Category: economy

Goldman Sachs Rule The World Not Governments
Alessio Rastani, BBC, Sept 26 2011
…the Eurozone crash will wipe out the savings of millions.

 

 

 

When the rich steal from everyone,
it’s Free Markets;

When the rich steal from the rich for the poor,
it’s Noblesse Oblige;

When the middle steal from the middle,
it’s Good Business;

When the rich and the middle steal from the poor,
it’s Fiscal Responsibility;

When the poor steal from the rich and the middle,
it’s Criminal;

When the poor steal from the poor,
it’s Tough Luck.

  
Trader Rastani says “governments don’t rule the world. Goldman Sachs rules the world.”

…the big money doesn’t “buy this rescue plan.

“They know the market is toast. They know the stock market is finished.

“…it’s going to crash, and it’s going to fall pretty hard because markets are ruled right now by fear.”

“A device with eyes and ears of its own, with a sense of place, and motion, and proximity, with memory of what it’s seen and where it’s been.” — Tim O’Reilly.

John Deere engineers are convinced the day of the driverless tractor will come for jobs such as orchard spraying and tillage.

“Most people just dealt with dribble and the common, you know, celebrity-tabloid-type stuff that doesn’t really matter in the world.

Wozniak:

“So I was the designer, who could kind of design anything you could conceptualize and then Steve liked to always find ways to turn it into a business.

“And he talked about the importance of having companies to make products, and that there were very few people who drove the world—and he wanted to be one of those people that was driving the world, and not just one of the millions and millions of people who kinda don’t matter.

Also Wozniak:

“I think I’d try to be more open to things like letting you have your iTunes library and easily share it with other music programs..that’s the monopoly approach. And you know, I just don’t like it.

“Some countries have this view that this new digital age world and internet should come to every citizen, but we’ll never have that in the United States. We’re just too far from it. I don’t ever expect it.”

Superb & challenging summary of jobs ahead:

Mr Obama can reasonably point out that he was elected in the wake of a financial meltdown that had threatened to bring about another Great Depression, with an unemployment rate that would make the current one look like a lucky escape.

The co-ordinated global stimulus by members of the G20 in 2009, though far from perfect, helped save the world from something much worse—though that probably provides little comfort to the 205m people round the globe who are now unemployed. Nor is there much scope for further stimulus.

But today’s jobs pain is about more than the aftermath of the financial crisis.

Globalization and technological innovation are bringing about long-term changes in the world economy that are altering the structure of the labour market. As a result, unemployment is likely to remain high in the rich economies even as it falls in the poorer ones.

But missing from the debate – and, in fact, much current discussion of America’s politics – is the single biggest issue facing the country: the destruction of the American middle class.

In fact, so staggeringly unbalanced has America become that the richest 400 American families have the same net worth as the bottom 50% of the nation. 

It all comes back to the age-old problem of distribution of resources.

If there is too much debt out there, then there also must be too many loans held by investors.

Or, to put it another way, the investor class has too much money !

We’ve gotten into this ‘too much debt’ problem to a large degree because of pressure from investors looking for a lucrative place to park their ‘too many assets’. The private debt market dwarfs government borrowing.

Chart the growth in U.S. household income since 1917.

See the money between the Top 10% and the Bottom 90% of Americans.

» Between 1948 and 1979 the richest 10% accounted for a third of average income growth.

» Between 1979 and 2007 the richest 10% accounted for a full 91% of average income growth.

When income grows, who gains?

We know nothing about the rich and that’s just silly.

In the first such analysis ever conducted, Swiss economic researchers have conducted a global network analysis of the most powerful transnational corporations.

Their results have revealed a core of 787 firms with control of 80% and a super entity comprised of 147 corporations…

G. W. Bush at 9/11 football game in Dallas… A football fan who angered another man by not standing during the national anthem is attacked with a Taser.

Record 46.2 million Americans live in poverty, Census Bureau says.

That’s 1 in 6.

The poverty threshold last year was an income of $11,139 for one person and $22,314 for a family of four.

