Tuesday, December 27, 2011

AMNESTY? HOW MUCH IS IT COSTING YOU? THE CONGRESSIONAL REPORT ON THE COST OF THE LA RAZA OCCUPATION:


THE LA RAZA WELFARE STATE COSTS LEGALS IN MEXIFORNIA ALONE $20 BILLION PER YEAR!

 Illegal immigrants drain the tax dollars


Congressional study shows illegal immigrants sap tax dollars BUT THEY SAVE EMPOYERS OF ILLEGALS FROM HAVING TO PAY LIVING WAGES TO FELLOW AMERICANS!

The Business Journal of Phoenix - by Ty Young Phoenix Business Journal
A study by the U.S. Congressional Budget Office released Tuesday backs up the view that undocumented immigrants sap more tax dollars than they provide, especially in education, health care and law enforcement.

The study pulled together reports from the past five years, using data from sources including the Pew Hispanic Center, the Rand Corp., the U.S. Department of Homeland Security and various universities. The Congressional study also incorporated facts from states, including Arizona, but its authors acknowledged there was no aggregate estimate that could be applied to the entire country.

The report says that in 1990, 90 percent of undocumented immigrants primarily were in six states: California, Florida, Illinois, New Jersey, New York and Texas.

By 2004, undocumented immigrants had increased tenfold in other states, most notably Arizona, Georgia, North Carolina and Tennessee, according to statistics from the Pew Hispanic Center.

The report estimates there are 12 million undocumented immigrants nationwide. Of those, 60 percent are uninsured and 50 percent of the children are uninsured. Again using 2004 statistics from the Pew Hispanic Center the average income of undocumented immigrants was $27,400 while Americans earned $47,800. The difference puts undocumented immigrants in a lower tax bracket, thus reducing the amount of federal and state income taxes generated.

The study also showed that while undocumented workers represented just 5 percent of state and federal service costs, their tax revenue did not offset the amount spent by government. The authors of the study stated that, "the general consensus is that unauthorized immigrants impose a net cost on state and local budgets. However, no agreement exists as to the size of, or even the best way of measuring, that cost at a national level."

In education, which the study notes is the largest single expenditure in state and local budgets, multiple states reported 20 to 40 percent higher costs educating non-English speaking students, many of whom come from the homes of undocumented immigrant parents. Using New Mexico statistics from 2004 as a model, education spending on undocumented immigrants comprised $67 million of the state's $3 billion education budget.

The study estimates there are 53.3 million school-age children in the U.S., 2 million of whom are undocumented immigrants and another 3 million who are legal citizens, but whose parents are not.

Undocumented immigrants are more likely to access emergency rooms and urgent care facilities because most do not have health care, the study said. In Arizona and other border areas, states paid nearly $190 million in health care costs for undocumented immigrants in 2000, the study reported. The amount, which the study says likely has risen since then, represented one-quarter of all uncompensated health care costs in those states that year.

While the report found that undocumented immigrants are less likely to be incarcerated than American natives, it said states still bear a large cost for the legal process. Based on a report from the U.S./Mexico Border Counties Coalition from 2001, counties from the four states that border Mexico spent more than $108 million on law enforcement activities involving undocumented immigrants. San Diego County in California spent nearly half of that, with more than $50 million going into law enforcement activities involving undocumented immigrants.



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By  Robert Rector   .............Heritage.org | May 16, 2006 (dated figures)
 THE LA RAZA DEMS HAVE EXPANDED THE MEXICAN OCCUPATION FOR CHEAP LABOR IN CALIFORNIA ENOUGH TO ALONE DOUBLE THESE FIGURES!

VISIT HERITAGE.org for more info on Mexican invasion and occupation

This paper focuses on the net fiscal effects of immigration with particular emphasis on the fiscal effects of low skill immigration. The fiscal effects of immigration are only one aspect of the impact of immigration. Immigration also has social, political, and economic effects. In particular, the economic effects of immigration have been heavily researched with differing results. These economic effects lie beyond the scope of this paper. Overall, immigration is a net fiscal positive to the government’s budget in the long run: the taxes immigrants pay exceed the costs of the services they receive. However, the fiscal impact of immigrants varies strongly according to immigrants’ education level. College-educated immigrants are likely to be strong contributors to the government’s finances, with their taxes exceeding the government’s costs. By contrast, immigrants with low education levels are likely to be a fiscal drain on other taxpayers. This is important because half of all adult illegal immigrants in the U.S. have less than a high school education. In addition, recent immigrants have high levels of out-of-wedlock childbearing, which increases welfare costs and poverty. An immigration plan proposed by Senators Mel Martinez (R-FL) and Chuck Hagel (R-NE) would provide amnesty to 9 to 10 million illegal immigrants and put them on a path to citizenship (THERE ARE PROBABLY NEARLY 40 MILLION ILLEGALS HERE NOW). Once these individuals become citizens, the net additional cost to the federal government of benefits for these individuals will be around $16 billion per year. Further, once an illegal immigrant becomes a citizen, he has the right to bring his parents to live in the U.S. The parents, in turn, may become citizens. The long-term cost of government benefits to the parents of 10 million recipients of amnesty could be $30 billion per year or more (CALIFORNIA PUTS OUT $20 BILLION A YEAR IN SOCIAL SERVICES OF ILLEGALS).



In the long run, the Hagel/Martinez bill, if enacted, would be the largest expansion of the welfare state in 35 years.


The Democrat Party - NOW PARTY FOR LA RAZA "THE RACE" SUPREMACY - HISPANDERING FOR ILLEGALS' VOTES


MEXICANOCCUPATION.blogspot.com

ON BEHALF OF THEIR LA RAZA “THE RACE” PARTY BASE, THE DEMOCRAT PARTY HAS BECOME THE PARTY OF DEPRESSED WAGES FROM HORDES OF ILLEGALS, OPEN BORDERS, MUCHO DREAM ACTS OF WELFARE, FREE ANCHOR BABY BIRTHING ( AND THEN 18 YRS OF WELFARE), OPEN BORDERS, NON-ENFORCEMENT, NO E-VERIFY, AND THE OBAMA LA RAZA INFESTED ADMINISTRATION!

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 “On Thursday, the House Republican leader, Representative John A. Boehner of Ohio, flatly predicted that Congress would not send an immigration measure to the president this year. Mr. Boehner accused Democrats of engaging in a “cynical ploy to try to engage voters, some segment of voters, to show up in this November’s elections.”
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REALITY IS THAT DEMS NEVER STOP WORKING FOR AMNESTY. BIT BY BIT AMNESTY, NON-ENFORCEMENT OF LAWS, OPEN AND UNDEFENDED BORDERS… 38 MILLION ILLEGALS CLIMBED OUR BORDERS TO LOOT WITH AN INVITATION PRINTED BY A CORRUPT DEMOCRAT POLITICIAN!

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April 29, 2010
Democrats Outline Plans for Immigration


WASHINGTON — A coalition of top Senate Democrats laid out the contours of a proposed overhaul of immigration laws on Thursday — and appealed to Republicans to join them in pursuing it — even as doubts mounted about the prospects of winning approval of legislation this year.
Under the outline of immigration changes drawn up by Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, the federal government would enhance border security and create a new fraud-resistant Social Security card.
Illegal immigrants who wish to remain in this country would have to admit they had broken the law, pay back taxes and fees, and pass a criminal background check to qualify for legal residency after eight years.
“Our immigration system is broken,” the majority leader, Senator Harry Reid of Nevada, said late Thursday afternoon at a packed news conference. “We’re offering this framework as an invitation, an invitation to our Republican colleagues to work with us to solve this problem that has plagued our country for too long.”
Even as the Democratic senators were still speaking, President Obama issued a statement praising the proposal as “an important step,” and he warned that lack of federal action would “leave the door open to a patchwork of actions at the state and local level that are inconsistent and, as we have seen recently, often misguided.”
Mr. Obama’s statement was a reference to the tough new law recently enacted in Arizona that many Democrats view as draconian and that helped prompt Democrats to take on the immigration issue sooner than some had planned.
“What has become increasingly clear,” Mr. Obama said, “is that we can no longer wait to fix our broken immigration system, which Democrats and Republicans alike agree doesn’t work.”
The statement contrasted with comments he made to reporters a day earlier on Air Force One, in which he suggested that Congress might not have the appetite for an immigration overhaul.
At the news conference, Democratic leaders said they were presenting the legislative framework in hopes of persuading Republicans to collaborate on the issue. They are also looking to sound out skeptical Democrats to gauge the prospects for support.
House Democrats have said they will not act unless the Senate moves first.
Mr. Reid, who is facing a difficult re-election fight back home, first put the issue back on the Congressional agenda a few weeks ago when he told a pro-immigration rally in Las Vegas that he intended to pursue legislation, a stance that caught many in Washington off guard.
Senator Lindsey Graham of South Carolina, the chief Republican negotiating with Democrats on the issue, dropped out of the talks, saying he was angry that Mr. Reid seemed to be giving immigration priority over a climate bill.
At the news conference Mr. Reid said it was “not logical to use immigration as an excuse to not help on energy.” But he also said Democrats were not directing their message at Mr. Graham.
“There are 40 other Republicans,” he said.
On Thursday, the House Republican leader, Representative John A. Boehner of Ohio, flatly predicted that Congress would not send an immigration measure to the president this year. Mr. Boehner accused Democrats of engaging in a “cynical ploy to try to engage voters, some segment of voters, to show up in this November’s elections.”
“There is not a chance that immigration is going to move through the Congress,” he said.
But Mr. Schumer, who is now chairman of a subcommittee on immigration long headed by the late Senator Edward M. Kennedy of Massachusetts, said he believed there was a possibility of success.
Mr. Schumer hailed his approach as a way to combine border security and improvements in the American work force while providing a chance for millions of people living illegally in the United States to gain legal status and pay taxes.
And Mr. Schumer, who is known for his ambition in both the political and policy arenas, drew loud laughter when he said that he would not have accepted the subcommittee gavel if he had thought otherwise.
“If I did not believe we could accomplish immigration reform, I never would have chosen to accept the immigration subcommittee chairmanship,” he said. “Committees of inaction and legislative backwaters are not places in which I thrive.”
Democrats acknowledge, however, facing a difficult task considering that President George W. Bush, was unable to persuade enough of his fellow Republicans to back immigration changes in 2007, and the effort collapsed.
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MEXICANOCCUPATION.blogspot.com




“THE AMNESTY ALONE WILL BE THE LARGEST EXPANSION OF THE WELFARE SYSTEM IN THE LAST 25 YEARS” …….Heritage Foundation


"The amnesty alone will be the largest expansion of the welfare system in the last 25 years," says Robert Rector, a senior analyst at the Heritage Foundation, and a witness at a House Judiciary Committee field hearing in San Diego Aug. 2. "Welfare costs will begin to hit their peak around 2021, because there are delays in citizenship. The very narrow time horizon [the CBO is] using is misleading," he adds. "If even a small fraction of those who come into the country stay and get on Medicaid, you're looking at costs of $20 billion or $30 billion per
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 THE HERITAGE FOUNDATION.org
 April 4, 2007
Executive Summary: The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer
by Robert E. Rector, Christine Kim and Shanea Watkins, Ph.D.
Executive Summary #12

Each year, families and individuals pay taxes to the government and receive back a wide variety of services and benefits. When the benefits and services received by one group exceed the taxes paid, a distributional deficit occurs, and other groups must pay for the services and benefits of the group in deficit. Each year, government is involved in a large-scale transfer of resources between different social groups.
This paper provides a fiscal distribution analysis of households headed by persons without a high school diploma. The report refers to these households as “low-skill households.” The analysis measures the total benefits and services received by these households compared to total taxes paid. The difference between benefits received and taxes paid rep_resents the total resources transferred by government on behalf of this group from the rest of society.
The size and cost of government are far larger than many people imagine. In fiscal year (FY) 2004, federal, state, and local expenditures combined amounted to $3.75 trillion. One way to grasp the size of government more readily is to calculate average expenditures per household. In 2004, there were some 115 million households (multi-person families and single persons living alone) in the U.S. Government spending thus averaged $32,706 per household across the U.S. population.
Government expenditures can be divided into six categories. The first four, which can be termed “immediate benefits and services,” are: Direct benefits, which include Social Security, Medicare, and a few smaller transfer programs;  Means-tested benefits, including cash, food, housing, social services, and medical care for poor and near poor individuals;  Public educational services, which include the governmental cost of primary, secondary, vocational, and post-secondary education;  Population-based services, which are government services made available to a general community including police and fire protection, highways, sewers, food safety inspection, and parks.
Two additional spending categories are: Interest and other financial obligations resulting from prior government activity, including interest payments on government debt and other expenditures relating to the cost of government services provided in earlier years; and Pure public goods, which include national defense, international affairs and scientific research, and some environmental expenditures.
On average, low-skill households receive more government benefits and services than do other households. In FY 2004, low-skill households received $32,138 per household in immediate benefits and services (direct benefits, means-tested benefits, education, and population-based services). If public goods and the cost of interest and other financial obligations are added, total benefits rose to $43,084 per low-skill household. In general, low-skill households received about $10,000 more in government benefits than did the average U.S. household, largely because of the higher level of means-tested welfare benefits received by low-skill households.
In contrast, low-skill households pay less in taxes than do other households. On average, low-skill households paid only $9,689 in taxes in FY 2004. Thus, low-skill households received at least three dollars in immediate benefits and services for each dollar in taxes paid. If the costs of public goods and past financial obligations are added, the ratio rises to four to one.
Strikingly, low-skill households in FY 2004 had average earnings of $20,564 per household. Thus, the $32,138 per household in government immediate benefits and services received by these households not only exceeded their taxes paid, but also substantially exceeded their average household earned income.
A household’s net fiscal deficit equals the cost of benefits and services received minus taxes paid. If the costs of direct and means-tested benefits, education, and population-based services alone are counted, the average low-skill household had a fiscal deficit of $22,449 (expenditures of $32,138 minus $9,689 in taxes). The average net fiscal deficit of a low-skill household actually exceeded the household’s earnings.
If interest and other financial obligations relating to past government activities are added, the average deficit per household rose to $27,301. In addition, the average low-skill household was a free rider with respect to government public goods, receiving public goods costing some $6,095 per household for which it paid nothing.
Receiving, on average, at least $22,449 more in benefits than they pay in taxes each year, low-skill households impose substantial long-term costs on the U.S. taxpayer. Assuming an average adult life span of 50 years for each head of household, the average lifetime costs to the taxpayer will be $1.1 million for each low-skill household for immediate benefits received minus all taxes paid. If the cost of interest and other financial obligations is added, the average lifetime cost rises to $1.3 million per low-skill household.
In 2004, there were 17.7 million low-skill households. With an average net fiscal deficit of $22,449 per household, the total annual fiscal deficit (total benefits received minus total taxes paid) for all of these households equaled $397 billion (the deficit of $22,449 per household times 17.7 million households). This sum includes direct and means-tested benefits, education, and population-based services. If the low-skill households’ share of interest and other financial obligations for past activities is added, their total annual fiscal deficit rises to $483 billion. Over the next ten years the total cost of low-skill households to the taxpayer (immediate benefits minus taxes paid) is likely to be at least 3.9 trillion dollars. This number would go up significantly if changes in immigration policy lead to substantial increases in the number of low-skill immigrants entering the country and receiving services.
Politically feasible changes in government policy will have little effect for decades on the level of fiscal deficit generated by most low-skill households. For example, to make the average low-skill household fiscally neutral (taxes paid equaling immediate benefits received and the appropriate share of interest on government debt), it would be necessary to eliminate Social Security, Medicare, all 60 means-tested aid programs and cut the cost of public education in half. It seems certain that, on average, low-skill households will generate deep fiscal deficits for the foreseeable future. Policies that reduce the future number of high school dropouts and other policies affecting future generations could reduce long-term costs.
Policies that would expand Medicaid and other entitlements will increase the size of future deficits of low-skill households at the margin. On the other hand, policy changes that curtailed medical inflation could reduce costs at the margin in future years. Policies which would halt the growth of out-of-wedlock childbearing or increase real educational attainments of future generations could also limit the growth of future deficits somewhat. However, these policy changes would be dwarfed by any alteration in immigration policy that would substantially increase the future inflow of low-skill immigrants; such a policy would dramatically increase the future fiscal burden to taxpayers.
Robert Rector is Senior Research Fellow in Domestic Policy Studies and Christine Kim is a Policy Analyst in Domestic Policy Studies at The Heritage Foundation. Shanea Watkins, Ph.D., is Policy Analyst in Empirical Studies in the Center for Data Analysis at The Heritage Foundation.
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SANCTUARY COUNTY LOS ANGELES SPENDS $600 MILLION ON WELFARE FOR ILLEGALS
County Spends $600 Mil On Welfare For Illegal Immigrants
Last Updated: Thu, 03/11/2010 - 3:14pm
For the second consecutive year taxpayers in a single U.S. county will dish out more than half a billion dollars just to cover the welfare and food-stamp costs of illegal immigrants.  
Los Angeles County, the nation’s most populous, may be in the midst of a dire financial crisis but somehow there are plenty of funds for illegal aliens. In January alone, anchor babies born to the county’s illegal immigrants collected more than $50 million in welfare benefits. At that rate the cash-strapped county will pay around $600 million this year to provide illegal aliens’ offspring with food stamps and other welfare perks.

THE EXORBITANT FIGURE DOES NOT INCLUDE THE ENORMOUS COST OF EDUCATING, MEDICALLY TREATING, OR INCARCERATING ILLEGALS ALIENS. THIS COSTS THE COUNTY AN ADDITIONAL ONE BILLION DOLLARS.

The exorbitant figure, revealed this week by a county supervisor, doesn’t even include the enormous cost of educating, medically treating or incarcerating illegal aliens in the sprawling county of about 10 million residents. Los Angeles County annually spends more than $1 billion for those combined services, including $500 million for healthcare and $350 million for public safety. 
About a quarter of the county’s welfare and food stamp issuances go to parents who reside in the United States illegally and collect benefits for their anchor babies, according to the figures from the county’s Department of Social Services. In 2009 the tab ran $570 million and this year’s figure is expected to increase by several million dollars. 
Illegal immigration continues to have a “catastrophic impact on Los Angeles County taxpayers,” the veteran county supervisor (Michael Antonovich) who revealed the information has said. The former fifth-grade history teacher has repeatedly come under fire from his liberal counterparts for publicizing statistics that confirm the devastation illegal immigration has had on the region. Antonovich, who has served on the board for nearly three decades, represents a portion of the county that is roughly twice the size of Rhode Island and has about 2 million residents.
His district is simply a snippet of a larger crisis. Nationwide, Americans pay around $22 billion annually to provide illegal immigrants with welfare benefits that include food assistance programs such as free school lunches in public schools, food stamps and a nutritional program (known as WIC) for low-income women and their children. Tens of billions more are spent on other social services, medical care, public education and legal costs such as incarceration and public defenders. 
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Michael Moriarty -- The Soros-Obama Puppet Show

Michael Moriarty -- The Soros-Obama Puppet Show

OBAMA & The Fall of America WHILE OBAMA'S CRIMINAL BANKSTERS AVOID PRISON & LA RAZA "THE RACE" Illegals Get Our Jobs - EMAIL BROADCAST THIS POSTING!

“Records show that four out of Obama's top five contributors are employees of financial
industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase
($362,207) and Citigroup ($358,054).”
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WHEN A MAJOR JOURNALIST ASKED OBAMA WHY THERE HAD NOT BEEN
ANY PROSECUTION OF CRIMINAL BANKSTERS, OBAMA REPLIED THAT THIS WAS BECAUSE (HIS
OWN) DEPT. OF JUSTICE HAD NOT PURSUED ANY CRIMINAL PROSECUTIONS.
“I’m not here to punish banks!” OBAMA, STATE of the UNION
MESSAGE, SENATE FLOOR.
THIS SAME DEPT. OF JUSTICE HAS NOW SUED FOUR STATES ON
BEHALF OF OBAMA’S LA RAZA “THE RACE” MEXICAN PARTY BASE. OBAMA NOW SUES STATES
IN THE NAME OF LA RAZA VOTING RIGHTS TO ASSURE ILLEGALS THEY WILL NOT HAVE TO
PRODUCE EVEN ONE OF THEIR POCKETFULS OF FRAUDULENT IDs TO VOTE.
WHILE OBAMA’S DEPT. OF JUSTICE LOOKS THE OTHER WAY AT THE
CRIMES OF HIS BANKSTER DONORS, THEY ARE QUITE PROACTIVE IN PUSHING OBAMA’S LA
RAZA AGENDA!

“The Bloomberg story... about a crooked Treasury secretary handing a room full of
crooked billionaires inside information worth billions of dollars... hardly
caused a ripple. As far as I know, no actions are being planned against Henry
Paulson or any of the hedge-fund managers involved. No other major media outlet
picked up the story. I saw nothing about it from the Department of Justice or
the Securities and Exchange Commission.”

THE MEXICAN INVASION, OCCUPATION AND EVER EXPANDING WELFARE
STATE DEPRESSES WAGES, PARTICULARLY FOR BLACK AMERICANS, FROM $300 TO $400 MILLION PER YEAR. ON TOP OF THAT AMERICANS ARE FORCED AT ALL LEVELS TO PAY FOR THE STAGGERING COST OF MEXICO’S WELFARE STATE IN OUR BORDERS!

