This week in economic outrage has some real winners. Everyday there are so many injustices it is hard to keep up. Here are some cut to the chase boil downs of news and events you might have missed. As usual, corporations are running the government while the American people and labor be damned.
IMF Doomsday Global Economic Slowdown
The IMF released an update on their world economic outlook, which by itself ain't too good, although the IMF view is the world revolves around China.
Global growth increased only slightly from an annualized rate of 2½ percent in the second half of 2012 to 2¾ percent in the first quarter of 2013,
New risks have emerged, including the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals.
Contained within the report is a doomsday warning, if the Federal Reserve screws up their unwinding of quantitative easing, it could bring the economy to it's knees. Of course Bernanke said that stimulus is still needed after the IMF report came out.
The theme of the update is "growing pains," and the key message is a warning to the U. S. and the Federal Reserve, in particular: Your monetary tightening, if done too quickly, could bring the world economy to its knees. And so far, we don't like what we see.
Of course, the IMF would get in trouble if it actually wrote that. So it says it a little more politely, warning that U.S. policy is creating a new "downside risk to global growth prospects." The IMF is concerned about "possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals."
The London Whale Loophole Act
The GOP are trying to destroy whatever financial reform the U.S. got through the Dodd-Frank legislation. The latest shenanigans are in the form of new legislation, some are calling this the London Whale Loophole Act. Bottom line Wall Street and TBTF banks are winning their war against any financial regulation, in spite of bringing the global economy to it's knees and ruining the lives of millions of people.
Republicans in Congress have been pressuring regulators for years to exempt derivatives that U.S. companies sell overseas from the new rules set by the 2010 Dodd-Frank financial reform law. For much of 2013, the deregulatory drive enjoyed bipartisan support in the House, with lawmakers casting their efforts as an attempt to harmonize U.S. law with international regulations. But financial reform advocates have attacked the initiative for padding Wall Street profits at the expense of important public protections, and Democratic support has eroded.
In June, the House passed a bill that would completely exempt from U.S. oversight derivatives sold through the nine most popular foreign derivatives jurisdictions. The legislation is occasionally derided as the "London Whale Loophole Act" on Capitol Hill -- a reference to the overseas trades that cost JPMorgan Chase more than $6 billion in 2012. London was the epicenter of much of the derivatives trading by U.S. financial firms leading up the 2008 crash, including AIG's infamous Financial Products division. If banks can simply route trades through loosely regulated overseas affiliates, financial reform advocates warn, the most critical aspects of Dodd-Frank will be effectively nullified.
Corporate Lobbyists Threaten Congress
“I think for the [House] Republican leadership in particular, people in the Valley would say, ‘How could you let this fail? We needed this,’” said one tech lobbyist.
“It would be a very different reception for them in the Valley if they were to go out there without having been able to accomplish this, which is an item high on the priority list for Silicon Valley, and it’s seen as doable,” the lobbyist added.
The hard feelings would come at a terrible time for Republicans, who are seeking to make inroads with Silicon Valley — and with its deep-pocketed donors.
House Republican “Young Guns” Eric Cantor (Va.), Kevin McCarthy (Calif.) and Paul Ryan (Wis.) have made pilgrimages to Facebook, Google and other top companies to meet with industry leaders, bask in the entrepreneurial culture and notch “cool points” for the party brand.
Along the way, they’ve banked hefty sums from a region that had long been a stronghold for Democrats.
But industry insiders say the budding relationship between the Grand Ole Party and the Next Big Thing could hit the skids over immigration reform.
U.S. Health is Mediocre
This should come as no surprise since our for profit health care system is so expensive most cannot afford health care.
The United States is falling behind its economic peers in most measures of health, despite making gains in the past two decades, according to a sweeping study of data from 34 countries.
Although Americans are living longer, with overall U.S. life expectancy increasing to 78.2 in 2010 from 75.2 in 1990, increases in psychiatric disorders, substance abuse and conditions that cause back, muscle and joint pain mean many do not feel well enough to enjoy those added years of life.
The United States is the most expensive health care system on the planet, yet ranks 27th out of 34 industrialized nations in quality and outcomes. In other words, Americans are paying exorbitant fees and still dying over the privilege.
The report was issued by the Institute for Health Metrics and Evaluation is titled The State of US Health: Innovations, Insights, and Recommendations from the Global Burden of Disease Study, and is available here.
The United States spends the most per capita on healthcare across all countries, lacks universal health coverage, and lags behind other high-income countries for life expectancy and many other health outcome measure.
House Kills Food Stamps
The Republican-sponsored proposal slashes food stamps for poor children and pads farm subsidies for wealthy agri-businessmen.
This comes just a week after Senate Republicans refused to protect the poorest students from doubled college loan interest rates because that required closing tax loopholes that benefit big corporations. It comes just weeks after a new study showed the Walmart heirs, among the richest people in the world, pay their workers so little that taxpayers fork over billions to subsidize Walmart's payroll through programs like -- food stamps.
Republicans hit the Sunday talk shows claiming food stamp funding will pass. We all should raid the Congressional canteen so they might get a taste of what it is like to not be able to eat.
