Better to Get Out of the Stock Market while the Gettin's Good!

They Call this Season "Fall" for a Reason
by Dave Lindorff
The Public Record
Sept 28th, 2009

So now it turns out that the whole Troubled Assets Relief Program (TARP) was a flop or more likely a scam. Remember Bush Treasury Secretary Henry Paulson telling us last September that credit markets had locked up, and then, after half of the $750 billion that he extorted out of Congress was handed out to Wall Street firms, new President Barack Obama justifying the spending of the second half of the money because we needed to “get the banks lending again”?

Well, now Neil Barofsky, the special inspector general for TARP, is telling us that all that money, and more than $2 trillion in loans, accomplished nothing. In an interview with Lagan Sebert, published in Huffington Post, Barofsky says, “We were told by Treasury that the purpose of the TARP fund was to increase lending. But we haven’t increased lending.”

Well yeah, that’s true. Just ask any ordinary working stiff. My little bank, the Harleysville National Bank here in eastern Pennsylvania, far from expanding lending, has been shutting down customer credit lines. As a bank manager told me, they were “reviewing all our equity lines” in light of declining property values (actually, property values in our area north of Philadelphia have remained pretty stable).

In general, banks across the country have been canceling credit lines, closing credit card accounts on customers deemed risky—including small businesses—and making it very hard to get a new mortgage. (They’ve also been raising all kinds of fees, ripping customers off in other ways, but that’s another story.)

And that goes for the biggest banks that got billions of dollars in taxpayer bailout funds.

Barofsky has been trying doggedly to find out whatever happened to all that money of ours that was shoveled out to the banks, and as he reports, he’s been working not just without any help from the Treasury Department, but actually against the active resistance of Treasury, which he accuses of having tried to dissuade him from even looking into it.

“My biggest surprise,” he says, “is when we announced an audit (of TARP), Treasury went out of their way to say…it would be a big waste of time.”

He says Treasury officials including Treasury Secretary Tim Geithner, claimed that it would be impossible to find out where the money went, on the argument that money is “fungible”—that is to say all money is the same. Of course this is a cynical and ridiculous assertion. If it were true, there would be no job for auditors, since all auditors do is look to find out where money went. (Imagine telling an IRS auditor that it is a waste of time auditing your books, because money is fungible!)

In any event, Barofsky has gone about his work, with or without the backing of the Obama Treasury Department, and what he found is that instead of lending out the money that they were provided with by taxpayers, the banks have been “acquiring other institutions, sitting on it, paying down credit lines,” and, of course, paying out obscene bonuses to executives.

The one thing the banks are not doing is lending.

But then, as I wrote last February, it was silly to think that by shoveling money into banks during a record recession, the banks would then lend it out. First of all, there was the awkward reality that good companies were and still are not looking to borrow money. Rather, they are trying to pay down debt and get their balance sheets on more solid ground to survive a period of low or declining sales and earnings.

The only companies that would be trying to borrow right now would be the ones that were on the rocks, and wanted money just to stay afloat. And what banker would lend to them? And second, if the banks could make more money by investing their new cash instead of making risky loans with it, why would they lend? So most of them just used the money to invest in Treasury Bonds.

The long and the short of it is that we’ve been taken for a very big and costly ride by banks that created a huge crisis and that then got the government to bail them out of it with our money, and by two administrations, one Republican and now one Democratic, that have been submissive and willing servants of the big banks.

The big surprise to me has been Paul Volcker, who I mistakenly took to be an over-the-hill relic and Wall Street patsy. The former Carter and Reagan-era Federal Reserve Board chairman, currently chair of President Obama’s economic advisory panel, is publicly warning that the president’s bank policies are preserving a system of giant banks that are “too big to fail,” and are risking further, even larger bailouts.

Barofsky agrees, saying that since the bailout, under Obama’s bank policies, big banks already deemed “too big to fail” have become even bigger, and he concludes, “We may be in a far more dangerous place today than we were in a year ago,” for having told certain financial companies that we will not let them fail.

Little wonder that the smart money—that would be the insiders in corporate boardrooms and executive suites—is reportedly selling shares as fast as they can be sold, with the experts reporting that insider sales of company stock are running 31:1 on the sell side. The explanation: with layoffs still running at over 500,000 a month, and nobody hiring, these executives don’t see anything in the year ahead or even longer that is likely to put the economy on a renewed growth path.

Putting these bits of news together doesn’t paint a pretty picture: We’ve got an economy that appears headed for at best a long period of stagnation and, more likely, for a second downturn, once the effect of last March’s stimulus package wears off. We’ve got a financial system that has been propped up artificially, its balance sheets soggy with underwater mortgages and worthless derivatives, and its executives holding assurances that they can count on the government bailing them out no matter what stupid or self-serving decisions they make.

