In Washington, they always try to announce unpleasantness during the
off-hours (weekends, holidays and such) so that – hopefully – the stink
will be less noticed.
In Detroit, too.
The recent announcement of the accession of Mary Barra as the new CEO
of General Motors just happened to be exactly coincident with the
announcement that the federal government has divested itself of its
remaining partial ownership of GM.
This is good news.
The bad news – according to the Center for Automotive
Research – is that $14 billion in taxpayer dollars went up in smoke as a
result of the government’s “investment” in GM.
Now, this is supposedly mitigated by the recovery of GM – and the
existence of all the associated jobs (and consumer spending and tax
revenue) that would have disappeared had GM not been crash-carted by the
federal government. That is, had the violence of the state not been
used to forcibly compel ordinary Americans to subsidize the failure of a
big corporation and thereby immunize it from the moral hazard (having
to face up to the consequences of poor decisions) that face them – you and me – in the course of their ordinary, individual lives.
But it’s a false premise.
Why is it assumed that, had GM not been crash-carted, a zero-sum game would have ensued? Certainly, there were parts of
GM that were sound. Had the corporation gone on the block, these
worth-something parts would not have been thrown away. Do people throw
away machine tools? Physical plants? Of course not. They are sold – and
re-used.
Productively.
Consider the analogy of a guy who owns a car he can no longer afford
to fix. Perhaps he is not competent to fix it. In any case, he realizes
it is time for him to bow out – and hand the keys to someone who can fix it (or who can afford
to have it fixed). The car is not thrown away because it needs a brake
job (or even a new engine). A free exchange takes place – and both
parties are benefited. The in-over-his-head former owner walks away from
something he isn’t able to deal with – cash in hand, which he can use
for other productive purposes. The new owner has less cash in hand, but
holds title to a new (to him) car that he will repair and which, once
repaired, will be of more value to him than the cash he parted with.
This analogy is simple, but it scales.
Had natural market forces been allowed to take their course, there
would have been change of a piece with our example above. Some people
within the company – in over their heads, perhaps – would have had to
get out. But new people would have come in- and made lemon aid out of lemons.
Without squeezing other people to do it.
Perhaps some of the individual brands (and specific car models)
subsumed under the GM umbrella would have been sold off – but the viable ones would not have been given the needle.
Ownership changing hands is not the end of the world. Sometimes, in
fact, it is a necessary tonic. So also the ebb and flow of success –
and failure. The prospect of the latter encourages the former.
It is much easier to be flippant about walking a tightrope knowing
there’s a safety net below.
It has been observed that America is a mixed economy: Socialism for
the rich – “free market” capitalism for the poor and middle class.
Though the American economy is far from being free, the fundamental
observation is valid. Corporate colossi such as GM are insulated from
the poor decisions taken by management, which almost never feels any
meaningful personal pain as a result of those decisions. They have
“pull.” The small businessman, the individual proprietor does not. The
former chuckles it up with congressmen and senators on private jets
owned by the corporation. The latter gets auto-penned form letters from
his congressman.
Saturday, December 14, 2013
Why You Are Speculating Instead of Investing
People buying assets—stocks, bonds, commodities, real estate—are
ignoring the assets’ returns-on-investment, and instead pinning their
hopes that what they buy today will go up in price tomorrow.
This isn’t “investing”—it’s speculating.
Why is this happening? Easy—read on.
Tell me if this rings a bell: You spent a lifetime putting together a little nest egg, and you want to invest it in something that makes a decent return-on-investment. Something safe and boring, because you don’t want to spend a sleepless night worrying about your money.
Instead, you’re tossing and turning at night because you are not investing—you’re buying assets and hoping they go up before you sell them.
In other words, you’re speculating—you’re gambling.
You’re hopping onto a stock for barely-logical reasons—then dumping it
at a moment’s notice—then rotating into bonds because of some dodgy tip
you heard from a buddy of a friend—then rotating out of bonds in a
panic because of what some idiot on CNBC just said. Then you wonder if
you should buy gold? Uh, no wait, agro-commodities—no, no, no, wait, uh, industrial commodities? Or REIT’s—or, no, ETF’s? Which one? . . .
Christ, whaddo I do . . .
It’s frightening, isn’t it, this buying into and cashing out of different assets—this perpetual momentum-chasing and constant speculation. As frightening as driving a convertible down a twisty mountain road at 100 miles per hour, with no brakes and iffy steering: It’s suicidal—yet there seems no way to get off this horrible ride.
Why are you chasing momentum and speculating? Why is your broker making more money off of your portfolio by way of fees than you are from profits?
Easy: Because today, there is no asset class which is giving consistently reliable, mid-level returns-on-investment.
And this is a deliberate policy . . .
Let’s look at the current investment landscape as it really is: Bond yields are nothing, dividends of stock are pathetic, rents are ridiculous compared to prices. And if you go into mutual funds or any of the other “financial products recommended by my investment advisor” (i.e., “hellfire turds with infinite hidden fees peddled by my local minion of the Demon Bankster Oligarchy”), you’ll probably barely keep pace with inflation . . . assuming of course there isn’t another market “correction”.
In short, nothing and no one is giving a nice, safe 7%
or 8% a year that lets a retail investor like you or me sleep soundly at
night.
That’s all you’re asking: A nice, steady return-on-investment. You’re not greedy, you’re not asking for 15% a year, not even 10%—just a measely 6.5% to 7.5% return, and you’d be a happy camper. Am I right?
But at best, once you factor in fees (which are the profit-killers in retail investing), no retail asset class gives you better than 4% a year, maybe 6% if you’re very lucky. To put that in context, to earn a measely $24,000 a year at 5% after all fees, you need investable assets of almost half a million dollars. And that return would be before taxes. After taxes, that would be . . . $18,000? $13,000, if you live in a high state-income-tax state like California?
$13,000 a year of net return-on-investment off of $480,000 in liquid, investable assets. [Long slow heartfelt whistle . . .]
Note that number: Close to half a million dollars in investable assets—that is, liquid assets. According to Federal Reserve figures, less than 1% of households have that kind of liquid, investable assets. Not real-estate or other physical assets or property. Liquid. Half a mill.
Half a mill, invested safely and prudently, gets you . . . 13 grand.
Jeez . . .
That’s what’s driven normally prudent, cautious people like you and me to speculate wildly, to take insane chances with their nest egg: Chasing returns. I’ve been writing about bitcoin and cryptocurrencies as of late, in the hopes of dissuading people from piling on to that chimera. They have no idea about bitcoins, and they could care less—all they know and care about is that it’s going up. They are chasing returns. And these are not greedy people—they’re just desperate. Meanwhile—and I hate to say it, as this might be you—people who don’t know any better are starting to play options and get into way-sophisticated, way-dangerous financial bets that could hurt them badly.
All because they have money, but that money is not making much. These people chasing returns aren’t greedy or evil. But they realize that, as they grow older, they won’t be able to count on Social Security to get them through their old age. They’ll need a nest egg that will produce enough income to get them through the thirty years after the end of their working life.
Because it is thirty years—and don’t ever let anyone tell you otherwise. Most people, especially those working corporate jobs and getting through a career as opposed to those who own their own business, will likely be sidelined by age 50, 55 tops. That is the reality of Corporate America: Unless you are in the rarefied upper-echelons of your company, you will be cashiered or otherwise sidelined by the time you’re 55—long before you become a liability (i.e., a pensioner) to the company you gave your working life to.
If you get sidelined at 55, and the average lifespan is about 80, 85, so then you need income that will get you through 25 or 30 years.
Once again, and with feeling: Jeez . . .
The origin of this insanity is well-known, and can be summarized in two terms-of-art, six words in total: Zero Interest-Rate Policy, and Quantitative Easing.
ZIRP and QE, as they are known, are the Federal Reserve policies that keep interest rates low. Low interest rates mean asset-price inflation, which translates into low returns-on-investment across the board.
To explain in simple terms: Low interest-rates from the Fed allows banks to borrow cheap money and go out and buy assets. Since you have more demand for the same assets, those assets naturally go up in price. As they go up in price, their return on investment decreases as a percentage of their purchase price. If a stock costs $100 and delivered 10% a year in dividends, with the higher asset-price of $200, that ROI is halved. The same mechanism (basically) works across all other asset classes.
You know the easiest way to spot asset-price inflation? The art market, and the market in collectibles. Art and collectibles are the ultimate greater-fool asset: You will make no money off of buying art or a collectible until and unless you find someone willing to pay more than what you paid for it.
Notice how lately, contemporary art prices have become insane? A Francis Bacon triptych just went for $142 million, a Norman Rockwell for over $40 million. Baseballs are going for six figures, and other ridiculous collectibles—rock concert posters, vintage video games (I’m not kidding)—are also going for absurd sums of money.
But you don’t need to go to the rarefied world of Sotherby’s and Christie’s, or the webpages of eBay—you can go down to your local Century 21 and see how housing prices have “rebounded”.
Nothing has changed in the American economy since 2009—the economy is still struggling, unemployment is still high, debt loads are still monstrous. But home prices are surging like it’s 2006 all over again.
Why? ZIRP and QE. The fact is, asset-price inflation is the whole point of the Fed’s twin policies: The Fed wants assets to be overpriced, and thereby give the impression—the illusion—that the economy is better than it actually is. With home prices up, people feel rich . . . even if they really aren’t. With stocks overpriced, 401(k) accounts are higher than ever . . . even as the stocks underlying them give dividends that are microscopic.
And it’s working, too: This morning, I read what I call a Cheerleader-Headline: “US Household Wealth Reaches High of $77 Trillion”. It’s an Associated Press story, and it sure does sound great, doesn’t it?
The only problem is, it’s not real. All those assets underlying household wealth—home prices, stock prices, bond prices—have all been artificially inflated by ZIRP and QE.
Since assets are on the rise, and since returns-on-investment are paltry, people see the rising asset-prices and say to themselves, “If only I’d gotten into XYZ stock or ABC bond, I would have made a pretty penny when the price of that asset popped, instead of being stuck here in this 4% ROI grind.”
After all, the 4% ROI grind—cruddy though it is—wouldn’t be so bad, if inflation were zero. But it’s not. So the 4% ROI grind is in fact eking out a measely, microscopic 1.5% to flat-1% return-on-investment.
Meanwhile, speculators are making out like bandits.
Repeat after me, with a disheartened and defeated sigh: Jeez . . .
So ordinarily prudent investors like you or me join the bandwagon: They start to speculate. And soon they—me—you—are miserable, getting hammered with each “sure thing”, making increasingly foolish bets to recoup the losses on previous “investments”. In short order, what was once conscientious investing that had turned to impetous speculation soon descends into pure, mindless, panicked gambling—
—and all of a sudden, your nest egg has taken a nasty hit: A loss of 20%, 30%, 40%.
And no one to blame but the guy in the mirror.
Jeez . . . Where’s the hemlock already.
They say that the first step to a cure is to identify the root cause of the problem. And we have: It’s the Fed creating an environment of cheap money. This is creating a “boom” market that is based on speculation—not real value. Returns-on-investment are exceptionally low, encouraging people to speculate, driving up the prices of assets, which in turn lowers returns-on-investment, further encouraging people to speculate. Rinse and repeat.
This spiralling asset bubble—because it is a bubble, and it is spiralling out of control (I mean, really, Twitter has a market cap of $25 billion on exactly $0 revenue?)—is why returns-on-investment are so paltry, encouraging speculation.
So! What’s the next step?
The first thing, after recognizing why we are in this period of irrational aset-price inflation, is to realize that this period will end. Like in a game of musical chairs, some players will realize this won’t end well, so they’ll scramble for a chair—and then everyone will be rushing for a seat.
When that happens, when this asset-price game of musical chairs finally ends, it will be nightmarish for all involved—but there will be tremendous opportunities after the crash.
Just as asset-prices have soared ridiculously, asset-prices will collapse more than they deserve, once this game of musical chairs ends.
Now, the next step is to figure out what to do. That’s what we do at SPG, try to figure out scenarios about what to do and how to invest once this period of cheap-money/asset-inflation ends.
But for now, in this essay, realize that you aren’t alone in having sleepless nights. Rest assured that it’s not you who’s crazy and the markets sane: It’s the markets—goosed by the Fed like a junkie high on heroin—that are insane.
Recognize the insanity, and prepare for the crash.
At my Strategic Planning Group, we’re working on what do when the SHTF. To see what it’s about, check out the SPG Preview Page.
This isn’t “investing”—it’s speculating.
Why is this happening? Easy—read on.
Tell me if this rings a bell: You spent a lifetime putting together a little nest egg, and you want to invest it in something that makes a decent return-on-investment. Something safe and boring, because you don’t want to spend a sleepless night worrying about your money.
Instead, you’re tossing and turning at night because you are not investing—you’re buying assets and hoping they go up before you sell them.
 |
| Now imagine a million other investors and you’ll start to get the idea. |
Christ, whaddo I do . . .
It’s frightening, isn’t it, this buying into and cashing out of different assets—this perpetual momentum-chasing and constant speculation. As frightening as driving a convertible down a twisty mountain road at 100 miles per hour, with no brakes and iffy steering: It’s suicidal—yet there seems no way to get off this horrible ride.
Why are you chasing momentum and speculating? Why is your broker making more money off of your portfolio by way of fees than you are from profits?
Easy: Because today, there is no asset class which is giving consistently reliable, mid-level returns-on-investment.
And this is a deliberate policy . . .
