Thursday, March 26, 2009

Usurious Bastards

by Ed Encho
The history of the last century shows, as we shall see later, that the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers, but was often disastrous for governments, businessmen, and the people generally.
-Carroll Quigley
As the conventional wisdom goes, the stock market is predicated on trust and as a crusty old uncle of mine once said to a young and impressionable teenager with zero knowledge of the way that the world really worked: “trust me is just another two letter word that means the same as fuck you.” Old Uncle Harvey’s words of wisdom came home to roost on this Monday morning in America when the finance oligarchs were able to use their inside juice to pull off the grandest and most audacious heist yet in this season of sleazy swindles. Obama Treasury Secretary and Wall Street fixer Timothy Geithner delivered the bacon for the bankers, gave the crack ho stock market a wonderful and intoxicating fix that sent the Dow screaming up by nearly 7 percent in a matter of hours and locked in the losses for the great grandchildren of every poor schmuck with the misfortune to be living through this period of plunder and wealth consolidation.

In phase two of the ongoing SPLURGE (any similarity to the con-game called the surge that allowed us to become winners in Iraq is fully intentioned), on Tuesday night, our very own national Teflon coated bullshit salesman, President Barack Obama, the banker’s gofer and shill for the new generation began to sell it to the saps and a marvelous job he is doing. This man my friends is no new Roosevelt, he is the devil in disguise and he (as many progressives had warned) is in the bag for the establishment. What we really have is a by proxy continuation of the Clinton administration, of course Hillary was to have been the one but in the waning days of the ruinous Bush-Cheney neocon war on America it was just too tough to pimp another dynasty so the crooks who run the system found another pitchman.

I cannot possibly articulate the sense of disgust and betrayal that I am experiencing as I write this, it is very difficult to restrain my gag reflex and keep from vomiting on my keyboard because once again the scum wins again and Americans have been played for chumps. Nobel Prize winning economist Paul Krugman(another Nobel Prize winner Joseph Stiglitz decried its "perverse incentives”) and columnist for the damned liberal New York Times put it best in his Monday column Financial Policy Despair:
Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.

But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost.
Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails — as it almost surely will — it’s unlikely that he’ll be able to persuade Congress to come up with more funds to do what he should have done in the first place.
This isn’t likely to win Krugman any friends in the Obama White House, especially with a sleazy little political gangster like Rahm Emanuel who I predict will eventually make even the Great Satan Karl Rove look like an amateur running the show and protecting the interests of his investment banker buddies. While Barack Obama may be the friendly Fozzie Bear face of this latest hostile takeover of the White House the real example of how things are really done is in this incredible NYT piece from back in January:
Early this month, Barack Obama was meeting with the House speaker, Nancy Pelosi, and other lawmakers when Rahm Emanuel, his chief of staff, began nervously cracking a knuckle.
Mr. Obama then turned to complain to Mr. Emanuel about his noisy habit.
At which point, Mr. Emanuel held the offending knuckle up to Mr. Obama’s left ear and, like an annoying little brother, snapped off a few special cracks.
The venomous cobra that is Emanuel is of course Mr. Obama’s minder and handler, note that he was the first announced member of the new administration, the first of a reoccupation of Washington by Clintonistas. The promised change, at least to this point has been strictly cosmetic, the wars still continue, more troops are headed to Afghanistan, the graveyard of empires past, Gitmo is still open, the new administration is engaging in Clintonian language manipulation regarding ‘torture’ that invokes memories of “it depends on what the meaning of is is”, the military is getting ready to be sent to the Mexican border and there has been no serious discussion of reigning in the run amok police state and the Stasi style high tech domestic spying operations. Yep, change has come to America alright, just like “the check’s in the mail”, “this won’t hurt a bit”, “I love you” and “I promise not to come in your mouth”…and it was all wrapped up in a big bundle of stinking dogshit with a $ sign on it and parked on the doorsteps of Americans and set afire by the Geithner-Bernanke-Paulson triad with the unarguable message that you are either cops or little people. Webster Tarpley had a good one that I heard that saving the banks is like trying to save one of Count Dracula's victims by giving the blood transfusion to the victim through the vampire when the real remedy is to just pull him off and drive a stake through his heart.

