Saturday, June 20, 2015

THE OBAMA DOCTRINE: DESTROY THE AMERICAN MIDDLE-CLASS TO ENLARGE THE PROFITS OF BILLIONAIRES - COLLECT MILLIONS FOR SPEECHES UPON COMPLETION - White House steps up assault on pensions


OBAMA TO CUT MEDICARE and SOCIAL
SECURITY TO PAY FOR THE BILLIONS
ILLEGALS COST US… AND THEY STILL
GET OUR JOBS!




White House steps up assault on pensions

White House steps up assault on pensions

By Andre Damon
20 June 2015
The White House has announced details of a plan to slash pension benefits for hundreds of thousands of beneficiaries of multiemployer pension funds, appointing long-time Washington fixer Kenneth Feinberg to oversee the cuts.

Feinberg, who as the Obama administration’s “pay tsar” rubber-stamped multimillion-dollar executive bonuses to Wall Street banks bailed out with taxpayer funds, will now be given power to slash workers’ benefits at his discretion.

The announcement stems from legislation passed by Congress in December allowing multiemployer pension plans to slash the benefits of current retirees, something that was previously barred under federal law. The bill was endorsed by a broad range of unions that oversee multiemployer pension funds, including the Service Employees International Union, the United Food and Commercial Workers Union, and North America’s Building Trades Unions.

There are more than 10 million participants in multiemployer pension funds, which cover employees in industries such as building trades, transportation and food service. The White House said in a statement that ten percent of participants are in plans that are significantly underfunded, putting as many as a million current employees and retirees in danger of having their retirement benefits slashed.
Treasury Secretary Jack Lew declared that Feinberg “has a proven track record.” In fact, this “track record” is a sign of what is in store. Over the course of two presidencies, Feinberg has been Washington’s go-to fixer whenever it needed to present a totally inequitable and unfair process as “impartial.”

In addition to his role as “pay tsar” for the bank bailout and “special master” for claims related to the September 11, 2001 terror attacks, Feinberg has been intimately involved in cleaning up after some of the biggest corporate scandals of the past decade. He oversaw the disbursement of a $20 billion settlement fund following the 2010 BP oil spill. The fund paid ruined fishermen, shrimpers and oyster farmers cash up front in exchange for waiving their right to sue the company for damages related to the worst ecological disaster in US history.

General Motors hired Feinberg in 2014 to help manage compensation payments to the families of the more than 150 people killed as a result of the company’s negligence in failing to recall vehicles with ignition switches it knew to be faulty.

Feinberg will continue his service to the banks and corporations by slashing workers’ retiree benefits. Although retirees will nominally have a vote on whether to accept cuts, the White House has given Feinberg the right to unilaterally override the decision of any group of retirees that votes down a proposal to slash benefits.

The attack on multiemployer pension funds is the latest stage in a decades-long drive by Wall Street and major corporations to slash the pension benefits of workers in both the private and public sector. This campaign has been dramatically accelerated in the aftermath of the Detroit bankruptcy, which set a precedent for slashing the benefits of public-sector retirees whose pensions are guaranteed by state constitutions or other laws.

In the months following Detroit’s bankruptcy, cities and states throughout the country have launched an offensive against public employee pensions.

· In California, Democratic politicians have filed a ballot proposal for a constitutional amendment to remove the state’s protection of public employee pensions.

· Last month, the Pennsylvania Senate passed a bill to slash benefits for current workers and eliminate defined-benefit pensions for new-hires.

· In Illinois, Governor Bruce Rauner, a Republican, is campaigning for an amendment to the state’s constitution that would allow him to rip up public-sector pensions. Last month, the Illinois House of Representatives approved a separate plan by Chicago Mayor Rahm Emanuel, a Democrat, to cut the pension benefits of teachers and municipal employees.

A multiemployer pension plan is defined by the government as “a collectively bargained plan maintained by more than one employer, usually within the same or related industries, and a labor union.” Such plans were created to allow unionized workers to receive a secure retirement even if they switched employers within a single industry.

