Memo to Greece: Make War Not Love with Goldman Sachs
Marshall Auerback and L. Randall Wray
In recent weeks, there has been much discussion about what to do about Greece. These questions become all the more relevant as the country attempts to float a multibillion-euro bond issue later this week. The Financial Times has called this fund-raising a critical test of Greece's credibility in financial markets as it battles with a spiraling debt crisis and strikes. The "credibility" of the financial markets is an important consideration in a country which has functionally ceded its sovereign ability to create currency, and thus remains dependent on the vagaries of the very banking institutions which helped create the mess in the first place.
Maybe Greece should secede from the European Union and default on its euro debt. Or go hat-in-hand to the International Monetary Fund (IMF) to beg for loans while promising to clean up its act. Or to the stronger Euro nations, hoping for charitable acts of forgiveness. Unfortunately, all of these options are going to mean a lot of pain and suffering for an economy that is already sinking rapidly. And it is questionable whether any of them provide long term viable answers.
Here's a more appropriate action: declare war on Goldman Sachs and other global financial firms that created this mess. Send the troops, the planes, the tanks, and the ships. Attack every outpost of the saboteurs on European soil. Blockade the airports and ports. Make Wall Street traders and CEOs fear for their lives, or at least for their freedom to travel. Build some Guantanamo-like facility to hold these enemy financial combatants until they can be tried, convicted, and properly punished.
Ok, if a literal armed attack on Goldman is too far-fetched, then go after the firm using the full force of the regulatory and legal systems. Close the offices and go through the files with a fine-tooth comb. Issue subpoenas to all non-clerical staff for court appearances. Make the internal emails public. Post the names of all managers and traders on Interpol. Arrest anyone who tries to board a plane, train, or boat; confiscate their passports; revoke their visas and work permits; and put a hold on their bank accounts until culpability can be assessed. Make life at least as miserable for them as it now is for Europe's tens of millions of unemployed workers.
We know that the Obama administration will not go after the banksters that created this global financial calamity. It has been thoroughly co-opted by Wall Street's fifth column, who hold most of the important posts in the administration. Europe has even more at stake and has shown somewhat more willingness to take action. Perhaps our only hope for retribution lies there.
Some might believe the term "banksters" is too mean. Surely Wall Street was just doing its job -- providing the financial services wanted by the world. Yes, it all turned out a tad unfortunate but no one could have foreseen that so many of the financial innovations would turn into black swans. And hasn't Wall Street learned its lesson and changed its practices? Fat chance. We know from internal emails that everyone on Wall Street saw this coming -- indeed, they sold trash assets and placed bets that they would crater. The crisis was not a mistake -- it was the foregone conclusion. The FBI warned of an epidemic of fraud back in 2004 -- with 80% of the fraud on the part of lenders. As Bill Black has been warning since the days of the Saving and Loan crisis, the most devastating kind of fraud is the "control fraud," perpetrated by the financial institution's management. Wall Street is, and was, run by control frauds. Not only were they busy defrauding the borrowers, like Greece, but they were simultaneously defrauding the owners of the firms they ran. Now add to that list the taxpayers that bailed out the firms. And Goldman is front and center when it comes to bad apples.
Lest anyone believe that Goldman's executives were somehow unaware of bad deals done by rogue traders, William Cohan reports that top management unloaded their Goldman stocks in March 2008 when Bear crashed, and again when Lehman collapsed in September 2008. Why? Quite simple: they knew the firm was full of toxic waste that it would not be able to continue to unload on suckers -- and the only protection it had came from AIG, which it knew to be a bad counterparty.
Hence on March 19, Jack Levy (co-chair of M&As) sold over $5 million of Goldman's stock and bet against 60,000 more shares; Gerald Corrigan (former head of the NY Fed who was rewarded for that tenure with a position as managing director of Goldman) sold 15,000 shares in March; Jon Winkelried (Goldman's co-president) sold 20,000 shares. After the Lehman fiasco, Levy sold over $6 million of Goldman shares and Masanori Mochida (head of Goldman in Japan) sold $56 million worth. The bloodletting by top management only stopped when Goldman got Geithner's NYFed to produce a bail-out for AIG, which of course turned around and funneled government money to Goldman. With the government rescue, the control frauds decided it was safe to stop betting against their firm. So much for the "savvy businessmen" that President Obama believes to be in charge of Wall Street firms like Goldman.
From 2001 through November 2009 (note the date -- a full year after Lehman) Goldman created financial instruments to hide European government debt, for example through currency trades or by pushing debt into the future. But not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece's debt-making income on bets that Greece would default. No doubt they also took positions as the financial conditions deteriorated-betting on default and driving up CDS spreads.
But it gets even worse: An article by the German newspaper, Handelsblatt, ("Die Fieberkurve der griechischen Schuldenkrise", Feb. 20, 2010) strongly indicates that AIG, everybody's favorite poster boy for financial deviancy, may have been the party which sold the credit default swaps on Greece (English translation here).
Generally, speaking, these CDSs lead to credit downgrades by ratings agencies, which drive spreads higher. In other words, Wall Street, led here by Goldman and AIG, helped to create the debt, then helped to create the hysteria about possible defaults. As CDS prices rise and Greece's credit rating collapses, the interest rate it must pay on bonds rises-fueling a death spiral because it cannot cut spending or raise taxes sufficiently to reduce its deficit.
Having been bailed out by the Obama Administration, Wall Street firms are already eyeing other victims (and for allowing these kinds of activities to continue, the US Treasury remains indirectly complicit, another good reason why one shouldn't expect any action coming out of Washington). Since the economic collapse is causing all Euronations to run larger budget deficits and at the same time is raising CDS prices and interest rates, it is easy to pick off nation after nation. This will not stop with Greece, so it is in the interest of Euroland to stop the vampires now.
With Washington unlikely to do anything to constrain Goldman, it looks like the European Union, which is launching a major audit, just might banish the bank from dealing in government debt. The problem is that CDS markets are essentially unregulated so such a ban will not prevent Wall Street from bringing down more countries-because they do not have to hold debt in order to bet against it using CDSs. These kinds of derivatives have already brought down an entire continent -- Asia -- in the late 1990s , and yet authorities are still standing by and basically doing nothing when CDSs are being used again to speculatively attack Euroland. The absence of sanctions last year, when we had a chance to deal with this problem once and for all, has simply induced even more outrageous and fundamentally anti-social behavior. It has pitted neighbor against neighbor -- with, for example, Germany and Greece lobbing insults at one another (Greece has requested reparations for WWII damages; Germany has complained about subsidizing what it perceives to be excessive social spending in Greece).
Of course, as far as Greece goes, the claim now is that these types of off balance sheet transactions in which Goldman and others engaged were not strictly "illegal" under EU law. But these are precisely the kinds of "shadow banking transactions" that almost brought down the global financial system 18 months ago. Literally a year after the Lehman bankruptcy -- MONTHS after Goldman itself was saved from total ruin, it was again engaging in these kinds of deals.
