Betrayal of justice
By Mike Krauss
Bucks County Courier Times
There is a cancer in American government. It is aggressive and spreading.
The cancer was first diagnosed by the FBI in 2004, when it warned of “rampant” mortgage fraud. But the warning was ignored. No action was taken and the cancer spread.
Now, after a congressional investigation and the work of a few courageous journalists, we know the extent of the fraud. One of those journalists, Greg Hunter summarized it.
“There was real estate document fraud when the original Promissory Notes and loan documents were ‘lost.’ The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS). No ‘note,’ no security. That is security fraud. No security means the special IRS tax treatments for the MBS’s were fraudulently obtained. That is IRS tax fraud. Because there were no documents, the rating agencies fraudulently made up triple ‘A’ ratings for the securities. When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents. That phony paperwork was and is being used to wrongfully remove homeowners from their property. That is foreclosure fraud.”
From the local loan originators and their managers up to the CEOs, rating agencies and foreclosure mill law firms — fraud as a business model.
Hunter and others point out that after the savings and loan scandal of the 1980s, which cost taxpayers more than $160 billion, there were more than 1,000 felony convictions, and even more prosecutions.
The cost of the mortgage fraud that brought on the collapse of the American economy, and has ruined the lives and destroyed the futures of tens of millions of Americans, is at least 40 times greater than the S&L fraud, according to William Black, now an economics and law professor who helped investigate and prosecute that earlier criminal wrongdoing.
Yet there has not been one criminal prosecution by the U.S. Justice Department related to the monstrous mortgage fraud; only a few fines and settlements that paper over the crimes. Why?
Gretchen Morgenstern, writing for the New York Times and recently Richard Cohen at the Washington Post have asked the question, but obliquely. Both can only go so far.
As documented by the independent public policy organization Global Research, the boards of directors of the Times, Post and Time Warner, which owns CNN and Time Magazine, are a virtual Who’s Who of the nation’s corporate and financial elite, and they do not want that question asked or answered.
The technical answer, provided by Black, is that the Office of Thrift Supervision, the regulator which in the S&L scandal referred more than 9,000 investigations to the FBI, has in this case referred none.
So the regulators are AWOL, the attorney general of the United States is missing in action and no one asks the president why that is, nor does anyone ask that question of the GOP front runner presidential wanabes, nor the members of Congress who have oversight of the Justice Department.
Because the honest answer would expose the extent of the cancer and the degree to which justice in the United States has been subverted.
It is difficult to get campaign contributions, donations to post-presidential foundations, lucrative sinecures on boards of directors or in academia, invitations to Davos or the regulators’ “round trip ticket” back to the big bucks on Wall Street from people you prosecute for criminal fraud.
The Sunlight Foundation tracks the maze of campaign contributions, and reported that executives of Goldman Sachs, the flagship of the pirate fleet that looted America, are splitting their campaign contributions 50-50 between Mr. Obama and Mr. Romney, the likely GOP presidential candidate.
The finance industry has spent nearly $4 billion lobbying Congress since 1998, apart from campaign contributions. The regulators have been silenced and the revolving door is fully greased.
There was a moment of hope, when the state attorneys general proposed to collectively take action on the fraud. But that moment may have passed. The cancer has metastasized.
With furious lobbying from Wall Street and under enormous pressure from the White House, as reported by Ms. Morgenstern and others, the effort of the state attorneys general was turned away from any investigation and prosecution and a deal has been proposed.
In exchange for paying some billions in fines, those who committed the fraud that has cost the middle class trillions of lost wealth and destroyed lives and futures, will get immunity from criminal prosecution and any future claims for damages.
Call it the first class action sell out.
But now six of the 50 state attorneys general are opposing this betrayal of justice: New York, Delaware, Kentucky, Minnesota, Nevada and California. They are demanding a full investigation and criminal prosecutions where warranted.
Profiles in courage. And in a hopeful sign, these courageous public servants are gaining more support daily.
If you want to fight the cancer eating at the American democracy, now is the time. There is a web site for a statement of support for these attorneys general. http://act.boldprogressives.org/sign/petition_conway/?source=bp
Americans hope that justice is blind; but, tied up and held for ransom?
Mike Krauss, is chairman of The Pennsylvania Project, a non partisan public policy advocacy organization. www.papublicbankproject.org
Monday, November 7, 2011
Tuesday, November 1, 2011
Drowning in sea of debt
Pennsylvania to Harrisburg: "Sorry."
By Mike Krauss
Bucks County Courier Times
Harrisburg is going under, drowning in a sea of municipal debt.
Like many American cities, the Pennsylvania capitol’s tax base has steadily eroded over many decades. Jobs have been lost as industry has died or gone offshore, and much of the middle class long ago fled the city.
With the Wall Street crash of 2008, tax revenues took another dive. And an expensive investment in a new trash incinerator has failed to produce anticipated revenues.
City Council members want to file for bankruptcy to buy time to work the city’s way out of this mess. The mayor disagrees, and now the governor with the support of the Legislature is stepping in.
The city will be put in receivership. One recent newspaper editorial headlined, “State had to act to spare Harrisburg.”
But that is not what’s happening.
As the story under the headline explained, the state is moving quickly “to reassure worried bond-holders,” and the state will take control of the city’s finances “to meet its financial obligations by selling off revenue-generating assets and raising taxes.”
In other words, the bond holders get a life boat and the city drowns. Already strapped for revenue, the city will be forced to divest of revenue generating assets, among them the municipal incinerator and parking garages.
These assets will almost certainly be snapped up at fire sale prices, another transfer of wealth to the already wealthy who will raise fees at these facilities and pocket the loot, while for the 45,000 residents of the city, a reported 29 percent of whom already live in poverty, life will get worse in already hard times.
It is doubtful that the legislators will be riding to the city’s rescue. State lawmakers just went through a gut wrenching exercise in slashing state spending. There is little appetite for spending money or raising taxes to save the people of Harrisburg — or anywhere else.
In fairness to Pennsylvania Gov. Corbett, when it comes to paying off the bondholders, he is in a bind.
Almost every public project in America, from roads and bridges to port expansion, parking garages and municipal incinerators is financed with private money.
