“Let the Plunder Begin”: The Return of Robert Rubin by Mike Whitney

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by Mike Whitney
Global Research, January 8, 2010
– 2010-01-07

“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” — John Maynard Keynes

There’s no denying that the economy is getting better, but will it last? Many economists don’t think so, including experts at opposite ends of the ideological spectrum, like Paul Krugman and Martin Feldstein. They think the economy will begin to fizzle sometime in the latter part of 2010 when Obama’s $787 billion fiscal stimulus runs out and consumers are forced to pick up the slack in demand. That’s a safe bet, too, considering that unemployment will still be somewhere in the neighborhood of 9 percent and households will still be digging out from the $13 trillion they lost during the crisis. And the fact that the Fed is planning to end its quantitative easing (QE) program in early April, doesn’t help either. Continue reading

Lining Up for the Wall Street Gravy Train By Mike Whitney

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By Mike Whitney
Information Clearing House
December 31, 2009

British economist John Maynard Keynes, believed in capitalism, but he was also sharply critical of its structural flaws. He summed it up succinctly like this:

“Our analysis shows… that long-run development is not inherent in the capitalist economy. Thus, specific ‘development factors’ are required to sustain a long-run upward movement.”

What Keynes was alluding to is the fact that mature capitalist economies tend towards stagnation. What happens, is that the rate of return on investment begins to dwindle as overcapacity builds. That causes declining profits which lead to belt-tightening, rising unemployment and falling demand. As investment drops off further, growth slows correspondingly and the economy dips into a protracted slump. This corrosive stagnation is the challenge that all advanced capitalist economies face. The solution–as Keynes notes–lies in “specific development factors”, which in today’s terms means “financial innovations”.

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Is the Fed Juicing the Stock Market? by Mike Whitney

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by Mike Whitney
Global Research, January 2, 2010

Is the Fed manipulating the stock market?  TrimTabs CEO Charles Biderman seems to think so, and he makes a strong case for his theory in an article at zerohedge.com.

Biderman focuses his attention on the mystery surrounding the stock market’s 9-month rally and asks, “Where is the money coming from?”  After all, the market cap has increased by more than $6 trillion since March 9. That amount of money should be fairly easy to trace; right?

Wrong.

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Obama’s Role in the Militarization of Mexico by Mike Whitney

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by Mike Whitney
Global Research, December 24, 2009

An Interview with Laura Carlsen

“Militarization is not the way to deal with Mexico’s political crisis.” — Laura Carlsen

Mike Whitney— Will you explain what Plan Mexico is and how it relates to the North American Free Trade Agreement? (NAFTA)

Laura Carlsen: Plan Mexico, also called the Merida Initiative, is a three-year regional security cooperation plan devised by the former Bush administration and presented in October of 2007. The plan grew out of the extension of NAFTA into security areas, known as the Security and Prosperity Partnership. Originally Plan Mexico was to be announced in the context of the SPP trinational summit but was delayed. It is presented as a petition of the Mexican president Felipe Calderon for US help in the war on drugs but in reality it was designed in Washington as a way to “push out the borders” of the US security perimeter, that is, that Mexico would take on US security priorities including policing its southern border and allowing US companies and agents into Mexico’s intelligence and security operations.

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“Accountability for War Crimes is Imperative” An interview with Cindy Sheehan By Mike Whitney

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By Mike Whitney
ICH

with Cindy Sheehan
Featured Writer
Dandelion Salad
Cindy Sheehan’s Soapbox Blog
Cindy Sheehan’s Soapbox
Dec. 24, 2009

Mike Whitney—President Barack Obama recently visited Dover Air Force Base where he was photographed with the flag-draped coffins of soldiers who were killed in Afghanistan and Iraq. Why did Obama do this and what was your reaction?

Cindy Sheehan–“I think Obama did this as a publicity stunt and used the dead troops (that he was responsible for killing) as props to show that he “cares” about the troops. This stunt was in the middle of the “discussions” about how many more troops to send to Afghanistan. (after he has already sent about 35,000)

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Brace Yourself For a Hard Landing By Mike Whitney

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By Mike Whitney
December 22, 2009 “Information Clearing House

Ben Bernanke has been a bigger disaster than Hurricane Katrina. But the senate is about to re-up him for another four-year term. What are they thinking? Bernanke helped Greenspan inflate the biggest speculative bubble of all time, and still maintains that he never saw it growing. Right. How can retail housing leap from $12 trillion to $21 trillion in 7 years (1999 to 2006) without popping up on the Fed’s radar? It’s not possible. Bernanke is just fudging the facts to save his skin.

