“I’ve been through Y2K and I’ve been through 9/11. I have never seen people so afraid as what we are seeing right now,” said gun shop owner Scott Moss recently. With more guns per capita – easily 250 million privately owned ones – and certainly more people in prisons than any other democracy, the intriguing question in this still worsening economic calamity is: If Americans found the courage for political rebellion now, would it preempt massive criminal violence, social havoc and armed rebellion later?
What we see President Obama and Congress doing and debating seem inadequate to restore financial health and security to the vast majority of Americans before millions more lives are devastated. Billions of tax dollars have gone to banks, corporations and others but have not stopped the hemorrhage of our financial lifeblood. More than half a million jobs continue to be lost a month; 3.5 million in the past year. Millions are losing their homes, health insurance and ability to buy food. Those with jobs are afraid to spend money.
As Nobel Prize winning and gloomy economist Paul Krugman said the other day after condemning what is going on in Washington, DC: “the economy is still in free fall” and we may be “falling into an economic abyss.” Harsh words for a harsh reality.
A strong economy must be built on a solid foundation of steadily rising wages. If wages don’t keep pace with production, the only way the economy can grow is through the expansion of debt, which leads to disaster.
Consider this: the US economy is 72 percent consumer spending. That means the Gross Domestic Product (GDP) cannot grow if salaries don’t keep up with the price of living. Low Income Families (LOF)–that is, any couple making less than $80,000–represent 50 percent of all consumer spending. These LOF’s spend everything they earn just to maintain their present standard of living. So, how can these families help to grow the economy if they’re already spending every last farthing they earn?
by Andrew Hughes
Global Research, December 11, 2008
The World Bank today released it’s long awaited forecast for the World economic future. “The financial crisis is likely to result in the most serious recession since the Great Depression,” said Justin Lin, it’s Chief economist. The global economy is captured in a downward spiral as never witnessed before. Whereas before, economies were more localized and had more immunity to outside forces, now Globalization has ensured that one big failure in the machine can create a systemic event that brings down all the component parts. The inevitable failure of a few major banks has demonstrated just how much havoc can be wreaked from Alaska to Beijing.
Emerging markets, dependent on mature market consumption, are teetering on the edge of Bankruptcy as Private capital inflow has been drying up and is forecast to reduce by half next year. The volume of world trade is set to decrease by 2.1%, the biggest drop for 33 years. Oil exporting countries from Venezuela to Russia are seeing revenue crash as demand across the world decreases. Poor countries, on the other hand, have experienced a decrease in the cost of living as food and oil prices drop. In an unforeseen twist of fate, Globalisation has enriched poorer countries and impoverished richer ones.
The Plot to Shift Taxes Off Wealth Onto Wage Earners
Interview with financial economist and historian, Dr. Michael Hudson. AAA rating of subprime junk; inflation; mishandling of crookedness; change in world order; privatization of banking system through the Federal Reserve; Alan Greenspan, Social Security and junk economics; windfall profits; the law of fraudulent conveyance. Dr. Hudson has been appointed Chief Economic Policy Advisor for the Kucinich for President campaign, and is writing a new tax policy for the United States. He is President of The Institute for the Study of Long-Term Economic Trend, a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of “Super-Imperialism: The Economic Strategy of American Empire”. Visit his website at www.michael-hudson.com.
Note: this is an old show but it still has a lot of relevant info. Hudson knows how to explain the financial crisis. Not sure on the exact date but sounds like it’s 2007. ~ DS
President-elect Barack Obama announced Wednesday the appointment of former Federal Reserve Board Chairman Paul Volcker to head a White House advisory board to oversee the new administration’s policies for stabilizing financial markets. The selection of the 81-year-old Volcker puts an inveterate enemy of the working class at the side of the new president, and demonstrates the class character of the right-wing government that Obama is assembling.
In the course of the week, Obama selected his entire economic team: Timothy Geithner, currently president of the New York branch of the Federal Reserve, who will become secretary of the treasury; Lawrence Summers, former Clinton treasury secretary, who will head the National Economic Council, the chief White House group for coordinating economic policy; and Peter Orszag, who will become budget director. Summers, Geithner and Orszag are all protégés of former Clinton treasury secretary Robert Rubin, former CEO of Goldman Sachs and now director and vice chairman of Citigroup.
One of US president-elect Barack Obama’s leading advisers has done more damage to Africa, its economies and its people than anyone I can think of in world history, including even Cecil John Rhodes.
That charge may surprise readers, but hear me out.
His name is Paul Volcker, and the 82-year-old banker was recommended as “a legend!” to Obama by Austan Goolsbee, his chief economic adviser.
Volcker was profiled by the October 21 Wall Street Journal: “The cigar-chomping central banker from 1979 to 1987, he received blame for driving up interest rates and tipping the US into the deepest recession since the Great Depression.”
But why dredge up crimes nearly 30 years old?
Because of the awesome financial destruction Volcker imposed, within most Africans’ living memory. His policies stunted the continent’s growth when it most needed internal economic coherence.
Even the International Monetary Fund’s (IMF) official history cannot avoid using the famous phrase most associated with the former Reserve Bank chair’s name: “The origins of the debt crisis of the 1980s may be traced back to and through the lurching efforts of the worlds’ governments to cope with the economic instabilities of the 1970s … [including the] monetary contraction in the United States (the ‘Volcker Shock’) that brought a sharp rise in world interest rates and a sustained appreciation of the dollar.”
“The bourgeoisie [are] out of answers, and with the increasing costs of production and transportation driven by the price of oil, with the price of oil driving the bourgeoisie into greater capital expenditures to increase the rate of surplus value; with oil undermining growth in the mass and rate of value added– manufacturing, hidden beneath all the noise and clamor of Wall Street, of all the investment bankers at all the trading desks slapping themselves on the back with each new deal– manufacturing had all ready rung the closing bell.
“Those who didn’t hear it, couldn’t hear it. They were too smart. They were too stupid.
So desperate are we for real change that Obama’s election promises became a veritable mantra for millions of people, especially the young, black and poor. Understandably, there is more than a little wishful thinking involved here given the disastrous decade we’ve been through. And after all the guy is young, apparently gifted and black, what more could anyone ask for?
However, a degree of realism is required and not only about Obama but concerning what is possible under the circumstances.
Nafeez Ahmed Location: London, United Kingdom Political analyst on security, conflict and global crisis. Director of Institute for Policy Research & Development, London. Author of “The London Bombings: An Independent Inquiry” (Duckworth, 2006) and “The War on Truth: 9/11, Disinformation and the Anatomy of Terrorism” (Arris, Olive Branch, 2005)
Prison labor is every US Corporation’s dream: cheap labor, no sick leave, no time off, no holidays and employees that can be easily replaced. For human rights activists however, it’s a nightmare for the very same reasons – but on the other side of the coin: forced labor, no unions, low pay and no protection for employees. The US has used or currently uses prison labor for anything from holiday coffee for Starbucks, cutting airplane components for Boeing, Game Boys for Nintendo, equipment for the war in Iraq, shrink wrapping mousses for Microsoft, making dentures, down to sewing lingerie for Victoria’s Secrets. It’s a multi-billion dollar business. Today, FSRN brings you an exclusive documentary, Prison Labor, Made in the U.S.A., with reporter Karen Miller.
Things are getting crazier by the day. On Tuesday, Treasury Secretary Henry Paulson announced that the Fed would commit another $800 billion to fight the financial crisis which has spread to the broader economy and is causing sharp declines in consumer spending. The Fed plans to buy $600 billion of mortgage-backed securities (MBS) from Fannie Mae and Freddie Mac and another $200 billion of Triple A bonds from non-bank financial companies that provide financing for consumers. There’s just one little hitch, Fannie and Freddie are already owned by the government, so buying the bad paper is like moving the figures from one ledger to another. It’s pointless. Except for the fact, that by shuffling the paperwork, Bernanke can drive down long-term interest rates and (hopefully) rekindle flagging home sales. It’s quite a trick.
And with the other $200 billion he can kick-start the securitization market by purchasing bundles of student loans, credit cards and car loans. Investors have been boycotting the asset-backed securities (ABS) markets for months now which has choked off the flow credit to consumers. So the Fed is trying to unclog the plumbing by stepping in as the lender of last resort. Of course, if the Fed really wanted to get money to consumers there are much easier ways to do it, like cutting the payroll tax or mailing out stimulus checks or issuing tax rebates to couples making under $60,000 per year. But that’s not what Bernanke wants to do. The real objective is to reignite securitization because that’s the vehicle the investment banks and hedge funds use to increase profits through leveraged bets on odd-sounding derivatives. (CDO, MBS, CDS). But no one is buying dodgy securities anymore because no one knows their true value. Until that can be worked out, investors will stay away. That’s why Bernanke and Paulson would be better off with a little less liquidity and a little more transparency. Price discovery for structured investments is critical. If investors know the market price, then they’ll jump in. If not; it’s no dice.
It is often said that the United States “has no energy policy,” that we “need to develop one as quickly as possible,” and that it should be based on alternate fuels and more importantly, alternate and renewable energy sources. Well the last two parts are true; the first is definitely not. As we enter an era of debate on and development of a new energy policy, it is very important to understand these facts. We would not be substituting something for nothing. Rather we would be replacing the current energy policy with another one. Further, the new one would be highly antithetical to the interests (to say nothing of the profits) of the developers and defenders of the old one. They would (and indeed will) constitute a very powerful enemy of change. It is impossible to estimate just how far they will go in defending their interests. But these folks have fought dirty in the past and there is no reason to believe that they will change their stripes anytime soon. But no old policy can be changed to a new one if one does not clearly understand just what the present one is.
Interview with Chris Carlsson author of “Nowtopia: How Pirate Programmers, Outlaw Bicyclists, and Vacant-Lot Gardeners Are Inventing the Future Today!” recorded June 22, 2008 on Mind Over Matters KEXP 90.3 FM Seattle.
It has never been more clear how much corporations depend on We, the People for their very existence. Corporations are given the right to exist through a public charter. For public corporations, shareholders are bestowed with limited liability, and they benefit from a public system of securities regulation that gives investors confidence to invest. In the best of times, corporations benefit both from public goods (public roads and infrastructure, public investment in R&D) and targeted benefits (tax subsidies, loan guarantees, and much more). In the worst of times, as we now see, the largest corporations can expect massive public support. Bloomberg reports that the United States has already committed an amazing $7.76 trillion — more than half of U.S. GDP — in funds for bailouts, guarantees, share purchases, insurance programs, swaps and more.
Don’t We, the People have the right to expect something in return?
How about starting with public release of the income tax returns of all corporations above a certain size (say, $10 million in assets)?
Jean Ziegler is a senior professor of sociology at the University of Geneva and the Sorbonne, Paris. He is one of the leading protagonists in the world for the anti-globalization movement and has taken a continued stand for human rights, the right to food and a decent livelihood for all people. In 2000, he was appointed by the United Nations Commission on Human Rights as the UN Special Rapporteur on the Right to Food.
Image by Dandelion Salad via Flickr
He kept this position until March 2008 in spite of much hard criticism from the neoliberal leaders of the U.S. and the UN for his categorical stand for equal rights for all people. His continued fight against poverty, hunger and chronic malnutrition in the world has been a constant embarrassment to the West. He is now the Swiss member of the UN Human Rights Council. His is one of the very few voices heard on the international scene speaking out loudly against the criminal financial system that has put the world in its present tailspin with hunger and lack of human rights, devastating a continually increasing mass of the world’s 6.6 billion population. Unfortunately he is not very well known in the Anglophone world, where, for obvious political reasons, his humanitarian message is hushed up.