Let’s look at the current investment landscape as it really is: Bond yields are nothing, dividends of stock are pathetic, rents are ridiculous compared to prices. And if you go into mutual funds or any of the other “financial products recommended by my investment advisor” (i.e., “hellfire turds with infinite hidden fees peddled by my local minion of the Demon Bankster Oligarchy”), you’ll probably barely keep pace with inflation . . . assuming of course there isn’t another market “correction”.
 |
| Those black swans are coming . . . |
That’s all you’re asking: A nice, steady return-on-investment. You’re not greedy, you’re not asking for 15% a year, not even 10%—just a measely 6.5% to 7.5% return, and you’d be a happy camper. Am I right?
But at best, once you factor in fees (which are the profit-killers in retail investing), no retail asset class gives you better than 4% a year, maybe 6% if you’re very lucky. To put that in context, to earn a measely $24,000 a year at 5% after all fees, you need investable assets of almost half a million dollars. And that return would be before taxes. After taxes, that would be . . . $18,000? $13,000, if you live in a high state-income-tax state like California?
$13,000 a year of net return-on-investment off of $480,000 in liquid, investable assets. [Long slow heartfelt whistle . . .]
Note that number: Close to half a million dollars in investable assets—that is, liquid assets. According to Federal Reserve figures, less than 1% of households have that kind of liquid, investable assets. Not real-estate or other physical assets or property. Liquid. Half a mill.
Half a mill, invested safely and prudently, gets you . . . 13 grand.
Jeez . . .
That’s what’s driven normally prudent, cautious people like you and me to speculate wildly, to take insane chances with their nest egg: Chasing returns. I’ve been writing about bitcoin and cryptocurrencies as of late, in the hopes of dissuading people from piling on to that chimera. They have no idea about bitcoins, and they could care less—all they know and care about is that it’s going up. They are chasing returns. And these are not greedy people—they’re just desperate. Meanwhile—and I hate to say it, as this might be you—people who don’t know any better are starting to play options and get into way-sophisticated, way-dangerous financial bets that could hurt them badly.
All because they have money, but that money is not making much. These people chasing returns aren’t greedy or evil. But they realize that, as they grow older, they won’t be able to count on Social Security to get them through their old age. They’ll need a nest egg that will produce enough income to get them through the thirty years after the end of their working life.
Because it is thirty years—and don’t ever let anyone tell you otherwise. Most people, especially those working corporate jobs and getting through a career as opposed to those who own their own business, will likely be sidelined by age 50, 55 tops. That is the reality of Corporate America: Unless you are in the rarefied upper-echelons of your company, you will be cashiered or otherwise sidelined by the time you’re 55—long before you become a liability (i.e., a pensioner) to the company you gave your working life to.
If you get sidelined at 55, and the average lifespan is about 80, 85, so then you need income that will get you through 25 or 30 years.
Once again, and with feeling: Jeez . . .
The origin of this insanity is well-known, and can be summarized in two terms-of-art, six words in total: Zero Interest-Rate Policy, and Quantitative Easing.
ZIRP and QE, as they are known, are the Federal Reserve policies that keep interest rates low. Low interest rates mean asset-price inflation, which translates into low returns-on-investment across the board.
To explain in simple terms: Low interest-rates from the Fed allows banks to borrow cheap money and go out and buy assets. Since you have more demand for the same assets, those assets naturally go up in price. As they go up in price, their return on investment decreases as a percentage of their purchase price. If a stock costs $100 and delivered 10% a year in dividends, with the higher asset-price of $200, that ROI is halved. The same mechanism (basically) works across all other asset classes.
You know the easiest way to spot asset-price inflation? The art market, and the market in collectibles. Art and collectibles are the ultimate greater-fool asset: You will make no money off of buying art or a collectible until and unless you find someone willing to pay more than what you paid for it.
Notice how lately, contemporary art prices have become insane? A Francis Bacon triptych just went for $142 million, a Norman Rockwell for over $40 million. Baseballs are going for six figures, and other ridiculous collectibles—rock concert posters, vintage video games (I’m not kidding)—are also going for absurd sums of money.
But you don’t need to go to the rarefied world of Sotherby’s and Christie’s, or the webpages of eBay—you can go down to your local Century 21 and see how housing prices have “rebounded”.
Nothing has changed in the American economy since 2009—the economy is still struggling, unemployment is still high, debt loads are still monstrous. But home prices are surging like it’s 2006 all over again.
Why? ZIRP and QE. The fact is, asset-price inflation is the whole point of the Fed’s twin policies: The Fed wants assets to be overpriced, and thereby give the impression—the illusion—that the economy is better than it actually is. With home prices up, people feel rich . . . even if they really aren’t. With stocks overpriced, 401(k) accounts are higher than ever . . . even as the stocks underlying them give dividends that are microscopic.
And it’s working, too: This morning, I read what I call a Cheerleader-Headline: “US Household Wealth Reaches High of $77 Trillion”. It’s an Associated Press story, and it sure does sound great, doesn’t it?
The only problem is, it’s not real. All those assets underlying household wealth—home prices, stock prices, bond prices—have all been artificially inflated by ZIRP and QE.
Since assets are on the rise, and since returns-on-investment are paltry, people see the rising asset-prices and say to themselves, “If only I’d gotten into XYZ stock or ABC bond, I would have made a pretty penny when the price of that asset popped, instead of being stuck here in this 4% ROI grind.”
After all, the 4% ROI grind—cruddy though it is—wouldn’t be so bad, if inflation were zero. But it’s not. So the 4% ROI grind is in fact eking out a measely, microscopic 1.5% to flat-1% return-on-investment.
Meanwhile, speculators are making out like bandits.
Repeat after me, with a disheartened and defeated sigh: Jeez . . .
So ordinarily prudent investors like you or me join the bandwagon: They start to speculate. And soon they—me—you—are miserable, getting hammered with each “sure thing”, making increasingly foolish bets to recoup the losses on previous “investments”. In short order, what was once conscientious investing that had turned to impetous speculation soon descends into pure, mindless, panicked gambling—
—and all of a sudden, your nest egg has taken a nasty hit: A loss of 20%, 30%, 40%.
And no one to blame but the guy in the mirror.
Jeez . . . Where’s the hemlock already.
They say that the first step to a cure is to identify the root cause of the problem. And we have: It’s the Fed creating an environment of cheap money. This is creating a “boom” market that is based on speculation—not real value. Returns-on-investment are exceptionally low, encouraging people to speculate, driving up the prices of assets, which in turn lowers returns-on-investment, further encouraging people to speculate. Rinse and repeat.
This spiralling asset bubble—because it is a bubble, and it is spiralling out of control (I mean, really, Twitter has a market cap of $25 billion on exactly $0 revenue?)—is why returns-on-investment are so paltry, encouraging speculation.
So! What’s the next step?
The first thing, after recognizing why we are in this period of irrational aset-price inflation, is to realize that this period will end. Like in a game of musical chairs, some players will realize this won’t end well, so they’ll scramble for a chair—and then everyone will be rushing for a seat.
When that happens, when this asset-price game of musical chairs finally ends, it will be nightmarish for all involved—but there will be tremendous opportunities after the crash.
Just as asset-prices have soared ridiculously, asset-prices will collapse more than they deserve, once this game of musical chairs ends.
Now, the next step is to figure out what to do. That’s what we do at SPG, try to figure out scenarios about what to do and how to invest once this period of cheap-money/asset-inflation ends.
But for now, in this essay, realize that you aren’t alone in having sleepless nights. Rest assured that it’s not you who’s crazy and the markets sane: It’s the markets—goosed by the Fed like a junkie high on heroin—that are insane.
Recognize the insanity, and prepare for the crash.
At my Strategic Planning Group, we’re working on what do when the SHTF. To see what it’s about, check out the SPG Preview Page.
Affluenza defense nets Ethan Couch probation for quadruple-fatal crash
December 13, 2013 (HOUSTON) --
''Affluenza,'' the affliction cited by a psychologist to argue that a
North Texas teenager from a wealthy family should not be sent to prison
for killing four pedestrians while driving drunk, is not a recognized
diagnosis and should not be used to justify bad behavior, experts said
Thursday.
A judge's decision to give 16-year-old Ethan Couch 10 years of
probation for the fatal accident sparked outrage from relatives of
those killed and has led to questions about the defense strategy. A
psychologist testified in Couch's trial in a Fort Worth juvenile court
that as a result of "affluenza," the boy should not receive the maximum
20-year prison sentence prosecutors were seeking. The term "affluenza" was popularized in the late 1990s by Jessie O'Neill, the granddaughter of a past president of General Motors, when she wrote the book "The Golden Ghetto: The Psychology of Affluence." It's since been used to describe a condition in which children - generally from richer families - have a sense of entitlement, are irresponsible, make excuses for poor behavior, and sometimes dabble in drugs and alcohol, explained Dr. Gary Buffone, a Jacksonville, Fla., psychologist who does family wealth advising.
But Buffone said in a telephone interview Thursday that the term wasn't meant to be used as a defense in a criminal trial or to justify such behavior.
"The simple term would be spoiled brat," he said.
"Essentially what he (the judge) has done is slapped this child on the wrist for what is obviously a very serious offense which he would be responsible for in any other situation," Buffone said. "The defense is laughable, the disposition is horrifying ... not only haven't the parents set any consequences, but it's being reinforced by the judge's actions."
District Judge Jean Boyd issued his sentence Tuesday after Couch "admitted his guilt" last week in four cases of intoxication manslaughter in the June accident, according to a news release from the Tarrant County prosecutor's office. The ruling came after the judge heard three days of testimony from witnesses, victims' loved ones, investigators and treatment experts.
The psychologist who testified as a defense witness at Couch's trial said the boy grew up in a house where the parents were preoccupied with arguments that led to a divorce, the Fort Worth Star-Telegram reported.
But prosecutor Richard Alpert argued in court that if the boy continues to be cushioned by his family's wealth, another tragedy is inevitable.
A message left for Boyd by The Associated Press was not returned Thursday. The Star-Telegram reported that the judge said the programs available in the Texas juvenile justice system may not provide the intensive therapy Couch needs. His parents had said they would pay for him to go to a $450,000-a-year rehabilitation center near Newport Beach, Calif.
Although Couch's case was handled in juvenile court, he has been identified publicly by the Tarrant County Sheriff's Office.
One legal expert said he had never even heard of "affluenza."
"The concept that I did something because I'm rich and spoiled doesn't look like a good causation," Richard Segura, a supervising attorney at the University of Texas at Austin's Criminal Defense Clinic, told the AP. "It doesn't sound like something that would ameliorate the punishment."
On the other hand, he said, the defense attorney would have likely looked at all the facts in the case and tailored them in a way that he thought would best influence the judge's decision. In addition, the judge likely factored in rehabilitation, restitution and other factors when sentencing Couch, Segura said.
Dr. Suniya Luthar, a psychologist who specializes in the costs of affluence in suburban communities, said her research at Columbia University in New York has shown that 20 percent of upper middle-class adolescents believe their parents would help them get out of a sticky situation at school, such as being caught for the third time on campus with a bottle of vodka. Boyd's sentence reinforces that belief.
"What is the likelihood if this was an African-American, inner-city kid that grew up in a violent neighborhood to a single mother who is addicted to crack and he was caught two or three times ... what is the likelihood that the judge would excuse his behavior and let him off because of how he was raised?" Luthar asked.
"We are setting a double standard for the rich and poor," she added, noting the message is "families that have money, you can drink and drive. This is a very, very dangerous thing we're telling our children."
Authorities said the teen and friends were seen on surveillance video stealing two cases of beer from a store. He had seven passengers in his Ford F-350, was speeding and had a blood-alcohol level three times the legal limit, according to trial testimony. His truck slammed into the four pedestrians, killing Brian Jennings, 43, Breanna Mitchell, 24, Shelby Boyles, 21, and her mother, Hollie Boyles, 52.
Scott Brown, Couch's lead defense attorney, said the teenager could have been freed after two years if he had drawn the 20-year sentence. Instead, the judge "fashioned a sentence that could have him under the thumb of the justice system for the next 10 years," he told the Star-Telegram.
(Copyright ©2013 by The Associated Press. All Rights Reserved.)
Icelandic bank executives sentenced to jail
Four former big names of Icelandic failed bank Kaupthing have been
sentenced to prison by a court in Reykjavík yesterday for their
involvement in market abuses related to a stake taken in the bank by
Qatari sheikh Mohammed Bin Khalifa Bin Hamad al-Thani just weeks before
its collapse in 2008.
The four men sentenced are Hreiðar Már Sigurðsson, Kaupthing’s former CEO; Sigurður Einarsson, former chairman; Magnús Guðmundsson, former CEO of the bank’s branch in Luxembourg; Ólafur Ólafsson, Kaupthing’s second largest share-holder at the time.
The men received sentences ranging from five-and-a-half to three years in prison in what is by far the largest case brought against executives Iceland’s failed banks by the nation’s special prosecutor following the 2008 financial meltdown.
Weeks before the bank collapsed, it announced that the Qatari sheikh
had bought over 5% of its shares in a move which was seen as a
confidence boost for Kaupthing. However, charges stated that the deal
was a complex deceiving scheme, in which a loan from Kaupthing was
deposited into shell companies in the British Virgin Islands before the
money was sent to a company based in Cyprus called Choice which was
owned by one of the defendants and the sheikh. From there, the money was
moved to another company, before finally making its way back to Iceland
to pay for the shares.
Ólafur Hauksson, special prosecutor for the case, said the loans granted by the bank to pay for the shares served the only purpose of boosting the bank’s shares. None of them were standing in court yesterday, and it is expected that they will appeal.
The four men sentenced are Hreiðar Már Sigurðsson, Kaupthing’s former CEO; Sigurður Einarsson, former chairman; Magnús Guðmundsson, former CEO of the bank’s branch in Luxembourg; Ólafur Ólafsson, Kaupthing’s second largest share-holder at the time.
