August 2010

"Show Me the Money!" - Waste and Fraud in Iraq from the Start

Michael Collins

The Associated Press ran an article Sunday that focused on the wasted funds during the US reconstruction efforts in Iraq. There were stories of an unused children's hospital, a prison for 3,600 that will never open, and the diversion of reconstruction funds to pay off Sunni fighters to turn on al Qaeda.

AP failed to mention that the main reason that we have to rebuild Iraq is that the United States government invaded it and destroyed everything it could in a display of shock and awe. Also unmentioned were the unique post invasion strategies of no security for sites like power plants that keep the country running and the dissolution of the 400,000 man army, the main institution that kept order in the country before the invasion. But I digress.

Anyone paying attention should know that financial controls and accountability went out the window from the very first days following the defeat of Saddam Hussein's military.

The Revenge of Main Street

"You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."
- Abraham Lincoln

Wall Street has a problem.

You see Wall Street functions much like Las Vegas. Their immense wealth depends on the continuing myth that their games aren't rigged, and the willful denial of reality by the suckers.
Just like Vegas, no one wants to talk about the money they lost playing the stock market. Instead, all you here about is how everyone is getting rich at the blackjack table. If you aren't getting obscenely wealthy betting on interest rate spreads then there must be something wrong with you.

In reality, the reason why you lost money is because the game is rigged. The House always wins in the end. The suckers are the ones who think there are rules. Like Wall Street, Vegas exists to separate you from your money.

Wall Street may seem all powerful, but like Vegas it has an Achilles Heel - if the people don't feed the beast it will starve.
If the greed of The House gets to extreme, and the rigging of the games becomes too obvious to ignore, people will stop gambling at the casinos and in the stock market. The House goes broke.

That tipping point, where the willful denial of Main Street starts to break down because the game rigging is so blatant, may have finally been reached.

A Decade of High Unemployment

If this isn't a definition of a Depression, I just don't know what is. Carmen Reinhart, University of Maryland Economist, is projecting a decade of high unemployment:

Ms. Reinhart’s paper drew upon research she conducted with the Harvard economist Kenneth S. Rogoff for their book “This Time Is Different: Eight Centuries of Financial Folly,” published last year by Princeton University Press. Her husband, Vincent R. Reinhart, a former director of monetary affairs at the Fed, was the co-author of the paper.

The Reinharts examined 15 severe financial crises since World War II as well as the worldwide economic contractions that followed the 1929 stock market crash, the 1973 oil shock and the 2007 implosion of the subprime mortgage market.

In the decade following the crises, growth rates were significantly lower and unemployment rates were significantly higher. Housing prices took years to recover, and it took about seven years on average for households and companies to reduce their debts and restore their balance sheets. In general, the crises were preceded by decade-long expansions of credit and borrowing, and were followed by lengthy periods of retrenchment that lasted nearly as long.

“Large destabilizing events, such as those analyzed here, evidently produce changes in the performance of key macroeconomic indicators over the longer term, well after the upheaval of the crisis is over,” Ms. Reinhart wrote.

Why Economic Growth in the United States Cannot Happen

By Joaquin posted by Michael Collins


So, you cut back on your lifestyle; performed a so un-Greek personal austerity reset but your credit card balance is still creeping up; or perhaps you are slowly burning through your savings; or you are at the end of the line; abandon ship. Whatever, you have a lot of company out there. (Image)

Why is it so hard to make ends meet these days? The days of living high on the credit hog are over and we all have to get small but in the end, we still have to make ends meet; we have to pay for food, pay for utilities, buy gas, etc. How to make that work?

We all bought a lot of stuff during those days of easy credit. Debt driven demand drove up the value of lots of things. Homes increased in value so much that they became a kind of income harvested through a home equity line of credit. Autos got big and powerful again making them unaffordable to buy and operate now that we have to live within our means. Cell phones replaced land lines and cost a lot more; especially when everyone in the family has to have one. Maybe you have a home that you cannot sell and you are stuck living 20 miles or more from your workplace and your car is fast reaching the point when you will need a new one just to get to work.

Friday Movie Night - LBJ

hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

Tonight's film is the PBS American Experience biography on President Lyndon B. Johnson. Mostly remembered for the Vietnam War, LBJ was also responsible for a host of economic related programs. LBJ is probably one of the last New Deal Democrats and this is the definitive biography on his Presidency and life.

 

 

Disabled Workers - Valuable Resource Treated Like Pond Scum

I'll never forget one day at a start-up. The CEO was designing a new company building. He was ranting, raving about elevators, storming up and down the halls, on his phone. He was talking to his attorney, demanding to find a legal way to not have an elevator in the new building. Why? Supposedly to save costs, but also to deny a disabled applicant needing an elevator, due to being in a wheelchair, a job. He spent thousands of dollars on attorney fees, studying the law, all to avoid putting in an elevator.

With that, I give you this Wall Street Journal article, Disabled Face Sharply Higher Jobless Rate:

The government's first detailed look at disabled workers' employment shows they are far more likely than the overall work force to be older, working part-time or jobless.

The average unemployment rate for disabled workers was 14.5% last year, the Labor Department said Wednesday, well above the 9% rate for those without disabilities. By the Labor Department's count, there were roughly 27 million Americans 16 years or older with a disability last year.

The employment situation doesn't appear to have improved this year: The unemployment rate for those with disabilities had risen to 16.4% as of July.

The Money Party - The Essence of our Political Troubles

Michael Collins
Originally published in "Scoop” Independent News
on September 30, 2007


The Money Party is a small group of enterprises and individuals who have most of the money in this country. They use that money to make more money. Controlling who gets elected to public office is the key to more money for them and less for us. As 2008 approaches, The Money Party is working hard to maintain its perfect record.

It is not about Republicans versus Democrats. Right now, the Republicans do a better job taking money than the Democrats. But The Money Party is an equal opportunity employer. They have no permanent friends or enemies, just permanent interests. Democrats are as welcome as Republicans to this party. It’s all good when you’re on the take and the take is legal.

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