of cash from the Federal Reserve, while corporate profits have been boosted by wage cuts and an increase in part-time labor.

Last month, the National Employment Law Project issued a report showing that nearly two million medium and high-wage jobs have been replaced by low-wage jobs. While US businesses have on the whole added 1.85 million low-wage jobs over the past six years, they have eliminated 1.83 million medium-wage (paying between $13 and $20 per hour) and high-wage (between $20 and $32 per hour) jobs.

Speaking last month at the New York Federal Reserve’s Regional Economic Press Briefing, William C. Dudley, acknowledged, “The vast majority of jobs that were lost in the nation and across the region were middle-skill jobs, such as construction workers, teachers, machine operators, and administrative support workers. These jobs have not come back during the recovery.” Dudley noted that these jobs are being replaced with “lower-skilled jobs—such as food service workers, retail clerks, health care aides, and child care workers.”

The number of people working part-time because they cannot find full-time work, which stood at 7.3 million last year, has nearly doubled since before the 2008 economic crisis. Fifteen years ago, only 2.3 percent of the employed population was working part-time for economic reasons, this share now stands at 5.3 percent.

In addition to the growth in part-time labor, the percentage of workers employed by temp agencies has nearly doubled, from 1.3 percent of all employees to 2.1 percent of all employees. There are now 2.8 million workers in such jobs, and are employed not by the companies who buy their labor, but rather by labor contractors. “Once known as a source of stopgap labor used primarily for routine clerical assignments, temp help services now plays an important role in the U.S. economy,” wrote the Bureau of Labor Statistics last month.

Meanwhile mass unemployment continues to take a disastrous social toll on the working population, with the long-term unemployed affected worst of all. A recent survey by the Brookings Institution revealed the extremely precarious situation for this section of the unemployed. In the survey, long-term unemployed people were interviewed during their bout of unemployment, and then again fifteen months later. Of those who were surveyed, only one in ten had found full-time work. Two-thirds were not able to find work of any kind.

The combined impact of falling wages and mass unemployment has had a devastating impact on workers’ incomes. The median household income in the US plummeted by 8.3 percent between 2007 and 2012. Meanwhile, the net worth of America’s billionaires reached $1.2 trillion last year, more than double what it was in 2009.

Over the past year, the White House and Congress have cut food stamp benefits twice, ended federal emergency jobless benefits for more than three million long-term unemployed, implemented sharp cuts to social spending, and used the rollout of the Affordable Care Act to encourage companies, including Target and Home Depot, to slash employee healthcare benefits.

These realities are an expression of the fact that the American ruling class, led by the Obama administration, is waging a brutal campaign against workers’ living standards, seeking to slash wages and social services while all instruments of government policy are directed at ensuring the wealth of the financial aristocracy.

The Size Of The Derivatives Bubble Hanging Over The Global Economy Hits A Record High

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The global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008.  It is a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system of the planet.  According to the Bank for International Settlements, the total notional value of derivatives contracts around the world has ballooned to an astounding 710 trillion dollars ($710,000,000,000,000).  Other estimates put the grand total well over a quadrillion dollars.  If that sounds like a lot of money, that is because it is.  For example, U.S. GDP is projected to be in the neighborhood of around 17 trillion dollars for 2014.  So 710 trillion dollars is an amount of money that is almost incomprehensible.  Instead of actually doing something about the insanely reckless behavior of the big banks, our leaders have allowed the derivatives bubble and these banks to get larger than ever.  In fact, as I have written about previously, the big Wall Street banks are collectively 37 percent larger than they were just prior to the last recession.  "Too big to fail" is a far more massive problem than it was the last time around, and at some point this derivatives bubble is going to burst and start taking those banks down.  When that day arrives, we are going to be facing a crisis that is going to make 2008 look like a Sunday picnic.

If you do not know what a derivative is, Mayra Rodríguez Valladares, a managing principal at MRV Associates, provided a pretty good definition in her recent article for the New York Times...

A derivative, put simply, is a contract between two parties whose value is determined by changes in the value of an underlying asset. Those assets could be bonds, equities, commodities or currencies. The majority of contracts are traded over the counter, where details about pricing, risk measurement and collateral, if any, are not available to the public.

In other words, a derivative does not have any intrinsic value.  It is essentially a side bet.  Most commonly, derivative contracts have to do with the movement of interest rates.  But there are many, many other kinds of derivatives as well.  People are betting on just about anything and everything that you can imagine, and Wall Street has been transformed into the largest casino in the history of the planet.

After the last financial crisis, our politicians promised us that they would do something to get derivatives trading under control.  But instead, the size of the derivatives bubble has reached a new record high.  In the New York Times article I mentioned above, Goldman Sachs and Citibank were singled out as two players that have experienced tremendous growth in this area in recent years...

Goldman Sachs has been increasing its derivatives volumes since the crisis, and it had a portfolio of about $48 trillion at the end of 2013. Bloomberg Businessweek recently reported that as part of its growth strategy, Goldman plans to sell more derivatives to clients. Citibank, too, has been increasing its derivatives portfolio, despite the numerous capital and regulatory challenges, In fact, its portfolio has risen by over 65 percent since the crisis — the most of any of the four banks — to $62 trillion.

According to official government numbers, the top 25 banks in the United States now have a grand total of more than 236 trillion dollars of exposure to derivatives.  But there are four banks that dwarf everyone else.  The following are the latest numbers for those four banks...

JPMorgan Chase

Total Assets: $1,945,467,000,000 (nearly 2 trillion dollars)

Total Exposure To Derivatives: $70,088,625,000,000 (more than 70 trillion dollars)

Citibank

Total Assets: $1,346,747,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $62,247,698,000,000 (more than 62 trillion dollars)

Bank Of America

Total Assets: $1,433,716,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $38,850,900,000,000 (more than 38 trillion dollars)

Goldman Sachs

Total Assets: $105,616,000,000 (just a shade over 105 billion dollars – yes, you read that correctly)

Total Exposure To Derivatives: $48,611,684,000,000 (more than 48 trillion dollars)

If the stock market keeps going up, interest rates stay fairly stable and the global economy does not experience a major downturn, this bubble will probably not burst for a while.

But if there is a major shock to the system, we could easily experience a major derivatives crisis very rapidly and several of those banks could fail simultaneously.

There are many out there that would welcome the collapse of the big banks, but that would also be very bad news for the rest of us.

You see, the truth is that the U.S. economy is like a very sick patient with an extremely advanced case of cancer.  You can try to kill the cancer (the banks), but in the process you will inevitably kill the patient as well.

Right now, the five largest banks account for 42 percent of all loans in the entire country, and the six largest banks control 67 percent of all banking assets.

If they go down, we go down too.

That is why the fact that they have been so reckless is so infuriating.

Just look at the numbers for Goldman Sachs again.  At this point, the total exposure that Goldman Sachs has to derivatives contracts is more than 460 times greater than their total assets.

And this kind of thing is not just happening in the United States.  German banking giant Deutsche Bank has more than 75 trillion dollars of exposure to derivatives.  That is even more than any single U.S. bank has.

This derivatives bubble is a "sword of Damocles" that is hanging over the global economy by a thread day after day, month after month, year after year.

At some point that thread is going to break, the bubble is going to burst, and then all hell is going to break loose.

You see, the truth is that virtually none of the underlying problems that caused the last financial crisis have been fixed.

Instead, our problems have just gotten even bigger and the financial bubbles have gotten even larger.

Never before in the history of the United States have we been faced with the threat of such a great financial catastrophe.

Sadly, most Americans are totally oblivious to all of this.  They just have faith that our leaders know what they are doing, and they have been lulled into complacency by the bubble of false stability that we have been enjoying for the last couple of years.

Unfortunately for them, this bubble of false stability is not going to last much longer.

A financial crisis far greater than what we experienced in 2008 is coming, and it is going to shock the world.

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Japan Begins Purposely Dumping 100s Of Tons Of Radioactive Water From Fukushima Into The Pacific

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How do you get rid of hundreds of tons of highly radioactive water?  You dump it into the Pacific Ocean of course!  In Japan, the  Tokyo Electric Power Co. has made the “painful decision” to begin purposely dumping massive amounts of radioactive water currently being stored at the destroyed Fukushima nuclear facility directly into the Pacific.  This is being done even though water radiation levels near Fukushima spiked to a brand new all-time record high just a few days ago.  The radioactive material that is being released will enter our food chain and will potentially stay with us for decades to come.  Fukushima is an environmental nightmare that never seems to end, but the mainstream media in the United States decided to pretty much stop talking about it long ago.  So don’t expect the big news networks to make a big deal out of the fact that Japan is choosing to use the Pacific Ocean as a toilet for their nuclear waste.  But even though they aren’t talking about it, that doesn’t mean that radioactive material from Fukushima is not seriously affecting the health of millions of people all over the planet.

According to the Japan Times, Tepco released 560 tons of radioactive water into the Pacific on Wednesday, and Tepco says that for the foreseeable future we should expect another 100 tons of radioactive water to be released into the ocean every single day…

Tokyo Electric Power Co. began dumping groundwater from the Fukushima No. 1 nuclear plant into the Pacific on Wednesday, in a bid to manage the huge amounts of radioactive water that have built up at the complex.

The utility, which says the water discharged is within legal radiation safety limits, has been fighting a daily battle against contaminated water since Fukushima No. 1 was decimated by the earthquake and tsunami of March 2011.

Tepco said 560 tons of groundwater captured and stored before it entered reactor building basements was to be released Wednesday, using a bypass system that funnels it toward the ocean after checking for radiation levels.

Using the bypass, Tepco hopes to divert an average of 100 tons of untainted groundwater a day into the ocean.

Tepco is assuring us that the radioactive water that is being released is within “legal radiation safety limits”.

But this is the same company that could not tell us why radiation levels in water near Fukushima reached a new all-time high just a few days ago…

Radiation has spiked to all-time highs at five monitoring points in waters adjacent to the crippled Fukushima No. 1 power station, plant operator Tokyo Electric Power Co. said Friday.

The measurements follow similar highs detected in groundwater at the plant. Officials of Tepco, as the utility is known, said the cause of the seawater spike is unknown.

Three of the monitoring sites are inside the wrecked plant’s adjacent port, which ships once used to supply it.

At one sampling point in the port, between the water intakes for the No. 2 and No. 3 reactors, 1,900 becquerels per liter of tritium was detected Monday, up from a previous high of 1,400 becquerels measured on April 14, Tepco said.

Nearby, also within the port, tritium levels were found to have spiked to 1,400 becquerels, from a previous high of 1,200 becquerels.

So do you trust Tepco?

I certainly do not.

And this is not just a Japanese issue.  Radioactive material from Fukushima has literally been found all over the planet.  For example, a nuclear fuel fragment from Fukushima has been found as far away as Norway.

Once this radioactive material gets into the ocean and into our food chain, there is no telling where it may end up.

If the mainstream media really did care about “the environment”, they would be talking about this.  But instead, there seems to be a conspiracy of silence.  Just consider the comments that Martin Fackler of the New York Times made during one recent interview…

Yeah… it’s so hard in Japan to talk about the radiation issue, like how bad is it really… There is a sense that if you even talk about these issues, you’re hurting the poor people of Fuksuhima. Therefore, we shouldn’t talk about it. That’s just not right… The folks who don’t want us to talk about it are the government, because they don’t want to pay compensation… I feel like there is a lot going on in Fukushima that just doesn’t get talked about in the local media, not necessarily for government cover-up sort of issues, but self restraint or self censorship. Even papers that are pretty strong in their reporting on Tepco in some ways, like the Tokyo Shimbun, won’t talk about these issues because they’re afraid that somehow its unpatriotic to talk about radiation. There’s a lot of questions and issues that are not being talked about, and I think they should be talked and if there is damage to the people of Fukushima that’s the responsibility of Tepco…

And the U.S. media certainly doesn’t seem to want to talk about how radiation from Fukushima could be affecting the west coast of our country.

But the evidence continues to mount that something very unusual is happening.

Just consider what is happening to young sea lions along the coast of California…

Sea lions are once again struggling to survive and are washing ashore, many of them pups dehydrated, malnourished and on the brink of death.

The year started off quieter than last year, and the Pacific Marine Mammal Center’s director of development, Melissa Sciacca, thought they were in the clear – until about a month ago, when the calls started coming in nonstop. The center, in Laguna Beach, is near capacity, with about 100 sea lions being treated so they can be returned to the wild once they are strong enough.

“We thought it was going to be a nice calm year; in the last month it’s just spiked,” she said. “The rescues just keep coming in at a steady pace.”

And as I wrote about just the other day, something is causing millions of fish to die in mass death events all over the globe right now.

Could Fukushima be a contributing factor?

A lot of people out there are attempting to downplay the impact that the Fukushima nuclear disaster has had on the Pacific Ocean.

I believe that this is a huge mistake.

Nuclear radiation causes cancer.

Nuclear radiation kills.

The total amount of nuclear material released from Fukushima just continues to increase and slowly accumulate in our food chain.  When these nuclear particles get into you, they can literally start cooking you from the inside out.  In a previous article, I included a quote from an opinion piece by Helen Caldicott that was published in the Guardian….