Now that it has become apparent that Obama is just more of the same and like Bush has his own legions of cultlike devotees and apologists we can all just take Bobby Knight's advice that if rape is intevitable relax and enjoy it because really what choice do we really have? Before it even really started the revolution has been hijacked, progressives are still getting the shaft, the Employee Free Choice Act is going to be dead on arrival, there is NO antiwar movement if the media refuses to acknowledge that there is a fucking war and even the Ron Paul movement libertarians have been marginalized by the old fool's proclivity to ghettoize himself and keep showing up at Nazi bund meetings like CPAC and regularly appearing on FOX.

The oligarchy has it's shit together, this is their homefield, they own the refs and there is no replay booth. Welcome to chumpland, when a show like HBO's Real Time With Bill Maher features Keith Olbermann as a guest and they both mock the very real detention camps by conflating their existence with the weeping, at the edge of sanity fascist basket case Glenn Beck it's a done deal that the agents have seized control of all phones and the only way out of the matrix will be in a body bag.

Despite the rear guard cover that the corporate media is giving to the ongoing looting spree by laying poison bait for maxed-out marks and rubes to get back into the casino and start spending their money at usurious interest rates by rapacious banks that are fast approaching the same sort of deal that you can score at pay day lenders there are those who really get it, too bad that their observations are drowned out by Dancing With the Stars, American Idol and the rest of the standard bread and circuses that placate the masses of asses. Some very excellent work has been done for those with an inclination for the truth by alternative media types and dissenting with the official state line experts who have been consistently right about this catastrophic clusterfuck from the outset.
The gold standard in calling out the great robbery and financier's coup d'etat has to go to Matt Taibbi whose piece in the new issue of Rolling Stone magazine entitled The Big Takeover is a must read. I excerpt a few pieces of this long but brilliant expose:
It's over — we're officially, royally fucked. No empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.
People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.
The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs — a company whose average employee still made more than $350,000 last year, even in the midst of a depression — was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That's the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers' credit card. 
The people who have spent their lives cloistered in this Wall Street community aren't much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don't know what the hell LIBOR is or how a REIT works or how to use the word "zero coupon bond" in a sentence without sounding stupid — well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.
That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize "toxic" risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.
In addition to Taibbi's magnum opus on the greedy pigs who have destroyed the economy I would also recommend Thomas Georghegan's treatise on the legalization of usury in the latest Harper's entitled Infinite Debt: How Unlimited Interest Rates Destroyed the Economy, the same April issue has Daniel Brook's article on the payday lending industry Usury Country, a piece in Washington Monthly by James K. Galbraith that calls bullshit on the 'the worst is over' folderol being foisted upon us by the high-rollers, the looters and the banksters where he speaks the forbidden heresy of No Return to Normal:
The most likely scenario, should the Geithner plan go through, is a combination of looting, fraud, and a renewed speculation in volatile commodity markets such as oil. Ultimately the losses fall on the public anyway, since deposits are largely insured. There is no chance that the banks will simply resume normal long-term lending. To whom would they lend? For what? Against what collateral? And if banks are recapitalized without changing their management, why should we expect them to change the behavior that caused the insolvency in the first place? 
The oddest thing about the Geithner program is its failure to act as though the financial crisis is a true crisis—an integrated, long-term economic threat—rather than merely a couple of related but temporary problems, one in banking and the other in jobs. In banking, the dominant metaphor is of plumbing: there is a blockage to be cleared. Take a plunger to the toxic assets, it is said, and credit conditions will return to normal. This, then, will make the recession essentially normal, validating the stimulus package. Solve these two problems, and the crisis will end. That’s the thinking.
But the plumbing metaphor is misleading. Credit is not a flow. It is not something that can be forced downstream by clearing a pipe. Credit is a contract. It requires a borrower as well as a lender, a customer as well as a bank. And the borrower must meet two conditions. One is creditworthiness, meaning a secure income and, usually, a house with equity in it. Asset prices therefore matter. With a chronic oversupply of houses, prices fall, collateral disappears, and even if borrowers are willing they can’t qualify for loans.

