Skip to main content

OUR TWO-TRACK ECONOMY

Simon Johnson has another excellent post up on his Baseline Scenario blog this weekend, entitled:  "More On The Two-Track Economy -- From The WSJ And Others." It's a follow-up piece to something he posted about ten days ago: "The Two-Track Economy."

The day Johnson posted the first part of this series, I posted a diary in a review of it: "A Tale Of Two Economies."

Also this weekend, the Wall Street Journal took note of these newly-emerging, dual economies in the U.S. in the following story: "Halting Recovery Divides America in Two." (NOTE: You'll need a subscription to access the whole story.)

I really don't know how much headline news it's going to take for some to accept certain facts, but the over-arching truth is--at least as far as our economy's concerned--the old rules no longer apply.

Stated another way, for 99% of America--those of us on Main Street--it's a "new normal," and it is UGLY; but, for the 1% that own Congress--the status quo on Wall Street--it's business as usual, a/k/a the "old normal."

Here's Johnson's latest:


More On The Two-Track Economy -- From The WSJ And Others
Simon Johnson
The Baseline Scenario
August 29th, 2009

The notion of a two-track economy seems to be taking hold.  We kicked the concept around pretty well last week -- your 130 comments (as of this morning) helped clarify a great deal of what we know, don't know, and need to worry about.  The two-track concept overlaps with, and builds on, long-standing issues of inequality in the U.S., but it's also different.  Within existing income classes, some people find themselves in relatively good shape and others are completely hammered.

New dimensions of differentiation are also taking hold within occupations and within industries - the WSJ this morning has nice illustrations.  The contours of this differentiation begin to shape our recovery or, if you prefer, who recovers and who does not - it's hard to say how this will play out in conventional aggregate statistics, but these are likely to become increasingly misleading.

--SNIP--

So now it's all about whether you are a preferred client of Goldman Sachs or another big finance house.

--SNIP--

This can lead to short-term growth - the speed of recovery in many emerging markets surprises many, from about 12 months after the crisis breaks.  But it also leads to repeated crisis, to derailed growth, and to a loss of income, status, and prospects for most of society.

The truth is there's an extremely weak--even "fake"--recovery for Wall Street that's now underway, but Main Street is paying an inhuman price for this, both literally and figuratively.

Nowhere is this more self-evident than in a not-so-microcosmic bit of political kabuki currently playing out between the Federal Reserve and Bloomberg with regard to the basic concept that the public deserves to know--with just a modicum of detail--where roughly two trillion dollars in federal funds have gone.

I first wrote about this many months ago, on a few occasions. I covered the latest development in this case again, on Thursday, in: "Has The Government Decided We Can't Handle The Truth?"

Then, fellow blogger, Bink, kicked some serious status quo butt in,  "The Secret That Will Destroy The World's Financial System," a couple of days ago.

Meanwhile, over the weekend, we heard that the Federal Reserve, in their outrageous response to the court, claimed they have no relevant documentation available to it that would enable it to respond to Bloomberg's FOIA request, in the first place! "Federal Reserve Finds No Documents at FRBNY Responsive to Bloomberg FOIA Request, Court Grants Emergency Stay Application."


Federal Reserve Finds No Documents at FRBNY Responsive to Bloomberg FOIA Request, Court Grants Emergency Stay Application
Submitted by Res ipsa loquitur on 08/29/2009 09:15 -0500

On August 28, 2009 the U.S. District Court of the Southern District of New York granted the Federal Reserve's Order to Show Cause and motion for a stay of the Court's recent Order compelling the Federal Reserve to produce "confidential" commercial and financial information concerning the financial institutions that have borrowed from credit facilities established by the Federal Reserve. The Federal Reserve's current position is that the immediate release of documents would moot any appeal, and cause irreversible damage to the institutions whose information is disclosed.

--SNIP--

Oral argument took place on August 27, 2009.  The Federal Reserve, as predicted, represented to the Court that an additional search of what the Federal Reserve considered "official files" at the FRBNY revealed no documents responsive to Bloomberg's FOIA requests. Bloomberg has reserved its right to dispute this issue pending the outcome of the appeal. The Federal Reserve and Bloomberg consented to seek an expedited appeals process,  upon the Federal Reserve obtaining authorization to proceed with an appeal by the District Court's September 30, 2009 deadline.

Are we supposed to believe that two trillion dollars was distributed by our government via the NY Federal Reserve branch, then under Tim Geithner's management, where he had absolutely no paper trail available relating to those expenditures?

Given the sheer facts of this matter, taken within the most basic context that we now have our own government and the Federal Reserve telling us we can't be allowed to discover the truth about this--because the very existence of many of our largest financial insititutions would be at risk--kind of sums it all up for everyone in black and white.

In other words, we're being told that if we knew the truth as to what has occurred to date, even now, many of those top 19 entities on Wall Street that supposedly (mis)manage 75%-plus of this country's assets, would go under...today.

Not last Fall. Not "earlier in the year." But, right now.

So, given this reality--trillions of taxpayer dollars later--how can anyone talk about a "recovery?"

Major banks (think: Citigroup and Bank of America) and other financial institutions (think: AIG) are still extremely insolvent.

This all makes sense...just as long as we keep lying to others--and to ourselves--that our reality some are calling a recovery is anything but that.

IT'S BLUE SMOKE AND MIRRORS FOR THE WALL STREET CASINO

For just a moment, let's revisit the "rigged game...."

Stock Market Insanity

What else can one call it when the stock of five completely bankrupt (to the tune of at least a couple of trillion bucks, and that's being nice about it) entities accounts for 30% of the overall activity in the marketplace? (See: "Five Financial Stocks Dominating Market Volume.")


Five Financial Stocks Dominating Market Volume
Submitted by Tyler Durden on 08/22/2009 12:37 -0500

Since the beginning of July, the most prominent feature of the market has been the divergence in volume between financials and "all other" stocks. While overall stock market volume has been flat if not down over the past two months, and a continuation of a long-term downward trend since the March ramp up, the volume in financial stocks has staged an unprecedented pick up.

--SNIP--

...five primary names have been responsible for the bulk of the volume in not just financials but across the entire market. The five stocks are Citi, AIG, CIT, Fannie Mae and Freddie Mac.

A summation of the individual volumes since March reveals an unprecedented dominance of the total market volume represented by just these five stocks, hitting nearly 2 billion shares on Friday, August 21.

Then there's this, over the past 48 hours, from Jesse's Cafe Le Americain (h-t to Naked Capitalism): "US Equity Markets Look Dangerously Wobbly As Insiders Sell In Record Numbers"


US Equity Markets Look Dangerously Wobbly As Insiders Sell In Record Numbers
by Jesse
Jesse's Cafe Le Americain
August 29, 2009

"... There are some obvious bubbles already formed in certain insolvent financial stocks like AIG, with disinformation rampant in the Wall Street demimonde...

--SNIP--

...Wall Street insiders and their enablers pig out on public money while the nation suffers. This is not change, this is business as usual."

Insider Selling in August Soars to 30.6 Times Insider Buying, Highest Level Since TrimTabs Began Tracking in 2004.
NYSE Short Interest Plunges 10.3%, While Margin Debt Spikes 5.9%

SAUSALITO, Calif., Aug. 28 PRNewswire -- TrimTabs Investment Research reported that selling by corporate insiders in August has surged to $6.1 billion, the highest amount since May 2008. The ratio of insider selling to insider buying hit 30.6, the highest level since TrimTabs began tracking the data in 2004.

"The best-informed market participants are sending a clear signal that the party on Wall Street is going to end soon," said Charles Biderman, CEO of TrimTabs.

TrimTabs' data on insider transactions is based on daily filings of Form 4, which corporate officers, directors, and major holders are required to file with the Securities and Exchange Commission.

In a research note, TrimTabs explained that insider activity is not the only sign the rally is about to end. The TrimTabs Demand Index, which tracks 18 fund flow and sentiment indicators, has turned very bearish for the first time since March.

--SNIP--

"When corporate insiders are bailing, the shorts are covering and investors are borrowing to buy, it generally pays to be a seller rather than a buyer of stock," said Biderman.

TrimTabs also reports that the actions of U.S. public companies have been bearish. In the past four months, companies have been net sellers of a record $105.2 billion in shares.

"Investors who think the U.S. economy is recovering are going to get a big shock this fall," said Biderman. "Companies and corporate insiders are signaling that the economy is in much worse shape than conventional wisdom believes."

TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity--including mutual fund flows and exchange-traded fund flows--as well as weekly withheld income and employment tax collections...

--SNIP--

...For more information, please visit www.TrimTabs.com.

And, of course, we can't forget this ongoing matter, now can we?

High Frequency Trading

Then there's the high frequency trading issue, which is now to the point where even U.S. senators are dropping all pretense of any fairness existing in the marketplace. This from Delaware Senator Ted Kaufman (Vice President Biden's handpicked replacement):  "Kaufman on HFT: The Bottom Line Is Liquidity Vs Fairness."


Kaufman on HFT: The Bottom Line Is Liquidity Vs Fairness
Submitted by Tyler Durden on 08/28/2009 15:37 -0500
(DIARIST'S NOTE:  "Tyler Durden" actually represents approximately 40 staffers at Zero Hedge.)

Liz Claman: Let me ask you, when the review comes in, what will you be looking for, because she may find that so far, the markets are relatively fair and we have a level playing field.

Ted Kaufman: I am absolutely convinced that when you look at it, and when you talk to enough people you know, people know it's not. My job is to suggest concerns that I have in my oversight capacity as a U.S. senator, and send them over to Mary Schapiro. Now it's up to Mary and the other commissioners to come back with a proposal and I will deal with it when it comes back.

Yes, our Senators are now telling us the market is rigged. How much more proof do we need? (See my other diaries over the past eight weeks for more on this.)

"But...but...but...we're told that the stock market's stellar performance is a key leading economic indicator. And, our leading economic indicators are all pointing to a recovery?"

Of course, we could venture off a bit into tinfoil hat land, but I'm keeping it real here...and this is as real as it gets!

Speaking of reality...contrary to the wisdom of others, this is not a conventional recession.

Folks, do not be lulled into inaction!

The International Monetary Fund (IMF) and the Bank of International Settlements (BIS) are telling us: this is not a conventional recession.

THIS IS NOT A CONVENTIONAL RECESSION!

"Our quarter-century penance is just starting."


Our quarter-century penance is just starting
By Ambrose Evans-Pritchard
Published: 10:00PM BST 29 Aug 2009

Never in modern times has there been such a flat contradiction between the euphoria of markets and the stern warnings of officialdom at central banks and financial watchdogs.

Corporate credit has seen the steepest rally in almost a hundred years, according to Morgan Stanley. Hedge funds are reviving the final bubble play of early 2007, writing put options on long-dated "volatility" contracts to wring out extra profit.

It is as if the Great Contraction - as the Bank of England now calls it - was just a random shock, as if we should naturally expect "V-shaped" resurgence to take us back to where we were. Yet that is what precisely we are being told will not and cannot happen.

"The current financial crisis is unlike any others," says the Bank for International Settlements. Lasting damage has been done. The "cumulative output loss" is likely to reach 20pc of GDP in the major economies.

The message is the same at the International Monetary Fund. "The world is not in a run of the mill recession. The crisis has left deep scars. In advanced countries, the financial systems are partly dysfunctional," said Olivier Blanchard, the Fund's chief economist.

Mr Blanchard said an IMF study of post-War banking crises led to an unpleasant finding. "Output does not go back to its old trend path, but remains permanently below it..."

So, we're told that everything's morphing into two economies...one for the haves...and another for the have-nots.

For the have-nots, it's...

A NEW NORMAL (Which is anything but normal, IMHO.)

Our future will be:

   unacceptably high unemployment for many years,

   increasing foreclosures and bankruptcies,

   the virtual death of the American consumer, at least as we've known consumption for the past few decades,

   ongoing deflation, a/k/a 'StagDeflation,'

   approximately one out of every seven people on Main Street in full-blown poverty and on food stamps by 2010,

   to a great extent caused by the hoarding of cash--that's OUR cash, by the way--by the folks on Wall Street...and...  

For the haves, it's...

THE OLD NORMAL (Which is business as usual.)

   with even more obscene salaries, and more rewards for totally myopic decision-making devoid of any social responsibility,

   because with the knowledge that our government is encouraging their bad behavior, rather than doing something about it, it's like giving carte blanche to the wolves in the henhouse,

   with just more unacceptable behavior,

   and encouragement--up to and including virtually deification--for the folks that got us into this mess in the first place...

So, against so many formidable obstacles, what's the solution?

Paul Krugman begins to address that at the end of his latest column in today's NY Times; but there are no easy answers: "Missing Richard Nixon."


Missing Richard Nixon
Paul Krugman
NY Times Op-Ed

August 31st, 2009

...We tend to think of the way things are now, with a huge army of lobbyists permanently camped in the corridors of power, with corporations prepared to unleash misleading ads and organize fake grass-roots protests against any legislation that threatens their bottom line, as the way it always was. But our corporate-cash-dominated system is a relatively recent creation, dating mainly from the late 1970s.

