Category: Social Issues

THANK GOD I’M WHITE

Fascinating report put out by the Census Bureau this morning. Here are some key points:

  • The nation’s official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009, the third consecutive annual increase in the poverty rate.  
  • There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009, the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published
  • The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage -16.3 percent – was not statistically different from the rate in 2009.
  • Breaking it down by ethnicity, living in poverty were 27.4% of all blacks, and 26.6% of all Hispanics. White, non Hispanics and Asians were doing better at 9.9% and 12.1% respectively.

Looks like us white folks are doing better than those minorities. I find this data fascinating. The number of people in poverty rose for the fourth consecutive year to an all-time high. But how could that be? Our very own government reported that Real GDP grew 3.0% in 2010. How could more people go into poverty if the economy grew strongly? It’s because the economy did not grow. The GDP numbers are a lie. The government borrowed from the Chinese, transferred the money to the poor and called it income.

The only people who recovered in 2010 were Wall Street bankers and big corporation CEOs like Immelt. The average person’s life got worse – little or no pay increases, higher food costs, and higher energy costs. If the economy had actually recovered in 2010, why did 6 million MORE people go on food stamps since 2009?

Obama and his minions got everything they asked for in 2009. They had both houses of Congress and they passed their plan, lock, stock and barrel. But somehow their Keynesian solutions led to greater poverty, 23% unemployment, and declining household income. Are you shocked that blacks and hispanics have almost three times the poverty of whites? When more than half your population is born out of wedlock and 50% of your kids drop out of high school and you depend on the government to pay your way in the world, what do you expect. At least they still have their Direct TV, cell phones, and SNAP cards.

The most revolting figure in the report is the real median household income of $49,445. This means 50% of the households in the U.S. make less than $49,445 per year. Below is a chart showing the real median household income going back to 1975. It is now lower than it was in 1997 and 6% below the peak, reached in 1999. Imagine the result if we used the real rate of inflation, rather that the government manipulated piece of shit called the CPI. My educated guess would be that real median household income is lower than it was in 1986.  

Year No. of Households Nominal $ Inflation Adjusted $
2009 117,538,000 $49,777 $49,777
2008 117,181,000 $50,303 $50,303
2007 116,783,000 $50,233 $52,163
2006 116,011,000 $48,201 $51,473
2005 114,384,000 $46,326 $51,093
2004 113,343,000 $44,334 $50,535
2003 112,000,000 $43,318 $50,711
2002 111,278,000 $42,409 $50,756
2001 109,297,000 $42,228 $51,356
2000 108,209,000 $41,990 $52,500
1999 106,434,000 $40,696 $52,587
1998 103,874,000 $38,885 $51,295
1997 102,528,000 $37,005 $49,497
1996 101,018,000 $35,492 $48,499
1995 99,627,000 $34,076 $47,803
1994 98,990,000 $32,264 $46,351
1993 97,107,000 $31,241 $45,839
1992 96,426,000 $30,636 $46,063
1991 95,669,000 $30,126 $46,445
1990 94,312,000 $29,943 $47,818
1989 93,347,000 $28,906 $48,463
1988 92,830,000 $27,225 $47,614
1987 91,124,000 $26,061 $47,251
1986 89,479,000 $24,897 $46,665
1985 88,458,000 $23,618 $45,069
1984 86,789,000 $22,415 $44,242
1983 85,407,000 $20,885 $42,910
1982 83,918,000 $20,171 $43,212
1981 83,527,000 $19,074 $43,328
1980 82,368,000 $17,710 $44,059
1979 80,776,000 $16,461 $45,498
1978 77,330,000 $15,064 $45,625
1977 76,030,000 $13,572 $43,925
1976 74,142,000 $12,686 $43,649
1975 72,867,000 $11,800 $42,936

 

The average family in the US is making much less money than they were 12 years ago. This supports John Williams contention that the US has virtually been in a decade long recession, despite what the government and main stream media report.

The situation continues to deteriorate. These families made up for their decline in income, by increasing their credit card, auto loan and student loan debt from $1.4 trillion in 1999 to $2.5 trillion today. Without jobs, incomes can’t rise. The Obama solution will be to funnel more of your money to those classified as in poverty. The only solution that will work is to liquidate the banks, liquidate the debt, wipe out those who made bad decisions, and start over. No one wants to accept the reality of this solution. It is too painful. It is mean and brutish. Tough shit. It is the only way. We could soften the blow by withdrawing our troops from around the globe, protecting our own borders and freeing up hundreds of billions in war spending for domestic purposes. What a concept – building bridges in the U.S. rather than rebuilding bridges we blew up in Iraq.

Otherwise we will continue on a path of ever declining income and bankers enriching themselves at our expense. But, at least I’m white. I got that going for me.

Income, Poverty and Health Insurance Coverage in the United States: 2010

Summary of Key Findings

     The U.S. Census Bureau announced today that in 2010, median household income declined, the poverty rate increased and the percentage without health insurance coverage was not statistically different from the previous year.

     Real median household income in the United States in 2010 was $49,445, a 2.3 percent decline from the 2009 median.

     The nation’s official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009 ─ the third consecutive annual increase in the poverty rate. There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

     The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage −16.3 percent – was not statistically different from the rate in 2009.

     This information covers the first full calendar year after the December 2007-June 2009 recession. See section on the historical impact of recessions.

     These findings are contained in the report Income, Poverty, and Health Insurance Coverage in the United States: 2010. The following results for the nation were compiled from information collected in the 2011 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC):

Income

  • Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred prior to the 2001 recession in 1999. The percentages are not statistically different from each another.

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

  • Among race groups, real median income declined for white and black households between 2009 and 2010, while changes for Asian and Hispanic-origin households were not statistically different. Real median income for each race and Hispanic-origin group has not yet recovered to the pre-2001 recession all-time highs. (See Table A.)

Regions

  • Households in the Midwest, South and West experienced declines in real median income between 2009 and 2010. The apparent change in median household income for the Northeast was not statistically significant. (See Table A.)

Nativity

  • Median income for households maintained by native-born householders declined between 2009 and 2010 in real terms. The change in the median income of all foreign-born households was not statistically significant. (See Table A.)

Earnings

  • In 2010, the earnings of women who worked full time, year-round were 77 percent of that for men working full time, year-round, not statistically different from the 2009 ratio. The 2010 real median earnings of these men and women were not different from the 2009 earnings.
  • Since 2007, the number of men working full time, year-round with earnings decreased by 6.6 million and the number of corresponding women declined by 2.8 million.

Income Inequality

  • Based on the Gini Index, the change in income inequality between 2009 and 2010 was not statistically significant, while the changes in shares of aggregate household income by quintiles showed a slight shift to more inequality. The Gini index was 0.469 in 2010. (The Gini index is a measure of household income inequality; zero represents perfect income equality and 1 perfect inequality.)

Poverty

  • The poverty rate in 2010 was the highest since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. Since 2007, the poverty rate has increased by 2.6 percentage points.
  • In 2010, the family poverty rate and the number of families in poverty were 11.7 percent and 9.2 million, respectively, up from 11.1 percent and 8.8 million in 2009.
  • The poverty rate and the number in poverty increased for both married-couple families (6.2 percent and 3.6 million in 2010 from 5.8 percent and 3.4 million in 2009) and female-householder-with-no-husband-present families (31.6 percent and 4.7 million in 2010 from 29.9 percent and 4.4 million in 2009). For families with a male householder no wife present, the poverty rate and the number in poverty were not statistically different from 2009 (15.8 percent and 880,000 in 2010).

Thresholds

  • As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2010 was $22,314.
    (See <http://www.census.gov/hhes/www/poverty/data/threshld/index.html> for the complete set of dollar value thresholds that vary by family size and composition.)

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

  • The poverty rate for non-Hispanic whites was lower in 2010 than it was for other racial groups. Table B details 2010 poverty rates and numbers in poverty, as well as changes since 2009 in these measures, for race groups and Hispanics.

Doubled-Up Households

  • Doubled-up households are defined as households that include at least one “additional” adult: a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder. In spring 2007, prior to the recession, doubled-up households totaled 19.7 million. By spring 2011, the number of doubled-up households had increased by 2.0 million to 21.8 million and the percent rose by 1.3 percentage points from 17.0 percent to 18.3 percent.
  • In spring 2011, 5.9 million young adults age 25-34 (14.2 percent) resided in their parents’ household, compared with 4.7 million (11.8 percent) before the recession, an increase of 2.4 percentage points.
  • It is difficult to precisely assess the impact of doubling up on overall poverty rates. Young adults age 25-34, living with their parents, had an official poverty rate of 8.4 percent, but if their poverty status were determined using their own income, 45.3 percent had an income below the poverty threshold for a single person under age 65.

Age

  • The poverty rate increased for children younger than 18 (from 20.7 percent in 2009 to 22.0 percent in 2010) and people 18 to 64 (from 12.9 percent in 2009 to 13.7 percent in 2010), while it was not statistically different for people 65 and older (9.0 percent).
  • Similar to the patterns observed for the poverty rate in 2010, the number of people in poverty increased for children younger than 18 (15.5 million in 2009 to 16.4 million in 2010) and people 18 to 64 (24.7 million in 2009 to 26.3 million in 2010) and was not statistically different for people 65 and older (3.5 million).

Nativity

  • The 2010 poverty rate for naturalized citizens was not statistically different from 2009, while the poverty rates of native-born and noncitizens increased. Table B details 2010 poverty rates and the numbers in poverty, as well as changes since 2009 in these measures, by nativity.

Regions

  • The South was the only region to show statistically significant increases in both the poverty rate and the number in poverty — 16.9 percent and 19.1 million in 2010 — up from 15.7 percent and 17.6 million in 2009. In 2010, the poverty rates and the number in poverty for the Northeast, Midwest and the West were not statistically different from 2009. (See Table B.)

Health Insurance Coverage

  • The number of people with health insurance increased to 256.2 million in 2010 from 255.3 million in 2009. The percentage of people with health insurance was not statistically different from 2009.
  • Between 2009 and 2010, the percentage of people covered by private health insurance declined from 64.5 percent to 64.0 percent, while the percentage covered by government health insurance increased from 30.6 percent to 31.0 percent. The percentage covered by employment-based health insurance declined from 56.1 percent to 55.3 percent.
  • The percentage covered by Medicaid (15.9 percent) was not statistically different from 2009.
  • In 2010, 9.8 percent of children under 18 (7.3 million) were without health insurance. Neither estimate is significantly different from the corresponding 2009 estimate.
  • The uninsured rate for children in poverty (15.4 percent) was greater than the rate for all children (9.8 percent).
  • In 2010, the uninsured rates decreased as household income increased from 26.9 percent for those in households with annual incomes less than $25,000 to 8.0 percent in households with incomes of $75,000 or more.

Race and Hispanic Origin (Race data refer to those reporting a single race only. Hispanics can be of any race.)

  • The uninsured rate and number of uninsured in 2010 were not statistically different from 2009 for non-Hispanic whites and blacks, while increasing for Asians. The number of uninsured Hispanics was not statistically different from 2009, while the uninsured rate decreased to 30.7 percent. (See Table C.)

Nativity

  • The proportion of the foreign-born population without health insurance in 2010 was about two-and-a-half times that of the native-born population. The 2010 uninsured rate was not statistically different from the 2009 rate for native-born, the foreign-born overall and noncitizens but rose for naturalized citizens. Table C details the 2010 uninsured rate and the number of uninsured, as well as changes since 2009 in these measures, by nativity.

Regions

  • The Northeast and the Midwest had the lowest uninsured rates in 2010. Between 2009 and 2010, there were no statistical differences in uninsured rates for any of the regions. The number of uninsured increased in the Northeast, while there were no statistically significant changes for the other three regions. (See Table C.)

