A collection of quotes from economic crisis to consequences. Before it is too late, learn what has happened to you, your democracy, and your economy, then act . . .
Remember there were two reactions to the global crisis in the 1930s. One resulted in fascism, the other resulted in the New Deal. And the reason we got the New Deal is because we had powerful, radical social movements with broad social visions and the guts to stand up and fight back. Those movements, with the complicity of the liberal class, have been destroyed. We are certainly in for a similar kind of social meltdown, without the aid of those movements, and led by a liberal class that is utterly bankrupt.
Dostoevsky was obsessed with this, that's what "Notes from the Underground" is about. It's about the defeated dreamer; it's about the person who went to all the Barack Obama rallies and chanted "Yes we can" and then realized that it doesn't make any difference. And so they withdrew, underground, and laughed at all the idiots and buffoons in the Tea Party or Sarah Palin, and nursed their cynicism and self-indulgence. And Doestoevsky writes that when that happens you enter an age of moral nihilism. And I think that's where we're headed.
Robert Reich, November 5, 2010: The Big Money economy is doing well these days. That's partly thanks to Ben Bernanke, whose Fed is keeping interest rates near zero by printing money as fast as it dare. It's essentially free money to America's Big Money economy.
Free money can almost always be put to uses that create more of it. ...
According to a Wall Street Journal survey released Thursday [November 3], overall compensation in financial services will rise 5 percent this year, and employees in some businesses like asset management will get increases of 15 percent.
... The Census figures show that in 2009 one out of every three Americans had incomes that fell below the amount (roughly $45,000 for a family of four) that most Americans and various budget estimates show is needed to "make ends meet" at a basic level. Also, of particular note, the report shows substantial increases in the poverty rate and the rate of people without health insurance, as well as declines in median income for various demographic groups. ...
Young adults and adults in their 30s and early 40s were particularly hard hit. For example, householders age 24 and younger saw their median incomes drop by 4.4 percent, a decline second only to that of non-citizens (4.5 percent). Young adults age 25 to 34-who already had among the highest uninsurance rates, with more than one in four uninsured in 2008-experienced the largest increase in the share of people without health insurance (2.6 percent).
... call it Post-Election Obama Retreat I, or more of the same, now Obama aides tell Mike Allen this morning that, for families with $250K to $1 million annual income, they hope to make permanent the Bush tax breaks (which cut top earners' income taxes from 36% from 39% (except for capital gains income, which is taxed at only 15%!)).
The United States of Inequality Top 1 Percent Take Home 24 Percent Of U.S. Income By Timothy Noah
September 3, 2010
Slate.com
Lane Kenworthy, January 5, 2009: ... both the CBO and Tax Foundation include government transfers in the incomes used to calculate effective tax rates. ... but if we want to see how much redistribution is accomplished via taxes vs. via transfers, it's better to use only market (pretax and pretransfer) income in calculating the effective tax rates. Doing that with the Tax Foundation data yields the following effective rates [for all taxes, local, state and federal]:
Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an assessment of the total cost to taxpayers of the Wall Street bailout. CMD concludes that multiple federal agencies have disbursed $4.6 trillion dollars in supporting the financial sector since the meltdown in 2007-2008. Of that, $2 trillion is still outstanding. Our tally shows that the Federal Reserve is the real source of the bailout funds.
CMD's assessment demonstrates that while the press has focused its attention on the $700 billion TARP bill passed by Congress, the Federal Reserve has provided by far the bulk of the funding for the bailout in the form of loans amounting to $3.8 trillion. Little information has been disclosed about what collateral taxpayers have received in return for these loans, sparking the Bloomberg News lawsuit covered earlier. CMD also concludes that the bailout is far from over, as the government has active programs authorized to cost up to $2.9 trillion and still has $2 trillion in outstanding investments and loans. ...
1. TARP itself hasn't even made money. AIG alone still owes us $75.6 billion. However, they always add the caveat "Other than AIG..." when they say that the bailouts were "profitable." But the AIG money was directly paid to many of these same banks that "paid back their TARP" at an outrageous 100 cents on the dollar! Mind you, this was done by government officials that were the former employees and current shareholders of the very banks they were helping. Let's make banks like Goldman Sachs, Bank of America and Societe Generale pay back the $105 billion of stolen taxpayer money before we let anyone say "TARP was paid back."
