A central theme of the hysteria over alleged “Russian meddling” in US politics is the sinister effort supposedly being mounted by Vladimir Putin “to undermine and manipulate our democracy” (in the words of Democratic Senator Mark Warner).
According to the narrative fabricated by the intelligence agencies and promoted by the Democratic Party and the corporate media over the past year and a half, Putin and his minions hacked the Democrats and stirred up social divisions and popular grievances to secure the election for Donald Trump, and they have been working ever since to destroy “our institutions.”
Their chosen field of battle is the internet, with Russian trolls and bots infecting the body politic by taking advantage of lax policing of social media by the giant tech companies such as Google, Facebook and Twitter.
To defend democracy, the argument goes, these companies, working with the state, must silence oppositional viewpoints—above all left-wing, anti-war and socialist viewpoints—which are labeled “fake news,” and banish them from the internet. Nothing is said of the fact that this supposed defense of democracy is a violation of the basic canons of genuine democracy, guaranteed in the First Amendment to the US Constitution: freedom of speech and freedom of the press.
But what is this much vaunted “American democracy?” Let's take a closer look.
The working class will never achieve genuine democracy, nor succeed in defending the democratic gains it extracted in the course of more than a century of struggle against the capitalist class, so long as it remains an oppressed class, exploited by the corporate owners and their state apparatus. Democracy for the workers and oppressed, as opposed to the phony democracy of the rich, can be achieved only through the creation of organs of workers’ struggle and control and the building of a revolutionary leadership to overthrow the existing state, place power in the hands of the working class, expropriate the capitalists and establish a socialist economy based on social equality.
FROM THE MAGAZINE
Finance’s Lengthening Shadow
The growth of nonbank lending poses an increasing risk.
Economy, finance, and budgets
A decade ago, as the financial crisis raged, America’s banks were in ruins. Lehman Brothers, the storied 158-year-old investment house, collapsed into bankruptcy in mid-September 2008. Six months earlier, Bear Stearns, its competitor, had required a government-engineered rescue to avert the same outcome. By October, two of the nation’s largest commercial banks, Citigroup and Bank of America, needed their own government-tailored bailouts to escape failure. Smaller but still-sizable banks, such as Washington Mutual and IndyMac, died.
After the crisis, the goal was to make banks safer. The 2010 Dodd-Frank law, coupled with independent regulatory initiatives led by the Federal Reserve and other bank overseers, severely tightened banks’ ability to engage in speculative ventures, such as investing directly in hedge funds or buying and selling securities for short-term gain. The new regime made them hold more reserves, too, to backstop lending.
Yet the financial system isn’t just banks. Over the last ten years, a plethora of “nonbank” lenders, or “shadow banks”—ranging from publicly traded investment funds that purchase debt to private-equity firms loaning to companies for mergers or expansions—have expanded their presence in the financial system, and thus in the U.S. and global economies. Banks may have tighter lending standards today, but many of these other entities loosened them up. One consequence: despite a supposed crackdown on risky finance, American and global debt has climbed to an all-time high.
Banks remain hugely important, of course, but the potential for a sudden, 2008-like seizure in global credit markets increasingly lies beyond traditional banking. In 2008, government officials at least knew which institutions to rescue to avoid global economic paralysis. Next time, they may be chasing shadows.
The 2008 financial crisis vaporized 8.8 million American jobs, triggered 8 million house foreclosures, and still roils global politics. Many commentators blamed a proliferation of complex financial instruments as the primary reason for the meltdown. Notoriously, financiers had taken subprime “teaser”-rate mortgages and other low-quality loans and bundled them into opaque financial securities, such as “collateralized debt obligations,” which proved exceedingly hard for even sophisticated investors, such as the overseas banks that purchased many of them, to understand. When it turned out that some of the securities contained lots of defaulting loans—as Americans who never were financially secure enough to purchase homes struggled to pay housing debt—no one could figure out where, exactly, the bad debt was buried (many places, it turned out). Global panic ensued.
The “shadow-financing” industry played a role in the crisis, too. Many nonbank mortgage lenders had sold these bundled loans to banks, so as to make yet more bundled loans. But the locus of the 2008 crisis was traditional banks. Firms such as Citibank and Lehman had kept tens of billions of dollars of such debt and related derivative instruments on their books, and investors feared (correctly, in Lehman’s case) that future losses from these soured loans would force the institutions themselves into default, wiping out shareholders and costing bondholders money.
The ultimate cause of the crisis, however, wasn’t complex at all: a massive increase in debt, with too little capital behind it. Recall how a bank works. Like people, banks have assets and liabilities. For a person, a house or retirement account is an asset and the money he owes is a liability. A bank’s assets include the loans that it has made to customers—whether directly, in a mortgage, or indirectly, in purchasing a mortgage-backed bond. Loans and bonds are bank assets because, when all goes well, the bank collects money from them: the interest and principal that borrowers pay monthly on their mortgage, for example. A bank’s liabilities, by contrast, include the money it has borrowed from outside investors and depositors. When a customer keeps his money in the bank for safekeeping, he effectively lends it money; global investors who purchase a bank’s bonds are also lending to it. The goal, for firms as well as people, is for the worth of assets to exceed liabilities. A bank charges higher interest rates on the loans that it makes than the rates it pays to depositors and investors, so that it can turn a profit—again, when all goes well.
When the economy tanks, this system runs into two problems. First, a bank’s asset values start to fall as more people find themselves unable to pay off their mortgage or credit-card debt. Yet the bank still must repay its own debt. If the value of a bank’s assets sinks below its liabilities, the bank is effectively insolvent. To lessen this risk, regulators demand that banks hold some money in reserve: capital. Theoretically, a bank with capital equal to 10 percent of its assets could watch those assets decline in value by 10 percent without insolvency looming.
Yet investors would frown on such a thin margin, and that highlights the second problem: illiquidity. A bank might have sufficient capital to cover its losses, but if depositors and other lenders don’t agree, they may rush to take their money out—money that the bank can’t immediately provide because it has locked up the funds in long-term loans, including mortgages. During a liquidity “run,” solvent banks can turn to the Federal Reserve for emergency funding.
By 2008, bank capital levels had sunk to an all-time low; bank managers and their regulators, believing that risk could be perfectly monitored and controlled, were comfortable with the trend. By 2007, banks’ “leverage ratio”—the percentage of quality capital relative to their assets—was just 6 percent, well below the nearly 8 percent of a decade earlier. Since then, thanks to tougher rules, the leverage ratio has risen above 9 percent. Global capital ratios have risen, as well. Many analysts believe that capital requirements should be higher still, but the shift has made banks somewhat safer.
The government doesn’t mandate capital levels with the goal of keeping any particular bank safe. After all, private companies go out of business all the time, and investors in any private venture should be prepared to take that risk. The capital requirements are about keeping the economy safe. Banks tend to hold similar assets—various types of loans to people, businesses, or government. So when one bank gets into trouble, chances are that many others are suffering as well. A higher capital reserve lessens the chance of several banks veering toward insolvency simultaneously, which would drain the economy of credit. It was that threat—an abrupt shutdown of markets for all lending, to good borrowers and bad—that led Washington to bail out the financial industry (mostly the banks) in 2008.
But what if the financial industry, in creating credit, bypasses the banks? According to the global central banks and regulators who make up the international Financial Stability Board, this type of lending constitutes “shadow banking.” That’s an imprecise, overly ominous term, evoking Mafia dons writing loans to gamblers on betting slips and then kneecapping debtors who don’t pay the money back on time, but the practice is nothing so Tony Soprano-ish. The accountancy and consultancy firm Deloitte defines shadow banking, wonkily, as “a market-funded credit intermediation system involving maturity and/or liquidity transformation through securitization and secured-funding mechanisms. It exists at least partly outside of the traditional banking system and does not have government guarantees in the form of insurance or access to the central bank.”
“Shadow banking is nothing new, encompassing everything from corporate bond markets to payday lending.”
In plain English, “maturity and/or liquidity transformation” is exactly what a bank does: making a long-term loan, such as a mortgage, but funding it with short-term deposits or short-term bonds. Outside of a bank, the activity involves taking a mortgage or other kind of longer-term loan, bundling it with other loans, and selling it to investors—including pension funds, insurers, or corporations with large amounts of idle cash, like Apple—as securities that mature far more quickly than the loans they contain. The risks here are the same as at the banks, but with a twist: if people and companies can’t pay off the loans on the schedule that the lenders anticipated, all the investors risk losing money. Unlike small depositors at banks, shadow banks don’t have recourse to government deposit insurance. Nor can shadow-financing participants go to the Federal Reserve for emergency funding during a crisis—though, in many cases, they wouldn’t have to: pensioners and insurance policyholders generally don’t have the right to remove their money from pension funds and insurers overnight, as many bank investors do.
Understood broadly, shadow banking is nothing new, encompassing everything from corporate bond markets to payday lending. And much of it isn’t very shadowy; as a recent U.S. Treasury report noted, the government “prefers to transition to a different term, ‘market-based finance,’ ” because applying the term “shadow banking” to entities like insurance companies could “imply insufficient regulatory oversight,” when some such sectors (though not all) are highly regulated. It isn’t always easy to separate real banks from shadow banks, moreover. Just as before the financial crisis, banks continue to offer shadow investments, such as mortgage-backed securities or bundled corporate loans, and, conversely, banks also lend money to private-equity funds and other shadow lenders, so that they, in turn, can lend to companies.
Such market-based finance has its merits; sound reasons exist for why a pension-fund administrator doesn’t just deposit tens of billions of dollars at the bank, withdrawing the money over time to meet retirees’ needs. For people and institutions willing, and able, to take on more risk, market-based finance can offer higher interest rates—an especially important consideration when the government keeps official interest rates close to zero, as it did from 2008 to 2016. Shadow finance also offers competition for companies, people, and governments unable to borrow from banks cheaply, or whose needs—say, a multi-hundred-billion-dollar bond to buy another company—would be beyond the prudent coverage capacity of a single bank or even a group of banks.
Theoretically, bond markets and other market-based finance instruments make the financial system safer by diversifying risk. A bank holding a large concentration of loans to one company faces a major default risk. Dispersing that risk to dozens or hundreds of buyers in the global marketplace means—again, in theory—that in a default, lots of people and institutions will suffer a little pain, rather than one bank suffering a lot of pain.
But too much of a good thing is sometimes not so good, and, in this case, the extension of shadow banking threatens to reintroduce the risks that innovation was supposed to reduce. Recent growth in shadow banking isn’t serving to disperse risk or to tailor innovative products to meet borrowers’ needs. Two less promising reasons explain its expansion. One is to enable borrowers and lenders to skirt the rules—capital cushions—that constrain lending at banks. The other—after a decade of record-low, near-zero interest rates as Federal Reserve policy—is to allow borrowers and lenders to find investments that pay higher returns.
The world of market-based finance has indeed grown. Between 2002 and 2007, the eve of the financial crisis, the world’s nonbank financial assets increased from $30 trillion to $60 trillion, or 124 percent of GDP. Now these assets, at $160 trillion, constitute 148 percent of GDP. Back then, such assets made up about a quarter of the world’s financial assets; today, they account for nearly half (48 percent), reports the Financial Stability Board (FSB).
Within this pool of nonbank assets, the FSB has devised a “narrower” measure of shadow banking that identifies the types of companies likely to pose the most systemic risk to the economy—those most susceptible, that is, to sudden, bank-like liquidity or solvency panics. The FSB believes that pension funds and insurance companies could largely withstand short-term market downturns, so it doesn’t include them in this riskier category. That leaves $45 trillion in narrow shadow institutions and investments, a full 72 percent of it held in instruments “with features that make them susceptible to runs.” That’s up from $28 trillion in 2010—or from 66 percent to 73 percent of GDP.
Of that $45 trillion market, the U.S. has the largest portion: $14 trillion. (Though, as the FSB explains, separation by jurisdiction may be misleading; Chinese investment vehicles, for example, have sold hundreds of billions of dollars in credit products to local investors to spend on property abroad, affecting Western asset prices.) Compared with this $14 trillion figure, American commercial banks’ assets are worth just shy of $17 trillion, up from about $12 trillion right before the financial crisis. Banks as well as nonbank lenders have grown, in other words, but the banks have done so under far stricter oversight.
An analysis of one particular area of shadow financing shows the potential for a new type of chaos. A decade ago, an “exchange-traded fund,” or ETF, was mostly a vehicle to help people and institutions invest in stocks. An investor wanting to invest in a stock portfolio but without enough resources to buy, say, 100 shares apiece in several different companies, could purchase shares in an ETF that made such investments. These stock-backed ETFs carried risk, of course: if the stock market went down, the value of the ETF tracking the stocks would go down, too. But an investor likely could sell the fund quickly; the ETF was liquid because the underlying stocks were liquid.
Over the past decade, though, a new creature has emerged: bond-based ETFs. A bond ETF works the same way as a stock ETF: an investor interested in purchasing debt securities but without the financial resources to buy individual bonds—usually requiring several thousand dollars of outlay at once—can purchase shares in a fund that invests in these bonds. Since 2005, bond ETFs have grown from negligible to a market just shy of $800 billion—nearly 10 percent of the value of the U.S. corporate bond market.
These bond ETFs are riskier, in at least one way, than stock ETFs. Some bond ETFs, of course, invest solely in high-quality federal, municipal, and corporate debt—bonds highly unlikely to default in droves. Default, though, isn’t the only risk: suddenly higher global interest rates could cause bond funds to lose value (as new bonds, with the higher interest rates, would be more attractive). And with the exception of federal-government debt, even the highest-quality bonds aren’t as liquid as stocks; they have maturities ranging anywhere from hours remaining to 100 years.
Investors in bond-based ETFs, then, face a much bigger “liquidity” and “maturity” mismatch risk. If the investors want to sell their ETF shares in a hurry, the fund managers might not be able to sell the underlying bonds quickly to repay them, particularly in a tense market. That’s especially true, since bond markets are even less liquid than they were pre–financial crisis. Because of new regulations on “market making,” banks will be highly unlikely to buy bonds in a declining market to make a buck later, after the panic subsides.
(ALBERTO MENA)
Alook at a related type of debt-based ETF raises even bigger mismatch concerns. “In 2017, investors poured $11.5 billion into U.S. mutual funds and exchange-traded funds that invest in high-yield bank loans,” notes Douglas J. Peebles, chief investment officer of fixed-income—bonds—at the AllianceBernstein investment outfit. A high-yield bank loan is one that carries particular risk, such as a loan to a company with a poor credit rating or to a company borrowing money to merge with another firm or to expand; the “yield” refers to the higher interest rate required to compensate for this risk. Rather than keep this loan on its books, the bank is selling it, in these cases, to the exchange-traded funds that are a rising component of shadow banking.
This new demand has induced lending that otherwise wouldn’t exist—in many cases, for good reason. “The quality of today’s bank loans has declined,” Peebles observes, because “strong demand has been promoting lax lending and sketchy supply. . . . Companies know that high demand means they can borrow at favorable rates.” Further, says Peebles, “first-time, lower-rated issuers”—companies without a good track record of repaying debt—are responsible for the recent boom in loan borrowers, from fewer than 300 institutions in 2007 to closer to 900 today. The number of bank-loan ETFs (and similar “open-ended” funds) expanded from just two in 1992 to 250 in June 2018.
Peebles worries as well about the extra risk that this financing mechanism poses to investors. “In the past, banks viewed the loans as investments that would stay on their balance sheets,” he explains, but now that banks sell them to ETFs, “most investors today own high-yield bank loans through mutual funds or ETFs, highly liquid instruments. . . . But the underlying bank loan market is less liquid than the high-yield bond market,” with trades “tak[ing] weeks to settle.” He warns: “When the tide turns, strategies like these are bound to run into trouble.”
The peril to the economy isn’t just that current investors could lose money in a crisis, though big drops in asset markets typically lead people to curtail consumer spending, deepening a recession. The bigger danger is a repeat of 2008: fear of losses on existing investments might lead shadow-market lenders to cut off credit to all potential new borrowers, even worthy ones. Banks, because they’re dependent on shadow banks to buy their loans, would be unlikely to fill the vacuum. “Although non-bank credit can act as a substitute for bank credit when banks curtail the extension of credit, non-bank and bank credit can also move in lockstep, potentially amplifying credit booms and busts,” says the FSB. The porous borders between the supposedly riskier parts of the nonbank financial markets—ETFs—and the less risky ones also could work against a fast recovery in a crisis. Thanks to recent regulatory changes, insurance companies, for example, are set to become big purchasers of bond ETF shares.
Worsening this hazard, just as with the collateralized debt securities of the financial meltdown, many bond-based ETFs contain similar securities. Such duplication could eradicate the diversification benefit that the economy supposedly gets from dispersing risk. Contagion would be accelerated by the fact that debt-based ETFs, like stock-based ETFs, must “price” themselves continuously during the day, according to perceived future losses; this, in effect, introduces the risk of stock-market-style volatility into long-term bond markets. (Bond-based mutual funds, of course, have existed for decades, but they did not trade like stocks and thus did not feature this particular risk.) Via the plunging price of collateralized debt obligations, we saw, in 2008, what happened to the availability of long-term credit when exposed to the pricing signals of an equity-style crash, but those collateralized debt obligations traded far less frequently than bond ETFs do today. Bond ETFs may be more efficient, yes, in reflecting any given day’s value; that supposed benefit could also allow a panic to spread more rapidly.
During the last global panic, the answer to getting credit flowing again—so that companies could perform critical tasks, such as meeting payrolls, before revenue from sales came in—was to provide extraordinary government support to the large banks. But even if one believes that such bailouts are a sensible approach to financial crises—a highly tenuous position—how would the government provide longer-term support to hundreds of individual funds, to ensure that the broader market keeps functioning for credit-card and longer-term corporate debt? This would greatly expand the government safety net over supposedly risk-embracing financial markets—by even more than it was expanded a decade ago.
“When both regular banks and shadow banks are tapped out, we may need shadow-shadow finance to take up the slack.”
Unwise lending also harms borrowers. Private-equity firms, too, are increasingly lending companies money, instead of just buying those firms outright, their older model. As the Financial Times recently reported, private-equity funds—or, more accurately, their related private-credit funds—have more than $150 billion in money available for investment. They make loans that banks won’t, or can’t, make, though this is leading banks to take greater risks to compete. “It’s been great for borrowers,” says Richard Farley, chair of law firm Kramer Levin’s leveraged-finance group, as “there are deals that would not be financed,” or would not be financed on such favorable terms.
Competition is usually healthy, and risky finance can spark innovation that otherwise wouldn’t have happened. But easy lending can also make economic cycles more violent. Even in boom years, excess debt can plunge firms that otherwise might muddle through a recession deep into crisis, or even cause them to fail, adding to layoffs and consumer-spending cutbacks. We can see this happening already, as the Financial Times reports, with bankrupt firms like Charming Charlie, an accessories store that expanded too fast; Six Month Smiles, an orthodontic concern; and Southern Technical Institute, a for-profit technical college.
The numbers are troubling. The expansion of shadow banking has unquestionably brought a pileup of debt. The Securities Industry and Financial Markets Association, a trade group, estimates that U.S. bond markets, overall, have swollen from $31 trillion to nearly $42 trillion since 2008. Federal government borrowing accounts for a lot of that, but not close to all of it. The corporate-bond market, for example, went from $5.5 trillion to $9.1 trillion over the same decade. Corporations, in other words, owe almost twice as much today in bond obligations as they did a decade ago. That’s sure to make it harder for some, at least, to recover from any future downturn.
There are policy approaches to resolving these debt issues. An unpopular idea would be to treat markets that act like banks, as banks—requiring ETFs, say, to hold the same capital cushions and adhere to the same prudence standards as banks. In the end, though, the bigger problem is cultural and political. What we’re seeing, more than a decade after the financial crisis, results from the government’s mixed signals about financial markets. On the one hand, the U.S. government, along with its global counterparts, realized in 2008 that debt had reached unsustainable levels; that’s partly why it sharply raised bank capital requirements. On the other hand, the government recognized that the economy is critically dependent on debt. Absent large increases in workers’ pay, consumer and corporate debt slowdowns would stall the economy’s until-recently modest growth. That’s why the U.S. and other Western governments have kept interest rates so low, for so long.
Thus, we find ourselves with safer banks but scarier shadows. Global debt levels are now $247 trillion, or 318 percent, of world GDP, according to the Institute of International Finance, up from $142 trillion owed in 2007, or 269 percent of GDP. When both regular banks and shadow banks are tapped out, we may have to invent shadow-shadow finance to take up the slack.
Maxine Wants Revenge
"La vengeance est un plat qui se mange froide" (“revenge is a dish best served cold”) is an oft-cited proverb from Pierre Choderlos de Laclos's novel Les Liaisons Dangereuses, published in 1782. A good line in a book or play, but a mentality that should have no place in the business of public policy. Such is not the case.
Last month an elected representative publicly stated that revenge is a part of her motivation and agenda when Representative Maxine Waters (D-CA) told a constituent gathering in Los Angeles that she is “going to do to you what you did to us.” The “you” Waters was referring to are players in the mortgage and banking industry. The odd twist here is that Waters is planning revenge on institutions for doing what she herself instructed them to do.
Waters, who was easily re-elected in the 2018 midterms with nearly 76% of votes cast, represents California’s 43rd congressional district which includes much of south-central Los Angeles. She appears poised to chair the House Financial Services Committee when Democrats assume control of the House of Representatives in January.
"I have not forgotten you foreclosed on our houses. I have not forgotten that you undermined our community. I have not forgotten that you sold us those exotic products, had us sign on the line for junk and for mess we could not afford. …What am I going to do you? What I’m going to do you is fair, I’m going to do to you what you did to us!”
A sitting House representative threatening U.S. businesses with retribution is remarkable enough, but retribution for what?
Apart from the dismissal of personal responsibility inherent in the idea that people were somehow forced into purchasing something they couldn’t afford, of note here is how the situation came about in the first place; how citizens of Waters’ community found themselves able to qualify for mortgages that were beyond their financial means. Making such loans is not in a lending institution’s best interests, so why would one do it? The institutions did it because Maxine Waters, among others, forced them to.
In the late 1990s and early 2000s a small cadre of House Democrats, most prominently Waters and Barney Frank (D-MA), worked in cahoots with then-CEO of Fannie Mae,Franklin Raines, to loosen mortgage lending standards and practices for the purpose of making homeownership a reality for a greater number of economically disadvantaged Americans. (Raines was subsequently embroiled in a scandal at Freddie Mac and Fannie Mae that resulted in him having to pay a record $24.7 million settlement.)
At the time Waters heaped praise upon banks and lending institutions for allowing people to sign on the line for loans they could not afford, saying in aSeptember 2003 hearing of the House Committee on Financial Services:
"Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine. In fact, the GSEs have exceeded their housing goals. What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission, a mission that has seen innovation flourish from desktop underwriting to 100 percent loans.”
In later comments during the hearing, Waters made clear the true mission for Fannie and Freddie that Democrats had in mind, which was finding ways to get minorities into mortgaged houses even if they could not meet qualification requirements for standard loans, such as the ability to bring a down payment to the closing transaction or to borrow an amount in excess of typical underwriting limits.
“Since the inception of goals from 1993 to 2002, loans to African-Americans increased 219 percent and loans to Hispanics increased 244 percent, while loans to non-minorities increased 62 percent. Additionally, in 2001, 43.1 percent of Fannie Mae’s single-family business served low-and moderate-income borrowers….”
Congressional and public records alike show that at the time Waters was a staunch opponent of anything resembling more oversight of lenders or lending practices; thus, more and more loans were made to those least able to pay them back and most likely to default on them.
And default they have, which brings the story full circle to last month when Waters vowed revenge on those banks and lenders that have “done this” to her constituent communities. Sadly, many in those communities believe it. They believe the reason they lost their homes is because when they fell behind on payments and were foreclosed upon, it was because those big banks forced them to take out a loan they couldn’t afford -- without realizing that their congressional representative forced those banks to lend them the money in the first place.
As for Waters’ accusation of banking having done this “to us,” at last check there have been no foreclosure proceedings brought against her $4.69 million, 8-bedroom, 5-bathroom, 6,100-square-foot West Hollywood mansion.
THE BANKSTERS’ RENT BOYS & GIRLS IN CONGRESS GATHER ROUND TO UNLEASH THE WHOLESALE LOOTING OF THEIR BANKSTER PAYMASTERS EVEN MORE….
BOTTOMLESS BAILOUTS AROUND THE CORNER WAITING!
After eight years of the Dodd-Frank bank “reform,” the American financial oligarchy exercises its dictatorship over society and the government more firmly than ever. This unaccountable elite will not tolerate even the most minimal limits on its ability to plunder the economy for its own personal gain.
“Democrats Move Towards ‘Oligarchical
Socialism,’ Says Forecaster Joel Kotkin.”
NO POL IN HISTORY SUCKED IN MORE BRIBES FROM BANKSTERS THAN
BARACK OBAMA, AND HE DID IT BEFORE HIS FIRST DAY IN OFFICE. What
did the Wall Street banksters know that took us so long to find out???
"One of the premier institutions of big business, JP Morgan Chase, issued an internal report on the eve of the 10th anniversary of the 2008 crash, which warned that another “great liquidity crisis” was possible, and that a government bailout on the scale of that effected by Bush and Obama will produce social unrest, “in light of the potential impact of central bank actions in driving inequality between asset owners and labor."
Obama, of course, covered up his own role, depicting his presidency as eight years of heroic efforts to repair the damage caused by the 2008 financial crash. At the end of those eight years, however, Wall Street and the financial oligarchy were fully recovered, enjoying record wealth, while working people were poorer than before, a widening social chasm that made possible the election of the billionaire con man and Demagogue in November 2016.
“The response of the administration was to rush to the defense of the banks. Even before coming to power, Obama expressed his unconditional support for the bailouts, which he subsequently expanded. He assembled an administration
dominated by the interests of finance capital, symbolized by economic adviser Lawrence Summers and Treasury Secretary Timothy Geithner.”
Trump criticized Dimon in 2013 for supposedly contributing to the country’s economic downturn. “I’m not Jamie Dimon, who pays $13 billion to settle a case and then pays $11 billion to settle a case and who I think is the worst banker in the United States,” he told reporters.
10 years after the financial crisis, Americans are divided on security of U.S. economic system
A decade after the 2008 financial crisis, the public is about evenly split on whether the U.S. economic system is more secure today than it was then. About half of Americans (48%) say the system is more secure today than it was before the 2008 crisis, while roughly as many (46%) say it is no more secure.
Opinions have changed since 2015 and 2013, when majorities said the economic system was no more secure than it had been prior to the crisis (63% in both years), according to the new survey, conducted Sept. 18-24 among 1,754 adults.
Republicans are now far more likely to view the system as more secure than they were during Barack Obama’s presidency. Three years ago, just 22% of Republicans and Republican-leaning independents said the economic system was more secure than before the crisis. Today, the share saying the same has increased 48 percentage points to 70%.
Views among Democrats and Democratic-leaning independents have moved in the opposite direction. Today, Democrats are less confident that the economy is more secure than it was before the 2008 financial crisis: Just a third say the economy is more secure – a drop of 13 percentage points from 2015 (46%).
Meanwhile, the public’s views of current economic conditions – and the trajectory of the U.S. economy over the next year – have changed little since March.
About half of Americans (51%) now rate the national economy as excellent or good, among the most positive measures in nearly two decades.
As has been the case since Donald Trump took office, Republicans are far more positive than Democrats about economic conditions: 73% of Republicans and Republican-leaning independents say economic conditions are excellent or good while just 35% of Democrats and Democratic leaners agree.
Partisans also are divided in their expectations for the economy. Republicans (57%) are much more likely than Democrats (12%) to say they expect the national economy to get better in the next year. Partisan differences in opinions about the economy – current and future – are about as wide as they were in March.
Similarly, there has been little recent change in Americans’ views of their own financial situations. About half (49%) say their finances are in excellent or good shape.
Partisan differences in people’s assessments of their personal finances, which were modest during most of Obama’s presidency, have increased since then.
A majority of Republicans (61%) say their personal financial situation is excellent or good, compared with about four-in-ten Democrats and Democratic leaners (41%).
Most Americans remain optimistic about their personal financial future. Almost seven-in-ten adults (68%) expect their financial situation to improve some or a lot over the next year. Republicans (79%) more than Democrats (59%) are optimistic about their finances getting better next year.
Fannie Mae and 'Freddie Maxine'
Democratic Rep. Maxine Waters of California appears a lock to become the next chairman of the House's powerful Financial Services Committee. Waters is pledging to be a diligent watchdog for mom and pop investors, and recently told a crowd that when it comes to the big banks, investment houses and insurance companies, "We are going to do to them what they did to us." I'm not going to cry too many tears for Wall Street since they poured money behind the Democrats in these midterm elections. You get what you pay for.
But here we go again asking the fox to guard the henhouse.
Back during he the financial crisis of 2008 to 2009, which wiped out trillions of dollars of the wealth and retirement savings of middle-class families, we put the two major arsonists in charge of putting out the fire. Former Democratic Sen. Chris Dodd of Connecticut and former Democratic Rep. Barney Frank of Massachusetts were the co-sponsors of the infamous Dodd-Frank regulations. Readers will recall that good old Barney resisted every attempt to reign in Fannie Mae and Freddie Mac and said he wanted to "roll the dice" on the housing market. That worked out well.
Meanwhile, Dodd took graft payments in the form of low-interest loans from Countrywide, while greasing the skids for the housing lenders in these years. Instead of going to jail or at least being dishonorably discharged from Congress, he wrote the Dodd-Frank bill to regulate the banks.
Enter Maxine Waters. Back in 2009, I had a run-in with "Mad Maxine," as she is called on Capitol Hill. The two of us appeared together on HBO's "Real Time With Bill Maher," and when she pontificated about the misdeeds of the housing lobby, I confronted her on the money she took from Fannie Mae and Freddie Mac PACs for her campaign.
Here is how the conversation went:
MAHER: Don't you think Wall Street needs regulation? That's where the problem is: that there was no regulation.
MOORE: Well, let's talk about regulation. One of the biggest institutions that have failed this year was Fannie Mae and Freddie Mac. This is an institution that your friends, the Democrats, in fact, you, Congresswoman Waters, did not want to regulate. You said it wasn't broke five years ago at a congressional hearing, and you took $15,000 of campaign contributions from Fannie and Freddie.
WATERS: No, I didn't.
MOORE: Yeah, you did. It's in the FEC (Federal Election Commission) records.
WATERS: No, it's not.
MOORE: And so did Barney Frank. And so did Chris Dodd.
WATERS: That is a lie, and I challenge you to find $15,000 that I took from Fannie PAC.
I have to confess that Waters is very persuasive. I feared when the show was over that I had gotten my numbers wrong and that I had falsely charged the congresswoman of corruption. But several fact-checking groups looked it up, and sure enough, I was right. She took $15,000 from the PAC and another $17,000, all told.
I was also right about her statements during a 2004 congressional hearing when she said:
"Through nearly a dozen hearings, we were frankly trying to fix something (Fannie and Freddie) that wasn't broke. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines."
We learned the hard way just four years later; this was all a fraudulent claim to avoid oversight of her campaign contributors. Imagine if a Republican had said these things.
She took in more than $100,000 from Wall Street this year as well. None of this is illegal, but it calls into question her shakedown tactics. First, she threatens to put their head in a noose as chairman of the Financial Services Committee — as she is getting them to pony up campaign contributions. Pay to play? You decide.
Waters has had run-ins with the House Ethics Committee because of fundraising tactics and insider wheeling and dealing. Back during the financial crisis, she was suspected of helping arrange meetings with Treasury Department officials and getting bailout money for OneUnited, a troubled bank that her family owned major stock holdings in. She beat the rap of corruption, but it sure smelled bad.
So will Maxine Waters be the crusading financial protector of our 401k plans and save America from the next financial bubble? Well, there will certainly be lots of harassment and shakedowns. But don't count on her steering us clear of Wall Street excesses. If history is any guide, Mad Maxine will be way too busy raising money from the people she is now in charge of regulating.
Stephen Moore is a senior fellow at The Heritage Foundation and an economic consultant with FreedomWorks. He is the co-author of "Fueling Freedom: Exposing the Mad War on Energy."
The global banking system has historically played both sides of major conflicts through war financing, and drawing out the battles by providing funds beyond what each country could have otherwise spent.
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Why Banks Love War & the War Economy
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“A series of recent polls in the US and Europe have shown a sharp growth of popular disgust with capitalism and support for socialism. In May of 2017, in a survey conducted by the Union of European Broadcasters of people aged 18 to 35, more than half said they would participate in a “large-scale uprising.” Nine out of 10 agreed with the statement, “Banks and money rule the world.”
White House report on socialism
The specter of Marx haunts the
American ruling class
Last month, the Council of Economic Advisers, an agency of the Trump White House, released an extraordinary report titled “The Opportunity Costs of Socialism.” The report begins with the statement: “Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse. Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the younger electorate.”
The very fact that the US government
officially acknowledges a growth of popular
support for socialism, particularly among the
nation’s youth, testifies to vast changes taking
place in the political consciousness of the
working class and the terror this is striking
within the ruling elite. America is, after all, a
country where anti-communism was for the
greater part of a century a state-sponsored
secular religion. No ruling class has so
ruthlessly sought to exclude socialist politics
from political discourse as the American ruling
class.
The 70-page document is itself an inane right-wing screed. It seeks to discredit socialism by identifying it with capitalist countries such as Venezuela that have expanded state ownership of parts of the economy while protecting private ownership of the banks, and, with the post-2008 collapse of oil and other commodity prices, increasingly attacked the living standards of the working class.
It identifies socialism with proposals for mild social reform such as “Medicare for all,” raised and increasingly abandoned by a section of the Democratic Party. It cites Milton Friedman and Margaret Thatcher to promote the virtues of “economic freedom,” i.e., the unrestrained operation of the capitalist market, and to denounce all social reforms, business regulations, tax increases or anything else that impinges on the oligarchy’s self-enrichment.
The report’s arguments and themes find expression in the fascistic campaign speeches of Donald Trump, who routinely and absurdly attacks the Democrats as socialists and accuses them of seeking to turn America into another “socialist” Venezuela.
What has prompted this effort to blackguard socialism?
A series of recent polls in the US and Europe have shown a sharp growth of popular disgust with capitalism and support for socialism. In May of 2017, in a survey conducted by the Union of European Broadcasters of people aged 18 to 35, more than half said they would participate in a “large-scale uprising.” Nine out of 10 agreed with the statement, “Banks and money rule the world.”
Last November, a poll conducted by YouGov showed that 51 percent of Americans between the ages of 21 and 29 would prefer to live in a socialist or communist country than in a capitalist country.
In August of this year, a Gallup poll found that for the first time
since the organization began tracking the figure, fewer than half
of Americans aged 18–29 had a positive view of capitalism, while
more than half had a positive view of socialism. The
percentage of young people viewing
capitalism positively fell from 68 percent
in 2010 to 45 percent this year, a 23-
percentage point drop in just eight years.
This surge in interest in socialism is bound up with a resurgence of class struggle in the US and internationally. In the United States, the number of major strikes so far this year, 21, is triple the number in 2017. The ruling class was particularly terrified by the teachers’ walkouts earlier this year because the biggest strikes were organized by rank-and-file educators in a rebellion against the unions, reflecting the weakening grip of the pro-corporate organizations that have suppressed the class struggle for decades.
The growth of the class struggle is an objective process that is driven by the global crisis of capitalism, which finds its most acute social and political expression in the center of world capitalism—the United States. It is the class struggle that provides the key to the fight for genuine socialism.
Masses of workers and youth are being driven into struggle and politically radicalized by decades of uninterrupted war and the staggering growth of social inequality. This process has accelerated during the 10 years since the Wall Street crash of 2008. The Obama years saw the greatest transfer of wealth from the bottom to the top in history, the escalation of the wars begun under Bush and their spread to Libya, Syria and Yemen, and the intensification of mass surveillance, attacks on immigrants and other police state measures.
This paved the way for the elevation of Trump, the personification of the criminality and backwardness of the ruling oligarchy.
Under conditions where the typical CEO in the US now makes in a single day almost as much as the average worker makes in an entire year, and the net worth of the 400 wealthiest Americans has doubled over the past decade, the working class is looking for a radical alternative to the status quo. As the Socialist Equality Party wrote in its program eight years ago, “The Breakdown of Capitalism and the Fight for Socialism in the United States”:
The change in objective conditions, however, will lead American workers to change their minds. The reality of capitalism will provide workers with many reasons to fight for a fundamental and revolutionary change in the economic organization of society.
The response of the ruling class is two-fold. First, the abandonment of bourgeois democratic forms of rule and the turn toward dictatorship. The run-up to the midterm elections has revealed the advanced stage of these preparations, with Trump’s fascistic attacks on immigrants, deployment of troops to the border, threats to gun down unarmed men, women and children seeking asylum, and his pledge to overturn the 14th Amendment establishing birthright citizenship.
That this has evoked no serious opposition from the Democrats and the media makes clear that the entire ruling class is united around a turn to authoritarianism. Indeed, the Democrats are spearheading the drive to censor the internet in order to silence left-wing and socialist opposition.
The second response is to promote phony socialists such as Bernie Sanders, the Democratic Socialists of America (DSA) and other pseudo-left organizations in order to confuse the working class and channel its opposition back behind the Democratic Party.
In 2018, with Sanders totally integrated into the Democratic Party leadership, this role has been largely delegated to the DSA, which functions as an arm of the Democrats. Two DSA members, Alexandria Ocasio-Cortez in New York and Rashida Tlaib in Detroit, are likely to win seats in the House of Representatives as candidates of the Democratic Party.
The closer they come to taking office, the more they seek to distance themselves from their supposed socialist affiliation. Ocasio-Cortez, for example, joined Sanders in eulogizing the recently deceased war-monger John McCain, refused to answer when asked if she opposed the US wars in the Middle East, and dropped her campaign call for the abolition of Immigration and Customs Enforcement (ICE).
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.
Supreme Court Considers Who Bears Responsibility for Security Fraud
An investment banker who sent deceptive emails dramatically overstating the financial health of a failing clean energy company shouldn’t be held responsible for securities fraud because he was only following his supervisor’s directions, the man’s attorney told a skeptical Supreme Court.
U.S. securities laws forbid those offering securities for sale from making false statements or participating in fraudulent schemes. Whether a person who merely passes the bad information along is legally liable is at issue in this case.
The company, Waste2Energy Holdings Inc. of Neptune Beach, Florida, founded in 2007, went out of business in 2013 after filing for Chapter 11 bankruptcy. The company had hoped to develop technology to convert waste into energy but failed to do so.
In 2009 Francis V. Lorenzo, then the director of investment banking at the brokerage Charles Vista LLC, emailed prospective investors offering for sale $15 million in debentures secured only by W2E’s earning capacity.
The emails indicated that W2E had $10 million in assets and purchase orders north of $40 million, and that the brokerage was willing to raise money to repay investors if needed.
But at the time the emails were sent, the company had already acknowledged that an audit had determined its assets were worth much less than $1 million.
Lorenzo’s boss and the brokers settled the claims the U.S. Securities and Exchange Commission (SEC) brought but Lorenzo refused. An SEC administrative law judge found Lorenzo’s superior drafted the emails but that Lorenzo had nonetheless broken the law by sending them because they contained false information about W2E’s financial situation.
The SEC banished Lorenzo from the securities industry for life and imposed a $15,000 civil penalty.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled against Lorenzo in 2017, finding that he participated in a scheme to defraud investors by sending the misleading emails even though he was not deemed to have made the untrue statements himself.
Lorenzo disagreed with the circuit court and the Supreme Court decided June 18 to hear his appeal. He argues that at most he may have aided and abetted a fraudulent scheme as a “secondary” violator of securities laws.
Borrowing language from the Supreme Court’s ruling in the 2011 case, Janus Capital Group Inc. v. First Derivative Traders, Lorenzo argued that because he did not have “ultimate authority over the statement, including its content and whether and how to communicate it,” he cannot be held liable under Rule 10-5(b) of the Securities Exchange Act. The rule forbids fraudulent schemes or devices, making false statements, and engaging in fraud that harms investors.
Justice Brett Kavanaugh, who sat on the circuit court panel at the time, dissented from its majority opinion, writing that Lorenzo hadn’t violated securities laws. “How could [petitioner] have intentionally deceived the clients when he did not draft the emails, did not think about the contents of the emails, and sent the emails only at his boss’s direction?”
Kavanaugh recused himself from the Supreme Court case, leaving the other eight justices to participate in oral arguments Dec. 3.
Justices Have Doubts
During those oral arguments, Lorenzo’s attorney, Robert Heim, said that sending the email was not an inherently deceptive act. Justice Neil Gorsuch appeared to agree that Lorenzo was not the author of the false statements in the emails.
But Justices Ruth Bader Ginsburg, Samuel Alito, and Sonia Sotomayor seemed to disagree with Heim.
Ginsburg asked Heim why it wasn’t “inherently deceptive to send a succession of untruths?”
“Lorenzo is essentially a conduit,” Heim replied. “He’s somebody that’s transmitting statements … on behalf of another … simply sending an e-mail is not enough to transform Frank Lorenzo into a primary violator from, perhaps, somebody who gave substantial assistance.
The language of the statutes and the rules make “a clear distinction between statements and … conduct.”
Alito asked why Lorenzo’s behavior wouldn’t “fall squarely” within the language of the rule used by the SEC.
Sotomayor was just as blunt, telling Heim: “I’m having a problem from the beginning. Once you concede … that you’re not challenging that your client acted with an intent to deceive or defraud, that you aren’t challenging the D.C. Circuit’s conclusion to that effect? Is that correct?”
Heim replied, “Yes, Your Honor.”
Sotomayor continued: “I don’t understand, once you concede that mental state, and he has the act of putting together the email and encouraging customers to call him with questions, not to call his boss with questions, how could that standing alone give away your case?
“That makes him both the maker of a false statement, but it’s also engaging in an act, practice, or course of conduct which operates or would operate as a fraud or deceit.”
The Trump administration argues the treatment Lorenzo received at the hands of the SEC was just.
“I don’t think you’re likely to see a … more
egregious fraud than this,” Christopher Michel,
assistant to the solicitor general, told the justices.
CRIMINAL GLOBALIST BANKSTERS AND THE POLITICIANS THEY BOUGHT:
The Story of Goldman Sachs and Clinton, Obama and Trump corruption.
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 TO SERVE THE RICH AND GLOBALIST BILLIONAIRES.
The GOP said the "Tax Cuts and Jobs Act" would
reduce deficits and supercharge the economy (and
stocks and wages). The White House says things
are working as planned, but one year on--the
numbers mostly suggest otherwise.
THE REALITY OF THE SWAMP KEEPER'S DISMAL TRUMPERNOMICS
Republicans said the bill would pay for itself (contra every independent forecaster) initially pegging the 10-year cost at $1.5 trillion, but later raised to $1.9 trillion. Despite bogus claims from the administration that the deficit was "coming down rapidly," it's on track to rise from $666 billion in 2017 to $970 billion this year. That puts it at about 4.6 percent of gross domestic product, virtually unprecedented in such strong economic conditions. Usually, when the economy is doing well -- and we're not in a major war -- tax revenue is strong, spending on programs such as food stamps and unemployment falls, and the budget gap narrows. In fact, the last time the unemployment rate hovered around 4 percent, we had a surplus.
GDP growth is up this year -- to about 3 percent -- after averaging 2.2 percent over the previous five years. That's largely due, though, to the fact that the tax cuts (alongside spending hikes) provided an enormous fiscal stimulus. Every independent outside forecast suggests that the impact of that stimulus will fade next year with the Federal Reserve downgraded its growth estimate for 2019 to 2.3 percent and 1.9 percent by 2020 which means economic slow down, but let's not call it a recession, yet.
Business investment spiked immediately after the tax cuts, but slowed last quarter. The stock market boomed initially, but most recently, stocks have fallen, thanks to other factors, such as the U.S.-China trade war. With lower tax rates, pretty much by definition stock prices should rise. Firms used their tax windfall for share buybacks, which further buoy stocks, and a record $1.1 trillion of buybacks has been announced this year, but the tax cuts were suppose to free up more money for raises (not buybacks), and in the long term it's hoped firms investment in new capital equipment will boost worker productivity, but Inflation-adjusted wages have continued trudging upward and with the most American losing tax cuts in 2019 we are seeing the Obama bump economy replaced by the trump fake-economy. Trump and the
GOP created a fake economic boom on our
collective credit card: The equivalent of maxing
out your credit cards and saying look how good
I'm doing right now.
Swamp Keeper Trump prepares for the inevitable move to impeach him and ask for asylum in Scotland.
Fox News host Tucker Carlson said in an interview Thursday that President Donald Trump has succeeded as a conversation starter but has failed to keep his most important campaign promises.
“His chief promises were that he would build the wall, de-fund Planned Parenthood, and repeal Obamacare, and he hasn’t done any of those things,” Carlson told Urs Gehriger of the Swiss weekly Die Weltwoche.
SWAMP KEEPER TRUMP’S SECRET SAUDI MISSION:
“You saved my a rse again and again… So, I’ll save yours like Bush and Obama did!
WHO IS FINANCING ALL THE TRUMP AND SON-IN-LAW’S REFINANCING SCAMS???
FOLLOW THE MONEY!
"I doubt that Trump understands -- or cares about -- what message he's sending. Wealthy Saudis, including members of the extended royal family, have been his patrons for years, buying his distressed properties when he needed money. In the early 1990s, a Saudi prince purchased Trump's flashy yacht so that the then-struggling businessman could come up with cash to stave off personal bankruptcy, and later, the prince bought a share of the Plaza Hotel, one of Trump's many business deals gone bad. Trump also sold an entire floor of his landmark Trump Tower condominium to the Saudi government in 2001."
“The Wahhabis finance thousands of madrassahs throughout the world where young boys are brainwashed into becoming fanatical foot-soldiers for the petrodollar-flush Saudis and other emirs of the Persian Gulf.” AMIL IMANI
I recommend that Ignatius read Raymond Ibrahim's outstanding book Sword and Scimitar, which contains accounts of dynastic succession in the Muslim monarchies of the Middle East, where standard operating procedure for a new monarch on the death of his father was to strangle all his brothers. Yes, it's awful. But it has been happening for a very long time. And it's not going to change quickly, no matter how outraged we pretend to be. MONICA SHOWALTER
CRIMINAL GLOBALIST BANKSTERS AND THE POLITICIANS THEY BOUGHT:
The Story of Goldman Sachs and Clinton, Obama and Trump corruption.
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 TO SERVE THE RICH AND GLOBALIST BILLIONAIRES.
THE TRUMP FAMILY FOUNDATION SLUSH FUND…. Will they see jail?
VISUALIZE REVOLUTION!.... We know where they live!
“Underwood is a Democrat and is seeking millions of dollars in penalties. She wants Trump and his eldest children barred from running other charities.”
THE ECONOMIST:
America’s drift to war and economic collapse
"The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!" PAT BUCHANAN
“It notes in passing that for the American government, which already runs annual budget deficits approaching $700 billion, “finding the money will be another problem.”
TRUMPERNOMICS FOR THE RICH…. and his parasitic family!
Report: Trump Says He Doesn't Care About the National Debt Because the Crisis Will Hit After He's Gone
"Trump's alleged comment is maddening and disheartening,
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
TRUMPERNOMICS:
THE SUPER RICH APPLAUD TWITTER’S TRUMP’S TAX CUTS FOR THE SUPER RICH!
"The tax overhaul would mean an unprecedented windfall for the super-rich, on top
of the fact that virtually all income gains during the period of the supposed
recovery from the financial crash of 2008 have gone to the top 1 percent income
bracket."
Billionaire Class Enjoys 15X the Wage Growth of American Working Class
AFP
3:00
The billionaire class — the country’s top 0.01 percent of earners — have enjoyed more than 15 times as much wage growth as America’s working and middle class since 1979, new wage data reveals.
Between 1979 and 2017, the wages of the bottom 90 percent — the country’s working and lower middle class — have grown by only about 22 percent, Economic Policy Institute (EPI) researchers find.
Compare that small wage increase over nearly four decades to the booming wage growth of America’s top one percent, who have seen their wages grow more than 155 percent during the same period.
Breitbart TV
The top 0.01 percent — the country’s billionaire class — saw their wages grow by more than 343 percent in the last four decades, more than 15 times the wage growth of the bottom 90 percent of Americans.
In 1979, America’s working class was earning on average about $29,600 a year. Fast forward to 2017, and the same bottom 90 percent of Americans are earning only about $6,600 more annually.
The almost four decades of wage stagnation among the country’s working and middle class comes as the national immigration policy has allowed for the admission of more than 1.5 million mostly low-skilled immigrants every year.
(Public Citizen)
In the last decade, alone, the U.S. admitted ten million legal immigrants, forcing American workers to compete against a growing population of low-wage workers. Meanwhile, employers are able to reduce wages and drive up their profit margins thanks to the annual low-skilled immigration scheme.
The Washington, DC-imposed mass immigration policy is a boon to corporate executives, Wall Street, big business, and multinational conglomerates as every one percent increase in the immigrant composition of an occupation’s labor force reduces Americans’ hourly wages by 0.4 percent. Every one percent increase in the immigrant workforce reduces Americans’ overall wages by 0.8 percent.
Mass immigration has come at the expense of America’s working and middle class, which has suffered from poor job growth, stagnant wages, and increased public costs to offset the importation of millions of low-skilled foreign nationals.
Four million young Americans enter the workforce every year, but their job opportunities are further diminished as the U.S. imports roughly two new foreign workers for every four American workers who enter the workforce. Even though researchers say 30 percent of the workforce could lose their jobs due to automation by 2030, the U.S. has not stopped importing more than a million foreign nationals every year.
For blue-collar American workers, mass immigration has not only kept wages down but in many cases decreased wages, as Breitbart News reported. Meanwhile, the U.S. continues importing more foreign nationals with whom working-class Americans are forced to compete. In 2016, the U.S. brought in about 1.8 million mostly low-skilled immigrants.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.
Study: Elite Zip Codes Thrived in Obama Recovery, Rural America Left Behind
Getty Images
4:49
Wealthy cities and elite zip codes thrived under the slow-moving economic recovery of President Obama while rural American communities were left behind, a study reveals.
The Economic Innovation Group research, highlighted by Axios, details the massive economic inequality between the country’s coastal city elites and middle America’s working class between the Great Recession in 2007 and Obama’s economic recovery in 2016.
Between 2007 and 2016, the number of residents living in elite zip codes grew by more than ten million, with an overwhelming faction of that population growth being driven by mass immigration where the U.S. imports more than 1.5 million illegal and legal immigrants annually.
The booming 44.5 million immigrant populations are concentrated mostly in the country’s major cities like Los Angeles, California, Miami Florida, and New York City, New York. The rapidly growing U.S. population — driven by immigration — is set to hit 404 millionby 2060, a boon for real estate developers, wealthy investors, and corporations, all of which benefit greatly from dense populations and a flooded labor market.
The economic study found that while the population grew in wealthy cities, America’s rural population fell by nearly 3.5 million residents.
Likewise, by 2016, elite zip codes had a surplus of 3.6 million jobs, which is more than the combined bottom 80 percent of American zip codes. While it only took about five years for wealthy cities to replace the jobs lost by the recession, it took “at risk” regions of the country a decade to recover, and “distressed” U.S. communities are “unlikely ever to recover on current trendlines,” the report predicts.
A map included in the research shows how rich, coastal metropolises have boomed economically while entire portions of middle America have been left behind as job and business gains remain concentrated at the top of the income ladder.
(Economic Innovation Group)
(Economic Innovation Group)
Economic growth among the country’s middle-class counties and middle-class zip codes has considerably trailed national economic growth, the study found.
For example, between 2012 and 2016, there were 4.4 percent more business establishments in the country as a whole. That growth was less than two percent in the median zip code and there was close to no growth in the median county.
The same can be said of employment growth, where U.S. employment grew by about 9.3 percent from 2012 to 2016. In the median zip code, though, employment grew by only 5.5 percent and in the median county, employment grew by less than four percent.
“Nearly three in every five large counties added businesses on net over the period, compared to only one in every five small one,” the report concluded.
Elite zip codes added more business establishments during Obama’s economic recovery, between 2012 and 2016, than the entire bottom 80 percent of zip codes combined. For instance, while more than 180,000 businesses have been added to rich zip codes, the country’s bottom tier has lost more than 13,000 businesses even after the economic recovery.
(Economic Innovation Group)
(Economic Innovation Group)
The gutting of the American manufacturing base, through free trade, has been a driving catalyst for the collapse of the white working class and black Americans. Simultaneously, the outsourcing of the economy has brought major wealth to corporations, tech conglomerates, and Wall Street.
The dramatic decline of U.S. manufacturing at the hands of free trade—where more than 3.4 million American jobs have been lost solely due to free trade with China, not including the American jobs lost due to agreements like the North American Free Trade Agreement (NAFTA) and the United States-Korea Free Trade Agreement (KORUS)—has coincided with growing wage inequality for white and black Americans, a growing number of single mother households, a drop in U.S. marriage rates, a general stagnation of working and middle class wages, and specifically, increased black American unemployment.
“So, the loss of manufacturing work since 1960 represents a steady decline in relatively high-paying jobs for less-educated workers,” recent research from economist Eric D. Gould has noted.
Fast-forward to the modern economy and the wage trend has been the opposite of what it was during the peak of manufacturing in the U.S. An Economic Policy Institute studyfound this year that been 2009 and 2015, the top one percent of American families earned about 26 times as much income as the bottom 99 percent of Americans.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.
Record high income in 2017 for top one percent of wage earners in US
In 2017, the top one percent of US wage earners received their highest paychecks ever, according to a report by the Economic Policy Institute (EPI).
Based on newly released data from the Social Security Administration, the EPI shows that the top one percent of the population saw their paychecks increase by 3.7 percent in 2017—a rate nearly quadruple the bottom 90 percent of the population. The growth was driven by the top 0.1 percent, which includes many CEOs and corporate executives, whose pay increased eight percent and averaged $2,757,000 last year.
The EPI report is only the latest exposure of the gaping inequality between the vast majority of the population and the modern-day aristocracy that rules over them.
The EPI shows that the bottom 90 percent of wage earners have increased their pay by 22.2 percent between 1979 and 2017. Today, this bottom 90 percent makes an average of just $36,182 a year, which is eaten up by the cost of housing and the growing burden of education, health care, and retirement.
Meanwhile, the top one percent has increased its wages by 157 percent during this same period, a rate seven times faster than the other group. This top segment makes an average of $718,766 a year. Those in-between, the 90th to 99th percentile, have increased their wages by 57.4 percent. They now make an average of $152,476 a year—more than four times the bottom 90 percent.
Graph from the Economic Policy Institute
Decades of decaying capitalism have led to this accelerating divide. While the rich accumulate wealth with no restriction, workers’ wages and benefits have been under increasing attack. In 1979, 90 percent of the population took in 70 percent of the nation’s income. But, by 2017, that fell to only 61 percent.
Even more, while the bottom 90 percent of the population may take in 61 percent of the wages, large sections of the workforce today barely pull in any income at all. For example, Social Security Administration data found that the bottom 54 percent of wage earners in the United States, 89.5 million people, make an average of just $15,100 a year. This 54 percent of the population earns only 17 percent of all wages paid in America.
However unequal, these wage inequalities still do not fully present the divide between rich and poor. The ultra-wealthy derive their wealth not primarily from wages, but from assets and equities—principally from the stock market. While the bottom 90 percent of the population made 61 percent of the wages in 2017, they owned even less, just 27 percent of the wealth (according to the World Inequality Report 2018 by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman).
The massive increase in the value of the stock market, which only a small segment of the population participates in, means that the top 10 percent of the population controls 73 percent of all wealth in the United States. Just three men—Jeff Bezos, Warren Buffet and Bill Gates—had more wealth than the bottom half of America combined last year.
Wages are so low in the United States that roughly half of the population falls deeper into debt every year. A Reuters report from July found that the pretax net income (that is, income minus expense) of the bottom 40 percent of the population was an average of negative $11,660. Even the middle quintile of the population, the 40th to 60th percentile, breaks even with an average of only $2,836 a year.
As the Social Security Administration numbers show, 67.4 percent of the population made less than the average wage, $48,250 a year in 2017, a sum that is inadequate to support a family in many cities—especially, with high housing costs, health care, education, and retirement factored in.
For the ruling class, though, workers’ wages are already too much. The volatility of the stock market and the deep fear that the current bull market will collapse has made politicians and businessmen anxious of any sign of wage increases.
In August, wages in the US rose just 0.2 percent above the inflation rate, the highest in nine years. Though the increase was tiny, it was enough to encourage the Federal Reserve to increase the interest rate past two percent for the first time since 2008. Raising interest rates helps to depress workers’ wages by lowering borrowing and spending. As the Financial Times noted, stopping wage growth was “central” to the Federal Reserve’s move.
Further analysis of the Social Security Administration data shows that in 2017, 147,754 people reported wages of 1 million dollars or more—roughly, the top 0.05 percent. Their combined total income of $372 billion could pay for the US federal education budget five times over.
These wages, however large, still pale in comparison to the money the ultra-rich acquire from the stock market. For example, share buybacks and dividend payments, a way of funneling money to shareholders, will eclipse $1 trillion this year.
Whatever the immediate source, the wealth of the rich derives from the great mass of people who do the actual work. Across the United States and around the world, workers, young people, and students have entered into struggle this year over pay, education, health care, immigration, war and democratic rights. This growing movement of the working class must set as its aim confiscating the wealth and power of this tiny parasitic oligarchy. Society’s wealth must be democratically controlled by those who produce it.
THE STAGGERING ECONOMIC INEQUALITY UNDER OBAMA'S ADMINISTRATION SERVING THE BILLIONAIRE CLASS.
THE ENTIRE REASON BEHIND AMNESTY IS TO KEEP WAGES DEPRESSED AND PASS ALONG THE REAL COST OF "CHEAP" MEXICAN LABOR TO THE AMERICAN MIDDLE CLASS.
AND IT'S WORKING!
SEN. BERNIE SANDERS
“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
YOU THOUGHT OBAMA INVITED OBAMANOMICS and started the assault on the American middle-class?
NOPE!
“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.”
Clinton Foundation Put On Watch List Of Suspicious ‘Charities’
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.
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.”
DICK MORRIS:
On America’s First Family of Crime….. NO! Not the Bushes again!
Clinton global hucksterism – Selling out America like they sold out the Lincoln Bedroom.
HILLARY CLINTON: CRONY CLASS’ “Hope and Change” huckster’s successor!
“I serve Obama’s cronies first, illegals second and together we will loot the American middle-class to double our figures. It’s called BAILOUTS! Evita Peron Clinton
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.
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.”
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.
PATRICK BUCHANAN: OBAMA’S ASSAULT ON AMERICA BEGINS AT OUR BORDERS
WHO REALLY PAYS FOR THE CRIMES OF OBAMA’S CRONY DONORS???
LAST WEEK BARACK OBAMA CELEBRATED FIVE YEARS OF THE LOOTING BY HIS WALL STREET BANKSTERS… now it’s back to cutting social programs to pay for all that rape by the 1% he represents. The following week it will be back to the AMNESTY HOAX to legalize Mexico’s looting of America and make it legal that Mexicans get our jobs first… they already do!
As in previous budget crises under the Obama administration, the events are being stage-managed by the two corporate-controlled parties to give the illusion of partisan gridlock and confrontation over principles—in this case, whether to go forward with the implementation of the Obama health care program—while behind the scenes all factions within the ruling elite agree that massive cuts must be carried through in basic federal social programs.
OBAMA’S CRONY CAPITALISM – A NATION RULED BY CRIMINAL WALL STREET BANKSTERS AND OBAMA DONORS
GET THIS BOOK
Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies
by Michelle Malkin
In her shocking new book, Malkin digs deep into the records of President Obama's staff, revealing corrupt dealings, questionable pasts, and abuses of power throughout his administration.
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?
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.”
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?
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.
The GOP said the "Tax Cuts and Jobs Act" would reduce deficits and supercharge the economy (and stocks and wages). The White House says things are working as planned, but one year on--the numbers mostly suggest otherwise.
THE REALITY OF THE SWAMP KEEPER'S DISMAL TRUMPERNOMICS
Republicans said the bill would pay for itself (contra every independent forecaster) initially pegging the 10-year cost at $1.5 trillion, but later raised to $1.9 trillion. Despite bogus claims from the administration that the deficit was "coming down rapidly," it's on track to rise from $666 billion in 2017 to $970 billion this year. That puts it at about 4.6 percent of gross domestic product, virtually unprecedented in such strong economic conditions. Usually, when the economy is doing well -- and we're not in a major war -- tax revenue is strong, spending on programs such as food stamps and unemployment falls, and the budget gap narrows. In fact, the last time the unemployment rate hovered around 4 percent, we had a surplus.
GDP growth is up this year -- to about 3 percent -- after averaging 2.2 percent over the previous five years. That's largely due, though, to the fact that the tax cuts (alongside spending hikes) provided an enormous fiscal stimulus. Every independent outside forecast suggests that the impact of that stimulus will fade next year with the Federal Reserve downgraded its growth estimate for 2019 to 2.3 percent and 1.9 percent by 2020 which means economic slow down, but let's not call it a recession, yet.
Business investment spiked immediately after the tax cuts, but slowed last quarter. The stock market boomed initially, but most recently, stocks have fallen, thanks to other factors, such as the U.S.-China trade war. With lower tax rates, pretty much by definition stock prices should rise. Firms used their tax windfall for share buybacks, which further buoy stocks, and a record $1.1 trillion of buybacks has been announced this year, but the tax cuts were suppose to free up more money for raises (not buybacks), and in the long term it's hoped firms investment in new capital equipment will boost worker productivity, but Inflation-adjusted wages have continued trudging upward and with the most American losing tax cuts in 2019 we are seeing the Obama bump economy replaced by the trump fake-economy. Trump and the GOP created a fake economic boom on our collective credit card: The equivalent of maxing out your credit cards and saying look how good I'm doing right now.
Swamp Keeper Trump prepares for the inevitable move to impeach him and ask for asylum in Scotland.
Fox News host Tucker Carlson said in an interview Thursday that President Donald Trump has succeeded as a conversation starter but has failed to keep his most important campaign promises.
“His chief promises were that he would build the wall, de-fund Planned Parenthood, and repeal Obamacare, and he hasn’t done any of those things,” Carlson told Urs Gehriger of the Swiss weekly Die Weltwoche.
“You saved my a rse again and again… So, I’ll save yours like Bush and Obama did!
WHO IS FINANCING ALL THE TRUMP AND SON-IN-LAW’S REFINANCING SCAMS???
FOLLOW THE MONEY!
"I doubt that Trump understands -- or cares about -- what message he's sending. Wealthy Saudis, including members of the extended royal family, have been his patrons for years, buying his distressed properties when he needed money. In the early 1990s, a Saudi prince purchased Trump's flashy yacht so that the then-struggling businessman could come up with cash to stave off personal bankruptcy, and later, the prince bought a share of the Plaza Hotel, one of Trump's many business deals gone bad. Trump also sold an entire floor of his landmark Trump Tower condominium to the Saudi government in 2001."
“The Wahhabis finance thousands of madrassahs throughout the world where young boys are brainwashed into becoming fanatical foot-soldiers for the petrodollar-flush Saudis and other emirs of the Persian Gulf.” AMIL IMANI
I recommend that Ignatius read Raymond Ibrahim's outstanding book Sword and Scimitar, which contains accounts of dynastic succession in the Muslim monarchies of the Middle East, where standard operating procedure for a new monarch on the death of his father was to strangle all his brothers. Yes, it's awful. But it has been happening for a very long time. And it's not going to change quickly, no matter how outraged we pretend to be. MONICA SHOWALTER
CRIMINAL GLOBALIST BANKSTERS AND THE POLITICIANS THEY BOUGHT:
The Story of Goldman Sachs and Clinton, Obama and Trump corruption.
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 TO SERVE THE RICH AND GLOBALIST BILLIONAIRES.
THE TRUMP FAMILY FOUNDATION SLUSH FUND…. Will they see jail?
VISUALIZE REVOLUTION!.... We know where they live!
“Underwood is a Democrat and is seeking millions of dollars in penalties. She wants Trump and his eldest children barred from running other charities.”
THE ECONOMIST:
America’s drift to war and economic collapse
"The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!" PAT BUCHANAN
“It notes in passing that for the American government, which already runs annual budget deficits approaching $700 billion, “finding the money will be another problem.”
TRUMPERNOMICS FOR THE RICH…. and his parasitic family!
Report: Trump Says He Doesn't Care About the National Debt Because the Crisis Will Hit After He's Gone
"Trump's alleged comment is maddening and disheartening,
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
TRUMPERNOMICS:
THE SUPER RICH APPLAUD TWITTER’S TRUMP’S TAX CUTS FOR THE SUPER RICH!
"The tax overhaul would mean an unprecedented windfall for the super-rich, on top
of the fact that virtually all income gains during the period of the supposed
recovery from the financial crash of 2008 have gone to the top 1 percent income
bracket."
Republicans Should Fight into January for the Wall
By Deroy Murdock
National Review Online, December 21, 2018
Bafflingly, President Trump has not used all his tools to promote the border wall. He has yet to address the nation from the Oval Office on this or any other topic. He should cancel his Mar-a-Lago vacation and, at the earliest opportunity, tell his fellow Americans in prime time the importance of securing this country’s colander-like border. He should restate that limiting immigration to those with passports and visas is fundamental to national sovereignty. Beyond the 396,579 illegal aliens apprehended at the border in fiscal year 2018 — atop those who successfully broke into America — the southern frontier is a hotbed of human smuggling, a conveyor belt for illegal narcotics (including opioids), and a veritable moving sidewalk for members of MS-13 and other vicious, bloodthirsty gangs.
Even more amazing, Trump rarely discusses the potentially lethal threat of special-interest aliens from such terror states as Iran, Sudan, and Syria. U.S. officials nabbed, respectively, 111, 86, and 44 illegal aliens from those dangerous countries in 2016. The Center for Immigration Studies’ Todd Bensman last week interviewed four Iranians wandering north through Costa Rica — to America. A wall would reduce this national-security risk. President Trump should explain this clear and present danger. This unassailable argument for the wall cannot be dismissed as “anti-Hispanic racism.” Inexplicably, the president barely mentions this.. . .
. . .
https://www.nationalreview.com/2018/12/republican-border-wall-fight-last-chance-for-security/
Fed attempt at calming markets fails
Wall Street plunge continues
By Nick Beams
22 December 2018
Wall Street had another wild day yesterday with the Dow ending down by 415 points, after rising by almost 400 points in the opening hours of trading. The S&P 500 index fell by 2 percent and the NASDAQ was down by 2.99 percent, capping the worst week for Wall Street since October 2008.
The Dow lost 1655 points for the week, a decline of 6.8 percent, its worst percentage drop since the onset of the financial crisis a decade ago, the NASDAQ lost 8.3 percent for the week and is now 22 percent below its high last August and the S&P fell by 7 percent and is now down 17.8 percent from its high.
Both the S&P and the Dow are on track for their worst December performance since December 1931, amid the Great Depression.
Bloomberg published an article noting that currently 38 percent of stocks are trading at 52-week lows. Since 1984, there have only been eight days when a larger proportion of stocks traded at those levels. Two of them took place during the October 1987 crash, when the Dow fell 23 percent in a day, with the rest occurring in October and November 2008.
The brief rally was set off by an interview with New York Federal Reserve president John Williams with the business channel CNBC in which he said the Fed was going into 2019 with eyes “wide open” and was willing to reassess its outlook for the economy and by implication its monetary policy.
He had clearly been given a brief to calm the markets after their adverse reaction to Wednesday’s decision to lift interest rates by 0.25 percent and indicate that the Fed was taking note. He defended the rate rise, based on the assessment that the economy would continue to grow next year, but said the Fed was paying close attention to financial markets.
The effect of his reassurances lasted about two hours before the markets started to plunge again.
The rate hike was not the only aspect of monetary policy which impacted the markets. There was an adverse reaction to the statement by Fed chair Jerome Powell during his Wednesday press conference that the wind back of its asset holdings, acquired under the program of quantitative easing (QE) when the Fed entered the market to buy bonds, was on “auto pilot” and would continue at the rate of $50 billion per month.
Under QE, the Fed expanded its assets from around $800 billion to more than $4 trillion. The effect of this measure was to push up the price of bonds and lower interest rates—the two have an inverse relationship. The downward pressure on interest rates under QE fuelled the continuation of the very financial speculation which had led to the crisis of 2008, giving rise to the longest bull-run on the stock market in history.
While the Fed began to reverse its QE policy 15 months ago, similar operations were continued by other central banks. But now they are moving in the same direction, tightening credit conditions in global financial markets.
One of the fears on Wall Street is that its dirty secret is being exposed and that just as the wave of cheap money under QE provided a major boost for financial operations its reversal, or quantitative tightening (QT), is going to bring an unravelling. This is because growth in the global economy remains well below the level attained before the financial crisis and it cannot withstand a return to what were once considered to be “normal” financial conditions.
There are increasing signs that the global economy is slowing significantly and could be headed for a recession. The year began with claims that in 2017 the world economy had enjoyed “synchronised” growth and had experienced its best year since the financial crisis of 2008.
But prospects for a continuation of that trend proved to be short lived and the year has ended with significant slowdowns in both the German and Japanese economies. Another indicator of global trends is the fall in commodity prices, with oil leading the way, having fallen by 30 percent in the last two months.
For most of this year, the US has been something of an outlier from this trend, with corporations receiving a major boost as a result of the corporate tax cuts enacted by the Trump administration at the end of last year. Trump claimed this would be a boost to investment and jobs. But that claim has already been given the lie by the major job cuts and closures announced by General Motors and the fact that the increase in corporate profits has largely been used to finance share buybacks and boost dividends.
It is significant that what the Financial Times described as a “tsunami of money”—estimated to reach $1 trillion for the year—has failed to prevent what could be the worst year for stock markets since the global financial crisis.
Besides financial conditions, trade-war tensions are another key factor in the sell-off. This was illustrated yesterday when an interview with Trump’s White House trade adviser Peter Navarro led to a further market fall late in the day.
Navarro told the Japanese news agency, Nikkei, that it would be “very difficult” for the US and China to reach an agreement within the 90-day deadline agreed to by Trump and China’s President Xi Jinping at their meeting in Buenos Aires on December 1.
Navarro, one of the main anti-China hawks within the administration, said there could be “no half-measures” and China had to address all US demands, including claims of forced technology transfers, cyber spying on business networks, state-directed investments and tariff and non-tariff barriers. In short, there had to be a total capitulation by China before any deal could be reached.
Underlining the central issues motivating the most hawkish anti-China forces within the administration and the military and intelligence apparatuses that have stepped up their offensive against China in recent weeks, he said: “China is basically trying to steal the future of Japan, the US and Europe, by going after our technology.”
He called the “Made in China 2025” program—the centre of its plan for industrial and technological development—a “label for a Chinese strategy to achieve dominance in the industries of the future.”
While China has dropped references to the plan in recent times, “no one in Japan or the United States really believes that they have abandoned the goals of China 2025.”
Another significant aspect of the present market plunge is the way in which economic processes are intersecting with growing political turmoil both internationally—the Brexit crisis in the UK being one of the most prominent examples—and the ongoing and deepening conflicts within the US political establishment.
Both the impending government shutdown in the US, over Trump’s insistence that funding for a wall between the US and Mexico must be included in any settlement of the standoff with Congress, and the political firestorm set off by Trump’s announcement of a withdrawal of US troops from Syria and the consequent resignation of Defence Secretary James Mattis have played into the market plunge.
In the longer term, the market and political turmoil is the outcome of the breakdown of the global capitalist order which erupted in the form of the financial crisis of 2008. In the decade since, none of the contradictions that produced it have been resolved, they have simply metastasized to return in even more malignant forms.
Market meltdown: Fears of a slowing economy worsen ahead of market close as the Dow drops another 600 points, Nasdaq barely avoids bear market and oil prices plummet to lowest point in 16 months
- Stocks are on track for their worst month in a decade this December
- The Dow Jones Industrial Average dropped as much as 600 points on Thursday before rebounding slightly to a loss of just 460 point at 3pm Eastern
- The S&P 500 index fell 2.3 percent but is on track to close at 1.12 percent down
- The technology-heavy Nasdaq composite is now down 20 percent from August
- The market swoon is coming even as the US economy is on track to expand this year at the fastest pace in more than a decade
PUBLISHED: 10:46 EST, 20 December 2018 | UPDATED: 15:17 EST, 20 December 2018
Stock prices are tumbling again Thursday as a series of big December plunges has stocks on track for their worst month in a decade.
The Dow Jones Industrial Average dropped as much as 600 points on Thursday before rebounding slightly to a loss of just 460 point at 3pm Eastern, bringing its losses since Friday to more than 1,800 points.
The benchmark S&P 500 index fell 2.3 percent but is on track to close at 1.12 percent down. It has slumped 11 percent this month and is now 15 percent below the peak it reached in late September. The technology-heavy Nasdaq composite did even worse, and is now down 20 percent from its record high in August.
After steady gains through the spring and summer, stocks have nosedived in the fall as investors worry that global economic growth is cooling off and that the US could slip into a recession in the next few years. Oil prices fell sharply again.
The market swoon is coming even as the US economy is on track to expand this year at the fastest pace in more than a decade. Markets tend to move, however, on what investors anticipate will happen well into the future, so it's not uncommon for stocks to sink even when the economy is humming along.
Right now, markets are concerned about the potential for a slowing economy and two threats that could make the situation worse: the ongoing trade dispute between the US and China, which has lasted most of this year and shows few signs of easing, and rising interest rates, which act as a brake on economic growth by making it more expensive for businesses and individuals to borrow money.