Category Archives: Obamanomics

Definition of ‘Obamanomics’ – A buzzword that describes the economic philosophy of U.S President Barack Obama. Obamanomics calls for lower tax rates for companies that meet certain criteria, such as providing decent healthcare and maintaining a U.S. workforce and headquarters. Obama’s economic platform also calls for higher taxes for high-income families and investment in education, healthcare and the sciences.

Obamanomics generally stands in opposition to supply-side, or “trickle-down”, economics, which holds that people (including the rich) should keep more of what they earn because they will spend that money, promoting economic growth. Obamanomics shares some similarities with Keynesian economics, which states that active government intervention and monetary policy can smooth out bumps in economic cycles and promote stability.

Obama’s doomed attempt to save his legacy

The White House adopts a strategy of deception by distraction

By Emily Miller

President Obama’s approval ratings are falling faster than skydiver Felix Baumgartner during his record-setting jump from outer space.

In a desperate move to salvage his second term, Mr. Obama threw out his top liberal agenda items — immigration, gun control and race relations — and pivoted to the economy. The problem is that the only one to blame for the five-year malaise is the current resident of the Oval Office.

The president fueled up Air Force One on Wednesday to fly to the heartland for two stops in an attempt to physically distance himself from Washington.

“It may seem hard right now, but if we’re willing to take a few bold steps — if Washington will just shake off its complacency, set aside the kind of slash-and-burn partisanship that we’ve seen over the past few years — I promise you, our economy will be stronger a year from now,” Mr. Obama said at the University of Central Missouri in Warrensburg.

The president acts like he just arrived at 1600 Pennsylvania Avenue last week. He’s had four years, yet his policies have failed to create jobs and restore economic growth.

“There are days I think he forgets that he is actually president,” Reince Priebus, the chairman of the Republican National Committee, told me Thursday. “He wants to blame everyone but himself and his failure to join bipartisan efforts to create jobs, like the Keystone pipeline, is the reason we are not in a better place.”

The economy has never grown much more than by minuscule amounts during the Obama administration. Gross domestic product has grown at an anemic pace since he’s been in the White House, barely sputtering at 1.8 percent in the first quarter of 2013. Unemployment under Mr. Obama has averaged a discouraging 8.8 percent and still tops out at 7.6 percent.

Gas prices are rising again, but Mr. Obama spent a long stretch of these speeches touting the doubling of “clean energy” production on his watch. He claimed to have “saved the auto industry,” but didn’t mention that Detroit has gone bankrupt.

Most absurdly, he cited as a point of pride that “our deficits are falling at the fastest rate in 60 years.” He left out two key points: The congressional Republicans demanded spending cuts for increasing the debt ceiling, and the rate of decrease is high because the deficits themselves have been the largest red ink in U.S. history. Spending was $1.4 trillion more than revenue in 2009 and $1 trillion more in 2012.

The Congressional Budget Office projects a $642 billion deficit for this fiscal year, but that’s mostly because Mr. Obama hiked taxes on Jan. 1 to pay for his spending habits.

The president takes almost as little responsibility for his own actions as Anthony D. Weiner, the disgraced sexting addict and former congressman running for New York City mayor.

“With this endless parade of distractions and political posturing and phony scandals, Washington has taken its eye off the ball. And I am here to say this needs to stop,” the president said in a 64-minute speech at Knox College in Galesburg, Ill. “Our focus has to be on the basic economic issues that matter most to you, the people we represent.”

By “phony scandals,” Mr. Obama is referring to the Internal Revenue Service targeting conservatives and then concealing the evidence and refusing to provide testimony to a congressional committee. He is also referring to his Justice Department sneaking into the emails and phone calls of reporters who don’t support the Obama administration’s agenda.

The president’s “endless parade of distractions” would also include exposing the National Security Agency’s secret Prism program that has been spying on innocent Americans’ Internet searches, phone calls and emails.

It has also been distracting to have Attorney General Eric H. Holder Jr. launch an investigation into whether George Zimmerman broke federal racial discrimination laws when he killed Trayvon Martin in self-defense.

Story Continues →

Tax writers promise 50 years of secrecy for senators’ suggestions

By Bernie Becker

The Senate’s top tax writers have promised their colleagues 50 years worth of secrecy in exchange for suggestions on what deductions and credits to preserve in tax reform.

Senate Finance Committee Chairman Max Baucus (D-Mont.) and the panel’s top Republican, Sen. Orrin Hatch (Utah), assured lawmakers that any submission they receive will be kept under lock and key by the committee and the National Archives until the end of 2064.

Deeming the submissions confidential, the Senate’s top tax writers have said only certain staff members — 10 in all — will get direct access to a senator’s written suggestions. Each submission will also be given its own ID number and be kept on password-protected servers, with printed versions kept in locked safes.

The promise of confidentiality was revealed just two days before the deadline for senators to participate in the Finance Committee’s “blank slate” process, which puts the onus on lawmakers to argue for what credits and deductions should be kept in a streamlined tax code.

A Finance Committee aide said Baucus and Hatch were trying to prove to colleagues that they were making secrecy a priority. Officials on the panel circulated the news to senators in a memo that was dated last Friday.

“The letter was done at the request of offices to provide some assurance that the committee would not make their submissions public,” the aide said. “Sens. Baucus and Hatch are going out of their way to assure their colleagues they will keep the submissions in confidence.”

