Time for your daily dose

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Yes indeed, it’s time for your daily helping.

A new, free-to-play game invites players to keep the USA’s “national debt” in check by choosing policies that “fulfill your vision of what America should be.”

The Fiscal Ship was developed by two right-wing propaganda mills in Washington DC: The Brookings Institution and the Woodrow Wilson Center, and was funded by the Peter G. Peterson Foundation.

Where did they get that “Fiscal Ship” title? Perhaps from this 1967 song…

fiscal shit3In the game you will learn such meaningless things as “the debt is 75% of the size of our economy.”

Actually the debt is 112% of US GDP, if we assume that the World Bank is correct when it says the U.S. GDP is $17.42 trillion.

The “national debt” is simply the amount of money that various parties (including the U.S. government) have deposited in Fed savings accounts. These deposits place no constraint whatsoever on the U.S. government. Nor will any individual, rich or poor, ever have to pay one penny on those deposits, although the Fred creates about $240 billion a year out of thin air to pay the interest on those deposits.

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In the game you will learn other meaningless things such as “Unless you act, 25 years from now the debt will be at levels never before seen in this country.”

Actually the amount of money on deposit at the Fed is already at levels never before seen in this country. Fortunately this has nothing to do with the U.S. government’s ability to keep creating money out of thin air.

Unfortunately, private debt will continue to strangle us. When your city, county, or state sells bonds to Wall Street, and must impose austerity in order to pay the debt, that is strangling you.

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The game asks you to choose between raising taxes (on average Americans) or cutting spending (on average Americans). Either way increases inequality, which the game refers to as “reducing inequality.”

Of course, the “national debt” has no bearing on the amount of money the U.S. government can create or tax back.

You will learn how to “protect the elderly” by privatizing Social Security so that Wall Street thieves can steal it all.

Here’s a two minute video connected with this bullshit…

And a 90-second video that shows you how to play…

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Why do progressives support Hillary?

Q. Why do progressives support Hillary?
A. They don’t

No true progressive supports Hillary.

You cannot be a progressive and support a neocon warmonger.

You cannot be a progressive and support plutocracy ( of which Hillary is a member) or austerity. Hillary has frequently praised Greece’s austerity nightmare.

You cannot be a progressive and (like Hillary) be as neoliberal as any Koch-funded Republican.

You cannot be a progressive and oppose universal health care, or free higher education.

The gap between Obamacare and universal Medicare is so huge that any “progressivism” which includes both of them is meaningless.

“Progressives for Hillary” is like “Pacifists for War.” There is no such thing

Q. Why does Wall Street favor Hillary?
A. Because Democrats “get things done.”

Republicans support neoliberal policies, but Democrats put them into practice. Reagan showed the way, but the Clintons put Reagan’s vision into practice. Reaganites think of it. Clintonites do it. Rank and file Republicans believe in screwing the public. Rank and file Democrats let it happen.

Q. Why do older people support Hillary?
A. Because, “Screw you; I’ve got mine.”

Hillary supporters tend to be older middle and upper middle class people who only care about themselves. They are “latte liberals” who are comfortable with the status quo. The only reason they’re Democrats is that sheer chance hooked them up with the Democrat team years ago. They don’t care about workers, and they will not pay a nickel more for a hamburger. They regard foreign policy as boring and irrelevant. They don’t care when “rag-heads” get blown up. They support plutocrats in exchange for a few crumbs of identity politics from the plutocrats.

They tend to get their information from corporate media outlets, which are all pro-Hillary, and whose commentators all want to keep their jobs.

(By contrast, Sanders supporters tend to be younger — or more flexible. They get their information from alternative media outlets. This is why the Establishment wants to shut down social media, and end net neutrality, so that corporations can once again control all information.)

Trump got wall-to-wall media coverage. Hillary got more coverage than Sanders, even when Hillary was trying to hide. In this way the corporate media planted in people’s minds that Sanders was a fringe candidate, and that Clinton was the “legitimate” candidate. Sanders got massive crowds at his speeches, but the corporate media outlets televised none of them.

If Sanders had received the free media publicity that was given to Trump and Clinton, then Sanders would have been so far ahead that Hillary would have dropped out of the race by now.

 Q. Why do Democrats support Hillary?
A. Team spirit

Hillary supporters don’t care about issues. They only care about the Democratic Party, and what they can personally get from it. They see their job as being obedient supporters of the team and its leaders. They are organizational voters, not principled voters. They admire team leaders who are arrogant bullies (like Hillary), and they condemn Independents as losers. They say, “How dare Sanders interfere with our team?”

Sanders did not run against Hillary. Sanders ran against the Democrat Machine. He faced the Clinton-Democratic-Republican-Establishment, with all of its behind-the-scenes tactics designed to preserve the power of the 1% over the 99%.

If voters had simply been given an opportunity to hear from and evaluate the character, positions, and track record of each candidate, without all the tricks of entrenched party elites and their media servants, then Sanders would have won by a landslide.

The fact that Sanders had racked up so many delegates in spite of the Machine is quite telling. However, the Machine’s roots run deep, and its reach is broad and multi-faceted. It has mesmerized far too many people into blindly embracing the myths that keep them voting against their interests.

Team spirit makes people spout absurdities like”:

“Hillary knows how to get things done.”
“Hillary has more experience.”
“Hillary is more realistic.”

Such notions are camouflage for, “We must support the team and its leader, regardless of what the leader stands for!”

Q. Why is Hillary even a candidate?
A. Because the process is rigged.

 States where Hillary won had closed primaries, meaning that the largest voting segment (i.e. independents) never got a chance to weigh in.

