The Money Party Deficit Reduction Scam and Social Security

Michael Collins

President Obama announced the new National Commission on Fiscal Responsibility and Reform on February 18 to address astronomical federal budget deficits. There has been considerable speculation that this commission will target current and future benefits for Social Security recipients to achieve its goals.

Why would this be the case? We need look no further than the treatment of major retirement funds over the past 20 years to get the answer. When the mob needed cash, it looted the Teamsters retirement fund. When large corporations or government entities get in trouble, they effectively borrow from their employee retirement funds by delaying required payments or otherwise gaming the programs. This provides a source of ready cash, a quick vehicle to cover management errors, or jack up their bonuses.

Think of the Social Security Trust Fund (trust fund) as the most lucrative retirement fund in the country, the ultimate pot of gold, and you'll immediately understand why it is that for decades, big business has plundered the trust fund. How does this happen?

The Biggest Retirement Fund Rip Off Ever

ForclosureGate and Real Estate Armageddon

Michael Collins

I wrote the story below in response to an outrageous trick Congress just tried to play on the public. As many of you know, the Senate passed 0/congress/bills/111/hr3808/text">HR 3808 The Interstate Recognition of Notarizations Act of 2010 unanimously on September 27. The bill was a carefully crafted, stealth "silver bullet" for the big banks to deal with their increasing legal problems with foreclosures. President Obama exercised a "pocket veto," which means he let it die after Congress adjourned. (Image)

While my story focused on the process and contempt shown to citizens by Congress in that process, I became aware of a much broader issue. We may well be on the verge of a real estate value meltdown as a result of very bad behavior, illegal in many cases, by the big banks combined with the legitimate push back of mortgage holders.

If banks can't foreclose and people can do a strategic default and walk away (0r live free in their residence), what will happen to real estate values?

The larger question emerged in reviewing bank bad behavior.

If there are fundamental flaws in many, maybe most mortgage, flaws of a serious legal nature, what if a strategic default movement spreads beyond just those facing foreclosure? That's where Armageddon comes in

Triumph of the Money Party!!! Warren's role downgraded, reports to Geithner

Michael Collins

The White House snatched back one of the few bones it's thrown to the people outraged at the looting of the United States Treasury by failed financial concerns - the big banks and Wall Street. The promised appointment Elizabeth Warren as head of the new agency to protect consumers from the financial services industry has been seriously downgraded. Instead of running the Consumer Finance Protection Agency, Warren's role has been diminished to that of special assistant to the president and adviser to Treasury Secretary Tim Geithner.

"President Obama, sidestepping a possibly heated confirmation battle, will appoint Harvard law professor Elizabeth Warren as a special advisor to the Treasury Department to launch the government's powerful new Consumer Financial Protection Bureau, according to two Democratic officials familiar with the decision." LA Times, Sept 15

Greedy Executive Pay Gets a Scolding and Not Much Else

Where have we seen this before? The White House has a lot of talk. Then a pay czar is appointed. After some period, a damning report is issued. Then we have the public scolding, while legislation, policy and amendments are ignored and defeated, often by the very same administration.

Any action on the latest outrage du jour? Nah.

Such is the the Obama administration's pay czar's report. To be fair, the Pay Czar was given no power to actually get the ill gotten gains back. He also was limited to institutions who received TARP funds, not the real bail out going on at the Federal Reserve.

The Special Master for TARP Executive Compensation, Kenneth R. Feinberg, a.k.a. Pay Czar, was chartered to monitor executive compensation of bailed out financial firms. This covered 419 banks who received TARP funds. 17 of those banks handed out ill-advised executive compensation tallying $1.6 billion dollars. $1.6 billion dollars equals 26,666 $60,000 a year salaries. In other words, to feed the executive pig, 26,666 people went without a job.

The Sovereign State of BP - Down for the Count?

Michael Collins

British Petroleum has operated as though it were a sovereign state since its inception. When they blew the well at their Macondo Prospect in the Gulf of Mexico, it never occurred to them that they would have to take orders from anybody. But that may change largely due to their inability to stop the flow of oil after nearly sixty days of gushing.

President Obama was clear in his speech last night. If any entity is going down as a result of the catastrophe, it will be BP. Today, Obama meets with BP's Chairman of the Board, Carl-Henric Svanberg, and the man he told the chairman to fire, Chief Executive Officer Tony Hayward.

Two sovereign states will collide. The outcome is a foregone conclusion.

Much Ado About Oil


EP is deviating just a tad from economics and delving into the wild world of underwater engineering and environment disaster. This is what people want to talk about, this is what is on their minds.

We're in horror. We're helpless, dependent upon continual press releases and attempts while real solutions to stop the leak are dismissed.

The next attempt is a top kill, which is to push drilling mud and cement into the leak hole. This latest attempt is high risk and could make the leaks worse. Realize this is 5,000 feet deep in the water, with corresponding water pressure in addition to a massive gushing oil plume. The damaged blowout preventer is 5 stories high. Blasting fluids with high pressure, twice as dense as the surrounding water, has the potential to create another hole if the blowout preventer has weakness in the metal or other interactions. Ugh, my sympathies to the engineers. This has never been tried in water.

The White House, Big Oil, and the "American Power Act"

Michael Collins

This analysis looks behind the scenes at how the ban on offshore drilling was lifted and what that had to do with the ultimate prize for big oil, the American Power Act.  It focuses on the current administration.  That in no way implies that the problem originated in January 2009.  The out sized and destructive influence of the oil monopoly has been with us for since the 1870's.

Banning Offshore Drilling

In 1969 a Unocal oil rig off the coast of Santa Barbara, California began leaking oil.  The extent of the leak, damage to wildlife, and the shoreline caused considerable outrage.  The state of California banned offshore drilling shortly after the leak.  In 1980, Congress banned offshore drilling in most federally controlled waters.  President George H.W. Bush reluctantly banned off shore drilling in 1990 for California, Florida, Oregon and Washington and in the North Atlantic.

What should be in Obama's State of the Union address, but isn't

My, my, my. Today we have a preview of President Obama's State of the Union address. What is most offensive is the claim this administration is trying to help the middle class.

We are being bombarded with these misleading headlines:

  • Obama announces initiatives for middle class
  • Obama announces economic aid for struggling middle class families

Right. So, guess what policy initiatives are in the speech? Tax cuts.

A doubling of the child care tax credit for families earning under $85,000; a $1.6 billion increase in federal funding for child care programs and a program to cap student loan payments at 10 percent of income above "a basic living allowance."

His initiatives also include expanding tax credits to match retirement savings and increasing aid for families taking care of elderly relatives. That program would also require many employers to provide the option of a workplace-based retirement savings plan.

Are these people shitting me? I'm sorry but we have massive unemployment. What a sorry ass excuse to help for the middle class. U.S. workers need jobs and they need good jobs now. Who cares about tax cuts! When your income is zero, what do tax cuts matter?

What should be in Obama's State of the Union Address?

How about these?

  1. Demand China float their currency. 83% of the non-oil trade deficit is due to China and their mercentile trade practices. It's pretty obvious too. China's GDP was 10.7% for Q4 2009. China holds the most U.S. treasuries. Meanwhile U.S. manufacturing shrank from about 15% of the economy to 12%.

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