It Is Such A Bummer That 'Conservative' Now Means Anti-Choice, Anti-Freedom, And Anti-American

On Twitter yesterday, someone Tweeted the following:

"Conservatives go on and on about 'freedom' right up until two guys kiss."

And that seemed funny and true. So I retweeted it.

And then someone else chimed in with the reminder that there are (or used to be) two kinds of "conservatives":

• the traditional kind, who worry about things like big government deficits and too much regulation, and
• the new kind, who want to re-combine (the Christian) church and state, overturn Roe v. Wade, diss education, reject science, ban gay marriage (and homosexuality), teach creationism as fact, and so forth.

In other words, in the common lingo, there are "fiscal conservatives" and "social conservatives."

But the bummer for anyone who considers him or herself a fiscal conservative is that the word "conservative" is being grossly misused and warped by the second usage.

There is nothing "conservative" about wanting to ban gay marriage and abortion, emphasize Christian religious values in government decisions, teach creationism, et al. Read more......

RON PAUL BELIEVES IN AN INFLATION CONSPIRACY THEORY: And Here's Why It's Totally Wrong

Ron Paul put on a show at Fed Chairman Ben Bernanke's testimony on monetary policy earlier today—even challenging the Fed to let him pay his taxes in gold.

In his rant, Paul argued that inflation was actually more like 9 percent—and not the 2.9 percent increase that Bureau of Labor Statistics says we've seen in the last 12 months—based on the old CPI statistics.

This "old measure" of measuring consumer prices actually touches on a much larger debate–one that has been spearheaded by John Williams and his website Shadow Government Statistics. Ron Paul's website actually cites Williams in many of its economic commentaries.

The stats

Williams's research contends that the 12-month inflation statistic we should have seen last month was 10.5 percent, arguing that the basis for calculating CPI back in 1980 was the pure formula before "the reporting system increasingly succumbed to pressures from miscreant politicians, who were and are intent upon stealing income from social security recipients, without ever taking the issue of reduced entitlement payments before the public or Congress for approval." Read more.......

Obama pushes community colleges to serve corporate America

As part of its effort to tailor higher education more closely to the needs of corporate America, the Obama administration and state governments are pushing four-year universities and colleges to drop remedial or developmental education. Instead these courses, which are chiefly used by working class students, are being shunted almost exclusively onto community colleges.

One way this is occurring is by restricting state and federal funding to four-year institutions. Over a dozen states have cut funding for remedial education at four-year universities and colleges.

Oklahoma and Nevada have taken the additional step of simply denying state funding for remediation at four-year institutions, while Colorado and South Carolina shifted remediation to community colleges several years ago.

This policy is not being implemented to improve access to remedial courses. Rather, it is being done with the intent of creating an even more unequal system of higher education in which working class students will have little or no access to a university-level education. Either working class youth will be denied a college education altogether, or they will be relegated to the community college system, which the Obama administration wants to transform into little more than training centers for low-wage jobs in manufacturing and the service industry. Read more.....

US workers without high school diplomas hit hard by recession

Workers in the US with less education have been hard hit by unemployment and low wages, since June 2009, the date named by the National Bureau of Economic Research as the “official” end of the recession in mid-2009.

Figures from the Bureau of Labor Statistics (BLS) show that workers who do not finish high school make on average about $23,400 a year, while those with high school diplomas make $33,500. Both compare poorly to those with a four-year college degree, who average $54,700, the bureau found.

Drawing on these statistics, a recent article from the Wall Street Journal notes that by 2020 there will be 6 million more workers without high school diplomas than there will be jobs available to them, according to a 2011 McKinsey Global Institute study. This is mainly due to the fact that industries that normally hire less-educated workers, such as construction and low-end manufacturing, have continued to decline in the recession.

Unemployment remains high for the less educated. While the official jobless rate for those with college degrees stands at 4.2 percent, this compares to an 8.4 percent jobless rate for those without a high school diploma, which is slightly higher than the national rate. Youth unemployment is particularly high, 23.2 percent, according to BLS figures. Read more......

Thousands in Michigan continue to lose welfare benefits

Thousands of Michigan citizens have lost cash welfare benefits in each of the past four months, after a strict 48-month lifetime limit was imposed on recipients by the state legislature last year. The new law signed by Republican Governor Rick Snyder went into effect on October 1, 2011, the beginning of the new fiscal year.

By the end January, almost one in four people who had been on the welfare rolls in Michigan in September had been dropped. The decline in cases continues as official unemployment stands at 9.3 percent in the state, leaving little prospects that those cut off will find work.

About 60,000 parents and children—making up 17,000 family cases—abruptly lost their support, with almost no notice. Even before the law was signed, and to avoid any challenges to cutting the rolls, Department of Human Services (DHS) director Maura Corrigan began to strictly enforce the 60-month limit approved years earlier by Democratic Governor Jennifer Granholm.

The exemptions for families whose caseworkers stated they were making progress by finding employment, or in counties where the unemployment rate is 25 percent above the state average, are no longer in force under Corrigan’s directive. Other federal rules related to meeting “Work First” reporting requirements can also be used to remove families from the program. Read more......

Dollar to Crash, Unemployment Rise and Stocks Bite Dust: Analysts

Despite talk of an improving economy and a surge in stock markets, doomsayers have warned of tougher times ahead for Americans with an imminent financial crash looming in the near future.

Three analysts, with expertise on finance and trends, told the USA Today Monday that the worst of the financial crisis was yet to hit the nation.

Gerald Celente from the Trends Research Institute talked of an impending "economic 9/11" situation, that he believes will result from the shortcomings or lack of control from lawmakers in dealing with economic disasters.

Celente, who is long known for forecasting trends since 1980, predicts that dollar will crash, thereby leading to less purchasing power and unemployment.

