* 2011: THE YEAR IN PICTURES
* GROWING WEALTH WIDENS DISTANCE BETWEEN LAWMAKERS AND CONSTITUENTS
By Peter Whoriskey, The Washington Post
[…] Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home equity.
Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
The comparisons exclude home equity because it is not included in congressional reporting, and 1984 was chosen because it is the earliest year for which consistent wealth statistics are available.
The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers. […]
* BREAK UP THE BANKS
It makes no sense to keep bailing out bankers while demanding austerity for everyone else.
By Simon Johnson, Slate
Santa Claus came early this year for four former executives of Washington Mutual, which failed in 2008. The executives reached a settlement with the FDIC, which sued them for taking huge financial risks while “knowing that the real estate market was in a ‘bubble.’ ” The FDIC had sought to recover $900 million, but the executives have just settled for $64 million, almost all of which will be paid by their insurers; their out-of-pockets costs are estimated at just $400,000.
To be sure, the executives lost their jobs and now must drop claims for additional compensation. But, according to the FDIC, the four still earned more than $95 million from January 2005 through September 2008. This is what happens when financial executives are compensated for “return on equity” unadjusted for risk. The executives get the upside when things go well; when the downside risks materialize, they lose nothing (or close to it).
At the same time, their actions and similar actions by other bankers are directly responsible for both the run-up in housing prices and the damaging collapse that followed. That collapse has impacted nonbankers negatively in many ways, including the loss of more than 8 million jobs.
It is also leading to austerity: Taxes are increasing and government spending is falling at the local and state level around the country. A difficult fiscal conversation still lies ahead at the federal level, but cuts and contractions of various types seem likely.
Some people argue that Americans need to tighten their belts. That’s an interesting discussion, particularly at a time with unemployment is still above 8 percent (with recent declines largely the result of many jobless workers’ decision to stop looking). Precipitate austerity is hardly likely to help the economy find its way back to higher employment levels.
But what about government support for the big banks? Is this contracting in the light of our current fiscal pressures? Unfortunately, it is not. Much government support remains, implicitly through allowing banks to be “too big to fail” and explicitly through various kinds of backing provided by the Federal Reserve.
The rationale behind supporting big banks is that they are needed for the economy to recover. But this position looks increasingly doubtful when the banks are sitting on piles of cash while creditworthy consumers and businesses are reluctant to borrow.
The same situation exists in Europe today, where the reality is even starker. Banks are receiving ever-larger bailouts, while countries that borrowed are cutting social programs and face rising social tensions and political instability as a result. Countries like Greece, Italy, and arguably Portugal overborrowed and now their citizens face severe consequences. But the bankers face no consequences whatsoever for overlending. […]
* THE GREAT ECONOMIC DIVIDE MAKES EVERYONE POORER
By Mark Thoma, The Fiscal Times
The argument that the rich should pay a larger share of our tax bill than the poor does not rest upon fairness alone. As Robert Frank explains in his book The Darwin Economy, requiring the rich to pay a larger share allows us to have more goods and services than we would have with a more equal tax structure – we can make everyone better off – and this improves economic efficiency.
To see how this works, imagine four families sharing a large, jointly owned backyard area. The families would like to install a swing set, slide, etc. for their children to share. The set costs $1,200, and they need to figure out how to pay for it. One of the households is fairly well off and would be willing to pay up to $800 for the swing set. But the other three families struggle to make ends meet, and each is only willing to pay $250. These families really want the swing set – even more than the well-to-do family – but even $250 is a squeeze on their tight budgets.
If everyone is asked to contribute equally to the swing set, $300 each, it won’t get purchased since that is more than the poorer households are willing to pay. But there are arrangements that will work. Suppose, for example, that the wealthy family offers to put up half, $600, leaving the other three families to share the remaining $600, or $200 each. The wealthy family gets a swing set for $600 even though it would have been willing to pay up to $800 for it – economists say this family enjoys $200 in consumer surplus. The less wealthy families also receive $50 in consumer surplus since each household gets the playground equipment for only $200 even though it would have paid $250.
