As Marie Antoinette supposedly said about the masses wanting bread, "Let them eat cake!"
The masses may not be asses, they may be the sleeping giant, but how can you tell the difference between the Leviathan's snores and the braying of a herd of donkeys?
Joe Sixpack may listen to Limpaw and decide to pick on Obama, but then Sally Sixpack may make a common-sense judgment that Obama is the bright spot in a gloomy night sky. Of the three branches, is the White House really the worst performer today? Of course, the SCOTUS of recent years is an outstanding disgrace with the Senate running a close second. Are the three branches in just another race to the bottom?
Myself, I think that the President seeks to respect the independence of the legisative branch and tries to perform according to what there is of the residual remains of a Constitutional ideal. The masses have no idea of how our government is supposed to function, according to Constitutional separation and balance of powers, but Obama does.
The media pseudo-elites appear to be more enthralled by the okeydoke than the masses they pretend to represent. I refer to the okeydoke of shock-doctrine effects that now underlie the paradigm of the Imperial Presidency that was foisted on us by way of US global hegemony following World War II (myth of "the most powerful man in the world").
Obama did what he could, went to considerable lengths in the summer of 2010, to retain Democratic control of the Congress. I caught myself smiling sardonically when I heard the President say that Americans will get the budget cuts they "want and deserve" (or words to that effect).
Nationally, the Republican National Committee controls the House of Representatives. Elections are rigged, more so in some states than in others. In Wisconsin, a GOP apparatchik invented thousands of votes out of nowhere to undermine the will of the people. And that's business as usual, attracting little comment in corporate media, which was very happy with the Wisconsin boohaha as a 'big story' earlier. The Republican National Committee is a huge and very successful money-making machine -- it uses images of ideologies in pursuit of further accumulation of wealth by its multiple masters and apparatchiks, but it represents no ideologies and has neither ideals nor realistic ideas.
Of course, Obama could PERHAPS have charted a very different course from the beginning (January 2009). I am not one of those who voted for him in 2008 out of wide-eyed naive expectations of great change in America despite the indifference and cynicism of most voters, including the majority who vote by not voting and who, with good reason, do not believe in the integrity of the vote-counting process.
Given that Obama is a political animal living in a political cage, can we reasonably expect him to do anything other than or better than what he is doing? I suspect that the President sees his role as contributing however he can to global social stability, but he is trying to do that as captain of a ship with a broken gyroscope and navigational system that is run by a corrupted and multiply-hacked computer.
Democrats, at best, are very slightly better. There's a little difference with the Progressive Caucus, just as there is with a few paleo-con Republicans, but none of them are currently proposing sane solutions to fundamental problems. Their positions are all based on obvious critiques of the okeydoke. But why bother even to discuss the okeydoke, except as history? Nobody today -- least of all Joe and Sally Sixpack -- really believes in it.
Well, maybe a few Tea Partiers still think that they believe in something, but about all they really agree on as national policy is that Obama is making a move to head up the New World Order and must be stopped at any cost.
I call that just more of the okeydoke. Cake for the masses.
Your best investment? Buy cake futures. I'm bullish on cake.
The Democrats had no need to wait until after the election, except that they did not want to confront minority power in the Senate. All they needed to do was vote on a House bill as it came to them, up or down, no reconciliation buzzwah. Why not?
I suspect a big part of the reason was ego ... and the institution of the Senate jealously guarding its powers that have extended far beyond what the Constitution allots them. Nearly as much of a disgrace to our Republic as the SCOTUS of the Citizens United case.
thx for the reply, I didn't mean the article is theoretical. I mean the entire foreclosuregate episode is often couched in theoretical terms. They banks and their cronies have been floating the idea that only true debtors are being hurt theoretically by "procedural errors", while innocent mortgagors are unscathed. Realistically ,the entire land record system might need to be purged of bad paper.
Great article. I think some people got tired of me talking/blogging about ForeclosureGate, robosigners and MERS. Or they don't understand what I am talking about. Or maybe they just want to stick their heads in the sand and believe whatever their political party tells them.
But your point is huge. How can lawlessness be tolerated? What is the meaning of fundamental requirements for contracts and contract law if there are no sanctions for those who break the law?
There are two standards - those for the "elect" and those for the rest of us. I have huge objections to any consent decree that lets these people off the hook. One has to wonder why there are not local prosecutions, just one would do it.
I have personally been coming land records and posting the results on the internet. How would you feel if 50%-70% of the land records have fraud on the face of the document. We have felonies in the public record and we can't prosecute? you don't even need discovery. It's public record with names attached! This isn't hard.
It's so obvious it is in your face.
How does this look , compare signatures.
These documents where supposed to clear title. Now they are clouded.
or this the Corporate Vp and the Notary have the same signature.... I've witnessed myself do things but not in the public record...
2 people one signature...
https://docs.google.com/document/pub?id=19wXsY3B5a17Y81xiznCysbqQ48zlpwb...
Thanks for pointing that out. I should have elaborated a bit after the 74 vote Senate majority was referenced. The Senate shamed itself that day. Clinton vetoed this. It was just too much.
