Saturday, October 24, 2009

Failed State Update with Krugman and Roberts

by Len Hart, The Existentialist Cowboy

In theory, a near worthless dollar is great for American manufacturers, American jobs. Lower costs for American goods means US exports should rise, reducing our trade deficit and helping pay off the national debt! That's the theory, the rationale behind Richard Nixon's decision to take the US off the so-called 'gold standard' back in the 70s.

The reality is this: despite the right wing's subversion of the dollar, despite the deals Nixon and subsequent GOP regimes cut with China, US exports have decreased, US jobs have decreased, the US standard of living has decreased as just one percent of the population has prospered at everyone else's expense. That has been the case at least since Ronald Reagan's tax cut of 1982, a tax cut which benefited only this rich base of GOP/right wing supporters. These downward trends have defined US history since the 1970s despite temporary gains made during the Carter and Clinton years. I have previously posted the key 'stats' which prove this to have been the case.

Check out the CIA's World Fact Book which lists the US at the very bottom of the list with the world's largest negative Current Account Balance. China, which pegs the Yuan to the dollar, is at the top of the list with the world's largest positive Current Account Balance. If the GOP had been correct, US exports should have risen! The 'balance of trade deficit' i.e, the NEGATIVE Current Account Balance would have been reduced! If the GOP had been correct, the US could have paid off huge amounts of national debt run up in incompetent and dishonest GOP regimes. The US might have survived decades of conservative budgets which forced the US to borrow from other countries. But --not surprisingly --things have not worked out as the GOP would have you believe.
Many economists, myself included, believe that China’s asset-buying spree helped inflate the housing bubble, setting the stage for the global financial crisis. But China’s insistence on keeping the yuan/dollar rate fixed, even when the dollar declines, may be doing even more harm now.

Although there has been a lot of doomsaying about the falling dollar, that decline is actually both natural and desirable. America needs a weaker dollar to help reduce its trade deficit, and it’s getting that weaker dollar as nervous investors, who flocked into the presumed safety of U.S. debt at the peak of the crisis, have started putting their money to work elsewhere.
But China has been keeping its currency pegged to the dollar — which means that a country with a huge trade surplus and a rapidly recovering economy, a country whose currency should be rising in value, is in effect engineering a large devaluation instead.
--Palin vs Krugman On The Dollar -- Who Is Right?
Foreign Policy magazine goes on to say that, as dismal as the effects of Chinese policy on the US and US consumers, 'It's the rest of the world -- particularly Europe and the Pacific Rim -- that are getting royally screwed by China's policy.' FB claims these countries now suffer because their products are 'less comptetive' in the US vis a vis Chinese exports.

Keep in mind, that it was Nixon who took the dollar off the gold standard because of 'pressures' on the value of the dollar. Simply, had there been a run on the buck, the gold in Fort Knox would not have covered it. The question is: is there any gold in Fort Knox?

Secondly, it was hoped that by removing the dollar from an unrealistic standard, US products would enjoy greater sales abroad. So what happened? Someone please tell me what the US produces? Cars? Nope, it imports them! Take a look at Flint Michigan if you are interested in knowing the effects this has had! Electronics? Nope! Since the early 1960s, it is Japan that has flooded the US market with transistor radios, calculators, etc! Aerospace? Nope! Ask a Californian! The Aerospace industry which had driven the SOCAL boom, is but a shadow of its former glory. What of 'Silicon Valley'. What of it? IT is outsourced to India!
The enormous scale of foreign borrowing and money creation necessary to finance Washington’s wars are sending the dollar to historic lows. The dollar has even experienced large declines relative to currencies of third world countries such as Botswana and Brazil. The decline in the dollar’s value reduces the purchasing power of Americans’ already declining incomes.

Despite the lowest level of housing starts in 64 years, the US housing market is flooded with unsold homes, and financial institutions have a huge and rising inventory of foreclosed homes not yet on the market.