And now that this system exists, reform of any kind has become extremely difficult. That's especially true for health care, where growing spending has made the vested interests far more powerful than they were in Nixon's day. The health insurance industry, in particular, saw its premiums go from 1.5 percent of G.D.P. in 1970 to 5.5 percent in 2007, so that a once minor player has become a political behemoth, one that is currently spending $1.4 million a day lobbying Congress.

--SNIP--

Every desperately needed reform I can think of, from controlling greenhouse gases to restoring fiscal balance, will have to run the same gantlet of lobbying and lies.

I'm not saying that reformers should give up. They do, however, have to realize what they're up against. There was a lot of talk last year about how Barack Obama would be a "transformational" president -- but true transformation, it turns out, requires a lot more than electing one telegenic leader. Actually turning this country around is going to take years of siege warfare against deeply entrenched interests, defending a deeply dysfunctional political system.


Bold type is diarist's emphasis

Originally posted to http://www.dailykos.com/user/bobswern on Mon Aug 31, 2009 at 03:23 AM PDT.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

    •  wasn't tyler durdin the name of Brad (5+ / 0-)

      Pitt's character in fight club.  Just wondered, is that guy for real.

      •  Yes it was (2+ / 0-)
        Recommended by:
        vets74, bobswern

        He was also a fictional character in Fight Club.  The more aggressive out of control half of someone who had dual personalities.

        This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

        by DisNoir36 on Mon Aug 31, 2009 at 05:42:56 AM PDT

        [ Parent ]

    •  Hey bob (10+ / 0-)

      Quit trying to sugar coat this?  ;-)

      ...someday - the armies of bitterness will all be going the same way. And they'll all walk together, and there'll be a dead terror from it. The Grapes of Wrath

      by deepsouthdoug on Mon Aug 31, 2009 at 05:24:23 AM PDT

      [ Parent ]

      •  LOL! n/t (4+ / 0-)

        "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

        by bobswern on Mon Aug 31, 2009 at 05:26:51 AM PDT

        [ Parent ]

        •  And let's forgive TWO AMERICAS EDWARDS (2+ / 0-)
          Recommended by:
          gogol, Do Tell

          for being right on the money about the economics of politics, then letting his balls get the best of him.

          John Edwards is a bit of an optimist. He had no view of America that included the whole middle class being savaged by the health care/pharma juggernaut.

          But that is what is happening.

          The Edwards view of America is now the central reality -- the whole lot of us getting Madoff-ized by the massive debt AND bail-out extravaganza.

          BTW: cash tax =EQ= debt tax.

          There is no such thing as a tax cut, on the whole. Its just redistribution to debt for the overall society.

          Angry White Males + Personality Disorder delusionals + sane Pro-Lifers =EQ= The GOPer Base

          by vets74 on Mon Aug 31, 2009 at 08:53:33 AM PDT

          [ Parent ]

    •  Paper trail? (3+ / 0-)
      Recommended by:
      Do Tell, vets74, Floande

      The paper that would have told us where the money went was used instead to print more money that then ent to Goldman.

      This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

      by DisNoir36 on Mon Aug 31, 2009 at 05:37:20 AM PDT

      [ Parent ]

      •  Do you know what a pile it is that they have no (9+ / 0-)

        paper trail?   I work in job training.  we get money and feds and regulation up the *ss.   We can't buy anything, no matter how little it costs, without a minimum of two friggin quotes.   Need a binder for ten bucks, document two quotes.  

        If they have no paper, they deserve to go to jail for fraud and abuse.  Fuckers  Sorry.  As I drowned in a sea of paper, bring me birth certificates and paychecks to prove your family size and income so we can help you retrain for a job that doesn't exist - banks and Haliburton rip off the system at will.  

        Corrupt bastards.  (There I go again.)

        "YES WE CAN" doesn't mean he is going to. ~~Daily Show

        by dkmich on Mon Aug 31, 2009 at 06:17:59 AM PDT

        [ Parent ]

    •  since it's apparently legal to show up with.... (3+ / 0-)
      Recommended by:
      vets74, bobswern, In her own Voice

      firearms near where elected officials are speaking... this suggests something.

      First, research the laws on open carry in Manhattan.

      If, as I suspect may be the case, open carry is legal, then:

      Rub the righties' noses in it by having a large group of armed citizens show up in front of the NY Stock Exchange for a nice peaceful demonstration.

      If it's not legal to carry openly in Manhattan, then do it with toy guns, such as water pistols and paintball rifles, all in their bright "it's only a toy" colors.  

      If that's still too much for some of y'all to take, then good oldfashioned pitchforks and torches (use flashlights for the torches) have at least a bit of historic resonance.  

      Also, bricks make wonderfully symbolic posters, that can be taped to various surfaces in the same manner as paper posters.   Use duct tape to be sure they stick properly and don't fall off.  There's no need to write anything on them, but if you have time, you can write "class war!" on them with permanent marker, or write it on the duct tape so it stands out more clearly.

      No matter what else, any demonstration that involves firearms or symbolism of same, or pitchforks & torches, has got to be conducted in a peaceful, orderly, and polite manner, without the slightest hint of being threatening in any way.  So participants in this sort of thing should be organized into local groups whose members get to know each other well, and from which are excluded anyone who might get hot-headed even so far as to shout rudely at those who are the target of the protest.  

      Either way, the message is: if it's class war you want, it's class war you'll get.  

    •  The most damning comment (13+ / 0-)

      In other words, we're being told that if we knew the truth as to what has occurred to date, even now, many of those top 19 entities on Wall Street that supposedly (mis)manage 75%-plus of this country's assets, would go under...today.

      Not last Fall. Not "earlier in the year." But, right now.

      So, given this reality--trillions of taxpayer dollars later--how can anyone talk about a "recovery?"

      All else is a distraction. We gave them 15 trillion in guarantees and they still cannot tell us how well they are doing - or maybe they don't really want people to realize that they received not just the 700 billion of the TARP, but 20 times more, in fact.

      •  Well, it's all but a stated fact that... (4+ / 0-)
        ...many of these entities did receive far more than just their TARP funds. And, of course, much--if not most--of this was totally obfuscated.

        But, yes, I totally agree with you; and even while writing this realized it's the quote you selected which is really the most telling of all. If there's fear about a collapse due to disclosure--today--then it's self-evident that there's major problems, today, too. And, frankly, I believe these problems relate to significantly more than just Citi, BofA, and AIG, as well. (They're just the ones we know about that are in the deepest of crap right now. I'm sure there are at least a few others.)

        "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

        by bobswern on Mon Aug 31, 2009 at 06:35:42 AM PDT

        [ Parent ]

  •  The administration cannot deny that they have (14+ / 0-)

    wasted months in enforcing the rewriting or cramming down of FIRST home mortgages, and have not shut down the fraudulent scams (i.e. the triplescoredotcoms of predatory lending.)

    So, today's WSJ headlines:

    Commercial Real Estate Lurks as Next Potential Mortgage Crisis

    The other kind of hurt is coming from the inability of property owners to refinance loans bundled into CMBS when these loans mature. By the end of 2012, some $153 billion in loans that make up CMBS are coming due, and close to $100 billion of that will face difficulty getting refinanced, according to Deutsche Bank. Even though the cash flows of these properties are enough to pay interest and principal on the debt, their values have fallen so far that borrowers won't be able to extend existing mortgages or replace them with new debt. That means losses not only to the property owners but also to those who bought CMBS -- including hedge funds, pension funds, mutual funds and other financial institutions -- thus exacerbating the economic downturn.

    And I'm just wondering if the Fed, et al will swoop in to save these limited partnerships mortgaged to shareholder corps, where they would NOT do enough to help the individual mortgagees.

    "Now if there is one thing that we do worse than any other nation, it is try and manage somebody else's affairs." Will Rogers

    by bamabikeguy on Mon Aug 31, 2009 at 03:39:19 AM PDT

  •  Silent Weapon for Silent Wars (13+ / 0-)

    This is what we are noticing. It's the squeeze toward our capitulation. Our 'American Dream' has been declared ended by the moneybags who've been planning their revenge on FDR ever since the New Deal. They're taking their money and moving on to greener pastures in Asia. The stock market rally is just squeezing a bit more out of the suckers who believe the claptrap about the recession already at bottom and looking up. There's no  more up, except for temperature. There's peak oil and unstable climate and eroded soil and abandoned subdivisions in our future. As Stranded Wind wrote yesterday: we are landless peasants now.
    ..............
    What time zone are you in bob? I look for your diary every morning.

    •  i'll disagree with my friend SW about that. (7+ / 0-)

      We're not all landless peasants yet, nor need we become same.  

      Think relocalization.  Think community.  Think outside the box.  

      And here's a strategy we need to pursue.

      Elect progressives to the office of County Sheriff in areas that have strong progressive communities.  Preferably rural.  

      Those Sheriffs would then be in the position to thwart foreclosure evictions in various ways by tying them up in the bureaucracy, and by wink-nudging it when people stay in their homes.   This will buy time, and time is of the essence.  

  •  We're on our own. (18+ / 0-)

    Those of us who live in that second economy have been told, "You're on your own.  We're sorry, but all the money has already been spent on hyped-up war and bailouts for the rich."

    There will be no WPA.  There will be no help for the millions who are losing their homes because they lost their jobs.  There will probably be nothing coming out of health care reform except a mandate that we turn over our last dollar to those patriotic health insurance companies.

    We can either band together and help each other or starve separately.

    •  Your right our new (3+ / 0-)
      Recommended by:
      gogol, G2geek, bobswern

      normal is "your on your own, screw you."  I agree we need to group together, or die alone.  When is your band meeting?

      Sometimes when life throws you a curve ball, throw a spit ball back at it.

      by zaka1 on Mon Aug 31, 2009 at 05:34:33 AM PDT

      [ Parent ]

    •  Unfortunately, I think many of us will be banding (0+ / 0-)

      together and starving together.  Just because we have the ability to band doesn't mean that we won't be starving.  The standard of living in America started it's decline when Bush came into office and the big giveaway to the rich in the form of lower taxes, and the corporate domination of our economy was encouraged.

      What will happen is  a gradual erosion year after year until the debt is removed either by writing it down, paying it off and then inflating it away.

       No expansion of the economy and our standard of living can occur unless the debt is destroyed.  

      The most important thing to remember is that this is going be a very long process, years if not decades.  

      We actually do have an example of what to expect by looking at Japan.  Japan had a debt bubble that blew up in 1989.  20 years later they are still working through it.   December 1989 the Nikkei was 38,916, today it is 10534 rallying from it's low of 7086 in March of this year.  And no one is sure that they have hit bottom.  

      Medicare for All, nothing less will do.

      by Do Tell on Mon Aug 31, 2009 at 09:19:01 AM PDT

      [ Parent ]

  •  I'm reminded of an article I read at daily beast (9+ / 0-)

    about Ted Kennedy's/The Kennedys' finances. Apparently his net worth nearly doubled in 2006, and he didn't lose more than a tiny amount since then. It said his investments are all very conservative.

    Apparently very modest stipends are divied out to the various Kennedys, from the maze of trusts set up by Joe, and designed to continue through the generations. This makes it difficult to blow a fortune or even use it to run for public office.

  •  Krugman (18+ / 0-)

    may be on to something fundamental in that last paragraph you underscore, bob.  And it just may be time for us to entertain the possibility that the office of the President is not at the top of the totem pole when it comes to economic decision making.  Total industry capture of the executive and the legislature (not the judiciary, though) seems to be at play here and our economic fates are no longer meaningfully in the hands of elected officials.  Closely watching the progress of the FOIA case and the bill to audit the Fed that has gained traction in the House.  If these initiatives are squashed as I fear they will be it will just reinforce the notion that the financial boys totally run the show and aren't accountable to anyone.

    •  there is no chance the Fed will be (8+ / 0-)

      required to disclose any of this information.  Congress is bought and paid for by the banks.

      •  Where's the next Daniel Ellsberg ??? (0+ / 0-)

        Apart from being a civilian, he earned the Congressional Medal of Honor.

        It took the rightie bastards decades to get us into another phony war.

        The Next Ellsberg -- needs to out the thugs who soaked up the Paulson Treasury raid money.

        Angry White Males + Personality Disorder delusionals + sane Pro-Lifers =EQ= The GOPer Base

        by vets74 on Mon Aug 31, 2009 at 09:00:18 AM PDT

        [ Parent ]

    •  Isn't This The Pits (3+ / 0-)
      Recommended by:
      G2geek, Do Tell, imperturb

      "Totally owned" is the key.

      For a long time I've been grappling with the notion that the fin-corp cabal is the spider, the world is the web, and all of us from Obama on down is the flies. The trick is that Congressional flies is closer to the spider and gets the strongest strands.

      WWTD: What Would Teddy Do?

      by JG in MD on Mon Aug 31, 2009 at 05:41:43 AM PDT

      [ Parent ]

    •  if what you're saying is correct, then you know.. (0+ / 0-)

      where it leads, right?

      It leads toward the inevitability of physical revolt and civil war.  

      That's something we need to think about long & hard, and then redouble our efforts to get effective change via the ballot box.  That also includes all the boring local races for minor posts in local government, which will be essential to the future we face.  

