Michael Burry is the star of Michael Lewis’ fantastic book The Big Short . He has TBP level skepticism times ten. Listen to him. This is a must watch video.
“when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable” – Michael Burry
Do you think General Dwight D. Eisenhower was telling these young men that they weren’t special? Was he telling them they’d never amount to anything? Was he telling them they were lazy and self involved? How do you motivate young people towards achieving great things? Do you berate them and tell them they will never achieve greatness?
Neil Howe echoes my sentiments exactly about the older generations that have ruined this country, but have the balls to blame young people who haven’t even begun their adult lives. We’ve had massive firestorm threads on this site about this exact issue. The Millenial generation has 87 million members and 60 million haven’t reached the age of 21 yet. And somehow the old cranks that have royally fucked up the futures of these Millenials with their greed, materialism, and delusion have the balls to blame the Millenials.
Will the older generations in this country ever man up and accept the consequences of their actions, or will they blame others right up to the time we thankfully put them six feet under? I have no faith that Boomers will ever step up and do what is required to leave a future for these young people. They have earned their Shallowest Generation title and will always wear it proudly.
Let the games begin.
“How not special you are.” That seems to be a popular message older people want to deliver to the young these days. In the last couple of years, I’ve started to notice this new tough-love refrain pop up in commencement addresses. This year, it’s really ramping up. Apparently, when middle-aged folk tire of apologizing to the young about how badly they have messed things up—they easily move on to remind the young how unworthy they are themselves.
See in particular the pugnacious and dismissive (if not contemptuous) address penned by Bret Stephens in the Wall Street Journal a few weeks ago, which got lots of attention. He starts out with this happy note: “Dear Class of 2012: Allow me to be the first one not to congratulate you.” And then he goes on:
Here you are, probably the least knowledgeable graduating class in history…
To read through your CVs, dear graduates, is to be assaulted by endless Advertisements for Myself…
Your prospective employers can smell BS from miles away. And most of you don’t even know how badly you stink.
And so on. OK, so Stephens didn’t actually deliver this address to an actual school. But I’m sure someone will try.
Last week, David McCullough, Jr., a high school teacher at Wellesley High School (and son of the Pulitzer Prize-winning historian) gave a lighter, wittier version of a similar message: Shape up, you’re very ordinary, and your parents’ incessant praise won’t help you now. “You’re not special” was his repeated refrain. The video has gone viral. Clearly, these “speeches” have struck a chord among some of today’s Boomers and Xers, those who find young people in schools, colleges, and workplaces just too confident, too full of themselves, and too “special” for their taste. Apparently, it’s time for older people to take youth down a few notches—for their own good.
So what exactly is going on?
At some level, I guess I’m baffled by the sudden popularity of this trope. Here we are at a time of historically high youth unemployment during the longest and most severe economic bust since the Great Depression. Why would anyone think Millennials need to be reminded by graybeards that history won’t give them a free pass? Just about everyone knows, moreover, that in the decades to come Millennials are eventually going to have save more and bear higher taxes (in just about any fiscal scenario) to pay for their parents’ unfunded retirement liabilities. And, if those programs go bust, Millennials are conveniently situating themselves in or near their parents’ households so they can help out in person. Shouldn’t these older people want to be nicer to these kids in anticipation of what’s ahead? Shouldn’t they be at least hoping that this rising generation is indeed special enough to handle the challenges being handed to them?
It might be different, I suppose, if these young Millennials were aggressively attacking their parents for their alleged misdeeds—like young Boomers famously and loudly assailed their own parents for raping the earth, waging colonial wars, and subjugating women and minorities. If that were the case, today’s older generations could plead self-defense. Yet Millennials rarely make such attacks, and certainly don’t make them at public events. I have attended a great many commencements, convocations, and ceremonies involving high-school and college students in recent years, and in all the them Millennials thank and congratulate their parents and teachers in the warmest terms. Never do I recall a young person saying something like, “Mom and dad, I really don’t think you are very special.”
So it’s a weird and one-sided conflict. If Millennials wanted to attack, of course, it would be easy enough to find targets to strike–starting perhaps with their elders’ greed, short-sightedness, and blind partisanship, which have recently brought the global economy to its knees and rendered the nation’s capital ungovernable. Yet Millennials do not strike. They bear perhaps the heaviest burden from their elders’ malfeasance. But they do not attack. Perhaps because they are just too nice to get nasty. Or because they would rather not get into a conversation with judgmental Old Aquarians who simply won’t stop arguing until they win.
Maybe, some say, this whole anti-special, tough-love line is justifiable as a natural and welcome corrective to the excesses of the “self-esteem” movement in recent years. According to psychologist Jean Twenge, mindless cant about every person’s preciousness is turning the young into raging narcissists. Maybe staring young people in the eye and saying, earnestly, “You are not special” will humble them, teach them a lesson, and incentivize them to try harder.
Personally, I think this is nonsense. Sure, I understand that parents or teachers must often tell young people that they aren’t meeting a standard—and instruct them in what they must do to improve. That’s fine. But I don’t see any reason, ever, to tell people publicly and officially—in groups or as individuals—that they are existentially not special. And certainly not if you are trying to motivate them to become better people.
Think about it: Why do all of the major religions (especially the monotheisms, which account for two-thirds of the world’s believers) teach that every soul, even that of the lowest sinner, is special in the eyes of God? Is that a huge mistake? Would these religions do a lot better by teaching that most of us are just an indistinguishable putrefying mess in the eyes of God? Or think about great moments in history: Caesar on the eve of Pharsalus, Henry V before Agincourt, Eisenhower before D-Day. Can we imagine King Hal rousing his motley crew by telling them that tomorrow, on Saint Crispin’s day, you will all be feeling very ordinary—because that’s really all that you are? Or think about pedagogy. How often have you ever heard a person say about his or her former teacher, “Yeah, he was amazing, turned my life around. He just made me feel so unspecial.”
So how can we explain what’s going on? I think we need to go deeper, to descend to America’s collective subconscious—and to recognize that generations sometimes give free reign to their worst instincts.
As America enters a Fourth Turning, characterized by a new mood of restraint and responsibility, older generations feel a need to exorcise their own attitudes of selfishness and habits of indulgence. How do they do this? Sometimes, atavistically, they do this by projecting these attitudes and habits on the young and blaming the young for them. In the western tradition, this rhetorical response is encoded in the Jeremiad, so-called because Jeremiah (in the 7th century BCE) blamed Israel’s woes on the decadence of the chosen people in general, but especially on the corruption of the “rising generation.” Ever since, throughout history, the Jeremiad periodically regains popularity as the need for its message arises. In New England during the 1660s, Increase Mather responded to recurring famines by blaming the colonists, and blaming especially “the sad face of the rising generation,” whose “heathenish” and “hard-hearted” ways boded ill for their collective future.
We may indeed be hard-wired to “blame the victim” just to assure ourselves that some sort of moral order still prevails. I know some parents who will scream at their kids for an accident they know wasn’t their fault. No, it’s not fair, but then again the parents can (rightfully) point out that life is not always fair and their kids had better get used to it. More optimistically, we call these “teaching moments.”
So I get why Boomers sometimes tell Millennials how unspecial they are. It so fits their life story. Boomers have spent a lifetime judging other generations. Back when they graduated high school and college, their parents called them “special” and hoped for a nice conventional ceremony. But young Boomers so often found a way to darken the mood and spoil the event. Ditto, today—only now it’s the kids who just want to have a nice conventional ceremony. And now it’s the parents who insist on delivering stern lectures about the selfish, complacent, and meretricious lives of a generation other than their own. Oh, sweetie, was this supposed to be a happy moment? Sorry!
I also get why Gen-Xers often echo the same line. While growing up, they absorbed so many negative images of youth that many figure horrible dis-incentives are the only way kids can be motivated—from “survivor” games to “this is your brain on drugs” ads. The very phrase “tough love” was invented in the ‘70s and ‘80s to describe the standard operating procedure for dealing with Xer kids. My Los Angeles friend Marc Waddell has reminded me that the current anti-special message echoes the famous line spoken by Brad Pitt, in that Xer classic Fight Club: “You are not a beautiful and unique snowflake. You are the same decaying organic matter as everyone else, and we are all part of the same compost pile.” Throughout history, this has been the retort of skeptics, cynics, and materialists to all of the saints, seers, and visionaries. Generationally, it has been the trademark response of the Nomad archetype to the Prophet archetype which always just precedes it.
Some Xers may also feel jealous: No one gave a damn about me when I entered college or got my first job, they recall. So why am I required to be so solicitous toward these Millennials—with all their onboardings, parent meetings, mentorships, feedbacks, career pathway maps, and 360 reviews? Sooner or later, Xers learn why. Because Millennials came along at a different time. That makes all the difference. And as Xers raise their own kids, they understand better what motivates that difference.
The very word “special” has itself changed its meaning from one generation to the next. During the Boomer and Gen-X ascendancy, the word “special” was increasingly used to single out individual excellence, as in the “special” academic or sports ace who in school performs better than everyone else. Every sarcastic speech about precious youthful specialness thus contains at least one anecdote about how absurd it is that everyone on the team can receive a medal. Echoes Wellesley High School’s McCullough, echoing everyone else: “If everyone is special, then no one is.”
But is that always true? Imagine society veering back to a more collective understanding of “special”—something a bit more like how King Hal addressed his “band of brothers.” Or imagine a generation of young people who, like Millennials, are more likely to reward everyone on the team simply for participating, who go back to pull forward anyone who needs help, and who don’t mind chopping up the valedictorian or homecoming award (recall the climactic scene in Mean Girls) among a large number of people? Yes, this is a different understanding of specialness, one that has hibernated in recent decades, but surely it too has some legitimacy. One hates to think that the few can be special only to the extent that the many are found deficient. Or, to put it more bluntly, that heaven is rendered meaningful and desirable only by the sufferings of those in hell.
I have found that Gen-Xers in particular find it hard to imagine how feeling special can mean anything other than a sense of individual entitlement. As managers and supervisors, therefore, their natural impulse upon encountering special-feeling Millennials is to confront them with a tough-love, drill-sergeant message: In my eyes, you maggots are not special at all! They admit to me that this approach, when they try it, often backfires—and at best does little good. My advice? Don’t fight the energy. Channel it. Say something like this: In my eyes, you young people really do seem special—and guess what, we expect special things from you! Most of these Xers tell me this works better, and many admit that they had never before thought much about how to leverage positive self-esteem in a collective setting.
In Part 1 of this three part series I addressed where and how the net worth of the middle class was stolen. In Part 2, I will tackle who stole your net worth and in Part 3, why they stole your net worth. Now let’s zero in on the culprits of this crime.
“Thus far, both political parties have been remarkably clever and effective in concealing this new reality. In fact, the two parties have formed an innovative kind of cartel—an arrangement I have termed America’s political duopoly. Both parties lie about the fact that they have each sold out to the financial sector and the wealthy. So far both have largely gotten away with the lie, helped in part by the enormous amount of money now spent on deceptive, manipulative political advertising.” – Charles Ferguson – Predator Nation
When you dig into the charts and data supplied by the Federal Reserve generated report, the data which goes back to 2001 tells a story not addressed by the deceptive, manipulative, political propaganda that passes for investigative reporting by the captured mainstream media. The chart below compares the median versus mean income growth from the last three Fed consumer surveys. Overall, it reveals a lost decade of negative income growth for the average middle class family. In the early part of the decade the average middle class family made some progress as jobs were relatively plentiful and the internet crash mostly impacted the rich, who own most of the stocks in the country. This is why the median income rose while the average income fell. The wealthy have a large impact on the average because they own the vast majority of assets in this country. The stock market debacle was unacceptable to the oligarchs and their money printing puppet Greenspan.
Both the liberal and conservative wings of the ruling oligarchy were in complete agreement. A new bubble needed to be blown in order to refill the coffers of the ruling class. Paul Krugman spoke for the liberal wing:
“To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”
Greenspan and his handpicked successor Bernanke represented the conservative wing by reducing interest rates to ridiculously low levels, failing to carry out their regulatory obligations, encouraging recklessness, and purposefully failing to acknowledge and deflate the greatest housing bubble in world history:
“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.” – Alan Greenspan – February 2004
“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.” – Ben Bernanke – October 2005
“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.” – Ben Bernanke – November 2005
The master plan worked like a charm from 2004 through 2007 as you can see by the tremendous surge in average income. The stock market rocketed by 75% between 2003 and 2007 and national home prices shot up by 50%. Wall Street creatively invented no doc, negative amortization, interest only, subprime mortgages and generated a frenzy of demand from anyone that could scratch an X on a loan document, just as Greenspan had demanded. Being “sophisticated” financial institutions, they were able to assemble thousands of shit loans that were certain to default into one big derivative package of shit and their captured lackeys at the “sophisticated” rating agencies stamped a AAA rating on the smelly pile of feces. Always looking out for the best interests of their clients (aka muppets), the upstanding Wall Street firms sold the derivative piles of shit to them as can’t miss investments. Wall Street profits went off the charts. Billions in bonuses flowed to the rich and powerful Wall Street titans. Mega-corporations generated record profits as consumers utilized the Fed induced tsunami of easy debt to buy BMWs, 72 inch HDTVs, home theaters, stainless steel appliances, granite counter-tops, Caribbean cruises, Jimmy Choo shoes, and Rolex watches in a mad frenzy of consumer delusion.
What you might also notice in the chart above is that median household income somehow declined during this decadent orgy of corporate fascist pleasure. How could this be? Table 2 from the Fed report makes it clear. The vast majority of households in this country generate 75% to 81% of their income from wages. Virtually none of the income generated in 85 million households (the bottom 75%) comes from interest, dividends or capital gains. You need money to make money. The top 10% only generated 46% of their income from wages. The report does not provide details on the top 1%, but wages most certainly account for less than 20% of their income. Interest, dividends and capital gains represented 22.2% of the income for the top 10%, while it represented less than 1% of income for the bottom 75%. This data is the smoking gun that proves that Federal Reserve policy and control fraud on a grand scale by the titans of Wall Street was designed and executed to benefit only the wealthy elite billionaire class and their co-conspirators. All the income gains during this time accrued to the psychopathic amoral financial oligarchy. The average family saw their real wages decline and anyone lured into the housing market during this time frame by the “sophisticated” financial experts at Citicorp, Bank of America, Wells Fargo, Merrill Lynch, Countrywide, Washington Mutual, Wachovia, Bear Stearns, Goldman Sachs, Lehman Brothers, and the other members of the Too Big To Fail criminal syndicate was set up for epic loses.
As expected, the psychopathic banker class could not be satisfied with the results of their looting. Their gluttonous voracious greed culminated in a historic collapse of the worldwide financial system resulting in a housing implosion, stock market crash and 8 million middle class Americans losing their jobs. The Fed report does show that average household income declined more than median household income after this historic financial oligarchy created collapse. One look at Table 6 from the Fed report will explain why. Only 15% of families own stocks and only 50% have retirement accounts. Approximately 50 million households in the country have virtually no stocks and less than 30% have retirement accounts. The top 10% wealthiest households, with a median household net worth of $1.2 million, proportionately own 3 times as much stock as the average family and 90% have retirement accounts. Therefore, the 57% crash in stocks impacted the top 10% to a greater extent, while the average family was most impacted by the 28% drop in home prices.
Despite the fact that the median net worth of the top 10% actual rose from $1.17 million in 2007 to $1.19 million in 2010 (while the bottom 80% saw their net worth decline by 36%) the losses in the stock market were intolerable to the banker predators and their captured government parasite politicians. All the “solutions” to the Wall Street induced financial debacle have been designed to benefit those who committed the crime and should have done the time. The singular design of those pulling the strings was to replenish the treasure chests on Wall Street, engineer a stock market rally to pump up the net worth and capital gain income for the 1%, and protect the vested interests of the financial elite. All the obscene criminally generated profits created during the boom were privatized into the grubby hands of the financial predators, while the subsequent gargantuan losses were socialized onto the backs of the American middle class taxpayers and future unborn generations.
TARP was rammed through the captured Congress by the oligarchs despite a 300 to 1 opposition from the public in order to protect obscenely wealthy bankers, stockholders and bondholders. The $800 billion of debt financed political pork, disguised as stimulus, was doled out to corporate contributors, union thugs, and a myriad of other special interests. Zero interest rates are specifically geared to generate billions of risk free profits for Wall Street and to force retirees to gamble their dwindling retirement funds in the rigged stock market. Bernanke and Paulson threatened the limp wristed pocket protector CPAs at the FASB into allowing Wall Street banks to make up the value of their loan portfolios in order to mislead the public regarding their insolvency. The tripling of the Federal Reserve balance sheet from $950 billion in September 2008 to $2.9 trillion today was done to remove the toxic assets from the balance sheets of the Too Big To Fail Wall Street cabal at 100 cents on the dollar. QE1, QE2, and Operation Twist have had the sole purpose of providing the “sophisticated” financial elite with the funds to pump into the stock market using their high frequency trading super computers.
The subsequent Federal Reserve contrived 100% increase in the S&P 500 has repaired the damaged balance sheets of the moneyed interests, while the average middle class family has sunk further into debt and despair. The powerful entrenched sociopathic marauder class cares not for the average middle class American. They can barely conceal their contempt and disgust for the masses as they blatantly flaunt their hegemony and supremacy over our decrepit decaying corrupted economic system. M. Ramsey King described the disgusting display last week:
“Jamie Dimon’s appearance before the Senate Banking Committee was a sickening display that clearly demonstrated that Congress has been thoroughly corrupted by Wall Street. Instead of grilling Dimon, Senators acted like overly affectionate puppies fighting each other for an opening to smooch their master.”
The destruction of the middle class has been methodical and systematic. The top 10% of earners had a median net worth of $1.19 million, or 192 times as much as the median wealth of $6,200 of those in the bottom 20% in 2010. In 2007, the top 10% had 138 times as much wealth as the bottom 20%. In 2001, it was 106 times as much. With the continued rise in the stock market, declining real wages for the middle class, and further home price declines, the gap between the top 10% and the bottom 20% has continued to widen. The level of pain being experienced by the middle class has reached an unprecedented extreme. A few data points from David Rosenberg make that clear:
I would add a few more data points to David’s list of woe:
The middle class has a gut feeling they are being screwed by somebody, they just can’t figure out who to blame. The ultra-wealthy elite keep up an endless cacophony of propaganda and misinformation designed to confuse an increasingly uneducated and willfully ignorant public while blurring the facts for those educated few capable of understanding the truth. They have been able to keep the masses dumbed down through government run education; distracted by sports, reality TV, Facebook, internet porn, and igadgets; lured by mass media messages of materialism; and shackled with the chains of debt used to acquire the goods sold by mega-corporations. We’ve become a society oppressed by a small faction of ultra-wealthy masters served by millions of impoverished, uneducated, sedated slaves. But the slaves are getting restless and angry. The illegally generated wealth disparity chasm is growing so large that even the ideologue talking head representatives of the elite are having difficulty spinning it. Even uneducated rubes understand when they are getting pissed on.
“Senator, don’t piss down my back and tell me it’s raining” – Fletcher – Outlaw Josey Wales
The situation is growing increasingly unstable and has left the country susceptible to an extreme outcome when this teetering tower of debt topples.
The moneyed interests have brilliantly pitted the middle class against the lower classes through their control of the media, academia, and the political system. They have cleverly blamed the victims for their own plight. They have convinced the general public that millions have lost their homes to foreclosure because they were careless, greedy and stupid. They blame the Community Reinvestment Act. They blame others for taking on too much debt when they were the issuers of the debt. The Wall Street moneyed interests created the fraud inducing mortgage products, employed the thousands of sleazy mortgage brokers, bullied appraisers into fraudulent appraisals, paid off rating agencies, bribed the regulators, bet against the derivatives they had sold to their clients, threatened to burn down the financial system unless Congress handed them $700 billion, and paid themselves billions in bonuses for a job well done. But, according to these greedy immoral bastards, the real problem in this country is the lazy good for nothing parasites on food stamps and collecting unemployment, who need to stop complaining and pick themselves up by their bootstraps and get a damn job. It’s a storyline used against Occupy Wall Street and anyone who questions their right to plunder what is left on the carcass of America. The vilest fraud in the history of man was perpetrated by these evil men and not one executive of these firms has been prosecuted. Obama, the champion of the little people, has proven to be nothing but a figurehead for the powers that be. Proof that the Wall Street syndicate is winning the war couldn’t be any clearer than the fact that the top six criminal banks now have 40% more of the nation’s assets in their vaults than they did before they burned down the economy.
The demonization of the victims continues, while the perpetrators prosper. The sociopaths appear to be winning; just as they seemed to be winning in the later stages of the Roman Empire.
“And we often fall into this bias on the prompting of con men and sociopaths of the predator class who use it to justify their own criminal actions and personal injustice. They are not burdened with empathy for their victims, and even delight in their misfortune. But they must find ways to make their actions more acceptable to society as a whole that normally does have such concerns for equity and justice.” – Jesse
“Are we like late Rome, infatuated with past glories, ruled by a complacent, greedy elite, and hopelessly powerless to respond to changing conditions?” – Camille Paglia
I think you know the answer to this question.
If you missed the first part of this series, CLICK HERE to read it.
“Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.” – Charles Ferguson – Predator Nation
The Federal Reserve released its Survey of Consumer Finances last week. It’s a fact filled 80 page report they issue every three years to provide a financial snapshot of American households. As you can see from the chart above, the impact of the worldwide financial collapse has been catastrophic to most of the households in the U.S. A 39% decline in median net worth over a three year time frame is almost incomprehensible. Even worse, the decline has surely continued for the average American household through 2012 as home prices have continued to fall. Median family income plunged by 7.7% over a three year time frame and has not recovered since the collection of this data 18 months ago. Even more shocking is the fact that median household income was $48,900 in 2001. Families are making 6.3% less today than they were a decade ago. These figures are adjusted for inflation using the BLS massaged CPI figures. Anyone not under the influence of psychotic drugs or engaged as a paid shill for the financial oligarchy knows that inflation is purposely under reported in order to keep the masses sedated and pacified. The real decline in median household income is in excess of 20% since 2001.
The destruction of the blue collar jobs has been underway since the early 1970s. And the relentless decline in real blue collar wages has followed a bumpy downward path for decades. Sadly, the average person doesn’t understand the insidious destruction caused to their lives by the Federal Reserve generated inflation, as they actually believe their wages today are higher than they were in 1973. The reality is the oligarchy has used foreign wage differentials and the perceived benefits of globalization to ship manufacturing and now service jobs to Asia while using their captured mainstream media to convince the average American that this has been beneficial to their lives. Using one of their 15 credit cards to buy cheap foreign goods made by people who took their jobs was never so easy. I wonder if the benefits of being able to buy cheap Chinese electronics, toxic dog food, and slave labor produced igadgets outweighed the $2.3 trillion increase in consumer debt, 27% decline in real wages, 7 million manufacturing jobs lost since the mid-1970s, 46 million people on food stamps, $15 trillion increase in the National Debt since 1978, and a gutted decaying industrial base.
Not only have the oligarchs gutted our industrial base, resulting in enormous job losses among middle aged industrial workers, but they are now in the process of impoverishing the youth of this country by sucking them into crushing college debt with the false promise of decent paying jobs when they graduate with a degree in feminist studies from the University of Phoenix. The fabricated mantra that a college education guarantees a good paying job and a better future is not borne out by the facts. There are over 4,800 institutions of higher learning in this country, with only about 50 considered elite. There are another few hundred top notch institutions, with a few thousand mediocre schools and hundreds of for profit on-line diploma mills exploiting the easy Federal government debt to lure millions into their profit scheme of bilking unemployed naïve middle aged dupes and eventually the American taxpayer. The average student loan debt per student is $29,000. Student loan debt outstanding has risen from $200 billion in 2000 to over $1 trillion today. The Federal Government is blowing another bubble. They are the issuer, regulator and guarantor of these loans. They are making the loans with teaser rates to the ultimate in subprime borrowers – students without jobs going for worthless degrees at mediocre schools. The taxpayer is on the hook for the billions in loses that will surely follow. The payoff for this quadrupling of debt has been an 8% real decline in wages for college graduates since 2000. The monetary policies of the Federal Reserve and bipartisan fiscal policies of our government have led to this dreadful job market for the middle class.
The mainstream media dutifully reported a few key highlights from the Federal Reserve report and moved onto more important issues like Snooki’s pregnancy and the octomom’s new porno gig. We certainly couldn’t expect business journalists at Bloomberg, CNBC, NYT, or CNN to actually analyze the data, produce an intelligent dialogue of the causes, and reach a conclusion that the affluent and influential on Wall Street and in Washington DC caused the average family in this country to endure tremendous hardship while the oligarchy plundered and pillaged the countryside, stuffing their pockets with ill-gotten gains. Each of the ideological camps within the oligarchy trot out the usual suspects to blame the other ideological camp, while doing nothing to change the existing paradigm. Krugman and Carville are assigned the task of blaming Republican policies and dogma for the demise of the middle class. Obama and his minions already had their press release prepared, blaming George Bush and claiming the median family has made tremendous strides since he assumed command in2009. Mitt Romney (worth $250 million), whose pocket change exceeds the annual median household income of $45,800, feels the pain of the average American family and proposes a tax decrease for billionaires and less overbearing regulation on the honorable Wall Street banks in order to help the average family. It’s nothing but Kabuki Theater as the characters play their assigned parts in this elaborate display. Gary Wills cuts right to the chase:
“Yet while the rest of the populace was suffering, the rich just got richer. In 2009 and 2010, years in which millions were unable to find work, the top one percent reaped 93% of the ‘recovery’ income, and corporations are making more than they ever did. And the Republicans can still propose even further cuts in the taxes of ‘job creators’ whose only job creation has been for their own lawyers and lobbyists.”
What you will not receive from the corporate mouthpieces in the mainstream media is an explanation of where the money went, who stole it and why it happened. The theme from the media is the loss in net worth and decade long decline in household income was unavoidable and due to circumstances beyond anyone’s control. This is a false storyline perpetrated by those who have stolen your money. It’s been a bipartisan screw job and it was initiated by Clinton, Rubin, Gramm and Leach, who deregulated the banking system in 1999 by repealing the Glass-Steagall Act, but made it clear the Greenspan Put would always be in place to protect the banks from their own recklessness, greed and hubris. As a result, Wall Street could go ahead and take irresponsible financial system destroying risks in pursuit of vast riches, knowing they could count on the unlimited checkbook of Uncle Sam if things went south, and that’s exactly what happened. Heads they won, tails you lost. It’s good to own the politicians, regulators, and media.
“Sometime around the year 2010, Xers will hit a hangover mood like that of the Lost in the early 1930s and the Liberty in the late 1760s: a feeling of personal exhaustion mixed with a new public seriousness. The members of this forty- and fiftyish generation will fan out across an unusually wide distribution of personal outcomes, reminiscent of a night at the bingo table. A few will be wildly successful, others totally ruined, and the largest number will have lost a little ground since the days of Boomer midlife.” – Strauss & Howe – Generations – 1991
Neil Howe and Bill Strauss wrote their first generational theory book six years prior to their epic Fourth Turning prophecy. It appears they nailed it. Generation X households saw their net worth crushed, with a 54% loss in three years. The Baby Boomer households also took a beating in this banker engineered financial collapse. The Silent generation has survived this downturn relatively unscathed. Most of the Silents traded down from their primary residence at or near the top of the housing boom. As Neil Howe points out:
“Most sold or annuitized their financial assets at a much better moment in the history of the Dow. Even if they didn’t, they are more likely than Boomers or Xers to be getting retirement checks from defined-benefit corporate or government plans that are unaffected by the market.”
The Millenials and late Xers did not lose much because they didn’t have much to lose. Most did not own a house or stocks. As the economy continues to deteriorate the generational tension builds. The Silents and Boomers, who vote in large numbers, have not and will not vote for anyone who attempts to reform our entitlement system and make it economically viable over the long-term for young people just entering the job market.
The false storyline about the 2007 through 2010 being an aberration in the long term path to prosperity for the average American family is refuted by the following chart.
This chart paints a long-term picture of generational inequality that has been going on over the last three decades. Over three decades the Silent generation has seen their median real net worth increase by 133%, while GenX has seen their median real net worth decrease by 55% compared to the same age cohort in 1983. Only those 55 and over have seen a real improvement in their net worth over the last 27 years. Considering this period encompassed a seventeen year bull market and the GDP grew from $3.5 trillion to $15.7 trillion, a 450% increase, a few bucks should have trickled down to the average household. Even on an inflation adjusted basis, GDP has risen 125% since 1983. Evidently the economic policies supported by both parties across decades have not floated all boats – just the yachts. Age is only part of the equation. Class is the other piece. There is a class war being waged and the Buffett, Dimon, Blankfein, Romney, Clinton, Koch and the rest of the ultra-wealthy oligarchs are winning. We are now in the midst of a Fourth Turning and the corrupt, dysfunctional, amoral social order will be swept away before the climax of this Crisis.
“Through the Third Turning and into the initial stages of the Fourth, the Silent will prosper, Boomers will cope with declining expectations, and Gen-Xers will get hammered. Throughout history, we have argued, inequality both by class and by age reaches its apogee entering the Crisis era. Indeed, part of the historical purpose of the Crisis is to tear down dysfunctional institutions, vacate positions of entitlement and privilege, rectify the inequality, and create a tabula rasa on which the rising generation can build something new.” – Neil Howe
The reason for the epic collapse of middle class net worth is quite simple when viewed from a 10,000 foot elevation. The great descent in net worth was primarily due to the bursting of the Federal Reserve created real estate bubble. The Case Shiller Home Price Index plunged 28% between 2007 and 2010. The wealth destruction was concentrated among the working middle class because their homes accounted for the vast majority of their household net worth. For the wealthy, housing is a fraction of their vast net worth, while for the lowly poor; homeownership is now only a dream. Of course, between 2000 and 2007 anyone that could fog a mirror was encouraged by George Bush, Barney Frank, the National Association of Realtors, Alan Greenspan, and Wall Street shills to “own” a home. With home prices having fallen an additional 7% since 2010, the middle class has seen a further decline in their net worth. Meanwhile, Ben Bernanke’s ZIRP, QE1, QE2, Operation Twist, and the upcoming “Operation Screw the Middle Class Again” have succeeded in expanding the net worth of millionaires, billionaires and the bonuses of Wall Street bankers, while destroying the fragile finances of little old ladies and middle class risk adverse savers.
Once you dig into the details beneath the thin veneer of Bernaysian obfuscation, you realize the corporate mainstream media storyline of middle class decline has a veiled storyline of a powerful, connected 1%, enriched at the expense of the middle class.
In Part 2 of this three part series I will examine who stole your net worth and in Part 3 why they stole your net worth. Part 4 will require pitchforks, torches and a guillotine.
Below are various headlines just from the last 24 hours. You have the manufacturing sector in the U.S. contracting. You have unemployment claims rising. You have new and existing home sales falling, even with the lowest mortgage rates in history. You have one of the best retailers in the country announcing that their sales are growing much slower than expected. You have the biggest consumer company in the world announcing they are having big problems and is reducing their expansion. This is all in addition to the European Clusterfuck. Anyone with two brain cells can see we have entered part two of the Greater Depression. Therefore, you won’t hear it from CNBC or any of the other corporate MSM shills. Six months into the recession, they will be forced to admit it.
Submitted by Tyler Durdenon 06/21/2012 10:10 -0400
One word to explain the Philly Fed which just printed at -16.6, or the weakest since August 2011, on expectations of an unchanged print: abysmal. Basically every subcomponent of the index was negative except for number of employees, although luckily we already know that US jobs (even part-time ones) are collapsing too. In short: if this horrendous print does not boost stocks higher, nothing can.
The average of new claims over the past month, meanwhile, climbed by 3,500 to 386,250, marking the highest level in almost seven months.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. This was lower than expectations of sales of 4.57 million.
Submitted by Tyler Durdenon 06/21/2012 00:40 -0400
HSBC’s Flash Manufacturing PMI printed at 48.1 – its lowest in 7 months as contraction continues in the world’s growth engine – as inventories rise at a faster rate and new export orders plunged at the fastest rate since March 2009. Risk markets were already leaking lower before this but extended losses with ES down 6pts from the close (and over 11 from the day’s highs). Treasuries are bleeding a little lower in yield but the real action is an exaggerated slide in WTI (which is rapidly heading towards a sub-$80 handle) and EURUSD which has dropped back to the day’s lows around 1.2660. Copper, Gold, and Silver are also sliding lower as AUD weakens (as we suggested last night) back to 1.0150.
Shares of Bed, Bath & Beyond fell 14% after the retailer said late Wednesday that it had surpassed expectations with 15% higher profit in the first quarter, but it broke from tradition with a downbeat outlook, middling same-store-sales growth and gross-margin contraction.
By Barney Jopson in New York and Duncan Robinson in London
Bob McDonald, chief executive for the past three years, admitted the company had made errors and should have produced better results. “We will continue to expand our developing market portfolio, but we will do it on a more balanced pace,” he told an investor conference in Paris.
There’s a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions.
Forget the politicians, they’re irrelevant.
Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear.
They’ve got you by the balls.
They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.
They don’t want that, you know what they want?
They want obedient workers, obedient workers. People who are just smart enough to run the machines and do the paperwork and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.
And now they’re coming for your social security money.
They want your fucking retirement money; they want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later because they own this fucking place. It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to believe, what to think and what to buy.
The table is tilted folks, the game is rigged.
Nobody seems to notice, nobody seems to care. Good honest hard working people, white collar, blue collar, it doesn’t matter what color shirt you have on. Good honest hard working people continue, these are people of modest means, continue to elect these rich cocksuckers who don’t give a fuck about them. They don’t give a fuck about you. They don’t give a fuck about…give a fuck about you! They don’t care about you at all, at all, at all.
And nobody seems to notice, nobody seems to care.
That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes everyday. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.
George Carlin
The really bad news is that most of these pension funds are assuming an 8% annual return. Bwaaaahhhhaaaaa!!!!
Insert a realistic 4% into those little models and the unfunded liability shoots through the top of this little chart like a rocket ship.
Math is hard. Check out your state. Are you willing to have your state tax rates tripled in order to pay the pensions and healthcare benefits of state government workers? It’s really that simple.
“In all the history of the boxing game you find no human interest story to compare with the life narrative of James J. Braddock…” – Damon Runyon
I watched Cinderella Man for the 2nd time in two weeks last night on AMC. I love this movie. I could watch it again tonight. I think it hits a chord with me because Jimmy Braddock was an average guy with integrity and a great work ethic. He was known for his powerful right hand, granite chin and an amazing comeback from a floundering career. He had lost several bouts due to chronic hand injuries and was forced to work on the docks and collect social assistance to feed his family during the depression. In 1935 he fought Max Baer for the Heavyweight championship and won. For this unlikely feat he was given the nickname “The Cinderella Man” by Damon Runyon.
Braddock was born in Hell’s Kitchen in New York City on West 48th Street within a couple of blocks of the Madison Square Garden venue where he would later become famous. His story of success, bad luck, perseverance, charity, love of his wife and three children, and ultimately becoming heavyweight champion of the world against all odds is the kind of story that gives you hope. His story played out during the dark days of the last Fourth Turning. The average person in this country was in deep trouble. Unemployment was 25%. Soup kitchens and bread lines dotted the landscape. Braddock had to beg and go on assistance to feed his family and heat his tiny apartment.
With his family in poverty during the Great Depression, Braddock had to give up boxing for a little while and worked as a longshoreman. Due to frequent injuries to his right hand, Braddock compensated by using his left hand during his longshoreman work, and it gradually became stronger than his right. He always remembered the humiliation of having to accept government relief money, but was inspired by the Catholic Worker Movement, a Christian social justice organization founded by Dorothy Day and Peter Maurin in 1933 to help the homeless and hungry. After his boxing comeback, Braddock returned the welfare money he had received and made frequent donations to various Catholic Worker Houses, including feeding homeless guests with his family.
His comeback inspired a nation down on its luck. If an average guy could pull himself out of poverty through hard work and the help of his fellow man (not the Government) to win the heavyweight championship of the world against a man who had killed two men in the ring, then everyone could dig themselves out of their holes. He inspired and gave hope to millions of poor and down on their luck people. He did it with class and humility. He was a good man.
Today the people who are admired and emulated are soulless, corrupt, egomaniacs like Obama, Romney, Jamie Dimon, Warren Buffett, Donald Trump, and selfish sports figures like LeBron James, Kobie Bryant and Tiger Woods. The masses are inspired by Snookie and the Situation, who make $2 million per year getting drunk and acting like assholes.
Every Fourth Turning needs people like James Braddock to inspire and give hope to the average person. The only figure during this Fourth Turning to come close has been Ron Paul. He will fade from the scene before this Fourth Turning runs its course. We need another Cinderella Man to step up and inspire a new generation of heroes. This country needs someone with integrity, humility and an innate goodness to follow and emulate. Times are getting tougher and people will be seeking guidance and an example to follow. They could turn to a mesmerizing tyrannical figure or they could be inspired to be better people by a figure that represents everything good about this country. I’m keeping my eyes open and seeking another James J. Braddock.
Lost in the annals of boxing is the sport’s true Cinderella story. James J. Braddock, dubbed “Cinderella Man” by Damon Runyon, was a once promising light heavyweight for whom a string of losses in the ring and a broken right hand happened to coincide with the Great Crash of 1929. With one good hand, Braddock was forced to labor on the docks of Hoboken. Only his manager, Joe Gould, still believed in him, finding fights for Braddock to help feed his wife and children. The diminutive, loquacious Jew and the burly, quiet Irishman made one of boxing’s oddest couples, but together they staged the greatest comeback in fighting history. In twelve months Braddock went from the relief rolls to face heavyweight champion Max Baer, the Livermore Butcher Boy, renowned for having allegedly killed two men in the ring. A charismatic, natural talent and in every way Braddock’s foil, Baer was a towering opponent, a Jew from the West Coast who was famously brash and made great copy both in and out of the ring. A ten-to-one underdog, Braddock carried the hopes and dreams of the working class on his shoulders. And when boxing was the biggest sport in the world, when the heavyweight champion was the biggest star in the world, his unlikely upset made Braddock the most popular champion boxing had ever seen.
Against the gritty backdrop of the Depression, Cinderella Man brings this dramatic all-American story to life, evoking a time when the sport of boxing resonated with a country trying desperately to get back on its feet. Schaap paints a vivid picture of the fight world in its golden age, populated by men of every class and ethnic background and covered voluminously by writers who elevated sports writing to art. Rich in anecdote and color, steeped in history, and full of human interest, Cinderellla Man is a classic David and Goliath tale that transcends the sport.
Remember when Obama told us with a straight face that his government healthcare solution would add 30 million people to the health insurance rolls, cover dependents until they were 26 years old and stop insurance companies from denying someone insurance for pre-existing conditions and not result in an increase in healthcare costs? OOPS!!!! It seems he may have been off by a trillion or three. Close enough for a lying politician. Since Barack forced my employer to expand dependent coverage to 26 year olds and cover pre-existing conditions for new employees, I’ve seen my premiums go up and my co-pay go from $15 to $25. I’m still waiting for that windfall raise from the 3,000% decrease in insurance premiums for my employer. How long do you think I’ll need to wait?
“How many people are getting insurance through their jobs right now? Raise your hands. All right. Well, a lot of those folks, your employer it’s estimated would see premiums fall by as much as 3,000 percent, which means they could give you a raise.” — Barack Obama
An aging population, improving economy and President Barack Obama’s health-care overhaul will push spending on medical services to almost 20 percent of U.S. gross domestic product by 2021, the government projected.
Spending on hospital visits, medications and other health care rose an estimated 3.9 percent in 2011 and consumed about 17.9 percent of GDP, the same as the previous two years, the Centers for Medicare and Medicaid Services said yesterday. The increases in such expenditures will continue to outpace economic growth projections, jumping 7.4 percent in 2014, when much of the insurance expansion created by the health law begins.
With a Supreme Court decision looming this month on the constitutionality of the health law, the Obama administration and Republican opponents have squabbled over whether the measure can trim medical spending while adding more than 30 million people to insurance rolls. The law would add 0.1 percentage point to average annual health spending through 2021, according to an analysis published in the journal Health Affairs.