The other requirement is a willingness to borrow, motivated by what Keynes called the "animal spirits" of entrepreneurial enthusiasm. In a slump, such optimism is scarce. Even if people have collateral, they want the security of cash. And it is precisely because they want cash that they will not deplete their reserves by plunking down a payment on a new car.
The aforementioned pieces by Taibbi, Geoghegan and Brooks all merited appearances on Amy Goodman's Democracy Now the past three days but perhaps the greatest statement of all was made by former Reagan administration Assistant Treasury Secretary Paul Craig Roberts who in his latest column, Is the Bailout Plan Breeding a Bigger Crisis? is coming very close to actually endorsing - GASP - Socialism! Roberts mentions that ugly little story that flew below the radar that our number one creditor China is starting to make noises about dumping the dollar as the world reserve currency:
Rome eventually understood that its imperial frontiers exceeded its resources and pulled back. This realization has yet to dawn on Washington.
More budget savings could come from a different approach to the financial crisis. The entire question of bailing out private financial institutions needs rethinking. The probability is that the bailouts are not over. The commercial real estate defaults are yet to present themselves.
Would it be cheaper for government to buy the shares of the banks and AIG at the current low prices than to pour trillions of taxpayers’ dollars into them in an effort to drive up private share prices with public money? The Bush/Paulson bailout plan of approximately $800 billion has been followed a few months later by the Obama/Geithner stimulus-bailout plan of another approximately $800 billion. Together it adds to $1.6 trillion in new Treasury debt, much of which might have to be monetized.
Could this massive debt issue be avoided if the government took over the banks and netted out the losses between the constituent parts? A staid socialized financial sector run by civil servants is preferable to the gambling casino of greed-driven, innovative, unregulated capitalism operated by banksters who have caused crisis throughout the world.
Perhaps the Federal Reserve should be socialized as well. The notion of an independent, privately-owned Federal Reserve system was never more than a ruse to get a national bank into place. Once the central bank is part of the state-owned banking system, the government can create money without having to accumulate a massive public debt that saddles taxpayers’ and future budgets with hundreds of billions of dollars in annual interest payments.
Roberts has been ahead of the curve since his early realization that the Republican party had been taken over by drooling brownshirts in the early years of the Bush-Cheney nightmare and he consistently serves as a reminder of that bygone era when some conservatives actually had principles, ideas and a respect for intellectualism way back back before Joe the Plumber became the man.
The DOW was up 174 today, it's morning in America again, time to pull yerself up by those good ole star-spangled bootstraps, go shopping... but if you look around you will notice that gas prices are creeping up again too since speculation is back in vogue, it could crack 8000 tomorrow when Barack Obama goes to give a progress report (grovel) to his banker bosses.
But that's not important, hey, didja hear the one about the Michigan dude who just got 90 days for being caught with his dick in a car wash vacuum cleaner?

Move Along, Nothing to See Here...

Monday, March 23, 2009

Why Tax Cuts and Ruinous War Make this Crisis Worse Than the 'Great Depression'

by Len Hart, The Existentialist Cowboy

Democrats have occupied the executive but eight of the last thirty years. The GOP, therefore, owns the decline and fall of both the American republic and its short lived empire. GOP policies are the cause of the collapse made even worse by the calamitous and lost war of aggression in Iraq.

Aggravating the crash are the lasting legacy and the bone-headed policies of Reagan, Bush, and Shrub! We are living the consequences of several major, pernicious trends that began with the inauguration of Ronald Reagan:
  • the rich began to get much, much richer and the poor much, much poorer
  • the labor movement was subverted and all but destroyed;
  • within but a few years the US would 'boast' of the world's largest NEGATIVE 'current account balance';
  • US industries of all types declined or disappeared entirely;
  • acts of terrorism against US interests increased.
All of the above trends reversed but only briefly during the Clinton years, most notably the gaping disparity between filthy rich elites and everyone else. The respite did not last long enough. The administration of the Junior Bush may be thought of as a mere continuation of the decline of the American empire begun under the regimes of Reagan and the senior Bush. Bush Jr will certainly be remembered as a latter-day Nero --insane, self-absorbed, moronic and megalomaniacal. Junior worked to undo the good done by Clinton. It is his only success however dubious and harmful.

A financial collapse is well-underway, thanks to almost thirty years of GOP criminality, insanity, incompetence and greed. But because Americans have not learned the lessons of history, we are now forced to endure a 'crash' that has the potential to be much worse than the depression which followed the crash of 1929. In 1929, the US, at least, had industries that would be resurrected --automotive, steel, mining, construction, and manufacturing of many types.

