California is a Giant Canary in Earth's Economic Mine Shaft

Important Notice, originally uploaded by shindohd.

The picture attached to this post was taken by fellow-blogger (shindotv.com ) and socnetizen, @ShindoTV. It depicts a screen on an ATM that is warning that Wells Fargo, one of the bigger banks California, won't be accepting IOUs issued by that state's government.

See California is going through massive, MASSIVE economic troubles. The thing that's bugging me is that aside from Shindo's post about California's IOUs being rejected, I haven't come across any other blog posts or news articles covering the fall of the fifth-largest economy in the world.

That IS what's happening and no one really seems to care.

Here's part of the comment I left on ShindoTV.com:

...I think the current economic situation in my former home state should be sending shockwaves through the rest of the country and even the rest of the planet. California is the 5th biggest economy in the world. When the government of the 5th biggest economy of the world can’t afford to pay its employees, this says something bad, not only about the state of California’s economy but of everyone else’s economies, too.

Sure, California's economy is really just a subset of the US economy as a whole, but it's a HUGE subset and when it drops, so does the US economy (even if no one is paying note of it).

So, what's my point? That we've still got a long way to go before we are out of this economic mess and the sooner we realize this, the better, since further denial will just prolong it.

California's economic mess predates the greater US economy's mess. They were struggling since before the "Governator" even took over and they are still struggling. As long as the government that runs the fifth largest economy in the world struggles, so will the rest of the world.

Just my ¥2. I could be wrong, but I haven't been, so far, and I've been talking about our economy crashing and bleeding out for years now.

Believe me--I really want to be wrong. (Been saying that for years, too!)

Original image here: http://www.flickr.com/photos/shindotv/3722990774/

Nobel-Winning Economist Says Obama's Plan Hurts the Folks Who Elected Him (that's us)

Read it!

Nobel Prize winning economist Joseph Stiglitz, who spoke out against Bush's lack of economic responsibility-taking for the disaster we're still living through is now pointing his finger at Obama. See, as politicians go, Obama is way better than Bush, but he seems to be just as bad in certain ways. According to Stiglitz, Obama's big solution to our economic issues is "ersatz capitalism."

"Ersatz," in case you're curious, is defined by Merriam-Webster.com as "being a usually artificial and inferior substitute or imitation." So, in this case, it's not capitalism that Obama is practicing here. Thankfully, he's not saying it's socialism, either, but here's what he does say:

What the Obama administration is doing is far worse than nationalization: it is ersatz capitalism, the privatizing of gains and the socializing of losses. It is a “partnership” in which one partner robs the other. And such partnerships — with the private sector in control — have perverse incentives, worse even than the ones that got us into the mess.

So what is the appeal of a proposal like this? Perhaps it’s the kind of Rube Goldberg device that Wall Street loves — clever, complex and nontransparent, allowing huge transfers of wealth to the financial markets. It has allowed the administration to avoid going back to Congress to ask for the money needed to fix our banks, and it provided a way to avoid nationalization.

But we are already suffering from a crisis of confidence. When the high costs of the administration’s plan become apparent, confidence will be eroded further. At that point the task of recreating a vibrant financial sector, and resuscitating the economy, will be even harder.

I've been saying, for a while now, that the government has been using the same old tricks to try and fix a failing system. Obama's government is no different in this sense. He is trying the same tricks that got us into this mess in the first place. Instead of forcing the men in suits to take responsibility for their choices, he's letting (almost) everyone keep their jobs and money while the real cost of the failure gets dumped on to us little people.

Gotta love that (crisis-of-)confidence builder, Obama. I almost miss Bush who you could always tell was a lying bastard. Obama seems like such a nice guy, but now he's ignoring the needs of actual Americans in favor of the needs of made-up businesses with corrupt people running them. Lovely.

Hay, Barry, where's my universal health care, man? I haven't seen a doctor in a decade. Yeah, you're welcome for your vote, jerkweed.

Edges of American Civilization Breaking Down

Seems like a heavy headline, but it's true.

What else can you call it when folks in a rural Alaskan village can no longer afford basic foodstuffs or the fuel to go where they can afford basic foodstuffs OR revert to living off of the land because climate change and pollution?

Don't all of those things fall under the domain of government to provide?

Seriously, things are messed up for Emmonak, Alaska, a rural town on the west coast of Alaska. In a piece of surprisingly good journalism (capped above, read the original February 9, 2009 article), CNN's Mallory Simon does a thorough job explaining the harrowing situation these people are in.

One family usually takes two snowmobiles when they go for supplies. Now they can only afford to take one--that cuts the amount of food they can take back with them and if one snowmobile breaks down, they're stuck. But assuming their machines run properly, they're still more challenges for them to deal with.

$15 cheese, $10 milk, $22 eggs, make basic survival for these people an even bigger challenge than they are used to living on the edge of civilization. Emmonak, Alaska is a village where Native Americans have lived for hundreds of years, yet the civilization that has made their lives easier has melted away like an Antarctic ice shelf.

If you're like me, you probably are wondering why these people can't just go back to their traditional ways of living. Well, the article covers this, explaining that "a brutal early winter brought the longest cold snap in five years. In September the temperature in many villages dropped as low as 20 degrees, a record low for many, according to the Alaska Center for Climate Assessment and Policy."

Thanks, Climate Change!

But that's not all--the article also reports that "Commercial fishermen couldn't make money from the seasonal king salmon harvest this year, because there was barely enough fish for subsistence."

See, back in May of 2008, SFGate.com

Yep, it's a 100% legitimate reason for Palin to be back in the news.