And it is expensive. Nationwide, the debt service is in the trillions of dollars, to be paid by taxpayers over generations. And now, a growing number of municipalities are in the same sinking boat as Harrisburg.
The governor’s bind is, if the bond holders don’t think they will always get their profits out, they may not invest. Where then will the money come from for vital public projects?
The answer is a new idea emerging in states and cities across the nation: public banks to provide affordable credit for public purposes.
Actually, it is an old idea, first practiced in America by the Quaker founders of the Commonwealth of Pennsylvania, who thought that the common wealth should serve the common good.
But the concept did not survive Alexander Hamilton, the first darling of New York bankers, and by the time the Federal Reserve gave control of the nation’s money and credit to a private banking cartel, the idea was extinguished altogether.
Except in North Dakota, where lawmakers responded to the creation of the Fed private banking monopoly by creating the state’s own bank, a public bank owned by the people of North Dakota..
The state of North Dakota does business as the Bank of North Dakota (BND). By state law, the BND holds all the state’s revenue and other assets. Then, as with any bank, these reserves are leveraged to create credit.
That credit is invested in Main Street and not Wall Street.
The BND is not a retail bank and does not compete with private banks. It is a partner in loans made by those banks, savings and loans and credit unions. And it provides a second level of risk assessment.
Only after a community bank approves a loan is the BND approached for participation; for example, to provide a larger loan amount than the local bank can offer, or to “buy down” the interest to the borrower. And then the loan has to pass the BND’s tests for credit worthiness.
For almost 100 years, the Bank of North Dakota (BND) has been an engine of prosperity.
In 2010 the BND reported: $30 million in profits returned to the state general fund without any taxes; a current loan portfolio of $2.8 billion in commercial loans and residential mortgages, including 255 business and industrial projects; student loans of over $1 billion; a $10 million loan program in partnership with the North Dakota Housing Finance Agency; and a disaster relief program with a fixed rate at 4 percent for five years and a variable rate currently at 2.75 percent.
Pennsylvania has a population almost 19 times greater than North Dakota and a far more varied economy. It is reasonable to project that a public Bank of Pennsylvania could produce some very large results.
And had there been a public Bank of Pennsylvania, to invest in cities like Harrisburg and offer low cost alternatives to municipal finance, the governor, state legislators, city officials and the people of Harrisburg might not be dealing with the present catastrophe.
By Mike Krauss
Bucks County Courier Times
Harrisburg is going under, drowning in a sea of municipal debt.
Like many American cities, the Pennsylvania capitol’s tax base has steadily eroded over many decades. Jobs have been lost as industry has died or gone offshore, and much of the middle class long ago fled the city.
With the Wall Street crash of 2008, tax revenues took another dive. And an expensive investment in a new trash incinerator has failed to produce anticipated revenues.
City Council members want to file for bankruptcy to buy time to work the city’s way out of this mess. The mayor disagrees, and now the governor with the support of the Legislature is stepping in.
The city will be put in receivership. One recent newspaper editorial headlined, “State had to act to spare Harrisburg.”
But that is not what’s happening.
As the story under the headline explained, the state is moving quickly “to reassure worried bond-holders,” and the state will take control of the city’s finances “to meet its financial obligations by selling off revenue-generating assets and raising taxes.”
In other words, the bond holders get a life boat and the city drowns. Already strapped for revenue, the city will be forced to divest of revenue generating assets, among them the municipal incinerator and parking garages.
These assets will almost certainly be snapped up at fire sale prices, another transfer of wealth to the already wealthy who will raise fees at these facilities and pocket the loot, while for the 45,000 residents of the city, a reported 29 percent of whom already live in poverty, life will get worse in already hard times.
It is doubtful that the legislators will be riding to the city’s rescue. State lawmakers just went through a gut wrenching exercise in slashing state spending. There is little appetite for spending money or raising taxes to save the people of Harrisburg — or anywhere else.
In fairness to Pennsylvania Gov. Corbett, when it comes to paying off the bondholders, he is in a bind.
Almost every public project in America, from roads and bridges to port expansion, parking garages and municipal incinerators is financed with private money.
And it is expensive. Nationwide, the debt service is in the trillions of dollars, to be paid by taxpayers over generations. And now, a growing number of municipalities are in the same sinking boat as Harrisburg.
The governor’s bind is, if the bond holders don’t think they will always get their profits out, they may not invest. Where then will the money come from for vital public projects?
The answer is a new idea emerging in states and cities across the nation: public banks to provide affordable credit for public purposes.
Actually, it is an old idea, first practiced in America by the Quaker founders of the Commonwealth of Pennsylvania, who thought that the common wealth should serve the common good.
But the concept did not survive Alexander Hamilton, the first darling of New York bankers, and by the time the Federal Reserve gave control of the nation’s money and credit to a private banking cartel, the idea was extinguished altogether.
Except in North Dakota, where lawmakers responded to the creation of the Fed private banking monopoly by creating the state’s own bank, a public bank owned by the people of North Dakota..
The state of North Dakota does business as the Bank of North Dakota (BND). By state law, the BND holds all the state’s revenue and other assets. Then, as with any bank, these reserves are leveraged to create credit.
That credit is invested in Main Street and not Wall Street.
The BND is not a retail bank and does not compete with private banks. It is a partner in loans made by those banks, savings and loans and credit unions. And it provides a second level of risk assessment.
Only after a community bank approves a loan is the BND approached for participation; for example, to provide a larger loan amount than the local bank can offer, or to “buy down” the interest to the borrower. And then the loan has to pass the BND’s tests for credit worthiness.
For almost 100 years, the Bank of North Dakota (BND) has been an engine of prosperity.
In 2010 the BND reported: $30 million in profits returned to the state general fund without any taxes; a current loan portfolio of $2.8 billion in commercial loans and residential mortgages, including 255 business and industrial projects; student loans of over $1 billion; a $10 million loan program in partnership with the North Dakota Housing Finance Agency; and a disaster relief program with a fixed rate at 4 percent for five years and a variable rate currently at 2.75 percent.
Pennsylvania has a population almost 19 times greater than North Dakota and a far more varied economy. It is reasonable to project that a public Bank of Pennsylvania could produce some very large results.
And had there been a public Bank of Pennsylvania, to invest in cities like Harrisburg and offer low cost alternatives to municipal finance, the governor, state legislators, city officials and the people of Harrisburg might not be dealing with the present catastrophe.