"2012 is when many of the long-simmering socioeconomic and political trends that we have been forecasting and tracking will climax," Celente said in the report.

"When money stops flowing to the man on the street, blood starts flowing in the street," the trend setter added.

The publication also profiled Harry Dent, who authored a book titled "The Great Crash Ahead." Dent foresees a stock market crash around 2013 or 2014 and believes stocks are given an "artificial short-term boost". Read more.....

The Perniciousness of ZIRP

Suppose that I promised to give you free chocolate for the next three years: How much chocolate would you eat today?

A pound? Half a pound? A few ounces? Or would you not eat any chocolate at all, once I made the announcement? After all, you’re going to have free chocolate for the next three years—seems silly to gorge on chocolate today, when you can have as much as you’d like tomorrow, or next week, or whenever you want over the next three years.

So free chocolate for the next three years? Great! . . . uh, only not right now, thanks very much: I’m kinda full.

But then what if I said to you, “Chocolate is free now—but I’m definitely going to raise the price in the near term. In a month, chocolate might be free—or then again, it might cost $1,000 an ounce. So get some while you can, because tomorrow, you never know!”

Well, obviously, to such an uncertain outlook, you’d go out and buy some chocolate now—because tomorrow, it might well be unaffordable. Read more....

CAPITALISM MAKES SOCIALISM ACCEPTABLE

The MMR conversation on savings and investment has now raged to over 600 comments. It would be an understatement to say that the conversation has been illuminating. To me, one of the more interesting facets of this discussion is the fact that we have MMTers, horizontalists (like Ramanan), MMRists and previously undecideds (like the mysterious JKH) all agreeing! I think this speaks volumes about the merits of what MMR is building. Our flexible, fact based and apolitical approach is proving agreeable to many and I hope we’ll continue to embrace even those who might disagree with much of what we say.

But the most illuminating point that came from the discussions was the point on S = I + (S-I), where S = Savings, I = Investment. Now, for the layman, I will try to break this down as best I can so bear with me. What we learn from the sectoral balances approach is that the government’s deficit is the non-government’s surplus. If the government taxed all your assets at a rate of 100% then you’d have no dollar denominated assets. That’s simple enough. The sectoral balances is a powerful concept as it highlights the power of the government and helps explain why a sovereign currency issuer might run persistent budget deficits without running into a Greek problem (the USA for instance has pretty much always run deficits so the idea that deficits are inherently bad, is inherently wrong!). But when we break this equation down we have to be very precise about what it means because improper explanation will lead one to put the cart before the horse. Read more......

ObamaCare's High-Risk Pools Cost Twice as Much Per Person As Projected

Enrollment in ObamaCare's high-risk insurance plans—intended to provide immediate coverage for the especially difficult to insure until the law's major insurance expansions start up in 2014—has so far been underwhelming: Fewer than 50,000 people are enrolled in the program, according to a new report from the Centers for Medicare and Medicaid Services. Initial estimates had projected that around 375,000 people would end up enrolled, possibly pushing it far over budget before 2014.

Overall, the program has so far spent just $600 million of the $5 billion it was allocated. But on an individual basis, patients have been far more expensive to treat than projected, costing quite a bit more than similar high-risk plans offered by states prior to ObamaCare.

The Washington Post's Sarah Kliff reports:

Those who have enrolled in the program are projected to have significantly higher medical costs than the government initially expected. Each participant is expected to average $28,994 in medical costs in 2012, according to the report, more than double what government-contracted actuaries predicted in November 2010. Then, the analysts expected that the program would cost $13,026 per enrollee. Read more.......

Mark Bittman: Government Is 'on Our Side' When It Stops Us From Eating What We Want to Eat

New York Times columnist Mark Bittman, who last year expressed enthusiasm for the "fun" and "exciting" project of micro-managing other people's diets via carefully calculated taxes and subsidies, today asks: Why not start with poor people? Bittman likes the idea of preventing food stamp recipients from using their taxpayer-funded scrip to buy products that do not meet with his approval. But he would not stop there:

Added sugar is not the only dangerous food. But unlike animal products, for example, which we also overconsume, it has no benefits. Yet we down it at the rate of 150 pounds per person per year, and while scientists argue whether it is addictive in humans (it meets the criteria for addiction in animals), it is most certainly habit-forming. [Robert H.] Lustig and his co-authors suggest [in a recent Nature article] that actions like imposing taxes on added sugar or establishing a minimum age for purchase of sodas (they mention 17 in their paper) would reduce consumption.

The question "Is this necessary?" is unavoidable. But as obesity and its consequences ravage our health care system, we struggle not only with our own diets but also with preventing our children from falling into the same traps... Read more..........

The Myth of the Greater Good

Politicians must stop acting like the ends justify the means.

I—and most other people, I assume—grew up being taught that the end doesn’t justify the means. Basically, this is an injunction not to rationalize one’s behavior while using other people as mere means to one’s ends.

Most people apply that principle day to day. If you want at an item on a supermarket shelf and someone is standing in the way, few of us would think it right to shove that person aside. Why not? It won’t do to say that the person might fight back. Would things change if an elderly, frail person were there? It also won’t do to say that other people might observe your conduct, perhaps leading to a fight, or an arrest, or at least a loss of reputation. Nor will it do to say that in normal circumstances waiting for the person to move would cost little in time and convenience. How much time and inconvenience would be required to make shoving an attractive option? The question answers itself. Read more......

This Is America Today, Part II

These facts are from the CIA—and they are undisputed:

• Infant mortality rate in the United States: 6.06 per 1,000 live births.

• Infant mortality rate in France: 3.29 per 1,000 live births.

• Average life expectancy in the United States: 78.37 years (75.92 for men, 80.93 for women).

• Average life expectancy in France: 81.19 years (78.20 for men, 84.54 for women).

