Tuesday, February 21, 2012

Today's links

Today's quote:  “We have two American flags always: one for the rich and one for the poor. When the rich fly it means that things are under control; when the poor fly it means danger, revolution, anarchy.”- Henry Miller




1--Interview: Theodorakis’ call to arms, Athens News

Excerpt: In a recent open letter to the international community, entitled “The Truth about Greece”, composer Mikis Theodorakis points to a nexus of military industrial interests - from Germany and France to the US - which profited from Greece’s excessive borrowing for decades.

In an exclusive interview with the Athens News, the leftwing icon lashes out at the Greek political system and calls for a popular uprising...

Mikis Theodorakis: In 2009, Greece was at a level of, let’s say, 100. In two years, the troika, the IMF and our government drove us to ground zero, as Premier [Lucas] Papademos conceded. Does no one wonder why the country is heading towards chaos, even though we are told every so often that the Europeans have sent tens of billions of euros? Where does that money go? It goes straight back to our creditors, while burdening the state with new debt and interest payments. That’s how debt rose to 160 percent of GDP, and with the new 130 billion euro package it will jump to 180 percent. That is unprecedented, and it means we will be bound hand and foot on a stake of debt and interest for the next 150 years. With what right can parties who represent a minority (polls give Pasok six percent voter support and New Democracy 20 percent) decide Greece’s future for the next 100 years?...

Would disorderly default be better for the middle and poorer classes than the bailout?

How can one speak of default in the future tense when we already have absolute bankruptcy - when 423,000 businesses have shut down and the unemployment rate is over 20 percent. Don’t you see the people scouring through garbage and sleeping on sidewalks? Those who led us consciously to bankruptcy - the troika and the government - now claim they want to save us from bankruptcy. It is incredible! With the new memorandum they are legitimising the first one (2010), which did not receive a three-fifths majority [needed to cede sovereignty]. Law professor Yiorgos Kasimatis has argued that even 300 MPs cannot negotiate our national integrity (akeraiotita). All acts implementing the memorandum are thus illegal. The troika, the government and all politicians who took such decisions are illegitimate. You can be sure that one day they will be tried and punished.

Can the left wing alone overturn the memorandum?

No, not just the left. But the entire people can - from the patriotic left to the patriotic right. The homeland. Hellas. United as one fist, one day we will oust unworthy governments, troikas and Merkel-Sarkozy.

Greece is rich. Our people are hard-working. What do we lack? We lack essential national independence. Since the end of the civil war, since 1950, all the major issues - diplomacy, defence, economy and politics - were decided by the Americans. What are the parties that have ruled Greece? They are the parties that have the US’ blessing and are sworn to keep the left wing in the corner. However, today the Patriotic Left is beginning to awaken. These are the forces that saved Greece from the Nazis, first fought the junta and finally delivered democracy. On that point, I am in a position to know the hidden truth.

As for the two parties [New Democracy and Pasok] that have ruled Greece, they led us to excessive borrowing, corruption, subjugation to the IMF in 2010, and, from there, to catastrophe. This is the view of the people, who punished Pasok and [former PM] George [Papandreou], who went from 44 percent in the 2009 elections to six percent in polls today. People are beginning to understand, to wake up and to protest...

Who is to blame for the crisis - the Greeks, the Germans with their austerity model or the all-powerful markets?

The only crisis is the crisis of international capitalism, which is up against the international mafia comprising the giants of finance capital - of virtual money. Finance capital has apparently bought off today’s European leadership, which does not realise that it is putting a noose around its own neck. Today, the European leadership threatens and acts like a predator. Tomorrow, they [all of Europe] will be the victims, just like us...

...the only party responsible for today’s hell is the political leadership. The government!

2--U.S. Unemployment Increases in Mid-February, Gallup

Excerpt: Underemployment also up, to 19.0%... The U.S. unemployment rate, as measured by Gallup without seasonal adjustment, is 9.0% in mid-February, up from 8.6% for January. The mid-month reading normally reflects what the U.S. government reports for the entire month, and is up from 8.3% in mid-January.

Gallup's mid-month unemployment reading, based on the 30 days ending Feb. 15, serves as a preliminary estimate of the U.S. government report, and suggests the Bureau of Labor Statistics will likely report on the first Friday of March that its seasonally adjusted unemployment rate increased in February. Gallup found that unemployment decreased to 8.3% in its mid-January report, and suggested that the U.S. unemployment rate the BLS reported for January would decline.