Tuesday, October 18, 2011
A Tale of two Cities
The First Amendment or private police
By Mike Krauss
Bucks County Courier Times
Occupy Wall Street is moving into its second month. From the outset, the police in New York City took a decidedly unfriendly posture to the demonstrators: pepper spray, billy clubs pushing and shoving, trying to restrain the movements of the demonstrators and lots of arrests.
The mayor of New York swung into action and accused the Wall Street demonstrators of trying to cripple the city’s economy.
“What they’re trying to do is take the jobs away from people working in this city.”
This is of course a ludicrous claim. If anything, as people travel into the city to participate and the media begin to focus, vendors, hotels, restaurants and many other merchants are selling more of their goods and services.
But this is not the kind of convention his honor wants to host.
Of course, the mayor may not have been thinking of the jobs of hot dog vendors, deli owners and local merchants. He may have been thinking about the jobs of bankers. But if so, his worry is unfounded.
The protesters don’t want mass layoffs of bank clerks. They just want to see some of their bosses go to jail.
In Philadelphia, where Occupy Philadelphia was launched only a week ago, city leaders took a different approach. A spokesman for the mayor set the tone, telling the media, “They (the protesters) have been law-abiding; there have been no arrests or citations; they’ve controlled their site very well; they have cooperated with police.”
He continued, “They’re exercising their right to free speech, and they’re going about it in a very mature way.”
Philly Mayor Michael Nutter visited the die-hards who slept out in the open the first night — at 1:30 a.m.
Philadelphia newspapers reported that Police Commissioner Charles H. Ramsey “has directed his officers to work with demonstrators and assist with marches. He emphasized that officers are bound to protect the demonstrators’ right to protest peacefully.”
Ramsey has also had the First Amendment read at roll calls and periodically over the police radio system as a reminder.
How to explain the difference in the two cities?
One reason may be that Philadelphia is the place where the “inalienable” rights of the people were first declared, and then protected in the Constitution, and it appears are still taught in the schools.
Another may be that the police in both New York and Philly report to the mayor, and they are very different men. The mayor of New York City, Michael Bloomberg, is a billionaire who made his billions — and goes on making them — providing business services to Wall Street. He has a major Wall Street firm as business partner.
But in a recent article in the journal Counterpunch, 20-year Wall Street veteran Pan Martens reported a more troubling explanation for the aggressive behavior of the New York City police: they’ve been bought.
Oh, I don’t mean New York cops are taking illegal bribes to beat up demonstrators. This is America. The bribes have been legalized. The cops have been hired by Wall Street, in a program started by former NYC Mayor Rudi Giuliani.
Martens reports, “It’s called the Paid Detail Unit and it allows the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to order up a flank of New York’s finest with the ease of dialing the deli for a pastrami on rye.”
According to Martens, for $37 an hour, the New York Stock Exchange, Goldman Sachs and other undisclosed firms will have paid out more than $11 million by the end of the year to hire cops with uniforms, badges, guns and the power to arrest.
Not every member of the force is happy with the arrangement. One officer described it on a website as officers “... working for, and being paid by, some of the richest people and organizations in the City, if not the world, enforcing the mandates of the private employer, and in effect, allowing the officer to become the Praetorian Guard of the elite of the City.”
One hopes that is what most of the officers think, but $11 million in hard times is bound to win friends and influence people.
So it appears that the “White Shirt” NYC cops who have been all over the demonstrators, as opposed to the familiar Blue Shirts, may not be “supervisors” as has been claimed, but are part of a private gang.
And they are being used by Wall Street today exactly as Wall Street used paid thugs at the turn of the past century to break up striking miners and steel workers.
So, hats off to the Honorable Michael Nutter, Mayor of the City of Philadelphia, his commissioner of police, Charles H. Ramsey, the men and women of the force and, above all, the people of the City of Philadelphia and the Occupiers for providing the nation with a much needed civics lesson.
Fed up with a government that serves, protects and defends only established wealth and privilege, they have taken matters in their own hands; but unlike the barons on Wall Street and their allies, they have not taken the law into their own hands.
Mike Krauss is chairman of The Pennsylvania Project, a former officer of Bucks County and Pennsylvania government and an international logistics executive. Reach him at www.papublicbankproject.org.
By Mike Krauss
Bucks County Courier Times
Occupy Wall Street is moving into its second month. From the outset, the police in New York City took a decidedly unfriendly posture to the demonstrators: pepper spray, billy clubs pushing and shoving, trying to restrain the movements of the demonstrators and lots of arrests.
The mayor of New York swung into action and accused the Wall Street demonstrators of trying to cripple the city’s economy.
“What they’re trying to do is take the jobs away from people working in this city.”
This is of course a ludicrous claim. If anything, as people travel into the city to participate and the media begin to focus, vendors, hotels, restaurants and many other merchants are selling more of their goods and services.
But this is not the kind of convention his honor wants to host.
Of course, the mayor may not have been thinking of the jobs of hot dog vendors, deli owners and local merchants. He may have been thinking about the jobs of bankers. But if so, his worry is unfounded.
The protesters don’t want mass layoffs of bank clerks. They just want to see some of their bosses go to jail.
In Philadelphia, where Occupy Philadelphia was launched only a week ago, city leaders took a different approach. A spokesman for the mayor set the tone, telling the media, “They (the protesters) have been law-abiding; there have been no arrests or citations; they’ve controlled their site very well; they have cooperated with police.”
He continued, “They’re exercising their right to free speech, and they’re going about it in a very mature way.”
Philly Mayor Michael Nutter visited the die-hards who slept out in the open the first night — at 1:30 a.m.
Philadelphia newspapers reported that Police Commissioner Charles H. Ramsey “has directed his officers to work with demonstrators and assist with marches. He emphasized that officers are bound to protect the demonstrators’ right to protest peacefully.”
Ramsey has also had the First Amendment read at roll calls and periodically over the police radio system as a reminder.
How to explain the difference in the two cities?
One reason may be that Philadelphia is the place where the “inalienable” rights of the people were first declared, and then protected in the Constitution, and it appears are still taught in the schools.
