Friday, January 15, 2016

THE DEMOCRAT PARTY v THE PEOPLE OF FLINT - Flint, Michigan: Portrait of an American city under attack by the Democrat Party

THE DEMOCRAT PARTY'S WAR ON THE AMERICAN MIDDLE CLASS CONTINUES IN FLINT

The conditions in Flint and Detroit reveal the reality behind the Obama administration’s claims of an “economic recovery” in America’s manufacturing cities, and the triumphal assertions by politicians and the media that the bankruptcy of Detroit—which sold off city assets to speculators and slashed the pensions of municipal workers and retirees—has brought about an economic turnaround.



Flint, Michigan: Portrait of an American city

Flint, Michigan: Portrait of an American city

15 January 2016
On Wednesday, just one day after Michigan Governor Rick Snyder mobilized the National Guard in response to the drinking water crisis in Flint, Michigan, he was forced to admit that ten Flint residents had died as a result of an outbreak of Legionnaires’ disease likely linked to the city’s contaminated drinking water.

Those deaths are in addition to the 9,000 children likely to have been put at risk for lead poisoning. Even small exposures of children to lead can permanently lower intelligence and academic achievement, and the effects cannot be corrected.

The city’s spiraling public health disaster is the result of its move in April 2014 to draw its drinking water from the Flint River, after the Detroit water department demanded higher rates in the aftermath of the Detroit bankruptcy. The Flint River, having been used as a dumping ground for chemicals by local industry for decades, was widely known to be polluted, but state-appointed Emergency Manager Darnell Earley argued that a cost savings of $5 million over two years—to be passed on to the city’s creditors on Wall Street—justified the move.

The city’s political establishment hailed the decision and the emergency manager and local Democratic Party officials declared that the water was safe in the face of mounting protests by residents. Throughout early 2015, city officials even falsified the results of tapwater tests in order to downplay the presence of lead.

On Tuesday, the Detroit News reported that the US Environmental Protection Agency had indications as early as February that drinking water in the city of Flint was contaminated, but took no action to inform the population, even as state and local officials sought to publicly reassure residents that the water was safe to drink.

Snyder’s admission of the outbreak of Legionnaires’ disease was made the day after President Obama gave a State of the Union address in which he declared, ritualistically, that “the state of our union is strong.” He bragged, “our auto industry just had its best year ever,” as part of a “manufacturing surge” that had led the United States to “recover from the worst economic crisis in generations.”

A look at Flint, the birthplace of General Motors, tells a different tale. In 1978, the city employed 80,000 autoworkers. Today, this figure stands at about 5,000. Flint has an official poverty rate of 40.1 percent, making it the second-most poverty-stricken city of its size in America, behind Youngstown, Ohio, another former icon of American industry.

A staggering two-thirds of the city’s children live in poverty, 10 percentage points higher than Detroit, America’s poorest large city. To an extent even greater than Detroit, the city’s population has dwindled and most of its historic buildings have either been demolished or stand vacant.

Even as government officials were forced to admit the scale of the disaster taking place in Flint, teachers in Detroit were engaged in a mass sick-out in defiance of their union that closed 60 schools, protesting dismal school conditions that left buildings covered in dangerous mold with huge gaps in flooring and no heat.

The conditions in Flint and Detroit reveal the reality behind the Obama administration’s claims of an “economic recovery” in America’s manufacturing cities, and the triumphal assertions by politicians and the media that the bankruptcy of Detroit—which sold off city assets to speculators and slashed the pensions of municipal workers and retirees—has brought about an economic turnaround.

In fact, the desperate conditions in Flint and Detroit are a microcosm of the social disaster that has been imposed on the American working class by decades of deindustrialization, mass layoffs and attacks on workers’ living standards.

Even as he sought to present an absurdly positive picture of social relations in America, Obama was forced to acknowledge the growth of poverty and social inequality, while attributing it to inexorable technological changes that resulted in workers having “less leverage for a raise.”

In reality, the horrific growth of poverty and social misery in cities such as Flint is the result of the class policies of the ruling elite, imposed by both parties and rubber-stamped by the trade unions and the Democratic politicians who have run cities such as Detroit, Flint, Baltimore and Chicago.

Every step in the destruction of Flint has taken place with the seal of approval of the unions, beginning with the wave of auto plant closings in the early 1980s which the unions said were necessary to improve the profitability of the automakers and the long-term prospects of autoworkers.
Three decades later, responding to the move in April 2014 to begin using water from the polluted Flint River, AFSCME Local 1600 president Sam Muma declared, “This is a good thing for the community. It will provide jobs” and make the city “self-sufficient.” Flint’s director of public works, Howard Croft, an African-American Democrat, declared that the move “marks the beginning of the new narrative of the city of Flint,” while Democratic Mayor Dayne Walling praised the decision as “an important day for us.”

These minor henchmen of the American financial elite have made their livelihoods peddling policies that have destroyed the lives of countless millions of families, led to hundreds of thousands of early deaths, and turned America into a country where most households are so poor they do not have enough cash to cover a $500 emergency expense.

The conscious policy of deindustrialization begun in the late 1970s, which reduced cities throughout the country to rubble, was aimed at extracting trillions of dollars from American workers by slashing wages, raiding pensions and selling off assets. But more than pure greed was involved in these sociopathic measures. Flint was the scene of the powerful sit-down strike of 1936-37 and a symbol of the independent strength of the American working class. Its destruction was a form of cruel vengeance extracted by the ruling elite.

Legend has it that when the ancient Romans sacked the city of Carthage, in addition to razing it to the ground, they salted the earth so that nothing would grow there again. This was done as retaliation for the defeats they had suffered at the hands of their great enemy, Hannibal.

That story, describing the actions of a people who were among the cruelest in history, is as far as we can tell not true. But the American ruling class, filled with bitter hatred of the workers of Flint, not only reduced the city’s factories to rubble and its children to poverty, but poisoned its water supply.
The disaster in Flint reveals the nature of the sociopaths and murderers among America’s billionaire financial oligarchs and their hired politicians and functionaries. The only way to reverse the decades of social destruction that they have wrought, and ensure a decent life for America’s workers, is to confiscate the ill-gotten billions of the financial oligarchy, seize the major corporations, and reorganize society on a socialist basis.

Andre Damon

Wave of selling hits US markets

Wave of selling hits US markets

By Nick Beams
14 January 2016
US stocks markets tumbled Wednesday as oil prices continued to fall and voices in the finance industry, together with economic commentators, warned of the potential for a major crisis.

The sell-off was across the board, the Dow falling by 365 points, 2.21 percent, the S&P 500 by 2.50 percent and the Nasdaq down by 3.4 percent. The day opened with an uptick but large-volume selling soon set in, the prevailing sentiment being that it was necessary to get out without waiting to see what would happen during the rest of the day.

Commentators said the sell-off was not just about oil, which has been touching levels as low as $30 per barrel, but the fall in prices for all industrial raw materials induced by the slowdown in China.
The sharp downturn has come in the wake of a series of assessments by banking officials that the conditions for a new financial crisis are fast developing.

On Tuesday economists at the Royal Bank of Scotland issued an assessment that said investors faced a “cataclysmic year” in which stocks could fall by 20 percent and oil could go as low as $16 per barrel.

In a note to clients, the RBS said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It warned that the present situation recalled 2008 when the collapse of Lehman Brothers set off a global crisis. This time the trigger could be China.

The bank’s credit chief Andrew Roberts said China had set off a “major correction and it is going to snowball” with equities and credit becoming “very dangerous.” He warned that the London market was particularly vulnerable to a negative shock because of the large number of commodity companies in the UK. The prices of all industrial raw materials, not just oil, are moving sharply down, reaching lows not seen since the immediate aftermath of the financial crisis.