Warren Buffet, the third richest man in world:

“Our leaders have asked for ‘shared sacrifice.’ But when they did the asking, they spared me. … While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks … [from] a billionaire-friendly Congress.”

War after 9/11 reaches $3.3 trillion. While not all of the costs have been borne by the government — and some are still to come — this total equals one-fifth of the current national debt.

• Congressional Research Service (war funding);
• Congressional Budget Office (war funding,health care to date);
• Joseph E. Stiglitz and Linda J. Bilmes, “The Three Trillion Dollar War,” and updates by the authors (veterans’ care, disability payments to date, estimates of value of life for war casualties);
• John Mueller and Mark G. Stewart, “Terror, Security and Money: Balancing the Risks, Benefits, and Costs of Homeland Security”(homeland security);
• Garrick Blalock, Cornell University (drivingdeaths);
• “Terrorism, Economic Development, and Political Openness” (lost time at airports in 2004);
• Adam Rose, Center for Risk and Economic Analysis of Terrorism Events at the University of Southern California (economic impact);
• Insurance Information Institute (event cancellation);
• Office of the New York City Comptroller (2002 estimates of physical damage);
• ‘Costs of War’ project, Eisenhower Research Project at Brown University (cost of war,including indirect defense costs);
• Todd Harrison, Center for Strategic and Budgetary Assessments (possible future war spending);
• Department of Defense (Pentagon repair,defense spending deflators);
• Bureau of Economic Analysis (G.D.P. deflators);
• All value of life calculations are based on E.P.A. guidelines used to evaluate new regulations.Current guidelines suggest the value of life is around $8 million, but estimates vary widely.

Gerald Caplan at Toronto’s Globe & Mail:

Ten years after the trauma of 9/11, the richest 1 per cent of American households earn as much as the bottom 60 per cent and have as much wealth as the bottom 90 per cent. But you ain’t seen nothing yet. Combine low taxes with tax credits, tax havens and tax loopholes, and you’ll come upon a capitalist nirvana where many of the largest corporations pay no taxes at all and where, according to estimates by the Tax Justice Network, trillions of corporate dollars are hidden away, costing perhaps a quarter of a trillion dollars in foregone taxes. No prizes for guessing where it goes instead of to the public good.

There are more filthy rich folks now than at any other moment in history and they’re leveraging their astounding wealth to make sure they get filthier at the expense of the rest of us, still of course the vast majority. What is true of America is equally true of Britain and increasingly true of Canada. While the middle class shrinks, the working class slips backwards and social mobility erodes, the rich buy themselves politicians, lobbyists, legal beagles, slick accountants, “trained economists,” television networks, “think” tanks and whatever other apparatus is needed to make them even richer. Their success surpasses even the most piggish of expectations.

Osama bin Laden inflicted a terrible crime on the American people. America’s elites and their allies have done the rest.

Warren Buffet’s essay in the NY Times: “Stop Coddling the Super-Rich”

Thinmk about this statement via John Robb:

“It should have been self evident that a ‘plutonomy’ wasn’t stable. Centralized demand is as toxic as centralized planning for an economy.”

 

When the rich steal from everyone,
it’s Free Markets;

When the rich steal from the rich for the poor,
it’s Noblesse Oblige;

When the middle steal from the middle,
it’s Good Business;

When the rich and the middle steal from the poor,
it’s Fiscal Responsibility;

When the poor steal from the rich and the middle,
it’s Criminal;

When the poor steal from the poor,
it’s Tough Luck.

 

Thinmk about this statement via Umair Haque:

“The institutions of advanced economies are being ever more perfectly tuned for wealth extraction. The result, of course: impoverishment.”

 

Also see:
American Plutonomy
American Plutonomy 2

21% of American children live in poverty.

42% of our children live in low-income families.

The poverty level for a family of four with two children was $22,050 in 2010, $22,050 in 2009, and $21,200 in 2008. More than half of America’s 18-24-year-olds live with parents.

A family of four needs to earn twice the poverty line, $44,700, to provide children with basic necessities.

By Alana Semuels, Los Angeles Times

Convinced that everything you buy these days has a Made-in- China label?

