The Wealth Gap and the Collapse of the U.S.

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land2341's picture
land2341
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Re: The Wealth Gap and the Collapse of the U.S.

One of the primary flaws of trickle down economics is that it presumed that the people who owned and ran businesses would do what was in the best interest of the business.  They did not.  They did what was in their own best interest even if it destroyed the company.

One of the flaws of liberal thinking is that it assumes the government can do a fair job of "taking care" of everyone without there being massive fraud and corruption and waste.  It cannot.

One of the flaws in conservative thinking is that it assumes that people will behave reasonably with the freedoms they are given and that business owners will behave fairly and in the best interest of the companies and the economy.  They will not.

THE major flaw in ALL of these schools of thought - be they economic or political - is that one way is the answer instead of realizing that you need a balanced amount of both.  

The republic is rotten at its core and the rot is spreading.

trwiley's picture
trwiley
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Re: The Wealth Gap and the Collapse of the U.S.

We need more than just a balanced approach. THE flaw is the monetary paradigm itself. Our whole socioeconomic system is what's rotten to the core.

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xraymike79
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Re: The Wealth Gap and the Collapse of the U.S.

Wall Street’s Global Race to the Bottom


MONDAY, OCTOBER 4, 2010

Wonder what’s happening with bank reform? Watch your wallets.

Having created giant loopholes in the Dodd-Frank law recently passed by Congress (keeping “customized” derivatives underground, for example), fighting off attempts to cap the size of the biggest banks, and keeping capital requirements relatively modest, Wall Street is now busily whittling back the rest through regulations.

Squadrons of lawyers and lobbyists are now pressing the Treasury, Comptroller of the Currency, SEC, and the Fed to go even easier on the Street.

Their main argument is if regulations are too tight, the big banks will be less competitive internationally. Translated: They’ll move more of their business to London and Frankfurt, where regulations will be looser.

Meanwhile, Wall Street is warning Europeans that if their financial regulations are too tight, the big banks will move more of their business to the US, where regulations will be looser.

Two weeks ago, after the Basel Committee on Banking Supervision (a global financial regulatory oversight body) came up with a new set of rules to toughen bank capital and liquidity requirements, European officials threatened to get even tougher. They approved a new system of European regulatory bodies with added powers to ban certain financial products or activities in times of market stress.

This prompted Lloyd Blankfein, CEO of Goldman Sachs, to issue — in the words of the Financial Times — “a clear warning that the bank could shift its operations around the world if the regulatory crackdown becomes too tough.”

Blankfein told a European financial conference that while Europe remains of vital importance to Goldman (with less than half of the bank’s business now generated in the U.S.), the introduction of “mismatched regulation” across different regions would tempt banks to search out the cheapest and least intrusive jurisdiction in which to operate.

“Operations can be moved globally and capital can be accessed globally,” he said.

So the race to the bottom is now official. Wall Street will set up its casino wherever financial gambling is least regulated.

jneo's picture
jneo
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Re: The Wealth Gap and the Collapse of the U.S.

TRWILEY, you are correct, I think everyone on this site either directly or indirectly supports a resource based economy, we need stability not constant growth on a finite planet.  Monetary economics was good software(metaphor) to get things moving, but we need stability and better efficiency software to run things.  The Price system is doing more bad than good as we currently see, printing more and more money and giving it to banks for their derivatives is not a solution.   Jan 2011!!  aught to be very interesting.

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xraymike79
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Re: The Wealth Gap and the Collapse of the U.S.

land2341 wrote:

One of the primary flaws of trickle down economics is that it presumed that the people who owned and ran businesses would do what was in the best interest of the business.  They did not.  They did what was in their own best interest even if it destroyed the company.

One of the flaws of liberal thinking is that it assumes the government can do a fair job of "taking care" of everyone without there being massive fraud and corruption and waste.  It cannot.

One of the flaws in conservative thinking is that it assumes that people will behave reasonably with the freedoms they are given and that business owners will behave fairly and in the best interest of the companies and the economy.  They will not.

THE major flaw in ALL of these schools of thought - be they economic or political - is that one way is the answer instead of realizing that you need a balanced amount of both.  

The republic is rotten at its core and the rot is spreading.

Completely corrupt and rotten from the inside out -- systemically corrupt.

OpEdNews - Article: Lawless Nation - Congress

By Michael Collins
Part II of III (Part I)

WASHINGTON - Placed in office through legalized bribery, supported by public funding for their every need, protected against the laws that we're expected to obey, Congress represents the epitome of lawlessness; lawmakers who have no regard for the law. (Image)

Members of Congress are different. They get to retire at age 62 with lifetime pensions and health benefits. To qualify, they need just five years of service. They get free phone, mail, and other communications plus paid domestic and foreign travel. Supposedly, they're not allowed to take gifts but the list of exceptionsoffers plenty of room for luxurious appreciation.