The men received sentences ranging from five-and-a-half to three years in prison in what is by far the largest case brought against executives Iceland’s failed banks by the nation’s special prosecutor following the 2008 financial meltdown.
Ólafur Hauksson, special prosecutor for the case, said the loans granted by the bank to pay for the shares served the only purpose of boosting the bank’s shares. None of them were standing in court yesterday, and it is expected that they will appeal.
Producer of Physical “Casascius” Bitcoins is Being Targeted by the Feds
by Michael Krieger
Meet Mike Caldwell. He is the maker of what seems to be the most popular physical bitcoins on the market, the Casascius coin. All Mr. Caldwell does is have people who want the coins produced send him a certain quantity of bitcoin and then for a $50 fee he puts the private key on a physical coin and sends them back. For this horrible crime of ingenuity and creativity, the U.S. government naturally, has decided to target him. Because they are too busy ignoring the real financial crimes happening out out there…
From Wired:
Mike Caldwell spent years turning digital currency into physical coins. That may sound like a paradox. But it’s true. He takes bitcoins — the world’s most popular digital currency — and then he mints them here in the physical world. If you added up all the bitcoins Caldwell has minted on behalf of his customers, they would be worth about $82 million.
Basically, these physical bitcoins are novelty items. But by moving the digital currency into the physical realm, he also prevents hackers from stealing the stuff via an online attack. Or at least he did. His run as the premiere bitcoin minter may be at an end. Caldwell has been put on notice by the feds.
Read more: http://libertyblitzkrieg.com/2013/12/1
Meet Mike Caldwell. He is the maker of what seems to be the most popular physical bitcoins on the market, the Casascius coin. All Mr. Caldwell does is have people who want the coins produced send him a certain quantity of bitcoin and then for a $50 fee he puts the private key on a physical coin and sends them back. For this horrible crime of ingenuity and creativity, the U.S. government naturally, has decided to target him. Because they are too busy ignoring the real financial crimes happening out out there…
From Wired:
Mike Caldwell spent years turning digital currency into physical coins. That may sound like a paradox. But it’s true. He takes bitcoins — the world’s most popular digital currency — and then he mints them here in the physical world. If you added up all the bitcoins Caldwell has minted on behalf of his customers, they would be worth about $82 million.
Basically, these physical bitcoins are novelty items. But by moving the digital currency into the physical realm, he also prevents hackers from stealing the stuff via an online attack. Or at least he did. His run as the premiere bitcoin minter may be at an end. Caldwell has been put on notice by the feds.
Read more: http://libertyblitzkrieg.com/2013/12/1
$2.75 an Hour?! The Shocking Secret of Goodwill
Goodwill CEOs make over $400,000 a year. But some of its disabled employees are paid less than $3 an hour.
Jodie Gummow
Spreading Christmas ‘goodwill’ during the holidays is what Goodwill
donation centers claim to be all about. The company sells thousands of
donated goods at low prices every year, particuarly around the festive
seaon.In fact, it has almost become part of our culture that when something is not useful to us anymore, we give it to Goodwill.
While part of Goodwill’s mission is also to give people jobs who have disabilities, a recent documentary reveals that the company is exploiting their workers with many legally exempt from minimum wage protection, Upworthy reported.
Former Goodwill employee, Sheila Leland, who is legally blind, said she had to quit her job at a local Goodwill after her employer reduced her hourly wage from $3.50 to $2.75 per hour.
Such actions perfectly legal, based on the law’s assumption that people with disabilities are not as productive as able-bodied individuals.
But advocates such as Marc Maurer, president of the National Federation of the Blind, says such laws are unfair and unethical.
Read more
US mayors’ report: Hunger and homelessness rise as aid programs are cut
By Kate Randall
13 December 2013
A new report on hunger and homelessness paints a devastating picture
of the conditions facing millions of workers and poor people in America. The new US Conference of Mayors’ Task Force annual survey
highlights the extent and causes of hunger and homelessness in 25
cities for the year between September 1, 2012 and August 31, 2013.The report finds that 83 percent of the cities surveyed reported an increase in requests for emergency food assistance over the past year, and 52 percent saw an increase in the total number of people experiencing homelessness. Despite this growing need, mayors in the surveyed cities expect assistance for the hungry and homeless to decrease in the coming year.
This social catastrophe is unfolding as the federal government prepares deeper cuts to the food stamp program, now known as SNAP (Supplemental Nutrition Assistance Program), and Congress allows federal extended jobless benefits for 1.3 million long-term unemployed to expire after Christmas.
Helene Schneider, Task Force co-chair and mayor of Santa Barbara, California, stated, “At a time when our cities are bracing for greater demands on emergency providers, most foresee a cut, not an increase, in the resources at their disposal.”
She added, “Nearly three-fourths of the cities expect that resources to provide emergency food assistance will decrease over the next year, and more than one-fourth expect that decrease will be substantial.”
The surveyed cities listed unemployment as the leading driver of hunger, followed by low wages, poverty and high housing costs. With unemployment insurance claims jumping to 368,000 in the week that ended December 7, from 300,000 the week before, and the Obama administration and Congress prepared to cut jobless benefits, the need for food assistance is certain to rise even further.
While cities reported a 7 percent average increase in the amount of food distributed during the past year, budgets for emergency food purchases increased by less than 1 percent. As a result, more than one-fifth of those needing emergency food assistance—21 percent—did not receive it.
In all of the 25 cities surveyed, food pantries were forced to reduce the quantity of food people could receive at each visit, and emergency kitchens had to cut back on the amount of food offered per meal. In two-thirds of the cities, people were turned away due to a lack of resources. All but one city expect requests for emergency food assistance to increase over the next year, with 12 cities expecting this increase to be substantial.
After job-creation, city officials point to increasing SNAP benefits as key to reducing hunger. This call for aid was cruelly answered in the negative on November 1, when the federal government began implementing $11 billion in cuts over three years to the food stamp program. This across-the-board cutback is estimated to have reduced benefits to less than $1.40 per person per meal.
Even deeper cuts to SNAP are threatened over the next decade. A Republican proposal to slash $39 billion will be reconciled with a Democratic proposal to cut $4 billion, resulting in a cutback that will inevitably cause increased hunger. The Congressional Budget Office estimates that a $39 billion cut would deny benefits to approximately 3.8 million people in 2014.
City officials in the Mayors’ Task Force Survey were asked to describe the potential impact of such a massive cutback. Some of the responses included:
Charlotte, North Carolina: “Food costs are up eight to 15 percent over the same time last year. Already, 40 percent of the families in our area must choose between paying rent or buying food.”
Dallas, Texas: “The proposed cuts would force over 18,000 Dallas County residents out of the [Texas Food Bank Network] program and eliminate 51.3 million meals provided with SNAP assistance.”
Providence, Rhode Island: If $39 billion is cut, “14,000 people will be terminated from the [SNAP] program statewide, including approximately 10,000 in Providence.”
Cleveland, Ohio: “There is no way that the charitable food system can make up for cuts of this magnitude.”
The extent of homelessness
Based on a single-night count in 3,000 US cities and counties, the Department of Housing and Urban Development (HUD) estimates that more than 610,000 people were homeless across the US on any given night last year. Of these, 65 percent were living in emergency shelters or transitional housing, while 35 percent were living in unsheltered locations such as under bridges, in cars, or in abandoned buildings. Individuals comprise 64 percent of those experiencing homelessness, while families make up 36 percent.The number of homeless families increased in 64 percent of the cities included in the mayors’ report. Sixty-eight percent of cities cited poverty as the main cause of homelessness among families, followed by lack of affordable housing (60 percent), unemployment (54 percent), eviction (32 percent), family disputes (28 percent), and domestic violence and low-paying jobs (12 percent each).
The surveyed cities were also asked to provide information on the characteristics of their adult homeless populations. The cities reported that, on average, 30 percent of homeless adults were severely mentally ill, 19 percent were employed, 17 percent were physically disabled, 16 percent were victims of domestic violence, 13 percent were veterans, and 3 percent were HIV Positive.
Seventeen of the 25 cities surveyed reported that emergency shelters had to turn away families with children experiencing homelessness because there were no beds available, while two-thirds of the cities were forced to turn away homeless unaccompanied individuals. The unmet need for emergency shelter ranged from 25 percent to 50 percent in eight cities. Fully half of those seeking shelter in Des Moines, Iowa were turned away, while in Phoenix, Arizona, 45 percent of the need for homeless accommodation was not met.
With permission
Source: WSWS
Fed to Explode QE Next Downturn – Can’t Control Velocity – Mike Maloney
More here: http://www.hiddensecretsofmoney.com ”What’s going to happen the next time there’s an economic downturn? They’re going to double, triple, quadruple (QE). Instead of making 85 billion per month, they’re going to be making 850 billion per month. It’ll go up TEN times.”Along with each episode of ‘Hidden Secrets Of Money’, Mike releases an exclusive presentation available only at our website. This is a small section of from Episode 5′s Exclusive Presentation to show folks who haven’t yet visited the site what they are missing out on. Watch the rest by clicking the link at the end of the video, or the link above.For more information about Gold & Silver or Mike Maloney, visit the Why Gold & Silver channel and subscribe: http://goo.gl/emXEBJoin GoldSilver.com & Mike Maloney on other social networks:Blog: http://goldsilver.com/
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We Are Now In A Situation That Looks Like A Dead End For The Paper Money System
From Philipp Bagus on Mises.org:
A
paper currency system contains the seeds of its own destruction. The
temptation for the monopolist money producer to increase the money
supply is almost irresistible.
In such a system with a constantly increasing
money supply and, as a consequence, constantly increasing prices, it
does not make much sense to save in cash to purchase assets later.
A better strategy, given this scenario, is to
go into debt to purchase assets and pay back the debts later with a
devalued currency. Moreover, it makes sense to purchase assets that
can later be pledged as collateral to obtain further bank loans. A
paper money system leads to excessive debt.
This is especially true of players that can
expect that they will be bailed out with newly produced money such as
big businesses, banks, and the government.
We are now in a situation that looks like a
dead end for the paper money system. After the last cycle,
governments have bailed out malinvestments in the private sector and
boosted their public welfare spending. Deficits and debts
skyrocketed. Central banks printed money to buy public debts (or
accept them as collateral in loans to the banking system) in
unprecedented amounts. Interest rates were cut close to zero.
Deficits remain large. No substantial real growth is in sight.
At the same time banking systems and other
financial players sit on large piles of public debt. A public default
would immediately trigger the bankruptcy of the banking sector.
Raising interest rates to more realistic levels or selling the assets
purchased by the central bank would put into jeopardy the solvency of
the banking sector, highly indebted companies, and the government.
It looks like even the slowing down of money
printing (now called “QE tapering”) could trigger a bankruptcy
spiral. A drastic reduction of government spending and deficits does
not seem very likely either, given the incentives for politicians in
democracies.
So will money printing be a constant with
interest rates close to zero until people lose their confidence in
the paper currencies? Can the paper money system be maintained or
will we necessarily get a hyperinflation sooner or later?
http://www.thedailycrux.com/Post/43942/end-of-america-update-how-the-paper-money-experiment-will-end
Russia’s
Largest Bank Proposes Bitcoin Alternative
Hot
on the heels of JPMorgan’s
“web cash” developments in the virtual currency arena, the
CEO of Russia largest bank – Sberbank – appears to be looking for
alternatives…
- *SBERBANK CEO GREF SAYS FUTURE BELONGS TO VIRTUAL CURRENCIES
- *GREF SAYS DEVELOPMENT OF VIRTUAL CURRENCIES ‘CAN’T BE STOPPED’
- *SBERBANK CEO CALLS FOR GREATER REGULATION OF VIRTUAL CURRENCIES
- *SBERBANK MAY FORM OWN VIRTUAL CURRENCY ON BASIS OF YANDEX MONEY
U.S.
Dollar Freefall Will Continue…Here’s Why By Gregory Mannarino
Gregory Mannarino brings us this ‘alert
video’ sharing with us that the US dollar will continue its free
fall and there’s a good reason why. Can anything at all stop this
ship that is taking on water and rapidly sinking? Gregory informs us
that the collapse of the dollar will be felt by every living person
in this world…and its end is all but complete.
Global Economy Endangered by “Quantitative Easing”: Towards a New Financial Derivatives Bubble?
Continental developments for a multipolar world
Notwithstanding so many expert studies and international conferences devoted to the reform of global finance and of banks considered “too big to fail”, we are still faced with continuing irresponsible and unacceptable economic and financial behaviour, and this is what bears the primary responsibility for the financial crisis.
To make things more complicated and dangerous, since 2008 public bailout operations have significantly increased indebtedness in the G20 economies. Overall, G20 countries have seen their total indebtedness increase by more than 30%, both domestic and international debt, public and private. This increase in total debt reflects a large increase in public indebtedness, particularly in advanced economies, that has not been offset by any decrease in aggregate private indebtedness.
Despite all efforts to decrease fiscal deficits, gross public debt of the G20 has risen by an average of 22% of GDP in the period between 2007 and 2013. The situation is more favourable in emerging economies, notably among larger economies in Latin America, where both fiscal deficits and public debt have declined on average. Among these economies, public debt to GDP is in most cases close to or below the 40% ratio.
To deal with such a major financial earthquake, central banks in major economies have lowered policy rates to near zero and have massively expanded their balance sheets. As a result, the central banks hold assets that have risen from about $4 trillion just before the crisis to $10 trillion today.
The policy of “quantitative easing”
In fact, since 2007 the US Federal Reserve System has been working with “non traditional policy tools”, that is with non conventional monetary weapons, which are based on enlargement and management of its “balance sheet”.
