Is Economic Collapse a Certainty? You do the Math

Blackmail Economics

I have never been partial to the phrase blackmail, when historically, it seems like white oligarchs are the ones mainly undertaking such actions and folk the color black aint have no part in defining. But that is another story, and for lack of something new to assist in the accretion of incident promoting a general comity of understanding, blackmail will have to suffice.

Now *I must admit, over the past four years I was troubled by the economic landscape prior to the abyss instituted via the Bush administration, and likewise, suspect of the assertions made by the Obama administration to solve these issues. Even worse is what I see on the side of the GOP that seems to purport that verbose vehemence objecting to any action by any party is what America needs to grow jobs.

My main consternation is that the GOP offers no solutions to solving the problems of the economy or creating jobs and that Obama obviously has no real comprehension of economics. Not that I do, but my layman understanding seems to be advanced placement compared to the house GOP and the present administration. Also is the observation that in order to prove a point, even if it is to get Obama out of the Whitehouse, it seems they will do anything – even black mail. I mean no matter how you look at it saying they will not raise the debt ceiling without spending cuts is extortion.

As the debt ceiling fight continues, Republicans are playing down the effect a default could have on our national economy. Rep. Ron Paul (R-TX), when asked about what would happen if we pass the August 2nd deadline without raising the debt ceiling noted that it could be a “positive thing” because it would show we’re “serious.”

Yes it is serious out here Mr. Paul. This while recent housing and employment data notes we are struggling and may even is close to a double dip recession. Albeit under employed folk like me see the dips melted together for it still feels the same. Not to mention I suspect home prices have much further to fall. The President is not out of the clear either. Just this week he indicated that the US would provide US financial support to bail out Greece. This after he has tripled the US deficit and we have 9.1 percent unemployment.

After a meeting with German Chancellor Angela Merkel, The president said, “I’m confident that Germany’s leadership, along with other key actors in Europe, will help us arrive at a path for Greece to return to growth, for this debt to become more manageable,” Obama said.

“But it’s going to require some patience and some time. And we have pledged to cooperate fully in working through these issues, both on a bilateral basis but also through international and financial institutions like the IMF.”

I find it hard to believe that the Democrats or Republicans, regardless in the House or Pennsylvania Avenue do not see that they are holding the American citizenry hostage. Things are not getting any better for most of us and it will only get worse. Three years ago I wrote an essay describing these times called “Real n the Field.” It is that time.

Just this past Memorial Day weekend, across the nation looked like places in the Middle East. There were reports of serious violence in Miami, New York, Chicago, Charlotte, Myrtle Beach, Nashville and even Boston. In Washington recently a teenager shot her Dad with a hunting bow when he took her cell phone. Approximately, 45.1 percent 4 of all unemployed Americans have been out of work for at least six months. That is a higher percentage than at any point during the Great Depression.

Not to mention that the average price of a gallon of gasoline in the United States was is a little under $4.00 compared to $1.88 in 2009 and the cost of food and energy have risen at an annualized rate of 17 percent over the past six months. According to the World Bank, the global price of food has risen 36% over the past 12 months. And this doesn’t include the problems with floods, natural disasters, droughts, food shortages or our actions abroad. Yea, we are being black mailed by politicians on both side of the aisle and the only thing that makes them different from us is that they are inside the beltway with a direct flight to Wall Street.