“All those people who are long [buyers of] oil and mining companies thinking that the dividends are safe are going to discover than they’re not at all safe,” Roberts said.

RBS’s prediction of a sharply lower oil price was matched by Morgan Stanley which said it could go to $20 per barrel. Standard Charter forecast an even bigger fall, to $10. “Given that no fundamental relationship is driving the oil market toward any equilibrium, prices are being moved almost entirely by financial flows caused by fluctuations in other asset prices, including the US dollar and equity markets. We think prices could fall as low as $10 per barrel.”

The Standard Chartered analysis points to the development of a vicious circle: a falling oil price sends down equity markets and then financial flow-on effects from the decline in stock prices lead to a further drop in the price of oil.

Following the RBS call to “sell everything,” the Guardian sought responses from a series of economists. While none went as far as the RBS, there was a distinct lack of confidence in their replies.

Erik Britton, director of Fathom Consulting, did not dispute that China would have a “hard landing.” He said it was headed for just 2 percent growth in gross domestic product, markedly less than the official government prediction of 6.5 percent for this year.

Jonathan Porter, the director of the National Institute for Economic and Social Research, said he was “worried” by current events “but not yet panicked.”

“But if the current concerns turn into a systematic meltdown on financial markets, then all bets are off,” he added.

Chris Williamson, the chief economist at the financial data provider Markit, said the worry was that the RBS warning could become a self-fulfilling prophecy and if a financial market rout led to a new recession, “policymakers are seriously lacking in tools to fight the new downturn.”

The RBS assessment was echoed by comments on Wednesday from Albert Edwards, strategist at the Societe Generale bank, who has long held the belief that equity markets are considerably over-valued. He said the West was about to be hit by a wave of deflation from emerging market economies and central banks were not aware of what was about to hit them.

He told an investment conference in London that developments in the global economy would “push the US back into recession. The financial crisis will reawaken. It will be every bit as bad as in 2008–09 and it will turn very ugly indeed.”

The US economy was in much worse shape than the Fed realised, with the US corporate sector being “crushed” by the appreciation in the value of the dollar. “We have seen massive credit expansion in the US. This is not for real economic activity; it is borrowing to finance share buybacks,” he said.
In an assessment of the significance of the fall in the markets, which in the US have experienced their worst new year opening in history, an article in the Financial Times on Monday pointed to longer-term trends. In the wake of the financial crisis, “aggressive easing” by the Fed and other central banks, coupled with a “mammoth spending binge” by China, had suppressed market volatility for an extended period and created a tide that lifted global assets prices.

“Now that liquidity is draining away and the bill for China’s spending—in the shape of overcapacity in some industries and high levels of indebtedness—is coming due,” the article noted.

“The worrying signal from the current turmoil is that the investor herd truly has become fearful and thinks the financial system is broken. Namely, that quantitative easing has merely papered over the cracks of global economic imbalances, borrowed hefty investment gains from the future and left taxpayers and company bondholders with a massive rise in outstanding debt.”

International Monetary Fund managing director Christine Lagarde also pointed to longer-term trends in a speech delivered in Paris on Tuesday. She said emerging market economies were facing a “new reality” in which their growth rates would be significantly slowed.

“Growth rates are down, and cyclical and structural forces have undermined the traditional growth paradigm,” she said.

That paradigm was based on boosting exports and attracting capital inflows. On current forecasts, she said emerging economies would move towards advanced economy incomes at less than two-thirds the pace predicted by the IMF a decade ago. “This is cause for concern,” she said.

The World Bank last week warned that these economies faced difficulties in 2016 after growing last year at their slowest pace since the financial crisis of 2008.

Lagarde said the shift by the Fed towards ending its easy monetary policies, together with the continuation of these policies by other central banks, had the potential to trigger exchange rate ructions.

“This volatility could be induced not only by the divergence in monetary policies in major advanced economies, but also by uncertainty about their overall prospects and policy action.”
In an indication of the deepening recessionary trends in the global economy, she noted that oil and metal prices were down by two-thirds from their peak and were likely “to stay low for a sustained period,” placing several developing economies “under severe stress.”
That stress is already in evidence with major economic contractions in Brazil and Russia, but it is not confined there. The economic outlook for two developed commodity-exporting countries, Australia and Canada, is also worsening.
Former US treasury secretary Lawrence Summers added his voice to those warning about the state of the global economy in a comment published in the Financial Times on Monday. He said that while markets do sometimes send out false alarms, economic and financial authorities should take notice because “the conventional wisdom never recognises gathering storms.”
“Because of China’s scale, its potential volatility and the limited room for conventional monetary manoeuvres, the global risk to domestic economic performance in the US, Europe and many emerging markets is as great as at any time I can remember,” he wrote.
It is impossible to predict exactly how the present turmoil will play out. But two certainties have been established.
Firstly, that the 2008 financial crisis was only the beginning of a breakdown of the global capitalist economy, for which the ruling elites have no economic solution. In fact, their actions have only created further wealth for the ultra-rich, increasing social inequality, while setting up the conditions for another financial meltdown.
And finally, that the renewed turbulence is going to produce even deeper attacks on the working class which, on top on those already being implemented, will bring an upsurge in social and political struggles.
  

"The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!"

Obama’s State of the Union address and the breakdown of American democracy

Obama’s State of the Union address and the breakdown of American democracy

14 January 2016
In our time, political speech and writing are largely the defense of the indefensible. Things like the continuance of British rule in India, the Russian purges and deportations, the dropping of the atom bombs on Japan can indeed be defended, but only by arguments which are too brutal for most people to face, and which do not square with the professed aims of the political parties. Thus political language has to consist largely of euphemism…A mass of Latin words falls upon the facts like soft snow, blurring the outline and covering up all the details.”

George Orwell in “Politics and the English Language,” 1946
**
The final State of the Union address given by President Barack Obama on Tuesday night was a litany of lies, banalities and military threats. The speech underscored the inability of the American political establishment to honestly address a single social question facing the broad masses of the population.
The address was generally praised by the media as a statement of confidence in America’s future. In fact, it combined bluster about the strength of the US economy absurdly at odds with economic and social reality with self-praise for “taking out” the enemies of American imperialism and assurances of more military havoc to come.

To the extent that Obama touched in passing on the growth of social inequality, the ever greater domination of the corporate-financial elite, falling wages and rising poverty, these pervasive features of social life in America were ascribed to cosmic forces of “change” entirely disconnected from government policies in general and those pursued by his administration in particular over the past seven years.

There is an objective significance to the reduction of the State of the Union address, an American political tradition that goes back to George Washington, to an empty and cynical media spectacle. This process did not begin with Obama. It has been underway for decades, in parallel with the ever further turn of the ruling elite and both big business parties to the right and the widening chasm between the entire political system and the broad mass of working people.

While there was never a golden age of American bourgeois politics, the annual State of the Union address before a joint session of Congress once had a certain democratic content. There was a time when the president in the form of this speech sought to make a sober assessment of the actual state of the nation’s economic, political and social life and the condition of its relations with other nations. It was both a means of internal communication within ruling circles and a report to the broader population.

In Abraham Lincoln’s December 1862 message to Congress, the Great Emancipator spoke in favor of abolition. “Fellow-citizens,” he declared, “we cannot escape history… In giving freedom to the slave we assure freedom to the free and honorable alike in what we give and what we preserve. We shall nobly save or meanly lose the last best hope of earth.”

In a later period, Franklin D. Roosevelt pledged a “Second Bill of Rights” that would include provisions ensuring “freedom from want.” (The proposal was a dead letter almost as soon as it was made.) In 1963, John F. Kennedy cautioned that “the mere absence of war is not peace.”