Historical Impact of Recessions

Since 2010 represents the first full calendar year after the recession that ended in June 2009, one can compare changes in income, poverty and health insurance coverage between 2009 and 2010 with changes during the first year after the end of other recessions:

  • Median household income declined the first full year following the December 2007 to June 2009 recession, as well as in the first full year following three other recessions (March 2001 to November 2001, January 1980 to July 1980 and December 1969 to November 1970). However, household income increased the first full year following the November 1973 to March 1975 recession, and the changes following the July 1990 to March 1991 and July 1981 to November 1982 recessions were not statistically significant.
  • The poverty rate and the number of people in poverty increased in the first calendar year following the end of the last three recessions. For the recessions that ended in 1961 and 1975, the poverty rate decreased in the next full calendar year.
  •      After the most recent recession, there was no significant difference in the uninsured rate during the first full year after the recession. However, in the year following the recessions that ended in 1991 and 2001, the uninsured rate increased.

Supplemental Poverty Measure

     The Census Bureau’s statistical experts, with assistance from the Bureau of Labor Statistics and in consultation with the Office of Management and Budget, the Economics and Statistics Administration and other appropriate agencies and outside experts, are now developing a Supplemental Poverty Measure. The Supplemental Poverty Measure, for which the Census Bureau expects to publish preliminary estimates in October 2011, will provide an additional measure of economic well-being. It will not replace the official poverty measure and will not be used to determine eligibility for government programs. See Income, Poverty, and Health Insurance Coverage in the United States: 2010 for more information.

     The Current Population Survey Annual Social and Economic Supplement is subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90 percent confidence level, unless otherwise noted.

     For additional information on the source of the data and accuracy of the estimates for the CPS, visit <http://www.census.gov/hhes/www/p60_239sa.pdf>.

I SURVIVED THE 9/12 TERRORIST ATTACKS. DID YOU?

Once Janet Nepalatano, the Queen of DHS, announced a credible terrorist threat, I knew I had to jump into action. The threat level was clearly elevated. We had reached Elmo Red threat level.

And then when our resident TBP terrorist threat analyst declared unequivically that September 12th would be the day of a devastating terrorist attack on our country, I was sure I had to make a run for it. You had to take this guy seriously. He’s a Boomer and has never been wrong in his entire life.

I was sure there were hundreds of suitcase nukes planted all over the country. I envisioned mushroom clouds across the land. The horror!!!

So, I jumped in my car and high tailed it to my Wildwood condo last night after work.

I had thought this through. Muslims hate water. They also would be kept away by the chocolate covered bacon sold on the boardwalk. Plus, think of the bad publicity they would get if they blew up my Section 8 black neighbors. My plan was foolproof.

I didn’t really go down to my condo to clean it before my next tenant goes in. I wasn’t down on my hands and knees in the bathroom cleaning pubic hairs off the floor, I was cowering in fear from the Muslim menace that lurks behind every bush.

It was a fearful evening, as our TBP analyst was sure of the imminent attack. But, then the clock ticked 8:00 pm and all was well. The GOP Presidential Debate came on CNN and all my fear and worry dissipated. What a fine group of patriots. And the Tea Party crowd at the debate was wonderful. They must have all had Mensa level IQs. Our country is in great hands with these men and women at the helm.

I think a ticket of Gingrich/Santorum would do wonders for our country. Behind the mantle of Jesus Christ and American Exceptionalism, this tandem would put an end to this pussy footing around and take out Iran, North Korea, Syria and any other ragheads that act up. Newt rightfully pointed out that tripling war spending in the last ten years is disgraceful. We should have quintupled it. Think of the jobs. The deficits wouldn’t exist because we could have plundered the riches of all the countries we would have invaded. With Jesus on our side any torture or collateral damage caused by our drones and cruise missiles is justified.

I can’t understand how Santorum lost his PA Senate seat by 16%. Maybe it is the foaming at the mouth issue he has when he addresses Ron Paul.

It is shocking to me that if you add up Gingrich’s and Santorum’s support in the polls, you get a number lower than a snake’s ass. The Fox News Tea Party is out for blood. They are itching for a good old fashion Christian/Muslim Armageddon showdown. But don’t cut their Medicare or Social Security.

Rick Perry was under blistering attack during the debate. In my opinion, he deflected it pretty well. He has essentially stolen most of Ron Paul’s hot button issues. He has called Bernanke treasonous, declared he is for sound money, called Social Security a ponzi scheme, and actually said we need to bring the troops home from Afghanistan. His low taxes, more jobs Texas story is connecting with the Republican base. He has somehow been able to hide his religious fundamentalist extremism, just as GWB did in 2000.

Southerners will never get behind Romney. He is considered a smooth talking Yankee Mormon. Perry will win the Republican nomination.

There are only a few states actually in play in the general election. Nevada, Florida, and Ohio have some of the worst economic problems in the country. People vote their pocketbook. If two of these states go Perry’s way, he wins in 2012. I expect the economic situation to worsen across the board between now and November 2012. Perry may win in a landslide. The Grey Champion of the Fourth Turning has arrived on stage.

When I departed Wildwood this morning at 5:45 am for my almost two hour trek to work, I turned on the radio to listen to the reports of the terrorist attacks. I was SHOCKED to hear that none had taken place. I’m sure we owe it to the 50,000 noble warriors at DHS that foiled the Muslim terrorists. Remember, turn in anyone that doesn’t look like you. It’s the American way.

3 Ways Older Americans Are Going to Wreck Your Life

I have nothing against old people.  I adored my grandparents and I’ll be old some day and I may well be in the same position, but given the demographic shift America is facing and the economic realities we’re now dealing with, the elderly population in America is set to screw you three ways to Tuesday.  Here’s how:

They Take Your Jobs – Americans who are approaching what used to be the “normal retirement age” aren’t retiring.  They’ve lost all the equity in their homes, their 401(k)s have taken a haircut and they can no longer keep doing cash out refinancings on their homes like an ATM to support their lifestyle …

…Continue Reading 3 Ways Older Americans Are Going to Wreck Your Life

OSAMA WON

Osama bin Laden got a 660,000,000% return on his investment. SIX HUNDRED AND SIXTY MILLION PERCENT. He’s dead, but we’ve bankrupted ourselves. He would have died eventually. We didn’t have to bankrupt ourselves. But we did. He won.

http://www.nytimes.com/interactive/2011/09/08/us/sept-11-reckoning/cost-graphic.html

WHERE’S OUR OIL PRICE COLLAPSE?

Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by “green” energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded:

“The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.”

In the six years since this report there has been unprecedented oil price volatility as the world has reached the undulating plateau of peak cheap oil. The viable mitigation options on the demand and supply side were not pursued. The head in the sand hope for the best option was chosen. The government mandated options, ethanol and solar, have been absolute and utter disasters as billions of taxpayer dollars have been squandered and company after company goes bankrupt. The added benefit has been sky high corn prices, dwindling supplies and revolutions around the world due to soaring food prices. The last time the country went into recession in 2008, the price of oil plunged from $140 a barrel to $30 a barrel in the space of six months. I’d classify that as volatility. We’ve clearly entered a second recession in the last six months. So we should be getting the benefit of collapsing oil prices.

But, a funny thing happened on the way to another oil price collapse. It didn’t happen. WTI Crude is trading for $87 a barrel, up 23% since January 1. Unleaded gas prices are up 54% in the last year and 43% since January 1. Worldwide oil pricing is not based on WTI crude but Brent crude, selling for $113 per barrel, only down 10% from its April high of $125. The U.S. and Europe consume 40% of all the oil in the world on a daily basis. Multiple European countries have been in recession for the last nine months. The U.S. economy has been in free fall for six months.

Some short term factors will continue to support higher oil prices.  The Chinese continue to fill their strategic petroleum reserve, Japan is still relying on diesel generators for electricity post-tsunami, and the Middle East is developing a love affair with the air conditioner. But, it’s the long term factors that will lead to much higher oil prices for myopic oblivious Americans.

U.S. GDP 2011 Q2 update 2009-2011 US GDP second Q2011 (percent) July 2011

John Hussman describes the situation on the ground today based upon six economic conditions presently in effect:

There are certainly a great number of opinions about the prospect of recession, but the evidence we observe at present has 100% sensitivity (these conditions have always been observed during or just prior to each U.S. recession) and 100% specificity (the only time we observe the full set of these conditions is during or just prior to U.S. recessions).

With 40% of the world in or near recession, how come oil prices are still so high and much higher than last year, when the economies in Europe and the U.S. were expanding? The number of vehicle miles driven in the U.S. is still below the level reached 43 months ago and at the same level as early 2005. The price of a barrel of oil in early 2005 was $42. The U.S. is using the same amount of oil, but the price is up 112%. It seems the U.S. isn’t calling the shots when it comes to the worldwide supply/demand equation.

It would probably be a surprise to most people that U.S. oil consumption today is at the same level it was in 1997 and is 10% lower than the peak reached in 2005. This is not a reflection of increased efficiency or Americans gravitating towards smaller vehicles with better mileage. Americans are still addicted to their SUVs and gas guzzling luxury automobiles. It’s a reflection of a U.S. economy that has been in a downward spiral since 2005.

1996 18,476.15 3.89 %
1997 18,774.07 1.61 %
1998 18,946.01 0.92 %
1999 19,603.83 3.47 %
2000 19,717.92 0.58 %
2001 19,772.60 0.28 %
2002 19,834.31 0.31 %
2003 20,144.82 1.57 %
2004 20,833.01 3.42 %
2005 20,924.36 0.44 %
2006 20,803.93 -0.58 %
2007 20,818.37 0.07 %
2008 19,563.33 -6.03 %
2009 18,810.01 -3.85 %

If the U.S. isn’t driving oil demand in the world, then why are prices going up? There are three main factors:

  1. Dramatic increase in demand from China and other developing countries.
  2. A plunging U.S. Dollar
  3. Peak oil has arrived

Surging Developing World Demand

The Energy Information Administration issued their latest forecast and it does not bode well for lower prices:

Despite continued concerns over the pace of the global economic recovery, particularly in developed countries, the US Energy Information Administration expects worldwide oil consumption to increase this year and next spurred by demand in developing countries. US oil consumption, however, is forecast to contract from a year ago. Worldwide oil demand, led by China, will increase by 1.4 million b/d in 2011 to average 88.19 million b/d and by 1.6 million b/d in 2012, outpacing average global demand growth of 1.3 million b/d from 1998-2007, before the onset of the global economic downturn.

China is now consuming over 9 million barrels per day. This is up from an average of 7 million barrels per day in 2006. Platts, a global energy analyst, put China’s 2010 figures at 8.5 million barrels per day, up 11.43% from the previous year. The forecast for China’s crude throughput in 2011 is an average of 9.24 million barrels per day up 8.5% from 2010. In the first seven months of this year, total crude throughput stood at average of 8.95 million barrels per day.

Standard Chartered Bank predicts that, by the year 2020, China will overtake all of Europe as the second largest consumer of oil in the world, and should catch up to the U.S. by the year 2030 as China’s demand continues to rise while U.S. demand is expected to be flat. Chinese crude imports grew 17.5% in 2010 to 4.79 million barrels per day. China is importing 55% of its oil today versus 40% in 2004.

China’s oil consumption per capita has increased over 350% since the early 1980s to an estimated 2.7 barrels per year in 2011. Consumption per capita has risen nearly 100% in just the past decade. Oil consumption per capita in the U.S. currently ranks among the top industrialized nations in the world at 25 barrels per year. However, today’s consumption levels are approximately 20% lower than they were in 1979. The chart below paints a picture of woe for the United States and the world. China overtook the United States in auto sales in 2009. They now sell approximately 15 million new vehicles per year. India sells approximately 2 million new vehicles per year. The U.S. sells just over 12 million new vehicles per year. In China and India there are approximately 6 car owners per 100 people. In the U.S. there are 85 car owners per 100 people.

They call China, India and the rest of the developing world – Developing – because they will be rapidly expanding their consumption of goods, services and food. There will certainly be bumps along the way, as China is experiencing now, but the consumption of oil by the developing world will plow relentlessly higher. China isn’t the only emerging country to show big increases in per capita consumption. The growth in consumption for several other countries far outpaces China. Consumption per capita in Malaysia has nearly quadrupled since the mid-1960s. Consumption in Thailand and Brazil has more than doubled to roughly 5.7 barrels and 4.8 barrels per year, respectively.

