Why have we built a paradise for offshore billionaires?
Showing posts with label bankster. Show all posts
Showing posts with label bankster. Show all posts
Monday, 18 December 2017
Saturday, 11 November 2017
Painful mirror time.....very soon.....
With so much corruption and sheer evil surfacing daily, we are rapidly getting to the point where the pitchforks and nooses will come out.
After all, it's far easier to find someone to blame than to look hard at yourself.
What do I mean???? How can I even SAY that when what has been done by others is horrendous????
Simple. We put those people there. Or allowed them to put themselves there.
When we sit back in the hope that "someone else" will do all the work and hard yards for us - we shouldn't be surprised at what they do. When we vote someone in for their' good looks, or their' charisma rather than their' ability to get the job done truthfully.... what do we expect??
And of course, giving those positions of power and authority mainly to psychopaths and narcissists is just asking for trouble.
Then, when these few have feathered their' nests, made their' billions - then naturally they will look down on us, as we are not as smart because we haven't done the same, and..... we are not part of the club.
I have always believed that the best person to run our bureaucracy is the one who least wants to.
Like the ex-President of Uruguay, who got things done so he could get back to the small farm he loved with his chickens and flowers. OMG..... a man of integrity !!! How refreshing.
Instead we have myriads of snout-troughers to deal with..... when will we ever learn??
You know, I think the RSL got it right with their' motto - "the price of freedom is eternal vigilance".
If you are not investing the effort to be vigilant - then you are not free.
Friday, 10 November 2017
Interesting article from the Guardian !!
It’s not enough to say, in response to the Paradise Papers
revelations, that we already knew that rich people parked their money
in offshore tax havens, where their piles accumulate far from the
scrutiny of our government. Nor is it enough to say that we were already
aware that we live in a time of “inequality.”
What we have learned this week is the clinical definition of the word. What we have learned is how much the rich and the virtuous have been hiding away and where they’re hiding it. Yes, there are sinister-looking Russian capitalists involved. But there’s also our favorite actors and singers. Our beloved alma mater, supposedly a charitable institution. Everyone with money seems to be in on it.
We’re also learning that maybe we’ve had it backwards all along. Tax havens on some tropical island aren’t some sideshow to western capitalism; they are a central reality. Those hidden billions are like an unseen planet whose gravity is pulling our politics and our economy always in a certain direction. And this week we finally began to understand what that uncharted planet looks like; we started to grasp its mass and its power.
Think about it like this. For decades Americans have been erupting in anger at what they can see happening to their beloved middle-class world. We think we know what the culprit is; we can see it vaguely through a darkened glass. It’s “elitism”. It’s a “rigged system”. It’s people who think they’re better than us. And for decades we have lashed out. At the immigrant next door. At Jews. At Muslims. At school teachers. At public workers who are still paid a decent wage. Our fury, unrelenting, grows and grows.
We revolt, but it turns out we have chosen the wrong political leader. We revolt again; this time, the leader is even worse.
This week we are coming face to face with a big part of the right
answer: it’s that the celebrities and business leaders we have raised up
above ourselves would like to have nothing to do with us. Yes, they are
grateful for the protection of our laws. Yes, they like having the
police and the marine corps on hand to defend their property.
Yes, they eat our food and breathe our air and expect us to keep these pure and healthy; they demand that we get educated before we may come and work for them, and for that purpose they expect us to pay for a vast system of public schools. They also expect us to watch their movies, to buy their products, to use their software. They expect our (slowly declining) middle class to be their loyal customers.
But those celebrities and business types would prefer not to do what it takes to support all this. That burden’s on us. Oh, they’re happy to haul billions out of our economy and use us up in the workplace, but maintaining the machinery that keeps it all running – that’s on us.
I don’t want to go too far here. I know that what the billionaires and the celebrities have done is legal. They merely took advantage of the system. It’s the system itself, and the way it was deliberately constructed to achieve these awful ends, that should be the target of our fury.
For decades Americans have lashed out against taxation because they were told that cutting taxes would give people an incentive to work harder and thus make the American economy flourish. Our populist leaders told us this – they’re telling us this still, as they reform taxes in Washington – and they rolled back the income tax, they crusaded against the estate tax, and they worked to keep our government from taking action against offshore tax havens.
In reality, though, it was never about us and our economy at all. Today it is obvious that all of this had only one rationale: to raise up a class of supermen above us. It had nothing to do with jobs or growth. Or freedom either. The only person’s freedom to be enhanced by these tax havens was the billionaire’s freedom. It was all to make his life even better, not ours.
Think, for a moment, of how this country has been starved so the holders of these offshore accounts might enjoy their private jets in peace. Think of what we might have done with the sums we have lost to these tax strategies over the decades. All the crumbling infrastructure that politicians love to complain about: it should have – and could have - been fixed long ago.
Think of all the young people saddled with catastrophic student-loan debt: we should have – could have – made that unnecessary. Think of all the decayed small towns, and the dying rust belt cities, and the drug-addicted hopeless: all of them should have – could have – been helped.
But no. Instead America chose a different project. Our leaders raised up a tiny class of otherworldly individuals and built a paradise for them, made their lives supremely delicious. Today they hold unimaginable and unaccountable power.
We endure potholes and live in fear of collapsing highway bridges because our leaders wanted these very special people to have an even larger second yacht. Our kids sit in overcrowded classrooms in underfunded schools so that a handful of exalted individuals can relax on their own private beach.
Today it is these same golden figures with their offshore billions who host the fundraisers, hire the lobbyists, bankroll the think tanks and subsidize the artists and intellectuals.
This is their democracy today. We just happen to live in it.
What we have learned this week is the clinical definition of the word. What we have learned is how much the rich and the virtuous have been hiding away and where they’re hiding it. Yes, there are sinister-looking Russian capitalists involved. But there’s also our favorite actors and singers. Our beloved alma mater, supposedly a charitable institution. Everyone with money seems to be in on it.
We’re also learning that maybe we’ve had it backwards all along. Tax havens on some tropical island aren’t some sideshow to western capitalism; they are a central reality. Those hidden billions are like an unseen planet whose gravity is pulling our politics and our economy always in a certain direction. And this week we finally began to understand what that uncharted planet looks like; we started to grasp its mass and its power.
Think about it like this. For decades Americans have been erupting in anger at what they can see happening to their beloved middle-class world. We think we know what the culprit is; we can see it vaguely through a darkened glass. It’s “elitism”. It’s a “rigged system”. It’s people who think they’re better than us. And for decades we have lashed out. At the immigrant next door. At Jews. At Muslims. At school teachers. At public workers who are still paid a decent wage. Our fury, unrelenting, grows and grows.
We revolt, but it turns out we have chosen the wrong political leader. We revolt again; this time, the leader is even worse.
Yes, they eat our food and breathe our air and expect us to keep these pure and healthy; they demand that we get educated before we may come and work for them, and for that purpose they expect us to pay for a vast system of public schools. They also expect us to watch their movies, to buy their products, to use their software. They expect our (slowly declining) middle class to be their loyal customers.
But those celebrities and business types would prefer not to do what it takes to support all this. That burden’s on us. Oh, they’re happy to haul billions out of our economy and use us up in the workplace, but maintaining the machinery that keeps it all running – that’s on us.
I don’t want to go too far here. I know that what the billionaires and the celebrities have done is legal. They merely took advantage of the system. It’s the system itself, and the way it was deliberately constructed to achieve these awful ends, that should be the target of our fury.
For decades Americans have lashed out against taxation because they were told that cutting taxes would give people an incentive to work harder and thus make the American economy flourish. Our populist leaders told us this – they’re telling us this still, as they reform taxes in Washington – and they rolled back the income tax, they crusaded against the estate tax, and they worked to keep our government from taking action against offshore tax havens.
In reality, though, it was never about us and our economy at all. Today it is obvious that all of this had only one rationale: to raise up a class of supermen above us. It had nothing to do with jobs or growth. Or freedom either. The only person’s freedom to be enhanced by these tax havens was the billionaire’s freedom. It was all to make his life even better, not ours.
Think, for a moment, of how this country has been starved so the holders of these offshore accounts might enjoy their private jets in peace. Think of what we might have done with the sums we have lost to these tax strategies over the decades. All the crumbling infrastructure that politicians love to complain about: it should have – and could have - been fixed long ago.
Think of all the young people saddled with catastrophic student-loan debt: we should have – could have – made that unnecessary. Think of all the decayed small towns, and the dying rust belt cities, and the drug-addicted hopeless: all of them should have – could have – been helped.
But no. Instead America chose a different project. Our leaders raised up a tiny class of otherworldly individuals and built a paradise for them, made their lives supremely delicious. Today they hold unimaginable and unaccountable power.
We endure potholes and live in fear of collapsing highway bridges because our leaders wanted these very special people to have an even larger second yacht. Our kids sit in overcrowded classrooms in underfunded schools so that a handful of exalted individuals can relax on their own private beach.
