It is not about OWS, it is about Financial Tyranny Part 3-The violent dishonorable defense of a Vampire Squid!

A Vampire Squid sucking on the face of humanity is not worth protecting. A justice system that ignores such evil while committing acts of violence upon those engaged in Constitutionally protected Free Assembly makes a joke out of itself!
The term “Vampire Squid” is taken from a very insightful article by Matt Tiabbi, that accurately shows in detail the practice Goldman Sachs has of manipulating markets to the detriment of the rest of humanity.

But so what? Don’t Paulson, Geithner, Rubin, Summers, Thein, Steele, Cramer, Bolten and Blankfein all have the Freedom to be as rich as they want to be? Who cares that it is an oligopoly backed up with taxpayer dollars to such a degree that Smith’s Perfect Free market competition does not apply. Who cares about the rest of us are getting hosed by their various pump and dump schemes (tech bubble, housing bubble, gas price bubble) and then paying for their bailout with tax money. They have a right to be rich! And if those dirty hippies protesting don’t see that…why then they can just go…go…go…get a job at McDonalds’s! And don’t cry when the police come and bust your heads you…you…you commies!

Clearly the rights of Blankfein and company to as much wealth as they can cheat out of the system are more important than a protester’s rights of Freedom of Assembly. That’s what the Constitution says! And if it’s not what the Constitution says then that’s what it means! You…you…you commie, fascist, socialist Obamanazis!!

I’m going to stop the ventriloquist act I was doing out of my own asshole for the past few sentences to get serious. (Coming up with such asinine rhetoric is exactly that easy) Violence in defense of these oligarchs is a serious matter. To recap recent events-
On October 28, Oakland police assaulted protesters with tears gas, flash-bang bombs, rubber bullets and bean bag projectiles. In this assault they critically injured Scott Olsen, a two-tour Iraq War veteran, giving him a concussion.
On November 5, Oakland Police injured two-tour Iraq War veteran and local businessman Kayvan Sabeghi with repeated blows from police batons.

There have been many arrests of people who have been obeying the terms of their particular permit. The fact that the First Amendment rights of these protesters have been so grievously abridged is highlighted by the other fact that many in the media who decry them have used the Constitution as a mere buzzword in their past rhetoric.

But I think that the hypocrisy of the media that defends the Vampire Squid is well established. But what of those who have sworn an oath to serve and protect and wind up committing these atrocities in defense of the Vampire Squid?

If you are sympathetic to those who committed these acts of violence and are reading these words please consider that wonderful things have happened when soldiers have stood down and refused to act against their own populations.

For example, during the 1991 Soviet coup attempt, Major General and hero of the Soviet Union, Viktor Karpukin was ordered to enter the Russian White House and assassinate Boris Yeltsin. He refused to do so when he saw the civilian casualties that would entail. The direct result of this was the fall of tyrants who had attempted a coup on Mikhail Gorachev.

Consider also how far this corporate dominance had gone already. Wells Fargo, one of the largest banks in this country, has recently been implicated in financing drug gangs in Mexico. Those same drug gangs doubtlessly have allies and members in Oakland and other cities. Police have to deal with those allies on those days when they are not attacking Americans in parks for using their Freedom of Assembly.

That is correct, the institution the police are defending is bankrolling their most organized enemies.

And on the other hand of the War on Drugs is the privatized prison complex. These are companies who have one customer-the taxpayer. Adam Smith’s Perfect Competition does not apply for that reason alone. Like Defense contractors, they can and do take a small amount of the tax money they get and lobby for more tax money and against any serious reform of the current situation. Although not formally a part of the Vampire Squid that police are defending right now, they profit from the burden of police departments of drug offenses and immigration.

By the way, were we to legalize marijuana, we would take away the market from these violent thugs, decrease the police workload, open up a new tax base, and have less tax money given to privatized prisons. Sounds like a great idea to me. So, of course, it has no elite political support. The only thing that historically changes public pressure like that has been exactly what the protesters are doing now-activist organizing!

On each of a policeman’s uniforms is an American flag, The Constitution that flag represents clearly allows for Freedom of Assembly and the right to petition the government for a redress of grievances. Allowing the Vampire Squid more freedom than a citizen/taxpayer/protester is an abomination. Enforcing the “rights” of the Vampire Squid at the expense of those protesters is telling the world and posterity that the cop in question does so do not take the flag on his uniform seriously.
Not only that, but if these tyrants remain unchallenged, humanity is in serious danger. Leaving aside Nuclear War, Ozone Depletion, Permafrost melting, feeding and watering 7 Billion people and the other long term dangers of human survival-let’s concentrate on one Soil Erosion. If we keep up blind subservience to short term traders and do not adjust for reality, we will not be able to feed the human race. (Pages 8-15)Will it be easier or harder to change things in a future where we ignore the actions of these tyrants?

Various Occupy Wall Street groups have advocated similar demands. Among those are measures to protect humanity from this Vampire Squid that will eventually kill us all. If you are part of the human race, you should be on their side.

If we can’t break free now, when will we?

It is not about OWS, it is about Financial Tyranny! Part 2-Shermer's Penalty Flag

It breaks my heart when someone I admire goes along with conventional wisdom. Michael Shermers career has been one of knowing the truth and having it set his readers free. When he jumps on the dishonest Bash OWS bandwagon I must call foul.
The best treatise I’ve ever read on Libertarianism is Mind of the Market by Michael Shermer, the creator of Skeptic magazine. It is a brilliant tour-de-force of behavioral economics, business comparisons and evolutional psychology. In it he makes the best case I’ve heard for the proper relationship between markets and governments. Property rights are important, but a just and fair legislative and legal system is also needed to uphold them (I am paraphrasing!). I couldn’t agree more. It’s a lot like a Football field. We cheer and love athletic accomplishment, but the referees are a needed part of what goes on. It is an absurd suggestion to allow this kind of fast violent sport without the oversight of referees to insure that everything is conducted in a just and fair manner.

That is the proper role of government. And it has become corrupted, unfair in the application of its rules, to our detriment, very recently. The Occupy Wall Street Movement is bravely addressing this issue as I write. And it is being met by some of the snidest, unfair, and dishonest commentary that I’ve ever read coming from by the elite punditry. If this were football, I’d have to call foul and throw a flag.

And a good referee has to throw the flags not only on players he dislikes, but on players he likes. He must throw a flag on a player he likes and respects. I’ve read Mr. Sheremer’s recent column, “Occupy This” and…
Whistle blows!

Intentional Straw Man! 10 yard penalty, repeat 2nd Down!

Discussing this foul let’s examine one by one, his “points of political and economic significance”, -

1.” no one went to jail because they didn’t break any laws…If you want someone punished for the meltdown you have to first change the law.”

Oh, but people did break the law. The poorly trained “robosigners” processing mortgages were not acting on their own volition! Someone set up a systemic breaking of the law in fraudulently processing foreclosures. If you attacked it as a real criminal operation…y’know bust the lower level thugs to get their cooperation, find the mid management types who systemically hired the robosigners to break the law, and work your way up the food chain we would find a lot of villains in this crisis who deserve prison time at all levels. The DOJ has yet to do this!

2. "The only reason to work on Wall Street is to make a boatload of money. That’s the whole point of playing the market.”

The outrage is NOT directed at people playing the market and winning a boatload of money! Michael you are so much a better player than this. Hacking away at the same man of straw that pundit like Will Cain hacks away at is beneath you. It’s like Peyton Manning intentionally grounding a football. You are a better player than that and you know it.

The problem the protesters have is with the huge amounts of theft, fraud, and market manipulation that has been committed by white collar criminals over the past 15 years and they have been very clear about this point.

3.“crony capitalism, which is nothing like the libertarian vision of real capitalism”.

Here you make an important difference, but do not go far enough. You admit some sympathy to the Wall Street protesters. You are very quick to term what has been going on as crony capitalism. And you are correct!

In the mid 1990’s there were 4 banks that now have become Citigroup, there were 11 banks that have merged into what I now JP Morgan Chase, there were 13 banks that merged into what is now B of A, and there were 9 banks that merged into what is now Wells Fargo. That did not happen in a vacuum, it happened because of political corruption, gaming the legislature, and well entrenched crony capitalism. HR 1489 (reinstating Glass-Stegal –justly separating commercial and investment banks) is on the list of Occupy Wall Street demands. If you really are against crony capitalism (aka oligopolies and monopolies) why not help Occupy Wall Street instead of jump on the dishonest pundit bandwagon?

4. “Wall Street CEOs and their resident COOs, CFOs, traders, and the like, make too damn much money, hundreds of times more than the gap used to be between the highest paid and lowest paid members of corporations.”

Once again, you express some sympathy for the OWS protesters, but then ignore the fraud, theft and market manipulation behind many of these fortunes.

