Nov 212013
 

Posted by greydogg, 99GetSmart

* PLUTOCRACY AND CORRUPTION: HARMING THE AVERAGE U.S. CITIZEN

In today’s society, plutocracy and political corruption go hand in hand, especially in Washington.

By Margaret Elkis, EconomyInCrisis

plutocrat2

Simply put, plutocracy is a government ruled controlled by wealthy individuals. It is no secret that wealth buys power, and that is exactly what we are seeing today. Unfortunately, with wealth and power often comes corruption. Author J.R. Martin stated in chapter nine of his book, Selling U.S. Out, that political scandal and corruption are not new. They have always existed. Indeed, all one has to do is read the news to learn of the corruption and greed taking place between the big players of our government:

  • political parties: Republicans and Democrats
  • lobbyists and overpaid consultants
  • the mainstream media

Over the past forty years, power, money and greed have corrupted our elected government officials at every level. What’s most alarming is that the blatant corruption has been tolerated and accepted by the American people. Unfortunately, members of both parties act as if their jobs are nothing more than a big political game. They’re so focused on insulting the other side and getting their own agendas passed that they forget they’re supposed to be working for the U.S. public.

As J.R. Martin writes:

“Neither party represents the interests of the American people since both are controlled by foreign and domestic corporations and special interest groups that provide the majority of their funding…both parties practice dishonest, divisive politics aimed at dividing and manipulating public opinion instead of seeking to build an honest national consensus on important issues confronting our nation.” […]

READ @ http://economyincrisis.org/content/plutocracy-corruption-harming-the-average-u-s-citizen

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* FAKE EMPLOYMENT NUMBERS – AND 5 MORE MASSIVE ECONOMIC LIES THE GOVERNMENT IS TELLING YOU

By Michael Snyder, TheEconomicCollapse

Employment-Population-Ratio-November-20131-425x255

According to a whistleblower that has recently come forward, Census employees have been faking and manipulating U.S. employment numbers for years.  In fact, it is being alleged that this manipulation was a significant reason for why the official unemployment rate dipped sharply just before the last presidential election.  What you are about to read is incredibly disturbing.  The numbers that the American people depend upon to make important decisions are being faked.  But should we be surprised by this?  After all, Barack Obama has been caught telling dozens of major lies over the past five years.  At this point it is incredible that there are any Americans that still trust anything that comes out of his mouth.  And of course it is not just Obama that has been lying to us.  Corruption and deception are rampant throughout the entire federal government, and this has been the case for years.  Now that some light is being shed on this, hopefully the American people will respond with overwhelming outrage and disgust.

The whistleblower that I mentioned above has been speaking to John Crudele of the New York Post.  In his new article entitled “Census ‘faked’ 2012 election jobs report“, he says that the huge decline in the unemployment rate in September 2012 was “manipulated”…

In the home stretch of the 2012 presidential campaign, from August to September, the unemployment rate fell sharply — raising eyebrows from Wall Street to Washington.

The decline — from 8.1 percent in August to 7.8 percent in September — might not have been all it seemed. The numbers, according to a reliable source, were manipulated. […]

READ @ http://theeconomiccollapseblog.com/archives/fake-employment-numbers-and-5-more-massive-economic-lies-the-government-is-telling-you

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* THE EURO CRISIS AND THE CONTRADICTIONS BETWEEN COUNTRIES IN THE PERIPHERY AND CENTER OF THE EUROPEAN UNION

By Eric Toussaint, CADTM

2010-2011_Greek_protests_collage

The crisis that started in the United States in 2007-2008, hit the European Union head on in 2008, and has been causing major problems in the eurozone since 2010. |2| Banks from the strongest European countries are responsible for spreading this plague from the United States to Europe, because they had invested massively in structured financial products. It is important to explain why this crisis has struck the European Union and the eurozone harder than the United States.

18 of the 28 countries in the European Union share a common currency, the euro. |3| The population of the EU is about 500 million people, |4| about half the population of China, Africa, or India, 2/3 of Latin America, and 50% more than the USA.

There are major differences between countries in the European Union. Germany, the United Kingdom, France, the Netherlands, Italy, Belgium, and Austria are the most highly industrialised and powerful countries in the EU. 11 countries are from the ex-Eastern European bloc (3 Baltic Republics — Estonia, Lithuania, and Latvia; Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, and Romania, which were part of the Soviet bloc, and Slovenia and Croatia, which were part of Yugoslavia). Finally, come Greece, Portugal, Ireland, Spain, and Cyprus, which have been brutalised by the eurozone crisis.