Keeping the submissions confidential for a half century, the aide added, was “standard operating procedure for sensitive materials, including investigation materials.”

The lengths Baucus and Hatch have gone to reassure their colleagues underscores the importance the tax writers are placing on the blank-slate plan, and it shows they are working hard to ensure that all 100 senators engage in the process.

Baucus told The Hill he fully expects more senators to participate in writing because of the secrecy guarantee.

“Several senators have said to me how important that is to them,” Baucus said. “It’s quite significant.”

It also illustrates the enormous pressure being brought to bear by K Street lobbyists, who are working furiously to protect their clients and the tax provisions that benefit them.

The move raises the stakes for Baucus and Hatch, who stand to lose credibility if the submissions start to leak out despite their vow to keep them in the vault.

Baucus announced this week that the Finance panel would mark up a tax reform bill this fall, after he has a chance during the August recess to consider his colleagues’ submissions. He suggested that the senators who take part in the blank-slate process would have greater influence.

From the start of the process, senators have expressed concerns that Baucus and Hatch wouldn’t be able to keep their proposals private. Given the enormous amount of money on the line — more than $1 trillion a year in tax expenditures are up for possible elimination — blowback from interest groups and businesses could easily derail the process.

The blank slate, some senators argue, forces them to choose sides on tax breaks that can have fervent backers back home and make them appear to be favoring special interests.

Hatch stressed that he still expects a fair number of GOP senators to give him oral suggestions, and Sen. Richard Burr (R-N.C.) told The Hill that he thought all Republicans would decide against putting ideas down on paper.

“We’re getting a lot of input regardless,” Hatch said. “All I want is input. I don’t care how they do it, whether it’s in writing or whether it’s personally.”

Under the confidential procedures set by the Finance panel, other committee staffers will only be allowed to handle senators’ suggestions if supervised by at least of the 10 authorized staffers.

Both the Democratic and Republican sides will receive a copy of a submission, and authorized staffers are supposed to log when copies of those proposals are made, who made them and how many.

The submissions can be released publicly, the memo says, if they’re scrubbed of any way of identifying the senator behind them.

But the confidentiality agreement might not be enough to get some senators off the sidelines.

Many have questioned whether it makes sense to move forward on the blank-slate approach when Democrats and Republicans have yet to resolve their long-standing differences about revenue.

While Republicans want the additional revenue from a simplified code to be used solely for lowering tax rates, Democrats want some of the windfall to go toward paying down the deficit.

Sen. Ben Cardin (D-Md.) stressed that he didn’t think any leaks would come out of the committee, even as he said he didn’t think it would have much impact on what senators actually write.

“If anything comes out, it’s certainly not going to be attributable to the leadership of the committee or the staff,” Cardin said. “It’ll be some other way it comes out, which is always possible.”

Still, Sen. John Thune (R-S.D.), who said that all Republicans were meeting one-on-one with Hatch, added that the two top tax writers were taking a chance.

“I think that, unfortunately for them, people around here tend to believe that anything in Washington — there are no secrets,” Thune said. “But they’re doing their best.”

“That should be somewhat reassuring,” Thune added. “I think people will feel a little bit more freedom.”

Source

About That US Recession…

by Tyler Durden

Whenever the annual change in core capex, also known as Non-Defense Capital Goods excluding Aircraft shipments goes negative, the US has traditionally entered a recession. Where is this number now: +0.8%, and declining fast. Feeling lucky?

Of course, in no other previous recession, was the US Fed holding $3.5 trillion in securities and increasing at a pace of $85 billion per month.

Source: Dept of Commerce

Source

Anonymous Cincinnati IRS official: “Everything comes from the top.”

A story in the Washington Post yesterday about the Internal Revenue Service’s Cincinnati office, which does most of the agency’s nonprofit auditing, clearly contradicted earlier reports that the agency’s targeting of Tea Party groups was the result of rogue agents.

The Post story anonymously quoted a staffer in Cincinnati as saying they only operate on directives from headquarters:

As could be expected, the folks in the determinations unit on Main Street have had trouble concentrating this week. Number crunchers, whose work is nonpolitical, don’t necessarily enjoy the spotlight, especially when the media and the public assume they’re engaged in partisan villainy.

“We’re not political,’’ said one determinations staffer in khakis as he left work late Tuesday afternoon. “We people on the local level are doing what we are supposed to do. . . . That’s why there are so many people here who are flustered. Everything comes from the top. We don’t have any authority to make those decisions without someone signing off on them. There has to be a directive.”

The staff member, who spoke on the condition of anonymity for fear of losing his job, said that the determinations unit is competent and without bias, that it grouped together conservative applications “for consistency’s sake” — so one application did not sail through while a similar one was held up in review. This consistency is paramount in the review of all applications, according to Ronald Ran, an estate-tax lawyer who worked for 37 years in the IRS’s Cincinnati office.

This pretty plainly contradicts the story coming out of the IRS that rogue agents in Cincinnati were responsible:

News of (acting IRS commissioner Steve) Miller’s resignation followed revelations that the IRS has identified two “rogue” employees in the agency’s Cincinnati office as being principally responsible for the “overly aggressive” handling of requests by conservative groups for tax-exempt status, a congressional source told CNN.