The problem seems to be that they can't declare an emergency to get federal aid because of a stupid state law that says financial emergencies can't be declared until, according to Mallory Simon's CNN.com article, "average income levels in the villages to drop below $26,500 -- regardless of the cost of living."

So, until Palin can change the state law (no fast feat), they're kind of stuck.

In the meantime, I'm happy to be living in one of the biggest cities on Earth. Basic laws of supply and demand will keep the city of New York in food and fuel for as long as those basic laws of supply and demand hold up. In other words, with millions of people living here, there will be millions of dollars to be made here--of course, if capitalism itself breaks down, well, then we're all in trouble. Just my ¥2, of course. Though the folks up in Emmonak are going to need more than ¥2 if they are going to make it.

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Washington Finally Interested in Helping We, The People... imagine that!

In a January 28, 2009 article at CNN.com, CNNMoney reporter David Goldman reported on the US House passing an $819 billion stimulus bill that included a buttload of money for us poor folks. Now, there are a couple of things to note, here.

First off, do you wonder why the bill that helps the poor folks out is coming now, after the corporations and the banks have already gotten their bailouts?

I looked at that headline and had to stop myself from shaking my head and worrying about inflation. Instinctively, I wanted to say "more money injected into the system which will drive down the value of the money already in the system."

The thing is, we've already seen well over a trillion dollars injected into the US economy in the past six months or so--possibly more than two trillion--it's hard to keep track. The value of the American dollar is fucked already, might as well pretend we have money--after all, it's only fair that finally, we, the regular folks, get our turn at the pot.

Why do I think we won't be seeing checks proportionate to what the banks and corporations have gotten? Regardless, you have to wonder why We, The People of the United States of America are third in line of economic importance behind the banks and the corporations.

It's more evidence proving that our government doesn't give two shits about the people they're supposed to represent. Why do we not get our bailout before these businesses and banks?

Aren't we more important than them?

Don't they exist, like our government, to serve us?

Apparently, not.

Secondly, you have to wonder why precisely NO REPUBLICANS voted for this bill.

To paraphrase Kanye West: Republicans to do not care about poor people.

I mean, seriously, Republicans--do you understand reality? We voted you assholes out of office. You had your asses handed to you in the last election. 8 million more people wanted the Democrats' guy over your guy and you guys are retarded enough to vote against a bill that helps the regular people who voted against you?

UNbelievable.

Of course, we only get our bailout checks because we voted Obama into office. This is his thank you gift to us. Our payoff, if you will. He knows he's got to give us SOMEthing or we'll revolt.

The thing that's the most frustrating is just how illogical our "leaders" in Washington are behaving.

Jon Stewart asked, on Tuesday's Daily Show, why not give us the money and let us pay off the loans we've defaulted on, rather than have the USG buy up all the bad debt? Give us the money so we'll directly spend it on the economy rather than giving the money to the greedy bastards who caused all this trouble in the first place?

It's fucking frightening when the only sane voice in the room comes from a basic cable TV comedy news show host.

What the fuck, America?

We elected Obama, but now what?

Are we going to let ourselves be seduced by hope? Or are we going to demand actual leadership from our elected politicians in Washington?

Change may have come to America, but Washington is still filled with dipshits and morons who are happy to trade oral sex acts with the economic powerhouses that put them in office.

And that Blagojevich guy is getting impeached for being honest about trying to sell the Illinois senate seat. Seems hypocritical when we all know how our government is up for sale.

How else do you explain us normal folks seeing our bailout checks last?

Bad Economy = Violence +Cop Cutbacks = Mad Max?

So, apparently, police forces are facing budget cutbacks. The above screencap comes from an October 23, 2008 article (here: http://www.cnn.com/…index.html ) at CNN.com. It seems there are a lot of not directly-obvious dangers connected with this economic mess. Seems that while people aren't paying their mortgages, they're also not paying their taxes. Or maybe they're choosing one over the other? Regardless, police forces are facing budget cuts--but that's not what I'm worried about.

When I saw this article, I immediate remembered an AP.org article I had meant to blog on that was posted on CNN.com back on October 13. Check it out here: http://www.cnn.com/…index.html

It's all about how people are turning to violence to deal with their own economic woes.

Now, the AP article talks about people who have tried or succeeded in killing themselves and/or their family in attempts to avoid taking responsibility for their debts. Disturbing stuff.

But I'm concerned with how far people are from using violence on others to solve their economic problems. Combine this with a shortage of police and we're looking at a disturbing coincidence.

Now, I don't think we're at all close to "Road Warrior" stuff, but I don't think it's a bad thing to think about. How close do we want to get to hiring Mad Max as a policeman before we start talking about priorities in this mess?

Perhaps this is why our government believes we need an active duty army unit on American soil now--don't know what I'm talking about? Go here: http://thepete.com/…de-the-us/ and/or here: http://thepete.com/…-inside-us

I think I'm going to stock up on motorcycle jackets and those bats with nails through them--just in case!!

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Bush to Host World Economic Summit

Oh yeah. That's a GREAT idea.

Has anyone else noticed that Bush tends to turn anything he touches to shit?

Why do people keep letting him touch things?

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Adbusters Takes Credit Where There Ain't No Credit

Truth be told, I didn't get very far into the article that the above screencap came from. I didn't need to get very far into it to realize that Adbusters, a group I've respected in the past, has stopped being a discerning, critical voice speaking against hegemony and has become part of the problem.

In a blog post from ten days ago (here: http://www.adbusters.org/…trike.html ) they make the claim that they are, in fact, behind the spending slowdown America is experiencing. They claim it all started with their "Buy Nothing Day" and "Turn Off TV Week" and it slowly grew from there.

