How 'bout we just lay out the facts on this one.
1. America's most profitable multi-nationals have $1.4 TRILLION (that they're admitting to - there is most likely scads more) sitting offshore in tax havens from Ireland to the Caymans.
2. These companies (mainly tech and pharmaceutical companies, including Google, Apple, Cisco Systems, Merck, etc.) would like to "repatriate" this money. This means, they'd like to bring it into the United States.
3. The companies have banded together as the "Win America Coalition" and hired 160 lobbyists to convince congress to give them a one time "Tax Holiday" so that they may bring this money into the U.S. at a 5% rate of taxation instead of the 35% the law currently says they will have to pay.
4. The Win America Coalition has recruited top economists, including UC Berkeley Professor Laura Tyson, a former Clinton administration economist, and Douglas Holtz-Eakin, past director of the Congressional Budget Office and adviser to McCain during his 2008 presidential run, to show Senators and Members of Congress how a tax holiday would inject hundreds of billions of dollars into the economy and create jobs. (Carolyn Lockhhead - SF Chronicle 10.15.11)
5. Senators John McCain (R-AZ) and Kay Hagan (D-SC) have introduced the "Foreign Earnings Reinvestment Act", sponsored by, among others, our own Barbara Boxer. The McCain/Hagans position paper on the bill bemoans the fact that this poor, unfortunate money is "trapped" in offshore banks, shell companies, and tax havens.
6. These "Win America" tax dodgers are the same companies that received the "Boxer Tax Holiday" (Go Barb!) in 2004, which coincidentally dropped their effective tax rates on repatriated money to the very same 5% they are asking for today and "gifted" them $315 BILLION (17% of Total US 2004 Tax Revenue). So it's not really a one time thing, more like a two times in 7 years thing.
7. Independent tax analysts have widely panned the idea. Numerous academic studies of the 2004 tax holiday showed that the companies spent most of the money they brought back on shareholder dividends, stock buybacks and executive pay. (ibid)
8. Interest groups as disparate as the conservative Heritage Foundation and the liberal Citizens for Tax Justice strongly oppose another tax holiday, in part because of evidence that the last one encouraged multinationals to SEND more of their earnings overseas, in anticipation of another tax holiday. (ibid) This means that a lot of this money is actually domestic profits that have been DEPATRIATED through tax evasions such as the "Double Irish" and the "Dutch Sandwich".
9. Senator Carl Levin published a study this week, which shows that companies receiving the 2004 Tax Holiday actually eliminated over 20,000 U.S. jobs between 2004 & 2007. For those of you who don't remember, that was when the economy was "good".
10. The difference in tax revenue to the federal government between the 35% tax rate currently required by law and the 5% tax rate sought by the "Win America Coalition" (lord), is $416 BILLION.
11. The total federal tax revenue for the U.S. in 2010 was $2.3 TRILLION, which means that "Win America" wants the federal government to gift them monies that would represent an 18% addition to total tax revenue collected in 2010.
12. The total federal deficit for 2011 is $1.3 TRILLION, which means that "Win America" wants the federal government to gift them monies that if collected would cut 32% off the 2011 federal deficit.
13. The fact that this money is only now being brought forward means that our national accounting systems and the figures they produce, Gross National Product, for example, are pretty much meaningless. For example, our 2010 Gross National Product, which includes the foreign revenue of domestic corporations was actually LESS than our Gross Domestic Product, which doesn't include foreign revenue (15.27 TRILLION to $15.35 TRILLION)!
If we can't trust that our most basic barometers of economic performance are accurate, then what are we to make of the decisions being made on the basis of those barometers?
The inequities and loopholes in our tax system have created this ridiculous scenario. We've got to pretty much toss that thing and start from scratch, but for now, let's send these home-grown, double-reverse carpetbaggers a loud and lusty "Oh HELL no!"
This bill is still in committee. The only petition we can find is one asking Apple Computer to "Think Responsibly" and end it's involvement in this lobbying effort. As the bill nears a vote, we will post links.
Friday, December 16, 2011
Monday, December 5, 2011
Part 4 - PSYCHE!
In case you missed the latest chapter in the Obamacare saga, it is a doozy.
We all sighed and moaned when the sketches of the particulars were released after the bill was signed into law. Having to buy private insurance. Having to? That's was the answer? We all expected some concessions to the insurance industry, but this was ridiculous.
What wasn't included in those sketches, perhaps intentionally, perhaps not, was a provision that the insurance companies spend at least 80% of their premium revenue from individual plans and 85% of premium revenue from large group policies on medical expenses.
This week, the government defined what could be classified as a "medical expense". Insurers wished to remove commissions paid to salespeople from the equation altogether. The Department of Health and Human Services this week issued its ruling on how the insurers must account for their expenses, and sales commissions will be classified as administrative costs and will count against the 15% or 20% of non-medical expenses allowed under the bill.
Mr. Rick Unger immediately published an article in Forbes calling this ruling the death knell for the for profit insurance industry as the level of profit that would result from this new metric would not be enough to sustain the interest of shareholders and officers of the big insurance companies. Then, Sara Kliff published an article at the Washington Post questioning Mr. Unger's conclusions. Then, Mr. Unger published another article saying "Nuh UHH!" LOVE this stuff.
Whatever the outcome, this development, coming the same week the results of the Obama-engineered FIRST EVER audit of the Federal Reserve - you know, the one that discovered that $16 TRILLION in under the table cash payouts to all those banks and brokerages? - has got me thinking maybe I ought not to have been impuning Mr. Obama's testicles quite so vehemently over the past year. Cat may actually have some moves!
We'll see....
We all sighed and moaned when the sketches of the particulars were released after the bill was signed into law. Having to buy private insurance. Having to? That's was the answer? We all expected some concessions to the insurance industry, but this was ridiculous.
What wasn't included in those sketches, perhaps intentionally, perhaps not, was a provision that the insurance companies spend at least 80% of their premium revenue from individual plans and 85% of premium revenue from large group policies on medical expenses.
This week, the government defined what could be classified as a "medical expense". Insurers wished to remove commissions paid to salespeople from the equation altogether. The Department of Health and Human Services this week issued its ruling on how the insurers must account for their expenses, and sales commissions will be classified as administrative costs and will count against the 15% or 20% of non-medical expenses allowed under the bill.
Mr. Rick Unger immediately published an article in Forbes calling this ruling the death knell for the for profit insurance industry as the level of profit that would result from this new metric would not be enough to sustain the interest of shareholders and officers of the big insurance companies. Then, Sara Kliff published an article at the Washington Post questioning Mr. Unger's conclusions. Then, Mr. Unger published another article saying "Nuh UHH!" LOVE this stuff.
Whatever the outcome, this development, coming the same week the results of the Obama-engineered FIRST EVER audit of the Federal Reserve - you know, the one that discovered that $16 TRILLION in under the table cash payouts to all those banks and brokerages? - has got me thinking maybe I ought not to have been impuning Mr. Obama's testicles quite so vehemently over the past year. Cat may actually have some moves!
We'll see....
Part 3 - SINGING BACKUP TO THE SUPREMES
We've been beating this drum for a while.
There is no precedent in American history which gives the Supreme Court final say on Constitutional issues. This is a 200-year-old Fedralist argument which has been repeatedly rejected by every branch of government INCLUDING the Supreme Court since the days of Jefferson and Burr. Still somehow today we find ourselves throwing our hands up in resignation as the current court issues blatantly biased ruling after ruling.
Here's an extremely important read from Larry Kramer, the dean of the Stanford Law School on this development, and what the Constitution and the settled law really say on the subject.
The idea of the other branches of government and/or the people taking on the Supremes is a time-honored one. Teddy Roosevelt and FDR famously, and successfully, did it last century. The most famous, and aggressive assault on a Supreme Court and their image of themselves as a sovereign entity, though, is Abraham Lincoln's speech on the Dred Scot decision by Chief Justice Taney's court which ruled that escaped slaves could not claim freedom by moving to free states, that they must still be considered the property of the slave owners from which they had escaped, and in fact did not even have standing to use the courts to sue for their freedom.
The speech follows in it's entirety below. I think it's time that Mr. Obama made one of these regarding the recent Supreme Court decisions on the 2000 Presidential vote in Florida, on the anti-lobbying legislation passed by Congress, and by the campaign finance regulations they struck down in Citizen United vs. The Federal Election Commission.
President Obama, as our first African-American president is the first Commander-in-Chief who could actually reference slavery or any of the arguments made against it in comparison to any other problem in America without worrying about being lambasted for it.
