Saturday, February 25, 2012

Consumerism = The New Spirituality

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Wednesday, April 6, 2011

Do The Math!

The Federal Deficit is $1.3 tril, going to $1.4 tril

The Frank-Dodd Resolution allowed The Fed to give away $3.3 tril to 2,100 banks (not budgeted).

The cost of Medicare and Social Security is under $2tril (budgeted).

So, if you add back the $3.3 tril from bankers given away to the $1.3 tril deficit, you end up with $2 Tril which is the amount of Medicare and Social security.

It would only require payment of less than 4% of the money "loaned" to banks to keep the Federal Government running.

So Why....

is Congress trying to pay for an unbudgeted deficit with budgeted money, by cutting those services? Why not go to the banks and say. Hey guys, we over-extended and need to collect on the loans we gave you. They were loans, right?

The obvious is that we have a Republican Congress and traditionally, they have opposed social programs. Also, Medicare and Social Security become easy targets; especially given the scare tactic of socializing too much.

But a big part of it is that Obama is either too chickenshit to go after the bankers the way FDR in this same scenario, or he is part of the clan.

Banker-boy Obama
Where does Obama fit in this. For starters he's enmeshed in the government and as Charles Ferguson stated in a lecture to MIT: "The nation “has evolved a political duopoly where two political parties agree on things related to finance and money.” Without a political structure immune to such influence, Ferguson sees little likelihood of challenging the interests of the financial giants."

How enmeshed is Obama?. Lets take a look at his Financial Advisers:
-- Two ex-CEOs of Fannie Mae - Jim Johnson and Franklin Raines
-- Larry Summers - ex Chief Economist for the World Bank who wrote a memo encouraging financing of "dirty industries" (not exactly pro-Main St. thinking)

Obama also rewarded Goldman Sachs exectutive Phillip Murphy for his role in destroying the economy, but making him Ambassador to Germany. Of the top ten contributors to Obama's campaign included are: Goldman Sachs, JP Morgan Chase; Citigroup and UBS; a bank who was caught breaking sanctions to fund Iran's uranium enrichment program. Obama is a died in the wool Free Market Banking Lobbiest

And now we stand at the cusp of a government shutdown with the focus on taking away services from the Main St. taxpayers instead of collecting the banking welfare from those who created this problem. If H.R. 1 which was introduced and passed by the House is any indication, $51bn is what would be required to keep the Federal Government running; at least that what they claimed needed to be cut from social programs to keep the government running. That's only 3.9% of the $3.3tril bankster give away.

Tuesday, February 15, 2011

The Fallacy of Blaming Pensions

One of the variables in the complications of operating both in the private and the public sector is pensions and a lot of blame is being put on pensions for why entitites such as the State of Illinois are failing. Too many payouts in the pension. That makes pensions a convenient problem for the extremely wealthy to point at.

However, there is a fallacy to this and there are other places to cut costs.

Ironically, the concept of pensions came out of a period of history when greed and wealth brought the nations economy to it's knees: The Great Depression.

Here's the way it should (and could) work.

The idea of pensions was based on a valid notion that population would continue to expand in this country (and it has) which means that the workforce would expand. Since the productivity of the workforce had a direct relationship with input into the pension funds, there would always be funds for pension, as long as there was a workforce. Well the population has continued to increase, but the workforce has 1) diminished in size and 2) diminished compensation.

What changed was that we shifted to a paradigm of an economy that favors the rich and big business in terms of return on capital by moving to a credit/loan/debt econonmy where money could be made (by a few) simply by the movement of money. No need to keep thrivant workforce. Having more jobs offshored didn't help. Consequently, what happened is that the paradigm shifted from the importance of people in the workforce to the importance of making money from money.

So, now the pensions which are being drawn upon by those retiring is a burden. One that is pointed to and blamed a lot for fiscal insolvency. What those who point the finger don't want you to see is that the other side of this, is that the money which once went to "Main St." got redistributed from supporting workers to private equity. So, the other solution to dissolving and/or renigning on pension funds, is to restribute some of that money (not all) back from the exceedingly well of people who make money from the movement of money (private equity), back to financing a work force.

Understanding how this happened is to understand how to fix the problem. The problem is a cause of deregulated Freidmanesque total free market supply side economics. Now, I am not against free market competition, but we no longer have a competitive market. And the answer is simple.

Regulation.

Greed begats greed. Allow for competition in the market, but regulate it so it doesn't take advantage of the populous that is the foundation.