Developed countries, especially those in Western Europe, have experienced substantial declines in oil consumption. Today’s per capita consumption in Sweden is roughly 12 barrels per year, down from 25 barrels per year in the mid-1970s.  France, Japan, Norway and U.K. all use less oil on a per capita basis than they did in the 1970s. These countries have been able to drive down the consumption of oil by taxing gasoline at an excessive level.

Americans pay 43 cents in taxes out of the $3.70 they pay at the pump for a gallon of gasoline. A driver in the UK is paying $4 per gallon in taxes out of the $9 per gallon cost. Gasoline costs between $8 and $9 per gallon across Europe today. The extreme level of gas taxes certainly reduces car sizes, consumption and traffic. Too bad the mad socialists across Europe spent the taxes on expanding their welfare states and promising even more to their populations. Maybe a $6 per gallon tax will do the trick. Forcing Americans to drive less by doubling the gas tax is a quaint idea, but it is too late in the game. Europe is still made up of small towns and cities with the populations still fairly consolidated. Biking, walking and small rail travel is easy and feasible. The sprawling suburban enclaves that proliferate across the American countryside, dotted by thousands of malls and McMansion communities, accessible only by automobiles, make it impossible to implement a rational energy efficient model for moving forward. We cannot reverse 60 years of irrationality. Even without higher gas taxes, the price of gasoline will move relentlessly higher due to the stealth tax of currency debasement.

A Plunging US Dollar

The US dollar has fallen 15% versus a basket of worldwide currencies (DXY) since February 2009. This is amazing considering that 57% of the index weighting is the Euro. If you haven’t noticed, Europe is a basket case on the verge of economic disintegration. The US imports a net 9.4 million barrels of oil per day, or 49% of our daily consumption. Our largest suppliers are:

  1. Canada – 2.6 million barrels per day
  2. Mexico – 1.3 million barrels per day
  3. Saudi Arabia – 1.1 million barrels per day
  4. Nigeria – 1.0 million barrels per day
  5. Venezuela – 1.0 million barrels per day
  6. Russia – 600,000 barrels per day
  7. Algeria – 500,000 barrels per day
  8. Iraq – 400,000 barrels per day

These eight countries account for over 70% of our daily oil imports. You hear the “experts” on CNBC declare that our oil supply situation is secure because close to 60% of our daily usage is sourced from North America. The presumption is that Canada and Mexico are somehow under our control. There is one problem with this storyline. US oil production peaked in 1971 and relentlessly declines as M. King Hubbert predicted it would. Mexico will cease to be a supplier to the U.S. by 2015 as their Cantarell oil field is in collapse. Most of the oil supplied from Canada is from their tar sands. Expansion of these fields is difficult as it takes tremendous amounts of natural gas and water to extract the oil.

The rest of the countries on the list dislike us, hate us, or are in constant danger of implosion. When the Neo-Cons on Fox News try to convince you that Iraq has been a huge success and certainly worth the $3 trillion of national wealth expended, along with 4,500 dead and 32,000 wounded soldiers, you might want to keep in mind that Iraq was exporting 795,000 barrels of oil per day to the U.S. in 2001 when the evil dictator was in charge. Today, we are getting 415,000 barrels per day. Dick Cheney was never good at long term strategic planning.

We better plant more corn, as our supply situation is far from stable. Maybe we can install solar panels from Obama’s Solyndra factory on the roofs of the 65 Chevy Volts that were sold in the U.S. this year, to alleviate our oil supply problem. The reliability and stability of our oil supply takes second place to the price increases caused by Ben Bernanke and his printing press. The average American housewife driving her 1.5 children in her enormous two and a half ton Chevy Tahoe or gigantic Toyota Sequoia two miles to baseball practice doesn’t comprehend why it is costing her $100 to fill the 26 gallon tank. If she listens to the brain dead mainstream media pundits, she’ll conclude that Big Oil is to blame. The real reason is Big Finance in conspiracy with Big Government.

Ben Bernanke is responsible for Americans paying $4 a gallon for gasoline. Zero interest rates, printing money out of thin air to buy $2 trillion of mortgage and Treasury bonds, and propping up insolvent criminal banks across the globe have one purpose – to deflate the value of the U.S. dollar. The rulers of the American Empire realize they can never repay the debts they have accumulated. They have chosen to default through debasement. It’s an insidious and immoral method of defaulting on your obligations. Let’s look at from the perspective of our two biggest oil suppliers.

A barrel of oil cost $40 a barrel in early 2009. The U.S. dollar has declined 30% versus the Canadian dollar since early 2009. The U.S. dollar has shockingly declined 20% versus the Mexican Peso since early 2009. How could the mighty USD decline 20% against the currency of a 3rd world country on the verge of being a failed state? Ask Ben Bernanke. Our lenders can’t do much about the continuing debasement of our currency, but our oil suppliers can. They will raise the price of oil in proportion to our currency devaluation. Since Bernanke’s only solution is continuous debasement, the price of oil will relentlessly rise.

Peak Oil Has Arrived

“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.” – 2010 Joint Operating Environment Report

We’ve arrived at the point where demand has begun to outpace supply and even the onset of another worldwide recession will not assuage this fact. World oil supply has peaked just below 89 million barrels per day. Supply has since fallen to 87.5 million barrels per day, as Libyan supply was completely removed from world markets. The International Energy Agency is already forecasting worldwide demand to reach 90 million barrels per day in the second half of 2011 and reach 92 million barrels per day in 2012. The IEA warns that “just at the time when demand is expected to recover, physical limits on production capacity could lead to another wave of price increases, in a cyclical pattern that is not new to the world oil market.”

project global oil production through 2100

The world is trapped in an inescapable conundrum. As supply dwindles, prices increase, causing global economies to contract, and temporarily causing a drop in prices, except the lows are higher each time. The drill, drill, drill ideologues do nothing but confuse and mislead the easily led masses. We have 2% of the world’s oil reserves and consume more than 20% of the daily output. We consume 7 billion barrels of oil per year.

Drilling for oil in the Arctic National Wildlife Refuge in Alaska and areas formerly off limits in the Outer Continental Shelf will not close the supply gap. The amount of recoverable oil in the Arctic coastal plain is estimated to be between 5.7 billion and 16 billion barrels. This could supply as little as a year’s worth of oil. And it will take 10 years to produce any oil from this supply. The OCS has only slightly more recoverable oil at an estimated 18 billion barrels and the BP Gulf Oil disaster showed how easy this oil is to access safely. The new over hyped energy savior is shale gas. The cheerleaders in the natural gas industry claim that we have four Saudi Arabias worth of natural gas in the U.S. This is nothing but PR talking points to convince the masses that we can easily adapt. The amount of shale gas that can be economically produced is far less than the amounts being touted by the industry. The wells deplete rapidly and the environmental damage has been well documented. And last but certainly not least, we have the abiotic oil believers that convince themselves the wells will refill despite the fact that there is not one instance of an oil well refilling once it is depleted.

I wrote an article called Peak Denial About Peak Oil exactly one year ago when gas was selling for $2.60 a gallon. I railed at the short sightedness of politicians and citizens alike for ignoring a calamitous crisis that was directly before their eyes. Just like our accumulation of $4 billion per day in debt, peak oil is simply a matter of math. We cannot take on ever increasing amounts of debt in order to live above our means without collapsing our economic system. We cannot expect to run our energy intensive world with a depleting energy source. There is no amount of spin and PR that can change the math. Un-payable levels of debt and dwindling supplies of oil will merge into a perfect storm over the next ten years to permanently change our world. The change will be traumatic, horrible, bloody and a complete surprise to the non-critical thinking public.

“In the longer run, unless we take serious steps to prepare for the day that we can no longer increase production of conventional oil, we are faced with the possibility of a major economic shock—and the political unrest that would ensue.” – Dr. James Schlesinger – former US Energy Secretary, 16th November 2005

We were warned. We failed to heed the warnings. If we had begun making the dramatic changes to our society 5 to 10 years ago, we may have been able to partially alleviate the pain and suffering ahead. Instead we spent our national treasure fighting Wars on Terror and bailing out criminal bankers. Converting truck and bus fleets to natural gas; expanding the use of safe nuclear power; utilizing wind, geothermal, and solar where economically feasible; buying more fuel efficient vehicles; and creating more localized communities supported by light rail with easy access to bike and walking options, would have allowed a more gradual shift to a less energy intensive society.

We’ve done nothing to prepare for the onset of peak oil. Until this foreseeable crisis hits with its full force like a Category 5 hurricane, Americans will continue to fill up their M1 tank sized, leased SUVs, tweet about Lady Gaga’s latest stunt, and tune in to this week’s episode of Jersey Shore. Meanwhile, economic stagnation, catastrophe and wars for oil are darkening the skies on our horizon.

 

“Dependence on imported oil, particularly from the Middle East, has become the elephant in the foreign policy living room, an overriding strategic consideration composed of a multitude of issues. …. Taken in whole, the National Energy Policy does not offer a compelling solution to the growing danger of foreign oil dependence.  …  Future military efforts to secure the oil supply pose tremendous challenges due to the number of potential crisis areas.  …..  Economic stagnation or catastrophe lurk close at hand, to be triggered by another embargo, collapse of the Saudi monarchy, or civil disorder in any of a dozen nations.”–  America’s Strategic Imperative A “Manhattan Project” for Energy

MICHAEL VICK GETS A $100 MILLION CONTRACT

You knew I had to post about the Michael Vick contract. Below are two opposing views of Michael Vick. The first is a response to the second. I know Smokey and Stuck are huge Vick supporters and will rally to his defense if anyone attacks him.

Michael Vick

“What if Vick were white?”

 

Michael Vick has a shiny new, six-year, $100 million NFL contract, and that’s swell.

Mazel tov. Really. May your creditors be paid off soon, your bankruptcy lifted and your tribe increase.

But what’s even more interesting — to me, at least — is a column last week by an ESPN Magazine writer named Toure who poses the question: “What if Michael Vick were white?”

As in, what if Vick were white and raised not in the low-income, predominantly black southeast community of Newport News, but in some generic white neighborhood, far from the “projects” culture that apparently corrupted him? Would he have ended up serving 18 months in federal prison for running an underground dogfighting operation out of Surry County?

And what’s really, really interesting is the accompanying photo-shopped image of Vick, showing him as Caucasian. You can check it out here:

 http://espn.go.com/espn/commentary/story/_/id/6894586/imagining-michael-vick-white-quarterback-nfl-espn-magazine

Toure has taken heat for posing his question and for the digitized image of Vick in “whiteface” — which Toure apparently had nothing to do with — but has also been praised for discussing the issue thoughtfully.

“Would a white kid have been introduced to dogfighting at a young age and would it become normalized to the extent that he builds it into his life after he joins the NFL? It’s possible, but it’s far less likely because what made Vick stand out among dogfighters is less race than class. … Vick’s stunningly stupid moral breakdown with respect to dogs is certainly related to the culture of the world he grew up in, which he says fully embraced dogfighting. But it’s also related to the household he grew up in.”

Toure then mentions Vick’s father, Michael Boddie, had admitted to The Washington Post that he abused drugs and alcohol around young Vick and even set up a dogfighting ring in the family garage so Vick could stage fights there.

Too many men “left to define manhood on their own,” Toure writes, gravitate toward “ghetto celebrities who are unsavory role models with bad habits.”

But a big hole in Toure’s analysis is that dogfighting isn’t just a “ghetto” thing. It isn’t even a “black” thing. Poor white country boys, some of whom also do drugs and alcohol, fight dogs, too.

As reprehensible as dogfighting is, the “culture” of dogfighting is that it truly is a blood sport — emphasis on “blood,” of course. But dog owners tend to take a certain pride in their dogs, even as they send them into a pit to rip others to pound pieces.

This is where Vick went far beyond merely fighting dogs — he reveled in the blood, the power over life and death. He became a death-dealing beast, himself.

He attacked, tortured and killed his own underperforming dogs in creative and cruel ways.
Drowning, electrocution, hanging, grabbing them by the legs and slamming them to the ground over and over to break their backs.

