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Global Economic Tremors
by Stephen Lendman
On October 28, the Financial Times' columnist Martin Wolf wrote: "Preventing a global slump must be the priority." He cited Nouriel Roubini back in February listing "twelve steps to financial disaster," all of which the US took and dragged the whole world down with it.
Priority one is to rescue it and avoid a possible depression. "Given the near-disintegration of the western world's banking system, the flight to safe assets, the tightening of credit to the real economy, collapsing equity prices, turmoil on currency markets, continued steep declines in house prices, rapid withdrawal of funds from hedge funds and ongoing collapse of the so-called "shadow banking system." More worrisome is that "next year could be far worse" so what does Wolf think should be done?
Subcommittee Demands Testimony from Treasury Official on Use of Bailout Funds; “Serious Questions” for Mr. Kashkari
Washington D.C. (November 11, 2008) – The leading Democrat and Republican of a House Oversight Subcommittee insisted on the testimony of a top Treasury official today. Congressman Dennis Kucinich (D-OH) and Congressman Darrell Issa (R-CA) sent a letter to Secretary Paulson insisting that Mr. Neel Kashkari, the Interim Assistant Secretary of the Treasury for Financial Stability, testify before a hearing of the Domestic Policy Subcommittee on Friday, November 14, 2008. Congressman Kucinich is the Chairman of the Domestic Policy Subcommittee and Congressman Issa is the Ranking Minority Member.
“There are serious questions about Treasury Department’s plans to realize the goals of the Emergency Economic Stabilization Act of 2008 that can only be addressed by the official in charge,” Kucinich and Issa wrote in the letter.
By Dave Lindorff
The one thing we are not hearing from Congress or from incoming president Barack Obama in the current economic crisis facing the country are the words “anti-trust” and “public ownership.”
From the moment the crisis first struck, with the near collapse of AIG, the mantra has been that companies like AIG, Morgan Stanley, Merrill Lynch, Citibank, etc.--and more recently General Motors Corp. and Ford--are “too big to fail.” That is, it is argued that these companies are so huge that if they were to collapse into the rubble they deserve to be, it would damage the nation irreparably.
The question is, if that is genuinely the case, why were they allowed to be that big in the first place, and why aren’t we rethinking that policy?
Fed Defies Transparency Aim in Refusal to Disclose
By Mark Pittman, Bob Ivry and Alison Fitzgerald
Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
With attention on bailout debate, Treasury made change to tax law
By Amit R. Paley, The Washington Post
The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.
But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.
An Open Letter Regarding the Upcoming G-20 Meeting in Washington, D.C.
From Dennis Kucinich:
WASHINGTON, D.C. (November 6, 2008) — On Friday, November 14, 2008, at 10:00 a.m. in Rayburn House Office Building, Room 2154, the Subcommittee will hold a hearing entitled, “Is Treasury Using Bailout Funds to Increase Foreclosure Prevention, as Congress Intended?” This will be the Subcommittee’s sixth hearing in the 110th Congress examining the foreclosure crisis and its solutions.
The End of Prosperity
by Stephen Lendman
From too much of a good thing. From the 1980s and 1990s excesses. From the longest ever US bull market. Heavily manipulated to keep it levitating. From August 1982 to January 2000. An illusory reprieve from October 2002 to October 2007. Fluctuations aside, all lost in the past 12 months. The wages of sin are now due, and payment is being painfully extracted. From all nations globally. Affecting ordinary people the most who had nothing to do with creating booms and busts. They got little on the upside but are paying dearly for the down.
The measure of a person's greatness and success lies not in the office to which that person is elected but in the person's ability to be true to the electorate once in office.
Anyone can sell their soul to buy a presidency or a dictatorship. It takes real power and courage to stand up to the forces that control most members of government. It takes true greatness to stand with the people against power-buyers.
The current financial crisis is a great opportunity to teach peace. Wars may be about land, or energy, or power, but they require vast expenditures of money.