Large private corporations are taking advantage of wage discrepancies

Wage discrepancies are very significant: the minimum wage in Bulgaria (in 2013, the gross monthly salary is 156 euros) is less than one tenth of what it is in countries like France, Belgium, and the Netherlands. |5| Wage discrepancies within European Union countries can also be very significant. In Germany, 7.5 million employees earn a paltry monthly salary of 400 euros, whereas the normal monthly salary in Germany is more than 1200 euros (there is no national legal minimum wage in Germany).

This discrepancy enables major European corporations, particularly German industrial corporations to be very competitive, because they outsource part of their production to countries like Bulgaria, Romania or to other Central and Eastern European countries, and then transport the parts back to Germany where they are assembled into final products. Finally, they export within the EU or to the global market after having cut the cost of wages to the bone. To top it all off, they pay no import/export taxes within the EU. […]

READ @ http://cadtm.org/The-euro-crisis-and-contradictions

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* FROM IRELAND TO GREECE: EUROPE’S YOUTH TAKE THE CUTS

The recent decision by the Irish government to cut jobseekers’ allowance for under-25s is just the latest in a series of discriminatory policies against young people that have been introduced in Europe in the last few years.

By James Higgins, CafeBabel

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It’s not easy to be young in Europe these days, particularly if you are among the 5.5 million young people in the EU that are unemployed. With the scourge of youth unemployment constantly in the headlines, and increasing demands for concerted action, governments are hitting back. But instead of focusing all their energy on the labour market inequalities, financial corruption, greed and cronyism that created and exacerbated the crisis, some are hitting back at the young people themselves.

Like it or lump it

On 16 October the Irish government announced that it would reduce jobseekers’ allowance for new entrants aged under-25 to €100 per week as part of its budget for 2014. People aged 25 will also get a reduced rate of €144, and only those aged 26 and upwards will get the full jobseekers’ rate of €188. In the Dáil (Irish parliament) some of the opposition parties and independents expressed concern at these measures, which smack of discrimination. Thankfully parliamentarians on the government benches explained that they wanted to ‘incentivise’ youth employment, and save young people from lying around watching flat-screen TVs all day. To make such a comment about any another age group would be unthinkable, but it seems that young people are fair game.

The National Youth Council of Ireland have labelled the cuts “disproportionate and unfair” and have warned that they will create further hardship for young jobseekers and accelerate the number of young people emigrating from the country. Shortly after the budget was announced, youth campaigners formed a mock airport queue outside the Irish parliament to compel the government to reverse the decision, but the protests fell on deaf ears. Young people would have to like it or lump it. […]

READ @ http://www.cafebabel.co.uk/society/article/from-ireland-to-greece-europes-youth-take-the-cuts.html

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* BARCLAYS BANK ‘HELPS’ AFRICA LOSE MORE IN TAX AVOIDANCE EACH YEAR THAN IT GAINS IN AID

Source: ScriptoniteDaily

DSC01189_3

Every  year, tax avoidance costs the continent of Africa lost revenues of $63bn a year.  This is more than Africa receives in overseas development aid – and enough to deliver the UN Millennium Goals of universal primary education, universal healthcare, and upgrade Africa’s entire road network.  Instead, banks are helping to spirit this money into offshore tax havens.  Barclays Bank is the largest retail bank in Africa, and today ActionAid is launching a campaign to tell Barclays to clean up its act on tax havens.

Why is Africa so Poor?

Africa suffers extreme poverty, and by some measures things are getting worse.  Between 1990 and 2011, the number of new born babies dying rose from 1 million to 1.1million a year, and the number of hungry people rose from 175 million to 239 million.

Much of this poverty and destitution is as a result of the myth of development.  Western creditor nations (mostly ex-colonial) extended credit to African nations in the name of ‘development’, after the Second World War.  In reality, it was merely to keep a surplus of petro-dollars making more money from the interest on loan payments, than in savings accounts during a time of high inflations (which would wipe the value).  Later, when the interest rates became unpayable – the creditor nations offered ‘bridging loans’ often to despots, with extraordinary interest rates and conditions attached. These loans were called ‘Structural Adjustment Programmes’ and administered through the IMF.  This became know as the Debt Trap – and once you understand the Debt Trap, you immediately see the concept of ‘development’ as a myth.  The West is not helping to develop Africa, Africa is helping to develop the West.