In Reagan's wake, what is left to fall back on; what is left to be restored? Most of the goods you buy are no longer made in the US. They come from China, Japan, and Taiwan. Programming is done in India. These deals can be traced back to Nixon's famous trip to China and Reagan's subsequent sellouts and betrayals of the both American industry and American labor.

How GOP Tax Cuts Cause Recessions and have Destroyed the US Economy

NOW --about one percent of the nation owns more than about 90 percent of the entire population combined! No accident, this is by GOP/right wing design:
  1. unfair tax cuts which have --in fact --shifted the tax burden to poor and middle class families;
  2. well-timed recessions which benefit only the investor class, providing them with opportunities to buy up cheap stocks, depressed real estate, and 'discounted' loans;
  3. the Military/Industrial complex which wages war for its living and in the process enriches only the big defense contractors.
GOP policies have made of the US a bloated, impotent, ridiculous empire. What do we export but arms and weapons of mass destruction from whom only an increasingly tiny elite have benefited? Americans abroad are hard pressed to glimpse anything of American manufacture because our top two exports are death and destruction. Even worse, Americans are hard pressed to find the result of American industry in America itself. The aisles of Wal-Mart, for example, are lined with Chinese products. The clothing aisles are filled by sweat shops throughout the so-called 'Third World'. If the US is to rebound, what song will it sing for it supper?

It is easy enough to say that if Obama wishes to succeed, he must figure out how to get money into the hands of 'just folk' who will spend the money in ways that will stimulate production. The question is complicated by the fact, that millions are reduced to shopping at Wal-Mart. Expenditures at Wal-Mart have negative effect on the US economy. Even if, as John Maynard Keynes proposed, the government put dollars in mason jars, buried them in a landfill and let people dig them up, it might not help. Chances are those 'bucks' would, likewise, be spent on foreign goods, stimulating foreign economies --not the failing economy of the US. Most monies spent at Wal-Mart wind up in China where they most certainly will not help the US out of the hole it's in. Wal-Mart, China's distribution wing in the US, is the economic Kudzu that ate America!

Efforts to rehabilitate the US economy are hindered by an apparent obsession with big banks. Here's the bad news:

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

--Paul Krugman, Financial Policy Despair
The big banks are to the investor classes what Wal-Mart is to bargain shoppers. They facilitate the transfer of American wealth abroad and that is the very source of America's financial downfall. In the fictional 'Bedford Falls' of the motion picture, 'It's a Wonderful Life', for example, monies deposited in George Bailey's 'Building and Loan' were re-invested in Bedford Falls, creating jobs and purchases in Bedford Falls. I doubt that there exist today any locally owned 'Buildings and Loans'.

I suspect that 'Building and Loans' have gone the way of classic black and white films, 78s, 45s and vinyl LPs. They are but shadows and memories of a simpler but better time in which Americans demonstrated the resolve to rebound and rebuild a nation that still belonged to them, a nation that had not yet been sold out to China. Like American jobs, American monies, jobs, and futures are gone with the wind!

Screw the big banks!

It would help if Americans, the media, and the administration of Barack Obama stopped focusing on the 'big banks'. But not before seizing their assets. Creating a responsible financial institution to replace them is not rocket science. It is a task, rather, that must be undertaken by the Obama administration if it is to succeed. Reagan/Bush rich elites do not drive economies; the imminent collapse of our economy is the proof of it. Governments do not drive economies. Big corporations do not drive economies though many board chairs are deluded into believing themselves to be 'captains of industry'.
More than 83 corporations have offshore subsidiaries where their funds are protected in tax havens in the Caymen islands such as: The Bank of America, Citigroup, Morgan Stanley, AIG, JP Morgan Chase, Wells Fargo, and even Pepsi and General Motors who received 13.4 billion have hundreds of millions of dollars in tax havens offshore. All these corporations receive protection from paying the US government their taxes and the loss to the US is into the 100 billion dollars of lost tax revenue.

Senator Carl Levin a democrat from Michigan and Byron Dorgan, Democrat of North Dakota requested the report to be released and are pushing for new laws prohibiting these bailout scam corporations from being tax dodgers while asking for bailouts from the taxpayer.