• Total expenditure on health care in the United States: 16.2% of GDP (2009).

• Total expenditure on health care in France: 3.5% of GDP (2009).

• Expenditure on health care in the United States per capita: $7,517 per year (2009).

• Expenditure on health care in France per capita: $1,148 per year (2009). Read more.....

This Is America Today

A true story: A fifty-ish woman I know was diagnosed with breast cancer. Dutifully, she and her husband contacted their insurance company to start the process of paying for her medical bills.

But lo and behold, the insurance company started dragging its feet—then tried to claim the woman’s breast cancer was a “pre-existing condition”.

That she had breasts in fact was a “pre-existing condition”—a “pre-existing condition” she had had since she was fourteen.

But the cancer? That was brand new.

The woman and her husband started the usual, insurance company-designated complaint process—which they quickly realized was a deliberate rigamarole, designed to get them spinning their wheels without receiving any money from the insurance company.

So they did the smart thing: They contacted lawyers. Not “a” lawyer, but a team of lawyers—four in fact, including a partner in a name law firm in her city.

This squad of lawyers had a morning meeting with the insurance company people.

In less than a single business day, the insurance company started paying up. In the two years since this little “episode”, as the cancer stricken woman calls it, she and her husband haven’t had a single problem with their insurance company. Read more.......

Top 5 Declining Business Industries

Previously, NuWire analyzed the Top 5 Business Trends that may positively impact some businesses’ potential for profit. Other businesses, however, will struggle to adapt to the trends that are driving a larger economic transition; typically, these are businesses that are adversely affected by factors such as the predominance of the Internet, the weakening of the U.S. dollar or the poor state of the housing market.

NuWire identified and explored five business industries that appear to be on the decline. Entrepreneurs should consider the downward trends inherent in these industries and perhaps choose to invest their time and money in more promising endeavors.

Print media

Paper is quickly going out of fashion. It’s expensive and it kills trees—two big taboos for the modern consumer. Furthermore, the Internet, a faster and more convenient platform, is quickly becoming the preferred method for gathering information that would traditionally be captured in print media. Only one in fifty Americans got the news regularly from the internet in 1996; a decade later, nearly one in three Americans regularly received news online, according to the Pew Research Center. Read more....

The World's Richest Countries

If wealth is power, then Qataris have some serious muscle to flex. The Persian Gulf emirate of 1.7 million people ranks as the world’s richest country per capita thanks to a rebound in oil prices and its massive natural gas reserves. Adjusted for purchasing power, Qatar booked an estimated gross domestic product per capita of more than $88,000 for 2010.

Qatar has the third-largest reserves of natural gas in the world, and it has invested heavily in infrastructure to liquefy and export it, as well as to diversify its economy, without overreaching as much as nearby Dubai. Qatar has lured multinational financial firms to the country, as well as satellite campuses of U.S. universities. The government is pouring money into infrastructure, including a deepwater seaport, an airport and a railway network, all with an eye to making the country a better host for businesses and the 2022 World Cup. Read more....

20 Lies Every American Should Know!

"It astonishes me to find... [that so many] of our countrymen... should be contented to live under a system which leaves to their governors the power of taking from them the trial by jury in civil cases, freedom of religion, freedom of the press, freedom of commerce, the habeas corpus laws, and of yoking them with a standing army. This is a degeneracy in the principles of liberty... which I [would not have expected for at least] four centuries." - Thomas Jefferson to William Stephens Smith, 1788

"I know of no safe depository of the ultimate powers of the society but the people themselves, and if we think them not enlightened enough to exercise control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education." - Thomas Jefferson, letter to William C. Jarvis, September 28, 1820. Read more.....

The Dynamics of Household Debt

Changes in debt-income ratios can be attributed to primary borrowing, interest rates, growth, and inflation. In a new working paper, we apply such a decomposition to the evolution of U.S. household debt. This shows that changes in borrowing behavior has played a smaller role in the growth of household leverage than is widely believed. Rather, most of the increase can be explained in terms of “Fisher dynamics” — the mechanical result of higher interest rates and lower inflation after 1980. Bringing leverage back down will similarly require contributions from factors other than reduced borrowing.

It’s a well-known fact that household debt has exploded in recent decades, rising from 50 percent of GDP in 1980 to over 100 percent on the eve of the Great Recession. It’s also well-known that household borrowing has increased sharply over this period. Indeed, for most people — including many economists — these are two ways of saying the same thing. In fact, though, they are quite different claims, and while the first one is certainly true, the second is not.

How can debt have increased if borrowing hasn’t? Though this seems counterintuitive, the answer is simple. We’re not interested in debt per se, but in leverage, defined as the ratio of a sector’s or unit’s debt to its income (or net worth). This ratio can go up because the numerator rises, or because the denominator falls. Household leverage increased sharply, for instance, in 1930 and 1931 (see Figure 1) but people weren’t were consuming more in the Depression; leverage rose because incomes and prices were falling faster than households could pay down debt. Similarly, changes in interest rates can change the debt burden without any shift in household consumption, because a level of spending that would be compatible with a stable debt-income ratio when interest rates are low will lead to a rising ratio when interest rates are higher. Read more.....

Bank of England deputy Governor Charlie Bean downplays QE effect on pensioners

Pensioners have not been hit as hard as they claim by quantitative easing (QE) and should accept that they must bear the burden of the downturn alongside working households, according to the Bank of England's deputy Governor Charlie Bean.

The comments by Mr Bean to the Scottish Council for Development and Industry are likely to inflame pensioner groups, who have argued that QE is eroding their incomes.

Ros Altmann, director-general of Saga Group, said on Tuesday: "QE has permanently impoverished more than 1m pensioners, and thousands more annuity purchasers will receive reduced pensions every week."

Mr Bean acknowledged that pensioner incomes have been hurt by the impact of QE, but claimed that the Bank's £325bn money-printing policy has lifted the asset value of their portfolios and helped secure the economic recovery. Read more.....

The Federal Reserve's Explicit Goal: Devalue The Dollar 33%

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.

But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today. Read more.....

The Boiling Frog: Effects of QE2 On The Bottom 80% of the U.S. Population

An old metaphor: If you take a frog and drop it into a roiling pot of boiling water, it’ll jump right out, unscathed. But if you put that same frog in a pot of cold water, and then slowly raise the heat, that frog won’t move. It’ll stay in that pot of water, calm as can be, right up until it is boiled to death.

I’ve been arguing that the unpayable Federal government debt, coupled with irresponsible Federal Reserve policies, will inevitably lead to a hyperinflationary event and currency collapse. In order to prepare for a web seminar on hyperinflation in America, I’ve been looking at the issue of how to safeguard assets before a currency collapse, and how to identify opportunities in the midst of a hyperinflationary crisis.

But along the way—inevitably—it’s led me to consider the issue of the effects of hyperinflation on the American people. Not even hyperinflation—just regular old rising consumer prices: How will they affect the average household. Read more.....

Never Trust Government Numbers

President Obama said in his State of the Union speech, “We’ve already agreed to more than $2 trillion in cuts and savings.”

That was reassuring.

The new budget he released this week promises $4 trillion in “deficit reduction”—about half in tax increases and half in spending cuts. But like most politicians, Obama misleads.

Cato Institute economist Dan Mitchell, a recent guest on my Fox Business show, cut through the fog to get at the truth of the $2 trillion “cut.”

“We have a budget of, what, almost $4 trillion? So if we’re doing $2 trillion of cuts,” Mitchell said, “we’re cutting government in half. That sounds wonderful.”

But what the president was talking about is not even a cut. The politicians just agreed that over the next 10 years, instead of increasing spending by $9.48 trillion, they’d increase it by “just” $7.3 trillion. Calling that a “cut” is nonsense.

Mitchell gave an analogy: “What if I came to you and said, ‘I’ve been on a diet for the last month, and I’ve gained 10 pounds. Isn't that great?’ You would say: ‘Wait, what are you talking about? That’s insane.’ And I said: ‘I was going to gain 15 pounds. I’ve only gained 10 pounds, therefore my diet is successful.’" Read more......

Signs Hyperinflation Is Arriving

This post is gonna be short and sweet—and scary:

Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value.

Such a run on commodities, I further argued, would inevitably lead to price increases and a rise in the Consumer Price Index, which would initially be interpreted by the Federal Reserve, the Federal government, as well as the commentariat, as a good thing: A sign that “the economy is recovering”, a sign that “normalcy” was returning.

I argued that—far from being “a sign of recovery”—rising CPI would be the sign that things were about to get ugly. Read more....

The Coming Middle-Class Anarchy

True story: A retired couple I know, Brian and Ilsa, own a home in the Southwest. It’s a pretty house, right on the manicured golf course of their gated community (they’re crazy about golf).

The only problem is, they bought the house near the top of the market in 2005, and now find themselves underwater.

They’ve never missed a mortgage payment—Brian and Ilsa are the kind upright, not to say uptight 60-ish white semi-upper-middle-class couple who follow every rule, fill out every form, comply with every norm. In short, they are the backbone of America.

Even after the Global Financial Crisis had seriously hurt their retirement nest egg—and therefore their monthly income—and even fully aware that they would probably not live to see their house regain the value it has lost since they bought it, they kept up the mortgage payments. The idea of them strategically defaulting is as absurd as them sprouting wings. Read more........

Two EU bodies spending money like no tomorrow

In these times of austerity when the EU Council, European Commission and the European Parliament are making efforts to cut costs, there are two EU bodies operating under the radar whose budgets have been increasing in an unchallenged way: the Economic and Social Committee (EESC) and the Committee of the Regions (CoR).

In May 2011 the European Parliament passed a resolution calling on the EESC in particular to implement a "comprehensive spending review" and "identify possible savings" - but still their budgets rise.

The budgetary control committee of the European Parliament challenged the secretaries general of the EESC and CoR - Martin Westlake and Gerhard Stahl - who once again failed to provide any concrete proposals on how savings might be made.

The figures speak for themselves.

Over the last eight years, the budgets of the EESC and CoR will have increased by some 50 percent, reaching €130 million and €86.5 million, respectively. There are around 50 officials at each committee with a minimum salary of €123.890 and six officials at each committee earning over €180,000 - more than the Dutch or UK prime minister. Read more....

The Fight of the Century

As economies contract, a global popular uprising confronts power elites over access to the essentials of human existence. What are the underlying dynamics of the conflict, and how is it likely to play out?

1. Prologue

As the world economy crashes against debt and resource limits, more and more countries are responding by attempting to salvage what are actually their most expendable features—corrupt, insolvent banks and bloated militaries—while leaving the majority of their people to languish in “austerity.” The result, predictably, is a global uprising. This current set of conditions and responses will lead, sooner or later, to social as well as economic upheaval—and a collapse of the support infrastructure on which billions depend for their very survival. Read more....

Why Capitalism Isn't Going Anywhere

It's the only system known to humanity that increases both growth and freedom.

At the height of the financial crisis in late 2008 and early 2009, a wave of articles declared the end of capitalism. A half-dozen reporters writing about the issue called Allan Meltzer, who since 1957 has been teaching about capitalism at Carnegie Mellon University in Pittsburgh.

Five of the calls he answered. The sixth was from a reporter of Die Zeit, the German weekly, who, as Professor Meltzer recalls it, asked, “Professor, what do you think about the end of capitalism?”

Professor Meltzer replied that that was the stupidest question he’d been asked in 50 years.

The reporter hung up the phone before Mr. Meltzer got to explain why, but the fuller answer is in Mr. Meltzer’s new book, Why Capitalism?, which Oxford University Press published this week.

The book is short — just 160 pages — but its simple, clear, and direct language makes a big point: that capitalism “is the only system known to humanity that increases both growth and freedom.” As a result, far from ending, capitalism has spread to formerly socialist or communist enclaves such as Eastern Europe, India, and even China.
inherent advantages. Read more....

Poor America - P a n o r a m a [B B C] (Must See)

With one and a half million (1.5 million) American children now homeless, reporter Hilary Andersson meets the school pupils who go hungry in the richest country on Earth. From those living in the storm drains under Las Vegas to the tent cities now springing up around the United States, P a n o r a m a finds out how the poor are surviving in America and asks whatever happened to the supposed 'government' and the Real People in charge - those who you 'don't see' pulling on the strings; and their vision and welfare for the country.

Could this be a form of 'Social cleansing' without the need of war or disease inflicted by the orchestrators - simply a controlled bout of poverty? Or is this the forced education that only condition children to know only a certain amount of knowledge that can only ever see them progress in working environments such as confined offices within the 'Human Zoo' qualities within the desperately overcrowded cities. Read more.......

What do we do now?

2012 will be the year of the end:

The End of America

The End of Europe

The End of Liberty

The End of Freedom

The End of Prosperity

The End of Everything

The End Times

If you spend a day or two reading news articles, watching TV or going to the movie’s these points above are a basic theme over and over again. The history channel broadcasts to you daily that 2012 is the apocalyptic end-times according to the Mayan calendar and Nostradamus. Five movies with themes of WWIII or 2012 end times went to the big screen this past year, with over a dozen more set for the first six months of this coming year. From the Wall Street Journal to the “Doom, Boom and Gloom” blog, you can read over and over again that the financial game is up and the death march of the Dollar and the European Union is set implode and take all of us down a rabbit hole of economic Armageddon. Read more.....

$16.1 trillion dollars loaned to banks in secret!

According to the results of the limited Federal Reserve audit, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.

The following is a list of loan recipients that was taken directly from page 131of the audit report….

Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion

Read more......

Kadima: The Problems

This weekend, Ha'Aretz ran an interview with Kadima and opposition leader Tzipi Livni that revealed many of the problems present in the party. What it reveals is a party with no defining or uniting ideology and a party leader so scared of losing her leadership position that she is unwilling to defend any vision for the party. She was afraid to denounce undemocratic initiatives that threatened the basic foundations of democracy in Israel. And according to the interviewer polls indicate that if elections were held today, half of the party's 2009 voters would vote for other parties. This would make Kadima a medium-sized party comparable in size to Avigdor Leibermann's Israel Beitenu party or to Labor. And there is clear fear that if she loses the leadership and former Defense Minister Shaul Mofaz becomes party leader that he will return the party to the Likud after breaking it up. Mofaz emerges from the interview as the typical Israeli general politician--interested in holding a ministry in the government whatever its ideology and makeup, not interested in ideology and with no real vision, in other words a security technocrat.

The Cancer Of Debt And Deficits

We are coming to the point in the United States when even the U.S. government will no longer be able to borrow at very low long-term rates.

That point is a few years off, and we have time to change paths; but as I have shown in previous letters, the longer we wait to get the deficit under control, the fewer choices we have and the more painful they are.

NO country can run deficits the size we are currently running, along with unfunded deficits over four times the size of the economy and a growing overall debt burden, without consequences.

Read more....

GAS PRICES HIT HIGHEST LEVEL EVER FOR THIS TIME OF YEAR….

Here we go again…I’ll update the inflation outlook tomorrow, but this is the big risk I discussed to the disinflation outlook. Gas prices are surging again

“At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.

“You’re going to see a lot more staycations this year,” says Michael Lynch, president of Strategic Energy & Economic Research. “When the price gets anywhere near $4, you really see people react.”

…Higher gas prices could hurt consumer spending and curtail the recent improvement in the U.S. economy.

A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That’s only 0.2 percent of the total U.S. economy, but economists say it’s a meaningful amount, especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession.” Read more.....

Simple Example Of Why 'Rich People' Don't Create Jobs

As everyone in this country keeps blaming everyone else for our high unemployment rate, one assertion gets repeated so often that it is now regarded as fact:

Rich people create jobs.

Specifically, the argument goes, entrepreneurs and investors create jobs.

So if we want to create more jobs, the argument continues, we need to cut taxes on entrepreneurs and investors--to increase their incentive to create jobs.

Now, I'm an entrepreneur, and Business Insider employs about 75 people, up from zero four years ago. So if this assertion were true, I'd happily espouse it. It would make me feel great, believing that I had created all those jobs. And it would make me feel perfectly justified in paying historically low tax rates. (After all, I created these jobs!). Read more....

Middle Class Poverty And Unrest In America

Poverty is on the rise in America, and buying passivity with cheap bribes has limits when applied to a fraying middle class.

If jobs are not coming back, then we as a nation need a conversation about poverty in America. The Status Quo assumption is that this is just another garden-variety recession, and that employment will bounce back, along with the "animal spirits" that drive borrowing and spending.

As of August 2011, it will be three years since the global financial meltdown. In three years, the Savior State has borrowed and blown $6 trillion maintaining the Status Quo, and the Federal Reserve has printed almost $3 trillion and shoveled that vast sum into "risk assets" to keep housing on life support and the stock market rising. The Fed has also devalued and debased the dollar, stealing wealth from the citizenry and holders of U.S.-denominated debt in the process, to serve two goals: 1) spark inflation and thus avoid deflationary deleveraging of the nation's fast-growing mountain of debt, and 2) to enable servicing that debt with cheaper dollars. Read more....