Internal radiation, on the other hand, emanates from radioactive elements which enter the body by inhalation, ingestion, or skin absorption. Hazardous radionuclides such as iodine-131, caesium 137, and other isotopes currently being released in the sea and air around Fukushima bio-concentrate at each step of various food chains (for example into algae, crustaceans, small fish, bigger fish, then humans; or soil, grass, cow’s meat and milk, then humans). After they enter the body, these elements – called internal emitters – migrate to specific organs such as the thyroid, liver, bone, and brain, where they continuously irradiate small volumes of cells with high doses of alpha, beta and/or gamma radiation, and over many years, can induce uncontrolled cell replication – that is, cancer. Further, many of the nuclides remain radioactive in the environment for generations, and ultimately will cause increased incidences of cancer and genetic diseases over time.

Doesn’t that sound lovely?

And it has been documented that radioactive material from Fukushima has been getting into the seafood being sold in North America.

For example, back in 2012 the Vancouver Sun reported that cesium-137 was being discovered in a very high percentage of the fish that Japan was selling to Canada…

• 73 percent of the mackerel

• 91 percent of the halibut

• 92 percent of the sardines

• 93 percent of the tuna and eel

• 94 percent of the cod and anchovies

• 100 percent of the carp, seaweed, shark and monkfish

So why was radiation testing for seafood subsequently shut down in Canada?

Since that time, as I detailed in one of my previous articles, a high school student up in Canada tested seafood bought at local grocery stores for radioactive contamination.  What she found was absolutely stunning…

A Canadian high school student named Bronwyn Delacruz never imagined that her school science project would make headlines all over the world.  But that is precisely what has happened.  Using a $600 Geiger counter purchased by her father, Delacruz measured seafood bought at local grocery stores for radioactive contamination.  What she discovered was absolutely stunning.  Much of the seafood, particularly the products that were made in China, tested very high for radiation.  So is this being caused by nuclear radiation from Fukushima?  Is the seafood that we are eating going to give us cancer and other diseases?

Why aren’t we being warned about this?

Earlier this year, a fish that was caught just off the coast of the Fukushima prefecture was discovered to have 124 times the safe level of radioactive cesium.

But virtually nobody in the mainstream media considers this to be important enough to talk about.

A lot of people seem to think that the Fukushima nuclear disaster is old news.  But in many ways the biggest problems for North America may just be beginning.  For example, according to scientists at the University of South Wales, the main radioactive plume of water from Fukushima has finally crossed the Pacific Ocean and is going to hit our shores at some point during 2014…

The first radioactive ocean plume released by the Fukushima nuclear power plant disaster will finally be reaching the shores of the United States some time in 2014, according to a new study from the University of New South Wales — a full three or so years after the date of the disaster.

The following graphics come directly from that study…

Fukushima Radiation - University Of New South Wales

So as the main plume of nuclear radiation reaches our shores, what will that do to our wildlife, our fishing industry and our beaches?

And what kind of danger does this radioactive water pose to those living along the west coast?

These are very important questions, but unfortunately those in power and those working for the mainstream media don’t really want to talk about these things.

Thursday, May 22, 2014

Obama administration asserts unlimited war powers without Congressional authorization

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In testimony before the US Congress on Wednesday, top Obama administration officials asserted that the president has unlimited war powers without even the fig-leaf of Congressional authorization.

Speaking before the Senate Foreign Relations Committee, the administration officials—State Department Deputy Legal Adviser Mary McLeod and Defense Department General Counsel Stephen Preston—declared that the 2001 Authorization for the Use of Military Force (AUMF) was not required for any of the drone attacks, troop deployments and other war operations carried out by the Obama administration.

For more than a decade, the AUMF has been a catch-all justification for all the illegal and unconstitutional activities of the Bush and Obama administrations—military invasions, indefinite detention (including at Guantanamo Bay), torture and drone assassination. Congress is currently considering revising or ending the AUMF as part of an effort to shift these operations onto a more permanent foundation.

In the course of questioning from senators on the future of AUMF, McLeod and Preston indicated that, in the administration’s view, there are in fact no additional powers that the executive has as a result of the AUMF that it does not already have from Article II of the US Constitution—an assertion of unlimited executive power.

Preston testified, “I am not aware of any foreign terrorist group that presents a threat against this country that the president lacks authority to defend against simply because they are not covered by the AUMF. If the group presents a threat the president does have authority to take steps against that threat.”

When asked by Republican Senator Bob Corker whether the president could continue to “carry out the counter-terrorism activities he is carrying out today” if the AUMF were repealed, McLeod replied, “Yes, I believe he could.”

“The US has the authority to target individuals, including Americans, who pose an imminent threat to attack our country,” McLeod added (emphasis added).

In the language of administration lawyers, “imminent” has been redefined to render this condition meaningless. McLeod did not say whether the killing of Americans could take place within the United States.

A report in Rolling Stone on the hearings noted: “When asked by Senator Tim Kaine (D-Virginia) ‘what could [the president] not do without the AUMF,’ Preston didn’t have an immediate answer. Kaine then asked if the US could continue to hold detainees at Guantanamo Bay if the AUMF were repealed. Preston dodged; McLeod added that the US can continue to detain prisoners ‘as long as we’re in an armed conflict with Al Qaeda.’”

“I think it would be fair to say that with or without an AUMF, to the extent that it grants authority for use of military force against al Qaeda, and the Taliban, and associated forces in which we’re in armed conflict … the president does have constitutional authority to act,” said Preston.

Asked whether the executive could unilaterally attack any country that it declares is “harboring” terrorists, without Congressional approval, McLeod replied, “We would have to think about whether individuals in that state or in that government of that state actually posed an imminent threat.” That is to say, the executive would have an internal deliberation and decide on whether to wage war based on its definition of “imminent.”

McLeod added that in the administration’s view it had the authority to wage war against Syria without Congressional authority based on the spurious allegations of chemical weapons use (in an internal civil conflict) last year. In the Syrian civil war, it was the United States, and not the Syrian government, that was directly allied with Al Qaeda and its “associated forces.”

Wednesday’s testimony is part of an internal debate within the political establishment over how to justify endless war. Testifying before the Senate Armed Services Committee almost exactly one year ago, Assistant Defense Secretary Michael Sheehan argued that the AUMF gives the administration virtually unlimited war powers anywhere in the world, including within the United States. He added that the war authorization would go on indefinitely, “at least 10 to 20 years.”

Thus, according to Sheehan at the time, further authorization from Congress was not required to launch drone strikes or wage war in the future, as long as these military operations could be connected in some way to Al Qaeda or its “associated forces”—a phrase that does not appear in the AUMF itself. Sheehan specially referred to the recent bombing of the Boston Marathon to extend the “battlefield” to the United States.