There are some 1,400 multiemployer defined-benefit pension plans, many of them covering small companies. The plans are jointly administered by trustees appointed by the unions and management.
Multiemployer pension funds, like pension funds more broadly, have for decades been starved of contributions by the corporations that are legally obligated to finance them. As a result, the federal Pension Benefit Guaranty Corporation, which guarantees the funds against default, posted a record deficit of $ 61.7 billion in 2014 and warns that it will run out of money within a decade.

One major pension plan, the Teamsters Central States plan, pays out $2.8 billion per year in retirement funds, but takes in only $700 million a year from corporations. The plan’s director claims it will run out of money in 10 to 15 years.

The systematic underfunding of multiemployer pension funds had taken place with the full complicity of the unions that help run them. For decades, union officials have allowed corporations to exit the plans in exchange for various perks favorable to the union bureaucracies.

The Teamsters Central States plan suffered a massive blow when Teamsters officials voted to allow United Parcel Service to exit the fund, dramatically reducing its active employees. The Teamsters rubber-stamped UPS’s move in exchange for being allowed to organize the company’s newly acquired freight division (and extract union dues from its employees).

The bill signed into law in December is the outcome of a February 2013 proposal, entitled “Solutions not Bailouts,” from the National Coordinating Committee for Multiemployer Plans, composed of major corporations and labor unions.

“Solutions not Bailouts” lists among those organizations that participated in its development the International Brotherhood of Teamsters (IBT) and the International Association of Machinists and Aerospace Workers (IAM), both of which have since sought to publicly distance themselves from the pension-cutting bill.

While the Teamsters were among the most enthusiastic lobbyists for the proposal in early 2013, union president James P. Hoffa later disassociated himself from the plan after encountering widespread opposition from the rank and file. In an October 28, 2013 letter to Congress, Hoffa withheld his official support from the proposal while declaring that “’Solutions Not Bailouts’ is an extremely thoughtful and sophisticated document.” He added that “the IBT supports many of the proposals in the document.”

Even while publicly claiming to oppose the pension-cutting law, Teamsters officials have participated in preparations to slash benefits for workers covered by funds they help manage. The Teamsters Central States executive director, Thomas Nyhan, has stated that all trustees, including union trustees, support his plan to cut benefits.



OBAMA: SERVANT OF THE 1%

Richest one percent controls nearly half of global wealth


The richest one percent of the world’s population now controls 48.2 percent of global wealth, up from 46 percent last year.

 


 

The report found that the growth of global inequality has accelerated sharply since the 2008 financial crisis, as the values of financial assets have soared while wages have stagnated and declined.



Wall Street’s legal offensive

Wall Street’s legal offensive

18 June 2015
Recent months have seen a series of court rulings reversing penalties imposed on Wall Street in the aftermath of the 2008 financial crash and eviscerating previously existing financial regulations.
On April 3, a US appeals court upheld a December ruling overturning the conviction of two hedge fund executives on insider trading charges. The ruling laid down a novel and narrow definition of insider trading intended to make it virtually impossible to obtain convictions against people who use inside information to rig markets for their own gain.

One month later, a judge ruled that JPMorgan Chase did not have to pay billions of dollars in fines related to fraudulent mortgage-backed securities sold by Washington Mutual, which JPMorgan purchased in 2008.

On Monday, in a ruling likely to have even more far-reaching consequences, a federal judge declared that the Federal Reserve broke the law in September 2008 when it took control of the majority of the stock of the insurance giant American International Group (AIG) and ousted its top management, in return for an $85 billion loan, which soon ballooned to nearly $185 billion.

These rulings are part of an accelerating legal offensive by the American financial aristocracy not only to exonerate itself for criminal actions that triggered the worst economic crisis since the Great Depression, but to assert the untrammeled domination of private capital over the public interest.

It is approaching seven years since the bankruptcy of Lehman Brothers on September 15, 2008 and the government bailout of AIG the following day.

The net result of the policies carried out in the ensuing years by Democratic and Republican  administrations alike, backed by Congress and the courts, is a massive increase in the wealth of the richest one percent of the population, a further concentration of power among a handful of Wall Street banks, and legal impunity for financial malefactors who are responsible for untold human suffering.