In many cases there was outright voter suppression (e.g. Brooklyn and Arizona).

Q. Why else did Sanders fail?
A. He did not adequately distinguish himself from Hillary.

 Sanders (like Hillary) regards Hugo Chavez as a “dead communist dictator” (Sanders’ own words). In foreign policy, Sanders is identical with Bush and Hillary. Sanders voted for almost as many wars of aggression as did Hillary when she was a Senator, and Secretary of State. Sanders supports all the lies about “ISIS.”™ And so on.

Q. Why would anyone support Hillary?
A. Fear

The corporate media outlets tell the masses that if they do not vote for Hillary, they will get Trump (even though Sanders would beat Trump more easily than Hillary). The corporate media created Trump in order to instill this fear. Indeed the media sells fear. And wherever there is fear, there is also greed, selfishness, and hate, all of it led by Hillaries.

 Q. Why do most Blacks support Hillary?
A. Because most Blacks still have a slave mentality.

Or if you prefer, a Stockholm syndrome. Average blacks tend to think they will be helpless without the protection of the plantation owner (i.e. without the leaders of the Democrat Machine). They imagine that “massa” loves them, when “massa” actually despises them.

Hillary helped her husband Bill end welfare, and to change laws so that Blacks filled up the prisons. Nonetheless, many Blacks think “massa” will protect them. (Not all, but enough for Hillary to win.)

One might ask, “When have the Clintons done anything for Blacks?”

Comment on Brazil (Pt 2)

I apologize for  not writing much lately, but I am working 12-hour days, and sometimes I am too tired to even turn on the computer.

The UK Guardian has an article about the coup in Brazil that is surprisingly good, given that the Guardian is normally right-wing.

Brazil shows that the peasants remain peasants because they think and act like a mob. More on this below.

Brazil’s dominant broadcast and print outlets are owned by a handful of Brazil’s richest families, and are radically neoliberal. For decades, the oligarchs have used those media outlets to defend their wealth, and to defend Brazil’s inequality.

Indeed, most of today’s corporate media outlets in Brazil supported the 1964 military coup that ushered in two decades of elitist dictatorship.

Globo (Brazil’s largest and most influential media outlet,)  spent 30 years cheering the 1964 coup and oligarchy that followed. The Latin American media outlets are so oligarchical and corrupt that the US corporate press seems professional and ethical in comparison.

Unfortunately in Brazil, as everywhere else, middle class people think exactly what the upper class wants them to think. The programming is done by the corporate media outlets, which are owned by the rich.

It has now become clear that corruption is not the cause of the effort to oust Brazil’s twice-elected president; rather, corruption is merely the pretext.

Yes, the corrupt ones are Rousseff’s accusers.

Rousseff’s moderately leftwing Workers’ Party first gained the presidency in 2002, when her predecessor, Luiz Inácio Lula da Silva, won a resounding victory. Due largely to his popularity and charisma, and bolstered by Brazil’s booming economic growth under his presidency, the PT has won four straight presidential elections – including Rousseff’s 2010 election victory and then, just 18 months ago, her re-election with 54 million votes.

The rich allowed the Workers’ Party to hold seats in Brazil’s government, because rich people tripled their fortunes when there was a high global demand for Brazil’s raw materials. Now that demand is down, Brazil is in a severe recession. Rich people (and corrupt politicians) are using the recession as a pretext to get rid of Rousseff and the Workers’ Party.

Brazil’s elite class and their media organs have repeatedly failed to defeat the Workers’ Party at the ballot box. What they have been unable to achieve democratically, they are now working to achieve anti-democratically: by having a bizarre mix of politicians – evangelical extremists, far-right supporters of a return to military rule, non-ideological backroom operatives – simply remove Rousseff from office.

Those leading the campaign for Rousseff’s impeachment and who are in line to take over – most notably the house speaker Eduardo Cunha – are far more implicated in scandals of personal corruption than is Rousseff. Cunha falsely told Congress that he had any foreign bank accounts, and then was caught last year with millions of dollars in bribes in secret Swiss bank accounts. Cunha also appears in the Panama Papers, working to stash his ill-gotten millions offshore to avoid detection and tax liability.

This is another reason for the coup against Rousseff. So many politicians are embroiled in corruption charges that their goal is to get rid of Rousseff and replace her with someone who will make all the corruption charges vanish.

Words cannot describe how surreal it was to watch the vote to send Rousseff’s impeachment to the Senate, during which one corrupt member of Congress after the next stood to address Cunha, proclaiming with a straight face that they were voting to remove Rousseff due to their anger over corruption. (!!!)

Some examples of people who voted to impeach:

Paulo Maluf, who is on Interpol’s red list for conspiracy.

Nilton Capixaba, who is accused of money laundering.

“For the love of God, yes!” declared Silas Camara, who is under investigation for forging documents and misappropriating public funds.

Eduardo Cunha, Speaker of the House and third in line to the presidency.  He’s the one who spearheaded the impeachment proceedings even though he got caught last year squirreling away millions of dollars in bribes in Swiss bank accounts, after he lied to Congress and told them he had nomoney in foreign accounts.

A New York Times article last week reported that “60% of Brazil’s Congress” (i.e. 357 politicians) who are voting to impeach Rousseff  “face serious charges like bribery, electoral fraud, illegal deforestation, kidnapping and homicide”. By contrast, Rousseff “is something of a rarity among Brazil’s major political figures: she has not been accused of stealing for herself.”

