Tuesday, April 30, 2013


Want to know why we're still in a recession? Here's economist Nouriel Roubini:

The problem is that the Fed’s liquidity injections are not creating credit for the real economy, but rather boosting leverage and risk-taking in financial markets. 

Translated from the econospeak, all the money from the Federal Reserve is being gobbled up and used by the wrong people (the banksters) for the wrong reasons (debt driven bets). Ordinary Americans are being cut out of the low interest rate gravy train because banks are hoarding the money to create excess reserves.

Pretty simple.

- Mark


Via Barry Ritholtz, Jeffrey Sachs' speech on Wall Street corruption and the destruction of the capitalist model ...

- Mark 


I've written about how Wall Street and the financial sector has worked to take your home by creating a legal property maze designed to extract wealth and, eventually, separate people from their homes. The key is slicing up mortgages (for securities) so that both the right to payments and ownership of the mortgage are lost in a property records nightmare that looks something like this ...

Now compare this with the old days, where most families held their mortgage and property records together. Everyone knew where the payments were going and who held legal title to the house. If you sold the house or refinanced you would have to go down to the county courthouse and physically change the record so that everyone could see clearly who owned the title and where the money was going. Pretty simple.

This is no longer case.

After slicing and dicing payments, and clouding legal ownership by shoving property titles into a shady recording monster called MERS, determining who has title to a house has become one of Wall Street's legal tools for extracting wealth without having to be responsible for what happens to the person paying the mortgage. As economist L. Randall Wray points out, because even the banksters don't have a clue who owes what it is so much easier to start foreclosure proceedings.

This helps explain, in part, the large number of illegal foreclosures and the lawsuits that are now being filed against the banks and the financial institutions. It also helps explain why the independent foreclosure review process was so skewed. Because the property title maze is such a mess federal regulators (and the Federal Reserve) have worked to deliberately minimize evidence of borrower harm.

It doesn't matter if property rights - the backbone of American capitalism - are disappearing into a legal blackhole, or if people were illegally booted from their homes. As long as Wall Street and America's financial institutions are OK the rest of us are supposed to be OK too.

Sigh ...

- Mark

Monday, April 29, 2013


According to Tax Justice Network the world's wealthiest individuals were hiding tens of trillions in offshore accounts at the end of 2010. The primary goal is to avoid paying taxes. Bloomberg does a pretty good job of introducting us to some of the tactics used by the world's billionaires in this article "Billionaires Flee Havens as Trillions Pursued Offshore."

The combined wealth of the world's 100 richest billionaires is over $1 trillion. Check out Bloomberg's billionaire index here.

- Mark

UPDATE: Check out who's hiding $32 trillion in offshore accounts (Money Morning) ...plus, the release of offshore records draws worldwide response (Center for Public Integrity). 


Incredible sink hole in Latvia ...

- Mark 

Saturday, April 27, 2013

WEEKEND READING (for 4-27-13)

Challenging the myth that more guns leads to less crime (Mother Jones).

This week's village idiot, New Hampshire State Rep. Stella Tremblay (Huffington Post).

These guys are in the running for next week's village idiot (TPM).

How the prison industrial complex destroys lives (Truthout).

White collar crime pays ... JPMorgan gambles away $6 billion and gets a slap on the wrist (Mother Jones).

Argentina is taking on the vulture capitalists that purchased their debt for pennies on the dollar and now want full payment (Truthout).

Relatedly, is piracy now legal? It might be if the people you're after are tied to a nation-state that owes your client money (Forbes).

Is there a 90 percent debt to GDP threshold that says we can't spend anymore to get out of the recession? Nope, it's just more GOP nonsense (Truthout).

With just one phony AP tweet we have learned something important. The mechanics behind High Frequency Trading (HFT) is problematic and our financial markets aren't as liquid (financially healthy) as we think (Mother Jones).

The George W. Bush manure locker is now open (Esquire).

Sherrod Brown takes on the mega banks and the Obama administration (TPM).

Much abused "state secrets privileges" is under fire in Congress (Wired).

Never one to let a good tragedy go to waste, these defense contractors are already pimping their products as the next solution for terrorist strikes (Wired).

For the math geeks ... How strong is this pole dancer? (Wired).

- Mark

Thursday, April 25, 2013

INFLATION IS HERE (and has been for some time)

In the FYI category ...The price of most basic commodities - unlike most of our paychecks - has been going up ...

Click to Enlarge (or click here for ginormous chart)

- Mark 

Wednesday, April 24, 2013


Over the past three years opponents of President Obama's economic stimulus plans have argued that America can't spend any more money because it has entirely too much debt. Fiscal austerity, you know.

Citing studies like "Growth in a Time of Debt" opponents of spending more to spur economic growth claim that when a country reaches a debt level that is more than 90 percent of what it produces every year (GDP) economic growth will stall and then collapse. With the national debt of the United States hovering around 90 percent opponents of President Obama's spending and jobs proposals have had a field day opposing his policies, arguing we don't have the money to spend.

Unfortunately for the people Paul Krugman calls the fiscal "austerians" (those who preach fiscal discipline today) this argument has fallen flat on its face. Here's why.

It turns out that studies like "Growth in a Time of Debt" had some serious flaws. Specifically, the study ...

1. Excludes countries in the post-war years who experienced significant growth while carrying debt to GDP ratios over 90 percent.
2. Allows New Zealand's single year of terrible growth with a 90 percent debt to GDP ratio to count as much as Britain's 19 years of healthy growth.
3. Included a sloppy coding error.

Paul Krugman does a good job of going after the austerians and explaining the errors of the study here and here.

Faulty methods aside, there's a stronger argument for spending more to create jobs. In real simple terms the stimulus worked.

In fact, the more data we look at the clearer it becomes that there is no doubt that the stimulus worked. In addition to adding about 1.9 percent to GDP the stimulus also added about 2.9 million jobs to the economy (blue line represents unemployment with stimulus money, red dots represent unemployment without).

For your friends who like to claim that unemployment is still high, or that the results were so meager that it wasn't worth the effort here's your meat and potato response: Because the recession was far worse than we expected we could have added at least a million more jobs to the economy if we had spent more.

Seriously. Take a look at the before and after stimulus spending charts (and, for kicks, ask yourself who benefits politically if the economy stagnates and the position of labor is undermined). So, yes, we need to spend more money.

One more thing. Keep in mind that when Wall Street almost bankrupted the nation we found more than $4 trillion in loans, guarantees and other financial backstops for their incredibly stupid market bets. Today we're on the hook for trillions more. For all this we got little more than record foreclosures, soaring unemployment, and record personal bankruptcies.

If we can find $4 trillion for ingrates who almost bankrupted the nation, and think they're above paying taxes, we can find one-tenth of that to create at least a million tax paying jobs.

- Mark 

Tuesday, April 23, 2013


Will President Obama be able to leave before the next market collapse? Not according to this guy (Money Morning).

Are the "bullion banks" manipulating the gold market? It appears so (Money Morning).

Paul Moreno wants you to believe unions - rather than a culture of racism - kept black ball players out of Major League Baseball (National Review). What an idiot.

How political ideology can lead people to embrace bad economics (NY Times / Paul Krugman).

A Facebook friend posted an ideologically bloated hack piece on rising health care premiums under Obamacare (Wall Street Journal). What he doesn't understand is that health care premiums were already scheduled to go up (Mark Martinez).

Senator Elizabeth Warren (D-MA) is pissed off. Here's why ...
Homeowners who were illegally foreclosed on received about $1,000 for getting booted (illegally) from their homes (Officer of the Comptroller of the Curreny, or OCC). However ...

It looks like most third party consultants hired by the banks to review each foreclosure case were paid about $10,000 per review (totaling about $2 billion for the consultants). They then tried to keep Senator Elizabeth Warren (and other members of Congress) from their review process, claiming that sharing information with Congress would violate company "trade secrets" (Salon). But wait, it gets better (or is that worse?) ...

The GAO (Government Accounting Office) found that the "independent" foreclosure review process was deliberately skewed - by the OCC and the Federal Reserve - to minimize evidence that homeowners had been cheated out of their homes (Nakedcapitalism).

Bank regulators still got grilled for not doing their job, instead choosing to shill for the banksters (Huffington Post).

UPDATE: Victims of foreclosure fraud are having trouble cashing their foreclosure checks (Think Progress).

- Mark

Monday, April 22, 2013

WAR AND MARKETS: Why great wealth is not a product of individual initiative alone

In my International Political Economy course we recently discussed the evolution of the nation-state, and how the process contributed to our current market-oriented economic system. The key - as I write in chapter 5 of my book - is understanding that since the 17th century surviving in the international community compelled the state to organize in a way that encourages individuals to create and build wealth that can be taxed. New sources of taxation were necessary to help fund the militaries of the modern eraWhile we may not always think of it this way, war is the inspiration for the modern state and the market-oriented economies we see around the world today. 

During the 17th century if you weren't part of the aristocratic or leisure class wealth creation and wealth accumulation were virtually impossible. Built to sustain old customs and traditions, feudal societies helped to stifle individual initiative and the accumulation of wealth for those who lived outside of the circles associated with the aristocracy and the church.

With the cost of war increasing during the 17th and 18th centuries enlightened leaders slowly came to realize that the ability to create wealth - as opposed to plunder and simple wealth extraction - was absolutely necessary if they were going to fund modern militaries. To create the funds necessary for fighting war feudal leaders began catering to the needs of the artisans and merchants of their time. They understood that the more artisans and merchants produced the more they could be taxed. The agreements between merchants, artisans and feudal tyrants (lords, kings, etc.) are the genesis of our modern constitutions.

The free market economies and the great wealth accumulation we see today are the end product of these agreements. Put more simply, the conditions under which great wealth can be created today are the product of the demands of war.

How the state created these conditions is a mystery for many.

Our modern market economies are the product of almost 400 years of evolution. During this time we have seen the most dominant nation-states pursue wealth and resources through exploration, colonization and plunder (1648-1815), colonization, exploitation, and economic nationalism (1815-1919) and by acquiring market share and market domination (1919-today).

Specifically, after the Treaty of Westphalia in 1648 we saw the great empires of the past (Britain, Spain, France and Portugal) secure the resources they wanted or needed by invading and plundering neighbors and far off lands alike. The spirit of exploration and the Reformation helped many question long held customs and traditions.

Colonization and mercantilism led to settlements and charter corporations, which became the keys to power and wealth. Generally speaking this period - also known as the first wave of imperialism - would last through the American Revolution.

After the Napoleonic Wars and the Treaty of Vienna (1815) we see the emergence of the new mercantile states (Germany, Italy, Japan, and Belgium) who went in search of colonies and territories. Even the United States pursued territorial conquest across the North American continent. While colonization was still part of the game the new European players would replace settlers with merchants whose primary goal was to extract resources. The end game during the second wave of imperialism was to support national economic development, industrialization and market players back home.

Culturally many of the myths and superstitions of the past came under attack from discoveries and ideas that emerged out of the Enlightenment. Economically, while much is said about Adam Smith in reality the intellectual godfathers of the 19th and early 20 centuries were Alexander Hamilton and Friedrich List.

The old "imperialists" developed a greater understanding of trade, finance, and capital investment(s), which allowed them to preach market capitalism. However, high tariffs in the United States and the realities behind Manifest Destiny, entrenched colonialism and the Open Door policies in Asia spoke more to aggressive economic nationalism than it did to Adam Smith.

Still, with freedom and liberty echoing in the west, the concepts we now understand as free markets and free trade emerged under the new constitutions of the 18th and 19th centuries.

After World War I and the Treaty of Versailles (1919) the concept of free trade is embraced in the west, but will take a few steps back after 1929. It re-emerges with a vengeance after World War II. But market economies are carefully re-created and managed by the dominant powers (starting with the agreements at Bretton Woods and Potsdam).

Wanting to avoid the conditions that led to the rise of fascism in Europe and communism in Russia - and leery about the impact of free markets run amok after 1929 - we see the establishment of "freer" markets in the west. While free markets are often preached John Maynard Keynes steps ahead of Adam Smith as the key intellectual force economically (at least through the 1970s).

Douglas MacArthur stands in front of Commodore Perry's flag at the Japanese surrender ceremonies aboard USS Missouri in Tokyo Bay, September 2, 1945. Commodore Perry's flag is symbolic because in 1854 he used the U.S. Navy to forcefully open Japan's economy for trade to the west (and stymied their imperial impulse in Asia). For his part Gen. MacArthur would rule and guide Japan's economy in the post-war era, which included the unionization of labor, equality for women and land reform. MacArthur Photo courtesy of the Navy Historical Center.