And there is a fundamental mistake in your challenge to “How much should the top earner earn?” It exempts the inhuman creation we call corporations. The way they game the system by using offshore tax loopholes is not insignificant. Especially seeing as how that tax burden is shifted to the rest of us.

B of A, that same B of A that wanted to charge a $5 a month Debit fee, was the recipient of a $1 Billion dollar tax rebate last year. I would want time to research a proper answer to the question of where the line of excess should be drawn. But allowing a $1 Billion dollar gift of tax money to company with the history of B of A is excessively evil, much so, than any pot smoker you ran into in New York.

5. “I agree that all competitions must be regulated by a well-defined set of rules that are consistently enforced with penalties assessed without prejudice or bias, from sporting contests to stock market trading.”

I agree too, Mr.Shermer. That’s why I had to throw the Straw Man flag on this piece. Here you do admit that you see corruption. And you admit that allowing Barry Bonds to police a steroid enhancing program while he is still playing (continuing the sports metaphors)is stupid. That is precisely what people are shouting in the streets about!

Right now we have a situation of mega trading houses that can trade worldwide 24/6. They can have multiple trading desks. They can hype one security at one desk while shorting a derivative based on that security at another desk. Which is exactly what Goldman Sachs got away with regarding mortgage securities.

When I read Mind of the Market I was very impressed. I was seeking a good example of Libertarian thought. The examples of Libertarianism to which I had been exposed were extremely poor. Well funded, think tank tested sophistry that cherry picked evidence, denied global warming, ignored the externalities in economic equations, and rationalized the pollution of our world, the potential death of our species, the return to robber baron days of economic serfdom. I knew that there had to a Libertarian out there somewhere who actually lived in the real world! And you did not disappoint with that book.

I was so impressed that I bought a Vote Libertarian bumper sticker and had in on my car during the 2008 campaign.

I saw the way Libertarianism was going shortly after the election with the ascent of Glenn Beck and what could have been a movement that ended the War On Drugs (I still maintain that the most eloquent argument against the War on Drugs I’ve ever heard was by conservative economist Milton Friedman) and reversed the Patriot Act provisions was changed into a rebranding of the policies that almost destroyed our economy.

I wound up tearing that sticker off my car and spitting on it. But I still loved that book! And I love (and quote ) Skeptic magazine. That’s why I can say that this column was not worthy of you Michael. I know that you are better player than that.!

If only you would be willing to turn your skepticism on crony capitalism instead of defending it!

It’s not about OWS, it’s about Financial Tyranny! Part One-The Decentralized Demands

The coverage and commentary of the Occupy Wall Street protests has been exactly what could be expected from people who alarmed us with Weapons of Mass Destruction in Iraq and placated us with a housing market that is only going up.
The Decentralized Demands

The common denominator running through the “journalism” covering this entire Occupy movement is the snide derision and outright lies that seems a prerequisite for covering the story, all the while missing the point about the very real outrages that have motivated the protesters. The country can survive some Civil Disobedience en masse and it can survive the occasional pot-smoking protester stereotype that actually does something harmful. The country as we know it is in serious trouble if we let the outrages which provoked these protesters to begin with stand.

A man who goes by the initials J.G. has said-“Capitalism, despite its magnificent virtues in the short term – above all, its ability to adjust to changing conditions has several weaknesses… The finiteness of natural resources is simply ignored, and pricing is based entirely on short-term supply and demand. More generally, because of the use of very high discount rates, modern capitalism attributes no material cost to damage that occurs far into the future.” (Call this Quote 1).

There will be more on J.G. later. But before we talk about J.G. and “class warfare” and sharpen our pitchforks while yelling “commie”, let’s take a look at Occupy Wall Street (or at least Occupy Chicago’s) list of demands. Is there really anything that’s out of line in these requests?

1. Pass H.R.1489 and reinstate Glass Steagal!

Eliminating Glass Steagal-the Depression era safeguard that separated investor banks and commercial banks is directly to blame for this crisis and the misery it caused. It was repealed as a final act of a lame duck Congress in 1999 and led us over a cliff very fast. This is not an unreasonable demand!

2.Repeal Bush Tax Cuts for the Wealthy.

The 1% had quite a party for a decade thanks to an illegitimate Presidency. Deficit concerns are lessened when we increase the tax base. Warren Buffet feels they should pay their fair share. This is not an unreasonable demand!

3. FULLY INVESTIGATE AND PROSECUTE THE WALL STREET CRIMINALS!

This one might be problematic. When you make fraud (like Goldman Sachs hyping the very Securities that it was shorting) legal, prosecuting someone for a crime is problematic. But the fact that it is problematic is inexcusable. When former CFTC head Brooksley Born first met Alan Greenspan (the villain at fault for this mess) whether or not fraud should be illegal, Alan Greenspan replied that he did not feel Fraud was a priority (at about 16:00). When massive scale Fraud is legal, that needs to be changed. That’s not the fault of the pot smoking hippie the news media has singled out as representative of this movement, it is the fault of paid off Congressmen who allows it and the lobbyists who bribed them!

4.OVERTURN CITIZENS UNITED v. US.

This horrible piece of Judicial Activism has already proven cancerous to our democratic electoral process. In a state of the Union Address, President Obama cited the negative effect of having foreign corporations able to influence our elections and “Justice” Scalia famously shook his head and said “Not True”. If it is not true, then why did the exact thing warned against come into existence, give money to Mitt Romney and then evaporate? This decision was a horrendous injury to the American People by the Supreme Court and needs to be overturned fast!
5. PASS THE BUFFET RULE ON FAIR TAXATION, CLOSE CORPORATE TAX LOOPHOLES, PROHIBIT HIDING FUNDS OFFSHORE.

I have no problem with that. Neither does Mr. Buffet. And I am still waiting credible Point A to Point B evidence that inconveniencing corporations costs jobs. Where there is demand, there is hiring to meet the demand. Demand is what needs to be nourished and the Buffet Rule can help.

Let’s return to J.G. at this point. J.G. says that "If we want to dig out of our current morass,
don’t we have to change this equation and isn’t the most direct way of doing this to divide the pie more evenly?
That would mean lower income and sales taxes for the bottom 75% of earners and higher taxes for the top 10%!
We have allowed the vagaries of globalization and the plentiful supply of cheap Chinese labor to determine our
income distribution, which has become steadily steeper, to the point where we have become one of the least
egalitarian developed societies. Wouldn’t it be better for us to decide deliberately and by ourselves that income
distribution which creates the best balance of social justice and incentive to work? " (Call this Quote 2)

He adds that“The wasteful status quo has powerful allies in the present corporate and political system. We do not easily accept bad news, nor do we easily deal with long horizon problems. …we are not particularly good with numbers, especially when it comes to probabilities, compound growth, and discount rates. We have a capitalist system that reflects our weaknesses; one that is fine-tuned only for the present and immediate future” (Call this Quote 3) I agree with J.G. which is why I quoted him.

And, kind reader I will reveal more of J.G. as we go on. Even though you may have an image of J.G. at this point with a knit rasta cap carrying an OCCUPY sign in one hand a Guy Fawkes mask in the other, please hear him out. Maybe you can envision the tents set up around the park and a hint of marijuana smoke in the air as I quote him. But do bear with me. J.G is worth quoting.

6. GIVE THE SEC STRICTER REGULATORY POWER, STRENGTHEN THE CONSUMER PROTECTION BUREAU, AND PROVIDE ASSISTANCE FOR OWNERS OF FORECLOSED MORTGAGES WHO WERE VICTIMS OF PREDATORY LENDING.

The new Consumer Protection Bureau has had an uphill battle since it was proposed, despite the fact that one of the key factors in the Real Estate Bubble was the way in which sub prime mortgages were sold to people. A predatory sell of an ARM to someone who cannot afford it is a devastating event in his or her life. Shrugging and saying “caveat empor” to someone who is suckered into dumping a lot of money into one of these crooked deals is callous, drains the tax base, and leaves parasites in high places.

7.TAKE STEPS TO LIMIT THE INFLUENCE OF LOBBYISTS AND ELIMINATE THE PRACTICE OF LOBBYISTS WRITING LEGISLATION-

This mess was started by the repeal of Glass Stegal. Which was dropped in at the last minute by a lame duck Congress. The creation of “Too Big to Fail” Banks was directly related to this repeal. This didn’t just magically happen. Banks had been working to repeal Glass Stegal since the 1980’s. We need to not only correct the mistake, but remove the mechanism by which it happened. There is no reason something too big to fail (and exist) should be able to influence Congress to this malevolent degree! The protesters are not out of line with this demand.

8. ELIMINATE RIGHT OF FORMER GOVERNMENT REGULATORS TO WORK FOR CORPORATIONS OR INDUSTRIES THEY ONCE REGULATED.

J.G says that “Capitalism does not address these very long-term issues easily or well. It seems to me that capitalism’s effectiveness moves along the spectrum of time horizons, brilliant at the short end but lost, irrelevant, and even plain dangerous at the very long end.” (call this Quote 4)Well said J.G. If Timber executive write the forest regulations, if Oil executives write the oil safety guidelines, if military contractors write their own checks and if private prisons influence immigration and drug laws, we don not have a democratic republic-we have a legal looting of the wealth of the United States of America.

