Category Archives: Crony Capitalism
June 5, 2015
Memo to the Fed: you are the enemy of the middle class, capitalism and the nation.
The Federal Reserve is appalled that we’re not spending enough to further inflate the value of its corporate and banking cronies. In the Fed’s eyes, your reason for being is to channel whatever income you have to the Fed’s private-sector cronies–banks and corporations.
If you’re being “stingy” and actually conserving some of your income for savings and investment, you are Public Enemy #1 to the Fed. Your financial security is nothing compared to the need of banks and corporations to earn even more obscene profits. According to the Fed, all our problems stem from not funneling enough money to the Fed’s private-sector cronies.
Fed media tool Jon Hilsenrath recently gave voice to the Fed’s obsessive concern for its cronies’ profits, and received a rebuke from the middle class he chastised as “stingy.” Hilsenrath Confused Midde-Class “Responded Strongly” To “Offensive” Question Why It Isn’t Spending.
Memo to the Fed and its media tool Hilsenrath: we’re not here to further enrich your already obscenely rich banker and corporate cronies by buying overpriced goods and services we don’t need. Our job is not to spend every cent we earn on interest to banks and mostly-garbage corporate goods and services. Our job is to limit the amount we squander on interest and needless spending. Our job is to build the financial security of our families by saving capital and prudently investing it in assets we control (as opposed to letting Wall Street control our assets parked in equity and bond funds).
Your zero-interest rate policy (ZIRP) has gutted our ability to build capital safely. For that alone, you are an enemy of the middle class. Let’s say we wanted to buy a real asset that we control, for example, a rental house, rather than gamble our retirement funds on Wall Street’s Scam du Jour (stock buybacks funded by debt, to name the latest and greatest scam).
Thanks to your policies of ZIRP and unlimited liquidity for financiers, we’ve been outbid by the Wall Street/private-equity crowd–your cronies and pals. They pay almost nothing for their money and they don’t need a down payment, while we’re paying 4.5% on mortgages and need 30% down payment for a non-owner occupied home. Who wins that bidding process? Those with 100% financing at near-zero rates.
Here’s a short list of stuff we don’t need to buy:
1. New house: overpriced. Debt-serfdom for a wafer-board/sawdust-and-glue mansion? Pay your banker buddies $250,000 in interest to buy a $300,000 house? Hope the bursting of the real estate bubble doesn’t wipe out whatever equity we might have? No thanks.
2. New vehicle: overpriced. We can buy a good used car and a can of “new car smell” for half the price, or abandon car ownership entirely if we live in a city with peer-to-peer transport services. We can bicycle or ride a motorscooter.
3. Anything paid with credit cards.
4. Any processed food.
5. A subscription to the Wall Street Journal and other financial-media cheerleaders for you, your banker buddies and Corporate America.
How Wall Street Devoured Corporate America: Thirty years ago, the financial sector claimed around a tenth of U.S. corporate profits. Today, it’s almost 30 percent
Here’s how your cronies have fared since you started your low-interest rate/free money for financiers policies circa 2001: corporate profits have soared:
Now look at median household income adjusted for inflation: down 4%–inflation which we know is skewed to under-weight the big ticket items such as healthcare and college education that are skyrocketing in cost:
And here’s how the middle class has fared since the Federal Reserve made boosting Wall Street and the too big to fail banks its primary goal, circa 1982: the bottom 90% have treaded water for decades, the top 9% did well and the top 1% reaped fabulous gains as a result of your policies.
If you’re wondering why we’re not spending, look at our incomes (going nowhere), earnings on savings (essentially zero) and the future you’ve created: ever-widening income disparity, ever-greater financial insecurity, ever-higher risks for those forced to gamble in your rigged casino, and a political/financial system firmly in the hands of your ever-wealthier cronies.
Capital–which includes savings–is the foundation of capitalism. If you attack savings as the scourge limiting corporate profits, you are attacking capitalism and upward mobility. The Fed is not supporting capitalism; rather, the Fed’s raison d’etre is crony-capitalism, in which insiders and financiers get essentially free money from the Fed in unlimited quantities that they then use to buy up all the productive assets.
Everyone else–the bottom 99.5%–is relegated to consumer: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest paid to banks and buying goods and services that further boost corporate profits.