The goal was to promote cooperation, stability, and to create the conditions for states to acquire market share.

While Geo-Politics and the realities of the cold war were still governed by balance of power considerations the west developed a more sophisticated understanding of power and wealth in the 20th century. Geo-Economic considerations compeled states to cooperate and develop new treaties to facilitate cooperation.

While realpolitik is still practiced it's clear that helping domestic corporations go abroad is much easier than sending troops to occupy foreign soil. Weapon innovation and fire power are still necessary for the dominant military powers but the security umbrella created by the United States allows nation-states (especially Japan, Germany, and western European states) to pursue research & development and the accumulation of investment capital in the 20th century.

To help merchants become more successful throughout these three periods the state consistently had to modernize the administrative machines of government  Keeping records, building infrastructures, managing the currency, creating an educated workforce, maintaining justice, regulating commerce, and establishing industrial standards requires bureaucratic efficiency. Because we understand the historical evolution of the state we can call these our bureaucracies of violence.

Along the way state driven treaties, market subsidies, opportunities at home, and state supported research & development became basic staples for building competitive market economies. The regular and efficient collection of taxes became critical too. Simply put, if the state is going to create the conditions under which great wealth is created the our social contract says that the state has a legitimate claim to tax it for war, current expenditures and the next generation (which helps explain why the tax rate on the richest Americans was above 90% from the 1940s through the 1950s).

Unfortunately there are not many people who understand how all of this is connected.

We now have large segments of society who (rather simplistically) like to believe that our market oriented economies emerged out of thin air, and that their wealth is the product of individual initiative alone. This is not true. Free markets didn't just emerge, and are not inevitable to the human condition. They are the product of the demands of war, and the result of complex historical developments and political agreements at both the local and international level.

Put more simply, in the modern era, the state creates the conditions under which great wealth is created. There are no invisible hands in our world.

- Mark

Saturday, April 20, 2013


I'm working on a longer post that explains the relationship between war, the state and the rise of market capitalism. This World War II era Disney 1943 clip helps to explain part of what I'm working on.

My next post will fill in the blanks on the role of the state in creating the conditions for markets to prosper.

- Mark 

Tuesday, April 16, 2013


Oh heck, I forgot to post this over the weekend. Still, these are great reads, especially the stuff on California history. 

A great discussion on tax avoidance: Global Tax Dodge, or Economic Boon? (NY Times).

When the majority loses ... Shareholder elections and the sham behind corporate governance (NY Times).

Brain Drain ... 120,000 professionals leave Greece amid economic crisis (Spiegel Online).

Dollar Politics ... Two-thirds of the $1.175 trillion in printed dollars is held outside of the United States. This is the equivalent of a $700 billion-plus interest-free loan to the U.S. that would cost $19 billion a year to service (Market Watch).

Has the financialization of our economy (where trading in financial instruments dominates trade in the instruments of commerce) gone too far? (New Republic).

Banks actually determined the number of victims they would have to deal with in their own foreclosure fraud (Wall Street on Parade).

Seven absurd ways the military wastes taxpayer money (Salon).

Quick responses to propaganda from the right (Forward Progressives).

Forget California's UC, CSU, and Community College system ... We have On-Line U in the works (KQED).

Amusing California history ... Charles Crocker's "spite fence" (SF Guidelines).

If you like history and railroads this Union Pacific interactive timeline is pretty cool (Union Pacific Timeline eBook).

More history (that I already posted on) ... when California determined who could have children and who would be sterilized (KCET).

Speaking of eugenics, here's how California's laws made it's way to Nazi Germany (SF Chronicle).

- Mark 


Tax day was yesterday, April 15th. According to the Heritage Network here's where your tax dollar goes ...


- Mark

Monday, April 15, 2013


It's April 15th and Jackie Robinson Day for Major League Baseball. The movie "42" - The Jackie Robinson Story - just came out (it's excellent). Every player on the 18 teams playing will wear #42 today. Three and one-half years ago I wrote a post explaining how President Obama is confronting many of the same problems that Jackie Robinson did 66 years ago, but on another level. 

From being painted as outsiders, to legions of people irrationally hoping that they fail, to the number of death threats received, the similarities between Jackie Robinson's place in the game and President Obama's place in national politics was questioned from the day they arrived on the big stage. As a reminder of the similarities between the two, I'm re-posting what I wrote almost three and one-half years ago.


