It's the Economy, Stupid!

Why Obama Has Failed and Lost My Vote

In Uncategorized on July 27, 2011 at 7:07 pm

I bet some of my friends might be surprised to hear me say this given some of my progressive views, after all what choice do we really have.  Well its funny after George W. Bush, who I thought was one of the worst presidents in my lifetime, I honestly believed that things couldn’t get worse with Obama.  Boy was I wrong.  Now I never had any belief that he was a progressive, he gave many interviews early in his candidacy which indicated he idolized and admired Ronald Reagan, and surrounded himself with supply siders, so I kind of figured from the beginning he was not progressive at all.

During the campaign though he offered us a choice, four more years of an already failed economic policy or something new.  He even discussed shared sacrifice, which had me thinking that to some degree he might start to bring fairness back to policy making.  Boy was I wrong.  Once in office he proceeded to break every promise turning his back on the progressives that elected him even going farther right then some of the Republicans he was negotiating with.

Lets start from the beginning.  When he took office he continued the Bush policy of TARP, which bailed out our banking industry.  Although some Right Wing activists thought this was a terrible idea, it was a necessary step to maintain the US economic solvency and kept the US from entering a depression.  But most of us grew up in the 60’s, 70’s and 80’s when “Too Big to Fail” just meant “Too Big”.  This is the reason we learned about the Sherman Anti Trust Act in School, so Corporations couldn’t get too big and singlehandedly take down our entire economy.  This is the reason we broke up the Telephone Companies and US Oil, companies should be this big.   I had thought Obama was going to save the banks and then break them up through regulation, which was a prevailing theory during the economic crises.  But this did not happen, in fact the exact opposite happened, the Banks were allowed to get bigger.  Now four banks each hold more then 10% of the US wealth.  Not only unprecedented but actually illegal.  The law states that no bank can be so large as to have more then 10% of the economic wealth deposited within it.  This law was created so that if any one bank fails, it can’t take down the entire economy.  Now four banks, Bank of America, Morgan Stanley Chase, Citigroup and Wells Fargo are so big that if any one fails it could have ripple effects throughout our entire economy.

Also to date their have been no prosecutions or convictions of anyone in the financial sector related to the economic collapse.  In fact The Obama administration has either settled with the banks or just plain stopped all investigations into the matter.  Crazy given the extent of the economic crisis.  Both indicating Obama is much friendlier with Wall Street then he led us to believe.  He has also, like his predecessor, not enforced regulatory laws already on the books for the financial services industry.  Leading us to the same deceptive and predatory trading practices prevalent before the crash.  In fact for these same banks, its business as usual, conducting the same activity they did prior to the crash.  What makes this worse is they are now doing it with government money instead of their own.  Since 2007, the beginning of the crash, the Fed has loaned the banking industry some $16 trillion.  Yes that’s Trillion.  Just so we understand, the GDP of the US is $14 trillion.  So $16 trillion to banks for bonuses and bad trades, for the rest of us, we get Austerity.

We then get a health care bill, a terrible health care bill.  Sorry my friends to the left, this bill is horrible.  Its just another huge taxpayer giveaway to the healthcare industry.  It does nothing more then take tax dollars and shift it into corporate profits without provided anymore healthcare or cost controls.  Great job.

Obama then extended the Bush Tax cuts for the wealthy and in his current Debt Ceiling negotiations included entitlement cuts.  Obama has shown himself to not only be a Supply Sider, he has shown himself to be more Right wing then Ronald Reagan and George W. Bush.  Not only did we get four more years of George Bush, we got nothing we asked for in the election and none of the promises he made.  He didn’t stand up for the Unions in Wisconsin like he said he would, he still won’t come out in favor of gay marriage and until recently had the Justice department enforcing the Defense of Marriage Act.  Obama has done nothing to warrant or earn my vote, and as such I will be searching for a new candidate in the fall.  I wish Obama luck, but here’s hoping he doesn’t get a second term.

 

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Capitalism, a Love Story

In Uncategorized on June 16, 2011 at 9:51 am

In 2008 Michelle Bachmann, now a presidential candidate, called on the media to “take a great look at the views of the people in Congress and find out—are they pro-America or anti-America?” Now, three years later I do believe this bears looking into.  Is America just Capitalism, an economic system in which the means of production are privately owned and operated for profit or are we more then that.  America was always thought of as the land of opportunity free of the restrictions of a European oligarchy, where all people had the opportunity to own land and businesses and generally practice free commerce.  Capitalism.  And for the most part this free wheeling, wild west style economic theory prevailed right up until the Great Depression.  The Old European Oligarchy returned to the US in the form of a New Monied Oligarchy which earned millions of dollars on the backs of the working class and did whatever was needed to keep the money they had earned.  By the time the Great Depression rolled around 90% of the wealth in the US was concentrated into that hands of 1% of the population.  The very conditions present back then are present today. And the wealthy individuals that have all this money will do whatever it takes to protect the wealth they have created for themselves.  However, in 1933 two men came along and realized the pain these protectionist policies were having on the society and convinced FDR to create a New Deal with the American people, one that would spread the wealth and create prosperity for all, including those at the top.  And for over 50 years that is what we had.  They raised taxes on the rich, and created a robust middle class and from 1940 – 1970 the US went with a major recession and no depressions.

