Two topics are covered in this blog. One is our financial system harming the middleclass and the other is that our politicians are ignoring the real wishes of the American People. Jim
Professor Elizabeth Warren of Harvard co-author of "The Two-Income Trap: Why Middle-Class Mothers & Fathers are Going Broke" and "The Big Squeeze" Tough Times for the American Worker," Steven Greenhouse of the NY Times delineate how the Republicans changed the equality game starting with Nixon who put in place our current healthcare system where corporations make money by denying expensive care. Corporate Healthcare wanted even more so they started denying routine tests, but the consumer storm made then back-off.
The Republican Congress passed the bills to essentially strip any protections for consumers and placed either lobbyists and incompetents in the SEC and other regulating agencies such as the Federal Reserve. The start of the new season of Damages staring Glenn Close is a must see at the beginning of the new season, a superb actor, a strong supporting cast,at 10 and 11 PM ET/PT on FX cable, tackles the complexities of the Madoff billions of dollars fraud. It is Law & Order that goes a whole season to resolve itself so it goes into complexities that Law & Order cannot handle in one episode. I caught it last season in the middle so I had to really think hard to find out what was really happening. Don't Miss !!.
The result of Republican congress since 1994, bad filibuster rule requiring 60 votes in the senate to vote on any bill, made President Clinton weak, Bill Clinton's staff effectively shut out the influence of Hillary Clinton by not telling her about crucial meetings and the extraordinary influence of his financial advisors Summers, Rubin of Goldman Sachs, and weekly meetings with Alan Greenspan made it possible to dispose of the regulatory Glass-Steagal Act passed during the Great Depression to prevent financial manipulations.
When Bill Clinton at the behest of Hillary Clinton vetoed the Bank enrichment bill, wealth and power including the New York Times started putting false scandals such as Whitewater and used the Lewinsky sex scandal to give him a message not to double-cross wealth and power! The greatly weakened Bill Clinton sign the Glass-Steagal Act and more bank deregulation bills that allowed banks to merge with investment banks and insurance companies. These Republican bills that started us on the road to financial armageddon. Super fast computers such as the one by Goldman Sachs makes individual investors and even Mutual Funds at peril.
Investments: Growth is going to be slow in the USA as long as a decade because of the financial harm these crooked bankers and hedge funds did to our economy which was largely a Financial Economy. History shows us that financial economies always fail as the greed meter gets higher and higher. See Niall Ferguson's book "The Ascent of Money: A Financial History of the World," or the PBS.org tape that you can buy.
What we all need to do is invest all over the world and de-emphasize the USA. A top thinker on investments appeared on Consuelo Mack http:wealthtrack.com last week. On this week’s Consuelo Mack WealthTrack: successfully navigating Wall Street, investment strategy and stock picking with a man who has mastered all three. Consuelo goes in depth with “Financial Thought Leader” Bob Doll, BlackRock’s Vice Chairman, Global Chief Investment Officer, and manager of three highly respected large cap funds. http://wealthtrack.com/previous.php
He favors emerging markets index which I recently cut back on after 90% gains and investments largely outside the USA. He does not Real Estate. I increased my index holdings emphasizing office space recently too. My belief is that the major advisors tells us to invest in things they would like to unload. Otherwise for the next ten years or more, investments outside the USA is where the growth is. I would advise gradually increasing your overseas holdings and how gradual depends on you. It will be hard so if you can get an advisor to do it for you, you are probably better off. Avoid those who promise too much like Madoff did.
Remember it pays to be contrary but also riding out things when ordinary investors pile in when it is near the top based on what TV advisors are telling them! About 25 percent of my holdings are still in the USA in value stock indexes, but my advisor rebalances every quarter so I don't get the maximum uptick, but I increase safety. I tend to tolerate risk more than my advisors so I made up my own system of index funds.
You might consider the Vanguard world index where they do rebalance for you in investments all over the world or use ETF index funds to invest all over the world. Pros trade in these a lot so expect sharp upticks and downticks. Just stay in. But in the end, you need to read books as the ones by John C. Bogle, a former Vanguard chairman, "Enough: True Measures of Money, Business, and Life and "Unconventional Success" by David F. Swensen, the top Yale Fund advisor is quite good. Vanguard Funds are owned by the investors so fees are low, a very important consideration for a slow growth economy.
Elizabeth Warren of Harvard compiled some data of interest to everyone on Inflation Adjusted status of the Middleclass which I saw on the Dylan Ratigan show. http://www.msnbc.msn.com/id/31510813/#35019924 Watch the whole show! Some of the Financial stars of CNBC won't appear on Ratigan's show because he knows too much and asks tough questions.
What happened between 1971 to 2007 to the Middleclass in Inflation Adjusted Dollars?
Inflation adjusted numbers show the tough time the Middleclass is having. With even more outrageous interest rates and minimum payments on credit cards, it is a wonder that we are surviving.
We pay 80% more on housing! (Borrowed so much on house equity that many more homeowners are in trouble.)
We pay 75% more on Health Insurance.
We pay 60% more on Automobiles.
We went from 50% on Fixed Expenses which are unavoidable to 75% to leave us with less disposable income!
Top One Percent got 24% of all income in the USA or 3 million or assuming four in a family, 750,000 families.
50% of total income in the bottom 50% of Americans or 150 million people., 37 million families.
Wall Street Profits: http://www.msnbc.msn.com/id/31510813/#35019924
Jim Kawakami, Jan 25, 2010, http://jimboguy.blogspot.com
What's the Matter With the Democrats? Post-Massachusetts Reflections on Popular Resentment, the Liberal-Left Vacuum, and Right Comeback
January 25, 2010
By Paul Street
... Last November 3rd, the Republicans took all of the top elected offices in Virginia's off-year election. The GOP expelled Democratic governor Jon Corzine in New Jersey. It repealed a gay marriage law in Maine.
And through it all the ratings of hard-right "paranoid-style"[1] radio and television personalities like Glenn Beck, Sean Hannity, Rush Limbaugh, and other demagogues of the FOX News variety have been sky high. The vapid and vicious proto-fascistic former Alaska governor Sarah Palin retains a fierce and stubborn base of support among millions of Americans who believe that Obama is advancing a "secret" socialist agenda and that the corporate media is owned and run by (of all things) "the left."
Meanwhile, the Anti-Defamation League reports that the number of right-wing paramilitary militias operating in the U.S. rose from 50 to 200 between 2007 and 2010.[2]
MSNBC talk show hosts Rachel Maddow and Keith Olbermann might portray the American right as a marginal collection of goofy tea-party kooks whose main role is to provide laughs for all-knowing liberals, but there is something much more significant going on.
THE MATERIAL BASIS OF MASS RESENTMENT
How did this happen? How could the seemingly discredited and even laughable right get so rejuvenated so quickly in the first year of the "liberal" Obama presidency?
There is deep and widespread anger and resentment across the land, There's nothing mysterious about the material basis of what the establishment media arrogantly dismisses as "populist rage." The official U.S. unemployment measure is over 10 percent, terrible enough though the real joblessness rate (including involuntarily part-time workers and the many millions of workers who have given up on the quest for employment) is over 17 percent.[3] One in four U.S. children now relies on Food Stamps. The foreclosure crisis continues, feeding mass homelessness.
There's nowhere to make an honest, family-supporting living for millions of U.S. (ex-) workers, stuck in a former manufacturing superpower whose corporate overlords have moved the lion's share of production offshore.(To give just one example among many: U.S. luggage producers account for less than 1 percent of the U.S. market, yet nearly every U.S. resident owns luggage[4]).
The top 1 percent of the U.S. population owns more than 40 percent of the nation's total net worth and closer to two thirds of its financial assets.
At least 92 million people - close to a third of the U.S. population - lives at less than 200 percent of the notoriously inadequate federal poverty level (currently $21,834 for a family of four).
Forty-five thousand Americans die each year in connection with their inability to obtain health insurance [5]- a curious commentary on life and death in "the world's greatest democracy," the only "modern" industrial-service economy state not to guarantee health care to its broad populace.
And while economic destitution and its terrible consequences (rising crime, incarceration, suicide, family dissolution and more) stalk the "homeland" even as television pundits speak positively of a Wall Street "recovery," the leading financial firms that caused the economic meltdown of 2008-2009 have benefited from massive federal bailouts to the degree that they have resumed giant, multi-billion dollar bonus packages. The federal government offers relatively little to ordinary working people but has recently passed the largest Pentagon budget (funded at more than $ 1 trillion per year) - a giant subsidy to the high tech corporate sector - in history and is presiding over an expensive five-front terror war in Afghanistan, Pakistan, Iraq, Somalia, and Yemen.