Gallup also finds 10.0% of U.S. employees in mid-February are working part time but want full-time work, essentially the same as in January. The mid-February reading means the percentage of Americans who can only find part-time work remains close to its high since Gallup began measuring employment status in January 2010.

Underemployment, a measure that combines the percentage of workers who are unemployed with the percentage working part time but wanting full-time work, is 19.0% in mid-February. This is higher than the 18.7% recorded for January, and is up significantly compared with January's mid-month reading of 18.1%.

Looking Ahead to the Government's Unemployment Report

The U.S. government in early March will report its February unemployment rate. That rate will be based on mid-month conditions. Therefore, Gallup's mid-month unemployment reading, based on data collected through the 15th of the month, normally provides a good basis on which to estimate the direction of the government's unemployment rate for the month. In mid-January, Gallup results suggested the unemployment rate would decline, consistent with the government's positive January jobs report of Feb. 3.

Seasonal forces typically cause unadjusted unemployment rates to increase at this time of year. In this regard, some of the sharp increase Gallup finds in unemployment and underemployment may result from seasonal factors. Although the government seasonally adjusts the U.S. unemployment rate, and the workforce participation rate could decline -- both of which could drive down its unemployment rate -- it still seems likely that the BLS will report an increase in the seasonally adjusted U.S. unemployment rate for February.

Regardless of what the government reports, Gallup's unemployment and underemployment measures show a sharp deterioration in job market conditions since mid-January. This is consistent with a similar decline in Gallup's Job Creation Index to +13 in the second week of February, from +16 for January. It is also consistent with an economy that continues to struggle with modest growth, particularly as gas prices surge. Further, it suggests that it is premature to assume the condition of the economy will not remain a major issue for Americans both financially and politically in 2012.

3--Foreclosure abuse rampant across U.S., experts say, Reuters

Excerpt: A report this week showing rampant foreclosure abuse in San Francisco reflects similar levels of lender fraud and faulty documentation across the United States, say experts and officials who have done studies in other parts of the country.

The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.

"The audit in San Francisco is the most detailed and comprehensive that has been done - but it's likely those numbers are comparable nationally," Diane Thompson, an attorney at the National Consumer Law Center, told Reuters.

Across the country from California, Jeff Thingpen, register of deeds in Guildford County, North Carolina, examined 6,100 mortgage documents last year, from loan notes to foreclosure paperwork.

Of those documents, created between January 2008 and December 2010, 4,500 showed signature irregularities, a telltale sign of the illegal practice of "robosigning" documents.

Robosigning involves the use of bogus documents to force foreclosures without lenders having to scrutinize all the paperwork involved with mortgages. The practice was at the heart of the foreclosure scandal that led to a $25 billion settlement between the U.S. government and five major banks last week.

4--Foreclosures on the Rise Again, CNBC

Excerpt: Foreclosure activity froze in many states in 2011, due to processing delays after fraud, or so-called "Robo-signing," were uncovered in the fall of 2010. The thaw is now on.

"We expect the pattern of increasing foreclosures to continue in the coming months, especially given the finalized mortgage and foreclosure settlement reached in early February between 49 state attorneys general and five of the nation's largest lenders," said RealtyTrac's CEO Brandon Moore in a written release. "Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts."...

Bank repossessions, the final stage of the foreclosure process, increased at least 30 percent year-over-year in several states, including Massachusetts, which saw a 75 percent spike. Bank-owned or REO (real estate owned) activity hit a 16-month high in Illinois and a 15-month high in Indiana. Default notices, the first stage of foreclosure, were flat nationally in January, but spiked in judicial states, like Connecticut and Pennsylvania (up 112 percent) and even in non-judicial states like Maryland (up 100 percent)....

Distressed property sales lower the value of homes around them, and that pushes more borrowers into a negative equity position, owing more on their mortgages than their homes are currently valued. Until banks work through the enormous backlog of foreclosures, which number in the millions, home prices will not hit a firm bottom, especially in the most troubled local real estate markets.

5--Icelandic Anger Brings Debt Forgiveness, Bloomberg

Excerpt: Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.

Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.

“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”

The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year....

Crisis Lessons

“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”

Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said.

Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates.

Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”

People Vs Markets

Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed...

Legal Aftermath

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.

Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.

That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.

6--Suddenly, a Sharp Deterioration in the Job Market, The Testosterone Pit

Excerpt: A hullabaloo broke out on February 3 after the BLS released its jobs report that indicated that a surprisingly robust 243,000 jobs were created in January, and that the unemployment rate had dropped to an even more surprising 8.3%. Cynics, academics, BLS heretics, BLS true believers, hype mongers, and politicians of all stripes waged a veritable media battle over these numbers that President Obama serenely trotted out as validation of his policies. Even Rush Limbaugh jumped into the fray. Rarely, if ever, had BLS numbers caused so much public disagreement—and scorn. But that’s history. Now we're in February, and unemployment, after a year of fairly consistent improvement, is suddenly showing a sharp deterioration.

On Friday, Gallup’s mid-month unemployment reading, which covers the preceding 30 days, jumped from 8.3% in mid-January, the low point since the financial crisis, to 9.0%. An astounding increase. And its Job Creation Index confirmed that trend, dropping from +16 in January to +13 in February....

And there was another indicator: the Philly Fed employment index collapsed from 11.6 in January to 1.1 in February—a warning shot for Jack Ablin of Harris Private Bank whose concerns on this were published by Politico's Morning Money on Friday. The index reflects hiring plans by employers, and they have pulled in their horns. They're now adequately staffed, though they might add a few people here and there, while they’re waiting for demand to show signs of life. That wait may tax their patience, however: gasoline prices are at an all-time high for this time of the year, and other debacles are tearing into the toughest creature out there that no one has been able to subdue yet....Gallup shed some light on this from a different angle. With a poll of open-ended questions, it tried to determine what worried Americans most about the national economy. Top three: “Jobs/unemployment” 26%, “National debt/Federal budget deficit” 16%, and “Continuing economic decline/Economic instability” 10%.

Jobs, still. Despite ceaseless rhetoric from the White House about the millions of jobs that it had created somewhere, the job market has improved only slightly. The BLS’s Employment Population ratio, which measures the percentage of people age 16 and older who have jobs, is the least corruptible employment number the government makes available. At 58.5%, it's only a fraction above the 58.1% from August, which was the worst reading since 1983, and far below its peak of 64.7% in April 2000

7--Commercial Bank Consumer Credit Declines Sharply in January, TrimTabs

Excerpt: Last week, the media lost no time exalting the latest Federal Reserve report that consumer credit jumped 9.3% annually in December, following the 9.9% increase in November. The back-to- back increase was viewed as a strong confirmation of a rise in consumer confidence necessary for an improvement in economic growth.....the biggest contributor to growth in consumer credit in December was government consumer loans, most of which are student loans. In order to accurately assess consumer credit trends, the government portion of consumer loans needs to be subtracted out of the data. When you do that two observations stand out:

First, government consumer loans have soared a stunning $314 billion since January 2009. Meanwhile, revolving credit has declined $162 billion and the non-government non-revolving portion of consumer credit has declined $222 billion.

Second, more recently, non-revolving credit excluding government consumer loans rose 4.5% annualized, far lower growth than the 12.5% annualized reported by the Fed’s.

So what about revolving credit? We believe the excitement about the 4.2% annualized December was probably premature. Our preferred measure of revolving credit comes from Fed’s weekly commercial bank data. We prefer this report for three reasons: 1) it is much more frequent, 2) the data is lagged by only one week, and 3) it provides a near real-time snap shot of consumer activity because commercial bank revolving credit accounts for nearly 75% of the larger monthly Fed consumer credit report.

While revolving credit at commercial banks increased 1.7% annualized, in December, it retreated a worrisome 19.7% annualized, in January. Not only is the decrease in January more than ten times the increase in December, it is more than double the combined November and December increase.

This new data suggests that while consumers may have gone out and shopped in November and December, it appears they curtailed their credit card purchases sharply in January. Will this trend continue? Who knows? One thing for sure, though, if this trend does continue, it suggests that consumers are retrenching, not a good sign for an economy where 70% of economic growth is dependent on consumption.

8--IMF Draft Sees Greek Debt Reaching 129% of GDP in 2020, WSJ

Excerpt: The International Monetary Fund now expects Greece's debt to reach 129% of the country's gross domestic product in 2020, three people with direct knowledge of a draft debt-sustainability analysis put together by the fund said on Sunday.

That is even further above the level most economists consider sustainable than previously thought, making it more difficult than ever to argue that the country can ever repay its debts.

Despite this, a number of signs last week had indicated that there was still enough political will in the euro zone to...

9--Independent audit "turned up accounting errors in nearly every loan file it reviewed", center for public integrity

Excerpt: Invalid charges

By September 2005, New Orleans homeowner Dorothy Stewart and her since-deceased husband had filed twice for bankruptcy protection and were having frequent problems keeping current with the payments on the small home they bought six years previous.

On Sept. 12, agents working for Wells Fargo Home Loans generated two “broker price opinions”—estimates, basically, of the value of the Stewart home. As loan servicer, Wells Fargo was in charge of collecting payments and managing a default or foreclosure if the borrowers fell behind.

A charge of $125 for each opinion was posted to the Stewart’s mortgage account. There was only one problem — Jefferson Parish, where the home was located, was under an evacuation order and closed to all but emergency personnel, thanks to Hurricane Katrina.

In an April 2008 ruling, Elizabeth Magner, a U.S. bankruptcy judge in New Orleans, rejected the two charges as invalid. She also disallowed 43 home inspections, 39 late charges, and thousands of dollars in legal fees charged to the Stewarts’ account.

Almost every disallowed fee was imposed while the Stewarts were making regular monthly payments on their home, the judge said.

The charges were assessed under circumstances contrary to Wells Fargo policy and were “unreasonable under the circumstances,” she ruled, after spending months unraveling the complicated loan file.

Magner determined that Wells Fargo had been “duplicitous and misleading” and ordered the bank to pay $27,000 in damages and attorneys’ fees. She also took the unusual step of requiring the servicer to audit about 400 home loan files in cases in the Eastern District of Louisiana.

Wells fought successfully to keep the results of the audit under seal, and last summer a federal appeals court overturned the part of Magner’s ruling that required the audit. But two people familiar with the results told iWatch News that Wells Fargo’s audit had turned up accounting errors in nearly every loan file it reviewed.

Wells Fargo declined to comment on the Stewart case or the subsequent audit.

Problems occur everywhere

Magner, the New Orleans judge, has dug into the accounts of more than 20 borrowers in her court since the Stewart case and found mistakes in every one of them, she said in a recent interview.

“These are loans of working-class people who bought homes they could afford and whose loans were not administered correctly from an accounting perspective,” she said. “I think that these types of problems occur in almost every [defaulted] loan in the country.”

So far, the most muscular attempts to rein in mortgage servicer bad practices have come in U.S. bankruptcy courts, where many judges, including Magner, have an accounting background....

In a 2010 ruling, David Houston III, a U.S. bankruptcy judge in Aberdeen, Miss., ordered American Home Mortgage Servicing Inc. to pay borrower Glen Cothern’s legal expenses due to its “egregious” conduct. The judge noted the “obvious mental anxiety, stress, and frustration” Cothern suffered when the servicer charged him for insurance he didn’t need, triggering two wrongful foreclosures and a customer-care experience that the judge described as “Kafkaesque.”

Stephani Humrickhouse, a federal bankruptcy judge in Raleigh, N.C., ordered Ocwen Financial Corp. to pay more than $70,000 for incorrectly reporting the mortgage of a couple as being in foreclosure. Ocwen still had not repaired the borrowers’ credit more than two years after they brought the accounting mistake to the servicer’s attention, the judge noted....

Servicer was wrong, wrong and wrong

One of the most searing rebukes to a loan servicer came last year from Judge Diane Weiss Sigmund, a federal bankruptcy judge in Philadelphia who sanctioned HSBC and its attorneys for failing to check whether computer-generated documents in a bankruptcy case were true before submitting them to the court.

The documents were wrong about the value of the home, the amount of the monthly payment, and falsely stated that the homeowners, Niles and Angela Taylor, had missed payments that they had actually made, the judge concluded....

JPMorgan Chase, one of the four big bank-owned servicers along with Bank of America, Wells Fargo, and Citigroup, says that it concluded that modification is a better alternative by about $2,600 per loan [page 50]. The servicers also said they have taken big strides in better servicing the loans of customers in default or foreclosure....