Miller said the staffers have already been disciplined, according to another source familiar with Miller’s discussions with congressional investigators. The second source said Miller emphasized that the problem with IRS handling of tax-exempt status for tea party groups was not limited to these two employees.

In related news, I also noted how the Post’s story on the Cincinnati office also appears to contradict what Miller told Congress this week about how many auditors the IRS has covering nonprofit groups. Miller said the figure was between 140-200, but the Post story puts the figure at 900. The Post doesn’t source the figure, but presumably that also came from people the reporters talked with in Cincinnati.

Source

The U.S. Economy Is Now Dangerously Detached From Reality

by Brandon Smith from Alt-Market

Recently I was asked to give a presentation on the current state of the global economy to a local group of concerned citizens here in Northwest Montana.  I was happy to oblige but when composing my bullet points I realized that, in truth, there were no legitimate economic numbers to examine anymore.  You see, financial analysts have traditionally used multiple indicators of employment, profit, savings, credit, supply, and demand in their efforts to divine the often obscured facts of our financial system.  The problem is, nearly every index we used in the past, every measure of capital flow and industry, is absolutely useless today.

We now live in an entirely fabricated fiscal environment.  Every aspect of it is filtered, muddled, molded, and manipulated before our eyes ever get to study the stats.  The metaphor may be overused, but our economic system has become an absolute “matrix”.  All that we see and hear has been homogenized and all truth has been sterilized away.  There is nothing to investigate anymore.  It is like awaking in the middle of a vast and hallucinatory live action theater production, complete with performers, props, and sound effects, all designed to confuse us and do us harm.  In the end, trying to make sense of the illusion is a waste of time.  All we can do is look for the exits…

There is some tangible reality out there, but it is difficult to find, and there are few if any mainstream numbers to verify.  One has to remember always that the fundamental world of money and trade revolves around real people and real circumstances.  No matter how corrupt our economic system is, as long as there are human beings, there will always be supply and demand that cannot be hidden.  We have to look past the “official numbers” and look at the roots of trade.  Where has demand fallen?  Where has supply diminished?  Where are the tangible goods and needs and how have they changed?

Let’s first start with the mainstream version of our system, looking at each aspect of the economy that no longer represents the truth of our situation…

Employment, Savings, And Debt

Much of this information is old news to those of us in the Liberty Movement, who tracked the progress of the global collapse long before the general public even knew of its existence.  However, it is useful to take a step back and look at the basic picture every once in a while.

According to numbers issued by the Department of Labor, weekly unemployment reports have dropped to a five year low, and the overall employment rate is holding at 7.9%.  This would seem to be a vast improvement over the dreadful bloodletting in the system only a few years ago.  Has the private Federal Reserve and the Obama Administration really done it?  Have they turned back the tide on the greatest fiscal crisis the U.S. has seen since the Depression?

No.  They haven’t.

They have only changed how the data is disseminated to the public. In order to understand how the employment statistics con is being engineered, it is important to understand the difference between “Adjusted” and “Unadjusted” numbers.

Labor Department data is “seasonally adjusted”, using a series of statistical assumptions including something called “Trend Cycle Analysis”.  Trend Cycle Analysis is, basically, a sham, but a sham put together in a very complex and confusing manner.  If you ask a mainstream economist what it is, you’ll likely get a three hour long dissertation filled with financial babble and very little concrete explanation.  So let me break it down as simply as I can…

Imagine that you are going to estimate how much profit you plan to make in a particular month, but you don’t just consider your current pay rate and pop it into a calculator; you also throw in the possibility of a few pay raises, an inheritance from a grandma who might kick the bucket, and, your exaggerated expectations of the entire year’s profit on top of that.  You may also take into account future bad weather, a mugging, a nuclear war….whatever.  All hypothetical situations not based in reality.  Basically, you decide that a particular trend in your income is inevitable, then, mold your statistical analysis around that assumption.

When your real profit numbers come in (the unadjusted numbers) and they do not meet your expectations, you simply change them according to what you believe SHOULD have happened.  If you insist that your profits are going to go up for the year, and they go down for a couple months instead, you change the variables you use to calculate the statistical average so that the results match your expectations, assuming that it will all balance out in the end.

Now, this sounds utterly insane for the common person out there trying to make a living.  If you ran your household this way, without accepting the cold hard unadjusted numbers in front of you, you’d find yourself broke and on the street in no time.  Unfortunately this is EXACTLY how our government handles most financial data; by coming to a final conclusion before hand, and then forcing the numbers to fit that conclusion.

This is why in February of 2013, “adjusted” first week unemployment rate was reported at 366,000 – a 5000 person drop from the week before.  A seeming improvement in the trend.  But, unadjusted numbers came in at 386,176 – a 16,000 person spike from the week before.  When one examines real unemployment numbers, he finds that the divergence between the adjusted and unadjusted statistics is growing larger with each passing quarter.  That is to say, the contradiction is becoming so blatant between the hard numbers and the Labor Department’s fantasy numbers that one must question whether or not the government is lying to us outright about the state of the economy (hint – they are lying).

These same methods are used by the government to calculate progress in the housing market, disposable income, etc.