And it wasn't exactly a low-level functionary or "rogue trader" who was carrying out these transactions on behalf of Goldman. Gary Cohn is Lloyd "We're doing God's work" Blankfein's number 2 man. So it's hard to believe that St. Lloyd did not sanction the activities as well in advance of collecting his "modest" $9m bonus for last year's work.
If these are examples of Obama's "savvy businessmen", then heaven help the global economy. The transaction highlighted, if reported that way in the private sector, would be accounting fraud. Fraud -- "Go to jail, do not pass Go" fraud. That senior bankers had no problem in structuring/recommending/selling such deals to cash-strapped governments should probably not surprise us at this point. However, it would be interesting to know if the prop trading desks of those same investment banks, purely by coincidence of course, then took long CDS (short the credit) positions in the credit of the countries doing the hidden swaps. A proper legal investigation by the EU could reveal this and certainly help to uncover much of the financial chicanery which has done so much destruction to the global economy over the past several years.
In this country, we have had a "war on terror" and a "war on drugs" and yet we refuse to declare war on these financial weapons of mass destruction. We all remember Jimmy Carter's "MEOW" -- the attempt to attack creeping inflation that was said to sap the strength of the US economy in the late 1970s. But Europe -- and indeed the entire globe -- faces a much more dangerous and immediate threat from Wall Street's banksters. They created this mess and are not only profiting from it, but are actively preventing recovery. They are causing unemployment, starvation, destruction of lives, and even violence and terrorism across the world. They are certainly more dangerous than the inflation of the 1970s, and arguably have disrupted more lives than Osama bin Laden -- whose actions led the US to undertake military actions in at least three countries. That should provide ample justification for Greece's declaration of figurative war on Manhattan.
However, in an ironic twist of fate, it was just announced that Petros Christodoulou will take over as the head of Greece's national debt management agency. He worked as the head of derivatives at JP Morgan, and also previously worked at Goldman -- the firm that got Greece into all this trouble!
Dimitri Papadimitriou has recently made what we consider to be an important plea for moderation of the hysteria about Greece's debt. Writing in the Financial Times, he complained that "The plethora of articles in your pages and others, some arguing in favour and other against a bail-out, contribute to market confusion and drive the country's financing costs to record levels. It is not yet clear that a bail-out is even needed, but this market confusion is rendering the government's ability to achieve its deficit goals ever more difficult."
Indeed, we suspect that the same financial firms that helped to get Greece into its predicament are profiting from -- and stoking the fires of -- the hysteria. He goes on, "what Greece really needs now is a holiday from further market confusion being created by contradictory, alarmist public commentary."
Greece, Euroland in general, and the rest of the world all need a holiday from the manipulation and destruction of our economies by Wall Street firms that profit from speculative bubbles, from burying firms, households, and governments under mountains and debt, and even from the crises that they create. Governments all over the globe should use all legal means at their disposal to ferret out the bad faith and even fraudulent deals that global financial behemoths are foisting on us.
Tuesday, February 23, 2010
Friday, February 19, 2010
Forget Washington, Look to Europe?
Eisenhower, we are here!
Wall Street is on the prowl again, out to destroy the economy of Greece. The story is hard to follow because it seems incredible, but this is how it goes.
Over the past decade, Wall Street pumped up one of its patented cheap money, easy credit bubbles in Greece. Now as it bursts, the parasites-in-pinstripes have been placing enormous bets on whether the Greeks will go under as their government struggles to pay back all that was borrowed.
The bets are made just like in the U.S., with credit default swaps (CDS), a form of insurance sold to buyers of Greek or any other bonds. The buyers are the hedge funds looking to make fast money if the insured bonds lose value and the seller has to pay out. The big banks broker the trades between buyers and sellers.
More than a year after the horrific collapse in the United States, while the president and Congress shadow box with the lobbyists, this market is still unregulated and the profits are still enormous.
Writing in Counterpunch, Andrew Cockburn explains how the game is played. "After the buyers and sellers have all placed their bets, the buyers start beating down the value of the insured bonds," to collect on the "spread" - the difference between the insured value and new lower value of the bonds.
Reports, rumors of reports, and reports of rumors will make the "news" that is used to spook the market with talk of default, and drive down the value of the bonds.
Mr. Cockburn observes, "As the fate of Greece see-saws, both sellers and buyers have been making money, as of course have the banks in the middle. None of this has much to do with the underlying condition of the Greek economy. There was no particular reason why Greece should have become a crisis just now. Wall Street just decided it was their turn."
The Wall Street barons are shameless, greedy, unrepentant destroyers of the prosperity of hundreds of millions. Like a plague of locusts, they infest economies, devour the wealth of others and move on.
In the 1980s it was the "Third World debt crisis." In 1994, the collapse of the Mexican currency. Last year, the U.S. and the mother of all frauds. Today, Greece. Tomorrow, according to reports in financial publications, maybe Portugal.
Now authorities are discovering that Wall Street - and most especially Goldman Sachs, those "savvy" guys Mr. Obama calls his "friends" - helped engineer the crisis on which they are now feeding.
The German newspaper Der Spiegel broke the story that Wall Street helped Greece and other European governments to hide their debt. On Feb. 14 the New York Times reported, "Records and interviews show that with Wall Street's help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers."
A few days ago in the United Kingdom, the Guardian explained the scam in more detail, reporting, "The trick was to construct complex financial arrangements that appeared on the books as 'swaps,' even though they were in fact loans. Greece was adding billions of dollars to its debt, and thanks to the ingenuity of the Goldman crew, no one knew about it until now."
Wealthier European governments like Germany and its taxpayers are on the hook to bail out Greece and possibly Portugal. Understandably, they are not happy and appear ready to fight back, and compel the European Commission to launch an investigation, focused particularly on the role of Goldman Sachs.
The kind of investigation the Obama Justice Department and the U.S. Congress should have launched. The serious kind, with criminal sanctions from which Wall Street's man, Fed Chairman Ben Bernanke can't protect them.
Of course, this is only the first step in an unfolding drama. The CEO of Goldman and the other con men will without a doubt wrap themselves in the American flag and go running to the administration and Congress for protection from those nasty, unfair Europeans.
What pathetic irony.
A century ago, when the U.S. Army rolled into Paris to save France from German tyranny, the American Gen. Pershing proclaimed the debt the U.S. was paying to France from the American Revolution with the words, "Lafayette, we are here!"
Over 60 years ago, the American general and later President Dwight Eisenhower led the invasion that helped rescue all Europe from the evil tyranny of the Nazis.
Now, while congressional leaders and President Obama shield the self-proclaimed masters of the universe on Wall Street, Americans are reduced to hoping some European leader will march into Washington and save America and the world from Wall Street's ruinous economic tyranny.
"Eisenhower, we are here!"
Makes you proud to be an American, doesn't it?
Wall Street is on the prowl again, out to destroy the economy of Greece. The story is hard to follow because it seems incredible, but this is how it goes.