9. ELIMINATE CORPORATE PERSONHOOD

We are coming up upon an event Science is terming “the Singularity”. It is referencing hypothetical future emergence of greater-than-human intelligence through technological means. It is absolutely vital that we recognize our first attempt at creating a “person” although merely a legal one has resulted in creating a monster. I’ve addressed this issue in my piece- “We should implement Asimov's 3 laws to protect us from our inhuman creations-not robots but corporations.”
10. INSIST THE FEC STAND UP FOR THE PUBLIC INTEREST IN REGULATING PRIVATE USE OF PUBLIC AIRWAVES to help ensure that political candidates ARE GIVEN EQUAL TIME for free at reasonable intervals during campaign season.-

We are witnessing the need for this in the unfair and dishonest coverage of the Occupy Wall Street movement. And if you wish to comment on OWS, it seems to be a prerequisite that you adopt a snide, derisive and condescending tone. We need the Fairness Doctrine back! I addressed that in “We’re feeling the effect of treating mass Libel and Slander as protected Free Speech right at this moment."

11. REFORM CAMPAIGN FINANCE WITH THE PASSAGE OF THE FAIR ELECTIONS NOW ACT (S.750, H.R. 1404)

Bought and paid for prostitutes to K Street are unfit to lead us through the daunting challenges ahead of us. The current campaign finance system requires that our elected representatives become these prostitutes. So I’m all in favor of reforming it.

12. FORGIVE STUDENT DEBT-

Want stimulate the economy, y’know increase demand so there is more hiring and more jobs? This is a great way to do it. The burden of debt for a college education is a major drain on many people throughout there adult lives. (Particularly if the degree was worthless in the job market.) What’s more the interest and structure on many of these loans means that they wind up being paid back in a very unfair and lopsided manner where the amount paid over decades is greater that the tuition. I say, after 2 decades, you’ve got your return on investment for this loan and what remains can either be forgiven or restructured to reasonable payments. What’s more, after we do that, that frees up the money that would have been servicing a loan to purchase goods and services!

There is nothing in these demands that I disagree with!
And as to J.G., I have a bit of a surprise. He’s not part of the 99%. He is very firmly a part of the 1%! Jeremy Grantham(Quote 2 is on page 5) is the Co Founder and Chief investment Strategist of Grantham Mayo Van Otterloo-a Boston Based Asset management firm that directs investors on a “return to mean” basis. That means he steers investment money way from bubbles and still makes money for them. The piece I quoted from him also has an excellent bit on how these short term bubble machines justly protested by Occupy Wall Street will kill our species eventually through soil erosion!(Quote1 was on page 2-Quote 3 was on page 3-Quote 4 is on Page 1)

Now is the time to admit they don’t work and fix our mistake!

We are at a turning point in our species. A minority of traders with a history of destruction in the name of short term profits has control of our media, our fortunes, our resources and our world (One of them recently boasted as much on the BBC-at about 2:38) and if left unchecked will kill humanity in the name of short term profits. That is the relevant issue not the caricature of protesters and victims of the system drawn by elitist pundits!

An Apology from the RNC to the American people!

This summary is not available. Please click here to view the post.

An Apology from the DNC to the American People

The Democratic National Committee would like to take this opportunity to sincerely apologize for President Obama’s milquetoast stands on important issues. He takes the party base for granted, and is just as bribable as a Republican on issues that are important to the American people! We are sincerely sorry that we must now watch him walk back in to the 2012 Presidential nomination with so much compromise and betrayal of campaign promises as his record.

It has been a disgusting spectacle to watch over the past few years hasn’t it? A landslide victory was won over the Republicans after 8 years of George W. Bush’s illegitimate rule. Only to see that after inauguration, the foulest parts of our system could easily bribe and control the Democratic leadership as well. Those that did not wish to concede to the minor reforms after Congress justly altered a demonic profiteering Health Care System bought themselves a “grassroots” movement to turn the tide the other way. And this was met with compromise, caving in, and often kowtowing to people who did not and will never vote for Obama.

As we speak, citizens are organizing in the Occupy Wall Street movement. There is justifiable outrage at Goldman Sachs selling and promoting Mortgage backed Securities at one of their investment desks while simultaneously shorting those very Securities at another desk. This led directly to the AIG bailout. They managed to profit heavily off of the economy going under. The Department of Justice has been pitiful in its response. This is the same Justice Department that is cowardly refusing to enforce the law when any Right Wing preacher endorses a candidate from the pulpit-
And when can the Justice Department under Obama be called on to enforce the law? Why when it breaks a 2008 campaign promise of course! The Pharmaceutical industry is currently in Stage 3 trials of Marijuana based drugs like Sativex and that means it can’t have voter approved Medical Marijuana dispensaries selling a plant at a lower price.

Obviously Obama and Holder’s DOJ is a cruel and insipid joke under these circumstances. We could have had a Republican in office and had this kind of big government intrusion over State’s rights for the benefit of a corporate crony happen! We’re sorry. We really are. We are the sorriest excuses for public servants because we promised the opposite and then screwed over our base of supporters!

And it has certainly been sickening to watch hypocrites like Boehner, Cantor, and Ryan cite cutbacks in Federal and State jobs as what is needed to “create jobs”! But we are no better. As this is written, “Free trade” agreements with Colombia, Korea and Panama are being railroaded through Congress. These agreements have a history of sacrificing GDP for gains in speculative markets. At a time of high unemployment we are going to be shipping more jobs overseas for corporate profits. One of the bright spots in the 2008 debate was McCain calling a Columbia “Free Trade” agreement a no-brainer as he asserted that country that taxes its cocaine is helping us try to stop the flow of drugs into our country that's killing young Americans. The 2008 Obama responded “the history in Colombia right now is that labor leaders have been targeted for assassination on a fairly consistent basis and there have not been prosecutions.”
But if a Free Trade Agreement is signed into law, not only can Obama join Boehner and Ryan in the shameful “We-have-to-cost-ourselves-jobs-to-create-jobs” club, but it will be his signature drying on a treaty with a government that targets labor leaders and doesn’t prosecute!
And then there was letting Cap and Trade die and coming out for oil drilling in the Gulf (essentially giving the middle finger to every environmental activist that canvassed for him) right before the largest oil spill ever. It was directly linked to corporate greed and negligence. Granted Obama did get a whole 3 billion dollars set aside from BP to deal with this mess. But to the DNC’s shame, no one was arrested for their negligence!
You have no idea how ashamed we are to have this man walk back into our party’s nomination. Our only hope really is for a national replay of the Nevada Reid vs Angle contest. A dismal sold-out center right Democrat vs a raving lunatic who endorses a theocracy! It’s as though the attitude of Democrats once elected is “Screw you, what are you going to do? Vote Republican?” It’s no wonder that you’ve taken to the streets.
Only know that despite the ads you will see over the coming year, we here at the DNC are so sorry it’s come to this, we really are!
We are honestly so fucking sorry!

Why you shouldn't consider a President Perry if you really care about small government!

Forget the abysmal environmental record, the rigged numbers regarding employment, and the shallow demagoguery that should shame every decent Christian who sees it. The real reason you can't call yourself a small government conservative and work or vote for a President Perry is his record regarding guilt and innocence under his administration. It is a model of corruption, incompetence, and dangerous abuse of power that no sane person would wish to apply to the Federal government!

The Death Penalty is probably the most egregious act of power a State, any State, can commit. Never is the collective will of a tax-funded bureaucratic collection of insulated tyrants more naked than when it chooses to extinguish a human life. And I have been on both sides of this issue. I can completely empathize with the outrage of the family of a murder victim and cannot say that I wouldn't join their ranks if something horrible like a murder took away someone close to me. But I also do not approve when the State commits the exact same crime. What's more (I know I'm going to sound like a Libertarian saying this, but I'm not), when the cruel brute force of something like the State takes an innocent life, it shows all of us what an unthinking monster deserving of restraint it truly is.(Now the question of whether or not Private Enterprises display the same characteristics is one for another day)
The administration of the State of Texas by Rick Perry provides us with a textbook example of how this unthinking monster needs to be restrained when it comes to not only the Death Penalty but the protection of the well connected and guilty.

In 2004, Cameron Todd Willingham was executed by the State of Texas for alleged arson in a fire which took the lives of his three daughters in 1991. The evidence that the fire was arson were based on the techniques used by the local authorities in Corsicana, Texas. While he was on Death Row, a fire science expert got a chance to look closer at the case and determined that there was no evidence for arson. The report was sent to Rick Perry's office and the request for a 30 day stay so the evidence could be reviewed was denied. Cameron Todd Willingham was executed as a direct result of this inaction.

