Month: November 2011

Thrivable:

The illusion of infinite growth, like the Emperor’s New Clothes, is maintained by the Emperor. The citizenry see something naked and ridiculous which can’t be sustained.

Much like the housing crisis and the dot-com boom/bust, the Wall Street Empire is revealed as naked, even to the emperor himself. #OWS has already succeeded by one measure, they broke the shared fiction about Wall Street for all of us.

And:

What was once a useful distinction between the left and the right has become artificially crafted polarity of two sides to the same position.

The majority of the left and the right have come so close to the center to serve corporate interests and woo uncertain voters, that they collapsed into each other in a meaningless muddle.

Barry Ritholtz breaks it down for you.

No matter the GOP spin, we cannot blame housing policies from the 1930s or mortgage tax deductibility from even before that.

It is a statistical invalid argument, as the data show.

Examining the big lie: How the facts of the economic crisis stack up.

An examination of public documents involving Mr. Lauder’s companies, investments and charities offers a glimpse of the wide array of legal options for the world’s wealthiest citizens to avoid taxes both at home and abroad.

His vast holdings — which include hundreds of millions in stock, one of the world’s largest private collections of medieval armor, homes in Washington, D.C., and on Park Avenue as well as oceanfront mansions in Palm Beach and the Hamptons — are organized in a labyrinth of trusts, limited liability corporations and holding companies, some of which his lawyers acknowledge are intended for tax purposes.

HA! 

‘What has the country so angry,” says Fred Siegel, “is the sense that crony capitalism has produced a population that lives off the rest of us without contributing. They’re right. It’s not paranoid.”

Great slogan but “we are the 99%” aims too low.

Why do Republicans advocate further tax cuts for the very rich even as they warn about deficits and demand drastic cuts in social insurance programs?

Well, aside from shouts of “class warfare!” whenever such questions are raised, the usual answer is that the super-elite are “job creators” — that is, that they make a special contribution to the economy.

It’s really the top 0.1%, not 1%, that have escaped with such a large slice of the pie.

And who are they? Let’s get one thing straight: They are not, on the whole, “job creators”.

Ian Walsh:

Which leads us to the sudden surge in the price of oil to $107 a barrel.  On the face of it, this is crazy.

Yes, the US has had a bit of a recovery, but Europe is going hard core austerity.  But this is the game the hot money is playing: they move out of bonds and into oil, out of oil and into bonds.  $107/barrel oil means the US recovery (such as it is, which isn’t much) isn’t going to last much longer.

Being rich is about being liquid when everyone else isn’t, so you can buy up assets on the cheap.

When [IF] the rich are properly under control (ie. when you keep them terrified of government and the people, as they should be) they can’t create such buying opportunities, they have to wait for them….

Right now the rich can and are crashing asset prices by forcing countries into austerity through attacks on their currencies and control of their political elites.  They then buy up assets for fire-sale prices.

These attacks …are deranged.

These attacks are about power: the global rich were bailed out after the crash, now they are using their hot money in attack after attack, demanding austerity, which will cause semi-permanent depression in those countries which accept it.

All of this is crazy.

The financial elites are on a plundering spree, gleefully using their power to force entire nations into poverty, blackmailing governments into huge payouts.

BBC’s Robert Peston: UK’s debt ‘biggest in the world’

The indebtedness of the UK – that’s the sum of household debts, company debts, government debts and bank debts – had risen to 492% of GDP, or almost five times the value of everything we produce in a single year.

…and is still the biggest relative to GDP of any of the big economies.

Japan’s debts were also 492% of GDP. US indebtedness is less, at 282% of GDP.

So what’s going on?

Well partly it’s to do with a phenomenon, that debt has been shuffled from the private sector to the public sector.

When banks stopped lending, and private-sector spending and investing collapsed, governments continued to spend, even though tax revenues were falling. So public-sector borrowing exploded.

To be clear, if governments had not continued to spend, our recession might well have become something much worse, a 1930s-style depression.

But it is fair to say that a consequence of banks, households and businesses trying to repay their debts has been a big increase in government borrowing.

What it means is that we must brace ourselves for many years of relatively low growth, perhaps 1% versus the 3% of the 16 boom years before the crash, because we no longer have the fuel of borrowing more and more every year.

The Divine Right of Capital, by Marjorie Kelly [link to .pdf]

In an era when stock market wealth has seemed to grow on trees—and trillions have vanished as quickly as falling leaves—it’s an apt time to ask ourselves, where does wealth come from?

More precisely, where does the wealth of public corporations come from? Who creates it?

To judge by the current arrangement in corporate America, one might suppose capital creates wealth—which is strange, because a pile of capital sitting there creates nothing.

“I tasted a beer and tried a cigarette once, as a wayward teenager, and never did it again.” —Mitt Romney

Whole sectors of the economy are dying.

Why is this happening?

Christensen retells the story of how Dell progressively lopped off low-value segments of its PC operation to the Taiwan-based firm ASUSTek —the motherboard, the assembly of the computer, the management of the supply chain and finally the design of the computer.

In each case Dell accepted the proposal because in each case its profitability improved: its costs declined and its revenues stayed the same. At the end of the process, however, Dell was little more than a brand, while ASUSTeK can—and does—now offer a cheaper, better computer to Best Buy at lower cost.

…the impact of foreign outsourcing on many other companies, including the steel companies, the automakers, the oil companies, the pharmaceuticals, and now even software development.

…steadily becoming primarily marketing agencies and brands: they are lopping off the expertise that is needed to make anything anymore.

George Monbiot on socialism for the rich:

For corporate welfare queens and their crystal baths, there is no benefit cap.

Limited liability, offshore secrecy regimes and state handouts ensure those at the top bear none of the costs they inflict on us.

…soon it will be impossible to actually arrive anywhere because everywhere will be full of people trying to get somewhere else…

Motor Car Madness,
written & produced in 1970 by Alan Wakeman.

…soon it will be impossible to actually arrive anywhere because everywhere will be full of people trying to get somewhere else…