Over the past decade, Wall Street pumped up one of its patented cheap money, easy credit bubbles in Greece. Now as it bursts, the parasites-in-pinstripes have been placing enormous bets on whether the Greeks will go under as their government struggles to pay back all that was borrowed.
The bets are made just like in the U.S., with credit default swaps (CDS), a form of insurance sold to buyers of Greek or any other bonds. The buyers are the hedge funds looking to make fast money if the insured bonds lose value and the seller has to pay out. The big banks broker the trades between buyers and sellers.
More than a year after the horrific collapse in the United States, while the president and Congress shadow box with the lobbyists, this market is still unregulated and the profits are still enormous.
Writing in Counterpunch, Andrew Cockburn explains how the game is played. "After the buyers and sellers have all placed their bets, the buyers start beating down the value of the insured bonds," to collect on the "spread" - the difference between the insured value and new lower value of the bonds.
Reports, rumors of reports, and reports of rumors will make the "news" that is used to spook the market with talk of default, and drive down the value of the bonds.
Mr. Cockburn observes, "As the fate of Greece see-saws, both sellers and buyers have been making money, as of course have the banks in the middle. None of this has much to do with the underlying condition of the Greek economy. There was no particular reason why Greece should have become a crisis just now. Wall Street just decided it was their turn."
The Wall Street barons are shameless, greedy, unrepentant destroyers of the prosperity of hundreds of millions. Like a plague of locusts, they infest economies, devour the wealth of others and move on.
In the 1980s it was the "Third World debt crisis." In 1994, the collapse of the Mexican currency. Last year, the U.S. and the mother of all frauds. Today, Greece. Tomorrow, according to reports in financial publications, maybe Portugal.
Now authorities are discovering that Wall Street - and most especially Goldman Sachs, those "savvy" guys Mr. Obama calls his "friends" - helped engineer the crisis on which they are now feeding.
The German newspaper Der Spiegel broke the story that Wall Street helped Greece and other European governments to hide their debt. On Feb. 14 the New York Times reported, "Records and interviews show that with Wall Street's help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers."
A few days ago in the United Kingdom, the Guardian explained the scam in more detail, reporting, "The trick was to construct complex financial arrangements that appeared on the books as 'swaps,' even though they were in fact loans. Greece was adding billions of dollars to its debt, and thanks to the ingenuity of the Goldman crew, no one knew about it until now."
Wealthier European governments like Germany and its taxpayers are on the hook to bail out Greece and possibly Portugal. Understandably, they are not happy and appear ready to fight back, and compel the European Commission to launch an investigation, focused particularly on the role of Goldman Sachs.
The kind of investigation the Obama Justice Department and the U.S. Congress should have launched. The serious kind, with criminal sanctions from which Wall Street's man, Fed Chairman Ben Bernanke can't protect them.
Of course, this is only the first step in an unfolding drama. The CEO of Goldman and the other con men will without a doubt wrap themselves in the American flag and go running to the administration and Congress for protection from those nasty, unfair Europeans.
What pathetic irony.
A century ago, when the U.S. Army rolled into Paris to save France from German tyranny, the American Gen. Pershing proclaimed the debt the U.S. was paying to France from the American Revolution with the words, "Lafayette, we are here!"
Over 60 years ago, the American general and later President Dwight Eisenhower led the invasion that helped rescue all Europe from the evil tyranny of the Nazis.
Now, while congressional leaders and President Obama shield the self-proclaimed masters of the universe on Wall Street, Americans are reduced to hoping some European leader will march into Washington and save America and the world from Wall Street's ruinous economic tyranny.
"Eisenhower, we are here!"
Makes you proud to be an American, doesn't it?
Sunday, February 14, 2010
This way out from the crooked casino
Wall Street has a president. The American people do not.
The American people are being battered. There will be no let up anytime soon.
The Conference Board projects 2010 salaries for all categories of employees of U.S. companies will rise less than 2 percent, far lower than the projected inflation rate of 2.6 percent. Even if Americans have a job, things will get worse.
But not for everybody.
The retailer, Polo Ralph Lauren reported last week the “return of (the) core luxury customer,” including buyers of couture dresses that sell for more than $4,000. “Top market” U.S. retailers like Nieman Marcus are also reporting strong sales. The French trade association, BNIC reports that cognac sales to the U.S. jumped 19 percent in the 4th quarter of 2009.
French cognac and $4,000 designer dresses - the Wall Street bail out at work - while only days ago, Mr. Obama compared the bonuses and salaries of the barons to those of baseball players; as if the Phillies or the Yankees wrecked the American economy, devastated millions and are paid from billions of taxpayer bailouts!
The same failed Wall Street team that cheered on deregulation and casino style banking and never saw the crash coming is still in place in Washington. Their agenda can be summed up in one word: more.
Wall Street has a president. The American people do not.
The Wall Street cartel must not only be broken up, but there must also be a decentralization of sources of credit and investment. The creation of state banks, modeled on the highly successful Bank of North Dakota is the most readily available means to that end.
Wall Street profits must be heavily taxed.
Americans must be put back in the homes they lost and helped to keep the ones they still have. The banks must be compelled to refinance every foreclosed home and current mortgage in America at the present market value of the home and at current interest rates.
The Wall Street banks that control 42 percent of all mortgages will take a huge hit. That’s the idea – to transfer back to the middle class some of the wealth that was plundered with the help of a witless Congress.
Funding for the war industry must be slashed and war industry profits must be heavily taxed.
The U.S. “defense” budget is now larger than that of every other nation combined. There are more than 700 U.S. military bases in 153 other nations, two wars, American armies in Europe and Asia and ongoing operations on every continent; while bozos with bombs sneak into America.
Taxes on the wealthiest must rise dramatically. And there must be jobs.
For the long term, decimated U.S. manufacturing must be rebuilt. And while trade and export are important, the American domestic market of 300 million is enough to support new American manufacturing.
Current depressed levels of imports from cheap labor nations must be kept that way – for perhaps a decade – with a “labor differential” duty. Trade must be focused on higher wage paying nations. Mexico must be more fully integrated into the NAFTA market.
The economic calamity in the U.S. has greatly reduced and even reversed the flow of illegal immigration from Mexico. To preserve this unexpected gain, the U.S. must push for rising wages there, to accompany better border security here.
But in the long term, wages must rise world wide. The parasites in pinstripes are a global plague. The U.S. must abandon the World Trade Organization and its drive for globally depressed wages to support global corporate profit.
To create jobs on the order needed in the short term, there must be massive government hiring, paid for by Wall Street and war industry taxes, higher taxes on the wealthy and a real reduction in military spending.
The administration and Congress now talk of jobs, but propose to spend what the NY Times aptly described as a “pittance,” and instead issue dire warnings about the deficit and debt – which did not matter when bailing out Wall Street, funding the war industry and protecting the profits of the health insurers and major polluters.
The federal government spends too much on the wrong things.
And while the budget submitted by the president nudges up taxes on the wealthiest, these proposals will be killed in the current Congress, as Mr. Obama well knows. Another flim-flam.