Later the same month, Obama delivered a speech at the National Defense University, dedicated to a defense of drone assassination. For the first time, Obama publicly acknowledged that he ordered the killing of Anwar al-Awlaki, a US citizen. Stating that “America is at a crossroads,” Obama said his administration intended to “engage Congress” about the AUMF in order “to determine how we can continue to fight terrorism without keeping America on a perpetual wartime footing.”

The testimony of McLeod and Preston makes clear that the administration is in fact seeking a mechanism for rooting unending war, drone assassination and associated illegal activities in the Constitutional powers of the president.

This legal rationale for what amounts to presidential dictatorship has been an underlying theme in the memoranda drawn up by both the Bush and Obama administrations. Bush’s Vice President Dick Cheney and his lawyers in particular sought to argue that the AUMF was essentially superfluous, a formality, and that the ability to torture and kill came from Article II.

These pseudo-legal arguments have been continued and extended under Obama, particularly as they relate to extrajudicial assassination. On Wednesday, the US Senate voted 52-43 to clear the way for a confirmation vote on Obama’s appointee for the First US Circuit Court of Appeals, David Barron. Barron is the author of the still secret memoranda drawn up to justify the killing of al-Awlaki and other US citizens without due process.

The vote on Wednesday was almost entirely along party lines, with Democrats voting for and Republicans against. Because of changes to Senate rules made late last year, the procedural vote prior to confirmation required only a simple majority, not a supermajority of 60 votes.

In order to facilitate confirmation, the administration said on Tuesday that it would cease its efforts to block the court-ordered declassification of one of the several memos drawn up by Barron during his tenure in the Justice Department’s Office of Legal Counsel from 2009 to 2010. This declassification, the White House announced, would take place at some indefinite point in the future.

The administration’s promise was enough to satisfy critics within the Democratic Party. Their basic agreement with the White House’s claims of unlimited executive power were summed up Senator Ron Wyden, who announced after voting for Barron’s nomination to go forward: “I believe that every American has the right to know when their government believes it has the right to kill them.”

A full confirmation vote on Barron will likely take place today.

How the Elites Extract Wealth from the People

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Fiat money is at base a form of indirect wealth transfer from those forced to hold the money to those issuing the money.

I describe the pernicious servitude created by debt as debt serfdom, as serfdom implies a neofeudal arrangement that requires serfs’ acceptance of this financial yoke of servitude. In other words, debt is freely accepted as the line of least resistance in a system that incentivizes debt and places high barriers to debt-free independence from a Status Quo operated to benefit the owners and issuers of debt, not the debtors.

Correspondent Jeff W. has identified an even more insidious form of monetary servitude that he calls fiat slavery, as the servitude is enforced by fiat (unbacked government-issued) money.

In other words, being forced to use state-issued fiat currency is a form of servitude, as fiat money is at base a form of indirect wealth transfer from those forced to hold the money to those issuing the money.

Beyond this state-enforced wealth transfer from citizens to the state, there is a secondary wealth transfer going on in any fiat-money system: the neofeudal financial nobility who are closest to the money spigot get to buy whatever real-world assets and income streams offer the best return before the money trickles down to the debt-serfs paying interest and taxes.

For example, the financial nobility can borrow billions of dollars at near-zero interest from the Federal Reserve, and use this nearly-free fiat money to buy student loans that pay 7+% annually. They can also snap up houses for cash that the nobility then rents to debt-serfs who have been outbid by those with the extraordinary advantage of unlimited access to the Fed’s nearly-free fiat money.

Here is Jeff’s commentary and analysis:

In a world where every country prints fiat money, the entire human race today, except for its money masters, is subjected to fiat slavery.

Almost everyone understands what it means to be a tax slave. It means that people must work several months of the year for the benefit of the taxing authorities. Taxes in the U.S. today are several times higher than they were 100 years ago, and at present-day tax levels, today’s Americans are rightly called tax slaves.

What it means to be a debt slave is also easy to understand.

It means that one must spend a large fraction of one’s time to earn money to pay creditors. Millions of Americans today are mired deeply in debt, but today’s America is also a country where if you personally stay out of debt, the government will go into debt for you.

Each American taxpayer is on the hook for his or her share of over $17 trillion in debt that government admits to; the real debt total is much higher. Government leaders are eagerly plunging us ever deeper into debt each year.

Most Americans also have personal experience of being a wage slave.

It means that a person has no way to make a living except by selling his labor into a glutted market. Thomas Jefferson hoped that most Americans could own their own farms and thereby profit from capital improvements that they made through their own efforts. Such Americans could be their own bosses and escape wage slavery. But today we live in an age of huge factory farms, and it is more difficult than ever to establish or run any small business. Thus wage slavery is the norm for Americans today.

But few people understand what it means to be a fiat slave.

Being a fiat slave means that one lives in a country where the machinery of money printing is used to maximize wealth extraction from its citizens.

How do they maximize the wealth they can extract through money printing? First of all, it is done by increasing of the volume of transactions that take place in a given fiat currency. Each newly-printed unit of fiat is a drop in the bucket in terms of the inflation it creates, and more fiat can be printed without causing serious inflation if a country has a bigger bucket.

For example, Canada’s GDP is about 11% the size of America’s. At first glance this might be taken to mean that Americans can print nine times more dollars than Canadians. But we must also remember that U.S. dollars circulate throughout the world, and Eurodollars and petrodollars also add to the total of U.S. dollar transactions.

Because of extraterritorial dollar circulation, the U.S. might actually be able to print 20 times more than Canada without causing serious (in terms of causing political problems for the money printers) inflation. From this we see why money printers may want to fight wars to protect America’s dollar circulation areas in the Middle East or in Afghanistan, where much of the opium trade is transacted in dollars.

But a country’s fiat transaction volume is only part of the equation. A more important part of the equation is the inflation level. Imagine two countries: Country A with an annual fiat transaction volume of 100 trillion units per year and Country B with a volume of 50 trillion. Everything else being equal, Country B can only print half as much fiat each year to give to its government and its banking elite.

But suppose further that the inflation rate in Country A is 5% absent any money printing, and the inflation rate in Country B is negative 2% due to global wage arbitrage, regulatory suppression of small businesses, and high unemployment. Suppose further that a real inflation rate of 5% is the money printers’ upper limit because it is the maximum asset erosion that wealthy bondholders will tolerate. Now we see that potential money printing in Country A is reduced to zero, while potential money printing in Country B is 3.5 trillion units (50 trillion times seven percent).

American money printers thus have trillions of dollars in incentive to support deflationary policies, which may include global wage arbitrage (sending work to the country where labor is cheapest), suppression of job creation by small businesses, suppression of private-sector labor unions, support for open borders immigration, commodity price suppression through market interventions, support for genetically modified seeds so as to push agricultural prices down, support for owners taking a larger share of corporate revenues so as to reduce labor’s share, and support for high levels of consumer debt so as to dampen inflationary pressure in a nation of demoralized debt slaves. All of these oppressive policies enrich the money printers at the citizens’ expense.