Americans are beginning to see the Teach Peace bailout grand theft warning is accurate. A JPMorgan Chase executive has confirmed the bailout funds are not to help homeowners but to consolidate power in anticipation of what could become a depression. The banks listed below are using taxpayer funds to buy smaller banks.
More from the Front Lines of the Financial Crisis
by Stephen Lendman
In its latest economic outlook, Merrill Lynch economists "worry about inflation, or more precisely," a lack of it. From crashing global equity markets, falling commodity prices, rising unemployment, stagnant wages, over-indebted households, declining production, the continuing housing crisis, and more. All pointing to several future quarters of negative growth. Showing that Fed chairman Bernanke will face "his greatest fear: deflation." An analysis of the coincident to lagging indicators signals "deep recession."
In his October 24, commentary, Merrill's North American economist David Rosenberg sees "economic data deteriorating in a very serious way (and says) we are witnessing unprecedented stuff happen:"
- the two-year housing recession "is still far from over" with new lows in a number of key readings;
- it's "morphed into a capex recession, industrial production" had its worst decline in 34 years;
- consumer confidence showed record declines;
- retail sales keep falling; evidence is that auto and chain store sales will show four straight down months; it's happened only four other times since 1947, so "we're living through a 1-in-200 event;"
- based on CPI data, prices are falling; at a rapid pace also seen only four other times since 1947;
By William Greider, The Nation
The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return.
William Greider: United Steelworkers Union prez Leo Gerard cracks open the sweetheart deal that bailed out nine banks--and likely lined the Treasury Secretary's own pockets--with billions of taxpayer dollars. Does anybody care?
Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on state governments to shore them up.
In the nine months to the end of September, the average state pension fund lost 14.8 per cent, according to Northern Trust, a fund company. The loss has grown since, as financial markets slumped further in October. The previous highest loss for state funds was 7.9 per cent for the full year in 2002.
California’s Calpers, the US’s biggest pension fund, last week reported a loss of 20 per cent of its assets, or more than $40bn, between July 1 and October 20 this year.
Public Enemy Number One
by Stephen Lendman
A note before beginning. This article focuses on today's financial and economic crisis. Not affairs of state, war and peace or geopolitics. No guessing who's number one under those headings. That said:
With so many good choices, it's hard just picking one. But given the gravity of today's financial crisis, one name stands out above others. The "maestro," as Bob Woodward called him in his book by that title. The "Temple of Boom" chairman, according to a New York Times book review. Standing "bestride the Fed like a colossus." Now defrocked as the "maestro" of misery. Alan Greenspan. From August 11, 1987 to January 31, 2006, as head of the private banking cartel euphemistically called the Federal Reserve. That Ron Paul explains isn't Federal and has no reserves.
By Robert Scheer, Truthdig
The battle for Barack Obama's economic soul is on in earnest, and it has nothing to do with the "European socialism" that John McCain attempted to use as an epithet against him. The Republican quickly dropped that line of attack, perhaps because the European Union's brand of democratic socialism has proved more effective in regulating the rapacious financial markets at the heart of the economic meltdown. Besides, the socialist British Labor Party has been President Bush's most loyal supporter of the Iraq occupation that McCain has made the test of true patriotism.
By Dave Lindorff
I’m ready to call this election. It’s going to be a big win for Barack Obama.
I know this because of a story I heard from an employee of a major polling organization. He tells of a poll worker who was interviewing homeowners in a small town in central Pennsylvania, part of that “real” American hailed by Republican vice presidential candidate Sarah Palin. The man knocked on the door, and when the woman of the house answered, told her he was a pollster and wanted to know how her household planned to vote in November.
The woman turned and yelled into the house, “Honey, how are we voting this year?”
From inside the house, a male voice yelled back, “I guess we’re voting for the nigger.”
The woman turned to the stunned pollster and, without a hint of embarrassment, said, “I guess we’re voting for Obama.”
Simply put, Obama has won the racist vote, a core Republican constituency since the late 1960s.
