Wednesday, October 30, 2013

WALL STREET HIT ANOTHER RECORD HIGH (YAWN) ... WHY IT DOESN'T MATTER

So Wall Street hit (yet) another record high yesterday. Should this even be news? If so, here are a few more distracting headlines we could be seeing in the future ...


"Baby cries after candy stolen."

"Charlie Sheen goes on drug fueled drinking binge ... Newest lady friend calls police."

"Sarah Palin confuses Liberty Bell with Taco Bell, orders Liberty Fritos."


Look, no one in the media should get excited about Wall Street setting another record. Why? Simply put, the successes of Wall Street today are not a product of solid market fundamentals, or a healthy economy. 

The successes of Wall Street are entirely due to a long train of favorable legislation, the trillion dollar bailout programs orchestrated by the Treasury Department, and dirt cheap money from the Federal Reserve (misleadingly called "Quantitative Easing"). 


If we cut off the easy money and remove the bailout programs Wall Street and the economy are right back in the toilet, again. 

Here's another reason why middle America should not be jumping for joy over the stock market yesterday. Well over 90% of what's in the stock market is owned by the richest 20% of the population. In effect, if you're cheering the stock rally - and unless you make at least $226,200 per year - you're probably clapping for people who aren't you. 



At the end of the day, the leading headline from yesterday should read: "Richest Americans getting even richer because of taxpayer backed Federal Reserve policies and Treasury Department bailout programs ... Americans too stupid and apathetic to notice, or care." 

Wall Street hitting new records is not news. What's making Wall Street hit new highs is the real story.

- Mark 

UPDATE: Here's an older but still humorous review of the Fed and its cheap money policies, a.k.a. Quantitative Easing ...



GOP'S OBAMACARE ROLLOUT COMPLAINTS ... RANK HYPOCRISY

Apart from trying to get individual Republican-led states to sabatoge the rollout of Obamacare, the GOP has conveniently forgotten about President Bush's Medicare Part D rollout disaster. Also ignored is what the GOP had to say about the Part D bumps in the road at the time ...


- Mark 

Monday, October 28, 2013

MILITARISM AND AMERICA'S GROWING CULTURE OF SECRECY ... WHAT IT MEANS (It's Not Good)



If you didn't see "The Deputy Director" program last night you can find the 60 Minutes interview with former CIA Deputy Director Mike Morell here

The Morell interview demonstrated how our national security state has become so entrenched in our society that a culture of militarism, rather than the spirit of democracy, is what drives our nation's security elite. Specifically, as Chalmers Johnson pointed out long ago, our nation's security institutions are now putting institutional preservation (theirs) ahead of our democratic structures. 

Worse, our nation's long-term security needs and democratic traditions are under strain and being compromised in the process. Here's why. 

Three points from former CIA Deputy Director Morell's 60 Minutes interview stand out because of what it reveals to us about our national security leaders thinking. It's not impressive ...

1. SNOWDEN: Former Deputy Director Morell is not happy with the Edward Snowden national security leaks
2. TORTURE & AMERICAN VALUES: While defending the activities of CIA operatives, Morell strangely claimed to oppose torture because it goes against our values (his discussion on our "coercive techniques" was framed in the now standard "it's not torture" meme).
3. OUR "JUST SAY NO" CONGRESS: Our biggest threat today is not al Qaeda but lawmakers in Washington who seem more concerned with political point scoring rather than rebuilding the economy. I agree with him here. But Morell's baffled by the development. I'm not (more on this below).

One thing's clear. While the former no. 2 guy at the CIA seems to have been an informed and steady hand while at the CIA, he appears to have lost sight of America's larger mission, and how the CIA and our growing national security state have contributed to the gradual erosion of America's historical place in the world. Here's the 60 Minutes clip (discussion below) ...


Here's what came to mind as I listened to Morell's comments:

1. THE SNOWDEN LEAKS ... NATIONAL SECURITY ON THE CHEAP
It's no secret that Deputy Director Morell would be opposed to the security leaks from Edward Snowden. His industry trade was compromised. But here's what Morell misses. The Snowden leaks are the product of the CIA allowing profit-driven private contractors - instead of career national security employees - to handle both background checks and sensitive material. 