THERE ARE ONLY EIGHT STATES WITH A POPULATION GREATER THAN
LOS ANGELES COUNTY WHERE HALF THE JOBS GO TO ILLEGALS USING STOLEN SOCIAL SECURITY NUMBERS. THIS SAME COUNTY PAYS OUT $600 MILLION PER YEAR IN WELFARE TO ILLEGALS, AND HAS A TAX-FREE MEXICAN UNDERGROUND ECONOMY CALCULATED TO BE IN EXCESS OF $2 BILLION PER YEAR. OH, AND 95% OF ALL ARREST WARRANTS FOR MURDER ARE FOR MEXICANS!
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THE CORRUPTION OF AMERICA
By Porter Stansberry
December 27, 2011
NewsWithViews.com
The numbers tell us America is in decline... if not outright collapse.
I say "the numbers tell us" because I've become very sensitive to the impact this kind of statement has on people. When I warned about the impending bankruptcy of General Motors in 2006 and 2007,
readers actually blamed me for the company's problems – as if my warnings to the public were the real problem, rather than GM's $400 billion in debt. The claim was absurd. But the resentment my work engendered was real.

So please... before you read this issue, which makes several arresting claims about the future of our country... understand I am only writing about the facts as I find them today. I am only drawing conclusions based on the situation as it stands. I am not saying that these conditions can't improve. Or that they won't improve. The truth is, I am optimistic. I believe our country is heading into a crisis. But I also believe that... sooner or later... Americans will make the right choices and put our country back on sound footing.
Please pay careful attention to the data I cite. And please send me corrections to the facts. I will happily publish any correction that can be substantiated. But please don't send me threats, accusations against my character, or baseless claims about my lack of patriotism. If I didn't love our
country, none of these facts would bother me. I wouldn't have bothered writing this letter.
I know this is a politically charged and emotional issue. My conclusions will not be easy for most readers to accept. Likewise, many of the things I am writing about this month will challenge my subscribers to re-examine what they believe about their country. The facts about America
today tell a painful story about a country in a steep decline, beset by problems of its own making.
One last point, before we begin... I realize that this kind of macro-economic/political analysis is not, primarily, what you pay me for.

You rightly expect me to provide you with investment opportunities – whether
bull market, bear market, or total societal collapse. And that's what I've done
every month for more than 15 years.

But that's not what I've done this month. You won't find any investment ideas at all in these pages. This issue is unlike any other I have ever written.

I'm sure it will spark a wave of cancellations – costing me hundreds of thousands of dollars. I fear it will spark a tremendous amount of controversy. Many people will surely accuse me of deliberately writing inflammatory things in order to stir the pot and gain attention. That's not my intention. The truth is, I've gone to great lengths throughout my career to protect my privacy.
I am speaking out now because I believe someone must. And I have the resources to do it. I am sharing these ideas with my subscribers because I know we have arrived at the moment of a long-brewing crisis.Our political leaders, our business leaders, and our cultural leaders have made a series of catastrophic choices. The result has been a long decline in America's standard of living.
For decades, we have papered over these problems with massive amounts of borrowing. But now, our debts total close to 400% of GDP, and America is the world's largest borrower (after being the world's largest creditor only 40 years ago)... And the holes in our society can no longer be
hidden...
We've reached the point where we will have to fix what lies at the heart of
America's decline... or be satisfied with a vastly lower standard of living in
the future.
How do I know? How do I statistically define the decline of
America?
The broadest measure of national wealth is per-capita gross
domestic product (GDP). Economists use this figure to judge standards of living
around the world. It shows the value of the country's annual production divided
by the number of its citizens. No, the production isn't actually divided among
all the citizens, but this measure provides us with a fair benchmark to compare
different economies around the world. Likewise, this measure shows the growth
(or the decline) in wealth in societies across time.
So... is America growing richer or poorer based on
per-capita GDP? Seems like a simple enough question, doesn't it? Is our economy
growing faster than our population? Are we, as individuals, becoming more affluent?
Or is the pie, measured on a per-person basis, growing smaller?
This is the most fundamental measure of the success or the
failure of any political system or culture. Are the legal and social rules we
live under aiding our economic development or holding us back? What do the
numbers say?
Unfortunately, it's a harder question to answer than it
should be. The problem is, we don't have a sound currency with which to measure
GDP through time. Until 1971, the U.S. dollar was defined as a certain amount
of gold. And the price of gold was fixed by international agreement. It didn't
actually begin to trade freely until 1975. Therefore, the value of the U.S.
dollar (and thus the value of U.S. production, which is measured in dollars)
was manipulated higher for many years.
Even today, our government's nominal GDP figures are greatly
influenced by inflation. The influence of inflation is particularly pernicious
in GDP studies. You see, inflation, which actually reduces our standard of
living, drives up the amount of nominal GDP. So it creates the appearance of a
wealthier country... while the nation is actually getting poorer.
The only real way to accurately measure per-capita GDP is to
build our own model. The need to build our own tools tells you something important
– the government doesn't want anyone to know the answer to this question. It
could easily publish data far more accurate than the indexes it puts out. But
government doesn't want anyone to know. And it wants to be able to say
"those aren't the real data" when studies like ours produce bad news.
So pay attention to how we built our charts. You can see for
yourself that our data are far more accurate than the government's figures. Our
data are based on the real purchasing power of the currency, not the nominal
numbers, which are completely meaningless in the real world.
The question we are trying to answer is: What would
per-capita GDP numbers look like, if we used a real-world currency, like gold,
or a basket of commodity prices, instead of the paper-based U.S. dollar? What
would the figures be if we measured GDP in sound money instead of the
government's funny money?
Here's how we figured it out. We took the government numbers
for nominal GDP and measured them first against commodity prices, and later (after
it began to trade freely) gold. We used a standard commodity index (the CRB) up
to 1975 and gold post-1975. The result of this analysis shows you the real
trend in U.S. per-capita GDP, as measured on a real-world purchasing power
basis.
Our analysis shows you what's actually happened to our real
standard of living. The results, we suspect, will surprise even the most
bearish among you.

America is in a steep decline.
Americans Are Getting Poorer – Fast

Let me anticipate the "official" criticism of our study.
Many people will claim that our numbers aren't "real." They will say
that we "mined" the data to produce a chart that showed a steep
decline.
That's simply not so. All we've done is convert the
government's nominal GDP stats into a fixed currency value that's based on
real-world purchasing power. The fact is, our data are far more accurate than
the government's because they represent the real-world experience. That's
why our data are far more closely correlated to other real-world studies of
wealth in America.
Consider, for example, annual sales of automobiles. Auto
sales peaked in 1985 (11 million) and have been declining at a fairly steady
rate since 1999. In 2009, Americans bought just 5.4 million passenger cars. As
a result, the median age of a registered vehicle in the U.S. is almost 10
years.
Our data shows that real per-capita wealth peaked in the
late 1960s. Guess when we find the absolutely lowest median age of the U.S.
fleet? In 1969. At the end of the 1960s, the median age of all the cars on the
road in the U.S. was only 5.1 years. Even as recently as 1990, the median age
was only 6.5 years.
Rich people buy new cars. Poor people do not.
Most important, our data "proves" something I know
many of you have felt or perceived for many years. You've seen the decline of
your neighborhoods. You've gone years without being able to earn more money in
your job. Or you've seen your purchasing power decrease to the point where
you're now substituting lower-quality products on your grocery list for the brand-name
products you used to buy.
You can see how much harder it is on your children to find
good jobs, to buy good housing or a new car. As a result, few people under the
age of 40 have the same kind of "life story" as their parents.
And because they can't "make it," many have
decided to "fake it." The average college student now
graduates with $24,000 in debt... and by his late 20s has racked up more than
$6,000 in credit card debt. Meanwhile, median earnings for Americans aged 25-34
equals $34,000-$38,000. (Source: Demos.org, "The Economic State of Young
America," November 2011.)
Can you imagine starting your life out as an adult with a
personal debt-to-income level at close to 100%? What does this say about the
state of our economy? What does this say about the state of our culture?
Who Suffers Most
It's not only the young that are having trouble in America.
It is also the old.
Debt levels among households headed by people older than 62
have been rising for two decades.
The average mortgage size for this population is now $71,000 – five times
larger than it was in 1987 (adjusted for inflation), according to William Apgar
of Harvard's Joint Center for Housing Studies.
Older Americans are also more reliant on credit card debt
than ever before... credit card debt. From 1992 through 2007 (which is the
latest data available) older Americans took on credit card debt at a faster
pace than the population as a whole. According to USA Today, lower- and
middle-income Americans aged 65 and older now carry an average of more than
$10,000 in credit card debt, up 26% since only 2005.
Given average interest rates of 20% for these debts, it's a
fair bet that these obligations will never be repaid. But they will have a
terrible impact on the standard of living of these older Americans.
What in the heck is going on? Don't Americans pay off their
mortgages before they retire? Don't they work hard during their careers, save,
and invest, so they can move to Florida and spend their retirement in comfort?
Older Americans living with credit card debt! This doesn't
sound like America, does it? Or maybe it does.
My bet is that most of my subscribers know that something
has gone terribly wrong with America. It's not easy to figure out how all of
this happened... but you know from your own experiences that these numbers
aren't wrong. It might not be pleasant to think about... but these figures
paint a sad but accurate picture: America is not the country it was 40 years
ago. These changes are warping our economy, politics, and culture.
In this month's issue, I'd like to try to define a few of
the core reasons we're in this situation. I can't possibly analyze all the
factors that have led to this decline. But I want to document the growth of
graft in politics. I want to demonstrate – with real facts and examples – how
public company leadership has deteriorated. And I want to document some of the
things that are occurring in the broader society, all of which I believe are
linked to this fundamental decline in our standard of living.
You see, I believe the decline of
our country is primarily a decline of our culture.
We have lost our sense of honor, humility, and the
dedication to personal responsibility that, for more than 200 years, made our
country the greatest hope for mankind. I want to detail some of the factors
that gave rise to the current entitlement society. We have become a country of
people who believe their well-being is someone else's responsibility.
I've labeled these problems: The Corruption of America.
These problems manifest themselves in different ways across
institutions in all parts of our society. But at their root, they are simply
facets of the same stone. They are all part of the same essential problem.
The corruption of America isn't happening in one part of our
country... or in one type of institution. It is happening across the landscape
of our society, in almost every institution. It's a kind of moral decay... a
kind of greed... a kind of desperate grasp for power... And it's destroying our
nation.
The Ethos of 'Getting Yours'
Americans know, in their bones, that something terrible is
happening. Maybe you can't articulate it. Maybe you don't have the statistics
to understand exactly what's going on. But my bet is, you think about it a lot.
For me, a poignant moment of recognition came this month.
Bloomberg news published an article based on confidential
sources about how Henry Paulson, the former CEO of Goldman Sachs and the
Republican U.S. Treasury secretary during the financial crisis, held a secret
meeting with the top 20 hedge-fund managers in New York City in late July 2008.
This was about two weeks after he testified to Congress that Fannie Mae and
Freddie Mac were "well-capitalized."
I knew for a fact that what Paulson told Congress wasn't
true. I wrote my entire June 2008 newsletter detailing exactly why Fannie and
Freddie certainly had billions in losses that they had not yet revealed to
investors – $500 billion in losses, at least. There was no question in my mind,
both companies were insolvent – "zeros," as I explained.
And yet, in front of Congress, the U.S. Treasury secretary
was saying exactly the opposite. Either I was a liar... or he was.
Then...
only a few days later... what did Paulson tell those hedge-fund managers?
He
told them the same thing I had written in my newsletter. He told them the opposite
of what he'd said publicly to Congress. He told these billionaire investors
that Fannie and Freddie were a disaster... They would require an enormous,
multibillion-dollar bailout... The U.S. government would have to take them
over... And their shareholders would be completely wiped out.
Here
you had a high-government official, explicitly lying to Congress (and by
extension, the general public), while giving the real facts to a group of
people who represented the financial interests of the world's wealthiest folks.
The story didn't come to the public's attention for two years.
This was the most outrageous example of graft and corruption
I have ever seen. Certainly it involves more billions of dollars in misappropriated
value than any other similar story I can recall. These managers had the
risk-free ability to make tens of billions of dollars, if not hundreds of
billions, by using derivatives to capitalize on what they knew was the imminent
collapse of the world's largest mortgage bank. Who picked up the tab? You know
perfectly well. It was you and me, the taxpayers.
(One of the investment managers present at this meeting was
Steve Rattner, who by that point was already deeply involved in another bit of
graft, his efforts to bribe New York state pension-fund managers for large
investments into his hedge fund, from which he earned perhaps as much as $100
million. He later settled the charges for a mere $10 million shortly after
Andrew Cuomo was elected governor of New York.)
The
Bloomberg story... about a crooked Treasury secretary handing a room full of
crooked billionaires inside information worth billions of dollars... hardly
caused a ripple. As far as I know, no actions are being planned against Henry
Paulson or any of the hedge-fund managers involved. No other major media outlet
picked up the story. I saw nothing about it from the Department of Justice or
the Securities and Exchange Commission.
What does that say about our country when even the most
egregious kind of corruption – involving hundreds of billions of dollars – is
simply ignored?
It seems like everyone in our country has lost his moral
bearing, from the highest government officials and senior corporate leaders all
the way down to schoolteachers and local community leaders. The ethos of my
fellow Americans seems to have changed from one of personal integrity and
responsibility to "getting yours" – the all-out attempt, by any means
possible, to get the most amount of benefits with the least amount of work.

