October 10, 2013

Is Homeland Security Preparing for the Next Wall Street Collapse? By Ellen Brown

http://truth-out.org/news/item/19314-is-homeland-security-preparing-for-the-next-wall-street-collapse


Reports are that the Department of Homeland Security (DHS) is engaged in a massive, covert military buildup. An article in the Associated Press in February confirmed an open purchase order by DHS for 1.6 billion rounds of ammunition. According to an op-ed in Forbes, that’s enough to sustain an Iraq-sized war for over twenty years. DHS has also acquired heavily armored tanks, which have been seen roaming the streets. Evidently somebody in government is expecting some serious civil unrest. The question is, why? Recently revealed statements by former UK Prime Minister Gordon Brown at the height of the banking crisis in October 2008 could give some insights into that question. An article on BBC News on September 21, 2013, drew from an explosive autobiography called Power Trip by Brown’s spin doctor Damian McBride, who said the prime minister was worried that law and order could collapse during the financial crisis. McBride quoted Brown as saying:


How to deal with that threat? Brown said, “We’d have to think: do we have curfews, do we put the Army on the streets, how do we get order back?” McBride wrote in his book Power Trip, “It was extraordinary to see Gordon so totally gripped by the danger of what he was about to do, but equally convinced that decisive action had to be taken immediately.” He compared the threat to the Cuban Missile Crisis. Fear of this threat was echoed in September 2008 by US Treasury Secretary Hank Paulson, who reportedly warned that the US government might have to resort to martial law if Wall Street were not bailed out from the credit collapse. In both countries, martial law was avoided when their legislatures succumbed to pressure and bailed out the banks. But many pundits are saying that another collapse is imminent; and this time, governments may not be so willing to step up to the plate.

The Next Time WILL Be Different

What triggered the 2008 crisis was a run, not in the conventional banking system, but in the “shadow” banking system, a collection of non-bank financial intermediaries that provide services similar to traditional commercial banks but are unregulated. They include hedge funds, money market funds, credit investment funds, exchange-traded funds, private equity funds, securities broker dealers, securitization and finance companies. Investment banks and commercial banks may also conduct much of their business in the shadows of this unregulated system. The shadow financial casino has only grown larger since 2008; and in the next Lehman-style collapse, government bailouts may not be available. According to President Obama in his remarks on the Dodd-Frank Act on July 15, 2010, “Because of this reform, . . . there will be no more taxpayer funded bailouts – period.” Governments in Europe are also shying away from further bailouts. The Financial Stability Board (FSB) in Switzerland has therefore required the systemically risky banks to devise “living wills” setting forth what they will do in the event of insolvency. The template established by the FSB requires them to “bail in” their creditors; and depositors, it turns out, are the largest class of bank creditor. (For fuller discussion, see my earlier article here.)

When depositors cannot access their bank accounts to get money for food for the kids, they could well start breaking store windows and helping themselves. Worse, they might plot to overthrow the financier-controlled government. Witness Greece, where increasing disillusionment with the ability of the government to rescue the citizens from the worst depression since 1929 has precipitated riots and threats of violent overthrow. Fear of that result could explain (BUT NOT JUSTIFY--NEVER JUSTIFY! demeter) the massive, government-authorized spying on American citizens, the domestic use of drones, and the elimination of due process and of “posse comitatus” (the federal law prohibiting the military from enforcing “law and order” on non-federal property). Constitutional protections are being thrown out the window in favor of protecting the elite class in power.

The Looming Debt Ceiling Crisis

The next crisis on the agenda appears to be the October 17th deadline for agreeing on a federal budget or risking default on the government’s loans. It may only be a coincidence, but two large-scale drills are scheduled to take place the same day, the “Great ShakeOut Earthquake Drill” and the “Quantum Dawn 2 Cyber Attack Bank Drill.” According to a Bloomberg news clip on the bank drill, the attacks being prepared for are from hackers, state-sponsored espionage, and organized crime (financial fraud). One interviewee stated, “You might experience that your online banking is down . . . . You might experience that you can’t log in.” It sounds like a dress rehearsal for the Great American Bail-in. Ominous as all this is, it has a bright side. Bail-ins and martial law can be seen as the last desperate thrashings of a dinosaur. The exploitative financial scheme responsible for turning millions out of their jobs and their homes has reached the end of the line. Crisis in the current scheme means opportunity for those more sustainable solutions waiting in the wings.