"Culturejammers" they claim, took things further and began "advocating a General Consumption Strike as the appropriate tool for reshaping the basis of our economies."

Someone even wrote a manifesto that was "printed in the pages of Adbusters, emailed to friends and discussed in cafes."

Wow, cafes, you say? WOW. That's like SERIOUS distribution!

Then they say:

And now, at the brink of an economic collapse, increasing numbers are joining the Consumption Strike. Already our actions are having profound consequences. The New York Times reports that consumer spending is down sharply, the first quarterly decline in two decades link and that consumer borrowing fell for the first time in a decade. And according to the Wall Street Journal our general decrease in consumption is putting retailers out of business and pushing mall vacancy rates to their highest level in seven years.

Pardon me while I ROFLMAO.

Guys at Adbusters, I hate to break it to you, but people aren't rejecting capitalism. They're not following your proud teachings.

People aren't buying stuff because of one simple reason:

SHIT IS EXPENSIVE.

They're not turning off their TVs because you guys told them to. They're doing it because the INTERNET IS COOLER.

I didn't sell my car in 2003 because I was moved by some campaign organized by a bunch of activist types. I sold it because I got tired of spending hundreds of dollars a year on a vehicle that spewed toxins and wasted space.

I didn't stop watching TV because of "Turn Off TV Week", I stopped watching TV BECAUSE TV IS STUPID.

Seriously, what you guys have done is become part of the problem.

You guys bitch and moan about how lame the system is--how everything's shallow and consumption-oriented. You tell the system to stop telling you what to do.

But how do you do it? By telling all of us what to do.

You want to replace someone else's hegemonic "ism" with your own. Why not let us all decide for ourselves what is best for ourselves?

Claiming credit for influencing people, is just trying to capitalize (!) on the misfortune we're all experiencing. It's like at the Wall Street rally I went to a few weeks back where people were handing out communism flyers because clearly the ONLY alternative to capitalism is communism!

Fight isms with isms. Good plan, guys.

Ever worry that maybe your ism isn't the one, true ism?

Ever worry that one ism doesn't fit all?

Ever worry that you might be full of shit?

Ever worry that pulling the same old cliched, holier-than-thou crap liberals are famous for might cost you the support of people who actually support your cause?

You should worry...

...because that's what's happened with me.


You guys are just as bad as anyone else trying to get their way. Trying to determine what's right for everyone is simply wrong--even if you insist that it's for our own good.

And this lying you're doing to your own followers, that's just wrong, too. Man, I never even heard of "Turn Off Your TV Week" before reading that article and you want me to believe you're responsible for people watching less TV?

Screw you guys.

Thanks for getting greedy and missing the point of your own existence.

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Clarification and Confusion on the Bailout

Over the weekend I had a good discussion with my step-dad about the bailout and decided I should revisit the topic despite the USG passing the bailout bill into law.

One thing I didn't let fully play out in my mind was exactly how far a credit freeze would go. If the banks stopped lending every day American businesses would grind to a halt. My step-dad sells marble counter-top installation services and his job would stop cold--if people stop getting home loans, homes stop getting built and that means no kitchens are built in homes and that means no marble counter-tops would be sold.

And this is just one thread of the giant sweater that is the American economy.

The thing is, I'm OK with all American business stopping for a little bit. I think our system is royally screwed up if it so heavily relies on CONSTANT lending EVERY DAY. But what can you do? Come up with a better plan? Sure! But you can't just walk up to Henry Paulson and say "Yo, this system, it sucks."

You need the support of millions in order to make a change that the system itself would never want. See, Paulson used to run one of the banks he's going to be bailing out. Yeah, conflict of interest much?

Paulson wants his old pals to get bailed out and he likes the system the way it is. Everyone rich can stay that way and risk is passed onto the USG and, indirectly, the American people. This is the ultimate crime of the mega-corporations. They make themselves so "valuable" by being HUGE. But they are so huge they crumble under their own weight. So, they are bailed out by the system that allowed them to get so big in the first place.

So, something big has to happen that turns everyone against that system.

Make no mistake, if it weren't for the USG and Wall Street's breaking the rules of the free market, the free market would have failed.

The ONLY thing keeping our economy alive is this new money.

Doesn't that scare anyone else?

Think about that: the only way to save the system is to break the rules of the system. Our leaders (who allowed this to happen in the first place) are just propping this mess up with a stick, hoping the stick won't break.

The reality sure seems to be that if we don't suffer now for this, we'll suffer later.

Seems simple enough. But wait--if it's that simple, why did the Federal Reserve pull $630 billion from other central banks to help with our crisis only to have the USG pass its $700 billion bailout package? (Read about the Fed's move: http://thepete.com/…government )

Why would the bailout package be needed at this point? And why are some banks considering the possibility of not accepting money from the bailout at all? (Read more about that: http://www.guardian.co.uk/…et.bailout )

In America we are not adequately prepared as kids to deal with the absurd "complexities" of the economy. Every time I try to learn more about stocks, futures, derivatives, etc, my brain starts to hurt. My basic sense of logic is forced out of shape just to follow what these people are telling me.

It all seems like a big shell game and frankly, I think the market should be shut down. It's all just a scam--a game of slight-of-hand where the magicians move money from the many to the few. It's like Vegas times a million--or should I say 700 billion?

We need to get back to simple, honest business-doing. No more unregulated free market. Let's mix in some socialism and water this crap back so we don't get in over our heads.

So many times we in the "Blame America First" crowd (aka the "Lack of Blind Faith in the American System" crowd) are told that all we do is whine and that we have no solutions.