Fear that Wall Street firms receiving billions of taxpayer dollars in aid might still go ahead with hefty executive bonuses has led one U.S. congressman to start investigating compensation packages.
Rep. Dennis Kucinich, D-Ohio, who is chairman of the Domestic Policy subcommittee of the House Committee on Oversight and Government Reform, said he plans to ask banks and brokerages to detail their employee pay packages.
Kucinich voted against the $700 billion bailout package, saying that he "had great suspicions" that the money wouldn't help stop the flood of foreclosures. Reining in excessive executive compensation was promised as part of the bailout plan. Now it appears, Kucinich said, that such promises aren't coming true and that some firms might even be using the cash from the federal bailout to reward employees.
"That raises questions about the legitimacy of the bailout and we really need to find out how widespread this is," he told ABC News today.
Kucinich's concerns stem from a recent report by London's The Guardian that more than $70 billion in bonuses might be paid out by Wall Street banks this year. The firms named by the British paper include Citigroup, Goldman Sachs and Morgan Stanley.
GC: Just a little background: I was reading your articles on the Web, with much interest, getting a lot of information; then, I was pleased to find your favorable comments on something I’d written. I wrote you that, should you find yourself in the D.C. area, give a holler—and, you’re the only guy I ever wrote that to who actually hollered!
GC: So … here we are … I want to get into your ideas—your views on the economy … But first, can you tell us a little about yourself? I’ve read some of your first book, CHALLENGER REVEALED, and I think it’s fair to say that you established your reputation as a whistle-blower back in 1987 in front of the Presidential Commission on the space shuttle disaster. You worked for NASA, you were prescient back then, your warnings were ignored or dismissed. I hope that some of us are a little smarter, and that there are more of us who can better heed your warnings now about our free-falling economy. First, Who is Richard Cook?
This Time Is Different
by Stephen Lendman
Whatever we know about today's financial crisis. Think we know. Eventually will know in the fullness of time. This time is really different. In 1922, Henry Ford put it this way in his book titled "My Life and Work:"
"The (economy's) primary functions are agriculture, manufacture, and transportation. Community life is impossible without them. They hold the world together....The great delusion is that one may change the foundation. The foundations of society are the men and means to grow things, to make things, and to carry things."
Real enterprise producing value. Tangible products. Not casino capitalism. Computerized gambling. The illusion of wealth. Disappearing once liquidity dries up. Or even now when it's abundant. With a keyboard click, or when investors fear an approaching economic storm.
by Stephen Lendman
Hard and troubled. Racked by fear and uncertainty. For many trauma. Experts predict, speculate and conjecture, but no one knows for sure what's ahead. Key questions are whether we're in a protracted and severe recession. Or at the onset of another Great Depression. So much is unresolved. The problems have built for years and are immense. Maybe nothing at this stage will work and the best hope is for light at the end of a very long, dark tunnel.
Again no one knows. The worst may or may not be too late to avoid. At best, stabilization and recovery will take time. Likely years. The degree of pain along the way will depend on future policy responses. Ones so far taken aren't encouraging. Their details aren't entirely clear. They're slowly emerging and from what's known since the original EESA/TARP announcement, the Treasury:
Code Pinkers Unite to Stop Auction, Save Gulf War Marine Mom's Home
Friday was an historic day. At 11am, Jocelyne Voltaire was scheduled to lose her home in Queens Village, the home she had lived in for the past 20 years, the home where she raised her four children. Unable to keep up her skyrocketing mortgage payments, Jocelyne watched in horror as her home was put on the auction block. This amazing video clip by American News Project brought Jocelyn's plight to our attention.
At 9:05 am EST, we sent out an urgent call to our CODEPINK list. Our jaws dropped when we saw the response. Donations of $5, $25, $500, even $1,000! Within an hour, we had raised over $10,000. And the money kept pouring in, along with beautiful messages of support.
Jocelyne was moved to tears. And the mortgage bankers, with our immediate promise of $15,000 at 11am, were "moved" to stop the auction.