The Government Accounting Office includes 63 of the 100 largest contractors who receive government contracts also have accounts in tax haven countries.

--Bailout Corporation Tax Havens in Caymen Islands
The bailouts failed because the wrong people got the money. The culprits are to be found in the 'Axis of GOP Moneterists'.
... in 1963, Milton Friedman and Anna J. Schwartz transformed the debate about the Great Depression. That year saw the publication of their now-classic book, A Monetary History of the United States, 1867-1960. The Monetary History, the name by which the book is instantly recognized by any macro economist, examined in great detail the relationship between changes in the national money stock--whether determined by conscious policy or by more impersonal forces such as changes in the banking system--and changes in national income and prices.

--Ben S. Bernanke, The Federal Reserve Board, Money, Gold, and the Great Depression
If Obama were a part of the 'revolution', he would have nationalized the crooks and seized their assets in the name of the people.

The trend in which an increasing tiny elite of about one percent of the total population would end up owning more than the rest of us combined is, perhaps, the number one cause of many for the current economic malaise. Millions of Americans cannot afford to make both the mortgage payment and the food bill, let alone plan for educations or retirement! Indeed! Where DID the money go?

The answer is simple and straight-forward: by way of GOP tax breaks for the rich, the money went straight into the coffers of an increasingly tiny elite, a class of oligarchs that now comprises but one percent of the entire population. This transfer of wealth is, in fact, a 'contraction' of the total money supply --the root cause of economic depression.

Of course, the 'elites' do not shop at Wal-Mart! As every decent American has lost faith in the despotic regime inside China, there is almost no one living outside the US who believes in the 'American' ideal. Bush had absolutely ho moral authority from which he could dictate a 'Pax Americana'. Inside the US, our own 'ideals' were disdainfully repudiated by a would-be emperor. The entire world sees this for what it is: a cruel fraud upon the American people and the world.

The average American HAS NOT benefited from US/China 'trade'.
  • In 1960, the wealth gap between the top 20 percent and the bottom 20 percent of Americans was thirty fold. Four decades later it’s more than seventy-five-fold.
  • Either way -- wealth or income – America is more unequal, economists generally agree, than at any time since the start of the Great Depression…
  • And more unequal than any other developed nation today.

Americans HAVE NOT benefited from the rise of leeches like Wal-Mart. Here’s why:
  • Despite bringing in over $378 billion last year, Wal-Mart repeatedly underpays its American workforce. More than 80 wage & hour lawsuits, including a recently certified class action lawsuit in California, are currently pending against the company. Plus, it faces more than 200 discrimination lawsuits for unfair promotion practices, pay discrepancies and other issues, including the nation’s largest workplace gender discrimination lawsuit. By failing to fairly compensate its employees, Wal-Mart cheats states out of income tax revenues.
  • Wal-Mart’s low wages means store employees have little or no disposable income to spend to stimulate the economy. Think about what even a small raise for Wal-Mart’s 1 million+ workers would mean nationally, or what it would mean to your city or town if everyone at your local Wal-Mart got a raise.
  • Wal-Mart sources the vast majority of its products from countries overseas, meaning most of the cost of a given Wal-Mart product doesn’t go into the U.S. economy. Rather than boosting the U.S. economy, Wal-Mart has played a major role in exporting U.S. manufacturing jobs to countries with low labor and environmental standards. Meanwhile, the company has embraced unions in its Chinese stores and has negotiated with them to raise Chinese salaries. Apparently, what is good enough for China is not good enough here at home.
  • Wal-Mart underfunds its health care plan and cuts corners whenever possible, forcing many of its employees to postpone care, thus decreasing their productivity and increasing the eventual cost of their treatment. In desperation, many of them rely on state-sponsored care and drain yet more funds from American communities. That means when Wal-Mart employees end up in emergency rooms, it’s U.S. taxpayers who end up footing the bill. If Wal-Mart were truly interested in stimulating the economy, it would begin to adequately fund its health care plan and take care of its own Associates.
  • Wal-Mart routinely dodges state and local taxes, meaning money spent at a Wal-Mart store won’t end up in your community. Wal-Mart actively works to challenge property tax assessments and creates complex real estate arrangements to obscure how much taxes the company owes. When Wal-Mart dodges its tax burden, it takes precious revenues away from cities and states to pay for roads, schools and other services. In turn, individual taxpayers are forced to pay more to make up the difference (which takes more money out of their pockets) or get by with less.
--The Quaker Agitator, Why Wal-Mart Does Not Strengthen Our Economy
Monies spent at Wal-Mart winds up in China! Monies thrown at the ruling elite who don't need a 'bailout' winds up in offshore accounts and the purchase of merchandise not produced in the United States. $billions$ are thus exported to be forever lost to the US economy, a loss no less important than $billions$ that are unfortunately spent at Wal-Mart.