Well, I've mentioned mine. Shut down the stock market, introduce certain basic aspects of socialism that cover basic needs for people and serve as a parachute for certain huge businesses that get too big to support themselves. We have people dying because they can't afford health care. Yet we're letting criminals get away with it on Wall Street and we pay them to do it. I say we let everyone go to the doctor's including the banks and the corporations that fail. We'll look at them, fire who screwed up, get them back on their feet and moving.

They fail again? We break them up into their component parts.

No more corporate behemoths that bring down the entire economy when they fail.

Who ever thought up the current plan should be fired and forced to live with poor people for a while.

Of course, as long as we put up with this system, it's We The People who are giving the government and the banks and the corporations a blank check.
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List of the Congresspeople Who Voted No on the Bailout Bill

OK, so thanks to Michael van Poppel over at BreakingToday.com (or on Twitter as BreakingNewsOn we have a list of every House rep who voted for and against the bailout bill. You can find the whole thing here: http://breakingtoday.com/34.html

I've also found a list of Senators who voted no on Wednesday from Politico.com. You can find that list here: http://www.politico.com/blogs/thecrypt/1008/Senators_who_voted_No.html

I'm going to post the nays below because the list is shorter, sadly.

These are not the people who chose fear over thoughtfulness. These are not the people who felt doing something was better than doing something right. These are the people who, for whatever reason, felt America needed more time to consider what to do.

Personally, I don't think you should vote for anyone in November--except Obama so we can at least keep the mad, fear/war monger John McCain out of the White House. Granted, after hearing about Obama personally calling black representatives in the House and asking them to vote for the bailout, I don't feel Senator Obama has got the best interests of America at heart. But then again, it's not about voting for Barack Obama--it's about voting for the closest thing we have to an alternative.

If only we could have an actual alternative.

All right, here's the list of House Representatives and US Senators that voted against the bailout bill. Please use this list to vote your conscience or use it to not vote for anyone in Congress:

Aderholt Akin Altmire Bachmann Barrow Bartlett (MD) Barton (TX) Becerra Bilbray Bilirakis Bishop (UT) Blackburn Blumenauer Boyda (KS) Broun (GA) Brown-Waite, Ginny Burgess Burton (IN) Butterfield Buyer Capito Carney Carter Castor Cazayoux Chabot Chandler Childers Clay Conyers Costello Courtney Culberson Davis (KY) Davis, David Davis, Lincoln Deal (GA) DeFazio Delahunt Diaz-Balart, L. Diaz-Balart, M. Doggett Doolittle Drake Duncan English (PA) Feeney Filner Flake Forbes Fortenberry Foxx Franks (AZ) Gallegly Garrett (NJ) Gillibrand Gingrey

Gohmert Goode Goodlatte Graves Green, Gene Grijalva Hall (TX) Hastings (WA) Hayes Heller Hensarling Herseth Sandlin Hill Hinchey Hodes Holden Hulshof Hunter Inslee Issa Jefferson Johnson (GA) Johnson (IL) Johnson, Sam Jones (NC) Jordan Kagen Kaptur Keller King (IA) Kingston Kucinich Lamborn Lampson Latham LaTourette Latta Linder Lipinski LoBiondo Lucas Lynch Mack Manzullo Marchant Matheson McCarthy (CA) McCaul (TX) McCotter McDermott McHenry McIntyre McMorris Rodgers Mica Michaud Miller (FL) Miller (MI)

Moran (KS) Murphy, Tim Musgrave Napolitano Neugebauer Nunes Paul Payne Pearce Pence Peterson (MN) Petri Pitts Platts Poe Price (GA) Rehberg Reichert Renzi Rodriguez Rogers (MI) Rohrabacher Roskam Rothman Roybal-Allard Royce Salazar Sali Sánchez, Linda T. Sanchez, Loretta Scalise Scott (VA) Sensenbrenner Serrano Shea-Porter Sherman Shimkus Shuler Smith (NE) Smith (NJ) Stark Stearns Stupak Taylor Thompson (MS) Tiahrt Turner Udall (CO) Udall (NM) Visclosky Walberg Walz (MN) Westmoreland Whitfield (KY) Wittman (VA) Young (AK) Young (FL)

Here are the senators who voted no on Wednesday: Allard (R) Barasso (R) Brownback (R) Bunning (R) Cantwell (D) Cochran (R) Crapo (R) DeMint (R) Dole (R) Dorgan (D) Enzi (R) Feingold (D) Inhofe (R) Johnson (D) Landrieu (D) Nelson (FL) (D) Roberts (R) Sanders (I) Sessions (R) Shelby (R) Stabenow (D) Tester (D) Vitter (R) Wicker (R) Wyden (D)

Of course, George Bush could veto this bill.

Yeah, like he's done anything right since January 20, 2000.

UPDATE 16:30: Bush already signed the bill. This ALL despite the Federal Reserve already injecting $630 billion into our economy last Wednesday.

Contact your Representative in Washington

It'll take five seconds to call and let them know what you're thinking.

Go to House.gov in the upper left corner of the site, there is a field where you can enter your zip. Click the "Go" button and you'll see the name of your House Rep. Click on that person's name and you'll be sent to their website. Then find the contact link, click on it, get their number in Washington DC (odds are they're in DC to vote on the bailout bill) and then CALL IT.