Another may be that the police in both New York and Philly report to the mayor, and they are very different men. The mayor of New York City, Michael Bloomberg, is a billionaire who made his billions — and goes on making them — providing business services to Wall Street. He has a major Wall Street firm as business partner.
But in a recent article in the journal Counterpunch, 20-year Wall Street veteran Pan Martens reported a more troubling explanation for the aggressive behavior of the New York City police: they’ve been bought.
Oh, I don’t mean New York cops are taking illegal bribes to beat up demonstrators. This is America. The bribes have been legalized. The cops have been hired by Wall Street, in a program started by former NYC Mayor Rudi Giuliani.
Martens reports, “It’s called the Paid Detail Unit and it allows the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to order up a flank of New York’s finest with the ease of dialing the deli for a pastrami on rye.”
According to Martens, for $37 an hour, the New York Stock Exchange, Goldman Sachs and other undisclosed firms will have paid out more than $11 million by the end of the year to hire cops with uniforms, badges, guns and the power to arrest.
Not every member of the force is happy with the arrangement. One officer described it on a website as officers “... working for, and being paid by, some of the richest people and organizations in the City, if not the world, enforcing the mandates of the private employer, and in effect, allowing the officer to become the Praetorian Guard of the elite of the City.”
One hopes that is what most of the officers think, but $11 million in hard times is bound to win friends and influence people.
So it appears that the “White Shirt” NYC cops who have been all over the demonstrators, as opposed to the familiar Blue Shirts, may not be “supervisors” as has been claimed, but are part of a private gang.
And they are being used by Wall Street today exactly as Wall Street used paid thugs at the turn of the past century to break up striking miners and steel workers.
So, hats off to the Honorable Michael Nutter, Mayor of the City of Philadelphia, his commissioner of police, Charles H. Ramsey, the men and women of the force and, above all, the people of the City of Philadelphia and the Occupiers for providing the nation with a much needed civics lesson.
Fed up with a government that serves, protects and defends only established wealth and privilege, they have taken matters in their own hands; but unlike the barons on Wall Street and their allies, they have not taken the law into their own hands.
Mike Krauss is chairman of The Pennsylvania Project, a former officer of Bucks County and Pennsylvania government and an international logistics executive. Reach him at www.papublicbankproject.org.
Saturday, October 15, 2011
Death of Democracy?
The concentration of wealth, and the destruction of the middle class
By Mike Krauss
Bucks County Courier Times
27 September 2011
The changes have been taking place for 40 years, but so gradually that the American middle class was not alarmed. People are like that. We can adjust to enormous change if it occurs gradually.
So it crept up on the American middle class: 40 years of flat wages, expensive credit substituted for income, two wage earners and multiple jobs to keep heads above water, jobs off-shored and American manufacturing decimated, wages further depressed by an over-supply of labor created by unchecked and mostly illegal immigration, taxes that favored the wealthy, banking laws and deregulation that allowed the finance industry to get a stranglehold on the American economy and government.
It is as if the American house had been infested by termites, but nobody noticed until the roof began to fall in. Suddenly, we can see how the house has been ravaged.
Poverty is rampant, millions of the middle class pushed down the ladder which generations expected to climb. Fantastic wealth has been concentrated among the few as never before.
The massive damage done is expressed in a chart recently published with surprising candor by the Federal Reserve and labeled “Owners Equity in Household Real Estate.”
It shows that in 1951 Americans held about $250 billion in home equity; about the time the GI Bill began not only to put veterans through college, but also to support the home ownership which created the modern suburbs and middle class.
By the time of the 2008 Wall Street crash and bail out, that equity had grown to almost $14 trillion, its growth virtually immune to the periodic recessions in the U.S. economy.
Even adjusted for inflation, that is a lot of wealth and represents what post World War II Americans achieved: the creation of the greatest and most broadly shared prosperity the world had ever seen — the rise of the American middle class.
With the crash, home equity fell off a cliff and has now been cut more than in half. It is falling still. Those Americans who owned most of that real estate, the middle class, have lost about $7 trillion of their wealth.
That wealth will not disappear. It will be transferred to the already wealthy. The new American way.
An industry trade group, Realty Trac Inc. reports that the sale of foreclosed homes accounted for 31 percent of home sales in the last quarter. These homes were not purchased by the poor, the unemployed or the struggling middle class. They were purchased — at bargain basement prices — by the already wealthy. Why would they do such a thing in a depression?
Because the economy only moves one of two ways: up or down. And when this depression ends, home prices will once again go up, and these assets will make the wealthy even wealthier.
Meanwhile, these homes will be rented. And millions of once middle class Americans will go from homeowners to home renters, and their wages will not be invested in an asset, but instead will go as rents to the wealthy.
Further, the Obama administration has floated the idea of ending the home mortgage interest deduction in the tax code, and providing rental assistance.
So the middle class taxpayer who still owns a home and pays taxes will lose that deduction, and be taxed to provide the money to be paid as rents to the new suburban slumlords.
Middle class Americans are experiencing a disaster of historic proportions. It was entirely man made. But, what to do about it?
A place to start is to stop listening to the prevailing narrative that Washington is dysfunctional and can’t get anything done because of partisan wrangling. That is a false and intentionally misleading narrative from a captured national media, whose owners fear the day the American middle class wakes up.
Washington gets plenty done. Doing nothing is a policy, the policy of keeping things the way they are.
Americans must wake up to the fact that high unemployment, home foreclosures, and out-of-control militarism, the destruction of the middle class and the legislation of every device known to man to preserve, protect and defend the wealth of the wealthy are the intended policies of the federal government.
The American political establishment is not bumbling. It is bought.
Political power flows from wealth. When the wealth of a nation is shared among the many, when there is a middle class, democracy can flourish. When wealth is concentrated, democracy dies.
By Mike Krauss
Bucks County Courier Times
27 September 2011
The changes have been taking place for 40 years, but so gradually that the American middle class was not alarmed. People are like that. We can adjust to enormous change if it occurs gradually.
So it crept up on the American middle class: 40 years of flat wages, expensive credit substituted for income, two wage earners and multiple jobs to keep heads above water, jobs off-shored and American manufacturing decimated, wages further depressed by an over-supply of labor created by unchecked and mostly illegal immigration, taxes that favored the wealthy, banking laws and deregulation that allowed the finance industry to get a stranglehold on the American economy and government.