This inversion of capitalism is not just destructive to the nation–it is evil. Funneling trillions of dollars in free money for financiers while chiding Americans for not going deeper into debt is evil.
Memo to the Fed: you are the enemy of capitalism, the middle class and the nation.
Written by Warren Mass
The standoff between Nevada rancher Cliven Bundy and the federal Bureau of Land Management (BLM) deescalated on April 12, when the bureau announced that it will stop its operation to confiscate Bundy’s cattle.
But another aspect to this ongoing story is jumping: The blogosphere is alive with allegations that Senator Harry Reid (pictured), and his son, Rory, have motivations of their own for wanting Bundy’s cattle off the disputed lands.
Though the major media announced that a “deal” had been reached between Bundy and the BLM, Bundy explained what transpired differently in an interview with KLAS TV in Las Vegas: “There is no deal here. The citizens of America and Clark County went and took their cattle. There was no negotiations. They took these cattle. They are in possession of these cattle and I expect them to come home soon.”
The BLM stated in its statement released on April 12: “Based on information about conditions on the ground, and in consultation with law enforcement, we have made a decision to conclude the cattle gather because of our serious concern about the safety of employees and members of the public.”
The BLM’s language made apparent that the bureau still regarded its actions “to remove illegal cattle from federal land consistent with court orders” as being legally justified:
This is a matter of fairness and equity, and we remain disappointed that Cliven Bundy continues to not comply with the same laws that 16,000 public lands ranchers do every year. After 20 years and multiple court orders to remove the trespass cattle, Mr. Bundy owes the American taxpayers in excess of $1 million. The BLM will continue to work to resolve the matter administratively and judicially.
As William F. Jasper noted in his April 11 article about the standoff, however, there was more to the federal action to remove Bundy’s cattle from “public lands” (where they are, allegedly, damaging the “fragile” habitat of the protected desert tortoise) than has been widely reported:
According to Bundy, whose family has been ranching in the area since the 1800s, the BLM’s armed invasion and occupation of Nevada has nothing to do with protecting the tortoise and everything to do with running him off the land, as it has already done to all of the other ranchers in Clark County.
As for the BLM’s assertion that its actions “to remove illegal cattle” are legally justified, among the many points that Joe Wolverton II made in his April 12 article charging that the seizure of Bundy’s cattle was unconstitutional was this citation from Section 1 of the Nevada constitution, titled “Inalienable Rights”:
All men are by Nature free and equal and have certain inalienable rights among which are those of enjoying and defending life and liberty; Acquiring, Possessing and Protecting property and pursuing and obtaining safety and happiness.
Wolverton observed: “Despite the Nevada constitution’s capitulation to supreme federal authority (authority, remember, that does not exist in the Constitution) … it could be argued [that the above-quoted language from Section 1] supersedes the other article’s cession of state and popular sovereignty.”
That which is unconstitutional, therefore, cannot properly be called legal.
As the tension between Bundy and the BLM ratchets down, a number of conservative bloggers and pundits have raised questions about another angle in this case: Does the BLM want Bundy’s cattle off the land his family has worked for over 140 years in order to free up the land for the construction of solar panel power stations?
That question was prompted, in part, by since-deleted information previously posted on the BLM website, information retrieved from Google’s cache.
The text of a BLM document retrieved from Google’s cache and posted by Liberty News Online contains the following chronology of events:
• “In 1993, some of the terms of Mr. Bundy’s grazing permit for the Bunkerville allotment were modified to protect the desert tortoise.”
• “In 1998, the United States filed a civil complaint against Mr. Bundy for his continued trespass grazing in the Bunkerville Allotment.”
• “In 1999, the Las Vegas Field Office Resource Management Plan designated the Bunkerville allotment as ‘Closed to Grazing’ to protect desert tortoise habitat.”
• “In March 2011, BLM counted 903 cattle from a helicopter spread out over approximately 90 miles in northeast Clark County within the Gold Butte area … 41 percent had either brands or earmarks registered to Cliven Bundy.”
• “In May 2012, the United States filed a Complaint seeking declaratory and injunctive relief for Cliven Bundy’s trespass grazing within the Gold Butte area outside the Bunkerville Allotment.”
A PDF of the BLM’s document, “Regional Mitigation strategy for the Dry Lake Solar energy Zone: Technical Note 444,” produced by the BLM in March, can be found online.