Not one leading banker has been prosecuted, let alone jailed. Rather, financial gangsters are being shielded by the government and vindicated by the courts. Maurice Greenberg, the former CEO of AIG and a major stockholder in the company, who filed the suit that was decided on Monday, is one of the more notorious examples of this breed.

Judge Thomas Wheeler of the US Court of Federal Claims declared in his ruling that the government “carefully orchestrated its takeover of AIG in order to... maximize the benefits to the government and to the taxpaying public.” An unpardonable crime.

(In point of fact, the government bailout of AIG had nothing to do with protecting the interests of the “taxpaying public.” It was driven entirely by a desire to rescue the financial elite and protect its wealth and power).

“The government’s unduly harsh treatment of AIG… was misguided and had no legitimate purpose,” wrote Wheeler. He added that the Fed "possessed the authority in a time of crisis to make emergency loans to distressed entities such as AIG,” but that “there is nothing in the Federal Reserve Act or in any other federal statute that would permit a Federal Reserve Bank to take over a private corporation and run its business as if the Government were the owner.”

The Wall Street Journal hailed the ruling as a “historic victory” for AIG and the “free market.” The newspaper declared that the decision marked the beginning of the “long way back from 2008” and the “government’s retreat to more normal boundaries.”

It quoted a law professor as calling the ruling “a harsh lesson for the government to think twice about interfering in the private sector and the free market.”

In the years leading up to Monday's ruling, Greenberg’s multi-million dollar legal campaign had been widely ridiculed as quixotic, with one commentator referring to it as “an absurdist comedy… worthy of the Marx Brothers or Mel Brooks.”

In 2012, a New York judge threw out a companion lawsuit by Greenberg against the New York Federal Reserve "with prejudice," in a ruling that denounced Greenberg's suit as implausible “on its face.”

Greenberg had been forced out as chairman and CEO of AIG in 2005 after federal regulators revealed that the company was engaged in fraud and tax evasion on a massive scale. AIG paid $1.6 billion to settle multiple charges of accounting fraud and Greenberg paid $15 million to settle Securities and Exchange Commission fraud charges against himself.

AIG played a central role in the 2008 financial crisis. In the decade prior to the crash, major banks made a fortune by bundling poor quality home loans into mortgage-backed securities, which were insured through derivatives contracts with AIG and similar outfits and given top ratings by credit rating agencies such as Moody's and Standard and Poor's.

When the housing market began to decline in 2006-2007, an enormous share of mortgage-backed securities went into default, triggering demands for bond insurers to make good the losses of their clients. AIG faced tens of billions of dollars in claims from its counterparties and was on the verge of collapse in September 2008 when it was rescued by the government.

AIG's bankruptcy would have triggered the collapse of major Wall Street banks and financial institutions, all of which were highly implicated in the sub-prime Ponzi scheme, together with leading banks around the world.

The Federal Reserve and Treasury ultimately lent $182.3 billion to AIG, which passed the money onto its counterparties, including the largest Wall Street banks, at 100 cents on the dollar, securing a “backdoor bailout” of the financial system two weeks before Congress authorized the $750 billion Troubled Asset Relief Program (TARP).

As a condition for disbursing bailout funds, the regulators proposed to the company's board of directors that the Federal Reserve receive 79.9 percent of AIG’S (then-worthless) stock, and charged an interest rate of 12 percent.

Just months after AIG’s bailout, in March 2009, the company became the object of public outrage when it was revealed that it was using taxpayer funds to pay $450 million in bonuses to executives at its London-based financial products unit, which was primarily responsible for the company’s $99.3 billion loss in 2008.

While the ruling by Judge Wheeler did not award Greenberg damages, it agreed with the basic thrust of his arguments. The judge lamented that the government would be allowed to “avoid any damages, notwithstanding its plain violations of the Federal Reserve Act.”

The 2008 crash and subsequent developments have revealed certain fundamental realities about American society. All of the official institutions, including the presidency, the courts, Congress and the financial regulators, have worked single-mindedly to shield the banks and the financial elite and enable them to grow even richer.

So-called “democracy” in America is a fa├žade. The reality is a plutocracy―the rule of the rich. Such a situation can be ended only through the revolutionary action of the working class in the fight for socialism.