Fast forward to today, and the same policies that Herbert Hoover was pushing in 1929 which made the recession worse are now being recycled and pushed today.  These are policies that protect the rich. I read a great article by Paul Krugman which inpired me to write this Rule by Rentiers, you should read it too. These policies being pushed by republicans are for the sole purpose to protect the wealth of the already wealthy at the expense of the overall populous. Michelle Bachman, the spokes person for this movement, said on the today show a few months ago, we need to lower the taxes on the wealthy in this country, for they are the job creators and as such should be protected.  This is an interesting statement, cause its a great sound bite, but if you look closely she advocating that the wealthy in this country should be a protected class, they shouldn’t have to pay taxes, they should be unregulated, stand above the law and the rest of us should be subservient to them.  This is the reason their have been no prosecutions of Wall Street Executives, this is the reason they bailed out Wall Street in the first place, and this is why the rest of us are meant to suffer.

They don’t want us to talk about it, but they declared a Class War against the rest of us, and so far they are winning.  They are slowly taking our money, public money, our hard working tax dollars and funneling it into private hands for profit. They sold the Chicago Parking Meter Revenue streams for the next 30 years to foreign investors, they tried to sell the revenue streams for the Pennsylvania Turnpike to another consortium, they are slowing selling our schools and now they are trying to sell our healthcare (Medicare & Medicaid) and security by privatizing both.  All so private industry can earn more profit.  And what doesn’t make sense is that people are buying it.  A good example is Medicare, it is being sold to the American people that private companies can administer healthcare more efficiently then the government.  What doesn’t make sense is the number, right now only 5% of all medicare dollars goes to administrative costs, and medicare fraud and waste accounts for less then 1% of all medicare dollars. Now they want to hand this program over to private health insurance companies.  These same private healthcare companies take 30% of all money contributed as profit to be distributed to investors, and 10% of all money contributed is spent on administrative costs, that means of all money contributed to private health care companies less then 60% actually goes toward actual healthcare, compared to 94% for those on Medicare.  Can someone, anyone explain how anyone could buy this plan. A similar plan is being concocted for Social Security, where they will give the option for individuals to opt out of Social Security and allow them to choose their own investment options.  This plan is a huge giveaway to wall street, as individuals will be directed to invest in plans that Wall Street comes up with, this the same Wall Street that drove us into the recession in 2008.

But it does not end there, at the same time they are pleading with the American people about fiscal restraint and cutting funding for public services, they are providing huge tax subsidies for very rich corporations like Exxon, Chevron, BP, GE, Bank of America, Goldman Sachs and others.  These are our Tax dollars, this is our money that we give to our government to provide those essential public services, and instead of providing those services they are giving the money away to these corporations and telling us we should do without.  And then what do I hear recently, as the US has reached its debt limit, and the Republicans in Congress are talking about more cuts to social programs and services the US Federal Reserve gives $600 billion to Wall Street as a sort of back door stimulus.  So again, big bailout for Wall Street and the Rich, nothing for the rest of us.

Capitalism, an economic system in which the means of production are privately owned and operated for profit. Nothing of what I said above sounds like capitalism to me.  You see, America was founded on the principle that all men (people) are created equal and as such should all have the same opportunity.  By setting up a privileged class, the Republicans, and by proxy the Democrats, have moved us away from a capitalism to a plutocracy or oligarchy.  As individuals and small businesses we no longer have access or the ability to influence our politicians or even make policy. And the laws and cuts they are implementing are constricting innovation, limiting the ability of small business to grow and as such are limited our, the peoples ability, to stand on equal footing, no matter what ones class is. The best example of this was a bill recently passed in Wisconsin that make it illegal for small family owned beer manufacturers to sell directly to the retails and bars, the law forces small mom and pop businesses which generally have higher operating costs to use a middleman, a distributor as they are called, which will cut into the profits of these small businesses and in all likelihood cut into their business altogether as it would now force the retailers, bars and restaurants that sell these products to buy them from a distributor, in which case they just may not.  This law was created at the behest of Milwaukee Brewing Company, the largest manufacturer of beer in Wisconsin, and was implemented to protect the largest brewer and create more barriers to entry for small brewing companies.  That’s not capitalism. Capitalism is suppose to provide a level playing field, however, based on the subsidies, tax breaks, and the above the law treatment of a privileged few, we no longer have that level playing field.  These wealthy and powerful few no longer are obliged to pay the taxes we pay, or obey the laws we obey, they have no rules, and all this made legal and allowed by both the Republican and Democratic lawmakers.