The biggest gift of all - a six to seven figure job with a major corporation or lobbying firm right after retirement - is still fair game for any member. The revolving doornever stops.

But supposedly Congress passes laws for the public benefit. They come to power based on contributions from their patrons, usually large donors. Then members resolutely deny that these contributions translate into legislation favorable to the donors. If pressed, member's state that the contributions merely buy access not votes.

In fact, members routinely vote the interests of their largest patrons. Thus, the contributions are a form of legalized bribery ("a favor or promise given to influence the judgment or conduct of a person in a position of trust.").

The financial industry contributed hundreds of millions to current members. WhenWall Street was about to fail in late 2008, they called in their markers and got an immediate bailout of $700 billion and "total potential Federal Governmentsupport (that) could reach up to $23.7 trillion" from the Federal Reserve and other government sources. This was in the midst of the 2008 federal election cycle when members solicited funds from the very people they bailed out.

Would this have happened without years of contributions by the financial industry?

What other incentives were involved that were not revealed?

The people face a health care crisis of epic proportions, losing insurance, under coverage for life threatening conditions. They have to delay or cease medication due to ever rising costs. Health care is unaffordable to many.

Congress addressed the problem much like they did the financial crisis. A bill was passed that left health insurance companies at the center of health care taking a handsome profit for doing little to nothing. Prior to passage of the health bill, the insurers raised rates shamelessly and did so again after the legislation was enacted, using the very health reform passed for the people to gouge the people for more money.

In the midst of total unemployment at about 20%, with the poverty on the rise, what has Congress done? The vast majority of citizens get little or not attention while those who cause the financial meltdown are handsomely rewarded. Members of Congress fret that they simply can't get the votes to help the people. But we know different.

It's planned failure that serves their wealthy donors. That's not a system of laws. It's an oligarchy with a strong dose of kleptocracy.

Congress routinely ignores the Constitution. Article I outlines "All legislative Powers herein granted shall be vested in a Congress." Section 8 of the article lists this power: "To declare War." When presidents make war without congressional authorization, Congress passes legislation that negates its war making powers in order to legitimize the illegal act by the executive branch.

These wars are funded by Congress even when a war was found to be based on lies, as was the case in Iraq. Congress continues to fund the efforts claiming it is necessary to protect the troops. They fail to acknowledge that the absence of illegal wars harmful to the nation is the best troop protection available.

With the illegal wars underway, Congress passes legislation to address the problems created by the illegal wars in the name of national security. As they do this, the real issues of national security, the legal rights of citizens and the economic well being of the nation, are violated or ignored.

A key function of Congress is oversight and investigation. When the nation was attacked on 9/11, the hapless response by the executive branch was on full display. A 2002 House - Senate Joint Committee detailed the extensive government knowledge of the emerging plot over years without effective executive action to stop it. Nothing came of the report. It is as though it never occurred.

When the 9/11 Commission was finally established, Congress allowed a formerBush administration insider to serve as the executive director and appointed co-chairmen who thought that the executive director was just fine. It came as no surprise when a thoroughly inadequate report was produced with key sections blacked out.

Illegal wars, the stripping of fundamental rights like habeas corpus, the declaration that presidents have the right to assassinate U.S. citizens by executive order, the rendering of charges without having to specify those charges were all ratified by Congress. It must be legal. Didn't Congress pass a law?

But they couldn't do this without the full cooperation of the judicial branch of government. Surely, our Supreme Court and federal judiciary are the last bastion of the law that is to protect us all.

Even if that were the case, the sheer weight of executive and legislative lawlessness presents an overwhelming tide that is irresistible to those in power. The seamless system of self-supporting lawlessness is an efficient structure denying citizen rights by mocking the laws of the nation.

END

xraymike79's picture
xraymike79
Status: Diamond Member (Offline)
Joined: Aug 24 2008
Posts: 2040
Re: The Wealth Gap and the Collapse of the U.S.

Congress And The Illusion Of Political Choice

10/6/2010

In a declining Empire, it goes without saying that special interests buy government officials to achieve their ends. What is interesting about the American example is that the large majority of the citizenry still believe they live in a Democracy. A commonplace observation, especially among self-styled "progressives," is that Americans vote against their own best interests over and over again. These progressives are very upset and disappointed by this outcome.

But the observation that people vote against their self-interest is misleading, for a vote cast for either party is necessarily a vote against the best interests of the voter almost all of the time. We can call this phenomenon the Illusion of Political Choice.

Mother Jones has published a special report Who Owns Congress? I've included some of the most interesting parts below. Go over to their report if you want additional details. First, let's look at the Big Picture.

