A Decade Called "The BIG ZERO"

"And as for the Republicans: now that their policies of tax cuts and deregulation have led us into an economic quagmire, their prescription for recovery is — tax cuts and deregulation."

December 28, 2009

Op-Ed Columnist

The Big Zero

By PAUL KRUGMAN

Maybe we knew, at some unconscious, instinctive level, that it would be an era best forgotten. Whatever the reason, we got through the first decade of the new millennium without ever agreeing on what to call it. The aughts? The naughties? Whatever. (Yes, I know that strictly speaking the millennium didn’t begin until 2001. Do we really care?)

But from an economic point of view, I’d suggest that we call the decade past the Big Zero. It was a decade in which nothing good happened, and none of the optimistic things we were supposed to believe turned out to be true.

It was a decade with basically zero job creation. O.K., the headline employment number for December 2009 will be slightly higher than that for December 1999, but only slightly. And private-sector employment has actually declined — the first decade on record in which that happened.

It was a decade with zero economic gains for the typical family. Actually, even at the height of the alleged “Bush boom,” in 2007, median household income adjusted for inflation was lower than it had been in 1999. And you know what happened next.

It was a decade of zero gains for homeowners, even if they bought early: right now housing prices, adjusted for inflation, are roughly back to where they were at the beginning of the decade. And for those who bought in the decade’s middle years — when all the serious people ridiculed warnings that housing prices made no sense, that we were in the middle of a gigantic bubble — well, I feel your pain. Almost a quarter of all mortgages in America, and 45 percent of mortgages in Florida, are underwater, with owners owing more than their houses are worth.

Last and least for most Americans — but a big deal for retirement accounts, not to mention the talking heads on financial TV — it was a decade of zero gains for stocks, even without taking inflation into account. Remember the excitement when the Dow first topped 10,000, and best-selling books like “Dow 36,000” predicted that the good times would just keep rolling? Well, that was back in 1999. Last week the market closed at 10,520.

So there was a whole lot of nothing going on in measures of economic progress or success. Funny how that happened.

For as the decade began, there was an overwhelming sense of economic triumphalism in America’s business and political establishments, a belief that we — more than anyone else in the world — knew what we were doing.

Let me quote from a speech that Lawrence Summers, then deputy Treasury secretary (and now the Obama administration’s top economist), gave in 1999. “If you ask why the American financial system succeeds,” he said, “at least my reading of the history would be that there is no innovation more important than that of generally accepted accounting principles: it means that every investor gets to see information presented on a comparable basis; that there is discipline on company managements in the way they report and monitor their activities.” And he went on to declare that there is “an ongoing process that really is what makes our capital market work and work as stably as it does.”

So here’s what Mr. Summers — and, to be fair, just about everyone in a policy-making position at the time — believed in 1999: America has honest corporate accounting; this lets investors make good decisions, and also forces management to behave responsibly; and the result is a stable, well-functioning financial system.

What percentage of all this turned out to be true? Zero.

What was truly impressive about the decade past, however, was our unwillingness, as a nation, to learn from our mistakes.

Even as the dot-com bubble deflated, credulous bankers and investors began inflating a new bubble in housing. Even after famous, admired companies like Enron and WorldCom were revealed to have been Potemkin corporations with facades built out of creative accounting, analysts and investors believed banks’ claims about their own financial strength and bought into the hype about investments they didn’t understand. Even after triggering a global economic collapse, and having to be rescued at taxpayers’ expense, bankers wasted no time going right back to the culture of giant bonuses and excessive leverage.

Then there are the politicians. Even now, it’s hard to get Democrats, President Obama included, to deliver a full-throated critique of the practices that got us into the mess we’re in. And as for the Republicans: now that their policies of tax cuts and deregulation have led us into an economic quagmire, their prescription for recovery is — tax cuts and deregulation.

So let’s bid a not at all fond farewell to the Big Zero — the decade in which we achieved nothing and learned nothing. Will the next decade be better? Stay tuned. Oh, and happy New Year.

Wall Street's 10 Biggest Lies of 2009

THE HUFFINGTON POST

Les Leopold

Author, "The Looting of America"
Posted: December 21, 2009 04:06 PM

Say goodbye to 2009, the worst economic year since the Great Depression.