The claim of “recovery” in the jobs market simply doesn’t jive with other indicators, like 2012 Christmas retail, which had the worst showing since the crash in 2008 (and these are still mainstream numbers!):

http://www.foxnews.com/us/2012/12/26/us-holiday-retail-sales-growth-weak…

Average household savings continue to scrape the bottom of the barrel, indicating that the public is not spending or withholding cash.  They are simply broke:

And the overall GDP of the U.S. contracted in the fourth quarter of 2012 for the first time in three years (again, according to official numbers, meaning the reality is much worse):

http://money.cnn.com/2013/01/30/news/economy/gdp-report/index.html

The downturn in consumption and industry also seems to be supported by the Baltic Dry Index, a measure of global shipping and rates.  The BDI has fallen to near historic lows THREE TIMES in the past year, which to my knowledge, has never happened before.  In the past, the BDI has been a strong prophetic indicator of future market volatility.  Usually, around a year after a severe decline in the index, a dangerous economic event takes place.  The BDI made its first sharp drop to all time lows at the end of January 2012, exactly a year ago.

U.S. household debt was recently reported to have fallen to a 29 year low, but the ratio used by the Federal Reserve applies a statistic for disposable income that is derived from the Trend Cycle boondoggle method.  While markets cheer, the truth is, the only reason household debt obligations have fallen at all is because bank lending and credit issuance remains frozen.  Consumer debt falls when there is no money to borrow.  In fact, the Federal Reserve actually pays large banks NOT to lend to the public; an activity which was exposed by Dennis Kucinich in 2009 on the House Committee on Oversight and Government Reform.  An activity that continued through 2012:

http://economix.blogs.nytimes.com/2012/07/31/the-fed-should-stop-paying-banks-not-to-lend/

Keep in mind, one of the primary arguments the Federal Reserve used when promoting the bailout concept was that it would “free up credit markets” so that lending could pick up again and fuel a recovery, and yet, at the same time, they were paying banks to NOT lend.

Meanwhile, the supposed job recovery has produced an astonishing increase in welfare recipients in the U.S., including a record 46 million Americans on foodstamps (approximately 15% of our population):

http://www.nbcnews.com/business/report-15-americans-food-stamps-980690

If we are to apply any “trend” to our calculations on overall economic health, then we should include the extreme level of government handouts, and poverty levels which are now at all time highs.  The facts are undeniable; the number of people who have much less than they did in 2008 has grown.  How then could the U.S. be considered “in recovery”?

National Debt And The Fiat Lie

With the Dow Index hovering near highs of 14,000 our system truly looks to be on a rocket ship to pre-2008 money market bliss.  In a mere five years we have returned to equity spikes that stagger the mind and the wallet.  At least, that’s how it all appears…

What needs to be taken into account, though, is the amount of fiat money being created by the Federal Reserve, and how much of that printed pixie dust currency is fueling our magical flight to Neverland.  Since 2008, our official national debt has increased from $10 trillion to $16.4 trillion, and some estimate $17 trillion to $18 trillion by the end of 2013 (unless, of course, a collapse occurs).  Which means our national debt, which took decades to reach the $10 trillion mark, will have nearly doubled in only six years!

So, what has a doubling of our national debt in such a short span of time bought us?  Well, credit markets remain frozen, property markets remain stagnant, poverty is at historic levels, welfare recipients are at epic highs, and consumer activity and GDP is back at 2008 lows.  Where did all that printed money go?  Where was it spent?  To answer that question, we only need to find what area of the economy has seen the most positive (or fantastical) activity.  What sector is seeing a massive boost while the rest tumbles?

I suggest that a large portion of QE1 through QE3 has gone to prop up the stock market, and nothing else.  I suggest that American taxpayers are fronting the bill for the equities bonanza we see today.  I suggest that the Dow is being used as a Red Herring to distract the populous for as long as possible while real assets are being snapped up and hoarded by international banks and foreign entities.  I suggest that we are being leached dry and that the parasites are almost ready to move on…

When will it all end?  Perhaps sooner than many people think.  The decision by D.C. to delay talks on the so-called “Fiscal Cliff” until March may not be coincidence.  Extensive cuts in federal spending are absolutely necessary and cannot be dismissed forever, but, because the last vestiges of our system that still operate do so through government money, such cuts will cause immediate damage to the economy, including possible default and dollar devaluation.  Refusal to make cuts will result in credit downgrades, currency inflation, and a loss of the greenback’s world reserve status.  There is no “right” way out of this quandary.

When this collapse is initiated, it would certainly behoove all parties involved, including central banks, international banks, and criminal politicians, to have a scapegoat handy for the citizenry to direct their rage at.

Event Horizon Economics

An “Event Horizon” in physics is a moment or singularity in spacetime at which a gravitational pull becomes so great that there is no way to escape it.  It is a point of no return.  I believe America’s economy has reached its own Event Horizon.  Our system is now entirely fiat driven, with very little or no true economy left.  Without constant injections from the Fed, and perpetually low interest rates, the country would implode tomorrow.  This is not recovery.  Actually, I’m not sure what to call it.

Today, independent economic analysts cannot look to the numbers to determine future trends.  Most are fake, and the rest are ugly, and I’m not sure much else can be said in their regard.  Instead, we must now look to events, rather than statistics, because our country has been maneuvered into a position of utmost frailty.  Like an avalanche shelf waiting for that perfectly timed disturbance to trigger its roaring collapse.  All that is needed is a macro-crisis, and it is no great feat for such a thing to be created in our tension filled global environment.

