Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
Poll Shows Anger with Both Parties
Frankly the results, are shockingly low all things ocnsidered, 55% GOP disapproval, 49% Democrat disgust.
All Hail the Credit Ratings Agencies
Rortybomb has done an analysis of the credit rating agencies track record and downgrades. h/t Paul Krugman.
Two quick sources that you might find helpful. There’s a long running argument that the ratings agencies work as a mini-IMF, forcing austerity measures favorable to bond-holders everywhere from developing nations to municipalities and states here in the USA.
But their travels in the political sphere go beyond that. It’s tough to rank the awful financial-sector policy decisions that were made in the past decade, but two of the worst ones were very much influenced by rating agency political pressures. When Congress tried to put some resolution powers in place to deal with the possibility of the GSEs collapsing, the ratings agencies put pressure there. When states were trying to put in sensible state-level regulations to deal with predatory subprime lending, the ratings agencies put pressure on federal regulators to overrule (“pre-empt”) them, leaving state housing regulatory powers at the mercy of the pro-bank OCC.
Corporations Record Profits, Jobs 0
We have known for some time Corporations are labor arbitraging Americans, moving jobs and profits offshore. Now a new study proves it. Think Progress overviewed the results:
Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.
Naked Capitalism equates the current debt ceiling manufactured crisis with TARP:
Washington DC appears to be readying itself for a repeat of the TARP, namely, the passage of unpopular legislation to appease the Market Gods (and transfer even more income from ordinary Americans to the Masters of the Universe). It isn’t yet clear whether this drama will be played out via generating bona fide financial market upheaval or mere threat-mongering (the Treasury market seems pretty confident that well-trained Congresscritters will fall into line). But unlike the TARP, which was a classic example of well-placed interests finding opportunity in the midst of upheaval, this reprise is a far more calculated affair.
Corporations preparing for U.S. default
Here comes Wall Street and corporations are now preparing for a default:
American businesses, from Wall Street banks to major industrial corporations, are preparing contingency plans for a pair of once-unthinkable events: the United States defaulting on its debt and the loss of the nation's top AAA credit rating.
While most bankers, investors and executives still cannot imagine that politicians in Washington could be reckless enough to let the government run out of money to pay its bills on August 2, they can't guarantee that the game of chicken that has been played in recent weeks won't go awfully wrong.
I think we all know these debt games along with the refusal to enact policies which would truly create jobs are going to make the economy much much worse. Paul Krugman thinks so too:
These are interesting times — and I mean that in the worst way. Right now we’re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.
U.S. Started Borrowing Immediately After Bush Tax Cuts
A pretty good analysis over at Think Progress:
Nearly 10 years ago today, on August 1, 2001, the Associated Press reported that the Treasury Department was tapping $51 billion of credit in order to pay for the budgetary cost of the first round of Bush tax cuts’ rebate checks. The AP reported at the time that Democratic Party opponents of the tax cuts worried that they’d return government budgets to “red ink“.
Default Could End Dollar Dominance
This is not good. Analysts are forecasting a U.S. sovereign default will cause the U.S. dollar to no longer be a reserve currency:
Analysts say a US debt default could cause a credit crunch similar to the one sparked by the collapse of Lehman Brothers at the height of the global financial crisis.
US lawmakers failed to reach a deal to lift the debt ceiling at the weekend, ahead of an August 2 deadline.
A senior currency analyst at Thomson Reuters John Noonan says markets are starting to prepare for the possibility that the US may default on its loans.
"When Lehman Brothers failed we saw credit markets freeze around the world," he said.
"Now that is something that could possibly happen once again if treasuries are downgraded and there is a US default - if that was the case we'd see stock markets come off quite viscously."
Market prices are now reflecting the possibility that the US will default on its debt after lawmakers again failed to reach a deal to lift the borrowing limit at the weekend.
John Noonan says a debt default in the US could also see the greenback lose its status as the world's reserve currency.
Elizabeth Warren and the Republicans Who Hate Her
We have a detailed account on how Elizabeth Warren was blocked by the GOP, or more to the point, the bankster's bought and paid fors.
When Representative McHenry was hectoring Warren, the screen showed that he had received almost $45,000 from Bank of America and another $15,500 from Wells Fargo. Connie Mack, a Florida Republican, had received $68,000 during the last election cycle from the financial services industry. Bank of America, Citigroup and JPMorgan Chase, I discovered later, had given a combined $1,957,522 to Republicans in the last election, nearly twice as much as they gave to Democrats. They’ve certainly gotten their money’s worth.
Best Headline of the Week
George Washington gets the headline of the week award with DC Is a Big Bag of Suck That Couldn't Solve a Rubik's Cube If It Were All One Color.
Please share news and articles you found critical reading.
expect U.S. Default to dominate this week
I think, for the first time, Corporations, Wall Street, other nations are contemplating a U.S. default is actually possible. Up until Friday almost everyone thought surely someone will pull the car out of the middle lane in this game of chicken.
Not our economic kamikaze Tea Party people. Nope, crazy people don't care about dying in a head on.
Maybe crazy like foxes - GREEDY foxes
How many of these characters are, either directly or through hidden partnerships, playing the gold market?
What? Profiteering on insider information by our self-righteous 'leaders' in Congress?
What? Tea Party people posing as ideologues but actually just more of the same old greedy crooks?
A better monetary system is possible
THERE IS A BETTER MONETARY SYSTEM
This coming Tuesday, July 26th from 10:00am to 11:30am in the Cannon House Office Building, Room 402, Washington, DC, Congressman Dennis Kucinich will host Dr. Kaoru Yamaguchi to give a presentation of his paper that concludes how HR 6550 will solve the national debt problem and function far better than our current debt-based money system.
"This briefing is intended specifically for Congresspeople and their aides. We ask you to strongly encourage your Congresspeople to attend."
Please consider and give expression to the American Monetary Institute approach to monetary reform, preparing the way for an honest evaluation of the costs of perpetual warfare in the 21st Century.
"Over time, whoever controls the money system controls the nation."
American Monetary Institute