      •  Maybe not that far (2+ / 0-)
        Recommended by:
        G2geek, In her own Voice

        But the possibility of a debtors' revolt (like with Argentina or Russia) is getting more real.  I suspect this is the major fear of TPTB, not civil unrest.

        •  say more about debtors' revolt. (2+ / 0-)
          Recommended by:
          gogol, glaser

          Interesting idea.

          Though ultimately it comes down to strategies for people defending their land, homes, and gardens / small farms.  If it can be done via the legal system, excellent.  If not, then hopefully via the ballot box.  Otherwise, things get physical.  

          Think about the essentials for surviving.  Water, food, clothing, shelter, sanitation, transportation, communication.  Land is the key to most of this: if you can get thrown out of your house, off your land, you lose.  

          Even sprawly suburbs are viable if people tear up their %$Q@#!! lawns and grow food, which they can easily do starting with a garden.   You would be surprised at what can be done (see http://www.sustainableseedco.com for more).   The only other necessary ingredient is water, and most parts of the US get enough rain that it can be managed.  

          All the rest can be managed by careful planning & cooperation.  Carpooling & trip sharing, conservation, frugality: for examples, look at how they managed the collapse in the USSR without mass starvation, and how Cuba managed its own peak oil transition successfully.  

          Most people are smart enough to be able to learn when crunch time comes.  Those who aren't will get darwinized and that's the way nature works.  But the key to the whole thing is a roof and enough land to grow a garden.  

          So that's where the issue of a debtor's revolt, or other forms of revolt has to be dealt with.   Ultimately it all comes down to protecting land and homes.

          What specifically do you have in mind?

  •  Put this in your bull market pipe and smoke it. (13+ / 0-)

    Federal Reserve and Treasury officials are scrambling to prevent the commercial-real-estate sector from delivering a roundhouse punch to the U.S. economy just as it struggles to get up off the mat.

    Their efforts could be undermined by a surge in foreclosures of commercial property carrying mortgages that were packaged and sold by Wall Street as bonds. Similar mortgage-backed securities created out of home loans played a big role in undoing that sector and triggering the global economic recession. Now the $700 billion of commercial-mortgage-backed securities outstanding are being tested for the first time by a massive downturn, and the outcome so far hasn't been pretty.

    More from doom-and-gloomers (who are to be compared to "truthers")?

    Nope.

    Today's WSJ.

    More bailouts comin' round the bend.

    But not a dime for jobs or health care.

    •  The same packaging for swaps that caused the (3+ / 0-)

      home mortgage crises was let alone to fester in commercial packaging:

      A typical CMBS is stuffed with mortgages on a diverse group of properties, often fewer than 100, with loans ranging from a couple of million dollars to more than $100 million. A CMBS servicer, usually a big financial institution like Wachovia and Wells Fargo, collects monthly payments from the borrowers and passes the money on to the institutional investors that buy the securities.

      The question is WHEN do they plan on regulation, after the fall?

      Not exactly pro-active.

      "Now if there is one thing that we do worse than any other nation, it is try and manage somebody else's affairs." Will Rogers

      by bamabikeguy on Mon Aug 31, 2009 at 04:33:57 AM PDT

      [ Parent ]

    •  You're only a "doom-and-gloomer" (1+ / 0-)
      Recommended by:
      OutcastsAndCastoffs

      if you're on the left. When you're Paulson running around screaming the sky will fall if we don't give the mega-banks trillions of dollars, all the "reality-based" Kossacks will nod their heads and fall in line—"Oh, yes, we must go along to save the economy or everyone will stop lending and we'll all die!"

      If you look at the possibility for negative outcomes from a left-of-center view, then you're a "doom-and-gloomer"—and, worse, you want the economy to fail and oil to run out and the earth to overheat, because otherwise you'd be polite and wait for those in authority, the serious people who are respectable and have real credibility, to warn us about those things, instead of jumping the gun and being all alarmist yourself.

      I mean, that's what I've read on this blog numerous times, so it must be true, right?

  •  Two Americas, (15+ / 0-)

    and nobody is doing anything about it.

    They "prefer an America where parents will lie awake at night worried if they can afford health care their children need."

    by TomP on Mon Aug 31, 2009 at 04:28:55 AM PDT

    •  Yes. That's it, plain and simple. n/t (6+ / 0-)

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Mon Aug 31, 2009 at 04:38:43 AM PDT

      [ Parent ]

    •  This is really Round Two (11+ / 0-)

      What the diarist relates also accurately describes Round One was the Bush expansion of 2002-2007.

      Back in the days before he killed his blog by going to a subscription-only service, Russ Winter used to talk about the Bush economy as relying up "Bully Wannabees" and "Marie Antoinettes", i.e., those benefiting from the engorging of Wall Street and the top 10% of the income quintiles.  The bottom 80% struggled by and took on increasing amounts of debt to do so.  Just like a banana republic.

      As a result, the median American family never recovered to the level of their 2000 income.

      What is different in Round Two is that your average American family has been knocked back even further, and will not be able to run up debt this time.

      There is an economic rebound from the recent recession bottom, but how it will be shared out is very much the question, and as you observe, it does not appear that the Democratic party -- despite having power such as it hasn't in over 30 years -- does not plan on really addressiing the issue.

      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Mon Aug 31, 2009 at 04:44:31 AM PDT

      [ Parent ]

      •  Didn't you just write a diary saying recovery is (3+ / 0-)

        here?  And that you support all the sunshine in the morning from bondad?

        If you take into consideration two economies that does appear to be right.

        The problem is almost everyone writing on Kos on in the 80$ that don't count to the political government of the wall street, c street, and CIA cabal.

      •  Here's How Democrats Addressed It Under Clinton: (10+ / 0-)

        Image Hosted by ImageShack.us

        We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

        by Gooserock on Mon Aug 31, 2009 at 05:04:24 AM PDT

        [ Parent ]

      •  Round Two (16+ / 0-)

        what's amazing about this "rebound" is that, in normal busts, the inequalities of the previous boom are reduced as the very rich get hurt more.

        This time, they are getting hit less and the inequalities of the boom are being made even worse. Stirling Newberry wrote somewhere that this was going to be the first regressive recession in history.

        As you flag, and is pointed out elsewhere, the aggregate numbers (GDP and the like) are increasingly useless given the absolutely staggering inequalities in how that number is distributed amongst the population) - and how differently middle and lower class people are hit by decreasing asset prices than the rich - middle classes lose most of their net savings and can lose their home, ie rather vita lstakes for them.

        •  Hyman Minsky called it the "first receiver" issue (5+ / 0-)

          A few months ago I wrote about this, noting that average Americans will be harmed even by a SUCCESSFUL banking bailout.

          Vast sums of money have been conjured up and delivered to Wall Street.  They are the "first receivers" of this money.  The core of the problem is that the direct recipients of the easy money gain directly, as they are able to purchase assets at today's prices.  Those who receive the easy money late or not at all will face asset and other prices already inflated by the paper money.  Per Minsky:

          Money creation might be of gain for the receiver of the new money, who receives it without a productive effort. The newly created money spreads through the economy as the first receiver spends it on particular goods, bidding up prices and, thus, raising the revenue of the sellers of those goods. But it is at the expense of those who are the ones that are the last to receive part of the new money, while at the same time have to pay higher prices. And then there is the risk of bank failures, a risk everybody will be affected by. Hence, we see that the bankers, the merchants and the government are the first to benefit by the creation of fiduciary media. But this also means that it is at the expense of other parts of the population. And at a crisis, everybody is likely to lose.

          So, if anything, the economic growth starting right now is weighted even more towards the financial classes than the Bushco economy.  I believe this explains at least some of the tremendous run-up in stock and commodity prices since spring -- it represents new money sloshing around, looking for a home.

          "When the going gets tough, the tough get 'too big to fail'."

          by New Deal democrat on Mon Aug 31, 2009 at 06:18:16 AM PDT

          [ Parent ]

          •  The very wealthy spend their money on... (0+ / 0-)

            more/larger vacation houses, fancy cars, and more exotic mistresses.

            Cocaine makes a dent, too.

            Coke is for people who have too much money.

            Invest in America -- not exactly.

            Angry White Males + Personality Disorder delusionals + sane Pro-Lifers =EQ= The GOPer Base

            by vets74 on Mon Aug 31, 2009 at 09:05:14 AM PDT

            [ Parent ]

            •  Even blowing dough on huge ticket items (2+ / 0-)
              Recommended by:
              joanneleon, vets74

              is not much help to the economy when it's a tiny number of families doing it. Let's face it, there is no way they can spend the kind of money they have on "stuff" for themselves—so a lot of what they spend is purely to cause mischief for everyone else and pay politicians off to keep rewriting the already skewed rules more and more in their favor. If these folks wore clothes that matched their political and economic program, they'd have a hundred belts and two hundred pairs of suspenders on.

              It's the same paranoid style of entitlement that runs through the whole right wing—"If you won't let me use government to forcibly convert people to my faith, you're taking away my freedom of religion rights!" The economic equivalent: "If you let working people benefit from anything that goes on in the economy, you're a Communist who wants to persecute courageous entrepreneurs!"

              •  Have you seen the Hamptons ??? (0+ / 0-)

                Any part of the country where McMansions proliferate ???

                Yeah... they can and do spend their money on themselves.

                Angry White Males + Personality Disorder delusionals + sane Pro-Lifers =EQ= The GOPer Base

                by vets74 on Mon Aug 31, 2009 at 01:27:25 PM PDT

                [ Parent ]

                •  Alas (1+ / 0-)
                  Recommended by:
                  vets74

                  Somehow I've managed to avoid seeing the Hamptons and Hilton Head and Martha's Vineyard. Just been traveling in the wrong kind of company, I guess. ;^)

                  I did drive through Weston and Wellesley down near Boston when I was younger. Those two towns were enough to give me a bad attack of Marxist fervor, but fortunately it passed in time.

                  If the rich spent all their money on toys and kept it out of politics (including front organizations like Heritage Foundation, AEI, etc.), then I'd be ecstatic. But they use a substantial portion of it as a "force multiplier" (I think that's the military term) instead of just enjoying what they have.

    •  Bernanke will get red faced at hearings (8+ / 0-)

      for his second term at the Fed, but since it will be the back-benchers doing the hard questioning, MSM won't show any of it....

      Business as usual.

      "Now if there is one thing that we do worse than any other nation, it is try and manage somebody else's affairs." Will Rogers

      by bamabikeguy on Mon Aug 31, 2009 at 04:54:52 AM PDT

      [ Parent ]

    •  Not yet, anyway (9+ / 0-)

      The middle and lower-middle class still believes there will eventually be a return to "normal". If at some point they figure out that the bankers have screwed them into a new feudalism, I think they will start doing something about it. I worry about what that will look like.

      In semi-related news, has anyone seen the recent charts of productivity of the Cantarell oil field in Mexico? It is falling off a cliff. The world "weather forecast" looks more and more like "shitstorm".

      •  I'm comfortably middle-class. (9+ / 0-)

        But I also recognize how fleeting every word in the subject-line of this comment is. I'm in IT. Job security has been a house-of-cards in my line of work, ever since I started.

        If the middle and lower-middle class haven't already figured out what sort of clusterfuck Wall Street has visited on us, then I suspect that the bulk of them aren't ideologically atuned to us. And if they figure out that there is no return to "normal" (short of some serious intervention that ain't coming) then it's not going to be the bankers and brokers who take the heat: it's going to be the underpriveleged and the dark-skinned.

        You can already see it with the teabaggers.

        Regards,
        Corporate Dog

        -----
        We didn't elect Obama to be an expedient president. We elected him to be a great one. -- Eugene Robinson

        by Corporate Dog on Mon Aug 31, 2009 at 06:07:05 AM PDT

        [ Parent ]

        •  Can't argue with that (1+ / 0-)
          Recommended by:
          TomP

          You could make a case that the tea-baggers and such are the first wave of the new lower-class, only to get worse along with the economy. But I do think you'll see some real blowback for the bankers before this is over. Any way you look at it, if the economic disparity continue, or grows, things are gonna get nasty.

          Of course, a lot of the disenfranchised are wasting a lot of energy raving about "socialism", when a little bit of "socialist" safety-net is probably what they (and many of us) need.

        •  IT Job security (or lack thereof) (1+ / 0-)
          Recommended by:
          Corporate Dog

          Case in point -- IBM. In the past 5 years, the IBM US workforce has dropped from 200,000 employees to about 100,000. The number of IBM employees in low wage countries has risen by 100K during this time. This is documented in IBM annual reports. IBM does not attempt to hide its strategy. But they are evasive in reporting the actual layoffs because this would force government regulations like giving 60 days notice to layed off workers (WARN notices). There are huge tax benefits to keeping profits offshore (thanks congress slugs).

          IBMers that I know, think the company will not stop offshoring jobs until there is only a thin veneer of US employees left. And this will be executive management and enough worker bees to put a local face on customer engagements.

          I assume this is happening at all US Tech firms as well.

          Q: What do you call 500 Congress-slugs at the bottom of the ocean? A: Divine intervention. (with apologies to the couple dozen honest ones.)

          by CitizenOfEarth on Mon Aug 31, 2009 at 08:03:20 AM PDT

          [ Parent ]

          •  FWIW: IBM was my first employer out of college. (2+ / 0-)
            Recommended by:
            CitizenOfEarth, Do Tell

            And my department's layoff in 2001 introduced me to the fact that there's no such thing as job security these days.

