A system based almost entirely on fraud

There's another important anniversary at this time of year. Five years ago this week the Banksters crashed our economy, basically by lying and stealing. Their "punishment" cost trillions. Out of our pockets, not theirs.

In summary, the financial industry collectively decided that you could fund economic growth despite stagnant wages through piling on mountains of debt. But when it all went bad, the solution wasn’t to rebalance the economy, to get money into the hands of ordinary workers and preference wages over assets. The solution was to point a fire hose of money at the people who caused the problem, and inflate their assets to preserve the status quo. The Federal Reserve’s emergency lending and then quantitative easing rescued bank balance sheets. The five biggest U.S. banks are now 30 percent bigger than they were at the height of the crisis, nursed back to health by the government. [...]

Worst of all, despite a crisis built on fraud, nobody who perpetrated that fraud saw the inside of a jail cell, removing any meaningful deterrent for financial crimes. Most of those criminals walked away with enough money to fund their lavish lifestyles forever.

Which brings us once again to the largest income gap between since the Roaring 1920s when the previous record was set.

The top 1 percent of U.S. earners collected 19.3 percent of all household income in 2012, their largest stake in Internal Revenue Service figures in at least a century. The previous peak of 18.7 percent came back in 1927, according to an analysis of IRS figures dating to 1913 by economists at the University of California, Berkley, the Paris School of Economics and Oxford University.

And do spare me the wailing about how the 1 percenters suffered more during the crash:

[S]ince the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.

Last year alone, the incomes of the top 1 percent of Americans rose 19.6 percent, compared with a 1 percent increase for the remaining 99 percent.

There oughta be a law. Oh wait. There was a law. They got it abolished and they'll be damned if they're going to allow it to be reinstated.

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Fiscal conservatives are killing us

It's always useful to remember budgets are only political documents. They're a rhetorical weapon of mass deception. Appropriations are the real deal. And more proof that the GOP really doesn't give a flying leap about budgets, even as they now refuse to go to conference to pass one, Republicans are furiously slicing and dicing funding to circumvent the sequestration cuts.

Of course they never offer specifics but the plan "focuses the biggest cuts" on aid to local school districts, health research and enforcement of labor laws. Also:

Veterans Affairs, Homeland Security and the Pentagon would be spared under the plan approved by the House Appropriations Committee on a party-line vote, but legislation responsible for federal firefighting efforts and Indian health care would absorb a cut of 18 percent below legislation adopted in March. [...]

Capitol Hill's budget would be untouched, however. House GOP leaders, who have boasted recently of their efforts to cut Congress' generous budget, opted against cutting further below levels imposed under the automatic, across-the-board spending cuts that began taking effects in March. In fact, the House would get a 1.6 percent budget increase when measured against current levels.

The foreign aid budget would be sharply cut as well, while a bill funding the IRS budget and implementation of new financial regulations would absorb a 20 percent cut from levels approved just two months ago.

Much more at the link but basically anything that aids or protects the middle class and working Americans or the needy gets the ginsu knife while their wealthy cronies are pretty much completely spared from the Republican whopper chopper. Now all they have to do is figure out how to blame the Democrats for it.

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Ted Cruz don't trust nobody but himself

You'll recall the House GOP passed a ridiculous budget based on Paul Ryan's roadmap to ruin back in March knowing full well it had zero chance of survival. Boehner thought he was being very clever with this pass the buck manuver. The GOPers immediately launched a mass tirade demanding Democrats pass their own damn budget in the Senate. Much to everyone's surprise, the Democrats did just that two months ago. According to normal process, the two budgets would go to a Senate/House conference committee shortly thereafter and a single compromise bill would emerge.

But there is no normal procedure now that the crackpot cons have taken even their own party hostage. Now comes the emerging leader of the lunatics, Ted Cruz who vows to block any budget conference negotiations unless his demand to "take a debt limit increase off the table" is met. In other words he wants to guarantee a replay of the same insane kabuki that almost took our economy down before. And that's much more important than passing a budget, which the GOP has been caterwauling about forever.

Cruz clearly has his eye on 2016 and he's more than willing to trash his own party, saying he doesn't trust big spending establishment Republicans either, in order to polish his bonafides with the crackpot rubes and establish himself as the new "Maverick" of the GOP. This is so "call in the white coats" insane that even the old Maverick Gumpy Gramps McCain is calling Cruz crazy. [video at the link]

Of course, no Republican is going to mention the deficit is actually shrinking. In fact it's shrinking faster than even the most optimistic estimates. But why should they be the first? Not like the media is out there telling the people at home about it either. They're too busy inventing scandals to drive their own damn traffic.

[Big thanks to Batocchio of Vagabond Scholar who is sitting in at Mike's Blog Roundup for the link.]

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Same old song and dance on Capitol Hill

The calendar is about to turn on the all new and unimproved GOP debt limit kabuki:

The federal debt limit is set to kick back into effect next weekend after a three-month hiatus, marking the start of a political game of chicken likely to culminate in the fall, when Congress will have to give President Obama a higher limit or risk a federal default.