Obama: The New Tricky Dick

For the past several days, since the folk inside the beltway worked out a deal to prevent a government shut down, I have been lmbao. What is strikingly humorous is how the democrats and Obama administration is announcing a moderate defeat and how House GOP leadership and beltway conservatives are claiming victory. Frankly I cannot tell who should get the award for best supporting cast but I will lean toward the Obama administration and I will tell you why. First, I do not see any victory for the GOP. Sure they claim to have cut 39.5 billion from the budget, but it may actually be about 20 billion according to my math, since what I have read seems to buttress the contention that about 20 billion were from the two prior house continuation resolutions to keep all government staff on the job. Now if this is true, Obama is playing wolf when he knows very well that he did not give in as much to GOP grass roots proponents desired. And on the other hand, the GOP leadership in the house has been made to either look like fools or reveal their honest deviancies in basic math. First they said they would cut $100 billion, then around $60 billion, then what they settled for last week. Talk about recapitulation. Then they celebrate as if they won the lottery. In fact they have evinced an approach that merely similar to the metaphorical house of cards. Yes they are on shaky ground for one can best believe they are getting it from the GOP base for not standing firm, and even worse, allowing Obama to usurp the claim of fiscal conservative economics for himself, maybe even inclusive of the democratic party. Now Obama will drop his player card. Supposedly Wednesday he will drop his anti-Paul Ryan plan to reduce the debt. Sure it has basic democratic plans to tax the uber wealthy and cutting defense department spending but surprisingly, it steals a few GOP trump card including slashing programs that aid poor and elderly folk (straight out the republican play book.). But more revealing is that he will show he will be trying to save Medicaid and Medicare unlike the Ryan budget. If you have read what I have read thus far regarding the budget proposal submitted by Paul Ryan, basically changes Medicare to a new program completely. Meaning states with a bunch of seniors like Pennsylvania and Florida may lead to the democrats if they are seen to be fighting against Ryan’s proposed changes to the program. So if house republicans succeed in making their changes via vote this week, changes that will obviate the government from the primary insurer to private corporations, then Obama will be in the driver seat for 2012. He reminds me of Richard Nixon in a way, namely that Nixon was in my eyes one of the smartest Presidents ever. And besides the war in Vietnam and his Watergate issues, earned the name “tricky Dick.” I mean he even got folks to drive 55 miles an hour. This is why Obama is giving his speech today on dealing with the nation’s long term debt. He scooped them; he undercut the GOP at their own game and stole their message. Yes folk, tricky Dick has returned in the form of Barack Obama.

freeman or slave

Point of order: 1] was trying not to post in honor of the basketball gods, sorry couldnt help it 2] aint thera flu the best thang since hot sauce?

In 1996, while I was in Senegal, I caught word of something that was going on in America. It reminded me of Waco in a sense given that I was living in Nigeria when that federal siege and stand-off was conducted. It involved a group of patriots know and the Montana Freemen.
From what I can recall of the stand-off between the Freemen and the federal agents that surrounded their 960-acre farm lasted 81 days can be reduced to the concept of individual sovereignty. The Freemen believed in the doctrine of individual sovereignty as expounded by the Sovereign Citizen Movement, and rejected the authority of the U.S. Federal Government. As a consequence of these beliefs they implemented actions to set up their own parallel systems of government common-law court, banking, and credit. Now some would say they were just plane ole right wing zealots, extremist or racist, but in a country where we look at television more than we read; and know more about celebrities than the constitution, history or science, then it is not hard to be an extremist of one concerns himself with the latter.

Their belief ironically was an extension from what this nations was founded on. The Revolutionary War was fought for one purpose only SOVEREIGNTY. Fuck what you heard, it wasn’t about freedom or religion or the British. In fact expost facto to the end of the revolutionary war, the colonies were each separate and Independent countries and still are today for each FREEMAN 21 years of age or older who owned land and was able to vote was a king in his own home; was untaxable (land and his income included). The Freemen of Montana understood this and viewed the U.S. government as a Foreign Corporation when compared to the state. As such, a corporation cannot have citizens, and that people accept to become citizens of this corporation when they accept a social security number and register to vote.

These were not some average run of the mill, local-jocal country cats. In fact they were the opposite, well read, informed of their rights under the constitution and had the skills to implement what they thought. They used "Anderson on the Uniform Commercial Code", a "Bankers Handbook" and various materials regarding the Uniform Commercial Code (UCC) to file notices of liens against public officials. These liens were supposedly sold to generate equity to fund efforts to pay of the US national debt. Since the liens they filed conformed to the UCC, and that their "Justus Township" court had an interest in a tort claim for damages created (national debt) by public officials for violations of their oaths of office. The Freeman viewed public officials' support and support of the credit system as a non-constitutional act that was "...depriving the people of their property until our posterity wakes up homeless...”

See the Freemen saw in 1996 what we are experiencing today - the perpetual national debt fiat credit system, and of the relationship of that system to inflation and price manipulations that were financially undermining and bankrupting the private individual class of individual Americans – especially farmers and ranchers.