Thus, if we insist upon equal contributions from everyone, we forego the opportunity to make all of the families better off – to give each family goods and services for a price less than their full willingness to pay. In economic terms, allowing unequal contributions increases efficiency. […]
* ON ELECTION DAY 2008, ’09, ’10, ES&S OP-SCANS BLOCKED THE (DEMOCRATIC) VOTE IN CUYAHOGA COUNTRY OHIO! ( 2 ITEMS)
By Mark Crispen Miller, News from the Underground
The scanners are “defective,” finds the US Election Assistance Commission (EAC). One in ten would “miss some votes,” freeze up “inexplicably,” etc. Although ES&S “tried to fix the problems earlier this year… the upgrade actually created more problems.”
“Defective”? Not really. Those scanners have been performing as intended by ES&S—an outfit started up and managed by right-wing Republicans, whose goods are always pooping out, or screwing up, in Democratic areas, like Cuyahoga County. That their goods thus deliver for the party means there’s really nothing wrong with them per se.
What’s “defective,” rather, is the US voting system overall—and the vision of all those (the EAC included) who refuse to see what’s happening right before their eyes.
U.S. government investigation finds Cuyahoga County’s election machines are flawed
Published: Thursday, December 22, 2011, 6:28 PM Updated: Friday, December 23, 2011, 1:29 AM
Laura Johnston, The Plain Dealer By Laura Johnston, The Plain Dealer
10 percent of Cuyahoga County’s voting machines fail pre-election tests
Published: Wednesday, April 14, 2010, 4:00 AM Updated: Wednesday, April 14, 2010, 7:41 AM
Joan Mazzolini, The Plain Dealer By Joan Mazzolini, The Plain Dealer
* ON THE MANNING ART. 32, COURT SECRECY AND NATIONAL SECURITY CASES
By bmaz, Emptywheel
I somehow stumbled into an article for The Nation by Rainey Reitman entitled Access Blocked to Bradley Manning’s Hearing. To make a long story short, in a Twitter exchange today with Ms. Reitman and Kevin Gosztola of Firedoglake (who has done yeoman’s work covering the Manning hearing), I questioned some of the statements and inferences made in Ms. Reitman’s report. She challenged me to write on the subject, so here I am.
First, Ms. Reitman glibly offered to let me use her work as “foundation” to work off of. Quite frankly, not only was my point not originally to particularly go further; my point, in fact, was that her foundation was deeply and materially flawed.
Reitman starts off with this statement:
The WikiLeaks saga is centered on issues of government transparency and accountability, but the public is being strategically denied access to the Manning hearing, one of the most important court cases in our lifetime.
While the “WikiLeaks saga” is indeed centered on transparency and accountability for many of us, that simply is not the case in regard to the US Military prosecution of Pvt. Bradley Manning. The second you make that statement about the UCMJ criminal prosecution of Manning, you have stepped off the tracks of reality and credibility in court reportage and analysis. The scope of Manning’s Article 32 hearing was/is were the crimes detailed in the charging document committed and is there reason to believe Manning committed them. Additionally, in an Article 32 hearing, distinct from a civilian preliminary hearing, there is limited opportunity for personal mitigating information to be adduced in order to argue for the Investigating Officer to recommend non-judicial punishment as opposed to court martial trial. That is it. There is no concern or consideration of “transparency and accountability”, within the ambit suggested by Ms. Reitman, in the least.
Calling the Manning Article 32 hearing “one of the most important court cases in our lifetime” is far beyond hyperbole. First off, it is, for all the breathless hype, a relatively straight forward probable cause determination legally and, to the particular military court jurisdiction it is proceeding under, it is nothing more than that. The burden of proof is light, and the issues narrow and confined to that which is described above. The grand hopes, dreams and principles of the Manning and WikiLeaks acolytes simply do not fit into this equation no matter how much they may want them to. Frankly, it would be a great thing to get those issues aired in this country; but this military UCMJ proceeding is not, and will not be, the forum where that happens. […]
* HOW THE FED FUELED THE MILITARIZATION OF POLICE
By Justin Elliot, AlterNet
|The militarization of America’s metropolitan police forces was on full display in recent months as police from Los Angeles to New York cracked down on Occupy protests, decked out in full SWAT gear and occasionally using strange pieces of military hardware.
Less well known is that police forces in small towns and far-flung cities have also been stocking up on heavy equipment in the years since Sept. 11, 2001.
In spite of strained city and state budgets in local years, the trend has continued thanks to generous federal grants. According to a new story by the Center for Investigative Reporting, $34 billion in federal grant money has financed the past decade’s shopping spree.