Venezuela v. US Budget Priorities
by Stephen Lendman
RINF Alternative News
Both countries are polar opposites. Bolivarian fairness defines
Venezuela. Government of, by and for wealth, power and privilege
describes America.Venezuela treats all its people equitably. America exploits millions of ordinary ones callously. Conditions today are worse than ever in modern times.
Force-fed austerity when vital aid is needed defines the United States of I Don’t Care! Wealth and poverty extremes are unprecedented. So are deprivation levels.
A US Conference of Mayors (USCM) survey showed emergency food aid requests in 25 large cities plus Washington increased on average by 7% year-over-year.
The time frame studied was from August 2012 through September 2013.
“(T)here’s no question that the slow pace of recovery is making it difficult – and, for many, impossible – to respond to the growing needs of the hungry and the homeless.”
Around 43% of emergency food requests came from employed people. Another 9% were homeless. Over 20% were elderly. Imagine letting millions of children go hungry.
Reasons for hunger were unemployment, low pay, poverty, and high housing costs.
Homelessness in surveyed cities rose 4%. Growing hunger in America comes at a time Congress cut vital food stamp benefits.
An initial $11 billion is gone over the next three years. Eligible recipients will receive less than $1.40 per meal in 2014.
Much larger cuts are planned going forward. Tens of millions of Americans rely on vital Supplemental Nutrition Assistance Program (SNAP) aid to get by.
It’s woefully inadequate. It’ll be less so ahead. SNAP recipients and other needy Americans need emergency food pantries to survive.
They’re the sustenance safety net of last resort. They’re struggling more than ever to keep up with growing demand. There isn’t enough contributed food to feed everyone needing it.
A previous article discussed a congressional budget deal no responsible government would accept.
It reflects social injustice. It’s the latest initiative doing so. Numerous others preceded it. Many more will follow.
At issue is waging war on vital safety net protections. Just societies prioritize them. Government resources are used responsibly.
Not in America. Federal revenues increasingly go for militarism, homeland repression, and generous corporate handouts.
Monied interests alone benefit. Popular needs go begging. Ordinary people are left high and dry. They’re increasingly on their own. Neoliberal harshness is official US policy.
What kind of nation ignores vital needs? What kind lets millions of its people go hungry and homeless?
What kind prioritizes global dominance? What kind serves monied interests at the expense of public ones?
What kind ignores its constitution’s general welfare clause? It states “The Congress shall have the power…to provide for the general welfare of the United States.”
Having power means using it responsibly. It’s about treating its people equitably. It’s doing so when most needed. Not in America. Now now. Not ever.
Things today are nightmarish for growing millions. Social America is on the chopping block for elimination.
Major safety net programs are targeted. Death by a thousand cuts is planned. Millions are increasingly on their own.
America is a let ‘em eat cake society. Sink or swim defines policy. Republicans, most Democrats and Obama are in lockstep.
Gutting vital New Deal/Great Society programs is planned. Imagine any country eliminating vital social justice benefits. Imagine the world’s richest one doing it.
Imagine a president calling it “shared sacrifice.” Ordinary people sacrifice so rich ones can share.
Imagine him saying we’re broke. We have no choice. Imagine one lie after another ad nauseam.
Imagine him prioritizing imperial ruthlessness. Imagine him devastating the lives of millions doing so.
Previous articles discussed social safety net cuts. They targeted Social Security, Medicare and Medicaid. More major cuts ahead are planned.
Others reduced spending on:
Head Start for comprehensive education, health, nutrition, and parent involvement services to low-income families with children;
earlier SNAP cuts;
Pell Grants for higher education;
federal wages, pensions and other benefits;
low-income heating assistance;
children’s health;
community health centers;
disease prevention programs;
medical research;
community development block grants for housing;
FEMA first responder funding;
WIC (Women, Infants, and Children) grants to states for supplemental foods, healthcare, and nutrition education for low-income families;
vital infrastructure and transportation needs;
environmental projects;
job training;
longterm unemployment insurance;
energy efficiency and renewable energy programs; and
other across-the-board sequester cuts hitting important domestic programs hardest.
What’s more important than nourishing food, shelter, clothing, healthcare when most needed, and education to the highest levels?
What kind of nation increasingly ignores them? What kind reflects I don’t care? Venezuela is polar opposite.
It mandates free universal healthcare, education to the highest levels, subsidized housing and food, as well as much more.
Its 2014 budget prioritizes serving public needs. In 2013, 37% of budgetary spending went for social services. In 2014, 62% is planned.
National Assembly finance committee member Jose Avila said:
“Our political orientation is to include those most in need. We must address the social sector and ensure access to food, housing, education, health and sport.”
He stressed how Chavez initiatives cut poverty in half. Extreme poverty fell over 70%. In 1998, it was 20.3%. It’ now 7%.
“Our economy is at the service of the Venezuelan people,” Avila added.
On November 5, Venezuela’s National Assembly approved its first round of discussions on its Draft Law on the Budget for the Fiscal Year 2014.
Committee on Finance and Economic Development president Ricardo Sanguino presented it.
It projects 4% 2014 economic growth. It exceeds previous year spending by 39%.
Sanguino said the draft law relates directly to the 2013 – 2019 National Plan for the Bolivarian Socialist Management, the Annual Operative Plan, and various 2014 Institutional Operative Plans.
Budget priorities reflect a strong commitment to Bolivarian principles. Since 2003, health, education, housing and nutrition spending grew from 39% to 48.8% of budgeted priorities.
Venezuela’s population numbers 30.5 million. “Mission Food” helps 17.5 million. It does so through nationwide subsidized supermarkets (Mercal, Pdval and Abastos Bicentenarios).
“Children of Venezuela” helped over 736,500 needy ones. The 2011 established “Great Housing Mission” provided homes for over half a million families.
Elderly Venezuelans receiving pensions increased from around 627,000 in 2003 to 2.5 million in 2013.
Venezuela is a social justice success story. It’s constitutionally mandated. Its Preamble states:
Constitutional provisions “establish a democratic, participatory and self-reliant, multiethnic and multicultural society in a just, federal and decentralized State that embodies the values of freedom, independence, peace, solidarity, the common good, the nation’s territorial integrity, comity and the rule of law for this and future generations.”
They’re “guarantee(d) the right to life, work, learning, education, social justice and equality, without discrimination or subordination of any kind…”
Bolivarianism “promotes peaceful cooperation among nations and further strengthens Latin American integration in accordance with the principle of nonintervention and national self-determination of the people, the universal and indivisible guarantee of human rights, the democratization of imitational society, nuclear disarmament, ecological balance and environmental resources as the common and inalienable heritage of humanity…”
America‘s Constitution has no such language. It shows in official policies. It’s reflected in today’s budget priorities. In Venezuela, constitutional provisions are more than just words.
They reflect reality. Significant amounts of state revenues go for social safety net programs. In America, increasingly less spending does so en route to eliminating it altogether.
Venezuela remains a work in progress toward improving social conditions equitably. America reflects a bipartisan commitment to wrecking them.
Both countries are social justice worlds apart. Which one matters most? Which is more equitable, fair and just?
Which assures a better future for all its people? Which backs its promises with governance of, by and for everyone?
Which cares only about wealth, power and privilege? Which threatens humanity’s survival? Which prioritizes a better future? Which wants it for everyone?
What’s more important than public welfare? Which system do you favor?
Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
http://www.claritypress.com/LendmanII.html
Visit his blog site at sjlendman.blogspot.com.
Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.
It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.progressiveradionetwork.com/the-progressive-news-hour
http://www.dailycensored.com/venezuela-v-us-budget-priorities/
JP Morgan facing $2bn fine for involvement in Madoff ponzi scheme
Bank
tentatively agreed to pay $2bn to settle allegations it failed to
inform US authorities of the jailed fraudsters suspicious activity
JP Morgan Chase is said to be close to a huge deal with the US government. Photograph: Spencer Platt/Getty Images
JP Morgan Chase, the biggest bank in the US, is facing another
multi-billion dollar fine, this time deriving from its involvement with
notorious Ponzi scheme fraudster Bernard Madoff.
The bank has tentatively agreed to pay $2bn to settle allegations it failed to inform US authorities of the jailed fraudsters suspicious activity, according to people familiar with negotiations. A settlement deal with the Justice Department could come as early as next week. The bank declined to comment.
Madoff was arrested at his Manhattan penthouse five years ago this week after his $20bn scam came to light. JP Morgan was his bank for two decades and the US authorities suspect it continued to service his business even as it suspected something was wrong.
The fraudster himself predicted the bank would one day face a big fine. In a 2011 interview with the Financial Times he said: “JPMorgan doesn’t have a chance in hell of not coming up with a big settlement.” He claimed: “There were people at the bank who knew what was going on,” an assertion that JP Morgan has consistently claimed is false.
According to court papers filed by Irving Picard, the trustee charged with recouping losses for Madoff’s victims, the bank had grave doubts about Madoff 18 months before his scam unwound. The documents quote one banker claiming Madoff’s “Oz-like signals” were difficult to ignore.
The bank has tentatively agreed to pay $2bn to settle allegations it failed to inform US authorities of the jailed fraudsters suspicious activity, according to people familiar with negotiations. A settlement deal with the Justice Department could come as early as next week. The bank declined to comment.
Madoff was arrested at his Manhattan penthouse five years ago this week after his $20bn scam came to light. JP Morgan was his bank for two decades and the US authorities suspect it continued to service his business even as it suspected something was wrong.
The fraudster himself predicted the bank would one day face a big fine. In a 2011 interview with the Financial Times he said: “JPMorgan doesn’t have a chance in hell of not coming up with a big settlement.” He claimed: “There were people at the bank who knew what was going on,” an assertion that JP Morgan has consistently claimed is false.
According to court papers filed by Irving Picard, the trustee charged with recouping losses for Madoff’s victims, the bank had grave doubts about Madoff 18 months before his scam unwound. The documents quote one banker claiming Madoff’s “Oz-like signals” were difficult to ignore.
US Congress, White House to allow jobless benefits to expire for 1.3 million
In a display of cruelty and callousness, Congressional Democrats have
made clear that they intend to allow federal extended jobless benefits
for over a million long-term unemployed to expire at the end of the
year.
Senate Majority Leader Harry Reid said that the jobless benefits extension would not be voted on this year in the Senate. Instead, he claimed that the Democrats would fight for a benefits extension next year. “We’re going to push here after the first of the year for an extension of emergency unemployment insurance when the Senate convenes after the new year,” Reid said Wednesday.
Reid blamed “Republican obstruction” for the decision to postpone the vote in the Senate to next year. This is a lie. As the Congressional Research Service notes, “The Senate gives its majority leader the primary responsibility for deciding the order in which bills on the calendar should come to the floor for action.” As Senate Minority Leader Mitch McConnell noted, “He’s the one in charge of the schedule.”
Instead of a vote on extended unemployment benefits, the Senate has allocated 30 hours to debate a nomination to the D.C. Circuit Court.
The elimination of unemployment benefits, which average about $300 a week, even as the Federal Reserve continues to hand tens of billions of dollars to the banks every month, and as corporate profits and the stock markets are soaring, is a clear example of the class interests defended by the entire state apparatus. Whatever the declamations of “partisan gridlock,” the Democrats and Republicans are united on the basic interests of the corporate and financial elite.
The social consequences will be devastating—first of all for the 1.3 million who will be cut off immediately, since they have already exceeded benefits offered by the states. This includes 214,800 people in California, 86,900 in Pennsylvania, 43,800 in Michigan, 64,300 in Illinois, and 127,100 in New York. An additional 3.6 million people would be impacted in 2014. The cutoff of this limited economic assistance will translate into home foreclosures, bankruptcy, hunger and poverty.
Extending the program through next year would cost $26 billion, according to the White House. This is a tiny fraction of what is expended on the military every year, and next to nothing when compared to the vast wealth of the corporate and financial elite.
The Democrats sent a clear signal that they intend to let extended jobless benefits lapse when they failed to make funding for the program a precondition for a budget agreement, which was announced Tuesday by US House and Senate negotiators. The agreement extends Medicare cuts, attacks federal workers’ pensions, and imposes regressive consumption taxes on air travel.
The bipartisan budget proposal is moving rapidly through Congress, passing a key House panel by a 9-3 majority. Republican leaders said the deal is expected to pass the House on Thursday before heading to the Senate next week, despite opposition from hardline conservatives. President Obama has said he will sign the agreement.
Pundits and media commentators are hailing the agreement as a “first step,” which sets the stage and political framework for a bipartisan agreement to slash Social Security and Medicare, the major federal health care and retirement programs.
By the White House’s own estimates, federal extended jobless benefits lifted 2.5 million people out of poverty last year alone. The White House also estimates that for every one person who receives extended jobless benefits, an average of two additional family members receive direct support.
Since the initiation of the Emergency Unemployment Compensation program in 2008, it has been renewed by Congress eleven times. Beginning in 2011, the program began to be pared back sharply. This took place at the same time as states throughout the country have been cutting back on the duration of benefits they provide, with some offering as little as 14 weeks.
These measures have led to a sharp increase in the number of people who are unemployed but do not receive benefits. In 2010, about two thirds of long-term unemployed people received benefits. That number had fallen to 54 percent by 2011 and was down to about 45 percent in 2012.
Now, only about one in three of the long-term unemployed receive benefits at all. This does not count those who have given up looking for work and are no longer counted as unemployed.
The decline in the official unemployment rate provides an entirely false picture of the real jobs crisis, since it does not take into account the sharp fall in the labor force participation rate. Long-term unemployment continues to plague the country. Currently 36 percent of the jobless population has been out of work for six months or longer. Prior to the 2008 crisis, the highest-ever recorded percentage of people out of work in the US for more than six months was 26 percent.