Prominent rightwing congressman Jair Bolsonaro – a rich oligarch who is widely expected to run for president — said he was casting his vote to impeach Rousseff in honor of a human-rights-abusing colonel in Brazil’s military dictatorship who was personally responsible for Rousseff’s torture. Bolsonaro’s son, Eduardo, proudly cast his vote to impeach in honor of “the military men of ’64” – the ones who led the 1964 elitist coup.

Many people – including the prosecutors and investigators who have led the corruption probe – think the real plan behind Rousseff’s impeachment is to end to the ongoing investigation, thus protecting corruption, not punishing it. Once Rousseff is impeached, Brazil’s media will turn public attention away from corruption, and the newly empowered faction in Brasilia will be able to protect themselves.

Middle class Brazilians are unhappy about the recession, and about political corruption. Their anger is fanned by the corporate media outlets, which direct public anger at Rousseff, who is one of the least corrupt of them all. As always the public follows like sheep to the slaughterhouse.

The elitists want to install Vice President Michel Temer as the new President. Mr. Temer is a flaming neoliberal who is under scrutiny because of a colossal graft scandal. A high court justice ruled that Congress should consider impeachment proceedings against Temer. He is so hated by the public that one recent poll found that only two percent of Brazilians would vote for him. Nonetheless Mr. Temer will automatically take power next month if the Senate decides to put President Rousseff on trial.

The middle class hates Rousseff, but they hate Temer even more. Because they obey the media outlets regarding Rousseff, they will get Temer whether they like it or not. The public is calling for elections, but Temer condemns these calls for democracy as a “coup” against him.

Once again we see that the price of mass stupidity is mass enslavement.

Impeachment just exchanges one band of thieves for another, giving the second band a chance to cover-up their crimes.

Q. Why does this keep happening?

A. Mob mentality

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This is not related to anything above, but at left is one of the villains of the original Star Wars series. At right is the new Star Wars villain. I changed nothing in these images. Hollywood has become utterly pathetic.

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Quiz time

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Let’s see what you make of this.

The following is from a right wing (i.e. neoliberal) newspaper in Venezuela called “The Informer.” (It’s in Spanish.)

(Most newspapers worldwide are neoliberal, since most are owned by rich people.)

“Venezuela is so broke that it can’t even print its own money. The Venezuelan Government has an outstanding debt of over $71 million to its own printer.” 

Here’s your quiz question: If a government owes itself money, can’t the government just print the money it is owed?

I mention this in order to draw your attention to a trick that is used to deceive you. When corporate media outlets talk about a country’s “national debt,” they always avoid clarifying whether the “national debt” is in the country’s own currency (which is trivial) or in a foreign currency (which is crucial).

The media outlets do this to make you think the “national debt” in a country’s own currency is a crisis. It isn’t. It can’t be. How can you have a “crisis” if you owe yourself money that you can print?

However, if the corporate media outlets can make you (falsely) think that your nation’s “national debt” (in its own currency) is a “crisis,” then rich people and their puppet politicians can make you submit to poverty, austerity, and inequality. They can make you falsely think that a monetarily sovereign government is the same as a private citizen.

This difference between foreign and domestic currencies does not apply to the USA, since the USA does all its foreign and domestic business in US dollars. However it does apply in every other country, to varying extents. Most nations create their own money out of thin air for domestic use, but they must obtain foreign currencies in order to buy imports.

Euro-zone politicians, of course, gave up their power to create their own currency out of thin air. They gave it to the corrupt bankers. Thus, if they have a trade deficit (like Greece), they must borrow in order to buy imports.

So let’s return to our Venezuela question. If a government’s money-printer is owed money, then can’t the printer just print the money that the printer is owed?

Yes, unless the money-printer is outside the country, and wants to be paid in a foreign currency. And indeed this is the case with Venezuela, whose government can create an infinite amount of bolivares out of thin air, but whose currency notes (the physical bank notes) are printed by a British company called De La Rue.

De La Rue (a private company) prints the currency notes for the U.K. plus 150 other countries, including Venezuela. De La Rue invents the images and designs on the notes, and if the client government likes them, the printing begins. The British firm devises a hundred new banknotes each year for various nations.

(Euro currency notes are printed by a German company called Oberthur Fiduciaire in Munich.)

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(Trivia: Oberthur Fiduciaire in Munich also printed Germany’s banknotes during the Weimar Republic hyperinflation. Today Oberthur Fiduciaire,  and the U.S. Bureau of Printing and Engraving in Washington DC, each print about eight billion bank notes per year.)

De La Rue also prints 15 million passports per year. It also prints various nations’ bonds, bank checks, traveler’s checks, vouchers, tickets, postage stamps, debit cards, credit cards, microchip “smart cards,” plastic payment cards, drivers licenses, and so on. Typically the printed currency notes are delivered to foreign nations’ central banks.

(And here you thought that all money was created by taxes and by banks as loans. Or maybe all money is lent by the Chinese, or by extraterrestrials. Anything to avoid the truth that monetarily sovereign governments create their own domestic spending money out of thin air.)

When the USA decided that Iraq should have a new currency, De La Rue’s plants in Britain, Kenya, Malta, and Sri Lanka printed ninety tons of new Iraqi dinar currency notes, and loaded them onto twenty-seven Boeing 747s, which were flown to the U.S.-controlled “green zone” in Iraq.

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De La Rue is constantly advancing anti-counterfeiting technology, because if you counterfeit currency notes, you are evil. (But if you steal trillions of dollars digitally, then you are worshipped by society, since digital money isn’t “real money,” right? Wrong. Digital money is the only real money. Currency notes merely represent digital money.)

In the De La Rue printing plants, access to sensitive areas is controlled by iris-recognition cameras like those featured in science fiction movies. Most employees only have clearance for their specific work area. Mobile phones are forbidden inside to prevent workers from taking photos or planning heists. The company has printing plants in 30 different countries, and when you apply to work there, the company reviews your bank statements, your mortgage contract, and your previous employment history to make sure you are not living beyond your means, and are therefore not vulnerable to blackmail or temptation.

De La Rue banknotes have many security measures built into them, from an array of watermarks and complicated etchings, to see-through images and markings that only show up under ultraviolet light. Furthermore there are “covert measures” known only to a client nation’s central bank. The battle against counterfeiters goes on constantly (as does the massive theft of digital money by bankers, rich people, and their puppet politicians.)

Of course, currency notes are increasingly disappearing as the world goes increasingly cashless, so that debt-slaves cannot hide any money from their slave owners. Indeed, in December 2015, De La Rue fired 300 employees because the company is phasing out the printing of banknotes to focus on security products, and on identity products such as passports.

For example, De La Rue is working on a means to store passports in mobile phones, so that debt-slaves can be tracked throughout the world. Australia is doing the same. Soon you will have to give your fingerprints if you want to visit Europe. It’s all about controlling the masses, and maintaining the gap between the rich and the rest.

Getting back to Venezuela, because of high inflation, President Nicolás Maduro’s administration ordered many new bank notes from De La Rue over the latter half of 2015. How many bills? According to the Wall Street Journal (which may be lying) President Nicolás Maduro’s administration ordered five billion (billion????) new bank notes over the latter half of 2015, and has ordered ten billion (???) more from the De La Rue company. That sounds like nonsense, since it would mean 485 new currency notes for every man, woman, and child in Venezuela. This would make Venezuela’s inflation rate of 68% (already the world’s highest) even worse.

Anyway the De La Rue company says that Venezuela’s government owes it $262,647,997.00 U.S. dollars in fees for printing money and passports, among other goods. De La Rue Director Ruth Euling sent a letter to José Khan, the head of Venezuela’s central bank, demanding USD $71.421.039 immediately.

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Maduro’s administration may soon switch from De La Rue to some competitor such as the Canadian Bank Note Company in Ottawa, or the Oberthur Fiduciaire Company in Paris, or Giesecke & Devrient in Munich. (These are all private companies, and they all print passports, postage stamps, etc.).

TAKEAWAY POINT

Whenever an article in the corporate media outlets says, “Such-and-such country is in debt,” you must ask, “Is this debt in the country’s own currency, or in a foreign currency?”

Most articles fail to clarify this, and are therefore meaningless.

If a government’s “debt” is in its own currency, then there is no debt crisis, since the government can always create more of its own money.

But if a government’s debt is in a foreign currency, then there can be trouble.

Here’s an example of bullshit from CNN Money:

“Venezuela owes $11 billion in debt payment this year. Some experts see Venezuela defaulting in October, when the country must pay $5 billion.”

Oh? Pay $5 billion to itself, or to foreigners in foreign currencies? Without clarification, this sentence is meaningless. Its purpose is to make you falsely think that sovereign governments are just like private citizens. And when you believe that lie, you will believe all the lies of neoliberalism.

Here’s another example:

Hugo Chávez died having completely depleted the coffers of the Venezuelan treasury.

Is that in bolivares, or in some foreign currency? The article doesn’t say. (They almost never do.) If it’s in bolivares, then the government has no “coffers.”

Hugo Chávez wasted the country’s last reserves in a populist orgy of expenditures such as the world has never seen. For instance, in a country of 30 million residents, 2 million households received free refrigerators from the government, while hundreds of thousands received other free electrical appliances prior to the October 2012 elections.

Didn’t Hugo Chávez understand that governments must only give handouts to the rich?

By the time Nicolás Maduro was declared the winner, Venezuela was almost bankrupt.

More bullshit. How can a country be “bankrupt” when its government can create money out of thin air? Or perhaps the article means bankrupt in foreign currencies. But that’s the thing. The article doesn’t say. (They almost never do.)

Incidentally the price of oil continues to rise. If it keeps rising, then President Maduro will survive.

ADDENDUM

What’s causing Venezuela’s inflation? There are two main factors.

Factor 1: Shortages in consumer goods cause prices to rise. The shortages are caused by the fall in oil prices, plus the hoarding of consumer goods by rich people in Venezuela. Venezuela imports most of its consumer goods, and it pays fort them in dollars, which Venezuela gets by selling oil. This makes Venezuela very vulnerable to the oil market. Somewhere between 92 and 94% of export income in Venezuela comes from oil. The government has tried to build “endogenous development” (i.e. local manufacturing, and self-sufficient agriculture), but these have had little success.  Why would anyone want to go out to work in the fields and sweat over produce that could fail with bad weather, or work in a factory when there is a sure income from oil?

Factor 2: Currency speculation. Venezuela has imposed currency controls to prevent or limit capital flight from the country. This inevitably creates black markets in currency exchange, which subvert the government controls. Currency manipulation is lucrative, and it is a weapon of choice for the United States (and its allies in the local oligarchies) when directed at governments targeted for destruction.

The flood of money has led some sectors of the economy, such as real estate and car sales, to effectively price their goods in U.S. dollars, though they do so on the sly because dealing in foreign currency is illegal.

As shortages cause prices to rise, people cling to their dollars as a hedge against inflation.

What is Maduro doing about it?

[1] In Jan 2015 he took control of the central bank, thereby enraging the oligarchs.

[2] The government is beginning to give special cards to the lower classes like the EBT cards used by Food Stamp recipients in the USA. This will help to control the black market in currency trading. It will also reduce the tendency of people to buy large quantities of foodstuffs and transporting them to Colombia for sale.