Industrial production has collapsed to the level of 1999, wiping out a decade of growth in industrial output.
--Paul Craig Roberts, "The US as Failed State"   
If the US is a 'failed state', it is because it has been impoverished by at least two trends: 1) the transfer of US wealth upward to just one percent of the US population which now owns more than 95 percent of the rest of the nation combined; 2) the decline of the US dollar, a trend begun when Richard Nixon eschewed the Bretton-Woods agreement.

Richard Nixon Takes U.S. Off Gold Standard
The United States now no longer controls many of its domestic industries. Over the last 10 years alone foreigners have spent $1.2 trillion to acquire more than 8,000 key US companies. As of 2002, foreigners owned fully 20 percent of American manufacturing. In many high-tech and defense-related industries, the proportion is far higher. Such US industries as mining, cement, publishing, engine and power transmission equipment, rubber and plastics, and sound recording and motion pictures are now largely foreign owned. Even in industries like pharmaceuticals, chemicals, industrial machinery, transportation equipment, electronics, metal industries, and coal and petroleum industries, foreign ownership has recently become very high.
Increasingly therefore profits and technological secrets in such industries accrue to foreign owners. Moreover many of the key jobs (in research and development, for instance) go to foreign workers, while the profits that accrue to foreign holding companies boost the tax revenues of foreign governments. We are no longer capable of producing many critical components needed in our high-tech and defense industries. 
--Foreign Ownership of U.S. Industries
I tried to learn the truth about those GOP/China deals back in the late seventies when I had a rare opportunity to put a microphone in front of George H.W. Bush in the Grand Ballroom of the Hyatt-Regency in downtown Houston. Had I known then, what I know now, it might have been a much, much better interview. I left unhappy with getting Bush's goofy story about eating "aeromatic meats" (dog lip) in the Forbidden City.
_______________________________________________________________________________

Thursday, October 22, 2009

Texas Oil Man: US Should Plunder Iraqi Oil

by Len Hart, The Existentialist Cowboy

Texas oil man T. Boone Pickets typifies what is dead wrong about America and what passes for 'foreign policy'. Pickens claims the US is 'entitled' to Iraqi oil. How convenient for the oil barons who conspired with Dick Cheney to carve up the oil fields of Iraq before 911 would give Bush the pretext he would need to attack and invade Iraq, a nation that had nothing whatsoever to do with 911.

Nevertheless, it would be claimed that Iraq was --somehow --a part of the 'war on terror'. Is there no end to the lies? Might I remind that on 911, it was a gang of Israelis, perhaps criminals from Mossad, who were seen dancing and celebrating! It was NOT Iraqis who celebrated the deaths of innocent Americans! Clearly --Bush waged war on everyone but the 'real terrorists'.

Mossad is just as crooked as is the CIA about which I have written, possibly, thousands of pages [See: Why the CIA is the world's number one terrorist organization] Secondly, the US is perpetually auctioned off to the highest bidders on K-Street! And the the most powerful lobby on K-street is most certainly the Jewish Lobby. Meanwhile, Israel is breaking every international law with respect to Palestine as we write and post.

Every cover, every rationalization, every pretext for war was a treasonous lie from traitors who betrayed the people of the US, the Constitution, and specific US Codes that make any death resulting from such a war a crime punishable by death. If you are reading this, George W. Bush, you are not out of the woods.

Now for the idiot du jour:
Oil tycoon T. Boone Pickens told Congress on Wednesday that U.S. energy companies are "entitled" to some of Iraq's crude because of the large number of American troops that lost their lives fighting in the country and the U.S. taxpayer money spent in Iraq.

Boone, speaking to the newly formed Congressional Natural Gas Caucus, complained that the Iraqi government has awarded contracts to foreign companies, particularly Chinese firms, to develop Iraq's vast reserves while American companies have mostly been shut out.

"They're opening them (oil fields) up to other companies all over the world ... We're entitled to it," Pickens said of Iraq's oil. "Heck, we even lost 5,000 of our people, 65,000 injured and a trillion, five hundred billion dollars."