In a few words, privately vetted nationals and private "patriots" don't have the same interests and motives to do their job as people who have made life decisions to serve their country. Snowden's not the problem here. The decision to privatize (outsource) national security plus the CIA's sloppily outsourced vetting process are the issue. 



Don't blame Snowden because the CIA wanted to do national security on the cheap.


2. THE SNOWDEN LEAKS, II ... AMERICA'S CULT OF SECRECY

As I pointed out in 2010 (here and here), starting with the Cold War our nation has slowly become an overly militarized and highly secretive state. As Chalmers Johnson argued in The Sorrows of Empire the U.S. no longer has a foreign policy based on diplomacy with war as the ultimate threat. Today the U.S. has a military empire (p. 22) with a growing military bureaucracy - both private and public - that places a primacy on institutional preservation, growth, and self-importance. 



From this we have seen an explosion in secrecy and the over-classification of mundane matters. So much so that President Obama had to sign into law "The Reducing Over-Classification Act" (H.R. 533) to prompt government agencies to share information with one another, and to stop classifying  stuff that doesn't need to be classified. 

What the over-classification of information has done is create a cottage industry of top secret organizations and new intelligence personnel across the nation. This cult of secrecy undermines the integrity of our democracy. Our evolving cult of secrecy is so well developed that exposing the growth and absurdities behind some of those secrets - which Edward Snowden did - has now become a national security emergency.

Apart from undermining the democratic spirit of transparency and openness, there's a very compelling reason why over-classification and our growing secrecy culture is unnecessary. If some of the useless and misleading information that President Bush used in the run up to war had been de-classified experts without a political agenda could have questioned the veracity of people like "Curveball," who (wrongly) claimed that Saddam Hussein had stockpiles of biological weapons and mobile plants.

This was never done, and the Bush administration ran with his allegations all the way towards the UN, and war. 
  

3. SNOWDEN LEAKS, III ... REVEAL A CULT OF SECRECY OVERKILL
This points to perhaps the greatest absurdity that has happened to our nation since 9/11: We've become so paranoid that our efforts at intelligence gathering has grown far in excess to the actual threats that exist in our world. 




Think about this. According to the Center for Disease Control you are 110 times more likely to die from contaminated food than you are from a terrorist attack. You're also more likely to be hit by lightening or win the lottery than die at the hands of a terrorist. Heck, you just might be killed by a toddler before you are killed by a terrorist. 

Yet, we have decided to weaken the 1st and 4th amendments by building a national security infrastructure that's designed to monitor speech and violate the sanctity of our personal effects, every minute of every day. Why? To catch terrorists.

The end result, as the Washington Post revealed in "Top Secret America," is that ...



* Some 1,271 government organizations and 1,931 private companies work on programs related to counter terrorism, homeland security and intelligence in about 10,000 locations across the U.S.
* Nearly 1 and 1/2 times the number of people who live in Washington, D.C., hold top-secret security clearances.
* In the D.C. metropolitan area, 33 building complexes for top-secret intelligence work are under construction or have been built since 9/11. They occupy the equivalent of three Pentagons.
* Many security and intelligence agencies do the exact same work, creating redundancy and waste.
* 50,000 intelligence reports are issued each year (about 1,000 a week), which even senior officials admit cannot possibly be digested.

This national security apparatus, with all of its secrecy and paranoia, grows every day.


4. TORTURE & SPYING ... COMPROMISING OUR VALUES/FRIENDS
While former Deputy Director Morell discussed "coercive techniques" instead of "torture" the reality is - especially if we apply international law, or go by U.S. standards used in World War II and Vietnam - we tortured people. While the claim that the terrorists are bad guys is real, the fact is - as Senator John McCain put it - it's not about who they are, it's about who we are.

The real problem with our national security teams' torture mentality is the conceptual aerobatics that these guys go through to justify their torture policies. It might make sense in their minds, but it doesn't make sense when we look at America's place in the larger stretch of history (the real thinkers out there know what this means). 

But wait, the impact of our cult of secrecy and evolving militarism gets better (or is that worse?). 