To learn more about the trend, I spoke with G.W. Schultz, who co-authored the story with Andrew Becker. (Also worth a look is the slide show accompanying the story.)
You start your piece with Fargo, N.D., where the police have a “$256,643 armored truck, complete with a rotating turret,” kevlar helmets and assault rifles in their squad cars. What did they say when you asked why they need this kind of heavy equipment?
Their view is that they need to be as prepared as a city like New York. We’ve been studying the grant programs for a while. You see this in city after city. Everyone has got an explanation for why they need more and not less grant money. I grew up in Tulsa; there’s still a lot of sensitivity around the Oklahoma City bombing. So the attitude is, “Look, we could have a similar attack and we need to be ready for it.” Now I live in Austin. The attitude here is, we could have an incident like the one in which a guy smashed his plane into the IRS building a few years ago, or the one in which a guy started shooting people from a tower at the Uniersity of Texas a few decades ago. Every city has an answer like that. The approach to security spending is based on speculation about what could happen, however remote. That attitude enables you to buy everything without limit because you can never attain 100 percent security.
What is the federal grant program that is handing out all this money?
What we learned over time is that it’s not just one grant program, it’s grantprograms. There is a dizzying array of grants that local communities are eligible for from the Department of Homeland Security and sometimes the Justice Department. A few grants existed prior to 9/11. After DHS was created, Congress kept creating new programs to meet perceived needs around security. For example, “We need a bulletproof vehicle to send in our SWAT unit if a Mumbai-style attack occurs.” That led to a spree of spending on bulletproof vehicles. Each round of purchases is fueled by a what-if scenario. […]
* HYPOCRITE ALERT: SOPA SUPPORTERS ENCOURAGED PEOPLE TO USE FILE-SHARING SOFTWARE FOR PIRATING COPYRIGHTED MATERIAL
By Washington’s Blog
For proof of the claim that SOPA supporters promoted file-sharing software, click on the Web Archive links here.
Whether or not you believe there was conspiratorial intent, it appears like the supporters of SOPA are hypocrites. […]
READ and VIDEO @ http://www.washingtonsblog.com/2011/12/big-supporters-of-sopa-encouraged-people-to-use-file-sharing-software-for-pirating-copyrighted-material.html
* EUROPEAN ECONOMY IN DIRE STRAITS, AND THE U.S. TOO. HOW SO, WHY SO?
By Richard Clark, OpEdNews
Central banks create the easy money & lax regulatory environments where bubbles emerge & provide limitless liquidity so that their bankster pals don’t lose money on the inflated value of their assets. That’s what the recent $640 billion boondoggle was really about: propping up toxic bonds worth a mere fraction of their original value. Financial theater & the show must go on. The truth wd. bring down the entire house of cards.
The bad news out of Europe continues unabated, including debt and ratings downgrades, sliding economic growth, and exploding red ink. It is becoming apparent that many of the countries of Europe have borrowed so much money from the banks of the other countries in Europe, that almost none of it can or will ever be paid back — not with the ever falling economic growth in these countries, which will worsen as austerity measures are imposed. In other words, even though the buyers of the bonds of these countries don’t yet realize it, the fact is that most of these bonds will never be fully redeemed. In other words they are toxic junk; the loans will never be repaid, at least not for anything like their nominal and originally stated value.
Most alarming of all is the enormous amount of money that the US and UK have borrowed from banks in various countries around the world. (See the beautifully illustrative graphs at the link provided both here and below, courtesy of the BBC. Scroll down to see them.)
Why is this extreme and growing US indebtedness particularly alarming? Because buyers for US Treasury bonds are steadily disappearing, and those who own them, like the Chinese central bank, are trying to sell what they have.
So who is now the major buyer of US Treasury bonds? Answer: The U.S. Federal reserve, which simply creates the money out of thin air, with computer keystrokes, and uses this “funnymoney’ to buy our nation’s bonds. But for how long can such an Alice-in-wonderland process continue?
Much of the hope in Europe rests upon carefully crafted bailouts which in turn rest, precariously, upon assumed rates of economic recovery and growth in order for loans to be repaid, and everything related . . to work out. However, without those assumed and anticipated rates of growth, such plans will fall apart, and more rescue funds — or outright defaults — are in store for us.