The government now estimates there are 4.1 million people who have been out of work for a half-year or more. According to the latest jobs report, the average duration of unemployment increased by more than a week in November, to 37.2 weeks, while the percentage of the jobless who have been out of work for more than six months hit 37.3 percent, up from 36.1 percent in October.
While the Democrats have sought to posture as opponents of cutting off extended jobless benefits, they have made a calculated decision to allow them to lapse, or even eliminate them altogether, potentially throwing millions of people into poverty.
The decision to allow federal jobless benefits to expire comes just a week after Barack Obama gave a speech in which he called income inequality the “defining challenge of our time” and declared that “over the course of the next year, and for the rest of my presidency” his administration would “focus all our efforts” on narrowing the gap between rich and poor.
Obama had the nerve to make these claims even as he allowed the first-ever nationwide reduction in food stamp benefits to take place in November, backed Detroit Emergency Manager Kevyn Orr’s attempts to slash Detroit municipal retiree benefits, supported a budget that makes permanent over a trillion dollars in sequester cuts, and now is allowing federal jobless benefits to expire.
As George Wentworth, senior staff attorney at the National Employment Law Project, told the WSWS earlier this month, “Unemployment insurance benefits are intended to create a means for workers to feed their families while they get to their next job. When you have benefits that are less than it takes to find a job, it puts pressure on people to take a worse job.” The cuts in benefits will mean that workers will be pressured to accept far worse jobs than they had originally lost.
This is entirely of a piece with the overall strategy of the US ruling class and the Obama administration, which has sought to use the economic crisis resulting from the 2008 crash to drive down workers’ wages, boost corporate profits, and swell the assets of the super-rich.
Senate Majority Leader Harry Reid said that the jobless benefits extension would not be voted on this year in the Senate. Instead, he claimed that the Democrats would fight for a benefits extension next year. “We’re going to push here after the first of the year for an extension of emergency unemployment insurance when the Senate convenes after the new year,” Reid said Wednesday.
Reid blamed “Republican obstruction” for the decision to postpone the vote in the Senate to next year. This is a lie. As the Congressional Research Service notes, “The Senate gives its majority leader the primary responsibility for deciding the order in which bills on the calendar should come to the floor for action.” As Senate Minority Leader Mitch McConnell noted, “He’s the one in charge of the schedule.”
Instead of a vote on extended unemployment benefits, the Senate has allocated 30 hours to debate a nomination to the D.C. Circuit Court.
The elimination of unemployment benefits, which average about $300 a week, even as the Federal Reserve continues to hand tens of billions of dollars to the banks every month, and as corporate profits and the stock markets are soaring, is a clear example of the class interests defended by the entire state apparatus. Whatever the declamations of “partisan gridlock,” the Democrats and Republicans are united on the basic interests of the corporate and financial elite.
The social consequences will be devastating—first of all for the 1.3 million who will be cut off immediately, since they have already exceeded benefits offered by the states. This includes 214,800 people in California, 86,900 in Pennsylvania, 43,800 in Michigan, 64,300 in Illinois, and 127,100 in New York. An additional 3.6 million people would be impacted in 2014. The cutoff of this limited economic assistance will translate into home foreclosures, bankruptcy, hunger and poverty.
Extending the program through next year would cost $26 billion, according to the White House. This is a tiny fraction of what is expended on the military every year, and next to nothing when compared to the vast wealth of the corporate and financial elite.
The Democrats sent a clear signal that they intend to let extended jobless benefits lapse when they failed to make funding for the program a precondition for a budget agreement, which was announced Tuesday by US House and Senate negotiators. The agreement extends Medicare cuts, attacks federal workers’ pensions, and imposes regressive consumption taxes on air travel.
The bipartisan budget proposal is moving rapidly through Congress, passing a key House panel by a 9-3 majority. Republican leaders said the deal is expected to pass the House on Thursday before heading to the Senate next week, despite opposition from hardline conservatives. President Obama has said he will sign the agreement.
Pundits and media commentators are hailing the agreement as a “first step,” which sets the stage and political framework for a bipartisan agreement to slash Social Security and Medicare, the major federal health care and retirement programs.
By the White House’s own estimates, federal extended jobless benefits lifted 2.5 million people out of poverty last year alone. The White House also estimates that for every one person who receives extended jobless benefits, an average of two additional family members receive direct support.
Since the initiation of the Emergency Unemployment Compensation program in 2008, it has been renewed by Congress eleven times. Beginning in 2011, the program began to be pared back sharply. This took place at the same time as states throughout the country have been cutting back on the duration of benefits they provide, with some offering as little as 14 weeks.
These measures have led to a sharp increase in the number of people who are unemployed but do not receive benefits. In 2010, about two thirds of long-term unemployed people received benefits. That number had fallen to 54 percent by 2011 and was down to about 45 percent in 2012.
Now, only about one in three of the long-term unemployed receive benefits at all. This does not count those who have given up looking for work and are no longer counted as unemployed.
The decline in the official unemployment rate provides an entirely false picture of the real jobs crisis, since it does not take into account the sharp fall in the labor force participation rate. Long-term unemployment continues to plague the country. Currently 36 percent of the jobless population has been out of work for six months or longer. Prior to the 2008 crisis, the highest-ever recorded percentage of people out of work in the US for more than six months was 26 percent.
The government now estimates there are 4.1 million people who have been out of work for a half-year or more. According to the latest jobs report, the average duration of unemployment increased by more than a week in November, to 37.2 weeks, while the percentage of the jobless who have been out of work for more than six months hit 37.3 percent, up from 36.1 percent in October.
While the Democrats have sought to posture as opponents of cutting off extended jobless benefits, they have made a calculated decision to allow them to lapse, or even eliminate them altogether, potentially throwing millions of people into poverty.
The decision to allow federal jobless benefits to expire comes just a week after Barack Obama gave a speech in which he called income inequality the “defining challenge of our time” and declared that “over the course of the next year, and for the rest of my presidency” his administration would “focus all our efforts” on narrowing the gap between rich and poor.
Obama had the nerve to make these claims even as he allowed the first-ever nationwide reduction in food stamp benefits to take place in November, backed Detroit Emergency Manager Kevyn Orr’s attempts to slash Detroit municipal retiree benefits, supported a budget that makes permanent over a trillion dollars in sequester cuts, and now is allowing federal jobless benefits to expire.
As George Wentworth, senior staff attorney at the National Employment Law Project, told the WSWS earlier this month, “Unemployment insurance benefits are intended to create a means for workers to feed their families while they get to their next job. When you have benefits that are less than it takes to find a job, it puts pressure on people to take a worse job.” The cuts in benefits will mean that workers will be pressured to accept far worse jobs than they had originally lost.
This is entirely of a piece with the overall strategy of the US ruling class and the Obama administration, which has sought to use the economic crisis resulting from the 2008 crash to drive down workers’ wages, boost corporate profits, and swell the assets of the super-rich.
TSA collected over $500K in spare change last year. Where does the money go?
TSA collected over $500K in spare change last year. Where does the money go?
When asked to empty their pockets at airport security, travelers are quick to oblige placing wallets, cell phones, and spare change in the baskets. In a rush to collect belongings and quickly head to gates for departure, stray coins can be an afterthought for some passengers.
Last year, those afterthoughts totaled $531,395–a substantial increase from the two years prior. In 2011 the TSA collected $488,000, which is up from $409,000 in 2010.
But just where does that hunk of change go? According to the TSA Loose Change Act, “The Transportation Security Administration (TSA) has authority to retain and spend, without annual appropriation, unclaimed money http://www.philly.com/philly/living/travel/20131209_Parade_TSA_Collected_Over__500K_in_Spare_Change_Last_Year__Where_Does_the_Money_Go_.html#6QyzEd7ZkkH9seHi.16
Are the Senkakus Worth a War?
“The U.S.-Japan Mutual Security Treaty of 1960 obligates the United
States to treat any armed attack against any territories under the
administration of Japan as dangerous to [America's] own peace and
safety. This would cover such islets as the Senkakus also claimed by
Beijing.”
So this author wrote 15 years ago in “A Republic Not an Empire.”
And so it has come to pass. The United States, because of this 53-year-old treaty, is today in the middle of a quarrel between Japan and China over these very rocks in the East China Sea.
This Senkakus dispute, which has warships and planes of both nations circling each other around and above the islands, could bring on a shooting war. And if it does, America would be in it.
Yet why should this be America’s quarrel?
The USSR of Nikita Khrushchev and the China of Mao Zedong, the totalitarian Communist states against whom we were committed to defend Japan, are dead and gone.
Why, then, are we still obligated to defend not only Japan, but all of its island possessions? Why were the treaties that committed us to go to war for scores of nations in the Truman-Eisenhower era not dissolved, when the threat that gave rise to those treaties disappeared?
“The commonest error in politics is sticking to the carcass of dead policies,” said Lord Salisbury. Of no nation is that truer than 21st-century America.
For some reason, we cannot let go. We seem so taken with our heroic role in the late Cold War that we cannot give it up, though the world has moved on.
Following China’s declaration of an air defense identification zone over the Senkakus [Diaoyu to China], South Korea declared its own ADIZ, which overlaps upon those of both China and Japan.
South Korea is also in a quarrel with China over a submerged reef in the Yellow Sea known as Ieodo, but to China, Suyan. Seoul has built a maritime research station on the reef, the value of which is enhanced by the oil and gas deposits in the surrounding seabed.
These clashing claims of Beijing and Seoul could present problems for us — for, under our 1953 mutual security treaty, an attack on South Korean territory is to be regarded as “dangerous to [America's] own peace and safety.”
Thus far, China’s response to South Korea’s ADIZ has been muted. For Beijing’s focus is on Japan.
However, South Korea also has a long-running dispute with Tokyo over an island chain in the Sea of Japan.
To the Koreans these islands are Dokdo, to the Japanese, Takeshima.
What we have here, then, are three overlapping air defense identification zones — of China, Japan and South Korea — and three territorial disputes — between China and Japan, China and South Korea, and Japan and South Korea.
And all three nations claim the right to fly warplanes into these zones, and to deny access to foreign warplanes.
America has little control over these countries, all of which have new governments that are increasingly nationalistic.
And this week there appeared an even more ominous cloud.
North Korea’s 30-year-old ruler Kim Jong-un, who has been purging his party and army, ousted, on charges of corruption, his uncle and mentor Jang Song Thaek, the second-most powerful man in the regime.
Kim reportedly had two of Jang’s aides executed, and he is now massing ships and planes along his western sea border with South Korea, a site of previous clashes between North and South.
Kim may also be about to conduct a fourth nuclear test.
Any collision between North and South could instantly involve the United States, which, 60 years after the end of the Korean War, still has 28,500 troops on the peninsula, with thousands right up on the Demilitarized Zone.
And, lest we forget, the United States has a 1951 security treaty with the Philippines that obliges us to come to the defense of those islands. Yet, Manila, too, is involved in a dispute over islets such as Mischief Reef and Scarborough Shoal in a South China Sea that has been declared sovereign territory by Beijing.
The U.S. security treaties with Manila and Tokyo were entered into to defend those countries against a Sino-Soviet bloc that no longer exists.
Our
treaty with Seoul was signed when South Korea was ravaged and destitute
after three years of war. Today, the South has twice the population and
40 times the economy of the North. Why are we still there?
Neither U.S. political party has shown the least interest in reviewing these open-ended war guarantees, though it seems certain that one of these 50- or 60-year-old commitments will one day drag us into a confrontation if not a major war.
U.S. foreign policy today appears rooted less in U.S. vital interests than in nostalgia for the Cold War. As Dean Acheson said of the British half a century ago, so, it seems to be true of us:
The Americans have lost an empire — and not yet found a role.
So this author wrote 15 years ago in “A Republic Not an Empire.”
And so it has come to pass. The United States, because of this 53-year-old treaty, is today in the middle of a quarrel between Japan and China over these very rocks in the East China Sea.
This Senkakus dispute, which has warships and planes of both nations circling each other around and above the islands, could bring on a shooting war. And if it does, America would be in it.
Yet why should this be America’s quarrel?
The USSR of Nikita Khrushchev and the China of Mao Zedong, the totalitarian Communist states against whom we were committed to defend Japan, are dead and gone.
Why, then, are we still obligated to defend not only Japan, but all of its island possessions? Why were the treaties that committed us to go to war for scores of nations in the Truman-Eisenhower era not dissolved, when the threat that gave rise to those treaties disappeared?
“The commonest error in politics is sticking to the carcass of dead policies,” said Lord Salisbury. Of no nation is that truer than 21st-century America.
For some reason, we cannot let go. We seem so taken with our heroic role in the late Cold War that we cannot give it up, though the world has moved on.
Following China’s declaration of an air defense identification zone over the Senkakus [Diaoyu to China], South Korea declared its own ADIZ, which overlaps upon those of both China and Japan.
South Korea is also in a quarrel with China over a submerged reef in the Yellow Sea known as Ieodo, but to China, Suyan. Seoul has built a maritime research station on the reef, the value of which is enhanced by the oil and gas deposits in the surrounding seabed.
These clashing claims of Beijing and Seoul could present problems for us — for, under our 1953 mutual security treaty, an attack on South Korean territory is to be regarded as “dangerous to [America's] own peace and safety.”
Thus far, China’s response to South Korea’s ADIZ has been muted. For Beijing’s focus is on Japan.
However, South Korea also has a long-running dispute with Tokyo over an island chain in the Sea of Japan.
To the Koreans these islands are Dokdo, to the Japanese, Takeshima.
What we have here, then, are three overlapping air defense identification zones — of China, Japan and South Korea — and three territorial disputes — between China and Japan, China and South Korea, and Japan and South Korea.
And all three nations claim the right to fly warplanes into these zones, and to deny access to foreign warplanes.
