WITHERING ON THE VINE

Whenever I see stories like the one below, I find myself focusing on the cultural and societal aspects, rather than what the writer was attempting to convey. The story captures the facts, but not the big picture of why this happened. It’s another sad story that has its roots in the delusion that debt financed spending equals wealth. The reason 30% of all the nurseries in the country have closed in the last five years is because they shouldn’t have been in existence in the first place. The demand for landscaping services in this country was falsely created by Ben Bernanke, Alan Greenspan and their printing presses. Greenspan’s interest rate policies created a false boom in housing. The false boom in housing led to a false boom in landscaping, renovations, decks, patios, appliances, and autos. Delusional Americans by the millions sucked the vaporous equity out of their houses and spent it on shit that made them feel richer. The took over $1.8 trillion out of their houses over 3 years and poured it into the economy, creating the illusion of true demand.

 

When the housing market crashed, the equity was vaporized, and homeowners were left with billions of debt and no cash. After the greatest housing boom in history, Americans are now left with near the lowest amount of equity in their homes in history. The boom started with Americans having in excess of 60% equity in their homes and today have less than 45% equity in their homes.

The demise of nurseries, Circuit City, Best Buy, millions of contractor jobs, and thousands of other small businesses can be directly blamed on the policies of the Federal Reserve. And now they are attempting the exact same medicine that created the misery in the first place. Their solution to a problem caused by excessively low interest rates and money printing has been to lower interest rates to zero and print money at hyper-speed. I just know it’ll work this time.

The story below glosses over the fact that the owners of this nursery made a choice to give their two daughters the weddings of a lifetime. It says this blew a hole in their budget. What is doesn’t say is that these people borrowed against their business to provide one day of extravagance for their daughters. How American of them. This is where the criminal actions of central bankers meets the stupidity, materialism and shallowness of the average American. If you can’t afford something, you don’t buy it. If you can’t afford an extravagant wedding without risking your livelihood, have a small affordable wedding. These people can blame their business failure on a struggling economy or circumstances beyond their control, but they made choices and are paying the price.

Until the people in this country come to their senses and realize that a debt financed lifestyle does not represent true wealth, we are destined to experience a depression for the ages. There will be thousands more small businesses that go under as the fake boom reaches its final bust stage.

” There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”Ludwig von Mises

 

Chesco nursery is among many that are withering

After 25 years, Dilworth Nursery has closed. Nationwide, so have up to 30% in the last five years, an expert said.

By Anthony R. Wood

Inquirer Staff Writer

 The Dilworth Nursery in Oxford, PA is being auctioned off.  (Photo by Tony Wood)
 
The Dilworth Nursery in Oxford, PA is being auctioned off. (Photo by Tony Wood)
 
The landscape of the nursery business began changing – and most definitely not for the better – about five years ago, but Jackie and Rick Dilworth didn’t expect theirs to end like this.

On Saturday, they circulated among thousands of their possessions – patio furniture, wood cabinets, kitchen items, the inventory of plants – while the practiced voice of an auctioneer spoke faster than the speed of the typical human’s comprehension.

As the result of a conspiracy of circumstances – most notably the struggling economy – after 25 years, the 13-acre Dilworth Nursery in East Nottingham Township, deep in Chester County near downtown Oxford, is closed for good.

The property is for sale, and the Dilworths aren’t sure where they’ll wind up.

“We never anticipated we’d go out this way,” Jackie Dilworth, 51, said. But they also knew, she said, that given the state of the industry, they could not continue to operate their wholesale-retail nursery, which specialized in unusual plantings for public gardens, arboretums, and landscape contractors.

“The business is not going to come back in our lifetime,” she said.

It certainly won’t happen soon, said Charlie Hall, a horticulture professor at Texas A&M University and an expert on industry trends.

Although hard data aren’t yet available, Hall estimated up to 30 percent of nurseries nationwide had closed in the last five years.

In the 1970s, he said, the nursery business was growing at a 14 percent annual rate, but that had slipped precipitously by the end of the 1990s.

He said that today’s twentysomethings could help revive the nursery trade eventually, but that it could take 15 years.

“It’s been a tough stretch for the nursery businesses and landscaping in general,” said Emelie Swackhamer, horticulturist at the Penn State agricultural extension in Lehigh County. For example, Waterloo Gardens retail shop recently shuttered its landmark Main Line store in Devon.

“People were using the equity they paid into their homes to pay for landscaping,” said Gregg E. Robertson, president of the Pennsylvania Nursery and Landscape Association. “That equity isn’t available anymore.

“The nurseries have been particularly hard-hit.”

Still, Bucks, Chester, Delaware, and Montgomery Counties have about 1,000 remaining nurseries, he said, adding, “Horticulturally, it’s one of the richest areas of the country.”

Along with a housing slump that has weakened demand for nursery stock, the industry’s troubles are deeply rooted in demographics, the experts said.

More baby boomers are moving into condos and letting the condo associations do the work. And many of the boomers staying in their homes are losing their appetite for the larger plantings nurseries sell.

In some ways, Swackhamer said, this literally has become a harder business: People are putting more money into “hardscape” – patios, decks, even outdoor additions.

“I think people want that comfort,” she said.

The Dilworths evidently were in the vortex of the industry storm. “That’s the type of nursery that’s been going out of business because of the recession,” said Susan Barton, a University of Delaware horticulturist.

The Dilworths also confronted a problem common among family-run nurseries: a lack of successors. “There’s always issues with transferring the business,” Swackhamer said.

Three years ago, the Dilworths encountered a not-so-common financial issue. Their two daughters got married, and the weddings ripped a huge hole in the Dilworths’ budget. Eschewing a modern trend, they had picked up the entire tabs.

“We did it the old-fashioned way,” Jackie Dilworth said.

Neither their daughters nor sons-in-laws wanted to continue the business.

Thus, on Friday and Saturday, the possessions accumulated over a generation – from spreaders to Adirondack chairs to Barbie dolls – were offered by Petersheim & Longenecker Auction & Appraisal Co. A pair of snowshoes went for $40; a metal patio set, $115.

About 100 people showed up to pick over plantings that included dwarf pine, blue plume cypress, and forest pansy redbud.

One of those attending, John Wallace, said that although he was sorry to see the nursery go, he would be sorrier to lose his neighbors.

“They’re very good people,” he said, “hardworking people. We’ll miss them.”

WTF STORY OF THE DAY

The liberal rag Phila Inquirer had this story on their front page today as an example of the “great” things being done by our beloved Federal Government. We pass Hammonton NJ on the way to the shore. It’s a podunk farm community. They employ Mexicans to pick blueberries. If the USDA was providing low interest loans to increase the blueberry crop or develop some new crop to sell to foreign countries, I wouldn’t blink an eye. But, why the fuck is the U.S. Department of Agriculture taking $600,000 of my tax dollars and supporting some theater of the absurd for farmers? This crap just piles higher and higher. We are borrowing $1.3 trillion per year from foreign countries and then we loan $600,000 at the same rate we are borrowing to some theater that will surely go under in the next 3 years. And most of the morons reading this story will see no problem with it. They won’t even question why the Dept of Agriculture has the ability to lend and grant their tax dollars to any business they choose. When you add up the money doled out to mega-corporations, bankers, the free shit army in West Philly, ethanol producers, the military industrial complex, senior citizens, and redneck theaters, your head should explode. But it won’t. The country is rejoicing. The NFL referee strike is over. Yippee!!! 

Arts angel to a theater in rural N.J.? USDA

By Howard Shapiro

Inquirer Staff Writer

 On stage at  the Eagle Theater in Hammonton, NJ are, from left, Ted Wioncek,  James Donio (Chairman), and Ed Corsi. PHOTO / CURT HUDSON
On stage at the Eagle Theater in Hammonton, NJ are, from left, Ted Wioncek, James Donio (Chairman), and Ed Corsi. PHOTO /
A little semiprofessional theater amid the farmland of Hammonton, N.J., has become the beneficiary of more than a half-million dollars in grants and low-interest loans from a most unlikely arts angel: the U.S. Department of Agriculture.

The Eagle Theatre, in the center of what’s known as the blueberry capital of the world, is wasting no time spending that money – its backstage area is filling with building materials and spiffy, soon-to-be-installed sound and lighting equipment, and construction has begun on a lounge-cum-wine bar for its patrons.

Eagle’s 2013 calendar features an eight-show season that includes the first production in the area of Lombardi, recently on Broadway, and the big-cast musicals A Chorus Line and Hair. Coming up this fall: The 25th Annual Putnam County Spelling Bee, the theater’s perennially popular Rocky Horror Picture Show, and a holiday extravaganza.

The Agriculture Department money is coming directly to the theater in three acts, so to speak: a $23,000 grant to improve its historic building and its ticketing and computer programming; an $89,000 20-year loan at 3.5 percent interest, mainly to enhance stage equipment; and a 30-year loan of $482,000 at 3.38 percent interest, to buy its building.

“It’s an unusual project for the USDA to finance,” said Howard Henderson, the department’s rural-development director for New Jersey. “This is a fascinating way we’ve been able to benefit a rural community.”

The Rural Development program, financed by Congress, exists to strengthen or help establish facilities in rural communities that will improve downtowns, provide services, and encourage local activities. But money usually goes to such projects as firehouse restoration or, as in New Jersey’s northern Sussex County, a plan for hospice units.

Henderson said he wasn’t surprised when the Eagle Theatre applied for the money 18 months ago, because it was no secret around Hammonton that “we have feet on the ground in rural areas.”

“But it’s unique. I believe this is the first theater we’ve done in Rural Development in anybody’s memory over, say, the last 30 years” – much of the time that such money has been available through the Agriculture Department.

It’s not unusual for local politicians to join arts groups in seeking federal money; indeed, community theaters and arts centers in nearby Millville and Vineland have been given new life by communities that believe the arts help revitalize downtowns. In the Philadelphia area, that’s also been a mantra in Media, Bristol, Souderton, Ambler, and especially Center City, where then-Mayor Ed Rendell championed Broad Street’s Avenue of the Arts.

It was the same idea that led to the Eagle Theatre’s revival in 2006, when a 6,000-square-foot warehouse – a block from the town’s main street and within eyeshot of NJ Transit’s station on its Atlantic City Line from 30th Street Station – was about to be demolished for a parking lot.

“I became interested in knowing its history,” said Hammonton native Tracy Petrongolo, an independent filmmaker and at the time leader of Hammonton’s first arts and culture committee. The Atlantic County town – population about 15,000 – is small enough that “if you ask the right people, you will learn the history of every building,” she said, “and we found out that was the old Eagle Theatre.”

It was opened as a silent-movie house in 1914 and sometimes had vaudeville action on its stage before becoming a warehouse only 13 years later. In the 1940s, a church moved in, and in the ’60s, a local family bought it for use as storage for their auto-parts company.

The nonprofit Hammonton Revitalization Corp., along with residents called Friends of Eagle Theatre, took out a loan to buy and rehab the theater – money that most of the Agriculture Department’s loan has replaced. No tax money was used to acquire or restore it; the town chipped in, with money and sweat equity.

“The Friends of Eagle Theatre themselves were actually in there with sledgehammers,” said Petrongolo, who later ran as an independent on an arts platform and won a council seat.

Hammonton now has an arts district that includes the Eagle Theatre, a branch of South Jersey’s Noyes Museum, a branch of Richard Stockton College, a dance studio, the longtime Hamilton Arts Center, and a dozen new working lofts for artists.

One night last weekend, the little theater on Vine Street began humming 20 minutes before showtime as about 140 people streamed in for one of the final performances of a two-act romp, Completely Hollywood (Abridged). The show, which affectionately mocks films, was given a high-style production and featured one of Eagle’s two artistic directors, Ed Corsi, in the cast.

It was a crossover audience, you might say, ranging in age from young adult to seniors, and crossing racial and ethnic lines. That included Mexican Americans, who make up more than 20 percent of the town’s residents and who have turned it into a South Jersey capital of lively Mexican restaurants.

Some carried in popcorn, candy, and sodas from the fresh-popcorn counter, a throwback to the 208-seat theater’s early days.

Eagle is a semiprofessional house – “We pay actors a negotiable stipend,” said its other artistic director, Ted Wioncek 3d – but it also deals show by show with Actors’ Equity, the national actors’ union, for some productions. Wioncek and Corsi say that, given its steady growth, they foresee a day when Eagle joins the ranks of major theaters by holding a standard Equity contract.

The show was about to begin, and the theater’s board chairman, James M. Donio – a mover and shaker about town who has been a supporter since revitalization began – was there to greet audience members individually. He was the force behind the funding application to the Agriculture Department.

“Every step of the way, there was a lot of process and paperwork to go through to make sure they vetted a request from a theater,” he was saying. “There’s a lot of that with firehouses that apply – and this is a theater. And every step of the way, we could give them everything they requested.”

The houselights were about to dim as the stage was illuminated for another evening of theater in the blueberry capital of the world.

 

FOR A FEW DOLLARS MORE – PART ONE

Where life had no value, death, sometimes, had its price. That is why the bounty killers appeared. For a Few Dollars More

 

“Tell me, isn’t a sheriff supposed to be courageous, loyal and, above all, honest?” – Man with No Name – For a Few Dollars More

Whenever I get an idea for an article I plan to keep it short and sweet. But it never seems to work out that way. Once I start typing, the articles tend to grow exponentially. It happened again with my attempt to make sense of how the United States of America managed to screw our finances up so badly, that an epic collapse is within view to people with their eyes open to facts and the truth. You don’t end up in the predicament we find ourselves in today due to a couple minor mistakes over a short time frame. It took thousands of horrible choices, colossal doses of delusion, a heaping of stupidity, and a mountain of denial over decades to put us on the brink of economic collapse. An unholy amalgamation of demographics, fiat currency, debt, taxes, power and greed have led us to this point. Next we experience collapse, revolution and ultimately, retribution.

Since I’ve identified four major rationales for our impending doom, I’ve decided to write a four part series that can be read in small doses, rather than one enormous article. I don’t want anyone to miss tonight’s episode of Dancing With the Stars, get distracted from the Royal Wedding preparations, or skip the best reality TV show ever – Ben Bernanke’s press conference, while reading an 8,000 word article about the end of America. The four part series will have a Clint Eastwood theme. For a Few Dollars More will address the Baby Boomer impact on America’s decline. A Fistful of Dollars will examine how the creation of the Federal Reserve and the income tax in 1913 set us on a path to ruin. Outlaw Josey Wales will scrutinize the looting of America by a small group of powerful, connected, super rich men lurking in the shadows, but pulling the strings on our puppet politicians. Lastly, Unforgiven  will detail the impending collapse of our economic system and the retribution that will be handed out to the guilty.

Over the last few weeks there seems to be consensus among many financial bloggers, whose credibility is far more trustworthy than the corporate mainstream media, that the country is teetering on the verge of economic collapse due to the complete capture of the government, financial, regulatory, and media by a small group of oligarchs. They have also been described as the super rich, plutarchs, ruling elite, and scum sucking leeches. The bloggers that I have the utmost respect for, including Jesse, Charles Hugh Smith, Mike Shedlock, Yves Smith and Gonzalo Lira have all come to the logical conclusion the horrific economic situation of the country is a direct result of the greed, corruption, fraud, and plundering by a powerful connected group of rich financiers operating without fear of being brought to justice by the authorities.

While pondering the ruminations of these dedicated truth tellers, I was reminded of the Clint Eastwood Spaghetti Western For a Few Dollars More. The quotes above are representative of living in the USA today. There are supposed to be courageous, loyal and honest sheriffs that protect the citizens from crime, corruption and evil doers. But, just as we saw in the Old West of Clint Eastwood movies, the sheriffs are always corrupt and bought off by the evil cattle barons. In a world where life has no value and you can’t rely on law enforcement to protect your interests, the citizens eventually will need to turn to bounty hunters to take care of the bad guys. The bounty hunters of truth reside on the internet. They reside at Zero Hedge, Jesse’s Café Americain, Of Two Minds, Mish, Chris Martenson, and dozens of other anarchist websites. When you can’t trust your government, your bankers, your church, your media, or mega-corporate CEOs, you need to seek the truth where it can be found. The insightful bloggers who courageously print the truth on a daily basis have unanimously concluded that a small band of powerful elite have accumulated undue influence and control over this country, having brought it to the verge of economic collapse. How did this happen? Who is responsible? Why were they permitted to gain this power?

Boomers Come of Age

“If those in charge of our society – politicians, corporate executives, and owners of press and television – can dominate our ideas, they will be secure in their power. They will not need soldiers patrolling the streets. We will control ourselves.” – Howard Zinn

Whenever I direct any blame for our economic woes towards the Baby Boom generation they react as expected. They blame the GI Generation for creating the welfare state. They declare that Generation X and the Millenials are just as greedy and self centered as the Boomers. Boomers are great at blaming, ridiculing and acting pompously, while taking no responsibility for their actions and more importantly their inaction. This generation cannot avoid their responsibility for the state of affairs. They like to take credit for their stand against the Vietnam War and their protests against the man during the 1960s. They don’t like to take credit for turning into materialistic, greedy, selfish, short-term focused bastards. When a generation of 76 million people decides to go in a particular direction, the country will go in that direction. While blaming FDR and the GIs who stormed the beaches of Normandy for creating the unfunded Social Security and Medicare liabilities, the Boomers have been voting since the mid-1960s and have been in control of corporate America and the levers of government since the early 1980s.

The U.S. Congress is dominated by Baby Boomers today and has been dominated by this generation since the 1990s. The Senate has 60 Boomers out of 100, while the House of Representatives has 254 Boomers out of 435 members. Boomers occupied the White House from 1992 through 2008. They have had the political power and control of the agenda for two decades and have failed miserably. Rather than do what was best for the country for the long-term, they took the expedient, easy, vote getting route. Promise more than you could ever deliver and let future generations worry about the consequences. Not one true noble statesman has arisen from this generation of myopic, self centered “Me Generation” political hacks. Even as the country nears the precipice, they continue to address the great issues of the day with talking points supplied by other Baby Boomer PR maggots from Park Avenue. These weasels care not for the country, but worry only about poll numbers and the next election cycle. An apathetic public, dominated by the Baby Boom generation, has the attention span of a gnat. As long as they can make the lease payment on their Escalade, use one of their 15 credit cards at the Mall, be entertained by 600 cable TV stations, play with the latest iSomething, live in their McMansion for two years without making a mortgage payment and consume massive quantities of fast food, then any thoughts of future generations or civic duty are unnecessary. Live for today has been the rallying cry for the Boomer generation. Pot was their drug during the 1960s. Debt has been their drug since 1980.

The drug (debt) dealer for the Baby Boom generation has been the Wall Street mega-banks, coincidentally, run by Boomers. The entire corrupt financial industry is being run by Boomers. The CEOs, CFOs, and the thousands of Harvard MBA VPs that created the fraudulent derivative scheme to bilk billions from clueless municipalities, pension funds and American taxpayers are all Boomers. It is no coincidence that the great debt delusion began in the early 1980’s. Jim Kunstler captured the essence of Boomer transformation:

“The Baby Boomers came back from the land, clipped their pony tails, discovered venture capital, real estate investment trusts, securitization of “consumer” debt, and the Hamptons. Greed was good.”

The Boomer CEO hall of scam has been built on the brilliance and financial acumen of Lloyd (god’s work) Blankfein, Charlie (keep dancing) Prince, Jamie (friend of Obama) Dimon, and the king of the Boomers, Hank (the system is sound) Paulson. These mainstays of crony capitalism led the Boomer charge of greed, greed and more greed. The Baby Boomer generation has been the proverbial pig in a python working its way through the decades as presented below. By 1985, Boomers had entered the work force in full force with the entire generation between the ages of 25 and 42. It will be a great day when the python craps this pig of a generation out the other end.