We’ve got an economy that is 70% based upon consumer spending, in which one in five people is unemployed or involuntarily underemployed. We’ve got a nation that hardly makes anything, at the same time that its currency is sinking like a stone, making imports increasingly expensive, And we have a stock market that has been inflated into a giant bubble, just waiting to pop.

October should be an interesting month this year.

Dave Lindorff is a Philadelphia-based journalist. He is author of Killing Time: An Investigation into the Death Penalty Case of Mumia Abu-Jamal (Common Courage Press, 2003) and The Case for Impeachment (St. Martin’s Press, 2006). His work is available at thiscantbehappening.net

A Portrait of Pittsburgh in the Grip of the Imperial Stormtroopers

Downtown Pittsburgh was like a militarized zone during the G20.
(Find more photos by andrewwws here.)

Street Report from the G20
Monday, 28 September 2009
By Bill Quigley, truthout | Perspective

The G20 in Pittsburgh showed us how pitifully fearful our leaders have become.

What no terrorist could do to us, our own leaders did.

Out of fear of the possibility of a terrorist attack, authorities militarize our towns, scare our people away, stop daily life and quash our constitutional rights.

For days, downtown Pittsburgh, home to the G20, was a turned into a militarized, people-free ghost town. Sirens screamed day and night.

Helicopters crisscrossed the skies. Gunboats sat in the rivers. The skies were defended by Air Force jets. Streets were barricaded by huge cement blocks and fencing. Bridges were closed with National Guard across the entrances. Public transportation was stopped downtown. Amtrak train service was suspended for days.

In many areas, there were armed police every 100 feet. Businesses closed. Schools closed. Tens of thousands were unable to work.

Four thousand police were on duty, plus 2,500 National Guard, plus Coast Guard and Air Force and dozens of other security agencies. A thousand volunteers from other police forces were sworn in to help out.

Police were dressed in battle gear, bulky, black ninja-turtle outfits - helmets with clear visors, strapped on body armor, shin guards, big boots, batons and long guns.

[...]

(Go here for the full article.)

Bloggers Disclaimer: I grew up in Pittsburgh and got my BS at Carnegie Tech in Oakland, where the stormtroopers gassed and arrested indiscriminately, and I'm damned pissed!

So Is The Economy Finally Turning Around? ...Depends on How Well You Read Graphs.

Source: New York Times

Source: Rock Creek Free Press

Police Make Life Miserable for the Poor of Tegucigalpa ...AND of Pittsburgh!

See Pittsburgh story below:


And to make matters worse, so far as the membership of the G20 is concerned, the poor are still "left out in the cold."

Blogger's disclaimer: I visited Tegucigalpa one time, and I grew up in Pittsburgh.

With big banks hitting taxpayers for $Trillions to pay their gambling debts, why is Congress jumping a tiny organization of relatively poor folks?

The answer to the title question is this: The big banks and other big-moneyed interests intend to tar ACORN with some of the very same election-related crimes that they themselves have been practicing ...and the Main Stream Media (owned by big-moneyed interests) have turned a blind eye to.

With regard to the recent (likely big-money sponsored) sting operation, which entangled only a very few of ACORN’s 700 employees, watch this DemocracyNow! segment:

Now let’s return to the “voter fraud” issue. The big-moneyed interests fear that if all of the “low- to moderate-income people across the United States” were to vote, candidates less deferential to the big-moneyed interests might be elected.

So, last fall ACORN was accused of registering voters who gave their names as “Mickey Mouse” or were registered in one state and falsely pretended to be an eligible voter in another.

But to the extent this may have been true, (1) such false registrations were clearly the faults of those who filled out the forms, (2) those folks who falsely filled out forms would be extremely unlikely to risk committing a felony double vote under the name Mickey Mouse and/or by traveling to another state to take this risk, (3) any conceivable culpability on the part of ACORN in such situations would not have been a felony, and...

(4) ACORN has never in fact been charged with “voter fraud.”

The same can’t be said of operatives sponsored by the big-moneyed interests.

Here’s what the MSM hasn’t told you: In the run-up to the 2004 presidential election, a firm called Sproul and Associates launched voter registration drives in at least eight states. The group was run by Nathan Sproul, the former head of the Arizona Christian Coalition and the Arizona Republican Party. And thanks to the sleuthing of John R. Brakey, Mark Crispin Miller, and Jared Irmas, it is known that Sproul’s voter registration services, “political consulting,” and certain unspecified post-election activities were paid for by the Republican National Committee (RNC) to the tune of $8,359,161(!) – making Sproul the eighth largest expenditure of the RNC’s 2004 campaign. (You can download a copy of this story here.)