Jon Stewart On Obama Contraception Controversy

Did a Daily Show segment with Jon Stewart calling out Republicans for their absurd stance on President Obama's contraception coverage compromise and employee exemptions turn the tide in the debate? The Young Turks host Cenk Uygur breaks it down.

All employers should be required to provide health care to it's workers, even contraception should fall under healthcare, a company should have no say beyond providing it to women... If the woman refuses such services due to religious beliefs... I personally find that stupid, but IT'S THE WOMENS CHOICE... Not anybody else's... Read more....

Five Lies About the American Economy

The ongoing recession has raised a troubling question for otherwise resurgent Keynesian economists: How can the American economy keep getting worse under the intensive care of an interventionist economic team almost universally praised for its brilliance? The answer may be that the Obama administration is dealing with a fictional economy, one that bears little resemblance to the economy the rest of us inhabit. And when the difference between fact and fiction becomes too apparent, they just make stuff up. Herewith, five big lies the administration loves to tell and the mainstream media (with some notable exceptions) love to repeat:

1. Bold government action staved off a Depression, saving or creating 1.5 million jobs.

“Just remember,” Treasury Secretary Tim Geithner said on November 1, 2009, “a year ago today, last year, you had markets around the world come to a stop. Economic activity just stopped, came to a standstill, like flipping a switch.” Read more....

The Only Way Out for the American Economy

Economic despair reigns in America, as stagnation and mounting debt make our future look hopeless. Yet America is uniquely positioned to rebound and recover our economic preeminence. All that is necessary is a political decision to reverse our energy policy and stimulate domestic production of hydrocarbons. From that would flow a true economic stimulus that would mend many of our ills.

The United States is again, for the second time in less than three years, being reminded of its absurd dependence of foreign sources of energy, most notably, oil. The upheavals in the Middle East have driven up the cost of a barrel of oil into triple digits as it was in 2008. The increasing demands of countries such as China and India and the deliberate devaluation of the dollar by the Federal Reserve and the Obama administration are steadily pushing up oil prices in dollars. Read more....

Top 10 Corrupt Countries

This list is taken from the Transparency International Corruption Index. The scoring is from 1 – 10 with the lower score being the most corrupt. The source of the index is polls and surveys from 21 independent institutions. Only verifiable data is accepted for inclusion. The index includes 163 nations.

10. Equatorial Guinea – 2.1

Equatorial Guinea is one of the smallest countries in continental Africa. The current president of Equatorial Guinea is Teodoro Obiang Nguema Mbasogo. The 1982 constitution of Equatorial Guinea gives Obiang extensive powers, including naming and dismissing members of the cabinet, making laws by decree, dissolving the Chamber of Representatives, negotiating and ratifying treaties and calling legislative elections. Read more....

Homeless Fill America's Streets

The world is now seeing the economic uncertainty of the U.S. but for many Americans, it has been apparent for quite some time. Economic despair has been spreading across our nation and it can be seen by the rising number of middle class Americans losing their homes. In some cases, joblessness and inability to pay rent has forced people to live in their cars, shelters, or on the sidewalk. Read more.....

Obama and the Closing of the American Dream

During his acceptance speech at the Democratic National Convention, Barack Obama spoke movingly of restoring the American Dream, the dream that allowed him to rise from poverty to Columbia University, Harvard Law School, and now, the Democratic nominee for President. In the meantime, the Republican party continue to try to turn their opponents’ strengths into weaknesses as they tap into voters’ resentments by suggesting that Obama might be too exceptional, too well-qualified, too “elitist” to be president. Aziz Rana recounts the history of Obama’s American Dream, and argues that many working class voters remember they once had a different dream, one that makes them skeptical of meritocratic success.

How can Barack Obama, a man who only recently paid off his student loans and who lives a relatively modest life in Chicago’s Hyde Park, a few blocks from one of America’s poorest neighborhoods, be more “elitist” than John McCain, the son of an admiral (not to mention the husband of a beer heiress), or more “elitist” than Hillary and Bill Clinton, a couple whose joint earnings since 2000 top 100 million dollars? Yet the E-word, and the charge that Obama is out of touch with the experiences of white, blue-collar workers, first leveled against Obama by the Clintons during the primary race, still hang heavy over his otherwise charmed campaign. Read more.....

America’s failed promise of equal opportunity

To achieve a truly fair society, we need to look to Lincoln, not Jefferson

Americans are increasingly aware that the ideal of equal opportunity is a false promise, but neither party really seems to get it.

Republicans barely admit the problem exists, or if they do, they think tax cuts are the answer. All facts point in the opposite direction. Despite various tax cuts over the past 30 years, not only have income and wealth inequality dramatically increased, but the ability of individuals to rise out of their own class has declined. Social stagnation is increasingly the norm, with poverty rates the highest in 15 years, real wage gains worse even than during the decade of the Great Depression, average earnings barely above what they were 50 years ago, and more than 80 percent of the income growth of the past 25 years going to the top 1 percent. In fact, since 1983, the bottom 40 percent of households have seen real declines in their income and the same goes for the bottom 60 percent when it comes to wealth. We know what the economic status quo does: It redistributes upwards. Read more...

Neoliberal Safety Nets: Looking at the Relationship Between Local Labor Demand and Welfare Sanctions

So I think this blog has a theoretical apparatus to discuss the simultaneous rise and expansion of both a carceral state and a market-conforming, submerged, “nudging” state, both targeted to different geographical and socio-economic spaces. But what about the spaces in-between? How has the regulation of conduct among the working poor changed in the past 20 years?