War in Syria and Iran leading to a tripling of energy prices.  Sanctions and strife with North Korea leading to Chinese economic retribution.  Conflict between China and Japan, again leading to Chinese economic warfare and perhaps real warfare.  An opportune “cyber attack” which could be used as an excuse for a market crash and even an internet shutdown.  A “political impasse” between Reps and Dems which leads to a default of U.S. credit.  Any one of these catastrophes could easily occur (with a little nudge from some well placed people) and feed a wider global tragedy.  The important thing to remember is that while this event will be blamed for the breakdown, it was international banks, the Federal Reserve, and elements of our own government that made the domino effect possible.  They put the pieces in place.  The act that knocks them over is secondary.

I have spent the past seven years writing about “potential” threats to our overall system, but these dangers were always just beyond our sight.  Just around the corner.  Today, it is as if the journey is over, and all those threats have materialized right before my eyes as real, and imminent.  I am watching that which I warned of come to fruition, and this is certainly not a pleasant thing.  What is valuable, though, is what we have all done in the Liberty Movement with the time that we had.  From when I began writing for the movement until now, I have seen an overwhelming increase in public awareness.  It may not be obvious to newer activists, but it is there all the same.  While we still face disparaging odds, and millions upon millions of oblivious bystanders, there is, amidst these darker moments, a steadfast community of free men and women forming.  I have full faith in the future.  Much more so than I ever did before.  Our economy may be detached from reality, but our endeavors as individuals will not be.  Our resolve will be the great game changer.  Not fiscal calamity.

Source

It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness

http://griid.files.wordpress.com/2012/07/obama_loves_banksters.jpg

by George Washington
12/24/2012

The “fiscal cliff” is a myth.

Instead, what we are facing is a descent into lawlessness.

Wikipedia notes:

In many situations, austerity programs are imposed on countries that were previously under dictatorial regimes, leading to criticism that populations are forced to repay the debts of their oppressors.

Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations.

Economist Marc Faber calls the U.S. a “failed state“.   Indeed, we no longer have a free market economy … we have fascism, communist style socialism, kleptocracy, oligarchy or banana republic style corruption.

Let’s look at some specific examples of our descent into lawlessness.

Lawless Looting and Redistribution of Wealth

The central banks’ central bank – the Bank for International Settlementswarned in 2008 that bailouts of the big banks would create sovereign debt crises … which could bankrupt nations.

That is exactly what has happened.

The big banks went bust, and so did the debtors.  But the government chose to save the big banks instead of the little guy, thus allowing the banks to continue to try to wring every penny of debt out of debtors.

Treasury Secretary Paulson shoved bailouts down Congress’ throat by threatening martial law if the bailouts weren’t passed. And the bailouts are now perpetual.

Moreover:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

  • A lot of the bailout money is going to the failing companies’ shareholders
  • Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”

And as the New York Times notes, “Tens of billions of [bailout] dollars have merely passed through A.I.G. to its derivatives trading partners”.

***

In other words, through a little game-playing by the Fed, taxpayer money is going straight into the pockets of investors in AIG’s credit default swaps and is not even really stabilizing AIG.

Moreover, a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing.  Indeed, the Fed bailed out Gaddafi’s Bank of Libya), hedge fund billionaires, and big companies, but turned its back on the little guy.

A study of 124 banking crises by the International Monetary Fund found that propping up banks which are only pretending to be solvent often leads to austerity:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.

***

All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.

In other words, the “stimulus” to the banks blows up the budget, “squeezing” public services through austerity.

Numerous top economists say that the bank bailouts are the largest robbery and redistribution of wealth in history.

Why was this illegal?   Well, the top white collar fraud expert in the country says that the Bush and Obama administrations broke the law by failing to break up insolvent banks … instead of propping them up by bailing them out.

And the Special Inspector General of the Tarp bailout program said that the Treasury Secretary lied to Congress regarding some fundamental aspects of Tarp – like pretending that the banks were healthy, when they were totally insolvent.  The Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely.  Making false statements to a federal official is illegal, pursuant to 18 United States Code Section 1001.

So breaking the rules to bail out the big, insolvent banks, is destroying our prosperity.

Lawless Justice System

A strong rule of law is essential for a prosperous and stable economy, yet the government made it official policy not to prosecute fraud, even though criminal fraud is the main business model adopted by the giant banks.

The perpetrators of the biggest financial crime in world history, the largest insider trading scandal of all time, illegal raiding of customer accounts and blatant financing of drug cartels and terrorists have all gotten away scot-free without any jail time.

There are two systems of justice in America … one for the big banks and other fatcats, and one for everyone else.

While Iceland prosecuted its top criminal bankers, and thus quickly got through its financial problems and now has a vibrant economy, the American government has done everything it can to cover up fraud, and has been actively encouraging criminal fraud and attacking those trying to blow the whistle.

The rule of law is now as weak in the U.S. and UK as many countries which we would consider “rogue nations”.    See this, this, this, this, this, this, this, this, this, this and this.

This is a sudden change.  As famed Peruvian economist Hernando de Soto notes:

In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.

Moreover, U.S. government personnel are on the take.  They have become so corrupt that regulators are literally sleeping with industry prostitutes … while they pimp out the American people.

The corruption of government officials is staggering, and the system of government-sponsored rating agencies had at its core a model of bribery.

We’ve gone from a nation of laws to a nation of powerful men making one-sided laws to protect their own interestsin secret. Government folks are using laws to crush dissent. It’s gotten so bad that even U.S. Supreme Court justices are saying that we are descending into tyranny.