He did this while he was an NFL star with a $130 million contract. A college graduate who’d been exposed to enough non-ghetto cultures to know that dogfighting wasn’t just illegal, but immoral.

This is not a “stupid moral breakdown” — this is sheer absence of a conscience or soul. This is knowingly and willfully breaking bad.

To say socio-economics or culture crafted Vick the boy into Vick the man is an insult to the majority of black kids who grow up poor and don’t torture and kill animals.

I hope Vick makes the most of his second chance. But I would never trust him with another animal.

Because Vick didn’t just gravitate toward unsavory role models — he became one, himself.

And he did it not because he grew up black or he grew up poor, but because he wanted to.

Posted by Tamara Dietrick on Wednesday, August 31, 2011 at 11:29 AM

What if Michael Vick were white?

 

Since the day he was arrested, people have asked. The answer isn’t what you think.

By Touré
ESPN The Magazine

 

This story appears in the Sept. 5 issue of ESPN The Magazine.

WHEN MICHAEL VICK PLAYS, I see streetball. I don’t just mean that sort of football where you have to count to four-Mississippi before you can rush the quarterback, nearly everything breaks down and it’s all great fun. I also mean street basketball. Vick’s style reminds me of Allen Iverson — the speed, the court sense, the sharp cuts, the dekes, the swag. In those breathtaking moments when the Eagles QB abandons the pocket and takes off, it feels as if he’s thumbing his nose at the whole regimented, militaristic ethos of the game.

All of that is why, to me, Vick seems to have a deeply African-American approach to the game. I’m not saying that a black QB who stands in the pocket ain’t playing black. I’m saying Vick’s style is so badass, so artistic, so fluid, so flamboyant, so relentless — so representative of black athletic style — that if there were a stat for swagger points, Vick would be the No. 1 quarterback in the league by far.

Race is an undeniable and complex element of Vick’s story, both because of his style as well as the rarity of black QBs in the NFL. A decade after he became the first black QB to be drafted No. 1 overall, about one in five of the league’s passers is African-American, compared with two-thirds of all players. But after his arrest for dogfighting, so many people asked: Would a white football player have gotten nearly two years in prison for what Vick did to dogs?

This question makes me cringe. It is so facile, naive, shortsighted and flawed that it is meaningless. Whiteness comes with great advantages, but it’s not a get-out-of-every-crime-free card. Killing dogs is a heinous crime that disgusts and frightens many Americans. I’m certain white privilege would not be enough to rescue a white NFL star caught killing dogs.

The problem with the “switch the subject’s race to determine if it’s racism” test runs much deeper than that. It fails to take into account that switching someone’s race changes his entire existence. In making Vick white, you have him born to different parents. That alone sets his life trajectory in an entirely different direction. Thus when this hypothetical white Michael Vick … wait, I can’t even continue that sentence in good faith. I mean, who would this white Vick be? That person is unknowable. When you alter his race, it’s like those Back to the Future movies where someone goes back in time, inadvertently changes one small thing about his parents’ dating history and then the person starts to disappear. If Vick had been born to white parents, you wouldn’t even be reading this right now. That Vick would have had radically different options in life compared with the Vick who grew up in the projects of Newport News, Va., where many young black men see sports as the only way out.

This is not to say there aren’t insights to be gained from hypotheticals. One pertinent question: Would a white kid have been introduced to dogfighting at a young age and have it become normalized to the extent that he builds it into his life after he joins the NFL? It’s possible, but it’s far less likely because what made Vick stand out among dogfighters is less race than class. The deep pockets of an NFL star led to a kennel that was too big not to fail eventually. But if it did, though, would this white kid have been busted? Remember, it wasn’t suspicion of dogfighting that started the investigation that put Vick in jail. It was that element that we’ve all seen hold back or bring down so many athletes from the hood — the entourage. Vick’s cousin Davon Boddie was arrested and charged with possession of marijuana with intent to sell in Hampton, Va. When police asked him for his address, he led them to the home where Bad Newz Kennels was located. After that, Vick never had a chance.

Here’s another question: If Vick grew up with the paternal support that white kids are more likely to have (72 percent percent of black children are born to unwed mothers compared with 29 percent of white children), would he have been involved in dogfighting? I ask this not to look for an excuse but to explore the roots of his behavior. Vick’s stunningly stupid moral breakdown with respect to dogs is certainly related to the culture of the world he grew up in, which he says fully embraced dogfighting. But it’s also related to the household he grew up in.

Vick’s father, Michael Boddie, was not a positive influence on him growing up. Boddie admitted to The Washington Post that he was a cocaine user and had been high and drunk around young Vick. He says he often prepared the family garage so Vick could have pit bull fights there. Boddie’s account is disputed by a family friend, who says Vick’s mother would not have allowed that. Either way, at some point in Vick’s youth, his father became estranged from the family. This breakdown of Vick’s paternal relationship is a pattern that’s all too common among black men of his generation. Too many are left to define manhood on their own, so they gravitate toward the most charismatic and inspiring men in their world. Sometimes those men are gritty local sports coaches who teach them the value of hard work, but sometimes they’re ghetto celebrities who are unsavory role models with bad habits.

Ultimately, there is no separating Vick from his circumstances: his race, parents, economics and opportunities. Alter any of those elements and everything about him and how the world sees him would be unrecognizable.

So let’s look at him a different way. Let’s see him as someone in the third act of the epic movie that is his life, leading a team that many expect to see in the Super Bowl. Bob Marley’s “Redemption Song” is playing underneath because the humbled protagonist has finally overcome his personal demons and has begun living up to his athletic promise. And to those who believe we should judge a man by how he responds when dealing with the worst life has to offer — with how he climbs after he hits rock bottom — Michael Vick has become heroic.

And that has nothing to do with race.

HAPPY BIRTHDAY JUNIOR ADMINISTRATOR

The Junior Administrator turned 18 today. He can vote. We’ve got one more onboard the Ron Paul bandwagon. This is his first birthday in 18 years not spent at home.

Avalon can’t stop herself from thinking of him like this. Tears are flowing.

I prefer to think of him winning his high school hockey championship. He is trying out for the Penn State Altoona hockey team this week. Good luck Kev. Channel the intensity you displayed in that championship series and you’ll do fine.

Happy Birthday Kevin!!!!!

I know you are probably too busy studying to celebrate, but remember your mommy today. And Jimmy has moved into your room and really likes it. 

WARM & FUZZY ADMINISTRATOR

The warm and fuzzy Administrator is about to disappear. The summer is over. Vacations are over. My relaxing 45 minute summer commute to work is OVER!!!!! The traffic this week is already bad. Next week it will be horrific. I listened to the traffic report this morning and they said the Schuykill Expressway was clear. So, I exited I476 onto the Schuykill this morning and entered a parking lot. It seems that between the initial report and my getting on the Schuykill, there was a 5 vehicle accident involving a tractor trailer. The tractor trailer won and the 4 cars lost. Let’s say my blood pressure rose a few points. I hope you are ready for a less forgiving, angrier, ballistic Administrator. The soft hearted, kind, civil Administrator has left the car.

ONE OF THESE DAYS…………………..

 

YOU ALL KNOW WHAT HAPPENS NEXT.

DICK CHENEY – THE EMBODIMENT OF EVIL

This is one of the finest pieces that Gonzalo has ever written. His passion regarding right and wrong, moral and immoral, and punishment fitting the crimes is dead on. Our country is warped and in rapid decline. There is only one way to save it. Prosecute the criminals. Make bankers accept the consequences of their actions. Let failures fail. Let the debt go bad. Enforce the rule of law equally. Throw Dick Cheney into Guantanomo before he reaches his final destination in hell.

Mr. Cheney’s Victory Lap

Dick Cheney is taking a lap around all the talk shows, peddling his memoir while giving his reputation one final spit-shine before he dies and goes straight to hell.

 

 

Dick Cheney

Oh—so you actually doubt he’ll go to hell? With the shit he’s pulled? Cabrón, please . . .

It is remarkable that relatively few people seem outraged by Mr. Cheney. Here is the man who, as Vice-President of the United States, violated some of the most important rights, freedoms and liberties that America has defended for over two-hundred years. Not only did he commit what in other times would have been considered war crimes and crimes against humanity—he is proud of having done so!

He boasts about the torture he ordered, he defends the wars of aggression that he fomented, and he is silent about the sweetheart deals he gave his former employer, Halliburton, in the “reconstruction” of countries that he helped destroy.

In short, he violated every rule in the book—yet no one is throwing the book at him. There are no Congressional hearings into his violation of the Constitution. There are no prosecutors sharpening their chops, getting ready to indict him on charges of corruption.

Most of all, there is no public outrage at him.

Sure, some loony Lefties and some old-style hard-ass Conservatives such as myself bitch and moan about him—but no one is seriously arguing for his arrest, indictment and prosecution for the despicable things he did while in office. Or if they are advocating his arrest and prosecution—like me, and perhaps you—then they are on the extreme fringes of the political discourse—like me, and perhaps you: Marginal, and inconsequential.

Read more »

HIDE THE WOMEN & CHILDREN – SMOKEY IS BACK!!!!

HERE’S SMOKEY

The wrath of Smokey is about to rein down upon his enemies and all who dare to cross swords with him. He has returned to TBP. He is out for revenge upon anyone who motherfucked him after his departure. He has a long memory to go along with that long cock.

Everyone duck. The shit is about to fly. Hide the women and children. Our PG13 rated site is about to go XXX.

I have one thing to say to Smokey. China is a bubble and will burst in the near future. Smokey will have to kiss my ass on the 50 yard line at the Super Bowl this year.

SES

WILL BOOMERS END UP EATING ALPO?

Another good article from http://www.mybudget360.com/.

At this point it doesn’t matter whether you were lured into the fantasy of a cushy retirement by Wall Street shysters or you decided to live for today with a leased BMW and a McMansion twice the size of what you needed or you thought you could retire off your internet stock profits and never ending equity in your house or you were just a dumbass and forgot to save for your retirement – YOU’RE PRETTY MUCH SCREWED. Stocks aren’t going up in the next decade. Bonds will fall in the next decade. And most of the Boomers have less than $100,000 saved for retirement. I hope they like the taste of Alpo.

Middle class retirement now largely a postcard fantasy – How Wall Street fabricated a buy and hold fairytale and jumped ship with taxpayer golden parachutes. Did baby boomers think about who they would be selling those 401k and pension stocks to?

The days of dreaming about long days playing golf on a green course and taking luxurious cruises around the world are appearing more and more like a foggy memory for those in the middle class planning for retirement.  As Wall Street bankers and hedge fund managers rob the public blind, the mission statement sold to baby boomers is starting to become a large bait and switch catchy enough to make it on a Hallmark card.  For decades Wall Street begged and lured the public in either directly or through pension funds into their web of easy money.  Save $100 a month and you’ll retire a millionaire!  As it turns out, the golden parachute was only available to a tiny fraction of the population while the oligarchy in the financial sector offloads their toxic bets onto the taxpayers struggling balance sheet.  The end game?  No retirement.  At least no retirement like those plastered on glossy mutual fund brochures.  What the Wall Street banking charlatans failed to tell you is that you eventually need to sell those stocks to use the money for real world spending.  What they also failed to mention is that the baby boomer generation is now going to sell into unrelenting headwinds of demographics bringing on a younger and poorer generation to purchase their stocks.  Of course Social Security is in the crosshairs of the financial elite since they already secured their financial piece of the pie.  You know things are bad when the Federal Reserve is stating that stocks are not exactly a winners bet in the years going forward.