Technical Note 444 states that the “’Regional Mitigation Strategy for the Dry Lake Solar Energy Zone’ recommends a strategy for compensating for certain unavoidable impacts that are expected from the development of the Dry Lake Solar Energy Zone (SEZ) in southern Nevada.”
Technical Note 444 states: “The resource values found in the Gold Butte ACEC are threatened by: unauthorized activities, including off-road vehicle use, illegal dumping, and trespass livestock grazing ; wildfire; and weed infestation.” (Emphasis added.)
The above-referenced BLM “Technical Note 444” specifically mentions the Gold Butte Area of Critical Environmental Concern (ACEC) 76 times. While the document expresses many environmental concerns, including “trespass livestock grazing,” it is important to keep in mind that the title of the document reveals the BLM’s ultimate objective, which is to create a “solar energy zone.”
One of the references listed in Technical Note 444 is “Final Programmatic Environmental Impact Statement (PEIS) for Solar Energy Development in Six Southwestern States. FES 12- 24, DOE/EIS-0403,” published jointly by the Bureau of Land Management (BLM) and the U.S. Department of Energy (DOE). The PEIS, notes TN 444, “assessed the impact of utility-scale solar energy development on public lands in the six southwestern states of Arizona, California, Colorado, Nevada, New Mexico, and Utah.”
The BLM and the DOE’s joint venture is — stated concerns about tortoises aside — about the generation of solar energy.
An article published by The New American in September 20012 noted that Rory Reid, the eldest son of Senate Majority Leader Harry Reid (D-Nev.), is the chief representative for ENN Energy Group, a Chinese firm planning to build a $5-billion solar plant on public land in Laughlin, Nevada.
The plan generated a great deal of controversy because Clark County officials voted to sell ENN the public land for $4.5 million, a figure far below its $38.6-million appraised value.
It is important to recognize that the land on which Bundy grazes his cattle is not the same land that ENN sought near Laughlin, which is over 200 miles away. However, the Bundy grazing land is within the BLM’s Dry Lake Solar Energy Zone, an area the BLM and DOW also want to use for “utility-scale solar energy development,” whether constructed by ENN or someone else. As blogger and candidate for the U.S. House of Representatives from California’s 8th District Rodney Lee Conover recently wrote:
As part of the plan for the Dry Lake solar zone, any solar developers are expected to pay into a fund to “mitigate” the Gold Butte area. However, the “mitigation” activities can’t take place with cattle grazing in the area. If the mitigation doesn’t take place, no money for the BLM.
Conover’s assertions are supported by the BLM’s document entitled “Cattle Trespass Impacts,” which states that grazing by Bundy’s cattle “impacts” solar development, more specifically the construction of “utility-scale solar power generation facilities” on “public lands.”
“Non-Governmental Organizations have expressed concern that the regional mitigation strategy for the Dry Lake Solar Energy Zone utilizes Gold Butte as the location for offsite mitigation for impacts from solar development, and that those restoration activities are not durable with the presence of trespass cattle,” an article by Kit Daniels posted by Infowars quoted the document.
Motivations are not always easy to prove, but in this case, Senator Reid’s hand has shown up more than once. The BLM’s principal deputy director, Neil Kornze, previously served as Senator Reid’s senior policy advisor. And we have noted Rory Reid’s role as the chief representative for China’s ENN Energy Group, which has sought to develop solar energy in Nevada. Whether these suspicions are proof of wrongful or illegal acts remains to be seen.
However, one thing is evident from what has transpired in Nevada: The federal government has reneged on a long-standing arrangement made by a rancher in good faith by which he and his family have earned a living for generations. In so doing, they have run roughshod over the rights of a U.S. citizen and have employed constitutionally dubious means to do so. If justice prevails, some judge with respect for the Constitution may follow the example of Chief Judge Robert C. Jones of the Federal District Court of Nevada. Last year — in the case of U.S. v. Hage — Jones issued an impassioned preliminary bench ruling in which he charged federal officials of the U.S. Forest Service (USFS) and the Bureau of Land Management (BLM) with an ongoing series of illegal actions against Nevada rancher E. Wayne Hage. Jones described the bureaucrats’ actions as “abhorrent” and a literal, criminal conspiracy.
Which is a pretty apt description of the BLM’s recent actions against Cliven Bundy.