WHAT FOLLOWS ARE SOME OF THOSE SUSTAINABLE SOLUTIONS...

October 9, 2013

A Truth Slips Past MSM Gatekeepers

http://heteconomist.com/a-truth-slips-past-msm-gatekeepers/?utm_source=feedly

A key rationale for this blog has been to help, along with many others, to impart basic knowledge about the policy scope available to a government that issues its own flex-rate currency. Leading modern monetary theorists have been plugging away at this task for a couple of decades now, and over time a growing number of people have joined the efforts. Recognition that a currency issuer is not revenue constrained, that it sets the terms on which it issues its own liabilities, that its spending and lending logically precede its taxing and borrowing, and that such policy space does not spell inevitable inflationary problems, is slowly on the increase. Another round of the U.S. debt-ceiling circus has prompted many to re-emphasize these elementary but important points. I did so in my previous couple of posts... Among more high-profile efforts, however, is a much needed contribution at the New York Times by James Galbraith. Were the gatekeepers sleeping, or is the 0.01 percent getting irritated by the GOP's antics?

In his article, Government Doesn't Have to Borrow to Spend (published 2 October 2013), Galbraith makes clear that "the debt ceiling is an anachronism … based on the idea that the government must raise money from elsewhere, before it spends." As he rightly points out, the government has no such need. For the U.S. and most other national governments (though not the hapless common-currency using governments of the eurozone), there has been no such need since the abandonment of the gold standard.


Upon pointing out the stake banks have in the current arrangement – the additional interest transfer they receive on bonds – Galbraith emphasizes that "there is nothing economically necessary" in the procedure. After all, if this procedure was needed to fund the government's spending, it would not be possible for the Federal Reserve simply to buy back many of the (supposedly financing) bonds once issued, as it does when engaging in quantitative easing.

Clearly, the Treasury could simply "skip the rigamarole and pay its bills without bonds". The Fed could still set the short-term interest rate -- the actual functional purpose, currently, of bond issuance -- by paying the appropriate rate on reserves. In such a setup, there would be no compulsion for the Fed to choose a positive rate, but equally nothing to stop it from doing so if it considered this appropriate. Policy implementation would be much simpler than under present practice, yet would achieve the same economic effects. So, Galbraith asks, why doesn't the government just ditch the bond issuance?

One reason, as he notes, is a current self-imposed constraint limiting Treasury "overdrafts" with the Fed. It is a self-imposed constraint that could and should be self-removed. However, so far it has not been removed because



The purpose, in other words, as Galbraith states explicitly in relation to the debt ceiling, "is to fool the rubes". I don't know about anyone else, but I'm tired of being taken for a rube. I reckon most of us are just about adult enough by now to face the pleasant and liberating truth. The truth -- that a currency-issuing government is not revenue constrained -- can set us free. Even under existing self-imposed constraints, the whole debt-ceiling "sham" (Galbraith's choice of word, and a good choice) could be circumvented, under present law, by taking the Platinum Coin option. (For the background on this idea, see Joe Firestone's Origin and Early History of Platinum Coin Seigniorage In the Blogosphere.) Galbraith points out that it would be possible to



That's right. The issuance of a single platinum coin would be sufficient to wipe out whatever amount of debt the government desired without any economic consequence whatsoever. It would not result in any additional government spending beyond what Congress has already passed. It would carry no more inflation risk than the same level of government spending under the present procedure of raising the debt ceiling and issuing bonds. The two approaches are economically equivalent in their effects. The Platinum Coin option is merely more transparent in making clear, as Galbraith states, that the public debt is a fiction and the debt ceiling a sham.

It appears that the government already has the capacity to issue such a Platinum Coin.