Texas Forensic Science Commission was formed by the Texas legislature to investigate bad science in murder investigations and abuses of power. They hired two independent experts and determined that there was no evidence for arson in this case.

Perry's response?

In October 2009, when the commission was about to accept a verbal report of one of these scientists, Perry removed Commission members and canceled that presentation.

I don't know about you, but I don't need to go any further!.Turning a blind eye to that inaction and coverup by Rick Perry, while at the same time mouthing Fox News talking points about “freedom”, railing against “Obamacare”, and listening to a carefully rehearsed Heritage Foundation presentation about Liberty makes a joke out of anyone who supports Perry. That's because that kind of behavior is exactly the kind of abuse of power that the Founders wanted to prevent. And turning a blind eye to it can only bring about a tyranny by empowering people like Perry more.

But wait, it gets worse! We've seen how a State headed by Rick Perry treats the innocent, how does it treat the guilty?

The legal tradition of Separation of Church and State usually receives lip-service and derision in far right circles. And to be fair, it is a good idea made of legal precedent, not actually in the Constitution. The Constitution only mentions religion twice and neither mention is a positive one. The State of Texas recently experienced a national headline making case that illustrates the need to separate Church and State.

FDLS leader and convicted child molester Warren Jeffs was recently sent away for life in spite of Rick Perry's actions not because of them. The members of the FDLS church were in charge of many aspects of life in those small rural towns. Call the police on Warren Jeffs? Hah! That's just not going to do a lot of good when then the judge, the sheriff, the deputies, the administrators are all members of the FLDS.

In an upcoming book-Profit's Prey (as of this writing it is available for e-book release) by private investigator Sam Browers (the lead investigator who is responsible for bringing down Jeffs), it is revealed that the initial 2008 raid of the FDLS's YFZ ranch resulted in every Texas Child Protective Services official that had anything to do with the case being either fired or reassigned. The molested child “wives” were then returned to their molesters. If that action did not come from the Governor's office then it can not be an excuse that he knew nothing of it. Complicity or Ignorance-both are equally as foul when dealing with the raw power of a State!

I've seen in my own line of work accused thieves and accessories to theft be fired just for proximity to a case. The reason is usually that they were either participants or too stupid to see the obvious. Either way, they don't belong in that position. The same thing standard has to be applied to Rick Perry when it comes to firing public servants so as not to embarrass well connected supporters.

The returning of molested children to their molesters is flat out inexcusable! Government small enough so it can't enforce the prosecution of institutionalized child rape is nothing to be proud of!

With Rick Perry's Texas, we have a proven record of the innocent being persecuted (and in this case killed) and the guilty being protected. That is exactly the kind of behavior that we never want to see in an elected official. And now we have him being endorsed as a “Tea Party” candidate? We can expect exactly what we got from the last Texas governor to be installed in the White House if we turn a blind eye to this proven record of State abuse.

Oh and come to think of it, the last time we believed a Texas Governor who promised a small government we had -

A CIA agent exposed for blatant petty political revenge. And a presidential pardon of the political hack responsible.

Voter Machine Fraud in the reelection campaign that was never completely investigated.

An attempt to privatize Social Security that was followed by an admission that privatization would do nothing to help solvency.

Money delegated to fix the levies in New Orleans after decades of crumbling diverted to foreign affairs. Then we had Hurricane Katrina flood the city who then had to endure two weeks of anarchy, death and sewage water.

A National ID act passed so as to take Driver's License standards away from the states.

A politically motivated firing of US Attorneys who were prosecuting Republicans while at the same time ignoring prosecutor misconduct against Democrats!

An expanded deficit three times (a lot of which is no-bid military contracts) that of what Obama spent to deal with the mess he inherited.

Private contractors murdering civilians in an occupied territory.

Appalling conditions in Walter Reed hospital. It shows the degree to which people like our Texas Governors actually “Support the Troops”.

Torture at Ahu Grahib and other shadow facilities that did not reveal any worthwhile information. (They are brazenly lying when attributing this to finding Bin Laden). This was followed by no prosecution for the bureaucrats in charge.

The ignored warning in August 2001 that there was an attack planned by Bin Laden in the USA.

A projected tax surplus spent and this country needing China in order to keep our economy going.

The record of ex-Texas Governors in the White House actually being small government speaks for itself. And Rick Perry is so “small government” that he-

Took Texas from $49 billion in spending when he entered office to $90 Billion in spending now.

Maintains a higher Debt to GDP ratio than California-Perry's Texas rate is 22.9% with debt per citizen at $10,645 and Left Coast California (Pelosi's home) is 18.7% with $9932 in debt per citizen.

Has doubled the state debt. Can you imagine what the US debt will look like if he gets a hold of it?

Has spearheaded efforts to lease roads to foreign corporations. That means taking something the taxpayer paid for and giving it to a foreign corporation so they can charge a toll on something that used to be free and was paid for by the taxpayer.

So, Rick Perry is small government in talking points and campaign slogans only. And he has a proven record of covering up for the guilty if they are well connected while ignoring the victims and killing the innocent then covering up his actions.

Are my fellow Americans that easy to mislead that they can seriously consider this man as a potential president? This kind of political monster is so evil that I could find myself voting for Obama just to keep him out of office.

And I think that is just what Obama is counting on. A national replay of Reid vs Angle.

Well, Mr. Santelli..., Are YOU listening?

In a recent interview, Rick Santelli made the assertion that it was because of the Tea Party the USA wasn't downgraded to BBB status by the same geniuses at Standard and Poors who saw Lehman Brothers and Bear Stearns as solvent companies worthy of high ratings. In the middle of another vanity rant in front of CNBC's cameras (this time filled with meaningless sports metaphors) Mr. Santelli tells us "Don’t get caught up in the minutia. All this BS." Well one man's minutia is another man's important detail. When confronted with the Conventional Wisdom world of pundits that is run by vain rants in front of cameras using focus group tested sound bites, the details have never been more important.

But this time, there is a reason that the vain elitist pundit does not want us looking at the details. According to Standard and Poors' Research Update- they lay the blame at the Republican Congress specifically the Gang of Twelve. They site failure of Republicans in Congress to raise revenues as a cause for concern that the Bonds may not be paid. In Standard Orwellian Doublethink he turned the situation on its head with an exact reversal of the facts and claimed the Tea Party was to be thanked for avoiding a BBB rating. And typical of a concise TV pundit presentation, no evidence is ever presented to back that up (although I'm sure mises.org is busy cherry picking those facts right now).

As I mentioned in my Where are we on the Deficit Football Field piece-we are nowhere near default. You can go to the CIA World Factbook and look at what our external debt is is in relation to our GDP. You can compare this with other countries. There are countries with higher ratios of external debt to GDP and they have no run on their bonds. This was an entriely contrived crisis (the goal of which is not fiscal solvency but killing socially beneficial programs) which Standard and Poors reacted to by correctly saying whom was at fault.

And if we were to go in the other direction, we could immediately do something direct about unemployment (Government workers and contractors do spend money and there is a multiplier effect). We could put people back to work repairing our infrastructure. We could eliminate many states deficits and have adequate fire, police and schools. Rick Santelli would throw a fit. But look at his behavior in February 2009 when a meager stimulus was being pushed through Congress to deal with the worst financial crisis in recent history. Mr. Santelli and others like him are going to throw fits no matter what is done (especially when cameras are present). As we recently saw in the "debt crisis" debate, there is no appeasing him or those like him, so it should not even be attempted.

At the time where Mr Santelli did his famous "Well, Mr. Obama..." schtick in front of the CNBC cameras, the think tanks that spread a message similar to his were busy rebranding the policies that had brought us to this point, and part of that playbook was saying "Failed" Stimulus instead of Stimulus especially when there were cameras shooting video. It was February 2009.

There are problems with taking the Dow as an indicator of economic health, but as a general yardstick, I'll use it now merely because it is so widely used. In Feb 2009, the Dow was at 7,600 approximately. The Stimulus failed so much that the Dow turned around and headed up to 12,500 in the space of two years. Unfortunately, it was not enough to deal with unemployment. Unemployment and underemployment are the true bites, the true measure of human misery. of any recession. To Mr. Santelli it is merely a number on a page and a higher ration of impoverished souls he must look at on his limo ride to and from the Chicago Board of Trade. He has a very important job of investing people's money until it is all gone, so I'm sure that added stress on his limo ride is very harsh on him!

But let's put a move like that in historical perspective, The Dow was at 7,600 in November 1997 and passed 12,600 in February 2007. That's some failure! Ten years (with wartime and deregulation caused housing bubble stimulus) worth of stock improvement in just 2 years is impressive. If it had been big enough to put people back to work, the Democrats would never have had to give away my Medicare benefits to Washington elitists in order pay for the Afghan and Iraq occupations.