In spite of the fact that we're not in a real war on terror (how do you fight an abstract concept?) - nor are in a predicament remotely as dangerous as the Founding Fathers or the Greatest Generation faced - we not only tell ourselves that we needed to torture, but that we need to build more military bases to confront our terrorist fears. We have at least 725 around the world, and perhaps over 1,000

We also tell ourselves that we need to spend even more money on defense, in spite of the fact that we spend more than the next 10 nation-states combined (of which 9 are considered allies). 

We then tell ourselves that we need to conduct drone strikes in other nations, even if civilians are killed and international law is compromised in the process. 



We even tell ourselves that we need to spy on our friends and allies, and have gotten so sloppy at it that they're finding out on a regular basis (for the record, getting caught spying on German Chancellor Angela Merkel, is not an aberration). 


5. TAKING OUR EYE OFF OF THE REAL ENEMY ... GAMES IN WASHINGTON
Finally, we have Deputy Director Morell's inability to understand what's happening in Washington. This is understandable. He's been focused on trying to protect our nation. But the gridlock and acrimony in Washington does have a source. 

Let's make this real simple. 


Gerrymandered districts create politically safe districts, which allow politicians to grandstand and stay in office. Throw in an unlimited amount of political money from corporate lobbyists (thank you Citizens United) and it's easy to understand why America's democracy has been turned into one big auction house. But instead of of buying used goods at bargain prices America's lobbyists are buying influence with politicians who just want to get re-elected. 

What makes this situation cancerous is that our politicos are simply echoing corporate lies about free markets when the reality is that our market wheels are greased with favorable legislation, reckless deregulation, cheap money from the Federal Reserve, and trillion dollar bailout programs from the Treasury Department and the Fed. 

With safe (gerrymandered) districts for the trouble makers in Congress it should come as no surprise that we have the GOP's 2009 promise not to cooperate with President Obama, their record (or threats of) filibusters in the Senate, their presentation of phony budgets with no numbers, the perpetual but phony debt ceiling crisis, no real jobs proposals, allowing the interests of Wall Street to run herd over Main Street, and general political grandstanding have become the norm in Washington. 

The end result of rising militarism and political gridlock in Washington? American democracy is in danger, big time. 

- Mark 

UPDATE: I overlooked this one, which should have ended up in section no. 4 (or 3) of this post. In a few words, NSA director General Keith Alexander thinks the U.S. government should "come up with a way of stopping" the release of information that the media gets from people like Edward Snowden and Julian Assange. In essence, Alexander is saying dilute or get rid of 1st amendment protections, which effectively erases his pledge - or the pledge of any military agent who agrees with him - to uphold and defend the Constitution. 

HALLOWEEN FUNNIES




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- Mark

Friday, October 25, 2013

DERIVATIVES EXPLAINED, PART III ... Why Financial Derivatives Are (still) Dangerous


Back in August I wrote the first two parts of a three part introduction on derivatives. The primary reason for writing these posts is because most Americans still have no idea what derivatives are, or how they almost destroyed our economy in 2008. This is unacceptable.

My goal was to provide some basic background information on complex market instruments that were not brought under control, and can still bring down our economy today. This is the final part of my three part derivative story.

DERIVATIVES 101, REVIEWED
You might recall that in Part I of "Derivatives Explained" (Early History) I explained that the logic behind derivatives isn't really as complex as we might think. To be sure, the actual trading is complex and mysterious because of the industry language and the market instruments used in the trades, but the derivative concept is really quite simple.

Think of it this way. A farmer decides to sell someone the wheat harvest he will produce in 6 months for $1 million. He signs a contract saying he will do so. Generally speaking, because this contract "derives" its value from the agreement to produce something in the future it's called a derivative contract. The contract can be sold by either the farmer or the buyer to other market players (who are then obligated to fulfill the terms of the contract). This is a derivative trade.

Ta Da! See how simple this is?

From a market perspective early agriculture derivative contracts (whose family of contracts are also referred to as futures, hedge, and forward contracts) served market players well because they

(1) Allowed farmers to hedge their bets by locking in a price for their goods.
(2) Allowed farmers to secure loans against their contracts
(3) Provided market players with increased confidence about the products brought to market. 

All three brought stability to markets.