This comment from Martin Griffiths in International Relations: The Key Concepts summerises the issue perfectly:

“Between 1982 and 1990 $927bn was advanced to debtor states, but $1,345bn were remitted in debt service alone. The debtor states began the 1990’s 60% more in debt than they were in 1982. Sub-Saharan Africa’s debt more than doubled in this period.  When the issue of debt forgiveness is raised, Western banks have argued that it would create what economists call ‘moral hazard’ – failing to honour debts would simply encourage poor states to keep borrowing in the expectation that they would never have to repay their debts.  On the other hand, some commentators argue that moral hazard should cut both ways.  Over borrowing is over lending, and creditors should pay their fair share of the costs of mistakes made in the 70’s.

By 1997 Third World Debt totalled over $2.2trn.  The same year $250bn was repaid in interest and loan principal. The debt trap represents a continuing humanitarian disaster for some 700 million of the world poorest people.  During the last decade, the world’s most heavily indebted continent, Africa, has experienced falling life expectancies, falling incomes, falling investment levels and rising infant and maternal mortality rates” (Griffiths, 2008) […]

READ @ http://www.scriptonitedaily.com/2013/11/20/barclays-bank-helps-africa-lose-more-in-tax-avoidance-each-year-than-it-gains-in-aid/

Aug 062013
 

Posted by greydogg, 99GetSmart

* THE UNITED STATES IS AWASH IN PUBLIC STUPIDITY, AND CRITICAL THOUGHT IS UNDER ASSAULT

By Henry A. Giroux, GreanvillePost

George Bush: The media and political class are openly trying to rehabilitate this grotesque war criminal’s image, while the population barely notices.

George W. Bush: The media and political class are openly trying to rehabilitate this grotesque war criminal’s image, while the population barely notices.

America has become amnesiac – a country in which forms of historical, political, and moral forgetting are not only willfully practiced but celebrated. The United States has degenerated into a social order that is awash in public stupidity and views critical thought as both a liability and a threat. Not only is this obvious in the presence of a celebrity culture that embraces the banal and idiotic, but also in the prevailing discourses and policies of a range of politicians and anti-public intellectuals who believe that the legacy of the Enlightenment needs to be reversed.  Politicians such as Michelle Bachmann, Rick Santorum and Newt Gingrich along with talking heads such as Bill O’Reilly, Glenn Beck and Anne Coulter are not the problem, they are symptomatic of a much more disturbing assault on critical thought, if not rational thinking itself.  Under a neoliberal regime, the language of authority, power and command is divorced from ethics, social responsibility, critical analysis and social costs.

These anti-public intellectuals are part of a disimagination machine that solidifies the power of the rich and the structures of the military-industrial-surveillance-academic complex by presenting the ideologies, institutions and relations of the powerful as commonsense.[1] [2] For instance, the historical legacies of resistance to racism, militarism, privatization and panoptical surveillance have long been forgotten and made invisible in the current assumption that Americans now live in a democratic, post-racial society. The cheerleaders for neoliberalism work hard to  normalize dominant institutions and relations of power through a vocabulary and public pedagogy that create market-driven subjects, modes of consciousness, and ways of understanding the world that promote accommodation, quietism and passivity.  Social solidarities are torn apart, furthering the retreat into orbits of the private that undermine those spaces that nurture non-commodified knowledge, values, critical exchange and civic literacy. The pedagogy of authoritarianism is alive and well in the United States, and its repression of public memory takes place not only through the screen culture and institutional apparatuses of conformity, but is also reproduced through a culture of fear and a carceral state that imprisons more people than any other country in the world.[2] [3] What many commentators have missed in the ongoing attack on Edward Snowden is not that he uncovered information that made clear how corrupt and intrusive the American government has become – how willing it is to engage in vast crimes against the American public. His real “crime” is that he demonstrated how knowledge can be used to empower people, to get them to think as critically engaged citizens rather than assume that knowledge and education are merely about the learning of skills – a reductive concept that substitutes training for education and reinforces the flight from reason and the goose-stepping reflexes of an authoritarian mindset.[3]  [4]

Since the late1970s, there has been an intensification in the United States, Canada and Europe of neoliberal modes of governance, ideology and policies – a historical period in which the foundations for democratic public spheres have been dismantled. Schools, public radio, the media and other critical cultural apparatuses have been under siege, viewed as dangerous to a market-driven society that considers critical thought, dialogue, and civic engagement a threat to its basic values, ideologies, and structures of power. This was the beginning of an historical era in which the discourse of democracy, public values, and the common good came crashing to the ground. Margaret Thatcher in Britain and soon after Ronald Reagan in the United States – both hard-line advocates of market fundamentalism – announced that there was no such thing as society and that government was the problem not the solution. Democracy and the political process were all but sacrificed to the power of corporations and the emerging financial service industries, just as hope was appropriated as an advertisement for the whitewashed world, a culture whose capacity to critique oppressive social practices was greatly diminished. Large social movements fragmented into isolated pockets of resistance mostly organized around a form of identity politics that largely ignored a much-needed conversation about the attack on the social and the broader issues affecting society such as the growing inequality in wealth, power and income. […]

READ @ http://www.greanvillepost.com/2013/07/26/the-united-states-is-awash-in-public-stupidity-and-critical-thought-is-under-assault/

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* GLENN GREENWALD SLAMS NSA BACKER REP. DUTCH RUPPERSBERGER OVER ABC INTERVIEW, DEFENSE INDUSTRY TIES

Source: DemocracyNow!