Circumventing Wage Laws Through Online Temp Work Sites
Salon wrote an expose on startups making huge money by claiming workers are contractors and they should bid on temp jobs online. More and more of these sites are springing up, making money off of other people's labor and paying way less than minimum wage to boot.
That’s progress — for the consumer of the service. But one thing you discover when reading reviews of these services is that the vast majority of commentary focuses primarily on the users. Far less discussion is devoted to the producers, to the phenomenon of a new and growing class of drudges — the peons now making your phone calls and conducting your Google searches and washing your cars and toilets. These are not your father’s jobs. The typical Task Rabbit or Fancy Hands employee is invariably an independent contractor eligible for no benefits, quite often working for rates well below minimum wage, and able to exert zero leverage to resist employer abuse.
There are no paid holidays, no sick days and no health benefits in this new “distributed workforce.” There are no unions in the world of “cloud labor,” a class of worker that fits neatly into what some academics have dubbed the “precariat.” Nor is it hard to understand why coverage of services like Fancy Hands rarely considers such things as working conditions, because, increasingly, the workers are invisible. They’re just another computer process working behind the scenes, albeit powered by coffee, rather than electricity.
Snowden Not Releasing True National Security Threats
The Guardian has quite the update about Snowden being snowed by article plants claiming he is threatening the U.S. with nuetron bomb level NSA secrets. Not so says the original reporter who broke the story and is in contact with NSA whistle blower Snowden. This is ridiculous.
The oft-repeated claim that Snowden's intent is to harm the US is completely negated by the reality that he has all sorts of documents that could quickly and seriously harm the US if disclosed, yet he has published none of those. When he gave us the documents he provided, he repeatedly insisted that we exercise rigorous journalistic judgment in deciding which documents should be published in the public interest and which ones should be concealed on the ground that the harm of publication outweighs the public value. If his intent were to harm the US, he could have sold all the documents he had for a great deal of money, or indiscriminately published them, or passed them to a foreign adversary. He did none of that.
Microsoft Eavesdropping on Encrypted Skype Calls
Be very aware of doing any business with secrets and using Skype. Think about this, if Microsoft is handing over encrypted voice calls to the NSA, that means they are eavesdropping on Skype calls. Do you really want Microsoft listening in on your latest business plans? I didn't think so.
- Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal.
- The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail.
- The company worked with the FBI this year to allow the NSA easier access via Prism to its cloud storage service SkyDrive, which now has more than 250 million users worldwide.
- Microsoft also worked with the FBI's Data Intercept Unit to "understand" potential issues with a feature in Outlook.com that allows users to create email aliases.
- In July last year, nine months after Microsoft bought Skype, the NSA boasted that a new capability had tripled the amount of Skype video calls being collected through Prism.
- Material collected through Prism is routinely shared with the FBI and CIA, with one NSA document describing the program as a "team sport".
Corporations Manipulating Public Opinion on Tax Code
Corporate lobbyists are also swarming the hill demanding lower taxes, what a surprise.
There is a very well-financed campaign underway by several business organizations to lower the federal corporate tax rate. They sometimes use misleading arguments to make it seem as if corporations are grossly overtaxed, when in fact the United States corporate tax burden is far from excessive.
One of the principal groups pushing for corporate tax cuts is called RATE, which stands for reforming America’s taxes equitably. Its members are among the largest and most profitable corporations in the country.
Economist Bartlett is always good for a reality check, as if that mattered, reality, in corporate controlled governments.
On July 1, the U.S. Government Accountability Office published a report examining the difference in effective tax rates among corporations. It found that profitable American corporations paid an average effective tax rate of just 13 percent. Inclusion of state, local and foreign taxes raised that percentage to about 17 percent. Both rates are far below the approximate 40 percent combined federal, state and local statutory rate.
This means that the effective corporate tax rate is less than the effective federal tax rate on households earning as little as $40,000.
Larry Summers Wants the Fed Chair
Just when you think the games D.C. plays cannot get worse. Larry Summers is pushing to be nominated as head of the Federal Reserve:
Former U.S. Treasury Secretary Lawrence Summers is indicating to President Barack Obama’s Wall Street supporters that he wants to become Federal Reserve chairman, according to people familiar with the matter, as he keeps in touch with senators who would vote on the nomination.
We have many horrified as Summers is a chief architect of what caused the 2008 financial crisis in the first place. Read the eight reasons Summers should not be allowed within a mile of the Federal Reserve.
Last Wednesday, I heard Perianne Boring, a new reporter on RT.com, report that Ben Bernanke was planning to resign as head of the Federal Reserve and that Larry Summers name had been mentioned as a replacement. I flashed back to four years ago and an article I wrote called “Bankrupting the world,” which said that Tim Geithner was just the face, the voice, behind the PPPIP (Public Private Partnership Investment Program) giveaway to America’s top commercial banks to restore what amounts to $200 trillion in their cumulative derivative debt.
I can say today that it’s even more apparent that Larry Summers was the corrupt brain behind the give-away and should go. Today, I can give you the same eight reasons why he shouldn’t be the Head of the notorious Federal Reserve Bank.