Today it is these same golden figures with their offshore billions who host the fundraisers, hire the lobbyists, bankroll the think tanks and subsidize the artists and intellectuals.
This is their democracy today. We just happen to live in it.
- Thomas Frank is a Guardian columnist
Monday, 4 September 2017
Great article - perhaps it might open an eye or two??
https://renegadeinc.com/socialism-best-us-capitalism-rest-us/
.....finally someone tells it like it really is.....
Monday, 28 August 2017
Tuesday, 15 August 2017
Maybe this article will open a few eyes.....
CONSPIRACY OR CHAOS?
“The main thing that I learned
about conspiracy theory is that conspiracy theorists believe in a
conspiracy because that is more comforting. The truth of the world is
that it is actually chaotic. The truth is that it is not The Iluminati,
or The Jewish Banking Conspiracy, or the Gray Alien Theory. The truth is
far more frightening – Nobody is in control. The world is rudderless.” –
Alan Moore
Alan Moore, the renowned graphic novel writer, and author of the dystopian classic V for Vendetta, politically identifies as an anarchist. His view that all political states are an outgrowth of anarchy, with the biggest gang taking control and dictating how things will be run, is manifested in V for Vendetta. As an anarchist, you can understand why he is doubtful of conspiracy theories and an all-powerful entity controlling the world. He believes in a chaotic world competing gangs position themselves to gain power and control.
“We live in a badly developed
anarchist situation in which the biggest gang has taken over and have
declared that it is not an anarchist situation – that it is a capitalist
or a communist situation. But I tend to think that anarchy is the most
natural form of politics for a human being to actually practice.”- Alan Moore
The Guy Fawkes mask from V for Vendetta
has been adopted by anarchist groups around the world, including:
Anonymous, WikiLeaks, and the Occupy protestors. Moore’s positive view
of the Occupy movement was based on his belief ordinary people had the
right to reclaim what had been taken from them by criminal bankers. The
initial impetus for the Occupy protests was the destruction of Main
Street USA by Wall Street sociopaths, who not only escaped prosecution
for their crimes, but were bailed out by the taxpayers they had pillaged
and further enriched as captured politicians enabled them to get even
bigger.Millions were evicted from their homes and lost their jobs. Middle class families have seen their real income continue to stagnate, while bankers, corporate executives, and politicians have reaped billions in bonuses, stock gains, and payoffs, provided by central bankers in their back pocket.
“I can’t think of any reason why as a
population we should be expected to stand by and see a gross reduction
in the living standards of ourselves and our kids, possibly for
generations, when the people who have got us into this have been
rewarded for it – they’ve certainly not been punished in any way because
they’re too big to fail. I think that the Occupy movement is, in one
sense, the public saying that they should be the ones to decide who’s
too big to fail. As an anarchist, I believe that power should be given
to the people whose lives this is actually affecting.” – Alan Moore
For those of us who visited Zuccotti Park during the early stages of
the Occupy Movement, you understood this was a true populist protest
with Ron Paul
libertarians alongside liberal college students, old time hippies,
middle aged men and women put out of work by the massive Wall Street
fraud, and a myriad of citizens supporting varied causes and exercising
their First Amendment rights. They were primarily focused on the true
enemy – sociopathic Wall Street bankers and corrupt captured
politicians. Sadly, the movement was co-opted in short order by Soros
and his minions, just as the Tea Party had been co-opted by neo-cons
earlier. Supposedly liberal mayors in NYC and across the country
eventually unleashed their police state thugs on the protestors and
wiped it out. Was this an example of chaos or conspiracy?There isn’t an easy answer to this question. I have to lean towards Alan Moore’s view of the world. There are certainly conspiratorial schemes plotted by powerful men in smoke filled rooms, but there are other gangs of men conspiring to push their competing agendas. Conspiracy theorists who think there is one massive conspiracy controlling every aspect of the world have an extremely tough case to make. People who believe everything is part of a grand conspiracy are seeking an easy solution to our problems, rather than dealing with the complexity and chaos which is the true nature of our world. V’s speech to London after blowing up the Old Bailey explains who is really to blame for allowing Deep State actors to gain control of our government, creating an Orwellian surveillance state.
Good evening, London. Allow me first
to apologize for this interruption. I do, like many of you, appreciate
the comforts of the everyday routine, the security of the familiar, the
tranquility of repetition. I enjoy them as much as any bloke. But in the
spirit of commemoration – whereby those important events of the past,
usually associated with someone’s death or the end of some awful bloody
struggle, are celebrated with a nice holiday – I thought we could mark
this November the fifth, a day that is sadly no longer remembered, by
taking some time out of our daily lives to sit down and have a little
chat.
There are, of course, those who do
not want us to speak. I suspect even now orders are being shouted into
telephones and men with guns will soon be on their way. Why? Because
while the truncheon may be used in lieu of conversation, words will
always retain their power. Words offer the means to meaning and for
those who will listen, the enunciation of truth. And the truth is, there
is something terribly wrong with this country, isn’t there?
Cruelty and injustice…intolerance and
oppression. And where once you had the freedom to object, to think and
speak as you saw fit, you now have censors and systems of surveillance,
coercing your conformity and soliciting your submission. How did this
happen? Who’s to blame? Well certainly there are those who are more
responsible than others, and they will be held accountable. But again,
truth be told…if you’re looking for the guilty, you need only look into a
mirror.
I know why you did it. I know you
were afraid. Who wouldn’t be? War. Terror. Disease. There were a myriad
of problems which conspired to corrupt your reason and rob you of your
common sense. Fear got the best of you and in your panic, you turned to
the now High Chancellor Adam Sutler. He promised you order. He promised
you peace. And all he demanded in return was your silent, obedient
consent.
Last night, I sought to end that
silence. Last night, I destroyed the Old Bailey to remind this country
of what it has forgotten. More than four hundred years ago, a great
citizen wished to embed the fifth of November forever in our memory. His
hope was to remind the world that fairness, justice and freedom are
more than words – they are perspectives. So if you’ve seen nothing, if
the crimes of this government remain unknown to you, then I would
suggest that you allow the fifth of November to pass unmarked. But if
you see what I see, if you feel as I feel, and if you would seek as I
seek…then I ask you to stand beside me, one year from tonight, outside
the gates of Parliament. And together, we shall give them a fifth of
November that shall never, ever, be forgot!
We have no one to blame but ourselves for our current state of
affairs. Blaming it on some shadowy group makes us feel somehow
comforted. If an all-powerful entity is controlling the world, then we
can easily convince ourselves anything we do to try and change the
course of history would be fruitless. Therefore, we just bitch on
internet forums. The truth is fear rules the actions of the majority.Those who constitute the Deep State are not conspiring directly by working together to rule the world and control the people. What they are doing is taking advantage of a dumbed down fearful populace by using the chaos, incompetence of institutions, and confusion spread by the propaganda press to institute their agendas. The Deep State consists of shadowy billionaires, mega-corporations, the military industrial complex, surveillance state agencies, crooked bought off politicians and their mass media mouthpieces.
Those with the financial means and access to the power of the media have embraced the Edward Bernays worldview that an invisible government of the rich and powerful is necessary to manipulate the opinions of the masses through propaganda in order for society to function smoothly. Is this truly a conspiracy or just competing gangs of rich and connected men utilizing their wealth to mold the minds of the masses in a way that continues to benefit and enrich them?
These Deep State players don’t meet every other Saturday to conspire and plot ways to pillage and enslave the masses. But they do know each other and silently agree to never rock the boat, whether they are Democrats, Republicans, liberals, conservatives, socialists, corporate executives, academics, or journalists. Money, control and power are at stake.
Those currently pulling the wires behind the scenes are conspiratorial in nature. It has become crystal clear since the election of Trump the farce of competing political parties is just a smoke screen used by the Deep State players to maintain their control. Trump’s shocking upset and seeming disregard for bowing down to the status quo has forced politicians of all persuasions to reveal their true masters. Both parties favor bloated government control of healthcare, with a medical industrial complex controlling the show, writing the rules, reaping riches, and buying off politicians. “Free” healthcare buys votes.
The flogging of the false Russian narrative by the corporate media has been used by neo-cons and ultra-libs to force Trump into the military interventionist camp – guaranteeing increased wealth for the military industrial complex. Neither party has any interest in cutting spending. The debt ceiling will be raised. The $4 trillion in annual spending will ratchet ever higher. Both sides are perfectly fine with $1 trillion deficits and $200 trillion of unfunded liabilities, as long as their gravy train keeps being fueled by the Deep State. They will spend your money until it all collapses under the mountains of debt.
Donald Jeffries explains why it is vital to the vested interests they scorn and ridicule anyone who uses factual data to prove conspiratorial intent by the government or its cancerous corporate outgrowths.