It would be worth doing a correlation with bankruptcies prior to the vote in the states where two Senators voted for the bill. They don't care. They don't have to.
It's actually Himmelstein, et al. who should be tagged with any problems with the analysis, which I don't think are significant. Warren is a second author, although it's easy to tag criticisms by using her well known name. The study on 2001 data and 2007 were done through survey research techniques described in detail in the article. In the two "acting out" reviews by McCardle, there was no real attack on this so the numbers stand. The methodology didn't yield what McCardle expected from her "Googling" but that's not a reason to doubt the numbers and, as I pointed out, the methodology wasn't challenged. The final critique by McCardle was to disparage those who file. This reveals McCardle's character and discretion sufficiently to cause me to dismiss her. Critiques of any major study are vital, even when peer reviewed as the studies cited were:
Perhaps they are not the brightest bulbs on the Christmas tree...
McCardle says the popularity of this study is extensive and, from that, she concludes that the authors manipulated the numbers to achieve that end. That's post hoc ergo propter hoc (at its worst)and it's also defamatory. If there was data manipulation in these articles (as opposed to errors of some sort) then the authors would be accountable to the university and the journal would have to retract. McCarcle combines a logical fallacy that most high school debaters would notice with a casual defamation as part of her critique.
I'll stick with Himmelstein et al. and say there should be more studies of these issues. If the numbers are inflated 10%, due to sampling error (which I doubt), they are still significant and show that the system ultimately ends up exploiting those with little chance to defend themselves and who are in the midst of a crisis.
Now I wouldn't say that the Bankruptcy Abuser was a myth. But familarity with bankrupty laws and figuring out who is able and willing to pay you back is SUPPOSED to be the core competency of those making loans. But by subsittuting regulatory capture for good business sense, the debt pushers pushed "bankrupty reform" as a way of being bailed out of their own bad business decisions. Changing the bankruptcy laws making it harder to escape from EXISTING debt was a HUGE gift to the credit card companies. There will will ALWAYS be people standing in line, waiting for a chance to borrow their way to the poor house. One of the reasons for bankruptcy law is to discourage others from making those loans to them.
"And we're in this ludicrous position of constantly calling on the Federal Reserve to solve problems that the Federal Reserve caused." That about sums it up. The side show is not the real deal and we're mired in multiple side shows as we fritter our wealth away, our human wealth.
It all fits together for the Money Party - they run the swindles, buy the government, fix the cases, and come out ahead of the game. The idea that the administration would float a $20 billion settlement offer is offensive to everyone. How about the $6 trillion loss in wealth by the people. It was a deliberate scheme to squeeze everybody. Then they turn around and drain every last ounce from people who have medical emergencies but lack sufficient health insurance. I'm sure the geniuses who brought on the ruin think they're superior for surviving. If they worked for any thing resembling a normal organization, they'd all be fired for cause. Instead, they continue to prosper. They are a toxic asset.
I recall some mention of allowing bankruptcy judges to give a haircut on mortgages, of course that very good idea to keep people in their homes was squashed like the other bugs of the middle class.
The public at large is not too interested for a couple of reasons. One is that they really don't have a clue what the Federal Reserve is. Perhaps the biggest swindle ever committed against the American people was to make them think a cabal of private bankers is actually a government agency.
And the subliminals are amazing and ingrained. I remember a few weeks ago a story on one of the networks, I believe about interest rates, and as the newscaster babbled on, the pictures in the background were of the Federal Reserve building. But not the whole building, instead it zoomed in on where the marble pillars met the roof.
Why?
What is this imagery saying? Well, it's saying that the Federal Reserve is a pillar. And that's what Americans have been duped into believing - that this cabal of private bankers, of bankers, by bankers and for bankers, whose real purpose is to shove hundreds of billions even trillions of dollars of the people's money into the pockets of bankers, and do so in a completely unaccountable and unchallenged way is really this rock solid government agency that protects our gold and looks out for the people's best interest.
It is the biggest swindle ever perpetrated on a people, and the largest transfer of wealth from the bottom to the top in world history.
Education on exactly what the Federal Reserve really is, and what it's doing to us is the Undiscovered Country for activists. 99% of the work on this remains to be done.
The Federal Reserve wants the people in the weeds arguing over the Democrat vs. Republican dog and pony show. So while that's going on they can continue to shove the people's money into the pockets of their friends.
And we're in this ludicrous position of constantly calling on the Federal Reserve to solve problems that the Federal Reserve caused. This mess, virtually in it's entirety was enabled by fractional reserve lending and 20 years of serial bubble blowing. The expansion of credit has enabled the elites to send half of the American manufacturing jobs overseas and make it appear as if this could be done without a loss to standard of living. This expansion of credit traces back in it's entirety to the Federal Reserve.
Someone once said, "Kill one person and it's a tragedy, kill a million and it's a statistic." Even the people who know what the Federal Reserve is doing are feeling dwarfed by it. It's so much money, the fraud and theft is so gigantic it's all feeling like just another statistic.