However, as I explained in Part II of "The Financial Commodity Tidal Wave," by the mid-1970s things became a bit more complex as derivative markets began to change. With the uncertainty in financial markets caused by the floating dollar and soaring inflation market players began to buy and sell financial commodities just as they had done with agriculture commodities.


Only this time, they weren't agreeing to buy and sell wheat that would be produced some time in the future. In an effort to reduce uncertainty and lock in costs, market players bought currency and interest rate contracts that the sellers agreed to produce at some date in the future.

Under the terms of the contract, instead of depending on one farmer to produce a good - as is the case with agriculture derivatives - currency and interest rate futures depended on market players being able to produce and fund their end of the bargain. This is critical because, while single acts of God can sabotage an agriculture good in the future, a myriad acts of human stupidity make derivative markets a financial minefield.

By 1985 the value of derivatives contracts in the financial community would surpass the value of derivative contracts in the agriculture community. Financial derivatives would explode in size and scope after 1985. And nothing has been the same since.

WHAT IT MEANS
The interesting thing is that unlike the farmer who wants to produce something of value, and lock in prices to hedge their bets to reduce uncertainty, today's financial derivative traders have moved beyond simply trying to reduce uncertainty. Today's derivative traders are now primarily interested in creating and trading financial derivative products for speculative reasons (and the fees).

Put another way, today's derivative market players are focused on making bets, not products.


The problem isn't the deal, or the actual the bets. As long as private market players are betting against like-minded market players, who are gambling with their own cash, things are OK.

The problem is that market players are gambling against naive and hard-pressed public pension fund managers and cash-starved municipalities who - in an era of declining wages, low taxes, and recession - are looking for quick fixes. What the managers and municipalities don't understand is the market players have gotten pretty good at what they're doing.

Wall Street's most savvy market players are looking for suckers to take the other end of their bets, and are seducing them with the prospect of easy money. What public pension fund managers and municipalities are finding is that they are being led into a system of rigged and bailed out markets where "the suckers" take financial hits they cannot afford, and where private players can't lose.

The case of Detroit is one example of how this has been happening.

LEAVE NO BANKER BEHIND ... AND SCREW YOU DETROIT
In August the NY Times reported that Detroit's less than savvy municipal managers made derivative bets in 2005 with UBS and Merrill Lynch (now with Bank of America). Caught in an economic web of low employment, recession, and a declining tax base the city of Detroit was desperate to raise cash.

So why not gamble, right?

While the derivative deal was quite complex (they all are now), under the guidelines of the contract the banks would pay the city Detroit if interest rates rose. For their part Detroit would pay the banks if interest rates went down.

As we all know, interest rates collapsed after the market crashed in 2008. This was followed by the Federal Reserve effectively running over Congress (to be fair, they pretty much allowed themselves to be run over) to lower interest rates in an effort to provide cheap loans and market guarantees to the banks.


Unfortunately, while bending over to help the banks with almost zero percent interest rates the Federal Reserve didn't make any provisions or stipulations that would help cities like Detroit deal with these artificially low rates.

The Fed essentially said, "Here bankers, take the cheap money ... and have your way with cities like Detroit while you're at it."

As a result, cities like Detroit were left to fend for themselves, especially in bankruptcy court. Meanwhile Wall Street feasted at the trough of the Federal Reserves low interest rate policies, and the myriad number of bailout programs fostered by the Treasury Department and the Fed (which totaled more than $14 trillion).


For their part, to cover their failed bets, Detroit started paying $50 million a year to the banks in 2009. Then they pledged about $11 million a month from their casino-tax revenue as collateral. To end their derivative obligations nightmare Detroit will emerge from bankruptcy owing about $250 million to the banks. It's also suggested that they cut pensions by 90 percent. But Detroit does get to keep their casino-tax revenue. Nice.

Here's the real fun part. If the market had not collapsed most analysts were predicting that interest rates would rise. Rising debt loads under President Bush had everyone expecting higher interest rates. Under this scenario Detroit would have pocketed some really nice profits.

But this isn't the point.

The point is Detroit is now one of America's many financial canaries in the mine, but no one wants to see it.

The point is cash-strapped cities and pension fund managers - worried about declining contributions (low employment, declining tax base, recession, etc.) - are gambling against seasoned market players whose industry leaders went in front of Congress and effectively said that helping their clients get the best return on their investment was not their job.