Having got what they wanted with more than $110 million in campaign contributions to Mr. Obama as senator and presidential candidate, and as much or more to Democratic members of Congress, Wall Street and the oligarchs are now shifting campaign contributions back to the GOP, to create competition for their support and hold the line on preserving their stolen wealth.
And the GOP bagmen are lining up.
As in a crooked casino, the deck is stacked against the American people. One weapon remains: the vote. A new Congress is the change most desperately needed by the American people, to set American on the new course that Mr. Obama abandoned when he chose Wall Street over your street.
The American people are being battered. There will be no let up anytime soon.
The Conference Board projects 2010 salaries for all categories of employees of U.S. companies will rise less than 2 percent, far lower than the projected inflation rate of 2.6 percent. Even if Americans have a job, things will get worse.
But not for everybody.
The retailer, Polo Ralph Lauren reported last week the “return of (the) core luxury customer,” including buyers of couture dresses that sell for more than $4,000. “Top market” U.S. retailers like Nieman Marcus are also reporting strong sales. The French trade association, BNIC reports that cognac sales to the U.S. jumped 19 percent in the 4th quarter of 2009.
French cognac and $4,000 designer dresses - the Wall Street bail out at work - while only days ago, Mr. Obama compared the bonuses and salaries of the barons to those of baseball players; as if the Phillies or the Yankees wrecked the American economy, devastated millions and are paid from billions of taxpayer bailouts!
The same failed Wall Street team that cheered on deregulation and casino style banking and never saw the crash coming is still in place in Washington. Their agenda can be summed up in one word: more.
Wall Street has a president. The American people do not.
The Wall Street cartel must not only be broken up, but there must also be a decentralization of sources of credit and investment. The creation of state banks, modeled on the highly successful Bank of North Dakota is the most readily available means to that end.
Wall Street profits must be heavily taxed.
Americans must be put back in the homes they lost and helped to keep the ones they still have. The banks must be compelled to refinance every foreclosed home and current mortgage in America at the present market value of the home and at current interest rates.
The Wall Street banks that control 42 percent of all mortgages will take a huge hit. That’s the idea – to transfer back to the middle class some of the wealth that was plundered with the help of a witless Congress.
Funding for the war industry must be slashed and war industry profits must be heavily taxed.
The U.S. “defense” budget is now larger than that of every other nation combined. There are more than 700 U.S. military bases in 153 other nations, two wars, American armies in Europe and Asia and ongoing operations on every continent; while bozos with bombs sneak into America.
Taxes on the wealthiest must rise dramatically. And there must be jobs.
For the long term, decimated U.S. manufacturing must be rebuilt. And while trade and export are important, the American domestic market of 300 million is enough to support new American manufacturing.
Current depressed levels of imports from cheap labor nations must be kept that way – for perhaps a decade – with a “labor differential” duty. Trade must be focused on higher wage paying nations. Mexico must be more fully integrated into the NAFTA market.
The economic calamity in the U.S. has greatly reduced and even reversed the flow of illegal immigration from Mexico. To preserve this unexpected gain, the U.S. must push for rising wages there, to accompany better border security here.
But in the long term, wages must rise world wide. The parasites in pinstripes are a global plague. The U.S. must abandon the World Trade Organization and its drive for globally depressed wages to support global corporate profit.
To create jobs on the order needed in the short term, there must be massive government hiring, paid for by Wall Street and war industry taxes, higher taxes on the wealthy and a real reduction in military spending.
The administration and Congress now talk of jobs, but propose to spend what the NY Times aptly described as a “pittance,” and instead issue dire warnings about the deficit and debt – which did not matter when bailing out Wall Street, funding the war industry and protecting the profits of the health insurers and major polluters.
The federal government spends too much on the wrong things.
And while the budget submitted by the president nudges up taxes on the wealthiest, these proposals will be killed in the current Congress, as Mr. Obama well knows. Another flim-flam.
Having got what they wanted with more than $110 million in campaign contributions to Mr. Obama as senator and presidential candidate, and as much or more to Democratic members of Congress, Wall Street and the oligarchs are now shifting campaign contributions back to the GOP, to create competition for their support and hold the line on preserving their stolen wealth.
And the GOP bagmen are lining up.
As in a crooked casino, the deck is stacked against the American people. One weapon remains: the vote. A new Congress is the change most desperately needed by the American people, to set American on the new course that Mr. Obama abandoned when he chose Wall Street over your street.
Thursday, February 11, 2010
Capitalism Collapsing?
The US and NATO Wage War on the World
This argument by Finian Cunningham, at Global Research will set some capitalists teeth on edge. But it needs to be considered - Mike
The argument is won: capitalism as an effective system to organise society and provide for human needs has expired. The evidence is conclusive. Trillions of dollars to kickstart the economy in the US and Europe may have given an ephemeral lease of life to the financial class to spin the casino wheel once again, but it is more apparent by the day that the tentative recovery has spluttered to a standstill. Gridlocked by unprecedented levels of personal and national debts, the engine of production the real economy is in a state of rigor mortis.
This collapse has been a long time in the making. Decades of easy credit was up to now a way for the ruling class - government, corporations, financial institutions - to let the majority of workers subsidize the chronic loss in their livelihoods, which have been drained since the mid-1970s by the oligarchy s self-aggrandizement from wage cutting, regressive taxation and public spending cuts. The political class, whether liberal or conservative, right or left, have facilitated this giant wealth-siphoning process.
However, the point is that the economic system is now objectively shown to be moribound. And it is impossible for so-called mainstream politicians to think of any other way of doing business. They are ideologically blind. Recall former British Prime Minister Margaret Thatcher s arrogant assertion: There is no alternative . Likewise, US President Barack Obama insists on throwing billions more dollars at the banks and financiers on Wall Street. But that won t kickstart an economy in which millions of workers are without jobs and homes or who are on crumby wages and up to their necks in debt. The profit system has hit an historic dead-end and this gridlock is a result of deep trends to do with the decline in capitalism as a mode of social production (falling wages and profits and the concomitant explosion in financial speculation and debts).
Widespread poverty and human misery is now seen on a massive scale in the so-called developed world. Some 40 million Americans, for example, are subsisting on food stamps. The distinction between developed and developing economies (always a myth anyway) is blurred. The ranks of the world s long-suffering poor are swelled with dispossessed blue and white-collar workers and their families from across the US and Europe. Together more than ever, they stand shut out from those gated havens of obscene wealth for a global minority.
Similar historic junctures have been witnessed before when capitalism floundered from its inexorable tendency to make the rich richer and the poor poorer. Disturbingly, the release valve for the system and its bankruptcy has always been war. Death and destruction is the lender of last resort to an economic system that despite itself inevitably polarises wealth to an unworkable degree. The First and Second World Wars claiming more than 70 million over a period of less than 10 years lives were effectively the ultimate, grotesque bailouts.
In our time, war, it seems, has already begun. The US oligarchy and its NATO allies are waging a veritable war on the world: killing, disappearing and incarcerating millions of civilians in Iraq, Afghanistan and Pakistan a war that is expanding into Yemen, Somalia and the rest of the Horn of Africa, with the militarization of sea lanes and oceans (see Chossudovsky, www.Globalresearch.ca) and the setting up of forward projecting military and missile bases in every continent (see Rozoff, ditto). On top of ordinary poverty and misery, the world is truly seeing another historic descent into barbarism. Given this war-mongering dynamic, the growing US antagonism with Iran, Russia and China is far from an idle threat. It is the logical next step for a deeply illogical economic system.
But history is not inevitable. We are not necessarily programmed to repeat its horrors. A combination of global communications among citizens and political and social consciousness may be enough to prevent a military conflagration and overthrow the misrule of the oligarchy. What is needed is a) a widening of the recognition that capitalism as a system of social production is finished; and b) the case has to be confidently made that an alternative is very possible. That alternative is socialism (the subject of a further article). To those who remain skeptical, they should bear in mind the stark choice that Rosa Luxemberg foresaw for humanity: that is, socialism or barbarism. And we already have the latter.finian.cunningham@gmail.com
This argument by Finian Cunningham, at Global Research will set some capitalists teeth on edge. But it needs to be considered - Mike
The argument is won: capitalism as an effective system to organise society and provide for human needs has expired. The evidence is conclusive. Trillions of dollars to kickstart the economy in the US and Europe may have given an ephemeral lease of life to the financial class to spin the casino wheel once again, but it is more apparent by the day that the tentative recovery has spluttered to a standstill. Gridlocked by unprecedented levels of personal and national debts, the engine of production the real economy is in a state of rigor mortis.
This collapse has been a long time in the making. Decades of easy credit was up to now a way for the ruling class - government, corporations, financial institutions - to let the majority of workers subsidize the chronic loss in their livelihoods, which have been drained since the mid-1970s by the oligarchy s self-aggrandizement from wage cutting, regressive taxation and public spending cuts. The political class, whether liberal or conservative, right or left, have facilitated this giant wealth-siphoning process.
However, the point is that the economic system is now objectively shown to be moribound. And it is impossible for so-called mainstream politicians to think of any other way of doing business. They are ideologically blind. Recall former British Prime Minister Margaret Thatcher s arrogant assertion: There is no alternative . Likewise, US President Barack Obama insists on throwing billions more dollars at the banks and financiers on Wall Street. But that won t kickstart an economy in which millions of workers are without jobs and homes or who are on crumby wages and up to their necks in debt. The profit system has hit an historic dead-end and this gridlock is a result of deep trends to do with the decline in capitalism as a mode of social production (falling wages and profits and the concomitant explosion in financial speculation and debts).
Widespread poverty and human misery is now seen on a massive scale in the so-called developed world. Some 40 million Americans, for example, are subsisting on food stamps. The distinction between developed and developing economies (always a myth anyway) is blurred. The ranks of the world s long-suffering poor are swelled with dispossessed blue and white-collar workers and their families from across the US and Europe. Together more than ever, they stand shut out from those gated havens of obscene wealth for a global minority.
Similar historic junctures have been witnessed before when capitalism floundered from its inexorable tendency to make the rich richer and the poor poorer. Disturbingly, the release valve for the system and its bankruptcy has always been war. Death and destruction is the lender of last resort to an economic system that despite itself inevitably polarises wealth to an unworkable degree. The First and Second World Wars claiming more than 70 million over a period of less than 10 years lives were effectively the ultimate, grotesque bailouts.
In our time, war, it seems, has already begun. The US oligarchy and its NATO allies are waging a veritable war on the world: killing, disappearing and incarcerating millions of civilians in Iraq, Afghanistan and Pakistan a war that is expanding into Yemen, Somalia and the rest of the Horn of Africa, with the militarization of sea lanes and oceans (see Chossudovsky, www.Globalresearch.ca) and the setting up of forward projecting military and missile bases in every continent (see Rozoff, ditto). On top of ordinary poverty and misery, the world is truly seeing another historic descent into barbarism. Given this war-mongering dynamic, the growing US antagonism with Iran, Russia and China is far from an idle threat. It is the logical next step for a deeply illogical economic system.
But history is not inevitable. We are not necessarily programmed to repeat its horrors. A combination of global communications among citizens and political and social consciousness may be enough to prevent a military conflagration and overthrow the misrule of the oligarchy. What is needed is a) a widening of the recognition that capitalism as a system of social production is finished; and b) the case has to be confidently made that an alternative is very possible. That alternative is socialism (the subject of a further article). To those who remain skeptical, they should bear in mind the stark choice that Rosa Luxemberg foresaw for humanity: that is, socialism or barbarism. And we already have the latter.finian.cunningham@gmail.com
Thursday, February 4, 2010
Over the top, or right on the money?
Rule of Law Nightmare
Ron Paul is a member of Congress
Could it all be a bad dream, or a nightmare? Is it my imagination, or have we lost our minds? It's surreal; it's just not believable.
A grand absurdity; a great deception, a delusion of momentous proportions; based on preposterous notions; and on ideas whose time should never have come; simplicity grossly distorted and complicated; insanity passed off as logic; grandiose schemes built on falsehoods with the morality of Ponzi and Madoff; evil described as virtue; ignorance pawned off as wisdom; destruction and impoverishment in the name of humanitarianism; violence, the tool of change; preventive wars used as the road to peace; tolerance delivered by government guns; reactionary views in the guise of progress; an empire replacing the Republic; slavery sold as liberty; excellence and virtue traded for mediocracy; socialism to save capitalism; a government out of control, unrestrained by the Constitution, the rule of law, or morality; bickering over petty politics as we collapse into chaos; the philosophy that destroys us is not even defined.
We have broken from reality–a psychotic Nation. Ignorance with a pretense of knowledge replacing wisdom. Money does not grow on trees, nor does prosperity come from a government printing press or escalating deficits.
We’re now in the midst of unlimited spending of the people’s money, exorbitant taxation, deficits of trillions of dollars–spent on a failed welfare/warfare state; an epidemic of cronyism; unlimited supplies of paper money equated with wealth.
A central bank that deliberately destroys the value of the currency in secrecy, without restraint, without nary a whimper. Yet, cheered on by the pseudo-capitalists of Wall Street, the military industrial complex, and Detroit.
We police our world empire with troops on 700 bases and in 130 countries around the world. A dangerous war now spreads throughout the Middle East and Central Asia. Thousands of innocent people being killed, as we become known as the torturers of the 21st century.
We assume that by keeping the already-known torture pictures from the public’s eye, we will be remembered only as a generous and good people. If our enemies want to attack us only because we are free and rich, proof of torture would be irrelevant.
The sad part of all this is that we have forgotten what made America great, good, and prosperous. We need to quickly refresh our memories and once again reinvigorate our love, understanding, and confidence in liberty. The status quo cannot be maintained, considering the current conditions. Violence and lost liberty will result without some revolutionary thinking.
We must escape from the madness of crowds now gathering. The good news is the reversal is achievable through peaceful and intellectual means and, fortunately, the number of those who care are growing exponentially.