It’s not a “fiscal cliff” … it’s an attempt to rape America … just like Greece and Ireland have been plundered.

Economics professor Randall Wray writes:

Thieves … took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in firesales at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.

Economics professor Michael Hudson agrees … saying that the banks are trying to roll back all modern laws and make us all serfs.

Professor Hudson explained in 2008:

You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.

Indeed:

Foreign Policy magazine ran an article entitled “The Next Big Thing: Neomedievalism“, arguing that the power of nations is declining, and being replaced by corporations, wealthy individuals, the sovereign wealth funds of monarchs, and city-regions.

Indeed, this isn’t the “Great Recession”, it’s the Great Bank Robbery. The big banks have pillaged and looted the rest of the world.

A lawless justice system is ruining the economy.

Lawless Central Bank

The non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest.   Nobel prize winning economist Joseph Stiglitz agrees, saying that the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy. The former vice president at the Federal Reserve Bank of Dallas said said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. “Nontransparency in government programs is always associated with corruption in other countries, so I don’t see why it wouldn’t be here,” he said.

Moreover, the Fed has broken the law by withholding information from Congress, letting unemployment rise in order to keep inflation low, and otherwise exceeding its authority under the Federal Reserve Act.

Acting in a lawless and unaccountable fashion is hurting the economy.

Lawless Attack on Democracy

The ability of the people to participate in their government’s decision-making is vital for a nation’s prosperity. But we no longer have democracy or a republican form of government in America.

The big banks own Washington D.C. politicians, lock stock and barrel.  See this, this, this and thisTwo leading IMF officials, the former Vice President of the Dallas Federal Reserve, and the the head of the Federal Reserve Bank of Kansas City, Moody’s chief economist and many others have all said that the United States is controlled by an “oligarchy” or “oligopoly”, and the big banks and giant financial institutions are key players in that oligarchy.

Laws are being passed in secret, and not even Congress knows what’s going on.

In other words, not only the justice system, but the entire system of American representation has been corrupted, thus harming the economy.

Lawless Infringement of Freedom

Personal freedom and liberty – and freedom from the arbitrary exercise of government power – are strongly correlated with a healthy economy, but America is descending into tyranny.

Authoritarian actions by the government interfere with the free market, and thus harm prosperity.

U.S. News and World Report notes:

The Fraser Institute’s latest Economic Freedom of the World Annual Report is out, and the news is not good for the United States. Ranked among the five freest countries in the world from 1975 through 2002, the United States has since dropped to 18th place.

The Cato institute notes:

The United States has plummeted to 18th place in the ranked list, trailing such countries as Estonia, Taiwan, and Qatar.

***

Actually, the decline began under President George W. Bush. For 20 years the U.S. had consistently ranked as one of the world’s three freest economies, along with Hong Kong and Singapore. By the end of the Bush presidency, we were barely in the top ten.

And, as with so many disastrous legacies of the Bush era, Barack Obama took a bad thing and made it worse.

But the American government has shredded the constitution, by subjecting us to indefinite detention, taking away our due process rights, deploying drones above our heads, spying on all Americans, and otherwise acting in attacking our freedoms.

Indeed, rights won in 1215 – in the Magna Carta – are being repealed.

Economic historian Niall Ferguson notes, draconian national security laws are one of the main things undermining the rule of law:

We must pose the familiar question about how far our civil liberties have been eroded by the national security state – a process that in fact dates back almost a hundred years to the outbreak of the First World War and the passage of the 1914 Defence of the Realm Act. Recent debates about the protracted detention of terrorist suspects are in no way new. Somehow it’s always a choice between habeas corpus and hundreds of corpses.

Of course, many of this decades’ national security measures have not been taken to keep us safe in the “post-9/11 world” … indeed, many of them started before 9/11.

And America has been in a continuous declared state of national emergency since 9/11, and we are in a literally never-ending state of perpetual war. See this, this, this and this.

In fact, government has blown terrorism fears way out of proportion for political purposes, and “national security” powers have been used in many ways to exempt big Wall Street players from the rule of law rather than to do anything to protect us.

So lawlessness infringement of our liberty is destroying our prosperity.

Lawless Initiation and Prosecution of War

It is well-documented that war destroys the economy.

Top U.S. government employees lied us into war, and used illegal torture, assassinations and other crimes of war in prosecuting the wars they unnecessarily started. They were – at a minimum – criminally negligent for failing to stop 9/11 (and see this).

In the name of fighting our enemies – the U.S. has directly been supporting Al Qaeda and other terrorist groups for the last decade. See this, this, this, this and this.

Our use of torture has also created many more terrorists than it has prevented.

Security experts – including both conservatives and liberals – agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this, this and this.

Indefinite detention, drone-strikes on innocent civilians, occupation of foreign countries, and most of America’s other tactics in the “war on terror” increase terrorism.

Terrorism feeds the cycle of war … and is thus harming our economy. (and because terrorism spooks people, they spend less, which further harms the economy).

So lawlessness in starting and prosecuting war is destroying our prosperity.

Postscript:  We’re not facing a “fiscal cliff”.  We’re facing a descent into lawlessness.  Stopping the fraudulent schemes, endless bailouts and imperial adventures is the place to start.