Every day, under our nose bankers take huge sums of the people's money virtually interest free from the Federal Reserve, then turn around and lend the people back their own money at 3% via treasuries bought through Goldman Sachs, stuffing their pockets with commissions along the way.
Now everybody blew a fuse in 2008 and insisted that from now on they want to know about ponzi schemes in real time. And yet out in the open right under everyone's nose the Federal Reserve sets up yet another ponzi scheme funneling billions hand over fist into banker's pockets and nobody does anything.
And it all coincidentally comes for us at a time when the man in the White House represents the culmination of all the hopes and dreams for 95% of the media, so they don't want to touch anything that makes him look bad.
it could be this story started to break, on the 31st, but because the amount of data is so massive, little pieces are coming to light over time.
It looks like they "paid it back" with glorified free money on fictional "profits". This the circle jerk financial situation I've been describing elsewhere.
Share the post, invite your friends, we sure need more outrage and chatter!
Do we know anything about whether all of these loans have been paid back?
I see that this writeup has had over 1000 views. I don't understand why I am the first person to leave a comment, but I would suspect that there's a connection between the silence here and the passivity and lack of outrage over this in general.
One difference though is that people come here to read about economics and your readers would all be above-average consumers of news reports.
But to me, they are refusing to talk revenues esp. things which also would reduce speculation, say some form of a Tobin tax, help our trade deficit, i.e. some form of a VAT, do something about offshore tax havens, i.e. 0% corporate tax rates as well as more jobs offshore outsourced, transaction tax to curtail flash trading....
all of these things, if you notice are not mention in the entire deficit "debate".
As far as deficit do not matter, it's been the GOP first and foremost.
I hope you write something around all of this, I know you focus on the fed, QE2, but I still am paying attention to that infamous scenario where MBS magically made money to be paid to the treasury, strange "one arm of the government borrows from another yet calls that profits" reports we've seen surrounding a lot of the "toxic assets" and derivatives connected with the housing bubble.
Bottom line, either party pays no attention to the big picture and how they have been sending this economic to the third world dogs for over 30 years now.
The right wing is going to use this opportunity over and over to insist on cutbacks in the social safety net. Anything except raise taxes on wealthy people. I don't think it will work. There is no solution that does not include raising revenue as well as cutbacks in spending. As for those cutbacks, it is going to be up to the voters to pressure politicians to keep social support at existing levels.
I just posted something on this at The Agonist that you might find interesting:
---------------
The S&P bond rating service put the AAA rating of the United States on warning today that the country faces a downgrade if it does not change direction in its fiscal policies. In technical terms this doesn’t mean anything immediately; S&P said the risk to the rating is a year or two away if deficit spending continues on its current trajectory. This is more like an auctioneer saying “fair warning” before letting the merchandise go for a dirt cheap price. The bond market didn’t pay too much attention to this development; people who are in the markets everyday already know that traders think it is only a matter of time before the US, UK, and other top-rated country credits lose their pristine halo for fiscal rectitude that is implied by a AAA rating.
The problem is the gulf between a AAA rating and any other rating is unbreachable. It’s almost like virginity; once you lose it you don’t get it back. This is especially so for the United States, which is the linchpin of the global financial system, and which has enjoyed nearly a century of preeminence in the markets, to the point where US Treasuries are the base (the “risk free rate”) from which all other bonds are priced. In fact, the US has long benefited from two critical attributes that are important to the management (and some might say exploitation) of global finance: the Treasury bond is the center of the international bond market from which all other bonds are referenced; and the US dollar is the reserve currency of the world. Both of these are now in danger of being lost.
Don’t think for a minute that this is a new development. It has taken decades of fiscal imprudence for the US to get to this point. Barack Obama and the US Congress will certainly take their share of the blame if the AAA rating is lost, but this ball began rolling downhill relentlessly with the George W. Bush tax cuts. His Vice President, Dick Cheney, was fond of saying that Ronald Reagan taught us that “deficits don’t matter.” Everyone who has ever worked in the bond market knows that deficits do indeed matter; they just don’t appear to on a day by day basis until some critical point is reached.
The “deficits don’t matter” philosophy does in fact go back to Ronald Reagan, and to the clowns who populated his administration (one of whom, Budget Director David Stockman, has redeemed himself by warning of the consequences of “deficits don’t matter” thinking). Arthur Laffer, the author of the Laffer Curve which argues that tax revenues can increase when tax cuts are enacted (at least up to a point), has not disavowed the damage done to fiscal policy by this nonsense. Grover Norquist is still out to “starve the beast” by making it politically dangerous for Republican politicians to raise taxes, thus creating endless deficits that supposedly will force Washington to cut back on spending. That never happened, because Washington grew to believe the US had an unlimited credit card. Consequently the beast was never starved, but instead grew ravenously year by year, until now it has begun to feed upon its host.
The S&P warning is a slap to the face of the Republican Party, which has campaigned for decades on the claim that the taxes you owe are money that is being stolen from you by a wasteful and bloated government. Over time, voters lost sight of the fact that taxes are payment for services rendered, and that politicians are elected to make the hard decisions about which services to provide and which to reject. What made it easy for Republicans to keep cutting taxes but not spending was their ability to borrow endlessly off a AAA rating. That privilege is now coming to an end.
The Democrats will have to get used to this as well. While never going as far as saying deficits don’t matter, the Democrats easily fell into the magical thinking of the Republicans. There never seemed to be any consequence to deficit spending, so why take deficits too seriously? President Obama is a perfect example of this. He has been able to afford a war in Iraq and Afghanistan, plus bailout the banks, plus expand unemployment benefits, without having to endure higher interest rates. He must have had an interesting weekend, with Tim Geithner having to explain to him the difference between a rating warning and an actual downgrade. This White House is not used to reining in spending, but it is going to have to get much more serious about it if it wants to avoid a rating downgrade by the next election. It won’t do anymore to brag about $38 billion in spending cuts while the federal government adds $50 billion to the deficit every two weeks.
The deficit spending of both the administration and Congress has been enabled in recent years by the Federal Reserve, which has monetized over $2 trillion of the federal debt. S&P said it did not take this Quantitative Easing program into account when it decided on issuing its rating warning, but it is hard not to notice that the biggest buyer of US government paper is now the US government itself. However you characterize it, you fall back on the fact that the Fed is printing money out of thin air, and using this money to buy up Treasuries on a weekly basis. The people who sell these Treasuries to the Fed – usually the big TBTF banks who are forced to buy them at the government auction – must be noticing that the dollars bill they are getting in exchange are increasingly thread worn.
Certainly the market is noticing; the price of everything tangible is going up and up because it has perceived real value, even silver and gold, which don’t pay dividends or interest. Central banks around the world have been complaining about the Fed’s reckless policies and the rampaging commodity inflation which is causing real suffering in poorer countries. The world has enough problem dealing with the inflationary pressure coming out of China; when the US adds its own inflationary splurge to the mix, the result can be catastrophic.
According to a lot of traders, S&P is three or four years too late in warning about the US deficits. It is not hard to believe, therefore, that now would have been an excellent opportunity for S&P to warn about Quantitative Easing. Instead it missed its opportunity. Perhaps, like many analysts, the S&P has trouble with answering a little thought experiment: if it is okay for the Fed to buy some of the Treasury debt, why not all of it, in perpetuity? Why should the US government go to the nuisance of selling its paper on the open market when it can sell an unlimited quantity to itself, and get real money in exchange?
The problem, as Germans with any sense of history will tell you, is that the US is creating unreal money at the Fed to obtain real money from the market, and over time the real money gets debased. Inflation sets in, and with everything in the markets, a point is reached where accelerating inflation cannot be controlled – too much thread worn paper is already in the market. This is precisely the sort of problem S&P should be warning about now, before that tipping point is reached. As it is, the ratings agencies will come to that conclusion when it is too late to avoid catastrophe.
A more recent expert on the risks of deficit spending might have some cogent advice for the US government. The Greek government is now coping with market rates on two year government paper in excess of 20%. Greek government securities are about as thread worn as any out there. The market is charging usurious rates for the Greek government just to roll over its debt – forget about adding any new borrowing. Well, that’s Greece you might say – a poor member of Europe with a struggling manufacturing base and overly generous pensions for its workers. Its outstanding debt in the market is equal to 100% of its annual GDP.
What many people don’t realize is that the US debt, now in excess of $14 trillion, is also at a level equal to 100% of its GDP. It can’t happen here, you still say – this is the United States, after all. Yes it can, and yes it will. This is the inexorable consequence of compounding mathematics on debt levels that only increase and never shrink. The tipping point is reached and the market demands much higher interest rates for government paper. That’s when American politicians will get very serious about reducing the deficit. The smoke and mirrors solutions being offered will be a thing of the past. The phony argument that the solution is to be found only in budget cuts will be seen as ludicrous. The government will be desperate for revenue too, and for that it will turn to the two sources left that have any money: the wealthy, and corporations.
The Republicans will be forced to jettison their sacred belief that growth and prosperity can come from cutting taxes and borrowing excessively to prop up consumption. The parasites which have thrived off such a policy – the financial industry – will have to shrink back to a far less important segment of society. The Democratic and Republican parties, if either of them survive the coming debacle, will have to return to their assigned responsibilities of deciding which of society’s priorities will get funded. And that AAA rating will be a thing of memory, perhaps never to return, just as the American position as reserve currency provider and centerpiece of the global bond market will have been squandered irretrievably.
There's growing interest these days in survival.
As Marie Antoinette supposedly said about the masses wanting bread, "Let them eat cake!"
The masses may not be asses, they may be the sleeping giant, but how can you tell the difference between the Leviathan's snores and the braying of a herd of donkeys?
Joe Sixpack may listen to Limpaw and decide to pick on Obama, but then Sally Sixpack may make a common-sense judgment that Obama is the bright spot in a gloomy night sky. Of the three branches, is the White House really the worst performer today? Of course, the SCOTUS of recent years is an outstanding disgrace with the Senate running a close second. Are the three branches in just another race to the bottom?
Myself, I think that the President seeks to respect the independence of the legisative branch and tries to perform according to what there is of the residual remains of a Constitutional ideal. The masses have no idea of how our government is supposed to function, according to Constitutional separation and balance of powers, but Obama does.
The media pseudo-elites appear to be more enthralled by the okeydoke than the masses they pretend to represent. I refer to the okeydoke of shock-doctrine effects that now underlie the paradigm of the Imperial Presidency that was foisted on us by way of US global hegemony following World War II (myth of "the most powerful man in the world").
Obama did what he could, went to considerable lengths in the summer of 2010, to retain Democratic control of the Congress. I caught myself smiling sardonically when I heard the President say that Americans will get the budget cuts they "want and deserve" (or words to that effect).
Nationally, the Republican National Committee controls the House of Representatives. Elections are rigged, more so in some states than in others. In Wisconsin, a GOP apparatchik invented thousands of votes out of nowhere to undermine the will of the people. And that's business as usual, attracting little comment in corporate media, which was very happy with the Wisconsin boohaha as a 'big story' earlier. The Republican National Committee is a huge and very successful money-making machine -- it uses images of ideologies in pursuit of further accumulation of wealth by its multiple masters and apparatchiks, but it represents no ideologies and has neither ideals nor realistic ideas.
Of course, Obama could PERHAPS have charted a very different course from the beginning (January 2009). I am not one of those who voted for him in 2008 out of wide-eyed naive expectations of great change in America despite the indifference and cynicism of most voters, including the majority who vote by not voting and who, with good reason, do not believe in the integrity of the vote-counting process.
Given that Obama is a political animal living in a political cage, can we reasonably expect him to do anything other than or better than what he is doing? I suspect that the President sees his role as contributing however he can to global social stability, but he is trying to do that as captain of a ship with a broken gyroscope and navigational system that is run by a corrupted and multiply-hacked computer.
Democrats, at best, are very slightly better. There's a little difference with the Progressive Caucus, just as there is with a few paleo-con Republicans, but none of them are currently proposing sane solutions to fundamental problems. Their positions are all based on obvious critiques of the okeydoke. But why bother even to discuss the okeydoke, except as history? Nobody today -- least of all Joe and Sally Sixpack -- really believes in it.
Well, maybe a few Tea Partiers still think that they believe in something, but about all they really agree on as national policy is that Obama is making a move to head up the New World Order and must be stopped at any cost.
I call that just more of the okeydoke. Cake for the masses.
Your best investment? Buy cake futures. I'm bullish on cake.
The Democrats had no need to wait until after the election, except that they did not want to confront minority power in the Senate. All they needed to do was vote on a House bill as it came to them, up or down, no reconciliation buzzwah. Why not?
I suspect a big part of the reason was ego ... and the institution of the Senate jealously guarding its powers that have extended far beyond what the Constitution allots them. Nearly as much of a disgrace to our Republic as the SCOTUS of the Citizens United case.
thx for the reply, I didn't mean the article is theoretical. I mean the entire foreclosuregate episode is often couched in theoretical terms. They banks and their cronies have been floating the idea that only true debtors are being hurt theoretically by "procedural errors", while innocent mortgagors are unscathed. Realistically ,the entire land record system might need to be purged of bad paper.
Great article. I think some people got tired of me talking/blogging about ForeclosureGate, robosigners and MERS. Or they don't understand what I am talking about. Or maybe they just want to stick their heads in the sand and believe whatever their political party tells them.
Bookmarking this site!
I was less theoretical here
ForeclosureGate Deal - The Mandatory Cover Up by Michael Collins
But your point is huge. How can lawlessness be tolerated? What is the meaning of fundamental requirements for contracts and contract law if there are no sanctions for those who break the law?
There are two standards - those for the "elect" and those for the rest of us. I have huge objections to any consent decree that lets these people off the hook. One has to wonder why there are not local prosecutions, just one would do it.
Thanks
I have personally been coming land records and posting the results on the internet. How would you feel if 50%-70% of the land records have fraud on the face of the document. We have felonies in the public record and we can't prosecute? you don't even need discovery. It's public record with names attached! This isn't hard.
It's so obvious it is in your face.
How does this look , compare signatures.
These documents where supposed to clear title. Now they are clouded.
https://docs.google.com/document/pub?id=1OdFaLKtGzg8bYxD3DBXcSGo0rM_CTtk...
or this the Corporate Vp and the Notary have the same signature.... I've witnessed myself do things but not in the public record...
2 people one signature...
https://docs.google.com/document/pub?id=19wXsY3B5a17Y81xiznCysbqQ48zlpwb...
Then there are notaries that don't exist....
https://docs.google.com/document/d/1C5s7jr0rjPHl4undKkbxVyr0EZ2i0yyL98_r...
this goes on and on in every county....
This can't be ignored.
Thanks for pointing that out. I should have elaborated a bit after the 74 vote Senate majority was referenced. The Senate shamed itself that day. Clinton vetoed this. It was just too much.
It would be worth doing a correlation with bankruptcies prior to the vote in the states where two Senators voted for the bill. They don't care. They don't have to.
Just remember that a prime mover of the 2005 legislation was none other than our dear presidents assistant, Joe Biden.
It's actually Himmelstein, et al. who should be tagged with any problems with the analysis, which I don't think are significant. Warren is a second author, although it's easy to tag criticisms by using her well known name. The study on 2001 data and 2007 were done through survey research techniques described in detail in the article. In the two "acting out" reviews by McCardle, there was no real attack on this so the numbers stand. The methodology didn't yield what McCardle expected from her "Googling" but that's not a reason to doubt the numbers and, as I pointed out, the methodology wasn't challenged. The final critique by McCardle was to disparage those who file. This reveals McCardle's character and discretion sufficiently to cause me to dismiss her. Critiques of any major study are vital, even when peer reviewed as the studies cited were:
McCardle says the popularity of this study is extensive and, from that, she concludes that the authors manipulated the numbers to achieve that end. That's post hoc ergo propter hoc (at its worst)and it's also defamatory. If there was data manipulation in these articles (as opposed to errors of some sort) then the authors would be accountable to the university and the journal would have to retract. McCarcle combines a logical fallacy that most high school debaters would notice with a casual defamation as part of her critique.
I'll stick with Himmelstein et al. and say there should be more studies of these issues. If the numbers are inflated 10%, due to sampling error (which I doubt), they are still significant and show that the system ultimately ends up exploiting those with little chance to defend themselves and who are in the midst of a crisis.
The statistics in Warren's paper do not hold up.
http://www.theatlantic.com/business/archive/2009/06/elizabeth-warren-and...
http://www.theatlantic.com/business/archive/2009/06/why-warrens-new-bank...
Now I wouldn't say that the Bankruptcy Abuser was a myth. But familarity with bankrupty laws and figuring out who is able and willing to pay you back is SUPPOSED to be the core competency of those making loans. But by subsittuting regulatory capture for good business sense, the debt pushers pushed "bankrupty reform" as a way of being bailed out of their own bad business decisions. Changing the bankruptcy laws making it harder to escape from EXISTING debt was a HUGE gift to the credit card companies. There will will ALWAYS be people standing in line, waiting for a chance to borrow their way to the poor house. One of the reasons for bankruptcy law is to discourage others from making those loans to them.
"And we're in this ludicrous position of constantly calling on the Federal Reserve to solve problems that the Federal Reserve caused." That about sums it up. The side show is not the real deal and we're mired in multiple side shows as we fritter our wealth away, our human wealth.
And it's a buzz cut against their will.
It all fits together for the Money Party - they run the swindles, buy the government, fix the cases, and come out ahead of the game. The idea that the administration would float a $20 billion settlement offer is offensive to everyone. How about the $6 trillion loss in wealth by the people. It was a deliberate scheme to squeeze everybody. Then they turn around and drain every last ounce from people who have medical emergencies but lack sufficient health insurance. I'm sure the geniuses who brought on the ruin think they're superior for surviving. If they worked for any thing resembling a normal organization, they'd all be fired for cause. Instead, they continue to prosper. They are a toxic asset.
I recall some mention of allowing bankruptcy judges to give a haircut on mortgages, of course that very good idea to keep people in their homes was squashed like the other bugs of the middle class.
The public at large is not too interested for a couple of reasons. One is that they really don't have a clue what the Federal Reserve is. Perhaps the biggest swindle ever committed against the American people was to make them think a cabal of private bankers is actually a government agency.
And the subliminals are amazing and ingrained. I remember a few weeks ago a story on one of the networks, I believe about interest rates, and as the newscaster babbled on, the pictures in the background were of the Federal Reserve building. But not the whole building, instead it zoomed in on where the marble pillars met the roof.
Why?
What is this imagery saying? Well, it's saying that the Federal Reserve is a pillar. And that's what Americans have been duped into believing - that this cabal of private bankers, of bankers, by bankers and for bankers, whose real purpose is to shove hundreds of billions even trillions of dollars of the people's money into the pockets of bankers, and do so in a completely unaccountable and unchallenged way is really this rock solid government agency that protects our gold and looks out for the people's best interest.
It is the biggest swindle ever perpetrated on a people, and the largest transfer of wealth from the bottom to the top in world history.
Education on exactly what the Federal Reserve really is, and what it's doing to us is the Undiscovered Country for activists. 99% of the work on this remains to be done.
The Federal Reserve wants the people in the weeds arguing over the Democrat vs. Republican dog and pony show. So while that's going on they can continue to shove the people's money into the pockets of their friends.
And we're in this ludicrous position of constantly calling on the Federal Reserve to solve problems that the Federal Reserve caused. This mess, virtually in it's entirety was enabled by fractional reserve lending and 20 years of serial bubble blowing. The expansion of credit has enabled the elites to send half of the American manufacturing jobs overseas and make it appear as if this could be done without a loss to standard of living. This expansion of credit traces back in it's entirety to the Federal Reserve.
Someone once said, "Kill one person and it's a tragedy, kill a million and it's a statistic." Even the people who know what the Federal Reserve is doing are feeling dwarfed by it. It's so much money, the fraud and theft is so gigantic it's all feeling like just another statistic.
Every day, under our nose bankers take huge sums of the people's money virtually interest free from the Federal Reserve, then turn around and lend the people back their own money at 3% via treasuries bought through Goldman Sachs, stuffing their pockets with commissions along the way.
Now everybody blew a fuse in 2008 and insisted that from now on they want to know about ponzi schemes in real time. And yet out in the open right under everyone's nose the Federal Reserve sets up yet another ponzi scheme funneling billions hand over fist into banker's pockets and nobody does anything.
And it all coincidentally comes for us at a time when the man in the White House represents the culmination of all the hopes and dreams for 95% of the media, so they don't want to touch anything that makes him look bad.
We are in deep, deep trouble.
it could be this story started to break, on the 31st, but because the amount of data is so massive, little pieces are coming to light over time.
It looks like they "paid it back" with glorified free money on fictional "profits". This the circle jerk financial situation I've been describing elsewhere.
Share the post, invite your friends, we sure need more outrage and chatter!
Do we know anything about whether all of these loans have been paid back?
I see that this writeup has had over 1000 views. I don't understand why I am the first person to leave a comment, but I would suspect that there's a connection between the silence here and the passivity and lack of outrage over this in general.
One difference though is that people come here to read about economics and your readers would all be above-average consumers of news reports.
But to me, they are refusing to talk revenues esp. things which also would reduce speculation, say some form of a Tobin tax, help our trade deficit, i.e. some form of a VAT, do something about offshore tax havens, i.e. 0% corporate tax rates as well as more jobs offshore outsourced, transaction tax to curtail flash trading....
all of these things, if you notice are not mention in the entire deficit "debate".
As far as deficit do not matter, it's been the GOP first and foremost.
I hope you write something around all of this, I know you focus on the fed, QE2, but I still am paying attention to that infamous scenario where MBS magically made money to be paid to the treasury, strange "one arm of the government borrows from another yet calls that profits" reports we've seen surrounding a lot of the "toxic assets" and derivatives connected with the housing bubble.
Bottom line, either party pays no attention to the big picture and how they have been sending this economic to the third world dogs for over 30 years now.
The right wing is going to use this opportunity over and over to insist on cutbacks in the social safety net. Anything except raise taxes on wealthy people. I don't think it will work. There is no solution that does not include raising revenue as well as cutbacks in spending. As for those cutbacks, it is going to be up to the voters to pressure politicians to keep social support at existing levels.
I just posted something on this at The Agonist that you might find interesting:
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The S&P bond rating service put the AAA rating of the United States on warning today that the country faces a downgrade if it does not change direction in its fiscal policies. In technical terms this doesn’t mean anything immediately; S&P said the risk to the rating is a year or two away if deficit spending continues on its current trajectory. This is more like an auctioneer saying “fair warning” before letting the merchandise go for a dirt cheap price. The bond market didn’t pay too much attention to this development; people who are in the markets everyday already know that traders think it is only a matter of time before the US, UK, and other top-rated country credits lose their pristine halo for fiscal rectitude that is implied by a AAA rating.
The problem is the gulf between a AAA rating and any other rating is unbreachable. It’s almost like virginity; once you lose it you don’t get it back. This is especially so for the United States, which is the linchpin of the global financial system, and which has enjoyed nearly a century of preeminence in the markets, to the point where US Treasuries are the base (the “risk free rate”) from which all other bonds are priced. In fact, the US has long benefited from two critical attributes that are important to the management (and some might say exploitation) of global finance: the Treasury bond is the center of the international bond market from which all other bonds are referenced; and the US dollar is the reserve currency of the world. Both of these are now in danger of being lost.
Don’t think for a minute that this is a new development. It has taken decades of fiscal imprudence for the US to get to this point. Barack Obama and the US Congress will certainly take their share of the blame if the AAA rating is lost, but this ball began rolling downhill relentlessly with the George W. Bush tax cuts. His Vice President, Dick Cheney, was fond of saying that Ronald Reagan taught us that “deficits don’t matter.” Everyone who has ever worked in the bond market knows that deficits do indeed matter; they just don’t appear to on a day by day basis until some critical point is reached.
The “deficits don’t matter” philosophy does in fact go back to Ronald Reagan, and to the clowns who populated his administration (one of whom, Budget Director David Stockman, has redeemed himself by warning of the consequences of “deficits don’t matter” thinking). Arthur Laffer, the author of the Laffer Curve which argues that tax revenues can increase when tax cuts are enacted (at least up to a point), has not disavowed the damage done to fiscal policy by this nonsense. Grover Norquist is still out to “starve the beast” by making it politically dangerous for Republican politicians to raise taxes, thus creating endless deficits that supposedly will force Washington to cut back on spending. That never happened, because Washington grew to believe the US had an unlimited credit card. Consequently the beast was never starved, but instead grew ravenously year by year, until now it has begun to feed upon its host.