Remember that President Lincoln is going after not only his vanquished opponent, Stephen Douglas with this speech, but also against a sitting Supreme Court It's a textbook example of how to rip someone a new one using logic, poetry, conviction, B**LS, and his own arguments.
Also, Don't be confused by this quote:
There is no precedent in American history which gives the Supreme Court final say on Constitutional issues. This is a 200-year-old Fedralist argument which has been repeatedly rejected by every branch of government INCLUDING the Supreme Court since the days of Jefferson and Burr. Still somehow today we find ourselves throwing our hands up in resignation as the current court issues blatantly biased ruling after ruling.
Here's an extremely important read from Larry Kramer, the dean of the Stanford Law School on this development, and what the Constitution and the settled law really say on the subject.
The idea of the other branches of government and/or the people taking on the Supremes is a time-honored one. Teddy Roosevelt and FDR famously, and successfully, did it last century. The most famous, and aggressive assault on a Supreme Court and their image of themselves as a sovereign entity, though, is Abraham Lincoln's speech on the Dred Scot decision by Chief Justice Taney's court which ruled that escaped slaves could not claim freedom by moving to free states, that they must still be considered the property of the slave owners from which they had escaped, and in fact did not even have standing to use the courts to sue for their freedom.
The speech follows in it's entirety below. I think it's time that Mr. Obama made one of these regarding the recent Supreme Court decisions on the 2000 Presidential vote in Florida, on the anti-lobbying legislation passed by Congress, and by the campaign finance regulations they struck down in Citizen United vs. The Federal Election Commission.
President Obama, as our first African-American president is the first Commander-in-Chief who could actually reference slavery or any of the arguments made against it in comparison to any other problem in America without worrying about being lambasted for it.
Remember that President Lincoln is going after not only his vanquished opponent, Stephen Douglas with this speech, but also against a sitting Supreme Court It's a textbook example of how to rip someone a new one using logic, poetry, conviction, B**LS, and his own arguments.
Also, Don't be confused by this quote:
"We believe, as much as Judge Douglas, (perhaps more) in obedience to, and respect for the judicial department of government. We think its decisions on Constitutional questions, when fully settled, should control, not only the particular cases decided, but the general policy of the country, subject to be disturbed only by amendments of the Constitution as provided in that instrument itself."
By "settled" he means that the rulings have gone around the circuits and no one has screamed bloody murder, and there have been no POPULAR UPRISINGS, ect. Citizens United and all the freedoms granted and corporations ownership since 1980 are most definitely NOT even remotely well-settled, not to mention the The Fed's dumping $16 trillion down the gullet of the credit-swap beast to cover about 30 acres of fat banker ass.
Ladies and gentlemen, Mr. Abraham Lincoln:
I am here tonight, partly by the invitation of some of you and partly by my own inclination. Two weeks ago Judge Douglas spoke here on the several subjects of Kansas, the Dred Scott decision and Utah. I listened to the speech at the time, and have read the report of it since. It was intended to controvert opinions which I think just, and to assail (politically, not personally,) those men who, in common with me, entertain those opinions. For this reason I wished then, and still wish, to make some answer to it, which I now take the opportunity of doing
And now as to the Dred Scott decision. That decision declares two propositions—first, that a negro cannot sue in the U.S. Courts; and secondly, that Congress cannot prohibit slavery in the Territories. It was made by a divided court, dividing differently on the different points. Judge Douglas does not discuss the merits of the decision and, in that respect, I shall follow his example believing I could no more improve on McLean and Curtis, than he could on Taney.
He denounces all who question the correctness of that decision, as offering violent resistance to it. But who resists it? Who has, in spite of the decision, declared Dred Scott free and resisted the authority of his master over him?
Judicial decisions have two uses: First, to absolutely determine the case decided and secondly, to indicate to the public how other similar cases will be decided when they arise. For the latter use they are called "precedents" and "authorities."
We believe, as much as Judge Douglas, (perhaps more) in obedience to and respect for the judicial department of government. We think its decisions on Constitutional questions, when fully settled, should control not only the particular cases decided but the general policy of the country subject to be disturbed only by amendments of the Constitution as provided in that instrument itself. More than this would be revolution. But we think the Dred Scott decision is erroneous. We know the court that made it has often over-ruled its own decisions and we shall do what we can to have it to over-rule this. We offer no resistance to it.
I have said, in substance, that the Dred Scott decision was, in part, based on assumed historical facts which were not really true and I ought not to leave the subject without giving some reasons for saying this. I therefore give an instance or two, which I think fully sustain me. Chief Justice Taney, in delivering the opinion of the majority of the Court, insists at great length that negroes were no part of the people who made, or for whom was made, the Declaration of Independence, or the Constitution of the United States.
On the contrary, Judge Curtis, in his dissenting opinion, shows that in five of the then thirteen states, to wit, New Hampshire, Massachusetts, New York, New Jersey and North Carolina, free negroes were voters and, in proportion to their numbers, had the same part in making the Constitution that the white people had. He shows this with so much particularity as to leave no doubt of its truth; and, as a sort of conclusion on that point, holds the following language:
In those days, by common consent, the spread of the black man’s bondage to new countries was prohibited but now Congress decides that it will not continue the prohibition and the Supreme Court decides that it could not if it would. In those days our Declaration of Independence was held sacred by all, and thought to include all but now, to aid in making the bondage of the negro universal and eternal, it is assailed and sneered at and construed and hawked at, and torn, 'til if its framers could rise from their graves they could not at all recognize it. All the powers of earth seem rapidly combining against him. Mammon is after him; ambition follows, and philosophy follows, and the Theology of the day is fast joining the cry. They have him in his prison house; they have searched his person, and left no prying instrument with him. One after another they have closed the heavy iron doors upon him, and now they have him, as it were, bolted in with a lock of a hundred keys, which can never be unlocked without the concurrent of every key; the keys in the hands of a hundred different men, and they scattered to a hundred different and distant places; and they stand musing as to what invention, in all the dominions of mind and matter, can be produced to make the impossibility of his escape more complete than it is.
It is grossly incorrect to say or assume, that the public estimate of the negro is more favorable now than it was at the origin of the government.
Three years and a half ago, Judge Douglas brought forward his famous Nebraska bill. The country was at once in a blaze. He scorned all opposition, and carried it through Congress. Since then he has seen himself superseded in a Presidential nomination, by one indorsing the general doctrine of his measure, but at the same time standing clear of the odium of its untimely agitation and its gross breach of national faith and he has seen that successful rival Constitutionally elected not by the strength of friends but by the division of adversaries, being in a popular minority of nearly four hundred thousand votes. He has seen his chief aids in his own State, Shields and Richardson, politically speaking, successively tried, convicted and executed for an offense not their own, but his. And now he sees his own case standing next on the docket for trial.
There is a natural disgust in the minds of nearly all white people, to the idea of an indiscriminate amalgamation of the white and black races and Judge Douglas evidently is basing his chief hope, upon the chances of being able to appropriate the benefit of this disgust to himself. If he can, by much drumming and repeating, fasten the odium of that idea upon his adversaries, he thinks he can struggle through the storm. He therefore clings to this hope as a drowning man to the last plank. He makes an occasion for lugging it in from the opposition to the Dred Scott decision. He finds the Republicans insisting that the Declaration of Independence includes ALL men, black as well as white and forthwith he boldly denies that it includes negroes at all and proceeds to argue gravely that all who contend it does do so only because they want to vote and eat and sleep and marry with negroes! He will have it that they cannot be consistent else. Now I protest against that counterfeit logic which concludes that, because I do not want a black woman for a slave I must necessarily want her for a wife. I need not have her for either, I can just leave her alone. In some respects she certainly is not my equal; but in her natural right to eat the bread she earns with her own hands without asking leave of any one else, she is my equal and the equal of all others.
Chief Justice Taney, in his opinion in the Dred Scott case, admits that the language of the Declaration is broad enough to include the whole human family, but he and Judge Douglas argue that the authors of that instrument did not intend to include negroes, by the fact that they did not at once actually place them on an equality with the whites. Now this grave argument comes to just nothing at all by the other fact that they did not at once, or ever afterwards, actually place all white people on an equality with one or another. And this is the staple argument of both the Chief Justice and the Senator for doing this obvious violence to the plain unmistakable language of the Declaration.
I think the authors of that notable instrument intended to include all men but they did not intend to declare all men equal in all respects. They did not mean to say all were equal in color, size, intellect, moral developments or social capacity. They defined with tolerable distinctness, in what respects they did consider all men created equal—equal in "certain inalienable rights, among which are life, liberty, and the pursuit of happiness." This they said, and this meant. They did not mean to assert the obvious untruth, that all were then actually enjoying that equality, nor yet, that they were about to confer it immediately upon them. In fact they had no power to confer such a boon. They meant simply to declare the right, so that the enforcement of it might follow as fast as circumstances should permit. They meant to set up a standard maxim for free society, which should be familiar to all, and revered by all; constantly looked to, constantly labored for, and even though never perfectly attained, constantly approximated, and thereby constantly spreading and deepening its influence, and augmenting the happiness and value of life to all people of all colors everywhere.
The assertion that "all men are created equal" was of no practical use in effecting our separation from Great Britain; and it was placed in the Declaration, not for that, but for future use. Its authors meant it to be, thank God, it is now proving itself a stumbling block to those who in after times might seek to turn a free people back into the hateful paths of despotism. They knew the proneness of prosperity to breed tyrants and they meant when such should re-appear in this fair land and commence their vocation they should find left for them at least one hard nut to crack.
I have now briefly expressed my view of the meaning and objects of that part of the Declaration of Independence which declares that "all men are created equal."
Now let us hear Judge Douglas’ view of the same subject, as I find it in the printed report of his late speech. Here it is:
"They were speaking of British subjects on this continent being equal to British subjects born and residing in Great Britain!" Why, according to this, not only negroes but white people outside of Great Britain and America are not spoken of in that instrument. The English, Irish and Scotch, along with white Americans, were included, to be sure, but the French, Germans and other white people of the world are all gone to pot along with the Judge’s inferior races.
I had thought the Declaration promised something better than the condition of British subjects but, no, it only meant that we should be equal to them in their own oppressed and unequal condition. According to that, it gave no promise that having kicked off the King and Lords of Great Britain we should not at once be saddled with a King and Lords of our own.
I had thought the Declaration contemplated the progressive improvement in the condition of all men everywhere but, no, it merely "was adopted for the purpose of justifying the colonists in the eyes of the civilized world in withdrawing their allegiance from the British crown and dissolving their connection with the mother country." Why, that object having been effected some eighty years ago, the Declaration is of no practical use now—mere rubbish—old wadding left to rot on the battle-field after the victory is won.
I understand you are preparing to celebrate the "Fourth" tomorrow week. What for? The doings of that day had no reference to the present and quite half of you are not even descendants of those who were referred to at that day. But I suppose you will celebrate and will even go so far as to read the Declaration. Suppose after you read it once in the old fashioned way you read it once more with Judge Douglas’ version. It will then run thus: "We hold these truths to be self-evident that all British subjects who were on this continent eighty-one years ago were created equal to all British subjects born and then residing in Great Britain."
And now I appeal to all Democrats as well as others; are you really willing that the Declaration shall be thus frittered away, thus left no more at most, than an interesting memorial of the dead past, thus shorn of its vitality, and practical value; and left without the germ or even the suggestion of the individual rights of man in it?
But Judge Douglas is especially horrified at the thought of the mixing blood by the white and black races: agreed for once—a thousand times agreed. There are white men enough to marry all the white women, and black men enough to marry all the black women; and so let them be married. On this point we fully agree with the Judge; and when he shall show that his policy is better adapted to prevent amalgamation than ours we shall drop ours, and adopt his. Let us see. In 1850 there were in the United States, 405,751, mulattoes. Very few of these are the offspring of whites and free blacks; nearly all have sprung from black slaves and white masters. A separation of the races is the only perfect preventive of amalgamation but as all immediate separation is impossible the next best thing is to keep them apart where they are not already together.
If white and black people never get together in Kansas, they will never mix blood in Kansas. That is at least one self-evident truth. A few free colored persons may get into the free States, in any event; but their number is too insignificant to amount to much in the way of mixing blood. In 1850 there were in the free states, 56,649 mulattoes; but for the most part they were not born there—they came from the slave States, ready made up. In the same year the slave States had 348,874 mulattoes all of home production. The proportion of free mulattoes to free blacks—the only colored classes in the free states—is much greater in the slave than in the free states. It is worthy of note too, that among the free states those which make the colored man the nearest to equal the white, have, proportionally the fewest mulattoes the least of amalgamation. In New Hampshire, the State which goes farthest towards equality between the races, there are just 184 Mulattoes while there are in Virginia—how many do you think? 79,775, being 23,126 more than in all the free States together.
These statistics show that slavery is the greatest source of amalgamation; and next to it, not the elevation, but the degeneration of the free blacks. Yet Judge Douglas dreads the slightest restraints on the spread of slavery, and the slightest human recognition of the negro, as tending horribly to amalgamation.
This very Dred Scott case affords a strong test as to which party most favors amalgamation, the Republicans or the dear union-saving Democracy. Dred Scott, his wife and two daughters were all involved in the suit. We desired the court to have held that they were citizens so far at least as to entitle them to a hearing as to whether they were free or not; and then, also, that they were in fact and in law really free. Could we have had our way, the chances of these black girls, ever mixing their blood with that of white people, would have been diminished at least to the extent that it could not have been without their consent. But Judge Douglas is delighted to have them decided to be slaves, and not human enough to have a hearing, even if they were free, and thus left subject to the forced concubinage of their masters, and liable to become the mothers of mulattoes in spite of themselves—the very state of case that produces nine tenths of all the mulattoes—all the mixing of blood in the nation.
Of course, I state this case as an illustration only, not meaning to say or intimate that the master of Dred Scott and his family, or any more than a per centage of masters generally, are inclined to exercise this particular power which they hold over their female slaves.
I have said that the separation of the races is the only perfect preventive of amalgamation. I have no right to say all the members of the Republican party are in favor of this, nor to say that as a party they are in favor of it. There is nothing in their platform directly on the subject. But I can say a very large proportion of its members are for it, and that the chief plank in their platform—opposition to the spread of slavery—is most favorable to that separation.
Such separation, if ever effected at all, must be effected by colonization; and no political party, as such, is now doing anything directly for colonization. Party operations at present only favor or retard colonization incidentally. The enterprise is a difficult one; but "when there is a will there is a way;" and what colonization needs most is a hearty will. Will springs from the two elements of moral sense and self-interest. Let us be brought to believe it is morally right, and, at the same time, favorable to, or, at least, not against, our interest, to transfer the African to his native clime, and we shall find a way to do it, however great the task may be. The children of Israel, to such numbers as to include four hundred thousand fighting men, went out of Egyptian bondage in a body.
How differently the respective courses of the Democratic and Republican parties incidentally bear on the question of forming a will—a public sentiment—for colonization, is easy to see. The Republicans inculcate, with whatever of ability—they can, that the negro is a man; that his bondage is cruelly wrong, and that the field of his oppression ought not to be enlarged.
The Democrats deny his manhood; deny, or dwarf to insignificance, the wrong of his bondage; so far as possible, crush all sympathy for him, and cultivate and excite hatred and disgust against him; compliment themselves as Union-savers for doing so; and call the indefinite outspreading of his bondage "a sacred right of self-government."
The plainest print cannot be read through a gold eagle; and it will be ever hard to find many men who will send a slave to Liberia, and pay his passage while they can send him to a new country, Kansas for instance, and sell him for fifteen hundred dollars, and the rise.
Next - Part 4 - PSYCHE!
Ladies and gentlemen, Mr. Abraham Lincoln:
June 26, 1857
Fellow citizens,I am here tonight, partly by the invitation of some of you and partly by my own inclination. Two weeks ago Judge Douglas spoke here on the several subjects of Kansas, the Dred Scott decision and Utah. I listened to the speech at the time, and have read the report of it since. It was intended to controvert opinions which I think just, and to assail (politically, not personally,) those men who, in common with me, entertain those opinions. For this reason I wished then, and still wish, to make some answer to it, which I now take the opportunity of doing
And now as to the Dred Scott decision. That decision declares two propositions—first, that a negro cannot sue in the U.S. Courts; and secondly, that Congress cannot prohibit slavery in the Territories. It was made by a divided court, dividing differently on the different points. Judge Douglas does not discuss the merits of the decision and, in that respect, I shall follow his example believing I could no more improve on McLean and Curtis, than he could on Taney.
He denounces all who question the correctness of that decision, as offering violent resistance to it. But who resists it? Who has, in spite of the decision, declared Dred Scott free and resisted the authority of his master over him?
Judicial decisions have two uses: First, to absolutely determine the case decided and secondly, to indicate to the public how other similar cases will be decided when they arise. For the latter use they are called "precedents" and "authorities."