So now, The Dow has dropped down to where it was last December. That's all the value and economic progress of this entire year evaporated because no one stood up to the "Gang of Twelve" freshman Republicans. And as a quick History lesson, didn't they welcome Obama into office with a cry of "I hope you fail!"? Regardless of the Unemployment, Underemployment and misery of their fellow citizens, they want Obama to face reelection with a poor economy even if they have to be the ones who kill the recovery personally.

As of this writing, I can't say how low it is going to go. No one can! I think I can say with some accuracy, that just as these creatures of publicity were using "Failed"Stimulus just as the stimulus was, in fact, succeeding...they will refrain from using Failed Austerity just as the Austerity they recommend is in the process of failing. It is the nature of the hypocrite.

And one doesn't have to dig far to find hypocrisy behind these loud narcissistic buffoons. Going beyond Mr. Santelli, the leader of Tea Party Nation, Judson Phillips, just revealed to the world something he believes would solve our economic problems-shovel ready projects! That's right, when confronted with the possibility of going from 11 to 9 carrier task forces, Mr. Phillips turns Keynsian! He said, "Thousands of employees would be hired for the steel mills that would provide the steel for the hull and various sub contractors would hire thousands. Do you know what that means?It means they would receive paychecks and go out and spend that money. That would help a recovery. That is a shovel ready project!"

So applying that proven form of economic cure to something that helps people instead of killing them and protecting our oil empire is Socialism and we can't have that, because we'd wind up like the victims of Stalin?

Actually repairing our infrastructure so we can compete with other countries is unthinkable as long as we have this deficit?

I have to compromise my Medicare in my old age with a worthless private voucher so Defense Contractors get to keep raking in millions, while killing civilians in other countries and drinking vodka out of each other's butt?

I have to say enthusiastically and loudly HELL,NO!!

And just to put things in perspective about just how contrived this crisis and these cuts really are-Look at this breakdown of the deficit

Obama and his "out of control" spending at a time when most of nation desperately needs that spending, is $2.4 Trillion. The incompetence and failure of George W. Bush (Iraq and Afghan wars, tax cuts for the rich, Housing bubble) account for $6.1 Trillion. If we absolutely HAD to cut the deficit (we don't) we could easily cut from the Bush part and still have enough money left over to put paychecks in Americans hands again and reclaim our place as the greatest nation on Earth.

Rick Santelli won't like it. Neither will Judson Phillips. But until I see them behave like loud narcissistic buffoons when a Defense bill is being considered or when a proposal to raise taxes on the people and entities who actually have money, there is zero reason to give them ANY credibility!

All revolutions provoke reactionaries. The Left should have realized this and not let them rebrand their failed policies so fast!

If Mr. Santelli wants to use Sports metaphors, here's one that should be considered. The Boston Red Sox went from being the losers everyone joked about to winning two World Series in the past 7 years when they embraced William James' Sabremetrics. It was a revolution in sports statistics that is still being felt. When Grady Little, their manager failed, they brought Bill James into the organization embraced his philosophy and have not looked back!

Mr. Santelli, Judson Phillips, Grover Norquist and others are the Grady Littles who screwed up and now feel entitled to have thier jobs back even as the market is getting massacred immediately after getting precisely what they wanted!

This week in Ignored Financial News-June 17, 2011

“The most unfiltered news you can find is going to be in the Financial Press,”-Noam Chomsky.

I’ve found that true time and time again. And although I haven’t found time to write a new column as of late (One is coming). I do find time to read the Financial News. And in that spirit, I’m going to be using my blog to link some of the stories I found of interest this week and why they merit a wider audience!

1)The externalities of Climate Change, Water Scarcity, Air Pollution, Biodiversity Loss and Ecosystem Degradation have been measured and nature is deeply in the red!

We’ve known for a long time that what are called “externalities” in economic equations are the source of a lot of what is wrong in our world. As a matter of fact, there is an economist from the University of Chicago-Ronald Coase who built his entire career on ignoring externalities! The Coase Theorem states that externalities should be ignored if property rights are defined, the number of people affected is small, and bargaining costs are negligible.
When we look at the environmental devastation inflicted on our planet, and this is a comprehensive business oriented paper that does just that, we find a cost of at least 6.6 Trillion (2008) Dollars with 2.15 Trillion of that being inflicted by the 3000 richest publicly traded companies. The Coase Theorem certainly does not apply!
The study concludes that there is a substantial long term risk to portfolios (and the workers and retires who own them) if things remain as they are. An estimated 28 % of World GDP (not US, but World) will be devoured as environmental externalities by 2050 if these trends are not reversed!

2)Wal Mart co exists just fine and profitable with unions-as long as they are not in the United States!
It’s been a long known policy of Wal-Mart that it will shut down a store before it allows it to unionize. This is brazenly illegal, but that does not stop the policy. Wal-Mart would rather pay the fine, screw over towns whose businesses have been demolished by Wal-Mart’s policies, and build somewhere else than allow a union to exist in one of it’s U.S. stores.
But when it comes to unions overseas, they recognize the rights of workers with no problem! China-Totalitarian China-can have union representation at their Wal marts, but the most free country on Earth can not!

3)Efforts to end “Too big to fail” have failed
An out going FDIC Chairman has just declared victory on her way out. Kind of like William Bennett declaring victory in the War on Drugs before stepping down as Drug Czar, when a Washington bureaucrat says the problem has been solved, expect the exact opposite!
4)But JP Morgan Chase’s Jamie Dimon still cries about modest changes
The greatest financial implosion since the Great Depression, and this asshole wants his casino back. Not only that he claims that it will hurt the economy for him to not be able to gamble with other people’s money and then be bailed out by taxpayers!
5)Dow Jones Business News commentator offers a scathing criticism of Ayn Rand and the effect she is having on our markets and world!
The conflict between Jesus Christ’s and Ayn Rand’s ideology is not something the Republican party can ignore! It needs to be addressed publicly!!Seriously, Democrats, RAM THIS DOWN THEIR THROAT!!!
6)The unfulfilled 2008 campaign promise to stop companies from moving good paying jobs overseas is about to hurt more Americans. Also it decreases our taxbase while giving nothing back!
It is time for Barack Obama to pay attention to what he promised in 2008 if he wants to motivate the people who put him where he is to give him another 4 years!

And the threat of Deflation (the Greek "crisis") didn't happen! An economy the size of New Jersey did NOT sink the global financial system through Deflation! Also, Ben Bernanke did not bring on Weimar-style Hyperinflation, now that we start feeling the effects of QE2! The people who want you to panic can't make up their mind if you should panic because of inflation or deflation.

I don't know about you but I laughed!

Where are we on the Deficit Financial Football Field?

