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Jul 10

Stolen Haitian Relief Money

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by Stephen Lendman

 

Following Haiti’s catastrophic January 12, 2010 earthquake, billions of dollars in relief aid were raised. Suffering Haitians got virtually none of it.

 

Hundreds of thousands remain homeless. A cholera emergency still exists. On June 19, the International Federation of Red Cross and Red Crescent said:

 

“There is a significant probability of a major cholera emergency in Haiti in the coming months but resources have been severely diminished.”

 

Increased numbers of cases were reported in the Artibonite, Nord-Ouest, Nord-Est, Ouest, Gonave island, and homeless camps in Port-au-Prince and surrounding areas.

 

The Pan American Health Organization (PAHO) estimates another 170,000 new cases by end of 2012.

 

Haiti’s problems are severe. Deep poverty, deprivation, and unemployment torment millions. Earthquake devastation compounded them. Little relief came. It was stolen for commercial development.

 

It’s common practice to divert relief aid to private developers. In 2004, a second tsunami struck Sri Lanka. The first one took 250,000 lives and left 2.5 million homeless throughout the region.

 

Coastal areas were scrubbed clean. Everything was gone. Sri Lankans living there lost everything. New rules prohibited rebuilding homes where they once stood. Buffer zone restrictions insured it.

 

Beaches were off-limits to people who once lived there. Displaced Sri Lankans were shoved into temporary grim inland camps. Soldiers prevented them from coming home.

 

At issue was developing coastal areas for profit. Luxury destinations were planned. Formerly occupied land was sold to commercial buyers. Privatization was the new game.

 

Displaced residents were entirely left out. What they lost, they never got back. Land grab money making became policy.

 

Tsunami victims in other ravaged countries suffered the same fate. The pattern repeated everywhere. People were prohibited from rebuilding where they once lived.

 

What nature wrought, corporate developers and corrupt politicians compounded by stealing their land for profit.

 

New Orleans Katrina victims suffered the same way. Blank became beautiful. Erased communities were replaced with upscale condos and other high-profit projects on choice city real estate.

 

Residents who once lived there were forced out. Politicians conspired with developers to assure they didn’t come back.

 

History not only rhymes, as Mark Twain once said, a lot of times it repeats. Haitians now suffer like Sri Lankans, other East Asian tsunami victims, and Katrina displaced New Orleans residents.

 

Haitians are no strangers to adversity and anguish. For over 500 years, they suffered severe oppression, slavery, despotism, colonization, reparations, embargoes, sanctions, deep poverty, starvation, unrepayable debt, and natural calamities.

 

They included destructive hurricanes and numerous magnitude 7.0 or greater regional earthquakes.

 

The last major one came in 1946. A magnitude 8.1 quake struck adjacent Dominican Republic. Haiti was also affected. Earlier catastrophic ones were in 1751 and 1770. Both devastated Port-au-Prince. In 1842 Cap-Haitien was destroyed.

 

In 2004, Washington militarized Haiti after ousting Jean-Bertrand Aristide. After January 2010, in came the marines.

 

After its worst catastrophe in nearly 170 years, Haitians need food, housing, medical care, clean water, and other vital services, not military forces confronting them repressively. They still do.

 

US marines are gone. MINUSTAH shock troops remain. For years, they’ve committed murders, kidnappings, extrajudicial detentions, rapes, non-sexual assaults, physical threats, and other type abuses. They’re enforcers for political and corporate crime bosses.

 

Haiti always was open for profit and exploitation. Earthquake devastation created new opportunities. The country was declared open for business. Washington and other Western predators took full advantage.

 

So did hundreds of for-profit NGOs. They skim most relief aid donations for themselves. So do corporate developers and other profiteers. They steal private donations and pledged amounts freely. Haiti’s pseudo-government then and now acquiesces.

 

No one helped Haitians like Jean-Bertrand Aristide. Two coups ousted him. Exile followed each time. He’s back but out of politics. Electoral manipulation installed Washington’s man.

 

Stealth Duvalierist Michel (Sweet Micky) Martelly became president. Most Haitians despise him. It hardly mattered. They had no say in preventing his illegitimate elevation to the nation’s highest office. Haitian suffering continues.

 

In January, Bill Quigley and Amber Ramanauskas headlined “Where the Relief Money Did and Did Not Go – Haiti after the Quake,” saying:

 

Despite billions in pledged and donated aid, “Haiti looks like the earthquake happened two months ago, not two years.”

 

Rarely does this news get covered. Over half a million people then remained homeless. They still do. Most debris lay where it fell. Cholera was killing thousands. It’s still out of control because too little is done to stop, control, and treat it.

 

Instead of relief going to help Haitians, it’s given to profiteering companies and NGOs. Haitians then and now ask where did the money go? It hasn’t helped them.

 

Washington diverted the largest amount. Instead of helping, it sent in the marines, let contracts for corporate predators, and funded well-connected profiteering NGOs. Haitians got hardly anything. They’re still waiting for desperately needed aid.

 

Their government got 1% of the money. Little went to Haitian companies or local NGOs. Private companies specializing in disasters got funding. Much of what was pledged never came. It happens every time.

 

Other funds received weren’t spent. Quigley and Ramanauskas are human rights lawyers. They said:

 

“Respect, transparency and accountability are the building blocks for human rights.”

 

“Haitians deserve to know where the money has gone, what the plans are for the money still left, and to be partners in the decision-making for what is to come.”

 

Once relief aid stops, they’ll be responsible entirely for solving problems so far not even addressed.

 

On July 5, The New York Times headlined “Earthquake Relief Where Haiti Wasn’t Broken.”

 

It provided a rare mainstream glimpse at how Haitians have been harmed and cheated.

 

“On the first anniversary of the Jan. 12, 2010 earthquake, in a sleepy corner of northeast Haiti far from the disaster zone, the Haitian government began the process of evicting 366 farmers from a large, fertile tract of land to clear the way for a new industrial park.”

 

They didn’t “understand why authorities wanted to replace productive agricultural land with factories in a rural country that had trouble feeding itself.”

 

Many other troubling incidents followed. Haitians are virtually helpless to stop it.

 

Bill Clinton co-chairs the so-called Haiti recovery commission. He celebrated the Caracol Industrial Park project by “cementing an agreement with the anchor tenant – Sae-A-Trading.” Wife Hillary helped seal the deal.

 

Sae-A is a South Korean clothing manufacturer. It’s a major supplier for Walmart and other large retailers.

 

They, like other local manufacturers, want to exploit Haitians lucky to have work no matter how poorly they’re paid and treated. They get below poverty wages. They’re treated little better than slaves.

 

Two and a half years after the quake, “Haiti remains mired in a humanitarian crisis.” Hundreds of thousands are homeless. They’re largely on their own to survive.

 

This and other commercial developments benefit profiteers, not Haitians. “Caracol Industrial Park is hardly reconstruction in the strictest sense.”

 

Its developers downplay labor and environmental concerns. They came to make money, not help Haitians. Sae-A has an odious reputation. It closed its Guatemala factory over troubled labor relations.

 

The AFL/CIO urged Haiti’s government not to accept them. A detailed memo described “egregious antiunion repression.” It includes “acts of violence and intimidation.” Guatemalan monitor Homero Fuentes called Sae-A “one of the major labor violators.”

 

Worker Rights Consortium executive director Scott Nova calls the company “a big player in a dirty industry with a track record that suggests a degree of ruthlessness even worse than the norm.”

 

Other critics expressed concerns about its Guatemalan labor and criminal law violations. Company executives used every dirty tactic imaginable to squeeze out profits. Manufacturing is conducted amidst intimidation, death and other threats on workers.

 

Nonetheless, Bill and Hillary Clinton welcomed Sae-A with open arms.

 

Caracol Bay contains Haiti’s most extensive mangrove reserve and valued coral reef. Better suited sites were bypassed. Haiti’s Audubon Society head Arnoud Dupuy called doing so “heresy.”

 

Environmental considerations were ignored. Despite objections, development went ahead as planned. It includes a heavy fuel oil power plant, a dense housing project, and port on a soon to be lost pristine bay.

 

Instead of promised “building back better,” profits superseded environmental and people concerns. Local backers and US officials downplayed the enormous damage done.

 

Haitians won’t be helped. They’ll be ruthlessly exploited for profit. Caracol’s mayor, Landry Colas, wasn’t consulted. He’d have picked a different site, he said.

 

This one is vast. It comprises nearly a square mile. It’s in Haiti’s north, south of Cap-Haitien. It’s bisected by the Hole of the North River and fed by the Massacre Aquifer.

 

Land was cleared last year. Small farmers were evicted. The tract resembles “a gravelly lunar landscape. Its perimeter is fenced, and outside the gate, a banner drapes a church, proclaiming ‘Sae-A Loves You.’ ”

 

It reminds some of Orwell’s “War is peace. Freedom is slavery. Ignorance is strength.”

 

Sae-A executives see Caracol Bay as a blank slate to develop and exploit as they wish. Haitians have a much different view. Land chosen has a history of foreign exploitation and agrarian struggle. Peasants alternated between occupation and eviction.

 

In 1986, residents reclaimed the land after Baby Doc Duvalier fell from power and fled to France. They divided it into hundreds of small farms. Many paid yearly rent to squat. The land’s replete with “collective memory.”

 

Bill and Hillary Clinton added more. Aggrieved Haitians won’t forget or forgive. The William J. Clinton Foundation and Inter-American Development Bank lured hundreds of potential investors to Haiti.