Emails are fine, faxes are fine, too, but calling will make the difference. They need to here a voice and be inconvenienced by calls to really feel the pressure. Please do it, it takes literally seconds to say "Hi, I'd like to register my lack of support for the bailout bill." When I called, they then asked me my name and zip and once I told them, they thanked me. That was it. PLEASE DO IT NOW. No bailout bill is a good bailout bill. We're helping the rich when they won't help the poor (us!). Watch the video if you need convincing.

Contact your Representative in Washington

Senate Passes the Bailout Bill After All

You knew they were going to do it.

If you read this blog you know I knew they were going to do it.

Forget that the Federal Reserve already sunk $630 billion into our economy. I was shocked when I saw a Twitter post from thePuck Tuesday that the Fed had decided to move on its own. Earlier in the day, I saw another socnetizen in my circle microblog something like "what difference does $70 billion make? Apparently a lot."

He was referring to the $70 billion less the Fed was borrowing from other central banks.

While I was shocked, it wasn't shocked because the Fed went ahead and did it. I was shocked because the Federal Reserve is usually pretty low key. They speak in riddles and hide in the shadows. Don't believe me? Check out FederalReserveEducation.org and see how long it takes for your ADD to kick in. These guys do not want us to know what they're up to, or else we already would.

So, the idea that these guys would make a move like this and draw all sorts of attention to them, is very surprising. Why should they not want to draw attention to themselves?

Simple, they're the real power in our country. But I'm digressing. This post is about the USG passing a bailout bill anyway.

This is what baffles me. How can the media not cover this in any serious way? Did a single person on TV or in print ask the question of anyone in congress: "WHY do we need the bailout now??"

Yet, yesterday, a bailout bill passed the Senate.

The good news is that now the House needs to vote on it. Hopefully, they will say no.

The idea of bailing the water out of the sinking ship that is the American economy pisses me off.

A bailout is stealing money from our future pockets and putting it in the hands of the rich. Hell, it's stealing from our pockets now, too. All that money ($630 + $700 billion= $1.33 TRILLION) will drive the value of the dollar straight down. Of course, if you're disgustingly rich, you'll hardly feel it.

That's what this ultimately comes down to. The fucking rich and their rich pals in government.

This is no democracy. Its a corporatocracy. It's the feudal system all over again.

We all work for corporations/feuds that kiss the ass of the king/George. The king/George keeps the military working for the good of the corporations/feuds keep the peasants (us) in line.

Man, it sounds so extreme, but with the shrinking middle class and the ever-present corporation, I feel like the metaphor fits.

UPDATE: My original post-title was "USG Passes Bailout After All" I realized that was inaccurate so I changed it.

Socialism and the Federal Reserve

In 1913, Woodrow Wilson (see portrait above) signed into law the Federal Reserve Act. The new law allowed for the creation of a central banking system. What does this have to do with socialism and why would I be writing about this in the middle of the current economic strife here in the US?

Not surprisingly, there has been a lot of writing (and blogging) about our economy. I've written about it a lot over the years, but most recently I blogged (here: http://thepete.com/…he-bailout ) about why I'm against the bailout, mainly because it breaks our own rules. After that, I blogged about why it's bad to break our own rules (here: http://thepete.com/…onable-man ), basically explaining that breaking our own rules makes us look like untrustworthy liars and it makes our laws look like jokes.

But in that last post I just linked to, I commented about socialism. People are accusing the USG of practicing the "S" word in bailing out Wall Street. I said that those accusers are both right and wrong. Effectively, they're right, but literally, not exactly.

Here's where the Federal Reserve comes into it.

The $700 billion the USG wants to give Wall Street will need to be borrowed before it can be gotten from We The People in the form of taxes. All banks and the USG borrow money directly from the central bank--the Fed. Now, the Fed is under no effective control of the USG. We don't vote for a single person who works for the Federal Reserve and the Fed's chairman is appointed the president for 14 years. (!)

In any practical sense the Fed is not a government agency. As a result, we can consider them a private organization. I've heard some say they are a legal corporation, but I haven't seen proof of this.

So, since the Fed is private and the USG is borrowing money from them, effectively, the Fed is bailing out Wall Street, not the USG. So, really, it's corporatism, not socialism.

But it sure feels like it's socialism, doesn't it?

Now, that's the nutshell. Not surprisingly, I have a lot more on the Federal Reserve loaning us money to bail out Wall Street and how the Fed is private. If you're interested, keep reading.

Effectively, though, I've made my point.

Isn't that funny? I keep having to use the word "effectively" because all this money stuff is so stupid and vague there's nothing tangible about it--just like our currency. If only we had a gold reserve... :(

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The Federal Reserve Waits for No Government

So, remember how there was all that funny hubbub regarding the US Congress trying to spend all this time working on a bailout bill for Wall Street? Remember how Bush, this morning, gave another bit of speechification (here: http://is.gd/3lH2 ) on how we really, really, really need to pass a bill to help Wall Street? Perhaps you remember that other time he talked about the economy where he said that if we didn't do something the entire economy was in danger?

As Jon Stewart might say:

Funny story!

Turns out the Federal Reserve decided to go on and bail out Wall Street all on it's own!

Yesterday, the Fed took it upon itself to borrow more money from other central banks around the world. Europe, the UK and Japan all took part in the fun, allowing the Fed to inject $630 billion into our economy, via loans to banks.

Now, the above screencap comes from Bloomberg.com (here: http://www.bloomberg.com/apps/news ) but neither CNN.com nor Money.CNN.com had any headlines about this. I did a quick search through Google News and it looks like the hardcore money sites are covering this, but I didn't see any of the mainstream news sites with headlines about it.

So, this means, once again, America doesn't know what the heck is going on with it's own money.

Not only that, but the Bloomberg article I cite above doesn't mention a damn thing about how $630 billion will impact inflation.