Of course, it could all be a bad dream, a nightmare, and that I’m seriously mistaken, overreacting, and that my worries are unfounded. I hope so. But just in case, we ought to prepare ourselves for revolutionary changes in the not-too-distant future.
*****************
The Crisis is Not Over
Paul Craig Roberts was Assistant Secretary of the U.S. Treasury in the Reagan administration. His latest book, How The Economy Was Lost, has just been published by CounterPunch/AK Press.
Is the financial crisis over? Is the recovery for real and, if not, what are Americans’ prospects? The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it:
The global crisis is understood as a banking crisis brought on by mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets.
The crisis was initiated when the U.S. allowed Lehman Brothers to fail, thus threatening money market funds everywhere. The crisis was used by the investment banks, which controlled U.S. economic policy, to secure massive subsidies to their profits from a taxpayer bailout and from the Federal Reserve. How much of the crisis was real and how much was hype is not known at this time.
As most of the derivative instruments had never been priced in the market, and as their exact composition between good and bad loans was unknown (the instruments are based on packages of securitized loans), the mark-to-market rule drove the values very low, thus threatening the solvency of many financial institutions. Also, the rule prohibiting continuous shorting had been removed, making it possible for hedge funds and speculators to destroy the market capitalization of targeted firms by driving down their share prices.
The obvious solution was to suspend the mark-to-market rule until some better idea of the values of the derivative instruments could be established and to prevent the abuse of shorting that was destroying market capitalization. Instead, the Goldman Sachs people in charge of the U.S. Treasury and, perhaps, the Federal Reserve as well, used the crisis to secure subsidies for the banks from U.S. taxpayers and from the Federal Reserve. It looks like a manipulated crisis as well as a real one due to greed unleashed by financial deregulation.
The crisis will not be over until financial regulation is restored, but Wall Street has been able to block re-regulation. Moreover, the response to the crisis has planted seeds for new crises.
Government budget deficits have exploded. In the U.S. the fiscal year 2009 federal budget deficit was $1.4 trillion, three times higher than the 2008 deficit. President Obama’s budget deficits for 2010 and 2011, according to the latest report, will total $2.9 trillion, and this estimate is based on the assumption that the Great Recession is over. Where is the U.S. Treasury to borrow $4.3 trillion in three years?
This sum greatly exceeds the combined trade surpluses of America’s trading partners, the recycling of which has financed past U.S. budget deficits, and perhaps exceeds total world savings.
It is unclear how the 2009 budget deficit was financed. A likely source was the bank reserves created for financial institutions by the Federal Reserve when it purchased their toxic financial instruments. These reserves were then used to purchase the new Treasury debt. In other words, the budget deficit was financed by deterioration in the balance sheet of the Federal Reserve. How long can such an exchange of assets continue before the Federal Reserve has to finance the government’s deficit by creating new money?
Similar deficits and financing problems have affected the EU, particularly its financially weaker members. To conclude: the initial crisis has planted seeds for two new crises: rising government debt and inflation.
A third crisis is also in place. This crisis will occur when confidence is lost in the U.S. dollar as world reserve currency. This crisis will disrupt the international payments mechanism. It will be especially difficult for the U.S. as the country will lose the ability to pay for its imports with its own currency. U.S. living standards will decline as the ability to import declines.
The financial crisis is essentially a U.S. crisis, spread abroad by the sale of toxic financial instruments. The rest of the world got into trouble by trusting Wall Street. The real American crisis is much worse than the financial crisis. The real American crisis is the offshoring of U.S. manufacturing, industrial, and professional service jobs such as software engineering and information technology.
Jobs offshoring was initiated by Wall Street pressures on corporations for higher earnings and by performance-related bonuses becoming the main form of managerial compensation. Corporate executives increased profits and obtained bonuses by substituting cheaper foreign labor for U.S. labor in the production of goods and services marketed in the U.S.
Jobs offshoring is destroying the ladders of upward mobility that made the U.S. an opportunity society and eroding the value of a university education. For the first decade of the 21st century, the U.S. economy has been able to create net new jobs only in domestic nontradable services, such as waitresses, bartenders, sales, health and social assistance and, prior to the real estate collapse, construction. These jobs are lower paid than the jobs were that have been offshored, and these jobs do not produce goods and services for export.
Jobs offshoring has increased the U.S. trade deficit, putting more pressure on the dollar’s role as reserve currency. When offshored goods and services return to the U.S., they add to imports, thus worsening the trade imbalance.
The policy of jobs offshoring is insane. It is shifting U.S. GDP growth to the offshored locations, such as China, thus halting growth in U.S. consumer incomes. For the past decade, U.S. households substituted an increase in indebtedness for the lack of growth in income in order to continue increasing their consumption. With their home equity refinanced and spent, real estate values down, and credit card debt at unsustainable levels, it is no longer possible for the U.S. economy to base its growth on a rise in consumer debt. This fact is a brake on U.S. economic recovery.
Stimulus packages cannot substitute for the growth in real income. As so many high value-added, high productivity U.S. jobs have been offshored, there is no way to achieve real growth in U.S. personal incomes. Stimulus spending simply adds to government debt and pressure on the dollar, and sows seeds for high inflation.
The U.S. dollar survives as reserve currency because there is no apparent substitute. The euro has its own problems. Moreover, the euro is the currency of a non-existent political entity. National sovereignty continues despite the existence of a common currency on the continent (but not in Great Britain). If the dollar is abandoned, then the result is likely to be bilateral settlements in countries’ own currencies, as Brazil and China now are doing. Alternatively, John Maynard Keynes’ bancor scheme could be implemented, as it does not require a reserve currency country. Keynes’ plan is designed to maintain a country’s trade balance. Only a reserve currency country can get its trade and budget deficits so out of balance as the U.S. has done. The prospect of U.S. default and/or inflation and decline in the dollar’s exchange value is a threat to the reserve system.
The threats to the U.S. economy are extreme. Yet, neither the Obama administration, the Republican opposition, economists, Wall Street, nor the media show any awareness. Instead, the public is provided with spin about recovery and with higher spending on pointless wars that are hastening America’s economic and financial ruin.
Ron Paul is a member of Congress
Could it all be a bad dream, or a nightmare? Is it my imagination, or have we lost our minds? It's surreal; it's just not believable.
A grand absurdity; a great deception, a delusion of momentous proportions; based on preposterous notions; and on ideas whose time should never have come; simplicity grossly distorted and complicated; insanity passed off as logic; grandiose schemes built on falsehoods with the morality of Ponzi and Madoff; evil described as virtue; ignorance pawned off as wisdom; destruction and impoverishment in the name of humanitarianism; violence, the tool of change; preventive wars used as the road to peace; tolerance delivered by government guns; reactionary views in the guise of progress; an empire replacing the Republic; slavery sold as liberty; excellence and virtue traded for mediocracy; socialism to save capitalism; a government out of control, unrestrained by the Constitution, the rule of law, or morality; bickering over petty politics as we collapse into chaos; the philosophy that destroys us is not even defined.
We have broken from reality–a psychotic Nation. Ignorance with a pretense of knowledge replacing wisdom. Money does not grow on trees, nor does prosperity come from a government printing press or escalating deficits.
We’re now in the midst of unlimited spending of the people’s money, exorbitant taxation, deficits of trillions of dollars–spent on a failed welfare/warfare state; an epidemic of cronyism; unlimited supplies of paper money equated with wealth.
A central bank that deliberately destroys the value of the currency in secrecy, without restraint, without nary a whimper. Yet, cheered on by the pseudo-capitalists of Wall Street, the military industrial complex, and Detroit.
We police our world empire with troops on 700 bases and in 130 countries around the world. A dangerous war now spreads throughout the Middle East and Central Asia. Thousands of innocent people being killed, as we become known as the torturers of the 21st century.
We assume that by keeping the already-known torture pictures from the public’s eye, we will be remembered only as a generous and good people. If our enemies want to attack us only because we are free and rich, proof of torture would be irrelevant.
The sad part of all this is that we have forgotten what made America great, good, and prosperous. We need to quickly refresh our memories and once again reinvigorate our love, understanding, and confidence in liberty. The status quo cannot be maintained, considering the current conditions. Violence and lost liberty will result without some revolutionary thinking.
We must escape from the madness of crowds now gathering. The good news is the reversal is achievable through peaceful and intellectual means and, fortunately, the number of those who care are growing exponentially.
Of course, it could all be a bad dream, a nightmare, and that I’m seriously mistaken, overreacting, and that my worries are unfounded. I hope so. But just in case, we ought to prepare ourselves for revolutionary changes in the not-too-distant future.
*****************
The Crisis is Not Over
Paul Craig Roberts was Assistant Secretary of the U.S. Treasury in the Reagan administration. His latest book, How The Economy Was Lost, has just been published by CounterPunch/AK Press.
Is the financial crisis over? Is the recovery for real and, if not, what are Americans’ prospects? The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it:
The global crisis is understood as a banking crisis brought on by mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets.
The crisis was initiated when the U.S. allowed Lehman Brothers to fail, thus threatening money market funds everywhere. The crisis was used by the investment banks, which controlled U.S. economic policy, to secure massive subsidies to their profits from a taxpayer bailout and from the Federal Reserve. How much of the crisis was real and how much was hype is not known at this time.
As most of the derivative instruments had never been priced in the market, and as their exact composition between good and bad loans was unknown (the instruments are based on packages of securitized loans), the mark-to-market rule drove the values very low, thus threatening the solvency of many financial institutions. Also, the rule prohibiting continuous shorting had been removed, making it possible for hedge funds and speculators to destroy the market capitalization of targeted firms by driving down their share prices.
The obvious solution was to suspend the mark-to-market rule until some better idea of the values of the derivative instruments could be established and to prevent the abuse of shorting that was destroying market capitalization. Instead, the Goldman Sachs people in charge of the U.S. Treasury and, perhaps, the Federal Reserve as well, used the crisis to secure subsidies for the banks from U.S. taxpayers and from the Federal Reserve. It looks like a manipulated crisis as well as a real one due to greed unleashed by financial deregulation.
The crisis will not be over until financial regulation is restored, but Wall Street has been able to block re-regulation. Moreover, the response to the crisis has planted seeds for new crises.
Government budget deficits have exploded. In the U.S. the fiscal year 2009 federal budget deficit was $1.4 trillion, three times higher than the 2008 deficit. President Obama’s budget deficits for 2010 and 2011, according to the latest report, will total $2.9 trillion, and this estimate is based on the assumption that the Great Recession is over. Where is the U.S. Treasury to borrow $4.3 trillion in three years?
This sum greatly exceeds the combined trade surpluses of America’s trading partners, the recycling of which has financed past U.S. budget deficits, and perhaps exceeds total world savings.
It is unclear how the 2009 budget deficit was financed. A likely source was the bank reserves created for financial institutions by the Federal Reserve when it purchased their toxic financial instruments. These reserves were then used to purchase the new Treasury debt. In other words, the budget deficit was financed by deterioration in the balance sheet of the Federal Reserve. How long can such an exchange of assets continue before the Federal Reserve has to finance the government’s deficit by creating new money?
Similar deficits and financing problems have affected the EU, particularly its financially weaker members. To conclude: the initial crisis has planted seeds for two new crises: rising government debt and inflation.
A third crisis is also in place. This crisis will occur when confidence is lost in the U.S. dollar as world reserve currency. This crisis will disrupt the international payments mechanism. It will be especially difficult for the U.S. as the country will lose the ability to pay for its imports with its own currency. U.S. living standards will decline as the ability to import declines.
The financial crisis is essentially a U.S. crisis, spread abroad by the sale of toxic financial instruments. The rest of the world got into trouble by trusting Wall Street. The real American crisis is much worse than the financial crisis. The real American crisis is the offshoring of U.S. manufacturing, industrial, and professional service jobs such as software engineering and information technology.
Jobs offshoring was initiated by Wall Street pressures on corporations for higher earnings and by performance-related bonuses becoming the main form of managerial compensation. Corporate executives increased profits and obtained bonuses by substituting cheaper foreign labor for U.S. labor in the production of goods and services marketed in the U.S.
Jobs offshoring is destroying the ladders of upward mobility that made the U.S. an opportunity society and eroding the value of a university education. For the first decade of the 21st century, the U.S. economy has been able to create net new jobs only in domestic nontradable services, such as waitresses, bartenders, sales, health and social assistance and, prior to the real estate collapse, construction. These jobs are lower paid than the jobs were that have been offshored, and these jobs do not produce goods and services for export.
Jobs offshoring has increased the U.S. trade deficit, putting more pressure on the dollar’s role as reserve currency. When offshored goods and services return to the U.S., they add to imports, thus worsening the trade imbalance.
The policy of jobs offshoring is insane. It is shifting U.S. GDP growth to the offshored locations, such as China, thus halting growth in U.S. consumer incomes. For the past decade, U.S. households substituted an increase in indebtedness for the lack of growth in income in order to continue increasing their consumption. With their home equity refinanced and spent, real estate values down, and credit card debt at unsustainable levels, it is no longer possible for the U.S. economy to base its growth on a rise in consumer debt. This fact is a brake on U.S. economic recovery.
Stimulus packages cannot substitute for the growth in real income. As so many high value-added, high productivity U.S. jobs have been offshored, there is no way to achieve real growth in U.S. personal incomes. Stimulus spending simply adds to government debt and pressure on the dollar, and sows seeds for high inflation.