It is as if the American house had been infested by termites, but nobody noticed until the roof began to fall in. Suddenly, we can see how the house has been ravaged.
Poverty is rampant, millions of the middle class pushed down the ladder which generations expected to climb. Fantastic wealth has been concentrated among the few as never before.
The massive damage done is expressed in a chart recently published with surprising candor by the Federal Reserve and labeled “Owners Equity in Household Real Estate.”
It shows that in 1951 Americans held about $250 billion in home equity; about the time the GI Bill began not only to put veterans through college, but also to support the home ownership which created the modern suburbs and middle class.
By the time of the 2008 Wall Street crash and bail out, that equity had grown to almost $14 trillion, its growth virtually immune to the periodic recessions in the U.S. economy.
Even adjusted for inflation, that is a lot of wealth and represents what post World War II Americans achieved: the creation of the greatest and most broadly shared prosperity the world had ever seen — the rise of the American middle class.
With the crash, home equity fell off a cliff and has now been cut more than in half. It is falling still. Those Americans who owned most of that real estate, the middle class, have lost about $7 trillion of their wealth.
That wealth will not disappear. It will be transferred to the already wealthy. The new American way.
An industry trade group, Realty Trac Inc. reports that the sale of foreclosed homes accounted for 31 percent of home sales in the last quarter. These homes were not purchased by the poor, the unemployed or the struggling middle class. They were purchased — at bargain basement prices — by the already wealthy. Why would they do such a thing in a depression?
Because the economy only moves one of two ways: up or down. And when this depression ends, home prices will once again go up, and these assets will make the wealthy even wealthier.
Meanwhile, these homes will be rented. And millions of once middle class Americans will go from homeowners to home renters, and their wages will not be invested in an asset, but instead will go as rents to the wealthy.
Further, the Obama administration has floated the idea of ending the home mortgage interest deduction in the tax code, and providing rental assistance.
So the middle class taxpayer who still owns a home and pays taxes will lose that deduction, and be taxed to provide the money to be paid as rents to the new suburban slumlords.
Middle class Americans are experiencing a disaster of historic proportions. It was entirely man made. But, what to do about it?
A place to start is to stop listening to the prevailing narrative that Washington is dysfunctional and can’t get anything done because of partisan wrangling. That is a false and intentionally misleading narrative from a captured national media, whose owners fear the day the American middle class wakes up.
Washington gets plenty done. Doing nothing is a policy, the policy of keeping things the way they are.
Americans must wake up to the fact that high unemployment, home foreclosures, and out-of-control militarism, the destruction of the middle class and the legislation of every device known to man to preserve, protect and defend the wealth of the wealthy are the intended policies of the federal government.
The American political establishment is not bumbling. It is bought.
Political power flows from wealth. When the wealth of a nation is shared among the many, when there is a middle class, democracy can flourish. When wealth is concentrated, democracy dies.
Friday, September 16, 2011
The never ending campaign
Obama jobs plan falls seriously short
In his address to the Congress and the nation, President Obama seemed in a determined fighting mood. The president said many things that will give hope to his dispirited supporters, and perhaps to many Americans.
But we have been there before, in the campaign of 2008, and Mr. Obama did not deliver. The nation got more of the same -- Wall Street and war and the protection of corporate profit as the overarching purpose of the federal government.
Mr. Obama is the most able political campaigner of his age, and his address must be seen for what it was -- a campaign speech. And whatever good the enactment of his many proposals might do, the Republicans in Congress are also campaigning (they never actually stopped), and their devotion to doctrine is as mindless, fanatical and frightening as that of the Ayatollahs in Tehran.
There will be no cooperation.
And even if the heartless, pseudo-Christian social Darwinists in the GOP should hear the cries of millions of struggling Americans, their grudging aide will come at a price: more cuts in the spending that sustains -- barely -- the lives of our most vulnerable citizens and the battered hopes of the beleaguered middle class.
In fact, as he did in the debt ceiling farce, Mr. Obama put those cuts on the table.
But, Mr. Obama's true believers will argue, look at all the good things the president proposed. Well, let's. This was billed as a jobs speech. And the word jobs was said by Mr. Obama 45 times -- almost once a minute. So, where are the jobs?
If Congress agrees to extend unemployment benefits, there will be some immediate spending, but no jobs. Grocery stores, pharmacies, auto repair shops and Wal Mart will see some more business. But it will be short-lived and no cause to hire. Just some quick profit taking and feel good headlines.
Similarly, the proposed cuts in employee and employer payroll taxes, while no doubt welcomed by both and the stuff of future campaign ads, leaves only modest sums in employees' pockets each month. And many American consumers may opt to pay down debt rather than take on new spending, as in fact they have been doing.
And even if Wal Mart adds some non-union, low-wage, no-benefits, part- time jobs, whatever will be sold will likely create more jobs in China than the United States.
And the employer payroll tax reduction will only spur hiring if employers see a sustained increase in demand, and so will lead to no immediate new hires, if ever.
But these payroll tax cuts depress revenues for Social Security and Medicare and give the U.S. Chamber of Commerce, all the GOP and many Democrats ammunition in the fear mongering campaign to eliminate both of those programs.
The president also proposed $35 billion to prevent the layoffs of an estimated 280,000 teachers, "while hiring tens of thousands more, along with additional police officers and firefighters," according to the New York Times.
Maybe. Or maybe battered school districts and local governments will use the funds to cover budget shortfalls and avoid tax increases.
The one sure jobs creator was spending on infrastructure. But the amounts proposed, given the need for jobs and the disastrous state of American roads, bridges, schools, water and sewer systems, public transportation and ...
You get the point. And after the recent storms, much of the mid-Atlantic and Northeast is a disaster area. It will take billions just to repair that damage. Obama's proposal got construction workers cheering. That was the point, as with so much of what the president proposed.
But the amounts proposed -- tens of billions -- fall hopelessly short of the scope and scale of the effort needed. And there is no guarantee that the GOP in the Congress will enact any of what the president proposed.
So the never ending campaign never ends. Already, the president and members of Congress are shaking the trees and being shaken down by the established interests that own Washington.