Tax slavery, debt slavery, wage slavery, and fiat slavery are four methods that elites employ to extract wealth from the people.

To this list we should also add their encouragement of Ponzi gambling. Ponzi asset bubbles are constantly being created and citizens are encouraged to go into debt to “cash in” on bubble profits (or get wiped out in bubble crashes). Those five methods are the major wealth extraction methods they use.

Those who support the cause of human freedom must resist tax slavery by insisting on a government that keeps its spending down to the bare basics. Free people must also support a culture that discourages people from getting into debt and encourages them to get out of debt and stay out. They must demand that government debt be rolled back to zero.

Policies that favor capital accumulation in families and a supportive legal environment for small businesses are the antidotes to wage slavery, and free people must also demand that there be zero wealth extraction from the citizens through money printing. That can best be done by requiring 100% gold backing for currency and eliminating fractional reserve banking. Eliminating the inflation that comes from money printing will also go a long way toward eliminating asset bubbles and Ponzi gambling on asset bubbles.

Older Americans have watched as a once-free people have been reduced to slave-like conditions. Not only has wealth been ruthlessly extracted from the people, but today’s surveillance state is more intrusive than ever, and the police are increasingly insolent and imperious.

What are we going to do? A necessary first step is to take the blinders off and to see clearly how elites are victimizing you. A second step is to figure out what practical steps you can take as an American to secure the blessings of liberty for yourself and your posterity. Freedom is not free, as the saying goes, and the price of freedom is not only eternal vigilance, but also intelligent action. We should begin this work today.

Awareness of the sources of wealth transfer and monetary servitude is the first step forward.

Let's End Congress's Blanket Authorization of Force

It's gone on 13 years too long

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It may sound hard to believe, but Senate Majority Leader Harry Reid, D-Nev., isn't always wrong–at least when he states the obvious: "9/11 is a long time ago," he said Wednesday, "and it's something that needs to be looked at again."

The "it" is the post-9/11 Authorization for Use of Military Force resolution, or AUMF, adopted three days after the terror attacks, and now going on its lucky 13th year. It's been in effect nearly twice as long as the Gulf of Tonkin resolution authorizing Vietnam, what was "America's Longest War"–until the 21st century, that is.

On Sept. 14, 2001, Congress authorized the president to use "all necessary and appropriate force" against the perpetrators of the 9/11 attacks and those who "harbored" them. Two successive administrations have since turned the 60 words of the AUMF's operative clause into what journalist Gregory Johnsen calls "the most dangerous sentence in U.S. history"–a writ for a war without temporal or spatial limits.

The last time the Senate held hearings on the AUMF, Sen. Lindsey Graham, R-S.C., asked the Pentagon's civilian special operations chief, Michael Sheehan, "does [the president] have the authority to put boots on the ground in the Congo?" Answer: "Yes, sir, he does."

Predictably, the hawkish Graham was totally okay with that. "The battlefield is wherever the enemy chooses to make it," right? Right, said Sheehan: "from Boston to the [Federally Administered Tribal Areas of Pakistan]."

Asked how much longer the war on terrorism will last, Sheehan replied, "at least 10 to 20 years." So presumably the AUMF can serve as the basis for Chelsea Clinton's "kill list" in 2033, after she trounces George P. Bush.

Lyndon Johnson once compared the Gulf of Tonkin resolution to "Grandma's nightshirt" because "it covers everything." Even LBJ might have marveled at how the last two administrations have stretched the post-9/11 AUMF.

Under the theory that "the United States is a battlefield in the war on terror," the Bush administration invoked it to justify warrantless wiretapping and military detention of American citizens on American soil. The Obama administration cites it as legal authority for the extrajudicial killing of Americans via remote-control.

The Senate Foreign Relations Committee will be taking another look at the AUMF this week. The hearing's title, "Authorization For Use Of Military Force After Iraq And Afghanistan," hints at a preordained conclusion: that an updated authorization is needed. Ranking Republican Sen. Bob Corker of Tennessee wants to be sure the executive branch has "all the tools and capabilities" it needs to address "threats that did not exist in 2001."

Rep. Barbara Lee, D-Calif., the sole member of Congress to vote "no" on the original AUMF, has a better idea: end it, don't mend it. Joined by libertarian-leaning, antiwar Republicans like Reps. Justin Amash and Walter Jones, she's introduced legislation to repeal the AUMF.

Two imperial presidents in a row have treated that authorization like a permanent delegation of congressional war power to the president. Their successors would no doubt do the same with any new "tools and capabilities" they're given.

Without the AUMF, presidents still retain the constitutional power to "repel sudden attacks," as James Madison put it. And if they think groups like al-Shabaab or Boko Haram demand a more sustained military response, they'll be free to make that case to Congress. But delegating new authorities in advance might permanently change our constitutional default setting from peace to war.

Madison also said that "No nation could preserve its freedom in the midst of continual warfare." We're now into our second decade running that experiment; how much longer do we want to risk proving him right?

Wednesday, May 21, 2014

Oligarchy: As American as Poisoned Apple Pie

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Oligarchs are as American as poisoned apple pie. Their wealth and power look mouth-wateringly good, but with every bite, democracy dies.

" . . . in so far as we make (the use of wealth in politics) hard, we are advancing the agenda of democracy and we are decreasing the power of oligarchs," said Jeffrey Winters, author of Oligarchy and professor of politics at Northwestern University, on a recent episode of Occupy Radio.

American oligarchs - wealthy elites who use money to buy power - have been around so long they're almost as traditional as apple pie. They co-opted a people's revolution, gave themselves vast acres of land in the newly formed nation and then pulled off a coup in 1787 that is commonly referred to as the US Constitution.

In the 1770s to '80s, something revolutionary was stirring in the colonies. It wasn't a war. It was a people's movement called democracy. In public meetings and town halls, ordinary citizens were gathering to discuss how to govern themselves. In the Journal of American History, Joyce Appleby wrote:

"Foreign visitors in the 18th century invariably commented on the vitality of public discussions and on the political confidence of ordinary men."

Although these ordinary men did not include African-Americans, women or indigenous tribes, these assemblies were not as divided by wealth and class as were the aristocratic governments of Europe. This gave rise to a culture that was virtually unknown at the time: that of commoners sharing the responsibility of self-government.

Yet, after the war, the revolutionary notion of democracy produced a counter-revolution. Oligarchs of that era found it difficult to conduct business among the 13 sovereign states, each of which was developing its own laws regulating commerce, taxes and tariffs. The first constitution of the United States (the Articles of Confederation) endured for 10 years, starting in 1778, before the oligarchs could find a way around it. Even then, they had to resort to extraordinary means.