You can see this in everything from the lowering of school
standards (revising the SAT) to the widespread use of performance-enhancing
drugs in professional, college, and high school sports. Cheating has become a
way of life in America.
I have an idea about
how this happened... about the root cause of this kind of corruption and why it
was inevitable, given some of the basic facts regarding how we've organized our
government and our corporations.
Let me show you the numbers – the hard facts – behind what's
happened to our country...
Editor’s note: This essay is excerpted from one of
the most controversial documents in America right now… the December 2011 issue
of Stansberry’s Investment Advisory. To access the full issue – where Porter
walks readers through the facts behind the rampant and blatant corruption that
has us on the brink of an economic crisis – click here. It’s the most important document you’ll read in the next year… and it’s completely, 100% free. Warning: Do not read this if you
are easily offended.


*
“Records show that four out of Obama's top five contributors are employees of financial
industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase
($362,207) and Citigroup ($358,054).”
*
IF YOU’RE NOT A BANKSTER, OR MEMBER OF THE MEXICAN FASCIST
PARTY of LA RAZA, YOU WILL NOT FIND A POSITION IN THE OBAMA WHITE HOUSE.
THE REASON WHY OBAMA BROUGHT IN BILL DALEY AS CHIEF OF STAFF, IS TO FURTHER HAND THE WHITE HOUSE TO BIG BANKS, LIKE BUSH CHENEY WORKED FOR BIG BUSH SAUDIS (9-11 INVADERS) OIL, OR LA RAZA! BILL DALEY IS A BANKSTERS’ MAN, AND ADVOCATE FOR OPEN BORDERS, AMNESTY OR OBAMA’S CONTINUED SABOTAGE OF OUR LAWS AND BORDERS FOR LA RAZA.

FROM CREOLE FOLKS

Obama Seeks Brother of "Chicago
Mob Boss" for Top White House Post
The roaches and con-artist, fake journalist on cable news are all lying about
William Daley being all this and all that, this man is an open borders, down with America, free trade globalist.
MSNBC and Gretta "the Scientology" Van Susteren from Fox News are knowingly deceiving the public about D. Issa & his letter to "business owners"=which they made into such a BIG DAM DEAL, but no one says anything when Barrack Hussein Obama, comes around with all of
these shady bankers, hedge fund managers and Wall St. Tycoons, which he puts in his cabinet. All of Obama's meeting with Wall Street asking, "What can I do for you?" is never something covered by Keith Oberman or Rachel Maddow.


(Bloomberg) -- President Barack Obama is considering naming William Daley, a
JPMorgan Chase & Co. executive and former U.S. Commerce secretary, to a
high-level administration post, possibly White House chief of staff, people
familiar with the matter said.

*
Obamanomics:
How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends,
Corporate Lobbyists, and Union Bosses

BY TIMOTHY P CARNEY

Editorial Reviews
Obama Is Making You Poorer—But Who’s Getting Rich?
Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack
Obama was supposed to chase from the temple—are profiting handsomely from
Obama’s Big Government policies that crush taxpayers, small businesses, and
consumers. In Obamanomics, investigative reporter Timothy P. Carney digs
up the dirt the mainstream media ignores and the White House wishes you
wouldn’t see. Rather than Hope and Change, Obama is delivering corporate
socialism to America, all while claiming he’s battling corporate America. It’s
corporate welfare and regulatory robbery—it’s Obamanomics.

Congressman Ron Paul says, “Every libertarian and free-market conservative needs to read Obamanomics.”
And Johan Goldberg, columnist and bestselling author says, “Obamanomics
is conservative muckraking at its best and an indispensable field guide to the
Obama years.”

If you’ve wondered what’s happening to America, as the federal government swallows
up the financial sector, the auto industry, and healthcare, and enacts deficit
exploding “stimulus packages,” this book makes it all clear—it’s a big scam.
Ultimately, Obamanomics boils down to this: every time government gets bigger,
somebody’s getting rich, and those somebodies are friends of Barack. This book
names the names—and it will make your blood boil.
*
Obama Is Making You Poorer—But Who’s Getting Rich?
Goldman
Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack
Obama was supposed to chase from the temple—are profiting handsomely from
Obama’s Big Government policies that crush taxpayers, small businesses, and
consumers.
Investigative
reporter Timothy P. Carney digs up the dirt the mainstream media ignores and
the White House wishes you wouldn’t see. Rather than Hope and Change, Obama is
delivering corporate socialism to America, all while claiming he’s battling
corporate America. It’s corporate welfare and regulatory robbery—it’s
Obamanomics. In this explosive book, Carney reveals:
* The
Great Health Care Scam—Obama’s backroom deals with drug companies spell
corporate profits and more government control
*
* The Global Warming Hoax—Obama has bought off industries with a pork-filled
bill that will drain your wallet for Al Gore’s agenda
*
* Obama and Wall Street—“Change” means more bailouts and a heavy Goldman Sachs
presence in the West Wing (including Rahm Emanuel)
*
* Stimulating K Street—The largest spending bill in history gave pork to the
well-connected and created a feeding frenzy for lobbyists
*
* How the GOP needs to change its tune—drastically—to battle Obamanomics
*
If you’ve wondered what’s
happening to our country, as the federal government swallows up the financial
sector, the auto industry, and healthcare, and enacts deficit exploding
“stimulus packages” that create make-work government jobs, this book makes it
all clear—it’s a big scam. Ultimately, Obamanomics boils down to this: every
time government gets bigger, somebody’s getting rich, and those somebodies are
friends of Barack. This book names the names—and it will make your blood boil.
*
Praise for Obamanomics
“The
notion that ‘big business’ is on the side of the free market is one of
progressivism’s most valuable myths. It allows them to demonize corporations by
day and get in bed with them by night. Obamanomics is conservative
muckraking at its best. It reveals how President Obama is exploiting the big
business mythology to undermine the free market and stick it to entrepreneurs,
taxpayers, and consumers. It’s an indispensable field guide to the Obama
years.”
—Jonha Goldberg, LA Times columnist and best-selling author
“‘Every
time government gets bigger, somebody’s getting rich.’ With this astute
observation, Tim Carney begins his task of laying bare the Obama
administration’s corporatist governing strategy, hidden behind the president’s
populist veneer. This meticulously researched book is a must-read for anyone
who wants to understand how Washington really works.”
—David Freddoso, best-selling author of The Case Against Barack Obama
“Every
libertarian and free-market conservative who still believes that large
corporations are trusted allies in the battle for economic liberty needs to
read this book, as does every well-meaning liberal who believes that expansions
of the welfare-regulatory state are done to benefit the common people.”
—Congressman Ron Paul
“It’s
understandable for critics to condemn President Obama for his ‘socialism.’ But
as Tim Carney shows, the real situation is at once more subtle and more
sinister. Obamanomics favors big business while disproportionately punishing
everyone else. So-called progressives are too clueless to notice, as usual,
which is why we have Tim Carney and this book.”
—Thomas E. Woods, Jr., best-selling author of Meltdown and The
Politically Incorrect Guide™ to American History
*
·
Hardcover: 256 pages
·
Publisher: Regnery Press (November 30,
2009)
·
Language: English
·
ISBN-10: 1596986123
·
ISBN-13: 978-1596986121

*

The Obamas’ new home has received a lot of attention in the corporate media
and on the blogs. This post will discuss other perspectives.
Hyde Park, where the Obamas have lived since 1994, is home to the
University of Chicago (UC) Law School and at least one of UC’s hospitals. Leo
Struass taught in the university’s Committee on Social Thought. The Federalist
Society was born at UC, and it is the alma mater of many Neo Cons,
including Supreme Court Justice Antonin Scalia.
Kenwood, where the Obamas’ new home sits, is a small neighborhood, only 1.09
miles in area. It is bound on the south by Hyde Park, on the north by North
Kenwood, and on the west by the neighborhood of Highland. Kenwood was once one
of the most elite neighborhoods in all of Chicago.
This map shows the juxtaposition of the Hyde Park and Kenwood neighborhoods:
The Obamas had decided that politics was Barack’s ultimate future while
still dating. In 1991, then Michelle
Robinson
, who was then Obama’s fiancĂ©e, left her job at the law firm of
Sidley Austin Brown & Wood. She went to work for the city of Chicago, first
as an assistant to Mayor Daley, then as the Executive Director of Public Allies
Chicago, a nonprofit that provides leadership training to young adults
interested in public service careers.
In 1996, she left the Public Allies to help create a student volunteer
program at The University of Chicago. By the time of this interview, she was
the Executive Director of Community Affairs for The University of Chicago
Hospitals. This is how Michelle portrays her change of career:
She was devastated when her father died from MS complications. “That’s when
I started analyzing my life, sitting in a firm,” she recalls, adding that in
that same year she also lost one of her best friends from college to cancer.
She soon left the firm to pursue a much lower-paying path in the public sector.
The fact is Michelle was actively recruited for City Hall by a close
friend, Valerie Jarrett, who was Mayor Daley’s Deputy Chief of Staff
at that time. Valerie later became the Finance Chair of Obama’s 2004 US Senate
campaign and then First Treasurer of Barack’s political action committee,
Hopefund.
It helps to have friends at City Hall. Among other
positions, Michelle was appointed twice to sit on the board of the Commission
of Chicago Landmarks
for two consecutive terms. Michelle maintained this
board seat from 1998 to March 2005, although normally a member only serves one
4 year term.
Flush from the success of Barack’s speech at the 2004 Democratic National
Convention, the Obamas decided it was time to find a residence more
fitting for their anticipated new status. Barack’s 1995 autobiography Dreams
of My Father soared, and they knew Alan Keyes was no threat to their future
success in the US Senate elections.
Sitting on the Commission of Chicago Landmarks board, Michelle knew
of a permit, waiting for review and approval to sell, for a designated
Historical Georgian revival home built in 1910 with four fireplaces, glass-door
bookcases fashioned from Honduran mahogany, and a 1,000-bottle wine cellar
owned by a doctor in Kenwood. The Commission is supported not only by donations
and taxes but also by charges for permits.
It’s a pretty extensive process, and they want a complete history of the house
and property when a permit is requested. Once the Board approves a permit, the
application goes to the city planning or zoning commission if more than a
simple sale is involved.
The doctor who owned the Kenwood home wanted more than the Obamas could afford.
As Barack has stated in numerous press interviews, buying the home would be a stretch.
Barack contacted his patron Tony Rezko, despite knowing he was under
investigation at the time, in order to see what could be done so the Obamas
could afford their dream house. Sub-division was likely the agreed-on
solution. In order to divide the lot, which the doctor purchased as
one entity, he would have to:
– Hire an approved architect and general contractor, who had been involved
in renovations and sub-divisions in Kenwood previously
– Have the lots surveyed and new plot plans drawn
– Re-start the Landmark Commission permit approval process
– Hold a public hearing (required).
On page 51 of the Commission
on Landmarks Ordinances
, one finds a justification for the doctor agreeing
to subdividing the land.
The applicant bears the burden of proof that the existing use of the
property is economically infeasible and that the sale, rental or
rehabilitation of the property is not possible, resulting the property not
being capable of earning any reasonable economic return.
Pages 51 and 52 of the Landmark ordinances show how many proofs and other
forms of extensive documentation are required in order to subdivide the land.
Can any rational person believe the doctor would have been willing to go along
with having his property sub-divided, and all the work and time involved,
without compensation and assistance? Who paid for this?
With Michelle sitting on the Landmarks board, Commission approval wasn’t
expected to be an issue, even though I have not located notice of the Public
Hearing from any of the involved boards. From there it would go to the City
Planning Board and the Zoning Boards, which also require public hearings. Each
of these steps average between 6 weeks and 3 months to complete.
The doctor’s property was located in what Chicago Zoning Terms refer to as Residential
Single zone 1, or RS1.
This means the house the Obamas bought required
6,250 sq. ft of area. Even if it had the designation lowered to RS2, it still
would have required 5,000 square feet, as seen on page 5 of Chicago’s zoning
ordinances. Starting on page 8, the ordinances specify setbacks and how much
space must be available on each side of a building. The open space on the
building’s sides normally conform to Fire Regulations, so that equipment can
access all portions of a building during crises.
Public Records at the Chicago Commission on Landmarks, the Chicago Planning
Department and Chicago Zoning Boards would show the exact dates of permits,
hearings and approvals. Michelle was so confident she listed the Obamas’ condo,
which was located on the first floor of a Hyde Park Brownstone. In October
2004, Michelle expressed surprise to a Chicago interviewer that the Condo had
sold so quickly, which meant they either had to put off a closing date or write
in a lease agreement for a specified amount of time in their Condo purchase
contract.
2004 was a year flush with success for the Obamas: the autobiographical book
sales increased; the DNC speech had been well received; Obama won his US Senate
seat; and Michelle received a recent promotion to a $316,962-a-year position as
Vice President at The University of Chicago Hospitals. Their income was over
1.67 million dollars, with anticipation of even greater gains ahead.
All that needed to be done, in the name of the doctor, on the Kenwood
property was completed by March 2005, and the house was finally listed. Michelle
Obama resigned her seat on the Chicago Commission on Landmarks at the same
time. Barack and Michelle closed on their new home in June of 2005,
for $1.65 million dollars, $300,000 less than the asking price, and most likely
using the proceeds of their Condo for a down payment, while taking out a
mortgage for $1.32 million from Northern Trust. Tony Rezko’s wife purchased the
newly divided sub-plot for the full price of $625,000 and closed on the same
day.
The City of Chicago requires parking permits, or people must rent space at
parking garages for around $30 per diem. There is no overnight on-street
parking. The Obamas had no yard to park on, and most likely parked on Rezko’s
property.
Within in a month of purchasing their new home, the Obamas began the same
process the doctor previously went through. Because Tony Rezko was being
indicted, they needed to be distanced from him. So the Obamas hired a lawyer
and an architect. Additionally, the Obama’s wanted to put up a fence separating
the two properties. On page 21 of the Landmark Ordinances above, it states
fences for Historic homes can be no more than 5’ high and must not be visible
from the street. If the Obamas had purchased a prefab chain, picket or wooden
fence, they would have lost the Historic designation and also the
eight-year property tax freeze benefit accrued by agreeing to keep the
house in conformance with Landmark
regulations.

A picture of the front view of Obamas’ house reveals landmark and zoning
requirements.
The concrete wall and evergreens were most likely done after the city
appropriated land for sidewalks, and the paving of what has been noted as a
wide and busy thoroughfare. If you notice, the trees were planted one to two
feet behind the concrete wall, most probably a result of zoning constraints.
The new fence was specially fabricated to conform to historic standards, and
the $14,000 cost was billed to Rezko per agreement by Obama and Rezko. Obama
states he paid for the architect and Lawyer. Strangely enough the fence
actually sits ON the property line between the two lots. Obama agreed to yard
maintenance for both properties. And given Obama’s history with the Harvard
Law Review and his limited known court experience from public records, Obama
most likely either edited or personally wrote the legal documents for his
sub-division and the fence. On January 12, 2006, the Obamas closed on the 1/6th
of Rita Rezko’s property they purchased for $104,500.
Facts not specifically cited above, and much more, can be found in this Chicago
Tribune article
.
In all likelihood the driveway was previously on Rezko land. Behind the
house is most likely an old carriage house converted into a garage. Parking on
the street in that type of neighborhood is prohibited by zoning and fire safety
laws, unless someone in authority had been previously notified of a large
gathering.
One other event of note occurred in 2005. Daniel Mahru, Rezko’s partner in
Rezmar for 16 years until the two men had, according to Mahru, “a difference of
opinion,” resigned from Rezmar, Rezko’s slum landlord operation. Did Mahru
leave because he knew any shady deals while Rezko was being investigated would
lead to disaster?
There were lots of people involved in the purchase of the Obamas’ house, and
they would all be owed some kind of consideration for their help and support.
Obama’s favors from Rezko amount to $925,000, plus an additional $14,000 for
the fence, bringing the total cash value to just one person to $939,000.
Will Rezko sit quietly in jail or will he bring Mayor Daley, Governor
Blagojevich and Senator Obama down with him?
How will Obama repay the “favors” he owes all these people?
I am sure Patrick Fitzgerald will reveal all these connections and much more
in Rezko’s upcoming trial at the end of this month.
*
Fannie Mae, Freddie Mac executives
to receive millions in bonuses
By Tom Eley
7 April 2009
Fannie
Mae and Freddie Mac, the mortgage lending giants currently under federal
conservatorship, will pay out $210 million in retention bonuses over the course
of 18 months, a recent letter by the companies’ federal regulator, James
Lockhart, states.
The
Obama administration is tacitly backing the payouts, since it has kept
Lockhart, a Bush appointee, as the head of the federal agency that regulates
the two mortgage finance companies.
Some
$51 million in bonuses was paid late in 2008. The remainder will be released in
2009 and early in 2010, according to the letter, sent Friday to Iowa Republican
Senator Charles Grassley.
Two
hundred and thirteen executives and employees at the two firms will each take
home more than $100,000 in 2009 bonuses. Two high-level executives will each be
awarded more than $700,000.
Last
year, Fannie paid out $4.4 million in bonuses to its top four executives.
In
the letter, Lockhart defended the bonuses as necessary to retain talent at
Fannie and Freddie. “It is not realistic to expect that experienced and highly
skilled employees will indefinitely continue to work as hard as they have if we
do not provide reasonable incentives to perform,” Lockhart wrote.
“If
the bonuses are rescinded, it sends the exact opposite signal, and it would be
extremely dangerous for the American economy to lose these workers at this
point,” he added.
The
two companies lost $108 billion in 2008 and have survived only because of two
government infusions of cash and loans totaling $400 billion.
The
plan to pay bonuses to executives at Fannie and Freddie provoked public outrage
when it became known on March 18. Amidst the scandal concerning bonuses paid to
executives and traders at the bailed-out insurance firm American International
Group (AIG), politicians of both parties railed against executive bonuses
awarded by firms receiving taxpayer bailouts. However, under pressure from the
Obama administration, Senate Democrats have waylaid legislation that would
heavily tax bonuses at AIG and other firms.
Now,
Fannie and Freddie have announced a new round of executive bonuses. Implicitly
acknowledging growing public anger, Lockhart’s letter does not disclose the
executives’ names “for personal privacy and safety reasons.”
The
plan to carry forward executive bonuses at Fannie, Freddie, AIG and other
bailed-out firms has the support of the Obama administration. During the AIG
scandal, Obama initially declared he was “outraged” that AIG, which has
received some $180 billion in government funds, was rewarding some of the very
executives and traders whose risky bets on credit default swaps and other
derivatives had led the company to ruin and helped bring the US and global
financial system to the point of collapse. In the face of a furious
counterattack by Wall Street firms and much of the media, following passage of
a bill by the House of Representatives imposing a 90 percent surtax on some AIG
bonuses, Obama quickly shifted gears and mounted a public campaign opposing
congressional efforts to tax the bonuses.
Significantly,
Obama has kept Lockhart, who was appointed by President George W. Bush, as the
head of the agency tasked with overseeing Fannie and Freddie, the Federal
Housing Finance Agency. According to the New York Times, “The law
creating Mr. Lockhart’s office...established him as the lead regulator until
his successor is named by the president and confirmed by Congress.”
“This is a de facto White
House endorsement of these payments,” Karen Shaw Petrou, partner at Federal
Financial Analytics, told the Times. Petrou called Obama’s stance “a
little odd considering that everyone spent days talking about how they were
shocked by the bonuses given to AIG.”
Fannie
and Freddie are the two largest mortgage lending firms in the US. Together,
they underwrite more than half the nation’s mortgages.
A
rising tide of delinquencies and defaults on mortgage payments led to the
government rescue of Fannie and Freddie in September 2008. The two
government-sponsored enterprises, or GSEs, have combined obligations in debts
and mortgage-backed securities of more than $5 trillion.
Fannie
Mae and Freddie Mac buy mortgages, repackage them and resell them as
mortgage-backed securities to banks and investors. Fannie Mae (Federal National
Mortgage Association) was created in 1938 during the Great Depression as a New
Deal reform to create lending liquidity in the housing market. It was
privatized in 1968 in order to remove its debt obligations from the federal
balance sheet.
Freddie
Mac (Federal Home Loan Mortgage Corporation) was created as a
government-sponsored but privately owned firm to further expand the secondary
market for mortgages in 1970.
The Obama administration’s
role in backing the firms’ bonuses underscores its preoccupation with
protecting the wealth and power of the American financial elite.
About the WSWS Contact Us Privacy Statement Top of page
*
April 1, 2009
Op-Ed Contributor
Obama’s Ersatz Capitalism
By JOSEPH E. STIGLITZ
THE Obama
administration’s $500 billion or more proposal to deal with America’s ailing
banks has been described by some in the financial markets as a win-win-win
proposal. Actually, it is a win-win-lose proposal: the banks win, investors win
— and taxpayers lose.
Treasury hopes to get us
out of the mess by replicating the flawed system that the private sector used to
bring the world crashing down, with a proposal marked by overleveraging in the
public sector, excessive complexity, poor incentives and a lack of
transparency.
Let’s take a moment to
remember what caused this mess in the first place. Banks got themselves, and
our economy, into trouble by overleveraging — that is, using relatively little
capital of their own, they borrowed heavily to buy extremely risky real estate
assets. In the process, they used overly complex instruments like
collateralized debt obligations.
The prospect of high
compensation gave managers incentives to be shortsighted and undertake
excessive risk, rather than lend money prudently. Banks made all these mistakes
without anyone knowing, partly because so much of what they were doing was “off
balance sheet” financing.
In theory, the
administration’s plan is based on letting the market determine the prices of
the banks’ “toxic assets” — including outstanding house loans and securities
based on those loans. The reality, though, is that the market will not be
pricing the toxic assets themselves, but options on those assets.
The two have little to
do with each other. The government plan in effect involves insuring almost all
losses. Since the private investors are spared most losses, then they primarily
“value” their potential gains. This is exactly the same as being given an
option.
Consider an asset that
has a 50-50 chance of being worth either zero or $200 in a year’s time. The
average “value” of the asset is $100. Ignoring interest, this is what the asset
would sell for in a competitive market. It is what the asset is “worth.” Under
the plan by Treasury Secretary Timothy Geithner, the government would provide
about 92 percent of the money to buy the asset but would stand to receive only
50 percent of any gains, and would absorb almost all of the losses. Some
partnership!
Assume that one of the
public-private partnerships the Treasury has promised to create is willing to
pay $150 for the asset. That’s 50 percent more than its true value, and the
bank is more than happy to sell. So the private partner puts up $12, and the
government supplies the rest — $12 in “equity” plus $126 in the form of a
guaranteed loan.
If, in a year’s time, it
turns out that the true value of the asset is zero, the private partner loses
the $12, and the government loses $138. If the true value is $200, the
government and the private partner split the $74 that’s left over after paying
back the $126 loan. In that rosy scenario, the private partner more than
triples his $12 investment. But the taxpayer, having risked $138, gains a mere
$37.
Even in an imperfect
market, one shouldn’t confuse the value of an asset with the value of the
upside option on that asset.
But Americans are likely
to lose even more than these calculations suggest, because of an effect called
adverse selection. The banks get to choose the loans and securities that they
want to sell. They will want to sell the worst assets, and especially the
assets that they think the market overestimates (and thus is willing to pay too
much for).
But the market is likely
to recognize this, which will drive down the price that it is willing to pay.
Only the government’s picking up enough of the losses overcomes this “adverse
selection” effect. With the government absorbing the losses, the market doesn’t
care if the banks are “cheating” them by selling their lousiest assets, because
the government bears the cost.
The main problem is not
a lack of liquidity. If it were, then a far simpler program would work: just
provide the funds without loan guarantees. The real issue is that the banks
made bad loans in a bubble and were highly leveraged. They have lost their
capital, and this capital has to be replaced.
Paying fair market
values for the assets will not work. Only by overpaying for the assets will the
banks be adequately recapitalized. But overpaying for the assets simply shifts
the losses to the government. In other words, the Geithner plan works only if
and when the taxpayer loses big time.
Some Americans are
afraid that the government might temporarily “nationalize” the banks, but that
option would be preferable to the Geithner plan. After all, the F.D.I.C. has
taken control of failing banks before, and done it well. It has even
nationalized large institutions like Continental Illinois (taken over in 1984,
back in private hands a few years later), and Washington Mutual (seized last
September, and immediately resold).
What the Obama
administration is doing is far worse than nationalization: it is ersatz
capitalism, the privatizing of gains and the socializing of losses. It is a
“partnership” in which one partner robs the other. And such partnerships — with
the private sector in control — have perverse incentives, worse even than the
ones that got us into the mess.
So what is the appeal of
a proposal like this? Perhaps it’s the kind of Rube Goldberg device that Wall
Street loves — clever, complex and nontransparent, allowing huge transfers of
wealth to the financial markets. It has allowed the administration to avoid going
back to Congress to ask for the money needed to fix our banks, and it provided
a way to avoid nationalization.
But we are already
suffering from a crisis of confidence. When the high costs of the
administration’s plan become apparent, confidence will be eroded further. At
that point the task of recreating a vibrant financial sector, and resuscitating
the economy, will be even harder.
Joseph E. Stiglitz, a
professor of economics at Columbia who was chairman of the Council of Economic
Advisers from 1995 to 1997, was awarded the Nobel prize in economics in 2001.

*
WHO DOES OBAMA KNOW AT J.P. MORGAN???

“Records
show that four out of Obama's top five contributors are employees of financial
industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase
($362,207) and Citigroup ($358,054).”
*
US nonprofit groups, cities lose
millions in Wall Street derivative scams
By Luis Arce
6 April 2009
An
examination of the complex financial derivatives sold to hospitals,
universities and local governments sheds light on the operations of Wall
Street.
Bankers
deliberately created financial products with hidden risks to lure public
officials who did not understand the investments. The unnecessary level of
complexity served to justify excessive profits and fees.
The
large number of complex derivatives used to swindle non-profit organizations
and municipalities across America by the likes of Merrill Lynch and JPMorgan
Chase shows how criminality and fraud have become an integral part of Wall
Street business practice.
The
banks and investment houses promised clients extra benefits in the form of cost
savings, higher returns or upfront cash payments. One local school official
said JPMorgan Chase told him “the deal was nearly failsafe and would allow the
schools to collect money that would disappear if interest rates rose,”
according to the December 2008 edition of Bloomberg Markets
magazine.
The
bank claimed that the benefits far outweighed the small probability of the
economy moving in the wrong direction. In the event, two of the supposedly
unlikely negative economic scenarios occurred: interest rates went down and
insurance companies backing the derivatives, like American International Group
(AIG) and MBIA, became submerged in debt and had their credit downgraded.
What
happened to these “nearly failsafe” transactions? Bloomberg Markets
wrote, “Wall Street’s drive for profits over the past decade has backfired on
towns, cities and counties that borrow in the $2.7 trillion municipal bond
market ... forcing hundreds of public agencies to spend billions of dollars
they don’t have to pay for increased interest payments and penalties.”
Public
service organizations also experienced losses from derivatives transactions.
South County Hospital in Wakefield, Rhode Island, for example, saw the
“interest rate on $52 million of its debt doubled to 12 percent a year ago,”
according to a March 18 report in Bloomberg News entitled “Swaps
Backfire on Hospitals Firing Workers to Pay Wall Street.”
The
trades produced an increase in interest payments precisely when interest rates
hit historical lows not seen since the Eisenhower administration in the 1950s.
Instead of benefiting from low borrowing rates, the hospital had to pay more to
fund its operations. This did not affect Merrill Lynch, the bank that made the
deal with South County Hospital. Its profits were paid upfront in the form of
fees.
The
trouble escalated when hospitals and universities were forced to post
collateral, which consumed cash and created a liquidity problem precisely when
more funds were needed to deal with the impact of the recession. Bloomberg
News noted: “It cost [South County Hospital] $12.7 million of collateral
for an interest-rate swap that backfired.”
An
interest rate swap is a contract between two parties where counterparty “A”
pays a fixed rate to counterparty “B” while receiving a floating rate usually
pegged to the London Inter-Bank Offered Rate (Libor). When the Libor rate
falls, the payer of the floating rate—the bank in the above-mentioned case—benefits.
To compensate, the fixed-rate payer has to post collateral.
Other
institutions that fell pray to Wall Street derivatives schemes include
Vanderbilt University in Nashville, Tennessee, which had to post $190 million
in collateral for a $1.7 billion swap. In order to make the payment, the school
was forced to sell $250 million in taxable notes in January.
The
University of Maryland Medical System in Baltimore paid its bankers $105.7
million in December. The university had $610 million in swaps with Bank of
America and JPMorgan Chase.
How
widespread is this problem? According to Moody’s Investors Services, South
County is one of at least 500 nonprofit organizations that entered into
derivatives with Wall Street with the hope of cutting costs.
Bloomberg
News
reported that the University of Maryland Medical System “reported a net loss of
$224.2 million in the six months ending December 31 after it posted $105.7
million in collateral for its swaps, according to a financial report from the
nonprofit.”
The
investment income nonprofit organizations use to subsidize their operations
fell $881.5 million in the third quarter of 2008, fueling concerns about their
ability to meet future swap payments. As result, swap counterparties began
demanding higher collateral postings, creating an additional financial strain.
This
occurred precisely as revenue fell, in the case of medical centers due in large
part to an increase in the number of patients who had lost their medical
insurance because they had been laid off.
Vanderbilt
University derives 64 percent of its revenue from its 600-bed hospital as well
as from other medical facilities. Similarly, the University of Maryland Medical
System consists of eight hospitals in and around Baltimore and depends on its
1,809 beds for revenue.
In
the case of South County Hospital, the Bloomberg News notes, the funds
handed over to the bank could have been used “to counter a drop in state aid
for treating uninsured patients, compensate for declining admissions, or buy
four years’ of orthopedic supplies. Instead, the facility is firing workers and
cutting pay.”
There
is an obvious contradiction between the Obama administration’s campaign
promises to develop a comprehensive health care system and its
multi-trillion-dollar efforts to rescue the very financial institutions that
are responsible for bilking hundreds of millions of dollars from hospitals and
universities.
Rating agencies’ culpability
In
a special comment entitled “Interest Rate Swaps Cause New Liquidity Stress for
Some Healthcare, Higher Education and Other Not-for-Profit Borrowers,”
published in February, the rating agency Moody’s explained how the trades
worked and what went wrong.
“Mark-to-market
liabilities for long-dated fixed payer interest rate swaps have grown
considerably over the last few months and pose new credit risks for
not-for-profit hospitals, higher education institutions, and other
not-for-profit borrowers,” wrote Moody’s.
“Recent
unprecedented developments in the debt capital markets,” the report continued,
“have caused short term taxable rates and short term tax-exempt rates to trade
at unusual levels.”
What
were the “recent unprecedented developments” that ended up costing hospitals
and universities millions? Moody’s doesn’t have the spine to tell. This should
come as no surprise since it is a well-accepted fact that the rating agencies
were in bed with the bankers when they rubberstamped high-risk products as
triple-A.
The
“unprecedented developments” involved the disclosure of huge losses incurred by
MBIA, AIG and other firms in credit default swap contracts. Moody’s culpability
lies in the fact that it assigned the highest rating to MBIA’s credit default
swaps in the first place. Eventually, rating agencies had no choice but to
downgrade MBIA.
Since
MBIA is a large player in the municipal bond market, its downgrading adversely
affected the ability of counties, cities and public agencies to raise money.
The end result was that tax-exempt rates rose from 67 percent to 108 percent of
taxable rates. Hospitals and universities found themselves in a situation where
they had to post collateral for the 41 percent difference.
The
JP Morgan story is worth telling because so far it is one of the few, if not
the only, major financial institution not dragged down by the credit collapse.
Not surprisingly, it turns out that the “good guys” at JPMorgan are as corrupt
as any one else on Wall Street.
JPMorgan
was among the most active banks involved in structuring financial products for
municipalities. Playing a game in which the bottom line is everything, the bank
found it “could charge 10 times as much for selling municipal derivatives,
public records show,” wrote Bloomberg Markets.
Among
JPMorgan’s victims was the Butler County school district, 40 miles south of
Pittsburgh, which paid $395,000 in bond issue fees and $893,000 in swap
contract fees for a $50.9 million bond. Another was the Erie, Pennsylvania
school district, which paid $373,000 and $1.2 million in debt issue fees and
swap contract fees, respectively, on a $49.9 million bond.
Similarly,
the Philadelphia International Airport paid $475,000 in fees and $4.0
million-$4.5 million for the swap on a $189.5 million bond.
In
the south, Jefferson County, Alabama paid $4.6 million in fees and $20 million
for the swap derivative on a $1.04 billion bond issuance.
The
Bloomberg Markets article narrates how JPMorgan showed no regret for the
consequences, demanding that Jefferson County pay back “with county tax money
or higher sewer fees.” The report added, “Such proposals caused a public outcry
.... In Birmingham, one in four people lives below the poverty line.”
According
to Bloomberg Markets, “JPMorgan lured municipalities into derivative
deals by offering upfront cash payments in exchange for a pledge by the local
government to agree to enter interest rate swaps with the bank in the future.”
Similarities with the subprime market
There
are obvious parallels here with the subprime fiasco. Subprime mortgage
originators lured unsophisticated homebuyers with so-called “teaser” interest
rates. In exchange for the teaser rates, the mortgage originators got home
buyers to agree to higher interest rates in the future.
The
originators didn’t disclose their fees. Similarly, in the municipal bond
market, as the Bloomberg Markets article notes, deals “were rarely put
out for public competitive bidding.” JPMorgan “routinely didn’t disclose their
fee for these contracts ... In some cases, the bank made more money than it
paid out.”
JPMorgan
was not adverse to exploiting political connections and influence to market its
bonds. “In Philadelphia, JPMorgan turned to bond lawyer Ron White, a confidant
and fundraiser for Mayor John Street,” Bloomberg Markets reports,
describing White as a man who “carries a lot of stroke with the city.” It added
that the bank “agreed to contribute to White’s charities” a total of $90,000,
plus an extra $50,000 for a deal in which White played no role.
When
investigated by the FBI, White said JPMorgan “was pushing swaps to generate
fees, not because they were in the city’s interest,” according to the Bloomberg
Markets article.
It
has been revealed that the financial advisers hired by Butler County, Jefferson
County and Philadelphia to analyze fees and prices and determine whether swap
contracts were fair maintained business relations with JPMorgan.
When
asked by Erie school board members how much JPMorgan would make in the deal,
the independent advisor, IMAGE, said, “I can’t quantify that to you ... this is
a financial transaction that is put into a huge hedge fund that JPMorgan
controls. There’s a trillion dollars of investments in that hedge fund. There’s
some other issuer in Tokyo or somewhere else who’s got an opposite bet and
they’re going to offset each other.”
In essence, Wall Street
created financial products to lure customers into deals that promised large
advantages at the beginning in exchange for postponing the risk of high
payments in the future. There is nothing in this corrupt business that deserves
saving. The only answer lies in turning the financial industry into a public
utility under the democratic control of the working class.
*
Obama's Wall Street cabinet
6 April 2009
A
series of articles published over the weekend, based on financial disclosure
reports released by the Obama administration last Friday concerning top White
House officials, documents the extent to which the administration, in both its
personnel and policies, is a political instrument of Wall Street.
Policies
that are extraordinarily favorable to the financial elite that were put in
place over the past month by the Obama administration have fed a surge in share
values on Wall Street. These include the scheme to use hundreds of billions of
dollars in public funds to pay hedge funds to buy up the banks’ toxic assets at
inflated prices, the Auto Task Force’s rejection of the recovery plans of
Chrysler and General Motors and its demand for even more brutal layoffs, wage
cuts and attacks on workers’ health benefits and pensions, and the decision by
the Financial Accounting Standards Board (FASB) to weaken “mark-to-market”
accounting rules and permit banks to inflate the value of their toxic assets.
At
the same time, Obama has campaigned against restrictions on bonuses paid to
executives at insurance giant American International Group (AIG) and other
bailed-out firms, and repeatedly assured Wall Street that he will slash social
spending, including Medicare, Medicaid and Social Security.
The
new financial disclosures reveal that top Obama advisors directly involved in
setting these policies have received millions from Wall Street firms, including
those that have received huge taxpayer bailouts.
The
case of Lawrence Summers, director of the National Economic Council and Obama’s
top economic adviser, highlights the politically incestuous character of relations
between the Obama administration and the American financial elite.
Last
year, Summers pocketed $5 million as a managing director of D.E. Shaw, one of
the biggest hedge funds in the world, and another $2.7 million for speeches
delivered to Wall Street firms that have received government bailout money.
This includes $45,000 from Citigroup and $67,500 each from JPMorgan Chase and
the now-liquidated Lehman Brothers.
For
a speech to Goldman Sachs executives, Summers walked away with $135,000. This
is substantially more than double the earnings for an entire year of
high-seniority auto workers, who have been pilloried by the Obama
administration and the media for their supposedly exorbitant and
“unsustainable” wages.
Alluding
diplomatically to the flagrant conflict of interest revealed by these
disclosures, the New York Times noted on Saturday: “Mr. Summers, the
director of the National Economic Council, wields important influence over Mr.
Obama’s policy decisions for the troubled financial industry, including firms
from which he recently received payments.”
Summers
was a leading advocate of banking deregulation. As treasury secretary in the
second Clinton administration, he oversaw the lifting of basic financial
regulations dating from the 1930s. The Times article notes that among
his current responsibilities is deciding “whether—and how—to tighten regulation
of hedge funds.”
Summers
is not an exception. He is rather typical of the Wall Street insiders who
comprise a cabinet and White House team that is filled with multi-millionaires,
presided over by a president who parlayed his own political career into a
multi-million-dollar fortune.
Michael
Froman, deputy national security adviser for international economic affairs,
worked for Citigroup and received more than $7.4 million from the bank from
January of 2008 until he entered the Obama administration this year. This
included a $2.25 million year-end bonus handed him this past January, within
weeks of his joining the Obama administration.
Citigroup
has thus far been the beneficiary of $45 billion in cash and over $300 billion
in government guarantees of its bad debts.
David
Axelrod, the Obama campaign’s top strategist and now senior adviser to the
president, was paid $1.55 million last year from two consulting firms he
controls. He has agreed to buyouts that will garner him another $3 million over
the next five years. His disclosure claims personal assets of between $7 and
$10 million.
Obama’s
deputy national security adviser, Thomas E. Donilon, was paid $3.9 million by a
Washington law firm whose major clients include Citigroup, Goldman Sachs and
the private equity firm Apollo Management.
Louis
Caldera, director of the White House Military Office, made $227,155 last year
from IndyMac Bancorp, the California bank that heavily promoted subprime
mortgages. It collapsed last summer and was placed under federal receivership.
The
presence of multi-millionaire Wall Street insiders extends to second- and
third-tier positions in the Obama administration as well. David Stevens, who
has been tapped by Obama to head the Federal Housing Administration, is the
president and chief operating officer of Long and Foster Cos., a real estate
brokerage firm. From 1999 to 2005, Stevens served as a top executive for
Freddie Mac, the federally-backed mortgage lending giant that was bailed out
and seized by federal regulators in September.
Neal
Wolin, Obama’s selection for deputy counsel to the president for economic
policy, is a top executive at the insurance giant Hartford Financial Services,
where his salary was $4.5 million.
Obama’s
Auto Task Force has as its top advisers two investment bankers with a long
resume in corporate downsizing and asset-stripping.
It
is not new for leading figures from finance to be named to high posts in a US
administration. However, there has traditionally been an effort to demonstrate
a degree of independence from Wall Street in the selection of cabinet officials
and high-ranking presidential aides, often through the appointment of figures
from academia or the public sector. In previous decades, moreover,
representatives of the corporate elite were more likely to come from industry
than from finance.
In
the Obama administration such considerations have largely been abandoned.
This
will not come as a surprise to those who critically followed Obama’s election
campaign. While he postured before the electorate as a critic of the war in
Iraq and a quasi-populist force for “change,” he was from the first heavily
dependent on the financial and political backing of powerful financiers in
Chicago. Banks, hedge funds and other financial firms lavishly backed his
presidential bid, giving him considerably more than they gave to his Republican
opponent, Senator John McCain.
Alongside
Wall Street, the Obama cabinet is dominated by the military, including three
recently retired four-star military officers: former Marine General James Jones
as national security adviser; Admiral Dennis Blair as director of national
intelligence, and former Army Chief of Staff Erik Shinseki as secretary of
veterans’ affairs.
These
are the deeply reactionary political and class interests that are represented
by the Obama administration.
Friday’s
financial disclosures further expose the bankruptcy of American democracy.
Elections have no real effect on government policy, which is determined by the
interests of the financial aristocracy that dominates both political parties.
The working class can fight for its own interests—for jobs, decent living
standards, health care, education, housing and an end to war—only through a
break with the two parties of American capitalism and the development of a
mass, independent socialist movement.
Tom Eley and Barry Grey

*
From the Los Angeles Times

Crimes suspected in 20 bailout cases -- for starters
The special inspector general says TARP is 'inherently vulnerable to fraud, waste and abuse.' The
risk grows as the plan becomes more complex, he says.


By Ralph Vartabedian and Tom Hamburger
April 21, 2009
Reporting from Washington and Los Angeles — In the first major disclosure of
corruption in the $750-billion financial bailout program, federal investigators
said Monday they have opened 20 criminal probes into possible securities fraud,
tax violations, insider trading and other crimes.
The cases represent only the first wave of investigations, and the total fraud
could ultimately reach into the tens of billions of dollars, according to Neil
Barofsky, the special inspector general overseeing the bailout program.
The disclosures reinforce fears that the hastily designed and rapidly changing
bailout program run by the Treasury Department and Federal Reserve is going to
carry a heavy price of fraud against taxpayers -- even as questions grow about
its ability to stabilize the nation's financial system.
Barofsky said the complex nature of the bailout program makes it
"inherently vulnerable to fraud, waste and abuse, including significant
issues relating to conflicts of interest facing fund managers, collusion
between participants, and vulnerabilities to money laundering."
The report said little about who is under investigation and how the fraudulent
schemes work, but investigators are already on alert for a long list of
potential scams. Such schemes could include obtaining bailout money under false
pretenses, bilking the government with phony mortgage modifications, and
cheating on taxes with fraudulent filings.
"You don't need an entirely corrupt institution to pull one of these
schemes off," Barofsky said. "You only need a few corrupt managers
whose compensation may be tied to the performance of these assets in order to
effectively pull off a collusion or a kickback scheme."
The risk of fraud is only increasing as the bailout becomes "more complex
and larger in scope," he said.
Indeed, much of the 247-page report released in Washington today by Barofsky's
office focuses on a segment of the bailout that is only now being put into
motion -- an effort to buy toxic securities from banks and other investment
groups in which the federal government would provide up to 92.5% of the money.
That effort could be the most vulnerable to fraud, Barofsky said, because
investors would have so little at risk.
Among the toughest recommendations in the report is for the Treasury to abandon
its planned structure for buying the toxic securities, which include intricate
bundles of bad mortgages and loans, before it gets rolling.
Members of Congress and consumer advocates expressed outrage Monday when they
heard about the findings of the report.
"It shouldn't be a big surprise that a huge pot of honey attracts a lot of
flies," said Tom Coburn of Oklahoma, the senior Republican on the Senate
Permanent Subcommittee on Investigations, which is also examining the program.
"I would guess that 20 investigations, while a good start, is only the tip
of the iceberg."
"That's an appalling record," Barbara Roper, director of investor
protection for the Consumer Federation of America, said of the 20 criminal
investigations. "In the midst of this crisis from which they are being
bailed out, the same people who created this mess are apparently still breaking
the law. What is it with these people?"
In a series of recommendations, Barofsky asked the Treasury Department for
greater transparency and greater fraud protections.
The Treasury Department's bailout chief, Neel Kashkari, said in a letter dated
April 14 that the recommendations would be "considered."
The report underscores just how complicated the bailout program has become.
What started out in October as a $750-billion effort only to buy toxic securities
has morphed into 12 separate programs that cover up to $3 trillion in direct
spending, loans and loan guarantees -- an amount roughly equal to the annual
federal budget.
Today, banks, insurers, brokerages, auto companies, car parts makers and homeowners
are just some of the beneficiaries of the program, known formally as the
Troubled Asset Relief Program, or TARP.
The report dedicated an entire section to what many experts believe is its most
risky operation -- a toxic asset purchase plan under a broader program known as
the Term Asset-Backed Securities Loan Facility, known as TALF. Originally, TALF
was aimed at expanding consumer lending programs for autos, student loans and
other types of credit.
But the Obama administration expanded TALF to include funding and federal loan
guarantees to purchase toxic securities.
That program has at least two parts: one to buy up bad loans from banks and
another to buy up bundled loans in the form of mortgage-backed securities from
investment markets. The government would split any profits with the private
investors it partnered with.
The latter has sparked greater concern because of the possibility that buyers
could collude to manipulate prices and extract kickbacks, with the government
taking virtually all of the risk.
"When you are buying from the market or the street, transparency comes
into question," Barofsky, a former federal prosecutor, said. "The
potential for pricing fixing and collusion becomes greater because the
government doesn't have control or knowledge of who" all the players are.
Members of Congress, who were given Barofsky's report Monday, have already
expressed concern over the plan.
House Financial Services Committee member Brad Sherman (D-Sherman Oaks), a
certified public accountant, said that under the plan, taxpayers would take
virtually all the risk, get zero control and only 50% of the profits.
"That doesn't sound like a good deal," he said.
"I can't imagine Warren Buffett signing something like that."
*
AFTER OBAMA SERVICES HIS CRIMINAL BANKSTER DONORS, HE’S OFF
TO HAND OUR JOBS TO HIS LA RAZA PARTY BASE, AND SABOTAGE OUR BORDERS TO ASSURE
HIS WALL ST PAYMASTERS HORDES MORE ILLEGALS TO KEEP WAGES DEPRESSED!

Labor Secretary Hilda Solis, a former California congresswoman with close ties to the
influential La Raza movement, announced the “We Can Help” project with great fanfare a few days ago.”

FROM JUDICIAL WATCH. org –

get on their emails!

Labor Dept. Helps Illegal Alien Workers Last

Updated: Tue, 04/06/2010 - 11:04am
The
Department of Labor has launched a special program to assist and protect
illegal immigrant workers in the U.S., referred to as “vulnerable” and
“underpaid” by the presidential cabinet member who heads the agency.
Hundreds
of new field investigators have been deployed to reach out to Latino laborers
in areas with large numbers of illegal alien employees. Their message, in
Spanish, is “we can help” bring workplace protections to the nation’s most
vulnerable and underpaid workers, including those who have no legal right to
live in the Untied States.

(THE
OBAMA PLAN TO PUT ILLEGALS INTO OUR JOBS AND VOTING BOOTHS!)

Labor Secretary Hilda Solis,
a former California congresswoman with close ties to the influential La Raza
movement, announced the “We Can Help” project with
great fanfare a few days ago. A total of 1,000 investigators from her agency will focus
on enforcing labor and wage laws in industries that typically hire lots of
illegal aliens without reporting anyone to federal immigration authorities.

(WHO WORKS FOR THE RIGHTFUL JOBS OF AMERICAN CITIZENS? WHO ENFORCES THE LAWS THAT PROHIBIT THE EMPLOYMENT OF ILLEGALS, EVEN IF THEY HAVE A STOLEN SOCIAL SECURITY NUMBER? NOT THE LA RAZA DEMS, OR HISPANDERING BARACK OBAMA!)

Solis told Latino workers that “your president, your secretary of labor and this
department will not allow anyone to be denied his or her rightful pay,
especially when so many in our nation are working long, hard and often
dangerous hours.” She assured illegal immigrants that “if you work in this
country, you are protected by our laws.”
The same day Solis publicly announced the Obama Administration’s new project, a Labor
Department investigator visited a day laborer center in northern California to
promote it. The federal employee actually chatted warmly with the illegal
immigrants about how to find jobs without being exploited, according to a local newspaper report.

“We’re the feds but the good ones,” he told the day laborers in Spanish. “We’re here to help workers.”
The agency has also launched a Spanish television advertising campaign to spread
the word and created a web site. Workers in industries from construction to
food service are urged to contact the Labor Department of wage and hour
violations. An investigator may be deployed to the work site or the employer
may be taken to court.
*
FOR MORE ON THE MEXICAN FASCIST PARTY OF LA RAZA, GO TO
MEXICANOCCUPATION.blogspot.com

HERE’S A GLIMPSE:
LA RAZA AGENDA: 3 Examples
Richard Alatorre, Los Angeles City Council "They're
afraid we're going to take over the governmental institutions and other
institutions. They're right. We will take them over. . We are here to
stay."
Mario Obledo, California Coalition of Hispanic Organizations and California
State Secretary of Health, Education and Welfare under Jerry Brown, also
awarded the Presidential Medal of Freedom by Bill Clinton "California is
going to be a Hispanic state. Anyone who doesn't like it should leave."
Jose Pescador Osuna, Mexican Consul General We are practicing "La
Reconquista" in California."
*

MOST OF THE FORTUNE 500 ARE GENEROUS DONORS TO LA
RAZA – THE MEXICAN FASCIST POLITICAL PARTY

“The principal
beneficiaries of our current immigration policy are affluent Americans who hire
immigrants at substandard wages for low-end work. Harvard economist George
Borjas estimates that American workers lose $190 billion annually in depressed
wages caused by the constant flooding of the labor market at the low-wage end.”
Christian Science Monitor
*

Lou Dobbs Tonight
Monday, June 16, 2008

Tonight, we’ll have all the latest on the devastating
floods in the Midwest and all the day’s news from the campaign trail. The
massive corporate mouthpiece the U.S. Chamber of Commerce is holding a “North
American Forum” to lay out its “shared vision” for the United States, Canada
and Mexico – which is to say a borderless, pro-business super-state in which
U.S. sovereignty will be dissolved. Undercover investigators have found
incredibly lax security and enforcement at U.S. border crossings, according to
a new report by the Government Accountability Office. This report comes on the
heels of a separate report by U.C. San Diego that shows tougher border security
efforts aren’t deterring illegal entries to the United States.
*
ACCORDING TO SENATOR LAMAR SMITH OF TEXAS, WHEN
CHALLENGING SO- CALLED “HOMELAND SECURITY = PATHWAY TO CITIZENSHIPS” LA RAZA
JANET NAPOLITANO, AS TO WHY OUR BORDERS ARE WIDE OPEN TO NARCOMEX, OBAMA HAS
CUT ENFORCEMENT BY MORE THAN 60% IN ALL AREAS.


Obama soft on illegals enforcement

Arrests of illegal immigrant workers have dropped precipitously under President Obama, according to figures released Wednesday. Criminal arrests, administrative arrests, indictments and
convictions of illegal immigrants at work sites all fell by more than 50
percent from fiscal 2008 to fiscal 2009.

The figures show that Mr. Obama has made good on his pledge to shift
enforcement away from going after illegal immigrant workers themselves - but at
the expense of Americans' jobs, said Rep. Lamar Smith of Texas, the Republican
who compiled the numbers from the Department of Homeland Security's U.S.
Immigration and Customs Enforcement agency (ICE). Mr. Smith, the top Republican
on the House Judiciary Committee, said a period of economic turmoil is the
wrong time to be cutting enforcement and letting illegal immigrants take jobs
that Americans otherwise would hold.
*
! YOU LIE! THE BELOW IS EXACTLY
WHAT THE DEMS DO TO US EVERY DAY. THEY LIE ABOUT DEFENDED OUR BORDERS, JOBS,
AND CULTURE, WHILE THEY CONTINUALLY PUT OUT INDUCEMENTS FOR MORE ILLEGALS TO
CLIMB OUR BORDERS, AND HEAD FOR THE VOTING BOOTHS!

*
“The president's straddling can work for the time being. But unless he wants to end
up in the sawdust, acrobat Obama will eventually have to hop on one horse and
lead the way. That would have to be the horse named "Enforcement
First." CHRISTIAN SCIENCE MONITOR

*
“What's needed to discourage illegal immigration into the United States has been known
for years: Enforce existing law.” ….. CHRISTIAN SCIENCE MONITOR


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