I’m currently enjoying Discipling the Poor: Neoliberal Paternalism and the Persistent Power of Race by Joe Soss, Richard C. Fording and Sanford F. Schram. They look at the historical evolution of the governance of the working poor through several lens, including local devolution, the marketization of poverty (“how privatization and the ‘business model’ have turned service provision into a site of profitable investment and a tool for servicing employer needs”) and competitive performance systems. (I saw at a recent talk that Wendy Brown’s critical thoughts on neoliberalisms have also taken a turn towards an analysis of “devolution” and “responsibilization” involved in current governing practices – see a writeup of a similar talk here.) Read more....

US Debt Crisis - 2012 is only for America

The real solution to the problem is to cut the US State spending as much as possible. It is not perfect, but it is by far the best solution. In 2001, the US Government spent 2/3 of what it does today. But, the Government grew bigger. More entities; more money. Many Government entities could use liquidating. They could make a lot of military cuts (but you try telling them that). See Congressman Ron Paul on this issue - he has a plan to cut one trillion in the first year. Read more....

THE U.S. ECONOMY IS STILL OPERATING WELL BELOW CAPACITY…

This morning’s industrial production figures were a bit mixed, but continue to show one clear conclusion – the US economy is operating well below potential capacity. The 45 year average in capacity utilization is 81. At 78.5, the US economy is just a few percentage points off of past recessionary levels and in a few cases below it! No wonder this still feels like a recession….The trend is certainly moving in the right direction, but the message is clear – we could be doing a lot better.

Econoday has some details on this morning’s report: Read more...

THE U.S.A. IS NOT THE ROMAN EMPIRE….

Time to put on my myth busting cap again. This time, it looks like the USA is turning into Rome. But probably not. This is a comparison we almost always hear from hyperinflationists, those making ridiculous claims about the USA being bankrupt or those who are excessively worried about the influence of the government in the USA. And maybe some of this is justified to a certain degree. After all, it was largely government ineptitude that led to the decline of the Roman Empire.

Before any discussion about the Roman Empire begins, we should put things in perspective. The rise and fall of Rome was a spectacular historical progression. Although the fall of Rome is often described as some sort of event, the truth is that the rise and fall of Rome occurred over the course of 1,000 years with the final 200 years broadly being seen as the period of decline. The USA has only existed for 235 years and has only been a superpower for about 100 of those years. This doesn’t mean we have 765 years left to party, but some perspective is appropriate. The tendency to view the fall of Rome as an event and not a gradual progression is highly misleading. Read more....

If You Don't Have A Job And You're Not Rich, Blame Yourself

If you're dissatisfied with the economy, or unemployed, Herman Cain thinks you should take a long, hard look in the mirror.

In an interview with the Wall Street Journal posted Wednesday, the up-and-coming GOP 2012 contender and former CEO of Godfather's Pizza summed up his bewilderment about recent demonstrations on Wall Street.

"Don't blame Wall Street," Cain said. "Don't blame the big banks. If you don't have a job and you're not rich, blame yourself."

The conservative radio talk show host described the protests as "planned and orchestrated to distract from the failed policies of the Obama administration, though he admitted he didn't "have the facts to back this up." Read more....

THE WORLD’S RICHEST PEOPLE ADJUSTED FOR AGE….

Mark Zuckerberg is the world’s richest person when adjusted for age according to The Economist

“MARK ZUCKERBERG is already a rich man. The most recent tally of the world’s wealthiest people by Forbes magazine put the Facebook founder’s net worth at $13.5 billion in 2011, ranking him 52nd in the world. Now Mr Zuckerberg is set to become considerably richer. His 28.4% stake in Facebook could see his fortune rise to as much as $28.4 billion, assuming that Facebook’s recently announced share offering is valued at $100 billion. That would place him ninth in last year’s rankings. But what may be most remarkable is Mr Zuckerberg’s youth. At 27, he is the youngest of the plutocrats by a considerable margin. In the top 100, only Larry Page and Sergey Brin, the co-founders of Google, are also under 40. Indeed, adjusted for years of age, Mr Zuckerberg will be the richest man in the world.” Click here for list....

THE RISKIEST COUNTRIES IN THE WORLD….

The Ishares blog recently highlighted the latest BlackRock Sovereign Risk Index showing where nations lie on the spectrum of riskiest sovereigns. The list is useful in better understanding the nations that one might prefer to avoid currently. Particularly useful for macro investors. The list shows most European nations at the riskiest end of the spectrum with the takeaway, in my opinion, being don’t bother considering investments in that region. Scandinavian nations sit at the opposite end

The BSRI uses more than 30 quantitative variables to track sovereign credit risk, complemented by qualitative insights from third-party sources. The index breaks down the data into four main categories that each count toward a country’s final BSRI score and ranking: Fiscal Space (40%), Willingness to Pay (30%), External Finance Position (20%) and Financial Sector Health (10%). Read more....

CNBC DOES MMR ON MONEY DEMAND

John Carney at CNBC has a very good story on money demand and the recent “taxes drive money” discussion. He takes the MMR position that money demand is not merely a function of the government’s ability to impose taxes and that the ability to efficiently mobilize resources into productive uses is the more important link in the demand chain. He says:

“This has implications for real world economics, of course. It demonstrates that taxes are not sufficient to give money value—at least, not beyond the level of near-term anticipated taxes. What is required first is the creation of wealth, or genuine economic output.

The desire for the products of our economic output drives money. If productivity collapses—or if it is anticipated that productivity will collapse—the value of money will collapse right along with it. Read more....

'Golden Voice' homeless man finds job, home after viral video success

Ted Williams, a homeless US man with a deep, refined voice has become an overnight online sensation after being "discovered" by a local reporter on a street corner in Columbus, Ohio. The 53 year-old has now been offered a job by the NBA's Cleveland Cavaliers and is being pursued by NFL Films for possible work. Williams said the team had offered him a two-year contract and said they would pay his living expenses. Williams was recently living in a tent and whose past includes a lengthy list of arrests. He has served time in prison for theft and forgery and has been cited with numerous misdemeanours, including drug abuse. In New York, Williams' mother Julia was thrilled her only child was turning his life around. Read more and watch the video....