2. TARP is a tiny little part of a massive amount of taxpayer support. TARP is actually less than 10 percent of your tax dollars that have been handed to the banks. And now the banks "paid back" the tiny slice that is TARP with our money, and you are supposed cheer them for savvy. At this very moment, the taxpayer is still owed $2.02 trillion dollars for the bailout by our politicians and banksters, and that number is growing every day.
Never mind the money that these same banks make getting endless 0 percent interest loans from the Federal Reserve (aka you) while either they lend it back to you at 14 percent interest or just lend it right to back the government and pocket the yield. Never mind the multitude of benefits they get from being Too Big To Fail. But you're not supposed to pay attention to that; you're only supposed to notice how fast they paid back TARP!
If only there were more journalists like Dylan, the vast majority of America's population may well have been on its way to grasping the gravity and the real implications of our current unprecedented wealth transfer paradigm, which the President, despite increasing "political points" rhetoric and recent attempts, such as the Volcker Rule, to if not stop then at least delay (thank you teleprompters), has been instrumental in blessing. Between TARP, guarantees, direct cash investments, and the trillions in implicit benefits from the record steep yield curve, the only beneficiary from the existing financial environment is the banking system, period. That this money could be put to much greater use elsewhere is without question: if these trillions had been invested in education, tech and research, America could now be on the verge of another technological revolution. But it is now too late ... Looking back many years from now, the sad legacy of this administration will not be some vaunted healthcare reform, but the unprecedented amount of capital that shifted away from the nation's working class to the nation's "financial innovation producing" class.
Sometimes, when chasing the bouncing ball of fraud and corruption on a daily basis, it is easy to lose sight of the forest for the millions of trees ... Luckily, Charles Hugh Smith, of oftwominds.com has taken the time to put it all into such simple and compelling terms ...
1. Enable trillions of dollars in mortgages guaranteed to default by packaging unlimited quantities of them into mortgage-backed securities (MBS), creating umlimited demand for fraudulently originated loans.
2. Sell these MBS as "safe" to credulous investors, institutions, town councils in Norway, etc., i.e. "the bezzle" on a global scale.
3. Make huge "side bets" against these doomed mortgages so when they default then the short-side bets generate billions in profits.
4. Leverage each $1 of actual capital into $100 of high-risk bets.
5. Hide the utterly fraudulent bets offshore and/or off-balance sheet (not that the regulators you had muzzled would have noticed anyway).
6. When the longside bets go bad, transfer hundreds of billions of dollars in Federal guarantees, bailouts and backstops into the private hands which made the risky bets, either via direct payments or via proxies like AIG. Enable these private Power Elites to borrow hundreds of billions more from the Treasury/Fed at zero interest.
7. Deposit these funds at the Federal Reserve, where they earn 3-4%. Reap billions in guaranteed income by borrowing Federal money for free and getting paid interest by the Fed.
8. As profits pile up, start buying boatloads of short-term U.S. Treasuries. Now the taxpayers who absorbed the trillions in private losses and who transferred trillions in subsidies, backstops, guarantees, bailouts and loans to private banks and corporations, are now paying interest on the Treasuries their own money purchased for the banks/corporations.
... Since the Federal government could potentially inflate away these trillions in Treasuries, buy enough elected officials to force austerity so inflation remains tame.
... The circle is now complete: in "saving our financial system," the public borrowed trillions and transferred the money to private Power Elites, who then buy the public debt with the money swindled out of the taxpayer. Then the taxpayers transfer more wealth every year to the Power Elites/Plutocracy in the form of interest on the Treasury debt. The Power Elites will own the debt that was taken on to bail them out of bad private bets: this is the culmination of privatized gains, socialized risk.
The electronic forms of communication are very useful in terms of transmitting a message. They're not very useful and possibly actually counterproductive in terms of transmitting ideas. And the thought-terminating cliches that dominate the wider culture dominate the internet. People retreat into intellectual ghettoes. So the tea party has their internal and external enemy. The external enemy is of course Barack Obama, the internal enemy is anybody who expresses any kind of empathy or understanding for the external enemy. And the left is the same. That creates a kind of closed system, a kind of tribalism. ... To somehow think that the Internet is going to rejuvenate the complexity of political thought, I think is naive. That severance from a print-based culture to an image-based cultures is not a good thing.
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