In fact, I haven't stumbled across anything mainstream newsish that even talks about inflation in the context of today's economy or the bailout or now, the Fed's bailout.

So, what the heck happens now?

Damned if I know.

Can't imagine why the tax-payers need to pay for anything now. But watch the media ignore the Fed deal and the Congress push through a bill just the same.

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IM Conversation = Sign of the (Economic) Times

Earlier this evening a buddy of mine started an IM conversation with me. Here's approximately how it began:

Him: Shit.
Him: You there?
Me: Yeah, man, what's up?
Him: My bank got taken over.
Me: HA-HA!
Me: Mine, too.
Him: lol
Me: Which one?
Him: Wachovia. You?
Me:WaMu
Him: ahhh, sucks.
Me: S'ok, I'm broke.
Him: me too. lol
Me: haha

I guess this is where the meek inherit the Earth?

Sign of the (economic) times...

Why I'm Against the Bailout

Last week, my mom sent me an email that started with the sentence: "Would we be better or worse off if there was no bailout of these banks?"

I was going to just answer her question right there, but then I realized my answer would make for a great blog post. So, here you go, Mom! Sorry it took so long, but I got a little distracted with the news lately. :)

By the screencap above, you might think we'd be better off if the bailout went through. The Dow dropped more than 500 points by closing today in reaction to the bailout bill not passing the House.

If the bailout did go through, we'd see banking begin to return to normal--loans could be given again, loads of people would still have jobs, and both the USG and Wall Street would save tremendous face (after all, it was the two bodies in concert who is responsible for this mess).

Of course, those are just the good things that would happen. There would be bad things, too, that our leaders aren't really going into.

Most importantly, in my mind, if the government really decides to spend $700 billion (about the price we've paid in Iraq so far), the negative impact could be pretty far reaching--especially on one part of our economy that no one likes to *really* talk about.

We have a problem in our culture--no one really likes to talk about the "i" word.

No, not impeachment.

Well, they don't like to talk about that either, but Americans seem even more loathe to use the other "i" word, inflation.

I'm kind of a broken record when it comes to inflation. I explained my view of it in a recent blog post here: http://thepete.com/…ed-economy

Suffice it to say, when $700 billion gets injected into our economy, it will be a lot of new money floating around. When you increase the supply of money, the existing money drops in value (as dictated by the law of "Supply and Demand"). When the bailout goes through, it'll send the dollar's value plummeting.

That's what can really make for a weak economy, BTW. A weak dollar.

So, in the end, sure, a bailout is going to keep our lives more or less like they are now. We'll be able to borrow again and bankers will keep their jobs and life will be grand until the real meaning of "trickle-down economics" is learned--when the lost-value of the dollar trickles down from the rich (who will use the new money first) to the poor (who will only see the benefits of that new money once the value of their own money drops--it's a little abstract, my apologies).

Another thing any bailout will fail to do is guarantee this won't happen again. We are all familiar with the Great Depression and the stock market crash that preceded it. Was there a bailout then? I don't know.

Regardless, we, as a country, survived the Great Depression and I'm sure America will survive this, whether we have the bailout or not.

So, why does it matter? It matters because the bailout lets people get away with breaking the rules. Hell, the bailout itself is breaking the rules of the free market.

I'm no free-marketeer, but the way I look at it, if you're going to bother to make rules, you should bother to follow them. If you don't want to bother to follow them, then change them and follow the new ones.

Breaking your own rules just makes you look unprofessional.

I'll post more about rule breaking tomorrow...

...assuming I don't get distracted by the news again. :\

Tomorrow's post on the rules will also involve socialism vs. capitalism, conservatives vs. liberals, and probably even McCain vs. Obama, if I can get really creative.

So:

Bailout = good in the short term (status quo, status quoed)

Bailout = bad in the long term (inflates inflation, weakens our overall economy and our individual power to buy stuff, doesn't prevent another economic explosion, also lets bad guys get away with it)

Well, Mom? I hope that answers your question.

Either way, we're in for a world of hurt. Luckily, most of us are broke, so we won't feel it as much as the rich folks panicking right now (though we may have trouble buying things that are about to get more expensive).

For all the folks on Utterli who got notified about this post, I hope you don't mind! I hardly ever notify everyone I've friended about posts, so hopefully you'll forgive me if you're not interested in this post.

Also, I'd love to hear what anyone reading this thinks. I really want to learn more about our money and how it works. I'm really nervous that it's really as simple and truly as messed up as it looks.

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Kucinich Reminds Us of Our Debt-Based Economy

I'm no economist but I do find physics interesting. Laws of physics are immutable, generally speaking. One of those laws is that neither energy nor matter can be destroyed or created--just transferred.

A truly stable economy should work the same way, in my estimation. The economic law of "supply and demand" is pretty similar to that physical law I mentioned above, when you think about it.

The economic law of "supply and demand" says that prices are determined based on those to things, supply and demand. High supply means low prices (to make sure you sell as many as you can) and low supply means high prices (to make sure you make as much money as you can). Demand works similarly but is inverted, with high demand making prices high and low demand making them low. In short, if you create more supply, the price goes down.

When it comes to money, the physical laws should apply here, too. After all, paper money used to represent gold. When new deposits of gold were found, the value of all gold would drop. However, back in 1913, the Federal Reserve Act was passed and our current system of banking was created. Any kind of precious metals were cast aside and money stopped being based on the value of gold and started being based on the "good credit of the United States of America."

In other words, the US dollar came to represent the productivity of the American economy.