Paul Krugman similarly concluded in favor of the Platinum Coin in a blog post at the NYT back in January.

Needless to say, it would be better still to dispense with bond issuance, the debt ceiling and gimmicks such as the Platinum Coin, and simply allow spending as and when passed by Congress to add to reserves. But this more obvious approach requires a change in the self-imposed constraints, whereas the Platinum Coin is apparently already an option under existing law.

October 7, 2013

Greg Palast Has Singer's Number--Pins Greece on him

http://us4.forward-to-friend.com/forward/preview?u=33e4ec877eed6a43863a4a92e&id=b2c4368622

October 4, 2013

Weekend Economists on the Hunt for Red October 4-6, 2013

(oddly enough, this picture is from The Hindu newspaper. Perhaps they aren't so anti-smoking as the West)


Yes, it is a HORRIBLE pun on my part. Yet how could I resist? While the author of The Hunt for Red October is laid to rest, we are entering a real Red October, one of bloodshed, potential for bloodshed, and bloodthirstiness, not to mention the usual avarice, coveting, and theft. But first, we remember....



So, a Man of the 1%, or at very worst, the 10%, though he didn't start out wealthy. And yet, he had vision: a vision of what is, what could be, what would be; and the gift of story-telling. No doubt that's how he kept his sanity, while in his original line of work: insurance.



We'll follow his story, and many more, to the bitter end (or surprise twists, as it may befall).

His website: http://www.tomclancy.com/

October 4, 2013

Cost Of Solar Set To Plummet With New 44.7% Efficiency Record

http://theenergycollective.com/tinacasey/279671/cost-solar-set-plummet-new-447-efficiency-record?utm_source=tec_newsletter&utm_medium=email&utm_campaign=newsletter&inf_contact_key=2c8c5d3bbb803fa3e98084de9831195ade111009c33849b810f11c8eae222e8c



A research team in Europe has achieved a world record-setting solar conversion efficiency of 44.7 percent, and assuming that higher efficiency translates into lower costs, it’s yet another indicator that we’re only at the beginning of a long, steep decline in the cost of solar power....

October 3, 2013

Why Obamacare Is Another Private Sector Rip-Off Of Americans By Paul Craig Roberts

http://www.informationclearinghouse.info/article36407.htm

The private sector allied with government is a second IRS...

The government of the “world’s only superpower,” the “exceptional,” the “indispensable” country, claims to know what is best for Syria, Iraq, Afghanistan, Libya, Yemen, Pakistan, Somalia, Mali, Russia, Venezuela, Bolivia, Ecuador, Brazil, China, indeed for the entire world. However, the “indispensable” country cannot even govern itself, much less the world over which the “superpower” desires hegemony. The government of the “world’s only superpower” has shut itself down. The government has shut itself down, because it cannot deal with the budget deficit and mounting public debt caused by twelve years of wars, by financial deregulation that allows “banks too big to fail” to loot the taxpayers, and by the loss of jobs, GDP, and tax base that jobs offshoring forced by Wall Street caused.

The Republicans are using the fight over the limit on new public debt to block Obamacare. The Republicans are right to oppose Obamacare, but they are opposing Obamacare largely for ideological reasons when there are very good sound reasons to oppose Obamacare.

Last February 3, I posted on this website a column, “Obamacare: A Deception,” written by an expert on the subject. http://www.paulcraigroberts.org/2013/02/03/obamacare-a-primer/

When Republicans for ideological reasons blocked a single-payer health system like the rest of the developed world has and, indeed, even some developing countries have, the Obama regime, needing a victory, went to the insurance companies and told them to come up with a health care plan that the insurance lobby could get passed by Congress. Obamacare was written by the private insurance industry with the goal of raising its profits with 50 million mandated new customers.