Political_donations_by_industry 
Donations by industry, 1989-2010

Finance, insurance and real estate is often abbreviated by the acronym FIRE, as in the FIRE economy which iTulip's Eric Janszen often refers to. It is not an accident that the period of our Empire's decline, which I date to 1983, coincides with the period of disproportionately large donations to Congress from FIRE representatives. (The chart above only goes back to 1989.) You can see that FIRE organizations donated more money to Congressional election campaigns than Labors and Unions, Energy and natural resources, Agribusiness and Construction combined.

The Illusion of Political Choice is best illustrated in the chart below (hat tip, Barry Ritholtz).

Senate_seating_chart 
Senate seating by major business sponsors

You can easily see that over well over half the Senate is "owned" by the FIRE sector or "lawyers and lobbyists" representing other special business interests. The actual percentage of money raised varies among politicians. For example, Mitch McConnell (R, Ky) has raised $37.2 million, 14% of which comes from FIRE interests, while Charles Schumer (D, NY) has raised $62.2 million, 27% of which comes from FIRE interests. These bribes are pitifully small compared to the services rendered in almost all cases. I am often disappointed that so many can be sold out for so little.

You can explore the Mother Jones report yourself but before I sum up, there were some other numbers I found interesting.

  • Percentage of US adults that gave $200 or more in '08: 0.61%
  • Percentage that gave more than $2,300: 0.13%
  • Number of people who gave more than $10,000: 36,388
  • Number who gave more than $95,000: 938

This is a remarkable statistic in so far as you'd have to give at least $25,000 to a political campaign to even get the candidate's attention and shake his hand. Otherwise, you'll get a table way in the back at the Fundraiser Dinner. And bear in mind that corporate donations are almost always made "voluntarily" by individuals within the corporation. That's just how its done.

With so few people controlling the Congress, and with the Illusion of Political Choice being the dominant paradigm, you might wonder why so many Americans remain vested in the political system. It's a good question, and one obvious answer is that they are really stupid. For example, my local "newspaper" reprinted a column by one Gail Collins, who is a syndicated columnist for the New York Times. Ms. Collins' column is called Worst election of the year

Which state is having the most appalling campaign season? So much competition!

There's Arizona, where Jan Brewer, the immigrant-bashing governor, stomped away from her horrible debate performance while reporters yelled: "Governor, please answer the question about the headless bodies!" Always hard to beat a state with a headless-bodies controversy.Arizona got additional awfulness points when Ms. Brewer announced that she was not participating in future debates since she only needed to do that one to get public campaign funds. Still more when she said she might change her mind if her poll numbers dropped. Even more for the fact that they haven't.

California (Fourth Month Without a Budget!) has a governor's race that's degenerated into a debate over whether Meg Whitman should take a lie detector test to refute the weepy claims of her undocumented ex-housekeeper...

She goes on in this vein. Now, we could simply say this is mindless drivel and leave it at that. But the more interesting question is why Ms. Collins remains fixated on these obviously corrupt—not to mention crazy—people participating in an obviously corrupt process. Another ready answer is that this is how Gail makes her living. Another is that she, like everybody else, likes to gawk at a train wreck.

But on a deeper level, I think Ms. Collins still wants to believe we live in a Democracy even as she ridicules the various sociopaths running for office. Otherwise, why would this insane, corrupt charade be worthy of her attention? And, by implication, ours?

Bonus Video

 

xraymike79's picture
xraymike79
Status: Diamond Member (Offline)
Joined: Aug 24 2008
Posts: 2040
Re: The Wealth Gap and the Collapse of the U.S.

It pays not to cultivate GM crops, survey finds

Let’s hope this spreads.  Monsanto’s stock has taken a major nosedive, another good thing.

Getting Screwed By Phone Companies and Broadband - US ranks as one of the worst when it comes to communications.

People Are Allergic To Facts – I’ve come to understand that our illusions are the only thing holding society together.  I suspect that when they break down sufficiently enough, we’ll become totally ungovernable and unmanageable and swiftly turn on each other is truly horrendous ways.  But that’s not what the link is about, not exactly.  We tend to accept our predisposed beliefs over facts, evidence, scientific research.

Foreclosuregate, Robogate, Take Your Pick - Massive fraud and coverup, incompetence on home mortgages, foreclosure — but SURE to watch the video, it’s absolutely stunning on the scale and size of what is going on.  Total meltdown happening right now, foreclosures have been foreclosures have been suspended nationwide.

More here on the Johnny Stewart show (video) - Foreclosure Crisis.  It’s not only Congress that doesn’t read the crap they sign — it’s your lender.  And then when you don’t make your payments, they steal the house back, whether or not they “legally” own it.

95,000 foreclosure just last month alone….

Clearly signs of the complete collapse of the American “economy”.  The root cause is what it always is.

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