Say hello to the billionaire bailout society in which the super-rich gamble, lose and get bailed out by the rest of us.

To save the system from total collapse we poured trillions of dollars into the financial sector. The result? Banks still are refusing to lend. Thirty million Americans are looking for full-time jobs and 49 million are skipping meals including one out of four children. But Wall Street again is reaping record profits and bonuses.

Not only are we richly rewarding those who wrecked our economy, but also, we have to put up with hundreds of fabrications about how the big banks got us here. Here is my biggest, fattest lies list for 2009:

1. "Government programs for low-income home buyers caused the financial crash." Wall Street defenders were quick to blame the Community Reinvestment Act, which urges banks to loan money in minority communities. In fact, almost none of the CRA loans are sub-prime and the vast majority are doing well, thank you. Blaming government programs deflects us from the real cause: Wall Street's incredibly reckless creation, marketing, selling and trading of "innovative" new securities that supposedly removed the risk from pools of risky debt. It didn't work. Wall Street, not the poor, crashed our economy.

2. "Income inequality is good for everyone." Lord Brian Griffiths, Vice-Chairman of Goldman Sachs at least had the nerve to say what so many of the super-rich really believe:

"We have to accept that inequality is a way of achieving greater opportunity and prosperity for all."

Unfortunately, the facts suggest otherwise. There is a high correlation between the mal-distribution of income and economic crashes. The last time our wealth and income distribution was as skewed as it is today was 1929, and that's not an accident. When too much money is in the hands of the few it runs out of real world investment and gravitates towards speculative investments. This inevitably creates asset bubbles and crashes. Record pay and bonuses on Wall Street and high unemployment are connected. (See The Looting of America Chapter 11).

3. "The rising number of billionaires is a sign of economic health." It's accepted media wisdom that the more billionaires the better. China with 130 billionaires now trails only the US, which has 359, according to Forbes magazine. But in our billionaire bailout society, the rising number of billionaires signals a collapsing middle class. Ponder this statistic: In 1970 the ratio of the compensation of the top 100 CEOs compared to the average production worker was 45 to 1. By 2006 it was an astounding 1,723 to one. Does that look healthy to you?

4. "Paying back TARP means banks are no longer on government welfare." Bank after bank is rushing to repay TARP funds during the worst economic year since 1937. They want to get out from under the Pay Czar (not that he's been sufficiently tough on the banks under his purview.) Banks that were insolvent only a few months ago now say they have the financial strength to refund tens of billions of dollars to the government. Where did all that money come from? Much of it comes from other government welfare programs for Wall Street (over $12 trillion worth) that aren't publicized. (See Nomi Prins's excellent accounting.) It may be the case that our banks are paying us back with our own money. Now that's financial innovation.

5. "Wall Street's freedom to innovate must be protected." Congressional leaders are tripping all over themselves to say new regulations will not discourage Wall Street innovations, something they claim is vital to our economy. Oh really? Do those "innovations" add anything useful to our country other than new casino games for the super-rich? Former Federal Reserve Chairman, Paul Volker, recently blew the whistle on this fabrication:

"I hear about these wonderful innovations in the financial markets and they sure as hell need a lot of innovation. I can tell you of two - Credit Default Swaps and CDOs - which took us right to the brink of disaster: were they wonderful innovations that we want to create more of?

.... I wish that somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy, just one shred of information....

The most important financial innovation that I have seen in the past 20 years is the automatic teller machine... How many other innovations can you tell me of that have been as important to the individual?" ("What Has Financial Innovation Done for You?")

6. "To retain critically needed talent, Wall Street must be free to pay top salaries and bonuses." Where would they flee if they just got paid like normal people rather than like gods? The British are putting in place a 50 percent tax on bonuses. Also, compensation is much, much lower in the European Union. But the real lie is that we need such "talent" in the first place. That kind of "talent" just crashed our economy. That kind of "talent" is widely overpaid - no way should bond traders receive 10 to 100 times what is earned by the best neurosurgeons in the world. Something is really wrong and it starts with the lie of banking "talent."