The president and all the GOP hopefuls are raising enormous sums through "super PACS," by passing the already anemic laws to prevent the wholesale selling of the office. And the Washington Post reported last week that members of the "super Congress" -- the elite committee that is charged to slash spending -- have set off on a furious round of fund raising, using their newly powerful positions to their best advantage.
Of course, say Mr. Obama and his would-be opponents, they have no idea what the super PACS that support them are doing with the tens of millions each is raising from contributors with no limit to their giving. And members of the super Congress would never protect the spending their contributors enjoy in exchange for a campaign contribution. That would be -- criminal.
There is no hope or health in Washington. The ship of state has foundered. It is time for the American people to put all the little boats in the water, and look to the states, counties and municipalities to provide the ideas, leadership and jobs that can collectively recover America's stolen prosperity.
In his address to the Congress and the nation, President Obama seemed in a determined fighting mood. The president said many things that will give hope to his dispirited supporters, and perhaps to many Americans.
But we have been there before, in the campaign of 2008, and Mr. Obama did not deliver. The nation got more of the same -- Wall Street and war and the protection of corporate profit as the overarching purpose of the federal government.
Mr. Obama is the most able political campaigner of his age, and his address must be seen for what it was -- a campaign speech. And whatever good the enactment of his many proposals might do, the Republicans in Congress are also campaigning (they never actually stopped), and their devotion to doctrine is as mindless, fanatical and frightening as that of the Ayatollahs in Tehran.
There will be no cooperation.
And even if the heartless, pseudo-Christian social Darwinists in the GOP should hear the cries of millions of struggling Americans, their grudging aide will come at a price: more cuts in the spending that sustains -- barely -- the lives of our most vulnerable citizens and the battered hopes of the beleaguered middle class.
In fact, as he did in the debt ceiling farce, Mr. Obama put those cuts on the table.
But, Mr. Obama's true believers will argue, look at all the good things the president proposed. Well, let's. This was billed as a jobs speech. And the word jobs was said by Mr. Obama 45 times -- almost once a minute. So, where are the jobs?
If Congress agrees to extend unemployment benefits, there will be some immediate spending, but no jobs. Grocery stores, pharmacies, auto repair shops and Wal Mart will see some more business. But it will be short-lived and no cause to hire. Just some quick profit taking and feel good headlines.
Similarly, the proposed cuts in employee and employer payroll taxes, while no doubt welcomed by both and the stuff of future campaign ads, leaves only modest sums in employees' pockets each month. And many American consumers may opt to pay down debt rather than take on new spending, as in fact they have been doing.
And even if Wal Mart adds some non-union, low-wage, no-benefits, part- time jobs, whatever will be sold will likely create more jobs in China than the United States.
And the employer payroll tax reduction will only spur hiring if employers see a sustained increase in demand, and so will lead to no immediate new hires, if ever.
But these payroll tax cuts depress revenues for Social Security and Medicare and give the U.S. Chamber of Commerce, all the GOP and many Democrats ammunition in the fear mongering campaign to eliminate both of those programs.
The president also proposed $35 billion to prevent the layoffs of an estimated 280,000 teachers, "while hiring tens of thousands more, along with additional police officers and firefighters," according to the New York Times.
Maybe. Or maybe battered school districts and local governments will use the funds to cover budget shortfalls and avoid tax increases.
The one sure jobs creator was spending on infrastructure. But the amounts proposed, given the need for jobs and the disastrous state of American roads, bridges, schools, water and sewer systems, public transportation and ...
You get the point. And after the recent storms, much of the mid-Atlantic and Northeast is a disaster area. It will take billions just to repair that damage. Obama's proposal got construction workers cheering. That was the point, as with so much of what the president proposed.
But the amounts proposed -- tens of billions -- fall hopelessly short of the scope and scale of the effort needed. And there is no guarantee that the GOP in the Congress will enact any of what the president proposed.
So the never ending campaign never ends. Already, the president and members of Congress are shaking the trees and being shaken down by the established interests that own Washington.
The president and all the GOP hopefuls are raising enormous sums through "super PACS," by passing the already anemic laws to prevent the wholesale selling of the office. And the Washington Post reported last week that members of the "super Congress" -- the elite committee that is charged to slash spending -- have set off on a furious round of fund raising, using their newly powerful positions to their best advantage.
Of course, say Mr. Obama and his would-be opponents, they have no idea what the super PACS that support them are doing with the tens of millions each is raising from contributors with no limit to their giving. And members of the super Congress would never protect the spending their contributors enjoy in exchange for a campaign contribution. That would be -- criminal.
There is no hope or health in Washington. The ship of state has foundered. It is time for the American people to put all the little boats in the water, and look to the states, counties and municipalities to provide the ideas, leadership and jobs that can collectively recover America's stolen prosperity.
Sunday, August 7, 2011
American Democracy?
Democratic Party died a slow death
By Mike Krauss
Bucks County Courier Times
The Democratic Party is dead. It was a slow death, painful to watch, but it’s over now. The remains will be buried alongside those of the Republican Party, which died some time ago.
The GOP took ill with the Civil Rights Act of 1964. Legions of Democratic southern whites fled their party and eventually made their new home in the GOP, bringing with them their passion for the Bible, guns and cars (Not necessarily in that order), and an abiding hostility to the federal government that had twice upended their social order and threatened their economic and political power.
Richard Nixon saw them coming and invited them in with a pitch to “law and order,” which gathered up the southern (and some northern) racists, the socially conservative voters upset by the changes of the 1960s, and the white suburban and rural voters who, while not necessarily racists, resented the huge and mostly urban spending of LBJ’s “Great Society.”
But Nixon was a moderate, who like Eisenhower before him did not make war on working men and women, and who took America out of war. And when Nixon went down the team that heckled Dwight Eisenhower at the ‘64 convention took over and the GOP died, to be replaced by the POG (Party of God), eager to fight His battles at home and abroad.
They joined the class of established and mostly corporate wealth that did not like it one bit when FDR started sharing that wealth and Lyndon Johnson tried to do the same.
All things federal became the enemy of the POG, while the nation’s established corporate wealth used all things federal to enlarge their wealth.
“Welfare cheats” (I wonder what color they were?), the ever useful communists and a focus on sex ( a sure attention getter) kept America’s increasingly deficient attention while the Reagan tax code accelerated the most massive transfer of wealth in American history — perhaps world history — into the hands of an ever richer few.