 

Big profits were promised. The industrial park was bait. Away from Haiti’s devastated south, it was ideal.

 

Ravaged areas remain troubled by slow rubble removal, problems securing land, and institutional ones.

 

Export processing zones aren’t new in Haiti. Choosing the best sites are prioritized. Professor Laurent Dubois calls developing industrial parks a “tired” idea, saying:

 

“The way I see it, in a deep, long, historical way, Haiti was founded by ex-slaves who overthrew a plantation system and people keep trying to get them to return to some form of plantation.”

 

“There have been cycles of (these) type project(s), where the idea is that foreign investment will modernize the country. But things have gotten progressively worse for Haitians.”

 

A local bank manager called developing a garment maquiladora zone a last resort idea. Free land, slave wages, extensive infrastructure development, and other investment incentives lured Sai-A. In return, it’s spending a modest amount.

 

Environmentalists were shocked that the company would anchor a giant industrial park. Before Haiti’s quake, they designated Caracol Bay to become the country’s first marine protected site.

 

Development imperils conservation. Haiti’s government chose the site. Washington’s heavy hand made the difference. It has valued soil and water resources. It’s ideal for farming.

 

Environmental impact studies weren’t done. After the fact, concerns were raised. It was too late. Caracol’s mayor Colas worries that his city will become another Cite Soleil slum.

 

He added that he feels like he’s being used. Signing ceremony attendees stop by City Hall, he said. They greet him, but there’s no relationship or involvement in planning or deals signed. Foreigners know more about what’s going on than he does, he complained.

 

Millions of Haitians have known nothing but brutal exploitation and numbing poverty for hundreds of years.

 

Caracol Bay and other commercial development projects change nothing. Haitian suffering continues.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”

 

http://www.claritypress.com/Lendman.html

 

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour

Jul 08

Dismal Jobs Report Reflects Economic Decline

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by Stephen Lendman

 

Years ago, America’s economy was a job creation machine. Today it’s rusted, wheezing, and sputtering on the way to collapsing.

 

In June, America added 80,000 jobs. U-3 unemployment remained at 8.2%. Based on 1980 calculations, it tops 22%.

 

Most jobs created are part-time, low-pay temp ones. The nation’s manufacturing base largely exists offshore. So do many high-pay service jobs.

 

Expectations were missed for the fourth straight month. Typically at this stage of the economic cycle, around a quarter million monthly jobs are created. Moreover, 36 months after an alleged recovery, U-3 unemployment is 3.6% below the pre-recession high.

 

The household survey adjusted on a comparable basis to the headline payroll one showed 153,000 June job losses. It was the third decline in the past four months. In total, 666,000 jobs are gone.

 

Average hours worked fell to 0.4% year-over year down from 4.3% in Q 1. It suggests downward GDP forecast revisions anywhere from 1.5% to contraction.

 

The University of Michigan “favorable (employment) news” index plunged to 27 in June from 34 in April and May. In March it was 38.

 

It reached a 2012 low. Since 1980, a decline of seven points month-over-month occurred only six times. In contrast, unfavorable employment new rose five points to 28. It hit a yearly high.

 

The Conference Board’s “jobs hard to get” index rose to 41.5 in June. It reflected a five-month high. In May it increased to 40.9 from 38.1 in April. The ISM jobs index fell slightly from 56.9 to 56.6 month-over-month.

 

Initial jobless claims averaged 387,000 in June. They rose 3% over May. In the past decade, months in which they increased this much saw declining payrolls over 70% of the time.

 

Average hours worked fell to 0.4% year-over year down from 4.3% in Q 1. It suggests downward GDP forecast revisions anywhere from 1.5% to contraction.

 

By any measure employment is weak. The private payrolls diffusion index measures the degree to which companies expand or contract them. It fell 1.9 points to 57.9. It dropped twice in the last three months. It’s the lowest read since last November.

 

The manufacturing diffusion index declined to 51.2 from 53.7. It hit a 2012 low. Average unemployment duration rose for the second straight month. It’s at 39.9 weeks up from 39.7 in May.

 

Part-time workers are growing at the expense of lost full-time jobs. The protracted trend shows the downsizing of American jobs, their quality, and future prospects.

 

The service sector diffusion index also fell. It’s down from 53.7 in May to 52.1. It’s the lowest figure since January 2010. Its forward looking indicators flashed weakness. Backlogs dropped from 53 to 47.5. It’s another 2012 low.

 

New orders fell to 53.5. Vendor performance slipped to 51 from 53. Export numbers declined to 49.5 from 53 in May and 58 in April. It’s the second lowest read since August 2010.

 

Prices plunged for five straight months from 68.4 in February to June’s 48.9. It’s the lowest level since July 2009. Overall, nominal non-manufacturing stands at a three-year low. Indications suggest considerably more downside.

 

Combining manufacturing and non-manufacturing indices, the composite dropped to 51.8 from 53.7 in April and May and 56.7 in February. It now stands where it did in January 2010.

 

The Conference Board’s measure of CEO confidence plunged in Q2 to 47 from 63 in Q1. Under 50 reflects negative sentiment. Only three times in the past decade did a decline this great occur. Each time it reflected the economy in recession or about to roll over.

 

Claiming the recession ended is more illusion than reality. Economic conditions are awful. Half or more of US households are impoverished or borderline.

 

Expect much worse ahead. Protracted Depression harshness shows no signs of abating.

 

Economist Jack Rasmus is a Progressive Radio News Hour regular. He explained that winter months job numbers “were grossly overestimated.”

 

They were boosted by highly suspect statistical adjustments. They were more relevant pre-2007 than today.

 

April, May and June reports were dismal. Putting a brave face on them doesn’t wash. They reflect economic decline, not growth. Later downward revisions may show they’re worse than now reported.

 

Recovery is nowhere in sight. Conditions are going from bad to worse. Main Street remains in protracted Depression.

 

On the Progressive Radio Network, economist Paul Craig Roberts called America a “third world economy.” Conditions are worse now than when crisis conditions erupted in fall 2007.

 

According to Rasmus:

 

Since the September 2008 banking crash, “the weakest (so-called) recovery on record followed. Over $3 trillion was pumped into the economy. Bankers got over $9 trillion in free money.” Some analysts estimate more than double that amount.

 

Money they got went for speculating and consolidating to greater size. Little went for economic growth. What’s reported is illusory. Weak official numbers are softening.

 

Bipartisan complicity to cut trillions of dollars in domestic spending post-election in addition to scheduled $2.2 trillion effective January 2013 promises to make tough times much harder.

 

A so-called “grand bargain” includes more corporate handouts, business tax cuts, and continuing the ones Bush instituted for rich elites. Doing so will increase the federal deficit by $4 trillion or more over the next decade.

 

At the same time, massive cuts in Medicare, Medicaid, Social Security disability, education, and virtually all other social spending are planned. Bipartisan agreement assures it.

 

Defense and homeland security are safe. So are intelligence and Pentagon black budgets believed to be in the hundreds of billions of dollars annually.

 

Expect increased corporate handouts. Their interests are prioritized over vital popular needs gone begging.

 

America is becoming banana republicanized. Disproportionally small numbers have enormous wealth. Ordinary people are exploited. Profits are privatized. Public pain is socialized.

 

Complicit corporate and political kleptocrats run the country. Gangsterism defines their agenda. Freedom and other democratic values are absent.

 

Social benefits are disappearing. Austerity replaced them. Code language calls it “grand bargain/fiscal cliff” priorities.

 

Crackdowns target protesters knowing the ruse and complaining publicly.

 

Today’s America reflects the worst of all possible worlds. Hard times indicate tougher ones coming.

 

America and other global economies are weakening at an alarming rate. Over 80% show declining industrial activity. Economist David Rosenberg called EU summit results “more bones than meat.” Reality replaced initial euphoria.

 

Analysts and media scoundrels praised the outcome. Deception is the name of their game. New ways to reverse economic decline weren’t proposed. Cutting near zero interest rates solves nothing.

 

Nor does central bank money creation for banks, not economic growth. America’s in deep trouble. So is Europe. Recession conditions are worsening. Manufacturing in Germany and France are declining. So is Germany’s service sector. Spanish bond yields again hit 7%. Depression conditions are deepening.

 

A Bank of England statement said:

 

“(A) weaker outlook for UK output growth means that the margin of economic slack is likely to be greater and more persistent.”

 

In other words, BoE governor Mervy King said Britain’s economy is lousy.

 

On July 6, the Wall Street Journal headlined “Jobs Report Revives Fears for Recovery,” saying:

 

Weak job numbers were reported for the third consecutive month. The quarter was the weakest since 2010. Nomura economist Ellen Zentner said soft data reflects a growing sense of uncertainty. What’s ahead “could be the beginning of a (significant) downshift in economic activity.”

 

US manufacturing is contracting. Household spending is down. Retail sales declined. The Redbook survey finished June with sales activity way below target year-over-year expectations. Instead of 2.9%, it registered 2.2%. Month-over-month gains were weaker. Instead of forecast 0.9%, it came in at 0.2%.

 

University of Michigan and Conference Board auto buying intentions show readings well off earlier year highs. Housing is in protracted Depression. Almost 30% of US homeowners are under water or have no equity in their homes. Recovery remains distant.

 

Consumer confidence reflects crisis conditions. The Fed, IMF and mainstream economics cut US 2012 growth forecasts. They still reflect overestimates.