How the War on Iraq Continues to Depress the US Economy

It is naively suggested that the 'defense industry'--the MIC --creates jobs and stimulates the economy. The US is left with a morally moribund economy built up around a handful of robber baron corporations like Halliburton, it's subsidiary KBR and, of course, Murder Inc., otherwise called Blackwater USA. What industries are left to America? Answer: industrialized death and destruction!

If you wish to build an entire economy upon death itself, wars of naked aggression, war crimes and outright murder, then this is definitely the way to go. But it is not a recipe upon which a viable, growing economy is based. There is a choice to be made between 'gun's and 'butter'.

The GOP administration of George W. Bush and Darth Cheney learned much from the Nazi collaboration with I.G. Farben, Thyssen, Krupp and America's own Henry Ford, an idiot whose portrait 'graced' Adolph Hitler's office. Indeed! There was money to be made in appalling acts of state sponsored genocide. Money was made by this ilk in Iraq. But it's not the kind of businesses I want to get juicy contracts that are paid by my tax monies. It is not a sustainable economy; it is rather a Faustian bargain in which riches result in the short term but financial collapse and living hells in the longer term.

Like Rome, the US has become a bloated, inefficient empire which produces very little of lasting value. Indeed, the biggest US exports, like those of Rome earlier, are death and destruction via the war business.

The cost of Bush's war on Iraq has surpassed one trillion dollars but there is no evidence of it benefiting the US economy. It is time to drive a stake through the heart of the malicious lie that wars are good for the economy. Only the Military/Industrial complex benefits from war but what is good for the MIC is has been harmful, perhaps, fatal for the country.

The MIC is a drag on the economy, an economic black hole into which is drained the economic and creative resources of the nation. War itself is a Faustian bargain. The hour of midnight is approaching.

The economic benefits of building a tank are temporary. Once built, the tank is a drag, requiring more to upkeep than war booty can justify. It returns absolutely nothing for the investment. In the end, only the military contractors building the tank or maintaining it have benefited and they will have done so at taxpayer (your) expense. On a larger scale, the Pentagon is an economic black hole, having sucked the life blood from the US economy. It should not be surprising, then, that the Pentagon is more akin to organized crime than legitimate enterprise. The 'Pentagon' is a 'gang'.
One of the most pernicious economic myths is the idea that war helps the economy. In reality, war is destructive and it always results in economic retrogression and misery.

The US economy didn’t really recover until 1946, when the immediate postwar period witnessed the dismantling of the command economy in favor of a much more liberalized market economy. Peace brought military demobilization, deregulation, and perhaps most importantly, a seventy-five percent reduction in government spending. This was a genuine peace dividend and it set the stage for America’s legendary post-war economic boom.

--War and Economic Decline
The idea that wars and military spending increases are good for the economy is sold and promoted. In fact, new studies now confirm what I have always believed and what Gore Vidal had stated in his classic: The Decline and Fall of the American Empire.
Nobel Prize-winning economist Joseph Stiglitz has blamed the Iraq war for sending the United States into a recession. On Wednesday, he told a London think tank that the war caused the credit crunch and the housing crisis that are propelling the current economic downturn. Testifying before the Senate's Joint Economic Committee the following day, he said our involvement in Iraq has long been "weakening the American economy" and "a day of reckoning" has finally arrived.