Now I am bring up this lesson from history to assert one thing, and that is that in order to be free and have the ability to exercise one’s liberty, we must be aware and informed. What is going on now in the present with respect to our government is criminal and in many cases unconstitutional. It is as if we accept without query and believe what is told to us just because we like the messenger without any additional forethought what so ever. But such has always been the nature of serfs. Maybe the Freemen had it right after all? Maybe not. But one thing for certain, they did show a lucid example of what it means to be a free man as opposed to being a slave – that believes whatever is told to them and afraid to find out or answer questions on their on.

death of the free market economy

It is very difficult for me to actually encapsulate the significance of what may lie ahead for our nation and maybe even for the world. True I have the practical ability to evaluate and examine, even project out comes with respect to a diversified corpus of subject – yet I am no sooth sayer and don’t own no crystal ball. All I can do is speculate and opine with the circumscribed and ineffectual information and faculties I have.

I am concerned that none of these folks inside the belt way can be honest with me or the public regarding the economy. The truth is that nobody knows what will work. And to go on and tell folks that something will work when they do not know is a bold face lie – regardless of who delivers the message. And yes I group all of them as the same from Obama to Bush, to Clinton to Regan with respect to this problem as well as all of the senators and congressmen who let this shit occur on their watch while they were giving themselves annual salary increases. Under Bush we accumulated more debt than that of the entire prior 42 Presidents of this country combined.
What really gets me is this talk of a “global new deal” and makes me wish I could read the transcripts of what was actually said between President Obama and British Prime Minister Gordon Brown because that April meeting will be here before you know it. I just wonder if we are seeing the beginning of the end of US sovernity. Since Regan, 78% of our economy is based on consumption, that is to say we buy more from others and produce nothing, and that for decades we have been spending more than we earn and borrowing more over the same period, it would be hard for me to see another nation or organization telling us what to do.

The truth is folks can talk about the stimulus as needed and that it is the solution, but it is not. We need way more than $900 billion to deal with this problem and I have estimated $2 trillion will be needed for the banks to be supported alone. Why, because we are a $14 trillion dollar economy in a global market place with more than $40 trillion dollars in lost equity worldwide. This is just the start of a real long period of stagnation and if over here we see bigger government and more government spending as the answer that means even a bigger government, like one international government may be what will be on the table when the G-20 meets in April. I mean when they speak of “coordinated efforts” this is what I hear and that means I won’t even rule out the creation of a single global currency.

I say be on the lookout, I wrote a while back about despots and even before then as to how Rome may be showing its ugly head again. So live it up while you can, and Mr. President, go on and spend that money albeit I’d prefer you give each citizen a check $240000) instead of bank and financial institutions that are gonna fail anyway. So get gone and get health care cost under control Mr. President and spend some loot in the states, shit it is about time we spend some loot at home domestically after 8 years of the tax breaks put in under the GOP. Because we citizens gone keep on borrowing and buying from other countries (which I why I indicated before that the combined debt of American households is larger than GDP of China and India combined). So enjoy the last days of the USA and don’t be surprised after the April meeting if we start seeing G-20 buildings in every country and in DC, or hearing the words G-20 on every news cast (since newspapers in America will die off). So cheers to the death of the free market economy - Good day.

Crack’s evil twin

Over the past few years I have provided warnings as well as proffered my personal view of how this current economic mess started. It was a terse recapitulation of some of the historical events I have personally considered to be the root at the problem. By doing so, it reminded me of the crack epidemic that started in the 1980s. As you may or may not know, Crack cocaine is a form of cocaine derived from powder cocaine. Since it would result in the form of a rock and could be smoked providing a quick high, it dramatically increased the numbers of Americans addicted to cocaine. Based on what I know about crack and substance abuse in general, the effects of Crack are similar to those of another C-word, CREDIT.

Now I am the first to talk about the massive debt, accrued via credit with respect to our US Government, both at the federal and State level. In fact, as of 2008, our total GDP was near or around 13 trillion, however our combined credit market debt was about 53 trillion. This is foul, but even worse are the habits that we regular old citizens practice. America has gone into debt unlike any other country.

It seems that we are no longer citizens, but rather consumers. Looking at credit cards alone, on average we owe about $971 billion. This is about, $3,100 of credit card debt per person, or $8,299 per household. This doesn’t even include non-revolving debt, like loans for auto, and other things. Our non-revolving debt is estimated to be $1.617 trillion, or about $5,200 per person ($13,800 per household).