 

Officially recession ended in mid-2009. Unofficially things are much worse now than then and heading south.

 

Political Washington bears full responsibility. Instead of dealing responsibly with crisis conditions, bipartisan complicity turned hard times into worse ones. Expect voters to be unforgiving in November.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”

 

http://www.claritypress.com/Lendman.html

 

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour

Jun 09

America’s Student Loan Racket

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by Stephen Lendman

 

This writer’s recent book titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War” includes a chapter on America’s student loan racket. It discusses the issue in detail.

 

It explains a disturbing government/corporate partnership. Students are exploited for profit. Providers are enriched. For many, rising tuition and fees make higher education unaffordable. Others need large loans to attend. As a result, they become debt entrapped.

 

Some face burdens up to $100,000 or higher. If unpaid after 30 years, it’s a $500,000 obligation. If default or declare bankruptcy, it’s unforgiven. Bondage is permanent.

 

Lenders thrive from defaults. Wages can be garnished. So can portions of Social Security and other retirement benefits. A conspiratorial alliance of lenders, guarantors, servicers, and collection companies derive income from debt service and inflated collection fees.

 

Education today grows more unaffordable. Many students are priced out and can’t attend. Others become debt entrapped. Growing numbers remain there for life. A predatory system fleeces them.

 

Principle, accrued interest, late payment and collection agency penalties create enormous burdens to repay.

 

Once entrapped, escape is impossible. Unless repaid, future lives and careers are impaired. Today’s economic crisis exacerbates conditions. Job opportunities are scarce. Ones for higher education grads are even fewer.

 

Around yearend 2011, student debt exceeded $1 trillion. It’s staggering. It increases nearly $3,000 per second. It exceeds credit card and auto loan obligations. It’s second only to outstanding mortgage debt. It’s rising exponentially. A lost generation threatens.

 

It’s part of the grand scheme to transfer maximum wealth to America’s super-rich. It’s been ongoing for decades. Under Obama, it accelerated.

 

On May 12, The New York Times addressed the issue. Titled “A Generation Hobbled by the Soaring Cost of College,” writers Andrew Martin and Andrew Lehren overall did a credible job worth reading.

 

Ohio Northern University’s Kelsey Griffith was mentioned. “To start paying off her $120,000 in student debt, she is already working two restaurant jobs and will soon give up her apartment here to live with her parents. Her mother, who co-signed on the loans, is taking out a life insurance policy on her daughter.”

 

Griffith knew college costs were high. She never imagined owing $900 a month after graduating. “No one told me that,” she said.

 

Nearly every baccalaureate candidate borrows to attend. Most can’t imagine a future “unprecedented financial burden.”

 

“Ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education — up from 45 percent in 1993.”

 

According to Consumer Financial Protection Bureau deputy director Rajeev Date:

 

“If one is not thinking about where this is headed over the next two or three years, you are just completely missing the warning signs.”

 

He compares student loans to risky mortgages. Its extraordinary growth surprised many. Its roots, in fact, are deep. Its “cast of characters” includes college marketing officers, state and federal lawmakers, administration officials, and predatory lenders, guarantors, servicers, and collection companies.

 

Loans are easy to get. They’re tough to service. They’re not forgiven. For many in today’s job market, they’re impossible. Onerous debt escalates to greater amounts. A vicious circle entraps graduates and dropouts, many for life.

 

Since crisis conditions erupted, states and cities nationwide slashed budgets. Education paid heavily. Adjusted for inflation, spending per college student reached a 25-year low.

 

At the same time, tuition and fees keep rising exponentially. If current trends continue “through 2016, the average cost of a public college (education) will have more than doubled” in the last 15 years.

 

Students and parents are unprepared. So-called experts claim not attending college is worse than graduating with debt. They, of course, have none to repay, and feel secure in well-paid jobs in an unfriendly environment for new grads.

 

Obama let a bad situation fester. Last October, he offered pathetic relief. Repayment schedules were relaxed slightly. Only federal loans are affected. Students in default don’t qualify. Moreover, for everyone who does, two or more fall behind in payments. A bad situation grows worse.

 

At most for the few qualifiers, savings are miniscule. At most, they’re about one-half of 1% on interest.

 

Nearly 10% of borrowers who began repayments in 2009 defaulted in two years. It’s double the 2005 rate. Some worry about the student loan system replicating the housing crisis. Doing so would have enormous economic implications.

 

Economists say the issue “hangs over the (economy) like a dark cloud for a generation of college graduates and indebted dropouts.”

 

Major purchases are delayed or abandoned. At issue is repaying student debt forever, according Bowling Green State University dropout Chelsea Grove. She owes $70,000. She’s working three part-time jobs. She’s not going back. She can’t afford it.

 

Twenty-three-year old Chistina Hagan is an Ohio lawmaker. She also attends Malone University. She’ll graduate shortly with over $65,000 in debt. Despite earning $60,000 a year, she’ll take a waitress job to service her $1,000 a month obligation. For her, it includes credit card debt.

 

Nationwide from 2001 – 2011, state and local per student financing dropped 24%. Over the same period, state school tuition and fees rose 72%.

 

Ohio State University gets 7% of its budget from Columbus. A decade ago it was 15%. In 1990, it was 25%. Decades earlier at some state universities, students attended free.

 

Today’s financial reality creates enormous burdens. At issue is handling costs and repayment obligations. Then it’s about finding decent jobs too few in number.

 

Few understand what they’ll face. Colleges recruit students aggressively. Financial aid is touted. Fine print language is a “minefield” to understand.

 

“Some are written in a manner that suggests the student is getting a great deal, by blurring the line between grants and loans or not making clear how much the student may have to pay or borrow.”

 

What’s portrayed as “doable” and “normal,” in fact, becomes onerous and unmanageable. Annual tuition increases aren’t factored in. Neither is inflation and high interest rates.

 

College admissions staff don’t explain. “While there are standardized disclosure forms for buying a car or a house or even signing up for a credit card, no such thing exists for colleges.”

 

College costs are complex. Besides rising tuitions and fees, “a vast array of grants and loans and a financial-aid system that discounts tuition for most students (use hard to understand) opaque formulas.”

 

Moreover, colleges avoid discussing affordability issues and possible future debt obligations. Growing numbers are like Wanda McGill. She “stopped opening her student loan bills.”

 

She’s not sure how much she owes but thinks it’s about $100,000. She can’t service it. After exhausting her funds, she dropped out of DeVry University’s Columbus branch. Now she earns $8.50 an hour.

 

“I was promised the world and was given a garbage dump to clean up,” she said. “Like my life was not already screwed up with welfare and all.”

 

She’s not alone. Epidemic conditions rage across America. An Occupy Student Debt protest joined other OWS campaigns.

 

Its web site “What You Need To Know” section says:

 

“We did what we were told to do and ‘followed our dreams,’ but we are now trapped by what was meant to be an investment in our futures, not a noose.”

 

“Obama’s recent student loan ‘reform’ has done nothing for those in default, or those of us with private (bank-backed) loans through Sallie Mae, Citibank, and so on.”

 

“If we default, we cannot rent or buy homes, or even find jobs with the 60% of employers that check credit. Our professional licenses (i.e. nursing/teaching) can be revoked. And with the fees assigned to defaulted loans that double the amount owed, getting back on one’s feet is nearly impossible.”

 

“Not only would voluntarily defaulting do nothing to solve the underlying problem of out-of-control student loan debt, but defaulting can result in any number of detrimental outcomes, including, but not limited to the consequences listed above.”

 

Today’s crisis spread from for-profit institutions to others. However, former ones represent the worst problem. Students complain they’re mislead. Lawsuits charge fraud, deception, doctoring attendance records, or offering near-worthless degrees.

 

As a result, their students are twice as likely to default. Among baccalaureate candidates, only 22% succeed in six years. At non-profit private schools, it’s 65%, and at public ones it’s 55%.

 

According to American Association of Collegiate Registrars and Admissions Officers associate executive director Barmak Nassirian:

 

“Mainstream higher ed can really self-righteously look at the big problem out there and say, ‘The problem lies with the other guy.”

 

“But there are all kinds of unfortunate practices in traditional higher education that are equally as problematic that are reaching the crisis point.”

 

Political Washington largely ignores the problem. It’s done little to curb abuses. Action belies lip service. A sinkhole of trouble deepens. A lost generation threatens.

 

Higher education today involves crushing debt burdens too onerous to repay. Rising poverty, unemployment, few job prospects, and a system sucking wealth to America’s super-rich makes today’s crisis unmanageable.

 

Education beyond secondary school once meant brighter futures. Today it ensures debt entrapment too demanding to repay. Neoliberal harshness polarized American society along class lines. It also affects Europe.

 

In modern times, it’s harder than ever to cope. For growing numbers of deeply indebted students it’s impossible. Their dreams became no-escape nightmares.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”

 

http://www.claritypress.com/Lendman.html

 

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

May 09

Predatory Capitalism Failed

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Predatory Capitalism Failed

 

by Stephen Lendman

 

Independent observers knew it long ago. Today’s global economic crisis provides added confirmation. In 2008, a staunch champion of the system expressed second thoughts. More on him below.

 

An ideology based on inequality, injustice, exploitation, militarism, and imperial wars eventually self-destructs or gets pushed.

 

Growing evidence in America and Europe show systemic unaddressed problems too grave to ignore. They remain so despite millions without jobs, savings, homes or futures.

 

Imagine nations governed by leaders letting crisis conditions fester. Imagine voters reelecting them despite demanding change. OWS aside, one day perhaps rage will replace apathy in America. The latest jobs report alone provides incentive enough to try and then some.

 

On May 4, the Labor Department reported 115,000 new jobs. It way overstated the true number. Official figures belie the dire state of things. At most, two-thirds the headline total were created. Even that’s in doubt.

 

Most were low-pay, part-time, or temp positions with few or no benefits. Decades ago, workers would have avoided them. Today, there’s no choice.

 

The report also showed economic decline. Expect much worse ahead. In 2008, Main Street Americans experienced Depression. It rages today. Poverty’s at record levels. Real unemployment approaches 1930s numbers. Dire conditions are worsening.

 

Announced job cuts are increasing. Hiring plans are down. Compared to year ago levels, they’re off 80%. Income is stagnant for those lucky to have work. The private diffusion index measuring growth fell sharply month-over-month.

 

The unemployment rate decline reflects discouraged workers dropping out. They want jobs but can’t find them. The Labor Department considers them non-persons. They’re not counted to make official figures look better.

 

Moreover, the broad based Household Survey showed employment dropping 169,000. It was the second consecutive monthly decline. The Labor Department uses a “population and payroll concept adjusted” calculation. Doing so tries to compare monthly payroll and household figures.

 

The measure plunged 495,000 in April after dropping 418,000 in March. The calculation represented the largest back-to-back decline since late 2009.

 

At 63.6%, America’s labor force hit its lowest level since September 1981. Since then, population totals grew from 229 million to about 312 million today. The state of the nation today reflects lots of people facing few jobs, and no policy to create them.

 

The employment/population ratio stands at 58.4%. Alone, it represents a shocking testimony to failure. So do other data. Long-term unemployment remains near record levels. Credit deleveraging continues. Housing’s in its worst ever depression. Prices keep falling. Inventories of unsold homes are huge. Foreclosures are at epidemic levels.

 

State and local downsizing continues. Personal income suffers. Conditions are bad and worsening.

 

On May 4, Pimco’s Mohamed El-Erian headlined his Financial Times article “Confirmed: America’s jobs crisis,” saying:

 

“Friday’s US jobs data sound a warning that should be heard well beyond economists and market watchers.”

 

Americans with jobs have poor ones. Wage growth is stagnant. Purchasing power can’t keep up with inflation. For ordinary Americans, secular income headwinds blow at gale force strength.

 

Crisis conditions today make “a mockery of the published unemployment rate of 8.1 per cent….The economic implications are clear.” At a time, Europe’s recession deepens, America’s declining.

 

Risks are increasing. A “potential (austerity caused) year-end ‘fiscal cliff’ (may) suck out some 4 per cent of GDP in purchasing power, and do so in a disorderly fashion.”

 

Instead of addressing crisis conditions responsibly, political Washington campaigns for reelection, and plans huge domestic budget cuts when stimulus help is needed.

 

Main Street Americans are pushed to the edge. Potential “social consequences” suggest “the possibility….of a lost generation.”

 

Unemployed teenagers “face the risk of going from being unemployed to becoming unemployable.” Today’s reality is bleak. It reflects “a multi-faceted unemployment crisis that politicians, both in America and Europe, are failing to comprehend, unite around, and respond to.”

 

“I worry greatly that facts on the ground will unfortunately warrant future analyses to be even more disheartening.”

 

Alan Greenspan’s Too Late to Matter Mea Culpa

 

As Fed chairman for nearly two decades (1987 – 2006), he engineered today’s crisis. Some call him the Maestro of Misery for good reason. Those benefitting most sing his praises. In 2008, he had second thoughts.

 

A longtime Ayn Rand disciple, he strayed noticeably in October 2008 House testimony. Her libertarian views influenced his. She championed regulatory free markets. So did Greenspan. He practiced what she preached.

 

Perhaps House Oversight and Government Reform Committee members couldn’t believe their ears. He acknowledged his worldview failure, saying:

 

“You know, that’s precisely the reason I was shocked, because I have been going for 40 yeas or more with very considerable evidence that it was working exceptionally well.”

 

While trying to have it both ways, he admitted his faith in regulatory free markets was shaken, saying:

 

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

 

“The Federal Reserve had as good an economic organization as exists. If all those extraordinarily capable people were unable to foresee the development of this critical problem…we have to ask ourselves: Why is that? And the answer is that we’re not smart enough as people. We just cannot see events that far in advance.”

 

In his book “Secrets of the Temple: How the Federal Reserve Runs the Country” William Grieder called Greenspan one of “the most duplicitous figures to serve in modern American government.”

 

He used “his exalted status as economic wizard (to) regularly corrupt the political dialogue by sowing outrageously false impressions among gullible members of Congress and adoring financial reporters.”

 

His ideology was hokum. Somehow he managed a Columbia doctorate without its dissertation requirement. His economic consulting firm flopped. It faced liquidation. He closed shop to join the Fed after serving earlier in the Reagan, Nixon and Ford administrations.

 

His background in government got him his job. His inability to forecast made him a perfect Fed choice. So did his reliability to serve monied interests over populist ones.

 

Saying he got it wrong after the fact hardly matters. Where was he when it counted. In 2006, Bernanke replaced him. He made a bad situation worse. Since 2008, he more than tripled the Fed’s balance sheet from about 6% of GDP to 20%.

 

His day of reckoning approaches. Perhaps in future congressional testimony, he’ll address his own shortcomings. Doing it when it counts matters. After the fact turns memoirs into best-sellers.

 

His cross to bear and Greenspan’s could fill volumes. Millions their policies harmed won’t line up to buy them.

 

How can they? They’re broke, on their own, out of luck, and unreceptive to hear defrocked Fed chairmen say they’re sorry. If so, they’d have done it right in the first place.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”

 

http://www.claritypress.com/Lendman.html

 

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour.

May 04

Choice Not on Ballot in French Election

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Choice Not on Ballot in French Election

 

by Stephen Lendman

 

France replicates most Western societies. Elections give voters little choice at best. Most often there’s none. Two dominant parties usually compete. In France, there’s three.

 

On April 22, first round presidential election voting took place. Three main parties competed. Former Union for a Popular Movement (UMP) leader and current president, Nicolas Sarkozy, faced two main challengers

 

He squared off against Socialist Party’s (PS) Francois Hollande and the far right National Front’s (FN) Marine Le Pen.

 

All three represent wealth and power. Popular interests aren’t considered. Sarkozy is far to the right of center. Neo-fascist best describes him. Le Pen’s even worse.

 

Sarkozy’s hugely unpopular. Voters aren’t fooled by demagogic rhetoric calling himself “the people’s candidate,” wanting workers “to live from (their) labor.”

 

How can they be with fast disappearing jobs. They want leaders committed to creating them. They want banker bailouts and euro straightjacket austerity ended.

 

One size fits all doesn’t work. Uniting 17 dissimilar countries under rigid euro rules failed. Eurozone monetary union was doomed to fail. Nonetheless, it was engineered fraudulently to look workable.

 

Membership means foregoing the right to devalue currencies to make exports more competitive, maintain money sovereignty to monetize debt freely, and legislate fiscal policy to stimulate growth.

 

European Central Bank (ECB) officials run financial policies. Sovereign governments have no say. French voters and others across Europe want measures hurting them reversed.

 

They chafe under ECB enforced rules, terms and diktats. They control parliaments. They pressure, bribe or otherwise force capitulation in ways no no shark would demand.

 

Predatory finance is a new form of warfare. What it wants it gets. Mass layoffs, wage and benefit cuts, and other painful measures assure bankers get paid first.

 

France is entrapped like other Eurozone countries. Sarkozy fronts for powerful financial interests. It’s hard imagining why anyone but elitists support him. Since taking office in May 2007, hundreds of thousands lost jobs.

 

Official unemployment’s at 10%, the highest in over 12 years. Around three million wanting jobs can’t find them. In the past decade, France lost more industrial jobs than any European country. Many came during Sarkozy’s tenure. He’s a job destroyer, not creator.

 

In 2008, he pledged 100,000 new ones. He was elected on a promise to revive employment, let workers earn more, and protect their pensions.

 

He pledged one thing and did another. He deplores worker rights. He supports reducing labor costs and cutting payrolls.

 

Over 1.4 million lost jobs. Around half a million were industrial ones. Wages and benefits were cut. So were pensions. Austerity harms European workers, including French ones.

 

Voters want him out. He advanced to a May 6 runoff. Polls show him well behind, though two late ones reflect a closer race. Let them eat cake policies win few friends. Neither does supporting imperial America.

 

New information surfaced about Gaddafi offering millions to fund his campaign. The French web site Mediapart said it had a 2006 Libyan document Gaddafi’s intelligence chief Moussa Koussa signed. It offered Sarkozy $66 million.

 

“It’s a setup, a slanderous” claim, he responded. He accused Mediapart of being a leftist mouthpiece. Opposition candidate Hollande urged judicial authorities investigate. So did Segolene Royal, the 2007 race runner-up. Gaddafi, of course, can’t confirm or deny reports. Dead men tell no tales.

 

Sarkozy’s right wing agenda can’t be denied. Nor can his hostility to democratic rights, immigrants, Roma, and and Islam.

 

France has Europe’s largest Muslim population. It’s about 10% of its populace. Sarkozy calls wearing the burqa a “symbol of enslavement,” adding:

 

“We cannot accept to have in our country women who are prisoners behind netting, cut off from all social life, deprived of identity.”

 

His solution is force-feeding secularism. It’s also about Islamophobia. It’s increasing dangerously. Right wing extremism fuels it. Sarkozy’s neo-fascism shares blame. The French umbrella Muslim group CFCM said attacks and insults rose 22% in 2011.

 

Interior Ministry figures show dozens of reported cases. According to CFCM’s president Abdallah Zekri, official numbers way understate reality. Many victims stay silent.

 

They face physical attacks, insults, provocations, Koran burnings or profanations, as well as incidents affecting mosques and cemeteries.

 

How likely winner Hollande handles these and other vital concerns won’t likely please voters. They’re being set up again for disappointment. They especially want pocket book issues addressed. Hollande’s agenda is opposite of what they need.

 

Ahead of the May 6 vote, he pledged more structural harshness. He supports worker layoffs. Hard hit French companies plan them. Sweeping ones are likely. So are more plant closings, wage and benefit cuts, and other measures on top of everything harming labor so far.

 

Called “Mr. Normal” by some, his political record is noticeably undistinguished. Perhaps he’s the least worst choice, but France deserves better.

 

New Yorker contributor Adam Gopnik calls him “the inoffensive, myopic, weight-conscious Socialist candidate, a man so milky-mild that one has to project onto him a secret life to make him seem not just a fully credible politician but a fully credible human being.”

 

His appeal rests on Sarkozy’s failure and Le Pen’s extremism. His rhetoric belies what’s coming with him as president. He supports austerity, deficit reduction, social spending cuts, and other polices serving finance capital.

 

His book titled “Let’s talk about France” attacked welfare state policies. He’s more right-wing than left. He was one of former President Francois Mitterrand’s economic advisors. He stayed loyal when austerity, factory closings, and layoffs became policy.

 

In 1999, he became the Socialist International’s vice president. In 2004, he organized the Socialist Party’s campaign for the neoliberal EU constitution. He also supports France’s imperial alliance with Washington. As president, he’ll resemble Obama, not FDR.

 

France’s financial aristocracy prefers Sarkozy. It finds little fault with Hollande. During his tenure, social democratic change won’t reemerge. At issue is how long will French workers tolerate him?

 

April 22 was round one. Sarkozy and Hollande advanced to a May 6 runoff. Le Pen finished third. Her National Front (FN) party received its highest ever support. Popular discontent fueled it. Pocket book issues matter most. Ten candidates competed. Only three mattered.

 

Late polls show Hollande winning with from 53 – 55% of the vote. Sunday, May 6 will decide. Progressive change won’t triumph. Workers are again set up for disappointment.

 

Finance capitalism dominates Europe. Hollande supports it. Socialist Party (PS) politics govern from the right, not left. Its name belies its policies.

 

PS is to Sarkozy’s Union for a Popular Movement (UMP) as US Democrats are to Republicans. Not a dime’s worth of difference separates them on issues mattering most.

 

Europe is much the same, including in France. On May 7, expect finance capital and France’s privileged to awaken knowing they’re in good hands with Hollande.

 

Same old, same old always wins. Worker interests haven’t a chance. Ballot box activism doesn’t produce change. Much more robust efforts are needed.

 

The way France, all Europe, and America are heading, maybe it’ll show up one day and try. There’s no other way popular interests can beat monied ones.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

Apr 19

Defending the Indefensible

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Defending the Indefensible

 

by Stephen Lendman

 

Robert Shiller is Yale University Professor of Economics and Professor of Finance and Fellow at the International Center of Finance, Yale School of Management.

 

He’s best known perhaps for his 2000 book titled, “Irrational Exuberance.” At the height of the tech bubble, he got it right predicting it would burst. His analysis included structural, cultural, and psychological factors.

 

His 2005 second edition was right again. He explained the housing bubble and likely aftermath. It peaked in 2005, began declining in 2006, and hasn’t yet hit bottom. Maybe a third edition will cover the next inevitable decline.

 

When it comes, expect far greater trouble than what preceded it. It’s building inexorably for eventual collapse. Only the fullness of time knows when, but so will we when the thud’s felt round the world.

 

Shiller’s new book titled, “Finance and the Good Society,” has another purpose. Instead of criticizing predatory finance, he defends it. Doing so may erode years of hard-won credibility.

 

He claims financial capitalism promotes prosperity. In the process, he defends Goldman Sachs and other Wall Street giants. It’s wrong thinking they cheat clients, he claims. Not according to former Goldman executive Greg Smith. After 12 years with the firm, he resigned, calling its “environment….as toxic and destructive as I have ever seen it.”

 

Goldman’s business model replicates others on the Street. It includes advising clients to invest in assets it wants to dump, selling them what makes the firm most money, and trading “any illiquid, opaque product with a three-letter acronym,” no matter how toxic or worthless.

 

It made him “ill,” he said, “how callously people talk about ripping their clients off.” Goldman’s entire history, or most of it, reflected it. It’s been involved in nearly all financial scandals since the 19th century. So have other Wall Street crooks. They make money the old fashioned way by stealing it.

 

Shiller’s right saying not all bankers are banksters. Mostly too-big-to-fail Wall Street ones qualify, but so do many medium-sized banks, large hedge funds, insurers like AIG, Fannie and Freddie for gaming the housing market, Sallie Mae for debt entrapping students, and other major players manipulating markets fraudulently for profit.

 

Engineering a financial coup d’etat, Wall Street giants inflated multiple market bubbles, pump and dump schemes, naked short selling, precious metals price suppression, high oil prices during falling or steady demand, currency manipulation, and other predatory schemes.

 

Together with political Washington and the Fed, they game the system, commit massive fraud, scams trillions of public wealth, and get open-ended bailouts when inevitable crises occur.

 

Bill Black Knows the System Well

 

In his book titled, “The Best Way to Rob a Bank Is To Own One,” former bank regulator expert on white-collar crime, public finance, economics, and related law, Bill Black explained the disconnect between the real economy and finance.

 

The latter’s supposed to make the former work better. In fact, it operates only for itself. In the process, economies are wrecked and millions in them harmed.

 

Black explained how failed bankers collude with failed regulators to create and sell unwary buyers failed assets. Speculation and debt need more of it to prosper, but it’s always a losing game. The greater the expansion, the harder it falls.

 

Ordinary people are hurt most because freed from regulation, bankers and other FIRE sector (finance, insurance, and real estate) players speculate on financial derivatives and an alphabet soup of securitized garbage.

 

It includes asset-backed securities (ABSs), mortgage-backed securities (MBSs), collateralized mortgage obligations (CMOs), collateralized debt obligations (CDOs), collateralized bond obligations (CBOs), credit default swaps (CDSs), and collateralized fund obligations (CFOs).

 

They’re sliced, diced, packaged, repackaged, and sold in tranches to sophisticated and ordinary investors. Many buy it unwittingly through mutual funds, 401(k)s, pensions, and other financial products.

 

Investors often end up bilked. Bankers get bailed out when fraudulent schemes fail. Regulatory free markets let major players game the system through fraud, price manipulation, insider trading, misrepresentation, Ponzi schemes, false accounting, liar loans, and other deceptive practices.

 

Shiller to the Rescue

 

Defending the indefensible, he says:

 

“People think that the wealthy in our society — among them the financiers — have a real and genuine incentive to use devious means to attack and subjugate, economically, the majority of the population.” It’s “an illusion,” he claims.

 

“The assumption today often seems to be that businesses have a real incentive to behave in an aggressive and evil manner.”

 

It’s not so, says Shiller, despite volumes of indisputable evidence proving otherwise.

 

Believing it, he says breeds resentment and adversely affects prosperity. Maybe he hasn’t noticed how disproportionately wealth is shared among an elite 1%. Most others are entirely left out, and it didn’t happen by chance.

 

Yet Schiller calls finance a force for good, no matter its flaws. Over time, it builds richer, more equitable societies, he claims. Where’s the beef!

 

Since the 1970s, real wages haven’t kept up with inflation. Automated plants displaced workers. High-paying production and service jobs went offshore to low-wage countries, and regulatory free finance capital scams investors repeatedly for profits.

 

Marx was right. He explained capitalism’s destructive contradictions, and condemned free market mumbo jumbo as anarchic and ungovernable. It alienates masses, destroys or prevents the creation of humane societies, produces class struggles between “haves” and “have-nots,” and reveals what’s happening today.

 

It includes stagnant wages, eroding benefits, high unemployment, low-pay mostly temp or part-time service jobs, unmanageable debt, for students debt entrapment at times for life, and booms followed by busts, followed by heading America and EU countries for third-world status.

 

Social responsibility lost out to predatory capital. It games the system for maximum profits. It buys politicians like toothpaste to let them. The result is a downward destructive cycle. Financialization replaced industrial America. Speculation replaced producing things. Fraud replaced obeying laws and regulations or get punished.

 

Instead of creating prosperity, Wall Street destroys it. Economies are wrecked. Millions in them are harmed. Fraud’s legitimized, and troubled banks most responsible get trillions in bailouts to keep them operating to steal more.

 

Shiller doesn’t excuse financial chicanery. Financial capitalism is like nature, he says:

 

“For all its beauty, it produces ugly things as well.”

 

Nonetheless, we need more financial innovation, not less, he believes. We need to “democratize” and harness it to create good. He fails to understand that money power in private hands and democracy can’t co-exist. Crooked bankers prove it repeatedly.

 

Finance capital’s too broken to fix. Harnessing it productively is nonsense. Shiller knows better but claims investment bankers resemble “diplomats negotiating an understanding between contentious powers.” They’re “keepers of the peace and promoters of progress.”

 

His students hear this bunkum. He wants finance given redemption. Forgive their sins because they can, should, and often do improve societies, he claims. He believes financial innovations and societal gains go hand in hand. Securitized fraud proves otherwise.

 

At issue is permitting finance to operate unrestrained, letting it consolidate to super-sized levels, allowing it to occupy and run Washington, and giving it control of the nation’s money for private gain. It results in the grandest of grand thefts. Government becomes a willing partner.

 

Instead of praising finance capital, Shiller should condemn it, demand too-big-to-fail institutions be broken up, insolvent ones shut down, regulations with teeth be reinstituted, lawbreakers do hard time in prison, and most of all return money power to public hands where it belongs. It includes publicly run state and local banks, replacing predatory ones.

 

It’s an idea whose time has come. Wherever they exist, prosperity follows. Privatized money power is trouble. It creates zombie economies, banana republics, and poverty.

 

When federal, state or local governments lend their own money, prosperity, not profit’s the issue. Everyone benefits, including households, small businesses, farmers, and municipalities. Replacing a predatory, rapacious system with one proved workable and equitable is vital to assure societies grow, prosper and help everyone in them.

 

Expecting bankers to act responsibly is like believing political Washington can reform. Both are irreparably corrupted, dysfunctional, and destructive. In their hands, societies and people in them are wrecked. Entirely new political, economic, and financial systems are needed.

 

Shiller’s book excluded them. Instead he defended the indefensible and lost credibility in the process. He’ll be hard-pressed regaining it.

 

Sustainable, prosperous societies aren’t possible without freeing them from rapacious bankers and similar FIRE sector players ripping them off for profit.

 

It never worked before and won’t now. Claiming otherwise doesn’t wash.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

Apr 03

Republican Paul Ryan’s Budget: Cruel and Unusual Punishment

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Republican Paul Ryan’s Budget: Cruel and Unusual Punishment

 

by Stephen Lendman

 

What Democrats endorse isn’t much better. Timing mostly differs to get past November elections.

 

For starters, Obama and Democrats agreed to the following cuts over the next decade:

  • $4 trillion overall, including:
  • $770 billion from education, environmental, transportation, and other infrastructure cuts, as well as lower wages and benefits for federal workers when they need more, not less;
  • $480 billion from Medicare and Medicaid, besides another $1 trillion from Obamacare;
  • $360 billion from mandated domestic programs, including food stamps, home heating assistance, income for the poor and disabled, federal pension insurance, and farm subsidies; and
  • $400 billion from military-related spending from unneeded weapons, as well as healthcare and other benefits for active service members and veterans.

 

Priority Pentagon items remain untouched to assure annual budget increases, generous supplemental add-ons, and secret open-checkbook intelligence allocations for numerous lawless purposes.

 

Bipartisan complicity assures people needs are on the chopping block for reduction or elimination to satisfy the insatiable appetites of Wall Street, war profiteers, other corporate favorites, and America’s super-rich. If reelected, Obama will rubber-stamp them.

 

Moreover, he’s on board for more, including slashing corporate and super-rich tax rates. At the same time, he OK’d Medicare co-pays increases, raising retirement age entitlements eligibility, and reducing or eliminating other vital benefits America’s poor need most.

 

They and ordinary Americans will be burdened to let corporations and super-rich elites end up better off than ever. Bipartisan complicity assures it.

 

At a time 25 million are unemployed, millions more underemployed, poverty’s at record levels, home foreclosures exceed 12 million, one in eight homeowners either face foreclosure or are past due 30 or more days, 11 million homeowners are “upside down on their mortgages,” eight million homes are either unsold or vacant, prices keep falling, unmet public needs are rising, corporate profits are at record levels, and super-rich elites are better off than ever, Republicans passed a budget inflicting more pain on households least to tolerate it.

 

Rep. Paul Ryan (R-WI) chairs the House Budget Committee. He wants Social Security privatized, its benefits reduced, Medicare abolished, Medicaid sharply cut, food stamps and other safety net essentials decreased, and taxes slashed for corporations and America’s super-rich.

 

On March 29, his proposed budget passed 228 – 191 along party lines as expected. No Democrats supported it. Ten Republicans defected. According to Ryan:

 

“It is so rare in American politics to arrive at a moment in which the debate revolves around the fundamental nature of American democracy and the social contract, but that is exactly where we are today. Today’s budget is a vote of confidence for the American experiment.”

 

For millions of vulnerable households, it’s nearly a death sentence. It harms their ability to get by, and Ryan plans more cuts. Already, income inequality and poverty are at record levels.

 

According to the Center on Budget and Policy Priorities, 62% of Ryan’s cuts come from “programs for lower-income Americans.” Over 10 years, it slashes $5.3 trillion from non-defense areas. At the same time, he allocates an additional $200 billion for defense and imperial wars with automatic add-ons annually plus unknown tens of billions in black budgets.

 

Specific proposed cuts include:

 

(1) $2.4 trillion from Medicaid and other low or moderate household income healthcare programs. Medicaid loses $810 billion. By repealing Obamacare’s Medicaid expansion and subsidies for those most in need to buy health insurance, he gets another $1.6 trillion.

 

(2) $1.2 trillion from programs other than Social Security, Medicare, Medicaid, and other healthcare programs.

 

(3) $134 billion from Supplemental Nutrition Assistance Program (SNAP) food stamp aid. If enacted, up to 10 million recipients would be entirely shut out.

 

(4) At least $463 billion from other programs serving America’s most needy, other than Medicaid and SNAP.

 

(5) At least another $291 billion in low-income discretionary programs, including Pell Grant tuition aid for needy students.

 

Ryan directs his cuts at vulnerable households unable to get by on what he wants reduced or eliminated. Millions will lose healthcare. Millions more won’t have enough to eat and will be dependent on what food banks provide. Education will suffer more than already. Poor students will have to forego it altogether.

 

Mitt Romney called it “an excellent piece of work.” Rick Santorum said it’s not enough. Households most harmed had no say. Opposition Democrats plan coming on board post-election. So does Obama with precise cuts to be agreed on then. For now, Senate Democrats will block Ryan’s plan. Post-election, they’ll go along.

 

Capitalism’s Cancer Stage

 

What’s ongoing fits John McMurtry’s explanation of capitalism’s cancer stage. He calls it “a world-system disorder which becomes cumulatively worse the longer it is unrecognised.”

 

Cancer’s defining nature is it “advances when not recognised by its life-host.” Its a mutant degenerate system. It’s evident in many ways. Ryan’s budget proposal is symptomatic. The problem’s much greater.

 

Predatory capitalism’s a “contagion” model. Its victims spread the disease. “No distinction is ever made between destructive and productive capital sequences. ‘Contagion’ conceals every moment of the cancer system at work.”

 

Victims are blamed for what predators cause. Few explain how Wall Street hijacked “government’s constitutional money-and-credit issue to speculate and debt-enslave others at endless costs for them and equally endless growing riches of the big banks.”

 

Ordinary people are scammed. They’re deprived of their rights. At the same time, Wall Street, other major financial interests, and corporate favorites are licensed to steal.

 

“The inner logic is very simple. The people must pay for the money-sequence cancer growth, and so more public wealth and individual savings must be taken away to do so. The principal mechanism is debt multiplication of governments and individuals managed by private banks’ issuing longterm compounding debts without the money to back the loans.”

 

Government, major financial interests, and other corporate giants partner for self-enrichment at the public’s expense. In the process, communities and national economies are destroyed. Predators profit on their road to ruin. Political Washington goes along.

 

“As in any cancer system, the life host is increasingly plundered, but the cancer is masked from immune recognition or response.”

 

Ryan and others like him serve wealth and power only. Hollowing out America and most households in it makes them richer and more able to plunder grab all they can, then move on to new hosts or pillage many simultaneously.

 

It’s not surprising that cancer became epidemic under capitalism. It thrives on illness and deplores good health.

 

“Yet once (it) become(s) aggressively invasive, (it’s) the blocked out by the life host at every turn on the social as well as individual plane. That is how the cancer system spreads, masking itself every move at both levels. Uncontrolled money-sequence multiplication and invasive growth into organic, social and ecological life-hosts is undeniable once the dots are joined.”

 

Suggesting it is taboo. Media scoundrels say nothing. Disease proliferates. Greed is its genesis. Political Washington’s on board facilitating it. Reelection and self-enrichment’s their motive.

 

Ryan’s a willing agent, a capitalist tool. So are most others in Congress and all presidents. The end game’s predictable. America’s heading for banana republic harshness, tyranny and ruin. Along the way, ordinary people are being trampled.

 

The cancer system’s at fault. A disproportionate number of America’s privileged share wealth and power. Ordinary people are exploited. Profits are privatized, debt socialized. Working households and future generations bear it.

 

Criminals run a kleptocracy. It’s corrupt, rotten to the core gangsterism. Politicians are in bed with business. Ordinary people haven’t a chance. Personal freedoms and other democratic values are illusions. What’s left after corporate crooks grab everything and bribe Congress and presidents to go along.

 

Money power runs America. Political Washington’s complicit letting it. Its criminal class is bipartisan. What can’t go on forever, won’t, but until then will transfer maximum wealth one way to those already with too much.

 

McMurtry’s “cancer system” explains it. This one’s likely to destroy itself along with its host, and maybe humanity in the process.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

Mar 31

Papering Over Disaster

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Papering Over Disaster

 

by Stephen Lendman

 

Fall 2007 began the onset of America’s greatest Depression. Europe’s in deep trouble. Reckoning day’s delayed by bailing out insolvent banks and throwing money at markets like confetti.

 

What can’t go on forever, won’t. Progressive Radio News Hour guest Bob Chapman warned investors for years. It’s just a matter of time. Houses built on sand collapse. American and European economies are no exception. They’re sick and getting sicker.

 

Another Greek crisis approaches, Chapman warns, whether “via austerity, demonstrations, military coup,” or perhaps the worst of all three if public rage erupts in violence.

 

Ireland, Portugal, Belgium, Spain and italy are next. BRIC giants China, India and Brazil are weakening. Pyrrhic victories conceal core meltdown trouble. Are policy makers “dumb enough to believe that austerity, lower wages and higher taxes bring prosperity?” What’s happening in Europe and America looks “surreal.” Recovery’s an illusion.

 

Another dirty secret is that France, Britain, and other EU countries also show weakness. “These problems are going to go on and on and on,” says Chapman.

 

Economist David Rosenberg also warns of trouble. Disturbing signs are everywhere. In America alone, consumer spending stagnated. Core capex shipments are down. The trade deficit’s widening. Mortgage applications are falling. Mortgage refinancing activity collapsed. Gas prices are heading for $4 a gallon on their way perhaps to 5.

 

In February, hiring announcements were down 85% year-over-year. Pink slips are rising. JOLTS (Job Openings and Labor Turnover Survey) data showed job openings down 81,000 in January. They’ve posted declines in three of the past four months. JOLTS hiring numbers also fell 30,000, and dropped in three of the past four months.

 

Savers are taxed, borrowers rewarded. A rigged system favoring Wall Street punishes most others.

 

<blockquote>The latest housing numbers are awful. Economist Robert Shiller believes “we will never in our lifetime see a rebound in” suburban home prices. He predicts “perpetual sluggish(ness).” Expect America to have a “Japan-like slump that will go on for years and years.”</blockquote>

 

Rosenberg says “headwinds are so acute that despite” zero interest rate policy for over three years, “trippling the Fed’s balance sheet, and four years of trillion-dollar-plus fiscal deficits,” a deepening mess remains. Inflation’s far higher than official figures. Poverty’s at record levels.

 

Recovery? What recovery! America’s 1% never had it so good. Another 10% or so are OK. Most others face harder than ever hard times with no end of misery in sight. Expect no change post-November, no matter who’s elected president or controls Congress. Washington’s criminal class is bipartisan.

 

Economist Paul Craig Roberts calls America’s economy “dead.” Consumer confidence is far below decade ago levels. Housing’s on its back. Retail sales are lower than January 2000. So is industrial production. Only markets and rigged GDP numbers are up.

 

Roberts stresses often that recovery’s impossible because troubled consumers account for over two-thirds of the economy. Middle class jobs moved offshore. Trillions are thrown at Wall Street and wasted on imperial wars while domestic needs go begging.

 

“The consequence of printing money when jobs have been moved offshore is an inflationary depression. This catastrophe” should unfold big time this year or next. “The emperor has no clothes, and sooner or later this will be recognized.”

 

Roberts shares his views with listeners on the Progressive Radio News Hour (PRNH). So does political economist Jack Rasmus. His analysis is cutting-edge. In early April, his newest book’s due out titled, “Obama’s Economy: Recovery for the Few.”

 

It covers analysis he gives PRNH listeners. He’s next scheduled on Saturday, March 31 at noon US Central time. Listen live or archived for his latest economic views and discussion of his new book.

 

It explains that after trillions thrown at Wall Street, trillions more for imperial wars, and more still in fiscal stimulus (largely for corporations and rich elites), America’s economy remains mired in trouble.

 

At the same time, equity markets more than doubled. Corporate profits hit record highs. CEO pay, bonuses, and stock options are obscenely high, especially for crooked banksters.

 

At the same time, corporate giants hoard cash and barely loan. Nearly 25 million are unemployed or underemployed. Economist David Rosenberg believes 30 million heading higher.

 

Home foreclosures exceed 12 million. Many more are coming. Another 15 million homeowners struggle underwater with negative equity. Income levels for 80% of households are stagnating, while state and local governments slash payrolls by hundreds of thousands, cut services, and raise taxes.

 

Rasmus faults wrongheaded administration, congressional, and Fed policies. Economic growth is illusory. High unemployment and poverty levels explain best.

 

Rasmus’ book followed his 2010 one titled, “Epic Recession: Prelude to Global Depression.” Both used reliable data excluded from mainstream discussion. It’s bad and getting worse. Expect harder than ever hard times.

 

Rasmus offers another way. He calls it an “Alternative Program for Economic Recovery.” It focuses on job creation, not destruction, housing, and local government. He recommends major structural economic reforms, targeting taxes, retirement, and banking.

 

He concludes with common sense workable proposals for “fundamental, longer term change necessary to reduce household, small business, and State-Local government debt, and to restore historic rates of income growth for working and middle class households.”

 

Read what others say about his book. Office and Professional Employees Union National President Nancy Wohlforth said it’s high time “to seriously begin public discussion and debate of economic alternatives” he proposes. They’re cutting edge and vital.

 

South Carolina AFL-CIO President Donna DeWitt offered praise, saying Rasmus “connects the dots and gives new meaning to common sense economics.”

 

“While working people reel in the downward spiraling economy, (he) analyzes how we got where we are and makes recommendations for sustained economic growth and recovery.”

 

“It’s the kind of reading that makes every leader stop and say ‘Wow! That makes perfect sense. Why didn’t I think of that?’ Then ask yourself, ‘Why wouldn’t our President think of that?’ ”

 

“When you’ve read the book, I’m confident that you will conclude that Rasmus has done a brilliant job of defining the impact of the Obama policies and decisions” that continue crisis conditions without letup.

 

This writer agrees with others. Rasmus’ articles and books are cutting edge. His analysis is some of the best. For years, his predictions proved accurate. Get them monthly on the Progressive Radio News Hour.

 

His new book offers must read detailed analysis, especially with storm clouds approaching at a time forced austerity’s harming growing millions.

 

It hardly matters whether Republicans or Democrats control Washington. Its criminal class is bipartisan. Public outrage alone can change things. It starts by getting and staying informed.

 

On America’s economy, Rasmus is one of the best. He’s honest, accurate, thorough, common sense, and clear. For many, his new book may be a wake-up call.

 

Read it and spread the word. Our only chance for change is us.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

Mar 17

Goldman Sachs: Making Money by Stealing It

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Goldman Sachs: Making Money by Stealing It

 

by Stephen Lendman

 

Money power in private hands and democracy can’t co-exist. Wall Street crooks transformed America into an unprecedented money making racket.

 

Goldman symbolizes master of the universe manipulative fraud. It’s been involved in nearly all financial scandals since the 19th century.

 

It makes money the old-fashioned way. It steals it through fraud, grand theft, market manipulation, front-running them, scamming investors, bribing political Washington, having its executives in top administration posts, and getting open-ended low or no interest rate bailouts when needed.

 

It’s business model and culture assure billions of bonus dollars for company officials, complicit traders, and others on the take. It’s a crime family, not a bank. It’s connected to others like it on Wall Street and corrupt politicians.

 

Compared to Goldman, Bernie Madoff was small-time. So are most other swindlers. Ones who matter most sit in Wall Street board rooms, plotting other scams.

 

Former bank regulator expert on white-collar crime, public finance, economics, and related law, Bill Black explained Goldman shenanigans pertaining to earlier SEC charges this way:

 

“Goldman designed a rigged trifecta. It turned a massive loss into a material profit by selling deeply underwater, toxic CDOs it owned. It helped make John Paulson (CEO of a huge hedge fund that Goldman would love to have as an ally) a massive profit – in a ‘profession’ where reciprocal favors are key, and blew up its customers that purchased the CDOs.”

 

An SEC civil suit charged Goldman with defrauding customers. It made billions, and settled for $550 million. It was pocket change, the equivalent of four 2009 revenue days. It hardly mattered.

 

No executive was fined or imprisoned. Grand theft continues unabated. They include fraudulent pump-and-dump schemes. Major media scoundrels don’t explain. Only scammed customers and insiders part of the dirty game understand.

 

On March 4, Black used James Q. Wilson’s “broken windows” metaphor pertaining to blue collar crime. He applied it to far more serious elite white-collar offenses. None rise to the level of financial ones. The amounts involved are staggering. Broken lives, communities, and economies result. The landscape’s littered with them.

 

No firm’s more adept at amassing fraudulent fortunes than Goldman. Its CEO Lloyd Blankfein calls it “doing God’s work.” It’s hard imagining greater arrogance. It’s harder knowing the Supreme Court ruled banks and other financial entities immune from securities fraud by those harmed. Only Washington may sue for redress.

 

It’s also appalling that Murdoch’s Wall Street Journal “serve(s) as cheerleader and apologist for those” who amass wealth by stealing it, said Black.

 

Goldman Executive Resigns

 

Broken clocks are right twice a day. On March 14, so was The New York Times. It gave rare op-ed space to  high level Goldman executive Greg Smith for views worth sharing. He served as executive director and head of the firm’s domestic equity derivatives business in Europe, the Middle East and Africa.

 

Headlining, “Why I Am Leaving Goldman Sachs,” he said:

 

After almost 12 years with the firm, today was his last day. He worked there “long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.”

 

In “simplest terms,” he said client interests are sidelined. Goldman thinks only about making money. “The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.”

 

In less blunt terms than Black, this writer, and other critics, he stopped short of explaining its grand theft model, but comments he made suggested it.

 

An earlier Goldman culture contributed to its success, he said. “It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients.”

 

Exaggerated? Absolutely, whatever minor differences between today and earlier existed. According to Smith, “virtually no trace” of what he admired remains. Whatever pride he once had is now gone. It was time to leave when he no longer could look aspiring students wanting Goldman jobs “in the eye and tell them what a great place this was to work.”

 

How can it be operating like a crime family. It’s business model involves grand theft. Customers are defrauded, not helped. Politicians are bought like toothpaste. Laws are subverted and ignored. Others are discarded or rewritten at its behest. Economies are wrecked for profit.

 

When future Goldman histories are written, honest ones will say Blankfein, president Gary Cohn, and other top executives “lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.”

 

Smith said his career involved advising two of the largest global hedge funds, five of America’s largest asset managers, and three of the Middle East’s most prominent sovereign wealth funds. His clients manage over a trillion dollars in assets.

 

He took pride, he said, advising them “to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs.” He knew it was time to leave.

 

“Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer), you will be promoted into a position of influence.”

 

Three key ways, include:

 

(1) Advising clients to invest in assets Goldman wants to dump, including toxic ones.

 

(2) Getting them to buy what makes Goldman most money.

 

(3) Trading “any illiquid, opaque product with a three-letter acronym,” no matter how much toxic or without merit.

 

He attended sales meetings devoid of ways to help clients. They’re about maximizing Goldman’s profit, no matter how illegally. “It makes me ill,” he said, “how callously people talk about ripping their clients off. Over the last 12 months, I have seen five different managing directors refer to their own clients as ‘muppets.’ ”

 

They’re marks to be manipulated and scammed for profit. He can’t explain how senior managers don’t understand that losing client trust means forfeiting their business. No matter if you’re the smartest guys in the room. They’ll know you’re smart enough to scam them without hearing back room insults about “muppets,” “ripping eyeballs out,” and “getting paid” at their expense.

 

He hopes his article “can be a wake-up call to” Goldman’s board. “Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist.”

 

“Weed out the morally bankrupt people, no matter how much money they make for the firm.” Make “people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.”

 

A Final Comment

 

Goldman’s entire history, or at least most of it, reflects predation. Its scams way pre-date Smith’s birth. In the 1920s, its Ponzi scheme investment trusts defrauded investors. Goldman profited. They lost out, and when Wall Street crashed were left high, dry, and broke.

 

One trust sold investors reflected others. Its offering price was $104 a share. It became virtually worthless at $1.75. It lost over 98% of its value. Unwary buyers then and now lose out. Only the stakes get bigger.

 

Today they’re enormous. Getting in bed with Goldman’s like swimming with sharks. You’re prey. They’re predators. Those burned understand Goldman’s culture enough to know it’s toxic and corrupted.

 

In 2002, it was largely responsible for Greece’s debt problems. It involved circumventing Eurozone rules in return for mortgaging assets.

 

Using creative accounting, debt was hidden through off-balance sheet shenanigans. Derivatives called cross-currency swaps were used. Government debt issued in dollars and yen was swapped for euros, then later exchanged back to original currencies.

 

Debt entrapment followed. Greece was held hostage to repay it. The country’s been raped and pillaged. Paying bankers comes first. Doing it left Greeks impoverished, high and dry. Goldman profited enormously by scamming an entire country and millions in it.

 

Its business model thrives on similar schemes globally. It’s about profits, no matter the huge cost to others. Expecting this leopard to change spots is like imagining reformers will transform Washington.

 

Former alderman Paddy Bauler once said “Chicago ain’t ready for reform.” It’s still not ready and may never be.

 

Neither is political Washington, Goldman, other Wall Street crooks, or their counterparts throughout corporate America.

 

They connive, cheat, profiteer from wars, drain trillions from households and the national treasury, wage war on labor, sell dangerous products, destroy the environment, and do whatever they damn please complicit with corrupt politicians who let them.

 

Goldman and other Wall Street giants are the worst of the lot. Standing armies pale by comparison. Michael Hudson calls finance warfare by other means. Generalissimo bankers run everything.

 

Their job is pillaging households, investors, communities, and countries for profit. Doing so holds humanity hostage. They’ll lose everything unless stopped. Job one’s assuring that’s done.  The stakes are too high for failure. It’s up to public rage to change things.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

Mar 08

America: Land of the Poor

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America: Land of the Poor

 

by Stephen Lendman

 

Years ago, who could have imagined the appalling growing poverty level in the world’s richest country?

 

Various reports confirm it, including a new one by the University of Michigan’s National Poverty Center (NPC), titled “Extreme Poverty in the United States, 1996 to 2011”.

 

NPC promotes multidisciplinary research on poverty and policy. It mentors and trains poverty researchers. It analyzes causes and consequences, and addresses pressing policy questions at both federal and state levels.

 

How is poverty calculated, it asked? The Census Bureau issues annual thresholds. They represent minimal income levels required to support various family sizes.

 

Its methodology dates from the mid-1960s and hasn’t changed. Inflation’s taken into account annually. Families are judged poor based on pretax income. Non-cash benefits aren’t counted, such as Medicaid and food stamps.

 

In 2010, singles under 65 with incomes of $11,344 or less were designated poor. For those over 65, it was $10,458.

 

For single parents with one child, it’s $15,030. With two children, it’s $17,568. For two adults with no children, it’s $14,602. With one child, it’s $17,552. With two children, it’s $22,113. With three children, it’s $26,023.

 

Adjusted for inflation, current thresholds are slightly higher, but bear no relation to reality. Individuals and families need double or more these levels to avoid poverty. Moreover, jerry-rigged inflation numbers further distort cost of living effects on all households.

 

The Department of Health and Human Services has its own federal aid eligibility guidelines. They differ slightly from Census numbers, and reflect marginally higher Alaska and Hawaii thresholds.

 

NPC’s H. Luke Shaefer and Harvard Kennedy School’s Kathryn Edin studied how Clinton’s 1996 welfare reform affected millions of poor Americans.

 

The Personal Responsibility and Work Opportunity Reconciliation (“welfare reform”) Act (PRWORA) changed eligibility rules. From 1935 until then, needy households got welfare payments through Aid to Families with Dependent Children (AFDC). It protected states by sharing caseload costs during hard times.

 

Thereafter, Temporary Assistance for Needy Families (TANF) set five year time limits. It gave states fixed block grants to administer at their own discretion. As a result, America’s most needy face huge risks during economic downturns when reduced federal aid exacerbates dire conditions.

 

Under TANF, recipients must work or receive job training, even during hard times when employment’s harder than ever to find. Moreover, single mothers with young children are grievously impacted. During their most formative years, children need them as caregivers.

 

With increasing austerity official federal policy, protracted harder than ever hard times are assured. Future NPC and other reports will reflect them.

 

For example, in 1994/1995, AFDC served 75% of impoverished families with children. In 2008-2009, it was 28%. The percentage varies by state. Some help fewer than 10% of impoverished families.

 

Moreover, when TANF was established, contingency fund assurances were given. That was then. Austerity demands little or none. The 2009 Recovery Act included TANF Emergency Fund aid. In September 2010, it wasn’t renewed.

 

During today’s dire economic times, budget strapped states force-feed harsh cuts. Vulnerable residents are harmed most, including families with children on TANF.

 

Moreover, its benefits are half or less poverty thresholds. Based on real inflation adjusted dollars, they’ve dropped precipitously since 1996.

 

In 2011, NPC estimates 1.46 million US households lived on $2 or less a day. It reflects a 130% increase from 636,000 in 1996. Around 2.8 million children live in extreme poverty. It represents 16% of all those impoverished.

 

Supplemental Nutrition Assistance Program (SNAP) benefits reduce, but don’t eliminate extreme poverty. So-called reform, said NPC, “has been followed by a dramatic decline in case assistance caseloads.”

 

They dropped from around 12.3 million 1996 monthly recipients to 4.4 million in June 2011. Adult beneficiaries comprise only 1.1 million.

 

As a result, millions of unemployed parents “have little access to means-tested income support programs.” A new generation of poor resulted. They include “households with children living on virtually no income.”

 

Children always are harmed most. Since November 2008, those affected increased dramatically at a time safety net protections are way inadequate and eroding.

 

Demographically, married couples comprised 37% of extreme poverty households. For single females, it’s 51%.

 

About 48% of affected households are headed by White non-Hispanics, 25% by Blacks, and 22% by Hispanics. NPC added:

 

“Thus, extreme poverty is not limited to households headed by single mothers or disadvantaged minorities, though the percentage growth in extreme poverty over our study period was greatest among these groups.”

 

It also said eroding social benefits are “leaving many households with children behind.” They haven’t enough resources to get by. TANF and other forced austerity bear most blame.

 

Given bipartisan agreement for additional deep cuts, America’s most vulnerable more than ever are on their own out of luck because policy makers able to prevent it don’t give a damn.

 

Cold hard truths reveal what they and complicit media scoundrels try hard to suppress. Growing impoverished millions reflect America’s dark side.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

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