We believe, as much as Judge Douglas, (perhaps more) in obedience to and respect for the judicial department of government. We think its decisions on Constitutional questions, when fully settled, should control not only the particular cases decided but the general policy of the country subject to be disturbed only by amendments of the Constitution as provided in that instrument itself. More than this would be revolution. But we think the Dred Scott decision is erroneous. We know the court that made it has often over-ruled its own decisions and we shall do what we can to have it to over-rule this. We offer no resistance to it.
I have said, in substance, that the Dred Scott decision was, in part, based on assumed historical facts which were not really true and I ought not to leave the subject without giving some reasons for saying this. I therefore give an instance or two, which I think fully sustain me. Chief Justice Taney, in delivering the opinion of the majority of the Court, insists at great length that negroes were no part of the people who made, or for whom was made, the Declaration of Independence, or the Constitution of the United States.
On the contrary, Judge Curtis, in his dissenting opinion, shows that in five of the then thirteen states, to wit, New Hampshire, Massachusetts, New York, New Jersey and North Carolina, free negroes were voters and, in proportion to their numbers, had the same part in making the Constitution that the white people had. He shows this with so much particularity as to leave no doubt of its truth; and, as a sort of conclusion on that point, holds the following language:
"The Constitution was ordained and established by the people of the United States, through the action, in each State, of those persons who were qualified by its laws to act thereon in behalf of themselves and all other citizens of the State. In some of the States, as we have seen, colored persons were among those qualified by law to act on the subject. These colored persons were not only included in the body of ‘the people of the United States,’ by whom the Constitution was ordained and established; but in at least five of the States they had the power to act and, doubtless, did act by their suffrages upon the question of its adoption."Again, Chief Justice Taney says:
"It is difficult, at this day, to realize the state of public opinion in relation to that unfortunate race, which prevailed in the civilized and enlightened portions of the world at the time of the Declaration of Independence and when the Constitution of the United States was framed and adopted."And again, after quoting from the Declaration, he says:
"The general words above quoted would seem to include the whole human family, and if they were used in a similar instrument at this day, would be so understood."In these the Chief Justice does not directly assert but plainly assumes,as a fact that the public estimate of the black man is more favorable now than it was in the days of the Revolution. This assumption is a mistake. In some trifling particulars, the condition of that race has been ameliorated but, as a whole, in this country, the change between then and now is decidedly the other way and their ultimate destiny has never appeared so hopeless as in the last three or four years. In two of the five States, New Jersey and North Carolina, that then gave the free negro the right of voting, the right has since been taken away and in a third, New York, it has been greatly abridged, while it has not been extended, so far as I know, to a single additional State, though the number of the States has more than doubled. In those days, as I understand, masters could, at their own pleasure, emancipate their slaves but since then, such legal restraints have been made upon emancipation, as to amount almost to prohibition. In those days, Legislatures held the unquestioned power to abolish slavery, in their respective States but now it is becoming quite fashionable for State Constitutions to withhold that power from the Legislatures.
In those days, by common consent, the spread of the black man’s bondage to new countries was prohibited but now Congress decides that it will not continue the prohibition and the Supreme Court decides that it could not if it would. In those days our Declaration of Independence was held sacred by all, and thought to include all but now, to aid in making the bondage of the negro universal and eternal, it is assailed and sneered at and construed and hawked at, and torn, 'til if its framers could rise from their graves they could not at all recognize it. All the powers of earth seem rapidly combining against him. Mammon is after him; ambition follows, and philosophy follows, and the Theology of the day is fast joining the cry. They have him in his prison house; they have searched his person, and left no prying instrument with him. One after another they have closed the heavy iron doors upon him, and now they have him, as it were, bolted in with a lock of a hundred keys, which can never be unlocked without the concurrent of every key; the keys in the hands of a hundred different men, and they scattered to a hundred different and distant places; and they stand musing as to what invention, in all the dominions of mind and matter, can be produced to make the impossibility of his escape more complete than it is.
It is grossly incorrect to say or assume, that the public estimate of the negro is more favorable now than it was at the origin of the government.
Three years and a half ago, Judge Douglas brought forward his famous Nebraska bill. The country was at once in a blaze. He scorned all opposition, and carried it through Congress. Since then he has seen himself superseded in a Presidential nomination, by one indorsing the general doctrine of his measure, but at the same time standing clear of the odium of its untimely agitation and its gross breach of national faith and he has seen that successful rival Constitutionally elected not by the strength of friends but by the division of adversaries, being in a popular minority of nearly four hundred thousand votes. He has seen his chief aids in his own State, Shields and Richardson, politically speaking, successively tried, convicted and executed for an offense not their own, but his. And now he sees his own case standing next on the docket for trial.
There is a natural disgust in the minds of nearly all white people, to the idea of an indiscriminate amalgamation of the white and black races and Judge Douglas evidently is basing his chief hope, upon the chances of being able to appropriate the benefit of this disgust to himself. If he can, by much drumming and repeating, fasten the odium of that idea upon his adversaries, he thinks he can struggle through the storm. He therefore clings to this hope as a drowning man to the last plank. He makes an occasion for lugging it in from the opposition to the Dred Scott decision. He finds the Republicans insisting that the Declaration of Independence includes ALL men, black as well as white and forthwith he boldly denies that it includes negroes at all and proceeds to argue gravely that all who contend it does do so only because they want to vote and eat and sleep and marry with negroes! He will have it that they cannot be consistent else. Now I protest against that counterfeit logic which concludes that, because I do not want a black woman for a slave I must necessarily want her for a wife. I need not have her for either, I can just leave her alone. In some respects she certainly is not my equal; but in her natural right to eat the bread she earns with her own hands without asking leave of any one else, she is my equal and the equal of all others.
Chief Justice Taney, in his opinion in the Dred Scott case, admits that the language of the Declaration is broad enough to include the whole human family, but he and Judge Douglas argue that the authors of that instrument did not intend to include negroes, by the fact that they did not at once actually place them on an equality with the whites. Now this grave argument comes to just nothing at all by the other fact that they did not at once, or ever afterwards, actually place all white people on an equality with one or another. And this is the staple argument of both the Chief Justice and the Senator for doing this obvious violence to the plain unmistakable language of the Declaration.
I think the authors of that notable instrument intended to include all men but they did not intend to declare all men equal in all respects. They did not mean to say all were equal in color, size, intellect, moral developments or social capacity. They defined with tolerable distinctness, in what respects they did consider all men created equal—equal in "certain inalienable rights, among which are life, liberty, and the pursuit of happiness." This they said, and this meant. They did not mean to assert the obvious untruth, that all were then actually enjoying that equality, nor yet, that they were about to confer it immediately upon them. In fact they had no power to confer such a boon. They meant simply to declare the right, so that the enforcement of it might follow as fast as circumstances should permit. They meant to set up a standard maxim for free society, which should be familiar to all, and revered by all; constantly looked to, constantly labored for, and even though never perfectly attained, constantly approximated, and thereby constantly spreading and deepening its influence, and augmenting the happiness and value of life to all people of all colors everywhere.
The assertion that "all men are created equal" was of no practical use in effecting our separation from Great Britain; and it was placed in the Declaration, not for that, but for future use. Its authors meant it to be, thank God, it is now proving itself a stumbling block to those who in after times might seek to turn a free people back into the hateful paths of despotism. They knew the proneness of prosperity to breed tyrants and they meant when such should re-appear in this fair land and commence their vocation they should find left for them at least one hard nut to crack.
I have now briefly expressed my view of the meaning and objects of that part of the Declaration of Independence which declares that "all men are created equal."
Now let us hear Judge Douglas’ view of the same subject, as I find it in the printed report of his late speech. Here it is:
"No man can vindicate the character, motives and conduct of the signers of the Declaration of Independence, except upon the hypothesis that they referred to the white race alone, and not to the African, when they declared all men to have been created equal—that they were speaking of British subjects on this continent being equal to British subjects born and residing in Great Britain—that they were entitled to the same inalienable rights, and among them were enumerated life, liberty and the pursuit of happiness. The Declaration was adopted for the purpose of justifying the colonists in the eyes of the civilized world in withdrawing their allegiance from the British crown, and dissolving their connection with the mother country."My good friends, read that carefully over some leisure hour, and ponder well upon it. See what a mere wreck, mangled ruin, it makes of our once glorious Declaration.
"They were speaking of British subjects on this continent being equal to British subjects born and residing in Great Britain!" Why, according to this, not only negroes but white people outside of Great Britain and America are not spoken of in that instrument. The English, Irish and Scotch, along with white Americans, were included, to be sure, but the French, Germans and other white people of the world are all gone to pot along with the Judge’s inferior races.
I had thought the Declaration promised something better than the condition of British subjects but, no, it only meant that we should be equal to them in their own oppressed and unequal condition. According to that, it gave no promise that having kicked off the King and Lords of Great Britain we should not at once be saddled with a King and Lords of our own.
I had thought the Declaration contemplated the progressive improvement in the condition of all men everywhere but, no, it merely "was adopted for the purpose of justifying the colonists in the eyes of the civilized world in withdrawing their allegiance from the British crown and dissolving their connection with the mother country." Why, that object having been effected some eighty years ago, the Declaration is of no practical use now—mere rubbish—old wadding left to rot on the battle-field after the victory is won.
I understand you are preparing to celebrate the "Fourth" tomorrow week. What for? The doings of that day had no reference to the present and quite half of you are not even descendants of those who were referred to at that day. But I suppose you will celebrate and will even go so far as to read the Declaration. Suppose after you read it once in the old fashioned way you read it once more with Judge Douglas’ version. It will then run thus: "We hold these truths to be self-evident that all British subjects who were on this continent eighty-one years ago were created equal to all British subjects born and then residing in Great Britain."
And now I appeal to all Democrats as well as others; are you really willing that the Declaration shall be thus frittered away, thus left no more at most, than an interesting memorial of the dead past, thus shorn of its vitality, and practical value; and left without the germ or even the suggestion of the individual rights of man in it?
But Judge Douglas is especially horrified at the thought of the mixing blood by the white and black races: agreed for once—a thousand times agreed. There are white men enough to marry all the white women, and black men enough to marry all the black women; and so let them be married. On this point we fully agree with the Judge; and when he shall show that his policy is better adapted to prevent amalgamation than ours we shall drop ours, and adopt his. Let us see. In 1850 there were in the United States, 405,751, mulattoes. Very few of these are the offspring of whites and free blacks; nearly all have sprung from black slaves and white masters. A separation of the races is the only perfect preventive of amalgamation but as all immediate separation is impossible the next best thing is to keep them apart where they are not already together.
If white and black people never get together in Kansas, they will never mix blood in Kansas. That is at least one self-evident truth. A few free colored persons may get into the free States, in any event; but their number is too insignificant to amount to much in the way of mixing blood. In 1850 there were in the free states, 56,649 mulattoes; but for the most part they were not born there—they came from the slave States, ready made up. In the same year the slave States had 348,874 mulattoes all of home production. The proportion of free mulattoes to free blacks—the only colored classes in the free states—is much greater in the slave than in the free states. It is worthy of note too, that among the free states those which make the colored man the nearest to equal the white, have, proportionally the fewest mulattoes the least of amalgamation. In New Hampshire, the State which goes farthest towards equality between the races, there are just 184 Mulattoes while there are in Virginia—how many do you think? 79,775, being 23,126 more than in all the free States together.
These statistics show that slavery is the greatest source of amalgamation; and next to it, not the elevation, but the degeneration of the free blacks. Yet Judge Douglas dreads the slightest restraints on the spread of slavery, and the slightest human recognition of the negro, as tending horribly to amalgamation.
This very Dred Scott case affords a strong test as to which party most favors amalgamation, the Republicans or the dear union-saving Democracy. Dred Scott, his wife and two daughters were all involved in the suit. We desired the court to have held that they were citizens so far at least as to entitle them to a hearing as to whether they were free or not; and then, also, that they were in fact and in law really free. Could we have had our way, the chances of these black girls, ever mixing their blood with that of white people, would have been diminished at least to the extent that it could not have been without their consent. But Judge Douglas is delighted to have them decided to be slaves, and not human enough to have a hearing, even if they were free, and thus left subject to the forced concubinage of their masters, and liable to become the mothers of mulattoes in spite of themselves—the very state of case that produces nine tenths of all the mulattoes—all the mixing of blood in the nation.
Of course, I state this case as an illustration only, not meaning to say or intimate that the master of Dred Scott and his family, or any more than a per centage of masters generally, are inclined to exercise this particular power which they hold over their female slaves.
I have said that the separation of the races is the only perfect preventive of amalgamation. I have no right to say all the members of the Republican party are in favor of this, nor to say that as a party they are in favor of it. There is nothing in their platform directly on the subject. But I can say a very large proportion of its members are for it, and that the chief plank in their platform—opposition to the spread of slavery—is most favorable to that separation.
Such separation, if ever effected at all, must be effected by colonization; and no political party, as such, is now doing anything directly for colonization. Party operations at present only favor or retard colonization incidentally. The enterprise is a difficult one; but "when there is a will there is a way;" and what colonization needs most is a hearty will. Will springs from the two elements of moral sense and self-interest. Let us be brought to believe it is morally right, and, at the same time, favorable to, or, at least, not against, our interest, to transfer the African to his native clime, and we shall find a way to do it, however great the task may be. The children of Israel, to such numbers as to include four hundred thousand fighting men, went out of Egyptian bondage in a body.
How differently the respective courses of the Democratic and Republican parties incidentally bear on the question of forming a will—a public sentiment—for colonization, is easy to see. The Republicans inculcate, with whatever of ability—they can, that the negro is a man; that his bondage is cruelly wrong, and that the field of his oppression ought not to be enlarged.
The Democrats deny his manhood; deny, or dwarf to insignificance, the wrong of his bondage; so far as possible, crush all sympathy for him, and cultivate and excite hatred and disgust against him; compliment themselves as Union-savers for doing so; and call the indefinite outspreading of his bondage "a sacred right of self-government."
The plainest print cannot be read through a gold eagle; and it will be ever hard to find many men who will send a slave to Liberia, and pay his passage while they can send him to a new country, Kansas for instance, and sell him for fifteen hundred dollars, and the rise.
Next - Part 4 - PSYCHE!
Sunday, December 4, 2011
Part 2 - THE EVER-GROWING PIE-IN-THE-FACE
The current crisis in Europe is a direct harmonic of the American derivatives meltdown. The thinking in the big boardrooms and at The Fed, is that a corresponding meltdown in Europe would reverberate back here and deliver the coup de grace to our already gravely ill banking system.
Our current economic models are built around the assumption that there will always be more and more humans clamoring for less and less available and more and more valuable real estate. The moment that any part of that assumption becomes untrue, the entire structure begins destroying itself by cutting the flow of the short-term loans banks take from each other to fund the long-term loans they make to consumers.
There will be more and more humans each year, 75 million more, to be exact, but what almost all of them will be are clamoring for is not overpriced real estate. It's food, water and medicine.
The idea of the ever-growing-pie (perpetually expanding economies and infrastructures that will accommodate a perpetually expanding population) has been a boondoggle from the start. Perhaps a global meltdown of the very institutions that have benefitted from it most is what needs to happen to get the G7 talking about leveling off their populations, and achieving what John Stuart Mill postulated in 1848 would be a "Stationary State".
But, let's stay with the current situation for now. We'll have plenty of time to talk about reorganizing the economy after the apocalypse.
Increasing the leverage at which citizens could purchase property came to fruition under Ronald Reagan's deregulation of the financial industry in America, which was continued to a lesser extent by Bill Clinton, and then taken to the extreme under George W. Bush. This created a generation and a half of folks who, unwittingly, were as vulnerable as big banks to price reversals in the housing market.
Home "ownership" peaked in America at 69% of families in 2004 - the top of the housing bubble. At that point, the banks were literally pulling people off the street and giving them mortgages. One hairdresser in Las Vegas bought 19 homes. The main reason banks didn't see any downside to the sub prime mortgages they were hawking was that they thought that they had it written off.
Mortgage-backed Securities (Derivatives) are a "risk-management" tool that amalgamate risky loans, dampening the exposure to a few defaults by bundling them together by the thousands and writing securities against them. Ironically these "securities" actually magnified big banking's exposure to massive mortgage defaults. Still, they became globally accepted by banks and their regulatory agencies world-wide as justification for leveraging into more and more risky loans.
The special quality of leveraged instruments is that they require less capitalization to create a scenario in which, when you win using them, you win big, BUT THERE IS NO SUCH THING AS A TIE. By going "all in" on the leveraged sub-prime mortgage market, all the big U.S. investment banks created a situation whereby they were vulnerable not only to a downturn in housing prices, but where a simple leveling off was enough to break them.
Take a look at this chart. The blue line is the National Home Price Index. It's easy to see why they thought this would be a good idea.
From 1980 to 2005, a mere 25 years, with a slight leveling off in the Clinton years due to his decision to focus on adding more low-income transactions to the mix, which dampened the curve, the average US home went from a value of $75K to a value of over $500K, eerily, a 666% increase. 1900-1980 = 300%, 1980-2005 = 666%. It was a housing market on steroids and crack and EVERYBODY was making money. Until they werent.
The housing market indeed leveled off, and the brutal kiss of the derivatives killed Lehman Brothers (apparently not dead enough that they wouldn't receive $183 billion from The Fed during QE1, though) and put the rest of the banks in such a wringer that credit evaporated almost overnight. This caused the credit-fueled housing market to nose over and dive. The National Home Price index lost 30% of it's value by November 2008. If somebody didn't stop it, all the big banks would go down in flames in very short order.
Now check out the consolidation in the blue line at the extreme right. That is arguably the effect of QE1, then there was a big dip, then QE2 came on line in November 2008 and it's bottomed out for a minute. The conventional thinking says that the $16 Trillion the Fed splattered around actually caused banks worldwide to start loaning money again, and that liquidity is all that is currently standing between the international banking world and the abyss.
The current world-wide exposure of banks and governments to credit-swap derivatives is estimated at $1.5 QUADRILLION! That, boys and girls, is $1500 Trillion. Should another 30% blow off the top of the housing market that exposure is going to become a black hole for big banking and the highly-leveraged generation of homeowners who bought into the price explosion in housing over the last 30 years. At that point, Occupy Wall Street will morph suddenly into Occupy Your House.
On the bright side, If big banking is kaput, who will foreclose on the mortgages? If the recent $16 trillion dole from the Fed is an indicator, the first American corporations that'll lie bloating in the street like drowned Saints fans will be Citigroup, Morgan Stanley, Merrill Lynch, Bank of America, Bear Sterns, Goldman Sachs, JP Morgan Chase, and that zombie bank, still staggering through the streets of New York and Tokyo oozing toxic "assets" three years after it's death, Lehman Brothers.
The basis of the problem is simple. Countries around the world and their people, with very few exceptions have been spending more money than they are making for a very long time, and they have no way to pay back what they've borrowed in a slowing world economy.
The keystone event is also very simple. Some banks or some countries that very few imagined could, will go under, and the default of their credit swap derivatives will be triggered.
There are billions of these contracts on the books, but nobody seems to have a way to estimate how to value them for sale or trade, let alone what will happen if they're defaulted upon. The worst of it it is that all the banks worldwide have tangled themselves up together in these toxic assets, and can't figure out how to unwind them. This has accomplished the exact opposite of the risk diversification that was their "as advertised" reason for coming into being.
Here's a very illuminating video on the scope of the problem by Chris Martenson, who suggests transitioning into "tangible assets" like precious metals. It's possible to use his capitalization on these themes to color one's evaluation of what he says but you'll find him very sincere and immensely knowledgeable.
Next - SINGING BACKUP TO THE SUPREMES
Our current economic models are built around the assumption that there will always be more and more humans clamoring for less and less available and more and more valuable real estate. The moment that any part of that assumption becomes untrue, the entire structure begins destroying itself by cutting the flow of the short-term loans banks take from each other to fund the long-term loans they make to consumers.
There will be more and more humans each year, 75 million more, to be exact, but what almost all of them will be are clamoring for is not overpriced real estate. It's food, water and medicine.
The idea of the ever-growing-pie (perpetually expanding economies and infrastructures that will accommodate a perpetually expanding population) has been a boondoggle from the start. Perhaps a global meltdown of the very institutions that have benefitted from it most is what needs to happen to get the G7 talking about leveling off their populations, and achieving what John Stuart Mill postulated in 1848 would be a "Stationary State".
But, let's stay with the current situation for now. We'll have plenty of time to talk about reorganizing the economy after the apocalypse.
Increasing the leverage at which citizens could purchase property came to fruition under Ronald Reagan's deregulation of the financial industry in America, which was continued to a lesser extent by Bill Clinton, and then taken to the extreme under George W. Bush. This created a generation and a half of folks who, unwittingly, were as vulnerable as big banks to price reversals in the housing market.
Home "ownership" peaked in America at 69% of families in 2004 - the top of the housing bubble. At that point, the banks were literally pulling people off the street and giving them mortgages. One hairdresser in Las Vegas bought 19 homes. The main reason banks didn't see any downside to the sub prime mortgages they were hawking was that they thought that they had it written off.
Mortgage-backed Securities (Derivatives) are a "risk-management" tool that amalgamate risky loans, dampening the exposure to a few defaults by bundling them together by the thousands and writing securities against them. Ironically these "securities" actually magnified big banking's exposure to massive mortgage defaults. Still, they became globally accepted by banks and their regulatory agencies world-wide as justification for leveraging into more and more risky loans.
The special quality of leveraged instruments is that they require less capitalization to create a scenario in which, when you win using them, you win big, BUT THERE IS NO SUCH THING AS A TIE. By going "all in" on the leveraged sub-prime mortgage market, all the big U.S. investment banks created a situation whereby they were vulnerable not only to a downturn in housing prices, but where a simple leveling off was enough to break them.
Take a look at this chart. The blue line is the National Home Price Index. It's easy to see why they thought this would be a good idea.
From 1980 to 2005, a mere 25 years, with a slight leveling off in the Clinton years due to his decision to focus on adding more low-income transactions to the mix, which dampened the curve, the average US home went from a value of $75K to a value of over $500K, eerily, a 666% increase. 1900-1980 = 300%, 1980-2005 = 666%. It was a housing market on steroids and crack and EVERYBODY was making money. Until they werent.
The housing market indeed leveled off, and the brutal kiss of the derivatives killed Lehman Brothers (apparently not dead enough that they wouldn't receive $183 billion from The Fed during QE1, though) and put the rest of the banks in such a wringer that credit evaporated almost overnight. This caused the credit-fueled housing market to nose over and dive. The National Home Price index lost 30% of it's value by November 2008. If somebody didn't stop it, all the big banks would go down in flames in very short order.
Now check out the consolidation in the blue line at the extreme right. That is arguably the effect of QE1, then there was a big dip, then QE2 came on line in November 2008 and it's bottomed out for a minute. The conventional thinking says that the $16 Trillion the Fed splattered around actually caused banks worldwide to start loaning money again, and that liquidity is all that is currently standing between the international banking world and the abyss.
The current world-wide exposure of banks and governments to credit-swap derivatives is estimated at $1.5 QUADRILLION! That, boys and girls, is $1500 Trillion. Should another 30% blow off the top of the housing market that exposure is going to become a black hole for big banking and the highly-leveraged generation of homeowners who bought into the price explosion in housing over the last 30 years. At that point, Occupy Wall Street will morph suddenly into Occupy Your House.
On the bright side, If big banking is kaput, who will foreclose on the mortgages? If the recent $16 trillion dole from the Fed is an indicator, the first American corporations that'll lie bloating in the street like drowned Saints fans will be Citigroup, Morgan Stanley, Merrill Lynch, Bank of America, Bear Sterns, Goldman Sachs, JP Morgan Chase, and that zombie bank, still staggering through the streets of New York and Tokyo oozing toxic "assets" three years after it's death, Lehman Brothers.
The basis of the problem is simple. Countries around the world and their people, with very few exceptions have been spending more money than they are making for a very long time, and they have no way to pay back what they've borrowed in a slowing world economy.
The keystone event is also very simple. Some banks or some countries that very few imagined could, will go under, and the default of their credit swap derivatives will be triggered.
There are billions of these contracts on the books, but nobody seems to have a way to estimate how to value them for sale or trade, let alone what will happen if they're defaulted upon. The worst of it it is that all the banks worldwide have tangled themselves up together in these toxic assets, and can't figure out how to unwind them. This has accomplished the exact opposite of the risk diversification that was their "as advertised" reason for coming into being.
Here's a very illuminating video on the scope of the problem by Chris Martenson, who suggests transitioning into "tangible assets" like precious metals. It's possible to use his capitalization on these themes to color one's evaluation of what he says but you'll find him very sincere and immensely knowledgeable.
Next - SINGING BACKUP TO THE SUPREMES
Part 1 - PANIC IN THE BOARDROOMS
What a week in the news, or BETWEEN the news, as it were. Tired of everyone railing on the corporate media. Old story. If you want straight skinny, search the internet. It's the most open, unrestricted channel for information that has ever existed in the history of the world. There is literally no excuse any more for being uniformed on any issue simply because you depended on the mainstream media and they let you down. C'mon man, we're better than that, aren't we? Search and destroy ignorance, people!
Anyhoo.. .
Here's what stuck out for us this week here at the Poo Palace. We apologize in advance for this being a fairly dry, fairly academic piece of writing. Lotta facts to lay out. Here's what we got:
1. The Fed's Euros for Dollars Swap meet
2. Mortgage-based derivatives and other risks of modern capitalism's basis in the "Ever-expanding" human occupation of Earth
3. Obama's continuing failure to stand up to the Supreme Court
4. Obama's amazing health care Trojan Horse
5. The oceans of "dark money" floating around offshore revealed when Google, Apple, et. al. offered to repatriate $1.2 TRILLION in overseas profit, so long as they could get an 85% discount on the taxes they'd owe if they did.
6. Newt Gingrich is the frontrunner for the GOP nomination for President. ...of the United States. ...Seriously.
EUROS FOR DOLLARS
The Fed announced this week that they were expanding their policy of letting troubled European banks trade their Euros for dollars, bumping the scope of the program to "unlimited". Most commentators pegged this move to the European Economic Summit coming up this week where many predicted the "death of the Euro" would occur.
What does this mean? Well, imagine you're England or France or Germany or The Netherlands, or Luxemborg, or any of the other "strong" economies in Europe. Your fortunes are tied to the Italy and Greece and the other European countries nearing default primarily because you share a currency with them. It's like revenue sharing in American sports without the benefit of being able to kick the shit out of the revenue receiving "franchises" every couple of months. Eventually, as with n'er do well relatives hitting you up at holidays, you're going to say, "That's it! Not another dime." That's what a lot of smart people were saying was going to happen this week at the European Economic Summitt.
A couple things stand out about this Fed Action.
First, the obvious question is; if nobody in Europe wants to borrow Euros, isn't the Fed taking a HUGE huge risk by letting European banks back up the dump trucks at the US taxpayers' collective loading dock, offload them and drive off filled with freshly printed greenbacks? The answer is "possibly". These swaps have been in place for a while and have thus far been profitable for the The Fed. The deals commit the Eurobanks to buy their Euros back in dollars, plus some vig. If, however, the Euro does vaporize, it's difficult to imagine exactly how and when, and with what they will do it. More on that doomsday scenario below.
Second, as difficult as this may be to believe, the Euro is currently stronger than the dollar relative to other world currencies.
Notwithstanding the more disturbing implications of that revelation, the folks at the Fed don't seem quite so stupid now do they?
It's even deeper than that. The "QE 1" on the chart above represents the first "Quantative Easing" announced by the fed. "Quantatative Easing" is analagous to the way Hippopotumi defecate, breaking up huge chunks of poo with the violent "high-speed winshield-wiper" action of their tails (this action, in addition to marking the hippo's territory also creates food for plankton and worms and therefore, by TRICKLING UP the food chain, fish!), only in The Fed's case it's huge chunks of money, the worms and plankton wear suits and fly in private jets, and the fish have armies and air corps as well as navies.
Documents recently made public have revealed that The Fed's QE 1 represented over $16 TRILLION DOLLARS splattered out to foreign governments and foreign and domestic corporations and banks. Theoretically, it would keep the credit flowing. It hasn't worked real well apparently, hence QE 2, which kicked off in November of 2010.
For those of you scoring at home, $16 TRILLION is over $1 TRILLION more than the entire US national debt at this time. It's 7 times all the tax revenue collected by the IRS in 2010. and about a TRILLION more than the U.S. Gross National Product (as declared - more on that later) for 2010. Fox News has estimated the cost of providing Universal Health Care to all US citizens over the next 10 years at $1.2 TRILLION, less than half what Citigroup got in QE 1.
Here is a list of the recipients these 0% loans, none of which have been repaid and which, incidentally, were over and above the bailout money provided by the Bush and Obama administrations:
Some of those few of you not in a coma by now may be wondering "Why further jeopardize the already historically weak dollar in order to inject liquidity into companies and banking systems overseas?"
Glad you asked.
(...next) THE EVER-GROWING PIE-IN-THE-FACE
Anyhoo.. .
Here's what stuck out for us this week here at the Poo Palace. We apologize in advance for this being a fairly dry, fairly academic piece of writing. Lotta facts to lay out. Here's what we got:
1. The Fed's Euros for Dollars Swap meet
2. Mortgage-based derivatives and other risks of modern capitalism's basis in the "Ever-expanding" human occupation of Earth
3. Obama's continuing failure to stand up to the Supreme Court
4. Obama's amazing health care Trojan Horse
5. The oceans of "dark money" floating around offshore revealed when Google, Apple, et. al. offered to repatriate $1.2 TRILLION in overseas profit, so long as they could get an 85% discount on the taxes they'd owe if they did.
6. Newt Gingrich is the frontrunner for the GOP nomination for President. ...of the United States. ...Seriously.
EUROS FOR DOLLARS
The Fed announced this week that they were expanding their policy of letting troubled European banks trade their Euros for dollars, bumping the scope of the program to "unlimited". Most commentators pegged this move to the European Economic Summit coming up this week where many predicted the "death of the Euro" would occur.
What does this mean? Well, imagine you're England or France or Germany or The Netherlands, or Luxemborg, or any of the other "strong" economies in Europe. Your fortunes are tied to the Italy and Greece and the other European countries nearing default primarily because you share a currency with them. It's like revenue sharing in American sports without the benefit of being able to kick the shit out of the revenue receiving "franchises" every couple of months. Eventually, as with n'er do well relatives hitting you up at holidays, you're going to say, "That's it! Not another dime." That's what a lot of smart people were saying was going to happen this week at the European Economic Summitt.
A couple things stand out about this Fed Action.
First, the obvious question is; if nobody in Europe wants to borrow Euros, isn't the Fed taking a HUGE huge risk by letting European banks back up the dump trucks at the US taxpayers' collective loading dock, offload them and drive off filled with freshly printed greenbacks? The answer is "possibly". These swaps have been in place for a while and have thus far been profitable for the The Fed. The deals commit the Eurobanks to buy their Euros back in dollars, plus some vig. If, however, the Euro does vaporize, it's difficult to imagine exactly how and when, and with what they will do it. More on that doomsday scenario below.
Second, as difficult as this may be to believe, the Euro is currently stronger than the dollar relative to other world currencies.
Notwithstanding the more disturbing implications of that revelation, the folks at the Fed don't seem quite so stupid now do they?
It's even deeper than that. The "QE 1" on the chart above represents the first "Quantative Easing" announced by the fed. "Quantatative Easing" is analagous to the way Hippopotumi defecate, breaking up huge chunks of poo with the violent "high-speed winshield-wiper" action of their tails (this action, in addition to marking the hippo's territory also creates food for plankton and worms and therefore, by TRICKLING UP the food chain, fish!), only in The Fed's case it's huge chunks of money, the worms and plankton wear suits and fly in private jets, and the fish have armies and air corps as well as navies.
Documents recently made public have revealed that The Fed's QE 1 represented over $16 TRILLION DOLLARS splattered out to foreign governments and foreign and domestic corporations and banks. Theoretically, it would keep the credit flowing. It hasn't worked real well apparently, hence QE 2, which kicked off in November of 2010.
For those of you scoring at home, $16 TRILLION is over $1 TRILLION more than the entire US national debt at this time. It's 7 times all the tax revenue collected by the IRS in 2010. and about a TRILLION more than the U.S. Gross National Product (as declared - more on that later) for 2010. Fox News has estimated the cost of providing Universal Health Care to all US citizens over the next 10 years at $1.2 TRILLION, less than half what Citigroup got in QE 1.
Here is a list of the recipients these 0% loans, none of which have been repaid and which, incidentally, were over and above the bailout money provided by the Bush and Obama administrations:
- Citigroup: $2.5 trillion ($2,500,000,000,000)
- Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
- Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
- Bank of America: $1.344 trillion ($1,344,000,000,000)
- Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
- Bear Sterns: $853 billion ($853,000,000,000)
- Goldman Sachs: $814 billion ($814,000,000,000)
- Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
- JP Morgan Chase: $391 billion ($391,000,000,000)
- Deutsche Bank (Germany): $354 billion ($354,000,000,000)
- UBS (Switzerland): $287 billion ($287,000,000,000)
- Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
- Lehman Brothers: $183 billion ($183,000,000,000)
- Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
- BNP Paribas (France): $175 billion ($175,000,000,000)
~~Source: The first EVER(!) GAO Audit of the Federal Reserve - page 131
Yeah, Lehman Brothers got $183 billion. What do you think are the chances we'll see any of that back? That payment alone is 366 times what we lost on Solyndra, by the way.
Yeah, Lehman Brothers got $183 billion. What do you think are the chances we'll see any of that back? That payment alone is 366 times what we lost on Solyndra, by the way.
Glad you asked.
(...next) THE EVER-GROWING PIE-IN-THE-FACE
Tuesday, November 22, 2011
Congress And The Theory of Knots
Any dry fly fisherman who has learned to fish "wet" can tell you that when you add extra flies and sinkers and indicators to the end of a leader, you encounter levels of "tangled" that you had never before imagined possible. Experienced wet fly hands use a "two-minute rule" for these situations. If the knotted condition of your leader, or your leader and rod, or your leader, rod, creel, hat, arms and legs is such that it can't be untangled in two minutes, simply cut the line and start over with new gear.
One day on the upper Sacramento river, in the time before I knew of the two minute rule, it occurred to me that with a knotted leader, as with many other situations in life, no problem is ever as simple again as it is the moment before the first solution is applied.
Looking down on a tangle, it is often easy to see the progression of moves that will undo it. "Three wraps of the sinkers around the rod, push the indicator between the leader and the fly line, two twists of the fly around the right side of that loop and we're outta here!" Once one's fingers become part of the system however, it almost invariably becomes an unrecognizable mess after the first two seconds.
I find myself today looking for a way to apply some knot theory to Congress.
Just read Article 1 Section 8 of the Constitution. Congress is charged with some really important stuff besides providing the pathetic tragi-comedy that rabbit punches us in the face from the morning paper each day. Today, it's the debt ceiling "supercommittee" FAILING to agree on a way to pull our collective chestnuts out of the towering inferno of public money that is US fiscal policy in the post-Reagan era, but every day it's something, and the ironic part is that the central issues preventing Congress from getting ANYTHING done are no mystery. In fact, they're common knowledge.
Let's break it down:
1. These people have to fund their campaigns every 2 or 4 years while building connections for their post-Congress gravy trains should those campaigns be unsuccessful, and the campaign funding and the post-Congressional careers are provided largely by the same large-money lobbying interests.
2. There is no number two.
Strangely, the simple solution to this knotty problem (scissors please!) is broadly acknowledged by luminaries on all sides of the American political cheesescape. John McCain co-sponsored a campaign finance reform bill with Democrat Russ Feingold which was signed into law by George W. Bush. Sarah Palin and Ron Paul have weighed in as vociferously as Barack Obama, Bill Bradley and Ralph Nader on the subject. Pretty much everyone seems to agree that it's time to cut the leader above this money/access/influence tangle and start fresh with a new rig.
So what's the holdup?
It's that gift that won't stop giving, the Reagan/Bush "conservative" Supreme Court bloc. Misters Justice Roberts, Scalia, Thomas, Alito and Kennedy have either struck down or removed the teeth from every significant piece of campaign funding and lobbying legislation to come before them, ruling that they either don't meet the criteria for corruption or political inequality or, in the most tortured piece of prime-time judicial advocacy since Mr. Justice Scalia slithered out of his coffin on a Saturday(!) and stopped the counting of Florida Presidential ballots, that they violate the free speech rights of corporate entities, which must enjoy the same constitutional rights and protections afforded to human citizens. "Hey," you may say, "judgment call, they ruled as they saw it based solely on legal grounds. Whaddya gonna do?"
You'd be heckamuch wrong.
In an stunningly bald-faced acknowledgement last year that, in the Supreme Court at least, Lady Justice sees 20/20 or better, Mr. Justice Kennedy told friends and relatives that he will serve through the first Obama term and will only retire should a Republican win the win the White House in 2012. So much for trusting the "Rule of Law", eh Tony?
Only one Supreme Court Justice, Samuel Chase (one of the signatories to the Declaration of Independence), has ever been impeached. In 1803 Chase got into trouble with the Jeffersonian Democratic-Republicans when he severely criticized their policies in front of a Baltimore Grand Jury. Chase explained that he objected to recent changes in Maryland law that gave more men the privilege of voting. Such changes as these advanced by Democratic-Republicans, Chase exclaimed, "would rapidly destroy all protection to property, and all security to personal liberty, and our Republican Constitution, [would] sink into mobocracy, the worst of all possible governments.… The modern doctrines by our late reformers, that all men in a state of society are entitled to enjoy equal liberty and equal rights, have brought this mighty mischief upon us, and I fear that it will rapidly destroy progress, until peace and order, freedom and property shall be destroyed."
"Mobocracy", good one, Sammy!
This little rant so angered Jefferson and other Democratic-Republicans that in 1804 the U.S. House of Representatives voted to impeach Chase on charges of misconduct and bias and of seditious criticism of Jefferson in the 1803 Baltimore grand jury charge. In 1805, the Democratic-Republican–controlled U.S. Senate moved to impeach Chase. Democratic-Republican senators charged that Chase had been guilty of judicial misconduct and that his partisan acts showed that he lacked judicial objectivity. Federalists defending Chase argued that he had committed no crime and that he could not be convicted under the constitutional definition of High Crimes and Misdemeanors. The Senate failed to achieve the two-thirds majority necessary to impeach Chase and he remained on the Court until his death.
Chase's acquittal is commonly acknowledged to have set an important precedent for the Court: That no Supreme Court justice could be removed simply because of his or her political beliefs. The failure to impeach Chase allowed Chief Justice Marshall to assert and define the powers of the Court in future decisions with more confidence. It was thus a step in the process of defining the independence of the Supreme Court as one of the three primary branches of U.S. government.
Huh?
Not sure how we get from a one-time failure to get a two-thirds majority to a major constitutional precedent, but that's how it came down. As a result, like a six-year-old at grandma's for the weekend, the Supremes now operate with complete impunity and without fear of consequences for biased, politically motivated rulings.
Kinda begs the question, "Who's holding the rod, and what are we fishin' for?", don't it?
Here's an interesting read on the topic of Judicial Supremacy by Stanford Law School Dean, Larry Kramer
Thursday, November 17, 2011
With the Right Kind of Eyes...
It got irrevocably sideways in America today. Today the sun came up, winked, turned left and just kept on going.
Today, Republican Senators and Representatives whined for the Democratic President to step in and tell them how to solve the debt crisis.
Today, a retired Philadelphia police captain was arrested protesting in uniform and right wing commentators denouncing him and his fellow protesters were beaten by the cops along with them and then, comforted by them in broad daylight in the streets of New York.
Today, "What the fuck?" really didn't cover it.
Today, in what was actually the weirdest, most orgasmically bizarre story of all, Newt motherfucking Gingrich polled out as the GOP frontrunner for, wait for it, President of the United States!
(we will pause here for you to finish laughing and jumping up and down and clapping)
Today, it was somehow actually possible to envision the country stirring and a TRUE 99%, made up of poor and middle class Republicans and Democrats congealing as more and more of us begin to see each other as neighbors and as complicit common victims of this vile troupe of backslapping swindlers who have been using the country as their collective ATM/Toilet for the last 30 years.
Today, it became evident that it might be time to figure out what the fuck we want.
That said, we have some thoughts. Let's call it a "jumping off place".
1. Outlaw Lobbying
2. Legalize Gay Marriage
3. Institute a Corporate Death Penalty (stock goes to zero & company operates going forward as a non-profit) and try British Petroleum & PG&E as the first corporate capital defendants. (BP trades on the NYSE)
4. Legalize Marijuana - rescue family farmers and supply the world with smoke and fiber (wood, paper, fabric)
5. End logging and the use of non-composite wood in all construction. (teach the loggers to grow weed)
6. Impose tariffs on foreign goods to counterbalance unfair labor practices abroad and bring technical and manufacturing jobs back to the US (an iPhone will cost 23% more, big whoop).
7. Adopt Universal Single Payer Healthcare. We spend twice as much as the next G7 country and have by far the worst results. 20% of the average family's income is spent on health insurance. That's obscene. Insurance is for cars. Health care is for people.
8. Tax corporations on their income. Tax people on their consumption.
9. Nationalize the offshore bank accounts of all American citizens and corporations after a discreet grace period, during which they may bring the money back into the U.S., pay taxes on it, and reinvest it in public works projects and/or bond it to school districts.
10. End all domestic oil and oil shale and oil sands exploration and outlaw the use of petroleum for terrestrial transportation of any kind after 2025. Current stocks and proven reserves will be able to handle the demand for medical and electronics plastics until a replacement is found.
That's just what we'd do and it's just a start. Nothing new about any of it really.
The new thing is that today, somehow, it feels almost possible.
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