The Democratic Party was already weakened by Reagan’s assault on unions and the exodus of whites, and took seriously ill when Bill Clinton, a fatherless boy who longed for a family, got adopted by Wall Street.
Clinton embraced “free” trade, which actually carries a terrible price in lost jobs and low wages for Americans, and has since decimated American manufacturing and destroyed the old union base of the Democratic Party.
But “free” trade does wonders for corporate profit and Wall Street.
Then Clinton joined ranks with the POG to repeal the laws that had kept the banks and financial casinos separated since the crash of 1929. The result was not only that Wall Street crashed again, taking a lot of the middle class with it, but also that the finance industry — which produces nothing of utility — overtook all others as the source of profit in American business, and has further accelerated the transfer of wealth to the richest Americans and directed investment away from productivity.
While Americans were sold on “trickle down” — better described as “Scraps Under the Table” — economics, the wealth of America gushed up to the top.
The incomes of the richest Americans doubled under Bill Clinton, and tripled under George Bush, while those of working men and women have remained flat for decades.
Barack Obama, who also was adopted by Wall Street and will like Bill Clinton become wealthy, kept the Democratic Party in Wall Street’s pocket. Cut off from its former life’s blood — working men and women — the party’s condition grew critical.
The exact moment of death came during the posturing over the debt ceiling when President Obama put Social Security, Medicare and Medicaid on the chopping block, and moved himself to the right of Ebenezer Scrooge.
So two political parties that worked at the center of American politics and between them represented most average Americans, have been replaced by two political parties that work at the same reactionary end of American politics and represent the wealthiest Americans and the corporate engines of their wealth — Wall Street and war and the established corporate parasites.
William Penn observed that governments, like clocks, “go from the motions men give them.” But clockmakers have tools. Political parties must be understood as the tools people use to get their hands on the machinery of government. The tools Americans use to make government do what they want have been taken out of their hands.
Americans must take them back, or fashion new tools, or sit by and watch the American democracy die
By Mike Krauss
Bucks County Courier Times
The Democratic Party is dead. It was a slow death, painful to watch, but it’s over now. The remains will be buried alongside those of the Republican Party, which died some time ago.
The GOP took ill with the Civil Rights Act of 1964. Legions of Democratic southern whites fled their party and eventually made their new home in the GOP, bringing with them their passion for the Bible, guns and cars (Not necessarily in that order), and an abiding hostility to the federal government that had twice upended their social order and threatened their economic and political power.
Richard Nixon saw them coming and invited them in with a pitch to “law and order,” which gathered up the southern (and some northern) racists, the socially conservative voters upset by the changes of the 1960s, and the white suburban and rural voters who, while not necessarily racists, resented the huge and mostly urban spending of LBJ’s “Great Society.”
But Nixon was a moderate, who like Eisenhower before him did not make war on working men and women, and who took America out of war. And when Nixon went down the team that heckled Dwight Eisenhower at the ‘64 convention took over and the GOP died, to be replaced by the POG (Party of God), eager to fight His battles at home and abroad.
They joined the class of established and mostly corporate wealth that did not like it one bit when FDR started sharing that wealth and Lyndon Johnson tried to do the same.
All things federal became the enemy of the POG, while the nation’s established corporate wealth used all things federal to enlarge their wealth.
“Welfare cheats” (I wonder what color they were?), the ever useful communists and a focus on sex ( a sure attention getter) kept America’s increasingly deficient attention while the Reagan tax code accelerated the most massive transfer of wealth in American history — perhaps world history — into the hands of an ever richer few.
The Democratic Party was already weakened by Reagan’s assault on unions and the exodus of whites, and took seriously ill when Bill Clinton, a fatherless boy who longed for a family, got adopted by Wall Street.
Clinton embraced “free” trade, which actually carries a terrible price in lost jobs and low wages for Americans, and has since decimated American manufacturing and destroyed the old union base of the Democratic Party.
But “free” trade does wonders for corporate profit and Wall Street.
Then Clinton joined ranks with the POG to repeal the laws that had kept the banks and financial casinos separated since the crash of 1929. The result was not only that Wall Street crashed again, taking a lot of the middle class with it, but also that the finance industry — which produces nothing of utility — overtook all others as the source of profit in American business, and has further accelerated the transfer of wealth to the richest Americans and directed investment away from productivity.
While Americans were sold on “trickle down” — better described as “Scraps Under the Table” — economics, the wealth of America gushed up to the top.
The incomes of the richest Americans doubled under Bill Clinton, and tripled under George Bush, while those of working men and women have remained flat for decades.
Barack Obama, who also was adopted by Wall Street and will like Bill Clinton become wealthy, kept the Democratic Party in Wall Street’s pocket. Cut off from its former life’s blood — working men and women — the party’s condition grew critical.
The exact moment of death came during the posturing over the debt ceiling when President Obama put Social Security, Medicare and Medicaid on the chopping block, and moved himself to the right of Ebenezer Scrooge.
So two political parties that worked at the center of American politics and between them represented most average Americans, have been replaced by two political parties that work at the same reactionary end of American politics and represent the wealthiest Americans and the corporate engines of their wealth — Wall Street and war and the established corporate parasites.
William Penn observed that governments, like clocks, “go from the motions men give them.” But clockmakers have tools. Political parties must be understood as the tools people use to get their hands on the machinery of government. The tools Americans use to make government do what they want have been taken out of their hands.
Americans must take them back, or fashion new tools, or sit by and watch the American democracy die
Thursday, August 4, 2011
Six thousand air strikes later
Freedom lovers' quarrel
By Mike Krauss
Bucks County Courier Times
Remember the freedom loving Libyans who rose up to overthrow Muhamar Gadhafi, the ones President Obama ordered the U.S. military to support, without a vote from Congress?
Remember how upset Congress was at this further encroachment of the president on its authority?
The whole business no longer is news. What a surprise.
But it did get a blurb the other day. One of the freedom-loving rebels shot and killed the freedom-loving “military chief” of their rebellion. Another of the freedom-loving Libyan rebels from their “special forces” held a press conference to blame the crime on someone in the “faction” known as the Feb. 17 Martyrs’ Brigade.