Even some of the more reactionary presidents of an earlier period could seriously acknowledge the existence of social problems. In 1922, Warren G. Harding began his State of the Union address by declaring, “So many problems are calling for solution that a recital of all of them, in the face of the known limitations of a short session of Congress, would seem to lack sincerity of purpose.”

The immense growth of social inequality in parallel with the dismantling of much of US industry, the decline in the global economic position of American capitalism and the increasing domination of a parasitic and quasi-criminal financial elite have made any objective accounting of the real “state of the union” a political impossibility. All those in attendance Tuesday night were well aware that the important policy decisions on both the domestic and international front are made neither by the president nor Congress, but rather by the military brass, the intelligence establishment and Wall Street. The same conviction is growing within broad layers of the population who are increasingly alienated from and disgusted by the entire political and economic set-up.

Having come to power by posing as an opponent of the war in Iraq and the militarism of the Bush years, Obama could hardly make an honest assessment of his foreign policy, which has added to the war in Afghanistan new wars in Libya, Syria and Iraq, an expansion of drone assassinations and a policy of military provocation against Russia and China that has brought the world closer to world war than at any time since 1945.

A major part of his address Tuesday was given over to boasting of America’s destructive military power and his readiness to use it. Responding to his critics among the Republican right, he proclaimed: “The United States of America is the most powerful nation on Earth. Period. Period. It’s not even close. It’s not even close. It’s not even close. We spend more on our military than the next eight nations combined. Our troops are the finest fighting force in the history of the world. No nation attacks us directly, or our allies, because they know that’s the path to ruin.”

Having posed as a critic of Bush’s anti-democratic buildup of the police powers of the state in order to get elected, Obama was in no position to discuss his expansion and institutionalization of police state measures such as pervasive government spying; the jailing and persecution of whistleblowers like Julian Assange, Chelsea Manning and Edward Snowden; the shielding of the authors and organizers of torture programs; the militarization of the police and defense of killer cops.

Among the most blatant lies in Obama’s speech was the assertion, “For the past seven years, our goal has been a growing economy that works better for everybody.” Had Obama added “who counts” to the end of this sentence he would have been closer to the truth.

Trillions of dollars for the banks and speculators whose recklessness, lawlessness and greed triggered the Wall Street crash and ensuing depression, not a single “bankster” prosecuted in seven years—that on one side. On the other, sweeping wage reductions for autoworkers imposed by Obama’s “Auto Task Force,” and austerity, school closures, pension cuts and attacks on health benefits for millions of working people under “Obamacare.”

The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!

In what has become a hallmark of American political rhetoric, Obama concluded his speech with sheer bathos: “I see [the voice of America] in the worker on the assembly line who clocked extra shifts to keep his company open, and the boss who pays him higher wages instead of laying him off… The protester determined to prove that justice matters—and the young cop walking the beat, treating everybody with respect, doing the brave, quiet work of keeping us safe.”

A political system that must resort to such stupid and transparent posturing is a political system in terminal crisis. The mounting indignation and militancy of the masses will seek new avenues of struggle outside of and in opposition to the entire rotten edifice of official politics.

Eric London and Barry Grey

Obama’s final State of the Union: Lies, evasions and threats


According to a report by the National Association of Counties issued on the eve of the State of the Union address, of the 3,069 counties in the United States, 93 percent are worse off than before the 2008 financial crash according to at least one of four economic indicators: total employment, the unemployment rate, the size of the economy and home values.

Obama’s final State of the Union: Lies, evasions and threats

By Patrick Martin
13 January 2016
The final State of the Union speech delivered Tuesday night by President Barack Obama was a demonstration of the incapacity of the American political system to deal honestly or seriously with a single social question.

Obama evaded the real issues that affect tens of millions of working people in America every day of their lives. He painted a ludicrous picture of economic recovery and social progress that insulted the intelligence of his television audience—and went unchallenged by the millionaire politicians assembled in the chamber of the House of Representatives.

Summing up what he called “the progress of these past seven years,” Obama gave first place to “how we recovered from the worst economic crisis in generations.” The so-called “recovery” has been a bonanza for corporate profits, stock prices, and the wealth and income of the super-rich. For the working people who are the vast majority of the population, it has been a disaster.

By most social indices, the American people are worse off in January 2016 than when Obama took office seven years ago. The real wages of working people have fallen, social services have deteriorated, pension benefits have been gutted, and cities such as Detroit and San Bernardino have been forced into bankruptcy.

According to a report by the National Association of Counties issued on the eve of the State of the Union address, of the 3,069 counties in the United States, 93 percent are worse off than before the 2008 financial crash according to at least one of four economic indicators: total employment, the unemployment rate, the size of the economy and home values.

In 27 states, not a single county has recovered fully from the 2008 crash and the deep economic slump that followed. These include such major states as Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, New York and Pennsylvania.

Obama, however, painted a picture of nearly unblemished economic advance, declaring, “The United States of America, right now, has the strongest, most durable economy in the world.” He boasted, “We’re in the middle of the longest streak of private-sector job creation in history. More than 14 million new jobs; the strongest two years of job growth since the ‘90s; an unemployment rate cut in half.”


BLOG: AS OBAMA AND THE DEMOCRAT PARTY SABOTAGE OUR BORDERS, E-VERIFY AND REFUSE TO ENFORCE LAWS PROHIBITING THE EMPLOYMENT OF ILLEGALS!


The president did not acknowledge that the post-2008 “recovery” is the weakest on record, that the vast majority of the new jobs created have been low-wage and many of them part-time, or that the drop in the unemployment rate is primarily due to the withdrawal of millions of people from the work force because they lost all hope of getting a decent-paying job.

He went on, tellingly, to cite the auto industry as a symbol of success, declaring that it “just had its best year ever.” This perfectly expresses the utter blindness, not just of Obama, but of the entire political establishment. The “best year ever” was for General Motors, Ford and Fiat-Chrysler, which enjoyed record profits, not for the auto workers who produced those profits.

Real wages for auto workers have dropped sharply since the Obama White House forced through a 50 percent cut in wages for all new hires as part of the bankruptcy reorganization of the industry in 2009. Mass discontent among auto workers was expressed at the end of 2015 in the rejection of contracts at Fiat-Chrysler and Nexteer, a major supplier, and in widespread demands for strike action, smothered by Obama’s stooges in the United Auto Workers union.

“Anyone claiming that America’s economy is in decline is peddling fiction,” Obama concluded. The social position of the American working class has, in fact, suffered a dramatic decline, through the combined efforts of the corporate bosses, the unions and the two capitalist parties, the Democrats and Republicans.

The president conceded that economic inequality has grown in the United States, but he described it as the outcome of long-term trends such as globalization and automation, as though the policies of his administration—bailouts for Wall Street, budget cuts and wage cuts for workers—had nothing to do with it.

In the seven years since the financial crash, brought on, as he admitted, by “recklessness on Wall Street,” not a single banker or speculator has been prosecuted or jailed. On the contrary, the billionaires have greatly increased their wealth, gobbling up 95 percent of all new income since Obama entered the White House.

Obama listed a few other policy “successes,” claiming that “we reformed our health care system, and reinvented our energy sector… we delivered more care and benefits to our troops and veterans.” He was referring, however, to a series of social disasters: the reactionary attack on health benefits for workers and their families known as Obamacare; the devastation of Appalachia and other energy-producing regions; and the abuse of ex-soldiers, wounded in body and mind, by the Veterans Administration.

Obama sought to defend the foreign policy record of his administration from criticism, mainly from the Republican right, where demands are being raised for military escalation in the Middle East and stepped-up attacks on democratic rights at home in the name of fighting “terrorism.”

While he claimed to reject an American role as the world’s policeman, he nonetheless boasted, “The United States of America is the most powerful nation on Earth. Period. It’s not even close. We spend more on our military than the next eight nations combined.”

He continued, “Our troops are the finest fighting force in the history of the world,” winning the bipartisan standing ovation that always accompanies any mention of American soldiers engaged in combat overseas.

Obama indulged in the glorification of killing that has become an essential part of the degraded spectacle that passes for political discourse in America. Describing the US war against the Islamic State in Iraq and Syria, he claimed, “With nearly 10,000 air strikes, we are taking out their leadership, their oil, their training camps, and their weapons.”

He called on Congress to pass an Authorization for the Use of Military Force against ISIS, but vowed to wage war with or without legislative approval. The leaders of ISIS, he proclaimed, “will learn the same lessons as terrorists before them. If you doubt America’s commitment—or mine—to see that justice is done, ask Osama bin Laden. Ask the leader of al Qaeda in Yemen, who was taken out last year…”

Then he declared, in language that will be noted by nations all over the world, that when it comes to waging war against potential adversaries, “our reach has no limit.”

Obama concluded his speech with an appeal to his Republican opponents to work with his administration and pull back from the extreme anti-immigrant and anti-Muslim rhetoric that has characterized the contest for the Republican presidential nomination.

In a clear reference to Donald Trump, he argued that “we need to reject any politics that targets people because of race or religion. This is not a matter of political correctness, but understanding what makes us strong.”

Obama was making an argument, not so much that racism and bigotry are intrinsically wrong, but that they make it more difficult for American imperialism to maintain its dominant world role. “When a politician insults Muslims,” he said, “it makes it harder to achieve our goals.”

The lottery and social despair in America

The lottery and social despair in America

9 January 2015
This mania, so generally condemned, has never been properly studied. No one has realized that it is the opium of the poor. Did not the lottery, the mightiest fairy in the world, work up magical hopes? The roll of the roulette wheel that made the gamblers glimpse masses of gold and delights did not last longer than a lightning flash; whereas the lottery spread the magnificent blaze of lightning over five whole days. Where is the social force today that, for forty sous, can make you happy for five days and bestow on you—at least in fancy—all the delights that civilization holds?
Balzac, La Rabouilleuse, 1842
The jackpot in the US Powerball lottery has hit $800 million, since there were no winners in Wednesday’s drawing. In the current round, which began on December 2, over 431 million tickets have been sold, a figure substantially larger than America’s population.
Go into any corner store in America and you will see workers of every age and race waiting in line to buy lottery tickets. With the current round, the lines are longer than ever. Americans spend over $70 billion on lottery tickets each year. In West Virginia, America’s second-poorest state, the average person spent $658.46 on lottery tickets last year.
Powerball players pick six random numbers when they purchase their tickets, with a certain percentage of sales going to the jackpot. If no winning ticket is sold, the jackpot rolls over to the next round.
The totals for the Mega Millions and Powerball national lotteries have been growing every year. This year’s jackpot has eclipsed 2012’s record of $656.5 million, the $390 million payout in 2007 and the $363 million prize in 2000. The jackpots have grown in direct proportion to ticket sales.
State-run gambling programs such as Powerball have been promoted by Democrats and Republicans alike as a solution to state budget shortfalls, even as the politicians slash taxes on corporations and wealthy individuals and gut social programs. From the standpoint of government revenue, lotteries and casinos are nothing more than a back-door regressive tax, soaking up money from the poor in proportion to the growth of social misery.
The boom in lotteries is global. Lottery sales grew 9.9 percent worldwide in 2014, after growing 4.9 percent in 2013.
Psychology Professor Kate Sweeny has noted that lottery sales grow when people feel a lack of control over their lives, particularly over their economic condition. “That feeling of self-control is very important to psychological well-being,” Sweeny says.
There is ample reason for American workers to feel they have no control over their lives. According a recent survey by Bankrate.com, more than half of Americans do not have enough cash to cover an unexpected expense of $500 or more—roughly the price of four name-brand tires.
Some 62 percent of Americans have savings of less than $1,000, and 21 percent do not have any savings at all. Most Americans are one medical emergency or one spell of unemployment from financial ruin.
For all the talk about “economic recovery” by the White House, the real financial state of most American households is far worse than before the 2008 financial crisis and recession. As of 2013, Americans were almost 40 percent poorer than they were in 2007, according to a recent survey by the Pew Research Center. While a large portion of the decline in household wealth is attributable to the collapse of the housing bubble, falling wages and chronic mass unemployment have played major roles.
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, according to the Federal Reserve’s latest survey of consumer finances. A large share of this decline has taken place during the so-called recovery presided over by the Obama administration.
In addition to becoming poorer, America has become much more economically polarized. According to a separate Pew survey, for the first time in more than four decades “middle-income households” no longer constitute the majority of American society. Instead, the majority of households are either low- or high-income. Pew called its findings “a demographic shift that could signal a tipping point” in American society.
“Is the lottery the new American dream?” asked USA Today, commenting on this month’s Powerball jackpot. The observation is truer than the authors intended. For American workers, achieving the “American Dream” of a stable job and one’s own home is becoming increasingly unrealizable.
Following more than 10 million foreclosures during the financial crisis, America’s home ownership rate has hit the lowest level in two decades, and for young households, the rate of home ownership is the lowest it has been since the 1960s.
For the tens of millions of America’s poor, and the more than 100 million on the threshold of poverty, the dream of winning the lottery has replaced the “American Dream” of living a decent life. A lottery ticket is a chance to escape to a fantasy world where money is not a constant, nagging worry, where one is not insulted and bullied at a low-wage job by bosses whose pay is matched only by their incompetence. The lottery is, as Balzac aptly described it, the “opium of the poor.”
Using the same phrase to describe religion, Marx noted that the “illusory happiness of the people” provided by the solace of religion is, in fact, a silent protest and distorted “demand for their real happiness.” It is the intolerable social conditions that compel masses of people to seek consolation in a lottery ticket that will propel them into revolutionary struggles.
Andre Damon



Survey finds a majority of Americans unable to pay for major unexpected expenses

Survey finds a majority of Americans unable to pay for major unexpected expenses

By Nick Barrickman
9 January 2016
A new survey put out by the personal finance management site Bankrate.com on Wednesday found that more than half of Americans could not weather a sudden financial crisis without having to borrow money from friends and family or being forced to reduce the amount spent on other items such as dining out, paying cable or cell phone bills, or other basic features of a “middle class” lifestyle.

The survey, conducted last month among a pool of 1,000 Americans in conjunction with Princeton Survey Research Associates International, found that only 37 percent of those surveyed would be able to pay an emergency expense of $1,000, such as an emergency room visit or the cost of repairing a broken down vehicle, out of pocket.

Sixty-three percent of those surveyed would not be able to cover such a sudden expense without either cutting down on expenses elsewhere, borrowing or resorting to credit. The survey found that nearly four in 10 Americans had suffered such a financial setback in 2015.

“Without an adequate rainy-day fund, we are all living on a very slippery financial slope,” Gail Cunningham of the National Foundation for Credit Counseling told Bankrate.com. “The unexpected, unplanned expense is going to rear its ugly head and usually at the most inopportune time…Things as small as a flat tire or one trip to the emergency room can wreck the budgets of those who do not have an adequate amount in their savings account,” she said.

For Americans making less than $30,000 per year, only 23 percent would be able to cover such a sudden expense on their own. This was contrasted by nearly 60 percent of those making over $75,000 annually who could say the same. Nine percent making $30,000 or below stated that they did not know how they would cover such expenses, meaning that they were one expensive setback away from personal financial ruin.

The poll comes amid a slew of other reports detailing an immense drop in the living standards of a significant section of the US population, a component of the growth of social inequality more broadly.

Since the 2008 financial collapse and the subsequent economic “recovery” in 2009, 95 percent of all wealth gains have gone to the top 1 percent in society. A report released in November by the St. Louis Federal Reserve showed that Americans’ personal savings in 2015 were half of what the average was in the early 1980s.

A US Federal Reserve report released in 2014 found that nearly six in 10 Americans had lost all or part of their savings due to the financial impact of the 2008 economic crisis, while a 2015 study by GOBankingrates.com revealed that the majority of Americans have less than $1,000 in savings to their name. A report released the Pew Research firm last month revealed that the number of middle-income homes as a portion of the population had largely vanished in the span of a few decades.

The figures come as the US Federal Reserve has begun raising interest rates for banks and other financial institutions, which will likely lead to further difficulty for individuals who rely upon credit in order to finance their costs of living.

The expenses eating away at the typical individual’s savings read like essential items for living in modern society. According to Bankrate.com, the largest expense for one-third of all Americans outside of food and shelter consisted of utilities such as water, electricity or phone service. For those over the age of 50, one in five cited medical bills as their largest co


Obama’s Legacy? Dismal and Declining Labor Force Participation


By Daniel Mitchell | January 14, 2016 | 10:35 AM EST
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(AP File Photo/Matt Rourke)
I normally enjoy working for the Cato Institute since it’s a principled and effective organization.
But every so often, my job requires an unpleasant task, and watching the State-of-the-Union Address as part of Cato’s live-tweeting program counts as one my least enjoyable experiences since joining the team.

But let’s make lemonade out of lemons by looking at lessons that can be learned from Obama’s speech. The most jarring part of the evening was when Obama bragged about the American economy.
Since we’re suffering through the weakest recovery since the Great Depression, that was rather bizarre.

Moreover, being proud that we’re doing better than Europe is akin to getting a participation ribbon in a soccer league for kids.

And the chest thumping about the unemployment rate was very misplaced since that piece of data only looks good because so many Americans have given up on finding a job.

I’ve pontificated on that issue before and cited the Labor Department’s overall data, but let’s dig a little deeper to fully understand why Obama should have apologized rather than patted himself on the back.

Here’s the employment/population ratio for the prime, working-age population of those between 25 and 54 years of age.


As you can see, this ratio has improved a bit over the past five years, but it appears that there’s very little hope that the overall employment situation will ever recover to where it was before the recession.
At least not with current policies.
Here’s another way of looking at the same data. It’s labor force participation by age. The lines don’t seem that far apart, but a 3-4 percentage point decline across age groups adds up to millions of people no longer productively employed.

Last but not least, here’s another way of approaching this data.
We have a chart from the St. Louis Federal Reserve Bank showing the number of working-age people not in the labor force.

There are two takeaways from this chart.

First, it’s clear that the problem started well before Obama.

But it’s also clear that the problem has gotten much worse during his tenure.

The bottom line is that the expansion of redistribution programs has lured more and more people out of the labor force, particularly when matched by government policies that have hindered the private sector’s ability to create jobs.

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute. Mitchell is a strong advocate of a flat tax and international tax competition.

Wave of selling hits US markets

Wave of selling hits US markets

By Nick Beams
14 January 2016
US stocks markets tumbled Wednesday as oil prices continued to fall and voices in the finance industry, together with economic commentators, warned of the potential for a major crisis.

The sell-off was across the board, the Dow falling by 365 points, 2.21 percent, the S&P 500 by 2.50 percent and the Nasdaq down by 3.4 percent. The day opened with an uptick but large-volume selling soon set in, the prevailing sentiment being that it was necessary to get out without waiting to see what would happen during the rest of the day.

Commentators said the sell-off was not just about oil, which has been touching levels as low as $30 per barrel, but the fall in prices for all industrial raw materials induced by the slowdown in China.
The sharp downturn has come in the wake of a series of assessments by banking officials that the conditions for a new financial crisis are fast developing.

On Tuesday economists at the Royal Bank of Scotland issued an assessment that said investors faced a “cataclysmic year” in which stocks could fall by 20 percent and oil could go as low as $16 per barrel.

In a note to clients, the RBS said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It warned that the present situation recalled 2008 when the collapse of Lehman Brothers set off a global crisis. This time the trigger could be China.

The bank’s credit chief Andrew Roberts said China had set off a “major correction and it is going to snowball” with equities and credit becoming “very dangerous.” He warned that the London market was particularly vulnerable to a negative shock because of the large number of commodity companies in the UK. The prices of all industrial raw materials, not just oil, are moving sharply down, reaching lows not seen since the immediate aftermath of the financial crisis.

“All those people who are long [buyers of] oil and mining companies thinking that the dividends are safe are going to discover than they’re not at all safe,” Roberts said.

RBS’s prediction of a sharply lower oil price was matched by Morgan Stanley which said it could go to $20 per barrel. Standard Charter forecast an even bigger fall, to $10. “Given that no fundamental relationship is driving the oil market toward any equilibrium, prices are being moved almost entirely by financial flows caused by fluctuations in other asset prices, including the US dollar and equity markets. We think prices could fall as low as $10 per barrel.”

The Standard Chartered analysis points to the development of a vicious circle: a falling oil price sends down equity markets and then financial flow-on effects from the decline in stock prices lead to a further drop in the price of oil.

Following the RBS call to “sell everything,” the Guardian sought responses from a series of economists. While none went as far as the RBS, there was a distinct lack of confidence in their replies.

Erik Britton, director of Fathom Consulting, did not dispute that China would have a “hard landing.” He said it was headed for just 2 percent growth in gross domestic product, markedly less than the official government prediction of 6.5 percent for this year.

Jonathan Porter, the director of the National Institute for Economic and Social Research, said he was “worried” by current events “but not yet panicked.”

“But if the current concerns turn into a systematic meltdown on financial markets, then all bets are off,” he added.

Chris Williamson, the chief economist at the financial data provider Markit, said the worry was that the RBS warning could become a self-fulfilling prophecy and if a financial market rout led to a new recession, “policymakers are seriously lacking in tools to fight the new downturn.”

The RBS assessment was echoed by comments on Wednesday from Albert Edwards, strategist at the Societe Generale bank, who has long held the belief that equity markets are considerably over-valued. He said the West was about to be hit by a wave of deflation from emerging market economies and central banks were not aware of what was about to hit them.

He told an investment conference in London that developments in the global economy would “push the US back into recession. The financial crisis will reawaken. It will be every bit as bad as in 2008–09 and it will turn very ugly indeed.”

The US economy was in much worse shape than the Fed realised, with the US corporate sector being “crushed” by the appreciation in the value of the dollar. “We have seen massive credit expansion in the US. This is not for real economic activity; it is borrowing to finance share buybacks,” he said.
In an assessment of the significance of the fall in the markets, which in the US have experienced their worst new year opening in history, an article in the Financial Times on Monday pointed to longer-term trends. In the wake of the financial crisis, “aggressive easing” by the Fed and other central banks, coupled with a “mammoth spending binge” by China, had suppressed market volatility for an extended period and created a tide that lifted global assets prices.

“Now that liquidity is draining away and the bill for China’s spending—in the shape of overcapacity in some industries and high levels of indebtedness—is coming due,” the article noted.

“The worrying signal from the current turmoil is that the investor herd truly has become fearful and thinks the financial system is broken. Namely, that quantitative easing has merely papered over the cracks of global economic imbalances, borrowed hefty investment gains from the future and left taxpayers and company bondholders with a massive rise in outstanding debt.”

International Monetary Fund managing director Christine Lagarde also pointed to longer-term trends in a speech delivered in Paris on Tuesday. She said emerging market economies were facing a “new reality” in which their growth rates would be significantly slowed.

“Growth rates are down, and cyclical and structural forces have undermined the traditional growth paradigm,” she said.

That paradigm was based on boosting exports and attracting capital inflows. On current forecasts, she said emerging economies would move towards advanced economy incomes at less than two-thirds the pace predicted by the IMF a decade ago. “This is cause for concern,” she said.

The World Bank last week warned that these economies faced difficulties in 2016 after growing last year at their slowest pace since the financial crisis of 2008.

Lagarde said the shift by the Fed towards ending its easy monetary policies, together with the continuation of these policies by other central banks, had the potential to trigger exchange rate ructions.

“This volatility could be induced not only by the divergence in monetary policies in major advanced economies, but also by uncertainty about their overall prospects and policy action.”
In an indication of the deepening recessionary trends in the global economy, she noted that oil and metal prices were down by two-thirds from their peak and were likely “to stay low for a sustained period,” placing several developing economies “under severe stress.”
That stress is already in evidence with major economic contractions in Brazil and Russia, but it is not confined there. The economic outlook for two developed commodity-exporting countries, Australia and Canada, is also worsening.
Former US treasury secretary Lawrence Summers added his voice to those warning about the state of the global economy in a comment published in the Financial Times on Monday. He said that while markets do sometimes send out false alarms, economic and financial authorities should take notice because “the conventional wisdom never recognises gathering storms.”
“Because of China’s scale, its potential volatility and the limited room for conventional monetary manoeuvres, the global risk to domestic economic performance in the US, Europe and many emerging markets is as great as at any time I can remember,” he wrote.
It is impossible to predict exactly how the present turmoil will play out. But two certainties have been established.
Firstly, that the 2008 financial crisis was only the beginning of a breakdown of the global capitalist economy, for which the ruling elites have no economic solution. In fact, their actions have only created further wealth for the ultra-rich, increasing social inequality, while setting up the conditions for another financial meltdown.
And finally, that the renewed turbulence is going to produce even deeper attacks on the working class which, on top on those already being implemented, will bring an upsurge in social and political struggles.
  

"The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!"

Obama’s State of the Union address and the breakdown of American democracy

Obama’s State of the Union address and the breakdown of American democracy

14 January 2016
In our time, political speech and writing are largely the defense of the indefensible. Things like the continuance of British rule in India, the Russian purges and deportations, the dropping of the atom bombs on Japan can indeed be defended, but only by arguments which are too brutal for most people to face, and which do not square with the professed aims of the political parties. Thus political language has to consist largely of euphemism…A mass of Latin words falls upon the facts like soft snow, blurring the outline and covering up all the details.”

George Orwell in “Politics and the English Language,” 1946
**
The final State of the Union address given by President Barack Obama on Tuesday night was a litany of lies, banalities and military threats. The speech underscored the inability of the American political establishment to honestly address a single social question facing the broad masses of the population.
The address was generally praised by the media as a statement of confidence in America’s future. In fact, it combined bluster about the strength of the US economy absurdly at odds with economic and social reality with self-praise for “taking out” the enemies of American imperialism and assurances of more military havoc to come.

To the extent that Obama touched in passing on the growth of social inequality, the ever greater domination of the corporate-financial elite, falling wages and rising poverty, these pervasive features of social life in America were ascribed to cosmic forces of “change” entirely disconnected from government policies in general and those pursued by his administration in particular over the past seven years.

There is an objective significance to the reduction of the State of the Union address, an American political tradition that goes back to George Washington, to an empty and cynical media spectacle. This process did not begin with Obama. It has been underway for decades, in parallel with the ever further turn of the ruling elite and both big business parties to the right and the widening chasm between the entire political system and the broad mass of working people.

While there was never a golden age of American bourgeois politics, the annual State of the Union address before a joint session of Congress once had a certain democratic content. There was a time when the president in the form of this speech sought to make a sober assessment of the actual state of the nation’s economic, political and social life and the condition of its relations with other nations. It was both a means of internal communication within ruling circles and a report to the broader population.

In Abraham Lincoln’s December 1862 message to Congress, the Great Emancipator spoke in favor of abolition. “Fellow-citizens,” he declared, “we cannot escape history… In giving freedom to the slave we assure freedom to the free and honorable alike in what we give and what we preserve. We shall nobly save or meanly lose the last best hope of earth.”

In a later period, Franklin D. Roosevelt pledged a “Second Bill of Rights” that would include provisions ensuring “freedom from want.” (The proposal was a dead letter almost as soon as it was made.) In 1963, John F. Kennedy cautioned that “the mere absence of war is not peace.”

Even some of the more reactionary presidents of an earlier period could seriously acknowledge the existence of social problems. In 1922, Warren G. Harding began his State of the Union address by declaring, “So many problems are calling for solution that a recital of all of them, in the face of the known limitations of a short session of Congress, would seem to lack sincerity of purpose.”

The immense growth of social inequality in parallel with the dismantling of much of US industry, the decline in the global economic position of American capitalism and the increasing domination of a parasitic and quasi-criminal financial elite have made any objective accounting of the real “state of the union” a political impossibility. All those in attendance Tuesday night were well aware that the important policy decisions on both the domestic and international front are made neither by the president nor Congress, but rather by the military brass, the intelligence establishment and Wall Street. The same conviction is growing within broad layers of the population who are increasingly alienated from and disgusted by the entire political and economic set-up.

Having come to power by posing as an opponent of the war in Iraq and the militarism of the Bush years, Obama could hardly make an honest assessment of his foreign policy, which has added to the war in Afghanistan new wars in Libya, Syria and Iraq, an expansion of drone assassinations and a policy of military provocation against Russia and China that has brought the world closer to world war than at any time since 1945.

A major part of his address Tuesday was given over to boasting of America’s destructive military power and his readiness to use it. Responding to his critics among the Republican right, he proclaimed: “The United States of America is the most powerful nation on Earth. Period. Period. It’s not even close. It’s not even close. It’s not even close. We spend more on our military than the next eight nations combined. Our troops are the finest fighting force in the history of the world. No nation attacks us directly, or our allies, because they know that’s the path to ruin.”

Having posed as a critic of Bush’s anti-democratic buildup of the police powers of the state in order to get elected, Obama was in no position to discuss his expansion and institutionalization of police state measures such as pervasive government spying; the jailing and persecution of whistleblowers like Julian Assange, Chelsea Manning and Edward Snowden; the shielding of the authors and organizers of torture programs; the militarization of the police and defense of killer cops.

Among the most blatant lies in Obama’s speech was the assertion, “For the past seven years, our goal has been a growing economy that works better for everybody.” Had Obama added “who counts” to the end of this sentence he would have been closer to the truth.

Trillions of dollars for the banks and speculators whose recklessness, lawlessness and greed triggered the Wall Street crash and ensuing depression, not a single “bankster” prosecuted in seven years—that on one side. On the other, sweeping wage reductions for autoworkers imposed by Obama’s “Auto Task Force,” and austerity, school closures, pension cuts and attacks on health benefits for millions of working people under “Obamacare.”

The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!

In what has become a hallmark of American political rhetoric, Obama concluded his speech with sheer bathos: “I see [the voice of America] in the worker on the assembly line who clocked extra shifts to keep his company open, and the boss who pays him higher wages instead of laying him off… The protester determined to prove that justice matters—and the young cop walking the beat, treating everybody with respect, doing the brave, quiet work of keeping us safe.”

A political system that must resort to such stupid and transparent posturing is a political system in terminal crisis. The mounting indignation and militancy of the masses will seek new avenues of struggle outside of and in opposition to the entire rotten edifice of official politics.

Eric London and Barry Grey

Obama’s final State of the Union: Lies, evasions and threats


According to a report by the National Association of Counties issued on the eve of the State of the Union address, of the 3,069 counties in the United States, 93 percent are worse off than before the 2008 financial crash according to at least one of four economic indicators: total employment, the unemployment rate, the size of the economy and home values.

Obama’s final State of the Union: Lies, evasions and threats

By Patrick Martin
13 January 2016
The final State of the Union speech delivered Tuesday night by President Barack Obama was a demonstration of the incapacity of the American political system to deal honestly or seriously with a single social question.

Obama evaded the real issues that affect tens of millions of working people in America every day of their lives. He painted a ludicrous picture of economic recovery and social progress that insulted the intelligence of his television audience—and went unchallenged by the millionaire politicians assembled in the chamber of the House of Representatives.

Summing up what he called “the progress of these past seven years,” Obama gave first place to “how we recovered from the worst economic crisis in generations.” The so-called “recovery” has been a bonanza for corporate profits, stock prices, and the wealth and income of the super-rich. For the working people who are the vast majority of the population, it has been a disaster.

By most social indices, the American people are worse off in January 2016 than when Obama took office seven years ago. The real wages of working people have fallen, social services have deteriorated, pension benefits have been gutted, and cities such as Detroit and San Bernardino have been forced into bankruptcy.

According to a report by the National Association of Counties issued on the eve of the State of the Union address, of the 3,069 counties in the United States, 93 percent are worse off than before the 2008 financial crash according to at least one of four economic indicators: total employment, the unemployment rate, the size of the economy and home values.

In 27 states, not a single county has recovered fully from the 2008 crash and the deep economic slump that followed. These include such major states as Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, New York and Pennsylvania.

Obama, however, painted a picture of nearly unblemished economic advance, declaring, “The United States of America, right now, has the strongest, most durable economy in the world.” He boasted, “We’re in the middle of the longest streak of private-sector job creation in history. More than 14 million new jobs; the strongest two years of job growth since the ‘90s; an unemployment rate cut in half.”


BLOG: AS OBAMA AND THE DEMOCRAT PARTY SABOTAGE OUR BORDERS, E-VERIFY AND REFUSE TO ENFORCE LAWS PROHIBITING THE EMPLOYMENT OF ILLEGALS!


The president did not acknowledge that the post-2008 “recovery” is the weakest on record, that the vast majority of the new jobs created have been low-wage and many of them part-time, or that the drop in the unemployment rate is primarily due to the withdrawal of millions of people from the work force because they lost all hope of getting a decent-paying job.

He went on, tellingly, to cite the auto industry as a symbol of success, declaring that it “just had its best year ever.” This perfectly expresses the utter blindness, not just of Obama, but of the entire political establishment. The “best year ever” was for General Motors, Ford and Fiat-Chrysler, which enjoyed record profits, not for the auto workers who produced those profits.

Real wages for auto workers have dropped sharply since the Obama White House forced through a 50 percent cut in wages for all new hires as part of the bankruptcy reorganization of the industry in 2009. Mass discontent among auto workers was expressed at the end of 2015 in the rejection of contracts at Fiat-Chrysler and Nexteer, a major supplier, and in widespread demands for strike action, smothered by Obama’s stooges in the United Auto Workers union.

“Anyone claiming that America’s economy is in decline is peddling fiction,” Obama concluded. The social position of the American working class has, in fact, suffered a dramatic decline, through the combined efforts of the corporate bosses, the unions and the two capitalist parties, the Democrats and Republicans.

The president conceded that economic inequality has grown in the United States, but he described it as the outcome of long-term trends such as globalization and automation, as though the policies of his administration—bailouts for Wall Street, budget cuts and wage cuts for workers—had nothing to do with it.

In the seven years since the financial crash, brought on, as he admitted, by “recklessness on Wall Street,” not a single banker or speculator has been prosecuted or jailed. On the contrary, the billionaires have greatly increased their wealth, gobbling up 95 percent of all new income since Obama entered the White House.

Obama listed a few other policy “successes,” claiming that “we reformed our health care system, and reinvented our energy sector… we delivered more care and benefits to our troops and veterans.” He was referring, however, to a series of social disasters: the reactionary attack on health benefits for workers and their families known as Obamacare; the devastation of Appalachia and other energy-producing regions; and the abuse of ex-soldiers, wounded in body and mind, by the Veterans Administration.

Obama sought to defend the foreign policy record of his administration from criticism, mainly from the Republican right, where demands are being raised for military escalation in the Middle East and stepped-up attacks on democratic rights at home in the name of fighting “terrorism.”

While he claimed to reject an American role as the world’s policeman, he nonetheless boasted, “The United States of America is the most powerful nation on Earth. Period. It’s not even close. We spend more on our military than the next eight nations combined.”

He continued, “Our troops are the finest fighting force in the history of the world,” winning the bipartisan standing ovation that always accompanies any mention of American soldiers engaged in combat overseas.

Obama indulged in the glorification of killing that has become an essential part of the degraded spectacle that passes for political discourse in America. Describing the US war against the Islamic State in Iraq and Syria, he claimed, “With nearly 10,000 air strikes, we are taking out their leadership, their oil, their training camps, and their weapons.”

He called on Congress to pass an Authorization for the Use of Military Force against ISIS, but vowed to wage war with or without legislative approval. The leaders of ISIS, he proclaimed, “will learn the same lessons as terrorists before them. If you doubt America’s commitment—or mine—to see that justice is done, ask Osama bin Laden. Ask the leader of al Qaeda in Yemen, who was taken out last year…”

Then he declared, in language that will be noted by nations all over the world, that when it comes to waging war against potential adversaries, “our reach has no limit.”

Obama concluded his speech with an appeal to his Republican opponents to work with his administration and pull back from the extreme anti-immigrant and anti-Muslim rhetoric that has characterized the contest for the Republican presidential nomination.

In a clear reference to Donald Trump, he argued that “we need to reject any politics that targets people because of race or religion. This is not a matter of political correctness, but understanding what makes us strong.”

Obama was making an argument, not so much that racism and bigotry are intrinsically wrong, but that they make it more difficult for American imperialism to maintain its dominant world role. “When a politician insults Muslims,” he said, “it makes it harder to achieve our goals.”

The lottery and social despair in America

The lottery and social despair in America

9 January 2015
This mania, so generally condemned, has never been properly studied. No one has realized that it is the opium of the poor. Did not the lottery, the mightiest fairy in the world, work up magical hopes? The roll of the roulette wheel that made the gamblers glimpse masses of gold and delights did not last longer than a lightning flash; whereas the lottery spread the magnificent blaze of lightning over five whole days. Where is the social force today that, for forty sous, can make you happy for five days and bestow on you—at least in fancy—all the delights that civilization holds?
Balzac, La Rabouilleuse, 1842
The jackpot in the US Powerball lottery has hit $800 million, since there were no winners in Wednesday’s drawing. In the current round, which began on December 2, over 431 million tickets have been sold, a figure substantially larger than America’s population.
Go into any corner store in America and you will see workers of every age and race waiting in line to buy lottery tickets. With the current round, the lines are longer than ever. Americans spend over $70 billion on lottery tickets each year. In West Virginia, America’s second-poorest state, the average person spent $658.46 on lottery tickets last year.
Powerball players pick six random numbers when they purchase their tickets, with a certain percentage of sales going to the jackpot. If no winning ticket is sold, the jackpot rolls over to the next round.
The totals for the Mega Millions and Powerball national lotteries have been growing every year. This year’s jackpot has eclipsed 2012’s record of $656.5 million, the $390 million payout in 2007 and the $363 million prize in 2000. The jackpots have grown in direct proportion to ticket sales.
State-run gambling programs such as Powerball have been promoted by Democrats and Republicans alike as a solution to state budget shortfalls, even as the politicians slash taxes on corporations and wealthy individuals and gut social programs. From the standpoint of government revenue, lotteries and casinos are nothing more than a back-door regressive tax, soaking up money from the poor in proportion to the growth of social misery.
The boom in lotteries is global. Lottery sales grew 9.9 percent worldwide in 2014, after growing 4.9 percent in 2013.
Psychology Professor Kate Sweeny has noted that lottery sales grow when people feel a lack of control over their lives, particularly over their economic condition. “That feeling of self-control is very important to psychological well-being,” Sweeny says.
There is ample reason for American workers to feel they have no control over their lives. According a recent survey by Bankrate.com, more than half of Americans do not have enough cash to cover an unexpected expense of $500 or more—roughly the price of four name-brand tires.
Some 62 percent of Americans have savings of less than $1,000, and 21 percent do not have any savings at all. Most Americans are one medical emergency or one spell of unemployment from financial ruin.
For all the talk about “economic recovery” by the White House, the real financial state of most American households is far worse than before the 2008 financial crisis and recession. As of 2013, Americans were almost 40 percent poorer than they were in 2007, according to a recent survey by the Pew Research Center. While a large portion of the decline in household wealth is attributable to the collapse of the housing bubble, falling wages and chronic mass unemployment have played major roles.
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, according to the Federal Reserve’s latest survey of consumer finances. A large share of this decline has taken place during the so-called recovery presided over by the Obama administration.
In addition to becoming poorer, America has become much more economically polarized. According to a separate Pew survey, for the first time in more than four decades “middle-income households” no longer constitute the majority of American society. Instead, the majority of households are either low- or high-income. Pew called its findings “a demographic shift that could signal a tipping point” in American society.
“Is the lottery the new American dream?” asked USA Today, commenting on this month’s Powerball jackpot. The observation is truer than the authors intended. For American workers, achieving the “American Dream” of a stable job and one’s own home is becoming increasingly unrealizable.
Following more than 10 million foreclosures during the financial crisis, America’s home ownership rate has hit the lowest level in two decades, and for young households, the rate of home ownership is the lowest it has been since the 1960s.
For the tens of millions of America’s poor, and the more than 100 million on the threshold of poverty, the dream of winning the lottery has replaced the “American Dream” of living a decent life. A lottery ticket is a chance to escape to a fantasy world where money is not a constant, nagging worry, where one is not insulted and bullied at a low-wage job by bosses whose pay is matched only by their incompetence. The lottery is, as Balzac aptly described it, the “opium of the poor.”
Using the same phrase to describe religion, Marx noted that the “illusory happiness of the people” provided by the solace of religion is, in fact, a silent protest and distorted “demand for their real happiness.” It is the intolerable social conditions that compel masses of people to seek consolation in a lottery ticket that will propel them into revolutionary struggles.
Andre Damon



Survey finds a majority of Americans unable to pay for major unexpected expenses

Survey finds a majority of Americans unable to pay for major unexpected expenses

By Nick Barrickman
9 January 2016
A new survey put out by the personal finance management site Bankrate.com on Wednesday found that more than half of Americans could not weather a sudden financial crisis without having to borrow money from friends and family or being forced to reduce the amount spent on other items such as dining out, paying cable or cell phone bills, or other basic features of a “middle class” lifestyle.

The survey, conducted last month among a pool of 1,000 Americans in conjunction with Princeton Survey Research Associates International, found that only 37 percent of those surveyed would be able to pay an emergency expense of $1,000, such as an emergency room visit or the cost of repairing a broken down vehicle, out of pocket.

Sixty-three percent of those surveyed would not be able to cover such a sudden expense without either cutting down on expenses elsewhere, borrowing or resorting to credit. The survey found that nearly four in 10 Americans had suffered such a financial setback in 2015.

“Without an adequate rainy-day fund, we are all living on a very slippery financial slope,” Gail Cunningham of the National Foundation for Credit Counseling told Bankrate.com. “The unexpected, unplanned expense is going to rear its ugly head and usually at the most inopportune time…Things as small as a flat tire or one trip to the emergency room can wreck the budgets of those who do not have an adequate amount in their savings account,” she said.

For Americans making less than $30,000 per year, only 23 percent would be able to cover such a sudden expense on their own. This was contrasted by nearly 60 percent of those making over $75,000 annually who could say the same. Nine percent making $30,000 or below stated that they did not know how they would cover such expenses, meaning that they were one expensive setback away from personal financial ruin.

The poll comes amid a slew of other reports detailing an immense drop in the living standards of a significant section of the US population, a component of the growth of social inequality more broadly.

Since the 2008 financial collapse and the subsequent economic “recovery” in 2009, 95 percent of all wealth gains have gone to the top 1 percent in society. A report released in November by the St. Louis Federal Reserve showed that Americans’ personal savings in 2015 were half of what the average was in the early 1980s.

A US Federal Reserve report released in 2014 found that nearly six in 10 Americans had lost all or part of their savings due to the financial impact of the 2008 economic crisis, while a 2015 study by GOBankingrates.com revealed that the majority of Americans have less than $1,000 in savings to their name. A report released the Pew Research firm last month revealed that the number of middle-income homes as a portion of the population had largely vanished in the span of a few decades.

The figures come as the US Federal Reserve has begun raising interest rates for banks and other financial institutions, which will likely lead to further difficulty for individuals who rely upon credit in order to finance their costs of living.

The expenses eating away at the typical individual’s savings read like essential items for living in modern society. According to Bankrate.com, the largest expense for one-third of all Americans outside of food and shelter consisted of utilities such as water, electricity or phone service. For those over the age of 50, one in five cited medical bills as their largest co


Obama’s Legacy? Dismal and Declining Labor Force Participation


By Daniel Mitchell | January 14, 2016 | 10:35 AM EST
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(AP File Photo/Matt Rourke)
I normally enjoy working for the Cato Institute since it’s a principled and effective organization.
But every so often, my job requires an unpleasant task, and watching the State-of-the-Union Address as part of Cato’s live-tweeting program counts as one my least enjoyable experiences since joining the team.

But let’s make lemonade out of lemons by looking at lessons that can be learned from Obama’s speech. The most jarring part of the evening was when Obama bragged about the American economy.
Since we’re suffering through the weakest recovery since the Great Depression, that was rather bizarre.

Moreover, being proud that we’re doing better than Europe is akin to getting a participation ribbon in a soccer league for kids.

And the chest thumping about the unemployment rate was very misplaced since that piece of data only looks good because so many Americans have given up on finding a job.

I’ve pontificated on that issue before and cited the Labor Department’s overall data, but let’s dig a little deeper to fully understand why Obama should have apologized rather than patted himself on the back.

Here’s the employment/population ratio for the prime, working-age population of those between 25 and 54 years of age.


As you can see, this ratio has improved a bit over the past five years, but it appears that there’s very little hope that the overall employment situation will ever recover to where it was before the recession.
At least not with current policies.
Here’s another way of looking at the same data. It’s labor force participation by age. The lines don’t seem that far apart, but a 3-4 percentage point decline across age groups adds up to millions of people no longer productively employed.

Last but not least, here’s another way of approaching this data.
We have a chart from the St. Louis Federal Reserve Bank showing the number of working-age people not in the labor force.

There are two takeaways from this chart.

First, it’s clear that the problem started well before Obama.

But it’s also clear that the problem has gotten much worse during his tenure.

The bottom line is that the expansion of redistribution programs has lured more and more people out of the labor force, particularly when matched by government policies that have hindered the private sector’s ability to create jobs.

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute. Mitchell is a strong advocate of a flat tax and international tax competition.

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