7. "Overpaid American workers are the real cause of unemployment." The New York Times writers who concocted this argument didn't think they were lying. But this is one of the most preposterous ideas put forth during 2009. ("American Wages out of Balance" New York Times November 11, 2009) Edward Hadas, Martin Huchinson and Antony Currie informed us that:

"American manufacturing workers should take average real wage cuts of as much as 20 percent to get into global balance."

They don't mention that the average non-supervisory worker has already taken an 18 percent cut in real wages between 1973 and 2007. What's worse, they claim that if workers don't take these additional cuts, these "overpaid" working stiffs will be the cause of another Great Depression. They write:
"But if American wages get stuck above global market-clearing levels, as in the 1930s, the result could well be something approaching Depression-era levels of unemployment."

Not a word is mentioned about how Wall Street's gambling caused all of this unemployment and how the continued failure of Wall Street banks to lend is stalling job growth, right now.

8. "I'm doing God's Work." Lloyd Blankfein, Chairman of Goldman Sachs said what too many Wall Street leaders truly believe: that they are so privileged and entitled that it seems as if the heavens bless their work. Why else are they earning hundreds of millions of dollars? Mr. Blankfein believes he is creating a virtuous circle by raising capital for corporations who create jobs and help our society prosper. But Goldman Sachs, JP Morgan Chase, Morgan Stanley and the rest of the apostles helped to bring the entire world economy to its knees. Does that mean God likes unemployment and widespread hunger?

9. "We're out of money." Who's we? Yes, the middle class is tapped out but the super-rich haven't even begun to pay their fair share for the mess they created. Yet the top 400 richest Americans alone are sitting on $1.27 trillion or so in wealth. Here's a dangerous thought. What if we had a very steeply progressive wealth/income tax that reduced the net worth of the super-rich to "only" about $100 million each? You wouldn't be suffering if you had $100 million kicking around. Now do the math: The 400 richest x $100 million each would equal $40 billion. That would leave about $1.23 trillion to help pay back the country for the Wall Street meltdown that we, our children and their children will be subsidizing.

10. "We are becoming a socialist economy." Somewhere between 68 and 78 percent of the US GDP is private sector activity, the highest among developed nations. And much of the government expenditures go to private contractors as well. But there's a kernel of truth in the socialist scare: What do you call a society that encourages the private accumulation of wealth without limit, and then when the super-wealthy get into serious trouble, we bail them out with taxpayer funds - largely from a declining middle-class? That's not free-enterprise. That's not socialism either. It's something new and it deserves to be called the billionaire bailout society.

Here's hoping that in 2010 we can begin to undo it.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.

The Senate Health Care Reform Bill: Incremental Gain or Poison Pill?

The title question was recently asked on one of the e-mail discussion forums I belong to.  This is a wise question, which recognizes that the Senate Health-Care Bill is much less than savvy Americans have been demanding, namely, a full-blown single-payer system.  So, it is being aggressively opposed by many progressive Democrats, who see so little positive reform and so much given away the the health-insurance industry that they regard it to be a "poison pill."  Yet, it is being vehemently opposed by the Republican right, who assert (basically by bald-faced lies) that it is "socialized medicine" that would put government bureaucrats in charge of deciding who your doctors will be and even running "death panels." 

The only reliable balancing of the pros and cons of this bill that I am aware of is that of Paul Krugman.

I have to trust Krugman.  While I am certain he's muzzled when it comes to writing about things like rampant election theft in the U.S. -- or 9/11 being an inside job -- I sincerely believe he stands behind every word he is permitted to publish in his column.  And he is perhaps the most credible single expert in the country on both economic issues (where he is a Nobelist) and anything else he spends enough time studying to write a column on.  So read Krugman's make on the Health Care bill and decide for yourself.

And regarding the right-wing-nut opposition in the Senate, I highly recommend that you watch the stirring speech by Senator Sheldon Whitehouse (D-RI), which lasts only 15 minutes out of the total 10 1/2 hour Senate session, beginning at minute 107.  But, rather than playing the entire session below, you should be able to directly access Senator Whitehouse's speech here.

Post Script: Well, I actually trust Senator Bernie Sanders about as much as I do Paul Krugman, and as it turns out Senator Sanders appears to be on the same page.

Health Care Reform DOA: Triumph of the Money Party

17 December, 2009 08:32:00 Michael Collins

There are many of us who have anywhere from serious to desperate need of health care reform. How surprised are you that the current effort is about to collapse under its own weight? There should be no surprise at all. We are going off to an undeclared war again, bankers reap profits while the real rate of unemployment is 17% at least, and there's no rush to restore the Constitutional rights stripped from us over the past years. It's The Money Party 24/7 as greedy and rapacious as they've ever been.


by Michael Collins

Dr. Howard Dean, MD, just said pull the plug on the current health care reform effort. The cure is worse than the disease, according to the good doctor.

Why the surprise?

Last week the president announced that he's sending 30,000 troops to Afghanistan without a declaration of war by Congress and without Afghanistan posing a direct threat to the United States violating both the United States Constitution and international law at the same time.

The bailed out Wall Street failures are paying back just enough of their loans to the Treasury Department to allow a new round of huge bonuses. At the same time, they continue to get tons of cash through the Federal Reserve. Pay back a few billion; get 7 trillion dollars in credit. Not a bad deal.

Congress failed to pass a bill to help with foreclosures. We're at eight million so far since 2008 with another four million predicted for 2010. The beat goes on.

The Justice Department and Congress failed to seriously investigate massive mortgage fraud from the very top on down to loan officers during the real estate bubble.

The White House and Congress forgot to include a cap on credit card rates in its credit card bill of rights. How unfortunate since the credit card companies jacked rates way up shortly after the bill passed.

The official unemployment rate of 10 percent is far below the true unemployment rate of about 17 percent or higher. Why? Because it might upset us to know that we're at Great Depression levels of unemployment.

Poverty is rising at a rapid rate with no end in sight but you'd never know it for all the attention it gets. Let the markets take care of it.

The people who made the financial mess on Wall Street are now running the U.S. Treasury. The key players, Secretary of the Treasury Geithner and insider extraordinaire Larry Summers, were appointed right after the inauguration.

The constitutional rights stolen by the previous administration are still missing in action with no real effort underway to restore them. The Patriot Act is alive and well. The feds can still tap your phone and email. They can get at any of your financial data they want and it's all done in secret. But we still haven't had a real investigation of 911.

Congress is about to consider an international treaty of copyright that will turn anyone with a public blog or web site into a cop required to enforce the new laws or face prosecution.

Throughout it all, not one member of Congress or the financial elite will miss a meal, worry about their health care, lose their house, or ever face prosecution for destroying the economy of the United States.

Their Ponzi scheme is literally too big to fail. If there were ever the least bit of concentrated scrutiny on the various wars and financial rip offs over just the past decade, it would be the end of all of them.

But The Money Party is a permanent fixture in our lives. It dominates politics, the media and the economy. It's a self-fulfilling prophecy that is always accurate. Rig the game so only those with money can run for office. Hold elections with invisible ballots on electronic voting machines that nobody really understands. Allow all sorts of legal bribes for legislators. And never allow the term election fraud to be mentioned anywhere but on a few internet web sites.

Marginalize the poor, ethnic groups, immigrants, and anyone who protests the system. Kill the unions. Then intimidate those who have the courage to show up and protest with SWAT teams decked out for a serious beat down.

Take all you can from the middle class to support the big casino in banking and on Wall Street. Make husbands and wives work two jobs and be grateful for the opportunity. Provide children a lousy education that costs more every year while you talk about how much you love education.

Create false issues that pit one group against another -- race against race, class against class -- so that the great horror is never realized -- a unified public movement to demand freedom, dignity, and respect in our personal and public lives and a chance to earn a decent living in return for our hard work.

The Money Party has no ideals or goals other than to take as much as they can, at every turn, all the time and never let up.

Blame citizens for the fraud committed by the financiers.

Turn a blind eye as people lose their homes, savings, health care and jobs.

Blame humanity for pollution when it's just a few industries that create the filth that's threatening us daily.

Create side shows not worthy of a second rate carnival that you call politics and never mention that changes in administrations are really cosmetic and stylistic, not substantial. Meet the new boss, not exactly the same as the old boss, but close enough.

It's all good if you're at the top or on the take. The river keeps flowing, filthy as it is, in your direction with more and more based on the real work and the real economy of citizens who, despite all of this, strive to improve their lives and contribute to the larger good.

