Wednesday, June 1, 2016

Today's Links

1--Tuition-Free or Debt-Free College: Elizabeth Warren, Hillary Clinton, and Bernie Sanders Put Band-Aids on the Cancer

We are now halfway through the presidential election campaign, however, and we have yet to hear from either Democratic or Republican candidates on the question of bankruptcy and student loans. The solutions some have offered to the student debt crisis, including Sen. Bernie Sanders’ proposal for tuition-free college, will do almost nothing for the 44 million people who have already been through school, have the debt to show for it, and vote...

Sanders could easily vow to fight for the repeal of 11 USC 523(a)(8), the tiny piece of federal code that has caused this problem. Tomorrow, he could sponsor a Senate companion bill for any one of 3 good bills currently in the house that would do just that.  But he had better be quick about it if he is serious about fighting for the citizens — and winning the nomination.

Be that as it may, the college debt tapeworm has swollen to enormous size. MarketWatch:
The total outstanding student loan debt in the U.S. is $1.2 trillion, that’s the second-highest level of consumer debt behind only mortgages. Most of that is loans held by the federal government.
About 40 million Americans hold student loans and about 70% of bachelor’s degree recipients graduate with debt.
The class of 2015 graduated with $35,051 in student debt on average, according to Edvisors, a financial aid website, the most in history.
One in four student loan borrowers are either in delinquency or default on their student loans, according the Consumer Financial Protection Bureau...

Remind you of anything? That’s right! Subprime! From Dollars and Sense:
The basic premise driving [Student Loan Asset Backed Securities (SLABS)] is that powerful financial actors and institutions are able, through regulatory and legal sanctioning by the government, to transform a debt obligation (student loan) into a financial asset (SLABS) that can be traded on the secondary markets. This can be understood as the “commodification of debt.” The underlying assets for SLABS are student loans that have been sliced and diced to create packages of debt obligations that are then sold to investors such as pension funds. SLABS has proven to be a lucrative device to hedge risk for investors, raise capital, and even to generate income when student loan debtors default (through derivative contracts such as credit default swaps, which pay off in the event of default). ...

Obama’s repayment and forgiveness programs are of the HAMP-like clusterf*ck nature:
The various repayment programs that promise forgiveness are cruel jokes, administered in bad faith by a Department of Education that has zero desire or intentions of forgiving any loans. I estimate that fewer than 15% of those signing up for these programs will actually make it through. The rest will be expelled owing far more than when they entered.
What the Obama administration did do was great for the federal government, not the students. Obama federalized the system to where the government now profitsimmensely from both interest on loans it makes directly to students, and defaults. To say that the federal government now sits atop the most predatory lending system in our nation’s history is not an understatement.
Obama’s Consumer Financial Protection Bureau (CFPB) was designed so as to give it essentially no jurisdiction over federal student loans. The CFPB busies itself only with private student loans, which at least have statutes of limitations, and are covered under Fair Debt Collection Practices, and Truth in Lending laws (federal loans are not). So the CFPB is no help. Meanwhile, Obama’s lawyers fight furiously behind the scenes to keep bankruptcy protections gone from student loans in order to protect their cash cow. 

2--The Brazilian Coup and Washington’s “Rollback” in Latin America, Mark Weisbrot

It is clear that the executive branch of the U.S. government favors the coup underway in Brazil, even though they have been careful to avoid any explicit endorsement of it. Exhibit A was the meeting between Tom Shannon, the 3rd ranking U.S. State Department official and the one who is almost certainly in charge of handling this situation, with Senator Aloysio Nunes, one of the leaders of the impeachment in the Brazilian Senate, on April 20. By holding this meeting just three days after the Brazilian lower house voted to impeach President Dilma Rousseff, Shannon was sending a signal to governments and diplomats throughout the region and the world that Washington is more than ok with the impeachment. Nunes returned the favor this week by leading an effort (he is chair of the Brazilian Senate Foreign Relations Committee) to suspend Venezuela from Mercosur, the South American trade bloc.

3--Abenomics "Death Cross" Strikes As Japan PMI Plunges To 40-Month Lows


This is the same city that was almost razed to the ground by American and British forces during two major battles in 2004 – one year after the US-led invasion of Iraq and the fall of Iraqi dictator Saddam Hussein. The Fallujah resistance was then made up mainly of Sunni militia.

During the US-British assaults on Fallujah, it is estimated that more than 1,000 civilians were killed – a disturbingly high casualty toll, similar to that incurred by the armed militants. The Americans spared no effort to crush the resistance – deploying over 10,000 troops, warplanes, 2,000-pound aerial bombs, helicopter gunships, howitzers and snipers in what was reckoned to have been the fiercest fighting by US forces since the Vietnam War. The US military even blared rock music at deafening levels in order to draw out protesters who would then be cut down by sniper fire.

But the killing of civilians did not stop when those battles ended. Years after the artillery smoke cleared, the people of Fallujah have been battling alarming cancer rates and horrific birth defects as a result of the depleted uranium munitions that the American forces bombarded the city with in 2004. Millions of rounds of this highly toxic metal are believed to have been fired by US forces during their assaults on Fallujah.

5--Hillary’s Role in Honduran Coup Sunk US Relations With Latin America to a New Low

6--How Russia Is Preparing for WWIII

the West has made a number of highly disturbing military moves including the deployment of the first elements of an anti-missile system in Eastern Europe, the dispatching of various forms of rapid reaction forces, the deployment of a few armored units, etc. NATO now has forward deployed command posts which can be used to support the engagement of a rapid reaction force.

7--As Markit concludes,
“The survey data indicate that factory output fell in May at its fastest rate since 2009, suggesting that manufacturing is acting as a severe drag on the  economy in the second quarter.

Payroll numbers are under pressure as factories worry about slower order book growth, in part linked to falling export demand but also as a result of growing uncertainty surrounding the presidential election.

“For those looking for a rebound in the economy after the lacklustre start to the year, the deteriorating trend in manufacturing is not going to provide any comfort.”

8--The Message From The Collapsing Yield Curve

The FOMC is tightening monetary policy because Fed officials believe that the US economy is showing more signs of sustainable growth with inflation rising back near their 2% target. Yet the yield curve is warning that the Fed’s moves could slow the US economy and halt the desired upturn in the inflation rate. Another possibility is that while the US economy might be strong enough to tolerate the normalization of US monetary policy, the global economy is much more vulnerable to Fed tightening moves...

The result has been that global fixed-income investors have been buying more US bonds because their yields exceed those available in the Eurozone and Japan. In other words, the short end of the yield curve may reflect the relative strength of the US economy and Fed tightening, while the longer end reflects weak global economic activity and easing by the other major central banks.

The divergence between the tightening of the Fed’s monetary policy and the ultra-easy policies of the ECB and BOJ has certainly contributed to the strength in the dollar and weakness in both the euro and yen since mid-2014. However, so far, the latter have failed to boost exports in the Eurozone and Japan, while the strong dollar has weighed on US exports.

9-- Belgian public sector goes on strike in run-up to French rail walkout

Le Soir cited the comments of journalist Bernard Demonty, who stated, “Not a single trade union movement made any government step down from power” in Belgian history. The article continues, “To make the government fall [Demonty says], one needs a general strike to the end. This cannot be so, for the trade unions are divided and not determined for it.”.....

Public sector workers in Belgium organised in a 24-hour national strike Tuesday, as French rail workers began indefinite strike action yesterday evening. Workers are mobilising across national borders in Europe against the reactionary austerity policies that the entire European Union (EU) has imposed on workers since the 2008 financial crisis.

While French workers are mobilising in struggle against the Socialist Party’s (PS) regressive labour law, the right-wing government of Belgian prime minister Charles Michel intends to impose welfare cuts and budget cuts in public service and education as well as to raise the pension age. The Belgian government’s aim is to make it easier for employers to hire part-time workers on short-term, part-time contracts with less security. Its proposed laws introduce a 45-hour workweek and impose overtime without extra pay...

A self-made banner floating along the marching crowds in Brussels read, “No more of our sacrifices for your privileges

10--US-backed offensive against Fallujah threatens “human catastrophe”

“The stories coming out of Fallujah are horrifying,” said Nasr Muflahi, NRC’s Country Director in Iraq. “A lack of food, medicine, safe drinking water and electricity are pushing families to the brink of desperation. People who managed to flee have told us of extreme hunger and starvation. We haven’t been able to see this for ourselves or assist people inside the town, and we are extremely concerned about the full extent of the terrors unfolding there.”

11-- The return of the “grand narrative

... the postmodern theoreticians—and the broader upper middle class social layer whose interests they articulated—rejected the idea that society is divided into classes; that the state is an instrument of class rule; that it is possible to understand the objective logic of social and economic development; that capitalism is leading mankind to catastrophe; and that it is the task of the working class, led by a revolutionary party, to overthrow this bankrupt social order on a world scale and lay the foundations of a society based on equality.
Despite the proclamations of the anti-Marxist theoreticians that Marxism is dead and buried, a new generation of youth, students and workers are living the “grand narrative” of economic breakdown, social polarization, war and dictatorship....

The unfolding global wave of class conflict is currently centered in France, where workers and young people are entering another week of strikes and demonstrations against the “El Khomri” labor reform measures pushed through parliament last month with the help of emergency measures implemented by President Fran├žois Hollande.
Workers at the national rail line SNCF began a rolling walkout Tuesday evening, while rail and metro workers in the city of Paris will walk out Thursday. The French Civil Aviation Authority is planning a strike beginning Friday, threatening to paralyze transportation in much of the country. This follows strikes by hundreds of thousands of workers at oil refineries and other workplaces, as well as mass demonstrations in which over a million people have taken part so far. Workers and youth have clashed with police forces mobilized under the state of emergency measures imposed in the name of fighting terrorism earlier in the year....

The events in France are particularly significant, since the May-June 1968 strike in that country marked a significant turning point in post-war politics.
That struggle, the largest general strike in European history, shook the foundations of the Gaullist state and directly posed the question of overthrowing capitalism. The French general strike was followed by a wave of unrest between 1968 and 1975 throughout the world that directly posed the question of state power. The period saw the massive anti-Tory movement of the British working class, strike movements in Italy and Latin America and the struggle against US imperialism by the Vietnamese masses.
Capitalism weathered these storms thanks to the betrayals of Stalinism, Social Democracy and the trade unions, which allowed it to survive and restabilize in subsequent decades....

Vladimir Lenin’s declaration that
Imperialism is the epoch of finance capital and of monopolies, which introduce everywhere the striving for domination, not for freedom.

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