America has little control over these countries, all of which have new governments that are increasingly nationalistic.
And this week there appeared an even more ominous cloud.
North Korea’s 30-year-old ruler Kim Jong-un, who has been purging his party and army, ousted, on charges of corruption, his uncle and mentor Jang Song Thaek, the second-most powerful man in the regime.
Kim reportedly had two of Jang’s aides executed, and he is now massing ships and planes along his western sea border with South Korea, a site of previous clashes between North and South.
Kim may also be about to conduct a fourth nuclear test.
Any collision between North and South could instantly involve the United States, which, 60 years after the end of the Korean War, still has 28,500 troops on the peninsula, with thousands right up on the Demilitarized Zone.
And, lest we forget, the United States has a 1951 security treaty with the Philippines that obliges us to come to the defense of those islands. Yet, Manila, too, is involved in a dispute over islets such as Mischief Reef and Scarborough Shoal in a South China Sea that has been declared sovereign territory by Beijing.
The U.S. security treaties with Manila and Tokyo were entered into to defend those countries against a Sino-Soviet bloc that no longer exists.
Our
treaty with Seoul was signed when South Korea was ravaged and destitute
after three years of war. Today, the South has twice the population and
40 times the economy of the North. Why are we still there?Neither U.S. political party has shown the least interest in reviewing these open-ended war guarantees, though it seems certain that one of these 50- or 60-year-old commitments will one day drag us into a confrontation if not a major war.
U.S. foreign policy today appears rooted less in U.S. vital interests than in nostalgia for the Cold War. As Dean Acheson said of the British half a century ago, so, it seems to be true of us:
The Americans have lost an empire — and not yet found a role.
Israel does control the US economy afterall? The Bank of Israel's former governor is about to lead the US Fed
More >
, , , , , , , , , , , , , , Former Governor of the Bank of Israel Prof. Stanley Fischer is set to replace Janet Yellen as US Federal Reserve Vice Chairman when she becomes Chairman next month, according to reports from press agencies. Fischer is reportedly President Barack Obama's preferred candidate for the post.
"Bloomberg" cites a source close to the matter as saying that Obama has already offered the job to Fischer who accepted it.
Fischer who was in Israel earlier this week to address the "Globes" 2013 Israel Business Conference strongly hinted that he was about to begin a new job. He said, "I'm currently looking for a job. I was advised not to take a position until I'd waited six months and that will be in another three weeks so I'm probably close to a decision."
"The Wall Street Journal" said that Obama is very close to announcing the appointment of Fischer. Next week the US Senate will vote to approve Yellen's appointment and if there are no hitches she will replace current Fed Reserve chairman Ben Bernanke next month.
Fischer, 70, stepped down as Governor of the Bank of Israel in June, midway through his second term. He holds dual Israeli and US citizenship.
"The New York Times" suggests that Fischer's experience in serving a foreign government could prove a stumbling block in the Senate hearing to approve his candidature, as could his three years as Citigroup vice chairman between 2002-2005, a period of expansion that eventually led to a Federal bailout.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
, , , , , , , , , , , , , , Former Governor of the Bank of Israel Prof. Stanley Fischer is set to replace Janet Yellen as US Federal Reserve Vice Chairman when she becomes Chairman next month, according to reports from press agencies. Fischer is reportedly President Barack Obama's preferred candidate for the post.
"Bloomberg" cites a source close to the matter as saying that Obama has already offered the job to Fischer who accepted it.
Fischer who was in Israel earlier this week to address the "Globes" 2013 Israel Business Conference strongly hinted that he was about to begin a new job. He said, "I'm currently looking for a job. I was advised not to take a position until I'd waited six months and that will be in another three weeks so I'm probably close to a decision."
"The Wall Street Journal" said that Obama is very close to announcing the appointment of Fischer. Next week the US Senate will vote to approve Yellen's appointment and if there are no hitches she will replace current Fed Reserve chairman Ben Bernanke next month.
Fischer, 70, stepped down as Governor of the Bank of Israel in June, midway through his second term. He holds dual Israeli and US citizenship.
"The New York Times" suggests that Fischer's experience in serving a foreign government could prove a stumbling block in the Senate hearing to approve his candidature, as could his three years as Citigroup vice chairman between 2002-2005, a period of expansion that eventually led to a Federal bailout.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
Corporate Extortion: States Are Giving Billions to Corporations That Don’t Create Jobs
Bidding war for Boeing showcases upside-down priorities.
Beyond the schizophrenic spectre of congressional negotiators saying no to spending as governors are offering mountains of cash is a maddening reality: these taxpayer subsidies do not create the promised jobs or investments, a series of striking academic studies have found. All they do is boost bottom lines by cutting corporate costs.
“Economic development officials value business tax incentives as tools needed to compete with other states,” a November report commissioned by New York State’s Tax Reform and Fairness Commission began, stating their presumptive selling point. “There is, however, no conclusive evidence from research studies conducted since the mid-1950s to show that business tax incentives have an impact on net economic gains to the states above and beyond the level that would have been attained absent the incentives.”
The 143-page study, produced by Marilyn M. Rubin of John Jay College and Donald J. Boyd, the former director of the Rockefeller Institute of Government State and Local Government Finance research group, was not alone in this conclusion.
Zero. Think about that. Right now the federal government is curtailing spending on a vast array of needed initiatives—from social safety nets to next-generation weather satellites. And in state and local government, which is the frontline for services and will face the consequences of federal budget cuts, yet another corporate giant is seeking and being offered billions—even as experts say those subsidies are worthless for creating jobs.
“When combined with many previous reports, the Rubin and Boyd [New York State] study shows that state and local giveaways to corporations simply redistribute wealth upward without increasing jobs,” wrote David Cay Johnston, a former Pulitzer Prize winning New York Times taxation reporter for TaxAnalysts.com. “Their continued existence is a testament to the benefits of being politically connected.”
Read more
IMF Wants a 71 Percent Tax Rate
Think Cyprus
Kurt Nimmo
“The IMF’s team of monkeys has been working around the clock on this one, figuring that developed nations can increase their overall tax revenue by increasing tax rates,” Black writes. “They’ve singled out the US, suggesting that the US government could maximize its tax revenue by increasing tax brackets to as high as 71%.”
Black notes that the latest criminal plot by the “grand wizards of
the global financial system” is telling. It “might be the clearest sign
yet that the whole house of cards is dangerously close to being swept
away.”
Can a person still be considered “free” when 71% of what s/he earns is taken away at the point of a gun by a bankrupt, bullying government? Or are you merely a serf then, existing only to feed the system?
Hatcheul explains that taxation schemes like the one cooked up by France’s socialist government – a 75% tax on income above one million euros – will not produce the result desired: the wealthy will avoid taxation, as French actor Gérard Depardieu did when he turned over his passport and became a tax exile. French billionaire Bernard Arnault applied for Belgian nationality in response to socialist thievery and penned a piece titled: If U.S. Had 75% Tax Rate, You’d Leave Too.
Hatcheul:
Of course these measures won’t return the world’s top economies to sustainable levels of debt. That could be achieved only through significant economic growth (the good way) or, as the IMF puts it, “by repudiating public debt or inflating it away” (the bad way). In October the IMF floated a bold idea that didn’t get the attention it deserved: lowering sovereign debt levels through a one-off tax on private wealth.
Think Cyprus.
The IMF is suggesting government should go into your bank account and clip what it deems appropriate and give it to the bankers. Hatcheul says the internationalist loan sharking operation is looking at 10 percent of bank held savings.
“From New York to London, Paris and beyond, powerful economic players are deciding that with an ever-deteriorating global fiscal outlook, conventional levels and methods of taxation will no longer suffice,” he writes. “That makes weapons of mass wealth destruction – such as the IMF’s one-off capital levy, Cyprus’s bank deposit confiscation, or outright sovereign defaults – likelier by the day.”
Old fashioned taxation is out. Expect outright grand larceny at the local bank enforced by the government.
Even if this highway robbery is limited to a few million rich people – and it won’t be, only a large and unprecedented fleecing will satiate the thieves – we can expect the economic results to be significant.
Stealing from producers who create wealth and prosperity will result in lower standards of living for all except the mega-rich who, of course, never pay a dime in taxes (and the really insidious ones employ government to steal even more from you to pay for their monopolistic enterprises and cover their financial market gambling loses).
The latest IMF scheme is the result of a century of brainwashing that insists taxation is part of a social contract between individuals and government. The internationalist banksters now insist we no longer have a use for the social contract concept. In order to prop up a corrupt financial system, outright robbery we be required.
This is part of the reason we have a militarized panopticon police state in place. Burglars usually arrive armed and will easily resort to violence if their plans are challenged or resisted.
With permission
Source: Infowars
Kurt Nimmo
Old fashioned taxation is out. Expect outright grand larceny at the local bank enforced by the government.
Romain Hatcheul’s largely passed over article on the Wall Street Journal’s website was revisited yesterday by Simon Black
over at the Sovereign Man blog. Black spells out the latest IMF scheme
to steal wealth from the producers and enslave billions of people: a
taxation rate over 70 percent.“The IMF’s team of monkeys has been working around the clock on this one, figuring that developed nations can increase their overall tax revenue by increasing tax rates,” Black writes. “They’ve singled out the US, suggesting that the US government could maximize its tax revenue by increasing tax brackets to as high as 71%.”
Can a person still be considered “free” when 71% of what s/he earns is taken away at the point of a gun by a bankrupt, bullying government? Or are you merely a serf then, existing only to feed the system?
Hatcheul explains that taxation schemes like the one cooked up by France’s socialist government – a 75% tax on income above one million euros – will not produce the result desired: the wealthy will avoid taxation, as French actor Gérard Depardieu did when he turned over his passport and became a tax exile. French billionaire Bernard Arnault applied for Belgian nationality in response to socialist thievery and penned a piece titled: If U.S. Had 75% Tax Rate, You’d Leave Too.
Hatcheul:
Of course these measures won’t return the world’s top economies to sustainable levels of debt. That could be achieved only through significant economic growth (the good way) or, as the IMF puts it, “by repudiating public debt or inflating it away” (the bad way). In October the IMF floated a bold idea that didn’t get the attention it deserved: lowering sovereign debt levels through a one-off tax on private wealth.
Think Cyprus.
The IMF is suggesting government should go into your bank account and clip what it deems appropriate and give it to the bankers. Hatcheul says the internationalist loan sharking operation is looking at 10 percent of bank held savings.
“From New York to London, Paris and beyond, powerful economic players are deciding that with an ever-deteriorating global fiscal outlook, conventional levels and methods of taxation will no longer suffice,” he writes. “That makes weapons of mass wealth destruction – such as the IMF’s one-off capital levy, Cyprus’s bank deposit confiscation, or outright sovereign defaults – likelier by the day.”
Old fashioned taxation is out. Expect outright grand larceny at the local bank enforced by the government.
Even if this highway robbery is limited to a few million rich people – and it won’t be, only a large and unprecedented fleecing will satiate the thieves – we can expect the economic results to be significant.
Stealing from producers who create wealth and prosperity will result in lower standards of living for all except the mega-rich who, of course, never pay a dime in taxes (and the really insidious ones employ government to steal even more from you to pay for their monopolistic enterprises and cover their financial market gambling loses).
The latest IMF scheme is the result of a century of brainwashing that insists taxation is part of a social contract between individuals and government. The internationalist banksters now insist we no longer have a use for the social contract concept. In order to prop up a corrupt financial system, outright robbery we be required.
This is part of the reason we have a militarized panopticon police state in place. Burglars usually arrive armed and will easily resort to violence if their plans are challenged or resisted.
With permission
Source: Infowars
Apocalypse, New Jersey
o jobs, no hope - and surveillance cameras everywhere. The strange, sad story of CamdenThe first thing you notice about Camden, New Jersey, is that pretty much everyone you talk to has just gotten his or her ass kicked.
Instead of shaking hands, people here are always
lifting hats, sleeves, pant legs and shirttails to show you wounds or
scars, then pointing in the direction of where the bad thing just
happened.
"I been shot six times," says Raymond, a
self-described gangster I meet standing on a downtown corner. He pulls
up his pant leg. "The last time I got shot was three years ago, twice in
the femur." He gives an intellectual nod. "The femur, you know, that's
the largest bone in the leg."
"First they hit me in the head," says Dwayne "The Wiz"
Charbonneau, a junkie who had been robbed the night before. He lifts
his wool cap to expose a still-oozing red strawberry and pulls his
sweatpants down at the waist, drawing a few passing glances. "After
that, they ripped my pockets out. You can see right here. . . ."
Even the cops have their stories: "You can see right
here, that's where he bit me," says one police officer, lifting his pant
leg. "And I'm thinking to myself, 'I'm going to have to shoot this
dog.'"
"I've seen people shot and gotten blood on me," says
Thomas Bayard Townsend III, a friendly convicted murderer with a tear
tattoo under his eye. "If you turn around here, and your curiosity gets
the best of you, it can cost you your life."
Camden is just across the Delaware River from the
brick and polished cobblestone streets of downtown Philadelphia, where
oblivious tourists pour in every year, gobbling cheese steaks and gazing
at the Liberty Bell, having no idea that they're a short walk over the
Ben Franklin Bridge from a full-blown sovereignty crisis - an un-Fantasy
Island of extreme poverty and violence where the police just a few
years ago essentially surrendered a city of 77,000.
All over America, communities are failing. Once-mighty
Rust Belt capitals that made steel or cars are now wastelands.
Elsewhere, struggling white rural America is stocking up on canned goods
and embracing the politics of chaos, sending pols to Washington ready
to hit the default button and start the whole national experiment all
over again.