Apart from being handed a country that was a mess, President Obama is facing challenges that range from questions about his citizenship to rallies with placards that make sure that he’s painted as an Muslim outsider who has single-handily remade America (e.g. “I want my country back”).

Others simply portray him in Joker-White dust, reminiscent of face paintings in tribal ceremonies.

Ultimately, the goal of his opponents is to delegitimize President Obama by marginalizing and isolating him. To do this his opponents need to believe that he is not a citizen, and an outsider. This is necessary to cast him as an illegal alien (the Holy Grail of outsiders for those on the right).

These developments might be amusing if they weren’t so serious. Like Major League Baseball’s Jackie Robinson, who broke baseball’s color barrier in 1947, President Obama is being derided by many of his opponents because of the color of his skin, and for what he represents. The images they use are telling because of how they seek to cast him as a scary outsider, with scary policies, from Africa.

I bring all of this up for two reasons. First, because of former President Jimmy Carter's remarks today.

Visit msnbc.com for Breaking News, World News, and News about the Economy

I'm also bringing all of this up because of how all of this is so reminiscent of America's past, when change has knocked on our collective doorsteps. Specifically, this reminds me of when Jackie Robinson was asked to play baseball for the Brooklyn Dodgers.

Recall, at the time, opposing teams rebelled. The St. Louis Cardinals even threatened to go on strike if Robinson played against them. Today, we find not so dissimilar developments.

Republican members of Congress have, in many respects, decided to go on strike too. Rather than legitimize President Obama’s policy efforts, they are taking their political ball and going home. They are simply saying ‘no” to everything of substance that President Obama proposes.
Jackie Robinson also became the target of rough physical play that everyone could see (especially when he received a 7 inch gash to his leg). The Philadelphia Phillies’ manager Ben Chapman went so as to tell his pitchers that when they had a 3-0 count against Robinson that they were to deliberately throw the ball at him rather than to legitimately walk him.

Today, death threats against President Obama are up 400% when compared to previous presidents.
Then we have the name calling. There was the game when Phillies’ players (and the manager) called Robinson a “nigger.” Today, Rep. Joe Wilson (R-SC) felt it was appropriate to call President Obama a liar during a joint session of Congress. Worse, Congressman Wilson has no problem validating his actions - and stripping his apology of any meaning - by soliciting and accepting money because of what he said.

In my view, any genuine act of contrition does not involve profiting from the stupid act, and then basking in the "support" that comes from said stupidity.
Others who played against Robinson yelled out that he should "go back to the cotton fields," among other slurs about his origins. Today, apart from calling President Obama a Muslim, many of his opponents also call for him to return to Kenya.
Look, there’s more to the Robinson-Obama parallel, but the fact is - as former President Jimmy Carter put it - outbursts like those from Congressman Joe Wilson are part of a larger and more disturbing reality in America. People are using very real issues to supercharge their anger, and taking it out on a man they genuinely want to discredit and delegitimize because of who he is. Jackie Robinson confronted the same challenges.

While anger at the "change" President Obama wants to bring has it's roots in an economy that was left in shambles by President Bush, many of those who oppose President Obama today are more concerned about what he represents. If it were otherwise, those who say they oppose President Obama on matters of policy and current events would have rebelled and hit the streets long ago during President Bush’s term, when he doubled our nation’s debt, wrecked our economy, and embarked on a Blundering Wars Project that will take years - if not several administrations - to resolve.

While President Carter's comments may not be welcome by the White House, they do remind us about our past, and about how far we still need to go. Still, if Jackie Robinson's experience is any indication, there is hope for the future.

Also, if you haven't seen it, check out this tune about Jackie Robinson ...

- Mark

Thursday, April 11, 2013


Last week I posted this article from Money Morning. In a few words it explains why you shouldn't trust what Goldman Sachs (or other large institutional investors) recommend. The reason, in part, is tied to the fact that Goldman Sachs has been known to exploit its customers. They will advise someone to sell a product but then buy the same product, which miraculously goes up in price. 

Conversely, Goldman will advise customers to buy a product - which they conveniently happen to own - which suddenly takes a dive in the market.