“I can remember when believing in
conspiracies wasn’t cool. Now, in the second decade of the twenty-first
century, more people are starting to sense that things may not be as
they appear to be. The truth in Lord Acton’s classic axiom that “Power
corrupts, and absolute power corrupts absolutely” becomes more
self-evident every day. Politicians from the only two parties we have to
choose from break promises, are unresponsive to the will of the people,
and opt for war, austerity measures, and state control over and over
again. Gary Allen, author of the book None Dare Call It Conspiracy,
defined things perfectly when he wrote, “It must be remembered that the
first job of any conspiracy, whether it be in politics, crime or within a
business office, is to convince everyone else that no conspiracy
exists.” – Donald Jeffries – Hidden History: An Exposé of Modern Crimes, Conspiracies, and Cover-Ups in American Politics
It ultimately comes down to power and control over the key mechanisms
of finance, taxation, legislation and the media. There isn’t one
specific group of conspirators working together to rule the world. Is
George Soros attempting to influence and control what happens in the
U.S. and Europe to benefit his interests? Yes. Are the Koch brothers
attempting to do the same with a different end goal? Yes. Are Pelosi and
Schumer conspiring to push their left wing agenda? Yes. Are McConnell
and Ryan conspiring to implement their establishment vision? Yes.They have competing agendas, but they want the status quo to remain intact. No one within the establishment wants to change anything of substance. The current system benefits their personal interests, while destroying the lives of hard working American citizens. The country is currently run by same party with slightly different rhetoric and policies put forth by the Republican side and Democrat side. Promises are made to voters and then reneged on in short order. Therefore, no significant change ever occurs. Meanwhile, the anger and frustration build among the deplorables.
What Trump has realized quickly is how powerful the vested interests are and how ruthless they will act to retain their power. During the campaign Trump ran on a non-interventionist platform, looking to repair our relationship with Russia, scorning NATO, and lessening our involvement in the Middle East. He know rattles his saber on a daily basis, threatening war with North Korea, Venezuela, Iran, Syria and anyone else who doesn’t toe the American Empire line.
He provokes Russia and China on a regular basis. He has sent more troops to Iraq, Afghanistan, and Syria, while expanding spending on the military. Neo-cons and neo-libs don’t think Trump is being aggressive enough in policing the world. They won’t be happy until middle class boys across the land are sacrificed as cannon fodder for our welfare warfare surveillance state.
Trump bloviated about the stock market being in a bubble during the campaign when it was trading at 18,000. He now pronounces the record highs of 22,000 as proof of his brilliant economic leadership. Meanwhile, the economy has grown at less than 2% during his first six months, retailers are going bankrupt and closing stores at a record pace, consumer spending and real wages are barely growing, and consumer debt has reached all-time highs. Best time to buy, according to the Prez.
A critical thinking individual might wonder how a market could be in a bubble at 18,000 but not be in a bubble at 22,000 ten months later. During the campaign Trump accused Obama and his BLS minions of manipulating the data to make horrible jobs numbers appear strong. Now he bellows about the strong jobs market as if we’re now supposed to believe the hysterically absurd 4.3% reported rate when 101 million out of 255 million working age Americans aren’t working. And a vast majority of the jobs are either part-time and/or low paying service jobs with shitty pay and benefits.
Trump is playing the status quo Deep State game in an attempt to fend off a coup currently in progress by lying to the masses. Jobs are plentiful, consumers are confident, the economy is booming, the stock market is always right. Ignore those vacant crumbling malls, your declining disposable income as health care cost increases outpace your salary increases by a factor of five, and your ever increasing credit card balance.
Trump wouldn’t be using the tried and true method of distracting from domestic failure by starting a foreign conflict because he understands how easily manipulated the ignorant American masses can be moved by fear? Rather than draining the swamp, Trump has been forced to swim with the gators. And his own people hired a Deep State alligator hunter named Mueller who will stop at nothing to mount Trump as a trophy or force him to depart the DC swamp for the friendly environs of Manhattan Island.
Trump belittled the troll-like Yellen during the campaign, declaring her low interest policy was geared to help Obama/Clinton. He talked tough about replacing Yellen and increasing rates. He evidently got the talk from the banker cabal and he suddenly loves low interest rates and believes Yellen is doing a bang up job. He has filled his cabinet with vampire squid and other Wall Street scum. He is as beholden to the Fed and their Wall Street puppeteers as his predecessors. Wall Street remains in control, while Main Street will continue to get screwed. It’s not a conspiracy. It’s about powerful special interests capturing the levers of government.
Our government doesn’t in any way resemble its original concept of a republic. It doesn’t even resemble a democracy at this point. Since FDR and specifically since LBJ, we’ve become a welfare/warfare state. Since Bush II we’ve devolved into a corporate fascist surveillance socialist state. Despite rhetoric about free market capitalism, both parties have embraced socialism. The super-rich, bankers, corporate executives, liberals and conservatives came to the realization socialism disguised as capitalism fills their coffers at a much higher rate than true free market capitalism.
They have bought off the poor with unfunded welfare benefits, the old and poor with unfunded “free” healthcare, government union workers with unfunded pension benefits and all with unfunded social security payments. Trillion dollar annual deficits and $200 trillion in unfunded welfare promises, enabled by Federal Reserve easy money policies, does wonders for the bank accounts of Deep State players and their acolytes. Spending money you don’t have is the ultimate confidence game, but the payback will be a bitch.
“Why are the super-rich for
socialism? Don’t they have the most to lose? I take a look at my bank
account and compare it with Nelson Rockefeller’s and it seems funny that
I’m against socialism and he’s out promoting it.” Or is it funny? In
reality, there is a vast difference between what the promoters define as
socialism and what it is in actual practice. The idea that socialism is
a share-the-wealth program is strictly a confidence game to get the
people to surrender their freedom to an all-powerful collectivist
government. While the Insiders tell us we are building a paradise on
earth, we are actually constructing a jail for ourselves.” – Gary Allen, None Dare Call It Conspiracy
The Deep State
thrives on chaos, confusion, and complexity. Our financial system,
healthcare system, entitlement systems, military, and government
agencies are too big and complex to fix. Those pulling the strings don’t
want the public to understand how anything operates. Supposed “experts”
are put forth on the corporate propaganda networks to further confuse
the masses. The purpose of government run public education is to
matriculate non-thinking socially engineered consumers into the world.The vast majority of iGadget distracted, math challenged, functionally illiterate morons will believe anything the propaganda media peddles because they are incapable of critical thinking. They have an infinite capacity for rationalizing how spending money they don’t have on things they don’t need is actually making their lives better. This same mindset keeps them from questioning how their government can run up a $20 trillion national debt (with $15 trillion added since 2000), with no adverse consequences. These debts are the ultimate threat to our survival as a nation.
Based on everything that has happened in the last twelve months, to believe this is part of some well-planned conspiracy is a reach of epic proportions. The Deep State/status quo were sure their hand-picked candidate Hillary Clinton was a shoe in. Since November the country has been roiled in election result challenges, chaotic antifa violence, fake news stories, silent coups, thousands of tweets, congressional investigations, assassination attempts on congressmen, special prosecutors, increasing odds of civil and foreign wars, and deteriorating economic conditions for the majority. Just when you thought the chaos couldn’t get more pronounced, we experienced a week of sheer turmoil and tumult. Even the stock market stopped rising for a day or two.
I’ve been observing the goings on this week with a jaundiced eye. As the rhetoric between President Cheeto and Kim Jung Nutjob has ramped up to nuclear proportions I’ve been reminded of the rhetoric and fake news leading up to the invasion of Iraq. Suddenly, confidential reports are released saying the midget dictator has miniaturized a nuclear warhead to go on top of his ICBMs that now supposedly can kill everyone in the U.S. The exaggeration of this country’s nuclear capabilities is on par with Hussein’s WMD and killing of babies in Kuwaiti hospitals.
The neo-cons smell blood and more money for their beloved arms peddlers. The propagandists have two thirds of Americans fearful of this rotund midget with an IQ of 85. Trump then set in motion his backup plan – attack Venezuela, which poses absolutely zero risk to America or our interests. But it does have the largest oil reserves on earth.
Now this weekend’s escapades in Charlottesville have worked the propaganda media into a tizzy. It’s these types of stories that reveal all the corporate media to be peddling the same narrative. Fox News was peddling the same white hate narrative as CNN and MSNBC. Because protestors with proper permits included some white supremacists, nazi sympathizers, and KKK members, all participants were branded as racists. Their right to protest regarding the removal of a Robert E. Lee statue was guaranteed by the First Amendment.
It was the violent Soros funded antifa SJWs who were bussed in to create a violent confrontation, while government officials told police to stand down and let the clashes happen. The Deep State is desirous of a race war and their media mouthpieces are busy spreading misinformation and falsehoods to further rile up the masses. Their job is to portray all flyover country whites who elected Trump as rednecks, racists and white supremacists. And at least half the country believes this fake news.