But in Camden, chaos is already here. In September,
its last supermarket closed, and the city has been declared a "food
desert" by the USDA. The place is literally dying, its population having
plummeted from above 120,000 in the Fifties to less than 80,000 today.
Thirty percent of the remaining population is under 18, an astonishing
number that's 10 to 15 percent higher than any other "very challenged"
city, to use the police euphemism. Their home is a city with thousands
of abandoned houses but no money to demolish them, leaving whole blocks
full of Ninth Ward-style wreckage to gather waste and rats.
It's a major metropolitan area run by armed teenagers
with no access to jobs or healthy food, and not long ago, while the rest
of America was ranting about debt ceilings and Obamacares, Camden
quietly got pushed off the map. That was three years ago, when new
governor and presumptive future presidential candidate Chris Christie
abruptly cut back on the state subsidies that kept Camden on life
support. The move left the city almost completely ungoverned - a graphic
preview of what might lie ahead for communities that don't generate
enough of their own tax revenue to keep their lights on. Over three
years, fires raged, violent crime spiked and the murder rate soared so
high that on a per-capita basis, it "put us somewhere between Honduras
and Somalia," says Police Chief J. Scott Thomson.
"They let us run amok," says a tat-covered ex-con and
addict named Gigi. "It was like fires, and rain, and babies crying, and
dogs barking. It was like Armageddon."
Not long ago, Camden was everything about America that
worked. In 1917, a report counted 365 industries in Camden that
employed 51,000 people. Famous warships like the Indianapolis were built
in Camden's sprawling shipyards. Campbell's soup was made here. Victor
Talking Machine Company, which later became RCA Victor, made its home in
Camden, and the city once produced a good portion of the world's
phonographs; those cool eight-hole pencil sharpeners you might remember
from grade school - they were made in Camden too. The first drive-in
movie was shown here, in 1933, and one of the country's first planned
communities was built here by the federal government for shipyard
workers nearly a century ago.
But then, in a familiar narrative, it all went to
hell. RCA, looking, among other things, for an escape from unionized
labor, moved many of its Camden jobs to Bloomington, Indiana. New York
Shipbuilding closed in the Sixties, taking 7,000 jobs with it.
Campbell's stuck it out until the Nineties, when it closed up its last
factory, leaving only its corporate headquarters that today is
surrounded by gates high and thick enough to keep out a herd of
attacking rhinoceroses.
Once the jobs started to disappear, racial tensions
rose. Disturbances broke out in 1969 and 1971, the first in response to a
rumor about the beating of a young black girl by police, the second
after a Hispanic man named Rafael Gonzales really was beaten by two
officers. Authorities filed charges against the two cops in that case,
but they initially kept their jobs. The city exploded, with countless
fires, three people shot, 87 injured. "Order" was eventually restored,
but with the help of an alarmist press, the incidents solidified in the
public's mind the idea that Camden was a seething, busted city, out of
control with black anger.
With legal business mostly gone, illegal business took
hold. Those hundreds of industries have been replaced by about 175
open-air drug markets, through which some quarter of a billion dollars
in dope moves every year. But the total municipal tax revenue for this
city was about $24 million a year back in 2011 - an insanely low number.
The police force alone in Camden costs more than $65 million a year. If
you're keeping score at home, that's a little more than $450 a year in
local taxes paid per person, if you only count people old enough to file
tax returns. That's less than half of the $923 that the average New
Jersey resident spends just in sales taxes every year.
The city for decades hadn't been able to pay even for
its own cops, so it funded most of its operating budget from state
subsidies. But once Christie assumed office, he announced that "the
taxpayers of New Jersey aren't going to pay any more for Camden's
excesses." In a sweeping, statewide budget massacre, he cut municipal
state aid by $445 million. The new line was, people who paid the taxes
were cutting off the people who didn't. In other words: your crime, your
problem.
The "excesses" Christie was referring to included
employment contracts negotiated by the police union. A charitable
explanation of the sweet deal Camden gave its cops over the years was
that the police union had an unusually strong bargaining position.
"Remember, this was the only police force in South Jersey whose members
regularly had to risk their lives," says retired Rutgers-Camden
professor Howard Gillette. The less-charitable say these deals were the
result of a hey-it-isn't-our-money-anyway subsidy-mongering. Whatever
the cause, until Christie came along, the Camden police had a relatively
rich contract, with overtime up the wazoo and paid days off on
birthdays. If a cop worked an overnight, he got a 12 percent "shift
enhancement" bump, which made sense because of the extreme danger. But
an officer who clocked in at noon under the same agreement still got an
extra four percent. "Every shift was enhanced," says a spokesman for the
new department.
But a big reason that Christie hit Camden's police
unions so hard was simply that he could. He'd wanted to go after New
Jersey urban schools, which he derided as "failure factories." But a
series of state Supreme Court rulings based on a lawsuit originally
filed on behalf of students in Camden and three other poor communities
in the Eighties - Abbott v. Burke, a landmark case that would mandate
roughly equal per-pupil spending levels across New Jersey - made cuts
effectively impossible. The courts didn't offer similar protection to
police budgets, though. By New Year's 2011, the writing was on the wall.
After Christie announced his budget plans, panicked city leaders got
together, pored over their books and collective-bargaining agreements,
and realized the unthinkable was about to happen. Camden, a city that
even before any potential curtailing of state subsidies made Detroit or
East St. Louis seem like Martha's Vineyard, was about to see its police
force, one of its biggest expenditures, chopped nearly in half.
On January 18th, 2011, the city laid off 168 of its
368 police officers, kicking off a dramatic, years-long,
cops-versus-locals, house-to-house battle over a few square miles of
North American territory that should have been national news, but has
not been, likely because it took place in an isolated black and Hispanic
ghost town.
After the 2011 layoffs, police went into almost total
retreat. Drug dealers cheerfully gave interviews to local reporters
while slinging in broad daylight. Some enterprising locals made up
T-shirts celebrating the transfer of power from the cops back to the
streets: JANUARY 18, 2011 - it's our time. A later design aped the logo
of rap pioneers Run-DMC, and "Run-CMD" - "CMD" stands both for "Camden"
and "Cash, Money, Drugs" - became the unofficial symbol of the
unoccupied city, seen in town on everything from T-shirts to a lovingly
rendered piece of wall graffiti on crime-ridden Mount Ephraim Avenue.
Cops started calling in sick in record numbers, with
absenteeism rates rising as high as 30 percent over the rest of 2011.
Burglaries rose by a shocking 65 percent. The next year, 2012, little
Camden set a record with 67 homicides, officially making it the most
dangerous place in America, with 10 times the per-capita murder rate of
cities like New York: Locals complained that policing was completely
nonexistent and the cops were "just out here to pick up the bodies." The
carnage left Camden's crime rate on par with places like Haiti after
its 2010 earthquake, and with other infamous Third World hot spots, as
police officials later noticed to their dismay when they studied U.N.
statistics.
At times in 2011 and 2012, the entire city was
patrolled by as few as 12 officers. Police triaged 911 calls like an
overworked field hospital, sometimes giving up on property and drug
crimes altogether, focusing their limited personnel mainly on gun crimes
committed during daylight hours. Heading into 2013, Camden was sliding
further and further out of police control. "If Camden was overseas, we'd
have sent troops and foreign aid," says Chuck Wexler of the Police
Executive Research Forum, a guy Chief Thomson refers to as his "wartime
consigliere."
Then, this year, after two years of chaos, Christie
and local leaders instituted a new reform, breaking the unions of the
old municipal police force and reconstituting a new Metro police
department under county control. The old city cops were all cut loose
and had to reapply for work with the county, under new contracts that
tightened up those collective-bargaining "excesses." The new contracts
chopped away at everything from overtime to uniform allowances to
severance pay, cutting the average cost per officer from $182,168 under
the city force to $99,605 in the county force. As "the transfer" from a
municipal police force to a county model went into effect last May,
state money began flowing again, albeit more modestly. Christie promised
$10 million in funding for the city and the county to help the new
cops. Police began building up their numbers to old levels.
Predictably, the new Camden County-run police began to
turn crime stats in the right direction with a combination of beefed-up
numbers, significant investments in technology, and a cheaper and at
least temporarily de-unionized membership. Whether the entire thing was
done out of economic necessity or careful political calculation,
Christie got what he wanted - county-controlled police forces seemed to
be his plan from the start for places like Camden.
In fact, just a few months ago, Christie publicly
touted Camden's new county force as the model he hopes to employ for
Trenton, and perhaps some of Jersey's other crime-sick cities. (For a
state with one of the highest median household incomes in America, New
Jersey also has four of the country's biggest urban basket cases in
Camden, Trenton, Paterson and Newark.) Local county officials, echoing
Christie, called Camden the "police model of the future for New Jersey."
In recent months, Christie has visited Camden several
times, making it plain that he puts the daring 2011 gambit here in his
political win column. And not everyone in Camden disagrees. One ex-con I
talked to in the city surprised me by saying he liked what Christie had
done, and compared Camden's decades-long consumption of state subsidies
to the backward incentive system he'd seen in prison. "In prison, you
can lie in your bed all day long and get credit for good time toward
release," he said, shaking his head. "You should have to do something
other than lie there."
No matter what side of the argument you're on, the
upshot of the dramatic change was that Camden would essentially no
longer be policing itself, but instead be policed by a force run by its
wealthier and whiter neighbors, i.e., the more affluent towns like
Cherry Hill and Haddonfield that surround Camden in the county. The
reconstituted force included a lot of rehires from the old city force
(many of whom had to accept cuts and/or demotions in order to stay
employed), but it also attracted a wave of new young hires from across
the state, many of them white and from smaller, less adrenaline-filled
suburban jurisdictions to the north and east.
And whereas the old city police had a rep for not
wanting to get out of the car in certain bad neighborhoods, the new
force is beginning to acquire an opposite rep for overzealousness.
"These new guys," complains local junkie Mark Mercado, "not only will
they get out of the car, they'll haul you in just for practice."
Energized county officials say they have a plan now
for retaking Camden's streets one impenetrable neighborhood at a time,
using old-school techniques like foot patrols and simple get-to-know-you
community interactions (new officers stop and talk to residents as a
matter of strategy and policy). But the plan also involves the use of
space-age cameras and military-style surveillance, which ironically will
turn this crumbling dead-poor dopescape of barred row homes and
deserted factories into a high-end proving ground for futuristic
crowd-control technology.
Beginning in 2011, when the city first installed a new
$4.5 million command center - it has since been taken over by the
county - police here have gained a series of what they call "force
multipliers." One hundred and twenty-one cameras cover virtually every
inch of sidewalk here, cameras that can spot a stash in a discarded pack
of Newports from blocks away. Police have a giant 30-foot mobile crane
called SkyPatrol they can park in a neighborhood and essentially throw a
net over six square blocks; the ungainly Japanese-robot-style device
can read the heat signature of a dealer with a gun sitting in total
darkness. There are 35 microphones planted around the city that can
instantly detect the exact location of a gunshot down to a few meters
(and just as instantly train cameras on escape routes). Planted on the
backs of a fleet of new cruisers are Minority Report-style scanners that
read license plates and automatically generate warning letters to send
to your mom in the suburbs if you've been spotted taking the Volvo
registered in her name to score a bag of Black Magic on 7th and Vine.
The streets have noticed the new technology. Dealers
and junkies alike have even begun to ascribe to the police powers they
don't actually have. "They have facial-recognition on cars, man," says
Townsend, the homeless ex-con with the murder sheet. "So that when you
go by 'em, they see if you are wanted for anything."
For sure, there's bitterness on streets in Camden over
the fact that the city was essentially abandoned three years ago. But
misery loves company, and this is a place where even the police seem
shellshocked. Some of them, you get the sense, feel abandoned too - cut
off from the rest of America just like everyone else here. Very few of
them have the pretend-macho air you get from hotshot cops in other tough
cities. Camden police will come straight out and tell you stories about
getting their faces kicked in and/or beaten half to death. And they all
talk about this place with a kind of awe, often shaking their heads and
whispering through the worst stories.
"The kid happened to be on a bike," begins a 20-year
police vet named John Martinez, closing his eyes as he remembers a story
from July 2011. He was riding with a rookie partner that day. The city
at the time was still in near-total chaos, with drug dealing mostly
going unchallenged by the police. But on that hot July afternoon,
Martinez spotted a teenager doing a hand-to-hand on Grant Street,
shrugged, and decided to pursue anyway.
"[The dealer] saw me walking up to him. I told the
rookie to stay in the car, because 90 percent of the time, they run."
The kid started pedaling away. The rookie gave chase in the car, then
stopped, jumped out and went after him on foot. Martinez started to
follow, but then looked back at the car and realized his newbie partner
had left it running.
"I started to run with him," he said, "but I thought, 'Yeah, this'll be gone.'"
By this, Martinez meant the car. Last summer, in fact,
a male-female pair of suburban junkies stole a squad car parked right
in front of police headquarters, ran over the cop it belonged to (he
survived, but his leg was shattered, his career over), tore across the
bridge into Philly pursued by a phalanx of Camden cops ("You can imagine
the public's bewilderment, seeing police cars chasing a police car,"
recalls Thomson), and crashed in Philly after a long chase - only to
flee on foot, double back, and steal another car, this time a
Philadelphia police cruiser.
"Junkie Bonnie and Clyde" were eventually caught, but
the point is, you can't leave a car running in Camden, especially a
police car. So on that July day, Martinez went back to his cruiser
instead of helping out his partner. Eventually, another experienced
officer showed up, also toting a rookie partner. The two rookies ended
up catching the suspect on foot and were trying to get him cuffed when
Martinez started to sense a problem. A crowd of about a hundred formed
in the blink of an eye and started pelting the cops with bottles and
rocks. Martinez ended up chasing onto a porch a teenager who'd thrown a
bottle.