In February 1787, George Washington (the richest man in the United States) proposed a convention in May in Philadelphia for the alleged purposes of revising the Articles of Confederation. Upon arrival, however, delegates to the Philadelphia Convention were dismayed to discover that Washington, Madison, Hamilton and others wanted to throw out the old Articles of Confederation. In their place, Hamilton proposed a new, second Constitution of the United States, which included a powerful federal government to rule over the state governments, a president for life, a senate appointed for life, an electoral college that elects the president and an appointed for life Supreme Court with authority over the state courts.

"Nothing but a permanent body can check the imprudence of democracy," Alexander Hamilton is quoted as saying according to the Notes of the Secret Debates of the Federal Convention of 1787 taken by Robert Yates.

Many of the delegates left in protest. Of the 62 delegates appointed, only 39 signed the new Constitution. The Philadelphia Convention, widely heralded today as the birthplace of democracy, was nothing short of an oligarchic coup. Terms for elected officials were a minor concession to the proponents of democracy. The Bill of Rights was tacked on at the insistence of outraged citizens during the process of ratification, but it narrowed the list of protected rights to 10 out of the dozens that were initially proposed.

Today, tourists can visit the sunny, open rooms of Liberty Hall, but in 1787, the Convention took place under strict secrecy. The doors were closed; the windows blacked out and security guards ringed the building. In Notes of Debates in the Federal Convention of 1787, the rules stated, "That nothing spoken in the House be printed or otherwise published or communicated." James Madison, one of the main recorders, refused to publish his notes until all of the framers were buried in the grave.

If the citizens had known what was transpiring in Philadelphia, an uprising reminiscent of the Battle of Seattle at the 1999 World Trade Organization protests might have ensued. In 1787, citizens of the 13 sovereign states considered the United States of America to be a description of a friendly alliance of nation-states similar to the United Nations. Under the new Constitution, however, the federal government of the United States of America became a new, powerful legal body that wielded supreme authority over the subordinate states.

When they found out, citizens of the day were not amused. Resistance to the new Constitution was widespread. In 1787, Washington wrote, "Commotions of this sort, like snow-balls, gather strength as they roll, if there is no opposition in the way to divide and crumble them." To ensure the states' ratification of the new Constitution, his colleagues Madison and Hamilton rolled out their propaganda machines.

William Grayson of Virginia wrote, "We are now told . . . that we shall have wars and rumors of wars, that every calamity is to attend us, and that we shall be ruined and disunited forever, unless we adopt this constitution . . . and the Carolinians, from the South (mounted on alligators, I presume) are to come and destroy our cornfields, and eat up our little children! . . . These, sir are the mighty dangers which await us if we reject - dangers which are merely imaginary, and ludicrous in the extreme!"

Ultimately, the adoption of the new Constitution came down to money. Like so many of our contemporary issues, the nation divided not down left/right lines, but by monied interests (which supported the new federal government) and popular dissent (which objected to the loss of local power and the rising supremacy of the oligarchs). The Anti-Federalists were out-powered by the media apparatus and political influence of the oligarchs, who convinced commercial interests, small landowners, farmers, merchants and artisans to side with them. After the states ratified the new Constitution, the proponents of the new system embarked on a long-term effort to alter or recreate the state constitutions and legislative structure to reflect the federal government.

Know your history, goes the stern warning. Without knowledge of the past, tyranny in the present continues to oppress us all. To better understand what transpired at Liberty Hall in 1787, imagine that a group of wealthy businessmen came together in secret to draft up a new set of laws and to create a new court system that has authority over the nations of Japan, Australia, Korea, Vietnam, Canada, the United States and more. Then these wealthy elites empower themselves to regulate commerce to their own advantage.

If this sounds uncomfortably familiar, it's because the modern-day Trans-Pacific Partnership Agreement has engaged in many of the same maneuvers as the 1787 Philadelphia Convention that established the US Constitution. The Trans-Pacific Partnership Agreement (TPP) is a trade deal that is being negotiated in secret. The legislators of the affected nations are not involved - just as the delegates to the Continental Congress were not present at the Philadelphia Convention. The tribunal courts of the proposed TPP would usurp the authority of the courts of the nations, just as the Supreme Court usurped the state courts. Under the TPP, commerce falls under the jurisdiction of the trade agreement board, rather than the individual nation-states. Local laws that violate the TPP would be considered void, just as state laws were nullified if they conflicted with the new, powerful federal government. Just as the TPP was initially being fast-tracked through Congress, so did the framers of the Constitution attempt to ram it through the state ratification process.

Echoes of the past can be heard in the problems of the present. The revolutionary notion of democracy was put on hiatus in 1787 and the coup of the oligarchs continues to this day. Rule of the oligarchs under the empty rhetoric of democracy is so familiar and comfortable that to have millionaires in Congress and a ruling class of wealthy elites seems as American as apple pie. But the poisonous politics of wealth are not the homegrown democracy that was cultivated in the backyards of local communities. They are a tainted substitute peddled by wealthy elites.

Today, oligarchic rule stands poised to kill equality, justice and ordinary citizens. Our grandmothers, all unwittingly, crisscrossed the crust, brushed it with oil and baked it until it was golden. The sweet scent of liberty emits from such well-intentioned efforts, but watch out! Our forks are loaded with false democracy and poisonous apples sold by the oligarchs.

The question is . . . are you going to eat it?

How the War on Workers Is Changing

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The War on Workers is going on a 50-state tour.

Ever since Ronald Reagan fired 11,000 striking air traffic controllers back on August 5, 1981, and appointed labor-hostile Raymond Donovan as the first anti-labor Secretary of Labor in our nation's history, there's been a War on Workers in America.

While worker productivity has skyrocketed since Reagan stepped foot inside the White House, wages have remained stagnant.

And the remnants of Reagan's War on Workers have been so successful - even during Democratic administrations - that it's not just keeping wages flat, it's even starting to erode them.

Since 2000, average worker take-home pay has been on a steady freefall, while pay for executives and CEO's has soared off the charts.

Thus, on the federal level, the War on Workers has been a huge success.

But while the War on Workers has been steadily eating away at the income of working-class Americans, its ultimate goal is to turn America's activist working middle-class into a dispirited, disheartened, and disempowered working poor-class.

To do that, the forces behind the War on Workers have to shift their focus to the state level, and do away with the last remaining state protections for workers.

That's where the Koch Brothers and other conservative political power players come in.

The Koch Brothers' Americans for Prosperity conservative front group, or AFP, has launched a massive campaign in Detroit, aimed at derailing that city's proposed bankruptcy settlement.