The point is that private gamblers and speculators who got bailed out when their bets soured and collapsed the economy are able to collect on the other side of the market collapse because Wall Street can still force cities like Detroit - who get no bailout help - into huge settlements.

Put another way, what's the big deal if Wall Street cons the cities and pensions out of their money?

Especially galling here is that many of the big financial firms on Wall Street were able to avoid bankruptcy, and avoid going into settlements that they are forcing on cities like Detroit. They were able to avoid this because of bailouts and favorable regulatory rulings that allow the banks to dump their toxic crap on the American taxpayer (in various forms, like legacy assets). Even better, for the banks, is that they're also getting trillions in loans and other market guarantees (see graph above), courtesy of the American taxpayer.

So, yeah, heads they win, tails we lose. And screw you Detroit.


Then we have the case of Goldman Sachs, who was recently fined (again) $100 million after they experienced the biggest loss in bank history.


GOLDMAN SACHS FINED (AGAIN) ... AND THE BEAT GOES ON
On October 16 the Commodity Futures Trading Commission (CFTC) reported that Goldman Sachs would pay yet another multi-million dollar fine ($100 million). Only this one is for traders misleading management about the extent of their losses, and then doubling down on those losses in an effort to try and win back (hide) their losses. The strategy failed, cost Goldman Sachs at least $6.2 billion, and is known in the industry as the London Whale.

Higher ups at Goldman Sachs claimed they had no idea what was happening when they lost $6.2 billion, which set yet another record in the industry.




Goldman Sachs execs claiming ignorance is a tough pill to swallow.

One could argue that Goldman Sachs knew about these trading strategies long before the losses started to pile up. More specifically, one might even argue that Goldman Sachs encouraged them - cough, cough - by doing absolutely nothing to stop their traders when they were making money on the same derivative bets years earlier (bonuses have a way of doing that).

This is especially the case since the deal makers were dipping into FDIC backed funds - which is supposed to be under extra scrutiny after 2008 - to make their bets.

THE END RESULT ... DERIVATIVE BETTING CONTINUES
In effect, by winning on the bailout side and coming up ahead on bankruptcy side - when pensions and municipalities are forced to take financial hits - Wall Street banks really have nothing to lose by continuing to pursue their derivative-laced bets. And, besides, companies like Goldman Sachs have been ripping off markets for years and getting away with it, with little more than small (for them) slap on the wrist fines.



Winning on both sides of their derivative bets, coupled with smallish fines, after helping to collapse markets and the economy in 2008 helps explain why derivative trading continues to grow in America. Simply put, without any real changes or market discipline for almost crashing the economy in 2008 there's no real downside to playing in the derivative casino in America.

And that, my friends, explains why financial derivatives are still dangerous.

- Mark

SEN. ELIZABETH WARREN ... DOING THE PEOPLE'S WORK, AGAIN


Now this is what a U.S. Senator should be doing when it comes to oversight and watching out for our tax dollars. Senator Elizabeth Warren (D-MA) wants the Federal Reserve, the Securities & Exchange Commission, and the Comptroller of the Currency to start putting some of Wall Street's fat cats behind bars. Check out her letter sent to the heads of each institution ...








Senator Warren is effectively asking, what have you done to pursue justice in the name of the American taxpayer. I like it.

- Mark

Kudos to Duane for the tip on this.

Thursday, October 24, 2013

ANOTHER "GOOD NEWS, BAD NEWS" STORY FROM WALL STREET ... OK, MOSTLY BAD NEWS


This is one of those "good news, bad news" stories.

Many of you are probably aware that JP Morgan was fined $13 billion for allowing their brokers to sell shoddy mortgage backed securities to market players. As part of the fine JP Morgan will also pay for the shoddy market products sold by Bear Stearns and Washington Mutual, both which were acquired by JP Morgan during the financial crisis. This is the "good news" part of the story.

The $13 billion fine comes on top of the roughly $5 billion in fines that JP Morgan paid between 2011 and 2013 for - what else? - illegally rigging, manipulating, and gaming the market. These fines include the famous London Whale fine of $920 billion, which JP Morgan top executives claim they knew nothing about.