Source

The Next American Civil War

https://i1.wp.com/a57.foxnews.com/global.fncstatic.com/static/managed/img/U.S./660/371/gunrights.jpg

A Commentary by J. D.Longstreet

“Tyrants preserve themselves by sowing fear and mistrust among the citizens by means of spies, by distracting them with foreign wars, by eliminating men of spirit who might lead a revolution, by humbling the people, and making them incapable of decisive action…” … Aristotle

You’d think ole “Ari” might have been peering through some sort of cosmic window into modern day America some 2300 years ago with comments such as those above.

There’s another way to look at it, as well.  One can grudgingly admit that the Greeks, of 2300 years ago, were smarter than modern Americans.  In my estimation — you’d be right.  So, I tend to go with the latter explanation.

See, America is building a head of steam preparing to go to war with itself a second time at this very moment.  This is not unusual — not in America.  We have already had two revolutions.  You may recall the American Revolution against Great Britain and the second — the War for Southern Independence, often erroneously referred to as the American Civil War, or the War Between the States.

Tensions are running high all across the country as citizens are rushing to arm themselves with the closest thing resembling combat weaponry they can possible find. Ammunition of all calibers is disappearing for the shelves of gun shops and back orders at the manufacturing plants are piled high.

Americans are preparing to dig-in.  In other words they are preparing for a fight.  They are preparing for the day when the words run out, as they surely will.  They will then have no other alternative than to turn — as their forefathers have done since the country was founded — to the gun.

Look.  Nobody really knows how many guns are in the hands of private citizens in America.  Many have multiple weapons.  A few are even registered, but, my guess is — the vast majority are not registered anywhere for exactly the reason Americans feel they are being driven, herded, as it were,  to armed resistance.   Of the weapons known to be in the hands of private civilian Americans there are enough, according to some reports, to arm every man woman and child in America today — well over three hundred million. 

That’s a lot of guns, but not nearly as many as there will be in 2013.  Manufacturers are finding it impossible to keep up with demand for their guns.

The old expression:  “Fools rush in”  is as apropos a word, or phrase, as I can conger to describe the actions of the so-called “gun grabbers” in America in recent days.  Their propagandists and boosters in the press and the Mainstream Media added to the mental light weights already liberally salted throughout the US Congress and White House are mindlessly fanning the flames of a conflagration that threatens to consume the country in another American war over the rights guaranteed by the US Constitution — including the Bill of Rights.  These are rights sacred to Americans.   These are the rights for which they have been willing to valiantly lay down their lives to protect since the birth of the nation. They are no less ready to put their lives on the line once again. I do not think our current “masters” fully understand that.

Look.  Those who would disarm America seem oblivious to the buzz saw into which they are mindlessly running.  Their naivete is monumental, off the scale. When describing weapons they want banned, their description of such weapons makes it clear they haven’t the foggiest notion what they are talking about.  It is also clear they are operating from pure emotion with no reason mixed in.  They often describe weapons they want banned.  They don’t seem to know that those weapons have already been banned since the 1930′s in America. They use the term “assault weapon” when there is actually no such weapon, only a political term to describe a weapon that is, well, scary looking.

In their ignorance, they cannot grasp that even if a gun ban were successful, a black market in guns and ammunition will spring up, almost overnight, and will make Prohibition resemble a Sunday school picnic.   Gun owners and those familiar with guns know, already, that guns are fairly simple to make, many with off the shelf, readily available, parts.

The very first firefight between government agents and American private citizens will be the ignition point of an all consuming maelstrom that will inundate the nation and render null and void any chance that America might reconstitute itself into its former image afterwards.  

To the folks on the left, the gun grabbers, if there is any doubt in your minds that Americans will defend their constitutional rights to the death, simply drive across the Lincoln Bridge and take a long look at row after row of white grave markers at Arlington National Cemetery.  As you gaze upon that place of honor, remember, we are the sons, grandsons, and great-grand sons of the men lying there.  We are no less inspired than they to defend the constitution against all enemies — domestic and foreign.

For those of you who purportedly serve the public in your position within the Congress, understand that we are taking careful note of your maneuvering to deny us our constitutional rights and we will be working tirelessly to see that your political career is ended when next you stand for election. That is a promise.

The idiots in the Mainstream Media still do not understand that freedom of the press , freedom of speech, is only viable so long as the right to keep and bear arms is guaranteed by the Second Amendment. The job of the press is inextricably linked to the armed citizen. If the armed American goes, so does the independent, non-state-controlled press.  Freedom of the press, freedom of speech, will disappear. 

It is such a simple thing — when thought through.  But that’s the problem.  They aren’t thinking.  They are reacting out of raw emotion — certainly NOT reason.   It is their handlers, however, who ARE reasoning. They reason, and rightfully so, that they cannot accomplish their agenda as long as the American citizen is armed.  And so the useful idiots of the Mainstream Media are trotted out to happily make fools of themselves in service to the political left, which will grind them into so much dust once their goals are realized.

It is such idiocy as this that brings men to grapple at each other’s throat.

And here we are again, preparing to do battle with each other, brother against brother, over an issue that was settled two and a half centuries ago.

At first glance it appears to be lunacy of the highest order — and yet — here we are on the cusp of violence to defend something the political left, an authoritarian cabal itself,  cannot abide, AT ALL:  personal freedom, individual freedom.