Bernanke was also staunch supporter of the low interest rate policy which led to the crash. Greenspan never believed that it was the Fed’s job to deal with credit bubbles. “The free market is self-correcting”, he thought. He was the nation’s chief regulator, but he was opposed to the idea of government regulation. Go figure? Here’ a quote from Greenspan in 2002:

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Eva Golinger: US Government led by Obama Is Preparing for War in South America By Mike Whitney

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By Mike Whitney
December 18, 2009 “Information Clearing House

1 Mike Whitney—-The US media is very critical of Venezuelan President Hugo Chavez. He’s frequently denounced as “anti-American”, a “leftist strongman”, and a dictator. Can you briefly summarize some of the positive social, economic and judicial changes for which Chavez is mainly responsible?

Eva Golinger—-The first and foremost important achievement during the Chávez administration is the 1999 Constitution, which, although not written nor decreed by Chávez himself, was created through his vision of change for Venezuela. The 1999 Constitution was, in fact, drafted – written – by the people of Venezuela in one of the most participatory examples of nation building, and then was ratified through popular national referendum by 75% of Venezuelans. Continue reading

U.S. Occupation and the Corrupt, Mafia-state of Hamid Karzai By Mike Whitney

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By Mike Whitney
ICH
December 14, 2009

It’s too bad Barack Obama didn’t consult with Malalai Joya before giving his Nobel acceptance speech on Thursday. The ex-Afghan Parliamentarian could have helped the president to see that the ongoing US occupation is damaging to both American and Afghan interests. Afghanistan is not the “just war” that Obama defends so passionately in his speech. It’s part of a larger US geopolitical strategy which Joya outlines in her new book “A Woman Among the Warlords: The extraordinary story of an Afghan who dared to raise her voice”. US policymakers have decided to establish a beachhead in Central Asia to monitor the growth of China, surround Russia, control vital resources from the Caspian Basin, and provide security for US mega-corporations who see Asia as the “market of the future.” It is the Great Game all over again. “Victory” in Afghanistan means that a handful of weapons manufacturers, oil magnates, and military contractors will get very rich. That’s it. It has nothing to do with al-Qaida, “democracy promotion” or US national security. That’s all just public relations pablum.

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2010: “The Year of Severe Economic Contraction” By Mike Whitney

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By Mike Whitney
ICH
December 14, 2009

Upbeat reports in the financial media, belie the effects of the ongoing credit contraction. Massive injections of central bank liquidity have prevented the collapse of financial markets, but have done nothing to ease the deleveraging of households or stimulate activity the broader economy. The crisis has stripped $13 trillion in equity from working families who now find their access to credit either cut off or severely curtailed by the same banks that received hefty taxpayer-funded bailouts. The fiscal strangulation of the millions of people who are no longer considered “creditworthy” is progressively weakening demand and spreading pessimism across all income levels. Growing public desperation was the focus of a special weekend report by Bloomberg News:
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Bernanke’s Fake Economic Recovery by Mike Whitney

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by Mike Whitney
www.globalresearch.ca, December 12, 2009
Counterpunch– 2009-12-11

“Economic recovery” is a term that has no fixed meaning. But it’s worth mulling over to determine whether aggregate demand is strong enough to keep the economy from tipping back into recession.  In normal times, the Fed slashes interest rates to increase the flow of capital to the markets and to consumers via lending at the banks. That’s the traditional method of “jump starting” the economy.

The Fed has never initiated policies which provide unlimited guarantees for underwater financial institutions. Nor has it ever poured more than a trillion dollars directly into the financial system by creating excess reserves at the banks and direct purchases of long-term assets. (Quantitative Easing) All of this is new. Naturally, this ocean of liquidity has produced price distortions which have been confused with real recovery. The S&P has soared more than 60 percent in the last 9 months, even though the yield on short-term Treasuries are at historic lows.

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Why Greece has the E.C.B. by the Shorthairs By Mike Whitney

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By Mike Whitney
December 09, 2009 “Information Clearing House

Greek Finance Minister George Papaconstantinou has the European Commission over a barrel and doesn’t even know it. Instead of dragging the EC over the coals–like he should –he’s carrying on like a blubbering crybaby. “Steady on there, Georgie”. Treasury Secretary Hank Paulson didn’t go wobbly when he stormed up Capital Hill and demanded a $700 billion TARP bailout, did he? Well, then, at least learn from history. The EC is not going to let Greece default and trigger another Lehman Brothers-type meltdown. That won’t happen. If G-Sax and JPM are Too Big To Fail (TBTF), then surely Greece is too. That means the Greek Finance Minister needs to summon his courage and hammer out the best deal possible for his country. Wishy-washy will get you nowhere.