--Is the Economy a Casualty of War?
Now --war critics have the economic data and models proving that military spending 'diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment.' This thesis is likewise confirmed in a paper by Thomas E. Woods at:

The obvious lies about the war have been exposed. Not enough attention has been focused on the one of the biggest con jobs of them all ---right up there with WMD.
White House economic adviser Lawrence Lindsey was the exception to the rule, offering an "upper bound" estimate of $100 billion to $200 billion in a September 2002 interview with The Wall Street Journal. That figure raised eyebrows at the time, although Lindsey argued the cost was small, adding, "The successful prosecution of the war would be good for the economy.”

--Cost of Iraq war could surpass $1 trillion
The US has been in a state of near perpetual war since the so-called Spanish-American war made of this nation an empire. But it was, specifically, according to Gore Vidal in The Decline and Fall of the American Empire, the moment at which the US became a net debtor nation that the US empire ceased to be an 'empire'. Americans are led to believe that the US can simply 'war' its way out of economic disaster. In fact, the US has been fighting wars with monies it doesn't have. The Iraq war may finish us off.

For Immediate Release: May 1, 2007

Contact: Lynn Erskine, 202-293-5380 x115

Washington, DC: The Center for Economic and Policy Research released a report today estimating the economic impact of increased US military spending comparable to the spending on the Iraq war. The report, presenting the results of a simulation from the economic forecasting company Global Insight, shows the increased level of military spending leads to fewer jobs and slower economic growth.

For the report, The Economic Impact of the Iraq War and Higher Military Spending, by economist Dean Baker, CEPR commissioned Global Insight to run a simulation with its macmacroeconomic del. Global Insight's model was selected for this analysis because it is a commonly used and widely respected model. It estimated the impact of an increase in annual US military spending equal to 1 percent of GDP (approximately equal to the military spending increase compared with pre-September 11th baseline).

The projections show the following:

-- After an initial demand stimulus, the effect of increased military spending turns negative around the sixth year. After 10 years of higher defense spending, there would be 464,000 fewer jobs than in the baseline scenario with lower defense spending.

-- Inflation and interest rates are considerably higher. After 5 years, the interest rate on 10-Year Treasury notes is projected to be 0.7 percentage points higher than in the baseline scenario. After 10 years, the gap would rise to 0.9 percentage points.

-- Higher interest rates lead to reduced demand in the interest-sensitive sectors of the economy. After 5 years, annual car and truck sales are projected to go down by 192,200 in the high military spending scenario. After 10 years, the drop is projected to be 323,300 and after 20 years annual sales are projected to be down 731,400.

-- Construction and manufacturing are the sectors that are projected to experience the largest shares of the job loss.

"It is often believed that wars and military spending increases are good for the economy," said Baker. "In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment."

The report recommends that Congress request the Congressional Budget Office produce its own projections of the economic impact of a sustained increase in defense spending. If wars are disastrous for the economy, then why does government insist upon fighting them when clearly 'national security' is simply not at risk?

--Report Shows Increased US Military Spending Slows Economy
The bottom line is that everything the GOP has told us about the economy is untrue, most certainly lies of the worst sort. This party has overtly courted a 'base' of just one percent of the total population. This 'base' of just one percent has been enriched beyond the ability of words to describe [See: L-Curve]. This was the deliberate and considered policy of the GOP leadership. To accomplish their goals, George Bush was 'selected' to lead this nation into an economically ruinous war of naked aggression in violation of federal law and international conventions. This act alone is punishable by death and these charges should be returned in federal indictments against George W. Bush, Dick Cheney (who, we have learned supervised a squad a professional murderers) and every other Republican of rank, responsibility and crucial decision making powers with respect to this panoply of heinous crimes not seen since the rise of the Third Reich!

[John Maynard] Keynes seemed to be the right man for the time as he was reflecting the increasingly common view that blamed the capitalists themselves for the situation. In the General Theory Keynes rejected the view that the boom-bust cycle was due to over-expansive government monetary policy and that the stubbornness of the Depression was due to government interference with market mechanisms. He labeled all economists who believed such views as “classical”—in other words, hopelessly out of touch with reality. Instead, Keynes proposed a “general theory” that he thought capable of explaining not only the good times but also the bad.

According to Keynes, what drives the economy is aggregate demand or aggregate expenditures. Aggregate demand can be broken down into three main components: personal consumption (C), private investment (I), and government expenditures (G). The relationship can be summed up with this formula: AD = C + I + G. If Aggregate Demand is strong, the economy will be strong. However, if Aggregate Demand falters, businesses will end up with large unsold inventories and will cut back on production to avoid surpluses in the future. As they cut back they will of course need fewer inputs—including labor—and high unemployment will result.