“The militia experts accuse
anti-government agitants of paranoia, yet they spin around and claim
that militias speak in coded phrases, have underground bunkers, and are
secretly conspiring to take over the world and enslave minorities. They
say it`s lunacy that men at the pentagon can conspire, yet they`re
certain that farmers out on the plain are plotting as we speak. They
depict the United Nations as weak and ineffectual, yet they portray
raggedy-ass backwoodsmen as the world`s biggest organized military
threat.” – Jim Goad, The Redneck Manifesto: How Hillbillies, Hicks, and White Trash Became America’s Scapegoats
I don’t believe what is happening in this country and around the world is some vast conspiracy. But I do believe the Deep State thrives on chaos and fear. They used 9/11 to pass the Patriot Act, creating an Orwellian
surveillance state. They used the Wall Street created 2008 global
financial implosion to rig the financial systems in their favor, while
issuing mind boggling levels of government debt and artificially
suppressing interest rates to create the largest financial bubble in
world history.I do believe we are in the midst of a Fourth Turning where the mood of the masses has turned unequivocally dark. As we approach the ninth year of this Crisis period, the intensification and potential for enormous levels of domestic and foreign bloodshed ramps up by the day. With a decade or so remaining in this period of turmoil, chaos and war, the existing social order will be swept away and replaced by something new. But not necessarily better.
Whatever Deep State conspiracies are being plotted by various gangs seeking power during this Fourth Turning, they will all rot from within. Human nature never changes. Hubris and greed will lead to miscalculations and missteps which will result in another financial crash, civil chaos, and world war. Blood will be spilled in vast quantities if the wrong people make the wrong decisions. Chaos will rein for the next decade and the outcome is very much in doubt. Get prepared mentally and physically for the trials ahead.
![https://www.eyeonspain.com/userfiles/07-There-May-Be-Trouble-Ahead[1].jpg](https://www.eyeonspain.com/userfiles/07-There-May-Be-Trouble-Ahead[1].jpg)
“The risk of catastrophe will be very
high. The nation could erupt into insurrection or civil violence, crack
up geographically, or succumb to authoritarian rule. If there is a war,
it is likely to be one of maximum risk and effort – in other words, a
total war. Every Fourth Turning has registered an upward ratchet in the
technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning
Friday, 4 August 2017
Wonderful insightful article.....
This cuts right to the heart of the matter..... been saying for the longest time that we need to get back to a local level.....
http://lithub.com/we-got-too-big-for-the-world/
Friday, 28 July 2017
Monday, 12 June 2017
Yep..... from the MSM (MainStreamMedia) no less..... amazing !!!
Households' share of national economic pie nears 50-year low
It’s not just small by Australian standards but also lies towards the bottom of the international ladder, economist warns
A worker removes stock in a warehouse
The Labor party is developing a position on the negative economic consequences from persistently low wages growth. Photograph: Bloomberg via Getty Images
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Gareth Hutchens
@grhutchens
Saturday 10 June 2017 08.07 AEST
The share of national income going to Australian households is close to a 50-year low, and now “lies towards the bottom of the international ladder”, an economist has warned.
Bureau of Statistics data show labour’s share of gross domestic product has fallen to 51.5%, down from 54.2% in the third quarter of last year. At the same time, the profit share of GDP has risen from 24.5% to a five-year high of 27.5%.
Paul Dales from Capital Economics said Australian households had not seen “one cent” of the extra income generated by recent soaring commodity prices because “it’s all gone into the pocket of business”.
He said the share of national income going to households was now “within a whisker” of a 50-year low and a meaningful cyclical or structural upturn in that share of income was “very unlikely” if jobs growth and wages growth remained so low.
Australian wages growing more slowly than cost of living
Read more
“The share of the economic pie that households currently enjoy isn’t just small by Australia’s own standards, it’s also small by international standards,” Dales wrote in a note to clients.
“As a share of GDP, the compensation of Australian employees lies towards the bottom of the international ladder. That’s not always been the case.
“Back in 1975, Australia households received a bigger share of the economic pie than households in the US, France and New Zealand. Only in the UK did the compensation of employees account for a larger share of GDP.
“But the downward trend in labour’s share of GDP over the past 40 years has been more marked in Australia than in those other economies, apart from New Zealand.”
This trend in most economies was mainlybecause of structural changes that had reduced the bargaining power of employees, including globalisation, the increased flexibility of the labour market and technical innovation, which had flattened firms’ cost curves, Dales said.
Labor says it's 'too easy' for bosses to drop pay deals
Read more
“But the larger decline in Australia may be partly because of the rise in the importance of the mining sector, which tends to generate relatively large profits while employing relatively few workers,” he said.
The news comes as the British Labour party leader, Jeremy Corbyn, says the face of British politics has changed after Theresa May’s snap general election leaves Britain with a hung parliament 11 days before Brexit talks begin.
“People have said they’ve had quite enough of austerity politics, they’ve had quite enough of cuts in public expenditure, under-funding our health service, under-funding our schools, our education service, and not giving our young people the chance they deserve in our society,” Corbyn said.
In Australia, the Labor party is developing a position on the negative economic consequences from persistently low wages growth, with broader policies to crack down on worker exploitation.
The party’s deputy leader, Tanya Plibersek, signalled plans on Thursday to strengthen the bargaining power of workers and unions in an attempt to revitalise stagnant wages.
Her intervention in the low-wages debate followed a speech last month by Brendan O’Connor, Labor’s employment and workplace relations spokesman, in which he Labor’s intention to make it harder for employers to terminate enterprise agreements.
Since you’re here …
… we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.
I appreciate there not being a paywall: it is more democratic for the media to be available for all and not a commodity to be purchased by a few. I’m happy to make a contribution so others with less means still have access to information.
Thomasine F-R.
Wednesday, 19 April 2017
After reading this.........
After reading this, there is little more to say......
http://www.zerohedge.com/news/2017-04-18/great-western-economic-depression
Friday, 31 March 2017
Monday, 20 February 2017
Aaahhhh....what a quiet meeting on Jekyll Island will do.....
How the Fed went from lender of last resort to destroyer of American wealth
Early morning, December 16, 2008, with a drizzle of freezing rain
falling, few would even glance at the line of inconspicuous Mercury
Marquis sedans pulling up to Washington, DC’s Fairmont Hotel. Emerging
from the luxurious four-star establishment, their Foggy Bottom home
eight times a year, are eleven little-known bureaucrats with their
contingent of requisite subordinates.
There is no fanfare to mark the coming momentous decision they are to take on as they comfortably settle in for the ten-minute caravan to the neoclassical white marble edifice known as the Marriner S. Eccles Federal Reserve Board Building, located at Twentieth Street and Constitution Avenue NW.
Another half dozen of their peers had already left their homes in nearby Georgetown or some other Washington suburb and they too are making their way to the same address for the all-important 9 a.m. meeting.
Only one of these bureaucrats—the chairman, a mild-mannered former professor—might have been recognized in an American airport. The rest—unelected, immune to political pressure, mostly academics, and save one, inexperienced in the intricacies of running a major corporation, or even a small business—were virtually invisible outside the narrow world they inhabited despite the enormous power they wielded.
As these seventeen people arrived, they stowed their coats and umbrellas, grabbed a cup of coffee or tea, and mingled, the low hum of their conversation perhaps more subdued than on similar occasions. The day before, the first of the two-day affair, had been extraordinary in both the dire picture it painted of the American economy and the realization that they would have to take bold and unprecedented action.
That next sleety morning, they met again, determined to take action
to prop up a faltering Wall Street, hopelessly mired in the greatest
financial crisis since the Great Depression. Even as they convened, the
wreckage of the previous three months still burned around them. Credit
markets had seized up and fears for the fate of the economy were
mounting.
With a few exceptions, virtually all of those at the meeting were PhD economists who had earned doctorates at MIT, Yale, Harvard, Princeton, and other top American universities. They met under the auspices of the Federal Open Market Committee (FOMC), the decision-making body of the Federal Reserve System. They believed a lifetime of study in economic theory and monetary policy had given them unique insight to steer policy for the most powerful central bank in the world, the lender of last resort for failing Wall Street banks, and the U.S. government’s last line of defense against utter financial chaos.
Created in 1913 after the Panic of 1907, the Federal Reserve was founded to keep the public’s faith in the buying power of the U.S. dollar. After failing miserably in the 1930s, the Fed aimed to be more responsive. This led the institution to find discipline in the rising macroeconomic models championed by top monetary theorists. During the ensuing “Quiet Period” in American banking, deposit insurance prevented panics, the Fed controlled interest rates and manipulated the money supply, and though occasional disruptions flared, like the failure of Continental Illinois National Bank and Trust Company in 1984, no systemic risk erupted for seventy years. The Fed had tamed the volatile U.S. economy.
Until September 2008, when all hell broke loose in a worldwide panic that completely blindsided and, embarrassed the Federal Reserve. The Fed had used billions of dollars in taxpayer funds to bail out Wall Street fat cats. Everyone blamed the Fed.
Just before 9 a.m., the door to the chairman’s office opened. Federal Reserve Chairman Ben Bernanke took his place in an armchair at the center of a massive oval table. The members of the FOMC found their designated places around the table; aides sat in chairs or couches against the wall. With staff, the room contained fifty or sixty people, far more than normal for this momentous occasion.
In front of each FOMC member was a microphone to record their words for posterity. To a casual observer, the content of their conversation would be obscured by economic jargon.
This day, their essential task was to vote on whether to take the “fed funds” rate—the interest rate at which banks lent money to each other in the overnight market—to the zero bound. The history-making low rate would ripple throughout the economy, affecting the price to borrow for businesses and consumers alike.
Bernanke was calm but insistent. His lifetime of study of the Great Depression indicated this was the only way. His sheer depth of knowledge about the Fed’s mishandling of that tragic period was undoubtedly intimidating.
By the end of the meeting, the vote was unanimous. The FOMC officially adopted a zero-interest-rate policy in the hopes that companies teetering on the brink of insolvency would keep the lights on, keep employees on their payrolls, and keep consumers spending. It would even pay banks interest on deposits.
Free cash. We’ll even pay you to take it!
As they gathered their belongings, everyone shook hands, all very collegial despite the sometimes vigorous discussion. They journeyed back to their nice homes in the toniest neighborhoods of America’s richest cities: New York, Boston, Philadelphia, Chicago, Dallas, San Francisco, Washington, DC.
They returned to their lofty perches, some at the Eccles Building, others to the executive floors of Federal Reserve District Bank buildings, safely cushioned from the decision they had just made. Most of them were wealthy or had hefty defined benefit pensions. Their investments were socked away in blind trusts. They would feel no pain in their ivory towers.
It took a few months, but the Fed’s mouth-to-mouth resuscitation brought gasping investment banks and hedge funds and giant corporations back to life. Wall Street rejoiced.
But the Fed’s academic models never addressed one basic question: What happens to everyone else?
In the decade following that fateful day, everyday Americans began to suffer the aftereffects of the Fed’s decision. By 2016, the interest rate still sat at the zero bound and the Fed’s balance sheet had ballooned to $4.5 trillion, thanks to the Fed’s “quantitative easing” (QE), the label given its continuing purchases of Treasuries and mortgage-backed securities.
To what end? All around are signs of an economy frozen in motion thanks to the Fed’s bizarre manipulations of monetary policy, all intended to keep the economy afloat.
The direct damage inflicted on our citizenry begins with our youngest minds and scales up to every living generation in our country’s midst.
The journey could begin anywhere, but let’s start in Erie, Pennsylvania, an area of the country that was struggling even before 2008. The Fed’s high interest rates in the 1980s killed its steel and auto industries. The zero bound has dealt the region another devastating blow. Now, in an Erie elementary school students are given stapled copies of “Everyday Mathematics” instead of an actual textbook. After a snowstorm, twenty-one buckets were deployed to catch leaks because there was no money to repair the roof. In the last five years, the Erie school district has laid off one fifth of its employees and closed three schools to cut costs. School officials are being forced to divert budgets earmarked for kids and facilities to cover the shortfall in its teacher pension fund, starved for yield in a zero-interest-rate environment where bonds return only 1 to 2 percent.
This is not limited to Erie. By mid-2016, long-term returns for U.S. public pensions have dropped to the lowest levels ever recorded—a $1.25 trillion funding gap—forcing pension fund managers from New York to California to resort to ever-riskier investments to meet their legal obligations—and to cut services to make up the shortfall.
Ruining Americans’ pension systems? The professor and the FOMC had not anticipated that particular side effect.
And then there are the millennials, the 77 million young people born between 1980 and 1995. As private equity surged into real estate, purchasing homes to be used as rentals in search of higher yields, house prices have soared and the market share of first-time home buyers has dropped to its lowest level in almost thirty years. Nearly half of males and 36 percent of females age eighteen to thirty-four live with their parents, the highest level since the 1940s.
Delaying household formation and all the consumer spending that goes with that? Not on the FOMC’s radar.
Even with mortgage rates at record lows, stagnant wages have made it difficult for millennials to amass down payments. Builders anxious to maximize returns now focus on constructing expensive houses, leaving fewer starter homes for sale in urban areas favored by today’s young adults. It is an ominous trend for baby boomers. For many, home equity makes up the bulk of their retirement savings.
Killing the move-up housing market? Nope, the FOMC didn’t foresee that either.
Chances are pretty good that most boomers didn’t get the gist of the statement released by the Fed on that December day in 2008. A certificate of deposit (CD) now pays a hair above nothing. Those boomers—my mom among them—have taken a long hard look at their retirement accounts and realized with a sense of dread that a lifetime of scrimping and risk-averse investing has left their nest eggs vulnerable to serious erosion.
With interest rates on CDs near zero, the average boomer household would need $10.6 million in principal to safely earn $15,930 in interest, the annual income at the federal poverty-line level for a family of two.
Do your folks have $10 million in savings? Mine don’t.
Of course, with $10 million, CDs might not be on the table, but that’s the point. Several hundred thousand dollars won’t do the trick without undue risk for aging boomers.
The members of the FOMC knew their decision would screw savers and the risk-averse elderly. They didn’t care. They couldn’t afford to. Even when well-intentioned smart people save the world, there are always a few, or in this case, millions of inevitable casualties. C’est la vie!
Sadly, there were no angry protests, no million-man marches on Washington that sent shock waves through our country after the FOMC issued its press release. Only the quiet, unheralded loss of some fundamental freedoms: the freedom to save for our retirements risk free, the freedom to sleep in peace knowing our pensions are safe, and the freedom for U.S. companies to invest in our nation’s future.
The FOMC’s vote during its final meeting of 2008 didn’t come from nowhere. It was part of a long tradition of economic interference by well-meaning bureaucrats, going back to the 1930s and accelerating with Federal Reserve Chairman Alan Greenspan in the 1980s.
Greenspan championed the era of financial deregulation that drove Wall Street to levels of greed that surprised even the most hardened investment banking veterans.
His pragmatic response to every crisis on Wall Street? Lower interest rates, which Greenspan did again and again and again. Blow bubbles and pray they don’t pop.
But they always do.
In the late 1990s, dot-com companies soared far beyond true valuations; reality pricked that balloon in 2001.
In response, Greenspan again aggressively lowered interest rates and blew another bubble, this time in housing, with catastrophic results that led to the worldwide meltdown in 2008.
In response, his successor, Ben Bernanke, followed suit, pushing through a massive monetary policy experiment by lowering interest rates to zero and using QE to flood America with easy money.
He based his policies on a lifetime of academic study. His theoretical models relied on the idea of the “wealth effect,” first articulated by British economist John Maynard Keynes. The concept assumed that free money would induce businesses to borrow, invest, and hire more employees. They in turn would buy homes, consume, and put savings into the stock market instead of CDs, where they would earn little to no interest. As their assets rose in value, people would spend more.
The resulting wealth-effect tide would lift all boats. Hailed as a genius by other academics, Bernanke had every confidence his theories would work.
When they didn’t, when the American economy continued to stagger, Bernanke doubled down. His models couldn’t be wrong; something else must be holding back the economy.
Janet Yellen, who followed Bernanke as Fed chair, maintained his radical policies with gusto, determined that households and businesses would invest, buy, consume, damn it! Though many on the FOMC sought an exit plan, Yellen was even more married to the Keynesian model of economic growth than Bernanke. She continued to advocate for more QE, and has even raised the specter of negative interest rates.
But real people haven’t responded the way academics anticipated in their wealth-effect models. Individuals, small businesses, and corporations alike have been flummoxed by Fed policy and made their own rational choices unforeseen by the FOMC.
Cheap money, combined with uncertainty about the regulatory and tax landscape, has encouraged corporations to buy back their shares rather than invest in their future. Companies in the S&P 500 Index—the benchmark for America’s top five hundred publicly listed companies—dispersed more than $600 billion to buy back their stock in 2014, and more than $500 billion in 2015.
This strategy has been employed by companies as diverse as Apple, Bank of America, and ExxonMobil, which lost its prized AAA credit rating after one hundred years, based partially on the record amount of debt it incurred to buy back shares. Since 2005, U.S. corporations have disbursed an estimated $296,000 on share buybacks for every single new employee who has been hired.
Because that’s the way the world works.
“No wonder share buybacks and corporate investment into research and development have moved inversely in recent years,” wrote Rana Foroohar in an op-ed in the Financial Times on May 15, 2016. “It is easier for chief executives with a shelf life of three years to try to please investors by jacking up short-term share prices than to invest in things that will grow a company over the long haul.”
Compared to the immediate post–World War II period, some American corporations now earn about five times more revenue from purely financial activities such as trading, hedging, tax optimization, and selling financial services, as compared to their core businesses.
As a result, the labor market has atrophied. Though lots of so-called eat, drink, and get sick jobs—for waiters, bartenders, and health care workers—have been created, Fed policy effectively pulled the plug on long-term investment and compromised high-paying job growth.
By mid-2015, only 62.6 percent of adult workers were employed or actively looking for a job, the lowest in nearly four decades. The so-called shadow unemployment rate is estimated to be as high as 23 percent. Many of these people will never come back into the workforce.
Paychecks reflect the stagnation. Unless you are among the top 10 percent of earners, your income has barely grown or declined since 2006.
Ultra low interest rates encouraged what economists refer to as “malinvestment.” Yes, the shale revolution created millions of high-paying jobs for workers with little college education. But when oil prices plunged, many of those high-paying jobs evaporated as quickly as they were created.
The bailed-out auto industry drove its own form of malinvestment, pushing the subprime auto loan sector into overdrive. The last time around, Greenspan encouraged people to buy more house than they could afford. The result was a tsunami of foreclosures. This time, those same budget-strapped households have been encouraged to drive more car than their wallets can bear.
Proof: a third of all cars traded in during 2015 had loans that were “underwater.” The owners had taken on debt for more than the value of the vehicles. Although the market for subprime car loans is nowhere near the size of the subprime mortgage market, it hurts the same people who can ill afford such hardships.
Of course there are those who love zero interest rates.
In five thousand years of record keeping, debt has never been cheaper. Stocks, bonds, real estate, yachts, planes, blue diamonds, you name it—Fed policies have fueled skyrocketing valuations across the full spectrum of asset classes. And bankers have happily issued debt against them all.
Paradoxically, though returns on risky investments have been consistently strong, fewer average Americans are comfortable with the risk of owning the most common of the pack—stocks.
The percentage of U.S. adults invested in the stock market fell from 65 percent in 2007 to 52 percent by the spring of 2016, a twenty-year low. Inflows into U.S. stock mutual funds—a good gauge of small-investor sentiment—were negative in six of the seven years since 2009. In 2015 alone, mutual fund investors withdrew $170.8 billion—this despite a bull market. Americans retrenched and retreated, especially those nearing retirement years. Fed-blown bubbles have decimated their savings not once, but twice.
Though they might not be able to name the Fed as the party rigging the game, their instincts remind them about the old adage: Fool me once, shame on you. Fool me twice, shame on me.
As for those mom-and-pop investors who remain in the market, they have little chance of escaping Fed policy because their assets are tied up in expensive and rigid 401(k) plans that emphasize index funds.
The Fed’s artificially low interest-rate level has distorted the relationship between stocks and bonds. Rather than one providing cover when the other is in distress, asset classes have increasingly moved in concert. And though portfolio advisers make it sound safe, index investing will prove disastrous when markets finally correct.
The one true growth industry? That would be all that high cotton harvested in high finance. Since 2007, world debt has grown by about $60 trillion, enriching legions of investment bankers one bond deal at a time.
The Fed’s experiment has widened the inequality gap, angering millions of people who bought into the American dream and know it’s being stripped away from them. The global elite get ever richer while those who work for a living see their earnings stagnate—or worse, get laid off.
The acclaimed Noam Chomsky documentary Requiem for the American Dream chronicles how the “concentration of wealth and power among a small elite has polarized American society and brought about the decline of the middle class.”
Chomsky’s intent is to crucify conservatives. But had the predominantly liberal Fed leadership not facilitated the bad behavior of the elite by encouraging them to borrow at virtually no cost, their wealth and power would never have become as concentrated as it is today.
The ostentatiousness with which the so-called one percent has flaunted its wealth has fueled the rise of anger and extremism, leading to the presidential campaigns of Bernie Sanders on the left and Donald Trump on the right.
And politicians wonder about the genesis of a deeply divided and dispirited populace.
Central bankers have invited politicians to abdicate their leadership authority to an inbred society of PhD academics who are infected to their core with groupthink, or as I prefer to think of it: “groupstink.”
Annual borrowing costs for the United States since 2008 have hovered around 1.8 percent, thanks to an overly accommodating Fed, which allowed a dysfunctional Congress and the administration of former President Barack Obama to kick the responsibility down the road. Massive spending programs, however ill conceived, got funded with little opposition. Obamacare, anyone?
According to the Congressional Budget Office (CBO), since 2008 federal debt held by the public has nearly doubled and now stands at 75 percent of gross domestic product (GDP). If this lunacy doesn’t end, debt will be 110 percent of GDP by 2036, exceeding the post–World War II peak of 106 percent.
And yet feckless politicians get to brag that they’ve cut the deficit, a distinction lost on too many of us. Yes, it has cost less to run the government and fund the safety net. But it’s done nothing to staunch the run-up in our nation’s crippling debt load, which has tripled in just twenty years’ time.
Were there voices of dissent to be heard in that conference room on that December day in 2008? Did anyone argue for the little guy, the cautious investor? Did someone in the room speak on behalf of pension fund managers now forced to take undue risks? What about the leadership of firms and big banks whose incentives are perverted to the extent that they no longer invest in our country’s future?
The short answer is yes. I worked for one of those who pushed back against the majority. He was the lone member of the FOMC who voted against the professor’s theories at that fateful meeting.
He fought the good but lonely fight, and I, in my capacity as trusted adviser, waged many a battle with him. But the sad truth is we lost the people’s war. In a world rendered unsafe by banks that were too big to fail, we came to understand the Fed was simply too big to fight.
I wrote a book to tell from the inside the story of how the Fed went from being lender of last resort to savior—and then destroyer—of America’s economic system.
During my nine-year tenure at the Federal Reserve Eleventh District Bank of Dallas, where I served as adviser to President Richard Fisher, I witnessed the tunnel vision and arrogance of Fed academics who can’t understand that their theoretical models bear little resemblance to real life.
To tell this story, I relied on firsthand experience, interviews with dozens of high-powered market players, reams of financial data, and publicly available documents from the Federal Reserve, including FOMC transcripts and other historical materials.
People are waking up. And it’s about time. Although I do not believe it is right to end the Fed, it’s high time it was upended. Every American must understand this extraordinarily powerful institution and how it affects his or her everyday life and fight back.
This is a special preview excerpt from FED UP: An Insider’s Take on Why The Federal Reserve is Bad for America By Danielle DiMartino Booth
To be published by Portfolio, an imprint of Penguin Random House, on February 14, 2017. For more information please visit www.DiMartinoBooth.com
Copyright © Danielle DiMartino Booth, 2017. All rights reserved.
Danielle DiMartino Booth is the founder of Money Strong, LLC, an economic consulting firm. She began her career in New York at Donaldson, Lufkin & Jenrette, and Credit Suisse, where she worked fixed income and the public and private equity markets. After working as a financial columnist at the Dallas Morning News, Booth spent nine years as an advisor to Richard W. Fisher at the Federal Reserve Bank of Dallas.
There is no fanfare to mark the coming momentous decision they are to take on as they comfortably settle in for the ten-minute caravan to the neoclassical white marble edifice known as the Marriner S. Eccles Federal Reserve Board Building, located at Twentieth Street and Constitution Avenue NW.
Another half dozen of their peers had already left their homes in nearby Georgetown or some other Washington suburb and they too are making their way to the same address for the all-important 9 a.m. meeting.
Only one of these bureaucrats—the chairman, a mild-mannered former professor—might have been recognized in an American airport. The rest—unelected, immune to political pressure, mostly academics, and save one, inexperienced in the intricacies of running a major corporation, or even a small business—were virtually invisible outside the narrow world they inhabited despite the enormous power they wielded.
As these seventeen people arrived, they stowed their coats and umbrellas, grabbed a cup of coffee or tea, and mingled, the low hum of their conversation perhaps more subdued than on similar occasions. The day before, the first of the two-day affair, had been extraordinary in both the dire picture it painted of the American economy and the realization that they would have to take bold and unprecedented action.
With a few exceptions, virtually all of those at the meeting were PhD economists who had earned doctorates at MIT, Yale, Harvard, Princeton, and other top American universities. They met under the auspices of the Federal Open Market Committee (FOMC), the decision-making body of the Federal Reserve System. They believed a lifetime of study in economic theory and monetary policy had given them unique insight to steer policy for the most powerful central bank in the world, the lender of last resort for failing Wall Street banks, and the U.S. government’s last line of defense against utter financial chaos.
Created in 1913 after the Panic of 1907, the Federal Reserve was founded to keep the public’s faith in the buying power of the U.S. dollar. After failing miserably in the 1930s, the Fed aimed to be more responsive. This led the institution to find discipline in the rising macroeconomic models championed by top monetary theorists. During the ensuing “Quiet Period” in American banking, deposit insurance prevented panics, the Fed controlled interest rates and manipulated the money supply, and though occasional disruptions flared, like the failure of Continental Illinois National Bank and Trust Company in 1984, no systemic risk erupted for seventy years. The Fed had tamed the volatile U.S. economy.
Until September 2008, when all hell broke loose in a worldwide panic that completely blindsided and, embarrassed the Federal Reserve. The Fed had used billions of dollars in taxpayer funds to bail out Wall Street fat cats. Everyone blamed the Fed.
Just before 9 a.m., the door to the chairman’s office opened. Federal Reserve Chairman Ben Bernanke took his place in an armchair at the center of a massive oval table. The members of the FOMC found their designated places around the table; aides sat in chairs or couches against the wall. With staff, the room contained fifty or sixty people, far more than normal for this momentous occasion.
In front of each FOMC member was a microphone to record their words for posterity. To a casual observer, the content of their conversation would be obscured by economic jargon.
This day, their essential task was to vote on whether to take the “fed funds” rate—the interest rate at which banks lent money to each other in the overnight market—to the zero bound. The history-making low rate would ripple throughout the economy, affecting the price to borrow for businesses and consumers alike.
Bernanke was calm but insistent. His lifetime of study of the Great Depression indicated this was the only way. His sheer depth of knowledge about the Fed’s mishandling of that tragic period was undoubtedly intimidating.
By the end of the meeting, the vote was unanimous. The FOMC officially adopted a zero-interest-rate policy in the hopes that companies teetering on the brink of insolvency would keep the lights on, keep employees on their payrolls, and keep consumers spending. It would even pay banks interest on deposits.
Free cash. We’ll even pay you to take it!
As they gathered their belongings, everyone shook hands, all very collegial despite the sometimes vigorous discussion. They journeyed back to their nice homes in the toniest neighborhoods of America’s richest cities: New York, Boston, Philadelphia, Chicago, Dallas, San Francisco, Washington, DC.
They returned to their lofty perches, some at the Eccles Building, others to the executive floors of Federal Reserve District Bank buildings, safely cushioned from the decision they had just made. Most of them were wealthy or had hefty defined benefit pensions. Their investments were socked away in blind trusts. They would feel no pain in their ivory towers.
It took a few months, but the Fed’s mouth-to-mouth resuscitation brought gasping investment banks and hedge funds and giant corporations back to life. Wall Street rejoiced.
But the Fed’s academic models never addressed one basic question: What happens to everyone else?
In the decade following that fateful day, everyday Americans began to suffer the aftereffects of the Fed’s decision. By 2016, the interest rate still sat at the zero bound and the Fed’s balance sheet had ballooned to $4.5 trillion, thanks to the Fed’s “quantitative easing” (QE), the label given its continuing purchases of Treasuries and mortgage-backed securities.
To what end? All around are signs of an economy frozen in motion thanks to the Fed’s bizarre manipulations of monetary policy, all intended to keep the economy afloat.
The direct damage inflicted on our citizenry begins with our youngest minds and scales up to every living generation in our country’s midst.
The journey could begin anywhere, but let’s start in Erie, Pennsylvania, an area of the country that was struggling even before 2008. The Fed’s high interest rates in the 1980s killed its steel and auto industries. The zero bound has dealt the region another devastating blow. Now, in an Erie elementary school students are given stapled copies of “Everyday Mathematics” instead of an actual textbook. After a snowstorm, twenty-one buckets were deployed to catch leaks because there was no money to repair the roof. In the last five years, the Erie school district has laid off one fifth of its employees and closed three schools to cut costs. School officials are being forced to divert budgets earmarked for kids and facilities to cover the shortfall in its teacher pension fund, starved for yield in a zero-interest-rate environment where bonds return only 1 to 2 percent.
This is not limited to Erie. By mid-2016, long-term returns for U.S. public pensions have dropped to the lowest levels ever recorded—a $1.25 trillion funding gap—forcing pension fund managers from New York to California to resort to ever-riskier investments to meet their legal obligations—and to cut services to make up the shortfall.
Ruining Americans’ pension systems? The professor and the FOMC had not anticipated that particular side effect.
And then there are the millennials, the 77 million young people born between 1980 and 1995. As private equity surged into real estate, purchasing homes to be used as rentals in search of higher yields, house prices have soared and the market share of first-time home buyers has dropped to its lowest level in almost thirty years. Nearly half of males and 36 percent of females age eighteen to thirty-four live with their parents, the highest level since the 1940s.
Delaying household formation and all the consumer spending that goes with that? Not on the FOMC’s radar.
Even with mortgage rates at record lows, stagnant wages have made it difficult for millennials to amass down payments. Builders anxious to maximize returns now focus on constructing expensive houses, leaving fewer starter homes for sale in urban areas favored by today’s young adults. It is an ominous trend for baby boomers. For many, home equity makes up the bulk of their retirement savings.
Killing the move-up housing market? Nope, the FOMC didn’t foresee that either.
Chances are pretty good that most boomers didn’t get the gist of the statement released by the Fed on that December day in 2008. A certificate of deposit (CD) now pays a hair above nothing. Those boomers—my mom among them—have taken a long hard look at their retirement accounts and realized with a sense of dread that a lifetime of scrimping and risk-averse investing has left their nest eggs vulnerable to serious erosion.
With interest rates on CDs near zero, the average boomer household would need $10.6 million in principal to safely earn $15,930 in interest, the annual income at the federal poverty-line level for a family of two.
Do your folks have $10 million in savings? Mine don’t.
Of course, with $10 million, CDs might not be on the table, but that’s the point. Several hundred thousand dollars won’t do the trick without undue risk for aging boomers.
The members of the FOMC knew their decision would screw savers and the risk-averse elderly. They didn’t care. They couldn’t afford to. Even when well-intentioned smart people save the world, there are always a few, or in this case, millions of inevitable casualties. C’est la vie!
Sadly, there were no angry protests, no million-man marches on Washington that sent shock waves through our country after the FOMC issued its press release. Only the quiet, unheralded loss of some fundamental freedoms: the freedom to save for our retirements risk free, the freedom to sleep in peace knowing our pensions are safe, and the freedom for U.S. companies to invest in our nation’s future.
The FOMC’s vote during its final meeting of 2008 didn’t come from nowhere. It was part of a long tradition of economic interference by well-meaning bureaucrats, going back to the 1930s and accelerating with Federal Reserve Chairman Alan Greenspan in the 1980s.
Greenspan championed the era of financial deregulation that drove Wall Street to levels of greed that surprised even the most hardened investment banking veterans.
His pragmatic response to every crisis on Wall Street? Lower interest rates, which Greenspan did again and again and again. Blow bubbles and pray they don’t pop.
But they always do.
In the late 1990s, dot-com companies soared far beyond true valuations; reality pricked that balloon in 2001.
In response, Greenspan again aggressively lowered interest rates and blew another bubble, this time in housing, with catastrophic results that led to the worldwide meltdown in 2008.
In response, his successor, Ben Bernanke, followed suit, pushing through a massive monetary policy experiment by lowering interest rates to zero and using QE to flood America with easy money.
He based his policies on a lifetime of academic study. His theoretical models relied on the idea of the “wealth effect,” first articulated by British economist John Maynard Keynes. The concept assumed that free money would induce businesses to borrow, invest, and hire more employees. They in turn would buy homes, consume, and put savings into the stock market instead of CDs, where they would earn little to no interest. As their assets rose in value, people would spend more.
The resulting wealth-effect tide would lift all boats. Hailed as a genius by other academics, Bernanke had every confidence his theories would work.
When they didn’t, when the American economy continued to stagger, Bernanke doubled down. His models couldn’t be wrong; something else must be holding back the economy.
Janet Yellen, who followed Bernanke as Fed chair, maintained his radical policies with gusto, determined that households and businesses would invest, buy, consume, damn it! Though many on the FOMC sought an exit plan, Yellen was even more married to the Keynesian model of economic growth than Bernanke. She continued to advocate for more QE, and has even raised the specter of negative interest rates.
But real people haven’t responded the way academics anticipated in their wealth-effect models. Individuals, small businesses, and corporations alike have been flummoxed by Fed policy and made their own rational choices unforeseen by the FOMC.
Cheap money, combined with uncertainty about the regulatory and tax landscape, has encouraged corporations to buy back their shares rather than invest in their future. Companies in the S&P 500 Index—the benchmark for America’s top five hundred publicly listed companies—dispersed more than $600 billion to buy back their stock in 2014, and more than $500 billion in 2015.
This strategy has been employed by companies as diverse as Apple, Bank of America, and ExxonMobil, which lost its prized AAA credit rating after one hundred years, based partially on the record amount of debt it incurred to buy back shares. Since 2005, U.S. corporations have disbursed an estimated $296,000 on share buybacks for every single new employee who has been hired.
Because that’s the way the world works.
“No wonder share buybacks and corporate investment into research and development have moved inversely in recent years,” wrote Rana Foroohar in an op-ed in the Financial Times on May 15, 2016. “It is easier for chief executives with a shelf life of three years to try to please investors by jacking up short-term share prices than to invest in things that will grow a company over the long haul.”
