Monday, August 24, 2015

OBAMA-CLINTONomics and the collapse of the global economy - Global Ponzi scheme threatens to implode

Global Ponzi scheme threatens to implode

Richest one percent controls nearly 

half of global wealth

Global Ponzi scheme threatens to implode

24 August 2015
Asian stock markets opened Monday with another sharp selloff. As of this writing, China’s Shanghai Composite index had dropped by over 8 percent and Japan’s Nikkei, Hong Kong’s Hang Seng and Australia’s All Ordinaries were all down by more than 3 percent. China’s central bank was preparing another round of cash infusions into the country’s financial markets.
The global panic, which has wiped out over a trillion dollars in stock values in the US alone, has shattered the claim that the US and world economies are in the midst of an economic recovery.
Prompted by decelerating economic growth in China, a collapse of financial markets and currencies in the so-called emerging market countries, and a continuing fall in the price of oil and other commodities, the plunge in stock prices is an expression not simply of passing conditions, but rather the inability of governments and central banks to address the fundamental contradictions of the capitalist system that led to the Wall Street crash and recession of 2008–2009.
What appears to be coming to an end is the period when massive infusions of cash by central banks into the financial markets, combined with a ruthless assault on the living standards of the international working class, could paper over the systemic character of the crisis and produce a boom in stock prices, corporate profits and the wealth of the financial aristocracy—even as the real economy continued to stagnate.
An article published Sunday in the New York Times (“Investors Race To Escape Risk In Global Bonds”) sheds light on a significant factor behind the crisis atmosphere on global markets. The Times explains that some of the biggest bond mutual funds based in the US, including BlackRock, Franklin Templeton and Pimco, are massively invested in emerging market government bonds whose values are now collapsing.
The article raises the very real possibility that one or more of these firms could be bankrupted by demands from investors for the return of their cash, under conditions where the firms cannot offload their emerging market bonds and meet these demands. Such an event would be comparable to, if not worse than, the collapse of Lehman Brothers in 2008.
The large-scale investments by bond mutual funds in these highly risky bonds underscores the rotten foundations not only of the so-called economic recovery, but of the global capitalist system itself. It demonstrates that the response of the capitalist class to the economic breakdown of 2008–2009 was a continuation and escalation of the parasitism and speculation that triggered the crash in the first place.
It exemplifies the modus operandi of world capitalism in its dotage and decay. What was historically considered the normal paradigm—investing capital to build factories and mines and carry out research and development, hire workers, and generate profit from the surplus value extracted through their exploitation—has become almost incidental to a ceaseless, feverish scramble for ever-higher yields from various forms of financial manipulation and outright fraud.
In the older imperialist centers, particularly the United States, the industrial infrastructure has been largely dismantled, decimating the jobs and living standards of the working class, in order to seek higher profits from the creation of financial bubbles. Following the 2008 Wall Street crash, the American ruling class led the way in using unlimited supplies of virtually free credit provided by central banks to push stock prices to record highs and generate an emerging market bubble, while laying siege to the jobs, wages and conditions of workers through mass unemployment and austerity policies.
The resulting “recovery” had the character of a gigantic Ponzi scheme, resting on a stagnant real economy and ever-increasing social inequality. This financial house of cards is being undermined by the growth of deflationary tendencies in the world economy, reflected most starkly in collapsing commodity prices and the slowdown in China, but also in anemic growth or outright recession in Japan, Europe and the US.
In January 2008, the World Socialist Web Site wrote that the crisis, then in its early stages, was “not merely a conjunctural downturn, but rather a profound systemic disorder” of the capitalist system.
On September 16, 2008, the day after the collapse of Lehman Brothers, the WSWS declared: “A sea change is unfolding in the US and world economy that portends a catastrophe of dimensions not seen since the Great Depression of the 1930s.”
The article continued: “These events are signposts in the historic failure of American and world capitalism. For the working class, they mean a rapid growth of unemployment, poverty, homelessness and social misery. The government, Wall Street and both political parties will seek to place the burden for the consequences of their own greed and incompetence squarely on the backs of working people.”
This analysis has been entirely confirmed. Seven years later, the labor force participation rate in the United States is at the lowest level in nearly four decades, while economic output in the euro area remains below its level in 2008.
The crisis has been compounded by the policies pursued over the past seven years. The world’s major central banks have taken on enormous levels of debt, limiting their ability to respond to a new panic. The balance sheet of the US Federal Reserve has ballooned from under a trillion dollars in 2008 to over $4 trillion today, and the Fed’s benchmark interest rate has been held essentially to zero, giving the central bank significantly less “ammo,” in the words of the Wall Street Journal, to respond to a renewed financial crisis.
“The world economy is like an ocean liner without lifeboats,” Stephen King, chief economist at HSBC, wrote in a recent research note.
All of the institutions of capitalist rule, most notably the European Union itself, have been dramatically weakened in the period since 2008. The signs of disarray and instability in Beijing, amidst a growing wave of strikes and protests by Chinese workers, have stoked fears in ruling classes around the world that the regime upon which they have relied to provide a cheap-labor manufacturing base and stimulate global growth may be unraveling.
The perplexity and bankruptcy of governments and policymakers in the face of the renewed downturn was summed up in a column published in the Financial Times over the weekend by former Treasury Secretary Lawrence Summers, who called on the Federal Reserve to keep interest rates at zero indefinitely.
Summers wrote: “Satisfactory growth, if it can be achieved, requires very low interest rates that historically we have only seen during economic crises. This is why long-term bond markets are telling us that real interest rates are expected to be close to zero in the industrialised world over the next decade.”
The intensification of the economic crisis sets the stage for immense social struggles. The working class will not accept a return to conditions of mass poverty and industrial slavery.
However, the whole history of the twentieth century—the victory of the working class in Russia in 1917 and the defeats that followed—and the initial results of mass struggles thus far in the current century, from Egypt to Greece, show that for the resistance of the working class to succeed, it must be guided by a socialist and internationalist program and led by a revolutionary party. The building of this leadership—the International Committee of the Fourth International—is the crucial task posed by the breakdown of world capitalism.
Andre Damon

can we really afford Hillary's version???




“Historically speaking, the rise in CEO compensation is tied to the global decline of American capitalism and the increasing financialization of the economy. In 1965 the ratio of CEO to worker pay was 20 to 1. By 1978 the ratio had only grown to 30 to 1. It was only in the 90s that CEO pay reached absurd heights, rising from 59 to 1 in 1989 to 376 to 1 in 2000.”
“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-CLINTONomics: the final death of the American middle-class


"While it is not spelt out directly, the BIS critique of the present policies is an expression of the fact that, in the final analysis, the source of all forms of profit is the surplus value extracted from the working class. Therefore, the only way for capital to overcome its crisis and restore stability is a massive increase in exploitation."

While the growth of social inequality has dramatically accelerated following the 2008 crash, this is a continuation of a decades-long process. The report notes, “Top 1 percent incomes grew by 80.0% from 1993 to 2014. This implies that top 1 percent incomes captured almost 60% of the overall economic growth of real incomes per family over the period 1993-2014.”

In fact, the US government’s response to the 2008 crash has been dedicated to inflating the wealth of the super-rich while driving down incomes for the vast majority of the population. The White House has protected Wall Street executives from legal prosecution, while the Federal Reserve has handed out trillions of dollars in cheap money through “quantitative easing” programs, leading share values to triple on major US exchanges.

On Thursday, US President Barack Obama plans to unveil what he has called a major new policy initiative in a speech in La Crosse, Wisconsin. The proposal entails new federal rules that would make an additional 3 percent of the US population eligible for overtime pay. If adopted, the change would add a mere $1.3 billion to worker’s wages annually. This is a tiny fraction of the trillions of dollars that have been transferred to the financial elite since the 2008 financial crisis.


'Incompetent' and 'liar' among most frequently used words to describe the president: Pew Research Center

“The larger fear is that Obama might be just another corporatist, punking voters much as the Republicans do when they claim to be all for the common guy.”


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 escalation of global financial parasitism

In fact, the US government’s response to the 2008 crash has been dedicated to inflating the wealth of the super-rich while driving down incomes for the vast majority of the population. The White House has protected Wall Street executives from legal prosecution, while the Federal Reserve has handed out trillions of dollars in cheap money through “quantitative easing” programs, leading share values to triple on major US exchanges.


These are only the most striking of a barrage of numbers reported in recent weeks, demonstrating that for the US financial aristocracy, the Crash of 2008 has been used to engineer a historic redistribution of wealth.

Sen. Bernie Sanders fights for the American worker.

THE CONSPIRACY TO SURRENDER AMERICA’S BORDERS…. The partnership between Wall Street-owned Barack Obama and Hillary Clinton and the  KOCH BROTHERS to surrender our borders and borders laws to assure a steady flood of illegals into America. Keeping wages depressed and passing along the real cost of all that “cheap” labor through taxes on the American middle-class will keep their corporate paymasters happy, profitable and generous. There is not ONE billionaire that does not support Obama’s amnesty hoax to legalize Mexico’s looting.

OBAMA-CLINTONomics: the final death of the American middle-class



"Notwithstanding these powerful trends, the stock markets continue to power on, providing a graphic demonstration of the degree to which the accumulation of wealth by global financial elites has become divorced from the actual process of production."

Wall Street profits and the widening 

social divide in America

The profits of the biggest US banks continued to swell in the second quarter of this year, even as the impact of five years of mass unemployment, stagnant economic growth and brutal cuts in social spending produced a further rise in poverty, homelessness and hunger.

Obama’s “recovery” and the social crisis in America … the recovery that NEVER was!

Sage Foundation: Wealth "Inequality" Will Continue to Worsen.

Wealth inequality increased significantly from 2003 through 2013; by some metrics inequality roughly doubled

…. that’s music to the ears of Hillary’s WALL STREET CRONIES!


The International Monetary Fund warned Wednesday that the world economy would remain locked in a pattern of slow growth, high unemployment and high debt for a prolonged period. The forecast, contained in the organization’s updated World Economic Outlook (WEO), marks a shift from previous economic projections in acknowledging that there is little prospect of a return to the growth levels that prevailed prior to the 2008 Wall Street crash.

The document’s grim analysis amounts to a tacit acknowledgement that the crisis ushered in nearly seven years ago by the financial meltdown is of a historical and fundamental character, and that the underlying problems in the global capitalist system have not been resolved.


“By large margins, even in opinion polls conducted by the corporate-controlled media, the American people support sharp increases in taxes on the wealthy to fund social programs and provide jobs for the unemployed; they oppose cuts in Social Security and Medicare and view education, health care and other public services as basic rights; they oppose government spying on the telephone and Internet usage of ordinary Americans, as well as other police-state measures; and they oppose overseas military interventions in the Middle East, Africa and Asia. The Democratic and Republican presidential candidates stand on the other side of the barricades on all these issues.”

THE LOOTING OF AMERICA: BARACK OBAMA AND HIS CRONY BANKSTERS set themselves on America’s pensions next!

The new aristocrats, like the lords of old, are not bound by the laws that apply to the lower orders. Voluminous reports have been issued by Congress and government panels documenting systematic fraud and law breaking carried out by the biggest banks both before and after the Wall Street crash of 2008.

Goldman Sachs, JPMorgan Chase, Bank of America and every other major US bank have been implicated in a web of scandals, including the sale of toxic mortgage securities on false pretenses, the rigging of international interest rates and global foreign exchange markets, the laundering of Mexican drug money, accounting fraud and lying to bank regulators, illegally foreclosing on the homes of delinquent borrowers, credit card fraud, illegal debt-collection practices, rigging of energy markets, and complicity in the Bernie Madoff Ponzi scheme.


One government-organized settlement has followed another, utilizing “deferred prosecution” deals and other gimmicks to allow Wall Street CEOs to get off scot-free. All the banks have had to do is pay largely fictitious fines, much of the nominal amount written off as tax credits.

No comments: