Wednesday, May 26, 2010

Private pay shrinks to historic lows as gov't payouts rise

Stacks of dollar bills pass through a machine at the Bureau of Engraving and Printing in this file photo.
By Mark Wilson, Getty Images
Stacks of dollar bills pass through a machine at the Bureau of Engraving and Printing in this file photo.

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.

SALARY WIZARD: What are you worth?
RECOVERY WATCH: Tracking the economy

The recession has erased 8 million private jobs. Even before the downturn, private wages were eroding because of the substitution of health and pension benefits for taxable salaries.

The Bureau of Economic Analysis reports that individuals received income from all sources — wages, investments, food stamps, etc. — at a $12.2 trillion annual rate in the first quarter.

Key shifts in income this year:

• Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.

The shift in income shows that the federal government's stimulus efforts have been effective, says Paul Van de Water, an economist at the liberal Center on Budget and Policy Priorities.

"It's the system working as it should," Van de Water says. Government is stimulating growth and helping people in need, he says. As the economy recovers, private wages will rebound, he says.

Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. "People are paid for being rather than for producing," he says.

Going Long, Going Deep, Going Broke: ZIRP and the Imploding Speculative Economy

A slow-growth real economy has been replaced with a credit-based speculative financial economy dependent on low interest rates and systemic fraud to survive. It is now imploding on a global scale.

Governments around the world have attempted to replace the real economy of value produced with a financial model based on credit growth and speculation. They have failed, and their constructs are imploding before our eyes.

I am going to cover a lot of ground here so load up on your stimulus of choice (ginseng, coffee, lime juice, etc.) and stay sharp.

As I wrote in Survival+: The grand experiment of the State controlling the private economy has failed. The grand experiment was to eliminate capitalism (risk, loss, destruction of wealth via competition) from "Capitalism" and thus banish pesky competitors to the Plutocratic Elites, and vanquish the business cycle of rising and falling demand and credit from affecting the State's collection and redistribution of taxes.

As the needs of the Savior State, its various fiefdoms and the financial Power Elites exceeded the production of the real economy, the State/capital partnership expanded globally in order to stripmine the unplundered resources, assets and populations not yet burdened with debt.

As I wrote in the chapter The Crisis of Predatory Global Capitalism (also in Survival+ The Primer), the exploitation implicit in "globalization" was Neoliberal Capitalism's Last "Fix." The over-extended, over-indebted, over-capacity, over-indulged domestic populations were no longer able to borrow and buy enough goods to fuel the astounding over-reach of the State and its Power Elite partners.

The "fix" was to go abroad and exploit/stripmine others' resources, labor and assets, and introduce them to the addictive charms of easy credit at low introductory rates.

Once globalization (essentially an updated, "improved" version of colonialization) harvested the easy fruit, global capital returned home to stripmine the domestic citizenry via various asset bubbles which incentivized speculation and consumption funded by massive borrowing.

Let us be crystal-clear about the purpose of zero interest rate policy (ZIRP): to destroy all incentives for saving and capital accumulation, and to reward and incentivize borrowing, leverage and speculation. More credit means more debt, which means more fees for Wall Street, more fees and interest payments to the banks, and more taxes to the Savior State. Only the borrowers lose.

Once the housing bubble collapsed, taking down most of the remaining wealth of the "middle class" (now nothing but a useful fiction to the financial Power Elites and the State), the Federal Reserve pushed the credit lever to maximum via its Zero Interest Rate Policy (ZIRP) and abundant credit to banks.

Unfortunately an over-indebted household cannot borrow more money even if it is offered at low rates, and banks--even those banks with explicit guarantees from the Federal government that all their losses will be covered by the State and its taxpayers--cannot throw good money after bad on this gigantic scale without incurring losses so ruinous even the State would suffer consequences.

So we have reached the endgame of Neoliberal Predatory State-Managed Capitalism. "Globalization" (a mildly positive-sounding word to describe parasitic financial colonialization) has reached the point of diminishing returns, as long supply chains, newly impoverished populations, foreign government expropriations, open rebellions against local predatory Elites and other factors reduce the plump gains.

The Financial Power Elites have now stripmined the domestic middle class, and there are no big profits left in picking over the carcass.

With no other "fix" available, the State and its Power Elite partners have attempted to do what worked a decade ago: inflate a real estate-based credit bubble which will magically restore buying power to the middle class.