With all the demagoguery surrounding the discussions of the Deficit, people with different agendas bombard us all with information that is often conflicting with the facts. To gain some perspective, I propose putting this deficit debates/demagoguery/drama of the last decade or so on a scale with which we are all familiar-a football field! And here is what I have found…
To start with, let’s identify the two extremes of Deficit politics. These will be our End Zones. Once the ball has gone in here, the game has changed. On one side we have a balanced federal budget dependant on no external debt, an opportunity to return to the gold standard with gold reasonably priced and all the stability and transparency that the modern equivalent of the gold specie flow mechanism would supposedly bring. On the other side of the field, we have the dollar becoming worthless with bond markets around the world refusing to buy our T-bills and the dawn of severe (if not hyper) inflation!
So where are we on this scale? It is a very difficult question to give a clear unqualified answer to. And one of the problems regarding answering this question is confirmation bias. Everyone is guilty of it, myself included. All too easily, stats that agree with our pet schools of economic thought will be highlighted and contradicting information will be dismissed. We’re only human.
I think we can all agree that this nation is nowhere near the Balanced Budget End Zone! As a matter of fact, I don’t think it’s an exaggeration to say we’re in our own territory with a Government-Fed Defense that keeps giving up yardage! But where are we? Are we inches away from allowing that hyperinflation touchdown? Are we in the Red Zone with one screw up getting out of hand resulting in that touchdown? Does recent news from the IMF that they would rather replace the U.S. Dollar with the SDR-IMF currency count as being at the Red Zone? Or does that count as us scrambling to stay out of Field Goal Range? Were we really on the other side of the field during the Clinton years and able to kick in the balanced budget Field Goal?
I’m afraid that I have to stop my little thought experiment here for just a moment. Using a football field as a scale is problematic, as I’ll demonstrate shortly. And the problem with Football metaphors when it comes to an exercise like this is that they can be too easy to spin. I’m trying to use a Football Field to gain some idea of the scale that we are dealing with. It’s all too simplistic to answer those questions that fit whatever school of economics you back with a football metaphor. We run the risk of diverting our thought experiment if we indulge in that too much.
Some obviously absurd examples…
“Well, you obviously know nothing about economics if you don’t agree with what Lord John Maynard Mises said regarding this very issue, we punted the ball in ’72 when we gave up the gold standard!!!”
“Nonsense, Ludwig Von Keynes said we could intercept the Shotgun Pass at Fed induced inflation and thus there is no Liquidity Trap!”
“You’re both wrong, the Phillips curve combined with Barack W. Bush keeping the Iraq War off the books shows we could have guns and butter before Alan Bernanke fumbled the ball with the Housing Crisis!”
I don’t agree with any of what I just spouted…I just wanted to demonstrate that I can pull this nonsense out of my butt all day if I have to. Let’s agree to forgo it and get some scale of just where on the gridiron we are. We can go back to our teams when we are done!
Let’s try to define the Balanced Budget End Zone for starters. Per CNBC, the U.S. has 8,965.6 tons of gold in Fort Knox. It’s the biggest stash of gold in the world. Compare that to Germany (3,749.8 tons), the IMF (2814.1 tons), Italy (2,702.6), France (2,684.6), China (1,161.9 tons) and Switzerland (1,146.5). Further adding to our international strength in this regard, the U.S. is by far the largest member of the IMF. The SDR (Special Drawing Rights) currency that the IMF was advocating to replace the US dollar is weighted with U.S. Dollars. Every SDR is 41% U.S. dollars. So if we apply that ratio to the IMF’s gold supply, our gold reserves are 10,144.7 tons. Germany, France, Italy and China combined have 10,298.9 tons.
If we were to put a dollar value on our gold supply at the current market price, $1500 per ounce then each ton of gold is worth 48 million dollars at 32,000 oz per ton. That means our total gold reserves including what we have weighting the IMF’s SDR is $486,945,979,200.
And at this point, we need to return to the first day of class in Economics 101 and answer the question “Are Assets Money?” And we need to do that because there is an obvious discrepancy between the $486.9 Billion figure representing our gold assets and the $14.72 Trillion figure that is our GDP. It affects the size of our theoretical Football Field. If our attempt to go back to the gold standard merely raises the price of gold to the point where everything has gold backing and we don’t care what the price of gold rises to, do we go with representing everything in our $14.72 Trillion economy with Fort Knox gold? Or do we merely cover the current Federal budget expenditures subtracted from our budget outlays (about $1.3 Trillion)?
Well, if everything in our economy is going to be represented by gold in Ft. Knox, then one ounce of gold is worth $45,343.87. If we’re only going to cover the outstanding Federal budget expenditures when we do this and afterwards behave ourselves then the price of gold is $4,004.50 per ounce.
In June 2000, when the price of gold was $290 per ounce and Bill Clinton was in office, each ton of that same amount of gold would have been worth $9,280,000 per ton for a total of $10,942,121,312. Adjusting for inflation brings the number up to $14.29 Billion. That’s $486 Billion worth of gold now that would only be worth $14.29 Billion if we returned to the gold standard when it was cheap back in the Clinton years and had not messed with the markets at all no matter what our needs are. That’s a factor of over 34 between 2000 and now.
It illustrates a very important point about this gridiron, it is elastic where as a real gridiron is not. If this were a real football team playing, don’t you think the Offense would have noticed the field stretching and said something if the Defense kept giving up enough ground to score 34 touchdowns and yet they only remain just outside Field Goal range?
The game could have changed if we had gone back to the gold standard when gold was $290 an ounce in 2000. The opportunity was blown (by a conservative House and President at the time) and probably won’t come around for another generation. Part of the reason this is advocated is that you lose the ability to stretch the field if we return to the gold specie flow mechanism. The equilibrium would be automatic in that case.
Are assets and wealth considered money? Not the way things are right now. Land, gold, silver, and other commodities are very problematic for pure barter. Money is the mental contract we all indulge in for easier barter of not only these commodities, but also finished goods and services. Gold backed currency can indeed fit the definition of money. But so can fiat currency, so can casino chips in the casino they represent, and so can electronic ink on a hard drive in the Federal Reserve building.
There are problems with fiat currency as well. Which brings us to our other End Zone the point at which the Bond markets quit supporting the fiat U.S. dollar. Our current GDP is $14.72 Trillion per CIA World Factbook. If we add up public debt (the debt held by the public only) and the gross debt (the intergovernmental debt owed to ourselves) we arrive at a figure that is approximately 88.9% of GDP. We are actually in good company of other countries who have large gold reserves. France has public debt that’s 83.5% of GDP, Germany has public debt that’s 78.8% of GDP. The U.K has 76.5% and China has 75%.
As a matter if fact, you can see how unrelated public debt and quality of life in a country are by scrolling down to the bottom of the list and seeing a country with 3.3% GDP worth of public debt and a quality of life so good that they are currently in the middle of a Civil War-Libya!
But to be fair, let’s establish a number that uses external debt as the tipping point for the U.S. dollar. If we go to the list of external debts (not public debts), the US is the leader at 13.98 Trillion followed by the other countries/Central Banks with high gold reserves, the E.U., U.K., Germany and France. When it comes to this ratio-External debt to GDP, other high gold reserve countries are not as close as we are.
Country External Debt GDP
USA 13.98 Tr 14.72 Tr
France 2.16 Tr 4.69 Tr
Germany 2.96 Tr 4.71 Tr
U.K. 2.19 Tr 8.98 Tr
China 406.6 Bl 9.87 Tr
Italy 2.22 Tr 1.7 Tr
Greece 532.9 Bl 321.7 Bl

So let’s give a generous benefit of the doubt and call the point at which Bond investors get tired of playing on an expanding Football Field and lose confidence in the currency of the country with the largest gold reserves in the world as when we become like Italy (a country with high gold reserves) with approximately external debt 130% of GDP and public debt 118.1% of GDP. The reason for that is that Italy is a high gold reserve country with a Central Bank (like us) and there have been calls recently to question Italy’s ability to service their external debt. The point where our external debt has reached $19.136 Trillion will be our Insolvency End Zone. Incidentally, there is currently no run on Italy’s debts just rumors, but we are bigger than Italy.
On one end we have where we were in 2000 with $14.29 Billion worth of gold in Fort Knox, gold at $290 an ounce and a projected budget surplus. On the other end we have $486.9 Billion worth of gold in Fort Knox with gold at $1500 an ounce and external debt of 19.136 Trillion. And we’ve just stretched the Field again by raising the debt ceiling. So, where are we?
Contrary to popular belief we never had a budget surplus in 2000. We had a projected surplus. It would be as fair to call the projected 2000 Clinton surplus Field Goal range as it would be to call where we are now Field Goal Range. A misstep dealing with the debt ceiling would cause a crisis of confidence in the Bond markets, but that won’t happen if we stretch the Football Field again (which we will)!
I think it’s safe to say that we are playing Defense just outside of Field Goal Range. And it is important to remember how we got here. Because if we can reverse it, we can regain ground we lost.
We are not at 1st and inches on our own goal line no matter what the pundits repeat ad nauseum. There is a difference of $5.156 Trillion before we get to that point. And that’s assuming that Bond markets would react negatively to us. Let us not forget that the Italian Euros are not the world’s default currency and default petro-currency, so we might have more leeway than Italy if things come to that.
So what was just outside Field Goal Range on the other side of the Field when we could have kicked that ball and achieved a balanced budget? Let’s start with 2003, the Iraq war had started and we had some of the current deficit hawks saying very clearly that they welcomed more debt. Rick Santorum let it slip that he did not consider himself a deficit hawk and he loved being able to use a lack of funds as an excuse to say no! (There is something very revealing in the way Washington elitist hypocrites absolutely loath tax money being spent to directly improve the lives of the people who pay those taxes.)
In 2003, with the war machine spending money like a coked up spoiled rich boy whose daddy was the local Congressman, our GDP was 10.918 Trillion dollars. Adjusted for inflation that’s 13.345 Trillion in 2011 dollars. Our external debt was 6.57 Trillion. Adjusted for inflation that’s 8.03 Trillion in 2011 dollars. That’s external debt that’s a little over 60% of GDP. That’s the 30 yard line on the Balanced Budget Side.
So the difference between that 30 yard line and the 30 yard line on the Fiscal Insolvency side is the difference between 60% and 95% of GDP in 2011 dollars on a Football Field we can stretch and distort as much as we may need to.
The reason we can not possibly be at the 1st and inches point is because of the behavior of the House Republicans so far. Since riding into office on promises of fiscal responsibility, they have spent $7.5 billion in extra defense spending which offsets them using deficit concerns to cut $4.4 Billion from programs they have always hated anyway. If this really was a 1st and inches deficit situation, they wouldn’t propose going $3 Billion closer towards fiscal insolvency and hyperinflation. They can’t advocate repeal of the meager Health Care reform at a cost of $23 Billion per year and have the claim that “we are out of money” be taken seriously! If we are truly on the verge of losing confidence of the Bond markets, why not lose the useless and counterproductive oil and ethanol subsidies, worth $99 Billion total?
Oh, and by the way, am I the only one who noticed that we opened up a new third military front at the exact same time we “ran out of money” last April?
The things that moved us down to this position on the field faster than anything, the Bush tax cuts and the Iraq/Afghan war, could move us safely back to better field position if we went back to 1990’s tax rates (worth $3 Trillion) and brought our soldiers home now that bin Laden is fish food (worth $159 Billion).
If anyone in Washington really cared about its unemployed citizens, it would stop the financial bleeding of the States who have to cut jobs right and left. The cost would be the equivalent of giving up a yard or two in the direction towards fiscal insolvency, true! But Police, Fire and Education would be strengthened instead of weakened and thus those states would be more attractive for investment. Consumption would increase as would the tax base and we’d find ourselves moving the other direction down this Football Field FAST!
And just in case you thought that China buying our T-Bills during the Iraq War and enabling this situation to come about was done out as a kind byproduct of “Free Trade”, take a good look at their external debt to GDP ratio. Their external debt is 4.12% of GDP. They are in a 1st and inches position to score a game changing touchdown and Obama, the GOP, Bush, and conservatives nationwide helped them do it!