[3] He is continuing to seek economic help from China is exchange for giving cheap oil to China.

[4] He is continuing to push for national self-sufficiency in consumer goods.

[5] He has removed the price controls, such that Venezuela’s currency is now free to “float.”

[6] He is moving toward unifying the various exchange rate programs in Venezuela.

Venezuela is now in a race. The oligarchs want to get rid of Maduro before he can stabilize the economy, and before oil prices can fully recover. If they fail, they will have to ask the USA to blockade Venezuela, using some bullshit excuse such as “human rights violations,” or Venezuela being a “state sponsor of terrorism.”

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And now in the comments section below, we’ll hear from the monkey…

Evil worms

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Today’s liar is Graham Steele, who was Canada’s Finance Minister from 2009-2012 under Stephen Harper. Steele, like Harper, was a neoliberal, and was therefore in favor of war, privatization, bank bailouts, inequality, gratuitous austerity, and so on.

Mr. Steele has an article in the Canadian Broadcasting Corporation’s blog. The CBC is Canada’s equivalent to the BBC. It is a government-run media outlet that tends to be right-wing and pro-neoliberal. When neoliberals are in power, they threaten to cut the CBC’s funding unless the network’s propaganda support’s neoliberalism. Canadian Prime Minister Justin Trudeau should do the same, but from the other end (the progressive end).

Anyway Graham Steele is annoyed that Justin Trudeau wants to increase government spending on programs that help average Canadians.

If you’re going to throw gobs of money at areas that have been neglected, you ought to think seriously about spending less somewhere else, so that you’re still living within your means. That’s the tough part of politics. The choices. The balance.

Right away he starts lying. Steele can’t help it. Neoliberal ideology is nothing but lies.

The Canadian government has no “means” to live within, since it creates its spending money out of thin air. Nor is there any need for “spending choices,” or “balance.” Steele is well aware of this, but he is a compulsive liar – i.e. a neoliberal,

The Trudeau government is evidently not interested, at all, in anything resembling balance. It’s cake for everybody. You have cake? Keep it. You want cake? Cake for you, and for you, and for you!

Hey Steele, this message is for you…

Neoliberals like it when the government hands out endless trillions for war, for bank bailouts, and for corporate subsidies, but they become snide and sarcastic when the government helps average people. “Cake for you, and for you, and for you!” For neoliberals, government spending that helps average people is “unsustainable.”

Of the three fiscal choices in front of any government — raise taxes, cut spending, run a deficit — the path of least resistance is always to run a deficit.

Yes, because that’s what the economy needs. Have you ever played the Monopoly board game? Imagine every three times around the board you tell all the other players, “The bank has handed out a total of five thousand dollars. I need all of you to give that $5,000 back to the banks right now so we can have a balanced budget. I need all of your money.”

monopolyThe game would end right there. No one would have any money to continue paying rents and so on. Balanced budgets are only necessary for entities that cannot create their spending money out of thin air.

Now Trudeau, Morneau and the rest of the Liberals are singing and dancing down that path, like Julie Andrews in the opening sequence of The Sound of Music.

Snide sarcastic little creep.

Running a deficit is an attractive option because there is nobody to speak for the future citizens who will pay for it. This, more than anything, explains the mountain of debt we have inherited and to which we continue to add.

Steele is well aware that no one will ever have to pay a penny on Canada’s “national debt,” but for neoliberals, lying is like breathing. They must do it.

I wish Sanders would be bold enough to speak candidly…

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Intergenerational equity — the fairness to our children and grandchildren of the debt we’re leaving for them — is the biggest unaddressed issue in our politics.

Suppose you told someone that his or her spouse was cheating, but you knew it was not true. You lied so that the couple would suffer pain and anguish. You would be an evil person.

Steele is evil. He uses the national debt hoax to make people falsely think they are “burdening their children.”

I’m so sick of these evil little worms.

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Too big to jail?

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The U.S. government pretends to be helpless to prosecute or control the big banks, claiming that the banks are “too big to fail.” And yet, the U.S. government has supreme power over the biggest banks. For example…

>>When the U.S. government is displeased, it uses fines to penalize the big banks. In March 2015 the U.S. government fined Commerzbank of Germany $1.5 billion for doing business with Iran. (Commerzbank also fired many of its German employees per U.S. demands.)  In March 2014 the U.S. government fined BNP Paribas (a French multinational bank) $8.8 billion for doing business with Iran. And these weren’t even U.S. banks.

>>The U.S. government deregulated the big banks, and it can re-regulate them.

>>The U.S. governmentcould choose not to continually bail out the banks when their bets go bad.

>>The U.S. government could choose to increase federal spending, and make college free, thereby offsetting the banks’ strategy to reduce all of us to debt-slaves.

>>The U.S. government could even break up the big banks if it chose to.

In short, “too big to fail” is bullshit.

So much for the false notion at all money is issued by banks as loans, and therefore banks are God. Banks are supremely powerful, but they must obey the U.S. government, which controls whether or not the big banks can invest in countries like Russia or Iran.

For example, the big banks in the USA and Europe still will not invest Iran (at least not openly), since they fear reprisals from the U.S. government, and from the Saudis and the Israelis. The big banks are confused about what the “lifting of sanctions” means, especially given the childish and impetuous nature of American, Israeli, and Saudi officials.

Actually most of the U.S. sanctions on Iran remain in place. Only nuclear-related sanctions have been relaxed. Even if you even open an office in Tehran and you’re using Microsoft operating system, you can still be in trouble.

Iran’s funds in foreign accounts remain frozen, and only some Iranian banks have been reconnected with the SWIFT system. More than 200 Iranian or Iran-related individuals and entities remain on the U.S. black list. Even non-US companies are prohibited from doing business with anything remotely connected with the Republican Guard (which is anti-imperialist). The EU has a similar list.  (Israel is demanding that the USA double its annual $3 billion gift to Israel as “compensation” for the USA relaxing some of its sanctions against Iran.)

By other means

Anyway, speaking of the big banks, the USA and Russia have been at war since 2014. The war may take the form of sanctions and counter-sanctions, but it is still war. Recall that in the late 1930s the USA blockaded and sanctioned Japan in order to make Japanese so desperate that they attacked U.S. forces in the Philippines, so that Washington would have a pretext to enter World War II. The Japanese didn’t take the bait in the Philippines, but they did in Hawaii.

The Prussian military general Carl von Clausewitz (1780-1831) famously wrote in his book On War that “War is the continuation of politics by other means.” I might amend that to say, “Bombs and bullets are a continuation of sanctions by other means.”

Russia needs foreign currency in order to buy imports. To get foreign currency, Russia exports things like oil. But U.S. sanctions have limited the parties that Russia can sell to. Oil prices are rising again, but they still remain depressed.

(Back on March 14, I wrote that, according to my calculations, oil prices had hit rock bottom on 11 Feb 2016, and would start rising again. It appears that I was correct.)

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In order to get more foreign currency fast, the Russians want to sell USD $3 billion worth of sovereign bonds (i.e. Treasury securities) that are backed by Russian assets such as gold, property, and so on. As an incentive, the Russians are willing to sell their bonds at a steep discount, or at a high rate of interest.

Parties who buy the bonds will not be paid their interest in rubles, but in the foreign currency of their choice, which the Russians are betting they can obtain before the bonds mature.

Russia has invited European and Chinese banks to bid on the bonds, as well as Bank of America, Citigroup, Goldman Sachs, J.P. Morgan Chase, and  Morgan Stanley. The big banks are interested in buying the Russian bonds, since the bonds will be very profitable. But when the banks asked the U.S. Treasury if it would be okay to buy the bonds, the U.S. Treasury and State Dept said no, as it would offset the U.S.-led sanctions against Russia.

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According to the Wall Street Journal, American banks have made inroads into the Russian market, setting up offices there and pitching for deals. Since 2002, U.S. banks have collectively captured a quarter of annual Russian investment-banking revenue. In 2007, U.S. banks did nearly $630 million of more than $2 billion in investment-banking business in Russia. That $630 million dropped to $26 million after the U.S.-led sanctions took effect.

The U.S. government doesn’t care if U.S. banks get rich inside Russia, since investment banks are parasites that suck Russia’s lifeblood. However it is another matter for banks to buy sovereign bonds from the Russian government. That actually helps Russia, and therefore cannot be allowed.

002In the graph at right, I corrected the title. When the U.S. government hates a foreign government, the foreign government is said to be issuing “sovereign debt.” (As in, “Look! The bastards are in debt, ha, ha, ha!”) On the other hand, when the U.S. government is allied with a foreign government, the foreign government is said to be issuing “sovereign bonds.”

Except for a temporary plunge in oil prices in mid-2012, Russia collected a lot of foreign currency from selling oil, and could hence afford to sell sovereign bonds, knowing it could pay back the debt in foreign currency. In August 2013, however, the oil market started shuddering, and Russia started worrying. In June 2014 the price of oil started plunging worldwide. At the same time, the U.S. and Europe imposed sanctions on Russia as punishment for thwarting Western aggression in Ukraine, and for helping Assad of Syria with electronic and satellite reconnaissance. The Russians sold no sovereign bonds in 2014, not wanting to go further into debt to Western banks.

Now the Russians want to sell $3 billion worth of bonds. Why?

[1] The Russians are desperate for foreign currency

[2] The Russians know they will be able to pay the bond interest in foreign currency, because oil prices are rising again. (Russia will get foreign currency by selling oil.)

Oil prices are rising because the Saudis are in severe economic trouble, and can no longer afford to depress oil prices by maintaining high oil output. Regardless of their lies, the Saudis are reducing output. They have no choice.

Oil prices are also rising because the oil glut, plus depressed oil prices, drove many oil producers out of business. This caused oil supplies to be used up. Now that oil is becoming scarce again, the price is rising again.

The Russians prefer to sell their bonds to China, but if the U.S. banks are willing to outbid China, then Russia may sell some of its bonds to the U.S. banks.

But – and here’s the point – the U.S. government doesn’t want the big banks to buy Russian bonds. The U.S. government hasn’t issued a direct prohibition, but has “strongly recommended” that U.S. banks don’t buy Russian, bonds. Translation: “Buy those bonds, and we will retaliate against you.”

In a sense the Russians are daring the USA. While the U.S. has applied sanctions against major Russian companies and individuals, it hasn’t taken the more radical step of imposing broader sanctions on sectors of the Russian economy such as energy and banking, or blocked the entire Russian government. The Russians are saying to the USA, “We want to sell bonds, and if you interfere, we will totally shut you down in Syria, and perhaps Lebanon and even Iraq.” (Israel is mulling yet another attack on and invasion of Lebanon. Currently the Israelis are studying how weakened Hezbollah has become from fighting the U.S.-backed ISIS ™ terrorists in Syria and Northern Lebanon.)

Also the Russians want to sell its bonds now before Hillary becomes the U.S,. President — knowing that Hillary is even more insane than Obama is.

True, Russia has been hurt by the sanctions and the fall in oil prices. The resulting shortage in imported consumer goods has caused inflation. Unemployment is rising. Nonetheless, in foreign affairs, the Russians are chess players, while the West is a bunch of thugs.

Bottom line

To repeat what I said above, the big banks are supremely powerful, but the U.S. government is even more powerful. Therefore…

[1] “Too big to fail” is bullshit. Even the biggest U.S. and European banks must obey the U.S. government.

and

[2] When we consider the evil and the poverty around us, let us remember that politicians are just as guilty as bankers.

Parasites (Pt. 2)

I’ll get to my topic below, but first, The Washington Compost says the Democrat race is finished. It claims that Hillary can lose every remaining primary and still clinch the Democrat nomination. (UPDATE: I just realized that the lies originated in the Associated Press. The Compost merely repeated them, as did most other corporate media outlets.)

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Other sources say the AP is lying as usual. Clinton has a lead of 212 pledged delegates, but there are nineteen states to go. Sanders could still catch up in June, especially if he continues to surge in California with 475 delegates to be won.

Sanders would be finished if there were not over a thousand delegates remaining , but there are over 1,400 delegates still to be won. The ComPost doesn’t want you to realize that.

Regarding the New York primary, Hillary (supposedly) won in Buffalo, Rochester, and New York City, while Sanders won everywhere else (he won 58 out of 63 counties). Nonetheless, Hillary “won” officially.

I say Hillary supposedly won because it seems that the primary was rigged against Sanders, just as it was in Arizona…

[1] New York has a closed Democratic primary (as do ten other states) in order to keep current insiders in power. With a closed primary, you can only vote if you are a registered Democrat. (If independents could have voted in New York State, Sanders might have won. It was the same in Arizona.)

[2] Before the primary began, more than 27% of New Yorkers (3 million people) were disqualified by restrictive voting laws. Countless others were disqualified because they were deemed “inactive.” In one Brooklyn precinct, 10% of those who showed up to vote found their names had been purged. In the county in which Brooklyn resides, more than 125,000 voters were cut from the Democratic rolls, leading to a massive 14% drop of eligible voters in five months’ time.

[3] In upstate New York, which was more favorable to Sanders, polling station hours were substantially cut back.

[4] Only voters who registered as Democrats by 9 Oct 2015 were eligible to vote. (No one was aware of this until he got to the polling station and was told he couldn’t vote.)

002Republican insiders do not need to rig their system as much as do Democrats, since Republicans tend to be more consistent in their opinions. All Republicans hate equality, democracy, workers, poor people, refugees, children (except fetuses), and people of color (except for the occasional token).

004Democrats are equally full of hate, but Democrat insiders are also threatened by populists who are outside the Democrat machine, such as independents and Green Party members. Democrats are much less Democratic inside their own system than are Republicans within the Republican system. Republican delegates tend to go with the candidate who has the most public popularity. Democrat delegates focus on keeping Democrat insiders in power, regardless of which candidate is the most popular with the public. (40 Senators and 166 House Representatives have endorsed Hillary, while only one senator has endorsed Sanders.)

005In fact the popularity factor proves that the Democrat system is rigged. National polls consistently show that Sanders has the highest favorability rating of all presidential candidates by far, and beats out all Republicans in head-to-head match-ups. Yet the Democratic machine and the corporate media outlets want to eliminate Sanders before the Democrat convention, so that Wall Street can continue to rule through Hillary.

Why does this happen? Why do the 1% rule the 99%? Reason: among average people there are too many like these…

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Amazingly, some people call Hillary a “aocialist.”

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Anyway I want to return to the theme of parasites and hosts.

Neoliberals and their toadies pretend that the financial economy is the same as the real economy. Thus, for neoliberals and their toadies (including the corporate media outlets), when Wall Street is booming, Main Street is booming, even when Main Street is dead. When the financial economy is hot, the real economy is hot, even when the real economy is in a depression.

Wall Street is a deadly parasite that claims there is no parasite. Thus, the more Wall Street gets fat by sucking the life out of Main Street, the more the corporate media outlets claim that Main Street is in a “recovery.” The fatter the parasite, the deader the host, and the greater the “recovery.”

The purpose of neoliberalism and austerity is to fatten the parasite. That is, to advance private ownership by rich oligarchs in order to widen the gap between the rich and the rest. All public assets and services must be surrendered to the parasites (i.e. privatized). Corporate power must supersede government power.

For example, austerity reduces the amount of government-created money in circulation so that you are forced to seek private money in the form of loans. This reduces you to a debt-slave, with your owners being the financial and corporate parasites.

However, even if we have less austerity, and we have more government money in circulation, we will be no better off unless we remove the parasite. As long as people remain debt slaves, they will surrender any extra money they get (e.g. from a $15.00 per hour minimum wage) to the banks and Wall Street.

As long as the parasite exists, it will continue to grow no matter what we do.

That’s why all money tends to flow upward in our society. It’s why inequality between the parasite and the host continues to worsen every day. All money and human energy is being sucked up by the bankers, investment bankers, financiers, equity fund managers, corporate raiders, corporate CEOs, etc.

The tube through which human energy is drained is private debt, which includes rents, fees, loan payments, and so on.

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Michael Hudson has an article about this in the Washington ComPost, which is also reprinted at Counterpunch.

Our economy has increasingly been financialized, and the result is a sluggish economy and stagnant wages.

Yes. All human energy is sucked up by the parasite. The economy is sluggish because we are being drained.

We need to decide whether to save the economy at large, or continue to save the banks and bondholders by leaving the debt hangover from 2008 intact. Without a debt write-down, the economy will continue to languish in debt deflation, and continue to polarize between creditors and debtors.