The Fed's strategy is simple: inflate a new asset bubble by forcing everyone to go long, and go deep. Non-football players, please pardon the football analogy: to go long and deep is to send a receiver far down field in the hopes that a long throw by the quarterback will reach him rather than a defensive player. It is a high-risk play with big rewards-- huge gains in yardage or perhaps even a quick touchdown.

By manipulating all markets--stocks, bonds, real estate, you name it--the Fed has made it impossible to "go short", that is, bet against the market. Every Monday for months on end, the stock market "ramped and camped"--shot up at the open and stayed there all day.

When the stock market rose hundreds of points in these absurd manipulations, the financial media gloated over the "gains" resulting from "the nascent recovery." Yet when the markets plummet as the air escapes from the "nascent recovery," then politicos and pundits demand an investigation. Can manipulation be more overt than this?

The Fed effectively nationalized the entire U.S. mortgage market to prop up housing, and the zero interest rate policy actively promoted borrowing to speculate on risky asset plays: there was only one game in town, and only one strategy for earning any yield left: go long, go deep.

If you are a bank, moral hazard has been banished; your gains are private and available to be distributed as annual bonuses, while your losses are absorbed by the taxpayers (socialized).

Is there any way to short the real estate market? Yes, there are a few small players attempting to create a market in shorting real estate, but in general the answer is no. Go long, go deep. All the incentives are on leveraging real estate to the maximum and borrowing money to speculate on future gains.

But it won't work now; the middle class has seen its wealth and income decimated, and it is too burdened with debt to take on more. The legitimacy of the State and the financial Elites has been lost, and so few believe that "real estate only goes up" and "buy and hold stocks is the key to wealth."

Indeed, the most striking feature of the now-crumbling stock market rally was the non-participation of the middle-class "retail" investor, who smelled a rat and stayed away in droves.

What the middle class learned was this: Go long, go deep, go broke.

The State and its two-party fiefdoms is attempting to woo a wary public with various simulacra reforms and political theater performances, but the State and Power Elites are blind to the deep damage their legitimacy has suffered. They also seem blind to the fact that the "bottom 80%" cannot take on more debt, and some percentage of the top 20% (the Upper Caste Managerial/Technical castes who keep the Status Quo humming) are now unwilling to take on more debt to pursue speculative fantasies.

In response to the loss of legitimacy, Americans are afraid of losing their "middle class lifestyle," and their sense of entitlement--nurtured by the Savior State and its Elites--drives them to demand "their fair share" of whatever spoils remain before the golden credit-bubble carriage turns back into a pumpkin.

Frequent contributor Harun I. submitted this story on a mass protest by state employees against the bankrupt state, and added his comments on the absurdity of such protests. One might as well protest gravity.

N.J. Gov. Chris Christie says Statehouse rally had 'absolutely no effect' on him.

This could have easily been titled "The Uncritical Masses". In the second video embedded on the webpage above the article not one of the persons interviewed had any idea of how to close the deficit. Naturally one has to ask: Why then are you protesting? There is no more free money to be found, i.e. the physical economy can no longer support the financial economy. Instead of reflecting on the reality of the situation, 30,000 petulant children masquerading as adults turned out to protest something for which they have no viable solution.

What these and others around the globe do not grasp is that the welfare state, debt-based economic growth model is informing us of its demise.

And while the banks played a role, let's not blindly place the blame at their feet. What did everyone think was going to happen when revenues from actual physical output was not enough to fulfill all the promises of the vampire, er, I mean welfare state? Who did they think was going to absorb all of that debt, uh, I mean risk? What did they think banks would do to protect themselves against this risk?

Thank you, Harun, for this cogent summary of the financial and governance realities.

Lest you think this entry is pure speculation (heh):

Here is a report on the insolvency of most central governments: BIS: The Future of Public Debt.

Here is a report on the future direction of interest rates--up: Interest Rates Have Nowhere to Go but Up.

Here is a snapshot of the real economy, not the one based on credit, leverage, embezzlement, fraud and speculative excess: The Jobs Picture Still Looks Bleak:

Many outsourced jobs will never return, and median income will likely continue to fall just like it did during the last so-called recovery.

Their remaining burdens are still heavy. At the end of last year, debt averaged $43,874 per American, or about 122% of annual disposable income. Most analysts believe a sustainable debt load is around 100% of disposable income, assuming a normal level of employment and normal access to credit—neither of which we are likely to have for some time.

The top 10% accounted for about half of total national income in 2007. But they were only about 40% of total spending. A vigorous jobs recovery can't be based on 40% of what was spent before the economy collapsed.

Pick your own favorite stage of our decline: Five Stages of Decline:

Institutional decline is like a disease: harder to detect but easier to cure in the early stages; easier to detect but harder to cure in the later stages. An institution can look strong on the outside but already be sick on the inside, dangerously on the cusp of a precipitous fall." Happens to the best on Wall Street, Washington, Corporate America CEOs: You're on top, but "sick on the inside, dangerously on the cusp of a precipitous fall" ... but you don't even know it.

Here is a telling snippet from John Mauldin's excellent report dated 5/6/10:

The greatest systemic risk, therefore, is not an economic concept but a political one. Systemic risk emerges when it appears that the political and legal protections given to economic actors, and particularly to members of the economic elite, have been used to subvert the intent of the system. In other words, the crisis occurs when it appears that the economic elite used the law's allocation of risk to enrich themselves in ways that undermined the wealth of the nation. Put another way, the crisis occurs when it appears that the financial elite used the politico-legal structure to enrich themselves through systematically imprudent behavior while those engaged in prudent behavior were harmed, with the political elite apparently taking no action to protect the victims.

The Power Elites and their parasitic State partners benefitted enormously from the credit-fueled speculative bubbles of the past two decades: Wall Street's revenues soared, tax revenues soared, government borrowing and spending soared. Immensely profitable fiefdoms were constructed around "defense" (global Empire), sickcare (healthcare), the police/prison/drug-war complex (the American Gulag), education (the destruction of family responsibility for learning) and dozens of other Plutocracy/Savior State partnerships.

The "game" was rigged by the Fed and the rest of the Central State machinery to incentivize going long (bet the market will keep going up forever) and going deep (leverage to the maximum, borrow stupendous sums for the express purpose of taking on high risks by speculating with the "cheap, easy money" in game-the-system fraud and embezzlement).

Now the net result, for individuals, enterprises and nations alike is starkly revealed: go long, go deep, go broke.

Turning all cars electric in Britain needs boost in power supply

Switching all cars in the country to electric would drain the National Grid of nearly a fifth of its capacity unless the equivalent of another six new nuclear power stations are built, claims a report.

The Royal Academy of Engineering said that to convert the countries fleet of 30 million vehicles would increase current demand by 16 per cent or an extra 10 gigawatts of power.

With the 70 GW grid currently running at near full capacity that would mean building the equivalent of six large nuclear power stations or 2,000 wind turbines to meet demand.

It would also mean that it will have to be controlled by a "smart grid" of millions of charging points in order to deal with increase and wild fluctuations in demand.

The findings came from the academy's latest report titled Electric Vehicles: charged with potential which outlines what needs to be done if our cars are to go green.

The organisation said that in order to reduce our carbon footprint then the sources for the National Grid will have to change to sustainable supplies.

Professor Phil Blythe, professor of intelligent transport systems at Newcastle University, said: "It is do-able but if we want to have electric transport you have to ensure that you have the overall supply strategy in place."

Professor Roger Kemp of Lancaster University, chair of the Electric Vehicles working group, said that unless we moved away from coal and gas fired power stations then there would be no point.

"Swapping gas guzzlers for electric vehicles will not solve our carbon emissions problem on its own," said the professor of engineering at Lancaster University.

"When most electricity in Britain is still generated by burning gas and coal, the difference between an electric car and a small low emission petrol or diesel car is negligible."

However the report concluded that by converting to low emission power generation such as nuclear, wind and water then it could be a great contributor to targets of reducing the country's carbon footprint by 80 per cent by 2050.

The report believes that conversion to green cars will be gradual with many people preferring hybrid cars at first until the electric infrastructure is in place.

UPDATE 1-BP's "top kill" on leaking well could be delayed

HOUSTON, May 25 (Reuters) - BP Plc (BP.L) will begin a process to plug a leaking undersea oil well on Wednesday at the earliest, but it could be delayed or even abandoned if tests show it would not work, a company executive said on Tuesday.

"In terms of when the actual kill might go forward, the earliest would be tomorrow and it could extend on from there," BP senior vice president Kent Wells told reporters on a conference call, referring to the "top kill" procedure.

Under intense pressure from the Obama administration to plug the five-week-old gushing leak in the Gulf of Mexico, BP sought to manage expectations of its latest effort.

The company has failed to plug or completely corral the leak that burst after a rig drilling the well a mile beneath the water's surface exploded and sank, killing 11 workers.

President Barack Obama and U.S. Interior Secretary Ken Salazar have publicly scolded BP for a breakdown of responsibility and missing deadlines in sealing the well.

BP officials had said the top kill, which involves injecting heavy drilling fluids twice as dense as water into the well to stop the oil flow, would begin last Sunday at the earliest.

They subsequently pushed its start to Tuesday, then Wednesday, and Wells said it might start later as scientists finish tests to gauge its chances of success.

"In terms of timing, the pace at which we're doing this -- subsea construction -- we usually spend months to do what we've done in days and weeks," Wells said. "We have to be careful in terms of setting expectations."


Wells said the tests may prompt BP to abandon the top kill altogether if scientists determine it can't be done safely or will worsen the leak.

"What we learn during this diagnostic phase will be crucial to us," he said.

Russell Hoshman, a petroleum engineer with the Interior Department's Minerals Management Service, said the agency is reviewing procedures to ensure they are technically sound so as to "not make this situation worse."

Wells said the 12- to 24-hour diagnostic phase would take place "over the next day or so." If given the go-ahead, the top kill could take half a day to two days to show results, he said.

The top kill involves injecting drilling fluids, which are heavier than oil, into the failed five-story blowout preventer at the seabed, at the rate of 50 barrels (2,100 gallons) per minute. The tests are supposed to show which of the five points of entry into the blowout preventer can be used.

The biggest risk in the procedure is that the upward pressure of the oil and gas rushing from the well would overcome the downward pressure from the mud and blow it out the top of the blowout preventer, BP executives have said.

Wells said some oil could get past the fluids and escape, but the concept is to pump them fast enough to overcome the oil and kill the well.


If the fluids aren't enough, BP could employ a "junk shot," or pump solid materials like shredded rubber golf balls as a "bridging agent" to slow the oil flow and allow more fluids down the well.

If those options don't work, BP can remove the bent pipe coming out of a piece of equipment on top of the blowout preventer and place a containment dome with a seal on top of it to corral the oil. The oil would be transported by pipe to a drilling ship at the surface.

BP tried such a containment dome over the leak before. Too much seawater inside mixed with natural gas coming from the leak and formed ice, known as hydrates, which blocked oil from flowing to the drillship. Wells said the seal should reduce seawater to cut potential for hydrates to form. (Reporting by Kristen Hays and Chris Baltimore; Editing by David Storey)



What can I say; here we go again!

I hardly need to go down the list of lies used to start US wars. We have been though that over and over again.

Nor do I need to elucidate on the many reasons why the US Government is in desperate need for yet another war with which to scare the American people into acceptance of more takes and fewer rights and freedoms.

Anyone with half a brain realizes that the US Government, unable to gain support for an invasion of Iran, has changed gears and decided that North Korea will be the next step towards World War III.

Here is the big lie...

Let us start with a cloned copy of the official South Korean website detailing the sinking of the Cheosan.

From that website we get the following picture of the remains of a torpedo dredged from the bottom of the ocean.

The official claim that North Korea fired this torpedo at a South Korean warship is based on the following blueprint of a North Korean torpedo claimed to be the weapon recovered from the ocean floor.

There are several differences between the torpedo plans and the actual torpedo recovered from the floor of the ocean. But I am going to focus on just one.

Take a close look where the tail cone assembly (indicated by the bulkhead at the leading edge of the fins) attaches to the torpedo main hull. A major component of all modern torpedoes are the fin actuators. These are the small motors that adjust the rudder and dive planes of the torpedo in order to maintain the intended depth and course to target.

Note that the blueprints of the North Korean torpedo show these actuators forward of the tail cone assembly, that is to say in front of the bulkhead that marks where the fin assembly attaches to the torpedo.

Now let us look at the torpedo actually recovered from the bottom of the ocean near where the Cheosan was attacked.

Note that the recovered torpedo these actuators are built INSIDE the tail cone assembly, that is to say to the REAR of the bulkhead that marks where the fin assembly attaches to the torpedo.

And again, as seen in the official released photo of the recovered torpedo.

In short, the torpedo recovered from the ocean where Cheosan was attacked is NOT the same torpedo shown in the North Korean plans. As I stated above, there are additional differences as well between the blueprints and the actual torpedo, but the actuators are the clincher.

The torpedo recovered fronm the oceasn where the Cheosan was sunk is not the North Korean torpedo shown in the blueprints.

U.S. troops in South Korea put on alert as tensions rise over sinking ship

Barack Obama yesterday ordered that the 28,000 U.S. troops in South Korea be put on alert as tensions with North Korea escalated.

The U.S. President demanded that Pyongyang apologise for sinking a South Korean warship in March and punish those responsible.

International investigators blame North Korea for sinking the Cheonan ship, killing 46 sailors. The Pentagon said it will start joint anti-submarine and military drills with South Korea ‘in the near future’ as a result of the findings.

Threat: South Korean soldiers jump out from a military truck during an anti-terror drill in downtown Seoul yesterday

Threat: South Korean soldiers jump out from a military truck during an anti-terror drill in downtown Seoul yesterday

South Korean President Lee Myung-bak bows after delivering a speech at the War Memorial of Korea today, in which he warned that North Korean would pay the price for the sinking of a navy ship in a surprise attack

Vow: South Korean President Lee Myung-bak bows after delivering a speech at the War Memorial of Korea yesterday, in which he warned that North Korean would pay the price for the sinking of a navy ship in a surprise attack

U.S. support for South Korea was ‘unequivocal’, White House spokesman Robert Gibbs added.

‘We endorse [President Lee Myung-bak’s] demand that North Korea... stop its belligerent and threatening behaviour,’ he said.

The U.S. is reportedly bringing forward deployment of a hightech F-22 Raptor ground-attack aircraft to Japan this month.

Should conflict erupt, it could reach North Korea within minutes.

North Korea threatened to fire at equipment from which South Korea planned anti-Pyongyang broadcasts. President Lee said he would not hesitate to retaliate.

The U.S. backs the Lee plan to bring the issue to the UN Security Council and would work with allies to ‘reduce the threat’.

Trigger: Navy personnel stand guard last week near the wreckage of the naval vessel Cheonan, which was sunk on March 26 near the maritime border with North Korea

Trigger: Navy personnel stand guard last week near the wreckage of the naval vessel Cheonan, which was sunk on March 26 near the maritime border with North Korea

U.S. Secretary of State Hillary Clinton, who is in talks in China, said the situation was ‘highly precarious’.

The row centres on the sinking of the South's Cheonan corvette in March, killing 46 sailors in one of the deadliest clashes between the two countries since the 1950-53 Korean War.

In a sombre televised address to the nation, President Lee said if his country's waters, airspace or territory were violated he would 'immediately exercise our right of self-defence.'

He added: 'I solemnly urge the authorities of North Korea ... to apologise immediately to the Republic of Korea (South Korea) and the international community.'

State of war: South Korean soldiers check speakers, which were used to broadcast propaganda toward North Korea, during a photo opportunity at a guard post near the demilitarized zone (DMZ) today

State of war: South Korean soldiers check speakers, which were used to broadcast propaganda toward North Korea

A Korean man watches a live broadcast of the president's speech as tensions between the two Koreas increased

Fears: A Korean man watches a live broadcast of the president's speech yesterday as tensions between the two Koreas increased

The two Koreas are still technically at war and have more than 1million troops near their border.

In the past the South has tolerated the North's outrages such as the downing of a South Korean airliner in 1987, which killed 115 people.

But this time the mood is far tougher and it has banned all trade, investment and visits with North Korea.

'North Korea will pay a price corresponding to its provocative acts,' said President Lee, adding that he would be operating a principle of 'proactive defence'.

'North Korea's goal is to instigate division and conflict. It is now time for the North Korean regime to change'.

Obama to snatch up to 75% of your income

Federal government could confiscate more than half of everything earned

Editor's Note: The following report is excerpted from Jerome Corsi's Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist. Red Alert subscriptions are $99 a year or $9.95 per month for credit card users. Annual subscribers will receive a free autographed copy of "The Late Great USA," a book about the careful deceptions of a powerful elite who want to undermine our nation's sovereignty.

If President Obama repeals the Bush tax cuts and imposes a 20 percent value added tax, or VAT, on the U.S., Americans may be facing tax rates where more than half of everything earned is confiscated by the federal government in the form of income taxes, Jerome Corsi's Red Alert reports.

Add Social Security taxes and the tax burden quickly advances to more than 60 percent.

"Adding state property and income taxes to the burden, the amount government confiscates could be in the 75 percent range before Americans have a chance to vote Obama out of office in 2012," Corsi wrote. "Are Americans willing to be taxed 75 percent of every dollar earned?"

That is the current tax burden in Scandinavian countries as the table below demonstrates.

"In a five-day work week, will Americans be willing to work four days for the government?" Corsi asked.

He said as Obama moves the U.S. in the direction of becoming a European-style social welfare state, it is important to consider taxation levels typical in Europe.

Corsi noted that even high levels of taxation are not sufficient in Europe to prevent debt levels from rising to crisis proportions, as has been seen in Greece and is looming on the horizon in Portugal, Spain and Italy.

"These are the real costs of income redistribution, as taxpayers are made to bear the taxation costs of generous pension plans for government employees at all levels of government – federal, state and local – as well as funding Social Security, paying for Medicare, Medicaid and Obamacare and funding welfare, including educating the children of illegal immigrants in Spanish in public schools," he wrote. "There is no limit to generosity when it comes to socialist states providing social welfare benefits to increasingly government dependent populations."

To learn more about the true costs of income redistribution, read Jerome Corsi's Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, "The Obama Nation."

Red Alert's author, whose books "The Obama Nation" and "Unfit for Command" have topped the New York Times best-sellers list, received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financialservices marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.

In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.

25 Questions To Ask Anyone Who Is Delusional Enough To Believe That This Economic Recovery Is Real

If you listen to the mainstream media long enough, you just might be tempted to believe that the United States has emerged from the recession and is now in the middle of a full-fledged economic recovery. In fact, according to Obama administration officials, the great American economic machine has roared back to life, stronger and more vibrant than ever before. But is that really the case? Of course not. You would have to be delusional to believe that. What did happen was that all of the stimulus packages and government spending and new debt that Obama and the U.S. Congress pumped into the economy bought us a little bit of time. But they have also made our long-term economic problems far worse. The reality is that the U.S. cannot keep supporting an economy on an ocean of red ink forever. At some point the charade is going to come crashing down.

And GDP is not a really good measure of the economic health of a nation. For example, if you would have looked at the growth of GDP in the Weimar republic in the early 1930s, you may have been tempted to think that the German economy was really thriving. German citizens were spending increasingly massive amounts of money. But of course that money was becoming increasingly worthless at the same time as hyperinflation spiralled out of control.

Well, today the purchasing power of our dollar is rapidly eroding as the price of food and other necessities continues to increase. So just because Americans are spending a little bit more money than before really doesn’t mean much of anything. As you will see below, there are a whole bunch of other signs that the U.S. economy is in very, very serious trouble.

Any “recovery” that the U.S. economy is experiencing is illusory and will be quite temporary. The entire financial system of the United States is falling apart, and the powers that be can try to patch it up and prop it up for a while, but in the end this thing is going to come crashing down.

But as obvious as that may seem to most of us, there are still quite a few people out there that are absolutely convinced that the U.S. economy will fully recover and will soon be stronger than ever.

So the following are 25 questions to ask anyone who is delusional enough to believe that this economic recovery is real….

#1) In what universe is an economy with 39.68 million Americans on food stamps considered to be a healthy, recovering economy? In fact, the U.S. Department of Agriculture forecasts that enrollment in the food stamp program will exceed 43 million Americans in 2011. Is a rapidly increasing number of Americans on food stamps a good sign or a bad sign for the economy?

#2) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March. This was an increase of almost 19 percent from February, and it was the highest monthly total since RealtyTrac began issuing its report back in January 2005. So can you please explain again how the U.S. real estate market is getting better?

#3) The Mortgage Bankers Association just announced that more than 10 percent of U.S. homeowners with a mortgage had missed at least one payment in the January-March period. That was a record high and up from 9.1 percent a year ago. Do you think that is an indication that the U.S. housing market is recovering?

#4) How can the U.S. real estate market be considered healthy when, for the first time in modern history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together?

#5) With the U.S. Congress planning to quadruple oil taxes, what do you think that is going to do to the price of gasoline in the United States and how do you think that will affect the U.S. economy?

#6) Do you think that it is a good sign that Arnold Schwarzenegger, the governor of the state of California, says that “terrible cuts” are urgently needed in order to avoid a complete financial disaster in his state?

#7) But it just isn’t California that is in trouble. Dozens of U.S. states are in such bad financial shape that they are getting ready for their biggest budget cuts in decades. What do you think all of those budget cuts will do to the economy?