Obamacare works for the insurance companies, but not for the uninsured. The cost of using Obamacare is prohibitive for those who most need the health coverage. The cost of the premiums net of the government subsidy is large. It amounts to a substantial pay cut for people struggling to pay their bills. In addition to the premium cost, it is prohibitive for hard pressed Americans to use the policies because of the deductibles and co-pays. For the very poor, who are thrown into Medicaid systems, any assets they might have, such as a home, are subject to confiscation to cover their Medicaid bills. The only people other than the insurance companies who benefit from Obamacare are the down and out who are devoid of all assets. This might prove to be a growing percentage of Americans. On September 19 the New York Times on the front page of the business section reported what I have reported for years: that real median family incomes in the US are where they were a quarter of a century ago. In other words, in a quarter of a century there has been no income growth for the median American family. In 2013 payroll employment is below where it was six years ago. During 2013 most of the new jobs, barely sufficient to stay even with population growth and insufficient to recover the job loss from the recession, have been part-time jobs that do not provide any discretionary income with which to drive a consumer economy.

Obamacare has resulted in the health insurance companies, who thought that they would be living in high profits from the mandated health coverage, being outsmarted by employers, who have reduced their full-time workers to part-time in order to avoid Omamacare’s requirement to provide health coverage to those employees who work 30 hours a week or more. Employers can get away with this, because jobs are hard to find. The lack of employment opportunities results in Americans with engineering degrees working as retail sales clerks and as shelf stockers in Walmart and Home Depot. Despite the abundance of unemployed and under-employed American technical and engineering workers, the large corporations lobby Congress for more H-1B visas to bring in lowly paid foreigners with the argument that there is a shortage of qualified Americans for technical work. As I have pointed out so many times, if there were a shortage of engineering and technical workers, salaries would be rising, not falling.

For millions of employees, Obamacare means cut hours and less take home pay plus out-of-pocket expenses to purchase an Obamacare health policy. For most people covered by Obamacare, this is a lose-lose situation. It is also a lose-loss situation for the vast majority of the young. Most young people, unless they have jobs that provide health coverage, do without it, because the chances of the young having heart attacks, cancer, and other serious health problems is low. Obamacare, however, requires the healthy young to pay premiums for coverage or to pay a penalty to the IRS...In my day this might not have been a problem. However, today there are few jobs for the young that pay enough to have an independent existence. The monthly payroll jobs reports do not show well-paying jobs. The Labor Department’s projections of future jobs are not jobs that pay well. For the youth, it seems that the penalty is less than the premium, so youthful penalties paid out of waitress and bartender tips will subsidize the unusable Obamacare health policies for the poor adults who are not thrown into Medicaid, which confiscates their assets, if any.

Obamacare benefits only two classes of people. It benefits employers who drop their employees working hours below the hours specified for Obamacare coverage, and it benefits the insurance companies or the IRS who collect the premiums and penalties. Many of the people who pay the premiums won’t be able to use the policies because of co-pays and deductions. The very poor with no assets might receive health care if they reside in states that accept the Medicaid provisions of Obamacare.

In 21st century America, the few people who have experienced income gains are the executives and shareholders of firms who offshored their production for US markets, Wall Street which makes bets covered by the Federal Reserve, and the military-security complex which has been enriched by the neoconservatives’ wars. Every other American has lost.

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

October 3, 2013

Chris Hedges | The Sparks of Rebellion

http://truth-out.org/opinion/item/19127-the-sparks-of-rebellion

I am reading and rereading the debates among some of the great radical thinkers of the 19th and 20th centuries about the mechanisms of social change. These debates were not academic. They were frantic searches for the triggers of revolt.

Vladimir Lenin placed his faith in a violent uprising, a professional, disciplined revolutionary vanguard freed from moral constraints and, like Karl Marx, in the inevitable emergence of the worker’s state. Pierre-Joseph Proudhon insisted that gradual change would be accomplished as enlightened workers took over production and educated and converted the rest of the proletariat. Mikhail Bakunin predicted the catastrophic breakdown of the capitalist order, something we are likely to witness in our lifetimes, and new autonomous worker federations rising up out of the chaos. Pyotr Kropotkin, like Proudhon, believed in an evolutionary process that would hammer out the new society. Emma Goldman, along with Kropotkin, came to be very wary of both the efficacy of violence and the revolutionary potential of the masses. “The mass,” Goldman wrote bitterly toward the end of her life in echoing Marx, “clings to its masters, loves the whip, and is the first to cry Crucify!”