Still paying attention? Or does this sound a lot like every other place in the Muslim world into which the U.S. sticks its nose?
The wire service news report explained, “The Feb. 17 Martyrs Brigade is a group made up of hundreds of civilians who took up arms to join the rebellion. Their fighters participate in the front-line battles with Gadhafi’s forces, but also act as a semi-official internal security force for the opposition. Some of its leadership comes from the Libyan Islamic Fighting Group, an Islamic militant group that waged a campaign of violence against Gadhafi’s regime in the 1990s.”
Clearer? Maybe not, because one spokesman of the rebels blamed “gunmen” for the murder, implying an unfortunate, but uncoordinated wartime casualty; while a spokesman for the rebel military said the murdered commander had been “summoned” to a meeting and was killed en route, suggesting a set up.
This is bad news for freedom- loving Libyans, but possibly good news for the non-freedom loving supporters for Mr. Gadhafi. Many who attended the funeral of the deceased rebel were reported to be shouting that they wanted Gadhafi back.
But a lot of Libyans may know less of these events than you. The day the story broke, NATO forces bombed the broadcast facilities of the government (non-freedom loving), so that other non-freedom loving Libyans would not get the good news, or freedom loving Libyans the bad news.
Sorting out the freedom lovers from the non-freedom lovers is more of a challenge in Libya than it was in Egypt and other parts of the “Arab Spring” uprising, which continues with considerable loss of life in Syria and other places.
That may be because in Egypt and elsewhere, unarmed citizens took to the streets in their capitol cities to oppose their governments, whereas in Libya, armed, uniformed and trained fighters no one had heard of came out of the dessert to attack, first oil facilities, and then set up a bank.
Why oil facilities? Why a bank? Who are these freedom- loving Libyans with interests in oil and banking?
One explanation is that Gadhafi has kept control of the country’s oil industry, and has even allowed the Chinese to get into it — but not the U.S.
Oh, dear.
Another explanation, widely circulated in Africa but not much heard in the U.S., is that Gadhafi was using the revenue to set up development and infrastructure banks in Africa, offering low-cost financing and cutting in on the action of U.S. and European banks.
Oh dear, oh dear.
And freedom fighters emerged.
But freedom is never cheap, as American presidents like to point out when they get bogged down in expensive wars, and the freedom-loving Libyans needed cash. Fortunately, it was available.
The bank accounts that held the billions Gadhafi planned to put into African banks and development were frozen by Mr. Obama. (With the help of course of the international banking cartel. It’s one thing to bypass Congress, and quite another to bypass the banks). And the freedom loving Libyans were recently given $30 billion of those now unfrozen funds to play with.
Which may explain why they are now killing each other.
And freedom-loving Libyans and their freedom-loving American and NATO sponsors are left to hope they sort out which freedom-loving Libyans control the money, so they can get on to the really important business of who controls the oil and the banking.
By Mike Krauss
Bucks County Courier Times
Remember the freedom loving Libyans who rose up to overthrow Muhamar Gadhafi, the ones President Obama ordered the U.S. military to support, without a vote from Congress?
Remember how upset Congress was at this further encroachment of the president on its authority?
The whole business no longer is news. What a surprise.
But it did get a blurb the other day. One of the freedom-loving rebels shot and killed the freedom-loving “military chief” of their rebellion. Another of the freedom-loving Libyan rebels from their “special forces” held a press conference to blame the crime on someone in the “faction” known as the Feb. 17 Martyrs’ Brigade.
Still paying attention? Or does this sound a lot like every other place in the Muslim world into which the U.S. sticks its nose?
The wire service news report explained, “The Feb. 17 Martyrs Brigade is a group made up of hundreds of civilians who took up arms to join the rebellion. Their fighters participate in the front-line battles with Gadhafi’s forces, but also act as a semi-official internal security force for the opposition. Some of its leadership comes from the Libyan Islamic Fighting Group, an Islamic militant group that waged a campaign of violence against Gadhafi’s regime in the 1990s.”
Clearer? Maybe not, because one spokesman of the rebels blamed “gunmen” for the murder, implying an unfortunate, but uncoordinated wartime casualty; while a spokesman for the rebel military said the murdered commander had been “summoned” to a meeting and was killed en route, suggesting a set up.
This is bad news for freedom- loving Libyans, but possibly good news for the non-freedom loving supporters for Mr. Gadhafi. Many who attended the funeral of the deceased rebel were reported to be shouting that they wanted Gadhafi back.
But a lot of Libyans may know less of these events than you. The day the story broke, NATO forces bombed the broadcast facilities of the government (non-freedom loving), so that other non-freedom loving Libyans would not get the good news, or freedom loving Libyans the bad news.
Sorting out the freedom lovers from the non-freedom lovers is more of a challenge in Libya than it was in Egypt and other parts of the “Arab Spring” uprising, which continues with considerable loss of life in Syria and other places.
That may be because in Egypt and elsewhere, unarmed citizens took to the streets in their capitol cities to oppose their governments, whereas in Libya, armed, uniformed and trained fighters no one had heard of came out of the dessert to attack, first oil facilities, and then set up a bank.
Why oil facilities? Why a bank? Who are these freedom- loving Libyans with interests in oil and banking?
One explanation is that Gadhafi has kept control of the country’s oil industry, and has even allowed the Chinese to get into it — but not the U.S.
Oh, dear.
Another explanation, widely circulated in Africa but not much heard in the U.S., is that Gadhafi was using the revenue to set up development and infrastructure banks in Africa, offering low-cost financing and cutting in on the action of U.S. and European banks.
Oh dear, oh dear.
And freedom fighters emerged.
But freedom is never cheap, as American presidents like to point out when they get bogged down in expensive wars, and the freedom-loving Libyans needed cash. Fortunately, it was available.
The bank accounts that held the billions Gadhafi planned to put into African banks and development were frozen by Mr. Obama. (With the help of course of the international banking cartel. It’s one thing to bypass Congress, and quite another to bypass the banks). And the freedom loving Libyans were recently given $30 billion of those now unfrozen funds to play with.
Which may explain why they are now killing each other.
And freedom-loving Libyans and their freedom-loving American and NATO sponsors are left to hope they sort out which freedom-loving Libyans control the money, so they can get on to the really important business of who controls the oil and the banking.
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