#8) In March, the U.S. trade deficit widened to its highest level since December 2008. Month after month after month we buy much more from the rest of the world than they buy from us. Wealth is draining out of the United States at an unprecedented rate. So is the fact that the gigantic U.S. trade deficit is actually getting bigger a good sign or a bad sign for the U.S. economy?

#9) Considering the fact that the U.S. government is projected to have a 1.6 trillion dollar deficit in 2010, and considering the fact that if you went out and spent one dollar every single second it would take you more than 31,000 years to spend a trillion dollars, how can anyone in their right mind claim that the U.S. economy is getting healthier when we are getting into so much debt?

#10) The U.S. Treasury Department recently announced that the U.S. government suffered a wider-than-expected budget deficit of 82.69 billion dollars in April. So is the fact that the red ink of the U.S. government is actually worse than projected a good sign or a bad sign?

#11) According to one new report, the U.S. national debt will reach 100 percent of GDP by the year 2015. So is that a sign of economic recovery or of economic disaster?

#12) Monstrous amounts of oil continue to gush freely into the Gulf of Mexico, and analysts are already projecting that the seafood and tourism industries along the Gulf coast will be devastated for decades by this unprecedented environmental disaster. In light of those facts, how in the world can anyone project that the U.S. economy will soon be stronger than ever?

#13) The FDIC’s list of problem banks recently hit a 17-year high. Do you think that an increasing number of small banks failing is a good sign or a bad sign for the U.S. economy?

#14) The FDIC is backing 8,000 banks that have a total of $13 trillion in assets with a deposit insurance fund that is basically flat broke. So what do you think will happen if a significant number of small banks do start failing?

#15) Existing home sales in the United States jumped 7.6 percent in April. That is the good news. The bad news is that this increase only happened because the deadline to take advantage of the temporary home buyer tax credit (government bribe) was looming. So now that there is no more tax credit for home buyers, what will that do to home sales?

#16) Both Fannie Mae and Freddie Mac recently told the U.S. government that they are going to need even more bailout money. So what does it say about the U.S. economy when the two “pillars” of the U.S. mortgage industry are government-backed financial black holes that the U.S. government has to relentlessly pour money into?

#17) 43 percent of Americans have less than $10,000 saved for retirement. Tens of millions of Americans find themselves just one lawsuit, one really bad traffic accident or one very serious illness away from financial ruin. With so many Americans living on the edge, how can you say that the economy is healthy?

#18) The mayor of Detroit says that the real unemployment rate in his city is somewhere around 50 percent. So can the U.S. really be experiencing an economic recovery when so many are still unemployed in one of America’s biggest cities?

#19) Gallup’s measure of underemployment hit 20.0% on March 15th. That was up from 19.7% two weeks earlier and 19.5% at the start of the year. Do you think that is a good trend or a bad trend?

#20) One new poll shows that 76 percent of Americans believe that the U.S. economy is still in a recession. So are the vast majority of Americans just stupid or could we still actually be in a recession?

#21) The bottom 40 percent of those living in the United States now collectively own less than 1 percent of the nation’s wealth. So is Barack Obama’s mantra that “what is good for Wall Street is good for Main Street” actually true?

#22) Richard Russell, the famous author of the Dow Theory Letters, says that Americans should sell anything they can sell in order to get liquid because of the economic trouble that is coming. Do you think that Richard Russell is delusional or could he possibly have a point?

#23) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010. In fact, that was almost twice the level of a year earlier. Does that look like a good trend to you?

#24) In March, the price of fresh and dried vegetables in the United States soared 49.3% - the most in 16 years. Is it a sign of a healthy economy when food prices are increasing so dramatically?

#25) 1.41 million Americans filed for personal bankruptcy in 2009 – a 32 percent increase over 2008. Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005. So shouldn’t we at least wait until the number of Americans filing for bankruptcy is not setting new all-time records before we even dare whisper the words “economic recovery”?

Customer stuck with counterfeit money from the post office

David Lipin

“The police said the $100 bills were actually $5 bills that had been bleached and altered,” recalls L.A. resident David Lipin. “They showed me how you could hold them up to the light and see Abraham Lincoln’s face." (Brian van der Brug, Los Angeles Times)

A business inadvertently gives you counterfeit money — are you stuck with it? In most cases, yes. But what if that business happens to be a branch of the federal government?

