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Posts Tagged ‘Economy

2014: The Year Propaganda Came Of Age

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Meijer sums it all up very well (read the whole thing!)

2014: The Year Propaganda Came Of Age

   December 26, 2014    by

……that truly defines 2014 for me. A level of propaganda I don’t recognize, and I don’t think I’ve ever seen before. 2014 has for me been the year of utter nonsense. To wit, it just finished in fine form with a 5% US GDP growth number, just to name one example. Really, guys? 5%? Really? With all the numbers presented lately, the negative Thanksgiving sales data – minus 11% from what I remember -, the so-so at best Christmas store numbers to date, shrinking durable goods in November and all? Plus 5%?

It really doesn’t matter what I say, does it? You have enough people believing ridiculous numbers like that to make it worth your while. After all, that’s all that counts…..

…..Ukraine defines 2014 as the year western propaganda came into its own. Not just fictional stories about an economic recovery anymore, no, we had our politico-media establishment ram an entire new cold war down our throats. And we swallowed it whole. We may have had a million more years of higher education than our parents and grandparents, but we sure don’t seem to have gotten any smarter than them……

 read entire article here

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Jeffrey Sachs on the American Corporate State

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The Economist   Nov 12, 2011          

Homeward bound

How to turn America around

The Price of Civilisation: Reawakening American Virtue and Prosperity. By Jeffrey Sachs. Random House; 336 pages; $27. Published in Britain as “The Price of Civilisation: Economics and Ethics after the Fall”. Bodley Head; £20. Buy from Amazon.com, Amazon.co.uk

JEFFREY SACHS is an American economist best known for his prescriptions for economically diseased poor countries. The country he now considers most in need of his diagnostic gifts is his own. “Something has gone terribly wrong in the US economy, politics, and society in general,” Mr Sachs writes in “The Price of Civilisation”. American politicians are the stooges of corporations, he says. And American voters have been tranquillised into obesity by saturation advertising.

Such sentiments would appear unremarkable if spouted by an Occupy Wall Street protester. But Mr Sachs, a professor at Columbia University, is a respected, mainstream macroeconomist. Mr Sachs catalogues the familiar problems that beset the American economy: unemployment stuck at 9%, an exploding budget deficit, America ceding technological leadership to China, poorly educated American children.

But this is not principally a work of economics. Mr Sachs blames America’s problems on politics. In the 1960s, southerners began to desert the Democratic Party and Republicans began to build an insurmountable congressional barrier to more activist government, which Mr Sachs deeply regrets. He despises Barack Obama’s Democratic Party almost as much as he does Ronald Reagan’s Republicans: “On many days it seems that the only difference between the Republicans and Democrats is that Big Oil owns the Republicans while Wall Street owns the Democrats.” He is particularly scathing of the “revolving door” between Mr Obama’s administration and Wall Street.

The convergence between the parties, says Mr Sachs, has led to policies that systematically favour capital over labour, keep tax rates low on footloose multinational corporations and starve government programmes that benefit the poor and the unemployed. This, he claims, flies in the face of popular will: he cites polls that find the majority of Americans favour more activist government and higher taxes on the rich.

Mr Sachs’s analysis can be doctrinaire and one-dimensional, but it is almost always grounded in solid economics. Capital, he argues, has prospered more than labour during the era of globalisation. And America’s per head GDP is inflated by spending on an inefficient health-care system and the armed forces. Mr Sachs’s prescriptions are also admirably precise: the federal government should spend an additional 0.5% of GDP on worker training and the same again on early-childhood development; the top tax rate should be raised to 39.6%, which, neatly enough, he says, would raise the equivalent of 0.5% of GDP……….

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Our Fragile “Hothouse” Economy

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  by Charles Hugh Smith  Of Two Minds   November 3, 2011

Financialization has led to a “hothouse” global  economy where the slightest disruption in central bank/Central State  intervention will cause the sickly flowers to wilt and expire.

Of the three great financial truths that have been left  unspoken for the past four years out of sheer dread, lest their mere mention  collapse our economy, let’s start with the most obvious: if the Federal Reserve  and Federal government ever crimped the dripline of “easing” and  bailouts, America’s financial sector would promptly roll over and expire.

Does this strike you as a robust, flexible, transparent  system? Of course not. Rather, it is a “hothouse” financial sector,  one that needs constant injections and a carefully controlled environment just
to keep it alive.

And since the U.S. economy has been fully financialized,  it is now dependent on financial machinations and skimming for its  “growth,” profits and the debt expansion that fuels everything else,  including the metastasizing Savior State, a gargantuan aggregation of an  unaccountable National Security State with crony-capitalist cartels and a  dependency-inducing Welfare State.

Without the debt conjured into existence by the Fed,  Treasury and the financial sector, even the mighty multi-tenacled Savior State would quickly starve.

As a result of our dependence on financialization and  exponential debt, our entire economy has become a weak, sickly  “hothouse” economy which can only survive in a narrow band of  temperature, debt injections and opaque manipulations of data and what’s left  of the nation’s shriveled markets.

Once exposed to Nature, i.e. “wild” transparent  markets that are allowed to discover the price of all assets naturally, then both the nation’s financial sector and its economy would implode.

The second great financial truth is that the financial  sector has long been detached from the real economy. The real economy is for chumps; the “no-risk” skimming of monetary legerdemaine is the raison d’etre of the entire financial sector, a point brilliantly made in this “must read” essay posted on Zero Hedge: MF Global Shines A Light On Monetarism’s Incapacity To Enhance The Real Economy

Granted, some of the  financialization schemes described are not that easy to grasp, but here’s the  primary point:

That is why this system has to change at some point. It  is exactly designed to be misleading, and the reason is so very simple. In any fractional system there will be a desire to amplify that fraction to the maximum degree. But in doing so, participants recognize that the process of maximization entails creating negative human emotions and perceptions since history is not really that kind to this manner of fractionalization. So the system has institutionalized, abetted by the very regulators that are supposed to cap fractions and leverage, these methodologies of hiding just how much financial entities have engaged in maximizing themselves under the cover of mathematical precision.

The Panic of 2008 was supposed to correct these excesses and remedy the fact that risks have not been accurately priced for decades. Yet the system has resisted every effort, simply settling for redefining the appearance of safety yet again. Somewhere in that mathematical pursuit of maximum fractions, the very goal of finance changed, as if traditional banking was no longer sufficient to support the pursuit’s ever-growing ambitions. So the financial economy has broken away from the real economy, using the ironic cover story of enhancing price discovery to the process of intermediation.

The fact that money is disconnected from the real economy never enters the consciousness of monetarists since money is always the answer. But make no mistake, the primary reasons for this global malaise are that money has lost its productive capacity and its proper place as a tool within the system.

The third great unspoken truth is that the conventional Status Quo– the financial punditry, the Cargo Cult of Keynesianism, the
incestuous academic community, the PhDs in the Fed and Treasury, the politico lackeys, the self-serving think-tanks of both empty ideologies (“which is better, Bud or Bud Light?”), not to mention the lobbyists, revolving door toadies and all the other hangers-on in New York and Washington– have no Plan B and certainly no Plan C. In other words, they are utterly clueless about what
to do when their abject and total failure becomes unavoidably obvious.

It is of course a crisis of self-service; nobody dares put their own status, wealth, power and perks at risk by thinking independently, much less speaking All That Cannot Be Spoken Lest This Sucker Implode.

But it is also a monumental lack of imagination; the lackeys and toadies cannot imagine any other Beast other than the one whose teat they have sucked all their lives. They live in mortal fear not of being ignorant or lacking in imagination–those deficiencies are too obvious to contest–but of the truth of the system’s increasing weakness and vulnerability being openly revealed.

America’s (and the world’s) financial sector is a fragile, sickly hybrid which will shrivel and expire the moment it is placed in the real, dynamic world. And because the global economy has become dependent on the slouching beast of financialization, it too is fragile and sickly, sensitive to the slightest perturbations and exquisitely vulnerable to any disruption of the constant life support offered by central banks and Central
States.

It is neither capitalism nor socialism, but a twisted hybrid of the worst traits of each.

I happened to catch a brief interview on DW TV (German TV, with English announcers and subtitles) of one of the few ECB (European
Central Bank) officials with the integrity to resign in protest at the ECB’s blatant interventions in the bond market (buying Italian bonds to prop up a market that would implode the second ECB support vanished) and the central bank’s slippage toward money-printing as the answer to every problem.

This gentleman said that the ECB had to monitor the global economy 24 hours a day lest some tiny policy mistake bring the entire shaky edifice down.

Does that strike you as a description of a robust, adaptable, capitalist system based on transparancy and price discovery of assets? Of course not; it describes a hothouse economy, always on the ragged edge of collapse if its central bank and Central State minders make the tiniest error in its care.

For four precious years we have been force-fed nothing but lies, obfuscation, misdirection, fear-mongering, spin, sins of omission, misinformation, propaganda, false rumors and false hopes. The hothouse is slowly falling apart, and the sickly global financial sector is wilting. The financial media is heralding every “save” and every “rescue” with ever-shriller enthusiasm, lest a contagion of truth spread through the hothouse like a chill wind.

But we can be sure of one thing: those who know better have already sold, and it is now the job of the politico lackeys and the
toadies of the Mainstream Media to convince the bagholders to hold on and not sell, because “everything’s been rescued.” Distilled to its essence,
that is their one and only job: to convince you not to sell. That keeps the bid up for their Masters to sell into.

If history is any guide, the final collapse will be triggered by an apparently “controllable” event, something like the bankruptcy of MF Global. All eyes are on Greece’s referendum, apparently scheduled for December 4 or 5; but regardless of the vote, does a “yes” or “no” change that nation’s fundamental insolvency? No, it doesn’t.

Does the passage of some toothless law in Italy magically render that nation solvent? No, no, a thousand time no; none of these public-relations tricks can change the fact that all these nations are insolvent, the banks are insolvent, and even France and Germany are staggering under unprecedented burdens of debt.

The smart money sold in May, 2010, and the disbelievers among the Power Elite sold in May 2011, or perhaps August. Now those below the
smart money (but still above the dumb money) are sniffing the fetid hothouse air, where the rank, sweaty desperation of the minders is now everpresent.

So the apparatchiks and foot soldiers have been ordered to keep the dumb money from selling, until their “betters” can sell into a rumor-juiced bid. This explains the sudden jump in the S&P 500 on every rumor of rescue, as if an over-indebted and leveraged-26-to-1 financial system can be rescued with “belt-tightening” and ECB intervention with taxpayer money.

The entire euro “project” was a scam that enabled a vast new scale of financialization. Now that the “project” is falling apart, the bagholders who bought into the shuck-and-jive are nervous and fearful; has it all really been “saved”?

No, it hasn’t; it cannot be saved. The only “solution” available is to sell: sell now, while there is still a bid. Sell fast, sell hard, sell everything denominated in euros. That is precisely what the Status Quo fears the most: an awakening continent of bagholders and debt-serfs.

Anyone thinking the euro (and eurozone) can’t possibly go down until after the Greek referendum may well find their confidence in the
Status Quo’s “rescue” has been sorely misplaced.

More from Smith:

The  Collapse of Our Corrupt, Predatory, Pathological Financial System Is Necessary  and Positive

Charles Hugh Smith, Of Two  Minds|Nov.  5,  2011          We are being throttled by the Big Lie: we’re told  that if the predatory financial system implodes…

How  Much of the Global Economy Is Useless Friction?

500 Million Debt-Serfs: The European Union Is a Neo-Feudal Kleptocracy (July 22,
2011)
The Dynamics of Doom: Why the Eurozone Fix Will Fail (July 25, 2011)
The European Model Is Also Doomed (February 7, 2009)
When Debt-Junkies Go Broke, So Do Mercantilist Pushers (March 1, 2010)
Why the Euro Might Devolve into Euro1 and Euro2 (March 2, 2010)
Why the Eurozone Is Doomed (May 10, 2010)
Ireland, Please Do the World a Favor and Default (November 29, 2010)
Why The European Union Is Doomed (March 28, 2011)
Greece, Please Do The Right Thing: Default Now (June 1, 2011)
Why the Eurozone and the Euro Are Both Doomed (June 23, 2011)
Greece Is a Kleptocracy (June 28, 2011)

Written by laudyms

November 5, 2011 at 3:16 pm

Richard Heinberg: the end of growth, and the natural gas controversy

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Post Carbon Institute                June, 2011

Last weekend, the New York Times published a series of articles that — through leaks from EIA officials and natural gas industry insiders — corroborated the findings of our landmark report, Will Natural Gas Fuel America in the 21st Century?: Don’t believe the hype about plentiful U.S. natural gas supplies.

Of course, the controversy over natural gas is far from over, and PCI continues to provide energy realism and literacy to the debate. This week, PCI Fellow David Hughes published an analysis of two contradictory studies assessing the greenhouse gas emissions of shale gas vs. coal. The conclusion? Shale gas is worse for the climate over a 30-50 year timeframe.

From hot air to deflating (economic) balloons… We were blown away to receive nearly 600 orders in the span of 12 hours for Senior Fellow Richard Heinberg’s newest book, The End of Growth: Adapting to Our New Economic Reality. In the video above, Richard Heinberg, author of “The Party’s Over” and leading peak oil educator, talks about the future of our ‘growth’ society.

Drug money saved banks in global crisis, claims UN advisor

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Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

Rajeev Syal The Observer 13 December 2009

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations‘ drugs and crime tsar has told the Observer.

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When is the Obama admin going to address Unemployment??

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unemployment

For every 10% unemployed there are another 20% that are underemployed, working part-time or have given up. That means more than 30% of our labor force is in big trouble, especially young people.

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Obamaland- nearly a year in

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I know many of my email friends are sick of my doom-and-gloom rants, so here’s a little folksy take on the same stinking mess:

joe bageantObama’s Fight for Reform-

Lay off the footwork and throw a punch!
By Joe Bageant

“Almost a year after the Great Giddy Swarming of the Obamians last November, some of the revelers are waking up with one booger of a hangover. And they are asking themselves, “What were we thinking when we had that tenth drink of Democratic Party Kool-Aid?” It was a clear cut case of seduction and date rape. The spike in the drink was, of course, hope. Poor pathetic American liberals. Forever doomed to be naive freshmen at the senior beer bash……”

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Written by laudyms

September 19, 2009 at 5:07 pm