In December, the nation's commander- in-chief announced (sounding amazingly Bush-like in West Point) that he will be deepening the country's massive and apparently endless investment in the unpopular "Af-Pak" quagmire. His "homeland" economic team is quarterbacked by the arrogant and authoritarian arch-neoliberal Larry Summers, a Goldman Sachs veteran and former Harvard president who callously privileges global finance capital's bottom line over and above job creation and manufacturing within the U.S.[6]
Noam Chomsky rightly sees this as a confirmation of the 18th century economist and philosopher Adam Smith's warning that "the architects of policy protect their own interests, no matter how grievous the effect on others." "And they are the architects of policy," Chomsky ads. "Obama made sure to staff his economic team with advisors from [the financial] sector."[7]
(Note Republicans make selective quotes for Smith's "Wealth of Nations", but ignore some extremely important caveats about uncontrolled Capitalism and free transfer of capital. The world trades 4 Trillion Dollars Daily with only 1 percent on commerce. Currency manipulation can be extremely lucrative. I hope President Obama has the guts to try to place a small tax on these transaction which would really help our deficits. Jim)
THE NOT-SO REACTIONARY PEOPLE
All of this is grossly contrary to the policy and social preferences of the majority of U.S. citizens, identical with the U.S. government in quaint democratic theory. The American people are nowhere nearly as reactionary as many middle class liberals I know insist. For what its worth (not all that much in America's corporate managed dollar democracy), popular U.S. attitudes on key policies and values have long stood well to the left of both of the two dominant U.S. political parties, the investor class, and the nation's "mainstream" (corporate) media. Contrary to pundits' routine description of the U.S. as a "center-right nation:"
* 71 percent of Americans think that taxes on corporations are too low (Gallup Poll, April 2007), 66 percent of Americans think taxes on upper-income people are too low (Gallup Poll, April 2007) and 62 percent believe corporations make too much profit (Pew Survey 2004).
* 77 percent of Americans think there is too much power concentrated in the hands of a few big companies (Pew Survey 2004), 84 percent think that big companies have too much power in Washington (Harris Poll 2007), and two-thirds think that "big business and big government work together against the people's interests" (Rasmussen Reports, 2009).
*A majority of American voters think that the United States' "most urgent moral question" is either "greed and materialism" (33 percent) or "poverty and economic injustice" (31 percent). Just 16 percent identify abortion and 12 percent pick gay marriage as the nation's "most urgent moral question" (Zogby, 2004). Thus, nearly two-thirds (64 percent) of the population think that injustice and inequality are the nation's leading "moral issues" (Katherine Adams and Charles Derber, The New Feminized Majority [Paradigm, 2008], p.72).
* Just 29 percent of Americans support the expansion of government spending on "defense." By contrast, 79 percent support increased spending on health care, 69 percent support increased spending on education, and 69 percent support increased spending on Social Security (Chicago Council on Foreign Relations [hereafter "CCFR"], "Global Views,"2004).
* 69 percent of Americans think it is the responsibility of the federal government to provide health coverage to all U.S. citizens (Gallup Poll, 2006) and 67 percent "think it's a good idea [for government] to guarantee health care for all U.S. citizens, as Canada and Britain do, with just 27 percent dissenting" (Business Week, 2005).
* 59 percent of Americans support a single-payer health insurance system (CBS/New York Times poll, January 2009) and 65 percent of Americans respond affirmatively to the following question: "Would you favor the government offering everyone a government-administered health insurance plan - something like the Medicare coverage that people 65 and over get - that would compete with private health insurance plans?" (CBS-New York Times, September 23, 2009)
From the polling data I've seen and from numerous heartland "voter contacts" and conversations I've had with "ordinary Americans" over the last few years. I suspect that a majority - or very close to it - of U.S. citizens would significantly agree with much of what Iraq occupation veteran Mike Prsyner recently said in a remarkable speech to Iraq Veterans Against the War:
"I threw families on to the street in Iraq only to come home and see families thrown on to the street in this county in this tragic, tragic and unnecessary foreclosure crisis. I mean to wake up and realize that our real enemies are not in some distant land. They're not people whose names we don't know and whose culture we don't understand. The enemy is people we know very well and people we can identify. The enemy is a system that wages war when it's profitable. The enemy is the CEOs who lay us off from our jobs when it's profitable. It's the insurance companies who deny us health care when it's profitable. It's the banks who take away our homes when it's profitable. Our enemy is not 5000 miles away. They are right here at home. If we organize with our sisters and brothers we can stop this war. We can stop this government. And we can create a better world." [8] ... http://www.zcommunications.org/znet/viewArticle/23720