On Sunday, Guardian columnist Glenn Greenwald appeared on ABC’s “This Week” to discuss his latest article, “Members of Congress denied access to basic information about NSA.” After speaking with him, the host, Martha Raddatz, asked House Intelligence Committee member Democratic Rep. Dutch Ruppersberger to respond to his report. Democracy Now! gets reaction from Greenwald to the claims made by Ruppersberger.

The full interview with Glenn Greenwald on Democracy Now!:

VIDEO @ https://www.youtube.com/watch?feature=player_embedded&v=d0R_jSP8GLM

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* U.S. DIRECTS AGENTS TO COVER UP PROGRAM USED TO INVESTIGATE AMERICANS

By John Shiffman and Kristina Cooke, Reuters

A slide from a presentation about a secretive information-sharing program run by the U.S. Drug Enforcement Administration's Special Operations Division (SOD) is seen in this undated photo.Credit: Reuters/John Shiffman

A slide from a presentation about a secretive information-sharing program run by the U.S. Drug Enforcement Administration’s Special Operations Division (SOD) is seen in this undated photo.Credit: Reuters/John Shiffman

 

A secretive U.S. Drug Enforcement Administration unit is funneling information from intelligence intercepts, wiretaps, informants and a massive database of telephone records to authorities across the nation to help them launch criminal investigations of Americans.

Although these cases rarely involve national security issues, documents reviewed by Reuters show that law enforcement agents have been directed to conceal how such investigations truly begin – not only from defense lawyers but also sometimes from prosecutors and judges.

The undated documents show that federal agents are trained to “recreate” the investigative trail to effectively cover up where the information originated, a practice that some experts say violates a defendant’s Constitutional right to a fair trial. If defendants don’t know how an investigation began, they cannot know to ask to review potential sources of exculpatory evidence – information that could reveal entrapment, mistakes or biased witnesses.

“I have never heard of anything like this at all,” said Nancy Gertner, a Harvard Law School professor who served as a federal judge from 1994 to 2011. Gertner and other legal experts said the program sounds more troubling than recent disclosures that the National Security Agency has been collecting domestic phone records. The NSA effort is geared toward stopping terrorists; the DEA program targets common criminals, primarily drug dealers. […]

READ @ http://www.reuters.com/article/2013/08/05/us-dea-sod-idUSBRE97409R20130805

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* BILL BLACK: IS IT LEGAL MALPRACTICE TO FAIL TO GET HOLDER TO  PROMISE NOT TO TORTURE YOUR CLIENT?

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posed from New Economic Perspectives

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One of the things I never expected to read was a promise by any United States official that a potential defendant in a criminal prosecution by our federal courts “will not be tortured.”

The idea that the Attorney General of the United States of America would send such a letter to the representative of a foreign government, particularly Russia under the leadership of a former KGB official, was so preposterous that I thought the first news report I read about Attorney General Holder’s letter concerning Edward Snowden was satire. The joke, however, was on me. The Obama and Bush administrations have so disgraced the reputation of the United States’ criminal justice system that we are forced to promise KGB alums that we will not torture our own citizens if Russia extradites them for prosecution.

The standard joke that came to mind when I read Holder’s letter was the bartender who brings out glasses to three customers and asks “which of you ordered his whiskey in a clean glass?” We take it for granted that no restaurant or bar will knowingly serve us our drinks in a dirty glass. I always took it for granted that no U.S. attorney general would knowingly allow a criminal suspect in U.S. custody to be the victim of torture, raped, branded, or a host of other forms of brutality. […]

READ @ http://www.nakedcapitalism.com/2013/07/bill-black-is-it-legal-malpractice-to-fail-to-get-holder-to-promise-not-to-torture-your-client.html

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* PLUTOCRACY AND CORRUPTION: HARMING THE AVERAGE U.S. CITIZEN

By Margaret Elkis, EconomyInCrisis

In today’s society, plutocracy and political corruption go hand in hand, especially in Washington.