--Reuters, Pickens says U.S. firms 'entitled' to Iraqi oil
T. Boone Pickens is either stupid, ignorant or just doesn't care! I am referring to various kinds of law, specifically English Common Law upon which most US laws and Constitution are based and, secondly, US Codes, Title 18, Section 2441 which makes what the US did in and to Iraq and to the people of Iraq a war crime punishable by death.

That applies, of course, to Bush who ordered the attack and invasion as well as his close associates who conspired with him knowing that Iraq had no WMD. It applies as well to the Army brass in an all volunteer army. They must take responsibility for having willingly participated in the commission of war crimes for which the penalty is death as prescribed by US law.

Now --are we to believe that US laws are no longer valid? Certainly --there must be a reason the Bush crime family is never brought to justice! There must be a reason that a certain 'class' in America is --in fact --above the law! Perhaps the law has become quaint replaced by a sophisticated but unjust two-tiered affair in which the criminal justice system enforces laws on behalf of an elite 'ruling class' which is itself place above the rule of law to which everyone is expected to pay obeisance and tribute! This elite ruling class of just one percent of the total US population own more than about 95 percent of the rest of us combined and is, in fact, the only beneficiary of US wars of aggression and oil theft in Iraq and elsewhere. Big Brother has arrived!

FACT TIME: there is only ONE justification for war under International Law and that is ''imminent threat'. Iraq POSED no such threat to the US or its interests. That's why Bush tried to claim that Iraq was a part of the so-called 'war on terrorism'' though there is absolutely NO EVIDENCE that Iraq had anything at all to do with 911.

I say revolution now! I say bring down this elite! I say arrest the war criminal who continue to rape the sovereign nation of Iraq! I say file capital charges against George W. Bush, his guilty staff and the Pentagon brass who knowingly and willing planned the entire heist on behalf of big oil!

I say charge every member of the Dick Cheney 'Energy Task Force' for planning it all, literally carving up the oil fields of Iraq before the all-too-convenient Riechstag Fire called 911 gave them the broad and wide ranging pretext to begin a perpetual war in which the US would plunder the Middle East.

Secondly, the US has an all volunteer army. Should that army commit war crimes, are not the willing participants of those crime subject to prosecution?

Is the legacy of the GOP/Reagan/Bush era the abolition of the rule of law? Clearly --unless things change, unless Bush and a gang of war criminals in the Pentagon are brought to justice, the very concept of the 'rule of law' will have become a macabre and ludicrous joke.
Oil tycoon T. Boone Pickens told Congress on Wednesday that U.S. energy companies are "entitled" to some of Iraq's crude because of the large number of American troops that lost their lives fighting in the country and the U.S. taxpayer money spent in Iraq.

Boone, speaking to the newly formed Congressional Natural Gas Caucus, complained that the Iraqi government has awarded contracts to foreign companies, particularly Chinese firms, to develop Iraq's vast reserves while American companies have mostly been shut out.

"They're opening them (oil fields) up to other companies all over the world ... We're entitled to it," Pickens said of Iraq's oil. "Heck, we even lost 5,000 of our people, 65,000 injured and a trillion, five hundred billion dollars."

--Reuters, Pickens says U.S. firms 'entitled' to Iraqi oil
What the US did in and to Iraq and to the people of Iraq is a war crime punishable by death. That applies to Bush who ordered the attack and invasion as well as his close associates who conspired with him in the knowledge that Iraq had NO WMD. It applies as well to the Army brass who must take responsibility for having willingly participated in the commission of war crimes.

A Nation of Laws or Outlaws? 

Clearly --unless things change, unless Bush and a gang of war criminals in the Pentagon are brought to justice, the very concept of the 'rule of law' will have become a macabre and ludicrous joke.

Goodbye America, you sold your soul to the likes of T. Boone Pickens!



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Tuesday, October 20, 2009

Bombs and Bailouts: How the US 'Pissed Away' 14 Trillion Dollars

by Len Hart, The Existentialist Cowboy

After four years sifting through a morass of US government records, the Brookings Institution reports that the US government has spent $5.1 trillion on the development and manufacture of nuclear weapons, adding that if 'clean up, stockpiling and dismantlement' is included, the cost rises to $5.5 trillion.

US officials have called it: "money well-spent". Having spent trillions threatening the world, the US has recently bailed out the crooked banksters and other robber barons to the tune of $8.5 trillion for the total cost of the bailouts. See the spreadsheet graphic below. Click on it for the complete story.
Since 1945, the United States has manufactured and deployed more than 70,000 nuclear weapons to deter and if necessary fight a nuclear war. Some observers believe the absence of a third world war confirms that these weapons were a prudent and cost-effective response to the uncertainty and fear surrounding the Soviet Union's military and political ambitions during the cold war. As early as 1950, nuclear weapons were considered relatively inexpensive- providing "a bigger bang for a buck"-and were thoroughly integrated into U.S. forces on that basis. Yet this assumption was never validated. Indeed, for more than fifty years scant attention has been paid to the enormous costs of this effort-more than $5 trillion thus far-and its short and long-term consequences for the nation.

--Atomic Audit: The Costs and Consequences of U.S. Nuclear Weapons Since 1940, Brookings Institution

Elsewhere, Brookings reports that even as the Cold War ended, the US continued spending some $35 billion a year [$96 million a day], 14 percent of the defense budget on nuclear weapons and maintenance. Even Brookings concedes '..with the benefit of hindsight and objectivity, the waste, the duplication and occasional foolishness.'

Much is made of an 'atmosphere of tension, ambiguity and fear'! But the fact of the matter is this: much of that 'atmosphere' is traceable directly to the presence of a US nuclear arsenal that threatens the world. Brookings concedes that the moneys were not always well spent but does not go far enough. How many of the starving millions might have been fed with just one percent of some 14 trillion squandered by the US on weaponry and bailouts? How much more goodwill might have been achieved with the investment of just half that amount in peaceful projects that would have benefited all mankind? The US may have blown a golden opportunity forever!
``Now I am become Death, the destroyer of worlds.''

-- Robert Oppenheimer, quoting the Baghavad Gita
That might describe as well the ruinous effects of a wastral US fiscal policy, a bloated bailout for banksters, an impending implosion that will directly result from the US enrichment of just one percent of its population as some 95 percent descend into poverty, illiteracy and hopelessness and all of it a result of the right wing export of US industries, jobs, and hope!

Adendum:
The lead headline, in the upper right-hand corner, said: “U.S. Deficit Rises to $1.4 Trillion; Biggest Since ’45.”

The headline next to it said: “Bailout Helps Revive Banks, And Bonuses.”

We’ve spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government — while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they’ve wanted.

And we still don’t seem to have learned the proper lessons. We’ve allowed so many people to fall into the terrible abyss of unemployment that no one — not the Obama administration, not the labor unions and most certainly no one in the Republican Party — has a clue about how to put them back to work.

--Bob Herbert, Safety Nets for the Rich


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Monday, October 19, 2009

Michael Moore: How 'Banksters' Bleed America

by Len Hart, The Existentialist Cowboy

I have stats that prove just one percent of the US population owns more than 95 percent of the rest of us combined. We are supposed to believe that's just an accident! It was, in fact, a deliberate transfer of wealth to those who benefit from US largesse to the US wealthy, members of the Military/Industrial complex, and, as Michael Moore dramatically demonstrates --a gang of 'banksters' who may have manufactured the recent 'financial crisis'!

Certainly --at the end of this 'crisis', only the 'banksters' will have benefited. Some already have! Everyone else wil be poorer if not poverty stricken. Bluntly --I am not all that excited about the restoration of the 'economic health' of the parasites who have leached upon the labors of those who create real wealth: workers!