The Real Legacy of Ronald Reagan Part 2

The man behind the myth sheds a lot of light on why there is a need for a myth in the first place. If you go into the Capitol Rotunda, you will find a statue of this man who broke the laws of the very body where this statue is housed. What kind of person was the man who busted air traffic controller’s unions, enabled the deregulation that caused the Savings and Loan implosion and whom was busted lying to the American people about the Iran Contra affair and why does he deserve to have history rewritten in his favor?

Despite his belief that Biblical End Times prophecy should influence policy, (he once called the Soviet Union “Gog”) he and his wife were devout believers in Astrology. Astrology, is frequently derided by many Fundamentalists as witchcraft, but Ron and Nancy get free passes because they have so enabled the social conservative agenda. Nancy took it so seriously that she ordered dedicated phone lines to be installed in the White House and Camp David so she could never be without the wisdom of the zodiac.

The President of the United States had his wife’s personal astrologer go over his itinerary and change it so that everything was optimized for the best influence of the Zodiac. Chief of Staff Don Regan was ordered to confer with Nancy regarding which days were best for the President’s activities. According to Joan Quigley’s memoirs, this belief in superstition was taken to seriously that the announcement of Anthony Kennedy for the Supreme Court was coordinated by a man with a stopwatch to insure that the man hit the correct moment!

This belief in superstition was echoed in the most powerful commander-in-chief of armed forces in the world believed completely in End Times eschatology. A man with the power to bring about Armageddon was a believer in Astrology and was quoted in the December 1983 issue of People magazine as saying-

"Theologians had been studying the ancient prophecies -- what would portend the coming of Armageddon-- and have said that never, in the time between the prophecies up untiI now, has there ever been a time in which so many of the prophecies are coming together. There have been times in the past when people thought the end of the world was coming, and so forth, but never anything like this."

This attitude was reflected in his Administration as well, His Secretary of the Interior James Watt, a man whose job it was to preserve the environment for future generations once said, “I do not know how many future generations we can count on before the Lord returns.”

But Reagan was very much a believer in hands off management. His job was not to lead. It was to use his movie star media savvy experience to sell an agenda to the American people while posing in front of a flag, reciting humorous stories, and reading a speech off a teleprompter. And he was given a pass by the press on that for most of his time in the White House.

Understand that Reagan had been shot while in office only 69 days. The press initially went easy on him. The public sympathy towards their leader was similar to what happened to George W. Bush after 9-11. The press took it easy on him when it should not have. The Executive Branch of the U.S is so powerful that it should never be given a free pass from inspection simply because pundits say that now is the time to rally around our leader.

But it makes sense that if a leader is basically hands off to an agenda that increases the deficit that was such a dire concern in the 1980 campaign, deregulates the S&Ls so that his contributors can have high yield no risk investments, increases defense contractor handouts, violates a law regarding funding terrorists in Central America with US taxpayer money, and empowered the Mujahadeen and Osama Bin Laden, elevate a War on Drugs that savagely curtails our legal rights, if you benefit from any of these policies, then the man is a hero who deserves his name on an airport.

That’s the reason behind the retelling of recent history. The powers behind the throne, the think tanks, the real Washington elite had a perfect sock puppet in Ronald Reagan. However horrible the policy, he can look the camera in the eye, justify it in focus group selected words which some speechwriter wrote that he reads convincingly off of a teleprompter.

He could even lie through his teeth to the American public regarding breaking the law and not be held accountable. On November 19, 1986, Ronald Reagan held a press conference regarding selling Tow and Hawk missiles to Iran. He said “…We only sold a few missiles” (more than 2,000 were sold), “We don’t condone shipments to 3rd parties…”, (Israel shipped the missiles), “The missiles were not sold to get back hostages…”(They were sold for that and to fund the Contras) and “We are trying to promote a dialogue with Iranian moderates…” (This was Khomeni’s regime. The moderates were either dead or in jail!)

Two months later, when testifying in front of the Tower Commission on this matter, he specifically acknowledged approving the arms sales. Two weeks after that he tried to reverse that and say his prior statement was erroneous. He was even caught accidentally reading his own notes on evading questions aloud into the record. He said under oath while looking at his notes “If the question comes up at the Tower Board meeting, you might want to say that you were surprised.”

Ronald Reagan could get away with saying that South Africa had stood with us during every war we’ve ever been in. They were actually on the other side during a war Mr. Reagan had fought in himself. He allowed an invasion of Beruit, then ran away while accusing his political opposition of cowardice. He escalated the Nixon era policy of a War on Drugs that serves to imprison people cruelly instead of treating their addiction.

He pardoned W. Mark Felt and Edward Miller for authorizing FBI agents to break into VietNam protesters’ offices without a warrant (small government behavior? I don’t think so!)

When he was running for office he said-
-“All the waste in a year from a nuclear power plant can be stored under a desk."- Burlington Free Press, 15 Feb 1980
-“History shows that when the taxes of a nation approach about 20 percent of the people's income, there begins to be a lack of respect for government... When it reaches 25 percent, there comes an increase in lawlessness.”- Time magazine, 14 Apr 1980
-"Because Vietnam was not a declared war, the veterans are not even eligible for the G.I. Bill of Rights with respect to education or anything."- Newsweek magazine, 21 Apr 1980
-"Trains are not any more energy efficient than the average automobile, with both getting about 48 passenger miles to the gallon."- Chicago Tribune, 10 May 1980
-"Approximately 80% of our air pollution stems from hydrocarbons released by vegetation. So let's not go overboard in setting and enforcing tough emissions standards from man-made sources."- Sierra magazine, 10 Sep 1980
-"I have flown twice over Mount St. Helens. I'm not a scientist and I don't know the figures, but I have a suspicion that one little mountain out there, in these last several months, has probably released more sulfur dioxide into the atmosphere than has been released in the last ten years of automobile driving or things of that kind."- Time magazine, 20 Oct 1980

Each of these statements is provably false and he was elected anyway. That might explain why Donald Trump isn’t concerned about being the Birther candidate!

The man obviously existed in a delusional fog completely divorced from reality. But he could read a speech in front of a teleprompter and make the nation feel that gaps in these falsehoods were not important, we’re being protected from the Soviet’s Evil Empire by him and his cronies.

I think that is the reason behind the recent Jan 21st Time Magazine cover stating Obama loves Reagan! Obama admiring this man and contributing to his myth, shows the current Chief Executive’s true colors. He has no problem letting the country be run by interests who did not or will not vote for him. As long as he can read a speech from a teleprompter and make us feel good about the worst ideas Washington elitists come up with, he has every reason to think he can repeat what Reagan did with a sluggish economy and low approval ratings.
But the bias in the news media is not liberal. If it was Reagan and Bush II would never have been given the free passes they were. I can’t see Obama making the deliberately false statements like Reagan did during the coming campaign and getting away with it.

Admire the political ability of Reagan or his handlers if you must. But as a person and a President, he was sorely lacking. How does Reagan, a proven senile, superstitious, delusional old fool, deserve his name on an airport, much less having history rewritten in his favor?

The Real Legacy of Ronald Reagan Part 1

We failed to learn from the Savings and Loan Scandal of the Reagan era and so we repeated the error with the Enron, Tyco, and WorldCom scandals. We failed to learn from those scandals and so we repeated the error with the Housing Bust and the current Great Recession. Even now people are indulging in Revisionist history and working to ensure another financial fiasco while rolling back the meager financial reforms enacted by Congress. For the sake of our country and future generations, let’s set the record straight regarding the Reagan years!