AFP is contacting nearly 90,000 conservatives in Michigan, ironically most of them working-class people who people like the Kochs refer to as "useful idiots."

AFP is urging their army of conservative "useful idiots" to oppose the bankruptcy settlement plan that would use $195 million in state money to help pay back former Detroit city workers the pension benefits that were taken out of their paychecks back in the day, and then stolen by Wall Street banksters in the Great Bush Crash of 2008.

In other words, the Koch Brothers and AFP don't want the Detroit city employees to have pensions for their retirement - after all, they are "evil government employees."

You know, firemen, police, sanitation workers - that sort of thing. And many of them are people of color, which is why trashing largely-black Detroit workers when talking to largely-white northern Michigan "conservative" AFP members isn't even slightly a racist dog-whistle, right?

Geez - "workers" and "Black" - for the conservatives kicking them upside the head is a two-for.

AFP has also threatened to run ads against any Michigan state legislators who vote in favor of the plan.

Outside of Michigan, AFP plans to spend at least $125 million to help conservatives across the country win in November's midterm elections, many of whom are helping to lead the way in the War on Workers.

As Corey Robin points out over at The New York Times, "Midterm elections at the state level can have tremendous consequences, especially for low-wage workers. What you don't know can hurt you — or them."

Back in the 2010 midterm elections, Republicans took over control of the executive and legislative branches in 11 states.

As soon as they stepped in office, those same Republicans, with a little nudging from groups like the U.S. Chamber of Commerce and the American Legislative Exchange Council or ALEC, began introducing bill after bill, which ate way at workers' rights, and gave more power to their employers.

Take Republicans in Wyoming for example.

In 2011, they introduced a bill that would have allowed restaurants to force their servers to pool their tips. The tips would then be redistributed among the non-serving staff.

In most states, tipped workers are paid an hourly wage that is under the minimum wage, because the thinking is that they'll make up the rest of the money with tips. Meanwhile, regular staff members are paid the minimum wage.

But, under the Wyoming legislation, by having servers pool their tips, and redistributing those tips to non-serving staff members, you would avoid having to pay non-serving staff members the minimum wage. The result? More poor working people!

Basically, Republicans in Wyoming wanted employers to be able to take away money that their employees had rightfully earned.

A year earlier in Florida, Republicans tried to pass legislation that would have prevented any "county, municipality, or political subdivision of the state" from passing laws that were designed to cut down on wage theft.

Meanwhile, Indiana, Mississippi, and Florida have all passed laws banning local governments from raising the minimum wage.

And the list goes on.

All across America, conservative lawmakers are doing everything in their power to quash working-class Americans, thus destroying the integrity and vitality of our democracy by turning the middle class into the working poor.

A functioning democracy requires a strong and functioning middle-class.

And despite what conservatives will try to tell you, unrestrained capitalism is not going to get us there, because unrestrained capitalism always produces a working poor-class, and not a strong middle-class.

To get a middle class, you must combine capitalism with government regulation and safety-net programs. It's really just that simple, and history tells the story over and over again.

Instead of following the Kochs like sheep, Michiganders and the rest of us should be working to put back into place the federal and state protections that protected workers for years and thus built America's once-strong middle class.

We need to put back into place laws and policies that balance the powers of employers and employees, and let workers unionize.

Only then will we once again have a strong and flourishing American middle class.

Latest Jobs and Housing Reports Show Americans are Struggling More than Ever

The details in new numbers show worsening inequality—not the recovery politicians tout.

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The latest nationwide jobs and housing statistics released this week suggest that America is no longer a country where—for most people—the future is going to be better than the past.

The percentage of people in most age and education levels in jobs compared to 2008 is down. The number of people holding multiple jobs is up. Average hourly wages have barely grown, compared to 2008. The number of people who are willing to leave their job for a new one is down. All of those trends are in the latest report [3] from the U.S. Bureau of Labor Statistics (BLS)—and there are even more depressing economic signs.

More than one-third of Americans who bought homes are trapped [4] by that debt, according to the real estate data website Zillow.com. Some 9.7 million homes, which is 18.8 percent of U.S. homeowners, owe more than their homes are worth. In another 10 million homes, the buyer’s equity is below 20 percent, which means they can’t sell and buy another home unless they find another way to cover all the transaction costs.

Taken together, the BLS report on the working class and the Zillow report on the middle class suggest that the country, despite virtually every politican’s assertion to the contrary, does not have its best days ahead. It may be that America’s best days—when the promise of hard work and playing by the rules led to economic security—is a thing of the past.

“There’s a recovery for some people, you know, and other people, not so much,” James Carville, the Democratic consultant told [3] The New York Times, soft-pedaling the implication of numbers. Jared Bernstein, a progressive economist who once joined Vice-President Joe Biden’s staff and has since left the White House, said these economic figures show the “inequality problem” is not an abstraction.

Let’s go through them one-by-one, starting with what’s called the “employment to population ratio.” The BLS slices up working people by category: people with a college degree or higher, men age 20 and over, Hispanics, whites, women age 20 and over, people without college degrees, blacks, high school dropouts, and teenagers. Compared with the start of the Recession in December 2007, there are fewer people now working in every single one of those categories. The Times explained [3] what has happened with women:

“Consider women, whose unemployment rate stood at 8.1 percent, up almost 2 percentage points from when Mr. Obama took office… Today it is at 5.7 percent, a seemingly shining number for Democrats…

“But while the number of women out of work appears to be much improved, the number of women employed compared with the total female population 55.2 percent, actually worse than it was in October 2010. Progress, in fact, is a mirage, the product of what ecomomists call the disappearing work force: people giving up and dropping out.”

There are other discouraging statistics reflecting the true state of the working and middle-class America in the BLS report. Nearly 6.7 million people said they had multiple jobs in 2010; now that figure is over 7 million. In October 2010, more than 2.57 million people said they could only find part-time work. This April, that figure was 2.62 million. BLS also reported that workers are not as afraid of being fired, as they were during the recession, but are more risk-averse to leaving a job voluntarily to try something else.

Wage stagnation frames this same story another way. When Obama took office in 2009, the average hourly wage was $18.46 an hour. This April, it was $24.31—but, after adjusting that figure for inflation, it’s equal to $20.40 in 2009’s dollars. Compare that to pre-tax income for the top 1 percent, which grew 31 percent in that same time period—from 2009 to this past April.

And there other signs of deepening inequality. Since the recession ended, the gross domestic product has grow 11 percent. Standard & Poor’s 500, a leading stock index, is up 83 percent. Corporate profits are up 53 percent. Yet median household income is down 4 percent.

Numbers can be numbing, but these statistics trace large and troubling trends. For most Americans, the future does not look as good as the past—even if the past was not quite as good as people might recall with nostalgia. That’s quite a paradigm shift, because it puts the country’s mood directly at odds with politicans who are running in 2014 and saying that things are slowly getting better.