To put it simply, we spend more than we save and in fact, our savings nationally have declined and at a negative level (about 2.0%) for the first time in our modern era of government. This means that if as a country we have negative savings, that we supplement what we don’t have from the surplus savings other nations have abroad, for other countries save more than we do in general. This is a result of several factors, namely folks living beyond their means. Just as our government borrows to hold lavish wars and purchase debt from big Wall Street banks, so do we the American people.

I can say the debt that we have amassed collectively has seemed to increase at a staggering rate since we came off the gold standard in the 1970s and again because of poor behaviors practiced across all segments of our economy. From credit cards, to the collateralization of debt, complex swaps and derivatives and other toxic papers.

At this point in time, at the corporate level alone, we have the most corporate-debt defaults, by dollar amount, in history. Some have even speculated that companies are poised to default on more than $500 billion of corporate bonds/bank loans over the next few year’s years. And why? Well I know no one asked me but it is simple due to people at all levels as stated earlier not being economically responsible. In 1991 we saved on average 7.3% of our income per household. As of 2007, this had declined to about 0.6%. We cannot continue this behavior for it means we will be living off of the surplus saving of other nations the likes of China and Japan. Politicians can only do so much, if anything about our current economic prospectus. Again it is on us. Because the way I see it, we may as well be smoking crack, for credit to me is its evil twin, and just as damaging and addictive. So Mr. Obama, you too need to put that pipe down, or at least tell me who and where you borrowing all this money we dont have from.

Tax Payer Life Support

Dang, I knew it was too good to be true. As soon as I give the President Props on his first interview on a major national television network, it just so happened to be the same day I got a hold of the presidents spending, I mean stimulus, I mean recovery plan. To be honest it seems as if it just is a way to package all of the wishes of the democrats in one bill. It may even need to be called the Reed-Pelosi Bill, which would be more appropriate.

Last year. More than 20 banks failed. This year I predict more that that number, if not double will fail. I don’t mind this, except for the fact that the FDIC has to insure these funds and that it is insured with our loot. Now, we have seen our economy shrink 3.8% in the last quarter alone, the largest decrease in 26 years coupled with a GDP that has been constricting anywhere from 5 to 10 percent since 2000 (my math).

Unfortunately, although they call this spending, I mean stimulus plan something needed NOW, it won’t go into affect until fiscal year 2010. Not to mention, it feels as if I am one of the few that has read from front to back the 600 plus pages of Obama’s spending, I mean stimulus plan. The scary thing is that many feel it is better to do something now than to wait to see what happens. I would rather think and do something that works than to TRY and implement a short term fix. Believing that this will fix the economy or will help is like telling me that I should believe in the tooth fairy and Santa Claus.

People, don’t be dumb, the choice is not do something now versus not doing anything at all, but rather if it doesn’t work, what will we do then? Seems nobody knows. I mean Obama calls it a recovery plan, yet he cannot assure the public that spending our money the same way Bush did will work. He speaks of a multi- legged stool, and that this is one leg, but any designer would design all legs for the stool at once. It’s like designing a house with one wall at a time. This just shows me that neither Penn avenue nor Capitol Hill has a clue of how to solve this problem. Being a person without a job, and one who owns his own business, it hard for me to see why it is that folk who got jobs, who’s salary I pay, act as if since they got a check coming in, I can do shit have azzed. I mean increasing food stamps and increasing unemployment benefits is not a stimulus plan.

One concern is that it seems that all of the job creation is designated for the public sector, you know state and local and federal government jobs. This makes no sense given that these aint where the job losses are occurring, in fact job losses at the government level is at about 2 percent. Most of the jobs are in the private sector: the Caterpillars, Home Depots and Astrazenca’s of this great nation. Add to that increasing spending in health care, education and unemployment benefits does nothing to stimulate the economy. What we need is manufacturing, in particular, making a product that everyone else around the globe would want to purchase. India got it down, why don't we?

But check this, the money for the Obama planned is all BORROWED, and the associated administration aint gone tell us that let alone how much that’s gone cost us to borrow this $800 plus billion. This is shady, just as shady as bailing out credit unions to the tune of 80 billion and not telling WE the general public.