Then you aren’t paying attention. Things made in the U.S.A. still dominate the American marketplace, according to a new study by economists at the San Francisco Federal Reserve.

Goods and services from China accounted for only 2.7% of U.S. personal consumption. About 88.5% of U.S. spending last year was on American-made products and services.

Services – dry cleaner, accountant, mechanic and manicurist – account for about two-thirds of spending. Then there’s groceries and gasoline.

Bloomberg article that’s a must read for biz owners:

If you have a personal bank account, yes, your money is safe from online banking fraud. Federal regulations compel banks to make good on losses to personal accounts, however they occur. But the same is not true of commercial accounts that are accessed online.

+ yourmoneyisnotsafeinthebank.org

What is America?
Company playground?

Time Warner CEO says internet porn eating our profits.

When adult goes down, it’s hard to find another area of your business that might go up.

But perhaps one ought to remember just how much cable companies tried to make out of man’s susceptibility to the filmic acts of the nubile and naked.

[sic]

“It was systemic; it was pervasive.”

None of the nearly 3,000 test reports that prosecutors seized from the company contained legitimate results, according to one person briefed on the investigation. Among other projects for which tests results were falsified were: the Lincoln Tunnel, the air traffic control tower at La Guardia Airport, the Javits Convention Center; a building at the Memorial Sloan-Kettering Cancer Center and the Intrepid Sea, air and Space Museum.

via BubbleGeneration:

The Economist, for example, says:

“There is no denying that for some middle-class Americans, the past few years have indeed been a struggle. What is missing from Mr Obama’s speeches is any hint that this is not the whole story: that globalisation brings down prices and increases consumer choice; that unemployment is low by historical standards; that American companies are still the world’s most dynamic and creative; and that Americans still, on the whole, live lives of astonishing affluence.”

This is yesterday’s orthodox argument. And most serious economists take this story less and less seriously.

Why not? Because…ummm…the global economy is in a state of shock. If this story was true, we wouldn’t be melting down.

A much more plausible story is this – one that forward-thinking economists are beginning to take very, very seriously.

Real wages have stagnated for decades. But corporate profits are at their highest. That means the net effect of global price competition is just to transfer wealth from the poorest to the richest.

We are a group of faculty and students in the Sociology department at the University of New Brunswick. As humans, we observe the multitude of problems facing humanity — globalization, climate change, economic growth and collapse, pollution, wars, population increase and international migration, peak oil — and wonder what the future will bring. As sociologists, we question the utility of current sociological theory for understanding the relationship between the natural and social systems that underpins many of these problems.

World’s strongest banks

There are two basic explanations for the recent global financial collapse. The first, the Marxist account, emphasizes the role of capitalist accumulation and, in particular, the ability of the financial classes to profit from asset bubbles. The second account emphasizes complexity and uncertainty. According to this account, lax regulation was a major contributing factor. In light of these competing accounts it is interesting to look at the information below, identifying banks in Singapore and Canada as the world’s strongest. Both locations came through the crisis comparatively unscathed and both are noted for their relatively high level of bank regulation.

A million dollar fender bender? 

Yes, a one million dollar fender bender at the Monte Carlo Casino.

Making jobs for everyone!?

Call me a heretic, fire up the kindling and ready the stake, but I’d say this particular item — which I’ll readily hold up my hands and admit hit a nerve — is a peculiarly apt metaphor for what’s gone wrong with the economy today: the super-rich, whose gains reflect little social value creation, have gotten richer — and are hyperconsuming the stuff of idle, yawning luxury with an appetite that makes Caligula look like a blushing bride. – Umair Haque: How Our Economy Was Overrun by Monsters and What to Do About It

Vince Cable has launched an extraordinary attack on “rightwing nutters” in America who are trying to block the raising of the US government’s debt ceiling and who are, he said, a bigger threat to the world economy than problems in the eurozone.

Vince Cable is Britain’s business secretary. He said:

“The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few rightwing nutters in the American Congress rather than the eurozone.”

Chort.

Our money…

“It doesn’t measure how good of a human being you are, but it does measure, in most cases, how much value you have provided to your fellow man.  How is this true?  Because your fellow men have chosen to give you their money for your service.”