 

President Slickmo

President Slickmo

Simply put, plutocracy is a government ruled controlled by wealthy individuals. It is no secret that wealth buys power, and that is exactly what we are seeing today. Unfortunately, with wealth and power often comes corruption. Author J.R. Martin stated in chapter nine of his book, Selling U.S. Out, that political scandal and corruption are not new. They have always existed. Indeed, all one has to do is read the news to learn of the corruption and greed taking place between the big players of our government:

  • political parties: Republicans and Democrats
  • lobbyists and overpaid consultants
  • the mainstream media

Over the past forty years, power, money and greed have corrupted our elected government officials at every level. What’s most alarming is that the blatant corruption has been tolerated and accepted by the American people. Unfortunately, members of both parties act as if their jobs are nothing more than a big political game. They’re so focused on insulting the other side and getting their own agendas passed that they forget they’re supposed to be working for the U.S. public.

As J.R. Martin writes:

“Neither party represents the interests of the American people since both are controlled by foreign and domestic corporations and special interest groups that provide the majority of their funding…both parties practice dishonest, divisive politics aimed at dividing and manipulating public opinion instead of seeking to build an honest national consensus on important issues confronting our nation.” […]

READ @ http://economyincrisis.org/content/plutocracy-corruption-harming-the-average-u-s-citizen

Aug 032013
 

Posted by greydogg, 99GetSmart

* BOMBSHELL: PLUTOCRATS BRAZENLY COLLUDE TO HURT STATE ECONOMIES AND SCREW WORKING PEOPLE

By Lynn Parramore, AlterNet

images-1

Illinois fatcats discuss plan to sabotage state bond ratings in scheme to destroy pensions.

These days, many Americans walk around feeling like no matter how hard they work, how much they manage to save or how carefully they plan for the future, the game is rigged against them. They suspect that behind closed doors, CEOs and Wall Street honchos are eagerly scheming to rip them off.

Their worst fears of corruption and collusion just came true in Illinois, where corporate titans were caught red-handed in the act of Rigging the Game.

Let’s step inside a recent gathering of the corporate-backed Union League Club of Chicago, where former Illinois Attorney General Ty Fahner, who now leads a band of plutocrats known as the “Civic Committee of the Commercial Club of Chicago,” recently launched into an hour-long diatribe on the evils of state pensions.

Fahner, a top GOP fundraiser, can’t abide the notion that teachers, firefighters, nurses and other public workers in the state of Illinois can still expect a decent retirement. Not a luxurious retirement, mind you — the average pension is $32,000 a year, and most state employees will not receive Social Security. But even a modest retirement for hard-working people is too much for today’s fatcats.

Fahner is part of a virulent strain of public raiders and economic crackpots who have become dominant in the Republican Party (and increasingly among the Democrats, too) who are hell-bent on destroying unions and attacking public employees. Ultimately they wish to privatize everything and reduce their tax responsibilities down to nothing.

That’s why Fahner has declared war on pensions and is promoting a pension crisis in order to justify it. He has called for cost of living cuts, raising the retirement age, capping pension earnings and shifting the cost of the pension obligation of teachers to local school districtsmany of which are too poor ever to payHe styles himself as a savior who wants only to protect the public from debt, when in reality he is a brutal plutocrat who will stop at nothing to line his pockets at public expense and reduce his and his friends’ taxes.

Illinois has real problems. However, Fahner desperately hopes the public will not catch on to the fact that states are having difficulty paying out pensions because of the lack of revenue caused by a Wall Street-driven financial crisis and the deep recession it set off, regressive taxes, and the myriad bond scams financiers have already inflicted on states, cities, towns, and municipalities which have triggered funding crises for pensions and other programs. (See “How Wall Street Fraudsters Plunder Public Finances, And 5 Ways to Fight Back.”)

Fahner has tried a number of dirty tricks to attack pensions in his career. But his most recent admission is absolutely breathtaking in its brazenness: He boasted of working to scam the Illinois bond rating.

During Fahner’s talk to the Union League Club, an unidentified person in the audience suggested that pressuring credit agencies to rig the state bond ratings in order to attack pensions might be a jolly good idea. Fahner gleefully replied that he had already thought about that — and his group has tried it.

Audience member: “Maybe sometimes you gotta be irresponsible to be responsible. If a political solution really doesn’t produce a favorable outcome, maybe you really need a market solution. And a market solution, I don’t mean bankruptcy, I mean actually talking down the state rating even further so the state’s bonds essentially become below investment grade. And it drives up the borrowing cost to the state and all of us to a significant level enough that you really feel the public pressure…”

Fahner: “The Civic Committee, not me, but me and some of the people that make up the Civic Committee… did meet with and call – in one case in person – and a couple of calls to Moody’s and Fitch and Standard & Poors, and say, How in the hell can you guys do this?”