Retirement becoming more of a postcard fantasy

The middle class has been pillaged and ransacked by financial thievery for decades.  The debt bubble and mass delusion is now imploding.  The graft and con games taking place in the financial sector would be comical if they weren’t so real and economically tragic.  The Federal Reserve has given covert loans to big banks while big banks publicly stating all was well.  The Federal Reserve has grown their balance sheet to a stunning $2.8+ trillion of questionable assets and other junk with little redeemable market value.  It would have a hard time selling these items on eBay let alone the natural marketplace.  There is no easier way to make a profit than stealing from the taxpayer.  Of course the problems in the system are coming at the expense of the working and middle class.  For those who bought into the Wall Street mantra of buy and hold, making a profit has gotten much harder:

annualized rate of returns

This is fascinating data to look at.  This decade has been horrible for stocks.  The S&P 500 stands today where it did in 1998.  The massive stock volatility is simply a reflection of the problems deep in our financial system.  The above chart examines P/E ratios over time.  Really fascinating information but the Fed study finds that P/E ratios are likely to go lower because of demographic shifts and also the reality that we have a lower wage employment force dominating our economy.  The latest decade is a reflection of the bubble era machinery that has hoisted up the financial sector into an untouchable corner yet middle class Americans have taken it squarely in their stock portfolios.  Why?  Because Wall Street has been preaching buy and hold as if it were some patriotic mission but many of these hedge funds and banking managers have placed bets that openly aim against American middle class success.  In fact, some have made bets on flat out American failure and have made billions of dollars with lower tax rates that are given to hedge funds.

The stock market casino

The stock market has been on a wild ride for well over a decade:

PE Expansion Contraction

Source:  Mish Global Economic Analysis Blog

You have a crazy expansion in the 1980s and 1990s with the peak productive years of baby boomers but also the carefree attitude with the debt bubble and the “deficits don’t matter” mentality that has harmed this nation and is leaving the Eurozone in tatters.  Of course all of that has come to a crashing halt first with the tech bubble bursting and then the real estate bubble imploding.  So you have to ask, when these baby boomers sell out of their 401ks and pension plans who will buy the stocks?  The 46,000,000 Americans on food stamps?  Or what above the average per capita worker making $25,000 a year?  Household incomes have been stagnant for well over a decade:

real-household-median-income1

To use an often quoted cliché, this is the perfect financial storm.  For the financially and politically connected the free market rules do not apply.  For the working and middle class they do.  This massive contraction is happening when millions are entering the retirement pipeline.  Now it would be one thing if people had vibrant retirement accounts.  1 out of 3 Americans have no savings account.  But for those with a retirement account they likely do not have funds to support their life as they age and this is seen in a Transamerica retirement study:

“Workers estimate their retirement savings needs at $600,000 (median), but in comparison, fewer than one-third (30 percent) have currently saved more than $100,000 in all household retirement accounts.”

And the fears most have are based on real life issues:

retirement fears

Source:  Transamerica

These aren’t fears about not having enough yachts or trips to Paris but whether they will eat decent food or Alpo.  Workers are accurate in how much they need but less than one third have even saved $100,000 or more for retirement.  For a median household income pulling in $50,000 a year in working years, the funds would likely last 3 or 4 years.  The biggest fear is outliving the money while coming in at a close second is simply not meeting basic family needs.  The next fear is cuts to Social Security because of course, the bankers and investment banks had to get their bailouts first before setting the U.S. economy on fire.

The Federal Reserve study found that P/E ratios are likely to become compressed as time goes on:

pe ratios moving forward

“Between 1981 and 2000, as baby boomers reached their peak working and saving ages, the M/O ratio increased from about 0.18 to about 0.74. During the same period, the P/E ratio tripled from about 8 to 24. In the 2000s, as the baby boom generation started aging and the baby bust generation started to reach prime working and saving ages, the M/O and P/E ratios both declined substantially. Statistical analysis confirms this correlation. In our model, we obtain a statistically and economically significant estimate of the relationship between the P/E and M/O ratios. We estimate that the M/O ratio explains about 61% of the movements in the P/E ratio during the sample period. In other words, the M/O ratio predicts long-run trends in the P/E ratio well.”

In other words, lots of money chasing the Wall Street illusion yet there will be fewer (poorer) buyers ahead.  The P/E ratios surged when baby boomers entered their peak earnings years.  Given the massive problems in our economy the fact that P/E will take it on the chin is no surprise.  What is more stunning is the fact that no real financial reform has taken place and that the political system is so utterly broken.  Money has infiltrated politics to a degree never before seen.  We have career politicians in the SEC basically training for plush gigs at Goldman Sachs or Morgan Stanley.  A revolving door out of D.C. and into big investment banks and back to D.C.  No wonder why there has been no true enforcement of the investment banks when many are simply using it as a training ground for future jobs!  If the working and middle class actually saw what went on trading floors they would never even think about playing the stock market.  The fact that we have millions now needing to dump stocks into the open market is simply another issue we will be facing.  These are people that have to sell (you can’t eat your stocks or pay for a medical bill with a stock).  Many are now realizing after a lifetime of work that retirement only meant more work with fewer benefits to compensate for the big banking bailouts.

DID RACISM CAUSE THIS?

Here is the story of Camden NJ. It has been under Democratic Party control for five decades. The population was 125,000 in 1950. Today the population is 77,000. The population is 50% black and 35% Puerto Rican. A full 26% of the households consist of married couples. The per capita income is $12,000. Median household income is $18,000. A full 52% of the population lives in poverty. The average home value is $35,000. The official unemployment rate is 20%.

The real question is how did the white man cause this. Surely this shithole became a shithole due to racism. It couldn’t have been the policies implemented by liberal Democrats over the last five decades. I feel tremendous guilt for causing this horrific result. Please take more of my taxes to hand over to the lazy good for nothing free shit army in Camden NJ. I know if we just give them more money Camden will surely revive itself.

City of Ruins

November 4, 2010  

Camden, New Jersey, with a population of 70,390, is per capita the poorest city in the nation. It is also the most dangerous. The city’s real unemployment—hard to estimate, since many residents have been severed from the formal economy for generations—is probably 30–40 percent. The median household income is $24,600. There is a 70 percent high school dropout rate, with only 13 percent of students managing to pass the state’s proficiency exams in math. The city is planning $28 million in draconian budget cuts, with officials talking about cutting 25 percent from every department, including layoffs of nearly half the police force. The proposed slashing of the public library budget by almost two-thirds has left the viability of the library system in doubt.

Camden is where those discarded as human refuse are dumped, along with the physical refuse of postindustrial America. A sprawling sewage treatment plant on forty acres of riverfront land processes 58 million gallons of wastewater a day for Camden County. The stench of sewage lingers in the streets. There is a huge trash-burning plant that releases noxious clouds, a prison, a massive cement plant and mountains of scrap metal feeding into a giant shredder. The city is scarred with several thousand decaying abandoned row houses; the skeletal remains of windowless brick factories and gutted gas stations; overgrown vacant lots filled with garbage and old tires; neglected, weed-filled cemeteries; and boarded-up store fronts.

Corruption is rampant, with three mayors sent to prison in a little more than two decades. Five police officers, two of whom are out on bail and three of whom have pleaded guilty, have been charged with planting evidence, making false arrests and trading drugs for information from prostitutes. County prosecutor Warren Faulk has had to drop charges against some 200 suspects, including some who’d spent years in prison, because of the misconduct. The city is dominated by an old-time party boss, George Norcross III. Although he does not live in Camden, his critics contend that he decides who runs for office and who does not, who gets city and state contracts and which projects get funded. Tens of millions in state funds have been used for city projects, from an aquarium on the waterfront to a new law school to an expansion of the Cooper University Hospital and construction of a medical school. In 2002 the state approved a $175 million recovery package to save the city, but according to a yearlong investigation by the Philadelphia Inquirer, only 5 percent had been used to combat crime, improve schools, provide jobs or bolster municipal services. Those who oppose Norcross insist he has turned the poverty and despair of Camden into a business. His critics charge that the new medical school, for example, was approved because it was part of a back-room deal Governor Jon Corzine cut with Norcross in Corzine’s failed re-election bid. When I met with him, Norcross dismissed the allegations and defended his huge infrastructure projects as crucial to revitalizing the bleak downtown.

Camden, like America, was once an industrial giant. It employed some 36,000 workers in its shipyards during World War II and built some of the nation’s largest warships. It was the home to major industries, from RCA Victor to the New York Ship Building Corporation and Campbell’s Soup, which still has its international headquarters in a gated section of Camden but no longer makes soup in the city. Camden was a destination for Italian, German, Polish and Irish immigrants, who in the middle of the last century could find decent-paying jobs that required little English or education. The city’s population has fallen by more than 40 percent from its 1950 level of 120,000. There are no movie theaters or hotels. There are lots with used cars but no dealerships that sell new vehicles. The one supermarket is located on the city’s outskirts, away from the endemic street crime.

There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch. Camden is awash in guns, easily purchased across the river in Pennsylvania, where gun laws are lax.

Camden is the poster child of postindustrial decay. It stands as a warning of what huge pockets of the United States could turn into as we cement into place a permanent underclass of the unemployed, slash state and federal services in a desperate bid to cut massive deficits, watch cities and states go bankrupt and struggle to adjust to a stark neofeudalism in which the working and middle classes are decimated.

* * *

I found the city’s homeless congregated in a collection of blue and gray tents, protected by tarps, set up under the shelter of a Route 676 ramp. The tent city, or “Transitional Park,” was overseen by Lorenzo “Jamaica” Banks, 57, who bought damaged tents from Wal-Mart and Kmart at a reduced price, repaired them and provided them to the homeless—at $10 a pop, police told me. Banks insisted he offered them for free.

When I walked into the encampment with my colleague, comics artist Joe Sacco, Banks was chopping firewood. A man with receding black hair and a beard, Banks was dressed in carpenter’s jeans and a plaid shirt over a gray hooded sweatshirt. There were about fifty tents in the park, and Banks owned forty of them. He spoke in the drumbeat staccato of a man who seems about to snap at any moment. He claimed to be a Vietnam vet, to have been a heroin addict now “clean for thirty-seven years,” to have ended up after the war in a mental institution, to have jumped off the Ben Franklin Bridge in a suicide attempt because of “a lot of flashbacks” and to have spent “twenty-two years, six months, three hours and thirty-three seconds” in prison for shooting to death his best friend because he was “killing his baby in front of me.”

“I’m better now,” he assured us as the commuter train into Philadelphia rumbled along the tracks overhead. “I’m on medication. I live here because it reminds me of the jungle.”

Banks, who called himself “the mayor,” ran the tent city, which had a population of about sixty, ranging in age from 18 to 76, like a military encampment. He had a second-in-command, his “CEO,” who took over when Banks had to buy supplies. There were weekly tent inspections on Saturday, weekly meetings every Tuesday night and a list of sixteen rules written on plywood tacked to a tree. These included restrictions on fighting and arguing, admonishments to clean up the trash, an order not to sell food stamps and several other blunt prohibitions, including: “Don’t bring your tricks here” and “No borrowing money or sex from anyone.” Residents received two warnings for infractions before they were evicted. Drugs were banned. Alcohol was not. Banks had even set up a bank account for the enclave. At night there were shifts when someone—Banks said he preferred a vet—had to stand guard. There was a Dumpster filled with trash at the edge of the encampment, white folding tables with white plastic chairs and five-gallon plastic water containers outside many tents. Firewood lay scattered about the site.

“Take a look at the American Dream,” Banks said as he guided us through the tents, stepping around rusted bicycles and shopping carts. “In today’s society no one is exempt from Transitional Park. Everybody is one paycheck away from being here.”

Officially, Camden has 775 homeless, but there are only 220 beds in the county, so city officials nervously tolerated the encampment, despite its illegality, until late spring, when they swiftly dismantled it. Those tossed out scattered, and about a half-dozen migrated to live in squalor under the concrete ramps of Route 676, where it runs across the river into Philadelphia.

Camden’s streets are filled with the unemployed. Ali Sloan El, who recently got out of prison, is chatting with some men in the street, several of whom are Muslims like him and have shaved heads and long black beards. The group of men around Sloan El have just witnessed a botched robbery at a barbershop a few minutes before Joe and I arrive. A young gunman, nervous and unsure of himself, had pulled out a pistol and tried to rob the barbers. He was chased out of the shop by a group of men and tackled on the sidewalk. One of the barbers is at the police station filing a report.

The mood inside the shop is hostile. “How did you know about the stickup?” asks a barber who says his name is Sam. “We were told about it on the street,” I answer. He arches his eyebrows in disbelief. “No one would talk to you on the street. No one would tell you nothin’,” he says coldly. “A mother with a 2-year-old in a stroller told us,” I tell him. “Yeah,” he admitted reluctantly, “maybe that’s right, maybe a mother would talk.”