The S&P warning is a slap to the face of the Republican Party, which has campaigned for decades on the claim that the taxes you owe are money that is being stolen from you by a wasteful and bloated government. Over time, voters lost sight of the fact that taxes are payment for services rendered, and that politicians are elected to make the hard decisions about which services to provide and which to reject. What made it easy for Republicans to keep cutting taxes but not spending was their ability to borrow endlessly off a AAA rating. That privilege is now coming to an end.
The Democrats will have to get used to this as well. While never going as far as saying deficits don’t matter, the Democrats easily fell into the magical thinking of the Republicans. There never seemed to be any consequence to deficit spending, so why take deficits too seriously? President Obama is a perfect example of this. He has been able to afford a war in Iraq and Afghanistan, plus bailout the banks, plus expand unemployment benefits, without having to endure higher interest rates. He must have had an interesting weekend, with Tim Geithner having to explain to him the difference between a rating warning and an actual downgrade. This White House is not used to reining in spending, but it is going to have to get much more serious about it if it wants to avoid a rating downgrade by the next election. It won’t do anymore to brag about $38 billion in spending cuts while the federal government adds $50 billion to the deficit every two weeks.
The deficit spending of both the administration and Congress has been enabled in recent years by the Federal Reserve, which has monetized over $2 trillion of the federal debt. S&P said it did not take this Quantitative Easing program into account when it decided on issuing its rating warning, but it is hard not to notice that the biggest buyer of US government paper is now the US government itself. However you characterize it, you fall back on the fact that the Fed is printing money out of thin air, and using this money to buy up Treasuries on a weekly basis. The people who sell these Treasuries to the Fed – usually the big TBTF banks who are forced to buy them at the government auction – must be noticing that the dollars bill they are getting in exchange are increasingly thread worn.
Certainly the market is noticing; the price of everything tangible is going up and up because it has perceived real value, even silver and gold, which don’t pay dividends or interest. Central banks around the world have been complaining about the Fed’s reckless policies and the rampaging commodity inflation which is causing real suffering in poorer countries. The world has enough problem dealing with the inflationary pressure coming out of China; when the US adds its own inflationary splurge to the mix, the result can be catastrophic.
According to a lot of traders, S&P is three or four years too late in warning about the US deficits. It is not hard to believe, therefore, that now would have been an excellent opportunity for S&P to warn about Quantitative Easing. Instead it missed its opportunity. Perhaps, like many analysts, the S&P has trouble with answering a little thought experiment: if it is okay for the Fed to buy some of the Treasury debt, why not all of it, in perpetuity? Why should the US government go to the nuisance of selling its paper on the open market when it can sell an unlimited quantity to itself, and get real money in exchange?
The problem, as Germans with any sense of history will tell you, is that the US is creating unreal money at the Fed to obtain real money from the market, and over time the real money gets debased. Inflation sets in, and with everything in the markets, a point is reached where accelerating inflation cannot be controlled – too much thread worn paper is already in the market. This is precisely the sort of problem S&P should be warning about now, before that tipping point is reached. As it is, the ratings agencies will come to that conclusion when it is too late to avoid catastrophe.
A more recent expert on the risks of deficit spending might have some cogent advice for the US government. The Greek government is now coping with market rates on two year government paper in excess of 20%. Greek government securities are about as thread worn as any out there. The market is charging usurious rates for the Greek government just to roll over its debt – forget about adding any new borrowing. Well, that’s Greece you might say – a poor member of Europe with a struggling manufacturing base and overly generous pensions for its workers. Its outstanding debt in the market is equal to 100% of its annual GDP.
What many people don’t realize is that the US debt, now in excess of $14 trillion, is also at a level equal to 100% of its GDP. It can’t happen here, you still say – this is the United States, after all. Yes it can, and yes it will. This is the inexorable consequence of compounding mathematics on debt levels that only increase and never shrink. The tipping point is reached and the market demands much higher interest rates for government paper. That’s when American politicians will get very serious about reducing the deficit. The smoke and mirrors solutions being offered will be a thing of the past. The phony argument that the solution is to be found only in budget cuts will be seen as ludicrous. The government will be desperate for revenue too, and for that it will turn to the two sources left that have any money: the wealthy, and corporations.
The Republicans will be forced to jettison their sacred belief that growth and prosperity can come from cutting taxes and borrowing excessively to prop up consumption. The parasites which have thrived off such a policy – the financial industry – will have to shrink back to a far less important segment of society. The Democratic and Republican parties, if either of them survive the coming debacle, will have to return to their assigned responsibilities of deciding which of society’s priorities will get funded. And that AAA rating will be a thing of memory, perhaps never to return, just as the American position as reserve currency provider and centerpiece of the global bond market will have been squandered irretrievably.
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