The GOP's problem is the budget deficit is disappearing on its own. In fact, we're running a bit of a surplus and despite their best efforts at sabotage, the economy is still slowly improving. Government won't run out of money till the fall at the earliest, so the GOPers are left without a hostage to take. Furthermore, GOP leadership isn't keen on threatening default anymore after the beating they took at the end of last year in the polls when they tried to use that trick again.

This is not going according to plan and they don't have a back-up strategy. So after repeatedly demanding the Senate Dems produce a budget, which they did at an astonishing pace, suddenly the GOP doesn't want to talk about budgets anymore.

"I think there's a better atmosphere for a solution than there's been in the past, but I'm a little worried about people here in the Senate having fiscal fatigue. There isn't any sense of urgency right now," said Sen. Bob Corker (R-Tenn.), one of three senators who joined Obama on Monday for a round of golf.

Got that. They've been wailing for years that this is the biggest crisis in the history of mankind, but suddenly they don't want to think about that today. In fact, they want to just forget the whole thing.

With the House and Senate both having passed budget resolutions, the next step in the process should be a conference committee, which Republican leaders said they wanted. Recently, however, they changed their mind and now refuse to allow the process to proceed.

The problem as usual is the crackpot caucus. If it's not going to piss off the damn librul Dimmocrats, then they don't want to know about nothing.

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Yellowstone business owners unhappy campers

Guessing most of these owners vote for Republicans because, small government. That would be the same Republicans who forced the sequester cuts designed to take a chainsaw to the national budget to take effect because, pisses off liberals, or something. Then the business owners discovered this is what "small government" looks like.

Yellowstone Park having to cut something, suspended snow plowing for a couple of weeks to save $400K . Bad for business. Via Kevin Drum, owners decided to pony up the cash to get it done themselves.

But therein lies the perennial rub: Cuts that are welcomed in the abstract are not always appreciated when they hit home. And everything the government does, however small, touches somebody. "You pay your taxes to get certain services," said Bruce Eldredge, executive director of the Buffalo Bill Historical Center, a world-class museum in the center of town, which delivered a $10,000 check to the chamber. "We would, I think, probably argue as a community that we pay our federal taxes to make sure the park is open at a specific time."

This is, obviously, the problem of government in a nutshell: everyone wants spending to be cut, but no one wants spending to be cut on them. They want it to be cut on other people.

In particular—and please excuse the wild guess here—I imagine that most people who have a serious jones for cutting federal spending are really only interested in cutting spending on poor people. Cutting other services just isn't what they signed up for. It's the Obamaphones and the food stamps that are wasteful, not the Yellowstone snowplows and small town air traffic controllers.

Exactly. Their spending is necessary. They are the mighty makers. Only wasteful spending is on those shiftless poors. You know, those takers who are dependent on government services these people don't need.

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The unseen victims of austerity addicts

According to the very important punditry, the sequestration spending cuts are just a big joke because -- ha ha -- the world didn't end and nothing happened to the well off Villagers, so what's the big deal? Of course they don't mention the cuts haven't really taken full effect yet. They're only just now beginning to filter out around our country. Sam Stein and Amanda Terkel collected 100 instances where the spending cuts have started. Already social safety programs like Meals on Wheels are being cut, thousands of jobs are being lost, and those who are lucky enough to keep their jobs are seeing pay cuts of 20% and more. None of these people are laughing.

John Stanton tells one combat veteran's story. The man served honorably in our government's wars. He came home and worked hard to climb the economic ladder. This is his reward.

Then sequestration slashed Maryak's paycheck by nearly 27%. That cut nearly $900 from the $3,400 he makes a pay period. He responded, first, by picking up a job four nights a week delivering pizza for Papa John's; he then traded in the BMW for a white Chevy Impala, to save money and because he discovered that nobody tips the delivery man in the BMW. And since that miserable combination hasn't quite closed the gap — gas is expensive, and the Impala gets terrible mileage — Maryak, who was awarded a bronze star in Sadr City in 2008, found himself dwelling deeply on one question: "How do I unfuck myself from this situation?"

His best answer is to go back to active combat duty, but that's not an easy option:

But Maryak, who's applied for eight deployments so far, has run into another problem: With the United States out of Iraq, withdrawing from Afghanistan, and wary of putting boots on the ground in Africa and the Middle East, "deployments are ridiculously hard to find nowadays."

Admit it pleases the anti-war part of me that this is true, but it doesn't help Maryak solve his cash flow problems. He takes responsibility for his choices. He's worked hard all his life. His story is being repeated thousands of times all across America. They deserve better than to be used as a pawns in the partisan political games on Capitol Hill.

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Sweet charity

I didn't find this at all surprising. Anybody who has ever worked in the restaurant/hospitality industry knows the rich are tightwads. Indeed the richer the are, the stingier they are with tips. So it goes with charitable giving.