Andre Damon


Sen. Bernie Sanders – America’s answer to
Wall Street’s looting, the war on the American
middle-class and jobs for legals!


“At this point, Clinton is the choice of most multimillionaires to be the next occupant of the White House. A recent CNBC poll of 750 millionaires found 53 percent support for Clinton in a contest with Republican Jeb Bush, 14 points better than Obama’s showing in the 2012 election with the same group.”

OBAMA-CLINTONomics: the never end war on the American
middle-class. But we still get the tax bills for the looting of their
Wall Street cronies and their bailouts and billions for Mexico’s
welfare state in our borders.

While the wealth of the rich is growing at a breakneck pace, there is a stratification of growth within the super wealthy, skewed towards the very top.

                                                                                                     


In 2014, those with over $100 million in private wealth saw their wealth increase 11 percent in one year alone. Collectively, these households owned $10 trillion in 2014, 6 percent of the world’s private wealth. According to the report, “This top segment is expected to be the fastest growing, in both the number of households and total wealth.” They are expected to see 12 percent compound growth on their wealth in the next five years.

In 2014 the Russell Sage Foundation found that between 2003 and 2013, the median household net worth of those in the United States fell from $87,992 to $56,335—a drop of 36 percent. While the rich also saw their wealth drop during the recession, they are more than making that money back. Between 2009 and 2012, 95 percent of all the income gains in the US went to the top 1 percent. This is the most distorted post-recession income gain on record.

 
OBAMA: SERVANT OF THE 1%

Richest one percent controls nearly half of global wealth


The richest one percent of the world’s population now controls 48.2 percent of global wealth, up from 46 percent last year.

 
 

The report found that the growth of global inequality has accelerated sharply since the 2008 financial crisis, as the values of financial assets have soared while wages have stagnated and declined.


THE CRONY CLASS:

OBAMACLINTONOMICS was created by BILLARY CLINTON!

Income inequality grows FOUR TIMES FASTER under Obama than Bush.


“By the time of Bill Clinton’s election in 1992, the Democratic Party had completely repudiated its association with the reforms of the New Deal and Great Society periods. Clinton gutted welfare programs to provide an ample supply of cheap labor for the rich (WHICH NOW MEANS OPEN BORDERS AND NO E-VERIFY!), including a growing layer of black capitalists, and passed the 1994 Federal Crime Bill, with its notorious “three strikes” provision that has helped create the largest prison population in the world.”

*

“Calling income and wealth inequality the "great moral issue of our time," Sanders laid out a sweeping, almost unimaginably expensive program to transfer wealth from the richest Americans to the poor and middle class. A $1 trillion public works program to create "13 million good-paying jobs." A $15-an-hour federal minimum wage. "Pay equity" for women. Paid sick leave and vacation for everyone. Higher taxes on the wealthy. Free tuition at all public colleges and universities. A Medicare-for-all single-payer health care system. Expanded Social Security benefits. Universal pre-K.” WASHINGTON EXAMINER

OBAMA’S WALL STREET and the LOOTING of AMERICA – SECOND TERM

The corporate cash hoard has likewise reached a new record, hitting an estimated $1.79 trillion in the fourth quarter of last year, up from $1.77 trillion in the previous quarter. Instead of investing the money, however, companies are using it to buy back their own stock and pay out record dividends.

Megan McArdle Discusses How America's Elites Are Rigging the Rules - Newsweek/The Daily Beast special correspondent Megan McArdle joins Scott Rasmussen for a discussion on America's new Mandarin class.



 

POLL: MOST INCOMPETENT AND DISHONEST PRESIDENT SINCE…. Well, isn’t Obama merely Bush’s THIRD and FOURTH TERMS??

 


OBAMA’S CRONY CAPITALISM

A NATION RULED BY CRIMINAL WALL STREET BANKSTERS AND OBAMA DONORS


 
PATRICK BUCHANAN

After Obama has completely destroyed the American economy, handed millions of jobs to illegals and billions of dollars in welfare to illegals…. BUT WHAT COMES NEXT?

http://mexicanoccupation.blogspot.com/2015/05/patrick-buchanan-when-obama-bankrupted.html




OBAMANOMICS: IS IT WORKING???

Millionaires projected to own 46 percent of global private wealth by 2019

By Gabriel Black
18 June 2015
Households with more than a million (US) dollars in private wealth are projected to own 46 percent of global private wealth in 2019 according to a new report by the Boston Consulting Group (BCG).
This large percentage, however, only includes cash, savings, money market funds and listed securities held through managed investments—collectively known as “private wealth.” It leaves out businesses, residences and luxury goods, which comprise a substantial portion of the rich’s net worth.

At the end of 2014, millionaire households owned about 41 percent of global private wealth, according to BCG. This means that collectively these 17 million households owned roughly $67.24 trillion in liquid assets, or about $4 million per household.

In total, the world added $17.5 trillion of new private wealth between 2013 and 2014. The report notes that nearly three quarters of all these gains came from previously existing wealth. In other words, the vast majority of money gained has been due to pre-existing assets increasing in value—not the creation of new material things.

This trend is the result of the massive infusions of cheap credit into the financial markets by central banks. The policy of “quantitative easing” has led to a dramatic expansion of the stock market even while global economic growth has slumped.

While the wealth of the rich is growing at a breakneck pace, there is a stratification of growth within the super wealthy, skewed towards the very top.

In 2014, those with over $100 million in private wealth saw their wealth increase 11 percent in one year alone. Collectively, these households owned $10 trillion in 2014, 6 percent of the world’s private wealth. According to the report, “This top segment is expected to be the fastest growing, in both the number of households and total wealth.” They are expected to see 12 percent compound growth on their wealth in the next five years.

Those families with wealth between $20 and $100 million also rose substantially in 2014—seeing a 34 percent increase in their wealth in twelve short months. They now own $9 trillion. In five years they will surpass $14 trillion according to the report.

Coming in last in the “high net worth” population are those with between $1 million and $20 million in private wealth. These households are expected to see their wealth grow by 7.2 percent each year, going from $49 trillion to $70.1 trillion dollars, several percentage points below the highest bracket’s 12 percent growth rate.

The gains in private wealth of the ultra-rich stand in sharp contrast to the experience of billions of people around the globe. While wealth accumulation has sharply sped up for the ultra-wealthy, the vast majority of people have not even begun to recover from the past recession.

An Oxfam report from January, for example, shows that the bottom 99 percent of the world’s population went from having about 56 percent of the world’s wealth in 2010 to having 52 percent of it in 2014. Meanwhile the top 1 percent saw its wealth rise from 44 to 48 percent of the world’s wealth.

In 2014 the Russell Sage Foundation found that between 2003 and 2013, the median household net worth of those in the United States fell from $87,992 to $56,335—a drop of 36 percent. While the rich also saw their wealth drop during the recession, they are more than making that money back. Between 2009 and 2012, 95 percent of all the income gains in the US went to the top 1 percent. This is the most distorted post-recession income gain on record.

As the Organization for Economic Co-operation and Development (OECD) has noted, in the United States “between 2007 and 2013, net wealth fell on average 2.3 percent, but it fell ten-times more (26 percent) for those at the bottom 20 percent of the distribution.” The 2015 report concludes that “low-income households have not benefited at all from income growth.”

Another report by Knight Frank, looks at those with wealth exceeding $30 million. The report notes that in 2014 these 172,850 ultra-high-net-worth individuals increased their collective wealth by $700 billion. Their total wealth now rests at $20.8 trillion.

The report also draws attention to the disconnection between the rich and the actual economy. It states that the growth of this ultra-wealthy population “came despite weaker-than-anticipated global economic growth. During 2014 the IMF was forced to downgrade its forecast increase for world output from 3.7 percent to 3.3 percent.”

 
OBAMA-CLINTONomics: the never end war on the American middle-class. But we still get the tax bills for the looting of their Wall Street cronies and their bailouts and billions for Mexico’s welfare state in our borders.

While the wealth of the rich is growing at a breakneck pace, there is a stratification of growth within the super wealthy, skewed towards the very top.

                                                                                                     


 

In 2014, those with over $100 million in private wealth saw their wealth increase 11 percent in one year alone. Collectively, these households owned $10 trillion in 2014, 6 percent of the world’s private wealth. According to the report, “This top segment is expected to be the fastest growing, in both the number of households and total wealth.” They are expected to see 12 percent compound growth on their wealth in the next five years.

 
In 2014 the Russell Sage Foundation found that between
2003 and 2013, the median household net worth of those in
the United States fell from $87,992 to $56,335—a drop of 36
percent. While the rich also saw their wealth drop during the
recession, they are more than making that money back.
Between 2009 and 2012, 95 percent of all the income gains in
the US went to the top 1 percent. This is the most distorted
post-recession income gain on record.







INCOME PLUMMETS UNDER OBAMA AND HIS WALL STREET CRONIES

collapse of household income in the US… STILL BILLIONS IN WELFARE HANDED TO ILLEGALS… they already get our jobs and are voting for more!


INCOME PLUMMETS UNDER OBAMA… most jobs go to illegals.

AS HIS CRONY BANKSTERS CONTINUE TO LOOT, INCOMES PLUMMET FOR AMERICANS (LEGALS).

GOOD TIME FOR AMNESTY FOR MILLIONS OF LOOTING MEXICANS?

MORE HERE:

http://mexicanoccupation.blogspot.com/2014/09/and-still-democrat-party-wants-millions.html

“The yearly income of a typical US household dropped by a massive 12 percent, or $6,400, in the six years between 2007 and 2013. This is just one of the findings of the 2013 Federal Reserve Survey of Consumer Finances released Thursday, which documents a sharp decline in working class living standards and a further concentration of wealth in the hands of the rich and the super-rich.”
 
 

"During the month, some 432,000 people in the US gave up looking for a job." EVEN AS JEB BUSH, HILLARY CLINTON and BERNIE SANDERS PREACH AMNESTY! AMNESTY! AMNESTY!

"The American phenomenon of record stock values fueling an ever greater concentration of wealth at the very top of society, while the economy is starved of productive investment, the social infrastructure crumbles, and working class living standards are driven down by entrenched unemployment, wage-cutting and government austerity policies, is part of a broader global process."


HILLARY CLINTON'S BIGGEST DONORS ARE OBAMA'S CRIMINAL CRONY

BANKSTERS!

"A defining expression of this crisis is the dominance of financial speculation and parasitism, to the point where a narrow international financial aristocracy plunders society’s resources in order to further enrich itself."

Federal Reserve documents stagnant state of US economy

Federal Reserve documents stagnant state of US economy

By Barry Grey
21 July 2015
The US Federal Reserve Board last week released its semiannual Monetary Policy Report to Congress, providing an assessment of the state of the American economy and outlining the central bank’s monetary policy going forward. The report, along with Fed Chair Janet Yellen’s testimony before both the House of Representatives and the Senate, as well as a speech by Yellen the previous week in Cleveland, present a grim picture of the reality behind the official talk of economic “recovery.”
In her prepared remarks to Congress last Wednesday and Thursday, Yellen said, “Looking forward, prospects are favorable for further improvement in the US labor market and the economy more broadly.”

She reiterated her assurances that while the Fed would likely begin to raise its benchmark federal funds interest rate later this year from the 0.0 to 0.25 percent level it has maintained since shortly after the 2008 financial crash, it would do so only slowly and gradually, keeping short-term rates well below historically normal levels for an indefinite period.

This was an expected, but nevertheless welcome, signal to the American financial elite, which has enjoyed a spectacular rise in corporate profits, stock values and personal wealth since 2009 thanks to the flood of virtually free money provided by the Fed.

"But as Yellen’s remarks and the Fed report indicate, the explosion of asset values and wealth accumulation at the very top of the economic ladder has occurred alongside an intractable and continuing slump in the real economy."

In her prepared testimony to the House Financial Services Committee and the Senate Banking Committee, Yellen noted the following features of the performance of the US economy over the first six months of 2015:

* A sharp decline in the rate of economic growth as compared to 2014, including an actual contraction in the first quarter of the year.

* A substantial slackening (19 percent) in average monthly job-creation, from 260,000 last year to 210,000 thus far in 2015.

* Declines in domestic spending and industrial production.
In her July 10 speech to the City Club of Cleveland, Yellen cited an even longer list of negative indices, including:

* Growth in real gross domestic product (GDP) since the official beginning of the recovery in June, 2009 has averaged a mere 2.25 percent per year, a full one percentage point less than the average rate over the 25 years preceding what Yellen called the “Great Recession.”
* While manufacturing employment nationwide has increased by about 850,000 since the end of 2009, there are still almost 1.5 million fewer manufacturing jobs than just before the recession.

* Real GDP and industrial production both declined in the first quarter of this year. Industrial production continued to fall in April and May.

* Residential construction (despite extremely low mortgage rates by historical standards) has remained “quote soft.”

* Productivity growth has been “weak,” largely because “Business owners and managers… have not substantially increased their capital expenditures,” and “Businesses are holding large amounts of cash on their balance sheets.”

* Reflecting the general stagnation and even slump in the real economy, core inflation rose by only 1.2 percent over the past 12 months.

The Monetary Policy Report issued by the Fed includes facts that are, if anything, even more alarming, including:

* “Labor productivity in the business sector is reported to have declined in both the fourth quarter of 2014 and the first quarter of 2015.”
* “Exports fell markedly in the first quarter, held back by lackluster growth abroad.”

* “Overall construction activity remains well below its pre-recession levels.”

* “Since the recession began, the gains in… nominal compensation [workers’ wages and benefits] have fallen well short of their pre-recession averages, and growth of real compensation has fallen short of productivity growth over much of this period.”

* “Overall business investment has turned down as investment in the energy sector has plunged. Business investment fell at an annual rate of 2 percent in first quarter… Business outlays for structures outside of the energy sector also declined in the first quarter…”

The report incorporates the Fed’s projections for US economic growth, published following the June meeting of the central bank’s policy-setting Federal Open Market Committee. They include a downward revision of the projection for 2015 to 1.8 percent-2.0 percent from the March projection of 2.3 percent to 2.7 percent.

That the US economy continues to stagnate and even contract is indicated by two surveys released last week while Yellen was testifying before Congress. The Fed reported that factory production failed to increase in June for the second straight month and output in the auto sector fell 3.7 percent. The Commerce Department reported that retail sales unexpectedly fell in June, declining by 0.3 percent.
These statistics follow the employment report for June, which showed that the share of the US working-age population either employed or actively looking for work, known as the labor force participation rate, fell to 62.6 percent, its lowest level in 38 years. During the month, some 432,000 people in the US gave up looking for a job.

The disastrous figures on business investment are perhaps the most telling indicators of the underlying crisis of the capitalist system. The Fed report attributes the sharp decline so far this year primarily to the dramatic fall in oil prices and resulting contraction in investment and construction in the energy sector. But the plunge in oil prices is itself a symptom of a general slowdown in the world economy.
Moreover, a dramatic decline in productive investment is common to all of the major industrialized economies of Europe and North America. In its World Economic Outlook of last April, the International Monetary Fund for the first time since the 2008 financial crisis acknowledged that there was no prospect for an early return to pre-recession levels of economic growth, linking this bleak prognosis to a general and pronounced decline in productive investment.

The American phenomenon of record stock values fueling an ever greater concentration of wealth at the very top of society, while the economy is starved of productive investment, the social infrastructure crumbles, and working class living standards are driven down by entrenched unemployment, wage-cutting and government austerity policies, is part of a broader global process.
The economic crisis in the US and internationally is not simply a conjunctural downturn. It is a systemic crisis of global capitalism, centered in the US. A defining expression of this crisis is the dominance of financial speculation and parasitism, to the point where a narrow international financial aristocracy plunders society’s resources in order to further enrich itself.

While the economy is starved of productive investment, entirely parasitic and socially destructive activities such as stock buybacks, dividend hikes and mergers and acquisitions return to pre-crash levels and head for new heights. US corporations have spent more on stock buybacks so far this year than on factories and equipment.
The intractable nature of this crisis, within the framework of capitalism, is underscored by the IMF’s updated World Economic Outlook, released earlier this month, which projects that 2015 will be the worst year for economic growth since the height of the recession in 2009.

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