They’re not—and other stories on the financial pages say why. The greed of Wall St. investors never stops. Today’s Wall St. Journal has a front-page story [5] on how big investment firms again are buying the "riskiest" corporate junk bonds, which promise to pay interest rates that are on par with what was sold to homeowners as subprime loans at the peak of the housing market bubble.

That trend can only end badly for the non-investing public. Either those corporations selling those bonds will raise prices to pay off investors when they come due, or they will end up going out of business and laying off the people working for those companies.

Whichever way you look at it, the bottom line is that for most Americans, the economic future is not bright 


Links:
[1] http://alternet.org
[2] http://www.alternet.org/authors/steven-rosenfeld
[3] http://www.nytimes.com/2014/05/20/us/politics/economic-recovery-is-leaving-major-democratic-constituencies-behind.html?ref=todayspaper&_r=0
[4] http://online.wsj.com/news/articles/SB10001424052702304422704579572261754798636?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj
[5] http://online.wsj.com/news/articles/SB10001424052702304422704579572390216147878?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj

The Powerful Forces Shredding Our Constitution

Preface to "The Rise of the American Corporate Security State"

Go To Original 

In the United States today, we have good reason to be afraid. Our democracy and our freedoms are impaired. Many Americans have lost their homes and jobs and will never get them back. Our pensions and our privacy are also gone. Most frightening of all, the Constitution that protected us for more than two hundred years from the tentacles of oppressive government and the stranglehold of private wealth is less respected every day.

After September 11, 2001, our government told us to fear foreign terrorists, so we did. To protect our national security, we submitted to unreasonable searches without protest; we surrendered our freedom of speech and association. At a staggering cost, we financed a permanent, mercenary military to patrol the world.

In September 2008, when the economy froze, the stock exchanges plunged and private firms began shedding jobs by the hundreds of thousands each week. The Treasury Department stepped in and transferred hundreds of billions of dollars in public assets to failing private financial institutions. The subsequent congressional inquiry determined that we were all responsible. We were guilty of irrational exuberance.

But now, taking stock years later, we have to recognize that no foreign terrorist shredded the Constitution. Nor did we, as citizens, bankrupt the nation. Powerful forces inside the country did. And worse than that: they intend to keep doing it. They have yet to be stopped. This is the real reason to be afraid: the rise of the Corporate Security State.

The Constitution gave us three branches of government to ensure that no one small faction could control the state. Each of them is failing us. The agencies of the executive branch appear to be helpless before the rise of the Corporate Security State. According to the attorney general, the Justice Department cannot prosecute corporations that usurp our rights and rob us of economic security, and the Treasury Department is forced to protect these financial forces from the consequences of their own reckless "trades." The president, whoever he happens to be, releases triumphant photographs of himself saluting in a flight suit or watching a live feed of SEAL Team Six killing Osama Bin Laden. He gives speeches about America and its greatness and periodically runs for re-election in what is now a grotesque pageant of clowns.

The Congress is paralyzed by squabbles over the debt, much of it occasioned by endless, off-the-books warfare. In the fall of 2013, the whole thing shuts itself down, along with the rest of the government, for lack of funding, flounders toward the next political showdown, and finally produces a meaningless agreement with itself about the national budget. Increasingly, the American public despises the entire body, and one poll taken during the 2013 government shutdown showed that we preferred cockroaches, zombies, and dog doo to Congress.

The judiciary, which is the last to go, blesses the increasing intrusion of money in politics, and stands down before the revelations of a secret court operating behind a veil of national security.

The Corporate Security State is tipping the balance between the self-interest of a governing corporate elite and the rights of the rest of us to freedom, privacy, safety, and fairness. We can see the power shift manifest in six clear and evolving trends since 2001:

Average citizens are subject to ever-expanding surveillance by the government-corporate complex.

Intelligence agencies, working with private corporations, gather extensive private data on everyone. Outsourced government has created a complex of private national security contractors who capture approximately 70 percent of the bloated national budget for intelligence and surveillance.

Control of information by the government-corporate complex is expanding.

The Obama administration continues to overclassify information. In 2009 and 2010, the number of classification decisions exploded. Among the documents deemed secret is the one setting out the cost of our national surveillance system and its unconstitutional domestic intelligence gathering capabilities. We are obliged to pay for it, but we have no right to know how much it costs or what it does.

The separation of powers established by the Constitution is eroding. Rights guaranteed by constitutional amendments are becoming irrelevant. Reporting a crime may be a crime, and informing the public of the truth is treason.

Since June 2013, we've discovered that the National Security Agency (NSA) has been routinely violating the First, Fourth, and Fifth Amendment rights of American citizens. The NSA has been doing this secretly for years, while the Justice Department uses the Espionage Act to prosecute national security whistleblowers as traitors when they try expose it.

The government-corporate surveillance complex is consolidating. What has been a confidential but informal collaboration now seeks to legalize its special status.

Legislation permitting the fluid exchange of information about citizens between the national intelligence apparatus and private financial and infrastructural institutions is moving through the Congress.

Financial reforms enacted after the crisis are inoperable and ineffective because of inadequate investigations and intensive corporate lobbying.

The major financial institutions, well-connected to the Congress, the Treasury Department, and the Justice Department, ensure that key regulations implementing reforms are either unfinished or ineffective.

Systemic corruption and a fundamental conflict of interest are driving us toward the precipice of new economic crises.

After the financial cataclysm of September 2008, the Justice Department's refusal to prosecute senior officials of the corporations that failed due to systemic fraud eliminated any deterrent. The deceptive practices continue, and the next collapse is only a matter of time.

The consequences of these trends and conditions are moving us toward a world like the one portrayed in the dismal post-apocalyptic movies churned out by Hollywood. We are submerged in wars that never end, and the wealth produced by and in the United States skews upward in ever greater concentrations. We await the emergence of the world's first trillionaire and look forward to the fawning portrait of him in a glossy business magazine.

Such a country can only be maintained with greater repression of dissent and suppression of the truth. This is why the government is into deeper and broader surveillance. Instead of funding education and health care, clean air, and water, our taxes are paying for intrusive electronic monitoring - of us.

But the battle for equality and fairness is not yet over. Many of the laws that prohibit surveillance and unreasonable search and seizure are still in place. Although they are under attack, and they erode incrementally if we are not paying attention, we still have recourse to them. And they still protect us from domination by a faction - the danger most dreaded by the framers of the Constitution. We must aggressively defend them, and we must promote peace for the United States and the rest of the world. For the war we think we are fighting abroad is also being waged against us. If we deprive others of their rights in an effort to protect ourselves, step-by-step we forfeit our own rights, too. That's just how it works.