On October 15, 1982, Ronald Reagan signed the Garn St. Germain Depository Institutions Act into law. This act turned small Savings and Loan Lenders known as “thrifts” into something they were never designed to be, private mints for speculators. The resulting scandal and bailout cost the US taxpayer over $1 trillion dollars (hardly fiscal responsibility!). One of the chief lobbyists behind getting it passed was Fred Thompson, current prospective Republican candidate. The language used in selling this abomination to the American people included “…to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans." That was what Ronald Wilson Reagan had to say about the bill.

You see, although one man may be held up as a symbol for an era, the sentiment, the work, and the cultural meme always go beyond any one single person (Reagan had nothing to do with the Enron, Tyco, and World Com scandals). Fred Thompson is currently a prospective candidate for the Republican nomination. And should he get in I have no doubt we’ll go through this deregulation looting and bailout cycle all over again. It is what the “Reagan Revolution” has given us!

But if we take a closer look at the Savings and Loan Scandal we can see a pattern of behavior emerging in the activities of the leadership during Reagan’s time and the behavior of the leadership today. I can see at least five similarities between the current Washington culture and the Reagan era people who bought S&Ls, put money into bad investments and got bailed out by the taxpayer. You will find a need in both cases to-

1.Deregulate and allow speculators to steal whatever they can get away with.
2.Lie to investors regarding risks.
3.Bribe Legislators.
4. Keep the public in the dark.
5.Have no one punished even when busted red handed.

Taking these gifts from the Reagan Administration one by one-

1. Deregulate and let speculators to steal whatever they can get away with.

This bill allowed Charles Keating, a hardcore social conservative, to buy Lincoln Savings and Loan and make it part of his Land Development Firm, American Continental Corporation. He could then put the assets of the S&L towards high risk investments that were insured with taxpayer money. The deal was one of virtually no risk (thanks to Reagan’s government intervention) and potentially high yield.

During the last housing boom, banks were allowed to sell portions of the loans called CDOs to themselves in order to keep prices up. During 2006 and 2007, CDOs of one bank frequently purchased slices of other CDOs of the same bank. AIG Insurance Corporation required an $85 billion dollar bailout in 2008 because they were the ones insuring these CDOs.

And that’s not even touching on the deregulation poster child- Jeff Skilling’s Enron!

We learned nothing from history after the S&L crash and Enron so of course we were doomed to repeat them recently.

2.Lie to investors regarding risk.

Part of what Charles Keating did is he masked his massive financial losses with financial schemes like speculative grade or “junk” bonds. Keating sold $250 million of Lincoln Junk Notes mostly to seniors. His salesmen told them that these speculative bonds (that had rows an rows of dilapidated condos in Texas that were going to make good on them) were federally insured! That was a lie. Some of these pensioners paid for trusting Charles Keating in one of the worst possible ways, elderly poverty after they had saved all of their lives.

In the years of the Housing Bubble, seniors were also targeted for reverse mortgages. Predatory lenders, aggressive marketing, and fraud perpetrators were finding seniors and inflicting elderly poverty on them. The sub prime mortgage market was targeting seniors with reverse mortgage scams and a lot of people wound up losing their homes. It worked like this, you are a senior who is cash poor but equity rich. Along comes a subprime lender, with a flashy sales pitch, willing to loan you more than your house is worth. Sounds like a good deal, huh? The thing is there is evil hidden in the contract and when your house equity drops in value, the loan changes into something you cannot afford to pay.

The Senate has just reported that Goldman Sachs “systematically misled clients, sold them financial instruments it knew to be junk, bet against them and profited off of their losses…”They have had 21 Billion dollars in a strategy which inflated earnings for them as housing assets were inflated and then shorted them in order not lose, all the while selling the CDO backed assets like “Timberwolf 1” to investors.

We did not tighten the regulations enough regarding deceptive advertising and full financial disclosure (have you read that credit card agreement lately) after the S&L fiasco. So we, of course, repeat history. And elderly poverty is such an ugly mark of a failed civilization, that it’s appropriate to stop and say, “Thank You, Ronald Reagan!” when we see examples of this failure.

3.Bribe Legislators

Banking regulator Ed Gray was mailed an anonymous video of S&Ls bad investments that were costing the taxpayer hundreds of millions. In response, Grey did his job and started cracking down on these fast buck schemes. Keating reacted by having legislators whom he was backing heavily, known as the Keating 5, to put pressure on Ed Gray to not do his job and leave Charles Keating alone! Alan Cranston, John Glenn, Donald Riegle, Dennis DeConcini and John McCain each received anywhere from $34K to $112K from Keating and Company. Later, when questioned whether or not his contributions influenced the Senators, Keating said, “I certainly hope so!”

One of the few examples of something good coming out of the current mess we are in is the new Consumer Financial Protection Bureau. Elizabeth Warren was and still is making enemies from in and out of Congress in both parties while trying to do the sane responsible thing. Insuring what went on merely a few years ago regarding sub-prime lenders and banks playing fast and loose with the rules and crashing the economy is a worthwhile and noble goal.

Is it really plausible, that given the history of the Keating 5 and the way things work in Washington, that Rep. Spencer Bachus can receive $1,069,313 from commercial banks, $108,000 of that from JP Morgan Chase, and $83,000 of it from Bank of America, and still be an entirely neutral and objective commentator when he says, “You have a lot of discretion and a lot of power, but I see very little accountability,” regarding Elizabeth Warren and the new CFPB? He has no problem with huge amounts of discretion, a lot of power and little accountability when it comes to JP Morgan Chase and Bank of America!

The same thing is going on now that went on before in the 80’s under Reagan and make no mistake. Corrupt Legislators intend to undo or underfund the minor changes the CFPB will implement so that the people paying them can continue to their looting and ultimately have the taxpayer bail them out for even more money. We have not learned from history.

4. Keep the public in the dark

Brother to one President and son of another, Neil Bush, took an unpaid but prestigious position on the Silverado S&L Board of Directors. He voted to approve loans and credit to William Walter and Kenneth Good, (his partners in other ventures). The two wound up stiffing Silverado for $130 million dollars. Good gave Neil Bush a $100,000 loan with no requirement to pay it back. As all of this was becoming public, there was a lot of pressure to not close it down coming from the Reagan Administration (which had George H.W. Bush-Neil’s father as Vice President). In fact the regulator was specifically told not to close down Silverado until after the 1988 election. If a prospective President’s son is in a venture that costs taxpayers millions and he gives orders to slow down an investigation and closure of a lending institution, that would seem to be something the public should be aware of and hopefully act upon.

In 2008, when a former member of the Keating 5 running as the Republican candidate for president announced that the economy is still fundamentally strong on the day when the stock market took its worst hit in history, there was no keeping financial mismanagement out of the election news. What was unsettling was that both candidates announced their support for a proposed $700 Billion dollar bailout with no conditions on how the money was to be spent. There was no choice between the two candidates that were going to win. We couldn’t even get a clear answer as far as how the money would be spent. Your choice was between Candidate A, who backed the $700 Billion dollar blank check and Candidate B who was going to whine about having write a $700 Billion dollar blank check but was still voting for it.

Oh, the guy behind the $700 Billion dollar figure was Henry Paulson, former Goldman Sachs CEO! That’s the same Goldman Sachs just busted by the Senate for preying on unwitting investors.

We did nothing to fix the problem of lack of transparency in these transactions after the S&L crash, and so of course, history repeated itself. Even now, with their hand caught in the cookie jar, they continue to spend millions on think tanks and PACs to insure nothing changes. This is all a gift of the “Reagan Revolution”!

5.Have no one punished even when caught red handed.

Neil Bush was eventually ordered to pay millions to the government and wound up only paying a mere $50K. That would still leave him $50K in the black from that “loan” from Kenneth Good, if Republican supporters did not pay his fine. Silverado’s collapse cost the taxpayer $1.3 billion.

Charles Keating was convicted and sent to jail, but in 1996 his convictions were overturned on a technicality.

As of this date, there have been neither prosecutions nor convictions in the collapse of Bear Stearns, Lehman Brothers, Citibank, Merrill Lynch, UBS, or Goldman Sachs.

The only person imprisoned as a result of the Reagan era Iran Contra Scandal was Bill Breeden, who stole a street sign in Odon, Indiana, which was named after Admiral John Poindexter. He held it hostage for a “Ransom” of $30 Million, the amount of money that had been transferred to the terrorist army the Contras.

We need to stop this hero worship of Ronald Reagan right now. I’m all for renaming that airport and putting a statue of a pregnant woman being shot in the back by a Contra in front of Reagan’s statue in the Capitol Rotunda. Ignoring the record of what happened during the Reagan Administration and embracing a false history of those years only insures that history will repeat itself. And Reagan, although dead, is continuing a long tradition of deregulating and allowing speculators to steal whatever they can get away with, allowing white collar criminals to lie to investors regarding risks, enable systemic bribing of Legislators keeping the public in the dark, and having no one punished even when busted red handed from beyond the grave.