What Is This “Washington”?

By James Kwak

(Warning: Very elementary post ahead. Most of you probably know all this already.)

Mitch McConnell, Senate Republican Leader, quoted in Bloomberg: “We have seen the consequences of giving Washington a blank check. My message to the president is simple: It’s time for Washington to focus on fixing itself. It’s time Washington take the hit, not the taxpayers.”

That sounds good (if you don’t like “Washington,” that is), but what does it mean? McConnell wants people to think that their tax dollars go to feed some animal named “Washington,” and therefore our budget problems can be solved by simply feeding Washington less — without “taxpayers” taking the hit.

That might be true if “Washington” simply consumed money for its own sake, but the problem is that most of the federal budget isn’t consumed by the federal government.

Of the $3.8 trillion in outlays in President Obama’s proposed FY 2012 budget, more than half comes in one door and immediately goes out another door back to ordinary people, the vast majority of whom are or were previously taxpayers. $742 billion gets paid out in unrestricted cash by Social Security; another $762 billion goes to pay for people’s health care expenses. Other entitlement programs such as retirement benefits for federal employees (civilian and military), food stamps, and unemployment insurance add up to another $716 billion.* There’s no way to reduce this spending without directly hurting “taxpayers.” You can argue that some of these programs should be eliminated, but you can’t argue that you can eliminate those programs without hurting ordinary people.

Another $207 billion goes to pay interest on the outstanding debt. There’s no way to reduce this spending without triggering a massive financial crisis, which would ordinarily be unthinkable.

Of the rest, almost two-thirds goes to pay for national security. Mitch McConnell might be open to cuts in defense spending, although I doubt that he’s come out and said so.

That leaves only $507 billion for discretionary, non-security programs. To start off with, this is less than a third of the projected 2011 deficit, so even if you think that all of it is money wasted on bureaucrats who do nothing, you still can’t balance the budget on their backs. (And besides, they are “taxpayers,” too — so shutting down the government is just a way of concentrating the pain on federal government employees.) And even there, a lot of that $507 billion simply flows right out to ordinary people (not federal employees): educational grants through the Department of Education, low-income housing vouchers through the Department of Housing and Urban Development, farm subsidies through the Department of Agriculture, and so on.

So what is “Washington”? You might legitimately believe that the Environmental Protection Agency provides no value to society and should be entirely eliminated; I don’t, but at least that position is logical. But that would only save you $10 billion.  Alcohol, Tobacco, and Firearms? $1 billion. You can also believe that some of the services provided by the government could be provided more cheaply by the private sector; but even if the government stopped providing those services, you would still have to pay someone something for them. The truth is, there is no animal named “Washington” that eats money. Most of what Washington does (in dollar terms) is write checks to people, so reducing a dollar of Washington’s spending generally takes a dollar, or close to a dollar, out of someone’s pocket.

And the Republicans know this. Much as they would love to kill EPA, ATF, CFPB, and the like, they know that is peanuts. That’s why Kevin McCarthy, the third-leading Republican in the House, “insisted that limits on Medicare must also be included in a bipartisan deal,” according to the same Bloomberg article. It’s very clear that “taxpayers” — in this case, Medicare recipients — are going to get hurt in any budget-cutting deal. The only question is which ones.

Saying “it’s time Washington take the hit, not taxpayers,” is not the only part of the Republican position that flies in the face of logic. The other part is the refusal to consider tax increases, especially when they are defined to include all revenue increases.

According to Bloomberg, Eric Cantor walked out of debt negotiations because he opposed administration revenue-raising proposals such as eliminating last-in, first-out (LIFO) accounting for inventory costs and ending subsidies for oil and gas companies. Now, you may or may not think that subsidies to oil and gas companies are good policy (theoretically, they promote exploration, which theoretically reduces our dependence on foreign sources). But your willingness to consider eliminating such subsidies should not depend on whether those subsidies are effected as cash payments by the government or as loopholes in the tax code.

This, of course, is the old tax expenditure issue. Anything the government can do by spending, it can also do (though perhaps not as efficiently) by granting a tax exemption. By Cantor’s logic, if the government were awarding cash bonuses to oil companies, he would be open to eliminating those bonuses; but since instead the government awards tax goodies (such as accelerated deductions) to oil companies, those goodies must be off the table.

It bears repeating that this is not an issue of what is or is not good policy. You could say the same thing about the subsidy for dependent care: because it’s implemented as a tax credit instead of as a spending program, it’s off limits to the House Republicans. Whatever your views are on the actual policies, it’s absurd to base your deficit-cutting strategy on whether they are labeled as spending programs or as tax goodies.

But it’s also absurd to think that the federal government exists independently from the American people. Really it’s a kind of fetishism: in Wikipedia’s words, “the attribution of inherent value or powers to an object.” Apparently some people have hated the government so long that it has become a kind of magical totem in their minds.

118 thoughts on “What Is This “Washington”?

  1. James, this is all an attempt to confuse the american ppl until there is a “crisis” where something has to be done immediately. Right now ppl are being convinced that there is a spending problem and that if spending is cut, all will be better. None of the connections that you have made between govt spending and who benefits that spending is being discussed. So once we are in crisis mode, ppl will say “please, cut my Medicare and SS just to get us out of this crisis”. So things like “ppl under 55 will get a voucher” will pass to “save Medicare”. And then in 10 years when those persons start getting their vouchers and those vouchers don’t work, the wealthy elite can use their media to tell ppl the reasons the Medicare voucher program doesn’t work is because of illegal immigrants or something even stupider.

  2. Your argument is logical, well reasoned and misses the point of the Republicans position – unless the Republicans are in charge, government is evil and deserves to fail. Obama and other people of good faith (such as yourself) miss the point – the Republicans don’t care because they are not negotiating in good faith.

  3. C’mon now, the ruling fetish is *MONEY*!

    “….In the beginning there was *money*, and then came life….”

  4. Great post, but I would suggest that we not call military spending “security” or “defense” spending. The sooner we realize that a lot of this money isn’t doing anything to protect us, the sooner it will be obvious that cutting MIC welfare could lead to some serious savings.

  5. You have fallen into Mr. McConnells trap. He could care less about “Washington”. What he wants is to get re-elected. What the Republicans do is go out and get a polling firm to do a survey of what the Public is for and against. Then the Democrats go out and hire the same firm. And the firm tells them the same answers. Then, you hear all the politicians talking about the same thing. After they get re-elected, they do as they damn well please.

  6. The gop in it’s current infestation is a fascist cartel. The gop promotes and advances the predatorclass, and predatorclass oligarchs singlularly and exclusivley. The gop pimps and brutes ridiculous fictions of nationalism and religious fervor, proclaiming godwillsit as the unholy – I mean holy excuse for all the abusive policies. The gop is bent, as in insatiable, in it’s insane pursuit of world domination through hypersuperior military control of the world oil and energy resources and systems. The gop promotes these false and immoral teaching through complete and total control of the complicit parrots in the socalled MSM who are defacto employees of, and servants to the predatorclass and the oligarchs parroting, pimping, and bruting predatorclass and oligarch fairlytales and fantasies. The socalled MSM is a propaganda and disinformation arm of the republican reich, the fascist elements of the conservative movement who brute and pimp Amerikan exceptionalism, and numerous other supremist ideologies cloaked in the flowing fabrics of patriotism and faux christianity.

    In fact, the gop (all of them) in it’s current panjandrum is the 4th reich. Nazii’s. Fascists. Supremists. Biggots and pathological liars.

    The sooner the American people recognize these evil monsters for what they are, – the better for the future of our children.

    Now partisans and fascists, and the dim sheep in redneck Amerika will counter that – “Democrats do it too,… and democrats are cowards… and democrats are socialist or communist or whatever slime de jour the gospel according to fox is pimping and bruting. That may be true. But it is the gop, NOT democrats who want privatize medicare and social security, and it is the gop – not democrats – who refuse to consider taxing the richest .01% of population, and it is the gop, NOT democrats who slime blame immigrants, and gays, minorities, and the poor in general for all of Amerika’s many ills that the fascists in the gop are singularly and exclusively responsible and culpable for causing, cloaking, and perpetuating.

    Look up the word fascist. Compare with gop policies and ideologies and get back to me.

    The mistake these fascist make is imaging we will all go sheepishly to the Homeland Security trains or detention centers, or ovens peacefully. – They got another thing coming!!!!

    In a world where there are no laws, there are no laws for anyone predatorclass biiiiiaaaatches!!!!

  7. The gop in it’s current infestation is a fascist cartel. The gop promotes and advances the predatorclass, and predatorclass oligarchs singlularly and exclusivley. The gop pimps and brutes ridiculous fictions of nationalism and religious fervor, proclaiming godwillsit as the unholy – I mean holy excuse for all the abusive policies. The gop is bent, as in insatiable, in it’s insane pursuit of world domination through hypersuperior military control of the world oil and energy resources and systems. The gop promotes these false and immoral teaching through complete and total control of the complicit parrots in the socalled MSM who are defacto employees of, and servants to the predatorclass and the oligarchs parroting, pimping, and bruting predatorclass and oligarch fairlytales and fantasies. The socalled MSM is a propaganda and disinformation arm of the republican reich, the fascist elements of the conservative movement who brute and pimp Amerikan exceptionalism, and numerous other supremist ideologies cloaked in the flowing fabrics of patriotism and faux christianity.

    In fact, the gop (all of them) in it’s current panjandrum is the 4th reich. Nazii’s. Fascists. Supremists. Biggots and pathological liars.

    The sooner the American people recognize these evil monsters for what they are, – the better for the future of our children.

    Now partisans and fascists, and the dim sheep in redneck Amerika will counter that – “Democrats do it too,… and democrats are cowards… and democrats are socialist or communist or whatever slime de jour the gospel according to fox is pimping and bruting. That may be true. But it is the gop, NOT democrats who want privatize medicare and social security, and it is the gop – not democrats – who refuse to consider taxing the richest .01% of population, and it is the gop, NOT democrats who slime blame immigrants, and gays, minorities, and the poor in general for all of Amerika’s many ills that the fascists in the gop are singularly and exclusively responsible and culpable for causing, cloaking, and perpetuating.

    Look up the word fascist. Compare with gop policies and ideologies and get back to me.

    The mistake these fascist make is imaging we will all go sheepishly to the Homeland Security trains or detention centers, or ovens peacefully. – They got another thing coming!!!!