Fahner went on to take credit for downgrades to Illinois credit ratings, saying, “If you watch what happened in the last few years, it’s been steadily down.” […]

READ @ http://truth-out.org/opinion/item/17917-bombshell-plutocrats-brazenly-collude-to-hurt-state-economies-and-screw-working-people

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* CHICAGO NEXT? WINDY CITY CASH BALANCE PLUMMETS TO ONLY $33 MILLION AS DEBT TRIPLES

By Tyler Durden, zerohedge

Chicago Mayor / neoliberal tool, Rahm Emmanuel

Chicago Mayor / neoliberal tool, Rahm Emmanuel

While everyone’s attention is focused on the Detroit bankruptcy, and just what assets the city will sell in lieu of raising a DIP loan, perhaps it is time to refocus attention to the city 300 miles west: Chicago. According to the Chicago Sun Times citing year-end audits, Obama’s former right hand man, Rahm Emanuel, closed the books on 2012 with $33.4 million in unallocated cash on hand — down from $167 million the year before — while adding to the mountain of debt piled on Chicago taxpayers. In addition to a liquidity problem, Chicago may also be quite insolvent as the city’s total long-term debt soared to nearly $29 billion. That’s $10,780 for every one of the city’s nearly 2.69 million residents. More than a decade ago, the debt load was $9.6 billion or $3,338 per resident. Of course, in a world in which debt is “wealth”, this is great news… at least until debt becomes “bankruptcy.”

Ironically last year, now-retiring City Comptroller Amer Ahmad argued that the city’s debt load was not “troubling” because, “We still have a very strong bond rating. Our fiscal position is getting better every year and we are aggressively managing our liabilities and obligations” (very much awhat the ECB’s Mario Draghi tells the world when he gives the periodic monthly update of European capital markets during the central bank’s press conference). It is ironic because last week, Moody’s downgraded Chicago from Aa3 to A3 in an unprecedented three notch cut in the city’s bond rating, citing Chicago’s “very large and growing” pension liabilities, “significant” debt service payments, “unrelenting public safety demands” and historic reluctance to raise local taxes that has continued under Emanuel.

Moody’s noted that the city’s total fund balance at the close of 2012 was $231.3 million and that Chicago has just $625 million in “leased asset reserves.” Had the city fully funded its $1.5 billion “actuarially required contribution” to its four under-funded city employee pension funds in 2012 alone, “these two reserves would have been entirely depleted,” Moody’s said.

The “unassigned” balance is $33.4 million. Experts recommend a cash cushion of at least $200 million for a budget the size of Chicago’s, according to the Civic Federation. The city ended 2009 with an unallocated checkbook balance of just $2.7 million. […]

READ @ http://www.zerohedge.com/news/2013-07-28/chicago-next-windy-city-cash-balance-plum

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* BANKS VERSUS THE PEOPLE: THE UNDERSIDE OF A RIGGED GAME! (PART 1)

By Eric Toussaint, CADTM, London Progressive Journal

Translation: “Snake” Arbusto

Unknown

Since 2007-2008, the major central banks (the ECB, Bank of England, the “Fed” in the USA, and the Swiss National Bank) have been making it their absolute priority to attempt to avoid a collapse of the private banking system. Contrary to what has been said more or less everywhere, the principal risk threatening the banks is not that a government will suspend payment of sovereign debt |1|.

None of the bank failures since 2007 have been caused by that kind of payment default. None of the bank bailouts organized by the various governments has been made necessary by suspension of payment by an over-indebted State. What has threatened the banks since 2007 is the structured private-debt holdings they have gradually built up since the major deregulations, which began in the late 1970s and culminated during the 1990s. The balance sheets of private banks are still packed with bad assets |2] which range from completely toxic assets – veritable time bombs – to non-liquid assets (meaning they cannot be sold or shifted on financial markets), and include assets of which the value is completely over-estimated in the banks’ balance sheets. The sales and depreciations of assets banks have booked until now in order to reduce the weight of these explosive assets have been insufficient. A significant number of them depend on short-term financing (either provided or guaranteed by the Public Authorities with taxpayers’ money) to stay afloat |3] and handle debts that are themselves short-term. That explains why the Franco-Belgian bank Dexia, which in fact amounts to a very large hedge fund, has been on the brink of bankruptcy three times in four years – in October 2008, in October 2011 |4|, and again in October 2012. During the most recent episode, in early November 2012, the French and Belgian governments provided aid amounting to 5.5 billion euros (53% of which was borne by Belgium) to recapitalize Dexia SA, a moribund financial company whose equity has melted away.

According to Le Soir: “The equity of the Dexia parent company dropped from 19.2 billion to 2.7 billion euros between the end of 2010 and the end of 2011. And at group level, total equity has become negative (-2.3 billion euros on 30 June 2012).” At the end of 2011, Dexia SA’s immediately outstanding debts amounted to 413 billion euros, and the amounts due under derivative contracts stood at 461 billion. Added together, those two figures amount to more than 2.5 times Belgium’s GDP! And yet Dexia’s senior executives, Belgian vice-prime minister Didier Reynders, and the dominant media are still claiming that the problem afflicting Dexia SA is largely caused by the sovereign debt crisis in the southern part of the Euro zone. The truth is that Dexia SA’s holdings in Greece did not amount to more than 2 billion euros in October 2011 – 200 times less than the amount of its immediately outstanding debts. In October 2012, Dexia’s shares were worth approximately 0.18 Euros – 100 times less than in September 2008. Despite this, the French and Belgian governments have decided once again to bail out this uncharitable organization at the cost of increasing the public debt in their own countries. In Spain, the near failure of Bankia was also caused by unsound financial packages, and not by a default on the part of any government. Since 2008, the same scenario has been replayed at least thirty times in Europe and the United States. Each time, the public authorities have come to the aid of the private banks (as they systematically do) by financing their bailouts with government debt.

Return to the beginning of the crisis in 2007

The gigantic private-debt house of cards began to collapse when the speculative real-estate bubble in the United States burst (followed by Ireland, the UK, Spain, etc.). The real-estate bubble burst in the United States when the price of homes, of which there was an oversupply, began to fall because more and more homes were without buyers.

The interpretations given by the mainstream media were dominated by partial – or deliberately fallacious – explanations for the crisis that struck the United States in 2007 and had a tremendous contagious effect, mainly on Western Europe. Regularly in 2007 and during the better part of 2008, it was explained to the public that the crisis had started in the United States because low-income people had gone into too much debt to acquire homes they were not able to pay for. Irrational behavior on the part of the poor was pointed to as the cause of the crisis. But beginning in late September 2008, after the failure of Lehmann Brothers, the dominant narrative changed and the finger was pointed at certain black sheep of the world of finance who had perverted the virtuous operation of capitalism. But the lies and partial explanations continued to circulate. Low-income families were no longer responsible for the crisis; it was the rotten apples in the capitalist class – Bernard Madoff, who put together a 50-billion-dollar swindle, or Richard Fuld, the boss of Lehmann Brothers.

The beginnings of the crisis go back to 2006, when the drop in real-estate prices began in the United States, caused by overproduction, itself caused by the speculative bubble that inflated real-estate prices and drove the construction sector to overheat and increase its activity far in excess of solvent demand. The collapse of real-estate prices is what caused the increase in the number of households unable to meet their payments on subprime mortgages. In the United States, households often refinance their mortgages after 2 or 3 years when home prices are trending upward in order to get more favorable terms (especially since, in the subprime-loan sector, the credit rate for the first two or three years was low and fixed, around 3%, before increasing sharply and becoming variable in the third or fourth year). When real-estate prices began to drop in 2006, households who had contracted subprime loans were no longer able to refinance their home loans favorably, and payment defaults began to multiply greatly starting in early 2007, causing the failure of 84 mortgage companies in the USA between January and August 2007.

As is very often the case, whereas the crisis is explained simplistically by the bursting of a speculative bubble, in reality the cause lies both in the production sector and in speculation. Of course, the fact that a bubble was created and eventually burst only multiplies the effects of a crisis that began with production. The entire rickety structure of subprime loans and structured products that had been under construction since the mid-1990s, collapsed, which had terrible repercussions on production in various sectors of the real economy. Austerity policies then amplified the phenomenon further by leading to the extended period of recession-depression in which the economies of the most industrialised countries are now floundering.

The impact of the real-estate crisis in the United States and the banking crisis that followed has had an enormous contagious effect internationally, due to the fact that numerous European banks had invested massively in US structured products and derivatives. Since the 1990s, growth in the United States and in several European economies had been supported by hypertrophy of the private financial sector and by a huge increase in private debt – household debt |5] and debts of financial and non-financial companies. On the other hand, public debt had tended to decrease between the second half of the 1990s and 2007-2008.

Thus there was a hypertrophy of the private financial sector. The volume of assets of European private banks compared to gross domestic product ballooned extraordinarily beginning in the 1990s to reach 3.5 times the GDP of the 27 member countries of the European Union in 2011 |6|. In Ireland in 2011, banks’ assets amounted to eight times the country’s gross domestic product.