Back in the Great Depression years of the 1930s, unemployed writers, like unemployed steelworkers, were in need of jobs, and so the New Deal's Works Progress Administration, which put all sorts of Americans back to work, did so for writers as well -- 6,500 of them in the Federal Writers' Project at approximately $20 a week. Among other things, the FWP's writers produced a series of classic guide books to American cities and states, still enjoyable to read today. (Richard Wright and John Cheever were among the crew who, for example, did The WPA Guide to New York City.) FWP workers also gathered more than 10,000 first-person oral histories of ordinary -- yet extraordinary -- Americans, relatively few of which were ever published.
Almost 30 years ago, the writer Ann Banks collected 80 of these into a deeply moving memory piece of a book entitled First-Person America. When you read through it, one thing likely to strike you about its narratives from our last spectacular economic meltdown was how many of the speakers didn't distinguish between the 1920s and the 1930s, between, that is, "the roaring twenties" of the "Jazz Age" and the Great Depression era. For lots of them, it was all tough times. As Banks wrote in her introduction: "For most of the people in this book, the Depression was not the singular event it appears in retrospect. It was one more hardship in lives made difficult by immigration, world war, and work in low-paying industries before the regulation of wages and hours. Though they spoke of living through bad times, those interviewed by the Federal Writers seldom mentioned the Depression itself."
by Linda Milazzo
As corporate media reports obsessively on Joe The Plumber, who misrepresented himself to Barack Obama saying he'd be victimized by Obama's tax plan, Americans more in need than Joe are being victimized for REAL everyday - not in hypothetical ways like Joe's imagined fears of paying rich people's taxes even though he isn't rich. But in ways that jeopardize every aspect of their existence due to the collusion between the American government and the financiers it loves.
And while John McCain and Sarah Palin make this self-serving plumber the cause celebre for their campaign, increasing numbers of Americans less fortunate than Joe are losing their homes, their jobs, their health insurance, and more. Yes, while physically imposing Joe 'Wutchagonnadoforme' Wurtzelbacher, alias "Joe The Plumber," bemoans his fabricated tax burden, Americans in greater need than seemingly healthy Joe, are suffering more burdensome tragedies than his phobia of spreading his wealth. Interestingly, what Joe fears the most - the spreading of wealth (be it real or imagined), may one day be his salvation - just as it was on Friday for Jocelyne Voltaire, whose home was saved by the kindness of strangers who spread THEIR wealth to her. These strangers' generosity toward Jocelyne defines the American spirit far better than the vitriol toward SHARING that defines the McCain campaign.
So who is Jocelyne Voltaire, and why is her story more relevant to America's current crisis than that of plumber Joe?
Recently, while traveling in the West, I had lunch at a modest-sized casino set in a wild, barren-looking, craggy landscape. On the hills above it spun giant, ivory white, modernistic windmills, looking for all the world like Martian invaders from War of the Worlds. I hadn't been inside a casino since the 1970s -- my mistake -- and the experience was eye-poppingly wild. Venturing into its vast room of one-armed bandits and other games was like suddenly finding oneself inside a giant pinball machine for the digital age, everything gaudily lit, blinking, pinging, flashing, accompanied, of course, by a soundscape to match.
It was (as it was undoubtedly meant to be) strangely exhilarating, riveting, totally distracting, and a curious reminder right now of just how distracting "casino capitalism" -- as Mike Davis calls it in today's post -- really has been. For years, with all the economic bells and whistles, all the mansions and yachts, all those arcane derivatives, all the high-tech glamour and glory, with Americans pouring into the stock market (or at least their pension plans and mutual funds doing it for them), you could almost not notice the increasingly barren, rocky world outside the American casino. You could almost not notice the shrinking of real value, of actual productivity in this country. These last weeks, Americans -- those who weren't already outside, at least -- have been rudely shoved into the real world to assess what their value (personal, national, global) actually is.