Next thing Martinez knew, he was jumped by "women,
older women, men, kids. . . . As soon as I grabbed the kid, everybody
started trying to forcibly take him from me. They're punching me in the
back, on the side of the head. . . . "
In the struggle, Martinez and the kid ended up
crashing backward through the porch railing and tumbling to the street,
where Martinez suddenly found himself looking up at 100 furious people,
with an angry teenager on top of him, reaching for the gun in Martinez's
thigh holster. The three other cops rushed to his aid - the two rookies
making another mistake in the process. They'd cuffed the original
suspect and put him in the back of the car, but in the rush to save
Martinez, they again left the cruiser unlocked. Backup arrived a few
moments later, but when Martinez got back to his feet, he realized the
crowd had left them all a big surprise.
"We go back to the original police car where that
drug-dealing suspect was, and the back door is open and he's gone,"
Martinez recounts. The neighborhood had taken the suspect back, cuffs
and all. "But I'll take that."
The moral of the story: Arrests in North Camden, the
most stricken part of town, sometimes just don't take. Many cops here
have stories about busts that either didn't happen or almost didn't
happen when the streets made an opposite ruling. "Ninth and Cedar. I
remember chasing a guy a block and a half - he had a Tec-9," says Joe
Wysocki, a quiet, soft-spoken 20-year Camden vet. "Handcuffing him, I
remember looking up and there were, like, 60 people around me. I threw
the guy into the car, jumped in the back seat with him, and [my partner]
took off."
"Telling the prisoner, 'Move over,'" joked another cop in the room.
"Yeah," says Wysocki. "Sometimes you just have to scoop and run."
Nobody in North Camden calls the police. When the
county installed the new "ShotSpotter" technology that pinpoints the
locations of gunshots, they discovered that 30 percent of all shootings
in the city go unreported, many of them from North Camden. "North Camden
would generally like to police itself," says Thomson. "Rather than
getting a call of an adult who had assaulted a child, generally you'll
get a call to send an ambulance and a police officer to the corner of
7th and York because there's a person laying there beaten nearly to
death with chains."
Late October 2013. It's nearly three years after the
layoffs. A trio of squad cars flies through North Camden. Over the
police radio, a voice chimes in from the RTOIC, or Real-Time Tactical
Operational Intelligence Center, a super-high-tech, Star Trek-ish bridge
of giant screen displays back at the metaphorical Green Zone that is
police headquarters. There, a team of police analysts monitors the city
using six different advanced technologies, watching those 121 camera
feeds via 10 42-inch monitors and six different listening stations
tracking cruisers by GPS. Somebody back there apparently spotted a drug
deal through a camera near where this police convoy is cruising.
"Black male, white shirt, bald head," the radio crackles. "White shirt, bald head."
The cars take off like rockets and screech to a halt
at exactly that same spot where John Martinez once almost punched his
ticket, the 400 block of Grant Street. We're right in front of that same
house. The wooden railing through which Martinez crashed backward two
years ago has been replaced by an iron one, and leaning against it is a
similar crowd of angry onlookers, glaring at the cops. Around the
corner, near the house with the new porch railing, a young black dude in
a white shirt stands surrounded by police, trying not to make sudden
moves. About 10 yards off from the "suspect," barking loudly and
standing next to his handler-partner, Sgt. Zack James, is Zero, a black
Czech shepherd police dog. Everything connected with crime in Camden
breaks some kind of record, and Zero is no exception - he's dragged down
65 suspects in foot chases, something only one other canine in
state-police history has done. Zero is friendly enough in nonworking
situations (he even drops to his back and sticks his tongue out to the
command "Cute and cuddly!"), but the department's male cops still cover
their balls reflexively, even from great distances, if they see him
loose in the parking lot.
Sgt. James, a burly officer who lives and works with
Zero full-time, seems like he's ready to do a Lambeau leap in
celebration, if only someone would try to run on his dog and become
number 66. But in this case, they've got the wrong guy. There's a brief
interrogation, the guy walks away slowly, and dog and humans pile back
into their respective cars and screech out at high speeds, disappearing
as quickly as they came.
Any reporter who's been embedded in Iraq or
Afghanistan will find these scenes extremely familiar - high-speed
engagements backed by top-end surveillance technology, watched by crowds
whose reactions range from bemusement to rage to eye-rolling
disappointment. In that latter category is Bryan Morton, a
fortysomething community leader of sorts who still lives in the North
Camden house where he was born. Morton went away in his youth for eight
and a half years for armed robbery and drug dealing, got out, went
straight, got his college degree, worked for years running local
re-entry programs, founded a North Camden Little League, and had things
looking up for himself, before he was laid off last May. Fortunately,
he'd bought a food cart six years before that, which he left in his
backyard as a backup plan; he now drives across town before dawn every
day, setting up next to the McDonald's in Camden's pinhead-size
"downtown."
Handsome, articulate, charming, Morton had just been
robbed the day I met him. The guy he hired to fix up his cart bolted
after the last payment, taking big chunks of his cart's sheet metal with
him. There had also been another murder in North Camden the day before,
a drug killing a few blocks up from Morton's house. Asked how bad
things have been in North Camden since the 2011 layoffs, he laughs
faintly. "Hell, the police gave up on this neighborhood long before
that," he says, hoisting the cart onto his pickup truck's trailer hitch
in the predawn light in front of his house. For years, he says, cops
would drive through his block once every half-hour or so, pretending to
police the place, but they wouldn't stop unless they had to.
"We know you're afraid to get out of the car," he says. "We know that."
North Camden is one of a few neighborhoods in the city
that still feels less policed than occupied. There's even an infamous
brick housing-project tower here called Northgate 1 where the middle
floors carry the nickname "Little Iraq," for the residents' reputation
for being not quite under government control. In fact, when the state
raided the tower to serve warrants a few years back, they were so
concerned with ground-level resistance that they invaded from the sky,
like soldiers in Afghanistan, rappelling onto the roof by helicopter.
The state police believed they'd sent a message, but there are locals
who reacted to the Rambo-commando episode with the same
you've-gotta-be-kidding-me incredulity you see on faces of kids
surrounded by multiple squad cars and millions of dollars in technology,
busted for loitering or a few lids of weed. "They pussies," is how one
Camdenite put it.
Thomson, the city's energetic young police chief - he
carries an uncanny resemblance to Homeland lead actor Damian Lewis - is
trying to provide a counterargument to the alien-occupier vibe. His plan
is to stabilize the city with foot patrols one neighborhood at a time.
On an October afternoon he drives me through Fairview, that
once-dazzling planned city full of brick homes built for New York
Shipbuilding workers nearly a century ago.
A little overgrown still, the place now looks, well,
nice, with few of the rat-infested vacant homes and factories that
dominate much of the rest of the city. Conspicuously, there's no obvious
drug traffic here. "A year ago, this space was controlled by
gangsters," Thomson says proudly. "Now you have kids playing there."
He nods in the direction of a street corner, where a
policeman in a paramilitary-style uniform, all steel-blue with a
baseball-style cap, stands on guard. There's one of these sentries every
few hundred feet, each seemingly within eyesight of the other, each
standing bolt upright and saluting military-style when the chief drives
by. We watch as a few elderly black pedestrians amble by, and if you
listen carefully you can catch the street patrolmen diligently offering
RoboCop-ian greetings to each one as they pass.
The plan is to deploy more and more of these
getting-to-know-you details, moving neighborhood by neighborhood,
working their way up to places like North Camden, where the police will
eventually answer once and for all the question of whether they will lay
it all on the line for America's most unsafe neighborhood.
Thomson is engaging and smart, and has the infectious
enthusiasm of a politician, except that he seems sincere. Driving
through Camden, watching these grim scenes of pseudo-occupation that in
this part of the world count as progress, my overwhelming feeling was a
weird kind of sympathy: None of this shit is on him. In another life,
actually, he and someone like Bryan Morton might have been co-workers,
or political running mates, since both men - the chief with his foot
patrols, Morton with his pan-Camden Little League - say they're working
toward the same thing: trying to create safe places for people to go in a
city that historically isn't terribly safe even across the street from
police headquarters.
But Thomson's optimism is based, again, upon the
assumption that if you create enough safe streets and parks in a place
like Camden, jobs will return, and things will somehow go back to
normal. But what if the jobs stay in China, Mexico, Indonesia? Then the
high-tech security efforts in cities like this start to feel like
something other than securing a few streets for future employers. Then
it's the best security money can buy, but just for security's sake,
turning a scene like Camden into a very expensive, very dark nihilistic
comedy: a perpetual self-occupation. Thomson clearly doesn't believe
this. He has hope - he's as intensely focused on development gains like
the opening of a new $62 million Rutgers-Camden nursing building as he
is about locking people up - but even he at times can't help but sound
like a military commander charged with recapturing alien territory.
"What you lose in one month, it takes five or six
months to get back," he says, referring to the footing the police lost
after the layoffs. "After what we went through, that's five to seven
years we don't have."
Early afternoon, I'm parked near a little stretch of
grass and chain-link in the shadow of the "Little Iraq" Northgate 1
tower. I'm riding with Kevin Lutz, a one-time homicide detective from
the old municipal police days who's just become a sergeant in the new
force. Lutz doesn't have any issues with getting out of any cars. In
fact, he seems to get along with most everyone, even the local crew
chiefs. We passed one earlier, a ripped character with a shaved head and
a bushy Sunni beard who, word is, someone from another block had
incompetently tried to assassinate the day before.
"Hey, what's up?" Lutz asks him. "How's your health?"
"I'm all right, man, I'm all right," the guy says, waving.
Lutz smiles and drives on. "He took one right in the
chest yesterday, center mass," he says. "It was just buckshot, though.
But check him out, walking around the next day, like it's nothing."
Later, we're near the towers. Lutz spots a white girl
sitting on a brick wall ringing the Northgate 1 parking lot, wobbling,
then suddenly falling backward over onto her head. He drives over and
the girl, obviously a junkie, gets up and is walking around,
disoriented. She starts spinning an impossible-to-follow tale about her
friend being attacked in adjacent Northgate Park, a story that within
minutes changes to a new story about that same friend just heading
toward Northgate Park to get some chicken. The constant in the story is
that she needs to get to Northgate Park. There's nowhere to get chicken
in Northgate Park, but you can get all the dope you want.
"Hey, go home," says Lutz. "OK? There's nothing good in that direction. We both know what's going on."
"But I've got to find my friend!" the girl screams.
"Go home," Lutz repeats, driving off.
She starts in the right direction, back toward Philly,
but in the rearview mirror Lutz sees her doing a 180 and heading back
to Northgate. He casually turns around. About 85 percent of the heroin
customers in this city are like this: young, white and from the suburbs.
At all hours of the day, you can see junkies plodding across the Ben
Franklin Bridge, usually carrying a knapsack that contains a set of
works and, very often, a "Homeless and Hungry" sign they've just used to
panhandle in Philly. The ones who don't come on foot come by car, at
all hours of the day, and they come in such huge numbers that police say
they couldn't deal with them all if they had a force of 5,000.
This is another potential hole in the policing plan:
The fact that broken suburbs - full of increasingly un- or underemployed
young people - send a seemingly limitless supply of customers for
Camden's drug trade. The typical profile is a suburban kid who tore an
ACL or got in a car accident back in high school, got an Oxy
prescription, and within a few years ended up here. This city,
incidentally, has a reputation for having the best dope on the East
Coast, which partly explains the daily influx of white junkies ("Dope,"
jokes Morton, "is a Caucasian drug"). In fact, when Camden made the
papers a few years back after a batch of Fentanyl-laced heroin caused a
series of fatalities here, it attracted dope fiends from hundreds of
miles away. "People were like, 'Wow, I've gotta try that,'" says Adrian,
a recovering addict from nearby Logan Township who used to come in from
the suburbs to score every day and is now here to visit a nearby
methadone clinic. "Yeah," says her friend Adam, another suburban white
methadone commuter. "If someone dies at a dope set, that's where you
want to get your dope."
While I was talking to Adam and Adrian in the city's
lone McDonald's, an ambulance showed up - somebody OD'd in the parking
lot. Adrian craned her head and nodded, watching the paramedics. She
says she and Adam often sit at the city transportation center in the
mornings and watch the steady flow of fights and drug-induced seizures.
"The thing about Camden is, when you come back here,
you can always say, 'At least my life is better than what I thought,'"
says Adrian. Two minutes later, she's in full McNod, head all the way
back, eyes completely closed, zoned out from a methadone dose she got at
a nearby clinic.
A decade or so ago, you wouldn't have seen white
people just hanging out in downtown Camden. Now they're here by the
hundreds every day. "There wasn't no white people up in this
motherfucker," says Raymond, the self-described gangster who was shot
six times. Now, he says, the city is full of white kids on dope. "The
last few years, it's like an epidemic surge," he says.
That's the crazy thing about this city. The Camden
story was originally a controversial political effort to isolate urban
crime and slash municipal spending by moving political power out of
dying nonwhite cities. And they do it, this radical restructuring backed
by the best in Baghdad-style security technology, and for a second or
two it looks like it's working - only the whole thing might be rendered
moot in the end by the collapse of the rest of America. All over the
country, we've been so busy arguing over who's productive and who isn't
that we might not be noticing that the whole ship is going down. There's
no lesson in any of it, just a giant mess that still isn't cleaned up.
Back in Northgate with Sgt. Lutz, we've circled around now, and Lutz shouts at the girl, who's made it all the way to the park.
"Hey, I told you to go home!" he shouts.
"But I need to get some fucking chicken!" she shouts back.
Lutz laughs, shakes his head, drives off, nodding toward Northgate Park.
"Best chicken in Camden," he says.
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