The rumor on the street, Sloan El informs us, is that the robber was high on a narcotic called wet. The drug of choice of Camden’s criminal class, wet is made by soaking marijuana in embalming fluid, which is a mixture of formaldehyde, methanol, ethanol and other solvents. Phencyclidine, or PCP, known on the street as angel dust, is often added to the mix. Wet is smoked dry but the leaves, which glisten, give the drug its liquid name. Wet numbs its users and endows them with what seems to them like superhuman strength. Their body temperatures rise, their blood pressure drops and they frequently hallucinate. The high can last up to six hours. Two Camden police officers who do not want to be named tell us they fear confronting street thugs on wet. “You shoot them and they just keep coming,” one says warily.

Those who do not join street gangs live like minnows, darting through the currents to avoid the predatory fish. Darnell Monroe, 33, wearing a new pair of brown Timberlands, a black leather jacket, jeans and a black-and-white checked kaffiyeh as a scarf, sits with us in the barbershop. One of the barbers immediately turns up the radio to a deafening roar, I suspect to drive us out. Monroe, also a Muslim, is a tall man with a shaved head and a full black beard. He spent four years in prison for dealing drugs. He became a father when he was 13. The mother was 16. “I’m sociable,” he says when I ask him about surviving in Camden, “but I keep moving. I don’t want to draw the wrong kind of attention. I don’t want a conflict.”

Monroe was shot three times in the stomach in 1998, when he was coming out of a bar and tried to break up a fight. “To this day I don’t know who shot me,” he says. He awoke in the hospital twelve weeks later. His kidney, liver and upper and lower intestine had been badly damaged. He lifts his shirt and exposes a massive scar on his stomach that looks like a brownish mountain range with jagged edges. “It was a .380 automatic,” he says. Until he was laid off last year, Monroe had a job as a forklift operator in the scrap yards by the port. On the back of his right hand is a tattoo of a padlock with his current wife’s initials, EGK, and under his left eye is a tattooed teardrop he got in jail, in 1993, when his sister died.

The city is busily cannibalizing itself in a desperate bid to generate revenue. Giant scrap piles rise in hulks along the banks of the Delaware. The piles, filled with discarded appliances, rusted filing cabinets, twisted pipes, old turbines and corrugated sheet metal, are as high as a three- or four-story house, and at their base are large pools of brackish water. A crane, outfitted with a large magnet, sways over the pile and swings scrap over to a shredding machine. A pickup and a U-Haul filled with old refrigerators, gates, screen doors and pipes are unloading in front of a small booth when we arrive. There are about twenty scrap merchants in the city, and they have created a market for the metal guts of apartments and houses. As soon as a house is empty—even if only for a few days between renters or because it is being painted—the hustlers break in and strip every pipe, radiator, screen door and window. Over the past three or four decades thousands of owners, faced with the destruction, have walked away from their properties. Camden produces a million tons of scrap a year. Its huge shredding machines in the port can chop up automobiles and stoves into chunks the size of a baseball. Ships from Turkey, China and India pull into the port and take the scrap back to smelters in their countries.

The only white people visible daily on the city’s streets are the hookers. Congregated near the highway ramps on Ferry Street, most are heroin addicts and nearly all are infected with AIDS, hepatitis C or other sexually transmitted diseases. The women sleep in abandoned apartments without running water, heat or electricity.

If arresting someone on wet is the least pleasant duty for Camden police, arresting hookers is the second. “Ninety-nine percent of them are heroin addicts,” a sergeant tells us. “I try not to deal with them. They have diseases. You pat them down and you find needles. You can get stuck with a needle. And they have MRSA, a skin disease with open sores. We have to get our cars disinfected afterward. Ninety-five percent have outstanding warrants, although they usually give us a wrong name.”

* * *

Despite Camden’s bleakness, despite its crime and its deprivation, despite the lost factory jobs that are never coming back—despite all this, valiant souls somehow rise up in magnificent defiance. In a room across the street from Sacred Heart Catholic Church, where meals are provided for the homeless on Saturdays, a group of African-American women bow their heads over a table and hold hands. They are led by Lallois Davis, 67, a heavyset woman who radiates an indomitable, unbroken spirit.

“The poor have to help the poor,” Davis says, “because the ones who make the money are helping the people with money.”

Davis raised four children and then, when a neighbor died, leaving behind her two orphaned grandsons, Davis took them in and raised them as well. She wears a large cross around her neck. She is known as Aunt Lallois.

“My heart is heavy,” says a 69-year-old woman named Brenda Hayes, her head bowed and her eyes shut. “There is so much heaviness. It is wounding me. How can I not worry?”

“Yes, Jesus. Yes, Jesus,” the other women respond.

“I know you didn’t carry us this far to drop us now,” she says. “I know there is no burden so heavy that we can’t carry it with your help. I thank you, Lord, for friends who have carried me through the roughest times.”

“Yes, Jesus. Nothing is impossible with you, Jesus,” the women say.

“Bodies,” Hayes says after the prayer. “Bodies out back. Bodies upstairs. People stabbed. I don’t go out at night. The last one was twenty feet away from me on my floor. There was one kid, he lived in the back of the projects, 18 years old. They buried him two months ago. Gunshot. There were four kids I knew murdered, one in the parking lot who was killed last year. He was 12 or 13. He was sleeping—some say he was living—in a car.”

“There are parents who are addicts who send their children out to sell drugs,” Hayes adds. “I know a mother who is a prostitute. Her oldest daughter sells weed to go to school, and one day the mother stole the weed and sold it to buy crack.”

Father Michael Doyle, an Irish priest, has been in the Sacred Heart parish for thirty-five years. He has witnessed the violence of poverty devastating his congregation. Father Doyle was a member of the Camden 28, a group of left-wing Catholics and anti–Vietnam War activists who in 1971 raided the city’s draft board to destroy files. He was sent to Camden as punishment by church leaders who disapproved of his activism.

“Today’s a very hard time to be poor,” says Father Doyle, seated in the church rectory. “Because you know you’re poor. You hear people my age get up and say, ‘We were poor. We put cardboard in our shoes.’ We talk like that. But we didn’t know we were poor. Today you do. And how do you know you’re poor? Your television shows you that you’re poor. So it’s very easy to build up anger in a, say, a high-voltage kid of 17. He knows he’s poor, he looks at the TV and all these people have everything and I have nothing. And so he’s very angry…. I’m talking about the violence that rises out of the marketing that shows the kid what he could have, creates a huge anger that explodes easily. That I discovered very quickly when I came to Camden. I discovered the anger was so near the surface, you just rub it and it explodes. And there’s no respect for you if you have no money.”

I ask him why the rage is invariably self-destructive. “They can’t get at it,” he said. “You have an enemy, and that enemy is greed and prejudice and injustice and all that type of thing, but you can’t get at it. There’s no head, there’s no clarity, so you take it out on your neighbor. It’s just horrendous what people do.”

“Women have some dignity in a poor ghetto because they bear children and raise them,” Father Doyle goes on. “Men are adding nothing and feeding from the trough. A woman walks down the street pushing a little cart, and a child on it—she’s somebody. But the man standing watching her is nobody.”

It is a bleak, rainy afternoon when we visit Harleigh Cemetery. Walt Whitman’s tomb, based on a design drawn by William Blake, is here with its heavy stone front and peaked roof with the poet’s name in imposing stone letters. So is the grave of another Camden poet, Nicholas Virgilio, who, as Father Doyle says, “mined beauty out of the gutters of Camden.” Virgilio died of a heart attack in 1989. The priest designed his grave in the shape of a podium. One of the poet’s verses is engraved on the stone:

lily:
out of the water…
out of itself.

Virgilio, who wrote his poems in his basement under a naked light bulb next to his washing machine, chronicled the slow strangulation of his city. The hookers knitting baby booties on a bus; sitting alone as he orders eggs and toast in an undertone on Thanksgiving; latchkey children “exploring the wild on public television”; the frozen body of a drunk found on a winter morning in a cardboard box labeled “Fragile: Do Not Crush”; as well as laments for his brother Larry, killed in Vietnam. I open his thin book, Selected Haiku, to a passage and place it on the marble top of his grave. Droplets of rain splatter the page:

the sack of kittens

sinking in the icy creek

increases the cold

INGVAR KAMPRAD – NAZIS WEREN’T SO BAD

SEIG HEIL!!!

Ingvar Kamprad, the owner of IKEA, is the gift that keeps on giving. More revelations about his “youthful indiscretion” of belonging the the Swedish Nazi party from 1943 through the early 1950s. Usually youthful indiscretions end in your youth, not your mid twenties after knowing that the Nazis had murdered 6 million Jews. It seems even at the age of 85 he still thinks the Nazis were a decent bunch. They were just misunderstood. This fucking prick is the reason I got shown the exit at IKEA. If you are new to the site, here is my story at IKEA:

http://www.theburningplatform.com/?p=10638

The funniest part of this is that if you google the name of the bitch CEO who fired me at IKEA – Pernille Lopez – the first thing that comes up on google is my article trashing her. She must love that. Serves the bitch right.

Book showing Ikea founder had deeper Nazi ties makes waves

By Nina Larson (AFP) – 5 hours ago 

STOCKHOLM — The founder of Ikea admitted long ago he foolishly flirted with Nazism in his youth, but a new book is making waves in Sweden with claims his ties to the fascist movement went much deeper than he has acknowledged.

Ingvar Kamprad, the 85-year-old Swedish billionaire who founded and still largely controls furniture giant Ikea, confessed in the 1990s that he had had links to the Nazi youth movement during World War II, when Sweden was neutral, describing it as the “greatest mistake of my life.”

He has always described the decision as the “folly of youth,” but a book published this week by journalist Elisabeth Aasbrink quotes Kamprad in an interview last year still hailing the Swedish fascist leader Per Engdahl.

“That was perhaps what was most surprising,” Aasbrink told AFP. “He has always said he got involved due to teenage confusion, but actually in August last year he was still loyal to this fascist leader.”

“He told me: ‘He (Engdahl) was a great human being and I will maintain that as long as I live’,” she said.

Swedish media have in recent days debated the book’s revelations, with an editorial the Dagens Nyheter newspaper ironically stating Thursday: “It was his life’s biggest mistake. And yet he keeps repeating it, for the rest of his life.”

Daniel Poohl of the anti-racist magazine Expo said the revelations were serious.

“Everyone has the right to make a mistake and get a second chance, but it is obvious that Kamprad still sees Per Engdahl as a great person,” he said in an interview with public broadcaster SVT.

“This was not just about happening in on a meeting by accident,” Poohl added.

Neither Kamprad, who lives in Switzerland, nor his spokesman could be reached for comment, but a statement on Ikea’s website stressed: “What happened almost 70 years ago is something Ingvar has apologised for numerous times … and has nothing to do with Ikea’s activities.”

“Ingvar has dedicated his adult life to Ikea and the democratic values Ikea stands for,” it added.

Aasbrink’s book “And in Wienerwald the trees remain” tells the story of Otto Ullman, a Jewish boy sent from Austria to Sweden right before the outbreak of World War II and soon becomes friends with Kamprad.

“Ingvar said to me: ‘don’t misunderstand me, but I fell in love.’ And they immediately became very close friends. They were 17 and 18 years old,” the author explains.

She says she did not start the project to dig into Kamprad’s Nazi past, but had wanted to understand how the Ikea founder could have been such good friends with Otto and at the very same time involved in a movement “with ideas that his friend was suffering the consequences of.”

“His parents were murdered in Auschwitz,” she pointed out.

But when she repeatedly asked Kamprad to explain what he was thinking at the time, he had finally said: “I cannot see any contradiction in this.”

Kamprad remained friends with Engdahl for years after the war ended, and Aasbrink’s book details a wedding invitation the Ikea founder sent the fascist leader in 1950 describing how he was proud to belong to the same circle as him.

Aasbrink also discovered that Kamprad, who has admitted activity in the far-right New Swedish Movement, had previously been a member of the more extreme Swedish Socialist Unity (SSS) party, with the member number 4014.