Well…

This ain’t necessarily so.  Rentiers collect, but they need not contribute.  They exalt themselves, and devalue labor.

In the past 30 years, nearly all the increase in surplus has been skimmed off by the top few percent in wealth.  The top 1% used to control 7% of the nation’s personal income. They now control over 21%.  Has their contribution to the rest of society tripled?  Not so.  They have manipulated the system, toforce labor to hand over its share of the increase in surplus.

Their contribution to the rest of society has not changed.  Their contribution to themselves has tripled.

If labor’s share of the nation’s output had remained constant, (and the top 1%’s) the middle and working class would all be about 15% better off than they are now.

And the economy would be in much better shape.

Lucy Kellaway reporting at the BBC:

I’ve amassed a treasure trove of data that overwhelmingly supports a long-held pet theory of mine.

The three worst traits of chief executives are a lack of self-knowledge, a lack of self-knowledge and a quite extraordinary willingness to give themselves the benefit of the doubt.

When it comes to describing their dark sides, 58 out of 60 leaders felt bound by the same rule – any weakness is perfectly admissible, so long as it is really a strength.

They almost all cite impatience, perfectionism and being too demanding – all of which turn out to be things that it’s rather good for a Chief Executive Officer (CEO) to be.

What is particularly interesting about this mass outpouring of faux weaknesses is that there is no difference between men and women, and no difference between Americans and Europeans.

All are as bad as each other.

It’s not good to hope that natural gas will adequately buttress oil:

The reason for this is that, unlike oil and coal, natural gas is usually carried (after cleaning to remove water oil and any other contaminants) through a pipeline that often runs (via additional pumps) directly to the customer. They, in turn, don’t usually store it, but burn it as needed, drawing the supply straight from the pipe. The problem that this gives the marginal producer is that the gas in the line must be at a certain pressure if it is to move down that pipe to the customer, and then come out of the nozzles at sufficient flow to be useful. That pressure has to be achieved, at the well once the natural pressure of the gas in the well has fallen over time and production, with a compressor, which cost money to install, run and maintain. At a certain point in the well life the gas being produced falls below the point at which it becomes economic to pay for that compressor (which is only a part of the total costs that an operating well will incur). It may even be (at the rates of decline being seen in many current wells) that the decline is so swift that as soon as the natural pressure falls below that needed for the pipeline, that the well closes and a compressor is never economical. In these cases the well life may well only be three or four years, rather than the fifty of the company model.

Who doesn’t pay taxes?

snippet:

As they say on the right, a poor man never hired anybody.

Therefore, taxing the rich hurts everyone else.

The contrary idea: job-holders actually create rich people.

 

Umair Haque:

Authentic prosperity isn’t about stockpiling chits and bits that you can — if you’re lucky — sell to the next guy before the house of cards collapses in on itself. It’s watching the people you love grow and flourish, making the dreams you’ve dared to nurture and safeguard come roaring to life, and, above all, living a life that matters long after you’re gone. That’s the stuff not merely of shareholder ‘value’ — but of authentic, enduring, human worth. Hence, I’d gently suggest: the economic sparkplug missing from our so-called prosperity won’t be invented in Silicon Valley, manufactured in Shenzhen, hawked by Madison Avenue or Wall Street, or ordained by Washington. It will be found in the pursuit of wisdom, grace, humility, courage, and great achievement. It’s the hard work of investing in the people you love, the dreams you have, and living a life that matters.

In the meantime, Gregor Macdonald…

It frankly doesn’t matter that some states, or even the United States, created non-farm jobs since the lows of 2009. The US economy is a large system that employed over 146 million at its peak last decade.

Now, having added nearly 30 million to its population over the past 10 years, the US employs 6-7 million fewer people than in 2005.

The implications for the operating costs of this system, from Social Security to Defense Spending are obvious. Thus, it’s a failure of analysis—an inability to comprehend scale—that leads people to conclude good news, or even bad news, from the month to month data.

Indeed, calling a +30,000 jobs number on the national level a ‘disaster’ has as little meaning as calling a +150,000 jobs number ‘good news’.