Do you think the RNC lavished all this money on Sproul for honest election-related activities?

Well, in fact, back in the fall of 2004 Sproul’s firm was up to its corporate keister in dirty tricks THAT WERE FELONIES. Below I’ve extracted one paragraph from a much longer article entitled “Republican Dirty Tricks” by Max Blumenthal, posted on AlterNet October 15, 2004:

Sproul's dirty tricks may have finally caught up with him, though far from his stomping grounds in Arizona. In Oregon, Sproul's firm is being investigated by the state attorney general and could face a class-C felony, punishable by five years in jail, for allegedly altering and destroying voter registration forms. And in Nevada, state election officials have just launched an investigation into whether Sproul's Voters Outreach of America destroyed the registration forms of exclusively Democratic voters.

Did the MSM tell you about this? Well, they have been pretty mum on this subject, but CNN did put out this story. Still, there have been no news reports of any of Sproul’s people being convicted of felony destruction voter registration forms. But Sproul and Associates received as much as $2.3 million of their total $8.3 million in payments from the RNC after the 2004 Election. Could it be that much of this late-arriving money was a legal defense fund?

So let’s summarize.

Nathan Sproul and the groups he controlled were paid $8.3 million to commit (and perchance defend themselves against charges of) felony election fraud in 2004 ...and yet he appears to have gotten away scot-free.

ACORN, a group representing “low- to moderate-income people” (and thus unlikely to have a multi-million dollar defense fund) is falsely accused of doing what Sproul did ...and is now denounced by both houses of Congress for the indiscretions of likely no more than a dozen of its 700 low-paid employees caught in a sting operation (run by Sproul?).

Post Script:

The ACORN witch hunt

US voter registration group under attack

By Tom Eley

21 September 2009

Are the Events of 9/11/2001 Already History? NO, Not Yet. Certainly Not Before the “Official Story” is Confronted with ALL the Facts of that Day

In my senior year at Carnegie Tech I elected to take a course called “Philosophies and Politics of the 20th Century.” I asked my instructor why “history” wasn’t part of the name. He replied that the 20th century (then scarcely more than half over) was too close in time to be called history, because historians who lived through the period weren’t through piecing it together. The course was designed to illustrate this fact by ultimately requiring each student to make his/her choice of an historical event in the first 50 years of the 20th century, go to the library, read books on the subject, and finally write an essay on what he/she thought the history books of the future should say. I picked as my title “An Analysis of the Factors Which Drew Serbia into the Balkan Wars” (the wars that triggered WW I). My instructor wrote a note on my bound essay explaining that he had to knock me down from an A to a B+ because while the essay was good, I had failed to incorporate some of the practices he was teaching ...like footnoting the sources I relied upon, so that the reader could recheck them (duh!).

Today I read an article on the front page of the Washington Post with the subtitle “Eight years later, the Sept. 11 attacks are pages in the history books to a generation that's too young to recall them.” Two alarm bells instantly went off in my head:

(1) It’s too early to be writing history books, and

(2) Something that is not yet history is apparently being jammed into the heads of impressionable American teenagers as though set in stone.

Of course, I haven’t seen the “history books” these students are being required to commit to memory. But if perchance they are based largely on the 9/11 Commission Report, then the writers of these books have ignored a stunningly huge amount of evidence conflicting with the “official story” including, but hardly limited to, references [1-5] and myriad references therein.

[1] David Ray Griffin, Richard Falk (2004) The New Pearl Harbor: Disturbing Questions About the Bush Administration and 9/11. ISBN 1566565529.

[2] David Ray Griffin (2004) The 9/11 Commission Report: Omissions And Distortions, Olive Branch Press. ISBN 1566565847.

[3] David Ray Griffin (2007) Debunking 9/11 Debunking: An Answer to Popular Mechanics and Other Defenders of the Official Conspiracy Theory, Olive Branch Press. ISBN 978-1566566865.

[4] David Ray Griffin (2008) 9/11 Contradictions: An Open Letter to Congress and the Press, Olive Branch Press. ISBN 9781566567169.

[5] Niels H. Harrit et al. (2009) Active Thermitic Material Discovered in Dust from the 9/11 World Trade Center Catastrophe, The Open Chemical Physics Journal, Vol. 2 ISSN: 1874-4125. (See also my blog RE the Harrit et al. paper.)

Many readers may not know who David Ray Griffin is. And probably fewer know who Lynn Margulis is. To introduce you to both, I reproduce below Lynn Margulis’ page on Patriots Question 9/11. There are very few more distinguished American Scientists than Prof. Margulis – and read her take on the 9/11 attacks!

Lynn Margulis, AB, MS, PhD – Distinguished University Professor in the Department of Geosciences, University of Massachusetts - Amherst. Elected to the National Academy of Sciences in 1983. Former Chair, National Academy of Science's Space Science Board Committee on Planetary Biology and Chemical Evolution. Recipient of the National Medal of Science, America's highest honor for scientific achievement, in 1999, presented by President William J. Clinton. The Library of Congress, Washington, DC, announced in 1998 that it will permanently archive Dr. Margulis' papers. President of Sigma Xi, the scientific research society, from 2005 - 2006. Recipient of the Proctor Prize for scientific achievement in 1999 from Sigma Xi. Prior to moving to the University of Massachusetts, Dr. Margulis was a faculty member at Boston University for 22 years. Her publications span a wide-range of scientific topics, and include original contributions to cell biology and microbial evolution. Dr. Margulis is best known for contributions to evolution, especially the theory of symbiogenesis. For more information on Dr. Margulis' career, please visit http://www.chelseagreen.com/authors/LynnMargulis and http://www.sciencewriters.org.

Author of over 130 scientific works and numerous books. Recent publications include Mind, Life, and Universe (2007 with Eduardo Punset), Dazzle Gradually: Reflections on the Nature of Nature (2007, co-authored with Dorion Sagan), Symbiotic Planet: A New Look at Evolution (1998), Acquiring Genomes: A Theory of the Origins of Species (2002, with Dorion Sagan), Early Life: Evolution on the Precambrian Earth (2002, second edition with Michael F. Dolan), Luminous Fish: Tales of Science and Love (2006), What is Sex? (1997, with Dorion Sagan), What is Life? (1995, with Dorion Sagan), Mystery Dance: On the Evolution of Human Sexuality (1991, with Dorion Sagan), Microcosmos: Four Billion Years of Evolution From Our Microbial Ancestors (1986, with Dorion Sagan), and Origins of Sex: Three Billion Years of Genetic Recombination (1986, with Dorion Sagan), Kingdoms and Domains: Illustrated Guide to the Phyla of Life on Earth (4th edition, co-authored by Michael J. Chapman, Academic Press, 2008 in press), Symbiosis in Cell Evolution (second edition, 1993).

• Statement to this website 8/27/07: "The 9/11 tragedy is the most successful and most perverse publicity stunt in the history of public relations. I arrive at this conclusion largely as the result of the research and clear writing by David Ray Griffin in his fabulous books about 9/11. I first met him when he was a speaker at a scholarly conference unrelated to 9/11. He immediately impressed me as a brilliant, outstanding philosopher - theologian - author, a Whiteheadian scholar motivated by an intense curiosity to know everything possible about the world.
  
  On the plane home and for the next two days I did little else but read Griffin’s first book about 9/11, The New Pearl Harbor. From there I went on to read his even more disturbing account of the bogus 9/11 Commission Report, The 9/11 Commission Report: Omissions and Distortions, which provides overwhelming evidence that the official story is contradictory, incomplete, and unbelievable.
  
  It is clear to me that David Ray Griffin and his fellow critics are correct: the 9/11 "new Pearl Harbor" was planned in astonishing detail and carried out through the efforts of a sophisticated and large network of operatives. It was more complex and far more successful than the Allende assassination, the US bombing of our own ship the "Maine" that began the Spanish-American war (and brought us Guam, Puerto Rico, Cuba, and the Philippines), the Reichstag fire that was used to justify the suspension of most civil liberties in Germany in the 1930's, and even Operation Himmler, which was used by Germany to justify the invasion of Poland, which started World War II.
  
  Whoever is responsible for bringing to grisly fruition this new false-flag operation, which has been used to justify the wars in Afghanistan and Iraq as well as unprecedented assaults on research, education, and civil liberties, must be perversely proud of their efficient handiwork. Certainly, 19 young Arab men and a man in a cave 7,000 miles away, no matter the level of their anger, could not have masterminded and carried out 9/11: the most effective television commercial in the history of Western civilization.
  
  I suggest that those of us aware and concerned demand that the glaringly erroneous official account of 9/11 be dismissed as a fraud and a new, thorough, and impartial investigation be undertaken."

If I’ve awakened your curiosity, listen to and watch this lecture by David Ray Griffin:

Can the American Economy Possibly Get Any Worse? Yes, and It Absolutely Will! ...Except for Those with Incomes in the Top 10%.

Recession Over? Depends on Who You Ask

by Mark Brenner

(Original article in Labor Notes September 2009 Issue)

Unemployment was already nearing 10 percent in March during this Detroit job fair. Now the Fed says it will stay there into next year, yet orthodox economists are saying the worst is over. When the Labor Department announced that a quarter million jobs were lost in July, the news was greeted with cheers and backslapping on Wall Street. One week later the Federal Reserve declared the worst was over -- we were on our way out of the recession.

Almost as an afterthought, the Fed also predicted that unemployment would stay close to 10 percent until the end of 2010.

If the jobless won't get a break for more than a year, what explains the sighs of relief from Washington and the celebrations on Wall Street? How is the recession over?

Our Pain, Their Gain

Recovery, it turns out, is in the eye of the beholder. And the government's statisticians -- together with most of the media -- put a lot more weight on the corporate bottom line than on workers' day-to-day. To make matters worse, our pain has been their gain.

Productivity rose 6.3 percent economy-wide between April and June. This means fewer people were doing more work, which helps explain why companies from Ford to Caterpillar to IBM reported healthy profits.

Businesses got back in the black by shedding workers, cutting hours, and eliminating everything from vending machines to health benefits. Employers have also used the lousy job market -- and the fear and uncertainty that creates -- to wring more work out of the workforce, often for less pay. Nothing reminds someone he's over a barrel like the threat of being fired during the worst economy in living memory.

According to a recent poll by The Economist magazine, one in six U.S. workers have taken a pay cut. Last month close to 26 million workers were unemployed, when you include those forced to work part-time instead of full-time or those who've given up looking altogether. Sixteen states report double-digit employment, with a half dozen others close behind.

Meanwhile, the financial giants who needed nearly $2 trillion in taxpayer bailouts are flying high again. In July Goldman Sachs bagged the biggest quarterly profit in the company's history: $3.4 billion. Even AIG -- the insurance giant turned basket case -- showed its first profit in more than a year. No wonder the stock market has climbed 45 percent since March.

And Goldman Sachs is partying like it's 1999, not 2009. The company has already set aside more than $11.4 billion for bonuses this year, although corporate bigwigs warned employees "to make sure that we're not being seen living high on the hog," as one exec told the New York Post.

More to Come

Meanwhile, workers are worrying about whether there'll be money coming in this year, not how to spend it. There's little good news on the horizon.

Even though profits are up, there's little hope for a near-term burst of hiring. Managers will wait as long as possible to see if a rebound is really taking root.

And today's technology -- from supply chain management software to digital payroll records -- allows companies to add workers "just in time." In the past, firms hired in anticipation of an uptick; now they wait till new orders or higher sales are in hand. But with consumers grappling with mounds of debt, new spending and consumer confidence are still in the tank.

This is especially bad news for the long-term unemployed, workers who've been out of a job for more than six months. Last month more than a third of all unemployed workers fell into this category, the highest level since 1948. Moreover, close to half a million will exhaust their unemployment benefits by the end of September, and perhaps as many as 1.5 million by the end of this year.

Same Old, Same Old

So what will turn recession into a recovery for the rest of us?

For most of the last generation the economy worked according to a simple formula. The rich took the lion's share of economic growth, while the rest of us made ends meet through easy credit and by working longer hours.

Whenever recession threatened, the Federal Reserve lowered interest rates and bankers were more than happy to prime the pump by peddling more debt. Our economy stayed aloft thanks to credit cards and the stock market and housing bubbles.

But by 2000 Ronald Reagan's infamous trickle-down had completely dried up, and most workers stopped seeing even the meager gains of the 1980s and 1990s.

In fact, every bit of economic growth in the 21st century has gone to the top 10 percent -- those earning at least $109,000. Two-thirds was captured by the top 1 percent-folks earning more than $400,000.

Today's Great Recession should have been the curtain call for an economic model that has left most workers with less buying power than they had in the mid-1970s, swelled the ranks of the uninsured to 46 million, created income inequality not seen since the Great Depression, and left most of us drowning in debt.

But apparently no one in Washington got the memo. The government's top economists have been preoccupied with nursing Wall Street back to health so that the speculators can continue on their merry way unchanged. Goldman Sachs' top financial officer confirmed the back-to-business mentality, telling the business press, "Our model really never changed, we've said very consistently that our business model remained the same."

There was outrage, yes, when the government fattened the fat cats with our money, but it wasn't enough. So we'll keep hearing well-paid pundits crow about "recovery" as if 255 million working people didn't even exist.

Now watch Bill Moyers interview former senior banking regulator William K. Black. Dynamite!

Then watch these two short videos to see the direction the economy is going out in San Diego. More dynamite!