It is not a coincidence the National Debt growth has far outstripped GDP growth since 1980. Boomers had been spoiled their whole lives and felt they deserved the goodies today while passing the bill to future generations. They voted for politicians who promised them more benefits, more programs, more subsidies, more tax breaks, more military adventures, and more pleasure. And this was “paid for” with more debt. Thirty five years of government debt declining as a percentage of GDP was reversed over the next thirty years starting in 1980, pushing it past the 90% tipping point in the last year. The country is over-indebted to the tune of $9 trillion on a current basis and $100 trillion on a long term accrual basis.

There is no better picture of Boomer decadence and myopia than an historical view of the national savings rate. The parents of the Boomers understood the meaning of sacrifice and investing in the future of the country. During World War II they bought US War Bonds to support the cause. From 1950 through 1985, the savings rate consistently ranged between 7% and 12%. Americans had this odd notion that if you saved more than you spent, you actually got ahead in life. Excess savings were used to invest in new plants and equipment that were used to produce goods and employ more Americans. By 1985, the Boomers considered these notions as quaint and old fashioned. The savings rate methodically declined until it went negative in 2006, just prior to the worldwide financial conflagration. Our inspirational Boomer president George (Mission Accomplished) Bush while waging two wars of choice, asked for the ultimate sacrifice from the Boomers. He solemnly urged them to buy a GM SUV with $0 down and 0% interest for 7 years, so we could defeat the terrorists. The Boomers who ran GMAC were more than happy to make loans to people with no income so they could “purchase” a $40,000 ostentatious gas guzzling hog. They were doing their patriotic duty for the good of the nation. It brings a tear to my eye just thinking about it.

The Boomers not only heeded George’s call, but they did him proud by buying 8,000 sq ft McMansions with $0 down and negative amortization ARMs. Luckily, the executives at the mortgage origination sweatshops were Boomers. They found no good reason to verify income or assets before loaning someone $600,000, because they knew their fellow Boomers at the rating agencies would rate the bundles of these toxic shit loans as AAA so the Boomers on Wall Street could sell them to greater fools. GMAC’s exemplary subprime mortgage arm – Ditech, did a bang up job getting migrant Mexican workers into $450,000 homes in California’s inland empire. As the tsunami of bad debt swept toward shore, delusional Boomers across the land borrowed $500 billion against the inflated value of their McMansions and installed granite counter tops, stainless steel appliances, home theatres, elegant patios, Olympic sized pools, and with the excess home equity, leased a BMW or two. The first devastating tsunami wave hit in 2008 and wiped out billions in faux Boomer wealth. Instead of learning a brutal lesson and reverting back to saving and frugality, the “never say sacrifice” Boomers ventured out to where the waves had subsided looking for more trinkets and treasures.

Tsunami Warning by Mobile Phone

The next tsunami wave is on its way. The delusional Boomers will be surprised again.

The Boomer persona has been formed over the last five decades and the country will deal with the consequences for decades to come. The clean cut Beaver Cleaver children of the 1950s turned into the pot smoking Dobie Gillis of the 1960’s, then into the slimy Gordon Gekkos of the 1980s and ultimately into the eternal wealth seeking Gollums of today.

 

  

This Boomer debt orgy over the last thirty years would have made Caligula blush. Of course, none of this could have happened without the Creature from Jekyll Island. I will address this aspect of our fate in Fistful of Dollars – Part Two.

Now for the righteous indignation from the Boomers that think I have unfairly lumped them all together as one. Their reactions are predictable. Even though they have had the means, the power and the time to reverse the course of USS Titanic, they plowed full steam ahead into the abyss. The GI Generation is dead. Generation X doesn’t hold the reins of power. The Boomer generation needs to look in the mirror to recognize who is to blame.  I’m sure there are a few good Boomers out there somewhere, but as a generation they have failed this country and our unborn generations miserably.

A FISTFUL OF DOLLARS – PART TWO

It is not easy to destroy the greatest empire in the history of mankind. The 20th Century was the American Century, but as with all empires, the combination of hubris, monetary debasement, imperial overreach and delusional overconfidence have set in motion the inevitable downfall of the American Empire. The policies, decisions, beliefs, and institutions implemented over decades have led the country to the threshold of financial disaster. Based on my observations, a catastrophic combination of demographics, fiat currency debasement, titanic levels of debt, smothering taxation, power in the hands of the few and Wall Street greed have led us to peak Empire. It will be downhill from here as we experience collapse, revolution and ultimately, retribution for the guilty and presumed guilty. I have already addressed the Baby Boomer generation’s contribution to our current plight, to the delight and accolades of Boomers across the land in For a Few Dollars More – Part One. The Boomers were a victim of their size and the timing of their arrival on the scene of empire collapse. Their delusions of debt based wealth and me first attitude could not have been satiated without the creation of the Federal Reserve and the institution of the personal income tax in 1913.

“When a man’s got money in his pocket he begins to appreciate peace.” – Joe – Fistful of Dollars

 

“Every town has a boss.” – Joe – Fistful of Dollars 

In the Old West of the 1800’s, before the creation of the Federal Reserve, money in your pocket meant gold or silver. If Joe were to repeat that line today, he would change it slightly:

“When a man thinks he’s got money in his pocket he begins to appreciate the good things in life like McMansions, BMWs, government provided retirement, government provided healthcare, and delusions of ever increasing wealth.”

Man made inflation is a glorious invention for the men who invented it. For the people who deal with it every day, not so much. Joe knew that every town had a boss. If you didn’t know who the boss was in the United States of America before 2008, you know now. Ben Bernanke and the Federal Reserve Bank of the United States is the boss of this town.

Crony Capitalism Pays for the Cronies

Without Federal Reserve intervention in the financial markets since September 2008, the biggest banks in the world would have entered bankruptcy liquidation. The U.S. economy would have experienced a 10% to 20% fall in GDP. The unemployment rate would have soared above 15%. The stock market would have fallen 70%. Wealthy bondholders and stockholders would have seen their wealth cut in half. Incumbent politicians would have all been thrown out of office. The richest Americans, constituting the ruling class, would have borne the brunt of the pain.

In a true capitalist system, organizations and people who assumed too much risk and made poor decisions would have failed. But the United States does not have a capitalist system. We have a corporate fascist economic system where a small cartel of bankers, military weapons suppliers, and mega-corporations set the agenda for the country through their complete capture of politicians and the mainstream corporate media. At the height of the crisis in 2008, President George Bush revealed whose side he chose:

“I’ve abandoned free-market principles to save the free-market system, to make sure the economy doesn’t collapse. I feel a sense of obligation to my successor to make sure there is not a, you know, a huge economic crisis. Look, we’re in a crisis now. I mean, this is — we’re in a huge recession, but I don’t want to make it even worse.”

George Bush was born with a silver spoon in his mouth. He was not trying to save the free-market system, because we didn’t have a free market system. He was saving his fellow billionaires under the cover of saving the average American. Bush knew as much about saving our economic system as he knew about when to declare mission accomplished in Iraq. He turned the task of saving the free market system over to his multi-billionaire Goldman Sachs Secretary of Treasury Hank Paulson and the real boss of Washington DC, Ben Bernanke. These noble American patriots proceeded to save the top 1% richest Americans on the backs of the American middle class. They did it under the guise of keeping the country out of a Depression. Those who committed the crimes and destroyed the worldwide financial system not only didn’t get punished, they were enriched by the actions of Paulson and Bernanke. This entire sordid chapter in the history of the American empire from 2008 until the imminent collapse, sometime before 2015, will leave future historians dumbfounded at the utter insanity and foolishness of the decisions that were made during the death throes of the empire. Not only did George Bush not save the free-market system, but he drove a stake thru its heart.

To boil the entire 2008 financial collapse down to one word, it would be: DEBT.

Three decades of ever increasing levels of consumer, corporate, and government debt eventually led to an unprecedented implosion. It was as predictable in 2008, to those who understand the fiat monetary system, as it was to Ludwig von Mises decades ago: 

 “There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”    

Federal Reserve – Destroyer of Worlds

The 2008 crash and the 1929 crash were manmade disasters. Alan Greenspan and Ben Bernanke created the atmosphere and conditions that led to the risk taking by bankers, home buyers and consumers. Monetary expansion, excessively low interest rates, the Greenspan/Bernanke Put, disinterest in regulation, and pandering to politicians allowed the party to get out of control. Taking away the punch bowl never crossed their mind. The Federal Reserve is controlled by the major Wall Street banks. These banks were partnerships until the 1980s, with partners personally liable for the actions of their banks. Excessive risk taking meant possible personal bankruptcy. Once they became corporations, excessive risk meant excessive compensation for the executives, with the downside being borne by the shareholders.

But that wasn’t enough. The executives were large shareholders, so they convinced the Federal Reserve to bail their corporations out whenever they made bad bets. It was a sweet deal if you were a banker. Knowing their lackeys at the Fed had their back, the goliath Wall Street banks used their power and wealth to convince the SEC to waive the 12 to 1 leverage rules so they could leverage their balance sheets 40 to 1. This meant that a 5% loss in their capital and they would be insolvent. The Harvard MBA CEO titans of the financial world created the housing bubble through their creation of fraud inducing mortgage products, a bewildering array of derivative products that even their MBA geniuses didn’t understand, and betting against the derivatives they were selling to their clients. When this toxic brew of fraud and debt exploded in their faces, the value of the assets on their books plunged by 30% to 40% in 2008 and 2009. The 10 biggest financial institutions in the country were effectively bankrupt. An orderly bankruptcy liquidation that wiped out the bondholders, stockholders and top executives was the solution to excessive risk taking and failure.  

This was an unacceptable solution to the billionaire class that owns half the financial wealth in the country. The President was a multi-millionaire. The Treasury Secretary was a billionaire. There were 250 millionaires in Congress. The top executives of the banks that own and control the Federal Reserve are multi-millionaires. The owners and talking head pundits of the mainstream media are all in the billionaire/millionaire class. The cover story used to bilk $700 billion from middle class taxpayers into the coffers of Wall Street mega-banks was that if we didn’t hand over the loot, the financial system would collapse and a Great Depression would ensue. Every program, policy, and rule change that has been rolled out since September 2008 by the Federal Reserve, Treasury, and Congress has benefitted billionaires, bankers, and politically connected corporations. The Federal Reserve has printed over $2 trillion out of thin air to save the billionaires that have been pillaging the middle class for decades.

The Federal Reserve bought $1.25 trillion of toxic mortgages from Wall Street, allowed these banks to borrow at 0%, threatened the FASB into suspending mark to market accounting so banks could fake the value of their loans, instructed banks to rollover commercial real estate loans as if they weren’t really worth 40% less than the value on their books, and rolled out $600 billion of QE2 in order to create a stock market rally, benefitting their billionaire constituents. The $800 billion stimulus program was shoveled to the corporate friends (contributors) of Congressmen across the land. Cash for Clunkers benefitted government owned car companies. The home buyer tax credit and changing loss carry back rules benefitted mega home builders. Every one of these deeds enriched bankers and billionaires while further impoverishing the working middle class. Real middle class wages continue to fall, unemployment remains near record levels, real inflation in food and energy is running above 10%, senior citizens haven’t gotten a Social Security increase in two years, savers are getting .25% on their savings, home prices continue to fall, and future generations will be stuck with the bill for the billionaire bailout.

The standard of living for the average American continues to fall. Real household income is lower than it was in 1999. The only reason it increased in the 1980s and 1990s was the huge influx of women into the workforce. Two earners were needed to try and maintain a constant standard of living. Real average weekly earnings are lower today than they were in 1970, even using the government bastardized CPI calculation that has been so massaged since 1982 that it has only resulted in a happy ending for government bureaucrats at the BLS. Calculating the CPI exactly as it was calculated in 1980 reveals the truth of what the Federal Reserve has wrought on working class America, a drastic decrease in their standard of living. The insidiousness of Federal Reserve created inflation has sucked the life out of the middle class and enriched the cocktail party class.

Real Average Weekly Earnings

The stealth transfer of wealth from the working middle class to the richest in our society was done through convincing the middle class that buying things with debt made you richer. This delusion was sold by the billionaire owned corporate mainstream media and peddled by billionaire bankers to the masses through credit cards, “creative” mortgage products, easy access to home “equity”, auto leases, and easy financing products. Only in a society where a fiat currency could be printed by a central bank with no requirement that it be pegged to an anchor such as gold, could such a staggering amount of debt be accumulated.

Delusions of Debt

The bill that has been rung up is in the form of a national debt that has increased by $4.6 trillion since September 2008, a 48% increase in two and a half years. Over this same time frame real GDP has increased by $200 billion, a 1.6% increase in two and a half years. Over this same period, the Federal Reserve has tripled their balance sheet by adding $2 trillion of debt. Think about this for one second. The leaders of the great American empire have burdened future generations with $6.6 trillion of new debt and increased the Gross Domestic Product by $200 billion. Is this a good return on investment? Did the 30 million unemployed and underemployed Americans benefit? Did the 45 million people on food stamps benefit? Did the 11 million households who are underwater in their mortgage benefit? Did the 3 million people who lost their homes in foreclosure since 2008 benefit? Are Americans paying twice as much for groceries and gasoline benefitting? Did the Tunisians, Egyptians, and other poor people around the world benefit?

The answer to all these questions is NO. The only beneficiaries have been bankers, billionaires, mega-corporations and the politicians who were bought off by these greedy traitors to the Republic. Anyone with an ounce of sense knows the country got into this mess due to the issuance of mountains of debt that was un-payable based upon any reasonable assessment of future cash flows to service the debt. Consumers could never have increased their wages enough to pay off the credit card, mortgage, home equity, student loan, and auto debt they accumulated since 1980. The government could never collect the amount of taxes needed to pay for the $100 trillion of entitlement promises they have made over the last four decades. By 2008 we had reached peak debt delusion.

The only questions that remained were how would the debt be defaulted on and who would bear the brunt of the default. The Federal Reserve Chairman and the U.S. Treasury Secretary rolled out a master plan that revolved around convincing the masses they were being saved, while actually enriching their masters on Wall Street. Their PR machine and captured mouthpieces throughout the mainstream media and in Congress spun the fear mongering message of Depression if the mega-banks were not handed trillions of taxpayer funds.

The proof of what did not happen is borne out in the chart below, showing the total credit market debt in the U.S.at $52.6 trillion, $200 billion higher than it was in 2008. If those who had collected billions in fraudulent profits while using unprecedented levels of debt were rightfully required to take responsibility for the catastrophe they caused, the debt levels would have dropped dramatically. The losses would have been borne by those responsible. The economy would have taken a body blow, all Americans would have been hurt, and many billionaires would have become millionaires or even paupers. The debt would have been written off and lessons would have been learned. The remaining banks (there are 8,000 others besides the 10 who control 50% of the deposits) would have followed traditional risk mitigation methods and the economy would have recovered.

But, as you can see, debt was not written off. No bankers were harmed during the making of this fake recovery. No criminal bankers were prosecuted. No government drones took responsibility for their failure. While the masses were distracted by stimulus packages, mortgage moratoriums, Obamacare and reality TV, the debt was shifted from the criminally negligent banks to you. The proof is right on the Federal Reserve website for all to see:

  • Financial institutions reduced their debt from $17.1 trillion in 2008 to $14.2 trillion today.
  • The Federal & state governments increased their debt from $8.7 trillion in 2008 to $11.9 trillion today.
  • The GSEs (Fannie, Freddie, Sallie) increased their debt from $3.2 trillion in 2008 to $6.4 trillion today.
  • Corporations increased their debt from $7.0 trillion in 2008 to $7.4 trillion today.
  • Household debt declined from $13.8 trillion in 2008 to $13.4 trillion as the Federal Reserve backstopped the write-off of $600 billion of bad debt by the banks.

Over $6 trillion of toxic debt was shifted from the insolvent financial industries to the middle class taxpayers under the guise of “Saving the System”. Bad debt does not become good by shifting it to taxpayers. The story line about Americans embracing austerity is false. Household debt rose from $8 trillion in 2000 to $13.8 trillion in 2008, a 72% increase, and has declined by 3% due to write-offs, not austerity.

Champion of the Middle Class

By extending the debt, shifting it to the taxpayer and pretending it is payable, the Federal Reserve and your government have chosen, to use its weapon of choice since inception in 1913 – INFLATION, to default on the debt. It is not a new tactic, it is their only tactic.

The Federal Reserve has slowly and methodically destroyed the American middle class through relentlessly printing more money and purposefully creating inflation, since its reprehensible creation in 1913. For the last three decades only one voice in the wilderness of Washington DC has fought this banking cabal.

“Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble last year, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts. In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans’ standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.” – Ron Paul – Sept 10, 2002

His colleagues in Congress did not stand up to the Federal Reserve in 2002. Instead, they cheered them on as Greenspan’s ultra loose monetary policy led to the greatest housing bubble in history and a financial collapse unparalleled in human history. As the collapse was hurdling down the track in 2006, Representative Paul once again rose in protest against an organization that is rapidly destroying the American dream.

“The coming dollar crisis is not likely to be “fixed” by politicians who are unwilling to make hard choices, admit mistakes, and spend less money. Demographic trends will place even greater demands on Congress to maintain benefits for millions of older Americans who are dependent on the federal government.

Faced with uncomfortable financial realities, Congress will seek to avoid the day of reckoning by the most expedient means available – and the Federal Reserve undoubtedly will accommodate Washington by printing more dollars to pay the bills. The Fed is the enabler for the spending addicts in Congress, who would rather spend new fiat money than face the political consequences of raising taxes or borrowing more abroad.

The irony is that many of the Fed’s biggest cheerleaders are the same supposed capitalists who denounced centralized economic planning when practiced by the former Soviet Union. Large banks and Wall Street firms love the Fed’s easy money policy, because they profit at the front end from the resulting loan boom and artificially high equity prices. It’s the little guy who loses when the inflated dollars finally trickle down to him and erode his buying power. Someday Americans will understand that Federal Reserve bankers have no magic ability – and certainly no legal or moral right – to decide how much money should exist and what the cost of borrowing money should be.” – Ron Paul – July 11, 2006

The dollar crisis is upon us. Congress and President Obama are avoiding the day of reckoning. The Federal Reserve is enabling profligate spending by politicians, while at the same time enriching their masters on Wall Street. Everything being done in Washington DC seems to be the exact opposite of what should be done. I think the fable of the scorpion and the frog describes our situation best. The scorpion asks a frog to carry him across a river. The frog is afraid of being stung, but the scorpion argues that if it stung, the frog would sink and the scorpion would drown. The frog agrees and the scorpion stings the frog during the crossing, dooming them both. When asked why, the scorpion points out that this is its nature. The Federal Reserve is printing money, creating inflation, enriching billionaire bankers, and dooming the country to certain collapse because that is its nature.

My intentions have been foiled again. I realize that my attempt to put our current economic predicament into perspective will now need to be a five part series. . For a Few Dollars More addressed the Baby Boomer impact on America’s decline. A Fistful of Dollars examined how the Federal Reserve’s actions over the last few decades have impoverished the middle class and has placed the country at the brink of collapse,   The Good, the Bad, and the Ugly will address the nefarious creation of a central bank and the implementation of a personal income tax in the dreadful year 1913. Outlaw Josey Wales will scrutinize the looting of America by a small group of powerful, connected, super rich men lurking in the shadows, but pulling the strings on our puppet politicians. Lastly, Unforgiven  will detail the impending collapse of our economic system and the retribution that will be handed out to the guilty.

I can’t wait to see how it ends.