The U.S. dollar survives as reserve currency because there is no apparent substitute. The euro has its own problems. Moreover, the euro is the currency of a non-existent political entity. National sovereignty continues despite the existence of a common currency on the continent (but not in Great Britain). If the dollar is abandoned, then the result is likely to be bilateral settlements in countries’ own currencies, as Brazil and China now are doing. Alternatively, John Maynard Keynes’ bancor scheme could be implemented, as it does not require a reserve currency country. Keynes’ plan is designed to maintain a country’s trade balance. Only a reserve currency country can get its trade and budget deficits so out of balance as the U.S. has done. The prospect of U.S. default and/or inflation and decline in the dollar’s exchange value is a threat to the reserve system.
The threats to the U.S. economy are extreme. Yet, neither the Obama administration, the Republican opposition, economists, Wall Street, nor the media show any awareness. Instead, the public is provided with spin about recovery and with higher spending on pointless wars that are hastening America’s economic and financial ruin.
Monday, February 1, 2010
Eloquent, ambitious, unfocused
Listen to the people
By: MIKE KRAUSS
Bucks County Courier Times
President Obama's State of the Union address was an opportunity to reestablish the potential for leadership that Mr. Obama has squandered since his inauguration. He failed.
The day after the speech, it was as if it had not happened.
Businesses went right on laying off, homes continued to be foreclosed, Congress went right back to business -trying to figure out how to get re-elected while selling out the voters to the entrenched interests - and the president headed out of town to promote his agenda.
And there is the problem - a Congress that is bought and paid for, and a president with an agenda as long as a laundry list and about as exciting.
The morning after Mr. Obama addressed Congress and the nation, nobody had a clear idea what the president proposes to do to rescue America from its disastrous slide - because the president proposes everything.
Mr. Obama needs urgently to take his own advice, delivered at the time of his inaugural with a clarity and prescience he has since lost, and begin to govern with focus.
He might start by sending his advisors and campaign gurus off to some island, cutting off all communication and listening to the American people.
Americans do not like the president's health care proposals. To be fair, they are not really his anymore, if they ever were. They are instead the remains of some good ideas that have been mauled beyond recognition by the health care industry.
Rather than wait for the legislation to die, as it will, the president needs to get the corpse out of the capitol, pull the legislation and - I know this is popular and therefore apparently suspect - give the people what they want: keep the ban on the most outrageous insurance industry practices, set limits on medical malpractice and expand Medicare to include as many of the uninsured who want to sign up, especially the now unemployed.
In his speech the president pointed out that everyone hates the Wall Street bailout, attempting the pose of a martyr to the sad burdens of his office. He should have been less theatrical and more truthful.
Not everyone hates the bailout. None of the fat cats on Wall Street, their retainers in Congress or their stooges in the regulatory agencies hate it. They love it!
It is the American people who hate it, because they know they have been massively ripped off.
If instead of making excuses and defending the outrage, the president actually went after the money - not just chump change that Wall Street will shrug off, but the trillions they took from the Treasury - took it back and put it into jobs creation, he would be overnight the most powerful man in America, which is what successful presidents must be.
How might Mr. Obama do that?
Simple. Finish the Wall Street takeover. The president took the banks' bad debts and losses and put those on the nation's balance sheet. Now he must take the assets. And tax the hell out of the highest wage earners in America.
Forget trickle down. It's a fraud. It is time to share the wealth, which for three decades has been steadily concentrated in the hands of a few, while the middle class is impoverished and the under-middle class explodes.
These three initiatives would put the people behind the president, and give him an audience and a hearing for whatever he wanted to do next.
First, a simple approach to health care that ends abuse, cuts costs and expands coverage through already established and generally liked programs.
Second, a recovery of the real cost of the bailout and a redirection of funds into massive jobs creation.
Third, a tax policy that demands a share of the riches of America for the people of America.
These limited and focused initiatives would put the people in the president's corner and Congress and entrenched interests on the run.
All three will require the president to listen to the people he was elected to represent; an apparently novel idea for Mr. Obama, who may be too smart for his own or the country's good, and unwilling to admit the people may know better than he what is in their interest.
But for as long as Mr. Obama refuses to listen to the people, just so long will he fail to lead.
February 01, 2010
By: MIKE KRAUSS
Bucks County Courier Times
President Obama's State of the Union address was an opportunity to reestablish the potential for leadership that Mr. Obama has squandered since his inauguration. He failed.
The day after the speech, it was as if it had not happened.
Businesses went right on laying off, homes continued to be foreclosed, Congress went right back to business -trying to figure out how to get re-elected while selling out the voters to the entrenched interests - and the president headed out of town to promote his agenda.
And there is the problem - a Congress that is bought and paid for, and a president with an agenda as long as a laundry list and about as exciting.
The morning after Mr. Obama addressed Congress and the nation, nobody had a clear idea what the president proposes to do to rescue America from its disastrous slide - because the president proposes everything.
Mr. Obama needs urgently to take his own advice, delivered at the time of his inaugural with a clarity and prescience he has since lost, and begin to govern with focus.
He might start by sending his advisors and campaign gurus off to some island, cutting off all communication and listening to the American people.
Americans do not like the president's health care proposals. To be fair, they are not really his anymore, if they ever were. They are instead the remains of some good ideas that have been mauled beyond recognition by the health care industry.
Rather than wait for the legislation to die, as it will, the president needs to get the corpse out of the capitol, pull the legislation and - I know this is popular and therefore apparently suspect - give the people what they want: keep the ban on the most outrageous insurance industry practices, set limits on medical malpractice and expand Medicare to include as many of the uninsured who want to sign up, especially the now unemployed.
In his speech the president pointed out that everyone hates the Wall Street bailout, attempting the pose of a martyr to the sad burdens of his office. He should have been less theatrical and more truthful.
Not everyone hates the bailout. None of the fat cats on Wall Street, their retainers in Congress or their stooges in the regulatory agencies hate it. They love it!
It is the American people who hate it, because they know they have been massively ripped off.
If instead of making excuses and defending the outrage, the president actually went after the money - not just chump change that Wall Street will shrug off, but the trillions they took from the Treasury - took it back and put it into jobs creation, he would be overnight the most powerful man in America, which is what successful presidents must be.
How might Mr. Obama do that?
Simple. Finish the Wall Street takeover. The president took the banks' bad debts and losses and put those on the nation's balance sheet. Now he must take the assets. And tax the hell out of the highest wage earners in America.
Forget trickle down. It's a fraud. It is time to share the wealth, which for three decades has been steadily concentrated in the hands of a few, while the middle class is impoverished and the under-middle class explodes.
These three initiatives would put the people behind the president, and give him an audience and a hearing for whatever he wanted to do next.
First, a simple approach to health care that ends abuse, cuts costs and expands coverage through already established and generally liked programs.
Second, a recovery of the real cost of the bailout and a redirection of funds into massive jobs creation.
Third, a tax policy that demands a share of the riches of America for the people of America.
These limited and focused initiatives would put the people in the president's corner and Congress and entrenched interests on the run.
All three will require the president to listen to the people he was elected to represent; an apparently novel idea for Mr. Obama, who may be too smart for his own or the country's good, and unwilling to admit the people may know better than he what is in their interest.
But for as long as Mr. Obama refuses to listen to the people, just so long will he fail to lead.
February 01, 2010
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