Sweden’s intelligence police Saepo had started a file on him in 1943, when he was 17, titled “Nazi”, she said.

“They obviously thought he was Nazi enough to create a file,” she said, adding she had been disappointed not to get access to possible file documents from after 1949 to probe how long Kamprad’s link to the SSS had lasted.

According to the part of the file she had seen, though, she said Kamprad claimed he “had recruited members … and doesn’t seem to miss an opportunity to serve the party.”

Aasbrink says she has received a lot of support, but also a number of angry letters and emails from people upset she was tarnishing a man widely respected for spreading a positive image of Sweden in the world.

“A lot of people think he’s a good representative for Sweden,” she said, adding: “I have also been criticised because he is an old man, but I didn’t interview him in an old people’s home. I interviewed him in Ikea’s headquarters.”

IRENE MODELS SHIFTING WESTWARD – NOT GOOD

My University uses this website to get a more accurate prediction for snowfall amounts. Meteorologists post every day. Their prediction accuracy is much better than the network TV crap. It seems all the models are shifting Irene’s track westwards. One model has it hitting NYC directly. That would be a damned shame.

Eyeing Irene’s Encounter

Computer modeling on Hurricane Irene has reversed its eastward nudge over the past couple of days and has been on a slow, arduous westward trend for the last couple of major computer model runs. I spoke yesterday about the 100 mile error that computer modeling can have with hurricanes in the four day out timeframe and how that meant nothing was certain (I was optimistic, perhaps wishing, that the east nudge would hold but pointed out that a 100 mile shift would change everything). While the models have not adjusted a full 100 miles, we’ve seen a movement of 50-75 miles to the west since this time yesterday and the modeling outcome has changed a good deal for this region.

A few caveats I’ll put out there.   First, Irene will be a large storm when it gets to this latitude and will impact many (especially if the “close to coast” or inland track verifies) but it should not pack the same intensity punch (Category 3 status) to our latitude as ocean temperatures in this part of the world are lower than they are in the Bahamas.  Hurricanes thrive on hot water and ocean temperatures locally are not conducive to supporting high intensity storms.   Irene will probably not be as strong as she is now but still pack a wallop when it visits us on Sunday.   Second, we probably have not seen the last of the nudges with this storm’s modeled path in either direction and it’s possible that we see a bit more nudging west or east in the coming day or two.

The models have shifted the storm’s projected track to the west, with the Euro taking Irene’s eye up the Chesapeake Bay through the western suburbs and north through the Poconos into Upstate New York after initial landfall in Eastern North Carolina.  Irene could bring near hurricane force sustained winds on its eastern side to South Jersey Shore Points in this scenario, with higher gusts.  Winds in Philadelphia could reach 50 mph in this scenario but the worst impacts would definitely be felt at the Shore from a wind and storm surge standpoint, with everyone impacted from heavy rainfall on the order of several inches.  The surge of water pushing up Delaware Bay would result in potentially significant coastal flooding on southern facing beaches (NJ side) in Delaware Bay and then lead to the risk of reverse coastal flooding on the northern facing beaches (Lewes) as winds veer around after the eye passes by.  The “saving grace” is that the landfall point being in the Carolinas would result in an inland track for Irene.  The result of Irene’s center being removed from the Atlantic for a period of time could weaken the storm some from its landfall intensity.  Definitely an ugly scenario but Irene is not as strong here as in the GFS’ case.

The GFS has a landfall point along the Jersey Shore and tracks the storm nearly over New York City.  This is nearly as ugly a scenario as the models can envision for track.  The storm will have had more time over water (granted, water not as warm but it’s still water and not land) and will be a bit stronger when it makes landfall.   The storm track could result in hurricane force winds hammering the Jersey and Delaware coastlines and bring heavy rain to the entire region.  Winds in Philly are not as strong in this scenario but we get a bit more rain in this scenario as we would be on the western side (rainy) of the storm.

One last point to make this morning:    East of the “eye” will have stronger winds than west of the eye, with the eastern side of the storm providing a better potential for quick spin-up tornadoes compared to the western side.   The west side of the storm provides a better potential for heavier rainfall.   Unless the storm takes a track over 100 miles east of the coastline, the region will see impacts from it…unfortunately, some of those will be rather significant.

KEYNESIAN SOLUTIONS – AFTER TOTAL FAILURE – TRY, TRY AGAIN

“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.” – John Maynard Keynes – The Economic Consequences of the Peace

  

While Barack Obama vacations on Martha’s Vineyard this week he’ll be thinking about his grand vision to save America – again. There is one thing you can say about Obama – he’s predictable. He promises to unveil his “new” plan for America in early September. The White House said Obama will give a speech after the September 5 Labor Day holiday to outline measures to boost hiring and find budget savings that surpass the $1.5 trillion goal of a new congressional deficit-cutting committee. It is heartening to see that Barack has turned into a cost cutter extraordinaire. He should be an inspiration to the Tea Party, except for one little problem. The plan he unveils in a few weeks will increase spending now and fret about spending cuts at some future unspecified date.

I can reveal his plan today because the White House has already leaked the major aspects of his plan. He will call for an extension of the Social Security payroll tax cut of 2% for all working Americans. This was supposed to give a dramatic boost to GDP in 2011. Maybe it will work next time. He will demand that extended unemployment benefits be renewed. Somehow providing 99 weeks of unemployment benefits is supposed to create jobs. It’s done wonders thus far. He will propose some semblance of an infrastructure bank or tax cuts to spur infrastructure spending. It will include a proposal for training and education to help unemployed people switch careers. He will attempt to steal the thunder from the SUPER COMMITTEE of 12 by coming up with $2 trillion of budget savings by insisting the Lear jet flying rich fork over an extra $500 billion.

You may have noticed that followers of Keynesian dogma like Paul Krugman, Larry Summers, Brad Delong, Richard Koo, John Galbraith, every Democrat in Congress, and every liberal pundit and columnist have been shrieking about the Tea Party terrorists and their ghastly budget cuts that are destroying our economy. They contend the stock market is tanking and the economy is heading into recession due to the brutal austerity measures being imposed by the extremists in the Republican Party. There is just one small issue with their argument. It is completely false. It is a bold faced lie. This is 2011. The economy has been in freefall since January 1. No spending cuts have occurred. Nada!!! As the CBO chart below reveals, the horrendous slashing of government will amount to $21 billion in 2012 and $42 billion in 2013. Of course, those aren’t even cuts in spending. They are reductions in the projected increases in spending. Politicians must be very secure in the knowledge that Americans are completely ignorant when it comes to anything other than the details of Kim Kardashian’s wedding and who Snooki is banging on Jersey Shore.

 

I’d like to remind the Harvard educated Keynesian economists that Federal government spending is currently chiming in at $3.8 trillion per year. Federal spending was $2.7 trillion in 2007 and $3.0 trillion in 2008. Keynesians believe government spending fills the gap when private companies are contracting. Obama has taken Keynesianism to a new level. Federal spending will total $10.8 trillion in Obama’s 1st three years, versus $8.4 trillion in the previous three years. Even a Harvard economist can figure out this is a 29% increase in Federal spending. What has it accomplished? We are back in recession, unemployment is rising, forty six million Americans are on food stamps, food and energy prices are soaring, and the middle class is being annihilated. The standard Keynesian response is we would have lost 3 million more jobs, we were saved from a 2nd Great Depression and the stimulus was too little. It would have worked if it had just been twice as large.

The 2nd Great Depression was not avoided, it was delayed. Our two decade long delusional credit boom could have been voluntarily abandoned in 2008. The banks at fault could have been liquidated in an orderly bankruptcy with stockholders and bondholders accepting the consequences of their foolishness. Unemployment would have soared to 12%, GDP would have collapsed, and the stock market would have fallen to 5,000. The bad debt would have been flushed from the system. Instead our Wall Street beholden leaders chose to save their banker friends, cover-up the bad debt, shift private debt to taxpayer debt, print trillions of new dollars in an effort to inflate away the debt, and implemented every wacky Keynesian stimulus idea Larry Summers could dream up.  These strokes of genius have failed miserably. Bernanke, Paulson, Geithner and Obama have set in motion a series of events that will ultimately lead to a catastrophic currency collapse. We have entered the 2nd phase of the Greater Depression and there are no monetary or fiscal bullets left in the gun. Further expansion of debt will lead to a hyperinflationary collapse as the remaining confidence in the U.S. dollar is exhausted. We are one failed Treasury auction away from a currency crisis.

John Maynard Keynes argued the solution to the Great Depression was to stimulate the economy through some combination of two approaches: a reduction in interest rates and government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment.

It sounds so good in theory, but it didn’t work in the Depression and it hasn’t worked today. It is a doctrine taught in every business school in America with no actual results to support it. Who needs facts and actual results when a good story believed and perpetuated by non-thinking pundits will do? Every Keynesian play in the playbook has been used since 2008. The American people were told by Obama and his Keynesian trained advisors that if we implemented his $862 billion shovel ready stimulus package, unemployment would peak at 7.9% and would decline to 6.5% by today. The cascade of recovery was going to be jump started by a stimulus package that equaled 27% of the previous year’s entire spending. Obama’s complete package was implemented. The outcome was an eye opener. If you show a Keynesian this chart, their response would be: “Imagine how bad it would have been if we didn’t spend the $862 billion.”

 

John Maynard Obama got everything he asked for in January 2009. He had both houses in Congress and did not need to consult Republicans to pass his Keynesian $862 billion porkulus bill. It seems that $252 billion, or 29% of the package was nothing more than transfer payments. Of course, according to Keynesians, the $252 billion should have had a multiplier effect when it was handed out. I think they were right. Obama was able to multiply the number of people on food stamps in January 2009 from 32 million to the current tally of 45.8 million. The monthly food stamp transfer payment has gone from $3.6 billion to $6.1 billion. Keynesians should be thrilled by this success story.

 [Review & Outlook]

Obama’s Keynesian dream bill included:

  • $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years.
  • $2 billion for child-care subsidies.
  • $50 million for that great engine of job creation, the National Endowment for the Arts.
  • $400 million for global-warming research.
  • $2.4 billion for carbon-capture demonstration projects.
  • $650 million on top of the billions already doled out to pay for digital TV conversion coupons.
  • $8 billion for renewable energy funding.
  • $6 billion for mass transit that had a low or negative return on investment.
  • $600 million more for the federal government to buy new cars. Uncle Sam already spends $3 billion a year on its fleet of 600,000 vehicles.
  • Congress earmarked $7 billion for modernizing federal buildings and facilities.
  • The Smithsonian received $150 million.
  • The Department of Education got $66 billion, more than the entire Education Department spent a just 10 years ago. $6 billion of this subsidized university building projects.

Obama declared in December 2008 there were shovel ready projects across the land that would create immediate jobs. Too bad he didn’t tell the American public only $30 billion of the $862 billion mountain of pork was earmarked for highways and bridges. Obama declared his stimulus would create 3.5 million jobs, later changed to “create or save”. There were 144 million Americans employed in January 2009. Today, there are 139 million Americans employed. Obama gives the term “success story” a new meaning. The Keynesians had their chance and now they want a do-over. Sorry, that isn’t how it works in the real world. As Speaker Nancy Pelosi put it, “We won the election. We wrote the bill.” No truer words have ever been spoken.

As we know, that was only the beginning of our Keynesian debt nightmare. Let’s do some critical thinking and assess the results of Obama’s other Keynesian solutions:

  • The Homebuyer Tax Credit cost taxpayers $27 billion or $43,000 per additional house sold. The Keynesians handed 3.9 million people $7,000 to do something they were going to do anyway. They lured first time home buyers into the market. Since the credit expired, median home prices have fallen $15,000 and continue to fall. This wonderful government program has created more underwater homeowners and did nothing to stabilize the housing market or home prices.
  • Cash for Clunkers cost taxpayers $3 billion. An incremental 125,000 cars were sold at a cost of $24,000 per car. This Keynesian dream program lured more people into debt and warped the used car market by destroying used cars and driving up prices for poor people who couldn’t afford a new car. There were no carryover benefits except for government controlled union car makers.
  • Obama’s HAMP program allocated $11 billion to supposedly allow 4 million homeowners to modify their mortgages, reduce their monthly mortgage payments and avoid foreclosure. HAMP has proven a colossal failure that has done more to harm than help debt-laden homeowners. It has achieved slightly more than 500,000 permanent modifications, 40% of which the Treasury expects to default. Far more borrowers have dropped out of the program than successfully achieved permanent loan modification. These borrowers, along with those who later default, will often be left with larger outstanding debt, worse credit scores, and less home equity.
  • Obama even handed $30 billion to the largest homebuilder corporations in the country, run by billionaires like Bob Toll, by allowing them to carry back their losses and wipe out tax liabilities in prior years. This did wonders for the housing market. It did stimulate bonus payments for the CEOs of these companies.
  • Billions of tax revenue was lost by handing out $1,500 tax credits for people to buy new windows, doors, and appliances they were going to buy anyway. We are still waiting for that multiplier effect.

The usual suspects are now declaring that we can’t make the same mistakes FDR made in 1937 resulting in a dramatic downturn in 1938. As usual, the Keynesian storyline about the Great Depression is false.

Depression Keynesian Fallacy

One thing to remember is that while the depression that started in 1929 may have come to a bottom in 1933, it took a long time to recover. There was a cyclical recovery in 1937, and why was that? Roosevelt had the good luck to have been elected dead flat at the bottom. So it wasn’t his policies that cured the last depression, it was luck and good timing, combined with the fact that they were creating a lot of money after Roosevelt took the dollar off the gold standard. That resulted in a false recovery, from 1933 to 1937, and it went downhill again. – Doug Casey   

 

Keynes′ theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is, policies that acted against the tide of the business cycle: deficit spending when a nation’s economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays. He argued that governments should solve problems in the short run rather than waiting for market forces to do it in the long run. Keynes had too much faith in the wisdom of politicians and Federal Reserve bankers. They mastered the art of deficit spending, but fell a little short on paying off the debts during boom times. About $14.6 trillion short so far.

The Great Depression had the same origins as our current Greater Depression. The three Republican administrations of the 1920s practiced laissez-faire economics, starting by cutting top tax rates from 77% to 25% by 1925. Non-intervention into business and banking became government policy. These policies led to overconfidence on the part of investors and a classic credit-induced speculative boom. Gambling in the markets by the wealthy increased. While the haves got richer, millions of have-nots lived below the household poverty line of $2,000 per year. The rip roaring party came to an abrupt end in October 1929, with the Great Stock Market Crash.

Between 1929 and 1932, the market fell 89% from its high. The Keynesian storyline is that Herbert Hoover’s administration did nothing to try and revive the economy. It took Franklin Delano Roosevelt and his New Deal Keynesian policies to save the country. It’s a nice story, but entirely phony. Between 1929 and 1933 the Hoover administration increased real per-capita federal expenditures by 88%, not exactly the austerity measures described in fantasy stories concocted by the mainstream media.  

Bureau of Economic Analysis National Income and Product Accounts Table

Table 1.1.6A. Real Gross Domestic Product, Chained (1937) Dollars [Billions of chained (1937) dollars]
 
 1929 
 1930 
 1931 
 1932 
 1933 
 1934 
 1935 
 1936 
 1937 
 1938 
 1939 
Gross domestic product
87.3
79.8
74.6
64.9
64.0
71.0
77.3
87.4
91.9
88.7
95.9
Personal consumption expenditures
63.1
59.7
57.8
52.6
51.5
55.1
58.5
64.5
66.8
65.8
69.4
Gross private domestic investment
12.2
8.1
5.1
1.5
2.3
4.1
7.6
9.7
12.2
8.0
10.3
Net exports of goods and services
0.8
0.4
0.2
0.0
-0.1
0.2
-0.5
-0.3
0.1
0.9
1.0
Government consumption expenditures and gross investment
9.2
10.2
10.6
10.2
9.9
11.1
11.5
13.4
12.8
13.8
15.0

 

The Great Depression officially lasted from 1929 until 1940. What is not well known is that real GDP was at the same level in 1936 as it had been in 1929. In no small part because real GDP soared by 37% between 1933 and 1936. The unemployment rate in 1929 was 5%. In 1936, even after real GDP had recovered to pre-depression levels, the unemployment rate was still 15%. It spiked back to 18% in 1938 and stayed above 15% until World War II. Tellingly, in 1936, private domestic investment was 21% below the level of 1929. 

By contrast, government expenditures surged by 46% between 1929 and 1936. With the government creating new agencies and employing people in make-work projects, private industry was crowded out. The extensive governmental economic planning and intervention that began during the Hoover administration swelled drastically under Roosevelt. The bolstering of wage rates and prices, expansion of credit, propping up of weak firms, and increased government spending on public works prolonged the Great Depression.

The facts powerfully contradict the notion endorsed by Krugman and other Keynesian devotees that the supposed 1937-38 Depression within the Great Depression was caused by Roosevelt slashing spending. In fact, real GDP only dropped by 3.5% in 1938 and rebounded by 8.1% in 1939. What actually collapsed in 1938 was private investment, which fell 34%. By contrast, government spending declined by only 4.5% in 1938, proving that Roosevelt did not drastically cut spending. To the extent that he eased up on the accelerator, it was by cutting back on useless jobs programs like those provided by the Works Progress Administration and the Public Works Administration. Austerity did not derail the recovery.

The reason private investment collapsed in 1938 was Roosevelt’s anti-business crusade. He denounced big business as the cause of the Depression. In March 1938, FDR appointed Yale University law professor Thurman Arnold to head the antitrust division of the Justice Department. Arnold soon hired some 300 lawyers to file antitrust lawsuits against businesses. Arnold launched cases against entire industries, with lawsuits against the milk, oil, tobacco, shoe machinery, tires, fertilizer, railroad, pharmaceuticals, school supplies, billboards, fire insurance, liquor, typewriter, and movie industries.

Paul Krugman’s recent veiled yearning for a war or staged crisis to revive the economy through spending to fight the war is another Keynesian fallacy perpetuated by the mainstream media. These mindless non-critical thinking talking heads actually believe World War II ended the Great Depression. Doug Casey obliterates their fantasy:

“People say that World War II cured the Depression, but in fact, it made it worse. As bad as things were in the ‘30s, they were worse during the war in the ‘40s. You couldn’t get shoes. You couldn’t get gasoline. You couldn’t get tires. You couldn’t get just about anything that was being used for the war. The war prolonged and deepened the Depression. The thing that ended the Depression was not the war but the fact that since people could not consume, they were forced to save. That delayed consumption resulted in a huge amount of savings, and that’s what caused the recovery in the late 1940s.”

 

The fact that the entire world was left in smoldering ruins after World War II, except for the United States, may have contributed slightly to our recovery from the Great Depression.

According to Murray Rothbard, in his book America’s Great Depression, the artificial meddling in the economy was a disaster prior to the Great Depression, and government efforts to prop up the economy after the crash of 1929 only made things far worse. Government intrusion delayed the market’s correction and made the road to complete recovery more difficult. Today’s myopic politicians, captured monetary authorities and Harvard trained Keynesian economists have learned the wrong lessons from the Great Depression. The upshot will be a second Greater Depression and further impoverishment of the dwindling middle class. The implications of more wasteful government stimulus programs, more quantitative easing and more debt are: further debasement of the currency and ultimately a hyperinflationary collapse. The great economist John Maynard Keynes understood currency debasement:

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

How to Cut Spending While Actually Increasing Spending

“Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.” – John Maynard Keynes – The Economic Consequences of the Peace

Obama’s plan to revive America will be announced with great fanfare in two weeks. We know for sure he will propose these two brilliant ideas:

  • Extending unemployment compensation again at a total 2012 cost of $65 billion. Because we know that paying people to not work creates millions of jobs. The multiplier effect is off the charts. Why work when you can watch The View and chow down on cheese doodles purchased with your SNAP card for 99 weeks?
  • Extending the payroll tax cut at a total 2012 cost of $100 billion. This was supposed to give a dramatic boost to the economy in FY11. Have you noticed any boost? A Keynesian will argue, “Imagine if we hadn’t done it.” A critical thinker might ask: Is it prudent to increase the unfunded Social Security liability by another $100 billion and hand the bill to future unborn generations, so we can buy a new IPod 2 today?

It is a certainty that Obama will announce an infrastructure bank or some variation to spur investment in our national infrastructure that is crumbling by the day. Top Keynesian, and architect of the Obama stimulus plan, Larry Summers has been blathering about this for months. Even though the first stimulus plan was sold as an infrastructure plan, they mean it this time. As usual, the storyline is false. You can’t drive anywhere in this country and not be inconvenienced by road widening, bridge building, and repaving projects. The Keynesians act like infrastructure projects are highly unusual and need new Federal dollars to jump start the engine. The fact is that every Federal, State and municipal government has a capital fund that is budgeted every year. Most of the projects have multiple year lead times. They require planning and coordination. The reason we have 160,000 structurally deficient or obsolete bridges and thousands of miles of crumbling underground pipes is because politicians decided to spend their budgets on something more useful like train museums, murals, turtle crossings, and studies on the mating habits of ferrets.

The country has lost approximately seven million jobs since 2007. Five million of the jobs were lost in sales industries and manufacturing industries. There are 139 million jobs in America today and only seven million, or 5% of all jobs, in the construction industry. How do Keynesians expect to revive the job market with an infrastructure bank that will benefit, at most, 5% of the U.S. workforce? Let me guess. They will propose billions of new spending on education so they can retrain sales clerks from Wal-Mart into architects for designing 160,000 new bridges.

Barack Obama will stand in front of the American people and lie. He is a born again cost cutter, who will propose new spending. As anyone with a calculator can figure out, the two guaranteed proposals from his upcoming speech will increase spending by $165 billion in 2012. If you go back to the handy dandy chart from the CBO showing the “horrific spending cuts” from the recent debt ceiling deal you will see  these “cuts” total $122 billion between 2012 and 2014. Barack will wipe out all of the supposed savings through mid 2015 with his new Keynesian plan. But don’t worry. His plan will have huge spending cuts in 2017 after his hoped for 2nd term is finished. Keynesians always promise to cut spending once their current emergency ends.     

The Keynesians had their chance. They controlled the Presidency and both houses of Congress. A Keynesian runs the Federal Reserve. They implemented everything they proposed. The $862 billion porkulus program, the $700 billion TARP program, home buyer tax credits, energy efficiency credits, loan modification programs, zero interest rates, QE1 and QE2. They increased social welfare transfers for Social Security, Unemployment Compensation, food stamps, Medicare, Medicaid, and Veterans by $600 billion since 2007, a 35% increase in four years. No one has foiled their plans. The Tea Party didn’t really exist until 2010. They didn’t lose the House until November 2010. They cannot blame the Tea Party extremists, but they do.

The Keynesians have successfully increased Federal spending by $1.1 trillion, or 41% since 2007, and are running deficits exceeding 10% of GDP, but they call the Tea Party extremists. Domestic investment is still 9% below 2008 levels as the Federal government has crowded out the small businesses that create the jobs in this country. And now the Keynesians declare we need more stimulus, more programs, more debt, more quantitative easing and lower interest rates. It just wasn’t enough the first time. You have to give the Keynesians credit. Despite the utter absolute failure of every scheme they have implemented, they will worship their models and theories until they successfully collapse our economic system. Then they’ll blame the Tea Party terrorists who foiled their plans.

None of the Keynesian solutions worked during this crisis, just as they didn’t work during the Great Depression. The solution was simple, yet painful. The banking system needed to be saved, not the banks. The bad debt needed to be purged from the system. Wall Street criminals needed to be prosecuted. Bondholders and stockholders needed bear the losses from their foolish investments. Saving and investment in the country needed to be encouraged, while borrowing and consuming needed to be discouraged. Our leaders have failed to lead. The American people have failed to accept the consequences of their actions. And now we are going to pay a heavy price as Ludwig von Mises predicted:

“There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.”