If things get too hot, you can just stage a big drama, get everybody upset, and make people feel grateful that they have the opportunity to be perpetual victims of the most rapacious, relentless, and callous scheme around to transfer wealth from the many to the very few.

It's only class war when we fight back and they're ready with their distracting dramas and debates on issues where the two sides are separated by just a few degrees of difference. Then demand bipartisan solutions where compromise is routinely used to break major campaign promises.

They don't care if we live or die although they do want us to be as productive as possible up to the end, as long as we don't expect to retire or enjoy the fruits of our labor.

We are nothing to them.

Michael Collins publishes Election Fraud News. His articles can also be found on Scoop Independent News, The Daily Censored  and The Smirking Chimp, among others.
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9/11 TRUTH: The OFFICIAL Conspiracy Theory Is a Monstrous LIE!

(1) Charlie Sheen’s Video Message to President Obama

Here below is the best video I’ve seen that summarizes in 7 minutes or less the reasons why anyone should suspect that the OFFICIAL conspiracy theory of the 9/11 attacks is not merely defective, it’s a deliberate pack of lies.



(2) 9/11 Truth in 9 Minutes

In my estimation the following video provides the best 9-minute explanation for why we should conclude that all three World Trade Center towers were brought down by explosives and not fires. Completing the proof is the fact that a recently published scientific article shows the presence of significant amounts of a high-tech explosive material in the dust from the collapsing towers.



(3) SPEED - Scene from "9/11: WORLD TRADE CENTER ATTACK"
by PilotsFor911Truth

The 24-minute video below presents a highly technical, but clearly presented, analysis of the reported speed of the Boeing 767 that struck the second World Trade Center tower on 9/11. While the Pilots For 9/11 Truth state that they “do not endorse any theory” of the events of 9/11, in this video the narrator states that the analyses presented “...conclusively proves the story we’ve been told by our government is at the very best not accurate and at the worst intentionally deceptive for an apparent agenda.”

SPEED - Scene from "9/11: WORLD TRADE CENTER ATTACK" from PilotsFor911Truth on Vimeo.

While the Pilots For 9/11 Truth restrict themselves to fact finding, I have developed a new hypothesis as to how the real 9/11 conspirators could have pulled off the attacks using resources that Osama bin Laden could only dream of. This hypothesis is supported in large part by what is seen in the following two videos.

(4) 2nd WTC Attack: Jersey Shore

In the following video taken from the Jersey Shore, just as the jetliner believed to be United Flight 175 is seen to strike the South Tower, a very fast object pulls out of a dive nearby, turns and disappears eastward in “the batting of an eye” ...specifically, all in just one second! The defenders of the OFFICIAL conspiracy theory claim this and other such objects (see below) were birds, but to see why they weren’t please use this link to download my latest original research (when you reach the DriveHQ site, please select A New 9/11 Hypothesis v12 for the text, and SlidesForNew911Hypothesis for the figures – preferably the animated PowerPoint version of the slides if you can play it, otherwise the pdf).



(5) 9/11 Altered Footage Comparison: Pax TV

Here below, someone going by the nom de plume “TheDust” shows how the news media swiftly altered the amateur videos that they had broadcast early on. These videos originally showed objects which looked like aircraft arriving a split second after, and flying at speeds similar to, the Boeing 767 attacker. In ultra slow motion the altered versions now show that bird silhouettes were substituted in place of (most of) the frames revealing aircraft. Again, go to my latest original research to see evidence that these cannot have been real birds of the sizes portrayed but can have been, and almost certainly were, fighter aircraft.

Eliot Spitzer: Geithner, Bernanke “Complicit” in Financial Crisis and Should Go

DemocracyNow!'s Amy Goodman and Juan Gonzales are granted an extended interview with former New York Governor Eliot Spitzer about the financial crisis and how it was handled by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner. Before becoming governor, Spitzer was known as the "Sheriff of Wall Street" for his vigorous legal actions against ponzi schemers and brokers profiting from manipulating the financial markets. In the present interview, Spitzer states that Bernanke and Geithner “actually built and participated in creating the structure that now has collapsed” and calls on them to be replaced. Spitzer also talks about the scandal that erupted last year that forced him to resign as governor.