Now, you can't just create money any more than you can just create matter or energy. The latter can't be done because the universe won't let us. However, because the concepts of money and economy are entirely man-made, the universe has no such regulations over our monetary system.

As a result, new money can be, and often is, injected into our economy. This money is either effectively created from nothing (lended/borrowed) or is literally newly created money (when banks or the USG borrow from the Fed). Either way, the result is inflation and, finally, a weak dollar.

And when the US dollar starts getting compared to the Canadian dollar (as it has been for about a year now), you know things are bad.

This morning on Democracy Now, Dennis Kucinich reminded us that our entire financial system is based on debt. The below is an excerpt that comes from a transcript (here: http://www.democracynow.org/…s_congress ) of an interview Dem Representative Dennis Kucinich gave to Amy Goodman this morning:

AMY GOODMAN: The issue of corporate compensation? According to the Institute for Policy Studies, chief executives of large US companies made an average of $10.5 million last year, 344 times the pay of the average worker.

REP. DENNIS KUCINICH: Well, this is really a fundamental issue in our society. Again, it’s all about how the wealth accelerates to the top and how work is not respected or rewarded for its own intrinsic value. We’ve really moved, you know. We’ve made a transition in our economy from industrial capitalism to finance capitalism. And with this debt-based economy that we have, where we keep—this public and private debt keeps exploding, as it has under—as it did under Alan Greenspan, quadrupling in a period of twenty years, we see ourselves in a position where the debt just keeps building and building and building, and we’re calling that economic progress. It is not.

We need to challenge again the underlying assumptions about a debt-based economy, about whether or not we should revisit the 1913 Federal Reserve Act, which has an unfortunately privatized monetary system and created a system which includes banks having the ability to create money almost out of thin air with a fractional reserve. We have to look at the implications of that, maybe put the Federal Reserve under the Treasury and have the Treasury really be responsive to the interests of the American people and keeping the economy going.

Yep, the Federal Reserve is a private entity. We don't vote for anyone who runs it, though we do vote for the guy who appoints the guy who runs it (aka, the president appoints the Fed Chairman). But considering how much control the Fed has over our lives and our money, it seems like we should have a bit more control over them. I really wish Kucinich had a real chance of ever winning the White House. I think it's his honesty that prohibits this.

Wow, just read that the bill didn't pass in the House. Kucinich got his way and Wall Street is totally panicking. Looks like that chant I heard down on Wall Street last Thursday was right: "You break it! You bought it!"

Dig that CRAZY irony!!

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Obama Solves Economic Crisis by Snapping Fingers!

Did that headline get your attention? Good :)

I just snagged this transcript of Obama's remarks to "a crowd in Green Bay, Wisconsin" today from BreakingToday.com, the site behind http://twitter.com/BreakingNewsOn

These remarks were "described as a 'major policy speech'" according to BreakingToday.com.

As always, my quips are NOT italicized.

The era of greed and irresponsibility on Wall Street and in Washington has led us to a perilous moment.

DO YA THINK?

They said they wanted to let the market run free but instead they let it run wild, and in doing so, they tramped our core values of fairness, balance, and responsibility to one another.

"tramped"?

So much for Obama being "well spoken" ;)

As a result, we are facing a financial crisis as profound as any we have faced since the Great Depression. As a result, your jobs, your savings, and your economic security are now at risk.

I had savings?

WAIT! I had economic security?? I HAD A JOB???

Holy CRAP! Why didn't anyone tell me??

This week, we must work quickly, in a bipartisan fashion, to resolve this crisis and avert an even broader economic catastrophe.

"Which is why I'm here in Wisconsin campaigning, rather than in Washington helping my colleagues sort this shit out."

The Great "Evil" (Socialism) Hits Wall Street

It's the end of an era on Wall Street, according to that screencap from CNN.com, it's the end of the era of the Wall Street investment banks. According to the article that the headline links to (here: http://money.cnn.com/…/index.htm ) the government is taking over the last investment banks, Goldman Sachs and Morgan Stanley. This is a move that: "allows Goldman and Morgan to scoop up retail banks and to streamline their borrowing from the Federal Reserve. The shift also is aimed at removing them as targets of nervous investors and customers, who brought down their former rivals Bear Stearns, Lehman Brothers and Merrill Lynch this year."

So, basically, this was done to strengthen these huge banks and to stop them from crumbling under the pressure of the other banks crumbling. If these banks did crumble we'd have a bigger economic meltdown.

At least, that's how I understand it.

HOWEVER, the cry of "socialism!" is a common thing in our country. Obama's been called a socialist, anyone who wants to see free health care for everyone has been called a socialist and now I'm calling the USG socialist since so many seem to think the government doling out money is socialism.

This puts the USG in the same category as the Soviet Union and the Nazis (apparently). They were all considered socialists--and thanks to that, we know that socialism IS EVIL.

OK, the real irony here is that socialism is NOT evil. It's the people who practice it that can either be corrupt or not. When you ignore hundreds of thousands of homeless and jobless people in our cities, that's OK. But when you ignore the plight of our crumbling banking system that's just wrong.

Amtrak? The airlines? Banks? They're all corporations and all have been bailed out by the government--by our tax dollars.

The people who cry out against socialism think it's fine when corporations need help, but not individuals.

When individuals need financial help it's because they didn't work hard enough or they're lazy or druggies or hippies.

When Wall Street needs help, no one really talks about why they need help, they just get that help.

Sure, the news and pundits explain that "these banks are too big, they can't be allowed to fail" but what does that really mean?

It means that the individual is not important. Only the system matters.

That doesn't just sound like socialism, that sounds like <em>communism</em>.