The debts of the private banks |7] in the Euro zone also amounted to 3.5 times the Zone’s GDP. Debt in the British financial sector has reached unheard-of heights in proportion to the GDP – it is 11 times greater, whereas public debt represents approximately 80% of GDP.
The gross public debt of the countries of the Euro zone amounted to 86% of the GDP of the 17 member countries in 2011 |8|.

Greek public debt was 162% of Greece’s GDP in 2011, while debts in its financial sector amounted to 311% of GDP – double the amount of public debt. Spain’s public debt was 62% of GDP in 2011, whereas debts in the financial sector were at 203%, or three times the amount of public debt. […]

READ @ http://londonprogressivejournal.com/article/view/1559/banks-versus-the-people-the-underside-of-a-rigged-game-

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* PLUTOCRACY AND CORRUPTION: HARMING THE AVERAGE U.S. CITIZEN

By Margaret Elkis, EconomyInCrisis

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In today’s society, plutocracy and political corruption go hand in hand, especially in Washington.

Simply put, plutocracy is a government ruled controlled by wealthy individuals. It is no secret that wealth buys power, and that is exactly what we are seeing today. Unfortunately, with wealth and power often comes corruption. Author J.R. Martin stated in chapter nine of his book, Selling U.S. Out, that political scandal and corruption are not new. They have always existed. Indeed, all one has to do is read the news to learn of the corruption and greed taking place between the big players of our government:

  • political parties: Republicans and Democrats
  • lobbyists and overpaid consultants
  • the mainstream media

Over the past forty years, power, money and greed have corrupted our elected government officials at every level. What’s most alarming is that the blatant corruption has been tolerated and accepted by the American people. Unfortunately, members of both parties act as if their jobs are nothing more than a big political game. They’re so focused on insulting the other side and getting their own agendas passed that they forget they’re supposed to be working for the U.S. public.

As J.R. Martin writes:

“Neither party represents the interests of the American people since both are controlled by foreign and domestic corporations and special interest groups that provide the majority of their funding…both parties practice dishonest, divisive politics aimed at dividing and manipulating public opinion instead of seeking to build an honest national consensus on important issues confronting our nation.” […]

READ @ http://economyincrisis.org/content/plutocracy-corruption-harming-the-average-u-s-citizen

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* 44 FACTS ABOUT THE DEATH OF THE MIDDLE CLASS THAT OBAMA SHOULD KNOW

By Michael Snyder, The Economic Collapse blog

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As Obama parades around middle-America, promoting hope-and-change amid a “Better-Bargain for the middle-class,” it seemed only appropriate to lay out a few ‘facts’ before his next pronouncement …

What is America going to look like when the middle class is dead?  Once upon a time, the United States has the largest and most vibrant middle class in the history of the world.  When I was growing up, it seemed like almost everyone was “middle class” and it was very rare to hear of someone that was out of work.  Of course life wasn’t perfect, but most families owned a home, most families had more than one vehicle, and most families could afford nice vacations and save for retirement at the same time.  Sadly, things have dramatically changed in America since that time.

There just aren’t as many “middle class jobs” as there used to be.  In fact, just six years ago there were about six million more full-time jobs in our economy than there are right now.  Those jobs are being replaced by part-time jobs and temp jobs.  The number one employer in America today is Wal-Mart and the number two employer in America today is a temp agency (Kelly Services).  But you can’t support a family on those kinds of jobs.  We live at a time when incomes are going down but the cost of living just keeps going up.

As a result, the middle class in America is being absolutely shredded and the ranks of the poor are steadily growing.  The following are 44 facts about the death of the middle class that every American should know…

1. According to one recent survey, “four out of five U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives”.

2. The growth rate of real disposable personal income is the lowest that it has been in decades.

3. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000.

4. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.

5. The home ownership rate in the United States is the lowest that it has been in 18 years.

6. It is more expensive to rent a home in America than ever before.  In fact, median asking rent for vacant rental units just hit a brand new all-time record high.

7. According to one recent survey, 76 percent of all Americans are living paycheck to paycheck.

8. The U.S. economy actually lost 240,000 full-time jobs last month, and the number of full-time workers in the United States is now about 6 million below the old record that was set back in 2007.

9. The largest employer in the United States right now is Wal-Mart.  The second largest employer in the United States right now is a temp agency (Kelly Services).

10. One out of every ten jobs in the United States is now filled through a temp agency.

11. According to the Social Security Administration, 40 percent of all workers in the United States make less than $20,000 a year. […]

READ @ http://www.zerohedge.com/news/2013-07-31/44-facts-about-death-middle-class-obama-should-know-about