“The real mystery is, what happens once we get past this projection period, when things have the real potential for spending going way out of control?” said Joe Antos, an adviser to the Congressional Budget Office who works as a health economist at the American Enterprise Institute, a Washington- based research group that advocates for limited government.
Health and Human Services Secretary Kathleen Sebelius said in a blog post that the law “is helping control health costs and expand coverage, and ensure better health and better health care, for all Americans in the next decade and well beyond.”
Chris Jacobs, a health-policy aide to Republican lawmakers on the Joint Economic Committee in Congress, said in an e-mail that the law puts government programs “on a glide path to becoming the majority of all health-care spending.”
Federal, state and local governments are projected to spend $2.4 trillion on health care in 2021, half of all U.S. medical expenditures, according to the analysis in Health Affairs by actuaries and economists from the Centers for Medicare and Medicaid Services. Government accounted for about 46 percent of health spending through 2013.
Increased rebates from drug companies selling to Medicaid patients and limits imposed by the law on insurers’ profits had “little overall impact” on national health spending in 2011, the researchers said. Total U.S. health-care expenditures will surpass $3 trillion in 2014 and reach $4.8 trillion in 2021, according to the government data.
The government researchers may have underestimated growth by assuming that scheduled cuts in Medicare payments to physicians and hospitals aren’t reversed by Congress, said Antos of the American Enterprise Institute.
“That’s too rosy,” he said by telephone.
Corporate Green Acres is the place to be. It seems the free shit army isn’t just occupying West Philly. They are crawling all over the Midwest farmbelt. It’s not your small family farm. It’s the giant corporate farms that have big time lobbyists and congressmen in their pockets. These bloated bills are nothing but handouts to corporations. Why should corporate farms be guaranteed a profit even if they don’t produce a crop? Why should I pay so that corporate fat cat farmers have no risk if their crops fail? Why should milk prices be controlled? Why should government be spending almost $100 billion per year of our tax dollars to promote and subsidize farmers in any way? Since the SNAP food stamp program falls under this bloated bill, maybe the West Philly FSA can join forces with the Iowa FSA to lobby for this bill.
Tuesday, June 12,2012
THE U.S. SENATE is poised this week to take up the crucial 2012 Farm Bill. This inordinately complex legislation is projected to cost $969 billion over the next 10 years, about $24 billion less than the cost of extending the soon-to-expire existing farm bill.
Big agriculture and its deep-pocketed lobbyists support the new bill, having accepted deep cuts in direct crop subsidies in exchange for legislators “protecting and strengthening” crop insurance programs. Industry considers the latter its safety net against adverse weather and unpredictable fluctuations of global commodities prices.
It’s less of a safety net than a security blanket that shifts risks to taxpayers and guarantees farmers substantial profits. That must change; otherwise, the cost of the new insurance programs could greatly exceed Congressional Budget Office estimates, leaving the federal government on the hook for billions of added dollars each year.
In a particularly cruel twist, the bill pays for these new programs in part by taking food out of the mouths of poor children.
Farm bills are the long-time home of the Supplemental Nutrition Assistance Program — food stamps. The proposal strips $4.5 billion from the SNAP program over 10 years, even as the struggling economy has record numbers of Americans seeking food stamps to help feed their families. The reductions would eliminate about $90 worth of groceries a month from the kitchens of low-income families. According to Sen. Kirsten Gillibrand, D-N.Y., who is introducing an amendment to restore the SNAP funds, half of those who benefit from the program are children.
The Obama White House is supporting the bill, S. 3240, sponsored by Sen. Debbie Stabenow, D-Mich., who chairs the Senate Agriculture Committee. The administration opposes the SNAP reductions, however, and wants the cost of crop insurance reduced.
MEANWHILE, AN odd amalgamation has emerged to oppose the bill. The liberal Environmental Working Group used U.S. Department of Agriculture data to reaffirm that corporate and very large individual agriculture operations — not small and mid-sized family farms — enjoy the vast majority of the insurance benefits. Last year in Missouri, for example, 74 percent of the $267 million in benefits went to 20 percent of recipients. In Illinois, the top 20 percent received 72 percent of $518.5 million.
From the right comes the American Enterprise Institute with its “Field of Schemes” report. It’s part of a broader AEI project called “American Boondoggle: Fixing the 2012 Farm Bill.” In “Schemes,” AEI experts focused on the bill’s proposed ‘shallow losses” insurance. Such insurance would cost far more than the direct crop subsidy programs being dropped and “create incentives for the wasteful use of economic resources,” the report says.
EXISTING CROP insurance programs already are out of whack. If crop yields fall short of projections, farmers collect from the government. If harvest prices fall short of projections, farmers collect. To make sure that farmers can afford the insurance premiums, the government pays an average of 60 percent of the cost. To make sure private companies offer the insurance, the government pays their commissions and administrative costs.
Expanded shallow-loss coverage would distort the system even further. As one Minnesota farmer told “The New York Times” last week, “I can farm on low-quality land that I know is not going to produce and still turn a profit.”
The farm bill needs a lot of work before it merits the support of the American people.
— The St. Louis Post-Dispatch
After the second day of testimony in the Jerry Sandusky trial, there are a couple things that are crystal clear to me. The first is that if this guy had an ounce of courage he would blow his fucking brains out. He is one of the most despicable human beings to ever inhabit this planet. And he shows absolutely no remorse for destroying the lives of dozens of young boys. When he is convicted he MUST be put into the general prison population so gets to experience the same pleasure he dished out.
The second thing that is crystal clear to me is that there are at least 10 other Penn State administrators/coaches/police that should also go to jail for these crimes. I see this criminal conspiracy exactly like the Catholic church priest abuse scandal. Anyone at Penn State that knew Sandusky was a child molestor and did nothing to stop him is as guilty as Sandusky and must go to jail. Paterno knew. McQueary knew. The President knew. The athletic director knew. Assistant coaches knew. The head of police knew. They are all guilty. They aided in the destruction of the lives of dozens of innocent boys. They did it to protect the reputation and wealth of Penn State. They did it because they thought their power and wealth was more important than the lives of little boys.
None of their lame excuses and alibis pass the smell test. These MEN are guilty. Not one woman has been implicated in the coverup. Do you think if there were a few women in positions of power at Penn State, they would have covered up the raping of little boys by a monster? This entire episode is a disgusting example of powerful men protecting other powerful men at all costs. It happens every day. It happens on Wall Street. It happens in Washington DC. It happens in the Vatican. It is a cancer that will kill our nation and the world.
By MARK SCOLFORO and GENARO C. ARMAS, AP
BELLEFONTE, Pa. — Former Penn State assistant coach Mike McQueary told jurors in Jerry Sandusky’s sex abuse trial Tuesday that he saw his ex-colleague with a prepubescent boy in an on-campus shower and that he that he heard “skin-on-skin smacking sound.”
His account of the night differed little from his appearance in December at a preliminary hearing for Penn State administrators Tim Curley and Gary Schultz. The one difference: He said the shower encounter took place in 2001 instead of 2002.
But the effect of what he saw, and heard, was unchanged, he said, responding to questions from Senior Deputy Attorney General Joseph McGettigan.
Sandusky is on trial on 52 criminal counts related to the alleged assaults of 10 boys during a 15-year period. Authorities alleged Sandusky abused boys at his home and inside the football team’s on-campus facilities among other places.
McQueary told the jury that he was at home, in bed, watching the film “Rudy,” when he decided to go to the football team building. He said he walked into the support staff locker room to put away a pair of new sneakers and, as he opened the door, he heard the noise.
“Very much skin-on-skin smacking sound,” he said. “I immediately became alert and was kind of embarrassed that I was walking in on something.”
He said that he turned and glanced over his right shoulder at a mirror that had a 45-dgree angle and saw Sandusky “standing behind a boy who was propped up against a wall.” He estimated the boy to be 10 to 12 years old.
He said that the “boy’s hands (were) up on the wall. The glance would have taken only one or two seconds. I immediately turned back to my locker to make sure I saw what I saw.”
McQueary said he looked directly into the shower and saw Sandusky “standing right up against the back of a young boy” with his arms around his midsection — “the closest proximity that I think you can be in.”
When asked what he saw, McQueary said “the defendant’s midsection was moving” subtly.
McQueary said he tried to think and then put his shoes in his locker and slammed it shut, hard.
“I made the loud noise in an attempt to say `Someone’s here! Break it up!'” McQueary said, adding that he stepped closer to the opening of the shower room and saw they were separated and facing him directly.
“We looked directly in each other’s eyes and at that time I left the locker room,” and went upstairs to his office, he said.
“It was more than my brain could handle,” he said. “I was making decisions on the fly. I picked up the phone and called my father to get advice from the person I trusted most in my life, because I just saw something ridiculous.”
He said he was very vague with his father on the phone, and that his dad, John, told him to leave immediately and come to the house.
McQueary said he went to coach Joe Paterno’s house the next morning and relayed what he had seen, but did not describe the act explicitly out of respect for the coach and his own embarrassment.
He said that Curley called him a week after he talked to Paterno and he attended a meeting with him and Schultz. They “just listened to what I had said,” McQueary testified. About week or two later, he said Curley called him to say they had looked into it.
McQueary’s testimony came after a teenager told jurors that a school district guidance counselor initially didn’t believe his abuse claims because the former Penn State assistant football coach was considered to have “a heart of gold.”
The teen, labeled Victim No. 1 by a grand jury, tearfully recounted for jurors repeated instances of abuse, which he said included kissing, fondling and oral sex during sleepovers at the coach’s home.
A social worker who spoke to Sandusky about the boy’s claims testified that the coach denied having sexual contact with the boy but did acknowledge lying on top of him and blowing “raspberries” on the boy’s stomach. The social worker, Jessica Dershem, also said Sandusky told her he couldn’t recall whether he had ever touched the boy below his waistline.
The charges against Sandusky — and two university officials accused of perjury and failing to report suspected child abuse — touched off a massive scandal that led to the firing of Paterno and the departure of the university president. Paterno died in January of lung cancer, just over two months after his ouster.
Now 18, the accuser known as Victim 1 recounted an early encounter that escalated to oral sex.
“I spaced,” he said. “I didn’t know what to do with all the thoughts running through my head, I just kind of blacked out and didn’t want it to happen. I froze.”
As he choked back tears, the sobbing teen recounted another time Sandusky forced him to perform oral sex, after saying it was his “turn.”
“I don’t know how to explain it. I froze, like any other time,” he said. “My mind is telling me to move but I couldn’t do it, I couldn’t move.”
The witness said he stayed quiet about the abuse, in part because his mother thought Sandusky was a positive influence in his life, but he began trying to distance himself from Sandusky.
At one point Sandusky became angry with him because they’d drifted apart and the teen became involved with his local Big Brothers Big Sisters organization, the teen said.
“I got extremely, extremely scared,” he said, recounting how it escalated into an argument between Sandusky and his mother.
Eventually the teen asked his mother if there was a website used to track sex offenders because he wanted to see if Sandusky was on it. That ultimately led to a meeting with the guidance counselor, where he reported being abused.
At first, the counselor didn’t believe him and questioned the wisdom of going to authorities, the witness said.
“They said we needed to think about it and he has a heart of gold and he wouldn’t do something like that. So they didn’t believe me,” he said.
School officials referred the case to the county’s child-welfare agency.
Dershem, a Clinton County Children & Youth Services caseworker, said the teen was initially uncomfortable talking to her but soon began to open up about his encounters with Sandusky.
She told the jury she had enough evidence by the end of her second meeting with the boy to determine that he had been abused by Sandusky.
He denied sexually assaulting the teen, saying he “he viewed (the boy) as an extended family member, kind of like a son,” Dershem said.
During cross-examination, defense attorney Joe Amendola asked the teen whether he had financial motives for bringing his accusations.
The teen denied that. “All I know is I’m here to tell the truth about what happened to me, just like everybody else,” he said.
Sandusky didn’t visibly react to the teen’s account and looked straight ahead during his testimony.
Another of Sandusky’s alleged victims testified Monday, the trial’s opening day, telling jurors that the coach sent him “creepy love letters.” The man said he began showering with Sandusky in 1997 and what started out as “soap battles” quickly escalated to sexual abuse, including oral sex.
Lead prosecutor Joseph McGettigan III has described Sandusky as a “serial predator” who methodically used his youth charity, The Second Mile, to zero in on fatherless children or those with unstable home lives, buy them gifts and take advantage of them sexually.
Amendola has countered that the case is flimsy and that some of the accusers apparently intend to sue and have a financial stake in the case.
WITH THE SANDUSKY TRIAL UNDERWAY I THOUGHT IT WAS WORTH REPOSTING THIS ARTICLE FROM 7 MONTHS AGO. NOTHING HAS CHANGED MY CONCLUSIONS.
“Never be afraid to raise your voice for honesty and truth and compassion against injustice and lying and greed. If people all over the world…would do this, it would change the earth. ” ― William Faulkner
I wish I could believe William Faulkner’s advice was possible in the world we live in today. But sadly, I am losing hope in our civilization. We seem to have entered a death spiral with little likelihood of pulling out. Our society has become so degraded and our populace so apathetic and willfully ignorant, that I think we are too far gone to recover. Honesty, truth and compassion have been soundly defeated by injustice, lying and greed. Our technologically advanced society has become a stinking cesspool, devoid of humanity, common sense and morality. Those with the power and wealth who control our country do not concern themselves with quaint concepts like good and evil, right and wrong, or moral and immoral. Sociopaths see no obligation to society, humanity, or posterity. They only care about themselves, their wealth, their status, their reputation, and their control of others. They are incapable of feeling shame or remorse. They blindly march forward towards their own and society’s self-destruction.
Joe Paterno was fired by the Penn State Board of Trustees on Wednesday night as head football coach of Penn State. It was the first good decision that has been made in the last two decades by the leaders of Penn State. The man was told that his Defensive coordinator was seen in the locker room shower raping a 10 year old boy in 2002. He did not call the police and report this crime. He and the other top officials at Penn State brushed this crime under the rug, allowing at least seven more young boys to be raped by this monster. The 28 year old graduate assistant not only did nothing to stop the crime he witnessed, but he accepted a position as an assistant coach, knowing that Paterno and the Athletic Director never did anything to hold Sandusky accountable for his crime. Sandusky was still on campus working out as of last week. The actions of all the players in this disgusting example of how far our society has degenerated are enough to make someone lose all hope for humanity:
I have been blind with rage for the last week as I’ve watched the powerful men of Penn State attempt to retain their power and reputations at the expense of truth, honesty, and accepting responsibility for their actions and willful inaction. As I’ve watched this tragedy unfold I was struck by the thought process of rich men in positions of power. They have huge egos and believe they are above the law. They think so highly of themselves they believe they can make the rules and ignore the laws which the little people must follow. They have no moral compass whatsoever. They cannot be shamed. The most despicable behavior by prominent men has been willfully overlooked because these men generate $50 million of profit per year for the university. Their sociopathic desire to protect their reputations and power has led to a scandal of such epic proportions that it will haunt Penn State forever and has permanently damaged the institution.
This is an institutional cancer that eats away at the fabric of our society. It is not isolated to Penn State. It is a societal sickness that threatens to overwhelm every facet of our lives. There is a constant thread that runs through every incident that comes to light. In 99% of the cases it is men protecting men. Money and greed always trump morality and truth. The exact circumstances can be observed in the priest abuse scandal that has rocked the Catholic Church in the last five years. Pedophile priests have existed within the Catholic Church for decades. The Penn State situation shows that pedophiles exist everywhere in our society. The bottom line is that they are sick men and need to be locked up and kept away from little boys. There is no more heinous criminal act than a grown man raping a little boy. Anyone who does this is pure evil and must be punished.
The Catholic Church’s wealth is almost beyond measurement. There are 1.2 billion Catholics in the world. The pope is one of the most powerful men on earth. Cardinals and bishops throughout the world wield tremendous influence over their flocks. As young Catholic boys you are taught that priests represent Jesus Christ on earth. They are treated with reverence and fear by little Catholic boys. Little Catholic boys would never question the motives of a priest. They are taught to obey, because a priest is the same as Jesus Christ. These beliefs allowed pedophile priests to prey on thousands of little boys around the world for decades with little or no backlash. Those crimes were horrific enough by themselves, but the actions of the bishops, cardinals and even the popes who have known about these crimes make it ten times worse. Again, powerful men will ignore rules, regulations, laws and simple human decency in order to protect their wealth, power, and reputations. Cardinals and bishops knew that priests were raping little boys and their solution was to transfer them to another parish where they could find fresh meat. The thought never entered their minds to turn these perverts in to the police. Their only concern was how a scandal would impact their beloved institution. Little boys were sacrificed at the altar of the Catholic Church by evil men.
The cover-up continues to this day. The Catholic Church uses the statute of limitations as their defense against the continuous stream of cases that continue to mount. They secretly pay out hundreds of millions to the victims as long as they promise to keep quiet. They use bankruptcy laws to close down parishes and avoid paying civil penalties for the crimes committed by its hierarchy. They hire public relations firms to create false and misleading stories designed to obscure the truth about the biggest criminal conspiracy in history. The powerful sociopathic men who were supposed to represent Christian teachings have destroyed the lives of thousands of boys in order to protect their institution. The end result is that in addition to the thousands of lives destroyed by the pedophile priests, hundreds of thousands of Catholics have lost faith in the leadership and have abandoned the church. The wealth these sociopaths attempted to protect has been eroded as donations have dried up and lawsuit payouts have mounted.
Not only have our educational and religious institutions failed us, but our financial and political institutions have spectacularly self-destructed over the last decade. Shockingly, these institutions have been run predominantly by men. At one time banks were stodgy institutions that abhorred risk and methodically made profits year after year by lending to people and businesses capable of paying them back. Investment firms were partnerships. If any one partner was to take an excessive risk, they could wipe out the personal wealth of the other partners. Therefore, they never took excessive risks or used excessive leverage. Their boring business model generated modest profits year after year. The officers of banks and investment houses were well compensated, but not excessively so. The leaders of these firms were children of the Great Depression. They understood bad times.
During the 1990’s they were displaced by a new generation of leaders. This has not turned out well for our country. These psychopathic CEOs were given the green light by their fellow psychopaths in Congress and at the Federal Reserve to loot and pillage to their heart’s delight. This conspiracy of thieves broke down the barriers between traditional banking and gambling using excessive leverage. They captured the regulatory agencies that were supposed to police them and leveraged their bets 30 to 1. They created fraudulent mortgage instruments designed to lure the stupid and crooked. They marketed debt to anyone with a breath and ability to scratch an X on a piece of paper. They designed derivatives so complex that even their own Harvard MBAs couldn’t figure out how they worked. They bribed rating agencies into stamping a AAA credit rating on crap so toxic that they joked about the idiots they were selling it to. They shorted the very same derivatives they were selling to their clients. These psychopaths raked in hundreds of billions in fees, salaries and bonuses, while detonating a nuclear bomb on the worldwide financial system.
When their bets came up craps, they had the gall to hold the American people hostage for trillions in bailouts. Their fellow psychopaths in Congress gladly forked over the money. Rather than mend their ways, these evil men have returned to their excessive risk taking and continue to pay themselves billions in compensation, while the American middle class is smothered to death under mountains of debt. These evil Wall Street geniuses have shown no remorse as seven million people have lost their jobs and millions more have lost their homes due to the greed and avarice displayed on an epic scale.
Wall Street bankers exhibit the epitome of psychopathic behavior, showing lack of empathy and remorse, shallow emotions, egocentricity, and deceptiveness. Psychopaths are highly prone to antisocial behavior and abusive treatment of others. Though lacking empathy and emotional depth, they often manage to pass themselves off as average individuals by feigning emotions. These Wall Street bankers will never willingly accept responsibility for their actions. They continue to use their wealth and power to control the politicians in Washington DC and the misinformation propagated by the corporate media they control. They own and control the Federal Reserve and will print money until the whole system collapses in a spectacular implosion that destroys our financial system. They only care about their own wealth, influence and status. They have no shame.
When I consider all that is wrong in our society, I become despondent, angry and despairing for the future of our country. It seems that everyone in positions of power across the spectrum of education, religion, finance, and politics are psychopaths, bent upon self-destruction no matter the cost to society or unborn generations. Our nation has degenerated into an egocentric, self-loathing, vain, shallow excuse for a civilization. There is anger flaring up, but it is just as likely to be misdirected and misinformed. The lack of critical thinking skills and the overwhelming effects of media propaganda has so degraded the intelligence of the populace that when the system breaks down in the next few years, the masses will clamor for a savior rather than seeking truthful answers and willingly making the sacrifices required to get our nation back on track. This country will get what it deserves – a despotic ruler and a brutish civilization governed on the basest of principles. This is what happens when a society rewards lying and greed over honesty and compassion. There are consequences to actions and inactions alike. We’ve made our choice.
I’m working on an article about the Federal Reserve survey put out yesterday, but Neil Howe beat me to the punch. Excellent analysis of how the financial crisis has affected each generation. No wonder us GenXers are so irritable. My article will be slightly more nasty as I will focus on the culprits.
Every three years (or so), the Fed’s Survey of Consumer Finances releases a report on “Changes in U.S. Family Finances.” It’s a goldmine of information on how families are doing financially—specifically, how their assets and liabilities and net worths are changing by various demographic categories.
Yesterday, the Fed released a new report for 2010, its first since 2007.
I anticipated that the news was unlikely to be good, given the carnage done to family financial assets and home prices during the recent Great Recession. I suspected net worth would be down overall, and down the steepest for younger families. I had already seen preliminary Fed estimates of 2009 data. And I had already ruminated over the depressing Census 2010 report on income and poverty.
But I have to admit, I wasn’t prepared for results as bad as these. Here’s the bottom line:
Net worth basically means the total assets–real and financial, including home–minus the total liabilities of every U.S. “family.” (Though the Fed uses the word “family,” it really means households; a “family” can consist of only one person.) In 2007, the median for all families was $126,000; in 2010, it was $77,300. That’s a fall of 39 percent.
What happened? The value of homes and financial assets (often in 401(k) retirement plans) crashed—and though the Dow has partially recovered, the prices of homes haven’t. The middle 60 percent of the income distribution was hit hardest, percentagewise, for just this reason: Most of the lowest 20 percent don’t own homes, and for most of the highest 20 percent homes constitute a smaller share of their net worth. The hardest hit region was the West (median net worth down 55 percent) mostly, again, for the same reason—homes.
Another interesting angle: The share of families with credit card debt is down, while the share with college debt is up. For the first time ever, education loans make up a larger share of a family’s average debt than car loans—which is suggestive of where Millennials and their families are, and are not, making their investments.
But what I want to draw real attention to is the differing trends by age. Gen-Xers and late-wave Boomers between the ages of 35 and 54 (down by 54 and 40 percent) have been hit by far the hardest. They bought late into the real-estate market, they borrowed most against the value of their homes, and they tended to buy in the newer, faster-growing, and exurban regions where home prices crashed the most steeply after 2006. They also (I suspect) tended to invest their assets aggressively, as most investment managers say young adults should. Early-wave Boomers age 55-64 (down by 33 percent) have fared a bit better. As for Millennials and late-wave Xers under age 35, their trend (down by 25 percent) doesn’t mean much since their net worth is still so small.
But now let’s look at families age 65 and over, a group dominated by the Silent Generation. They have done much better (down by only 18 and 3 percent). Most of the Silent traded down from their primary residence at or near the top of the housing boom. Most sold or annuitized their financial assets at a much better moment in the history of the Dow. Even if they didn’t, they are more likely than Boomers or Xers to be getting retirement checks from DB (defined-benefit) corporate or government plans that are unaffected by the market. And even if they couldn’t or wouldn’t retire, they have been less likely to lose their jobs: 65+ Americans are the only age bracket whose employment-to-population ratio has risen continuously through the recent recession.
The new Fed study looks at income as well as net worth. Its verdict is the same as that of the annual Census reports (cited earlier): The age 65-74 and 75+ age brackets are the only ones to experience rising real median incomes between 2007 and 2010. Families in every younger age bracket experienced substantial declines.
OK, you might say: We’re only talking about the last three years. Things go up and down. Maybe this is just Brownian motion.
No, it’s not. It’s all part of a much longer trend. Let me now show the results going all the way back to the earliest Fed reports—that is, going back to 1983, and updating everything into inflation-adjusted 2010 dollars.
As you can see, the real median net worth of every age bracket under age 55 was better off back in the early Reagan years than it is today. (Remarkably, the situation for age brackets under age 45 never improved much after 1983.) Over age 65, things are much better today than at any time before 2004. And in 2010, for the first time ever, the age 75+ bracket is actually the best off of any adult age bracket. Back in the early 1960s, by most accounts, it was the worst off.
Now let me restate these results in a fashion that makes the generational point a bit clearer. In the following table, I express the median net worth of each bracket as a percent of the median net worth of 35-to-44 year-olds in that year. Take a look:
Here’s the take-away. Back in the early 1980s, when the 35-to-55 age brackets were dominated by the Silent Generation, people that age were roughly on par with the household net worth of the elderly. Interestingly, a 50-year-old family was 39 percent wealthier than a 75+ family. The Silent, in short, were doing pretty well—as they continued to do relative to other generations as they grew older. Today, a 50-year-old family is 54 percent poorer than a 75+ family.
Today’s headlines on the Fed report say the median net worth of all families has fallen to 1992 values. Which is true, averaged across all families. But it is also true that today’s young families are doing much worse than like-aged families in 1992—and that today’s senior families are doing much better.
All of this, by the way, was long-ago predicted. Back in 1987, the eminent demographer Richard Easterlin wrote Birth and Fortune, a book in which he tried to explain why Americans born from the late-1920s to the early 1940s (the Silent Generation) had always done so well in the economy relative to the generations that came before and after them. Easterlin noted that one of the most remarkable features of the 1950s and early 1960s was how the typical young man at 30 could earn more than the average wage for all working men—and could certainly live better than most “retired” elders of that era. He also noted that since the late 1970s, the economic conditions facing young late-wave Boomers had become much tougher. Easterlin called the Silent the “Fortunate” or “Lucky” Generation, and attributed their high incomes to their relatively small numbers—pointing out that they were the product of the “birth dearth” of the Great Depression.
Bill Strauss and I always thought that the explanation lay somewhat deeper than just demography and was connected to their location in history and their archetype. The Silent were socialized early in life to get ahead by following the rules in a fresh-built system that actually rewarded rule-followers. This they did, and it worked. A good Silent joke (popularized by Woody Allen) is that 80 percent of life is just showing up. I know very few Gen-Xers who think this is true—or even funny.
In case you’re interested, here’s what Bill and I wrote about the economic future of the Silent back in our first book, Generations, published in 1991:
No American generation has ever entered old age better equipped than the Silent. Today’s sixtyish men and women stand at the wealthier edge of America’s wealthiest-ever generation, poised to take full advantage of the generous G.I.-built old-age entitlement programs. Armies of merchandisers and seniors-only condo salesmen will pounce on these new young-oldsters as they complete a stunning two-generation rags-to-riches transformation of American elderhood. Where the 1950s-era elder Lost watched their offspring whiz past them in economic life, the 1990s-era elder Silent will tower over the living standards of their children. In 1960, 35-year-olds typically lived in bigger houses and drove better cars than their 65-year-old parents. In the year 2000, the opposite will be the case.
Now let me contrast this to what we predicted back then about the future of Gen-Xers:
Sometime around the year 2010, Xers will hit a hangover mood like that of the Lost in the early 1930s and the Liberty in the late 1760s: a feeling of personal exhaustion mixed with a new public seriousness. The members of this forty- and fiftyish generation will fan out across an unusually wide distribution of personal outcomes, reminiscent of a night at the bingo table. A few will be wildly successful, others totally ruined, and the largest number will have lost a little ground since the days of Boomer midlife.
Going back to these 21-year-old passages is so much fun! Let’s not stop here. Consider the following remarks, especially what we predicted back then about the intense protectiveness of Gen-X parents. (Anyone catch the “Are You Mom Enough?” Time Magazine cover last week—pitched to a whole generation of attachment parents?) Here they are:
Gen-Xers will make near-perfect fifty-year-olds. On the one hand, they will be nobody’s fools. If you really need something done, and you don’t especially mind how it’s done, these will be the guys to hire. On the other hand, they will be nice to be around. More experienced than their elders in the stark reality of pleasure and pain, Xers will have that Twainlike twinkle in the eye, that Trumanesque capacity to distinguish between mistakes that matter and those that don’t. In business, they will excel at cunning, flexibility, and deft timing–a far cry from the ponderous, principles-first Boomer style. In sports, the combination of Xer coaches and Millennial players may well produce a new golden era of teamwork and civic adulation. In the military, Xers will blossom into the kind of generals young Millennial soldiers would follow off a cliff. Their leading politicians may strike old Boomers as affable, sensible, quick on their feet–and more inclined to make deals than to argue about abstractions.
In the early 21st century, Gen-Xers will make their most enduring mark on the national culture. Their now-mature keenness of observation and their capacity to step outside themselves will kick off exciting innovations in literature and filmmaking. They may become the best on-screen generation since the Lost. As parents of growing children, they will by now be too affectionate, too physical–too eager to prevent teenagers from suffering the same overdose of reality they will recall from their own youth. In so doing, Xers will tip the scales toward overprotection of children–much as the Liberty did in the 1780s, the Gilded in the 1860s and the Lost in the 1930s. Midlife parents (mothers especially) may hear themselves criticized by Millennials for “momming” a pliant new generation of Adaptives.
Enough wild digression. Let’s get back to the main point of this posting. Just-released Fed data confirms what we have always known about likely economic trajectory of today’s generations: Through the Third Turning and into the initial stages of the Fourth, the Silent will prosper, Boomers will cope with declining expectations, and Gen-Xers will get hammered.
Thoughout history, we have argued, inequality both by class and by age reaches its apogee entering the Crisis era. Indeed, part of the historical purpose of the Crisis is tear down dysfunctional institutions, vacate positions of entitlement and privilege, rectify the inequality, and create a tabula rasa on which the rising generation can build something new.
I love how the powers that be in our Democratic run urban areas are blaming the warm Spring for the 50% increase in murders in their cities. Classic liberal response. It couldn’t be the policies they’ve inflicted on their residents for the last 40 years. How’s that War on Poverty working out in Chicago, Detroit and Philly? If you were thinking about moving to Chicago, think again.
If they are blaming the surge in murders on temperatures rising to 60 degrees in March, imagine what will happen when temperatures hit 100 degrees in August. It’s going to be a long hot summer in the cities.
CHICAGO — There are many theories about what has caused a recent spike in Chicago’s homicide rate, including a splintering of established drug gangs, the warm winter and high unemployment in some neighborhoods that seem a world away from the city’s beaches, lush parks and skyscrapers.
The numbers clearly show there is a problem, with eight killed and at least 35 wounded in a spasm of gunfire last weekend.
The violence is nowhere near its historical peak of the early 1990s, when Chicago recorded roughly 900 homicides per year. But from Jan. 1 through late May there were 203 homicides, an increase of more than 50 percent over the 134 during the same period in 2011.
Mayor Rahm Emanuel has made combatting gangs a priority and has stood with Police Superintendent Garry McCarthy to unveil a plan of attack. Among the new police tactics is the deployment of dozens of specialized undercover officers to units on Chicago’s West and South sides and then saturating those neighborhood streets with uniformed officers.
In addition, Gov. Pat Quinn on Monday signed into law the Illinois Street Gang RICO Act, which aims to dismantle gangs by boosting penalties for crimes performed as part of a criminal enterprise.
In Englewood, a roughly 20-by-20-block South Side neighborhood, homicides jumped from 40 in 2010 to 60 last year, which is more than half of the total 2011 homicides for cities such as Cleveland, Milwaukee, Washington, D.C., Oakland, Calif., and Kansas City, Mo.
Though police are loath to attribute this winter’s unusually warm weather as a possible factor, because it smacks of excuse-making, there were far more people on the streets in January, February and March — including gang members — than during those months in 2011.
Just as important have been dramatic changes within the gangs themselves.
“In the past the gangs were very organized from the top down,” said Sgt. Matthew Little of the Chicago Police Department’s gang enforcement unit. As more gang leaders are arrested, convicted and sent to prison, the gangs they left behind have become “very splintered,” he said.
Young men on the city’s streets agree.
“There is no one to control this, so it has become haywire,” said Devon Tims, who identified himself as one of the Chicago Vice Lords, making him one of the city’s estimated 70,000 gang members.
In interviews, McCarthy said the “fracturing” of larger gangs into smaller ones has doubled the number of factions and conflicts. “These kids have guns and they end up using them,” he said.
McCarthy said the gangs are far more territorial and rigid than those that operated when he was a ranking commander in the New York City Police Department and the chief in Newark, N.J. And that means trouble when a gang member simply crosses the street into rival territory.
“If we see a car with three of (one gang’s) guys three blocks over there (on another gang’s turf), they are probably going to shoot someone,” said Leo Schmitz, a gang enforcement commander who was redeployed in January to command Englewood’s police district.
The demolition of the city’s infamous public housing complexes in recent years also played a role. While the high rises long were considered a massive failure that warehoused the city’s poorest families and became magnets for gangs, tearing them down caused a new set of problems by scattering gang members to other parts of the city.
Some of them eventually settled in the thousands of houses that were abandoned during the nation’s recent financial crisis. There the battle for supremacy started anew.
Residents and activists from the most violent neighborhoods have seen similar campaigns to combat gang violence over the years and were both hopeful and skeptical about the latest one.
Jean Carter-Hill, an activist from Englewood, said she thinks the increase in officers patrolling the streets is helping clean up the area but that the city needs to do more, such as helping youths with conflict resolution.
“Every time there is a conflict, these young people get a gun,” she said. “And everyone seems to know where a gun is.”
You can’t watch the mainstream media propaganda channels for more than ten minutes without a talking head breathlessly announcing that gas prices have dropped for the 24th day in a row and are now back to $3.55 a gallon. Wall Street oil analysts, who are paid hundreds of thousands of dollars per year to tell us why prices rose or fell after the fact, are paraded on CNBC to proclaim the huge consumer windfall from the drop in price. This is just another episode of a never ending reality show, designed to keep the average American sedated so they’ll continue to spend money they don’t have buying crap they don’t need. The brainless twits that pass for journalists in the corporate mainstream media never give the viewer or reader any historical context to judge the true impact of the price increase or decrease. The government agencies promoting the storyline of those in power extrapolate the current trend and ignore the basic facts of supply, demand, price and peak oil. The EIA is now predicting further drops in prices. Two months ago they predicted steadily rising prices through the summer. What would we do without these government drones guiding us?
As you can see from the chart, gas prices tend to be volatile and unpredictable in the short term. You can also see that since 1998 the trend has been relentlessly higher. The average inflation adjusted price of gasoline in 1998 was $1.41 per gallon, versus $3.55 today, a 152% increase in fourteen years. Over this same time frame the BLS manipulated CPI was up only 44%. If we are swimming in oil, as the MSM pundits claim, why the tremendous surge in price? It must be those evil oil companies. It couldn’t possibly be the impact of peak oil. To acknowledge the fact that worldwide oil production has reached its peak would be to concede that our suburban sprawl, just in time world is drawing to an excruciating end. So the politicians spout their assigned storylines, supported by their paid off “experts” (aka Daniel Yergin), and unquestioningly reported as fact by their designated corporate media outlet. Those of a liberal bent assail oil companies and speculators; refuse to acknowledge the law of supply and demand, while touting green energy as the solution to all our energy needs. Those of a conservative bent believe in attacking foreign countries to secure “our” oil, refuse to acknowledge the law of supply and demand, and spout “drill, drill, drill” slogans because dealing with facts is inconvenient. The willfully ignorant public believes whichever storyline matches their preconceived beliefs. All is well – no one is required to think critically. Thinking is hard.
There are numerous factors that affect the price of oil on a daily basis, but at the end of the day supply and demand determine price. The chart below documents the key external events that have had a major impact on oil prices since 1970. The vital fact that you won’t hear on CNBC is that every recession since 1970 has been immediately preceded by an oil price spike. Anyone living in the real world (this excludes Cramer, Liesman, Bartiromo, & Kudlow) knows we have entered part two of the Greater Depression. The surge in oil prices in the last two years has precipitated this renewed downturn.
The MSM blathering baboons of bullshit dutifully report the price of gas on a given day. People who live in the real world fill up their gas tanks every week, so the average price over a period of time is what matters. The average price of a gallon of gasoline in 2008 was $3.39. The average price in 2011 was $3.48. The average price in 2012 has been $3.62 thus far. This data paints an entirely different picture than the one painted by the politicians, experts and the clueless captured media. Gas prices are higher than they were prior to the last economic implosion. Cause and effect is a concept beyond the intellectual capabilities of MSM journalists and the millions of government educated zombies they mesmerize with misinformation. The lack of intellectual curiosity and critical thinking skills plays directly into the hands of those with a storyline to sell or truth to obscure.
The recent storyline proliferated by the MSM at the behest of Washington DC politicians and the corporate interests that control them, is that the U.S. is on the verge of energy independence, with hundreds of years of plentiful oil right under our feet. The chart below made the rounds last week on Bloomberg, defender and mouthpiece of billionaires everywhere. This chart surely proves that peak oil is bullshit. Right?
Besides the false representation of oil production and the misleading conclusion that we have more oil than we need, the chart and Bloomberg screed does not provide the true context of why worldwide demand is tumbling. The chart is NOT showing global crude oil production. It is showing global oil and other liquids supply, which includes crude and condensate, natural gas plant liquids, other liquids (mostly ethanol), and processing gains (increase in volume from refining heavy oil). The MSM would rather mislead the public than provide the true picture of the supposed oil production boom. The question is whether the MSM is misleading the public due to their own journalistic incompetence or are they carrying out their assigned mission on behalf of the corporate oligarchs running the kingdom.
The chart below reveals a truer picture of the worldwide energy situation. Conventional oil production hit its peak/plateau around 74 million barrels per day at the end of 2004, and has barely budged from that level over the last eight years. Despite all the rhetoric about the North American oil boom, conventional oil production is at virtually the same level today as it was in 2004. The U.S.(shale oil) and Canadian (tar sands) gains in production have been matched by the collapse in Mexican production. The Middle East countries produced 23.3 million barrels in September 2004. The average price of a barrel of oil in 2004 was $38. They are now only producing 23.9 million barrels when prices are 120% higher.
Global oil demand in 2004 was around 84 million barrels per day. To increase liquid fuel supply to meet the 90 million barrels per day demand we had to turn to unconventional fuels like tar sands, tight oil, and biofuels, all of which have far higher production costs and far less energy content than sweet crude. As the easy to access, cheap to produce ($20 per barrel in Saudi Arabia), close to the surface sweet crude has been depleted, it has been replaced by heavy crude, tar sands, deep-water oil, and shale oil, with production costs in excess of $80 per barrel. Anyone anticipating a long-term decline in fuel prices must be smoking tar sands in their bong. The liquids that have “replaced” conventional crude have a few slight drawbacks. Natural gas liquids provide about 70% as much energy per barrel as crude oil, so a barrel of NGL is not equivalent to a barrel of crude. Have you filled up your SUV lately with some NGL? Ethanol provides only 60% as much energy per barrel as crude oil and its EROEI is pitifully low. The energy returned on energy invested for these non-conventional sources of energy approaches the minimum limits unless prices rise dramatically. The Obama green army does not want this chart making its way into the public discourse. Their fantasyland of renewable energy solutions is proven to be a fool’s errand.
The price of a barrel of West Texas crude is currently $86 per barrel, down from $109 per barrel in February. Obama supporters will proclaim that his threat to crack down on speculators had the desired effect. He must have scared those nasty speculators with his gravitas. The price rise surely didn’t have anything to do with the U.S. led attack on Libya, the act of war economic sanctions on Iran, the beating of Israel/U.S. war drums, Japan demand due to the shutdown of their nuclear power industry, or the relentlessly higher demand from China and India. And now the MSM is trying to spin a yarn that prices have dropped by 21% because worldwide supply is surging. That is so much more palatable than telling the truth and admitting that we’ve entered the 2nd phase of the Greater Depression.
It took $140 a barrel in oil in 2008 to tip the world into recession. Worldwide economies were much stronger then. The U.S. National Debt has risen by $6.5 trillion, or 70% since 2008. Real GDP has risen by $200 billion since 2008, or a 1.5% increase. Debt to GDP has risen from 64% to 102%. Consumer debt at $2.55 trillion is exactly the same as the 2008 level even after Wall Street banks have written off over $1 trillion, subsidized by the American taxpayer. The consumer deleveraging storyline is completely false. In 2008 there were 234 million working age Americans and 145 million of them were employed. Today there are 243 million working age Americans and 142 million of them are employed. In 2008 there were 28 million Americans in the food stamp program. Today there are 46 million Americans collecting food stamps. The economic situation in Europe has deteriorated at a far greater rate. Therefore, it is not surprising that it only took $109 a barrel oil to push the world back into recession.
The main reason prices are dropping is the collapse in demand from Europe and the United States. The bumpy plateau of peak oil is in full force. Prices rise to the point where they push economies into recession, demand crashes due to the recession, and prices decline. The double whammy of oil prices reaching $111 a barrel in 2011 and $109 a barrel in 2012 have sapped the life out of the American consumer. This is reflected in the plunge in gasoline and petroleum usage since 2008, with a temporary leveling off in 2010, followed by a further nosedive since 2011. As this recession deepens over the next six months, prices will likely fall further. But this is where the Catch-22 kicks in.
Once prices drop below $80 a barrel it sets in motion a reduction in capital investment, as new production projects are not economically feasible below $80 per barrel. Oil analyst Chris Nedler explains the Catch-22 aspect of oil prices in a recent article:
Research by veteran petroleum economist Chris Skrebowski, along with analysts Steven Kopits and Robert Hirsch, details the new costs: $40 – $80 a barrel for a new barrel of production capacity in some OPEC countries; $70 – $90 a barrel for the Canadian tar sands and heavy oil from Venezuela’s Orinoco belt; and $70 – $80 a barrel for deep-water oil. Various sources suggest that a price of at least $80 is needed to sustain U.S. tight oil production.
Those are just the production costs, however. In order to pacify its population during the Arab Spring and pay for significant new infrastructure projects, Saudi Arabia has made enormous financial commitments in the past several years. The kingdom really needs $90 – $100 a barrel now to balance its budget. Other major exporters like Venezuela and Russia have similar budget-driven incentives to keep prices high.
Globally, Skrebowski estimates that it costs $80 – $110 to bring a new barrel of production capacity online. Research from IEA and others shows that the more marginal liquids like Arctic oil, gas-to-liquids, coal-to-liquids, and biofuels are toward the top end of that range.
My own research suggests that $85 is really the comfortable global minimum. That’s the price now needed to break even in the Canadian tar sands, and it also seems to be roughly the level at which banks and major exploration companies are willing to commit the billions of dollars it takes to develop new projects.
Oil prices may temporarily drop below $80, but prices below that level for a prolonged period will lead to supply being constricted, which will ultimately lead to higher prices. The storyline of hundreds of years of Bakken shale oil that will make the U.S. energy independent is the latest fiction to be peddled by the oligarchs as a way to sedate and confuse the masses.
U.S. oil production in 2007 averaged 8.5 million barrels per day. Today, the U.S. is producing 10.7 million barrels per day. We must have hit the jackpot. Not quite. Actual crude oil production has increased by 1 million barrels per day, a 20% increase. The other 1.2 million barrels have been from liquefied natural gas (up 34%) and government subsidized ethanol (up 100%).
The U.S. crude oil production is at the same level it was in 1998, but somehow we are on the verge of becoming energy independent. The recent increase is solely due to the horizontal drilling and hydraulic fracturing of shale deposits in Texas and North Dakota. You don’t hear much about Alaskan production declining for the ninth year in a row and California production declining to the lowest level in three decades. The paid shills predicting Bakken production of 3 million barrels per day are purposely lying or just plain delusional.
North Dakota oil production has reached 550,000 barrels per day versus 187,000 barrels per day in 2009. Simpletons in the MSM will just extrapolate this growth to 3 million barrels by 2020. No need to examine the facts. Oil market expert Tom Whipple reveals the dirty secrets behind the Bakken shale oil miracle:
It took the production from 6,617 wells to produce North Dakota’s 546,000 b/d in January. Divide the daily production by the number of wells and you get an astoundingly low 82 b/d from each well. I say “astounding” because a good new offshore well can do 50,000 b/d. BP’s Macondo well which exploded in the Gulf a couple of years ago was pumping out an estimated 53,000 b/d before it was capped.
Now a North Dakota shale oil well is not in the cost class of a deep-water offshore platform which can run into the billions, but they do cost about three times as much as a classic onshore oil well as they first must be drilled down 11,000 feet and then 10,000 horizontally through the oil bearing layer before the fracturing of the rock can take place. The “fracking” involves at least 15 massive pumps that inject water and other chemicals into the well. Take a Google Earth flight over northwestern North Dakota. The fracked wells are hard to miss as there are now about 9,000 of them and they are each the size of a football field.
There is still more — fracked wells don’t keep producing very long. Although a few newly fracked wells may start out producing in the vicinity of 1,000 barrels a day, this rate usually falls by 65 percent the first year; 35 percent the second; and another 15 percent the third. Within a few years most wells are producing in the vicinity of 100 b/d or less which is why the state average for January is only 82 b/d despite the addition of 1300 new wells in 2011.
The rapid depletion of these wells, enormous expense to drill new wells, oil prices barely above cost of production, low EROEI, swiftly falling Alaskan and shallow water production, and the snail’s pace of deep water production are not a recipe for energy independence. Shale oil production will never exceed 1 million barrels per day. And if you believe Saudi Arabia’s promises to fulfill any shortfalls, I’ve got some delightful beachfront property in Afghanistan to sell you. Saudi conventional crude oil production is at the same level it was in 2005.
The seven year Saudi plateau is just a precursor to what is going to happen over the next decade. Saudi Arabia began pumping oil in 1945. It will all be gone by 2045. You can’t extract an infinite amount of oil from a finite world. Pretending this isn’t true won’t make it so. Oil has been the lifeblood of our nation since the late 1800s. The depletion of this essential ingredient of the modern world will not lead to a sudden death for our way of life but a slow downward spiral of waning supply, escalating prices, and economic decay.
The sustained high and rising oil prices will be economically destructive as our debt saturated, suburban sprawl, mall centric, SUV crazed, cheap oil dependent society methodically and agonizingly implodes. Chris Skrebowski describes our future succinctly:
“Unless and until adaptive responses are large and fast enough to constrain the upward trend of oil prices, the primary adaptive response will be periodic economic crashes of a magnitude that depresses oil consumption and oil prices.”
We’ve entered one of these periodic economic crashes. They are coming faster and faster. So enjoy that 40 cent drop in gas prices as you drive down to sign up for food stamps. The Saudis have a saying that acknowledges their luck in being born on top of billions of barrels of oil and the inevitability of its depletion:
“My father rode a camel, I drive a car, my son flies a jet plane, his son will ride a camel.”
Delusional Americans believe they have a right to cheap plentiful oil forever. They refuse to acknowledge that luck has played the major part in their rise to economic power. The American saying will be:
My great grandfather rode a horse, my grandfather drove a Model T, my father drove a Buick, I leased a Cadillac Escalade, my son died in the Middle East fighting for my oil, his son will never be born.
“I was never satisfied with the Israeli explanation. . . . Through diplomatic channels we refused to accept their explanations. I didn’t believe them then, and I don’t believe them to this day. The attack was outrageous.”
— US Secretary of State Dean Rusk
“Accidents don’t occur through repeated attacks by surface vessels and aircraft. It obviously was a decision made pretty high up on the Israeli side, because it involved combined forces. The ship was flying an American flag. My judgment was that somewhere along the line some fairly senior official gave the go ahead. I personally did not accept the Israeli explanation.”
— US Secretary of State Dean Rusk, Recorded interview, www.ussliberty.org
“…the board of inquiry (concluded) that the Israelis knew exactly what they were doing in attacking the Liberty.”
— CIA Director Richard Helms in his book A Look Over my Shoulder
“It was no accident.”
— CIA Director Richard Helms in interview for Navy Times, 6/26/2002. Asked to say more, Helms remarked that he did not want to spend the rest of his life testifying in court about the attack.
“To me, the picture thus far presents the distinct possibility that the Israelis knew that the Liberty might be their target and attacked anyway, either through confusion in Command and Control or through deliberate disregard of instructions on the part of subordinates.”
— CIA Deputy Director Admiral Rufus Taylor
That the attack was deliberate “just wasn’t a disputed issue” within the National Security Agency
— Former NSA Director retired Army Lieutenant General William Odom on 3 March 2003 in an interview for Naval Institute Proceedings
Former NSA/CIA Director Admiral Bobby Inman “flatly rejected” the Cristol/Israeli claims that the attack was an accident
— 5 March 2003 interview for Naval Institute Proceedings
“I have never believed that the attack on the USS Liberty was a case of mistaken identity. That is ridiculous. Israel knew perfectly well that the ship was American.”
— Admiral Thomas H. Moorer, former Chief of Naval Operations and later Chairman, Joint Chiefs of Staff writing for Americans for Middle East Understanding, June 8, 1997
“To suggest that they [the IDF] couldn’t identify the ship is … ridiculous. … Anybody who could not identify the Liberty could not tell the difference between the White House and the Washington Monument.”
— Admiral Thomas Moorer, Chief of Naval Operations and later Chairman, Joint Chiefs of Staff, quoted in The Washington Post, June 15, 1991, p. 14
“To me, the picture thus far presents the distinct possibility that the Israelis knew that Liberty might be their target and attacked anyway.”
— Admiral Rufus Taylor, Deputy CIA director, as quoted by CIA director Admiral Rufus Taylor in A Look Over My Shoulder.
Of four former NSA/CIA seniors with inside knowledge, none was aware of any agency official who dissented from the position that the attack was deliberate
— David Walsh, writing in Naval Institute Proceedings
“That the Liberty could have been mistaken for the Egyptian supply ship El Quseir is unbelievable”
— Special Assistant to the President Clark Clifford, in his report to President Lyndon Johnson
“Inconceivable that it was an accident � 3 strafing passes, 3 torpedo boats. Set forth facts. Punish Israelis responsible”
— Clark Clifford, Secretary of Defense under Lyndon Johnson, in Minutes of NSC Special Committee Meeting, 9 June 1967
“A nice whitewash for a group of ignorant, stupid and inept [expletive deleted].”
— Handwritten note of August 26, 1967, by NSA Deputy Director Louis W. Tordella reacting to the Israeli court decision exonerating Israelis of blame for the Liberty attack. Dr. Tordella expressed the view that the attack was deliberate and that the Israeli government attempted to cover it up to authors James Ennes and James Bamford and to Congressman George Mahon (D-Texas), and in an internal memorandum for the record. He noted “a nice whitewash for a group of ignorant, stupid and inept (redacted)” in the margin of the official Israeli excuse for the attack as noted in the NSA Gerhard report 1982)
“The attack was clearly deliberate.”
— General Marshall Carter, former director, National Security Agency, in a telephone interview with James Ennes
“The attack was deliberate”
— Lucius Battle, former presidential advisor, as keynote speaker for 1982 USS Liberty reunion.
“My immediate reaction was it was not an accident. It had to be a deliberate attack.”
— Lucius Battle, in BBC Documentary “Dead in the Water”.
“….did not buy the Israeli ‘mistake’ explanations either. Nobody believes that explanation.” When informed by author Bamford of gruesome war crime (killing of large numbers of POWs) at nearby El Arish, Morrison saw the connection. “That would be enough,” he said. “They wouldn’t want us in on that. You’ve got the motive. What a hell of a thing to do.”
— Major General John Morrison, US Air Force, Deputy Chief NSA Operations during the attack and later Chief of NSA Operations as reported in Body of Secrets by James Bamford, p233.
“I can tell you for an absolute certainty (from intercepted communications) that they knew they were attacking an American ship.”
— Oliver Kirby, former deputy director for operations/production, National Security Agency. Kirby participated in NSA’s investigation of the attack and reviewed translations of intercepted communications between pilots and their headquarters which he reports show conclusively that they knew their target was an American ship. Kirby is considered the “Godfather” of the USS Liberty and USS Pueblo intercept programs. (Telephone interviews with James Ennes and David Walsh for Friendless Fire, Proceedings, June 2003)
On the strength of intercept transcripts of pilots’ conversations during the attack, the question of the attack’s deliberateness “just wasn’t a disputed issue” within the agency.
— Lieutenant General William E. Odom, former director, National Security Agency, interview with David Walsh on March 3, 2003, reported in Naval Institute Proceedings, June, 2003
Inman said he “flatly rejected” the Cristol thesis that the attack was an accident. “It is just exceedingly difficult to believe that [USS Liberty] was not correctly identified” based on his talks with NSA seniors at the time having direct knowledge of intercepted communications. No NSA official could be found who dissented from the “deliberate” conclusion.
— Admiral Bobby Ray Inman, USN, Director National Security Agency 1977-1981, reported in Proceedings, June, 2003
“I found it hard to believe that it was, in fact, an honest mistake on the part of the Israeli air force units. I still find it impossible to believe that it was.”
— Paul C. Warnke, Undersecretary of the Navy and later general legal counsel to the Department of Defense.
“In many years, I have wanted to believe that the attack on the Liberty was pure error. It appears to me that it was not a pure case of mistaken identity. . . . I think it is about time that the State of Israel and the United States government provide the crew members of the Liberty, and the rest of the American people, the facts of what happened and why it came about that the Liberty was attacked 30 years ago today.” Later, McGonagle remarked, “USS Liberty is the only US Navy ship attacked by a foreign nation, involving large loss of life…that has never been accorded a full Congressional hearing.”
— Captain William L. McGonagle, Commanding Officer, USS Liberty, speaking at Arlington National Cemetery June 8, 1997.
“The Israelis told us 24 hours before that …if we didn’t move it, they would sink it. Unfortunately, the ship was not moved, and by the time the message arrived the ship was taking on water.”
— John Stenbit, Assistant Secretary of Defense for C3Im in an address to the AFEI/NDAI Conference for Net Centric Operations, Wednesday, April 16, 2003
State Department Legal Advisor and author of highly critical detailed analysis of the Israeli excuse in telephone interview from his home in France, Mr. Salans described the attack as deliberate.
— Legal Advisor Carl Salans
Walter Deeley, NSA department head, conducted still-classified investigation of the attack and remarked later in telephone interview that he regards the attack as deliberate.
— NSA Department Head Walter Deeley
“The highest officials of the [Johnson] administration, including the President, believed it ‘inconceivable’ that Israel’s ‘skilled’ defense forces could have committed such a gross error.”
— Lyndon Johnson’s biographer Robert Dallek in Flawed Giant, Oxford University Press, 1998, pp. 430-31
Never before in the history of the United States Navy has a Navy Board of Inquiry ignored the testimony of American military eyewitnesses and taken, on faith, the word of their attackers.
— Captain Richard F. Kiepfer, Medical Corps, US Navy (retired), USS Liberty Survivor
“The evidence was clear. Both Admiral Kidd and I believed with certainty that this attack…was a deliberate effort to sink an American ship and murder its entire crew…. It was our shared belief. . .that the attack. . .could not possibly have been an accident…. I am certain that the Israeli pilots [and] their superiors. . .were well aware that the ship was American.”
— Captain Ward Boston, JAGC, US Navy (retired), senior legal counsel to the US Navy Court of Inquiry
According to Kidd’s legal counsel, Captain Ward Boston, USN, Kidd discussed with him his belief that the attackers were aware they were attacking an American ship. The Court ruled otherwise because they were so directed by Washington.
— Admiral Isaac C. Kidd, President of the Navy Court of Inquiry, as reported in Navy Times, 6/26/2002
“I feel the Israelis knew what they were doing. They knew they were shooting at a U.S. Navy ship.”
— Captain Ward Boston, legal counsel to the Navy Court of Inquiry, as reported in . Navy Times, 6/26/2002
“No one in the White House believed that the attack was an accident.”
— George Christian, Press Secretary to President Lyndon Johnson in letter to James Ennes, 1978.
After reviewing the Court of Inquiry in his official capacity as legal counsel to the convening authority, concluded that the evidence did not support the findings that the attack was an accident and declined to recommend that his Commander sign and forward it to Washington.
— Rear Admiral (then captain) Merlin Staring, Staff Legal Office for Commander in Chief US Naval Forces Europe and later Chief Judge Advocate General of the Navy. Statement to Navy Times, 3 June 2002 and elsewhere
“This book [Assault on the Liberty] gives convincing evidence that the attack was deliberate and that the facts, including the Navy’s bungling before and during the attack, were covered up.”
— United States Senator Adlai E. Stevenson III as reported in Congressional Record — Senate S13136 September 23, 1980. Senator Stevenson later announced his interest in holding Congressional hearings on the attack. He pointed out that the survivors have been consistent in their accounts of what happened and that the attack was, in his word, “premeditated.” Also reported by William J. Small, United Press International, September 28, 1980.
“The Congress never investigated this matter, and I don’t detect much enthusiasm for getting into it now.”
— Senator Adlai Stevenson III in letter to James Ennes dated September 9, 1980
“From what I have read, I can’t tolerate for one minute that this was an accident! … What have we done about the Liberty? Have we become so placid, so far as Israel is concerned or so far as that area is concerned, that we will take the killing of 37 (sic) American boys and the wounding of a lot more and the attack on an American ship in the open sea in good weather? We have seemed to say: ‘Oh, well, boys will be boys.’ What are you going to do about it? It is most offensive to me!
— Senator Bourke Hickenlooper; From transcript of July 1967 Senate Foreign Relations Hearing on Foreign Assistance Act of 1967.
“I have read the Navy investigation of the Liberty, and the evidence adduced there, and I have read the Israeli court of inquiry records, and based upon their own records of the investigation, I cannot agree that it was accidental.”
— Senator Bourke Hickenlooper; From transcript of May, 1968, Senate Foreign Relations Hearing on Foreign Assistance Act of 1968, page 444.
“American leaders did not have the courage to punish Israel for the blatant murder of its citizens. . . . The Liberty‘s presence and function were well known to Israel’s leaders. …Israel’s leaders concluded that nothing they might do would offend the Americans to the point of reprisal. If American leaders did not have the courage to punish Israel for the blatant murder of American citizens, it seemed clear that their American friends would let them get away with almost anything.
— George Ball, under secretary of state at the time writing in The Passionate Attachment: America’s Involvement with Israel, pages 57-58.
“I don’t think that there’s any doubt that it was deliberate…. [It is] one of the great cover-ups of our military history.”
— David G. Nes, the deputy head of the American mission in Cairo at the time
“FBI officials counter that ‘friendly’ spying can be as damaging as spying for enemies, they note, as in 1967 when Israeli jets deliberately attacked the electronic intelligence-gathering ship USS Liberty….”
— FBI Officials reported in Washington Times, November 26, 1998
“How much better if Congress would….call to account those who were involved in spreading lies about the tragedy.”
— James Akins, former US Ambassador to Saudi Arabia James Akins in Special Report, The Israeli Attack on the USS Liberty, June 8, 1967, The Washington Report on Middle East Affairs, December, 1999
“The attack was deliberate and not an accident.”
— Victor Ostrovsky, author and former Mossad officer, in telephone conversations with former Congressman Pete McCloskey October 10, 1991, and with and several conversations with James Ennes.
“It’s an American ship!” the pilot of an Israeli Mirage fighter-bomber radioed Tel Aviv as he sighted the USS Liberty on June 8, 1967. Israeli headquarters ordered the pilot to attack the American ship.
— former US Ambassador to Lebanon Dwight Porter describing transcripts of communications he saw, reported in syndicated column “Remembering the Liberty” by Rowland Evans and Robert Novak, November 6, 1991.
“The historical event which took place in June 1967 can hardly be called enigmatic and mysterious. …It is difficult to understand that the Israelis could not identity the USS Liberty, since the ship had a unique antenna and equipment and especially since the Israelis had identified the ship with long term observation.”
— Translated from a taped interview with Sergeev Oleg Korneevitch, retired Colonel, Soviet GRU.
“The government of Israel intentionally attacked the ship. …The attack was not legally justified. …(there were) two further violations of international law…the use of unmarked military aircraft (and)…the wanton destruction of life rafts.”
— Walter L. Jacobsen, Lieutenant Commander, US Navy, in Naval Law Review, Vol 36, Winter 1986
“The attack was not an accident.”
— Stephen Green, author. Antelope Valley Press, April 5, 1984
“Certain facts are clear. The attack was no accident. The Liberty was assaulted in broad daylight by Israeli forces who knew the ship’s identity. …The public, however, was kept in the dark. Even before the American public learned of the attack, U.S. government officials began to promote an account satisfactory to Israel. The American Israel Public Affairs Committee worked through Congressmen to keep the story under control. The President of the United States, Lyndon B. Johnson, ordered and led a cover-up so thorough that years after he left office the episode is still largely unknown….”
— Paul Findley, author and former Member of Congress 1961-1983 in They Dare to Speak Out, by Paul Findley, 1985, page 166
“Is the Liberty episode being erased from history. So it would seem…What has happened to our prying journalistic corps and our editors, normally so indignant of attempted suppression of the news?…We believe that a joint select committee of Congress should investigate the strange case of the USS Liberty…”
— William F. Buckley, journalist and publisher, National Review, June 27, 1967
(In a review of “Six Days of War” by Michael Oren.) “Oren…frequently descends to vulgar propaganda. Deeming the Israeli combined air and naval assault on the USS Liberty …an accident,’ Oren rehashes official Israeli tales and embellishes them with his own whoppers.”
— Norman Finkelstein, PhD, author, professor of political science, DePaul University, writing in Journal of Palestine Studies, Spring, 2003, p85
“The attack on the USS Liberty was planned and there is and was a cover-up.” “If the very valuable lessons of the Liberty were known, the capture of the USS Pueblo could not have happened.”
— Lloyd M. “Pete” Bucher, US Navy, Commanding Officer USS Pueblo when captured by North Korea in January 1968, in telephone conversations with James Ennes and on September 6, 2002, with Richard Schmucker.
“Nearly everyone who is not affiliated with Israel…and who has seriously looked into the attack believes that it was deliberate. …The bare facts of the attack rule out any other conclusion.”
— Donald Neff, author, Washington Report on Middle East Affairs, August, 2002, p29
Ralph Hoppe, Colonel, US Army, retired, reports that dozens of intelligence reports soon after the attack described the attack as deliberate including a “consensus report” which summarized the collective view of the US intelligence community. Soon orders came from Washington to collect and destroy all such reports. Nothing more in official channels described the attack as deliberate.
— Aerotech News and Review, March 2, 2001, by John Borne, PhD, and conversations with James Ennes
“It is clear that the Israelis knew that they were attacking a vessel of the US Navy, especially as it was flying a large Stars and Stripes at the time. The fact that they spent six hours reconnoitering and executing the attack, which included machine-gunning the lifeboats, attests to the deadly intent of the operation.
— Andrew and Leslie Cockburn, Dangerous Liaison, the Inside Story of the US-Israeli Covert Relationship, by Andrew and Leslie Cockburn, p152.
“A. Jay Cristol’s virtual minority of one assessment is not supported by the detailed non-technical common sense evidence to the contrary in Body of Secrets (by James Bamford). “There is nothing surprising in Bamford’s conclusion that the attack was deliberate. Liberty survivors have made that case convincingly for years.”
— Professor Hayden Peake, author, former CIA officer and member, Association of Former Intelligence Officers, The Intelligencer, Vol. 12, No.1, Summer 2001
Book reviews transcripts of communications during the attack which establish that the attack was deliberate.
— Israel’s Wars, 1947-1993, by Ahron Bregman
Survivors of the attack are unanimous in their conviction that the attack was deliberate. Among other things, their belief is based upon the intense pre-attack reconnaissance, the fact that the firing continued from close range long after the attackers examined the ship and its markings from a few feet away, and because the Israeli version of events as reported to the United States is grossly untrue.
— USS Liberty survivors
Several Air Force intelligence analysts who have come forward to report that they saw real-time transcripts of communications from the attacking forces which show clearly that they were aware they were attacking an American ship. Others who saw these transcripts include Dwight Porter and Oliver Kirby, mentioned above, and several top officials of the American intelligence community.
— Former US Air Force intelligence analysts Ron Gotcher, Steve Forslund, Richard Block and pilot Charles Tiffany
Published doctoral thesis establishes that the attack was deliberate.
— John Borne, PhD, adjunct professor of history, NY University.
Rejects the US Navy Court of Inquiry as inadequate, declares that the attack was apparently deliberate, and calls upon the United States to conduct a complete and thorough investigation.
— Resolution #508 of the American Legion at its 49th annual national convention in August, 1967
“The [Navy Court of Inquiry] leaves a good many questions unanswered.”
— The New York Times, July 1, 1967
“The naval inquiry is not good enough.”
— The Washington Post, June 30, 1967
“They must have known…that Liberty was an American ship.”
— The Washington Star, June 30, 1967
“The action was planned in advance”
— Drew Pearson and Jack Anderson in The Washington Post, June 30, 1967
“Only the blind or the trigger happy could have made such a mistake”
— The National Observer
“The attack was deliberate. Those responsible should be court-martialed on charges of murder.”
— California Congressman Craig Hosmer in the Congressional Record–House, June 29, 1967, p. 17893
“How can this be treated so lightly? What complaint have we registered?
— Mississippi Congressman Thomas G. Abernethy in the Congressional Record–House, June 29m, 1967, pp. 17894-5
“Certain facts are clear. The attack was no accident. The Liberty was assaulted in broad daylight by Israeli forces who knew the ship’s identity. …The President of the United States led a cover-up so thorough that years after he left office, the episode was still largely unknown to the public — and the men who suffered and died have gone largely unhonored.”
— Paul Findley, They Dare to Speak Out, Lawrence Hill & Co., 1985, p166
“Nearly as bizarre as the attack itself was the reaction of the American government to the incident. A foreign nation had butchered American servicemen, sending thirty-four to their graves… A virtually unarmed American naval ship in international waters was shot at, strafed with rockets, torpedoed, set on fire…then left to sink as crazed gunners shot up the life rafts. The foreign nation then says, sorry about that, and offers an explanation so outrageous that it is insulting, and the American government accepts it, sweeps the whole affair under a rug, then classifies as top secret nearly all details concerning it.”
— James Bamford, author, “The Puzzle Palace”
The story has been hushed up.”
— Louisiana Congressman John R. Rarick in the Congressional Record–House, September 19, 1967, pp. 12170-6