Then we have the "bad news" part of the story.

Because of corporate tax law, about $11 billion of the $13 billion fine is tax deductible. With a 38 percent tax rate (assuming there are no other deductions) JP Morgan can expect to get more than $4 billion of that fine back in the form of a tax rebate (or credit).

So, yeah, that $13 billion fine is actually about $9 billion.

- Mark
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If we're looking for a silver lining here, according to Reuters $9 billion still makes the fine the biggest in bank history. In the larger scheme of things that's still good news, I guess ... especially if not fixing the problem that breeds this kind of behavior is considered good news.



- Mark

UPDATE: Correction. JP Morgan's Chief Financial Officer says that $7 trillion of the $13 trillion is tax deductible.

GOVERNOR. BOBBY JINDAL'S POLITICAL NIGHTMARE CONTINUES

Yet another example of how clueless some of our legislators can be. This is what Louisiana Gov. Bobby Jindal was talking about when he said that the GOP "must stop being the stupid party" ...


- Mark 

Wednesday, October 23, 2013

Tuesday, October 22, 2013

OBAMACARE IS NOT THE CAUSE OF PART-TIME EMPLOYMENT IN AMERICA

Two weeks ago I outlined how our local congressman, Rep. Kevin McCarthy (R-Bakersfield), has been appearing in the media to peddle the GOP's "Obamacare is creating a part-time jobs economy" lie. I provided a nice graph to show that Rep. McCarthy's was not telling the truth and, quite frankly, doesn't know what he's talking about.

Well, if you're a McCarthy supporting Republican, be prepared to lose your tinfoil hats (once more) because you're about to find out why the GOP's "Obamacare-Part-Time-Jobs" meme is a lie (again).


The Wall Street Journal just came out with this article today, "Don't Blame Health Care Law for Part-Time Employment."

Specifically the WSJ reports that "a closer look at the data provides little evidence for the notion that the health law is driving a shift to part-time work ...". What's worse for the GOP is how the data shows that "part-time work has actually been falling as a share of employment in recent years."


Here's another development you can see from the graph above. The number of part-time employees actually started going up in March of 2008, when George W. Bush was president, and was already well on its way to 20 percent of the work force (December 2009) when President Obama entered office.

Citing the most recent numbers from the Bureau of Labor Statistics the Los Angeles Times' Michael Hiltzick makes the same point. Specifically, Hiltzick writes that "the number of part-time jobs for economic reasons - slack demand, cutbacks in hours - has remained stable" since Obamacare became the law of the land.

So, yeah, not only was part-time employment in America already surging when President Obama took over, but those numbers have actually dipped, and have not moved in a statistically significant manner because of Obamacare.

- Mark 

PRO-LIFE? THINK AGAIN ...

Do you have a pro-life friend who likes talking about how they support the sanctity of life? If so ask them:

1. Do you support torture? 
2. Do you support the death penalty?  
3. Do you oppose euthanasia for the terminally ill?  
4. Do you believe that over 100,000 civilians killed (as collateral damage) in a reckless war of choice is justified?
If they answer yes to one or all of these questions they do not appreciate the sanctity of life, and are not pro-life. They're pro-something, but it's definitely not pro-life. 



Seriously. How does turning a blind eye to torture, state sanctioned murder, human suffering, and mindless death make you a defender of the sanctity of life? How about those who say they are pro-life but who also work to deny food and health care to children and the working poor?




There's more, but you get the point. Many in the pro-life crowd have a demented version of human dignity and don't really appreciate the sanctity of life. 

- Mark

READING FOR THE WEEK (Oct. 22, 2013)


Good story. Ex-death row inmate establishes scholarship for the attorney who freed him (Gawker).

Lifting the curtain on a shameful era in America (Winston-Salem Journal).

Gulf ecosystem in crisis three years after BP oil spill (Truth Out).


INFORMATION YOU CAN USE TO DEBUNK RIGHT WING LIES
How to prove that President Obama LOWERED the deficit in four easy steps (Addicting Info).

Health care costs in America are going up at their slowest rates since the government started tracking the data in 1960 (Kaiser Family Foundation).