    In a world where there are no laws, there are no laws for anyone predatorclass biiiiiaaaatches!!!!

  8. “But it’s also absurd to think that the federal government exists independently from the American people.” Well stated James!

  9. Ah, but what spending does take place in Washington? Well, lobbying for one thing. We spend money for goods and services, and then the firms we give the money too use it to corrupt our politician, inducing them to act in ways that are contrary to our interests.

    That is a story about what is wrong with government that gets far less attention than it deserves. Meanwhile, we have these endless made up stories about what’s wrong with government that distract us from the real problems. That’s no accident, of course. Mitch McConnell doesn’t do the dishonest things that he does because he was born to it. He saddled up with the GOP and serves the GOP’s masters. Arizona’s campaign finance law, instead of being gutted, should be extended to the entire nation.

  10. This is a great post, but …. as one “commenter” puts it:

    “The gop in it’s current infestation [sic] is a fascist cartel.”

    This is not about policy, intellect, debate, who’s right/who’s wrong, etc … This is about power, in its
    most brutal form this side of physical violence and warfare. And nothing short of brutality in equal or greater magnitude will stop it. This is the end game of the long-running “starve the beast” strategy. The
    debt has been formed, now it’s time for the slashing. “They” have just enough votes to block any initiative they do not approve of. And, due to the accumulated debt, they don’t have to do anything to destroy the federal govt, which of course has always been the goal. Those behind this abstracted brutality are internationalists and don’t give a damn about this government, this country, or its people. It is just the world’s largest motherlode, riipe for rape, pillage, and plunder. Is there any point in arguiing at the point of a gun? Such situations require a different kind of response.

  11. Yes, I realize that the Republican leaders don’t really believe that spending can be cut without hurting people. And while some of them may believe it, I’m sure their staffers realize that it is incoherent to base policy on whether something is a tax loophole or a spending program. These are clearly convenient political positions to take. But I still think it’s worthwhile to point out that those positions don’t make any logical sense, because maybe then a few more people won’t fall for them.

  12. Been reading Naomi Klein lately? Crisis capitalism must be protected at all hysterically rhetorical costs, and McConnell knows this! Logic plays no role for Republican talking points, save to serve structurally for such daily deceit hoisted upon the American citizenry!

  13. Good post.

    I see three possible scenarios. (1) Senator McConnell is psychotic and out of touch with reality, (2) Senator McConnell is pretty sharp and still got it together, but his constituents are psychotic and out of touch with reality, or (3) some combination of the two. In any event, it’s a tragedy for America.

    Christianne Amanpour interviewed Senator McConnell last Sunday. The senator answered not a single one of Christianne’s questions. Oh, yes, he spoke, but never to the point of her questions. I wonder why ABC even tries to ask him questions.

    I see no good way to change things in the way our government governs. The Middle East finally boiled over. I don’t even smell smoke in America. The Congress holds all the cards.

  14. James, one point I need to make: “entitlement programs”. I’ve seen this phrase spread pretty widely of late. It needs to change. Its very much a republican phrase. Its given because of “entitlements”, not because its moral and ethical to give the money to these people is the idea thats underlying that phrase. “Social Justice programs” may be a bit too biased in the other direction.

  15. McConnell is also stuck about the results of the 2010 election. Evidently, he doesn’t remember how many fewer people voted.

    Now more people are gearing up to vote in 2012 & both parties are vulnerable.

    DC still hasn’t gotten it. Consumers who don’t have $$$ to spend are no longer consumers.
    Firing public employees = lower sales city, state, nationwide = more public/private layoffs = more people on UI/food stamps/TANF/Medicare/Medicaid = NO SAVINGS due to Economic Contraction.

    Course, that was Mr. Johnson’s subject on On Point yesterday.

  16. The simple fact is that these programs (Medicare, Social Security and Medicaid) are growing at unsustainable rates, and sane people from all political walks of life who study them know this. Simply put, we won’t be able to afford what we actually think of as “government” soon, which is why moderate liberals, e.g. the Washington Post editorial board, support entitlement reform.

    And yes, having worked in Congress over a decade I can tell you that there IS such a thing called the government as distinct from the People. The difference is its our jobs to actually know the facts and address challenges such as these. It’s not the jobs of those who elect Members of Congress. They have their own jobs, families and lives.

    I see you failed to mention the ethanol credit, which is likely because it doesn’t fit your simplistic “Democrats – reasonable, Republicans – unreasonable” model. In that case the Republicans in the Senate mostly voted to end the credit (i.e. raise taxes) but the majority Democrats didn’t go along.

  17. “one point I need to make: “entitlement programs”. I’ve seen this phrase spread pretty widely of late. It needs to change. Its very much a republican phrase. Its given because of “entitlements”, not because its moral and ethical to give the money to these people is the idea that’s underlying that phrase”.

    Actually, the term “entitlement” refers to the fact that all of us are entitled to the benefits regardless of our income levels, employment status, etc.. Everyone gets Social Security and Medicare. Those are entitlement programs. Not everyone gets Medicaid or food stamps. Those are not entitlement programs. What the Republicans have done is some very successful semantic tap-dancing whereby “entitlements” have come to be equated with “welfare” in the minds of many Americans who in fact enjoy or (maybe!) will enjoy entitlements.

  18. Windmill, it’s worse than you think. Note the barrage of publicity about the deficit when polls clearly showed that the public was more concerned about unemploymant. They don’t use poll results to appeal to public opinion. They use poll results to decide how best to use misleading propaganda to change public opinion.

  19. “its our job to actually know the facts and address challenges such as these. It’s not the jobs of those who elect Members of Congress. They have their own jobs, families and lives.”

    I see.
    It’s the not the “job” of the American people to think about how they’re being governed or misgoverned.
    I think we should all be grateful for this candid and forthright expression of the real Inside The Beltway mentality.
    In a way, yes, Washington is separate from the rest of the nation and it’s people like DCLawyer who are a big part of the reason why.

  20. “$742 billion gets paid out in unrestricted cash by Social Security”

    No. $742 billion gets paid back to the trust fund from which it was borrowed for past spending. What the trust fund does with the money has absolutely no bearing on your point, except to blather about “entitlements”.

    Small difference? Yeah, but a lot of misery and evil fits into that space.

  21. “more than half comes in one door and immediately goes out another door back to ordinary people, the vast majority of whom are or were previously taxpayers” — Why do we need these gatekeepers to channel money through their doors?

    Especially since they’ve promised more to go out the door than comes in!!

  22. No, James: *not* a good post. …..a partisan post. ….a post designed to kick the can a little longer.

    Social security and all the “health” ….smile. progams need to be fixed. Period. Paragraph.

    This problem didn’t leap onto the backs of Americans like a crouching puma, without warning.

    Except for the “economists” who specialize in shell games, that SS is going bankrupt has been known
    for forty years. Ah, I remember a debate with Dukakis and Dershowitz and Wm. Rusher televised,
    down at Faneuil Hall, about the fizzle end of social security. The fizzle end was a ways off, but….

    The year was 1972.

    Prop-up–the-bloated govt…. scare-the-people…. liberals wouldn’t look. Privatize? Pshaw!
    What if the stock market went down????!!!! We need The Government to keep the people safe…..

    What if you put the “mandated savings” in a bank?

    Of course you may “believe” what you wish. But know that you are looking through a glass darkly.
    And not very clearly. …..Lady in Red

  23. Yes, “entitlements” is a terrible term. How about insurance programs, emphasizing the idea that the
    citizenry pays into these things through a lilfetime. You paid for them, you have a right to expect something in return. They are not charitable gifts.

    “The simple fact is that these programs (Medicare, Social Security and Medicaid) are growing at unsustainable rates, and sane people from all political walks of life who study them know this. Simply put, we won’t be able to afford what we actually think of as “government” soon, which is why moderate liberals, e.g. the Washington Post editorial board, support entitlement reform.”

    Social Security is not growning at an unsustainable rate. Most of the shortfall there is due to the upward
    migration of income. Ask a former SS trustee about that, and about how to fix it.

    As for Medicare and Medicaid … it’s health care itself that is growing at an unsustainable rate. Private health insurance rates are growing faster than Medicare and Medicaid. Without a different trajectory health care costs will eat up the entire economy, not just the govt. As many others have said — Medicare is not the problem, Medicare is the solution

  24. “…moderate liberals, e.g. the Washington Post editorial board, support entitlement reform.”

    So-called “moderate liberals” are supporting entitlement reform because they’re afraid of what might happen if the debt ceiling isn’t isn’t raised in time to avert a government shutdown. Financial sustainability has nothing to do with it, but political blackmail sure does. Guess who’s responsible for that?

  25. @Sufferin,

    I’m unclear why you’d object to the notion that its not the jobs of people who aren’t elected to government positions (or the staff employed by them) to comprehend and address the issues involved in entitlement reform.

    To the degree that people CAN be truly informed, that’s great. But those of us who work in the policy arena should understand they often cannot, and not take advantage of it. It’s pretty clear that you’re more interested in mud throwing than any serious dialogue.

    The phrase “entitlements” are used on a bi-partisan basis, and not equated with welfare by anyone I know on either side of the aisle (at least not anyone who plans to stay for any length of time). The fact that they aren’t “welfare” however, does not eliminate the fact that they are not sustainable, and will soon begin to impinge on the operations of the US government.

  26. Hey Maybe we can get our Congress critters to give up their Health insurance. I’m sure they could get a good deal on the open market.

  27. There is *nothing* except “health” care where the patient/user/buyer never sees/doesn’t care about
    the cost.

    “Health care” can reform itself with vouchers, the ability of a patient to make cost decisions.

    I “know” a $1.375 million dollar baby not yet 20 months old who still has a feeding tube inserted. But,
    “money is no object…..” cries its mother, who works as a cashier.

    Not everyone is entitled to a multi-million home or a Lexus, or….

    When people absorb the reality of the actual “health care” costs, reform will happen….. passive voice…. it was just “happen.” ……….Lady in Red

  28. Tap-dancing is no substitute for “serious dialogue”.
    We seem intent on “overlooking” the fact that the people whose “job” is apparently to pay no attention to what happens to their taxes and benefits are also the people who pay the salaries of the socalled “public servants” in DC.
    There’s a term for it: democracy.
    Whether people “on either side of the aisle” refer to Social Security and Medicare as entitlements–it’s really neither here nor there which terms are used by the inhabitants of Versailles on the Potomac. What matters is that decades of dezinformatsia by opponents of Social Security & Medicare has caused a good many people outside of Washington think of these benefits as “welfare” when it fact they aren’t.

  29. @DCLawyer. Not really.
    We don’t have a debt crisis. We have an unemployment crisis.

    The budget deficit is just a thermometer of the national sectoral balances. Please read William Mitchell’s blogs or another MMT researcher’s work. Stop parroting statements that if they are laid side by side don’t make any sense.

    Deficit spending 101 – Part 1 http://bilbo.economicoutlook.net/blog/?p=332
    Deficit spending 101 – Part 2 http://bilbo.economicoutlook.net/blog/?p=352
    Deficit spending 101 – Part 3 http://bilbo.economicoutlook.net/blog/?p=381

  30. To #7 above,
    both side do engage in overreach.

    When the Republicans overreach, we see increasing inequality and further support for the strong preying on the weak.

    When the Democrats overreach, we see teachers get unions and minorities get benefits.

  31. Once the masses are disabused of the quaint and outdated notion that the Fed government budget is analogous to a household budget writ large, we may begin to make progress. There is NO similarity between the federal government which is the monopoly issuer of currency and all other entities (people, states, foreign countries, corporations etc…) which are users of the US Dollar.

    This concept is not mere tin foil hattery but rather just the logical outcome of a thorough and complete understanding of the US banking system and the role of the Treasury and Fed in setting rates and clearing reserves.

    RayW appears to be one of the only people on this site (including the authors) who actually understands the role of fiat currency in a floating exchange rate environment.

  32. Eric Cantor is attempting to position himself for a possible Presidential run. He’s an idiot that should be ignored.

  33. Mitch is a beauty. He voted for every war appropriation bill under the sun, and voted against after school funding, low income energy assistance, and other measures before the Senate that targets helping PEOPLE.

    Mitch, like his republican ilk, believe in funding the major budget destabilizer since “sept 11”, which is aggressive war, whereby contractors have made untold, countless billions (trillions), and american boys and girls have paid for it in blood and human tissue. This pales in comparison to the millions maimed and/or killed by these illegal wars.

    Here’s a link to his voting record:


    Kwak points out a common fallacy in this post, and although sophisticated people recognize the canard, there are many more who do not, that is, “Washington simply consumes money for its’ own sake.”

    The austerity ghouls on the right wing of the fascist party, should know some basic economics: austerity will engender higher unemployment, less discretionary spending, a continued housing slump, (despite the tripe MSNBC was reporting today on its’ site), and a lengthening of this global depression.

    They don’t get it, and never did.

  34. I’m not sure what the point of posting analysis of political talking points as if those points were ever intended to be truthful, serious, logical, or anything but vicious propaganda is. Am I missing something here?

  35. Washington – atypical split-personality this singularity we once called a Republic!
    Tell me,… what will our GDP look like in 3-5 years when all manufacturing is off-shored, and our service industry is severely diluted by computers and robotics? Perhaps if were lucky it will be at least $10trillion, but certainly it ain’t gonna grow, because folks, it has finally reached its maturity.(JMHO)
    Quote: Seneca…”If one does not know to which port one is sailing no wind is favorable”

    Granted, there are a couple good politicians in Washington with (#1) US Sen. Bernie Sanders (I/Vt) the only Senator I really feel comfortable endorsing, and (#2) US Rep. Ron Paul (R/Tx), the only Representative.
    Yep,…that’s about it. (JMHO)

    “hypocrisy runs deep and turbulent when fed with questionable ambitions, and seems a untimely coming out,… such as that of a democratic idealist, dressed down nemesis – drowning in a vacillating,.. never ebbing cross current;… but these damn republicans make hypocrisy a trivial principle – a commonality, and the proletariat their insufferable cross to bear as they perambulate a feral yet ironically absent consciousness”

    It is time,…”Amend the Constitution”, period! Or burn it,.. before we all burn! (JMHO)

    Thankyou James and Simon

  36. Predatorclass parrots like DCLawyer ,The Banker, and the entire gop in lockstep unison seek to maintain the perversions, illegality, immorality, and toxicity of the current global econonomic systerm, – wherein all the worlds wealth and resources majikally flows into the offshore bank accounts of the predatorclass by perpetutating an insane and completely unsustainable PONZI SCHEME based on debt products majikally shapeshifted into assets. The people are deprived, oppressed, disinformed, and forced to hazard and endure the massive burdens and longterm suffering imposed on them by centralbanks, governments and the predatorclass by bailingout or masking this economic horrorshow. This fiction and naked lie is the root and certain demise of the present system. Print all the fiat currency you want. Throw trillions of taxpayers dollars to predatorclass and criminal financial institutions and “all the kings horses and all the kings men, cannot put’ this corrupt and evil financial system together again. “Ashes, ashes all fall down.” The underlying math butttressing these PONZI SCHEMES, only applies if flows continue to pump in and up false economics. Once those flows destabilize as we’ve seen in the the several boombubblebust events of the last 30 years and culminationg in the unending horrorshow of 2008, the PONZI SCHEME’s crumble and disintegrate. Central banks – and no central bank is more nefarious and creapy than the “Monster from Jekyl Island” the FED, can pour taxpayer dollars into the predatorclass oligarchs and falsely pump up markets and pimp and brute recoveries to thier cold dark hearts content, – but the most basic economics is NOT working in the peoples favor, and so is doomed to collapse. The inevitable collapse could be market forces recognizing the paper profits do not actually exist, or ruthlessly oppressed and deprived social forces demanding by whatevermeanspossible a restoration of fairness and the rule of law. It is the latter upheaval that will rip apart and burn this current corrupt and evil panjandrum.

    Whatever fetish you hold to, – waytofew are ruthlessly robbingandpillaging fartomany. The people are fast realizing this evil. There will be a reckoning and a balancing, and it won’t be pretty or bloodless.

    In a world where there are no laws, – there are no laws for anyone predatorclass biiiiiiaaatcches!!!!

  37. Just so much of the logic is wrong here. Your premise is just plain wrong and so the conlussion drawn therefrom are also wrong. You need to read Bastiat again. You very basically argue that if gov’t doesnt spend money it receives in taxes, then that money will not get spent. Except that I would spend all of the money I spend on taxes. Its just that I would spend it on things I want, whereas the govt spends it on things it wants…..like getting re elected.

    Then you move onto short term thinking arguments such as….

    ” You can argue that some of these programs should be eliminated, but you can’t argue that you can eliminate those programs without hurting ordinary people.”

    In the short term they will be hurt, In the long term we are all screwed b/c of the ponzi scheme.

    The program is hurting folks right now. How many people would be able to afford better healthcare or put food on the table if they did not pay ss taxes?

  38. Oh, did I see ERIC CANTOR’s name being mentioned on these pages? Is this the same ERIC CANTOR who reportedly is invested in a fund that ultra-shorts US Treasuries, meaning a huge spike in the asset value of the holding if the US continues to implode via its’ debt crisis? No, it couldn’t be, could it?

    A republican seeking to profit off the misery of the country he is paid to protect and defend via sacred oath, I mean, doesn’t this seem to defy all reason, logic, and understanding?

    Am I MISSING something, here?

    Well, apparently, you may want a gander, so I have the link, here below:


    And just one more thing, that BACHMANN person…….always railing against “socialism” and wasteful gubmint spending…..OOPPPSSSSS……did someone get caught with the old knickers down?

    Oh, GOD, swelling WELFARE ROLLS?


    It’s endless, the hypocrisy; but more so, this complete gaming of the system for self-serving pecuniary benefit.

  39. While you are discussing this the bank regulators, by establishing special rules for the G-SIFIs, the globally systemic important financial institutions, and awarding them a formal “too-big-to fail” franchise, priced at a modest 1 to 2.5 percent of capital increase, payable over several years, are de-facto decreeing all other as “global systemic irrelevant financial institutions”, which can only mean that the small banks don’t stand a chance… bye bye banks! Now indeed we will have a 110% moral hazardous financial system!

    It is a sad but the truth is that our dear George Bailey would not have stood a chance against a Basel Committee. Did we really authorize the bank regulators to do that?

  40. so what is the answer then? increase taxes to continue funding the entitlements without the US taking on more debt? How high would my taxes go? 50%? I’m just curious what this scenario would look like.

    I think I’m most curious about how healthcare costs would be controlled. if $1mm treatment is available for every cause of death under the sun… then wont’ every US resident demand to receive that treatment? when more is paid out than was paid in for 100% of the population, it just doesn’t work… even if we paid 80% taxes just to fund healthcare, at some point we need to “ration care”? No?

  41. Imagination in a monkey brain is a dangerous phenomena. When you stop laughing at the image, go check out the 20th century pictures of what man did *for real* in order to defend the ists and isms he made up in his imagination.

    Not funny, right?

    And neither is fiat money managed by imaginary *laws* of physics that did nothing but suck it all back to the “god” who released the fiat money…

    Ah, but the TRUTH is so much stranger than fiction, that it is IMPOSSIBLE to tell without a really long prelude.

    This was written in a “short story” called Paper 42 – Energy – Mind and Matter and presented to a some people in Chicago in 1934. Eventually, 196 “Papers” covering, literally, every topic under the sun, were compiled into a book.

    Ready? Published in 1934:

    “The increase of mass in matter is equal to the increase of energy divided by the square of the velocity of light.”

    The lies are THICK as a BRICK amongst those who go off and do *science* stuff like the Tuskagee Experiment.

    The whole derivatives saga unfolded on a website that used the language in this unknown book to move the fiat money back to themselves on a daily basis – through a new tributary, of course. And that’s the origin of the “financial products”.

    As for the *character* of these self-proclaimed gods (Imagination + monkey brain = I AM a god)

    – psychotic is actually the lighter side of their being…it’s their *charm*….

  42. What are McConnell or any of the post-Reagan “Government is the Enemy” Republicans or Democrats really saying when they vilify “Washington”? Surely, “We have met the enemy and he is us”? McConnell is making an unwitting, Freudian admission — that he is the problem, he and his ilk.

  43. James,

    An unusually solid post, but you might have considered the savings potential available to gvts by increasing the operating effiicency of government:
    – defense procurement and a more focused approach to national defence (look at the savings possible by relying mainly on nuclear weapons and abstaining completely from labor-intensive warfare? There must be many places where would be terrorists would like their relatives not be irradiated)
    – medicare: farm it out to the Canadians or Dutch and declare doctors having sat an annual competency test immune from civil liability suits
    – social security: deport the long term unemployed to less costly places (ie where the cost of subsistence is lower than in the US) until they are fit to work or the job market recovers. Meanwhile pay a small welcoming fee to every current illegal immigrant prepared to seek US citizenship and inform on current and past employers (the fee would only be a small portion of the penalties to be paid by illegal employers)

    And I could go on, mentioning only things that do not have negative first order effects on the living standards of two-thirds of the US population. And no one in US politics asserts the European concept of solidarity as a core element of US political culture, so two thirds would be a robust platform. If the gvt would make a decent management consultant dictator for a year (she should have some self-destruct feature to prevent hanging on) and offer only 1% of the savings as compensation, there would be at least a trillion worth of savings (and a juice estate of the self-destroyed consultant).. Sound economic management requires a rational approach, not a sentimental or ideological one…Your post shows that neither party can be relied on to manage the economy rationally (an inherent flaw of democratic government, but not a fatal one) but it does not show what good gvt could achieve, while alieniating only a small fraction of the electorate. Most democratic systems (especially two party systems) rely on painful events to change policy direction, hence, as you imply, the present is not painful enough…

  44. James, How about we eliminate the money wasted on foreign aid and the unjust wars in Iraq, Afghanistan and most recently Libya? How about we reduce the federal budget deficit so we’re not spending fifty cents of every dollar on interest payments?

  45. The answer Die ia fairly taxing the predatorclass. The superriich have to give back to the nation and economy they pilfered for the last thirty years. The predatorclass must abide by the ruleoflaw, just like every other American, and that means that many predatorclass criminals and PONZI SCHEME operators will have to pay. Pay financially and pay with – hopefully long jail sentences for their criminal activities!!!! There is no other way out save a realdeal 1776 revolution.

    “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.”

    The babyjesus and the gospel according to fox are not going to save you predatorclass biiiiiiaaatches. You will pay. You will pay with your money and your blood, – but you will pay!!!!

  46. James, Why oh why can’t someone (I have given up on Obama) explain these simple facts to the American people. I try and try but I don’t have the voice of Fox News. Someone has to do this Reid and Obama seem worthless maybe Nancy P.

  47. This is Mr. Kwak’s second straight post where the message I infer is “don’t worry, be happy”. The federal government is really only spending on our behalf and it’s churlish of us not to be grateful. Moreover, to reduce that spending on ourselves would be cutting off our nose to spite our face.

    It’s a comforting message, but I have a nagging concern: do my children and grandchildren deserve to feel similarly comforted or instead of treasures in heaven are we laying up poverty in hell?

  48. I wish…. I wish…. I wish…. we could get past Red and Blue. Repubs and Dems and fix the damn system.
    Washington is NOT peopled with good folk. It needs a new broom. A BIG broom.

    I have a lot of problems with the right part of the right wing, but they are GOOD FOLK. …I will deal with the anti-gay and forced birthings issues later.

    Baseline ignores ZeroHedge, but this is an interesting post there from this am:

    The U.S. Is A Kleptocracy, Too

    If we dare look at the plain facts of the matter, we have to conclude the U.S. is a kleptocracy not unlike Greece, only on a larger and slightly more sophisticated scale.

    Yesterday, I noted that Greece Is a Kleptocracy; the U.S. is a kleptocracy, too. Before you object with a florid speech about the Bill of Rights and free enterprise, please consider the following evidence that the U.S. is now a kleptocracy worthy of comparison to Greece:

    1. Neither party has any interest in limiting the banking/financial cartel. The original Glass-Steagal bill partitioning investment banking from commercial banking was a few pages long, and it was passed in a few days. Our present political oligrachy spends months passing thousands of pages of complex legislation that accomplishes essentially nothing.

    As Federal Reserve Bank of Kansas City President Thomas Hoenig recently noted (in a rare admission by an insider–I wonder how long it will be before he “resigns to pursue other opportunities,” i.e. is muzzled):

    The problem with SIFIs (“systemically important financial institutions,” a.k.a. too big to fail banks) is they are fundamentally inconsistent with capitalism. They are inherently destabilizing to global markets and detrimental to world growth. So long as the concept of a SIFI exists, and there are institutions so powerful and considered so important that they require special support and different rules, the future of capitalism is at risk and our market economy is in peril.

    Do you really think Dodd-Frank and all the other “fooled by complexity” legislation has accomplished anything? Hoenig cuts that fantasy off at the knees:

    As late as 1980, the U.S. banking industry was relatively unconcentrated, with 14,000 commercial banks and the assets of the five largest amounting to 29 percent of total banking organization assets and 14 percent of GDP.

    Today, we have a far more concentrated and less competitive banking system. There are fewer banks operating across the country, and the five largest institutions control more than half of the industry’s assets, which is equal to almost 60 percent of GDP. The largest 20 institutions control 80 percent of the industry’s assets, which amounts to about 86 percent of GDP.

    In other words, nothing has really changed from 2008 except the domination of the political process and economy by the financial cartel has been masked by a welter of purposefully obfuscating legislation. This is of course the exact same trick Wall Street used to cloak the risk of the mortgage-backed derivatives it sold as “low risk” AAA rated securities: by design, the instruments were so complex that only the originators understood how they worked.

    That is the current legislative process in a nutshell. Much of the 60,000 pages of tax code are arcane because they describe loopholes and exclusions written specifically to exempt a single corporation or cartel from Federal taxes.

    The U.S. is truly a kleptocracy because its political leadership actually has no interest in limiting the banking/financial cartel. When questioned why their “reforms” are so toothless, legislators wring their hands and bleat, “Honest, I wanted to limit the banks but they’re too powerful.” Spoken like a true kleptocrat.

    2. Our stock markets are dominated by insiders. It is estimated that some 70% of all shares traded are exchanged in private “dark pools” operated by the TBTF banks and Wall Street, and the majority of the remaining 30% of publicly traded shares are traded by high-frequency trading machines that hold the shares for a few seconds, or however long is needed to skim the advantages offered by proximity to the exchange and speed.

    If that’s your idea of an “open market,” then you’re the ideal citizen for a kleptocracy.

    3. The rule of law in the U.S. has been divided into two branches: one in name only for the financial Elites and corporate cartels, and one for the rest of us mere citizens. Between corporate toadies on the Supreme Court who have granted corporations rights to spend unlimited money lobbying and buying legislators as a form of “free speech”–ahem, how can something that costs billions of dollars be “free”?–and vast regulatory brueacracies that saw nothing wrong with MERS and the complete corruption of land and mortgage transfer rules, the U.S. legal system is now a perfection of kleptocracy.

    As economist Hernando de Soto observed in The Destruction of Economic Facts, the ForeclosureGate mortgage mess is not just a series of petty paperwork mistakes–it is the destruction of the entire system of trustworthy transfer of property rights for non-Elites:

    Knowing who owned and owed, and fixing that information in public records, made it possible for investors to infer value, take risks, and track results. The final product was a revolutionary form of knowledge: “economic facts.”

    Over the past 20 years, Americans and Europeans have quietly gone about destroying these facts. The very systems that could have provided markets and governments with the means to understand the global financial crisis—and to prevent another one—are being eroded. Governments have allowed shadow markets to develop and reach a size beyond comprehension. Mortgages have been granted and recorded with such inattention that homeowners and banks often don’t know and can’t prove who owns their homes. In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.

    The results are hardly surprising. In the U.S., trust has broken down between banks and subprime mortgage holders; between foreclosing agents and courts; between banks and their investors—even between banks and other banks.

    Frequent contributor Harun I. summarized the reality of this political and financial coup by kleptocrats:

    As described by Georgetown University bankruptcy expert Adam Levitin, in testimony to subcommittee of the House Financial Services Committee, “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever, [and] could cloud title to nearly every property in the United States.” It would also raise the question of the legality of the resulting millions of foreclosures on American homeowners, since the banks cannot prove “ownership” of the foreclosed property.

    The statement above gets to the elemental issue that apparently is lost on many otherwise intelligent people. This is not about frivolous claims based on technicalities. This is about securities fraud (theft) on a ludicrously massive scale. These so-called securities were sold to governments, pension funds and other financial institutions globally. Trillions were made by banks selling what is becoming clearly understood to be worthless pieces of paper and when the jig was up, which ultimately led to the destruction of economies globally, they made ordinary citizens the losers by sliding their worthless pieces of paper to the balance sheet of taxpayers worldwide.

    And while some are quibbling over whether someone should get a free house, those who have perpetrated the greatest swindle in the history of mankind are about to get away with it, because they are “systemically important”, code for TBTF (too big to fail).

    You think money laundering and tax evasion is a specialty only of Caribbean island “banking centers”? Think again; we have corporate oversight equivalent to that of Somalia. U.S.A. a haven for corporate money laundering: A little house of secrets on the Great Plains:

    Among the firm’s offerings is a variety of shell known as a “shelf” company, which comes with years of regulatory filings behind it, lending a greater feeling of solidity.

    “A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy,” the company’s website boasts. “A person you control… yet cannot be held accountable for its actions. Imagine the possibilities!”

    “In the U.S., (business incorporation) is completely unregulated,” says Jason Sharman, a professor at Griffith University in Nathan, Australia, who is preparing a study for the World Bank on corporate formation worldwide. “Somalia has slightly higher standards than Wyoming and Nevada.”

    The U.S. was declared “non-compliant” in four out of 40 categories monitored by the Financial Action Task Force, an international group fighting money laundering and terrorism finance, in a 2006 evaluation report, its most recent. Two of those ratings relate to scant information collected on the owners of corporations. The task force named Wyoming, Nevada and Delaware as secrecy havens. Only three states – Alaska, Arizona and Montana – require regular disclosure of corporate shareholders in some form.

    4. Just as in Greece, taxes are optional for the nation’s financial Elites. In Greece, you don’t mention your swimming pool to avoid the “swimming pool tax.” Here in the U.S., that sort of tax avoidance is against the law (smirk). Here, you hire a Panzer division of sharp tax attorneys and escape taxation legally (well, mostly legally–whatever it takes to win).

    If you are unfortunate enough to be a successful small entrepreneur who nets $100,000 a year, you pay 15.3% self-employment and 25% Federal tax on the bulk of your income, a combined rate of 40.3%, and a combined rate of 43.3% on all income above $82,400.

    Those who net millions pay less than half that amount, somewhere between 17% for the top 1/10th of 1% and 21% for the top 1%: Citizens for Tax Justice, which looks at all taxes paid including federal, state and local taxes, said that in 2010 the top 1 percent of earners will pay 21.5 percent of taxes.

    Note that the 21.5% paid by the top 1% includes all state and local taxes. Here in California, the small businessperson earning $100,000 pays between 5% and 9% state tax, so their combined state and Federal tax burden on their highest earnings is a whopping 50%. Then there are property taxes and the 9.5% sales tax, and endless junk fees skimmed from small business. Add all that together and the total taxes paid rises to the 60% level, or roughly triple what the top 1% pay.

    (Bitter note from a tax donkey: To all those tax-and-spenders who whine that California has “low taxes,” please pay my “low” property tax bill, will you? It’s “only” $11,000 a year.)

    Super Rich See Federal Taxes Drop Dramatically:

    The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

    Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called United for a Fair Economy. Their goal: Raise taxes on rich people like themselves.

    Schoenberg, who now teaches a business class at Columbia University, said his income is usually “north of half a million a year.” But 2009 was a bad year for investments, so his income dropped to a little over $200,000. His federal income tax bill was a little more than $2,000.

    “I simply point out to people, ‘Do you think this is reasonable, that somebody in my circumstances should only be paying 1 percent of their income in tax?'” Schoenberg said.

    Do you really think you don’t live in a kleptocracy? Why? Because the truth hurts?

  49. @Lady in Red “The problem with SIFIs (“systemically important financial institutions,” a.k.a. too big to fail banks) is they are fundamentally inconsistent with capitalism. They are inherently destabilizing to global markets and detrimental to world growth. So long as the concept of a SIFI exists, and there are institutions so powerful and considered so important that they require special support and different rules, the future of capitalism is at risk and our market economy is in peril.”

    Right so, and that is why in other areas we have trustbusters. Unfortunately in banking it seems we have gotten ourselves trust-facilitators instead… and of course here we should not to confuse trust with trustworthiness

  50. Yes. Sad, indeed.

    And this ain’t gonna be solved by a Punch and Judy shadow boxing game between liberals and
    conservatives. This is systemic.

    We need an entire sweep of new players, uncorrupted, good people willing to “serve their country”
    for a stint.

    We need to get rid of the “professional politician” — of all stripes and colors. They have been

    Washington is rotting, rotten.

    Did you know (I’m sure you did) that while the economy was imploding and wars were raging across
    the globe and riots and ….. the biggie issue in Congress was how much money banks were going to
    chisel out of debt and credit cards?

    Washington — the government — has indeed, with the collusion of Wall Street and banking — taken
    over America. The Quiet Coup, as Simon once wrote. (He seems to have moved a long ways,
    intellectually, off that mark….)

    Can we get it back? Ever? Dunna know.

    But, sad, indeed. ….Lady in Red

  51. james, i have had high regard for baseline, but I think you risk relevance and it’s now time to move on from the blame game, and start to deal with the fundamental imbalances of our dated socialized system of entitlements. obama has the opportunity to seize the bull of entitlements firmly by the horns, show some leadershiip (for which i believe he WILL find a following on both sides of the political divide), and recommend meaningful and significant (FUTURE) CUTS to medicare, medicaid and social security, BEFORE it’s too late and we end up like greece. the numbers just don’t add up. we’ve been living on the fumes of a long empty fuel tank for the better part of the past decade, subsidized with credit, and everyone hopes we return to the heady old days of 2006. until we realize it’s 2011, and likely to remain 2011, then we are at greater risk of getting back to 2009 than even breathing a whiff of 2006 ever again. if you continue on your path, then you do a diservice to your cause, and i’d argue, become part of the same problem that exists in washington; that of debate without leadership or action.

    we cant afford our socialized entitlements framework anymore. it’s time to move on, cut it and accept it. only then will you find cash savings willing to be put to work to create future jobs. right now, those savings are worried to inaction about what the future holds.

    time to choose; our (parents’) retirement, or our children future. show some leadership.

  52. @ Lady in Red

    That’s some great cooking,…now I’ll serve up desert, if you don’t mind. :-))

    #3) “Between Corporate toadies on the “Supreme Court” who have granted corporations rights to spend unlimited money lobbying as a form of free speech ,…. – the US legal system is now a perfection of kleptocracy.”

    Ref: “Packing The Courts”, by James MacGregor Burns (The Rise of Judicial Power and the Coming Crisis of the Supreme Court – 2009)

    Excerpts: Mr. Burns has come to believe that the Supreme Court, an institution (Third Branch) of government has become more powerful, and more partisan, than the founding fathers envisioned.
    Remarkable as it might seem today, the framers did not intend the Supreme Court to be the ultimate arbiter in all constitutional issues, and instead foresaw a more limited role for the highest court of the land. Burns reminds us, the “Constitution” does not grant the Supreme Court the power of judicial review – that is, the authority to strike down laws passed by Congress and signed by the president. And yet from John Marshall to John Roberts, Supreme Court justices have used this power to “Obstruct” the acts of “Presidents and Congress”, often derailing “Progressive Reform” as a result. In doing so, Mr. Burns argues, they have “Disrupted the System of Checks and Balances” so carefully enshrined in our Constitution.”

    *Noteworthy: The term “Packing the Courts” is synonymous with FDR’s failed attempts at increasing the size of the (bench) court after a conservative bench repeatedly overturned key “New Deal” legislation, effectively blocking his efforts to fight the “Great Depression”. (In which the United States is on the precipice? – JMHO)

    Thankyou James and Simon

    God Bless You, Julian Assange

  53. Earle mentions the Court, which is now Supreme Folly. Roberts, and the other radical, right-wing extremists on the bench, have sold any notion of democracy down the drain to the highest bidder, and woe is us.

    While big, rich corporations own the political establishment, now free reign is given to more effectively control the masses, with the greatest propaganda tool ever……the idiot box.

    It’s not called the “idiot box” for nothing.

  54. Bravo Julian Sands, and you’re right Woop, – the socalled Supreme Court is a 5-4 “Folly” that continually promotes and advantages the predatorclass and predatorclass oligarchs, – and repeatedly undermines and disadvantages the people, – most notablly poor and notwhite people.

    We inhabit a keptocracy. What are we going to do about it???

  55. @Tony Foresta

    Q: “We inhabit a keptocracy. What are we going to do about it???”
    A: Bare the unbalanced system until just after it’s too late.

    Because the U.S. government can and does dip their hands into monies whenever they want without being held responsible for the i.o.u.s and the supply of new “investors”, well with money, are running out; entitlement programs are ponzi -schemes. Write them off! (Make a hard cut-off age, anyone born after that year is NOT going to be able to expect any benefits — and nor will they be paying into that system anymore.)

    Yes, many will suffer; but many more will suffer if they continue to participate in this charade.

    The education system must provide a curriculum to teach people how to handle their own finances and be financially literate. Expecting the government to protect you from yourself is moral and intellectual laziness; expecting a government that, in reality doesn’t have any checks and balances, will give you your money back (in nominal terms) sometime down the road is stupid.

    Oh, and a populous that is vigilant, organized and not willing to tolerate B.S. from their elected officials would help cut down on corruption. But that will not happen; the good folks are far too busy in other more worthy activities. (Now if you’ll excuse me I’m off to watch National Karaoke followed Lying-Back-Stabbing Chumps on an Island.)

  56. @Lady in Red,

    Thank you for being the true breath of fresh air on this board and not being a partisan cheerleader for either of our corrupt parties. Re Zerohedge, I would also add to the list, the McCarran-Ferguson Act for enabling and encouraging insurance oligopolies. Somehow in health reform, Congress allowed this one to slip by. Wonder how that happened.

    Instead our FTC has to justify its useless existence somehow so it…attacks Google, ironically a basically free (to most users) service. No way would it ever attack a SIFI or an insurance company or a cable or phone company. Ask yourselves what great service you’ve been getting and at what prices in those industries.

    During 2008, it would have been a golden opportunity to simply allow the SIFIs to fail. It would have been a great dinosaur die-off and yes it would have been temporarily and deeply damaging to our economies, but it would have been a massive reset enabling the re-establishment of real market forces. I think the results would have been the sprouting of small un-SIFIs around the world. In addition, both political parties would probably have died alongside the SIFIs. Oh how I would have wept over that one.

    Instead the next time we have a severe worldwide financial crisis it will be driven by a run on the sovereigns as we’re seeing. The PIIGS are simply hinting at how bad it will be. It won’t just be the banking system that will go down, but the currencies themselves as legitimate stores of value. Hard to electronically print more money out of that one.

    And if the major sovereigns’ currencies become worthless, imagine what happens to the sovereigns’ political systems. Then James won’t even have a party to be partisan about.

  57. Exactly Diogenes, and JDM. – “these cards are marked, they’re a mess!” The socalled government no longer works in our best interests, in the peoples best interests, – which by the way these nefarious monsters swear oaths too on the socalled bible. The socalled 1st Amendment of the socalled “goddamn piece of paper” formally known as the socalled Constititution gaurantee’s the people the right to “…petition the government for redress of grievances.” We need to excercise this right!!!! We need to demand that our government honor their oathes and work to provde for the peoples best interests. What we have now is kleptocracy, fascism, wherein the richest .01% of the population own and control everything, and the rest of us are relegated to X’s and O’s, digits, with absolutely no voice or worth in the operations of the socalled government. When this kind of evil is predominant, “…it is the right of the people to alter and abolish it”

    Tear the entire system down. Burn it all to the ground. It is an evil and toxic horrorshow that only benefits, protects, and advances the predatorclass. Burn it all down, and start over!

    We’ll fight these battles anyway, – best get stocked, locked, cocked, and ready to rock now before it’s too late and right these horrible wrongs. Burn it all to the ground NOW!!!

  58. Allow me to print Monopoly Money, let me assign “value” to its’ “currency”, give me 100 + years, I too (and so could you) could accumulate a statistically-estimated net worth at $100 Trillion. We then could buy everything and anything we wanted to, control every legislature and government in all Christiandom ( and every other principal religion, except perhaps for one), and with this, comes, of course, the negation, abrogation, and dissolution of the rule of law, and as Annie says, the ascendency of the MONKEY BRAIN controlling the planet, including its’ armamentarium of classified technology, weaponry, and gadgetry.

    Tony, the ONLY hope for humankind, given the impressive odds in their FAVOR, is divine guidance, intervention, and heavenly grace.

    As an aside, Social Security and Medicare could be delivered on an actuarially sound footing, if proper FUNDING was provided, that is, taxing those who created this cluster-MESS, commensurate with their appropriated and stolen loot.

    That’s it for now, it’s off to the salt mines.

  59. James, you were right at the beginning when you said (understanding your league of followers) that what you were writing, we already knew. I still appreciate the highlighting of the various distinctions. Amazingly, recently, I have actually heard a few of your points on the major media, a very unusual thing, since these folks (being an important member of the plutocracy) rarely select clarity as an option in reporting on these matters. They mostly like to fog up people’s minds by simply playing useful sound bites, and offering commentary by partisans which never are interested in clarity, but simply continue to play upon the vast, unmitigated ignorance of the American voter. I heard some time back that there were a couple of media outlets which were considering a running critique of pols’ statements across the bottom of their screens to get at the deceptive quality of the current political dialogue. It never happened, and I continue to be appalled at how the public refuses to go after this totally slack reportage and editorializing which is misleading at best and downright immoral at worst.

    Don’t ever stop trying to push for clarity in these debates, one never knows when a little of this will seep into the national consciousness. Sooner or later there should be some intellectual osmosis taking place, at least one can hope.

  60. Your entire agrument is arbitrary. When government taxes, it is taking property/money away from its citizens. Spending occurs after government has confiscated your property, some bureaucrat decides how “best” to disperse the property/money to his subjects to keep them content (i.e Greece). Equating tax credits and Government spending as one in the same is unintellectual. Government should not decide how much property it will let its citizens keep.

    Anyone that looks for government to solve their problems will end up being disappointed.

  61. @DH. “Government should not decide how much property it will let its citizens keep.”

    Your description doesn’t describe our monetary system in any way. Property isn’t money. Property is a real asset. The private and external sectors spend money issued by a government with a sovereign currency system. I challenge you to describe our monetary system in a logically consistent manner that includes the assumptions you make. If you want to talk about how the private, external, and government sectors balance real asset use, then you can talk about inappropriate claims to resources. We have a good system for making those policy decisions in public. It is a good system, and many are working for a more perfect one.

    Try reading and then working through the MMT links above. Reading them and saying that MMT is “tin hat” or concluding that you don’t believe it without working through the model by looking at the math, examining Fed and Treasury documentation, sifting through the data, etc isn’t honest, or useful.

    We don’t have a debt crisis. We have a depressed aggregate demand crisis that reflected in our high unemployment figures.

    James explained the private/public thing well with:

    “But it’s also absurd to think that the federal government exists independently from the American people. Really it’s a kind of fetishism: in Wikipedia’s words, “the attribution of inherent value or powers to an object.” Apparently some people have hated the government so long that it has become a kind of magical totem in their minds.”

    //so it goes …

  62. @ RayW, I was going to attempt tackling it when I got home today, but you’ve done a much better job of it than I could have….^ 5.

  63. See Greece over there —> that’s our future if things don’t change!

    The working stiffs have been saddled with cost of malfeasance of their politicians that lined their pockets so corporations (e.g. bankers, etc) could hoard the loot in their Swiss Bank accounts.

    Maybe, we are not Greece today but if we have to fund private Industries with windfalls because supply-side economics says we must give away the store to promote economic progress — but at what cost and at one point does it become counter-productive? With all these corporate windfalls where is the trickle down?

    As James pointed out, the numbers look bad — that is only because US govt is such a push over on controlling costs. I am not talking about decreasing benefits to ordinary citizen but the Industrial, Medical, Military, Lobbyist complex that promotes corporate welfare.

    (Corporate welfare like) Simply, US pays twice the amount that the Swiss pay for health care. US pays for military missions all around the world. Gives tax breaks to Oil, Coal, Gas, Ethanol (until recently), Agriculture, and sure the list goes on. Plus, any time a lobbyist can deregulate an industry is always a multi-billion dollar boon that goes directly into their pockets.

    It doesn’t take a rocket scientist to call a potential future train wreck in the making.

  64. “The Constitutional Interpretation — what it means for America’s Preservation?” (past to present)

    Too date the United States has had a total of 112 Supreme Court Justices, all partisan to political affiliation (with very few exceptions?) , having dramatic, and sometimes dire consequences to our Republic as a whole.
    The list below shows party affiliation as follows:
    #1 – #13 Federalist (13)
    #14 – #20 Republican (GOP – Grand old Party) (7)
    #21 – #34 Democrats & Whigs ([11 Democrats & 2 Whigs]) (13)
    #35 – #48 Republican (14)
    #49 – #50 Dem’s (2)
    #51 – #54 GOP (4)
    #55 – #56 Dem’s (2)
    #57 – #65 GOP (9)
    #66 – #68 Dem’s (3)
    #69 – #75 GOP (7)
    #76 – #87 Dem’s (13)
    #88 – #92 GOP (5 )
    #93 – #96 Dem’s (4 )
    #97 – #106 GOP ( 10)
    #107 – #108 Dem (2 )
    #109 – #110 GOP (2 )
    #110 – #112 Dem’s (2 )
    Totals:____13 Federalist___2 Whigs___58 GOP___39 Dem’s (you do the math?)

    Note: The Chief Justices have absolute control over the bench and its direction – basically a one man show (JMHO)

    Ref: http://en.wikipedia.org/wiki/List_of_the_Justices_of_the-Supreme_Court_of_the_United_States



    Please note: The country has a timeline that correlates to “War & Peace,… juxtaposed with “Prosperity and (Depression’s/ Recessions) Futility! I find this very relevant, especially concerning today’s activist judges that now sit on the Bench!

  65. @Lady In Red – Did you see this “analysis” that is the Editor’s Pick on CNBC site? Here’s part of it:

    The U.S. tax code is “absolutely broken” and the only way to fix it is to spread the burden to lower-and middle-income earners, Scott Hodge, president of the Tax Foundation, told CNBC Thursday.

    “The United States leans more heavily on the top 10 percent of earners than any other country on Earth and our poor people actually have the lowest income tax burden of any industrialized country,” he said.

    According to Internal Revenue Service data, the top 25 percent of earners paid 86.3 percent of federal income taxes while the bottom 50 percent paid 2.7 percent of taxes. Those in the middle paid 11 percent of taxes.

    “We need to broaden the tax base,” Hodge said. “I hate to say this because no one’s going to like this in Washington but we need to bring many of those people who no longer pay any income tax back on the tax rolls.”

    I guess the IRS slapping penalty fees on people who don’t buy for-profit health insurance isn’t enough to keep the war profiteering satiated…

    Carla’s link had interesting commentators – dueling bible quotes, Woop, – figuring out who is doing *god’s work*


    sorry, the dude used all caps:


    Monkey Brains believing their own made up crap, Part III.

    At heart, the REAL math they’re following is:

    More misery for others = More $$$$ for ME ME ME.

    “In the beginning there was MONEY, and then came life.”

    Let’s see how Greece enforces it….if thugs arrive on their shores to take it, the Just War against the global Orks will be officially announced. (wiki Just War – first *officially* declared Just War was against the Teutonic Knights a thousand years ago). You’ve got to thin their herd periodically….

  66. again, What is this… “Washington”?

    That’s for the Supreme Court to decide? Coming soon to a neighborhood near you, “The Supreme Court will take up the Constitutionality of Obama’s Health Care Reform”! This will be on the Robert’s docket by mid 2012.
    This is government by the 3rd ( Party on?), and is sure to be exulted, and hailed by MSM (the now defunct 4th (Party on?) of a Monarchy?
    The deficit means nothing to these buffoons as long as the world is held in this steady-state political, and war like trance… perpetuated by a few “Oligarchy (one per continent) Wizard’s”!

    Ref: http://en.wikipedia.org/Supreme_Court_of_the_United_States#Composition

    PS. Where’s Timmy off to now that he’s done the bidding for his masters? Answer: Just follow Orzaq and company,…? Oh, and by the way, once the ECB and the IMF have raped and pillaged Greece of all intrinsic, and tangible wealth – will it let go. (JMHO)

    Been getting a lot of Tele` lately Simon, Bravo !!!

  67. @ Earle, I’m not a betting person, but if I did bet, I’d bet the Robert’s court won’t TOUCH the health care legislation, because it represents a cash cow to big insurance. Robert’s and his ilk on the Court, which some on this board have referred to as “right wing fascists” (la la la de da de la la), never met a law they didn’t love, that enriched their benefactors, masters, overlords, and string-pullers.

    Happy 4th, Earle!

  68. @earle – How long has Greece been a country?

    So are you suggesting that this time around, through virtual reality, tens of hundreds of years of LIFE in Greece is going to get sucked up into predatory *banks*?


    How’s that work – the majik of virtual reality…?

    Time to push the LIARS to go “all in”…let’s see who has the *nuts* at the final table…

  69. Folk…. This is not about how many angels can dance on the head of a pin: we are up against a wall.

    I listen to NPR prat about the number of times the debt ceiling has been raised….and how it’s all political…. and Obama voted against it when he was a senator, because the Republicans…. and, then, next….

    So. We *always* raise the debt ceiling?

    And, we *always* kick the can?

    And we *always* protect Wall Street? ….with incomprehensible legislation designed to allow the creeps to do whatever they want….? And, what….? We re-elect Obama to Stand Against Them…?


    We need a new plan, folk.

    You know: as much as I worry about an “American taliban” incubating inside the “forced birthers” in the Christian right, the only ones I think have a chance against Wall Street are Palin, Bachmann…. Chris Christie might handle it. Maybe no matter who we should have Elizabeth Warren riding shotgun….

    The rest is posturing. And, frankly, this crop of boys mostly just ain’t gonna cut it.

    (One has to laugh at the thought of Obama not “letting” Geithner go! I wonder: is he stuck to your hand, or something…?)

    I’d wipe out 90 per cent of Congress for more newbies: smart people dedicating a chunk of their lives for their country and, then, back home.

    This is bad, James. Simon, you know: this is bad.

    As Dorothy Parker so aptly put it: “This isn’t just plain terrible. This is fancy terrible. This is terrible with raisins in it.”

    And, if I laugh, ’tis that I may not weep. …..Lady in Red

  70. @ Lady, why do Palin, and Bachmann receive such pervasive media attention, if banking interests had even the slightest doubt as to their true allegiances?

    Also, Chris Christie…..a republican insider with documented, questionable business dealings, that some would argue reflect poor judgment, rampant conflicts of interest, insider sweetheart deals……what the federal government terms a “conflict of interest” seems to be standard operating procedures for this gent.

    You made want to re-consider how these three people would decide important matters in office, by looking at their track record.

    In any event, I agree the options are extremely limited, and it’s massively depressing.

  71. “Banking interests” are terrified of both Palin and Bachmann, I think.

    (I know little of Christie, but I like is forthright speaking. And, bringing the unions in line.)

    I hark back to Ross Perot, made out by the media to be a fool, a jerk…. “unqualified.”

    What Perot was was an outsider: someone the Beltway folk couldn’t predict.

    The Punch and Judy show of Dems vs Repubs is predictable. It doesn’t really matter which side wins
    as long as the “players” stay the same. It will only be shadow boxing.

    We need outsiders.

    Hell. The Tea Party is beginning to talk about keeping Congress folk in their districts and only going to
    DC for a short period of time to deal with pending legislation, not steeping in the pot of lobby organizations.

    We don’t need more laws, more politicians who are responsible for new legislation. We have too many f*******g laws! Repeal ten for each new one passed.

    Simon has, sadly, folded his tent since I discovered him with his piece, The Quiet Coup. Now, he lectures, testifies, appears on tv. ….will be comfortable in his old age.

    I’m looking forward to “The Undefeated,” the story of Palin. It’s hard for me to comprehend withstanding the trashing she endured. …and, still: no one knows about Obama at Columbia…. his intl travel as a young man…. his Marxist friends…. all of this is buried. ….Somewhere.

    ….but they’re going to interview each of Bachmann’s 23 foster kids hustling for dirt. …Lady in Red

  72. I am a strong unionist, Lady, and people like Christie should take up a hobby, and stop harping on workers. He NEEDS to turn his attention Inward, as in discovering just how WRONG his own conduct has been, before he yaps his big trap over how bad labor unions are ripping people off.

    Certainly, highly questionable transactions that made some people tons of money have more appeal to a mass audience that beating up on teachers making $70K per year.

    But this is classic for republicans, trash labor, while ripping off and gaming the system for you and your buds.

  73. Well.

    I have not been a “strong unionist” since the death of Eugene Debs.

    I suppose the world needs “you” as a counterpoint to something.

    I was appalled when NJ union leaders refused to allow seats for parents and children of the school system
    to a legislative session on teachers’ rights, salaries: “when they pay dues…..”

    Esp. teachers unions have nothing to do with education any longer. They are about teacher pay,
    classroom size, teacher seniority, teacher benefits, teacher vacations and no accountability because
    it’s “difficult” …. and,

    …anyway, any problems are the fault of the parents, or the lack of parents, the buses, the principals,
    the school boards, the….

    Sadly, the worst of the very worst who slide through a college education become teachers — and they
    force out anyone who is competent.

    Teachers’ unions are about lazy, dumb folk and their entitlements.

    This was not a cage you should have rattled: I believe the American public educational system is soooooooo broke the only fixing will come after we destroy it. The worst of the parasites will hang on to the very end: they couldn’t get jobs changing sheets in a motel. I hope we do not sacrifice another generation to the incompetents.

    You challenge me to consider: which is worse: Washington, DC or the American public education system? Hmmmmmmmmmm. ….Lady in Red

  74. I’ve suspected for many months your reactionary approach to complex issues, Lady, and your insipid rant this evening provides only additional proof of factual ditto-brain status.

  75. How’s that work – the majik of virtual reality…?

    Your in the wrong game, its called Global warming and the South Pole ice shelf. At 3/4 the worlds ice reserves, it could break off and migrate to warmer waters causeing a 175 foot rise in the ocean levels world wide in rather short order. A panic would ensue to block the ocean from bays such as San Fransico and the Mediteraian to name a few, if unsuccessful Greece would go the way of Atlantis and just what Earle described.

  76. Sorry Woopie, you lose out. At one time there were only women, she had a problem and had to create man. But man overwhelmed the system and took it over to advance his gains, not even taking a moment to relize where he had come from. And today we see the result of his policys and wars in the form of NUMBERS. They are ugly, hypocritical, and wrong to all but him. So pick your side and bide your time for a God you don’t believe in, can fix our problem.

  77. @ herbie, you must know, I like women, I love women, some of my best friends are women. But to suggest women are less war-mongering than men, in positions of power, influence, or authority, is sexist, and runs contrary to reality.

    Mrs. Clinton is a case in point, but there are many others that could be named.

    As for my belief in the Almighty, only my heart knows my real feelings.

  78. @Owen – that was sarcasm about the majik of virtual reality. And the contraction of “you are” is “you’re” :-)

    @Woop – you’re right about women and power – but it was a necessity to become sneaky and conniving and ruthlessly selfish in the daily dealings with the physical superiority of brute force that man threw around. Modern man did not change his ways, but added the feminine ploys to his bag of tricks. And which women do then end up worshiping? A Nihilist like Ayn Rand….

    What I find most impressive about the fruit loops woman’s soup served up by CIA et al pawing through their databases for Eliza Doolittle material is how much effort both women put into not learning a damn thing that is real about life. Which makes perfect sense that they should be the “chosen ones” – they will always choose the path that will create the most misery, the most blowback, the most unintended consequences. Just how the boys like it…

    Pervasive and so perverse, this “religious” trolling – Hospice asked the family, “…Does she believe in suffering?…” Nanosecond response, emphatically delivered in perfect timing from everyone present – “NO!”

    No way that one woman is going to get into the private life of another woman without one hell of an all out cat fight – and the babushka busybody stupid enough to start telling other women who are WAY MORE QUALIFIED TO RUN THEIR OWN LIVES than she is, and have the PROOF to back it up, that stupid busybody will end up defeated – I can promise you that.

    So you are right, kids. There are no good choices for Prez – how could there be? After this past decade, if you were to drag out a 50-something PERSON forced into poverty after a LIFE of honest work – you’d find out exactly what and HOW the predators took down *the economy*.

    We are in a very real “Cold War” – which will occasionally and UNEXPECTEDLY run *hot* every once in a while….

    The WORST traits in humanity come up to the surface in the struggle for survival – 7 BILLION people is a NUMBER that turned humanity into an insect life form – most akin to a cockroach, btw. Like I said before, the question remains on the table from *micro* cultures – WHY did they not know how to keep the balance of 100 people to 1000 buffalo….just how stupid are they about *nature*?

    You’ve all lost your – how does that phrase go, ah yes – you’ve all lost your cotton-picking minds over these past few years of bs-ing at the final table with the made up crap of ismm this and ist that – time to turn over the cards….

  79. again, and again… What Is This “Government”?

    The Over-Reaching Neo-Federalist/Whig Government and the Unconstitutionality of “Forced Fed Obama Care”! That’s what our government is,… with the help of all MSM? (JMHO)

    Your choice if you decide to choose is one of three,…

    #1) “Obama’s Death Panels”? or,… #2) “Death in Dante`s,… “The Quintessential Post-Revival Resurrected Poor`House”? or,… #3) “WWIII “? (remember that Einstein was quoted as saying – it was WWIV that would consume all humanity! (so we’ve got another score to settle?)

    Ref: http://en.wikipedia.org/wiki/Los_Angeles_Times


  80. Classic – after 10 years of pushing out the GOOD teachers under “Every Child LEFT Behind” totalitarian bs

    The cry is “bad, lazy teachers” – they’re YOUR hand-picked through psychobabble testing cadre of aparatchiks!

    Who are you kidding with that schtick?! Parents are going to have to stop acting like they don’t have the ULTIMATE responsibility for educating their own spawn.

    Since 1934 Earle we’ve had the *nuts* (and in case anyone is confused by what *nuts* I’m talking about, I am using the Poker use of the word *nuts* – it means you have the winning hand. It does not refer to presidential candidates :-)) being ALLOWED to run up against Obambi.

    We’ve got the *energy* nuts – always did. Game over, Koch et al. Or is this now where the guns under the table are going to come out? Ain’t no roach faster than a native Northeast one that grew up on the streets…

  81. Yes, yes, with the spelling, i’ve been wrenchin w/ the car all day long.

  82. Earle, its not quite that bad, toward the end we still owed the creator one last chance for her survival. To my knowledge it has never been accomplished in all the universe, and she is still a teen. So the ace in the hole can’t even be used for a minimum of 5 years without spoiling her chances. The formula then reverts back to the greed-vs- numerology equasion which in the end, the numbers actually prevail if one can stomach the greed. Which leads me back to the biding of time and efficient use of resources, for the time being. And quelling rebellion from time to time.

  83. Mr. Kwak is right on point: we shouldn’t do anything that would interfere with the social and economic justice programs that made this country great. And to think the evil Republikkkans want to end Obamacare when it’s so going to help this country and save money in the end. Nothing is unsustainable if we just keep taxing the working class more so that they can do their part in helping those either unwilling or unable to help themselves.

  84. Wow, Edgar! I thought “Washington” was just stupidity, laziness and greed. I never imagined that there
    was a theory behind it all.

    I’ve been out of school too long. ….smile. …..Lady in Red

  85. Public choice? Nice theory to explain how current political situation is in a state of decay. When, you have a Senator, Mitchell McConnell who has been office for 26 years say those folks in Washington. I ask is he taking about himself or is this another exercise in calling the kettle black? It just makes my stomach turn listening to all this grandstanding and bickering on all fronts and does very little to address the “REAL” problems in an intelligent manner. SIMPLY, these politicians have been selling out to whomever can provide the best retirement cushion. There is no urgency to change business as usual. Shame on us for being such children about concept of mutual sacrifice. Subsidies for successful businesses need to stop. Medical industry in US need to live with current world levels for payment for services. People live longer and that results in more medical costs. It is a given that more money will need to be set aside to offset those costs along with possibility of raising retirement age. Very sad, but taxes are required to differentiate civilization and that unspeakable alternative. Lots of academics have crunched the numbers the choice continue down current path until system breaks or deal with it now while we still have choices.

  86. “Washington” would be doing us all a favor, if “it” stopped marching to the beat of foreign lobbying interests, and earnestly commenced paring down this massive military-spying-security complex, erected, once again, for the interests of bankers, and executives.

    Ending the illegal occupations and wars all over the planet, closing off all the dying vestiges of empire, and behaving as a responsible, lawful, political entity….would begin enhancing the lives of millions, across the planet.

    Finally, end the self-deluded paranoia, manifested through incessant, expensive, and useless spying and controls of millions of Americans, etc. These are the sorts of abuses, albeit high tech, that riled souls, and inflamed passions of colonial America, and led to the eloquent and heartfelt break from the Crown, on July 4th, 1776. Burn forever the ironically-named “PATRIOT ACT”, and stomp the ashes under foot.

    America still holds the promise of a better tomorrow, but there isn’t much time left, and The People sense this.

  87. The issue is that much government spending is currently being borrowed and that we are approaching our credit limit. Failure to address the deficit risks a credit downgrade and then a sovereign debt crisis here. Interest alone at $207 billion would be over $700 billion if normalized and in a sovereign debt crisis rates would go higher than the recent average. Government spending should not be included in GDP; we should be measuring the base to see whether it is growing or shrinking. We know it is shrinking and that means government is unsustainable and borrowing trillions to make us feel better has been a big mistake that destroys future growth. It is going to be very painful lowering the deficit but it must be done.

  88. “This July 4, at holiday outings, picnics, barbecues, ballgames, outdoor concerts, parades, fireworks displays, visits to the shore on vacation, and other celebratory events, remember the growing millions of victimized and deprived Americans in need. The state ignores them, denies them, even condemns them for their plight. Those most desperate are helped the least so the most privileged and well-off can be advantaged the most. As we give thanks and count our blessings this and every day, think of the poor and desperate who have few or none of what we take for granted. Remember, but for the grace of the Almighty, their plight could be ours.”

    “Finally, remember as well on our “day of independence” the many tens of millions worldwide we deprived of theirs. Included are the people of Iraq, Afghanistan, Palestine and every nation living under US-imposed neoliberal unfair free-market rules exploiting the many for the interests of a privileged few. Those harmed range from the southern tip of Chile to the vastness of Africa to the Asian continent and throughout Europe, most notably in the East once under Soviet control. People everywhere pay for our nation putting wealth and power interests above basic humanity.”

    “On this “independence day” and all others, think of them and our own deprived millions at home. Then imagine a future time free of that condition because enough people mobilized to change things bettering everyone. That would be something worth giving thanks for and celebrating.”



  89. @Anonymous “US-imposed neoliberal unfair free-market rules”???

    When the Basel Committee for Banking Supervision, whose recommendations the USA is committed to follow, decides that when a bank lends to the government it requires zero capital but that when it lends to a small businesses or entrepreneur it needs 8 percent of generously defined bank capital (Basel II), or 7 percent of a more strictly defined capital (Basel III) it is doing much more than regulating and supervising banks, it is in fact introducing a monstrous almost communistic pro-government bias into the world’s financial system, as well as an unexplained risk-adverseness that could easily jeopardize the creation of the next generation of decent jobs. Who on earth authorized the Basel Committee to do that?

  90. Thats an interesting article Woop,

    The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and (bounties for services in suppressing insurrection or rebellion, shall not be questioned.”)

    The only problem I see is they overlooked the “authorized by law” phrase. That means congress shall approve the validity of the debt, by raising it’s limit, which so far they have not. [And part of that amendment needs be removed, its straight up black mail at its best.]

  91. I am still reeling at Edgar’s “public choice” link.

    I cannot imagine a more succinct description of political corruption.

    I’m terrified of the American taliban wing of the Tea Party, long term.

    But, for now, the Tea Party is where The Good Guys are.

    Ultimately: never ever ever ever re-elect anybody to Washington.
    No matter how good: corruption pervades. … and power corrupts,
    too! ….smile. ….Lady in Red

  92. The very same chickenhawks, and funnyboyz decrying “biggovenment”, are the same pack of hobggoblins pimping, promoting, and profiting from private military, ittelligence. and communications industrial complexes.

    The gop are lockstepunison pathologicalliars. They’re predatorclass, and so an enemy of the people – they hold absolutely zero concern for their socalled fellow Americans, – – why should we hold any less for them??? .001 of the population has raped and pillaged and robbed the remaining p.999% of population. And this horrorshow continues unabated at this celebratory moment. This thread has brought to light the glaring problem.. Waytoofew have raped and pillaged and robbed fartoomany.

    We must bring and end to this horrorshow.

    In a world where there are no laws, – there are no laws for anyone predatorclass biiiiiaaaatches!!!

  93. Wow.

    I suspect this is not about numbers. This is about “feelings.” And quite unchangeable.

    I’m beginning to understand the class warfare thingie. ….Lady in Red

  94. No rulers, historically, treat their people worse than those in a lot of Arab tribal “kingdoms”. And now they have the $$$ to employ a permanent mercenary army – look at where the devil worshiping Blackwater dude is living now. Talk about creating a global business – all done *off the books* under the guise of a *cheap* decade long WAR.

    Constitutional Convention – forge an *energy* policy. Burn The Patriot Act.

    The scum bags have jumped ahead with that ludicrous 14 Amendment….!

    Law and Justice do not rest with the minority. The majority rules – if only through the physics of inertia.

    The oil WILL RUN OUT. Any HUMAN who is too stupid to get that REAL fact needs to be hauled off any stage they pontificate their stupidity from…which seems to be D.C. these days.

    Tea Baggers don’t have any credibility – never did. Pure hooliganism – drunken stupidity – and SO EASY to take down if they had to present their *ideas* in a civilized debate. That’s why they keep trying to instigate violence….

  95. History is a great teacher. Look to the empires of the past for a vision of what is to come. Whenever, themany are ruthlessly oppressed and abused by thefew, – the end is always relovution. Then, all bets are off. The Godz and Goddesses determine the end, and we stupid and feable humans are merely spectators to the chaos.

    Don’t imagine many of us will go sheepisly to the trains and ovens. “You got another thing coming!!” predatorclass biiiiiaaaatches!

    Buckle up!

  96. Here’s more evidence, of the ruthless oppression by the few, Tony, in contradistinction to the suffering of say……….sooooo many underwater on mortgages; unable to fund a private education for their children..at the very same school attended by the parent; at rising costs in energy, food, and other living necessities;…..all the millions of hopelessly and irrevocably unemployed, or employed in low-paying positions and subject to the harsh dictates of heartless employers;……perhaps the synergy of these things with engender the “reckoning”, as you so eloquently write.

    But read this, also, but you may want to swig some MAALOX before:


  97. @Woop “ruthless oppression by the few”

    I guess you refer to the regulators because

    Who authorized the Basel Committee and some other few regulators to do more than regulate or supervise banks and change the whole social fabric of our economy? http://bit.ly/mU3ERz

    And who authorized the Basel Committee to award “too-big-to-fail” franchises to some “systemic important financial institutions” and thereby de-facto classify all other banks as “systemic unimportant and irrelevant financial institutions”? http://bit.ly/mU3ERz

  98. @ Per, first, I love your technical views on regulators, these are invariably incisive and difficult to rebut, to be sure.

    You are correct in asserting Basel’s capital requirement differentials represent “a monstrous, almost communistic, pro-government bias into the world’s financial system”, but I also maintain that it’s clear the effects of regulatory oversight can be distorted and exaggerated with certain viewpoints, not the least of which is your own sophisticated one.

    Anyway, I regard your contributions to this forum as important, and await your reply.

  99. Per, what about the sleaze-buckets at the rating agencies? Surely, this is some hot spot in hell reserved for these scoundrels?

  100. @Woop… Do you mean to say that there is a higher proportion of “sleaze-buckets” at the rating agencies than there is in other places of society? Could not the real problem be that somebody gave these rating agencies more importance than they should have, and therefore empowered too much the standard amount of “sleaze-buckets” always present to do more harm than usual?

  101. Per, perhaps no higher in concentration at the rating agencies than in the general population, but the sleaze effect at the former arguably inflicted more harm, than, say, an irascible salesman who habitually pads his expense account, without detection.

    Your second point is well-taken.

  102. “…traits such as superficial charm, an exaggerated sense of self-worth, glibness, lying, lack of remorse and manipulation of others.These traits, Kouri points out in his analysis, are common to psychopathic serial killers. But — and here’s the part that may spark some controversy and defensive discussion — these traits are also common to American politicians. (Maybe you already suspected.)”



  104. “JAY: So, what do you think? Good versus evil. We’re playing out the debt struggle and the debt ceiling issue. And if we don’t raise the debt ceiling, we’ll be in the apocalypse. What do you make of it all?”

    “HUDSON: I think it’s evil working with evil. I think the whole argument in Congress is a charade that was pretty much set up two years ago, when the Obama administration first took office and Mr. Obama appointed the reduction commission of Republican Senator Simpson and Clinton manager Bowles. When Mr. Obama went on television two days ago, he said he’s hoping to reach a compromise, which is pretty much what this commission said. And the people he appointed to the commission to head it were the people who said, number one, cut back Social Security. If you have to choose between paying Social Security and Wall Street, pay our clients, Wall Street. And secondly, cut back Medicare. But most especially, cut back Medicaid to the poor. You have to give money to the job creators, mainly the financial managers who are closing down firms, downsizing, and outsizing–outsourcing on labor. They’re called job creators instead of–to the people who actually get work and spend money on goods and services, which is what’s keeping the market going in business.”


  105. “The budget debate is a charade. Republicans are playing bad cop. Obama plans selling out his constituency. Ahead is a nightmarish scenario comparable to Greece, impoverishing working households to pay bankers, starving states and cities of revenue, forcing them to sell public assets cheap, putting America on sale at fire sale prices, creating a dystopian Great Depression, wiping out generations of social progress.”

    “Moreover, only a democrat could do this, especially a smooth talking charlatan like Obama – more duplicitous and pernicious than hardline Republicans saying, “(M)eaningful changes to Medicare, Social Security and Medicaid (plus other social spending policies must be made to) preserve the integrity of the programs and keep our sacred trust with our seniors (and other needy households), but make sure those programs were there not for just this generation, but for the next generation.”

    “He lied. He wants them incrementally ended, perhaps over the next decade when another president will have to answer for his social destruction. His Wall Street and other corporate cronies demand it. They also want and will get the debt ceiling raised. It’s why they funded his 2008 campaign, put him in the White House, and assure his reelection if he plays ball.”


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