It was written recently that Wall Street types were 'mocking' us, 'us' being the people of the US. Well, of course, Wall St mocks us. They're alright! They made out like the bandits they are in fact. Write this down: 1) Rich folk, bankers and elites LOVE recessions; they start them by 'taking their profits' i.e, dumping their holdings and depressing markets. 2) They short sell all the way down. 3) Then, they pick up the bargains when you are forced to sell or have already declared bankrupcy.

The banksters can do this because they control the markets.


Michael Moore 'Shakesdown' the Robber Barons

Clearly, the REAL cause of the economic collapse is the precipitous decline of US productivity over a period of some 30 years. The tell-tale symptom of this decline has been the fall of the dollar since Richard Nixon abandoned the 'gold standard' for the obvious reason that a run on the buck would have emptied Ft. Knox. Given a few ups and downs, the dollar has declined along with purchasing power, wages and living standards since that time.

The truth of my assertions can be found in the CIA's own 'World Fact Book' which lists China at the top of the list with the World's LARGEST POSITIVE 'current account balance'; the US is on bottom with the world's largest NEGATIVE current account balance, formerly known as the 'balance of trade' deficit! The difference between China's positive account and the US's negative account is largely the monies you might have made had not the GOP betrayed the American middle and lowers classes even as it enriched an increasingly tiny, ruling elite!
But it’s not a simple case of flourishing banks versus ailing workers: banks that are actually in the business of lending, as opposed to trading, are still in trouble. Most notably, Citigroup and Bank of America, which silenced talk of nationalization earlier this year by claiming that they had returned to profitability, are now — you guessed it — back to reporting losses.

Ask the people at Goldman, and they’ll tell you that it’s nobody’s business but their own how much they earn. But as one critic recently put it: “There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system.” Indeed: Goldman has made a lot of money in its trading operations, but it was only able to stay in that game thanks to policies that put vast amounts of public money at risk, from the bailout of A.I.G. to the guarantees extended to many of Goldman’s bonds.

So who was this thundering bank critic? None other than Lawrence Summers, the Obama administration’s chief economist — and one of the architects of the administration’s bank policy, which up until now has been to go easy on financial institutions and hope that they mend themselves.

Why the change in tone? Administration officials are furious at the way the financial industry, just months after receiving a gigantic taxpayer bailout, is lobbying fiercely against serious reform. But you have to wonder what they expected to happen. They followed a softly, softly policy, providing aid with few strings, back when all of Wall Street was on the ropes; this left them with very little leverage over firms like Goldman that are now, once again, making a lot of money.

--Paul Krugman, The Banks are no Alright

The US is now a COW to be milked by 'banksters' at home and the Chinese ruling elite abroad. It was the treacherous, if not treasonous, activities of Bush, Nixon, Reagan and, most recently, Bush JR, who brought the world's great superpower to its knees!

It was Bush Jr who laid the groundwork for Nixon's famous trip China back in the seventies. Today, China props up a worthless dollar so that it can continue to sell US consumers --sheeple --products that were once produced by US industries, US businesses who employed a prosperous US working class that, bluntly, no longer exists. Name a single heavy industry in which the US leads the world (excluding military hardware). Secondly, the US dollar is worthless were it not propped up by China who is just trying to save their own asses by doing so.

Kudos to both Democracy Now and Michael Moore. Beginning with the 1989 classic Roger & Me, the Academy Award-winning director Michael Moore says his films come back to a central core concern: the economic system we have is unfair, unjust and undemocratic.

With his new film, Capitalism: A Love Story, Moore tackles the financial system and the interchanging circles of Washington politicians and corporate managers that run it. Moore says 'I thought I'd cut to the chase and propose we deal with this economic system and restructure it in a way that benefits people and not the wealthiest one percent.'

I agree! A 'recovery' in which wealth merely resumes its flow upward to just one percent of the population is just a band-aid on the pulmonary artery. If the flow upward is not stopped, the ultimate collapse of the US economy will make the Great Depression look like a Baptist picnic.



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