On Dec. 7, the Treasury Department announced that it would withhold payments through HAMP to JPMorgan Chase and Bank of America for the third straight quarter because neither servicer has fixed problems the government found.

The Treasury Department warned it would “permanently reduce” payments owed to Chase unless the problems were fixed by the first quarter of 2012.

Meanwhile, the mortgage market remains in historically rotten shape. Foreclosure rates dropped sharply at the end of 2011, in part because of increased scrutiny, but home seizures may jump as much as 25 percent in 2012 as banks push through delayed foreclosures, according to RealtyTrac....

Cassandra Gray, and most other homeowners interviewed for this story, said that communication with their loan servicer has been anything but timely, and processes for resolution anything but clear.

It is this feeling of helplessness, coupled with the fear of losing their most prized asset, that homeowners say is the worst part of the experience.

“When I talk about it I get emotional,” said Cassandra Gray, who is waiting to see if GMAC brings another foreclosure action or tries to settle the case. “I can’t think about it. I can’t think about my home no longer being my house. I have a child with special needs. I don’t know where we would go.”



10--Pain Without Gain, Paul Krugman, NY Times

Excerpt: Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking... It’s not an official recession yet, but the only real question is how deep the downturn will be.

And this downturn is hitting nations that have never

recovered from the last recession. ... Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster. ...

Specifically, in early 2010 austerity economics ... became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. ...

Now the results are in... The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending

11--Silencing The Critics, Paul Craig Roberts, Infowars

Excerpt: What the Ministry of Truth calls “peaceful protesters brutalized by Assad’s military” are in fact rebels armed and financed by Washington. Washington has fomented a civil war. Washington claims its intention is to rescue the oppressed and abused Syrian people from Assad, just as Washington rescued the oppressed and abused Libyan people from Gaddafi. Today “liberated” Libya is a shell of its former self terrorized by clashing militias. Thanks to Obama, another country has been destroyed.

Reports of atrocities committed against Syrian civilians by the military could be true, but the reports come from the rebels who desire Western intervention to put them into power. Moreover, how would these civilian casualties differ from the ones inflicted on Bahraini civilians by the US supported Bahraini government, the military of which was fortified by Saudi Arabian troops? There is no outcry in the western press about Washington’s blind eye to civilian atrocities committed by its puppet states.

How do the Syrian atrocities, if they are real, differ from Washington’s atrocities in Afghanistan, Iraq, Pakistan, Yemen, Libya, Somalia, Abu Ghraib, Guantanamo prison, and secret CIA prison sites? Why is the american Ministry of Truth silent about these massive, unprecedented, violations of human rights?

Remember also the reports of Serbian atrocities in Kosovo that Washington and Germany used to justify NATO and US bombing of Serbian civilians, including the Chinese consulate, dismissed as another collateral damage. Now 13 years later, a prominent German TV program has revealed that the photographs that ignited the atrocity campaign were grossly misrepresented and were not photographs of atrocities committed by Serbs, but of Albanian separatists killed in a firefight between armed Albanians and Serbians. Serbian casualties were not shown. http://www.freenations.freeuk.com/news-2012-02-19.html

The problem that truth faces is that the western media continually lies. On the rare instances when the lies are corrected, it is always long after the event and, therefore, the crimes enabled by the media have been accomplished....

However, Russia is politically and militarily weaker than the Soviet Union. Washington has infiltrated Russia with NGOs that work against Russia’s interests and will disrupt the upcoming elections. Moreover, Washington-funded “color revolutions” have turned former constituent parts of the Soviet Union into Washington’s puppet states. Shorn of communist ideology, Washington does not expect Russia to push the nuclear button. Thus, Russia is there for the taking.

China is a more difficult problem. Washington’s plan is to cut China off from independent sources of energy. China’s oil investment in eastern Libya is the reason

Gaddafi was overthrown, and oil is one of the main reasons that Washington has targeted Iran. China has large oil investments in Iran and gets 20% of its oil from Iran. Closing down Iran, or converting it into Washington’s puppet state, closes down 20% of the Chinese economy.

Russia and China are slow learners. However, when Washington and its NATO puppets abused the “no-fly” UN resolution concerning Libya and violated the UN resolution by turning it into armed military aggression against Libya’s armed forces, which had every right to put down a CIA sponsored rebellion, Russia and China finally got the message that Washington could not be trusted.

This time Russia and China did not fall into Washington’s trap. They vetoed the UN Security Council’s set-up of Syria for military attack. Now Washington and Tel Aviv (it is not always clear which is the puppet and which is the puppet master) have to decide whether to proceed in the face of Russian and Chinese opposition.

The risks for Washington have multiplied. If Washington proceeds, the information that is conveyed to Russia and China is that they are next in line after Iran. Therefore, Russia and China, both being well-armed with nuclear weapons, are likely to put their foot down more firmly at the line drawn over Iran. If the crazed warmongers in Washington and Tel Aviv, with veins running strong with hubris and arrogance, again override Russian and Chinese opposition, the risk of a dangerous confrontation rises.

12--Two-thirds of Americans said they think there are “very strong” or “strong” class conflicts in society, politico

Excerpt: Two-thirds of Americans said they think there are “very strong” or “strong” class conflicts in society, according to a Pew Research Center poll on Wednesday. That marks a 19 percent increase from 2009, when just 47 percent cited it as a main issue.

The clash between rich and poor now ranks as American society’s greatest social conflict, pollsters found, followed by 62 percent whosaid there are very strong or strong conflicts between immigrants and native-born Americans, and 38 percent who said these conflicts exist between blacks and whites. In 2009, more Americans said there were strong conflicts between immigrants and native-born Americans than the rich and poor.

And the intensity of the clash between rich and poor has grown more extreme, with 30 percent saying there are very strong conflicts in this poll compared with 15 percent who said the same in 2009. The 30 percent of Americans surveyed is the largest number recorded since the question was first asked in 1987, the pollsters said.

Over half of Republicans, or 55 percent, said there are very strong or strong conflicts between the rich and the poor, and 73 percent of Democrats and 68 percent of independents agree. All those figures have shot up since 2009, when 38 percent of Republicans, 55 percent of Democrats and 45 percent of independents told pollsters they believed the same.

Overall, just 23 percent of Americans said there are not very strong conflicts between the wealthy and poor and 7 percent said there are no conflicts whatsoever.

13--COULD FEBRUARY JOBS NUMBER TANK?, pragmatic capitalism

Excerpt: - M.M. spoke with Harris Private Bank’s Jack Ablin who has been among the most accurate predictors of the monthly non-farm payrolls report, largely by following the Philly Fed’s employment index. The index, based on a survey of employers’ hiring plans, has been tightly correlated with the NFP numbers. And on Thursday the Philly employment index tanked from 11.6 to 1.1 … This suggests a February jobs gain of just 50,000, a huge drop from January’s 243,000.

The Philly number COULD be an outlier. But if it isn’t, it’s a worrisome sign that employers have largely done the hiring they feel they need to do and are now waiting to see if demand picks up before adding any more workers. But without more workers getting jobs, it’s hard for demand to pick up. … Ablin: “I’m not sure where economists’ estimates are yet for February jobs. But they were 100K short last month and now they may wind up overestimating the number. … What [the Philly Fed] is doing is asking respondents if they are going to add or get rid of jobs.

“It looks like they are saying they are still adding, but very few. … And if you look at corporate income statements, they have cut pretty much everything they can cut, cost-wise. And they have a lot of operating leverage. … But if revenues don’t come through, they will just sit there. I won’t worry about one 50,000 jobs month too much … But I do hope the Philly Fed is wrong this time.”

14--Good and Bad Deficits, Robert Skidelsky, Project Syndicate

Excerpt: Government deficits incurred on current spending for services or transfers are bad, because they produce no revenue and add to the national debt. Deficits resulting from capital spending, by contrast, are – or can be – good. If wisely administered, such spending produces a revenue stream that services and eventually extinguishes the debt; more importantly, it raises productivity, and thus improves a country’s long-run growth potential.

From this distinction follows an important fiscal rule: governments’ current spending should normally be balanced by taxation. To this extent, efforts nowadays to reduce deficits on current spending are justified, but only if they are fully replaced by capital-spending programs. Indeed, reducing current spending and increasing capital spending should be carried out in lock step.

Brock’s argument is that, given the state of its economy, the United States cannot return to full employment on the basis of current policy. The recovery is too feeble, and the country needs to invest an additional $1 trillion annually for ten years on transport facilities and education. The government should establish a National Infrastructure Bank to provide the finance by borrowing directly, attracting private-sector funds, or a mixture of the two. (I have proposed a similar institution in the United Kingdom.)...

Above all, we need to recognize that the state’s role goes beyond maintaining external security and domestic law and order. As Adam Smith wrote in The Wealth of Nations:

“The third and last duty of the sovereign....is that of erecting and maintaining those public institutions and those public works, which though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual, or small number of individuals; and which it, therefore, cannot be expected that any individual, or small number of individuals, should erect or maintain.”

Chief among these public works, for Smith, are those that “facilitate the commerce of any country, such as good roads, bridges, navigable canals, harbors, etc.” Another piece of forgotten knowledge that Smith also mentions is the importance of education. He is right to do so, however much today’s deficit hawks seem, by their behavior, to prove the opposite.

15--The wage-cutter in chief, WSWS

Excerpt: Obama made no direct reference to the most critical element of the “saving” of the auto industry: the White House intervention to impose a 50 percent wage cut on new hires at GM and Chrysler, along with cuts in healthcare benefits for active and retired GM workers, both union and non-union.

But he made an indirect reference to it in the course of his speech at the Boeing plant Friday, which was excerpted and rebroadcast as his Saturday radio and Internet address.

“American workers,” he told his audience, “you’re the most productive on Earth. You can compete with anybody. You will out-work anybody, as long as the playing field is level. You can compete with any worker, anywhere, any time—in China, in Europe, it does not matter.”

These remarks were interrupted by applause, undoubtedly led by the union executives who comprised the principal cheerleading section for Obama at the Seattle rally. This only demonstrates the utterly reactionary nature of both the union organizations themselves, and their alliance with the Democratic Party and the Obama administration.

Why should workers applaud the notion of “out-competing” workers in other countries? How do American workers benefit from such competition? Obama is congratulating himself and his union stooges for instigating a race to the bottom in which American workers fight with their class brothers in Europe, Japan, China and around the world over who can work the cheapest and endure the greatest exploitation for the benefit of giant transnational corporations.

When Obama invokes the “level playing field,” as he did in the State of the Union speech, he is sending a message to the US corporate elite that he fully supports their drive to revive manufacturing in the United States by reducing the living standards and working conditions of American workers to the levels that now prevail in China, Mexico and other “competitor” nations....

Whether it is Greek workers fighting against across-the-board cuts in living standards of 50 percent, or Chinese workers fighting police-state repression on behalf of giant American and European manufacturers, or Egyptian workers opposing a US-backed military dictatorship, or US workers opposing the destruction of wages and benefits at Cooper Tire, the working class all over the world is fighting the same enemy.

16--The truth about Greece, Mikis Theodorakis

Excerpt: ...We have survived very difficult situations throughout the centuries and it is certain that if they lead us to the brink of death by force, Greeks will not only survive but they will be reborn....

Production has come to a standstill, the unemployment rate has reached 18%, 80.000 shops have closed down, along with thousands of small businesses and hundreds of industries. In total, 432.000 enterprises have shut down. Tens of thousands of young scientists are abandoning the country, which is every day sinking into medieval darkness. Thousands formerly wealthy citizens are scavenging on rubbish heaps and sleeping on the pavement. ...

The only force capable of effecting all these revolutionary changes is the Greek people, unified under a huge Front of Resistance and Solidarity in order to remove the Troika (the IMF and the European banks) from our country. At the same time all their illegal actions (loans, debts, interest, taxes, privatization of national wealth) should be considered as if they never took place. Naturally, their Greek partners, already condemned in our conscience as traitors, will have to be punished.

I am totally dedicated, body and soul, to this cause (the unification of the People in one Front) and I believe that I will be proved right in the end. I have fought, gun in hand, against Hitler’s occupation. I have experienced the Gestapo’s dungeons. I have been sentenced to death by Germans and have miraculously survived. In 1967 I founded PAF (The Patriotic Anti-dictatorial Front), the first resistance organization against the military junta. I fought underground, was caught and imprisoned in the junta’s “slaughterhouse”. Once again I survived.

I am today 87 years old and it is very possible that I will not live to see the salvation of my beloved country. But I will die with a clear conscience, because I will continue doing my Duty towards the ideals of Freedom and Justice until the end.

Athens, 12.2.2012

Mikis Theodorakis

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