America is suppose to be the land of opportunity, and the Republicans are pushing the premise that Obama and the democrats are destroying this country.  But I beg to differ. It is the Republicans, Michaelle Bachman, Paul Ryan, John Boehner and Eric Cantor, along with all their like in the state governorships and legislatures.  At a time when fiscal restraint is called for they continue to push huge tax cuts for the wealthy, and cut programs, infrastructure and everything else they can find.  America is our roads, our innovation, our resources, our people, and they are gutting everything.  They are even taking away our democracy itself, by declaring martial law in cities like Benton Harbor Mich, and Detroit Mich, and 3 other states have implemented similar laws to do the same thing.  They are trying to get rid of successful programs like Medicare and Social Security.  And most importantly they have decided no longer to invest in our society, decided that only the wealthy are worth protecting, the rest of us aren’t.  They have no problem spending money on Defense and sending our soldiers to die for corporations, but when it comes to investing in the people at home, that is not allowed.  The budget fight is interesting to watch, cause at no point will they cut defense or the huge subsidies for the largest corporations in the world, but passing a simple jobs bill is too expensive.  $600 billion to Wall Street is fine, $600 billion for jobs and the people, not going to happen.  And the best part about the Republican plan, the only stimulus that is acceptable is more tax cuts for the super rich.  The choice is ours at the end of the day, we can continue to watch our politicians funnel money to the private sector, or we can finally take back out government and get it working for the people again, after all, we are suppose to be a government for the people, by the people, and not a government for the rich, wealthy and corporations, by the rich wealthy and corporations.  My solution, no more private sector money in elections, all elections should be paid for by the public, equal money being given to both parties as well as equal on air time.  Also, no more special interest money in elections, no ads no nothing.  And Term Limits, we need to get rid of the fuckers who think this is a lifelong job to live off of the public.  Ok I am done.  Please comment, would like to hear your thoughts.

The Domino Effect of Default

In Uncategorized on May 16, 2011 at 9:50 am

Up until recently the US has not even come close to defaulting on our debt.  The US Government prints its own money which is backed by the good faith of the American People that we will repay our debts.  This weekend I was watching Fox News (Yes I know), and they were discussing the Debt Ceiling with a bunch of self proclaimed Tea Part activists.  The conversation was very disturbing as it clearly showed their ignorance of the issue.  One comment compared it to a Credit Card, another to a family which needs to live within its means and another person who boldly claimed it was Obama’s debt and he should deal with it.  But what disturbed me most was how Fox News portrayed a default on the debt, not as a catastrophic collapse of our economy, but that the Stock Market would go down a few hundred points and a few Bond Traders would loose some money.  This is where my blood started to boil, as I couldn’t believe any news organization could be so irresponsible.  But then I thought about it, and realized all the news networks were portraying it the same way.  So I want to be perfectly clear on this, a Default on our Debt would produced a Catastrophic and Cataclysmic effect on our economy which would make the recession of 2008 look like a child’s tea party.

1)      The immediate effect would be the rise in Interest Rates.  This isn’t just the rate that banks borrow at or the government borrows at, immediately as if overnight all our Credit Cards Doubled their Interest Rates.   Mortgages rates would also increase.

2)      Stock market would sharply drop. We are not just talking a few hundred points, potentially half if not more of the value of the market would be lost.  This would effect 401(k)’s and Pensions you name it.  A lot of Company’s as a result would also have trouble making payroll as we saw with the Crash in 2008.

3)      The value of the dollar would be less. No one knows how much less, but imagine overnight that the cost of milk goes from $4.00/gallon to $8.00/gallon.  This can happen.  Think Gas is high now, consider that same scenario for gas, which could go to $7 or $8/ gallon.

4)      Along the lines of above, the Dollar could lose its special status as the Reserve currency of the world.  Right now most, if not all commodities are purchased in US Dollars.  China and Russia have already moved off of the US dollar as a reserve currency.  What happens if the rest of the world does this?  In order to Purchase GAS, Milk, Grain, Gold, imagine we first have to convert the dollar into another currency.  The cost of these products could go up astronomically.

5)      Credit would also tighten, imagine small businesses not being able to borrow to expand, or having their revolving credit line canceled so they can’t make payroll.

And these are just a few of the scenarios we can project.  We are still in economic recovery, with close to 10% unemployment (some estimates say this number is closer to 17%).  If the US were to default, overnight 1 million people would be unemployed and would propel us into a depression which would make the depression of 1930 look like a summer vacation.  This is not a time for games, or nonsense and especially not a time for people who are ignorant of this issue to be setting policy.  Its time as a nation we grow up and start allowing the adults in the room, the intelligent people make policy, raise the debt ceiling and move on to more important issues.  And if you don’t understand the issue, either educate yourself or SHUT THE FUCK UP.