One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income. In 2011, the wealthiest Americans—those with earnings in the top 20 percent—contributed on average 1.3 percent of their income to charity. By comparison, Americans at the base of the income pyramid—those in the bottom 20 percent—donated 3.2 percent of their income. The relative generosity of lower-income Americans is accentuated by the fact that, unlike middle-class and wealthy donors, most of them cannot take advantage of the charitable tax deduction, because they do not itemize deductions on their income-tax returns.

It's not that rich don't donate at all, but they do it mainly for self-interested reasons. Like tax breaks. This is especially true of conservatives. Something that was made perfectly clear after the fiscal cliff farce of 2012 finally concluded and Ari Fleischer tweeted this threat.



The super wealthy also do it for prestige. Billionaires will donate hundreds of millions to museums and universities and other cultural insitutions that cater mainly to their social class to either get things named after them, or to advance academic work that suits their personal agenda. You won't see the Kochs endowing a chair in civil rights studies or labor law. Nor will you likely see the Waltons donating to Planned Parenthood even as Walmart's business practices create the welfare clients who desperately need the affordable health care.

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The true cost of the Iraq war

James Fallows reminds us George W. Bush fired anybody who dared suggest the true cost of Iraq war. Before the invasion the Bush administration falsely claimed it would be over in a few months, with few troops and cost a couple of billion dollars because as Paul Wolfowitz put it, "the invasion would be largely 'self-financing' via Iraq's oil." Of course, it didn't happen that way at all. Not even close.

Furthermore, according to a new study done at the the Kennedy School at Harvard, we've only just begun to pay and the real costs look more like this:

The Iraq and Afghanistan conflicts, taken together, will be the most expensive wars in US history - totaling somewhere between $4 to $6 trillion.

Mother Jones created a set of cost charts about this as well. You'll notice the greatest cost driver is the interest. Never let them forget, the Bush administration borrowed a ton of money to pay for this folly.



And then there's the hidden costs which were mostly not covered in appropriations at the time. Taking care of the troops that survived and came home damaged. That was the double edge sword of improved battlefield care of the injured. It kept the death count relatively low compared to previous wars, but now we have an obligation to take care of these veterans for the rest of their lives. Considering how young they were when they were deployed, those costs will survive longer than those who started this abomination will live themselves. Our children, and quite possibly our grandchildren, will be paying this war off until they reach old age.

Funny, you never hear the austerity addicts talking about that spending.

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Look at all the hungry people

Wall St. Journal is concern trolling about the rise in use of the food assistance. Some well fed genius is appalled to learn the number of enrollees aren't falling along with the unemployment rate. Well you don't have to be a rocket scientist to figure it out. There's a simple answer:

There are record numbers of Americans on food stamps today because there are record numbers of Americans in poverty (records begin in 1959.)

As of 2011, there were 46.2 million men, women, and children living below the U.S. poverty line. There isn't much reason to believe that the last year of mediocre job growth has dented that number. And until it plunges, the food stamp rolls are going to stay full -- plain and simple.

The jobs being created are minimum wage positions that often only offer part time hours. Minimum wage in this state is $7.25 and most of the jobs in that range won't give any one person more than 24 hours of work in a week. The price of everything from food, to fuel, to clothing to shelter has risen far faster than wages, which we already know have been basically flat for over a decade. Every private food bank is seeing an astronomical rise in clients who were formerly secure in the middle class.

Furthermore the vast majority of the weath that's been created during this stubbornly slow recovery is being sucked up by the already wealthy 1% at the top. But sure, let's demonize the poors. You know, you give those people too many free ramen noodles and they'll never want get off the dole. Better we should let their kids starve than ask the wealthy to kick in a few more tax dollars to help them out. [graphic via Class Wars]

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The invisible victims of casino capitalism

I may as well have titled this "expendable people." Those would be the millions struggling to cope with having lost everything that formerly defined their comfortable lives. They live among us, nearly unnoticed by the throngs of the still secure who stride confidently down sidewalks to their next appointment or linger in cafes absorbed in their mobile devices. In the vast halls of our policy makers, they only exist as random numbers on charts and spreadsheets. The political overlords do not see their faces. They're too far removed from the reality of the invisibles' existence to have even the faintest understanding of their misery.

The luckier invisibles can still afford tenuous shelter in cheap motels but there is little hope they will find a way to return to any semblance of the middle class comfort they once enjoyed. Once the jobs they performed were essential to the creation of wealth for the investor class. Casino capitalism changed all that. Workers are expendable, a negative expense to be eliminated from the balance sheets lest they interfere with the profit margins.

Most of the invisible newly poor played by the rules. They worked hard to build decent lives. They were cheated out of everything, in one way or another, by the investor class. The end of their road looks like some version of this.



No one thinks it could happen to them before they get there. Truth is, it could happen to anyone.

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