            Regards,
            Corporate Dog

            -----
            We didn't elect Obama to be an expedient president. We elected him to be a great one. -- Eugene Robinson

            by Corporate Dog on Mon Aug 31, 2009 at 08:18:20 AM PDT

            [ Parent ]

            •  IBM was my employer (0+ / 0-)

              until January this year. These days exIBMers have plenty of company. You are lucky you moved on in 2001. Every year the screws have gotten tighter. It has turned into a real dog eat dog culture. No one cooperates. The employee performance measurement system is such that it is to your benefit when other employees fail.

              Q: What do you call 500 Congress-slugs at the bottom of the ocean? A: Divine intervention. (with apologies to the couple dozen honest ones.)

              by CitizenOfEarth on Mon Aug 31, 2009 at 08:49:12 AM PDT

              [ Parent ]

      •  But, hey, who listens to the rantings of . . . (1+ / 0-)
        Recommended by:
        CitizenOfEarth

        petroleum geologists when faith will see us through.  That Ghawar and Cantrell are in decline has been known and described in The Oil Drum since 2007.

        We have been so good about hiding from the structural problems in our society and government and actively avoiding the consequences of our lifestyle that the onrushing semi of declining material affluence for the preponderance of Americans is going to be quite a shock when it hits.

        Hell, of course the wealthy/powerful are working diligently to insulate themselves, and they count on fear, faith and ignorance as a whip to divide the population into groups that will be ineffective in sustained cooperative action.  It worked in India and it looks like it is working here.

        Distrust of authority should be the first civic duty. - Norman Douglas

        by Fossil on Mon Aug 31, 2009 at 07:12:42 AM PDT

        [ Parent ]

  •  Democracy Incorporated by Sheldon Wolin (14+ / 0-)

    Book published in 2008 lays out power of corporations. Here is a book review from amazon.com on the book.

    "A great book; well argued. The influence of 'corporate America' on the body politic is, in my view, well beyond repeal and thus any semblence or vestiges of democracy salvageable. Although differing in form from the totalitarian regimes of Nazi Germany and fascist Italy and Spain, many of the substantive elements in governance common to these regimes can be found in present day America. Unlike the history and evolution or transition of these regimes in to totalitarian governments, the transition to an 'inverted' American totalitarianism has been qualitatively different - but nonetheless effective. All under the veneer and guise of a democracy.
    This book should be required reading for all Americans."

    •  And with the cooperation of so many Americans (0+ / 0-)

      who think that they should vote against their best interests, election after election, because they are racist, anti-science, gun loving, homophobic, or so blinded by their religion that they thought Bush was a religious conduit and anything he did was sanctioned by the Lord, not to mention just plain old ignorant.

      The corporate takeover could not have occurred without their cooperation and approval.

      Medicare for All, nothing less will do.

      by Do Tell on Mon Aug 31, 2009 at 09:38:19 AM PDT

      [ Parent ]

  •  I get frustrated reading your diaries, for... (15+ / 0-)

    ...you load them up with supporting links/information, the sum of which can drive a reader mad (and wipe out half a morning :) -- if that reader is like me, not versed in the nuances of the economy and Wall Street and struggling to understand how we arrived at this "old normal-new normal" situation. The frustration is not from your diary style, but from the accumulation of information telling us what many of us have long suspected: that that our political leaders (and therefore we) are owned by those who have the big bucks -- something I fear will never, ever change.

    Anyway, I thought of this again last night watching 60 Minutes (or a re-run of it, I suppose) with the story on how the Commodities Futures Modernization Act in 2000 deliberately shielded Wall Street players from the old (1907 crisis inspired) Bucket Shop law, banning gambling on Wall Street -- a shielding that was apparently directly responsible for last year's economic crisis (because it opened the gates to CDS's as instruments of gambling on the losses or gains by others).

    While 60 Minutes told us that this Act was written into legislation passed in the closing moments of a lameduck legislative session, it did not choose to tell us that the Act was attached as a rider to an 11,000 page Omnibus Spending Bill by Phil Gramm and that few in Congress and apparently no one in the WH knew it was in the Omnibus (which really makes you worry about what might make it into any law, including HCR, if legislators don't bother to read what they're voting on).

    I wish that 60 Minutes had included that information so that if our legislators are going to sell us out with legal impunity, then they should at least be publicly identified and discredited for it. Shaming them seems to me to be all we have left.

    Learn more about second-class U.S. citizenship at http://www.equalitymatters.org/

    by Larry Bailey on Mon Aug 31, 2009 at 05:08:38 AM PDT

    •  This shieled derivatives from regulation (7+ / 0-)

      Good move, eh? Also Glass-Steagall was repealed in the same timeframe, taking down the Depression-era law to separate banks and brokerages. Has a lot to do with the current issues.

    •  Don't worry, I get frustrated writing them! (5+ / 0-)
      And, yes, it's topic (actually, a set of topics) that's both complex and, in other ways, elegantly simple (okay, maybe not "elegantly," but there are some basic truths at work here, and attempting to go much farther than looking at human greed and incompetece as well as a deeply flawed system, to explain what's going on is, in at least some instances, really overcomplicating the truths that are self-evident).

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Mon Aug 31, 2009 at 05:34:13 AM PDT

      [ Parent ]

    •  I saw 60' on bucket shops of the 1907 (6+ / 0-)

      crisis--complete news to me.  Never knew this phenomenon had occurred before bringing on the same kinds of losses.  Apparently we never learn--or we do, do something about it, then conveniently forget.  It's like the behavior pattern of adolescents--the parents look away for a moment and the teens take advantage by exceeding the limits--getting involved in high-risk behaviors--getting in trouble with the law and costing their parents a lot of money bailing them out.  Too bad it crashes the family economy so that the rest of the fam has to eat beans and rice and work at McDonald's to supplement the family income.

      It's also the pattern of sociopaths and criminals in social-psychological behavior.  Regulation, law enforcement is required.  Too much freedom without responsible restraints is not a good thing.  So much for free markets.

      Find your own voice--the personal is political.

      by In her own Voice on Mon Aug 31, 2009 at 05:45:03 AM PDT

      [ Parent ]

      •  Then as now, the mantra was Deregulation. (3+ / 0-)

        The difference now is that Wall St runs the congress like a puppet show. We tend to forget that before the crash, players walked away with massive fortunes. Thanks to the Obama "Don't look backwards" policy, we'll never bring the purps to account for their treachery.

        Q: What do you call 500 Congress-slugs at the bottom of the ocean? A: Divine intervention. (with apologies to the couple dozen honest ones.)

        by CitizenOfEarth on Mon Aug 31, 2009 at 07:16:12 AM PDT

        [ Parent ]

    •  shaming them? Hell no. Primary them! n/t (2+ / 0-)
      Recommended by:
      Larry Bailey, vets74
      •  That too -- if they are ours. n/t (2+ / 0-)
        Recommended by:
        G2geek, Do Tell

        Learn more about second-class U.S. citizenship at http://www.equalitymatters.org/

        by Larry Bailey on Mon Aug 31, 2009 at 06:46:55 AM PDT

        [ Parent ]

        •  hell, even if they're theirs. (3+ / 0-)
          Recommended by:
          Larry Bailey, Do Tell, vets74

          Primary the Republicans too.  

          Go undercover into the R party.

          Run on an economic populist ticket.  

          Tell the public: enough wasting time on the culture war, now we're engaged in a war for our own survival.  Bring out all the oldschool Republican stuff about self-reliance and Main Street vs. the evil city slickers.  

          Push the economic populist line so hard it makes TPTB quake in their boots.

          Do it from both parties at the same time.  

          Give the bastards the fight.  

          Never give up.  

          Or rather, if we don't solve this via the ballot box, the time will come when people start demanding to solve it via the ammo box.   Our task is to prevent the latter outcome as far as possible.  Even if it means going undercover as Republicans to push economic populism from that angle too.  

          •  I appreciate your enthusiasm. n/t (3+ / 0-)
            Recommended by:
            G2geek, Do Tell, vets74

            Learn more about second-class U.S. citizenship at http://www.equalitymatters.org/

            by Larry Bailey on Mon Aug 31, 2009 at 06:59:36 AM PDT

            [ Parent ]

          •  Strong primary opposition is the ticket. (0+ / 0-)

            Want to knock somebody off, divide his base.

            Its been happening since the attackon chuck Percy, decades ago.

            Text book example of using money to wipe out a politician -- there it was California money, invading Illinois.

            This idea of running in Republican primaries has merit. Pull away the Eisenhower/Warren/Rockefeller Republicans. Leave them the wack-job delusionals for the general election.

            Angry White Males + Personality Disorder delusionals + sane Pro-Lifers =EQ= The GOPer Base

            by vets74 on Mon Aug 31, 2009 at 09:09:42 AM PDT

            [ Parent ]

  •  Seems to me (8+ / 0-)

    the current stock market rally has been orchestrated  by the financial powers that be to lure the average guy (by that I mean retired schmoes with a couple of million in investable assets who think they are the rich) back into the market as a COVER for the insiders to dump their junk without tanking the market.

    Then once the insiders are out, they'll let it all collapse again.

    Theater all...

    Give me government-run healthcare over Wall Street-run healthcare anyday...

    by trillian on Mon Aug 31, 2009 at 05:33:03 AM PDT

    •  Duh (1+ / 0-)
      Recommended by:
      vets74

      It's what they did when the tech bubble collapsed.

    •  Actually, I believe that the rally was (0+ / 0-)

      orchestrated to reflate the balance sheets of corporate America, banks, as well as the individual.

      What cheaper way is there to put a few trillion back into everyone's pockets so that the economy can recover?

      Like rising home values, rising stock portfolio values makes everyone feel better and the smart ones can sell into the rally.  

      Also, when the stock market increases the value of a corporation's stock, the corporation can then float a secondary stock issue, selling more stock to the institutions/public so that they can put that cash to work elsewhere.

      IPO's are pretty much dead, but a stock market rally really does raise all boats.  (Except for the working poor and those who do not own any stock)

      This strategy really is a boon to the economy.  

      Medicare for All, nothing less will do.

      by Do Tell on Mon Aug 31, 2009 at 09:47:46 AM PDT

      [ Parent ]

  •  Pretty good diagnoses (7+ / 0-)

    of the disease. When I begin to see progressives getting passionate about campaign finance reform, I'll know that the cure is on the way.

  •  bobswern, I love your (5+ / 0-)

    diaries.  This all started back in the 80's "the great robbery of mainstreet."  It has been done in slow steady increments that we couldn't see cleary until the bailouts were given and our livelyhoods taken away by our own government involved with corporate welfare.  A jobless recovery is a joke, how many jobless recoveries have we had?  At least three I can think of.  

    There is something so wrong and most of us can feel it, and see it, but are unsure how to deal with it.  We are on our own, mainstreet is dying.

    Sometimes when life throws you a curve ball, throw a spit ball back at it.

    by zaka1 on Mon Aug 31, 2009 at 06:01:41 AM PDT

    •  Some of us saw it in vivid color. (6+ / 0-)

      The writing was on the wall when Bill Clinton rammed NAFTA through and sold us out.   He was no friend of the working/middle class.  He was just a corporate owned, DLC puppet.  

      When you get right down to it, the middle/working class hasn't had any representation for years.  The last President that worked with the middle class was Eisenhower.   LBJ was focused on the poor and followed by Nixon and a 40 year decent into hell.  

      "YES WE CAN" doesn't mean he is going to. ~~Daily Show

      by dkmich on Mon Aug 31, 2009 at 06:32:33 AM PDT

      [ Parent ]

  •  when white-collar crime is made a capital offense (6+ / 0-)

    will be a great day for humanity.

    Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

    by Benito on Mon Aug 31, 2009 at 06:32:38 AM PDT

  •  The Class War is won (3+ / 0-)
    Recommended by:
    Do Tell, vets74, zaka1

    When the govt is allowed to hide what it does with taxpayer money, the war is over. So much for the Obama promise of lifting the veil of secrecy.

    Q: What do you call 500 Congress-slugs at the bottom of the ocean? A: Divine intervention. (with apologies to the couple dozen honest ones.)

    by CitizenOfEarth on Mon Aug 31, 2009 at 06:46:18 AM PDT

    •  What people are just realizing is that the rich (1+ / 0-)
      Recommended by:
      CitizenOfEarth

      and the powerful know no political party.  They maintain control by controlling both parties, and  in the past decade or so they learned that they needed to control the message so they concentrated their media holdings.  Also they instituted hate radio to ensure that the angry white people are kept angry through a constant campaign of lies.

      Most of the power is concentrated in very few hands and until laws are enacted that destroy the wealth of the mega-rich (think 90% tax on income) and not repealing the estate tax, we will be doomed to a sliding standard of living.  The rich get richer and the rest of us get poorer.

      Their goal is to not only destroy the middle class, but to ensure that they carry the rich on their backs.

      It will be our children who will be paying back these enormous debts and deficits, the rich will continue to prosper.  

      Medicare for All, nothing less will do.

      by Do Tell on Mon Aug 31, 2009 at 09:56:15 AM PDT

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site