This shouldn't come as a surprise to anyone. We need to remember - as I pointed out last year - that after the 2008 market collapse Goldman Sachs' executives sat in front of Congress and brazenly dodged questions as to whether it's their responsibility to "act in the best interest of their clients" (FF to 25:30 in this clip). 

Put another way, Goldman Sachs seems to believe that they are not obligated to disclose their own interests, or conflicts, in any given transaction. In their estimation investment banks aren't required to act in their clients' best interest. 

But wait. Goldman is now upping the ante. 

To help their investing clients feel more comfortable about the products that they will advise them to buy or sell Goldman Sachs has developed a "new framework for forecasting equity returns over the medium term using a consistent approach globally."  They're so excited about their shiny new equities forecasting model that they are extending their "forecast horizon to the end of 2015.

Hey, I have a model too. Only my model isn't tied to some fancy or obscure formula that takes a Ph.D. in physics to figure out. It's based on common sense, and tied to my understanding that as long as the Federal Reserve and the Treasury Department keep pumping money into the system that markets will continue to "recover." It's insights like this that makes me a market guru.  

Seriously, here's Goldman's less than stunning model-based prediction: "With a 2015 horizon all regions look attractive on an absolute basis." 

What they're actually saying - but won't tell you - is: "Hey, our models are complex beasts based on little more than our hope that the Fed and Treasury will keep pumping cheap money into the system. If our assumptions are right - and you should trust us on this - everything we sell should do well, so buy what we sell you."

And you can trust Goldman Sachs. Their models worked so well that they were able to predict the 2008 market collapse, right?

So, yeah, buy all the equities Goldman Sachs wants sell you over the next two and half years. And right after that give me a call. I have a bridge to sell you. It's in Iraq. Cheap too.

- Mark 

Wednesday, April 10, 2013


Via Loans & Credit we get the world's 16 largest stock exchanges. Large buildings represent about $2 trillion each. The map shows market value and share turnover of each exchange in 2009.

Click to Enlarge.

Between the New York Stock Exchange and NASDAQ (the first electronic exchange) the United States has about 38% of the total market value of the exchanges represented on this graph (there are about 100 stock exchanges total).

- Mark

Monday, April 8, 2013


I've written about junk science and how it has contributed to terrible policies in America's past. These two articles on California's sterilization policy - "When California Decided Who Could Have Children ..." and the "State's little known history of shameful science" - helps explain how our eugenic policies made their way to Nazi Germany.

Long story short? Our previous efforts to determine who's best to breed and raise children hasn't always truned out well, nor made our lives any better. Not even close.

- Mark


In an effort to explain that there is no problem with social security I've written numerous times to our local paper and on my blog about the topic. Incredibly, and in spite of over $2.7 trillion in surpluses in our national social security account, President Obama is thinking of handing the Republicans a political gift by offering to unilaterally lower social security payouts - in exchange for nothing. The worst part is that the GOP didn't even ask for the measure.

Former Labor Secretary Robert Reich explains President Obama's unsolicited proposal:

If you think linking future social security payouts to a "chained CPI" is nuts click sign this petition. I already did.

- Mark 

Saturday, April 6, 2013


The price tag for war in Iraq and Afghanistan: $4 trillion (U.S. News & World Report).

A somewhat long but comprehensive overview of Iran's "nuclear odyssey" over the years (Carnegie Endowment). 

Syria's war inspired rape crisis (The Atlantic).


Is Wall Street crowding out traditional home buyers from the distressed housing market? It looks that way (Money Morning).

Why you shouldn't trust what Goldman Sachs - or what other large institutional investors -  recommend (Money Morning).

David Stockman on the corruption of capitalism in America (NY Times).

Why big corporations get away with paying peanuts in taxes (Money Morning).

Test your knowledge of FDR's New Deal (U.S. News & World Report).

What's a socialist? It's not what you think (NY Times).

California's lesson for America (Paul Krugman / NY Times).

Senator Barbara Mikulski (D-MD) apologizes for her role in passing the Monsanto Protection Act (Natural Society). 

American capitalism was built on confiscated Indian land, slave labor, British textiles, and cross-Atlantic finance (NY Times).

Almost 30% more of U.S. west coast children have thyroid problems compared with those born the year(s) before Japan's 2011 Fukushima nuclear meltdown (MSNNation of Change).

Yes, antibiotic-resistant bugs can jump from animals to humans (Mother Jones).

In 2009 at least 88% of all corn, cotton, and soybean seeds planted in the United States were from genetically modified (GMO) seeds (GMO Compass). Be sure to check out the graphs.

The true value of GMO corn seeds doesn't come from increasing yields in average or good years but from reducing losses in bad years (University of Wisconsin-Madison News).

We have two salmon that are the same age below ... can you spot the genetically engineered (GMO) salmon? (Infinite Unknown) Take your time.

For what it's worth ... The top 10 worst genetically modified (GMO) foods that you should think about avoiding (Natural Society).

- Mark

Friday, April 5, 2013


So Monsanto got a U.S. Senator to insert an amendment into a bill that provides it with legal cover if their products are determined by a court of law to be dangerous to the public's health. But don't be surprised by this development. Monsanto wants (needs?) legal protections and exemptions for their genetically engineered products because at least 88% of all corn, cotton, and soybean seeds planted in the United States in 2009 were from genetically modified seeds. 

Over the past 20 years the jump in the use of genetically engineered (or GMO, for genetically modified) seeds has been phenomenalThis is especially the case for corn farmers since 1997 ... 

Because GMO products have become such an integral part of America's agriculture and food markets (soy, cotton, corn, etc.) the real issue for companies like Monsanto is that profits could be hurt significantly if a court ordered farmers to stop using GMO products because of public health concerns. We're talking big bucks here. 

This helps explain why Monsanto pushed U.S. Senator Roy Blunt (R-MO) to add a last minute amendment to H.R. 933, which was a spending bill designed to, once again, avert a government shutdown. 

The amendment was written with the help of Monsanto and effectively says that Monsanto doesn't have to pay attention to federal court orders that halt the sale or planting of GMO seeds deemed to pose a public health threat. By temporarily (6 months) erasing the separation of powers between congress and the courts H.R. 933 sets a terrible precedent for democracy in America.

Part of what's driving this issue is the tension between those who believe that genetically engineered foods (often called "frankenfoods") are always harmful (they're not) and an industry that claims GMOs are "environmentally sustainable" (they're not). Further clouding the issue are cases where corn farmers who don't use GMO seeds benefit from farming neighbors who use pesticide-resistant GMO corn seed (the free rider effect). But this reality is more than off-set by the sudden death spiral of the monarch buttefly and bee colonies, which is increasingly linked to the cumulative effect of using products from the GMO-chemical industry. 

In any case, because of Blunt's amendment the GMO-chemical industry is increasingly viewed as a favored commercial bully that is above the law. This is something that U.S. Senator Jon Tester, a farmer from Montana, picked up on while discussing Blunt's Monsanto amendment, which has derisively become known as the "Monsanto Protection Act"  ...

SEN. JON TESTER: Mr. President, Montana is home to thousands of working families that make a living off the land. Like my wife and I, they’re family farmers and ranchers. The House of Representatives is prepared to toss those working families aside in favor of the nation’s large meatpacking corporations.
The House inserted a provision in the bill that gives enormous marketing power to America’s three largest meatpacking corporations, while stiffing family farmers and ranchers. Family-run production agriculture faces tremendous market manipulation. Chicken farmers, hog farmers, cattle ranchers all struggle to get a fair price from the meatpackers, and if they fight back, they risk angering corporate representatives and being shut out of the market. Thanks to this provision, the Agricultural Department will not be able to ensure a fair, open market that put the brakes on the worst abuses by the meatpacking industry. What’s worse is that the USDA took congressionally mandated steps to protect ranchers from market manipulation over the last few years. That’s what we told them to do in the 2008 farm bill. And this provision will actually overturn rules that the USDA has already put into place. But apparently, intense, behind-the-scenes lobbying won out in the House of Representatives, and now we’re back to square one with the big meatpackers calling the shots. 
The second provision sent over from the House tells the USDA to ignore any judicial ruling regarding the planting of genetically modified crops. Its supporters are calling it "Farmer Assurance Provision." But all it really assures is a lack of corporate liability. 
The provision says that when a judge finds that the USDA approved a crop illegally, the department must re-approve the crop and allow it to continue to be planted, regardless of what the judge says. Now let’s think about that. The United States Congress is telling the Agricultural Department that even if a court tells you that you’ve failed to follow the right process and tells you to start over, you must disregard the court’s ruling and allow the crop to be planted anyway. Not only does this ignore the constitutional idea of separation of powers, but it also lets genetically modified crops take hold across this country, even when a judge finds it violates the law—once again, agribusiness multinational corporations putting farmers as serfs. It’s a dangerous precedent. Mr. President, it will paralyze the USDA, putting the department in the middle of a battle between Congress and the courts. And the ultimate loser will be our family farmers going about their business and feeding America in the right way.
Sunshine Week shouldn’t be a show-and-tell, Mr. President. And slipping corporate giveaways into a bill at the same time that we call for more open government is doubling down on the same policies that created the need for Sunshine Week in the first place. That’s why I’ve introduced two amendments to remove these corporate welfare provisions from the bill. Montana has elected me to go to the Senate to do away with the shady backroom deals, to get rid of handouts to big corporations and to make government work better.

For those unfamiliar with GMO products they are, in very general terms, seeds and other food products that have been modified to increase resistance to pests or increase yields and product growth (in both plants and animals), among other producer benefits. If you're looking for an analogy GMOs are essentially like steroids athletes take to improve performance. While the comparison may be unfair (and overstated), think of Barry Bonds as corn ...

The big difference here is that while we're banning the use of steroids in professional and collegiate sports, we're now granting legal exemptions to companies that produce the GMO products used in our food system. 

Let that one sink in for a moment.

- Mark

NOTE I: I want to emphasize that the Monsanto Protection Act is really an amendment attached to House Resolution 933, which focused on spending. Like the Affordable Care Act which is now called "Obamacare" H.R. 933 is now referred to what the political and media talking heads now labels the Monsanto Protection Act.

NOTE II: This video - The World According to Monsanto - shows how Monsanto has bulldozed and steamrolled its way over science and necessary review processes to get its way. It's almost two hours long, but the section starting at 33:45 through 40:00 minutes provides a snapshot of how Monsanto does business.

NOTE III: One interpretation of how Monsanto gets a legal pass from H.R. 933 can be found here.

Thursday, April 4, 2013


Money Morning really does some solid research and analysis, which is why they were ahead of the curve in 2008. I even used some of their stuff in my book. In this post they take a look at where the "real" Dow Jones average is today. Guess what? Adjusted for inflation the "real Dow" is not close to the 14,000 level everyone got so excited about a few weeks back ...

Yeah, adjusted for inflation the real Dow is actually hovering around 585. By the look of things - and thanks to the Federal Reserve - the Dow is still over inflated.

What this means - as Money Morning points out - is that since the creation of the Federal Reserve in 1913 every dollar in the U.S. is now worth 4 cents.

Let the good times roll. 

- Mark 

A TALE OF TWO CITIES (uh, countries)

Classes started this week and I've been running. This is one of the topics we'll be discussing in my International Political Economy class today ...

- Mark

Monday, April 1, 2013


Former Reagan Budget Director David Stockman affirms what many of us have been saying for years in this NY Times piece. He makes primarily two points. First, we're riding yet another Federal Reserve financial bubble. Second, President Reagan's irresponsible deficit spending and tax cuts for the rich policies laid the groundwork for George W. Bush's failed policies. 

Stockman explains why he left President Reagan's team in 1985, and how those reasons are tied into the failed policies of President Bush:

The destruction of fiscal rectitude under Ronald Reagan — one reason I resigned as his budget chief in 1985 — was the greatest of his many dramatic acts. It created a template for the Republicans’ utter abandonment of the balanced-budget policies of Calvin Coolidge and allowed George W. Bush to dive into the deep end, bankrupting the nation through two misbegotten and unfinanced wars, a giant expansion of Medicare and a tax-cutting spree for the wealthy that turned K Street lobbyists into the de facto office of national tax policy. In effect, the G.O.P. embraced Keynesianism — for the wealthy.

For my money, Stockman gains extra points for explaining how the Federal Reserve is helping to bankrupt the nation, and for earlier going after Paul Ryan's delusional budget math
In all cases it's clear that President Reagan's former budget director sees only one side of America (the rich) gaining from the tax and spending policies that began under his former boss, President Reagan (and he helps support former Bush Treasury official Bruce Bartlett's tax piece too).

Read the article if you have the time. It explains much of what is wrong with America's economy, and how it started.

- Mark