The culprit in this story, the element that throws the entire system out of whack, is private investment. Private investment consists of business expenditures on machines, buildings, factories, and so on. In other words, investment is capital formation. Keynes claimed that private investment is inherently unstable due to what he called the “animal spirits” of businessmen/capitalists. He believed that businessmen are ultimately irrational and prone to herd-like behavior. Like sheep that blindly follow other sheep in the herd, it is easy for businessmen to become “irrationally exuberant”—as well as irrationally lethargic. Investment lethargy would trigger a large decrease in private investment, thus decreasing aggregate expenditures and triggering an economic downturn.

--Ivan Pongracic, Jr, The Great Depression According to Milton Friedman
Following are just some of the 'accomplishments' of the GOP as they come to me. With any effort at all, you will find hundreds more. The following I dashed 'off the top of my head".
  1. Total and humiliating defeat for the US in Iraq
  2. The utter collapse of the US economy
  3. The export of American jobs to China and anywhere BUT the US.
  4. Selling out the American consumer to Wal- Mart; most Americans no longer earn enough to shop anywhere else. Wal-Mart depresses local economies, has forced employees to work 'off the clock', in other words, 'work for free'. Wal-Mart has destroyed the 'downtown' areas of small towns. You can still see them. But only in Norman Rockwell prints.
  5. Dividing the US into those who have and those who have not where those who have not make up over 90 percent of the population and those have are but a about one percent and own MORE than 90 percent combined.
  6. The dumbing down of America with 'faith-based' initiatives'; what had been needed was fact-based initiatives that encouraged intelligence --rather than gullibility and the belief in economic voodoo. Like 'trickle down theory' and other GOP 'economic voodoo', 'faith-based initiatives' was a callous fraud exemplified by the "Houston Miracle" often attributed to Bush protoge Rod Paige. It was a fraud. The test scores were phony baloney. Like Enron, they cooked the books.
  7. The destruction of New Orleans because black folk dared to live there. Recently it has been learned that residents of the white suburb of Algiers Point murdered black residents trying to escape rising flood waters in New Orleans. As New Orleans tried to recover, Bush infamously said: "Brownie, you're doing a heck of a job"
  8. The subversion of American jurisprudence by packing SCOTUS with ideologues and idiots who clearly thought that it was their job to re-write the Constitution --not apply it. Clue: Antonin Scallia cannot carry James Madison's shit! Scalia had all but admitted his bias even before the debacle in Florida was taken to the high court. Scalia himself admitted that his aim was to prevent Bush from falling behind in the recount. He would try to undo the laws of common-sense and logic to do it: "Count first and rule upon the legality afterward is not a recipe for producing election results that have the public acceptance that democratic stability requires!" Excuse me, Antonin! The guy getting the fewer number of votes is supposed to lose! Fact is, Antonin never had a stupid idea that he could not intellectualize with big words and bullshit!

    But --as Scallia himself opined: "I'm too smart for this court!" Of late, that may be true. And that is enough to give one night terrors.
  9. The destruction of the US environment.
  10. Presiding over US descent into third world, possibly fourth world status.
  11. Turning American cities into sprawling out-of-control carbuncles the purpose of which was to inspire car sales and increased oil consumption. This is especially stupid as 'car making' was essemtially 'outsourced' to Japanese plants paying MUCH LOWER wages inside the US. Toyota was allowed to build cars in the US and pay much less than autoworkers would have made in Detroit. Workers who make less money, spend less mony --unless they are extended credit. Credit seems like FREE MONEY! Until the bill comes due!
  12. Gerrymandering congressional districts such that the GOP might get majorities in both houses of Congress.
  13. Openly deriding the Constitution --as George W. Bush did numerous times in various ways.
  14. Encouraging stupidity, rewarding incompetence, elevating ideology above intelligence.
  15. Turning American cities into ugly carbuncles in which robber baron corporations brainwash a captive audience in Potemkin villages called 'suburbs' or --worse --'planned communities' which come with an implicit guarantee that you will not see a 'negro'.
  16. Becoming a blood-sucking parasite that killed its host.