Compared to the immediate post–World War II period, some American corporations now earn about five times more revenue from purely financial activities such as trading, hedging, tax optimization, and selling financial services, as compared to their core businesses.
As a result, the labor market has atrophied. Though lots of so-called eat, drink, and get sick jobs—for waiters, bartenders, and health care workers—have been created, Fed policy effectively pulled the plug on long-term investment and compromised high-paying job growth.
By mid-2015, only 62.6 percent of adult workers were employed or actively looking for a job, the lowest in nearly four decades. The so-called shadow unemployment rate is estimated to be as high as 23 percent. Many of these people will never come back into the workforce.
Paychecks reflect the stagnation. Unless you are among the top 10 percent of earners, your income has barely grown or declined since 2006.
Ultra low interest rates encouraged what economists refer to as “malinvestment.” Yes, the shale revolution created millions of high-paying jobs for workers with little college education. But when oil prices plunged, many of those high-paying jobs evaporated as quickly as they were created.
The bailed-out auto industry drove its own form of malinvestment, pushing the subprime auto loan sector into overdrive. The last time around, Greenspan encouraged people to buy more house than they could afford. The result was a tsunami of foreclosures. This time, those same budget-strapped households have been encouraged to drive more car than their wallets can bear.
Proof: a third of all cars traded in during 2015 had loans that were “underwater.” The owners had taken on debt for more than the value of the vehicles. Although the market for subprime car loans is nowhere near the size of the subprime mortgage market, it hurts the same people who can ill afford such hardships.
Of course there are those who love zero interest rates.
In five thousand years of record keeping, debt has never been cheaper. Stocks, bonds, real estate, yachts, planes, blue diamonds, you name it—Fed policies have fueled skyrocketing valuations across the full spectrum of asset classes. And bankers have happily issued debt against them all.
Paradoxically, though returns on risky investments have been consistently strong, fewer average Americans are comfortable with the risk of owning the most common of the pack—stocks.
The percentage of U.S. adults invested in the stock market fell from 65 percent in 2007 to 52 percent by the spring of 2016, a twenty-year low. Inflows into U.S. stock mutual funds—a good gauge of small-investor sentiment—were negative in six of the seven years since 2009. In 2015 alone, mutual fund investors withdrew $170.8 billion—this despite a bull market. Americans retrenched and retreated, especially those nearing retirement years. Fed-blown bubbles have decimated their savings not once, but twice.
Though they might not be able to name the Fed as the party rigging the game, their instincts remind them about the old adage: Fool me once, shame on you. Fool me twice, shame on me.
As for those mom-and-pop investors who remain in the market, they have little chance of escaping Fed policy because their assets are tied up in expensive and rigid 401(k) plans that emphasize index funds.
The Fed’s artificially low interest-rate level has distorted the relationship between stocks and bonds. Rather than one providing cover when the other is in distress, asset classes have increasingly moved in concert. And though portfolio advisers make it sound safe, index investing will prove disastrous when markets finally correct.
The one true growth industry? That would be all that high cotton harvested in high finance. Since 2007, world debt has grown by about $60 trillion, enriching legions of investment bankers one bond deal at a time.
The Fed’s experiment has widened the inequality gap, angering millions of people who bought into the American dream and know it’s being stripped away from them. The global elite get ever richer while those who work for a living see their earnings stagnate—or worse, get laid off.
The acclaimed Noam Chomsky documentary Requiem for the American Dream chronicles how the “concentration of wealth and power among a small elite has polarized American society and brought about the decline of the middle class.”
Chomsky’s intent is to crucify conservatives. But had the predominantly liberal Fed leadership not facilitated the bad behavior of the elite by encouraging them to borrow at virtually no cost, their wealth and power would never have become as concentrated as it is today.
The ostentatiousness with which the so-called one percent has flaunted its wealth has fueled the rise of anger and extremism, leading to the presidential campaigns of Bernie Sanders on the left and Donald Trump on the right.
And politicians wonder about the genesis of a deeply divided and dispirited populace.
Central bankers have invited politicians to abdicate their leadership authority to an inbred society of PhD academics who are infected to their core with groupthink, or as I prefer to think of it: “groupstink.”
Annual borrowing costs for the United States since 2008 have hovered around 1.8 percent, thanks to an overly accommodating Fed, which allowed a dysfunctional Congress and the administration of former President Barack Obama to kick the responsibility down the road. Massive spending programs, however ill conceived, got funded with little opposition. Obamacare, anyone?
According to the Congressional Budget Office (CBO), since 2008 federal debt held by the public has nearly doubled and now stands at 75 percent of gross domestic product (GDP). If this lunacy doesn’t end, debt will be 110 percent of GDP by 2036, exceeding the post–World War II peak of 106 percent.
And yet feckless politicians get to brag that they’ve cut the deficit, a distinction lost on too many of us. Yes, it has cost less to run the government and fund the safety net. But it’s done nothing to staunch the run-up in our nation’s crippling debt load, which has tripled in just twenty years’ time.
Were there voices of dissent to be heard in that conference room on that December day in 2008? Did anyone argue for the little guy, the cautious investor? Did someone in the room speak on behalf of pension fund managers now forced to take undue risks? What about the leadership of firms and big banks whose incentives are perverted to the extent that they no longer invest in our country’s future?
The short answer is yes. I worked for one of those who pushed back against the majority. He was the lone member of the FOMC who voted against the professor’s theories at that fateful meeting.
He fought the good but lonely fight, and I, in my capacity as trusted adviser, waged many a battle with him. But the sad truth is we lost the people’s war. In a world rendered unsafe by banks that were too big to fail, we came to understand the Fed was simply too big to fight.
I wrote a book to tell from the inside the story of how the Fed went from being lender of last resort to savior—and then destroyer—of America’s economic system.
During my nine-year tenure at the Federal Reserve Eleventh District Bank of Dallas, where I served as adviser to President Richard Fisher, I witnessed the tunnel vision and arrogance of Fed academics who can’t understand that their theoretical models bear little resemblance to real life.
To tell this story, I relied on firsthand experience, interviews with dozens of high-powered market players, reams of financial data, and publicly available documents from the Federal Reserve, including FOMC transcripts and other historical materials.
People are waking up. And it’s about time. Although I do not believe it is right to end the Fed, it’s high time it was upended. Every American must understand this extraordinarily powerful institution and how it affects his or her everyday life and fight back.
This is a special preview excerpt from FED UP: An Insider’s Take on Why The Federal Reserve is Bad for America By Danielle DiMartino Booth
To be published by Portfolio, an imprint of Penguin Random House, on February 14, 2017. For more information please visit www.DiMartinoBooth.com
Copyright © Danielle DiMartino Booth, 2017. All rights reserved.
Danielle DiMartino Booth is the founder of Money Strong, LLC, an economic consulting firm. She began her career in New York at Donaldson, Lufkin & Jenrette, and Credit Suisse, where she worked fixed income and the public and private equity markets. After working as a financial columnist at the Dallas Morning News, Booth spent nine years as an advisor to Richard W. Fisher at the Federal Reserve Bank of Dallas.
Sunday, 19 February 2017
Sunday, 11 December 2016
Getting very close.....
See this cartoon in the light of GFC2, 3,4 & 5 all together.....
Better waaaayyyyy early than a few seconds too late.....
Wednesday, 9 November 2016
Time.......................
So why have I not been active in this blog since last July?
Simple - what has there been to say?? Only more of the same old, more fingers found to shove into the crumbling dykes - and if there were a fiddle anywhere handy - someone would be playing it while all around falls to dust.
Until today, that is.
I am no fan of Trump, but what he DOES represent is that he gave a voice to the 99% who have been unheard and ignored for so long. What do the Elites (the less than 1%) fear most??
US !!! Our vast numbers.
But we have been fragmented by living in our fantasies, our delusions and yes - in our hopes and dreams.
Today is a pivotal day where the 99% have said ENOUGH !!!!!
So well done Trump. I have to give the man credit. Especially when running against an entrenched machine, a biased media, a corrupt and entrenched bureaucracy, a massive corporatocracy & military/industrial complex...... and opponents who really didn't play very nicely with the other children. Not to mention $1 BILLION in campaign funds. Talk about buying a Presidency!!!!!
The next real test will be whether Trump can deal effectively with that entrenched and 'entitled' bureaucracy - I wish him all the best and Godspeed. Especially in scaling-back the Neocon objective of projecting American power over the rest of the world.
But ultimately, nothing can detract from the slap-in-the-face to the Elites that today brought.
It will be interesting to watch what happens from here..... as for me, I have for some time been looking forward to the world beyond all this nonsense, the world we always wanted to be in, the world that we deserved.
May we see it soon. ♥
Friday, 15 July 2016
Thursday, 30 June 2016
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