THE GOOD, THE BAD AND THE UGLY – PART THREE

“You see in this world there’s two kinds of people, my friend. Those with loaded guns, and those who dig. You dig.” –  Blondie – The Good, the Bad and the Ugly

“There are two kinds of people in the world, my friend. Those who have a rope around their neck and those who have the job of doing the cutting.” – Tuco – The Good, the Bad and the Ugly

The economic peril that we find ourselves confronted with, has been ninety-eight years in the making. The confluence of debt, demographics, delusion, and denial has left the country at the precipice of annihilation. There are two kinds of people in the world, those who control the money and those that are controlled by those who control the money. The last century has been marked by a methodical looting of the good (working middle class) by the bad (Federal Reserve & bankers) and supported by the ugly (Washington D.C. politicians). When historians pinpoint the year in which the Great American Empire began its downward spiral they will conclude that year to be 1913. In this dark year for the Republic, slimy politicians, at the behest of the biggest bankers in the country, created a private central bank that has since controlled the currency of the United States. This same Congress staked their claim as the most damaging group of politicians in US history by passing the personal income tax in the same year. These two acts unleashed the two headed monster of inflation and taxation on the American people.

The government began keeping official track of inflation in 1913, the year the Federal Reserve was created. The CPI on January 1, 1914 was 10.0. The CPI on January 1, 2011 was 220.2. This means that a man’s suit that cost $10 in 1913 would cost $220 today, a 2,172% increase in ninety-eight years. This is a 95.6% loss in purchasing power of the dollar.  The average American does not understand the insidious nature of central bank created inflation. It makes you think you are wealthier while you are driven into abject poverty. The Federal Reserve and politicians have pulled the wool over your eyes. The CPI was 30.9 in 1964. Today, it is 223.5. This means prices have risen 723% since 1964. The only problem is your wages have not risen at the same rate, even using the government manipulated CPI. Using a true CPI figure, average weekly earnings are 64% below what they were in 1964. This explains why a family of five could live well with one parent working in 1964, but even with both parents working and accumulating debt in prodigious amounts, the average family cannot live as well today.

It is not a coincidence that the percentage of the working age population employed bottomed in 1964 at 59%. The participation rate rose steadily for the next thirty six years, topping out in 2000 at 67.1%. The employment to population ratio also bottomed at 55% in 1964. It rose to 64.4% by 2000. It seems that future historians will mark the year 2000 as the peak of the American Empire. Apologists for the Federal Reserve and politicians who have steered this country since 1964 would argue the increase in the percentage of the population working was a positive development. Nothing could be further from the truth.

The American middle class was forced to send both parents into the workforce just to keep up with the ever declining real weekly earnings. The Federal Reserve created inflation has methodically destroyed the American dream for the middle class. As both parents had to go into the workforce, American children were left to fend for themselves or be raised by strangers in daycare centers. The pressure of trying to keep up with inflation strained families to the breaking point. The number of divorces per thousand marriages was 10 in the early 1960s. It more than doubled to 22.6 by 1980 and still resides at 17 today. There are many factors for the disintegration of the traditional family unit, but the financial strain on families to maintain a consistent standard of living due to relentless inflation has been a key factor.

From the founding of our country there had been constant conflict between corrupt bankers trying to control the currency of the nation to further their own enrichment at the expense of the people and a few courageous leaders willing to fight them. The bankers won the century old battle in 1913.

Den of Vipers & Thieves

“I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank…You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, I will rout you out.” Andrew Jackson

The First Bank of the United States was created in 1791. Alexander Hamilton, the 1st Secretary of the Treasury, proposed this bank and convinced a hesitant President Washington to agree. John Adams and Thomas Jefferson were against the concept. It favored the moneyed classes of the North versus the agrarian South. The bank was given a 20 year charter and President James Madison let it expire in 1811. He understood the true nature of the banking interests:

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance”.

Madison had to renew the charter in 1816 as the War of 1812 resulted in large government debts. Politicians always turn to bankers when funding wars and programs to get them re-elected. As usual, once unshackled, the bankers immediately caused a boom through their loose monetary policies. The Bank created a fake boom by 1818 through its reckless lending, which encouraged speculation in land. This lending allowed almost anyone to borrow money and speculate in land, sometimes doubling or even tripling the prices of land (remind you of another time in recent history?). In the summer of 1818, the national bank managers realized the bank’s massive over-extension, and instituted a policy of contraction and the calling in of loans. This recalling of loans simultaneously curtailed land sales and slowed the U.S. production boom due to the recovery of Europe. The result was the Panic of 1819. There was a wave of bankruptcies, bank failures, and bank runs; prices dropped and wide-scale urban unemployment struck the country. By 1819 many Americans did not have enough money to pay off their property loans. Do you see any difference between 1816 – 1819 and 2005 – 2011? Central banks don’t eliminate financial panics, they cause them. Booms and busts have always existed. They have become more common and extreme since the unleashing of greedy corrupt central bankers in the U.S., going back two centuries.

Andrew “Old Hickory” Jackson became President in 1829 and proceeded to declare war on the Second National Bank. He was the first and only President in U.S. history to pay off the National Debt. He worked tirelessly to rescind the charter of the Second Bank of the United States. His reasons for abolishing the bank were:

  • It concentrated the nation’s financial strength in a single institution.
  • It exposed the government to control by foreign interests.
  • It served mainly to make the rich richer.
  • It exercised too much control over members of Congress.
  • It favored northeastern states over southern and western states.

President Jackson believed that only Congress should be responsible for the issuance and control of the currency. Delegating that duty to powerful New York bankers was distasteful to him:

“If Congress has the right to issue paper money, it was given to them to be used … and not to be delegated to individuals or corporations”

President Jackson vetoed the extension of their bank charter in 1832. He redirected government tax revenue to other state banks.  The Second Bank of the United States was left with little money and, in 1836, its charter expired and it turned into an ordinary bank. Five years later, the former Second Bank of the United States went bankrupt. Those who believe that a central bank is essential to economic progress need to examine the “free banking” period from 1837 to 1861. In the last five years of the Second Bank’s existence prices rose by 28%. Over the next 25 years, prices in the U.S. fell by 11%. We experienced the dreaded deflation. Did deflation destroy America? Not quite. GDP grew from $1.5 billion in 1836 to $4.6 billion in 1861. Deflation is only fatal to debtors. Inflation is the friend of lenders and the moneyed classes.

The American Civil War brought about the National Banking Act of 1863, which created a network of national banks. Politicians always need bankers to fight their wars and Abraham Lincoln was no different. By 1870 there were 1,638 national banks. This did not eliminate the booms and busts that punctuate human history, but the booms and busts were not scientifically created by a small cabal of bankers. With thousands of banks, those who made bad lending decisions failed. The economy withstood the periodic panics and continued to grow. The GDP of the U.S. grew from $7.6 billion in 1863 to $39 billion by 1913, with virtually no inflation. The Federal government ran surpluses or very small deficits during this entire time period. These facts refute the argument that a strong central bank was necessary to keep our economic system operating smoothly. It seems the Big Lie was not invented by the Nazis.

Creature from Jekyll Island – Control the Money, Control the Country

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. No longer a government by free opinion, no longer a government by conviction and vote of majority, but a government by the opinion and duress of a small group of dominant men.”President Woodrow Wilson

Any impartial assessment of inflation throughout the history of the United States confirms that from the beginning of our nation through the War of 1812, the Mexican American War, the Civil War, the Spanish American War and the Industrial Revolution, the country experienced virtually no inflation as bankers were kept from controlling the U.S. currency and our legal tender was backed by gold. The creation of the Federal Reserve in 1913 and the closing of the gold window by Richard Nixon in 1971 unleashed a tsunami of inflation that continues to inundate our country today, killing the once prosperous middle class.

The Rothschilds of London understood that a fiat currency system would benefit the few (bankers & politicians) who understood it and the masses would be too ignorant to understand they were being screwed:

“Those few who can understand the system (check book money and credit) will either be so interested in its profits, or so dependent on it favors, that there will be little opposition from that class, while on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”

The House of Rothschild had been the dominant banking family in Europe for two centuries. They were known for making fortunes during Panics and War. Some claimed they would cause Panics in order to take advantage of those who panicked. American bankers learned the lesson well. The Panic of 1907 was the used as the reason for creating the Federal Reserve. A small cabal of powerful U.S. banking interests understood that if they could control the currency of the U.S., they could control the country, its politicians, and its people.

In 1906, Frank Vanderlip, Vice President of the Rockefeller owned National City Bank, convinced many of New York’s banking establishment they needed a banker-controlled central bank that could serve the nation’s financial system. Up to that time, the House of Morgan had filled that role. JP Morgan had initiated previous panics in order to initiate stronger control over the banking system. Morgan initiated the Panic of 1907 by circulating rumors the Knickerbocker Bank and Trust Co. of America was going broke. There was a run on the banks creating a financial crisis which began to solidify support for a central banking system. During this panic Paul Warburg, a Rothschild associate, wrote an essay called “A Plan for a Modified Central Bank” which called for a Central Bank in which 50% would be owned by the government and 50% by the nation’s banks.

In November 1910 a secret conference took place on Jekyll Island off the coast of Georgia. Those in attendance were:  Paul Warburg, Bernard Baruch, Senator Nelson Aldrich, Colonel House, Frank Vanderlip, Benjamin Strong, Charles Norton, Jacob Schiff, and Henry Davison. From this meeting of the most powerful bankers and politicians in the country came the plan for a Central Bank. This conference was unknown until 1933. In 1935, Frank Vanderlip wrote in the Saturday Evening Post: “I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System.”

Behind the scenes these powerful men were formulating the plan for a Federal Reserve System. There was no outcry from the public to implement this plan. The public knew nothing of this. The Aldrich Plan was renamed the Federal Reserve Act and pushed forward by Paul Warburg and Colonel House. Warburg essentially wrote the Act and pressured Congressmen to see his way or lose the next election. Colonel House, who had socialist leanings, was the top advisor to President Wilson.

 

The Glass Bill (the House version of the final Federal Reserve Act) had passed the House on September 18, 1913 by 287 to 85. On December 19, 1913, the Senate passed their version by a vote of 54-34. More than forty important differences in the House and Senate versions remained to be settled, and the opponents of the bill in both houses of Congress were led to believe that many weeks would elapse before the Conference bill would be taken up. The Congressmen prepared to leave Washington for the annual Christmas recess, assured that the Conference bill would not be brought up until the following year. The creators of the bill then pulled the ultimate swindle on the American public. In a single day, they ironed out all forty of the disputed passages in the bill and quickly brought it to a vote. On Monday, December 22, 1913, the bill was passed by the House 282-60 and the Senate 43-23. This meant that the single most important piece of legislation ever passed by the Senate was missing the votes of 26 Senators because it was passed during the Christmas recess. President Wilson, at the urging of Bernard Baruch, signed the bill on December 23, 1913.

File:Fed Reserve.JPG

The Road to Hell is Paved by Central Bankers

“Banking was conceived in iniquity, and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen, they will create enough deposits, to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers, and pay the cost of your own slavery, let them continue to create deposits.” – Sir Josiah Stamp (President of the Bank of England in the 1920’s, the second richest man in Britain)

 

The results speak for themselves. The Federal Reserve has been in existence for ninety eight years and over that time the U.S. Dollar has lost 95.6% of its purchasing power. In other terms, the bankers who have controlled our currency since 1913 have generated 2,172% of inflation in just under a century. In the prior one hundred years, when the country was growing by leaps and bounds, there was virtually no inflation. I’m not sure the average person fully understands this concept. To put it in layman’s terms, something that cost $4.40 in 1913 will cost you $100 today. A pair of boys’ school shoes cost 98 cents in 1913. You could purchase three loaves of bread for 10 cents. You could purchase six rolls of toilet paper for 26 cents. The truly frightening impact on the American middle class has happened since Richard Nixon closed the gold window in 1971 and allowed the Federal Reserve to print money unfettered by consequences and slimy politicians to make irresponsible unfulfilled promises as bribes for votes. This chart should worry even the most ignorant of the masses.

Items 1971 2010/11 % Increase
Average Cost of new house $28,000 $273,000 975%
Median HH Income $10,300 $47,000 456%
Average Monthly Rent $150 $750 500%
Cost of a gallon of Gas $0.40 $3.80 950%
Average New Car Price $3,430 $29,200 851%
United States postage Stamp $0.08 $0.44 550%
Movie Ticket $1.50 $7.89 526%

 

Even with the proliferation of two worker households since 1971, household income has not come close to keeping up with the costs of daily living. The average American’s standard of living has declined dramatically over the last forty years and they don’t even know it. Americans have become the slaves of bankers and pay the cost of their own slavery through inflation and debt. It is not a coincidence that consumer debt, which was virtually non-existent prior to the 1960s, began to take off in the 1970s and went nearly parabolic from the early 1990s until the 2008 financial collapse. As the Federal Reserve and political class created inflation, which reduced your standard of living, the bankers who own the Federal Reserve and control the politicians used their slick marketing machine to convince you that acquiring goods using vast quantities of debt was just as good as buying things with cash you saved.

Who benefits from inflation and the issuance of trillions in debt to average Americans? Based upon the decades of gargantuan Wall Street profits, mammoth bonuses paid to bank executives, and fact that Washington politicians absconded with trillions from American taxpayers to save their Wall Street masters, it appears that bankers and politicians are the beneficiaries. A gutted, indebted, jobless, demoralized middle class were the recipients of the downside of inflation and debt. Without a Central Bank issuing a fiat currency, with no constraints, none of this could have happened.

The Federal Reserve is primarily responsible for the destruction of the American middle class. In 1915, according the Federal Reserve annual report, they operated with 35 total employees. Today, they operate with over 20,000 employees and the cost to operate the system exceeds $3.3 billion. The Federal Reserve has failed on every one of its stated mandates:

  • It was created to stabilize the banking system and keep bank panics from occurring. Within sixteen years of its creation it caused the near collapse of the banking system and the Great Depression. The stagflation of the 1970s was caused by Fed policies. The Savings & Loan crisis was created by their policies. The internet bubble, housing bubble and eventual financial collapse were caused by Federal Reserve blunders. There have been 18 recessions since the creation of the Federal Reserve.
  • The stable prices mandate has been a wretched failure, as the Fed has manufactured 2,171% of inflation and destroyed 96% of the currency’s purchasing power. This manufactured inflation has enabled the creation of our welfare/warfare state.
  • The Federal Reserve mandate of moderate long-term interest rates has clearly not been met. The Fed Funds Rate has plotted a path of extremes over the decades, ranging from 0% to 19%, not exactly stable. The Federal Reserve has consistently set rates too low, leading to credit bubbles, which always pop and end in recession or depression.
  • The mandate of maximum employment has also been a miserable failure. The easy credit policy of the Federal Reserve during the 1920s led to the Great Depression with unemployment rates exceeding 20%. Unemployment has averaged between 5% and 15% consistently since the formation of the Federal Reserve. The true unemployment rate today exceeds 15%.
  • The Federal Reserve was supposed to supervise and control the activities of banks. Instead, under Alan Greenspan and Ben Bernanke, they stepped aside and let banks take preposterous risks while giving an unspoken assurance that the Fed would clean up any messes they caused with their debt based enrichment schemes. This total dereliction of duty and gross regulatory negligence led the greatest financial collapse in history.

The American working middle class (Good) have been deceived by the Federal Reserve, the banks that control them (Bad) and the Washington DC political class (Ugly) into believing that a fiat currency, un-backed by gold, supported by systematic inflation is beneficial to their wealth. This has been the Big Lie for the last century and has positioned the country for an epic collapse. Presidential candidate Ron Paul has been the lone voice of sanity in Washington DC for the last two decades and his assessment of the Federal Reserve while questioning Ben Bernanke in 2009 needs to be understood by every American:

“The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen. The foolish notion that unlimited amounts of money and credit created out of thin air can provide sustainable economic growth has delivered this crisis to us. Instead of economic growth and stable prices, (The Fed) has given us a system of government and finance that now threatens the world financial and political institutions. Pursuing the same policy of excessive spending, debt expansion and monetary inflation can only compound the problems that prevent the required corrections. Doubling the money supply didn’t work, quadrupling it won’t work either. Buying up the bad debt of privileged institutions and dumping worthless assets on the American people is morally wrong and economically futile.”

I’ve now completed three parts of the five part series, documenting the downfall of the great American Empire. Part four, Outlaw Josey Wales, will scrutinize the looting of America by a small group of powerful, connected, super rich men lurking in the shadows, but pulling the strings on our puppet politicians. Lastly, Unforgiven  will detail the impending collapse of our economic system and the retribution that will be handed out to the guilty.

The smell of revolution is in the air.

Part One – For a Few Dollars More

Part Two – Fistful of Dollars

OUTLAW JOSEY WALES – PART FOUR

“Now remember, when things look bad and it looks like you’re not gonna make it, then you gotta get mean. I mean plumb, mad-dog mean. ‘Cause if you lose your head and you give up then you neither live nor win. That’s just the way it is.” – Josey Wales – Outlaw Josey Wales 

 

To hell with them fellas. Buzzards gotta eat, same as worms. – Josey Wales – Outlaw Josey Wales 

There is a war underway in this country. The working middle class that built this country from the ground up are being systematically eliminated by a small cabal of super rich powerful elite. The middle class was much like Josey Wales, a peaceful Missouri farmer just working his land trying to make an honest living. Then a band of lawless thugs come along and kill his wife and son and burn down his farmhouse. A man can only take so much before he gets mean and vengeful. The rich and powerful, the corrupt Wall Street bankers, the banker controlled Federal Reserve and the bought off politicians in Washington D.C. have been pillaging the middle class for decades.

They’ve killed the middle class and in 2008 they essentially burned down the worldwide financial system. Somehow, they convinced the American public the war was over. A small band of super wealthy individuals on the boulevard of greed, Wall Street, and in the putrid swamp of Washington D.C. blackmailed the American middle class taxpayers by threatening to bring down the financial system unless they were handed $700 billion, saved from bankruptcy by the Federal Reserve buying $1.2 trillion of toxic mortgage debt, and provided free money by their sugar daddy at the Federal Reserve. The politicians then absconded with another $800 billion of taxpayer funds and handed it out to their corporate political cronies in the name of shovel ready projects and adding 3 million new jobs.

At the end of the Civil War, the Confederate guerrillas that Josey Wales had joined agree to lay down their arms with a promise of freedom. Instead the Union thugs began to mow them down with a Gatling gun. This is perfect symbolism for what the ruling elite have perpetrated in the last three years. Within months of nearly destroying the worldwide financial system, the Wall Street desperados were paying themselves hundreds of billions in bonuses for a job well done plundering and sacking the American middle class taxpayer. They certainly earned the bonuses, considering they could borrow from the Fed at 0% and earn 2.5% on Treasuries or pile into stocks and commodities, knowing Uncle Ben would guarantee profits with QE2.

Jim Grant, in early 2009, described the excessive response by those in power to a crisis caused by them:

“To try to exorcise the Great Depression, President Herbert Hoover deployed fiscal and monetary stimulus equivalent to 8.3% of gross domestic product. To banish the demons of 2008-9, successive administrations have spent, or encouraged to printed, the equivalent to 28.9% of GDP. A macroeconomist from Mars, judging by these data alone, would never guess how much more severe was that depression than this recession. The decline in real GDP from August 1929 to March 1933 amounted to 27%; that from December 2007 to date, just 1.8%… so for a slump 1/15 as severe as the Depression, our 21st-century economy doctors administered a course of treatment more than three times as costly.”

Ultimately, GDP fell 3.1% between the 3rd quarter of 2008 and the 3rd quarter of 2009. The government response has amounted to throwing $7 trillion ($4.2 trillion increase in national debt, $700 billion of TARP bailouts, $200 billion of losses taken by Fannie Mae & Freddie Mac, $100 billion of losses taken by the FDIC, and the Federal Reserve increasing their balance sheet by $1.8 trillion) of your tax dollars at the problem. As a side benefit, they have thrown senior citizens under the bus by paying them 0% on their savings, not providing a cost of living increase to their social security for two years, and hitting them over the head with 10% levels of inflation on food and energy.

At this point it looks bad for the working middle class and it looks like they aren’t going to make it through the next banker made financial crisis. The middle class just wants the chance for a new beginning. They want jobs. They know the country has been hijacked by the banking corporatocracy, supported by the corrupt political class in D.C. It is time for the middle class to channel their inner Josey Wales and get plumb mad-dog mean. It is not time to lose your head and give up. The middle class are being pursued by Wall Street bounty hunters and government crooks trying to finish them off. It is time to make a stand and fight. It is essential that we know our enemies and how they achieved their power. It all began in 1913 with the creation of the Federal Reserve and the implementation of the personal income tax. I’ve previously detailed how the baby boom generation contributed to our fiscal plight in Part One – For a Few Dollars More, how the actions of the Federal Reserve’s over the last few decades have impoverished the middle class and placed the country at the brink of collapse in Part Two – Fistful of Dollars and addressed the nefarious creation of a central bank in Part Three – The Good, the Bad, and the Ugly.

How to Buy a Tax Break

“There’s another old saying, Senator: Don’t piss down my back and tell me it’s raining.” – Fletcher – Outlaw Josey Wales

When the Federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans. – Ron Paul

The Senator pissing down the backs of Americans while telling us it was raining was named Nelson Aldrich, from Rhode Island. He was a Republican lackey of J.P. Morgan who was the driving force behind the creation of the Federal Reserve and the passage of the Sixteenth Amendment, creating the personal income tax. His daughter married John D. Rockefeller, Jr. and his son became the Chairman of Chase National Bank. I wonder how beholden he was to the banker class. A decade before 1913 Aldrich had declared an income tax as communistic. He was right.  Karl Marx published his Communist Manifesto in 1848. It included ten planks. Two of the ten planks were as follows:

  • A heavy progressive or graduated income tax.
  • Centralization of credit in the hands of the State by means of a national bank with State capital and an exclusive monopoly.

The United States had tinkered with an income tax during the Civil War and the 1890’s, but the Supreme Court declared it unconstitutional. Until 1913, the Federal government was restrained from overspending because it was completely reliant on tariffs and duties to generate revenue. Without the ability to print money and tax its citizens, politicians could not roll out new programs and fight foreign wars of choice.The Sixteenth Amendment changed the game forever.

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” 

Politicians pulled the old bait and switch on the American people. The initial tax rates of 1% to 7% were low. That did not last long. By 1918, the top marginal rate was 77%, as Woodrow Wilson needed to fund his war of choice. The top tax rate reached 92% during the Eisenhower Administration and today rates are still 500% to 1,000% higher than they were in 1913. The government is addicted to tax revenue. In 2009, they absconded with $1.2 trillion in taxes from American individuals. Does anyone think the bloated government bureaucracy spends these funds more efficiently or for a more beneficial purpose than its citizens could have? The income tax distorts financial planning and business investment, and it encourages tax avoidance and evasion.

Partial History of
U.S. Federal Income Tax Rates
Since 1913
Applicable
Year
Income
brackets
First
bracket
Top
bracket
Source
1913-1915 1% 7% IRS
2003-2009 6 brackets 10% 35% Tax Foundation

Source: Wikipedia

The average American thinks income taxes are essential because politicians tell them so. The only discussion is about what the rates should be. But, the country grew tremendously between 1789 and 1913 without a personal income tax. Income taxes do not benefit the average American, they drain wealth from the citizens and hand it to politicians who then use them to bribe constituents for votes with handouts and fund foreign wars of choice. The IRS tax code has progressively been utilized by the rich and influential class to skew it in favor of those with the most lobbyists. Politicians get elected by promising benefits to the masses while being funded by rich people and big corporations. A tax code of 60,000 pages, with over 600 IRS tax forms, and filled with tax breaks for influential constituents (farmers, oil companies, homeowners, foreign corporations, etc.) is not designed to benefit the average American. The tax code is used to pay off those who “contribute” to the politicians that control the tax code.

Congress frequently holds hearings on tax simplification so members can denounce the tax code’s complexity. Congressional experts and impartial think tanks provide useful simplification ideas. When the TV cameras are turned off, Congress swiftly ignores them and votes for more special interest breaks for their biggest contributors. The storyline that is pounded into the minds of all Americans is that 50% of the population pays no taxes and the rich pay an inordinate amount of taxes. The Republicans and Democrats fight a battle of false talking points to confuse and obscure the truth.

The Republican mantra since the Reagan era has been to cut taxes and allow the “free market” to work its magic. They have succeeded in convincing a vast swath of Americans that lowering the highest tax rates have benefitted the masses. This is completely untrue. An unfunded tax cut today is just a tax increase on future generations. Democrats went along with tax cuts as long as the Republicans went along with spending increases. The Democrats hit the jackpot, with a supposedly fiscal conservative president signing a Medicare D bill that added trillions of unfunded liabilities to our national balance sheet. The Republicans are on cloud 9, as a supposedly liberal anti-war president has increased war spending to $1 trillion per year while ramping up our foreign wars of choice. Everyone gets what they want in Washington D.C. This is called bi-partisanship.

The Big Lie

As the chart above shows, at least before Reagan the top marginal rates were kept high to pay for the social programs instituted by Congress and the wars of choice fought by our Presidents. After 1980, in some sort of warped Twilight Zone episode, politicians across the land convinced themselves and the masses they could have lower taxes, more entitlement goodies, never ending war, and an unlimited heaping of material goods, with no adverse consequences. Well, it was a lie.

  • The GDP in 1981 was $3.1 trillion, today it is $14.7 trillion.
  • The National Debt in 1981 was $907 billion, today it is $14.4 trillion.
  • The amount of annual Federal income tax revenue in 1981 was $347 billion, today it is $1.1 trillion.
  • The amount of annual Federal spending in 1981 was $678 billion; today it is $3.8 trillion.
  • Total consumer debt in 1981 totaled $353 billion, today it is $2.4 trillion.
  • Total mortgage debt outstanding grew from $1.5 trillion in 1981 to $14.6 trillion by 2008.
  • Median household income was $17,710 in 1980 and is now $49,777.

These facts reveal an empire spiraling out of control, delusional and living on borrowed time with borrowed money. The output of the country has grown by 474% in the last 30 years, while the National Debt has grown by 1,588%. Those two facts alone paint a picture of eventual collapse. The lesson of allowing politicians and bankers unfettered access to unlimited amounts of fiat currency backed by nothing but a hollow promise to pay is clear, in the divergence of income tax revenue and spending. The dramatic slashing of top marginal rates from 70%, which had been in place for a fifty year period when the U.S. economy boomed, was supposed to invigorate the economy and unleash the free market spirit of our entrepreneurs. A funny thing happened on the way to prosperity for all. Federal income tax revenue has only grown by 317% in the thirty years since the Reagan Revolution. The CPI has grown by 289% over this same time frame. Therefore, tax revenue is essentially flat with 1980 on an inflation adjusted basis. This wouldn’t be a problem, except that the politicians we elected ramped up spending by 560% over these same thirty years. Federal spending has grown at almost twice the rate of income tax revenue. Bug meet windshield.  I guess this is called supply side economics.

Politicians of both parties have promised the American public they could have low taxes, unlimited social welfare benefits, a house that always appreciated in price, electronic gadgets galore, and the true American dream of getting something for nothing. And it was all made possible by your friendly Wall Street banker and their friends at the Federal Reserve. The data above already paints a dire picture for the American Empire, but the next ten years will finish the job. GDP is stagnant as Federal government spending props up the teetering edifice of economic activity. The National Debt will reach $20 trillion by 2015 and is on course to reach at least $25 trillion by 2019. Both the Republican and Democratic “plans” to “reduce” the deficit are a joke. They don’t reduce anything. They add to the debt.

The citizens of this country should be outraged by such fiscal irresponsibility, and marching on Washington D.C. with pitchforks and torches. But, there is no outrage across the countryside. This is because the vast majority of Americans followed the example of their beloved government leaders and lived far beyond their means in a delusional attempt to borrow their way to material prosperity. The median household income has risen by 281% since 1981, less than inflation over the same time frame. The median household is taking home less than they did in 1981 on an inflation adjusted basis. The McMansions, BMWs, computers, 52 inch HDTVs, and 15 other essential electronic gadgets that represent the current American Dream were financed. Consumer debt, used to buy (rent) luxury automobiles and essentials like 4 TVs and 3 computers, grew by 680%, more than twice the rate of median household income. Mortgage debt grew by an astounding 973% in the last thirty years.

[Mortgage+Debt+Outstanding+1952-2007.bmp]

The last thirty years have been a faux American Dream. The madness of crowds has been replaced by the sober reality that the material goods purchased with debt steadily depreciate day by day, while the debt stays firmly in place. Who benefitted and who lost during these thirty years of delusion? There is only one beneficiary from the issuance of trillions in debt – Wall Street bankers. The ten biggest banks in the country hold more than 50% of the mortgage debt and 80% of the credit card debt in the U.S. The poor never had much, and they still don’t. Politicians have averted riots and social unrest by pouring trillions into welfare, social security disability, SNAP programs, earned income credits, and hundreds of other transfer payment bribes to the poor. The middle class has borne the brunt of the banker plundering and pillaging.

The Super Rich Storyline

There are three storylines that are pounded home repeatedly by the mainstream media and the Republican Party ideologues.

  1. More than 50% of Americans don’t pay any taxes.
  2. The top 1% pays 38% of all the Federal income taxes.
  3. Increasing the highest tax rate above 35% would destroy jobs and kill small business owners.

The misinformation spewed forth by the super rich, who control the media, politicians, and media message, to disguise their continued looting of the American middle class, is unrelenting. There are 117 million households in the United States with a median household income of $48,000. Data from the Tax Foundation shows that in 2008, the average income for the bottom half of taxpayers was $15,300. The first $9,350 of income is exempt from taxes for singles and $18,700 for married couples. Politicians of both parties also provided credits for children, earned income credits, mortgage tax deductions, property tax deductions, and a myriad of other tax goodie payoffs for votes. When half the households in the country make less than $48,000 per year in income, of course they won’t be paying any Federal income taxes. There are approximately 151 million Americans earning income. Almost 73 million, or 48%, make less than $25,000. As Wall Street enriched billionaires are interviewed by millionaire journalists on CNBC, scorning those who don’t pay their fair share of taxes, they outsource the blue collar jobs of those on the lower income scale to China and India. Without good paying jobs, the middle class uses debt to maintain their American dream, further enriching the billionaire class in a circle of death.

average-income-americans

 

This chart reveals the true nature of who controls our country. It is a battle between a few thousand of the richest people in America versus the other 150 million. The facts are the middle class and poor pay a much higher percentage of their income in taxes than the rich. The Social Security tax cuts off at $106,800. Therefore, the median household pays 6.2% of their income, while the rich household making $5 million per year pays .13% of their income. This applies to sales taxes, property taxes, state taxes, local taxes and the thousand other taxes and fees charged on utility bills, etc. William Domhoff notes that the top 1% who make $1.3 million per year only pay 30.9% of their income in taxes, while those making $141,000 per year pay 31.5% of their income in taxes. I guess their tax lawyers aren’t as well paid. Even those making $34,000 pay 27% of their income in taxes.

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Source: Citizens for Tax Justice

The top 1% does pay 38% of the Federal income tax because they have a 23.5% share of the national income. The last time the top 1% reached this level of income was in 1928, just before the Great Stock Market Crash and the Great Depression. During the glory years of the American Empire, between 1946 and 1971, the top 1% of households’ share of the national income ranged between 8% and 13%. With the era of unbridled greed and debt that began in the 1980s, the inequitable distribution of wealth has risen to new heights. This level of pillaging by those in control of the finance sector of the economy, supported by their mouthpieces in Congress, and championed by their controlled media pundits, has reached a level that will eventually lead to revolution.

The biggest lie pushed forth by the powerful super rich in this country is related to the top marginal tax rate, which is currently 35%. The Republican agenda includes a further cut in the top rate to 25%. It is sold to the American public as a good thing for them. It has nothing to do with them. The 35% rate applies to only taxable income over $379,000. Of the 151 million Americans earning a living, this rate would apply to about 200,000 people. The top marginal tax rates during the glory years of the American Empire (1946 – 1971) were between 70% and 90%. These rates only applied to taxable income above $400,000, when the average income was less than $10,000 per year. These were the best years for the American middle class.

The IRS issues an annual report on the 400 highest income tax payers. In 1961, there were 398 taxpayers who made $1 million or more. Today there are over 78,000 taxpayers who make more than $1 million. The loopholes written into the tax code over decades by lobbyists paid for by the super rich, plus much lower tax rates on the largest sources of income of the wealthy (capital gains taxed at 15%), explain why the average federal income tax rate on the 400 richest people in America was 18.11% in 2008, according to the IRS, down from 26.38% when this data were first calculated in 1992. Among the top 400, 7.5% had an average tax rate of less than 10%, 25% paid between 10% and 15%, and 28% paid between 15% and 20%. The average American’s share of their income going to federal taxes increased from 13.1% in 1961 to 22.5% in 2008. William Domhoff explains how the super rich have paid off Congress to rig the system in their favor:

“According to another analysis by Johnston (2010a), the average income of the top 400 tripled during the Clinton Administration and doubled during the first seven years of the Bush Administration. So by 2007, the top 400 averaged $344.8 million per person, up 31% from an average of $263.3 million just one year earlier. How are these huge gains possible for the top 400? It’s due to cuts in the tax rates on capital gains and dividends, which were down to a mere 15% in 2007 thanks to the tax cuts proposed by the Bush Administration and passed by Congress in 2003. Since almost 75% of the income for the top 400 comes from capital gains and dividends, it’s not hard to see why tax cuts on income sources available to only a tiny percent of Americans mattered greatly for the high-earning few. Overall, the effective tax rate on high incomes fell by 7% during the Clinton presidency and 6% in the Bush era, so the top 400 had a tax rate of 20% or less in 2007, far lower than the marginal tax rate of 35% that the highest income earners (over $372,650) supposedly pay.” – Wealth, Income, and Power – William Domhoff

As an added bonus, hedge fund managers like John Paulson, who made $9 billion over two years, paid no income taxes on his windfall. In 2007, Republicans and a key Democrat, Sen. Charles Schumer of New York, fought to keep the tax rate on hedge fund managers at 15%, arguing that the profits from hedge funds should be considered capital gains. Schumer, the ultra-liberal champion of the poor, knows who butters his bread – Wall Street. But it gets better. As long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They pay taxes only when they cash out, which could be decades from now. These upstanding citizens access their jackpot winnings by borrowing against the carried interest, often at rates as low as 2%. I’m sure every youngster in America dreams of becoming a hedge fund manager so they can use system risking leverage to make bets on derivatives, reap billions in profits, pay no taxes, and produce no value for the country. The new American Dream.

It is plain to see by anyone without an ideological agenda that a few thousand corrupt individuals have managed to gain control of the American economic system. The introduction of the personal income tax and creation of the Federal Reserve in 1913 have provided the means for the few to dominate the many. Over the last century, a rich super class has created their wealth through issuing debt to the masses, writing the tax code in their favor through their captive politician protectors, using their own private bank to issue trillions in fiat currency and create inflation, and used their control of the mass media to convince the average American that this was beneficial. Chris Whalen in his brilliant economic history of the United States – Inflated – How Money & Debt Built the American Dream sums up what has happened:

“Once the two functions, controlling the amount of currency in circulation, and second the government’s fiscal operations, are housed under the same roof, inflation and a decrease in the value of money are the inevitable result. It is always easier to borrow than to raise taxes. Politicians who have access to the printing press will invariably use it.”

The small cabal of banking elite committed the crime of the century between 2001 and 2008. They used their power over the Federal Reserve and political class to reap hundreds of billions in ill-begotten profits and crashed the worldwide economic system in 2008. They then held the country hostage as they extorted trillions more in bailouts from the taxpayers. As a reward for their chutzpah, they have paid themselves billions in bonuses. While 44 million people try to make ends meet with food stamps, these criminals continue to pillage the countryside attempting to steal the remainder of middle class wealth. As the middle class sinks further into despair, anger is building. The political class has tried to pay off the poor with entitlement payments, but it is the middle class that will revolt when their hope for a better life is destroyed by the moneyed class. With debt in the system expanding at hyper-speed, the American Empire will not decline with a whimper but with a bang. All previous Fourth Turning’s in U.S. history have resulted in tremendous bloodshed. The next ten years will follow this pattern. I’ll address the coming revolution against the criminal banking element in the last part of this five part series – Unforgiven.

UNFORGIVEN – PART FIVE

 

 

“You’d be William Munny out of Missouri, killer of women and children”. – Little Bill Daggett – Unforgiven 

 “That’s right, I’ve killed women and children, I’ve killed just about everything that walked or crawled at one time or another, and I’m here to kill you Little Bill, for what you did to Ned” – Willam Munny – Unforgiven 

Funny thing, killin’ a man. You take away everything he’s got and everything he’s gonna have.William Munny – Unforgiven 

Clint Eastwood’s final western was one of the darkest, most violent, vicious westerns ever made. Much of the film takes place in darkness. The tone of the film is depressing, with a drained wintery look reminiscent of High Plains Drifter. The script had been written in 1976 during our last Awakening, but Eastwood held off making the movie until 1991 when he was old enough to play the lead role. Age, stages of life, and mood are key elements in the movie, as they are in the plot playing out in the world today. Unforgiven  is a story of atonement, justice and retribution. The cold forbidding atmosphere reflects a Fourth Turning mood. We’ve entered our hibernal Crisis, with its violent struggles and compulsory sacrifices in an era of maximum danger and ultimately a fight for survival. This decisive test of human strength and fortitude was as predictable as the change in seasons. Strauss and Howe understood the generational dynamics of the country would align to create the mood change which would usher in the third Fourth Turning in American history:

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe – The Fourth Turning 

Unforgiven  follows the journey of William Munny, a cold blooded vicious bandit in his youth, turned peaceful farmer in his old age. As a widower with two kids and a failing farm, he agrees to kill two cowboys who had disfigured a prostitute in the town of Big Whiskey, in return for a reward of $1,000. In his youth he drank heavily and murdered for fun, now he was killing for money. The town is run with an iron fist by an aging gunfighter, turned sheriff, named Little Bill Daggett, who doesn’t allow guns in his town. Munny and his two companions arrive amidst a driving rain storm in the middle of the night. They proceed to execute the two cowboys, but both of Munny’s companions reveal they don’t have a stomach for killing anymore. After collecting the reward, Munny finds out that his friend Ned was captured, tortured, and murdered by Little Bill Daggett. He takes a drink of whiskey and the tale turns into a story of retribution and atonement. He arrives back in town in the pitch black of night and enters the saloon where Little Bill and his men are gathered. He guns down six men, including Little Bill. As he lies on the floor wounded, Bill laments that he doesn’t deserve to die this way. Munny declares:

“deserves got nothin’ to do with it.”

Bill tells Munny he will “see him in hell”, a sentiment which Munny agrees with. Munny then kills him. There is no rousing ending. No cheers from the audience. The ugliness of violence is portrayed realistically and myths of the Old West are demolished. You are left to meditate about the concepts of age, repute, courage, heroism and the fine line between good and evil.

The themes, atmosphere, violence, brutality and finale of this eulogy to the western genre are a perfect representation of our current dire circumstances. The town of Big Whiskey represents the United States. The sheriff rules with an iron fist over the population, but his cronies can get away with murder. Hypocrisy abounds across the U.S. as politicians use the rule of law to keep the masses controlled while rewarding their corporate and banker cronies with government handouts, tax breaks, and free money. I see Munny, his companions and the prostitutes as symbols of the flawed citizens of the United States. They’ve made mistakes, committed crimes, made poor life choices, but they ultimately tried to make an honest living as upstanding citizens. When the authorities pushed them to the brink with their overbearing regulations, brazen criminal actions and blatant institutional corruption, each constituent reacted differently. Some responded with defiance, most rolled over, some ran away, and Munny responded with viciousness and retribution.   

This is how it will play out over the next ten to fifteen years. Cynicism about solutions put forth by corrupt politicians, distrust of government bureaucrats and crooked bankers, and a society wide demoralization, as widespread unemployment and declining living standards for middle class Americans has darkened the landscape like an approaching winter storm. The disillusionment of average Americans is reflected in poll after poll, with only 20% of the population satisfied with the direction of the country versus 70% just prior to 9/11. The mood change in the country since 2005 is palpable. The gap between the Haves and the Have Nots has never been greater and continues to widen. The middle class has floundered for decades, while bankers, politicians and corporate titans have reaped vast riches through peddling debt and gaming a system rigged in their favor.

In general, are you satisfied or dissatisfied with the way things are going in the U.S. at this time?

Recent data from the Pew Foundation finds that Americans are sick of being the world’s policeman. Even conservative Republicans are becoming more isolationist in their views. This was also the case during the 1930’s in the last Fourth Turning. The vast majority of Americans want to keep our noses out of other countries’ affairs because they realize the trillions spent are bankrupting the country.

Even though Americans, by a large majority, favor slashing foreign aid, ending our three foreign wars of aggression, and no longer allowing the super rich and mega-corporations to use the 60,000 page tax code as their means to avoid taxes, our leaders increase war spending, continue to meddle in the affairs of foreign countries, and seek further tax benefits for the super rich and mega-conglomerates. The will of the people is ignored because the government has been bought by the financial and military industrial complex, with funding by the Federal Reserve and the banking cartel that pulls the strings on their puppet – Ben Bernanke.

 

I’ve previously detailed how the baby boom generation contributed to our financial quandary in Part One – For a Few Dollars More, how the traitorous deeds of the Federal Reserve over the last few decades have ruined the middle class and placed the country on the precipice of disintegration in Part Two – Fistful of Dollars, addressed the nefarious conception of a central bank in Part Three – The Good, the Bad, and the Ugly and revealed how the super rich have used the tax code and their control of politicians to pillage the nation in Part Four – Outlaw Josey Wales. Now I will detail the likely result of years of frivolous consumerism, creation of a debt tsunami, corrupt myopic leadership, crooked bankers, and a angry despondent populace. The lack of preparation by government and individuals ensures this Crisis will be far worse than it had to be. The violent clash between competing forces will be extreme, bloody and result in retribution dished out to the guilty. Ultimately, the country will need to atone for its sins.    

Preparation

“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impossible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance. Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – Strauss & Howe The Fourth Turning

This Fourth Turning was as predictable as the seasons. The American Revolution Crisis ended in 1794. The Civil War Crisis arrived 66 years later in 1860. That abbreviated vicious Crisis ended in 1865. The Depression/World War II Crisis arrived 64 years later in 1929. Our current Crisis arrived in the 2008/2009 time frame, exactly 64 years after the end of the last Crisis. Strauss and Howe wrote their book in 1996. They knew we had about a decade to prepare for the looming winter ahead. We had time to fortify, prepare, save, not waste our seed corn on foreign adventures, and reduce all non-essential spending. Not only did we not do what needed to be done, we did the exact opposite of what needed to be done.

The reason is the country has been run by ideologue linear thinkers. Believers in linear history are constantly blindsided by the fact that history is cyclical and periods of progress are counterbalanced by periods of regression. As neo-con Republicans continue to push their lowering taxes on the rich, Christian fundamentalism, drill drill drill energy plan, bowing down to Wall Street bankers and wars on Muslims, drugs, and immigrant agenda, the mood of the country has shifted away from their falsehoods and fabrications. As ultra-liberal Democrats continue to push their agenda of ever increasing entitlements, ridiculous Keynesian stimulus, disengenuous green energy plans, blind support of corrupt unions, wars to prove they’re as tough as Republicans, pushing for gay marriage and rolling over for Wall Street bankers the people of the country have tired of their lies and deceit.

Our country had a decade to prepare for the coming tempest. All generations should have worked to elevate the moral and cultural standards of the country. Instead the decadence, selfishness, materialism and profligacy of the nation were taken to new heights. The complete lack of self control exercised by the media and the public has allowed government bureaucrats to impose despotic laws and regulations to protect us from ourselves and phantom terrorists. The Federal government needed to cut back its size and scope so that it would be nimble in the face of the Crisis. Politicians needed to prevent further civic decay by speaking bluntly and honestly to the American people about the future challenges, while stressing collective duties over personal rights. We needed a revival of citizenship over individualism, with a focus on future generations who would be left with the fallout of thirty years of debt induced societal degradation. The government should have shifted its budgetary focus away from the non-needy old to the young people of our once great Republic. The future of the country depends on the young, not the old. The preparation scorecard on all these accounts is a miserable failure:

  • Since 9/11 the American public has willingly allowed the government to strip liberties and freedoms away in the name of safety and security through passage of the Patriot Act, spying on US citizens, and wars of aggression in Iraq, Afghanistan and Libya.
  • The government wolves control the sheep through the use of fear and misinformation. The War on Terrorism is used at every opportunity to keep the sheep-like populace under control in their holding pens.
  • The corporate owned mainstream media glorifies wealth, celebrity, and sensationalism while infecting the culture with a vapid mind numbing array of TV shows and spewing toxic levels of filth and porn across the airwaves and internet.
  • The Federal government cut back its scope by increasing its annual spending to $3.8 trillion in 2011 versus the $1.6 trillion it spent in 1996, a 138% increase in fifteen years. Meanwhile, GDP only increased by 92% over this same time frame.

 

  • Our leaders prepared for the tough times ahead by increasing the National Debt from $5.2 trillion to $14.3 trillion in fifteen years, a 175% increase, or almost twice the rate of GDP growth. Rational leaders always triple their debt level when knowing harsh times are coming.
  • The blunt talk coming from politicians since 1996 included: buy an SUV with 0% financing to defeat terrorism; sure we can pay for your drug costs with Medicare Part D; home prices never fall and everyone deserves a house; free market capitalism always works; cutting taxes on the rich will increase tax revenue; they have weapons of mass destruction; debt doesn’t matter; giving bankers $700 billion will save our economy; spending $800 billion will generate 3.5 million jobs; and QE2 will reduce mortgage rates and jump start the economy.
  • Our leaders have thrown the Millenial generation under the bus, while promising to never cut Medicare, Medicaid, or Social Security for the 76 million Boomers that make up the largest voting bloc in the country. The collective long-term survival of the country has been cast aside in the name of the selfish desires of the generations in power.

The lack of cultural and civic preparation has been far outdone by the extraordinarily deficient amount of preparation in the economic and military areas. Everyone knows that when you discern tumultuous times are on the horizon, you conserve, save, and marshal your forces for the coming storm. Our leaders needed to level with Americans and tell them the entitlements they were promised could never be honored. Americans needed to ramp up their savings and become more self reliant in preparing for their old age. Federal, state and local governments needed to shift their employees from defined benefit plans to defined contribution plans. Americans needed to pare back their debt and stop over-consuming. The government needed to balance budgets, reform the tax code shifting toward consumption, and reduce entitlement promises. America needed to gird for a possible war whose scale, cost, manpower and casualties would seem impossible in 1996 (every prior Fourth Turning led to all encompassing war). The preparation scorecard for these areas was dreadful:

  • The most damning data in proving how delusional the government, consumers, businesses and banks has approached the future is the rise in total credit market debt from $18 trillion in 1996 to an all-time high of $52.6 trillion today, or 350% of GDP.

 

  • Rather than level with people and explain that entitlement promises could not be fulfilled, a supposedly fiscal conservative Republican President added another $15 trillion unfunded liability to our $100 trillion obligation. 

   

  • Our current socialist president rammed through a national healthcare bill that will filter 30 million people into the system and will add in excess of $1 trillion of unpaid for costs, further burying the hopes and dreams of our youth under a mountain of un-payable obligations.
  • Americans, who used to save 10% of their disposable income, were only saving 5.5% in 1996. Rather than prepare for the future by saving more, they put their faith in housing values growing 10% per year for infinity, and let their savings rate drop below 1% by 2005. The current level of 4.9% is not sufficient and is reflected in the fact that two-thirds of all workers have less than $50,000 in total savings.

 

  • States have unfunded pension liabilities approaching $3 trillion, with the Federal government carrying a $1 trillion pension liability. Unfunded liabilities are really future tax increases on unborn generations.
  • The one area that seemed under control in the late 1990s was budget deficits. Budget surpluses in the late 1990s turned into $1.5 trillion annual deficits today and as far as the eye can see. The national debt at 95% of GDP has past the point of no return.
  • The price for a barrel of oil was $12 in 1998. Rather than take advantage of this Indian summer and creating a plan to transition from depleting oil to other energy sources, our leaders did nothing. The American people bought massive SUVs, minivans and pickups and moved further into the suburban countryside, miles from civilization. The bumpy plateau of peak oil has arrived and oil prices have ranged between $70 and $140 a barrel for the last few years. We will long for these prices in a few short years.

 

  • Rather than conserving our military forces and preparing for a future major confrontation we have overextended our limited forces, spent $1.2 trillion on wars of choice, killed 7,300 American soldiers, and wounded another 43,000 soldiers.

The complete lack of preparation, indeed the choice to actively do the opposite of prepare, has insured this Fourth Turning Crisis will be that much more destructive.

“History offers no guarantees. If America plunges into an era of depression or violence which by then has not lifted, we will likely look back on the 1990s as the decade when we valued all the wrong things and made all the wrong choices.” – Strauss & Howe – The Fourth Turning

Retribution

“The refusal of the political class to imposes losses on large bank creditors since the collapse of Lehman Brothers and Washington Mutual in 2008 illustrates the extent to which the financialization of the western industrial economies has turned into a gradual coup d’état by the banks and the global speculators who dominate their client base.” – Chris Whalen

 

“We’re not moving toward Hitler-type fascism, but we’re moving toward a softer fascism: Loss of civil liberties, corporations running the show, big government in bed with big business. So you have the military-industrial complex, you have the medical-industrial complex, you have the financial industry, you have the communications industry. They go to Washington and spend hundreds of millions of dollars. That’s where the control is. I call that a soft form of fascism — something that’s very dangerous.”Ron Paul 

As the average American continues their epic struggle to stay afloat in these turbulent times it is clear to those with critical thinking skills, like Chris Whalen and Ron Paul, that the game is rigged in favor of those with enormous wealth and power. There is no doubt the levers of government and finance have been seized by a super rich minority of men, willing to use all means necessary to increase their wealth and power at the expense of those they consider lowly expendable peasants. The myth perpetuated by those in control of the system is that everyone in America has ample opportunity to move up the ladder, even as they push the ladders away from the parapet surrounding their castle.

The talking points of the super rich, which are pounded into the brains of slumbering Americans, are they pay all the taxes, create all the jobs, create all the wealth, and drive innovation. The facts say otherwise. The super rich aren’t creators, they are destroyers. The top 0.1% richest Americans didn’t get rich by creating new companies and letting their entrepreneurial talents shine. These 152,000 people, with an average income of $5.6 million per year are overwhelmingly executives at large corporations, banks, law firms, and real estate firms. These people account for 68% of the richest of the rich. Entrepreneurial creators and producers account for less than 10% of the richest Americans. The executives that make up the 68% are masters of creating debt, wealth for themselves by peddling debt to the middle class, and creating jobs in China and India by outsourcing U.S. jobs.

The average income of the 137 million people that sit at the bottom of the income pyramid has declined by 1% since 1970. The people at the top of the pyramid saw their average income rise by 385%. Was this because they worked harder? No. It was because they used their existing wealth to buy politicians and pay lobbyists to write laws, create loopholes, reduce regulations, and alter the tax code in their favor. This was not a conspiracy. It was human nature. Humans are driven by greed and fear. Lusting for power and wealth is a common human frailty. Those who are able to acquire wealth and power through their superior abilities and intellect are usually driven individuals. It is built into their DNA to seek more wealth and power. There are 310 million Americans and based on the chart below, only 1.5 million would be classified as very rich or extremely rich. Many of these people associate in the same circles. This incestuous relationship is what breeds the growing inequality in our country. The game is rigged in favor of these 1.5 million people because they run the corporations, occupy the halls of Congress, peddle the debt products to the bottom 90%, and use their mass media to control the message to the under-educated, over-medicated, gadget distracted masses.

 

The problem with humans is they always push the envelope too far. The rich and powerful have methodically accumulated more wealth and more power since their glorious coup in 1913 with the creation of the Federal Reserve and the personal income tax. They have used inflation and the tax code to further their agenda. The rate of their pillaging has waxed and waned over the last century as the mood of the country has oscillated during the five turnings between crisis and triumph. The rate of looting has accelerated in the last thirty years as their false message of free market capitalism, lower tax rates for the rich, and the issuance of unparalleled amounts of debt was bought hook line and sinker by the American public. Their plundering of the national wealth reached a sickening crescendo in the last ten years, as their internet bubble was replaced by their housing bubble, which has been replaced by their debt bubble of immense proportions. As the middle class has been impoverished, 30 million people are unemployed or underemployed, senior citizens have been sacrificed at the altar of Wall Street and 45 million people are forced to use food stamps, the top 1% has done fabulously. They continue to rake in a greater proportion of the national income every year.  In 2009, in the midst of an epic financial crisis, the number of millionaires in the United States soared by 16% to 7.8 million as despair and hopelessness spread across the land and fearful Americans were railroaded into bailing out the bankers that initiated the crisis and believing the Obama’s Keynesian solutions would actually trickle down to them.

 

As the game approaches its inevitable termination those in control have become increasingly audacious and frantic in their attempts to embezzle what remains of middle class wealth. The anger and disillusionment grows by the day. The mood of the country darkens like the sky before an approaching blizzard. The intensity and violence during a Fourth Turning hastens as events spiral toward a climax. The extreme actions taken by those in power since September 2008 have set in motion a chain of events that will lead to civil war. The powerful elite in government (Bush, Paulson, Bernanke, Congress) chose to bail out the powerful elite on Wall Street (Blankfein, Dimon, Pandit, Lewis) on the backs of the American middle class. TARP, QE1, QE2, and the $800 billion stimulus package were all created by the ruling elite to benefit the ruling elite, who control the vast amount of financial wealth in the country. Savers and seniors have been thrown under the wheels of a Lamborghini driven by the profligate Wall Street gamblers.

financial-wealth-united-states

Average Americans feel betrayed by politicians, bankers and corporate America. The Tea party movement is a reflection of that anger. Fourth Turnings always sweep away the old order and replace it with a new order. The old order isn’t ready to be swept away, but their time is coming. The U.S. economic model is unsustainable and is guaranteed to collapse in the near future. Those in power are trying to engineer a controlled collapse, but they will lose control just as they did in 2008. Panic and depression will ensue. Vast amounts of wealth will be destroyed. When the middle class realizes they have been screwed again by Wall Street and K Street, and they no longer have anything left to lose, they will lose it.

The welfare class will only riot if their EBT cards stop working and the monthly welfare direct deposit ceases. It’s the critical thinkers in the middle class that will lead a revolution. There are 250 million guns owned by Americans. With this amount of firepower and millions of Americans with nothing left to lose, those attempting to retain power will be at a distinct disadvantage. I believe armed vigilantes will hunt down those responsible for the destruction of the American economy and invoke their own justice. Their gated communities and penthouse suite doormen will not protect them. No politician, banker, or corporate executive will be safe. Some will escape in their Lear jets to foreign lands, but the rest of the world will be equally chaotic and unsafe for those who committed crimes against humanity. Innocent people will die. Deserve will have nothing to do with it. The very existence of our country will hang in the balance.

Atonement

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

“Don’t think you can escape the Fourth Turning the way you might today distance yourself from news, national politics, or even taxes you don’t feel like paying. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted. The Fourth Turning necessitates the death and rebirth of the social order. It is the ultimate rite of passage for an entire people, requiring a luminal state of sheer chaos whose nature and duration no one can predict in advance.” – Strauss & Howe – The Fourth Turning

No one can predict the exact events (debt ceiling, Euro collapse, Middle East war) that will propel this Fourth Turning. But, the underlying drivers are clear: public debt, private debt, banker coup, military overreach, corporate fascism, Federal Reserve created inflation, an oil dependent society with depleting oil and rampant corruption across all levels of government. The fingers of instability grow longer as we add $4 billion per day to the national debt. A grain of sand will fall on the wrong part of the sand pile triggering a collapse of our currency. The event is unknown, the timing unclear, but the destination is certain. A dollar collapse will trigger a surge in interest rates, which will be fatal to our debt bloated society. Every previous Fourth Turning involved revolutionary aspects. The American Revolution and Civil War were wars of revolution. The stirrings of revolution were rampant in the early 1930s, with a plot foiled by General Smedley Butler. The New Deal was a response designed to quell discontent among the masses. Enough people are becoming aware of who to blame for the ills in our society that Henry Ford’s prediction is ever closer to being realized:

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before morning.”

 

An uprising against the super rich and their banking cartel partners in crime is in the cards over the next ten years. Our society has degenerated and has been ransacked by sociopaths in suits as Jesse from Jesse’s Café Americain  so eloquently states:

“Not all sociopaths wield knives and knotted cords. Some wear suits, and are exceptionally intelligent and articulate, obsessively driven, and are able to use and undermine the law and the rules for their advantage, like weapons.  It is never about the win, never about the money.  It is about the kill, the expression of their hatred, about elevating themselves with the suffering of others. Bind, torture, kill.  Not only with ropes and knives, but also with power and money, and the subversion of law.  Lawlessness is their addiction, their will to power.

When societies become lax and complacent, these sociopaths can possess great political power through great amounts of unprincipled money.  And over time they become almost anti-human, destroyers of all that is good, all that is life, all that offends their insatiable sickness with its goodness.  They twist the public against itself, and turn a broad sweep of society into their killing grounds. This is the undeniable lesson of the last century.  There are monsters, and they walk among us.” 

Human beings are a flawed species. We are often driven by emotion rather than reason. We are easily convinced of things we want to be convinced about. Those with superior intelligence often take advantage of those with inferior intelligence. We are prone to mass hysteria and believing things that, in retrospect, were utterly ridiculous. We can be swayed by fear and greed in alternating degrees of delusion. History teaches us that this time isn’t different. We’ve experienced depression, war and social upheaval on an epic scale three times since the founding of this country. With only three data points it is tough to discern patterns that would reveal exactly how this Fourth Turning will play out. But it is apparent to me that each Fourth Turning alternates between a mostly external struggle and a mostly internal struggle. The American Revolution was a struggle against an external oppressor – Great Britain. The Civil War was an internal struggle between the industrial North and the agrarian South. The Depression/World War II struggle was mainly against an external threat – Germany, Japan, and Italy.

The Fourth Turnings that centered upon an external threat ended with a glorious High. The Civil War Fourth Turning resolution felt more like defeat, with the country exhausted, bitter and angry. All indications are this Fourth Turning will be mainly an internal struggle between the ruling class of bankers, business elites, and politicians and the downtrodden middle class. The lying, cheating, fraud, theft and other wrongs committed by those in power will need to be atoned for. The generational dynamics in place will drive the reactions of the country moving forward. We have been badly led. A vast swath of the populace has lived beyond their means. The existing system is unsustainable. The Boomer generation does not want to yield on their perceived entitlements. The Millenial generation will be saddled with un-payable debts. Generation X is caught in the middle of this generational struggle. The huge imbalances in our society have built up over decades like flood waters behind a weakening levee. When the levee breaks the existing order will be swept away in the raging torrent that will follow.

The ruling class will be stripped of their unseemly acquired wealth; the Boomer generation will be scorned for their reckless disregard for future generations and stripped of their entitlements; Generation X will resign themselves to a lower standard of living, knowing full well by doing so, their children will not be saddled with crushing levels of debt; Millenials will have borne the burden of the revolution and violence which will be inevitable as the ruling class fights to retain their dominating position in society.  Darkness descends upon our land. Storm clouds gather on the horizon. We’ve all played a part in the catastrophe that lies before us. Everyone in our crumbling society will need to atone for its sins, whether they deserve to or not. Will Munney was not an innocent man, but he ultimately atoned for his sins by digging deep into his soul and finding the strength and fortitude to fight the evil establishment. Each generation’s rendezvous with destiny awaits. There are no guarantees. The myth of American Exceptionalism will not protect us from the choices we’ve made. God will not shield us from the consequences of our actions. The American Empire hangs in the balance. As the ghosts of Roman emperors whisper – Glory is fleeting.

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning

“History offers no guarantees. Obviously, things could go horribly wrong – the possibilities ranging from a nuclear exchange to incurable plagues, from terrorist anarchy to high-tech dictatorship. We should not assume that Providence will always exempt our nation from the irreversible tragedies that have overtaken so many others: not just temporary hardship, but debasement and total ruin. Losing in the next Fourth Turning could mean something incomparably worse. It could mean a lasting defeat from which our national innocence – perhaps even our nation – might never recover.” – Strauss & Howe – The Fourth Turning

 

 

 

OBAMA PHONE

The Free Shit Army marches on. I always wondered how the people in West Philly could all afford cell phones. Now I know. They can’t. You and I are paying $1.8 billion per year because they deserve the latest iPhone 5. Check out your monthly phone bill and notice the charge called FEDERAL UNIVERSAL SERVICE FUND. That’s your “contribution” to the Obama phone fund. A family of four making $31,000 per year qualifies for an Obama phone. Hat tip to DaveL for this story. 

Screaming Apparent Obama Supporter Explains Why We Need to Re-Elect President: ‘He Gave Us a Phone, He Gonna Do More!’

Posted on September 27, 2012 at 10:09am by Mike Opelka

Yesterday, both President Obama and Mitt Romney were in the swing state of Ohio campaigning. At one Romney event near Cleveland, a group of Obama supporters gathered to voice their dislike for Romney.

Obama Supporter at Romney Event in Ohio Says Vote Obama for Free Phone
Photo Credit: YouTube

One apparent Obama supporter was caught on video seemingly giving a very clear explanation of why she is voting for the president and why she does not like Mitt Romney.

The passionate explanation for the former involves Obama giving free phones:

 In case you did not hear that clearly, we will transcribe it as best we can.

“Everybody in Cleveland, low minorities, got Obama phone. Keep Obama in president, you know. He gave us a phone, he gonna do more.”

The person shooting the video asks, How did he give you a phone? To which the woman replies: “You sign up! If you on food stamps, you on social security, you got low income, you disability…”

The video includes a cut at that point and picks up with the filmer asking “What’s wrong with Romney?” Without blinking, the passionate Obama supporter says:

“Romney, he sucks! Bad.”

If this kind of thinking sounds familiar, we have heard similar comments from Obama supports as far back as 2009.

TheBlaze has also reached out to the person who posted the video, requesting the entire, unedited clip.

For the record, government sponsored cell phones started long before President Obama took office. However, the size of the program (and its cost) have grown considerably since 2008.

This story has been updated.

(H/T: Matt Patrick – KTRH Radio in Houston)

 

Reports Of Fraud, Abuse Surround Federal Free Phone Program

July 19, 2012 11:10 PM

MINNEAPOLIS (WCCO) — A federal program is giving away thousands of free cell phones and minutes in Minnesota, and you’re paying for it.

Helping low-income people connect to services they need, the program gives free phones with hundreds of free minutes each month to people in need to land jobs, make appointments and stay in touch with family.

But the program has come under fire for its $1 billion price tag and reports of fraud.

A company called Life Wireless teamed up with The Center for Changing Lives in Minneapolis to issue free phones to those who qualify, such as Michelle Adams.

Adams is looking for a job and signed up for a free phone.

“I’m really happy that they have this kind of service for people,” Adams said.

But it didn’t take long to find one man who admits he didn’t use the system the way it’s intended.

Odell Hilson sold his phone for $20 because he needed the money. He didn’t remember which company gave it to him, but he didn’t seem to care that taxpayers picked up the tab.

“They would be upset, because they figure they were paying for it and if that’s the case, then that’s not my problem,” Hilson said.

Look at your cell phone bill. There’s a line called the Universal Service Fund. It goes to pay for this Federal Communications Commission-sponsored program called Lifeline. It’s usually a couple dollars a month.

Lifeline began by paying for landlines for those in need. The rules called for customers to have an income 135 percent below poverty guidelines.

But in 2008, Lifeline added wireless providers and problems have been reported across the country ever since — people are getting dozens of free phones and not having the proof they need to be on the program at all.

Life Wireless is one of 104 companies in Minnesota approved to enroll customers in the program.

In all, those companies have distributed more than 55,000 phones at hundreds of events throughout the state.

Life Wireless says it has strict training for employees and they know what questions to ask.

“Nobody does more than Life Wireless to prevent waste, fraud, and abuse, and the best way to do that is to see the customer face-to-face in a live enrollment,” Jim Carpenter of Life Wireless said.

Still, Arkansas Congressman Tim Griffin doesn’t think the safeguards go far enough.

He believes most phones aren’t being used to help find jobs, and they’re costing the country far too much.  The republican has introduced a bill in Washington to get rid of the cell phones and only cover landline costs.

“The federal government doesn’t need to be providing people with cell phones,” Griffin said.

A spokesperson from the FCC said it has started to reform the program after getting complaints. By next year, it says there will be a national database to make it impossible for a household to get more than one free phone.

Cowboys.com

HAHAHAHAHAHAHA, so now it’s official, the Cowboys really do suck

 

Cowboys.com now gay dating site, due to Dallas goof

By Peter Mucha

Inquirer Staff Writer

A Web domain let slip by America’s Team is now dedicated to (mostly) gay dating.

Welcome to the new Cowboys.com, a “online dating community for men.”

 

The Dallas Cowboys once tried to own Cowboys.com, but last week it relaunched as a gay dating website.
 
The Dallas Cowboys once tried to own  Cowboys.com, but last week it relaunched as a gay dating website.

 

<a href=”http://ad.doubleclick.net/jump/ph.sports/eagles;type=secondary;pos=content_btf;tile=9;sz=300×250;ord=122111090052?” target=”_blank”> <img src=”http://ad.doubleclick.net/ad/ph.sports/eagles;type=secondary;pos=content_btf;tile=9;sz=300×250;ord=122111090052?” border=”0″ /></a>
“Are you a country western cowboy looking for a man to  ride into the sunset with?” the home page asks. “. . . You’ll be able to find  your perfect match here.”Holy Brokeback Mountain, Batman.Those who sign up for free, can send a “wink” to “a member of your choice,”  according to the FAQ. “It is a quick, fun way to let someone know you’re  interested.”Those who purchase a gold membership – $50 a month, $144 for six months – can  send an email.

“As many states continue to pass gay marriage laws with the support of  President Barack Obama, Cowboys.com will be well positioned to take advantage of  the continued growth in the gay dating sector,” declared the Baltimore-based  owners group in a news release last week.

“We will also serve the needs of straight daters as well,” said Darren  Cleveland, head of City Advertising, a Florida-based ad agency that’s part of  the owners group.

The National Football League’s Dallas Cowboys had a winning bid of $275,000  on the domain name back in 2007, but, according to the news release and a Domain  Name News report, a mixup kept the deal from being completed.

Sort of like some fourth-quarter Tony Romo passes.

Previously, the site sold western apparel and rustic decorations.

The site basically lay dormant for the last five years before emerging with  its current theme.

Cleveland pooh-poohed the idea the site was a strategy to extract a handsome  price from the football team.

“That’s definitely not our intention,” he said.

The ownership group operates thousands of websites with all sorts of themes,  and the direction of Cowboys.com grew from research into what people searching  for “cowboys” online were looking for.

It wasn’t all football.

The division rival New York Giants, by the way, do own Giants.com, and ditto  for Washington and Redskins.com.

Eagles.com, however, owned by the Ginn Computer Company of Marmora, N.J., is  still “under construction.” The registered owner did not immediately return a  phone call to say if he’s planning to feature raptor birds, Eagle scouts, silver  dollars or football chatter – or to just hold out for the highest  bidder.

original article here.

 

http://thestrangestbrew.com/

 

U.S. ENERGY INDEPENDENCE

Listening to the two clowns running for President discussing energy policy is like listening to those babies on the internet babbling jibberish as if it means something. One clown babbles about renewable energy and green jobs. The other clown babbles about drill, drill, drill and 100 years of supply under our feet. These two lying sacks of shit are telling the American public that America can and will be energy independent any day now. You see stories in the MSM that we have become a net exporter of “petroleum products”. The clueless masses thinks this means we have an excess supply of oil. What it means is that our economy is so bad, we have gasoline left over to sell other countries because we don’t have enough business to generate demand in this country.

The fact is that the United States uses 18 million barrels of oil per day. We import 10 million barrels of oil per day. We export 2 million barrels of petroleum products per day. We extract 5.7 million barrels per day from our soil. Do these facts support the idea of energy independence in the near future? Ever?

Is fracking going to save the day? When was the last time you filled up your tank with shale natural gas? How will our glut of shale gas save us? I haven’t seen the plans for converting gas stations and vehicles to natural gas. Have you? Obama wants you to plug your cars into an outlet and use coal to power your cars. The 2,000 Chevy Volts that Government Motors has sold this year will surely save the country from Big oil.

The dishonesty and lies spewed by both parties regarding U.S. energy independence benefits no one. An honest discussion about the implications to our society of much more expensive energy is too much to ask in the land of delusion.

DON’T WORRY, DRIVE ON: Fossil Fools & Fracking Lies from MONSTRO on Vimeo.

 From both political parties come cliches on energy policy

Monday, September 24,2012

 

We’ve heard it all before. Over and over for most of the last 40 years.

From politicians of both parties, cliches and nonsense on energy. Take the biggest cliche of all: U.S. energy independence. The candidates are all for it. Mitt Romney says he’ll make us independent by 2020, conveniently at the end of his second term. President Barack Obama says the route to energy independence is an “all-of-the-above” strategy and a “doubling-down” on renewables, especially if, as Obama has argued at various times, we have “Apollo” programs for new energy technologies.

These pronouncements are imprecise to the point of being meaningless.

Virtually any policy could be attached to the slogans, and their interminable restatement seems mainly an effort to produce a few uplifting sound bites on the evening news.

So Romney and his running mate, Paul Ryan, R-Wis., are for U.S. energy independence.

How original! This has been proposed by, well, just about every politician since Richard Nixon. He came up with the idea in 1973 (to be achieved by 1980). Romney’s only innovation is an eight-year time frame and he has called for “North American energy independence,” to include Canada and Mexico, both major energy exporters. Nixon wanted independence in seven years, but since Gerald Ford, the standard energy independence time frame has been 10 years. When Ford’s aides first looked into the matter, they felt their first goal was to redefine “independence” and their second was to redefine “10 years.”

The pained effort to define energy independence has been ongoing. In the 1970s Nixon’s (and Gerald Ford’s) Treasury Secretary William Simon thought energy independence meant having diversified sources of oil supply. By that definition we’ve been energy independent for about 25 years.

I have no idea what Romney means by it, especially since he seems to want us to only be independent of such countries as Venezuela (at least under Hugo Chavez) and of the Middle East.

Of course, the simplest definition is one Nixon first used: We would only use energy supplies produced in and by the U.S. This is possible; we could forbid imported energy supplies. Period.

It would also be almost unspeakably stupid. It would mean, for example, if world energy prices were low, we would forcibly lower our standard of living and put American firms at a great competitive disadvantage by choosing expensive energy over cheaper. No doubt other nations would send us a “thank you.” Complete energy self-sufficiency was tried in Romania under the Communist dictator Nicolae Ceausescu.

Ask any Romanian who lived through that time how well the experiment worked out; you won’t get a recommendation.

A few politicians and pundits argue that our engagement in the global energy market does cost us. That is why we went to war, in 1991, most notably. But does anyone seriously believe the U.S. (the world’s only military superpower) would just stand aside while the global economy fell to pieces because of a major disruption of the oil market?

Of course, Obama also touts energy independence on his campaign website along with a few new imprecise energy slogans.

“All-of-the-above,” for example, could mean “anything-I-like-to the extent-I-like it.” “Doubling-down” could mean spending twice as much money as we already have or just reinforcing some nebulous commitment with twice as much rhetoric, uttered twice as loudly.

Obama also has the burden of having spent billions of taxpayer dollars already on his fantasies of renewable energy “Apollo” programs, programs that were supposed to create millions of “green jobs.” Like energy independence, as studies have shown, it’s unclear just what constitutes a green job.

What is really unfortunate about the president’s policies is that he could actually do some good on the energy front by ordering the Environmental Protection Agency to suspend the pernicious Renewable Fuel Standard — a.k.a. the ethanol mandate. He could even blame George W. Bush since the 2007 ethanol bill was one Bush strongly endorsed.

Then again so did Sen. Barack Obama and many other Democrats in Congress.

Of course, that bill had a lofty goal beyond ethanol: As House Speaker Nancy Pelosi described it, this was the U.S. “energy independence day” bill.

And who opposes that?
Peter Z. Grossman is a professor of economics at Butler University in Indianapolis and the author of “U.S. Energy Policy and the Pursuit of Failure.”

LLPOH’s Short Story: Why Would a Company Offshore Its Business?

I am always stunned by the comments that appear relative to corporations deciding to take their businesses offshore. There are screams about it being a short-sighted decision, that the corporations are cutting their own throats, and that the businesses are evil and are doing it to spite the working class.

So, let’s take a look at some of the reasons why a corporation would move offshore:

Corporate Tax Rate:

The US corporate tax rate is the highest in the world, at 39%. That is astonishingly high. For every dollar they earn, they give 39% to the federal government. Some very large corporations have gotten extremely good at minimizing this rate, but it costs them a lot to do so (albeit less than actually paying the rate.

Adding insult to injury, there are also state corporate tax rates – the highest (Iowa) maxing out at 12%. So if you run a corporation in Iowa, your highest total corporate tax rate is 51%. If you happen to be in California, the state corporate tax rate is 8.84%. In Pennsylvania, 9.9%. So, the effective corporate tax rate total is in the neighbourhood of 50%.

There is simply no way to put this other than to say that that is absolutely appalling. If you own a corporation paying that rate, and decide to take a dividend, you pay a further 15% on what you take out. So if your corporation makes $100 profit, you lose $50 to corporate tax, and then you lose a further $7.50 to dividend tax. Your effective tax rate is then almost 58%.
And here is the further kicker – the idiot Democrats want to take the dividend tax rate up to the marginal rate – let us say 35%. In that case, out of your $100 profit, you would lose $50 to corporate tax rates, plus a further $17.50 to dividend tax, leaving the owner of the business to take home an amazing $33.50 for every $100 dollars the corporation manages to make.

If you were a corporation owner, and faced the prospect of this occurring, would you not run for the hills? Would not a low-tax nation look enticing? Be honest – would you really take the chance of funding a business, when the reward you can reap is 33.5% of profits? Really?

High Cost of Labor

Wages in the US are the world’s highest, at around $54,000 per person. That is a disadvantage if you are competing in a world market. Trust me on that. In addition to that wage, you also have the joy of payroll tax, which is currently 7.65%. Any bets that it will go up as SS runs out of money, or as Medicare falls further into the black hole? Would you bet your house on that? Business owners do.

The cost of providing medical insurance adds a further $12,000 – $15,000 per employee. Anyone want to make the same bet – that it will not keep climbing? Bet your house on it, maybe?

Unemployment taxes add about another $1000 per year to the costs. And we all know unemployment rates will surely fall, now don’t we?

So, the US has the highest wages in the world, and the additional costs per employee probably push $20,000 per year. The additional costs exceed the base wages per employee in all but about 20 countries on earth. If you were running a business, and were faced with base costs of about $75,000 per employee, do you think just maybe there would be incentive to look to offshore some of that extraordinary cost?

Compliance Cost/Miscellaneous Cost

There are huge compliance costs with doing business in the US. EPA and OSHA lead the way. Choose your own numbers for these, but even small businesses spend tens of thousands of dollars a year dealing with EPA and OSHA issues.
There are sundry miscellaneous costs as well – such as property tax, etc. If you ae unfortunate enough to have a unionized workforce, you can add further tens of thousands of dollars per year dealing with those issues.

Countries without such compliance costs certainly look attractive if you are a business owner.

Ways to Compete

There are three main ways a company can compete for business. They are via price, via service, or via quality. Some companies – Apple, for instance – have managed to carve out a niche where they compete on innovation (or perceived innovation), and there are some other niche ways to compete, but we will focus on these three.

With regard to price, I have already laid out the basis as to why the US cannot compete on price – labor costs, associated labor costs, and compliance costs are just too outrageously expensive. The only positive price/cost factor that exists is that there is a distance benefit that exists – it is expensive to ship product long distances. Small, light products are obviously cheaper to ship than big, heavy items. But, in general, the shipping costs do not overcome the labor costs.

With regard to service, the distance issue really is a benefit. A good local company can exceed the service that a foreign corporation can provide. Modern technology, local representatives, etc., are eroding that ability. And significant pricing advantages generally outweigh the service issues.

With regard to quality, there are several issues that are making the US uncompetitive. First, the ethic of quality simply does not exist in the US. Workers do not buy in to the need to produce quality product. Second, they skills of US workers are falling behind their world-wide competition. The education system is lagging, and the wrong skills are being studied, and so workers with the skills to produce high-quality products are hard to come by. And also, US consumers do not generally place a high value on quality – they want cheap. High quality comes at a cost. Make no mistake about it.

So, given all of that, how does the corporation compete? It can compete on service, but on quality and price it is in trouble. And the ability to compete on service is being daily eroded.

My company competes on quality and service, and not on price. However, I am being continuously squeezed on price and service. How long I can manage to keep the foreign completion away remains to be seen.

In Sum

So business faces: the highest tax rates in the world, the prospect of significant tax increases, the highest labor costs in the world, the highest compliance costs in the world, and has a workforce whose skill base has eroded over the last few decades. Given that, is it really short-sighted that corporations are abandoning ship and are moving offshore? Really?

If you owned a business, and faced these challenges, and looked at a possible return of under 35% of profits earned, would you stay in business considering the risks? Would you try to move your business to a more favourable locale? I face that decision every day, and every day I get closer to calling it a day and closing up shop.

If the Democrats manage to get the dividend tax rate raised to the levels being discussed, mark my words – you will see an exodus of business the likes of which have never before been seen. It will be the straw that breaks the camel’s back.

NEW JERSEY’S SHITTIEST SHITHOLE

Just when you think it can’t get any worse than Philadelphia, PA, you just need to cross the Ben Franklin Bridge into beautiful Camden on the Delaware to see it can get much much worse. Don’t ever make a wrong turn in Camden. It will be your last. Decades of Democrat “solutions” in full bloom.

America’s Deadliest And Poorest City Set To Disband Its Entire Police Force Over Budget Crisis

Tyler Durden's picture

Submitted by Tyler Durdenon 09/24/2012 10:51 -0400

While the stock market in the US continues to surge (if not so much in China where the composite is back to 2009 lows) as the relentless liquidity tsunami makes its way into stocks, and other Fed frontrunning instruments, and only there, reality for everyone else refuses to wait. Last week we saw reality striking in Greece, where a section of Athens literally shut down after it ran out of all cash. Today, reality comes to the US, and specifically its poorest city, Camden, which is a twofer, doubling down also as America’s deadliest city. It turns out Camden is about to become even deadliest-er, as its police force is set to be disbanded following a budget crisis in this effectively insolvent city.

AP reports:

This city, long among the nation’s poorest and most crime-ridden, is on the verge of dismantling its police department and starting anew with a force run by the county government.

 

City officials are making the move to increase the number of officers while keeping the cost the same by averting rules negotiated with a union that city officials have seen as unwilling to compromise.

 

Unless the union – which is skeptical of the stated motivations for the change – reaches a deal with the county, no more than 49 per cent of the city’s current officers could join the new force and those that do will get pay cuts.

 

John Wilson, a 57-year-old unemployed baker who’s lived in the city his whole life, thinks it’s worth a try.

 

‘The police in Camden clearly haven’t been doing their job,’ he said last week as he walked to his home in the Parkside neighborhood, which has seen six homicides since the start of 2011.

 

‘Any change has to be better. It can’t get worse now.’

Oh yes it can. Here’s why:

Officials say there are about 170 drug markets operating in this city of 77,000 near Philadelphia, more than 700 people on parole and 600 registered sex offenders.

 

The murder rate is unthinkably high. In 2007, Newark attracted national attention for a record number of homicides.

 

As of Friday, there had been 47 murders this year. The city record of 58 was set in 1995.

One can only hope this is not a harbinger of what is coming to all American cash flow, not money dilution ability, ends. Sadly, for Camden there is no more hope.

The city has the nation’s highest poverty rate with more than two residents in five living in poverty, census data show.

 

The big factories that once made Camden an industrial boomtown have been gone for a generation.

 

Over the past decade, revitalization efforts focused on expanding hospitals and universities, which brought some life to downtown but had a less discernible effect on neighborhoods where even the best-kept blocks have abandoned homes.

 

The city expects only $25 million of its $150 million next proposed budget to come from property taxes. Most of the rest is supplied by state aid – and that’s declining.

Think massive ECB bailouts, which in the US are far more streamlined. As for the local residents who still are paying property taxes, it may be prudent to just take your real estate losses and move on. Or else…

In January 2011, the city government conducted massive layoffs, including nearly half the police department and about one-third of the firefighters.

 

Since then, all the laid-off public safety workers have been called back, but their numbers have fallen through attrition.

 

Now, there are 270 police officers, down from 450 in 2005 and 368 the day before the layoffs.

 

Police Chief Scott Thomson, who is slated to lead the Camden County Police Department’s Metro Division, points to crime statistics for the two years before the layoffs that showed the crime declining.

 

He says it’s because of intensive community policing efforts that came about when detectives were reassigned from desk jobs to patrols and the force was able to be more proactive.

 

With the smaller force, he said, walking and biking beats are used more sparingly.

In the meantime, the local cops are all preparing to bail as entitlement funding runs out

The Fraternal Order of Police lodge that represents Camden’s rank-and-file officers is upset that they have not been presented with a formal plan.

 

Cappelli says officers in the new department would have base salaries that are the same or higher than what they make now – ranging from $31,000 for a rookie to about $80,000.

 

Officers’ health insurance contributions would increase, and officers would also lose longevity and shift differential payments that combined can boost their pay up to 22 per cent.

 

The plan is to start hiring for the new force in October and have a mix of city and county police patrol the city during a training period before shutting down the city department sometime in the first few months of 2013.

The plan will not work. Good luck Camden: you will need it in your transformation to the first circle of US hell, soon to be joined by many more.

And here are some pictures of just what Dante would see in his modern descent into America.

Shocking crimes: A Camden police officer stands in the doorway of a home on August 22 in New Jersey's most impoverished city, where authorities say a 2-year-old boy was decapitated, apparently by his mother
Shocking crimes: A Camden police officer stands in the doorway of a home on August 22 in New Jersey’s most impoverished city, where authorities say a 2-year-old boy was decapitated, apparently by his mother
Fight: A supporter of the Camden Police Department speaks during a hearing before the New Jersey Senate Judiciary Committee, in Trenton
Fight: A supporter of the Camden Police Department speaks during a hearing before the New Jersey Senate Judiciary Committee, in Trenton
Forces dwindling: There are now 270 police officers in Camden, down from 450 in 2005 and 368 the day before the layoffs
Forces dwindling: There are now 270 police officers in Camden, down from 450 in 2005 and 368 the day before the layoffs
 
Run down: Crack houses have sprung up amid the boarded-up factories and burned out houses in Camden

 

 
Abject poverty: The unemployment rate in Camden skyrocketed from less than 9 per cent to more than 20 per cent during the recession
Gone: Camden police officers will lose their jobs at the end of the year when the department is disbanded
Gone: Camden police officers will lose their jobs at the end of the year when the department is disbanded

 

Decay: The Camden police have struggled to keep up with the soaring murder rate, amid layoffs and budget cuts
Decay: The Camden police have struggled to keep up with the soaring murder rate, amid layoffs and budget cuts
Decay: Soaring unemployment and the flight of thousands of city residents has resulted in urban blight spreading across the city
Decay: Soaring unemployment and the flight of thousands of city residents has resulted in urban blight spreading across the city

Run-down: Residents look out over the gutter city where almost half of people are unemployed
Run-down: Residents look out over the gutter city where almost half of people are unemployed

MOST DANGEROUS CITIES: Camden, St. Louis, Oakland, Detroit, Flint; You Know, ALL Those Cities Run By Republicans… lol


Did a ‘National Endowment of the Arts’ $40,000,000,000 ‘earmark’ go to Camden NJ for this gorgeous project? How are those free market principles working out in Camden? We’re sure that MOST of the kids in Camden have strict parents who are still married and go to church on Sundays..Nation’s most dangerous city: Camden tops the list again. The top 5 most dangerous cities have Mayors who are democrats. We’re willing to bet that most, if not all of the top 20 are all run by democrats. (Get on that for us liberals, so you can justify feeling better that we might be wrong on something so irrelevant.)The annual ranking of the most dangerous cities in the nation has again listed Camden as the worst. (We can fix this problem. Give ALL law abiding citizens in Camden, all 12,000 of them, guns! Guns, guns, guns! Then elect conservatives and watch the magic that happens within ONE year..)The annual rankings from CQ Press are based on FBI-compiled crime data and population figures for 2008. Some criminologists say the methodology is unfair.
Camden is no stranger to the top of the list. It was the most dangerous city for 2003 and 2004 and is consistently in the top 10. The bad ranking comes during a year when the number of murders in Camden has dropped amid major changes to the police department.


A daily occurrence in Camden N.J. That taxpayer funded free smoke detector program is really working out. That would fall under personal responsibility wouldn’t it? Don’t worry, with Obama and Pelosi’s future ‘Universal Home Owners Insurance’ bill, YOU will someday be responsible for paying for this house IF the democrats get their way. ‘Fire up those kerosene heaters!’ With ‘cap and trade’ causing heating bills to ‘skyrocket’ as Obama said, look for residents to start using fire pits in their living rooms…

(Story continued)

The study found Camden had more than 2,300 violent crimes for every 10,000 residents last year.

St. Louis, Oakland, Calif., Detroit and Flint, Mich., round out the top five.


Is this one of Valerie Jarrett’s buildings in Chicago? Oh, no, wait, it’s an apartment building in Detroit. With Fannie, Freddie and ACORN, you too can purchase a studio with no money down with a ‘NINJA’ loan; no income, no job and no assets..

WHAT’S UP WITH CAMDEN NJ?

Camden is a socialistic welfare community in New Jersey, and the largest “cost-center” east of the Mississippi. Because almost half of the residents live in poverty, Camden’s inhabitants have realized the only way they have any hope of being successful in life is by adopting the ideals of Stalinist Communism. The majority of Camden’s residents are Hispanic or Black. Camden is also one of the most dangerous cities in the United States. If you don’t believe it, then just take a stroll through downtown Camden and count how many needles and stray bullets you find lining the city streets.

This grotesque and dilapidated city lies across the Delaware River from Philadelphia, but I wouldn’t advise going in the river since you’ll come across a number of dead bodies on the Camden side.

In the early 20th century, Camden was actually not such a bad place, and was the home of major corporations such as RCA and Campbell Soup, but is now the huge mess it currently is because the last remaining conservatives fled for the more prosperous cities of South Jersey, or even North Philadelphia. Camden is one of the few parts of the United States without a Republican Party. Because of this, the Democratic Party is virtually guaranteed to win every election. They’re doing one heck of a job, aren’t they?

‘ATTENTION LIBERALS’ WILL YOU PLEASE DO SOMETHING ABOUT THE ‘HOMOPHOBIA’ IN THE CITY OF CAMDEN? (You know, that city that votes 100% democrat.)

ALL LIBERALS ARE TO REPORT TO THE WORST NEIGHBORHOOD IN CAMDEN AT AROUND 11:30 PM ON A FRIDAY NIGHT AND PROTEST DISCRIMINATION AGAINST BLACK LESBIANS.

Rachael Maddow can come too, since liberals like Maddow might think that the American people would rather NOT hear insults being hurled at a former Governor who has a kid with down syndrome, compared to a report on ‘ghetto-homophobia.’

All these tax eaters, brand new cars, no jobs and a good ole ass whoopin! Chalk up a victory for the lesbians here, as the straight black female ‘right wing republican’ homophobe chick (we’re kidding) with the big mouth that started all this, got her ASS kicked by the lesbian with the really bad weave..don’t sweat it baby, sing a song…

“To all the women in Camden…. who always seek that drama….you’re just a baby’s mama…who voted for Barack Obama…Hmmm, Hmmm, Hmmm…”

IT’S NOT FAIR – THEY CAN’T CHEAT ANYMORE

Another liberal Democrat, union supported, storyline obliterated by facts. It seems PA test scores plunged in math and reading. How could this happen? Obama has been in charge for four years. His Federal government solutions to making our kids smart should be working by now. Our fine batch of union teachers and their 4% per year salary increases and gold plated health and pension plans must surely be working their magic on our children and making them smarter. Right? Well, it seems a monkey wrench was thrown into the ever increasing test scores in PA. Once schools were prevented from cheating and faking test scores, the scores plummeted – Especially in the City of Philadelphia. More than 20% of Phila public schools were CAUGHT cheating. I’m sure there were others that were not caught.

The teachers union slimeballs blame the drop in scores on the draconian education “CUTS”. Here are a few inconvenient facts for the union bloodsuckers:

PA spends $26 billion per year on education, more than $14,000 per student – up 40% since 2000. Does this chart show draconian cuts? Private and charter schools without union teachers spend less than $12,000 per student and get far higher test scores.

 

PA Public School Revenue

Here are some more inconvenient facts:

Since 1995, when Pennsylvania doubled taxpayer spending on K-12 education from $13 billion to more than $26 billion, SAT scores have been flat and state results on the U.S. Department of Education’s Nation’s Report Card haven’t improved much since 2002. Today, Pennsylvania school districts spend more than $14,000 per student—with some as high as $25,000—and studies show absolutely no connection between district spending and student achievement. Moreover, the achievement gap in some of our most failing and violent public schools continues to widen, like the Harrisburg School District where taxpayers invested more than $18,000 per pupil but 9 out of 10 students couldn’t reach proficiency in math. Because these facts get in the way, the public school industry resorts to rickety rhetoric, citing “draconian funding cuts” over the past two years. But the truth is these cuts occurred with the end of the federal stimulus, which was always intended to be temporary aid. Excluding federal funds, Gov. Corbett’s proposed budget actually represents a two percent increase in spending on K-12 education since FY 2007-08, the year before the stimulus.

After decades of Federal government mandates, programs, and initiatives, along with doubling and tripling spending on education, our children are dumber than ever. But if we just throw another $2 billion at teachers unions, all will be well. The City of Philadelphia school district, in addition to being bankrupted by their union contracts, has achieved the fantastic result of having 13% of its 250 schools meeting the minimum standards for reading and math. They have certainly lived up to the promise of NO CHILD LEFT BEHIND – they have dumbed down every child in Philadelphia. And you wonder why this country is doomed.

Pennsylvania’s school test scores drop for the first time since 2002

September 23, 2012|By Dan Hardy, Dylan Purcell, and Kristen A. Graham, Inquirer Staff Writers

The percentage of Pennsylvania students meeting state math and reading standards on the PSSAs – the annual academic accountability test – declined this year for the first time since the tests began in 2002.

Education Secretary Ron Tomalis on Friday attributed the drop to tight security procedures enforced during the spring testing, especially in 110 schools across the state still under investigation for possible cheating from 2009 to 2011.

This is the first year, Tomalis said, that the public can be confident that, overall, test scores are not tainted by adult interference. “We have hit the reset button on student performance,” and the 2012 scores provide a new baseline, he said.

Well over 100 educators will eventually face state disciplinary charges for cheating that could lead to the revocation of their professional certificates, Tomalis said. But that could take years, and the results of state disciplinary board hearings in Harrisburg would be disclosed only if educators were disciplined.

In Philadelphia, 53 district-run schools and three charter schools are still under investigation for allegations of cheating in past years.

Of those 53, all but two experienced declines in both subjects from the previous year. The Philadelphia Military Academy at Elverson had a 71 percent decline in math scores from 2011 to 2012, the biggest drop of any city school. The two other schools had a decline in either math or reading.

Statewide, the 110 schools that had been under investigation this year for cheating averaged a double-digit drop in math and reading scores. With those schools taken out of the mix, math and reading scores for students statewide would have declined about 0.5 percent. With the investigated schools included, they were down about 1.5 percent.

Last year, 77.1 percent of the state’s students scored at or above grade level on the math test; this year, 75.7 percent met the mark. In reading, student scores declined from 73.5 percent at grade level to 71.9 percent. Tomalis called those percentages “unacceptable for Pennsylvania,” adding that everyone needs “to redouble our efforts.”

In Philadelphia this year, 50 percent of students districtwide performed at grade level in math, 45 percent in reading. That is down from 59 percent in math and 52 percent in reading last year.

“These results are clearly disappointing, and they simply remind us of the work we have ahead in developing a strong system of schools in Philadelphia and in supporting our students’ learning,” School Superintendent William R. Hite Jr. said.

The news was not all bad. The High School of the Future was one of the most improved schools in the district. It rose 27.2 percentage points in reading and 22.8 percentage points in math.

“I took a double take,” said longtime district principal Rosalind Chivis, who has been at the helm of the 425-student school since 2008. “I knew we would improve, but it blew me away when I saw the data. I was so very proud of the learners. They worked really, really hard, and a big part of it is motivating them to do well, to take the test seriously and do well.”

Along with the decline in test scores, the number of schools statewide meeting achievement benchmarks declined sharply from last year, in large part because Pennsylvania’s No Child Left Behind school accountability standards went up a sizable amount from 2011.

The state thresholds went up from 67 percent of students required to make the mark in 2011 to 78 percent this year. In reading, the benchmark went from 72 percent to 81 percent.

This year, 51 percent of schools statewide met state academic benchmarks by having the required percentage of students scoring at grade level or above. That was down from 75 percent in 2011.

In Philadelphia, only 33 – 13 percent – of the district’s 250 schools met state standards, down from 41 percent in 2011.

Among city charter schools, 54 percent met the benchmarks, down from 63 percent in 2011. In Philadelphia’s suburbs, 65 percent of schools made the mark, down from 81 percent.

Statewide, in addition to Philadelphia, five districts and three charter schools remain under investigation for cheating from 2009 to 2011, Tomalis said. They are the Harrisburg, Hazleton Area, Pittsburgh, Reading, and Scranton districts and the Imhotep Institute, Philadelphia Electrical and Technical, and Walter D. Palmer Leadership Learning Partnership charter schools.

An additional five districts and one charter school that were under investigation this year will continue to be monitored and will have strict new test security measures. Though no one was identified as having cheated, there was no satisfactory explanation of the irregularities at those schools, Tomalis said.

Some educators and education advocates blamed the drop in student performance on reduced funding for schools.

“It defies logic that they could expect student performance to improve after cutting nearly $1 billion” in funding in 2010-11, said Wythe Keever, a spokesman for the Pennsylvania State Education Association, the state’s largest teachers’ union.

Keever said cheating “is wrong. . . . Those individuals should be held accountable.” But he said Tomalis was using cheating revelations to “shift attention away from the real issue: adequately funding public education.”

Tomalis said the state’s Technical Advisory Committee found heightened test security the only factor in the drop. “I don’t buy the excuse the numbers went down because of budget cuts,” he said.

Union leaders were quick to criticize state officials for tying cheating to the statewide drop in test scores.

“Any cheating on tests is deplorable, but to use an incomplete investigation involving a handful of schools and educators statewide to discredit our public schools and the educators who have dedicated their careers to helping all children reach their full potential is nothing short of a political cheap shot,” Ted Kirsch, president of the American Federation of Teachers Pennsylvania, said in a statement.

Jerry Jordan, president of the Philadelphia Federation of Teachers, agreed. Cheating may have occurred, he said, but its impact is negligible.

“When resources are pulled from our schools, scores drop,” Jordan said.

By 2014, according to the federal No Child Left Behind law under which the state tests are mandated, 100 percent of students should be scoring proficient or advanced. Virtually all educators see that as unrealistic.

Last year, the Obama administration started allowing states to scrap the 2014 deadline if they would agree to adopt new rules that focus on the bottom 15 percent of schools, and make other changes.

Thirty-two states, including New Jersey, and the District of Columbia have been granted the waivers.

Tomalis on Friday called it likely that Congress will pass a new version of No Child Left Behind in the next year or two and that the state did not want to keep changing accountability plans. He instead asked for federal permission to freeze test benchmarks for schools at 2012 levels, but was turned down.

Pennsylvania’s academic thresholds are set to increase to 89 percent in math and 91 percent in reading next year.

NEIL HOWE: OBAMA WILL WIN

Neil Howe details why Obama will win. Essentially, Romney is a clueless candidate.

2012 Election Update: Romney in Retreat

Regrettably, I’ve been away from this blog too long—the result of too much travelling and a bit too much work.  I’m hoping for an easier fall and winter.

Seven weeks have passed since I looked at the generational dynamics behind the Obama-Romney contest, when the overall balance seemed fairly even.  Now, it’s tipping clearly if not decisively for Obama.  RCP currently shows a 3.3 percent national margin for Obama, but this probably understates the incumbent’s advantage: RCP records not a single national survey giving Romney even a minimal margin since Gallup’s tracking poll in late August.  Global futures markets like InTrade now tip 70/30 for Obama.  (If you’re confident Romney is going to win, you can at least expect to make some money.) And for true gloom and doom for Romney, take a look at this new Pew survey.  It shows Obama ahead by 8 percentage points overall among likely voters, and leading Romney on almost every issue and every scale of likeability.

The last month has been genuinely and relentlessly awful for Mitt Romney.

First came his selection of Paul Ryan as VP, which reinforced the male-white-accounting-econowonk side of the ticket (not exactly where Romney needed reinforcement—and there were so many great alternative VP picks roughly Ryan’s age) while tying Romney to a very specific plan to cut the cost of Medicare.  Nothing could have pleased Axelrod and Plouffe and others in the Democratic HQ more than to change the topic of conversation from how slowly the economy is recovering under Obama to how much Romney wants to throw seniors over the cliff.  I actually agree with most of the fundamental elements of the Ryan plan (incentives and budgets for health-care providers are surely coming, like them or not).  But hey Romney, wait until you’re President and appoint Ryan as your director of OMB or your head of CMS.  But add him to your ticket?  Probably not the best idea.

Second, there was the GOP’s lukewarm convention.  The Democrats’ wasn’t much either, but then again they didn’t have to prove anything: Everybody already knows who the Obamas and Clintons are.  The GOP had to persuade the public why the presidential mantle of office should be transferred to this relative unknown.  They needed to put the Democrats on trial for keeping America mired in the worst economic mess since the Great Depression.  They needed to excoriate the other party for the suffering of America’s unemployed and underemployed middle- and lower-income citizens (just as the Democrats surely would have done to the GOP had a Republican been the incumbent).  But the Romney campaign did very little of this.  Instead, they talked about budget-balancing, too much regulation, and Obama’s “anti-business” attitudes.  Wow.  And with the growing danger of war or broader war mounting in the Mideast and East Asia, the GOP could have mounted a principled critique, say, of Obama’s track record on his policies of engagement with Iran, Russia, and China.  But no.  Virtually nothing at all on national security issues, which subsequently (and remarkably) allowed the Democrats at their convention to look responsible in an area where their party has been perennially vulnerable.

OK, a missed opportunity with the convention.  But (and here’s number three), Team Romney subsequently failed to follow up with any of the policy strategy and detail he “didn’t have time for” earlier.  Instead, he has been dogged by gaffes and garbled misstatements in poorly staged impromptu interviews—while getting rhetorically outmaneuvered at every turn by Team Obama.  The worst fumble of all was his off-the-record suggestion that the growing share of Americans who pay no federal income taxes (“47 percent”) are essentially lost to the Republican Party.  Mindboggling.  This poor, struggling, laid-off, and dependent 47 percent in fact constitutes a growing constituency for the GOP (a point I will return to shortly).  Rather than express outrage that today’s horrible economy has stripped them of their livelihoods and independence, Romney is throwing them under the bus.

It’s almost as though Romney is channeling Herbert Hoover and can’t recall Ronald Reagan.  When he tries to talk like a conservative, George Will recently commented, Romney sometimes sounds like one of those robotic German spies in vintage WWII movies: He’s memorized lots of facts, but he’ll never know who Stan Musial is.

Fourth, and most recently, comes Ben Bernanke’s announcement of QE3 and an “indefinite” guarantee of near-zero interest rates, which was soon followed by a sizeable surge in the Dow.  For the first time—even though the real economy hasn’t done much of anything–Obama is matching or even overtaking Romney in his perceived ability to handle the economy.  A very large and somewhat amusing gap has now appeared in how political partisans now view the economy.  Back in early August, 71 percent of Republicans and 62 percent of Democrats said they were hearing “mostly bad news about the economy.”  Today, 60 percent of Republicans continue to say that—but only 15 percent of Democrats.  That’s a 45-point spread.

Is the economy doing much better?  I say no.  I don’t think it’s doing better at all.  (Indeed, I think it’s likely we have already entered a new recession and just don’t know it yet.)  So I think the GOP—which is now hopping mad at Bernanke for giving the economy a “sugar-water high” just weeks before the election—is quite mistaken about Bernanke’s motives.  Chairman Ben did not go “all in” with QE3 because he wants to be re-chosen as Fed head by Obama.  He did it because he knows the economy is in really deep trouble.  (I will come back to this in another post.)

So what are Mitt’s odds at this point?  Quite honestly, they aren’t great, and if I had to make a wager right now I would certainly bet on a modest Obama victory—a smaller voter margin than 2008, but not a cliffhanger.  As for Congress, the House will certainly remain in GOP hands (Pelosi’s sudden optimism seems delusional) and the Senate will probably be split 50-50 right down the middle.

Of course, a comeback is possible.  It’s a tall order.  For Romney to rally and win, some combination of the following three-and-a-half things will have to happen.

(1) Romney has a great debate performance.  Without it, he’s toast.  With it, he could get back into the running.  The boost could be big precisely because voter expectations at this point are so low.  And because lots of voters still don’t know him very well—aside from the gaffes they hear about in the news.  According the surveys, voters are really looking forward to the debates: Fully two-thirds now say they will be “very” or “somewhat” helpful in deciding which candidate to vote for, the largest share since Clinton-versus-Bush, Sr., in 1992.  Keep in mind as well that Romney got plenty of practice debating in the primaries and often performed very well in them, showing plenty of wit, humor, and grace under fire.

(2) National security goes critical, which will probably hurt Obama. It’s hard to recall a recent election–maybe Clinton-Dole in 1996?—in which foreign affairs has played such a minor role.  Which is incredible when you think we now have 70,000 troops fighting in Asia (and getting shot at and killed by our own uniformed “allies”) together with thousands more fighting more surreptitiously, with and without deadly predators, in dozens of other far-flung nations.  And the temperature is now getting hotter on most fronts, with Islamist violence clearly rising, Syria gripped in civil war, Egypt and much of North Africa run by new and unstable regimes, Iran and Israel (and inevitably the United States) near the brink of war in the Persian Gulf, and, most recently, a new risk of war in the China Sea.  At some point, geopolitics may well burst into 2012 election like a wild and uninvited guest–to the White House at least, which will likely be put mostly on the defensive.  Romney may or may not be able to leverage the opportunity.  In any case, Obama doesn’t have enough time left for a “wag the dog” response.

(3) Another bad shoe drops on the economy, which will certainly hurt Obama.  Obama “owns” current economic performance in 2012 nearly as much as Hoover “owned” it in 1932.  Most Democratic partisans understand this, explaining their desire to play up positive news and to rejoice at the Fed-triggered revival in the Dow.  Voters mostly think that Obama is trying hard, and so long as GDP and employment are growing ever so slightly (unlike 1932, obviously), they may go along with his argument that he is at least much better than the GOP alternative.  But what if these numbers, which are now merely flatlining, suddenly turn decisively down between now the election, raising new and urgent talk of yet another recession?  Perceptions about Obama’s “slow progress” and “incomplete” grade on the economy would, in this case, quickly shift—on the issue that everyone agrees is most on voters’ minds.

I promised three-and-a-half things, so let me add one more consideration that is related to the condition of today’s economy and is more speculative.  I want to talk for a moment about class and income deprivation, and how these may feed into a new sort of partisanship.

To mention class, of course, is to raise perceptions that nearly everyone figures work against the GOP.  And a recent Pew report (“Yes, the Rich are Different”) makes it clear just how tough it is, once the words “rich” and “poor” are mentioned, for most voters to say much that’s flattering about the GOP.

The report, which is well worth reading for its own sake, tries to analyze how Americans think about class.  When most Americans are simply asked what they think about “the rich,” the responses reflect an revealing mix of praise and damnation.  On the other hand, most Americans agree that rich people are more “intelligent” and more “hardworking” than the average American.  (More “hardworking” is, I think, a new development: Fifty years ago I’m quite sure most Americans would not have said that.)  On the other hand, most Americans also believe that the rich are much more likely to be more “greedy” and “dishonest” than the average American.

Yet it’s when the report assesses changes over time, especially from 2008 to 2012, that its findings really tip hard against the GOP.  Point (1): Americans across-the-board, in both parties, feel that since 2008 the gap between the rich and poor has been widening.  Point (2): Most Americans, again in both parties, feel this widening is a bad thing for our country.  Point (3): Most think that the Republicans will help mostly the rich and that the Democrats will help mostly the poor and middle class.  Point (4): Most think point (3) is especially true for Mitt Romney (at least, those who knew enough about Romney to have an opinion).  This is a veritable syllogism of bad news for the Romney camp.

So now let me bring your attention to another Pew survey, which appeared at nearly the same time: “A Closer Look at the Parties in 2012: GOP Makes Big Gains among White Working-Class Voters.” It comes to conclusions which, while not contradicting the other report, point in a totally different direction.  It’s fascinating to contemplate these two reports side by side.

The report starts with the unsurprising finding that total voter identification by party has faded somewhat for the Democrats since 2008 (from 51 to 48 percent) and has gained somewhat for the GOP (from 39 to 43 percent). Not including “leaners,” the GOP has a net gain of 3 percentage points. Yet here’s the surprise: More than all of this total gain for the GOP has occurred in the lowest income brackets.  Among the highest income brackets, the Democrats have actually gained share.

The report shows, in addition, that minorities at all ages are just about as Democrat-favoring in 2012 as in 2008 (and more than in 2004), while nearly all the Democrat identification losses are among whites–and virtually all of these losses are among lower-income whites.  (High-income whites are just as pro-Obama today as in 2008.)  In 2008, whites were strong pro-GOP in every income bracket above $50,000.  In 2012, they are strong pro-GOP in every bracket above $30,000.

The same holds true if you substitute education for income.  College-plus America (with a four-year degree or more) is more pro-Democratic in 2012 than it was in 2008; college-minus America (everybody else) is more pro-GOP.

You’re welcome to view the crosstab data yourself, graciously provided by Pew.  Let me summarize the main findings in the following graphic.

So how do we make sense of these very different perspectives?  My own view is that, yes, a sense of class awareness—and class division—has grown since 2008 in ways that tarnish the image of the GOP in eyes of America’s have-nots and have-lesses.  But these are also the Americans who have been hurt the worst over the last four years in unemployment, lost income, lost wealth, and foreclosed homes.  (See the new annual CBO report on income and poverty for the gory details.)  Their sense of class grievance is overweighed by their sense of performance failure on the party now in the White House: This is Obama’s economy, he failed, it really hurts, and I don’t want four more years of this.  Wealthy Americans just aren’t feeling the “really hurts” part.

Overall, from 2008 to 2012, the share of all Americans who call themselves “lower” or “lower-middle” class has grown from 25 to 32 percent.  (This itself is a disturbing finding, again brought to us by Pew Research.)  More than all of that 7 percentage point increase has gone to the GOP.  The share of GOP supporters who call themselves “lower class” has jumped from 13 to 23 percent while the “lower class” share of Democratic supporters has risen much less (from 29 to 33 percent).

Moreover, areas that do not traditionally vote Democratic, but swung blue for Obama, appear to be swinging back the most in this election. The Midwest, South, and Mountain regions show large declines of 6 to 9 points in net support for Democrats over Republicans, while traditionally bluer regions like New England, the Mid-Atlantic, and the West Coast show little or no decline.  (This is reflected in the rural/urban split in my table.) In other words, traditionally Republican voters who “took a chance” on Obama and are hurting in today’s economy may be feeling buyers’ remorse.

Whether all this affects the outcome of the election is uncertain. Clearly, the aftermath of the Great Recession provides the GOP with some real opportunities for a full-throated populist message.  Just as clearly, Mitt Romney is probably the candidate least equipped to deliver such a message.  The “47 percent” miscue says it all.  And for this reason, the GOP is now likely to lose the election.  (You notice that I called this merely “half a point” for Romney.)

Yet there are other implications likely to follow from this growing two-way rip tide of class tension in America.  Ominously, it may portend a further widening of the blue-red polarization of America once the 2012 exit polls are counted, with a growing regional and urban-rural split in voter preferences.  We may see the disappearance of the “purple” states that appeared in 2008, and the reappearance of more bright-blue and bright-red states.  By 2016, assuming Obama wins, a crowded and all-Gen-X field of GOP primary contestants may choose to tack far more in the populist direction than did McCain in 2008 or Romney in 2012.

And what about voting by generation?  The huge generational gap remains: The Silent will swing way to the GOP this year, and the Millennials will swing way to the Democrats.  But on top of this preference, there is certain to be a distinct class twist.  You can expect the huge anti-Obama margin among seniors to acquire an extra passion among the hard-beaten, Tea-Party, “heartland” edge. Likewise, you can expect the huge pro-Obama margin among young adults to pick up its greatest energy among collegians and among affluent and urban young professionals.  According to the New York Times’ recent feature story on non-college Millennials, many of them are struggling but few of them plan on voting for Obama.  More to the point, however, few of them plan to vote for Romney either—or even feel they are in any way on his radar screen.

PRAY FOR AN ATHEIST

I just got an email from Muck. His Leukemia has flared up and he’s been battling an infection for a couple weeks. The treatment has knocked him on his ass and he’s been pretty weak. But he vows to be back in the near future as soon as they get his treatment coordinated.

We all know he’s an atheist, but lets screw with him and say a few prayers.

WE PISS TRILLIONS AWAY OVERSEAS WHILE OUR INFRASTRUCTURE CRUMBLES

The http://theeconomiccollapseblog.com/ with another fine list of things to depress you. Here is the missing piece. I hear various jackass pundits like Larry Summers declare that what this nation needs is a massive Keynesian Federal Infrastructure Program to repair our infrastructure and generate jobs. It’s a crock of shit. The Federal government, state governments, county governments, and municipal governments create budgets every fucking year and have been creating them for over 200 years. Expenditures for capital and infrastructure projects have been in these budgets every year. So why is our infrastructure crumbling?

It’s because these politicians and government bureaucrats have CHOSEN to spend YOUR money on gold plated public union contracts, beautiful new municipal buildings, bridges to nowhere, social welfare programs, food stamps, SSDI for depressed people, corporate tax breaks, solar energy subsidies, ethanol subsidies, and the biggest of them all – handing hundreds of billions to dictators we prop up throughout the world, three trillion dollars fighting wars in the Middle East, and spending $900 billion per year policing the world.

We spent billions blowing up Iraqi infrastructure, then spent billions more rebuilding Iraqi infrastructure that we had blown up, while our own infrastructure crumbles by the day.

Well it’s too fucking late people. The fucking money is gone. We can’t afford a massive Keynesian infrastructure program. The money is already committed to Social Security, Medicare, Obamacare, and the Military Industrial Complex. So Solly. 

 

21 Facts About America’s Decaying Infrastructure That Will Blow Your Mind

 
You can tell a lot about a nation by the condition of the infrastructure.  So what does our infrastructure say about us?  It says that we are in a very advanced state of decay.  At this point, much of America is being held together with spit, duct tape and prayers.  Our roads are crumbling and thousands of our bridges look like they could collapse at any moment.  Our power grid is ancient and over a trillion gallons of untreated sewage is leaking from our aging sewer systems each year.  Our airports and our seaports are clogged with far more traffic than they were ever designed to carry.  Approximately a third of all of the dam failures that have taken place in the United States since 1874 have happened during the past decade.  Our national parks and recreation areas have been terribly neglected and our railroads are a bad joke.  Hurricane Katrina showed how vulnerable our levees are, and drinking water systems all over the country are badly outdated.  Sadly, at a time when we could use significant new investment in infrastructure, our spending on infrastructure is actually way down.  Back during the 50s and the 60s, the U.S. was spending between 3 and 4 percent of GDP on infrastructure.  Today, that figure is down to about 2.4 percent.  But of course we don’t have any extra money to spend on infrastructure because of our reckless spending and because of the massive amount of debt that we have accumulated.  While the Obama administration is spending more than half a million dollars to figure out why chimpanzees throw poop, our national infrastructure is literally falling apart all around us.  Once upon a time nobody else on the planet could match our infrastructure, and now we are in the process of becoming a joke to the rest of the world.

The following are 21 facts about America’s failing infrastructure that will blow your mind….

#1 The American Society of Civil Engineers has given America’s crumbling infrastructure an overall grade of D.

#2 There are simply not enough roads in the United States today.  Each year, traffic jams cost the commuters of America 4.2 billion hours and about 2.8 million gallons of gasoline.

#3 It is being projected that Americans will spend an average of 160 hours stuck in traffic annually by the year 2035.

#4 Approximately one-third of all roads in the United States are in substandard condition.

#5 Close to a third of all highway fatalities are due “to substandard road conditions, obsolete road designs, or roadside hazards.”

#6 One out of every four bridges in America either carries more traffic than originally intended or is in need of repair.

#7 Repairing all of the bridges in the United States that need repair would take approximately 140 billion dollars.

#8 According to the U.S. Chamber of Commerce, our decaying transportation system costs the U.S. economy about 78 billion dollars annually in lost time and fuel.

#9 All over America, asphalt roads are being ground up and are being replaced with gravel roads because they are cheaper to maintain.  The state of South Dakota has transformed over 100 miles of asphalt roads into gravel roads, and 38 out of the 83 counties in the state of Michigan have transformed at least some of their asphalt roads into gravel roads.

#10 There are 4,095 dams in the United States that are at risk of failure.  That number has risen by more than 100 percent since 1999.

#11 Of all the dam failures that have happened in the United States since 1874, a third of them have happened during the past decade.

#12 Close to half of all U.S. households do not have access to bus or rail transit.

#13 Our aging sewer systems spill more than a trillion gallons of untreated sewage every single year.  The cost of cleaning up that sewage each year is estimated to be greater than 50 billion dollars.

#14 It is estimated that rolling blackouts and inefficiencies in the U.S. electrical grid cost the U.S. economy approximately 80 billion dollars a year.

#15 It is being projected that by the year 2020 every single major container port in the United States will be handling at least double the volume that it was originally designed to handle.

#16 All across the United States, conditions at many of our state parks, recreation areas and historic sites are deplorable at best.  Some states have backlogs of repair projects that are now over a billion dollars long….

More than a dozen states estimate that their backlogs are at least $100 million. Massachusetts and New York’s are at least $1 billion. Hawaii officials called park conditions “deplorable” in a December report asking for $50 million per year for five years to tackle a $240 million backlog that covers parks, trails and harbors.

#17 Today, the U.S. spends about 2.4 percent of GDP on infrastructure.  Meanwhile, China spends about 9 percent of GDP on infrastructure.

#18 In the United States today, approximately 16 percent of our construction workers are unemployed.

#19 China has plans to build 55,000 miles of highways by the year 2020.  If all of those roads were put end to end, it would be longer than the total length of the entire U.S. interstate system.

#20 The World Economic Forum ranks U.S. infrastructure 23rd in the world, and we fall a little bit farther behind the rest of the developed world every single day.

#21 It has been projected that it would take 2.2 trillion dollars over the next 5 years just to repair our existing infrastructure.  That does not even include a single penny for badly needed new infrastructure.

So where did we go wrong?

Well, one of the big problems is that we have become a very materialistic society that is obsessed with short-term thinking.  Investing in infrastructure is something that has long-term benefits, but these days Americans tend to only be focused on what is happening right now and most politicians are only focused on the next election cycle.

Another major problem is that there is so much corruption and waste in our system these days.  The government certainly spends more than enough money, but very little of that money is spent wisely.  A lot of the money that could be going toward rebuilding our infrastructure is being poured down the toilet instead.  For much more on this, please read my previous article entitled “16 Sickening Facts That Show How Members Of Congress And Federal Workers Are Living The High Life At Your Expense“.

Unfortunately, it is probably appropriate that our infrastructure is decaying because we are decaying in just about every other way that it is possible for a society to decay.

We are decaying economically, politically, mentally, emotionally, physically, morally and spiritually.

We are a complete and total mess.  So why shouldn’t what is happening to our infrastructure on the outside match what is happening to us as a nation on the inside?

And sadly, we simply do not have the money that we need for infrastructure because of all the debt that we have piled up.  The federal government, our state governments and our local governments are all struggling to stay afloat in an ocean of red ink, and unfortunately that means that spending on infrastructure is likely to be cut even more in the years ahead.

So get used to rotting, crumbling, decaying infrastructure.  What you see out there right now is only just the beginning.