We all need to be responsible and look at this seriously for our kids depend on this. The strange thing is that folks who may have voted for Obama, just seem to trust him, like he aint no politician. I wouldn’t be surprised if the same folks aint even read what he has proposed as a stimulus, I mean recovery plan for if they did, the would see it does nothing to solve the problem which is two fold: housing devaluation and foreclosures and debt accrued by synthetic papers in the form of collateralized debt. Especially with us having about a $1 trillion deficit this year - even before this stimulus bill, and with a $10.6 trillion national debt, we may as well just sign over our nation state to China, our largest creditor.

So to all the republicans and democrats and you to Mr. President, don’t piss on me and say it is raining. I as a tax payer am suffering. It was you that said the problem should be directed towards “mortgage relief” but you plan don’t even address this, nor does it reach us regular folk. Like I said, I pay my taxes, but this tax payer here feels like he is on life support.

Slacking on your Macking

Maybe its just me, but it seems as if all political has gotten off target. Especially when I look at the Obama campaign. The way I see it there are about 50 days left to the super bowl. He needs to be in the tunnel, screaming and ready to take the field. But for some reason he is slacking in his macking, he aint got his game face on, and unfortunately, he has gotten distracted and taken the bait McCain put in front of him. He has been more focused on Sara Palin, Lipstick, Pigs and waffles than on his own play book.

He even act as if he doesn’t see that that is exactly what the opposition desires, for they aint talked about nothing of substance with any semblance of astuteness to this day. Shit, we, the general public know more about lil momma than John McCain. Now I’m not taking sides but I must give my folk an informed heads up on what may be required.

First, fuck talking about McCain trying to say he for change. Let folk talk, he will eventually put a foot in his mouth. Instead, talk about his record, being a friend of big business; make him one of them, saying he is not the common man like (George W. Bush). The best way to do this is to associate it directly to the economy, specifically the failing Housing market. How can a man with more than 5 houses know what such an experience is like? Make sure that you connect him to this in tangible and political terms. Ask where has he been for the past 2 plus decades when all these problems started? Why historically, has he been against regulation of the Securities Exchange Commission and in support of the hideous accounting practices that hide pertinent information to the common investor (like George Bush)? Point out that he believes the market is self correcting, but query as to how can such be, if the problem we see in housing is due to folks on Wall Street paying people to rate securities as being solid or good when they are not (like George Bush)?

They take unprecedented action to save the Big Financial Institutions like the investment bank Bear Stearns but nothing for the common man. Particularly Securities and Exchange Commission (SEC) Chairman Christopher Cox. One of the men McCain was considering as a VP running mate. Make special note of how the Senate banking Committee asked Cox if legislation or more resources would be needed to prevent future problems such as these from occurring, even suggesting that the credit rating institutions, who are paid by wall street to rate securities (MBS’s), have a inherit conflict of interest, and that he said no, and Fannie Mae and Freddie Mac had to be bailed out like Bear Stearns. Can you say corporate welfare? This is not the common man. No wonder China owns 374 billion of US debt in the form of mortgage loans/debt (I spoke of MBS’s a while back).

True, Mccain got a little game, or else u would not have let Jones campaign buy the rights to the top search engines on key election terms. Jones I’m telling you, ignore the mundane and attack your opponent weakness. His ability to think and side against the common man. I’d even bring up that he was a POW, and that he needs to release to the public that he has been screened for Post Traumatic Stress Disorder, for no one with such should be answering that Red phone at 3am. Now get busy folk, get your game face on and stop slacking in your macking. Just my two cents, that is if you wanna win, and I got more too. vote

$3 ATM

Point of order: Sorry for delay in post, forgot I was still a scientist and had two journal articles to proof and correct for Health Education Journal and Global Public Health

Now since I was finally able to post Recess – is- on and PP (which were written in April), back on the grind, which you know in most cases means loot. I am kind of frustrated with America, I mean we aint got what it takes it seems anymore. I can understand how K street gets politicians in a bind but I can’t understand why regular folk don’t see why things are the way they are economically.

We are big on crying and asking folks to do for us, but we never have a good understanding of first what needs to be done or even what or how serious the problem is. Come this November, after the general election, well really before, I hope we can come to an understanding of the aforementioned.