The next time Rand Paul's supporters claim that he's a doctor remind them that he is certified by a board of ophthalmology that he created in 1999 ... (Salon).

The absurdity of billionaires against social security (Huffington Post).

Republicans proposed, endorsed, and loved the Affordable Care Act ... in 1989, before it was called Obamacare (Occupy Democrats).


MORE TEA PARTY / RIGHT WING STUFF
Senator Ted Cruz' claim that "Virtually every person across this country has seen premiums go up and up and up" is one big lie (PolitiFact).

Inside the Fox News lie machine: Fact checking Sean Hannity on Obamacare (Salon).

Senator Rand Paul (R-KY): Spreading misinformation can be a great tactic (National Journal).

The damage done by the GOP (Paul Krugman).

You might be a conservative if you believe ... (Addicting Info).


NUCLEAR / MILITARY
The end of overkill? Reassessing U.S. nuclear weapons policy (Cato).

Want to know the effects of a nuclear attack on your hometown? There's an ap for that (Mail OnlineNuclear Secrecy).

- Mark

Monday, October 21, 2013

HOW TO BEAT WALL STREET CHEERLEADERS WITH FACTS (it's really not that hard)

This interview with the AFL-CIO's Damon Silver is really Media Market Speak 101. It helps everyone understand how easy it is to respond to Wall Street talking heads who like to repeat the lie that social security and Medicare are problems, and need to be cut. The really good stuff starts at 1:22 into the clip ...


For a similar lesson on how to educate Wall Street cheerleaders about the historical realities behind the American economy and the banking industry - before and after the Glass-Steagall Act was passed (1933) - check out this CNBC interview with Senator Elizabeth Warren (D-MA).

Sen. Warren tries to educate the cheerleaders about the need for common sense regulation by pointing to economic history but, it would appear, doesn't get too far.




- Mark

In the FYI category, while the attempt to neuter or abolish the Glass-Steagall Act began in the 1960s (actually it started the day after it was passed in 1933) the super charged lobbying efforts to deregulate the banking industry didn't really kick in until the early 1980s. It finally happened when the Financial Services Modernization Act was passed in 1999. The post-2008 bailout cost to the American taxpayer for deregulating Wall Street is now more than $14 trillion.


Finally, the $42 billion we're supposed to be excited about according to the chart above says absolutely nothing about opportunity costs, 2008-induced unemployment, the trillions in toxic bank "assets" the Federal Reserve is holding, the lack of collateral in our shadow banking system, or how many banks would simply go bust if it weren't for taxpayer backed bailout cash.

Friday, October 18, 2013

RAISE THE MINIMUM WAGE

The budgetary cost of low wages translates into more than $7 billion in public assistance. This taxpayer funded public assistance goes to low wage workers who make so little that they need help to meet basic needs.


Let's make this real simple. If the state - and not market forces - is providing or filling in the missing portion of a living wage the state is subsidizing the profits of market players. What they don't pay in wages they get to pocket, while you and I get to pick up the bill in higher taxes (then again, this dynamic isn't new).

At the end of the day you can not speak as if market forces alone are sufficient for meeting the needs of America's middle class when the state has to fill in the missing "wages" necessary for a worker to meet basic household needs. The glue that holds society together is not built around market capitalism, it is built around market subsidies, and state support.

To deal with the issue of using the public trough to subsidize private market players we need to raise the minimum wage to at least $12 per hour. For those of you ready to scream about runaway inflation or how raising wages will cut into profits let's take a look at what's happening in Australia, courtesy of my FB friend Robin Blinn ...


Here's another take on the issue from the Raise Minimum Wage FB site ...


We can either work to help raise the minimum wage in America or we can continue to subsidize market players with taxpayer dollars. The latter will have us living in a society - yeah, I'm over generalizing for effect here (it is my blog) - like this ...


And, yes, the average social security recipient gets a about $1,200 per month (the average is $1,269).

- Mark 

HOLIDAY REMINDER

FYI ...


- Mark

Thursday, October 17, 2013

Wednesday, October 16, 2013

IT'S STILL NOT OVER ... WHAT AILS AMERICA


As usual, Robert Reich is succinct and to the point ... 