We need more than just a debt write-down. We need to kill the parasite. More on this below.

Instead of using credit to finance tangible industrial investment that expands production, banks have been lending to those who want to buy real estate, stocks and bonds. Banks are also lending to corporate raiders – those who buy companies with high-interest bonds, thereby raising debt-to-equity ratios. The raiders leave a bankrupt shell, and threaten employees that bankruptcy would wipe out their pension funds or Employee Stock Ownership Plans if they do not agree to replace defined benefit pensions with defined contribution schemes that are much more risky.

It’s called asset-stripping, and it’s how Peter G. Peterson became a billionaire. It’s also how Mitt Romney got rich, namely by destroying companies and escaping with their loot. Now Peterson uses his fortune to push for the privatization of Medicare and Social Security.

The parasite dynamic is more extractive than productive. Corporate financial managers, for example, can raise their company’s stock price by simply buying back shares from investors. The managers borrow money to buy the stick.  In addition to raising debt-to-equity ratios, these short-term tactics “bleed” companies, forcing them to cut back on research, development and projects that require long lead times to complete. Corporate managers are paid by how much they can raise their stock prices in the short run. When earnings are diverted to pay dividends, or to buy back shares, growth slows. But by that time, today’s manages will have taken their money and bonuses and run.

For example, hedge fund investor Eddie Lampert bought K-mart when it was in bankruptcy in 2003, merged it with Sears, and squeezed billions of dollars of cash out of the company and shunted the, into his own businesses. In 2000, K-mart had 2,165 stores. Since then, because of Lampert, 1,203 stores had to close, and the number keeps rising fast. In three years or less, K-Mart and Sears will be extinct. Lampert will have sucked the company dry. (K-mart will close 68 more stores this summer. Sears will close 10.)

On an economy-wide scale, rising debt can inflate prices for real estate, stocks or bonds on credit. Asset prices reflect whatever banks will lend against them, so easier credit terms (such as lower interest rates, lower down payments and more time to pay back loans) increase the asking prices of everything else.

In my opinion this is the main reason why a car that cost $300 in 1925 costs $30,000 today. On a macroeconomic level, debt inflates prices over time.

Banks have found the biggest loan markets (and targets) in mortgages for real estate, natural resources (oil and mining) and infrastructure monopolies. Therefore most of the interest that banks receive from their lending comes from property rents and monopoly rents. Whatever the tax collector leaves behind can be sucked up by the banks in form of interest payments on further loans. These loans create debt-leveraged “capital” gains, which receive favorable tax treatment compared to profits and wage income, which are taxed higher. The savings end up in the hands of banks rather than individuals who would spend that money back into the economy.  

At least half of all the money in the economy is sucked up by the parasite. Some of it right away. Other portions of it more slowly.

Home mortgages absorb a maximum 43 percent of the buyer’s income just to service their debt. Student loans, auto loans, credit cards and other bank debt may absorb another 10 percent of the debtor’s income. This leaves only half of personal income available to spend on anything else one might need. Meanwhile, wage withholding for Social Security and Medicare (the FICA tax) eats more than 15 percent of income. Other taxes (income taxes, property taxes and sales taxes) take up another 10 to 25 percent. In the end, the combination of financialization and the taxes shifted off the finance sector and onto individuals can eat away as much as 75 percent of a wage-earner’s income.

Therefore 25% of all your money (i.e. all your human energy) is taken as taxes, and half of your remaining money sucked away by the parasite, which enjoys a free lunch.

Loading the economy down with debt (in all its forms) leaves less disposable income for individuals and businesses that could otherwise be buying consumer goods and investing in real production. As the “One Percent” puts the “99 Percent” deeper into debt, financialization has become the major cause of increasing inequality of wealth and income. In due course, the amount of debt will exceed the economy’s ability to produce a large enough surplus to pay it back. This makes a financial breakdown inevitable.

It’s tempting to think there will be a mass breakdown, but the USA could just as easily become a nation of shanty-towns. The rich will still have their mansions, country clubs, gated communities, private jets, and private islands.

This financial dynamic always leads to a transfer of property from debtors to creditors, unless debts are forgiven or brought in line with the debtor’s ability to pay and the current market value of homes that are over-mortgaged and owe more debt than they are worth.

With neoliberalism, everything is geared toward [1] giving public assets to rich owners, and [2] reducing everyone to slaves so they give their human energy to their owners.

In 2008, banks convinced governments to “solve” the debt problem by taking bad bank debt onto the public balance sheet and then bailing out the banks. But while a government bailout or IMF loan may enable private creditors to jump ship, it shifts the burden onto the government – mainly to be borne by taxpayers. This requires governments to cut back spending, or to raise taxes to transfer income from taxpayers to bondholders.

That’s true at the state, county, and municipal level, where governments impose austerity in order to pay creditors. The system is insane. Or maybe this is the natural course of all empires. They are born, they grow, and they develop cancer, which kills them. Or else they are destroyed by war or some calamity.

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In the end, society must choose whether to save the economy at large, or to save bondholder and banking claims on the economy.

What would getting rid of the parasite entail? The Socialist Worker blog has a detailed explanation of how the banks should be reformed. I very lengthy but you can skim it if you’re in the mood.

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Finally, here’s a bit of macabre absurdity.

In an interview with Austrian newspaper Die Presse, Former U.S. Secretary of State Madeleine Albright defended her murder of half a million children, while calling Russian President Vladimir Putin, “a truly evil man.”

Madeleine Albright is tight with Hillary Clinton. (“We came, we saw, he died.”)

Albright