Concluding Paragraphs in this section
Theodore Pelagidis, an economics professor at the University of Piraeus, put it this way: “This is part of the death spiral of the recession as a result of austerity measures. People realize that contagion has come to banks and they are very afraid of losing their deposits. On average around 4bn-5bn euros in capital flees the banking system every month.” It’s not just the super-rich behind the flight of funds.
It’s now “game over” for Greece. The market is “predicting’ a nearly 100% chance of default on Greek bonds even as the bankers and Eurocrats squabble over the prospect of raising the haircut on Greek debt from 20% to 50% (i.e. reducing the value of Greek bonds by up to 50%).
The ECB is interfering heavily in the bond markets of various countries in their attempts to keep things going. But they’ve apparently tossed in the towel on Greece, as evidenced by the Greek bond yields above.
However, when we note the ways in which the Spanish, Irish, and Italian debts have come down off their highs, can we make sense of why the ECB focused their efforts there? Sure, that’s easy, and the BBC has put together an extraordinarily helpful interactive chart to make it all crystal clear. That interactive chart can be found here. (Scroll down.)
To begin with, what the chart is showing by the width of the arrows is how much money each country owes to the banks of other countries — the larger the width of the arrow, the greater the amount.
Of particular interest are the charts for the UK and the US, which make clear why these two countries could never be allowed to fail, for fear of the worldwide economic catastrophe it would cause.
The main point that these charts graphically and beautifully demonstrate is that every country owes hundreds of billions to banks in every other country. And like the leeches they are, the banksters will continue to bleed us for as long as they can, collecting interest due them, until the entire system comes down. And when our house-of-cards economy finally collapses (assuming we let that happen), they will snatch up its pieces at bargain prices, and build a new economy, leading to a world in which their wealth and power is even greater than before, while all the rest of us in the 99% will be every so much poorer and desperate.
* ARAB MONITORS VISIT SYRIA’S HOMS
Source: Aljazeera and agencies
Observers headed to the country’s deadliest city a day after at least 33 people were reported killed there.
Arab League monitors have arrived in the besieged Syrian city of Homs, Syrian television reports, a day after activists said dozens of people were killed in the city.
|“The Arab League observers’ delegation has begun its meeting with Homs governor Ghassan Abdel Al,” Dunia television reported.
Witnesses said the army pulled back tanks from Bab Amr, a flashpoint neighbourhood in the city, ahead of the observers’ arrival on Tuesday. However, some activists said tanks had just been repositioned in other areas of the city.
“Activists say they are planning to hold sit-ins to coincide with the arrival of the observers,” Al Jazeera’s Zeina Khodr, reporting from Antakya on the Turkish border, said.
The 50 observers, who arrived in Syria on Monday, will be split into five teams of 10, according to Reuters news agency.
Teams are also due to visit Damascus, Hama and Idlib on Tuesday.
The teams will use government transport, according to their head, Sudanese General Mustafa al-Dabi. But delegates insist the mission will nevertheless be able to go wherever it chooses with no notice.
“Our Syrian brothers are co-operating very well and without any restrictions so far,” al-Dabi told the Reuters news agency.
“The element of surprise will be present,” Mohamed Salem al-Kaaby, a monitor from the United Arab Emirates, said.
“We will inform the Syrian side the areas we will visit on the same day so that there will be no room to direct monitors or change realities on the ground by either side.”
The observers’ mission is part of a plan seeking to put an end to the government’s crackdown, which the United Nations estimates to have killed more than 5,000 people since March.
Syrian foreign ministry spokesman Jihad al-Makdissi said the ”mission has freedom of movement in line with the protocol” Syria signed with the Arab League.
Under that deal, the observers are banned from sensitive military sites
The arrival of the observers and 10 Arab League officials came as activists reported the deaths of at least 45 people around the country on Monday, 33 of them in Homs.
An advance team of monitors arrived in Damascus on Thursday to lay the groundwork for the observer mission to oversee the implementation of the peace plan.
Burhan Ghalioun, head of the opposition Syrian National Council (SNC), said some of the observers were in Homs “but they are saying they cannot go where the authorities do not want them to go”.
Ghalioun also sought UN and Arab League intervention “to put an end to this tragedy”, and urged the UN Security Council to “adopt the Arab League’s plan and ensure that it is applied”.
“The plan to defuse the crisis is a good plan, but I do not believe the Arab League really has the means [to enforce it],” he told reporters in Paris.
“It is better if the UN Security Council takes this plan, adopts it and provides the means for its application.”
The Arab League plan endorsed by Syria on November 2 calls for the withdrawal of the military from towns and residential districts, a halt to violence against civilians and the release of detainees.
President Bashar al-Assad’s government has been accused of intensifying its crackdown since signing the agreement.
Residents in Homs said on Monday that army tanks fired shells, machine guns and mortars into their neighbourhoods. Amateur video filmed by anti-government activists showed carnage in the city.
“What is happening is a slaughter,” Fadi, who lives near the Bab Amr neighbourhood, told the Reuters news agency. “They hit people with mortar fire.”
Bab Amr has been one of the hardest hit areas of Homs, a focal point of the Assad government’s crackdown on nine months of anti-government demonstrations.
Some parts of Homs have also seen fierce clashes between the Syrian army and the so-called Free Syrian Army which is made up of army defectors who say they decided to side with protesters.
There have been reports that deserters have been able to inflict casualties on the army.
“The violence is definitely two-sided,” said a resident who gave his name only as Mohammed. “I’ve been seeing ambulances filled with wounded soldiers passing by my window in the past days. They’re getting shot somehow.”
The opposition SNC said on Sunday that Homs was under siege and facing an “invasion” from about 4,000 troops deployed near the city.
* FISCAL CRISIS TAKES TOLL ON HEALTH OF GREEKS
By Suzanne Daley, NYTimes
[…] Greece used to have an extensive public health care system that pretty much ensured that everybody was covered for everything. But in the last two years, the nation’s creditors have pushed hard for dramatic cost savings to cut back the deficit. These measures are taking a brutal toll on the system and on the country’s growing numbers of poor and unemployed who cannot afford the new fees and co-payments instituted at public hospitals as part of the far-reaching austerity drive.
At public hospitals, doctors report shortages of all kinds of supplies, from toilet paper to catheters to syringes. Computerized equipment has gone unrepaired and is no longer in use. Nurses are handling four times the patients they should, and wait times for operations — even cancer surgeries — have grown longer.
Access to drugs has also been affected, as some drug manufacturers, owed tens of millions of dollars, are no longer willing to supply Greek hospitals. At the same time pharmacists, afraid that the government might not reimburse them, are asking for cash payments, even from those with insurance.
Many experts say that Greece’s public health system was bloated and corrupt and in dire need of reform. But they say also that the cuts have been so deep and have come so fast, that they have hit like a tsunami.
In just two years, the government has cut spending on health care to $17 billion from $19.5 billion — a 13 percent decrease. And under its agreement with its creditors, Greece must find even more health care savings next year — as much as $915 million, government officials said.
At the same time, public health facilities have seen a 25 to 30 percent increase in patients because so many Greeks can no longer afford to visit private clinics. […],
* MIGRANTS FROM EUROZONE STRUGGLERS FLOCK TO GERMANY
Source: Athens News (Reuters)
|Greeks and Spaniards with little or no chance of finding work at home are flocking to Germany in search of jobs, data show.
Figures from Germany’s statistics office show immigration has surged in the wake of Europe’s debt crisis, as Germany’s powerful and so-far resilient economy attracts those from crisis-hit euro states.
The number of immigrants arriving from Greece soared 84 percent in the first half of 2011, while those coming from Spain rose 49 percent. In total 67,000 more foreigners moved to Germany than in the same period a year earlier.
“It’s striking to see the strong rise in immigration from European Union countries particularly hard-hit by the financial and debt crises,” the office said.
Germany pulled out of the 2008-9 financial crisis faster than its peers, growing by around 3 percent in 2011 as a domestic consumption boom and strong demand for German exports fuelled the economy.
Unemployment in Greece is running at 17.7 percent and expected to continue climbing through next year, while in Spain more than one in five are out of work. By contrast, Germany’s joblessness rate of 6.9 percent is its lowest in two decades.
“Every day I’m inundated with calls from Greece from people looking for work. I’ve never seen anything like it,” said Angelos Doulgeris, who runs Greek restaurant Kos House in Berlin.
“Many of those are highly qualified people. I have been able to offer two people some casual work, but that is it – we are not getting any more customers.” […]