... Even when this crisis is over, further crises lie ahead unless we correct three distortions of our democracy that have allowed a minority of extremist Republicans to hold the nation hostage: 

(1) Gerrymandered congressional districts have shielded the extremists from accountability to the broader public. Gerrymandering isn’t new but in recent years right-wing state legislatures have extended and perfected it. The best solution: redistricting by nonpartisan committee. Voters supported this in California; evidence suggests many voters in “red” states would now be supportive as well.

(2) Unlimited and often secret money from a handful of right-wing billionaires has bankrolled the extremists. Big money in politics isn’t new, either, but the Supreme Court’s disgraceful 2010 decision in “Citizen’s United vs. Federal Election Commission” opened the floodgates, and the recently-argued “McCutcheon vs. Federal Election Commission” (challenging the personal donation limits that became law in 1974) could open them wider. “Citizen’s United” must be reversed, if necessary by a constitutional amendment. And at least one of the five Republicans on the Court must be replaced by someone dedicated to preserving our democracy. In the meantime, there must be full disclosure of all contributors. 

(3) Raging inequality -- with the typical family getting poorer and almost all economic gains going to a small group at the top –- has made the white working class susceptible to the extremists, financed by those seeking to entrench their privilege and power. As Justice Louis Brandeis said over a century ago when America faced a similar scourge, “We can have a democracy or we can have huge wealth in the hands of a few, but we cannot have both.”
 
To understand how we can reverse this trend, see “Inequality for All” and check the website www.inequalityforall.com.

- Mark 

PRESIDENT REAGAN EXHORTS CONGRESS TO "HONOR ITS FINANCIAL OBLIGATIONS"

President Ronald Reagan makes President Obama's case on the debt ceiling, again ...


- Mark

Tuesday, October 15, 2013

REPUBLICANS SUPPORT OBAMACARE ... UNTIL "HE" BECAME PRESIDENT

If you want a little perspective on how absurd the GOP's opposition to the Affordable Care Act really is, check out the history of the GOP standing behind the provisions of Affordable Care Act before it became "Obamacare" ...


In the FYI category, support among conservatives for Obamacare goes up when it's called the Affordable Care Act. More importantly, when people across the nation are asked about specific provisions of the AFA  - or Obamacare - support for the program hits 88 percent.

Finally, here's 15 myths you should ignore when it comes to Obamacare.

- Mark 

Monday, October 14, 2013

WHY REPUBLICANS WANT TO TURN BACK THE CLOCK ON VOTING (and oppose Obamacare)

Have you ever wondered why Republicans want to implement voter ID laws, which would restrict the number of blacks, women, and college age kids from voting in America? It's definitely not because of voter fraud, as they claim. You stand a better chance of being hit by lightening or winning the lottery than uncovering a case of voter fraud (it accounts for a paltry .0004 - .0007 percent of voting activity).

The reality is that the GOP wants to turn back our nation's constitutional clock, to a time when it was more difficult for women, 18 year-olds, and blacks to vote. The rationale is simple. If we make it more difficult for blacks, women and college age kids to vote their chances of winning elections go up. 

While no Republican advocates this (at least openly), it helps if we understand what the GOP leadership sees. If we turn back the clock to 1850 this is what the 2012 presidential election results would have looked like without blacks, women, and 18 year-olds voting in America.


Yeah, it's "President Romney" in a landslide.

Simply put, the 15th amendment (blacks allowed to vote, 1870), the 19th amendment (women allowed to vote, 1920) and the 26th amendment (18 year-olds allowed to vote, 1971) are the cornerstone of American democracy today. And the GOP understands this. But they also understand that blacks, women and college age kids are the demographic groups they do not appeal to, and are losing ground on every year. 

It's why America ended up with an electoral map in 2012 that looked like this ...



Bluntly speaking, diluting the results of the 15th, 19th, and 26th amendments with voter ID laws and other legal gimmicks is an attempt by the GOP to gain control over an electorate - and a nation - that increasingly rejects their political ideology and divisive views. 

And, for the record, trying to over turn a law (Obamacare) that was passed in Congress, signed by the President, and upheld by the Supreme Court falls in line with the desperation the GOP feels over having their world views passed over by history. To get their way they need to undo or ignore established constitutional protocols.

It's really that simple.

- Mark