This country has not been in this bad of shape economically since the 1920s and 1030s. I’m sure some will disagree with me, but this is just my opinion. Right now, at least based on numbers from two years go; our domestic financial debt was more than 14 trillion dollars. Fourteen trillion. Today I suspect it is maybe 4 or 5 trillion more, but there aren’t any real numbers available, just estimates so I made my own.

And although we talk about the housing market as being a major contributor to this problem as well as multiple wars, the truth is that the financial sector is mostly to blame, along with republican and democratic leadership at the legislative and executive level. For as I said before, with regulatory constraints basically removed, this created an environment for this particular sector of our economy to go buck wild. Bill Clinton repealed the Glass –Stegall Act and bam.

Long time ago, there were regulated fees for Credit Cards for example, now they can make up fees and even charge you for paying on time or even if you pay off your monthly balance. Don’t even throw in the outrageous and wide ranging interest rates credit card companies (the financial sector) can charge, that is a whole ‘nother story. But to sum it all up, this is where the problem lies. We didn’t have this type of concern when America made stuff and had a strong manufacturing base. Since the financial sector has replaced manufacturing as our largest industry, our national debt has sky rocketed. This sector alone accounts for more than 30% of all of our national debt. Namely as a result of what is called Securitization or what can be called collateralizing debt obligation

Like I said back in the 20s and 30s when we saw similar problems, the national debt was about 250% of our gross domestic product. Today it is about 350%. What does this mean, well in simple terms, maybe a 10% reduction in the values of our houses for those of us who own one, commodity inflation (as mentioned in a prior post) and a 500 trillion dollar debt, which will eventually come back to bite us in the ass one day. I think that is one of the reasons I don’t have an ATM card. Never had one ever. So they next time you go to an ATM machine, just remember that the $3.00 they charge you to use it, is just adding to our national debt. Three cheers for the financial sector. Hip Hip Hooray.

Addendum: Love the fact folks can come in shop with dogs and kids, lay up and drink wine for free – they always end up buying stuff.

jobless recovery

Dire times are confronting the average US family and citizen. This is mainly due to the constant instability in the US labor market. The labor market in America has been on a downward swing since the early 90s. However, it has exacerbated under the misleadership of the Current Administration. The evidence has been accumulating consistently since 2002. The U.S. unemployment rate has been constantly growing under the Bush watch and many economists are very concerned about how the economy is rapidly improving as the labor market is continuing to get worse. This is what many as a jobless recovery have called.

A jobless recovery means that the overall productivity of the current labor pool is increasing in an atmosphere where no new jobs are being created. The truth of the matter is that jobs are being depleted rapidly on the U.S. front. This means that we are seeing dramatic economic gains for big corporation while they are not increasing their spending on new employees and payroll spending.
No one can predict when US business will start hiring again in America. All new jobs as of late have been in countries that we have already developed a trade imbalance. Bush is a large part of this because since he started his watch, nearly.4 million Americans have lost their jobs. Right now, the unemployment rate is the highest it has been in about a decade. So much for the so-called tax relief he signed that was opposed to create a million more new jobs. I was told that the recession officially ended in November 2001, but all I see are more jobs leaving and more people out of work.

The underlying problem is that growth has remained sub par for an unusually long time. So don’t believe it when you hear politicians say that economic perspective for America is going to help create or maintain jobs. The President has brought most of this on the American public. Although under his tax plan, the average American family of four will be able to keep at least $1,600 more of their own money annually, it really just benefits the wealthy. His tax plan thus far has managed to increase the upside of the economy but the question is at whose expense? The central problem for me is the elimination of dividend taxes. Although I do own stocks, bonds and securities, the plan would in essence increases investors' returns, which mean that stocks can be in a better position to carry higher valuations. In addition these higher valuations will come at the expense of American citizens. Already we see a rise in the federal deficit, and pundits estimate that it will be more than $500 billion by the end of the year. Couple this with the number of American companies, federal and state governments who are exporting jobs abroad, America’s future seems extremely bleak from an economic perspective.

Companies the likes of American Express, Levi’s, Earth link, Kodak, and Verizon are elimination more jobs at home and relocating to the cheaper labor havens of South America and Asia. So I just say it may be a good time in America, maybe some of our folk will decide to start a business as opposed to look for a job.