THE MOST DESTRUCTIVE MONETARY MYTH IN THE USA…

There’s a myth in the USA that just won’t go away. It’s this idea that a household balance sheet is somehow comparable to that of the federal government’s. Few myths are more destructive and lead to greater confusion and/or misguided government policy. In recent months this has become a particularly public subject as the debt ceiling debates have raged and the European debt crisis continues. The problem is, the analogy between a sovereign government’s balance sheet and a household’s balance sheet is never accurate. The reason this analogy always fails is due to the difference between being a currency issuer and a currency user. Read more....

THE BURDEN WE LEAVE OUR GRANDCHILDREN….

If you hadn’t noticed over the course of the last few weeks, Paul Krugman appears to be making a move closer to the Modern Monetary Realism position that government debt is not something that constrains a government in the same way that it constrains a household. He writes:

“People think of debt’s role in the economy as if it were the same as what debt means for an individual: there’s a lot of money you have to pay to someone else. But that’s all wrong; the debt we create is basically money we owe to ourselves, and the burden it imposes does not involve a real transfer of resources.” Read more....

43% of Unemployed out of Work 6+ Months

Jobs numbers were released today for the month of January and compared to what we've seen in the last few years, the signs are pretty positive. Official unemployment fell to 8.3% the lowest since February of 2009. But long term unemployment remains a major issue, with the share of the jobless who have been out of work for more than 6 months at 43% and 1.2 million people dropped out of the labor force in just the past month. Campaign For America's Future's Richard Eskow breaks it all down. Read more....

Top 10 Global Economic Challenges Facing America's 44th President

The Top 10 Global Economic Challenges report focuses on the most critical issues facing America’s 44th president. From restoring financial stability to establishing a U.S. policy on climate change and engaging the emerging economic powers, the report contains timely analysis and recommendations by Brookings leading global economic experts.

Given its enormous stake in a strong and resilient economy, it will be critical for America to lead on today’s main global economic challenges. In this introduction to the 2008/2009 Top 10 report, Lael Brainard discusses the global context and America’s opportunity.


The top 10 global economic issues, as identified and ranked by Brookings Global, include:
1. Restoring Financial Stability by Eswar Prasad:With U.S. financial troubles at the center of the current global vortex, the U.S. has important obligations to strengthen the global financial system, including by enhancing financial regulation and diminishing reliance on foreign credit. Read more....

Causes of Poverty

Almost half the world — over 3 billion people — live on less than $2.50 a day.
The GDP (Gross Domestic Product) of the 41 Heavily Indebted Poor Countries (567 million people) is less than the wealth of the world’s 7 richest people combined.

Nearly a billion people entered the 21st century unable to read a book or sign their names.
Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

1 billion children live in poverty (1 in 2 children in the world). 640 million live without adequate shelter, 400 million have no access to safe water, 270 million have no access to health services. 10.6 million died in 2003 before they reached the age of 5 (or roughly 29,000 children per day). Read more.....

Americans Living in Their Vans in California

America is getting poorer. The U.S. government has just released a bunch of new statistics about poverty in America, and once again this year the news is not good. According to a special report from the U.S. Census Bureau, 46.2 million Americans are now living in poverty. The number of those living in poverty in America has grown by 2.6 million in just the last 12 months, and that is the largest increase that we have ever seen since the U.S. government began calculating poverty figures back in 1959. Not only that, median household income has also fallen once again. In case you are keeping track, that makes three years in a row. Read more.....

Nearly one in six in poverty in the U.S.; children hit hard, Census says

Nearly one in six Americans was living in poverty last year, the Census Bureau reported Tuesday, a development that is ensnaring growing numbers of children and offering vivid proof of the recession’s devastating impact.

The report portrays a nation where many people are slipping backward in the wake of a downturn that left 14 million people out of work and pushed unemployment rates to levels not seen in decades.

As poverty surged last year to its highest level since 1993, median household income declined, leaving the typical American household earning less in inflation-adjusted dollars than it did in 1997. Read more....

The Biggest Risk to the Economy in 2012, and What’s the Economy For Anyway?

Treasury Secretary Tim Geithner, speaking at the World Economic Forum in Davos a few days ago, said the “critical risks” facing the American economy this year were a worsening of Europe’s chronic sovereign debt crisis and a rise in tensions with Iran that could stoke global oil prices.

What about jobs and wages here at home?
As the Commerce Department reported Friday, the U.S. economy grew 2.8 percent between October and December – the fastest pace in 18 months and the first time growth exceeded 2 percent all year. Many bigger American companies have been reporting strong profits in recent months. GE and Lockheed Martin closed the year with record order backlogs. Read more....

Obama’s debt-chopping plan – Is it fully equipped for a debt free 2012?

After the scuffles over the raising of the debt ceiling ended with a final rise of the most awaited debt limit and after S&P cut off a notch from the pristine credit rating of the US (AAA), President Barack Obama has finally rolled off his plan to help the US get back on track. Unless the Obama administration slashes off the national debt, nothing positive can ever happen to the economy. Though a number of groups have published their own debt reduction plan, nothing has ever been effective in curbing the spiraling debt level of this economic superpower.

Just as the consumers are running to the professional debt help companies to control their personal finances, the government is also continuously borrowing money from other nations in order to cope up with the rising expenses of the nation. As Obama has rolled out the new plan to decrease the increasing debt level in the US, the most common question by the financial analysts is whether or not this plan is equipped enough to make the difference. Read on to educate yourself on this. Read more....