Remember that Aristotle said: “Tyrants preserve themselves by …  by eliminating men of spirit who might lead a revolution, by humbling the people, and making them incapable of decisive action… .” Could this be why over a dozen of the US’s highest military officers have been hounded from service in recent months? Is it why this financial crises has dragged on and on … to keep us humble and incapable of decisive action? 

And now they intend to disarm us.

Look.  There is so much pent-up anger in America today that if this argument over gun control ever gets beyond the talking stage it is reasonable to believe there will be violence on a scale not seen since the 1860′s in this country. 

I would ask the political left if they understand that this is only a temporary argument over gun control?  Do they understand it will quickly become an argument over whether or not the country continues to exist as a single fifty state entity or breaks up into separate countries?  I don’t think they do.  Indeed, I don’t think most Americans understand that once this fight begins, in earnest, there will be no turning back and when it is ended — there will be no going back, either. 

I don’t want a war in my homeland, either.  But, dear reader, THIS is exactly how they begin.

© J. D. Longstreet

After Hegemony: America’s Global Exit Strategy

http://socioecohistory.files.wordpress.com/2011/01/dollar-is-toast.png?w=400&h=290

14 Dec 2012
By Kenneth Weisbrode

What will America look like in a post-American world? The National Intelligence Council, with its just-released Global 2030 forecast, has become the latest voice to join the chorus of those who see U.S. hegemony giving way to a leading but less-dominant position. It is worth considering what the loss of hegemony is likely to mean for America in terms of its trade, influence, reach and voice in international forums. What impact will these and any other consequences have on the way America engages with the world, as well as on its ability to provide the kinds of leadership that make it a hegemon? And how will all this affect the ways Americans live?

Examinations of hegemonic decline have historically focused on the world beyond the imperial center. The barbarian invaders get most of the glory and attention, with the subjects of historical empires who lived in what is called the “metropole,” that is, the imperial center or “homeland,” as understudied as the nature of these places following a hegemonic collapse. In fact, the fate of some more-recent metropoles has been relatively positive over the long run. Austria, Turkey, Britain and even Russia continue to survive as viable countries. Some of them even thrive and may offer useful lessons. Austria, for example, is a small, prosperous, secure and mainly conservative imperial successor state. So is Japan. The question is how Americans will cope with such a changed condition.

A loss of hegemony generally means a loss of access to markets and resources. In the case of the U.S., that would include the loss of global reserve status for the dollar, with implications for trade, government borrowing and interest rates. It will cost Americans more to get what they want, and, at the same time, they will have less to spend. As a result, they will have to do much more to live within their means.

This will make it more difficult to influence or even inspire other societies to follow America’s lead, but it won’t be impossible. Elements of the American character — creativity, pragmatism, adaptability — may continue to serve the country and other nations well, if under different circumstances. Adjusting to those changed circumstances will require a more collaborative and empathetic approach to the way Americans interact with the world.

Speculating about the American future in these circumstances requires a more precise understanding of the effect that global hegemony has already had on the United States and the global system. From the country’s founding to the peak of the industrial era,  some Americans went out of their way to abjure the idea and the reality of hegemony, deliberately eschewing international engagement in the name of what was later called exceptionalism. In the 20th century others did the reverse, also in the name of exceptionalism. Now, in the 21st century,  Americans seem to be doing both at the same time, while coping with ever more serious challenges at home and abroad.

These challenges will likely be exacerbated by a loss of hegemony. At home, it is likely to be accompanied by a decline in prosperity, with potential implications for domestic civility. The proportion of Americans who now live in poverty, currently at 15 percent, will probably increase. National cohesiveness may deteriorate when Americans realize that the cultural, ideological and economic foundations of national “success” are actually much weaker than they imagined.

Abroad, it will further constrain the effectiveness of America’s military as a tool for advancing American interests. America’s relative decline has already nurtured the increasingly widespread perception that the use of American military power limits American influence over the long term. Whereas hard power underwrote soft power — and sometimes vice versa — during America’s hegemonic rise, during its fall the two appear to be at cross-purposes. This reversal is consistent with much of the history of imperial decline.

How will Americans respond to such a world, in which U.S. influence, already limited, is no longer advanced by its military dominance? And if it is true that, as Henry Kissinger said recently, America will remain powerful but not hegemonic, how do you preserve one while losing the other? Will Americans, and the rest of the world, be content with an Austrian or Japanese future for the U.S.? That is hard to imagine. But the alternatives, perpetual empire and national disintegration, are too awful to contemplate.

If today’s preoccupation with decline is any indication, some Americans are in search of something like a grand global exit strategy. It may be better to imagine instead a post-hegemonic condition that retains some of the fruits of American exceptionalism — namely the exportability of its culture and technology — while multiplying the incentives, both domestic and foreign, against the frequent use of military power and other heavy forms of coercion. Time may be running out to shape these two goals in unison.

It is difficult to say what this will mean in practice. Making the world safe for a hegemonic retreat has always been, to some extent, a fantasy: a pre-emptive concession that is too clever by half. Even America cannot dictate the world’s reaction, least of all that of its adversaries and challengers. There also is no fixed or predictable pattern of retreat. Sometimes imperial states, even hegemons, simply just disappear, leaving only the successor states behind.

Kenneth Weisbrode is a diplomatic historian at the European University Institute and author of “The Atlantic Century” (Da Capo).

Source

%d bloggers like this: