Grand Theft Economics
pbs.org
Fri, 09 Oct 2009 18:54 EDT
Just over a year after economic calamity brought promises of reform from Washington, has Wall Street really changed? Former International Monetary Fund chief economist Simon Johnson and US Rep. Marcy Kaptur (D-OH) report on the state of the economy
here.
Transcript:
BILL MOYERS: Welcome to the
JOURNAL.
I sat in a theater packed with passionate moviegoers, every one of them seemingly aghast at the Wall Street skullduggery exposed by Michael Moore in his latest film. It's called
Capitalism: A Love Story. Here's an excerpt:
MICHAEL MOORE: We're here to get the money back for the American People. Do you think it's too harsh to call what has happened here a coup d'état? A financial coup d'état?
MARCY KAPTUR: That's, no. Because I think that's what's happened. Um, a financial coup d'état?
MICHAEL MOORE: Yeah.
MARCY KAPTUR: I could agree with that. I could agree with that. Because the people here really aren't in charge. Wall Street is in charge.
Mike Whitney
Global Research
Thu, 19 Nov 2009 19:04 EST
Things could get ugly fast. With the Democrats backing-off on a second round of stimulus, the Fed signaling an end to quantitative easing, and Obama moaning about rising deficits; there's a good chance that the stumbling recovery could turn into another sharp plunge. Bank lending is shrinking, consumers spending is off, housing prices are falling, unemployment is soaring and the wholesale credit markets are in a shambles. This isn't the time to slash government support in the name of "fiscal responsibility". Obama needs to ignore the gloomsters and alarmists and pay attention to the Nobel laureates like Joe Stiglitz and Paul Krugman. They're the guys who know how to steer the ship to safe water.
But there are troubling signs that Obama has joined the ranks of the deficit hawks and is planning a policy-reversal that will pitch the economy into a nosedive. Here's what he
said on his tour through Asia:
"I think it is important to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession."
So it's true. Obama has aligned himself with the faux-prophets and dollar demagogues who think that the end is nigh. But trimming the deficits now (when they should be expanding) will lead to a viscous cycle of debt deflation that will push-down asset prices, increase defaults, force more layoffs, slow consumer spending, lower earnings and send the economy into a downward spiral. The president is paving the way to a double-dip recession, a slump that could be worse than the first.
Has Obama perused the jobless figures lately? Has he noticed the Fed shoving more than a $1 trillion under the collapsing housing market with no sign of improvement? Has anyone told our blinkered accountant-in-chief that the entire financial system is propped-up with $11.4 trillion of dodgy scaffolding that could buckle in the first big gust?
Jason Simpkins
MoneyMorning.com
Fri, 20 Nov 2009 19:29 EST
Gold has surged 60% in the past 12 months and it's not letting up. The "yellow metal" is continuing that scorching surge into the last part of the year, establishing new highs on a near-daily basis. In fact, gold established yet another record price yesterday (Wednesday) when it peaked at $1,153.40 an ounce on the New York Mercantile Exchange (NYMEX).
And the records are going to keep on coming.
With the U.S. dollar in a freefall and global gold demand rising, analysts say the precious metal will likely continue its bullish trend through at least the first half of 2010. It could rise as high as $2,000 an ounce, which would represent a 73% gain from current record levels.
"Everything is pointing to the price of gold going higher," Mike Sander, an investment adviser at Seattle-based Sander Capital Advisors, wrote in an e-mailed report.
Henry A. Giroux
Share The World's Resources
Wed, 09 Sep 2009 17:11 EDT
In the US, colleges and universities have embraced market fundamentalism at the expense of enabling equitable access. Higher education must be reclaimed as a fundamental public good and not allowed to be a training ground for corporate interests, writes Henry A. Giroux.
As the school year begins, colleges and universities in North America are doing everything possible to attract students, including making themselves over in the image of a high-end mall or a cool brand name. Some institutions are giving students free Apple iPhones and Internet-capable iPods. Others are building attractive athletic facilities, developing more retail stores on campus, and providing plenty of specialized coffee shops. Some welcome this change as a brilliant market strategy while others believe that any face lift will improve the often stodgy academic image many colleges project.
Raw Story
Fri, 20 Nov 2009 12:31 EST
© Unknown
The US public debt topped 12 trillion dollars for the first time in history, Treasury officials disclosed Tuesday, moving past a key barrier that raised hackles in Congress.
Treasury data showed Monday's outstanding debt at 12.031 trillion dollars, up from 11.999 trillion on Friday.
The ballooning debt reflects the massive deficit spending by the government in an effort to revive an ailing economy over more than one year.
The public debt topped 10 trillion dollars in September 2008.
The debt is quickly approaching the statutory limit of 12.104 trillion dollars, meaning Congress would have to raise the ceiling to prevent a shutdown of government operations.
David Streitfeld
The New York Times
Thu, 19 Nov 2009 07:00 EST
© Joe Raedle/Getty Images
Policy changes in insurance, while introduced on a temporary basis, are becoming so popular that they could prove difficult to undo
San Francisco - In January, Mike Rowland was so broke that he had to raid his retirement savings to move here from Boston.
A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary.
"It was kind of crazy we could get this big a loan," said Mr. Rowland, 27. "If a government official came out here, I would slap him a high-five."
In its efforts to prop up a shattered housing market, the government is greatly extending its traditional support of real estate, including guaranteeing the mortgages of middle-class and even upper-class buyers against default.
Reuters
Thu, 19 Nov 2009 10:29 EST
New York - Budget shortfalls poses a direct threat to millions of U.S. jobs, many in the private sector, as state and local governments lay off workers and cut spending on contracts and other business services, a think tank said on Thursday.
State and local governments will have to raise taxes and cut spending in the current and next two fiscal years to cover shortfalls totaling $469 billion, according to an Economic Policy Institute report.
The think tank -- where White House adviser Jared Bernstein spent years developing ideas found in the $787 billion economic stimulus plan he oversees -- said the U.S. government must give states and cities $150 billion in direct budget relief to save between 1.1 million and 1.4 million jobs.
"Given the fragility of the economy, already high unemployment and the magnitude of the budget shortfalls, it is clear that we cannot afford inaction," the report said, calling the gaps "a ticking time bomb for the economy."
Andre Damon
World Socialist Website
Fri, 20 Nov 2009 10:21 EST
© Unknown
The number of home loans in the US that are either in foreclosure or at least one payment past due reached one in seven last month, a record high, according to a survey released Thursday by the Mortgage Bankers Association.
The survey found that nearly 10 percent of mortgage holders were at least one payment behind on their mortgages, while 4.47 percent of them were in foreclosure. Both of these are the highest figures on records dating back to 1972.
About 7 million households are behind on payments or in foreclosure.
These figures present just one indicator of the worsening conditions facing US workers caught up in the longest economic downturn since the Great Depression. The number of people behind on their mortgage payments has doubled since last year, as has the percentage in foreclosure, according to the survey.
The foreclosures were spread throughout all borrower categories, with high-quality, fixed-rate mortgages showing the fastest growth in delinquencies, not the sub-prime mortgages that initiated the foreclosure crisis.
Charlie Weston
Independent.ie
Fri, 20 Nov 2009 06:18 EST
At least 77,500 households are in arrears on their mortgages and rent payments.
This is more than twice previous estimates of the numbers of people struggling to keep a roof over their heads. It is a clear sign that the country is now gripped by a mortgage and rental crisis, experts said.
Also, one in five households are struggling to pay credit card bills, credit union loans and overdrafts. Higher-income families are more likely to owe money to credit card companies and to be overdrawn.
The major study of incomes and living standards by the Central Statistics Office indicates that thousands of homeowners and those who rent are so deep in debt that many are at risk of losing their homes.
The frightening figures underscore the mortgage misery in the country and stress the need for a rescue scheme for heavily indebted families, mortgage experts said.
Frank Tang and Jan Harvey
Reuters
Wed, 18 Nov 2009 04:08 EST
© Reuters//Ilya Naymushin
An employee takes gold ingots to be weighed in a room for final weighing and packaging at the Krastsvetmet plant in the Siberian city of Krasnoyarsk November 16, 2009
Gold rose to a record high above $1,150 an ounce on Wednesday as stronger-than-expected U.S. consumer prices and a steadily weakening dollar stirred inflation fears.
Market sentiment also improved after news that billionaire hedge fund manager John Paulson is launching a new gold fund, including $250 million of his own personal investment.
Doubts about a nascent economic recovery and worries about the consequence of unprecedented quantitative easing also increased gold's appeal as a safe haven.
"There is a lurking concern in the background that still exists," said Bill O'Neill, partner at LOGIC Advisors, noting that investors were worried about the vulnerability of banks and the financial system.
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