Markets started tumbling this week on news that Fitch Ratings cut Greece’s debt rating from A- to to BBB+ which means it will cost the government more to roll over its debt in the future. It also means that the ECB may not accept Greek government bonds as collateral when they return to the pre-crisis rules in 2011. The ratings flap has reawakened Dubai fears and the possibility of a sovereign default within the EU.

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Larry Summers is Steering the Economy Towards “Structural Adjustment” By Mike Whitney

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By Mike Whitney
December 08, 2009 “Information Clearing House

There’s no fixed number of greenbacks in a vault at the Treasury which limit how much the federal government can spend. Since the US pays its debts in its own currency–it can print as many dollars as it pleases. Of course, if boosting the money supply triggers inflation, the Fed has to withdraw liquidity and raise interest rates. But that’s not the problem at present. The problem is how to zap the economy back to life. The problem is how to get 16 million people out of unemployment lines and back to work. That’s the real challenge. The problem is political not economic. Obama is surrounded by industry reps who are trying to scare him about the size of the deficits. But deficits aren’t the problem; unemployment is. Once people get back to work and build their savings, their creditworthiness will improve, and the next economic expansion will begin. When more people are paying into the system, the deficits will come down. But the deficits won’t come down if tens of millions of people are still on the sidelines and forced to cut their spending. Judging by last Thursday’s speech at the “Jobs Summit”, Obama still doesn’t grasp this:

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The Audacity of Ethnic Cleansing by Mike Whitney

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by Mike Whitney
www.globalresearch.ca/, December 4, 2009

This is Obama’s plan for Afghanistan, a carbon-copy of George Bush’s.

“Today, we Afghans remain trapped between two enemies: the Taliban on one side and US/NATO forces and their warlord hirelings on the other.” Malalai Joya “A Woman Among the Warlords” Scribner Publishing, New York

The Bush administration never had any intention of liberating Afghanistan or establishing democracy. The real aim was to remove the politically-intractable Taliban and replace them with a puppet regime run by a former-CIA asset. The rest of Afghanistan would be parceled-off to the warlords who assisted in the invasion and who had agreed to do much of the United States dirty-work on the ground. In the eight years of military occupation which followed, that basic strategy has never changed. The U.S. is just as committed now as it was at the war’s inception to establish a beachhead in Central Asia to oversee the growth of China, to execute disruptive/covert operations against Russia, to control vital pipeline routes from the Caspian Basin, and to maintain a heavy military presence in the most critical geopolitical area in the world today.

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Financial Crisis in Dubai: Towards a Nightmare Scenario? by Mike Whitney

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by Mike Whitney
Global Research, November 28, 2009

The default in Dubai is not the beginning of Financial Meltdown 2. Don’t look for dominoes here. Yes, it does raise serious questions about the vast debt-overhang in emerging economies–particularly East Europe. But, this is not a “sovereign default” in the strict sense, nor is there any great risk of contagion. Oil-rich Abu Dhabi is loaded with liquid assets, possibly as much as $800 billion. They could pay off Dubai World’s measly $60 billion debt without batting an eye. But Abu Dhabi wants to send its wastrel younger brother a wake-up-call by forcing Dubai to restructure its debt. That means that banks, bondholders and contractors will have to take a haircut, which is not surprising given the abysmal condition of the commercial real estate market.

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Soaring Unemployment and Double-dip Recession? Blame N.W.O. Larry By Mike Whitney

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By Mike Whitney
November 26, 2009 “Information Clearing House

Barack Obama’s chief economic advisor, Lawrence Summers, is determined to sabotage a second round of stimulus. And, he’s getting plenty of help, too. Congressional Democrats are dragging their feet because they’re worried about the political backlash and midterm elections, the GOP deficit hawks are looking for a way they can derail the Obama agenda and reestablish their bone fides as fiscal conservatives, and the bailout-traumatized American people are simply opposed to anything that generates more red ink. Even Obama has joined the fray and started badmouthing stimulus stressing the importance of living within our means and trimming the deficits. So it looks like a done-deal; no more stimulus. There’s only one problem, without another blast of stimulus the economy is headed for the skids.

Summers knows this because he is an extremely bright and competent economist. With Summers, the issue is loyalty, not intelligence. To prove this point, consider Summers comments in a Washington Post editorial (September of 2008) where he explains what needs to be done to put the economy back on track:

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