No Quarter http://noquarterusa.net/blog/2008/09/27/baracks-fannie-mae-buddies/
Back in 2004, when the Republicans controlled the House, they tried to have a hearing on the threat that the financial mismanagement of Fannie Mae and Freddie Mac presented to the U.S. Economy. Here’s the video evidence of the Democrats defending the status quo and blocking efforts to hold these people accountable:
I think this is representative [My YouTube reception is broken and sporadic...]:
Dems: Maxine W: "...trying to fix something that wasn't broken..." Gregory Meeks: beating up on fed regulator Armando Falcon Lacie Clay: "...a lynching of Raines..." Arthur Davis: piling on Barney Franks: "...a rush to judgement..."
At the table [separately, I think]:
Frank Raines
Armando Falcon, Fed. Hous. Enterp. Oversight Dir.: "...didn't come under us...did whatever they wanted..."
Reps: Chris Shays Don Manzullo: calls out Jamie Gorelick, et al Richard Baker Ed Royce
September 27, 2008 Memory Lane: 'Lynching' Franklin Raines and How Fannie Mae Isn't 'Broke' Clarice Feldman Classical Values brings to our attention this incredible video showing how the Republicans in Congress tried hard to regulate better Fannie Mae and how the Democrats fought that tooth and nail, even referring to criticism of foremer chairman Raines as a "lynching".
I read a little piece of informationin my local rag today that strikes me as... interesting.
It seems, back in the 90's, they decided that the FDIC had plenty of money and the banks needed to no longer send their dimes int to the central authority. Now, Wa-Mu had enough liability to drain the fund with approximately another 90 banks on the precipice of failure.
It reminds me of when the pension funds of big corporations asked that they use the surplus in the funds to finance current operations.
what the heck, the US taxpayer has infiinitely deep pockets! Let the Bailout roll! Manna from heaven!
"If you want a sense of the pain that still lies ahead, look closer at the details. Look at who's not part of the rescue: the Federal Deposit Insurance Corp., the agency that guarantees Americans' chequing and saving accounts. By arranging the emergency sale of most of WaMu's assets to JPMorgan Chase, the U.S. government avoided a massive claim on FDIC. That's the good news. Here's the bad: (1) More bank failures are certain, (2) JPMorgan can't save them all and (3) the deposit insurance fund, at $45-billion (U.S.), could probably handle only one or two WaMu-sized busts before it runs out of money, which would force it to turn to the U.S. taxpayer for a loan.
How can that be? The United States, home of more than 8,000 financial institutions, has had relatively few of them go broke since the savings-and-loan debacle, and that was nearly 20 years ago. Only three small FDIC-insured banks failed last year and none in 2005 and 2006. There has been plenty of time to build up the fund. But it hasn't happened because some genius decided, back in the mid-1990s, that the deposit insurance fund need not save too much for a rainy day. So for the next decade, most U.S. banks got a holiday from sending their dimes to FDIC.
Well, baby, it's pouring outside now. And the tale of FDIC seems like a perfect illustration of what has made the U.S. economy so sick. Subprime mortgages are just a manifestation of the bigger problem: The people don't save, the government doesn't save and even the parts of it that exist to set aside money for the bad times, don't save enough."
The economic disaster that is military keynesianism
Why the US has really gone broke
Global confidence in the US economy has reached zero, as was proved by last month's stock market meltdown. But there is an enormous anomaly in the US economy above and beyond the subprime mortgage crisis, the housing bubble and the prospect of recession: 60 years of misallocation of resources, and borrowings, to the establishment and maintenance of a military-industrial complex as the basis of the nation's economic life
By Chalmers Johnson
The military adventurers in the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups thought that they were the "smartest guys in the room" — the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay or repudiate. This fiscal irresponsibility has been disguised through many manipulative financial schemes (causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
There are three broad aspects to the US debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defence" projects that bear no relation to the national security of the US. We are also keeping the income tax burdens on the richest segment of the population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our base and our loss of jobs to foreign countries through massive military expenditures — "military Keynesianism" (which I discuss in detail in my book Nemesis: The Last Days of the American Republic). By that, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of the US. These are what economists call opportunity costs, things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs, an infinitely more efficient use of scarce resources than arms manufacturing. Fiscal disaster
It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for the fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defence budget, is itself larger than the combined military budgets of Russia and China. Defence-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The US has become the largest single seller of arms and munitions to other nations on Earth. Leaving out President Bush's two on-going wars, defence spending has doubled since the mid-1990s. The defence budget for fiscal 2008 is the largest since the second world war.
Before we try to break down and analyse this gargantuan sum, there is one important caveat. Figures on defence spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicised) basic budget total and double it" (1). Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defence budget is "black"," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.
There are many reasons for this budgetary sleight-of-hand — including a desire for secrecy on the part of the president, the secretary of defence, and the military-industrial complex — but the chief one is that members of Congress, who profit enormously from defence jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense, nor the Department of Homeland Security, has ever complied. Congress has complained, but not penalised either department for ignoring the law. All numbers released by the Pentagon should be regarded as suspect.
In discussing the fiscal 2008 defence budget, as released on 7 February 2007, I have been guided by two experienced and reliable analysts: William D Hartung of the New America Foundation's Arms and Security Initiative (2) and Fred Kaplan, defence correspondent for Slate.org (3). They agree that the Department of Defense requested $481.4bn for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7bn for the "supplemental" budget to fight the global war on terrorism — that is, the two on-going wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4bn to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional "allowance" (a new term in defence budget documents) of $50bn to be charged to fiscal year 2009. This makes a total spending request by the Department of Defense of $766.5bn.
But there is much more. In an attempt to disguise the true size of the US military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4bn for the Department of Energy goes towards developing and maintaining nuclear warheads; and $25.3bn in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt and Pakistan). Another $1.03bn outside the official Department of Defense budget is now needed for recruitment and re-enlistment incentives for the overstretched US military, up from a mere $174m in 2003, when the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7bn, 50% of it for the long-term care of the most seriously injured among the 28,870 soldiers so far wounded in Iraq and 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4bn goes to the Department of Homeland Security.
Missing from this compilation is $1.9bn to the Department of Justice for the paramilitary activities of the FBI; $38.5bn to the Department of the Treasury for the Military Retirement Fund; $7.6bn for the military-related activities of the National Aeronautics and Space Administration; and well over $200bn in interest for past debt-financed defence outlays. This brings US spending for its military establishment during the current fiscal year, conservatively calculated, to at least $1.1 trillion. Military Keynesianism
Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neo-conservatives and poorly informed patriotic Americans believe that, even though our defence budget is huge, we can afford it because we are the richest country on Earth. That statement is no longer true. The world's richest political entity, according to the CIA's World Factbook, is the European Union. The EU's 2006 GDP was estimated to be slightly larger than that of the US. Moreover, China's 2006 GDP was only slightly smaller than that of the US, and Japan was the world's fourth richest nation.
A more telling comparison that reveals just how much worse we're doing can be found among the current accounts of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. In order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88bn per year trade surplus with the US and enjoys the world's second highest current account balance (China is number one). The US is number 163 — last on the list, worse than countries such as Australia and the UK that also have large trade deficits. Its 2006 current account deficit was $811.5bn; second worst was Spain at $106.4bn. This is unsustainable.
It's not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On 7 November 2007, the US Treasury announced that the national debt had breached _$9 trillion for the first time. This was just five weeks after Congress raised the "debt ceiling" to $9.815 trillion. If you begin in 1789, at the moment the constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defence expenditures. The top spenders
The world's top 10 military spenders and the approximate amounts each currently budgets for its military establishment are: Rank Country Military budget 1. United States (FY 2008 budget) $623bn 2. China (2004) $65bn 3. Russia $50bn 4. France (2005) $45bn 5. United Kingdom $42.8bn 6. Japan (2007) $41.75bn 7. Germany (2003) $35.1bn 8. Italy (2003) $28.2bn 9. South Korea (2003) $21.1bn 10. India (2005 est.) $19bn World total military expenditures (2004 est) $1,100bn World total (minus the US) $500bn
Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration's policies. They have been going on for a very long time in accordance with a superficially plausible ideology, and have now become so entrenched in our democratic political system that they are starting to wreak havoc. This is military Keynesianism — the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.
This ideology goes back to the first years of the cold war. During the late 1940s, the US was haunted by economic anxieties. The great depression of the 1930s had been overcome only by the war production boom of the second world war. With peace and demobilisation, there was a pervasive fear that the depression would return. During 1949, alarmed by the Soviet Union's detonation of an atomic bomb, the looming Communist victory in the Chinese civil war, a domestic recession, and the lowering of the Iron Curtain around the USSR's European satellites, the US sought to draft basic strategy for the emerging cold war. The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated 14 April 1950 and signed by President Harry S Truman on 30 September 1950, it laid out the basic public economic policies that the US pursues to the present day.
In its conclusions, NSC-68 asserted: "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living" (4).
With this understanding, US strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment, as well as ward off a possible return of the depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of 6 February 1961: "The conjunction of an immense military establishment and a large arms industry is new in the American experience" — the military-industrial complex.
By 1990 the value of the weapons, equipment and factories devoted to the Department of Defense was 83% of the value of all plants and equipment in US manufacturing. From 1947 to 1990, the combined US military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, US reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is a form of slow economic suicide. Higher spending, fewer jobs
On 1 May 2007, the Center for Economic and Policy Research of Washington, DC, released a study prepared by the economic and political forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. The US economy has had to cope with growing defence spending for more than 60 years. Baker found that, after 10 years of higher defence spending, there would be 464,000 fewer jobs than in a scenario that involved lower defence spending.
Baker concluded: "It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment" (5).
These are only some of the many deleterious effects of military Keynesianism.
It was believed that the US could afford both a massive military establishment and a high standard of living, and that it needed both to maintain full employment. But it did not work out that way. By the 1960s it was becoming apparent that turning over the nation's largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E Woods Jr observes that, during the 1950s and 1960s, between one-third and two-thirds of all US research talent was siphoned off into the military sector (6). It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles. Can we reverse the trend?
Nuclear weapons furnish a striking illustration of these anomalies. Between the 1940s and 1996, the US spent at least $5.8 trillion on the development, testing and construction of nuclear bombs. By 1967, the peak year of its nuclear stockpile, the US possessed some 32,500 deliverable atomic and hydrogen bombs, none of which, thankfully, was ever used. They perfectly illustrate the Keynesian principle that the government can provide make-work jobs to keep people employed. Nuclear weapons were not just America's secret weapon, but also its secret economic weapon. As of 2006, we still had 9,960 of them. There is today no sane use for them, while the trillions spent on them could have been used to solve the problems of social security and health care, quality education and access to higher education for all, not to speak of the retention of highly-skilled jobs within the economy.
The pioneer in analysing what has been lost as a result of military Keynesianism was the late Seymour Melman (1917-2004), a professor of industrial engineering and operations research at Columbia University. His 1970 book, Pentagon Capitalism: The Political Economy of War, was a prescient analysis of the unintended consequences of the US preoccupation with its armed forces and their weaponry since the onset of the cold war. Melman wrote: "From 1946 to 1969, the United States government spent over $1,000bn on the military, more than half of this under the Kennedy and Johnson administrations — the period during which the [Pentagon-dominated] state management was established as a formal institution. This sum of staggering size (try to visualize a billion of something) does not express the cost of the military establishment to the nation as a whole. The true cost is measured by what has been foregone, by the accumulated deterioration in many facets of life, by the inability to alleviate human wretchedness of long duration."
In an important exegesis on Melman's relevance to the current American economic situation, Thomas Woods writes: "According to the US Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation's plant and equipment, and infrastructure, at just over _$7.29 trillion… The amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock" (7).
The fact that we did not modernise or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated. Machine tools, an industry on which Melman was an authority, are a particularly important symptom. In November 1968, a five-year inventory disclosed "that 64% of the metalworking machine tools used in US industry were 10 years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States' machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the second world war. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry."
Nothing has been done since 1968 to reverse these trends and it shows today in our massive imports of equipment — from medical machines like _proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.
Our short tenure as the world's lone superpower has come to an end. As Harvard economics professor Benjamin Friedman has written: "Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence and cultural influence. It's no accident that we took over the role from the British at the same time that we took over the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone" (8).
Some of the damage can never be rectified. There are, however, some steps that the US urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defence budget all projects that bear no relationship to national security and ceasing to use the defence budget as a Keynesian jobs programme.
If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.
Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicised) basic budget total and double it" ==
The take home message...the US since the sixties has turned upside down by dumbing down education standards, affirmative action discriminating against the smart, talented and industrious in favor of second and third raters. Enterprise and societal standards have been reduced to the lowest common denominator.
The American society has been on a guilt trip over race. Think about the audacity of a Congressional Black Caucus. The term alone is an outrage.
The Democrats are owned by them and the Republicans are fearful of calling them for what they are, bigots, hustlers and champions of losers.
We ruined public education in every major city. We brain washed our children and made hyper-blackness ghetto values main stream. Now the true price for lowering standards has truly become known.
Reparations will finally be paid for white guilt alright to the tune of $700 B and counting. We are going to pay and will do so before our politicians have the guts to tell the truth. And the media, they are worthy of what ever hard judgment could be dealt them.
We have an election and a hustler for a candidate whose candidacy would be a joke except for his race. Coincidently, the same candidate is going to get 95% black support because he is black and a significant % of young people who have been indoctrinated into believing the myths and legends and propaganda of the self loathing white leftists in academia.
Here is where this has brought us. From the Telegraph...
...The financial system could face a meltdown of 1929 proportions unless US politicians succeed in their efforts for a $700bn rescue scheme, experts added. The warning came as Republicans and Democrats met in Washington for a rare weekend debating session to attempt to seal agreement on the contentious plan, aimed at preventing a long-lasting recession in the US. Officials close to Paulson are privately painting a far bleaker portrait of the fragility of the global economy than that advanced by President George W Bush in his televised address last week. One Republican said that the message from government officials is that “the economy is dropping into the john.” He added: “We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days. “What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.” Investors fretted about contagion into Europe, where Fortis, which was part of the consortium that bought ABN Amro last year, fired its chief executive after liquidity concerns pushed shares down more than 20pc to a 14-year low. Holland’s ING and BNP Paribas are looking at buying the bank this weekend. London investors have warned that the FTSE could suffer falls of as much as 1,000 points - a fifth of its value, if the deal falls through. Peter Spencer, economic adviser to the Ernst & Young Item Club, said: “This is the time you have to bail people out and ask questions later. It is very difficult to see how the US banking system would survive without that.This has the potential to make 1929 look like a walk in the park.” Senator Harry Reid of Nevada, the majority leader, said: “We hope sometime [Sunday] evening we can announce some kind of agreement in principle. We may not have another day.” Rebel Republicans - who see Paulson’s proposals as socialism by the back door - were warned they will be responsible for causing an “amazing catastrophe” if they continue to oppose the plans, which would see taxpayers buy up the bad debts of failing banks. Instead they want an insurance scheme for banks, which would spread the cost to private enterprise.
It is too late to do anything now except pay the price, and I have news for you, I doubt it will be sufficient, but this nonsense has to stop. It is time for some hard truths.
It is a sorry myth. You do not achieve social justice by causing injustice to one party in favor of another. The scheme is absurd. A current generation is being asked to accept group and past generational guilt.
Economic justice? You tend your garden, I don't and therefore you owe me?
LISBON, Sept 27 - Venezuela's leftist President Hugo Chavez said on Saturday it was the capitalist system that had caused the financial crisis in the United States and the country should come up with a new constitution.
Speaking to reporters in Lisbon on the last leg of a tour that included visits to China and Russia, he said: "I think the United States should start a constituent process to create a constituent assembly, a new truly democratic model."
A constituent assembly is a body elected to draft and sometimes adopt a new constitution.
"It was capitalism that caused the ruin" in the United States, said Chavez, who is one of Washington's fiercest critics, calling the financial crunch "the worst financial crisis in history".
"Let the U.S. empire end and let a great nation and great republic rise from the ruin ... It's time to shout 'Liberty!' again in the United States," Chavez said, calling for a new government to be free of the "dictatorship of the elite" such as big banks and corporations.
Critics accuse Chavez of running an authoritarian, Cuban-style regime in oil-rich Venezuela.
Pat Buchanan, the former Republican presidential candidate, claimed that the crash of 2008 will usher in a more sober and much diminished America, branding the credit crisis “a Katrina-like failure of government, of our political class, and of democracy itself. The party’s over. What we are witnessing today is how empires end.”
Are those Missouri thought militia folk just a warm up?---
Obama has proposed a "civilian national security force that's just as powerful, just as strong, just as well-funded [as the military]." Later he seemed to say (maybe) that this organization would support the military in noncombat duties. But in that case, why does it have to be so powerful? Whatever he had in mind, he was obviously not bothered by the ugly historical overtones of muscular national police forces or parallel armies. History is full of such organizations, from the Committee of Public Safety wreaking bloody havoc in revolutionary Paris to the immense terror-force of the Stalinist NKVD to Mao's murderous Red Guards. Because Obama (evidently) does not listen to history, he seems to have no sense of its hints and warnings. Weekly Standard ---
I don't understand this empire talk. The closest we came to having an empire--unless you count our 57 states as an empire--was briefly after the Spanish Empire broke apart.
We're involved in global trade. We defend many countries. When the Soviet Empire broke apart, the parts came rushing voluntarily towards the west and the US.
Where's our empire in Africa?
In South Amwrica?
In Europe?
Maybe Japan is part of our empire?
I wish someone would put pins on a map showing me just where our empire is.
The current mortgasge crisis is merely a sympton not the cause. The US has been losing compeitiveness for a decade plus. This crisis is a first derivative of Bretton Woods II. Much of the current rot is a function of cold war evconomic ideology run amok. The recent bubbles, stocks then houses, were a convenient way of papering over the stagnating wages and global wage arbitrage. It was also a stalling strategy in a concerted choice to become a knowledge economy. The imbalance of those policy failed policy decisions is evident in the current fiasco. We are experiencing not the beginning of the end but the end of the beginning. As more Americans begin to examine the current economic regime they will arrive at the same conculsion that the rest of the world knew long ago but was afraid to say: the US is literally a paper pusher in the form of Treasuries. The bond market is the biggest bubble on earth. We are heading straight into amassive asset deflation and there is but one way out of this: devlaution. There is simply too much debt in the United States. Thedays of multiple flat screens is coming to a close. Like mortgages the US governemtnoperated on a orignate (T bonds) and distrubute (Central Banks). This model is ending. Furthermore the leveraged bet that the US would be the financial services leader globally has shown itself to be a complete joke. The segment has grown well beyond what is prudent as a percentage of profits. In short the US is in for a massive adjustment. Without fdollar hegemony, the aircraft carriers will not mattert. The US is in the process of being downgraded. The CDS market, evil as it is, is telling you that the soveregin risk of the UNited States is at levels never seen before. Nothing is risk free, not ven the United States.
Washington Times Sunday, September 28, 2008 Illegal immigrant factor http://www.washingtontimes.com/news/2008/sep/28/illegal-immigrant-factor/ It’s no coincidence that most of the areas hit hardest by the foreclosure wave - Loudoun County, Va., California’s Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters - also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.
Regional reports across the country have decried the subprime meltdown’s impact on illegal immigrant “victims.” A July report showed that in 7 of the 10 metro areas with the highest foreclosure rates, Hispanics represented at least one-third of the population; in two of those areas - Merced and Salinas-Monterey, Calif. - Hispanics comprised half the population.
Everyone is worried that the taxpayer will have to pony up the $700B, but that is a joke. the government will have to sell bonds to cover the entire amount. Those bonds will be bought by those who hold dollars around the world because they want to maintain the myth that the US is solvent otherwise their holdings are not worth what they hope that they are.
This will probably be the last time this game works unless there is a serious plan to reduce both the trade and fiscal deficit.
Defense spending is no more than government infrastructure spending. The vast majority of it is spent within the US from domestic suppliers. It all ends up as ordinary income and is taxed as such.
Yes, Mat, we have troops posted in various countries, keeping down the restive populations, the supreme penalty ready to hand, with tax farmers moving across the destitute country sides, sucking the guts out of the peasants, to support our military, games, circuses, and high life style of our elite, all over the world, just like Rome.
That's why the Toyota is our car of choice here, and Chinese goods are our addiction, and we send billions a month to the oil cartels.
Mat, consider that we had more defense and intelligence spending in place on 9-10. Assume the additional spending was effective in preventing 9-11. That total defense spending would be very productive activity and would have resulted in the saving ofhundreds of billions if not into the trillions.
Long ago, the park information sign said, that wheatland out there in the picture used to be covered with a shallow sea. What happened to the shallow sea I don't know, but the loess forming the rolling farmland blew in from the west, after the sea was gone, from volcanoes, I think the theory is.
No offense was taken. Looking at the various clips of our rulers and masters and gauging at the results of their work, leaves me agog for the next shoe to drop.
It must be really really subtle, because we let the pagans from the near and far abroad buy our land, factories, banks, build stuff here, get educated at our universities, which knowlede is used against us, come and go as they please, run their own governments back in their own lands, and fool us into paying for their own defense.
I like wide open spaces like your Palouse. Nebraska's sand hills are like that, but not as productive. Still, they're like an oasis when you drive into them coming out of the Bad Lands of South Dakota, Bob. Broken Bow has a nice old time hotel and steak house, if you go that way.
We're going for sure, Linear, but just when is still under discussion. It's looks like not in time for me to register to vote back there. Though my wife, who is registered, is getting an absentee ballot. So that's one vote anyway.
We're going to Seattle Monday or Tuesday to see her friend. I'll try to drop into that dealership in Bremerton.
I gave up the satellite service long ago, Bob, to help pay some bills. All I miss is FNC, football, basketball, baseball, and South Park. Even ESPN was becoming tiresome with their PC spray.
Even though my country is one of those that can be regarded as leeching off the US's military strength, I do agree that the US armed forces should withdraw from countries whose populations have reached a certain level and development. They can jolly well pay for their own defense if they don't like the US there. Germany, South Korea - Why is the US still there?!?
Luckily for me, my own country knows the value of keeping on the US' good side, and keeping up our own side of the bargain as well. Basing for the US Navy, below the counter support, stuff like that.
The only problem in the near future would be when/if China ascends to the top spot, not even globally, but regionally in the Asia/Pacific Rim. Will we switch to closer ties with China? Or try to play both sides?
Ha. Following appears to be 10 minutes too late. OBE
ReplyDeleteBar patrons tend to be ahead of the curve on this stuff. Pardon me if this has already been posted.
No Quarter
No Quarter
http://noquarterusa.net/blog/2008/09/27/baracks-fannie-mae-buddies/
Back in 2004, when the Republicans controlled the House, they tried to have a hearing on the threat that the financial mismanagement of Fannie Mae and Freddie Mac presented to the U.S. Economy. Here’s the video evidence of the Democrats defending the status quo and blocking efforts to hold these people accountable:
I think this is representative [My YouTube reception is broken and sporadic...]:
Dems:
Maxine W: "...trying to fix something that wasn't broken..."
Gregory Meeks: beating up on fed regulator Armando Falcon
Lacie Clay: "...a lynching of Raines..."
Arthur Davis: piling on
Barney Franks: "...a rush to judgement..."
At the table [separately, I think]:
Frank Raines
Armando Falcon, Fed. Hous. Enterp. Oversight Dir.: "...didn't come under us...did whatever they wanted..."
Reps:
Chris Shays
Don Manzullo: calls out Jamie Gorelick, et al
Richard Baker
Ed Royce
Clarice Feldman
September 27, 2008
Memory Lane: 'Lynching' Franklin Raines and How Fannie Mae Isn't 'Broke'
Clarice Feldman
Classical Values brings to our attention this incredible video showing how the Republicans in Congress tried hard to regulate better Fannie Mae and how the Democrats fought that tooth and nail, even referring to criticism of foremer chairman Raines as a "lynching".
H/T: M.Simon
Whit,
ReplyDeleteI am all fired up and have been looking all over the internets to no avail for the Cavuto interview with the Good Doctor from Galveston.
Looking forward to seeing it.
http://www.blinkx.com/videos/Ron%2BPaul%2BNeil%2BCavuto?sortby=date
ReplyDeletethat's an interesting video
ReplyDeleteI read a little piece of informationin my local rag today that strikes me as... interesting.
ReplyDeleteIt seems, back in the 90's, they decided that the FDIC had plenty of money and the banks needed to no longer send their dimes int to the central authority. Now, Wa-Mu had enough liability to drain the fund with approximately another 90 banks on the precipice of failure.
It reminds me of when the pension funds of big corporations asked that they use the surplus in the funds to finance current operations.
what the heck, the US taxpayer has infiinitely deep pockets! Let the Bailout roll! Manna from heaven!
"If you want a sense of the pain that still lies ahead, look closer at the details. Look at who's not part of the rescue: the Federal Deposit Insurance Corp., the agency that guarantees Americans' chequing and saving accounts. By arranging the emergency sale of most of WaMu's assets to JPMorgan Chase, the U.S. government avoided a massive claim on FDIC. That's the good news. Here's the bad: (1) More bank failures are certain, (2) JPMorgan can't save them all and (3) the deposit insurance fund, at $45-billion (U.S.), could probably handle only one or two WaMu-sized busts before it runs out of money, which would force it to turn to the U.S. taxpayer for a loan.
ReplyDeleteHow can that be? The United States, home of more than 8,000 financial institutions, has had relatively few of them go broke since the savings-and-loan debacle, and that was nearly 20 years ago. Only three small FDIC-insured banks failed last year and none in 2005 and 2006. There has been plenty of time to build up the fund. But it hasn't happened because some genius decided, back in the mid-1990s, that the deposit insurance fund need not save too much for a rainy day. So for the next decade, most U.S. banks got a holiday from sending their dimes to FDIC.
Well, baby, it's pouring outside now. And the tale of FDIC seems like a perfect illustration of what has made the U.S. economy so sick. Subprime mortgages are just a manifestation of the bigger problem: The people don't save, the government doesn't save and even the parts of it that exist to set aside money for the bad times, don't save enough."
http://www.theglobeandmail.com/servlet/story/LAC.20080927.RDECLOET27/TPStory/?query=FDIC
And the GOP back bench counter plan is to have Wall Street fund the bailout through insurance like payments -- riiiiight!
what's the take home message of the video?
ReplyDeleteAmericans need a new government and a new form of government. The current system has been gamed.
ReplyDeleteThe economic disaster that is military keynesianism
ReplyDeleteWhy the US has really gone broke
Global confidence in the US economy has reached zero, as was proved by last month's stock market meltdown. But there is an enormous anomaly in the US economy above and beyond the subprime mortgage crisis, the housing bubble and the prospect of recession: 60 years of misallocation of resources, and borrowings, to the establishment and maintenance of a military-industrial complex as the basis of the nation's economic life
By Chalmers Johnson
The military adventurers in the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups thought that they were the "smartest guys in the room" — the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay or repudiate. This fiscal irresponsibility has been disguised through many manipulative financial schemes (causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
There are three broad aspects to the US debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defence" projects that bear no relation to the national security of the US. We are also keeping the income tax burdens on the richest segment of the population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our base and our loss of jobs to foreign countries through massive military expenditures — "military Keynesianism" (which I discuss in detail in my book Nemesis: The Last Days of the American Republic). By that, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of the US. These are what economists call opportunity costs, things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs, an infinitely more efficient use of scarce resources than arms manufacturing.
Fiscal disaster
It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for the fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defence budget, is itself larger than the combined military budgets of Russia and China. Defence-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The US has become the largest single seller of arms and munitions to other nations on Earth. Leaving out President Bush's two on-going wars, defence spending has doubled since the mid-1990s. The defence budget for fiscal 2008 is the largest since the second world war.
Before we try to break down and analyse this gargantuan sum, there is one important caveat. Figures on defence spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicised) basic budget total and double it" (1). Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defence budget is "black"," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.
There are many reasons for this budgetary sleight-of-hand — including a desire for secrecy on the part of the president, the secretary of defence, and the military-industrial complex — but the chief one is that members of Congress, who profit enormously from defence jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense, nor the Department of Homeland Security, has ever complied. Congress has complained, but not penalised either department for ignoring the law. All numbers released by the Pentagon should be regarded as suspect.
In discussing the fiscal 2008 defence budget, as released on 7 February 2007, I have been guided by two experienced and reliable analysts: William D Hartung of the New America Foundation's Arms and Security Initiative (2) and Fred Kaplan, defence correspondent for Slate.org (3). They agree that the Department of Defense requested $481.4bn for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7bn for the "supplemental" budget to fight the global war on terrorism — that is, the two on-going wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4bn to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional "allowance" (a new term in defence budget documents) of $50bn to be charged to fiscal year 2009. This makes a total spending request by the Department of Defense of $766.5bn.
But there is much more. In an attempt to disguise the true size of the US military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4bn for the Department of Energy goes towards developing and maintaining nuclear warheads; and $25.3bn in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt and Pakistan). Another $1.03bn outside the official Department of Defense budget is now needed for recruitment and re-enlistment incentives for the overstretched US military, up from a mere $174m in 2003, when the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7bn, 50% of it for the long-term care of the most seriously injured among the 28,870 soldiers so far wounded in Iraq and 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4bn goes to the Department of Homeland Security.
Missing from this compilation is $1.9bn to the Department of Justice for the paramilitary activities of the FBI; $38.5bn to the Department of the Treasury for the Military Retirement Fund; $7.6bn for the military-related activities of the National Aeronautics and Space Administration; and well over $200bn in interest for past debt-financed defence outlays. This brings US spending for its military establishment during the current fiscal year, conservatively calculated, to at least $1.1 trillion.
Military Keynesianism
Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neo-conservatives and poorly informed patriotic Americans believe that, even though our defence budget is huge, we can afford it because we are the richest country on Earth. That statement is no longer true. The world's richest political entity, according to the CIA's World Factbook, is the European Union. The EU's 2006 GDP was estimated to be slightly larger than that of the US. Moreover, China's 2006 GDP was only slightly smaller than that of the US, and Japan was the world's fourth richest nation.
A more telling comparison that reveals just how much worse we're doing can be found among the current accounts of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. In order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88bn per year trade surplus with the US and enjoys the world's second highest current account balance (China is number one). The US is number 163 — last on the list, worse than countries such as Australia and the UK that also have large trade deficits. Its 2006 current account deficit was $811.5bn; second worst was Spain at $106.4bn. This is unsustainable.
It's not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On 7 November 2007, the US Treasury announced that the national debt had breached _$9 trillion for the first time. This was just five weeks after Congress raised the "debt ceiling" to $9.815 trillion. If you begin in 1789, at the moment the constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defence expenditures.
The top spenders
The world's top 10 military spenders and the approximate amounts each currently budgets for its military establishment are:
Rank Country Military budget
1. United States (FY 2008 budget) $623bn
2. China (2004) $65bn
3. Russia $50bn
4. France (2005) $45bn
5. United Kingdom $42.8bn
6. Japan (2007) $41.75bn
7. Germany (2003) $35.1bn
8. Italy (2003) $28.2bn
9. South Korea (2003) $21.1bn
10. India (2005 est.) $19bn
World total military expenditures (2004 est) $1,100bn
World total (minus the US) $500bn
Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration's policies. They have been going on for a very long time in accordance with a superficially plausible ideology, and have now become so entrenched in our democratic political system that they are starting to wreak havoc. This is military Keynesianism — the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.
This ideology goes back to the first years of the cold war. During the late 1940s, the US was haunted by economic anxieties. The great depression of the 1930s had been overcome only by the war production boom of the second world war. With peace and demobilisation, there was a pervasive fear that the depression would return. During 1949, alarmed by the Soviet Union's detonation of an atomic bomb, the looming Communist victory in the Chinese civil war, a domestic recession, and the lowering of the Iron Curtain around the USSR's European satellites, the US sought to draft basic strategy for the emerging cold war. The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated 14 April 1950 and signed by President Harry S Truman on 30 September 1950, it laid out the basic public economic policies that the US pursues to the present day.