The revolutionists of history counted on a mobilized base of enlightened industrial workers. The building blocks of revolt, they believed, relied on the tool of the general strike, the ability of workers to cripple the mechanisms of production. Strikes could be sustained with the support of political parties, strike funds and union halls. Workers without these support mechanisms had to replicate the infrastructure of parties and unions if they wanted to put prolonged pressure on the bosses and the state. But now, with the decimation of the U.S. manufacturing base, along with the dismantling of our unions and opposition parties, we will have to search for different instruments of rebellion.

We must develop a revolutionary theory that is not reliant on the industrial or agrarian muscle of workers. Most manufacturing jobs have disappeared, and, of those that remain, few are unionized. Our family farms have been destroyed by agro-businesses. Monsanto and its Faustian counterparts on Wall Street rule. They are steadily poisoning our lives and rendering us powerless. The corporate leviathan, which is global, is freed from the constraints of a single nation-state or government. Corporations are beyond regulation or control. Politicians are too anemic, or more often too corrupt, to stand in the way of the accelerating corporate destruction. This makes our struggle different from revolutionary struggles in industrial societies in the past. Our revolt will look more like what erupted in the less industrialized Slavic republics, Russia, Spain and China and uprisings led by a disenfranchised rural and urban working class and peasantry in the liberation movements that swept through Africa and Latin America. The dispossessed working poor, along with unemployed college graduates and students, unemployed journalists, artists, lawyers and teachers, will form our movement. This is why the fight for a higher minimum wage is crucial to uniting service workers with the alienated college-educated sons and daughters of the old middle class. Bakunin, unlike Marx, considered déclassé intellectuals essential for successful revolt.

It is not the poor who make revolutions. It is those who conclude that they will not be able, as they once expected, to rise economically and socially. This consciousness is part of the self-knowledge of service workers and fast food workers. It is grasped by the swelling population of college graduates caught in a vise of low-paying jobs and obscene amounts of debt. These two groups, once united, will be our primary engines of revolt. Much of the urban poor has been crippled and in many cases broken by a rewriting of laws, especially drug laws, that has permitted courts, probation officers, parole boards and police to randomly seize poor people of color, especially African-American men, without just cause and lock them in cages for years. In many of our most impoverished urban centers—our internal colonies, as Malcolm X called them—mobilization, at least at first, will be difficult. The urban poor are already in chains. These chains are being readied for the rest of us. “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, beg in the streets or steal bread,” W.E.B. Du Bois commented acidly....

October 2, 2013

What Then Can I Do? Ten Ways to Democratize the Economy Gar Alperovitz and Keane Bhatt

http://truth-out.org/opinion/item/18908-what-then-can-i-do-ten-steps-toward-transforming-the-system

The richest 400 Americans now own more wealth than the bottom 180 million taken together. The political system is in deadlock. Social and economic pain continue to grow. Environmental devastation and global warming present growing challenges. Is there any path toward a more democratic, equal and ecologically sustainable society? What can one person do? In fact, there is a great deal one person working with others can do. Experiments across the country already focus on concrete actions that point toward a larger vision of long-term systemic change - especially the development of alternative economic institutions. Practical problem-solving activities on Main Streets across the country have begun to lay down the elements and principles of what might one day become the direction of a new system - one centered around building egalitarian wealth, nurturing democracy and community life, avoiding climate catastrophe and fostering liberty through greater economic security and free time.

Margaret Mead famously observed: "Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has." Some of the ten steps described below may be too big for one person to take on in isolation, but many are exactly the right size for a small and thoughtful group committed to building a new economy, restoring democracy and displacing corporate power. As the history of the civil rights movement, women's movement, and gay-liberation movement ought to remind us, it's precisely actions of this sort at the local level that have triggered the seismic shifts of progressive change in American history.

1. Democratize Your Money! Put your money in a credit union - then participate in its governance.


2. Seize the Moment: Time For Worker Ownership! Help build a worker co-op or encourage interested businesses to transition to employee ownership and adopt social and environmental standards as part of their missions.


