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This excerpt is from an essay by Bill Moyers titled “Money and Power in America”.

“The movers and shakers — the big winners — keep repeating the mantra that this inequality was inevitable, the result of the globalization of finance and advances in technology in an increasingly complex world.  Those are part of the story, but only part. As G.K. Chesterton wrote a century ago, “In every serious doctrine of the destiny of men, there is some trace of the doctrine of the equality of men.  But the capitalist really depends on some religion of inequality.” 

oligarchyExactly.  In our case, a religion of invention, not revelation, politically engineered over the last 40 years. Yes, politically engineered.  On this development, you can’t do better than read Winner Take All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class by Jacob Hacker and Paul Pierson, the Sherlock Holmes and Dr. Watson of political science.

They were mystified by what had happened to the post-World War II notion of “shared prosperity”; puzzled by the ways in which ever more wealth has gone to the rich and super rich; vexed that hedge-fund managers pull in billions of dollars, yet pay taxes at lower rates than their secretaries; curious about why politicians kept slashing taxes on the very rich and handing huge tax breaks and subsidies to corporations that are downsizing their work forces; troubled that the heart of the American Dream — upward mobility — seemed to have stopped beating; and dumbfounded that all of this could happen in a democracy whose politicians were supposed to serve the greatest good for the greatest number. So Hacker and Pierson set out to find out “how our economy stopped working to provide prosperity and security for the broad middle class.”

In other words, they wanted to know: “Who dunnit?” They found the culprit. With convincing documentation they concluded, “Step by step and debate by debate, America’s public officials have rewritten the rules of American politics and the American economy in ways that have benefitted the few at the expense of the many.”

There you have it: the winners bought off the gatekeepers, then gamed the system.  And when the fix was in they turned our economy into a feast for the predators, “saddling Americans with greater debt, tearing new holes in the safety net, and imposing broad financial risks on Americans as workers, investors, and taxpayers.” The end result, Hacker and Pierson conclude, is that the United States is looking more and more like the capitalist oligarchies of Brazil, Mexico, and Russia, where most of the wealth is concentrated at the top while the bottom grows larger and larger with everyone in between just barely getting by.

Bruce Springsteen sings of “the country we carry in our hearts.” This isn’t it.”

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BraceyourselfOh Canada! Producer of so much oil and making strides to export it to other countries just had its first jump in gasoline prices.  One question to contemplate is that rather than exporting oil to other countries wouldn’t it be nice to stabilize the domestic market supply and give Canadian consumers a break at the pumps?  Wouldn’t a steady rate of return and a Canadian public that doesn’t hate your guts be a good thing?

“Sorry Canada-friends!”, says the Oil Industry there are bottom lines to fatten up – the door to fuck-right-off is on your left please use it at our convenience, plebs!

Oh, and the usual excuses about market instability.  I really enjoy paying for market jitters and financial speculation.

“McTeague blamed jitters and excessive financial speculation over instability in the Middle East for “distorting” fuel prices.

Meanwhile, he noted, actual supply for crude has never been better.

 I love the fresh pungent smell of oligarchy in the morning.

Laura Lau, a senior vice-president portfolio manager with the Brompton Group specializing in natural resources, said the markups are a direct reflection of international headlines.  The risk premium for oil has soared, even though the unrest hasn’t stopped crude from flowing.

“We could see some relief, but it depends on what happens in Iraq,” Lau said. “If it escalates, we’ll probably see it go up. If it’s resolved or the intensity comes down, we could see oil and gasoline prices come down.”

She noted that no shortages have been reported so far, although oil companies in the region have begun to withdraw nonessential staff following the violent siege of northern Iraq’s Baiji refinery by Sunni militants.

“So could oil production be reduced? Yes,” Lau said. “But right now, it’s more the threat of it than the actual reality.“

This just in, lone Donkey in Iraq pisses on Pipeline – Corrosion could destroy Iraq Oil forever! Oil Barons in North America: Raise the prices, call it “market-forces” and let’s get to work acquiring that 5th yatcht, STAT!!!

Comments on the CBC article nail the BS surrounding the gas gouging:

“These price hikes are pure BS. Only 6% of the oil used in the North America comes from Iraq. The 2 biggest sources are 28% Canada and 16%Saudi Arabia. Then we have Mexico and Venezuela at 11% each with 27% coming from various sources. So to say the price of fuel is rising (in North America) because of a conflict in Iraq is a lie.”

Of course if it is a profitable lie for the right people then it isn’t really a lie then, is it?

[Source: CBC.CA]

 

Bonus Round!

Profitability above all!

robiraq1-510x332

Graph (1) above: as experience has shown, Americans love a good fairy tale. In the case of U.S. involvement in Iraq we have been fed a long series of substantially unrelated rationales from political ‘liberation’ (1990-1991) to WMDs (weapons of mass destruction) and democratization (2003 – 2006) and now on to ‘re-stabilization.’ Left unstated are economic interests like oil company profits, munitions sales and contracts for rebuilding what the U.S. has destroyed. Graph (1) illustrates the relation of oil prices to oil company profits. Wars against oil-rich nations raise the price of oil to the benefit of international oil companies. What do one million dead and four million displaced human beings matter when profits are to be ‘made?’ Source: Reuters.

We’re running out of canaries people, wake up and smell the system you’re living in.

A big thanks to Moe over at Whatever Works for finding this short video on our ISP’s.   Just watch the free market in action…

Keeping with the light blogging schedule, this is a repost from Alter.net about why the people of OWS are so ticked off and why they are protesting.  Consider it a primer to help in understanding their positions.

1. Wall Street caused the crash: Unless you are suffering from financial amnesia, you should remember that it was Wall Street’s reckless gambling that did us in. It was Wall Street banks and hedge funds, not home buyers, who created the enormous demand for high-risk mortgages to pool, to securitize, and to turn into Ponzi-like gambling structures with names like CDOs, CDO squared and synthetic CDOs. It was the money-grubbing rating agencies that blessed these pieces of garbage with AAA ratings. As a result, trillions of dollars of worthless toxic assets polluted our financial system. When the bubble they induced burst, our system crashed, causing 8 million working people to lose their jobs in a matter of months due to no fault of their own. Anyone who still blames low-income home buyers, or regulations or Greece — or anyone other than Wall Street — should be checked for dementia.

2. The Wall Street crash directly caused the gravest unemployment crisis since the Great Depression: We’re three years into the worst jobs crisis since 1937. Upwards of 29 million people are out of work or have been forced into part-time jobs. The number of people who have been jobless for more than 26 weeks is at post-WWII record levels. And there’s no end in sight to this misery. Meanwhile, Wall Street’s representatives in Washington want us to focus on cutting public employment and public services to address the debt that Wall Street itself precipitated. WE wouldn’t have a debt crisis were it not for the bailouts, the crash, the lost jobs and the soaring cost of jobless benefits that can be laid at Wall Street’s door. (The debt was also caused by tax cuts for the rich, and the bankers certainly don’t want to talk about that.) For those diversionary debt tactics alone, Wall Street should be occupied until it pays to replace the jobs it destroyed.

3. Wall Street profited from the bailouts and remains unaccountable: Taxpayers provided trillions of dollars in cash and asset guarantees to the wealthiest bankers and hedge fund managers in the world. But nothing was extracted from them in return. Here’s one egregious example: Goldman Sachs paid $550 million in SEC fines for selling mortgage-related securities that were designed to fail so that a large hedge fund could bet against them. The securities failed as planned and the hedge fund pocketed $1 billion in profits. But after we bailed out AIG, Goldman Sachs picked up nearly $12 billion for similar bets that AIG had insured. Goldman Sachs collected 100 cents on the dollar and those dollars were ours.

4. The super-rich are getting richer: When the economy was crashing during 2008, high frequency traders in hedge funds and banks made upwards of $20 billion from the turmoil. This trading scam provided no redeeming value to our economy. Rather, it was a hidden tax on our sorrows — a transfer of funds from the many to the few. In 2010 the top hedge fund managers “earned” over $2 million an HOUR! The top 25 hedge fund managers took in as much as 650,000 teachers. Young people have the right to question these lopsided values. All of us have the duty to do something about it.

5. The super-rich are paying lower and lower taxes: While the government pleads poverty when asked to create a massive jobs program, our financial elites use every loophole available to avoid taxes. In 1995, the 400 wealthiest families paid about 30 percent of their income in taxes (after all deductions). Today their effective rate is less than 16 percent. And for what? What did society gain from their retained wealth? Not jobs, not debt reduction, only more Wall Street gambling.

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SAP now coming to the USA

The US debt crisis is being oversimplified.  The message we here is we cannot pay our debts and therefore we need balance our spending and balance the budget.  Average people can understand that – but here is what has been done so far to combat debt via Whatever Works and a big thanks to Moe for her great work in compiling this list…  The debt has not just magically become a priority, but has been helped along by the policies listed below…

  • Irresponsible tax cuts.
  • Toothless regulation.
  • Interlocking directorates.
  • Boards hand picked by CEO’s.
  • Quarterly earnings now the fickle measure of a stock’s worth.
  • Perverse incentive systems.
  • A business media of enthralled groupies slavishly following and thrilling to rock star plutocrats.
  • The collapse of the  concepts of the common good and civics.
  • Devotion to profits above all.
  • The demonizing of any talk of fairness or social justice.
  • Purposefully ignoring our collapsing infrastructure while we prop up the economies of China and Brazil and their enormous investments in their own infrastructure (transportation, ports, broadband) that will ultimately make us even more uncompetitive than we are now. (After all, there’s no profit in proppingup a joint where workers demand a living wage.)
  • Our government’s committment to protect the ‘job creators’ who, during a decade of historically low tax rates have managed to lose more American jobs than at any time since the Depression.

Wealth is still being created in the US, but not for the average worker, or small business owner.  Let’s take a peek at this startling table glaned from The Centre for Labour Studies in Boston Massachusetts.

(This is a informative report btw, I would highly recommend you read the whole thing, or at least the summary at Sociological Images for the highlights.)

Table 3:

Growth in Real Annualized National Income, Corporate Profits, and Wage and

Salary Accruals in the First Six Quarters Following the End of Five Post-World War II Recessions from 1973-75 to 2007 – 09

(Numbers in Billions of Dollars in Constant 2010 CPI-U Dollars)

Recession’s Ending Quarter to Six to Seven Quarters Later (A)National Income Growth (B)Corporate Profits Growth (C)Accrued Wage and Salary Growth (D)Corporate Profits Share of Growth in National Income

(in %)

(E)Aggregate

Wage and

Salary Share

Of Growth in

National Income

(in %)

Six Quarters
1975 I – 1976 III $462 $148 $174 32 38
1982 IV – 1984 II $817 $227 $205 28 25
1991 I – 1992 III $237 -$4 $119 -1 50
2001 IV – 2003 II $333 $178 $50 53 15
2009 II – 2010 IV $528 $464 $7 88 1
Seven Quarters
2009 II – 2011 I $505 $465 -$22 92 0    [!!!]

The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented. The lack of any net job growth in the current recovery combined with stagnant real hourly and weekly wages is responsible for this unique, devastating outcome.”

    The economy is working perfectly, or dysfunctionally depending on which class of people you belong to.  The debt crisis is will be the stick used to beat the middle class and poor out of social benefits and health care, all in the service of keeping the plutocracy drowning in profit.  The Republicans certainly are gung-ho about dismantling the social life preserving aspects of the state, as their backers (as well as the Democrats backers) are acting in the best interests of those who support them.

In a third world country this would be called “Structural Adjustment” and be headed by the IMP.  What lies within Structural Adjustment Programs is can be boiled down to this Austerity for the Poor and Wealth Engorgement for the rich.  Stay tuned for the hollowing out of Education, Social Security, Welfare, Public Health, Health Care and anything else that benefits the common good.  The funds will be funnelled up the ladder to the wealthy elite and oligarchy with lip-service being payed to the tough choices being made for the “good of the economy” while the majority of Americans and their children are saddled in economic misery with the debt continuing to increase on them due to the malfeasance of the rich.

SAP’s are no longer for the “other” peoples of the world, now they are made ‘in’ and ‘for’ the USA.

Rick Salutin should not have been dismissed as an op-ed writer at the Canada’s ‘national’ newspaper the Globe and Mail. His spot taken by religious apologist Irshad Manji has left a gaping hole in coverage of news and events from the perspective of the working class. However, one and awhile they allow Jim Standford to add a bit of reality to the generally rightward op-eds that are par for the course in the Globe and Mail.

Jim lays the smack down in an article that tells about how our society is being (has been) structured to benefit the wealthy and their interests and how new movements such as the Tea Party seemed to have missed the target when it comes to where they lay their righteous anger. This post will be quote heavy as I intend to reference it as a basis for economic discussions in the future, so please bear with the meticulous quoting as to what Mr. Standford had to say.

“American economist Emmanuel Saez has painstakingly assembled a century-long statistical series on U.S. income distribution. On two occasions, the share of income captured by the richest 1 per cent reached about a quarter of the national total. The first time was in 1928, the second in 2007. As we all know, both peaks in wealth concentration were followed by financial catastrophe and depression. Indeed, maldistribution clearly contributed to both meltdowns.”

Not to harp on a point but progressive taxation addresses this problem well and at one point in time was actually in the tax code of the US.

“But there’s a startling difference in the political reverberations that followed the two conflagrations. In the 1930s, outrage at the pre-Depression extravagance of the rich, contrasting with the dislocation experienced by masses of Americans, sparked a decade of left-leaning foment. Government expanded income security, directly hired millions of unemployed, and actively supported a new generation of unions to fight for the common folk. Meantime, it reined in business excess through tough financial rules, anti-trust policies, and high taxes on the rich.”

So what is different this time around?  Why are we not getting the limitations put back on the business class?

“This time around, there’s been plenty of populist anger – but (so far) it’s been steered in exactly the opposite direction. Social supports and public employment are being cut dramatically (especially by U.S. state and local governments). Barack Obama’s election promise to modernize labour laws and rebuild unions was dead – even before he lost Congress. And several state governments are now preparing a full assault on union rights: Recent proposals in Ohio and Wisconsin would virtually outlaw collective bargaining across broad swaths of the public sector.”

It seems like this is the road that has brought us to ruin, let’s go faster! The important questions to keep in mind is economic disaster and ruin for whom and which segments of society are not being as dramatically effected.

“The richest 1 per cent almost tripled their share of U.S. national income since 1978, gobbling two-thirds of the income gains generated in the whole economy over the past decade. With numbers like these, highlighting the incomes of the ultra-rich is no longer an idle, envious pastime. The concentration of wealth at the top has become macroeconomically significant.”

Two thirds of all the income gains, to the top 1%.  This is not equitable, rational or even reasonable.  Why does emergent political policy look the way it does?  Political influence of this nascent oligarchy is the answer.

‘Recession or no recession, the gravy train at the top hasn’t paused for breath: Executive bonuses keep rising, and the top 25 hedge-fund managers made a staggering $1-billion each in 2009. Nevertheless, the trend in U.S. politics is not to challenge the contrast between the top and the bottom, but to reinforce it. The Tea Party portrays government itself as the problem. And rather than empowering average workers to improve their lot (like the Wagner Act did in 1935), America’s rightward lurch in labour relations will reinforce the stagnation at the bottom.”

I would speculate that measures that increase social and economic equality such as Universal Healthcare were derailed precisely because of this misplaced furor of the Tea party and other people, who wrongly blame the government rather than elites for their current economic situation.  It certainly was not the government that took 2/3 of all the economic income gains from 1978.   Indeed it is pretty bad in the US, but does Canada fare any better?

“Canada is a kinder, gentler, fairer place. So the numbers aren’t as extreme. Or are they? Here, the richest 1 per cent (less than 250,000 tax filers) capture 17 per cent of total income, and that share has merely doubled (not trebled) since the egalitarian 1970s. A full third of all income gains across Canada since 1987 have gone to that lucky group. For the ultra-ultra-rich (the top 0.1 per cent of families, 25,000 in total, with average income of $1.5-million), their share of national income has trebled to 6.5 per cent.”

Erm. Well…  Yeah, we are a little better of as the egalitarian principles in Canada are eroding at a slower rate than those of the US.

“Despite this largesse, in Canada, too, the political bandwagon lurches to the right. There’s been infinitely more hot air expended since the financial meltdown over the salaries of unionized garbage collectors than those of high-flying financiers. Our home-grown plutocracy, meanwhile, keeps raking it in. Bonuses at the Big Six banks alone reached $8.9-billion in 2010, the highest ever. The Canadian Centre for Policy Alternatives recently documented that the typical Canadian CEO made as much by 2:30 p.m. on Jan. 3 as the average worker makes all year long.

It is not rational for this sort of imbalance to exist in an economy.  This is not the market determining a fair price for work done, this is naked avarice strutting though Canadian society as if nothing was wrong.

“Imagine a city the size of Saskatoon hogging a third of all the new income generated by the entire country. Imagine folks who earn as much in a few hours as the rest of us do in a year – yet still lecture us on the need to tighten our belts. Imagine 25,000 families earning as much as the bottom seven million tax filers put together. How long will these excesses fly under the public’s radar, while we bicker over wage gaps between unionized garbage collectors and non-union fast-food workers?   Not long, I hope.”

The belt tightening needs to start at the top, competent leaders, lead by example and from the front.  Did we see during this latest recession the business classes calling for more social programs and higher taxes on their cohort?  Not even a faint whisper.  Why?  Because when rapacious avarice is the name of the game, sharing the pain and helping others is not even in the playbook.

Feathering the nests and nest eggs on the backs of the rest of society is par for the course of North American elites.  Witness the wage stagnation that is still with us since the 1970’s.  And who (are we told to) do we blame for this?  The penuriousness of the burgeoning plutocracy?  Of course not.  The blame goes to the Government and the Unions, two public institutions that have mandates to actually protect, rather than exploit,  people.   A tip of the hat for the propaganda program that has set the people against themselves rather than those who are actually running the show.

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