In its conclusions, NSC-68 asserted: "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living" (4).
With this understanding, US strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment, as well as ward off a possible return of the depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of 6 February 1961: "The conjunction of an immense military establishment and a large arms industry is new in the American experience" — the military-industrial complex.
By 1990 the value of the weapons, equipment and factories devoted to the Department of Defense was 83% of the value of all plants and equipment in US manufacturing. From 1947 to 1990, the combined US military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, US reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is a form of slow economic suicide.
Higher spending, fewer jobs
On 1 May 2007, the Center for Economic and Policy Research of Washington, DC, released a study prepared by the economic and political forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. The US economy has had to cope with growing defence spending for more than 60 years. Baker found that, after 10 years of higher defence spending, there would be 464,000 fewer jobs than in a scenario that involved lower defence spending.
Baker concluded: "It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment" (5).
These are only some of the many deleterious effects of military Keynesianism.
It was believed that the US could afford both a massive military establishment and a high standard of living, and that it needed both to maintain full employment. But it did not work out that way. By the 1960s it was becoming apparent that turning over the nation's largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E Woods Jr observes that, during the 1950s and 1960s, between one-third and two-thirds of all US research talent was siphoned off into the military sector (6). It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.
Can we reverse the trend?
Nuclear weapons furnish a striking illustration of these anomalies. Between the 1940s and 1996, the US spent at least $5.8 trillion on the development, testing and construction of nuclear bombs. By 1967, the peak year of its nuclear stockpile, the US possessed some 32,500 deliverable atomic and hydrogen bombs, none of which, thankfully, was ever used. They perfectly illustrate the Keynesian principle that the government can provide make-work jobs to keep people employed. Nuclear weapons were not just America's secret weapon, but also its secret economic weapon. As of 2006, we still had 9,960 of them. There is today no sane use for them, while the trillions spent on them could have been used to solve the problems of social security and health care, quality education and access to higher education for all, not to speak of the retention of highly-skilled jobs within the economy.
The pioneer in analysing what has been lost as a result of military Keynesianism was the late Seymour Melman (1917-2004), a professor of industrial engineering and operations research at Columbia University. His 1970 book, Pentagon Capitalism: The Political Economy of War, was a prescient analysis of the unintended consequences of the US preoccupation with its armed forces and their weaponry since the onset of the cold war. Melman wrote: "From 1946 to 1969, the United States government spent over $1,000bn on the military, more than half of this under the Kennedy and Johnson administrations — the period during which the [Pentagon-dominated] state management was established as a formal institution. This sum of staggering size (try to visualize a billion of something) does not express the cost of the military establishment to the nation as a whole. The true cost is measured by what has been foregone, by the accumulated deterioration in many facets of life, by the inability to alleviate human wretchedness of long duration."
In an important exegesis on Melman's relevance to the current American economic situation, Thomas Woods writes: "According to the US Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation's plant and equipment, and infrastructure, at just over _$7.29 trillion… The amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock" (7).
The fact that we did not modernise or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated. Machine tools, an industry on which Melman was an authority, are a particularly important symptom. In November 1968, a five-year inventory disclosed "that 64% of the metalworking machine tools used in US industry were 10 years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States' machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the second world war. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry."
Nothing has been done since 1968 to reverse these trends and it shows today in our massive imports of equipment — from medical machines like _proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.
Our short tenure as the world's lone superpower has come to an end. As Harvard economics professor Benjamin Friedman has written: "Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence and cultural influence. It's no accident that we took over the role from the British at the same time that we took over the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone" (8).
Some of the damage can never be rectified. There are, however, some steps that the US urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defence budget all projects that bear no relationship to national security and ceasing to use the defence budget as a Keynesian jobs programme.
If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.
.
.
http://mondediplo.com/2008/02/05military
Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicised) basic budget total and double it"
ReplyDelete==
Given my experience, I would concur.
Here's what I find disturbing--
ReplyDeleteStatement By Missouri Governor On Obama Police State Tactics
that is disturbing
ReplyDeleteThe take home message...the US since the sixties has turned upside down by dumbing down education standards, affirmative action discriminating against the smart, talented and industrious in favor of second and third raters. Enterprise and societal standards have been reduced to the lowest common denominator.
ReplyDeleteThe American society has been on a guilt trip over race. Think about the audacity of a Congressional Black Caucus. The term alone is an outrage.
The Democrats are owned by them and the Republicans are fearful of calling them for what they are, bigots, hustlers and champions of losers.
We ruined public education in every major city. We brain washed our children and made hyper-blackness ghetto values main stream. Now the true price for lowering standards has truly become known.
Reparations will finally be paid for white guilt alright to the tune of $700 B and counting. We are going to pay and will do so before our politicians have the guts to tell the truth. And the media, they are worthy of what ever hard judgment could be dealt them.
We have an election and a hustler for a candidate whose candidacy would be a joke except for his race. Coincidently, the same candidate is going to get 95% black support because he is black and a significant % of young people who have been indoctrinated into believing the myths and legends and propaganda of the self loathing white leftists in academia.
that is part of the take home...
Look at the video and see the stupid ignorant and arrogant intimidating their betters in every way.
ReplyDeleteHere is where this has brought us. From the Telegraph...
ReplyDelete...The financial system could face a meltdown of 1929 proportions unless US politicians succeed in their efforts for a $700bn rescue scheme, experts added.
The warning came as Republicans and Democrats met in Washington for a rare weekend debating session to attempt to seal agreement on the contentious plan, aimed at preventing a long-lasting recession in the US.
Officials close to Paulson are privately painting a far bleaker portrait of the fragility of the global economy than that advanced by President George W Bush in his televised address last week.
One Republican said that the message from government officials is that “the economy is dropping into the john.” He added: “We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days.
“What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.”
Investors fretted about contagion into Europe, where Fortis, which was part of the consortium that bought ABN Amro last year, fired its chief executive after liquidity concerns pushed shares down more than 20pc to a 14-year low. Holland’s ING and BNP Paribas are looking at buying the bank this weekend.
London investors have warned that the FTSE could suffer falls of as much as 1,000 points - a fifth of its value, if the deal falls through.
Peter Spencer, economic adviser to the Ernst & Young Item Club, said: “This is the time you have to bail people out and ask questions later. It is very difficult to see how the US banking system would survive without that.This has the potential to make 1929 look like a walk in the park.”
Senator Harry Reid of Nevada, the majority leader, said: “We hope sometime [Sunday] evening we can announce some kind of agreement in principle. We may not have another day.”
Rebel Republicans - who see Paulson’s proposals as socialism by the back door - were warned they will be responsible for causing an “amazing catastrophe” if they continue to oppose the plans, which would see taxpayers buy up the bad debts of failing banks. Instead they want an insurance scheme for banks, which would spread the cost to private enterprise.
what's the take home message of the video?
ReplyDeleteDon't elect democrats of any color. We already knew most of the white ones were crooks.
It is too late to do anything now except pay the price, and I have news for you, I doubt it will be sufficient, but this nonsense has to stop. It is time for some hard truths.
ReplyDeletewhat about social and economic justice?
ReplyDeletewhat about social and economic justice?
ReplyDeleteExcellent things. The definition of them and how to secure them might be a matter of great debate.
It is a sorry myth. You do not achieve social justice by causing injustice to one party in favor of another. The scheme is absurd. A current generation is being asked to accept group and past generational guilt.
ReplyDeleteEconomic justice? You tend your garden, I don't and therefore you owe me?
Finally KGO has a program worth listening to, other than Dr Bill--they are broadcasting the California Bears game.
ReplyDeleteLISBON, Sept 27 - Venezuela's leftist President Hugo Chavez said on Saturday it was the capitalist system that had caused the financial crisis in the United States and the country should come up with a new constitution.
ReplyDeleteSpeaking to reporters in Lisbon on the last leg of a tour that included visits to China and Russia, he said: "I think the United States should start a constituent process to create a constituent assembly, a new truly democratic model."
A constituent assembly is a body elected to draft and sometimes adopt a new constitution.
"It was capitalism that caused the ruin" in the United States, said Chavez, who is one of Washington's fiercest critics, calling the financial crunch "the worst financial crisis in history".
"Let the U.S. empire end and let a great nation and great republic rise from the ruin ... It's time to shout 'Liberty!' again in the United States," Chavez said, calling for a new government to be free of the "dictatorship of the elite" such as big banks and corporations.
Critics accuse Chavez of running an authoritarian, Cuban-style regime in oil-rich Venezuela.
Pat Buchanan, the former Republican presidential candidate, claimed that the crash of 2008 will usher in a more sober and much diminished America, branding the credit crisis “a Katrina-like failure of government, of our political class, and of democracy itself. The party’s over. What we are witnessing today is how empires end.”
ReplyDeleteAre those Missouri thought militia folk just a warm up?---
ReplyDeleteObama has proposed a "civilian national security force that's just as powerful, just as strong, just as well-funded [as the military]." Later he seemed to say (maybe) that this organization would support the military in noncombat duties. But in that case, why does it have to be so powerful? Whatever he had in mind, he was obviously not bothered by the ugly historical overtones of muscular national police forces or parallel armies. History is full of such organizations, from the Committee of Public Safety wreaking bloody havoc in revolutionary Paris to the immense terror-force of the Stalinist NKVD to Mao's murderous Red Guards. Because Obama (evidently) does not listen to history, he seems to have no sense of its hints and warnings. Weekly Standard
---
I don't understand this empire talk. The closest we came to having an empire--unless you count our 57 states as an empire--was briefly after the Spanish Empire broke apart.
We're involved in global trade. We defend many countries. When the Soviet Empire broke apart, the parts came rushing voluntarily towards the west and the US.
Where's our empire in Africa?
In South Amwrica?
In Europe?
Maybe Japan is part of our empire?
I wish someone would put pins on a map showing me just where our empire is.
perhaps those Missouri folks just cling to their guns or religion or have antipathy to people who aren’t like them
ReplyDeleteHere's A View From Where We Went On A Drive Today
ReplyDeleteSteptoe
Butte
Maybe those Missourians who cling to their guns and Bibles will beat back the Obamamilitia.
I wish someone would put pins on a map showing me just where our empire is.
ReplyDelete==
You can't be serious.
Who's S?
ReplyDelete==
S:
The current mortgasge crisis is merely a sympton not the cause. The US has been losing compeitiveness for a decade plus. This crisis is a first derivative of Bretton Woods II. Much of the current rot is a function of cold war evconomic ideology run amok. The recent bubbles, stocks then houses, were a convenient way of papering over the stagnating wages and global wage arbitrage. It was also a stalling strategy in a concerted choice to become a knowledge economy. The imbalance of those policy failed policy decisions is evident in the current fiasco. We are experiencing not the beginning of the end but the end of the beginning. As more Americans begin to examine the current economic regime they will arrive at the same conculsion that the rest of the world knew long ago but was afraid to say: the US is literally a paper pusher in the form of Treasuries. The bond market is the biggest bubble on earth. We are heading straight into amassive asset deflation and there is but one way out of this: devlaution. There is simply too much debt in the United States. Thedays of multiple flat screens is coming to a close. Like mortgages the US governemtnoperated on a orignate (T bonds) and distrubute (Central Banks). This model is ending. Furthermore the leveraged bet that the US would be the financial services leader globally has shown itself to be a complete joke. The segment has grown well beyond what is prudent as a percentage of profits. In short the US is in for a massive adjustment. Without fdollar hegemony, the aircraft carriers will not mattert. The US is in the process of being downgraded. The CDS market, evil as it is, is telling you that the soveregin risk of the UNited States is at levels never seen before. Nothing is risk free, not ven the United States.
Sep 27, 2008 - 2:32 pm
BC: After the house burns
We go back to trading in real goods and real services.
ReplyDeleteWe build new factories and use domestic resources and labor.
We focus on infrastructure and capital spending because consumer spending has to decrease and savings must increase.
We return to the idea of import replacement, especially in energy.
The Obama Missouri Mind Militia hasn't a chance in Washington State where The Washington Supreme Court Ruled Politicians Have A Right To Lie
ReplyDeleteThat's not enough, Deuce. You need rational budget relating to defense related spending. I'd say no more than 5% of tax income collected.
ReplyDeleteI feel like I'm in somebody's parents' basement.
ReplyDelete..need ^a rational budget..
ReplyDeleteWashington Times
ReplyDeleteSunday, September 28, 2008
Illegal immigrant factor
http://www.washingtontimes.com/news/2008/sep/28/illegal-immigrant-factor/
It’s no coincidence that most of the areas hit hardest by the foreclosure wave - Loudoun County, Va., California’s Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters - also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.
Regional reports across the country have decried the subprime meltdown’s impact on illegal immigrant “victims.” A July report showed that in 7 of the 10 metro areas with the highest foreclosure rates, Hispanics represented at least one-third of the population; in two of those areas - Merced and Salinas-Monterey, Calif. - Hispanics comprised half the population.
Everyone is worried that the taxpayer will have to pony up the $700B, but that is a joke. the government will have to sell bonds to cover the entire amount. Those bonds will be bought by those who hold dollars around the world because they want to maintain the myth that the US is solvent otherwise their holdings are not worth what they hope that they are.
ReplyDeleteThis will probably be the last time this game works unless there is a serious plan to reduce both the trade and fiscal deficit.
Defense spending is no more than government infrastructure spending. The vast majority of it is spent within the US from domestic suppliers. It all ends up as ordinary income and is taxed as such.
ReplyDeleteNo, Deuce. It's a non productive activity. Same as pushing paper back and forth.
ReplyDeleteYes, Mat, we have troops posted in various countries, keeping down the restive populations, the supreme penalty ready to hand, with tax farmers moving across the destitute country sides, sucking the guts out of the peasants, to support our military, games, circuses, and high life style of our elite, all over the world, just like Rome.
ReplyDeleteThat's why the Toyota is our car of choice here, and Chinese goods are our addiction, and we send billions a month to the oil cartels.
Cause, that's what empires do.
I'm not sure I was ever in someone's parent's basement ("is that double possession correct?") and the metaphor is unclear to me.
ReplyDeleteIt's why the hungry millions, from across the empire, take such great risks, to come to the belly of the hated beast.
ReplyDeleteSteptoe Butte.
ReplyDeleteReminiscent of Mary's Peak in Oregon Coast Range. Or, as OSU students call it, Mary's Butt.
I feel like I'm in the attic, with a bat.
ReplyDeleteMat, consider that we had more defense and intelligence spending in place on 9-10. Assume the additional spending was effective in preventing 9-11. That total defense spending would be very productive activity and would have resulted in the saving ofhundreds of billions if not into the trillions.
ReplyDeleteYour friends' parents' basement is where you thought up all these really cool ideas, which had fuck-all to do with anything in real life.
ReplyDelete$700B is real enough.
ReplyDeleteAnd I mean that as no real offense, because I recall those times fondly.
ReplyDeleteSuddenly! it is.
ReplyDeleteLong ago, the park information sign said, that wheatland out there in the picture used to be covered with a shallow sea. What happened to the shallow sea I don't know, but the loess forming the rolling farmland blew in from the west, after the sea was gone, from volcanoes, I think the theory is.
ReplyDeleteThere was a fight there between the Native Americans, and the US Army, which Col. Steptoe lost, The Battle of (or near to) Steptoe Butte
"The United States spends far too little as a percent of GNP on defense."
ReplyDeleteMark Helprin,c. 9-12-01.
Seared into my memory.
just like Rome
ReplyDelete==
It is like Rome. More subtle, but like Rome. That said, unlike the people of Rome, Americans are genuinely good and decent people. It's the system.
No offense was taken. Looking at the various clips of our rulers and masters and gauging at the results of their work, leaves me agog for the next shoe to drop.
ReplyDeleteIt must be really really subtle, because we let the pagans from the near and far abroad buy our land, factories, banks, build stuff here, get educated at our universities, which knowlede is used against us, come and go as they please, run their own governments back in their own lands, and fool us into paying for their own defense.
ReplyDeleteI like wide open spaces like your Palouse. Nebraska's sand hills are like that, but not as productive. Still, they're like an oasis when you drive into them coming out of the Bad Lands of South Dakota, Bob. Broken Bow has a nice old time hotel and steak house, if you go that way.
ReplyDeleteHerod was educated in Rome.
ReplyDeleteAnd yes, he was a Pagan and a Roman.
ReplyDeletethe wall street journal gives a good explanation of the $700B and the financing of it.
ReplyDeleteLT, I now have two nominations for you to be sentenced to be on the board of directors at the EB.
ReplyDeleteShould you be willing to accept, it would be my pleasure to concur with their wishes.
There of course is no penalty for refusal.
The bar is the basement, dear host.
ReplyDeleteA Bigger Threat Than Wall Street--Iran Is A Threat From Hell
ReplyDeleteThe Australian
We prefer to call it a rathskeller. We do maintain some standards.
ReplyDeleteWe're going for sure, Linear, but just when is still under discussion. It's looks like not in time for me to register to vote back there. Though my wife, who is registered, is getting an absentee ballot. So that's one vote anyway.
ReplyDeleteWe're going to Seattle Monday or Tuesday to see her friend. I'll try to drop into that dealership in Bremerton.
The plonk is not to your liking tonight Trish?
ReplyDeleteThere of course is no penalty for refusal.
ReplyDeleteThough everybody will be pissed if you refuse :) And you can drink warm beer by your lonesome, in the corner.
I humbly accept.
ReplyDeleteI hope y'all don't regret it.
I'll endeavor to maintain the high standards of ...
Um...where was I?
Oh, yeah. Just keep my spot open down at the end of the bar, and I'll try not to piss off the payin' customers.
LT
Welcome to the board.
ReplyDeleteWelcome, Linear.
ReplyDeleteMy Nielson TV ratings package came in the mail. Any tv programs anybody wants me to dis?
Other than The View, which I already got firmly in mind.
..and fool us into paying for their own defense..
ReplyDelete==
The correlations with Rome are striking. I didn't fully realize it, until now.
Any tv programs anybody wants me to dis?
ReplyDeleteI gave up the satellite service long ago, Bob, to help pay some bills. All I miss is FNC, football, basketball, baseball, and South Park. Even ESPN was becoming tiresome with their PC spray.
Have at 'em!
Welcome, Comrade. Soon we'll have enough to start a minyan. :)
ReplyDeleteThank you, Mat.
ReplyDeleteEven though my country is one of those that can be regarded as leeching off the US's military strength, I do agree that the US armed forces should withdraw from countries whose populations have reached a certain level and development. They can jolly well pay for their own defense if they don't like the US there. Germany, South Korea - Why is the US still there?!?
ReplyDeleteLuckily for me, my own country knows the value of keeping on the US' good side, and keeping up our own side of the bargain as well. Basing for the US Navy, below the counter support, stuff like that.
The only problem in the near future would be when/if China ascends to the top spot, not even globally, but regionally in the Asia/Pacific Rim. Will we switch to closer ties with China? Or try to play both sides?