3. Take Back Local Government: Demand Participatory Budgeting!
Organize your community so that local government spending is determined by inclusive neighborhood deliberations on key priorities.



4. Push Local Anchors to do Their Part!
Make nonprofit institutions like universities and hospitals use their resources to fight poverty, unemployment, and global warming.


5. Reclaim Your Neighborhood With Democratic Development!
Build community power through economic development and community land trusts.


6. Public Money for the Public Good! Organize to use public finances for community development.

7. Stop Letting Your Savings Fuel Corporate Rule! Get your workplace to offer more retirement-plan opportunities for responsible investment.



8. Democratize Energy Production to Create a Green Economy! Get involved in public and cooperative utilities to fight climate change.



9. Mobilize the Faith Community! Get your religious organization to move its money to a local financial institution involved in community development.



10. Make Time for Democracy! Fight unemployment by joining the fight against work



And There's More SEE LINK FOR DETAILS

There are many additional practical precedents to build on, refine and adapt. The examples outlined above aim to encourage thinking about how we move beyond partial experiments toward greater publicly benefiting democratization over time. For many others, see Community-Wealth.org and What Then Must We Do? Straight Talk About the Next American Revolution, by Gar Alperovitz. But all of this hinges on the strategic and self-conscious decision to adopt a sustained course of institution-changing action - one linked to movement-building politics and explicitly understood as a way to begin laying the necessary groundwork for something more.

October 1, 2013

Obedience to Corporate-State Authority Makes Consumer Society Increasingly Dangerous

http://truth-out.org/opinion/item/19050-the-experiment-requires-that-you-continue-obedience-to-corporate-state-authority-in-an-increasingly-dangerous-consumer-society

...Obedience and disobedience are universal social experiences. All human beings know what it feels like to obey - with varying degrees of enthusiasm - and we all know what it feels like to disobey. Each of us has plenty of experience with both, and we are always capable of one or the other at any given moment. Every individual with the capacity for independent thinking and action makes multiple daily decisions about whether to obey or disobey various laws, rules, wishes and suggestions of others, whether we are aware of these decisions or not.

Modern societies are largely founded on the seductive idea that valuing obedience over disobedience will bring personal success and social cohesion. We are taught from an early age that even minor disobedience will sharply increase the likelihood of scary prospects like personal failure and social chaos. These emotionally powerful messages are drilled into us at home and at school, cultivating the necessary habits for powerful interests to function effectively, from parents and teachers to state institutions and large multinational corporations.

When it comes to the nature of obedience-disobedience, there is nothing we could accurately call normal. While obedience can be a particularly strong habit to break, humans (in contrast to other primates with more hard-wired social behavioral programming) are born neither obedient nor disobedient. We have strong tendencies to engage in both types of behavior across cultures and generations, in rational and irrational ways. Whether to obey or disobey in any given situation is a personal choice. Human social reality is extremely variable and complex. As long as we remain social creatures, we must deal with the obedience-disobedience question.

Acts of obedience have over the centuries been the cause of far more destruction and savagery than have acts of disobedience - maybe most dramatically during World War II. Humanity witnessed an eruption of systematized violence on a scale never before seen, an outcome fully dependent on the obedient behavior of ordinary people. The war ended with two extraordinarily destructive acts: a handful of men obediently followed orders over Hiroshima and Nagasaki, resulting in the instant incineration of several hundred thousand human beings. Soon afterward, as a result of the Nuremberg Tribunal, it became crystal clear for anyone touched by the war that personal considerations of conscience were simply unavoidable when making decisions in hierarchical contexts. The duty to obey authority could no longer justify inhumane actions, neither morally nor legally. Questions regarding obedience and disobedience were revealed to the world as intensely personal, deeply ethical and of supreme consequence. In a post-Nuremberg world, the ultimate responsibility for one's actions falls on the individual, not on powerful interests that persuade or coerce....


AND EVEN COMPLETE OBEDIENCE BRINGS NO PROTECTION

THOUGHTFUL, PROVOCATIVE PIECE