What it all sounds like to me is hypocrisy.
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Congress Must Demand Bush and Cheney Resign

So, I'm not entirely sure how my personal email address got on the "Democrats.com" email list, but some how it got on it. (My email was on the Republicans email list, too at one point, but I had the good sense to remove it.) Earlier tonight I got an email from them that had an amusing subject--I've made it the title of this post.

My first reaction was: "That's rich! Where were the Democrats five years ago when Bush illegally invaded Iraq?"

I still think it's a valid concern, but I actually read their email and something in it really got me going. Have a look:

Congress Must Demand Bush and Cheney Resign

George Bush wants taxpayers to pay $700 billion to bail out Wall Street for its reckless investments in mortgage-backed securities. That's on top of $800 billion for other recent bailouts, including A.I.G., Fannie Mae, Freddie Mac, and Bear Stearns.

The current financial disaster is the direct result of the Bush-Cheney Administration's 8-year policy of deregulation, corruption, and greed.

The Bush-Cheney Administration cannot be trusted to solve the massive problems they created. Before Congress gives the Bush Administration one dime of taxpayer money for financial bailouts, Congress must demand the immediate resignation of George Bush, Dick Cheney, and Henry Paulson and the appointment of Speaker Nancy Pelosi as President until our next President is sworn in on January 20, 2009.

Email your Senators and Representative and spread the word:
http://www.democrats.com/resign

Again, my instinct, initially, was to blow this email off, just like I did Robert Wexler's attempts to impeach Bush while simultaneously asking for campaign donations. However, I'll give you one guess at what it was in this email that made my ears prick up.

No, it wasn't the basic message that Bush and Cheney should be gone from the White House. I've been saying that for years and there are WAY more reasons for them to leave than just Bush and Cheney's move to embrace socialism for corporations. No, what made my right eyebrow rise was that last bit. They want Bush, Cheney and Paulson out and:

...the appointment of Speaker Nancy Pelosi as President until our next President is sworn in on January 20, 2009.

Now, I'm no fan of Pelosi. She lost my faith when she said that impeachment was off of the table a while back. However, getting a Democrat woman into the White House before even the election would be a devastating blow to the McCain campaign. There would be no way in hell he could win after enough of raised our voices to get his man out of the Oval Office.

I get scared looking at the polls and wondering why Obama isn't doing better in them. How can they be polling so close to neck and neck when McCain is campaigning on a platform he ripped off from George Bush?

I don't believe Americans are that stupid. This is why I'm hoping you, my faithful readers will please click on that link above (or this one here: http://www.democrats.com/resign ) and voice your support for a demand of resignations from Bush, Cheney and Paulson.

If enough of us speak up now they won't have a choice but to actually react. We, The People of the United States of America can make our opinion known by telling Congress ourselves that we want this administration GONE from the White House.

Please, please, please, please, do this!

I don't ask for much--I hardly ever ask my readers to sign on any dotted line, but if we can just get together on this one point--that we want the Bush Administration gone IMMEDIATELY--we don't have to worry about McCain winning in November.

Please go here:

http://www.democrats.com/resign

...and fill out the form.

Here are some other places around the 'net you can read about this email:

http://digg.com/political_opinion/Congress_Must_Demand_Bush_and_Cheney_Resign

http://suzieqq.wordpress.com/2008/09/20/congress-must-demand-bush-and-cheney-resign/

http://boards.msn.com/MSNBCboards/thread.aspx?threadid=788298

http://mccainsucks.wordpress.com/2008/09/20/congress-must-demand-bush-and-cheney-resign/

http://www.nj.com/forums/politics/index.ssf?artid=1801971

Got a blog? Please blog about this. Got a Twitter account or an account at another micro or miniblogging site (like Jaiku or Tumblr)? Pleeease post about this there.

Feel free to post links to your blog posts in the comments.

By doing this we can avoid giving our flawed election system the chance to screw up another presidential election with a tight race! We need a landslide to have an undeniable winner--unlike in 2004 and in 2000 when Bush won by an iffy hair's width.

By making your voice heard you can beat the electronic systems that are owned by Republicans and don't provide reliable methods for recounts.

I've already filled out that form. I hope you will, too.

Please and thank you! {seesmic_video:{"url_thumbnail":{"value":"http://t.seesmic.com/thumbnail/J6WP06YwpM_th1.jpg"}"title":{"value":"Congress Must Demand Bush and Cheney Resign "}"videoUri":{"value":"http://www.seesmic.com/video/1A8wekkf25"}}}

Bush Wants $700 Billion to Save US Economy

Happy Saturday! Bush and TreasSec Paulson want Congess to agree to spend nearly three-quarters of a TRILLION dollars to save our economy.

Where the hell do we have that kind of money laying around? You can't even say "Oh, we'll be paying for this for decades in taxes!"

You can't borrow money from the future. We WILL be paying it back for that long but where is that money coming from and what were we going to use it for?

I'm pretty sure we will be just conjuring the cash from nothing but I'd like to hear that from someone official for once.

Do you have any idea how injecting 700 billion new dollars will change the value of the US dollar? The value will drop even lower.

What worries me even more is that Bush made the comment today that "The risk of doing nothing far outweighs the risk of the package."

Doing nothing would be a much greater risk than spending $700 billion.

He just admitted that our economy is totally screwed.

And I mean TOTALLY.

What's worse than needing to spend nearly one-tenth the national debt to "save" our economy?

I'm betting that the media and even most people won't get the severity of this.

The US economy is FUBAR and the only thing that will save it is 700 BILLION.

One helluva thing to wake to.
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