Los Angeles resident David Lipin found himself asking this question the other day after he cashed a $1,000 Postal Service money order at a West Hollywood post office.

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He said the postal worker handed him 10 $20 bills and eight $100 bills.

Lipin, 43, said he then stopped at a nearby gas station to fill his tank. He tried to pay with one of his new $100 bills.

"The clerk took a close look at it and said it was fake," Lipin told me. "Then she looked at some of the other $100 bills. She said they were fake too, and she called the police."

Alarmed, Lipin phoned a lawyer friend. At his friend's urging, he too called the Los Angeles Police Department to report that he'd been given bogus bills. "I wanted it very clear that I was a victim and not someone trying to pawn off some counterfeit dollars," Lipin said.

The cops arrived at the gas station and inspected the cash. They shook their heads.

"The police said the $100 bills were actually $5 bills that had been bleached and altered," Lipin recalled. "They showed me how you could hold them up to the light and see Abraham Lincoln's face. All eight turned out to be counterfeit."

So now what? The police took a report but said they couldn't do anything. They suggested that Lipin try the L.A. County Sheriff's Department, which serves West Hollywood.

A sheriff's deputy also said they couldn't do much and suggested he try the Secret Service. So did the post office when Lipin returned to the same branch that had given him the funny money.

Spain must make wide ranging reforms, weak recovery-IMF

MADRID, May 24 (Reuters) - Spain must make far reaching, comprehensive reforms, including to the labour market, while its economic recovery remains fragile, The International Monetary Fund said on Monday. "The challenges are severe: a dysfunctional labor market, the deflating property bubble, a large fiscal deficit, heavy private sector and external indebtedness, anemic productivity growth, weak competitiveness, and a banking sector with pockets of weakness," the IMF said in an annual report on Spain.

The IMF said after a weak recovery the economy would grow by 1.5-2.0 percent in the medium term.

"Our central scenario is one of continued adjustment of the various imbalances with growth rising gradually to 1.5-2 percent in the medium term," the report said.

(Reporting by Paul Day; editing by Axel Bugge)

Latvia Says I.M.F. Is Imposing Fresh Conditions on Rescue Package

FRANKFURT — Latvia said Wednesday that the International Monetary Fund had imposed fresh conditions for it to qualify for rescue funds, exacerbating an emerging split with the European Union over a €7.5 billion bailout last year.

Latvia’s rescue program has run into trouble repeatedly since it was agreed upon last autumn. Since then, there have been riots in Riga, the capital, and a change of government. Assistance funds have been disbursed late or not at all.

Analysts said other countries that have gotten help from the I.M.F., like Hungary and Ukraine, could also be affected by uncertainty over Latvia, raising the prospect of renewed financial turbulence in emerging markets.

The stakes are particularly high because Latvia has pegged its currency to the euro, the common European currency, and is loath to give it up.

Teams from both the I.M.F. and the E.U. are in Riga again this week, and the prime minister, Valdis Dombrovskis, said the negotiations had turned contentious, largely over how quickly to cut the country’s budget deficit.

“The talks are fairly difficult,” he told Latvian radio. “The conditions the I.M.F. is proposing are also fairly difficult.”

A devaluation would hit banks from other E.U. countries that are heavily invested in Latvia, particularly Sweden, especially hard. It also could highlight the dwindling credibility of plans across the region for countries in Eastern Europe to eventually adopt the euro.

An outright Latvian default, however, seems unlikely, analysts said.

“A default of a sovereign government in the European Union is simply not going to be contemplated, politically speaking,” said Daniel Gros, director of the Center for European Policy Studies in Brussels. “No one considers that acceptable.”

Christian Keller, chief economist for emerging Europe at Barclays Capital in London, said that a more orderly devaluation might be possible.

The fund has long been skeptical that Latvia could restructure its economy at a time of crisis without devaluing its currency, but swallowed its reservations for the sake of a quick solution last year, according to two former I.M.F. officials, who spoke on condition of anonymity because they were no longer with the fund.

Now that the crisis has eased, the I.M.F. seems to be more willing to make tougher demands that could lead to a devaluation. But to publicly call for such a move would roil markets.

The E.U., by contrast, has focused on supporting one of its members.

Both the I.M.F. and the E.U. declined to comment on the continuing talks.

A currency devaluation would be a standard prescription to ease Latvia’s pain, as it would promote exports and ease pressure to cut wages at a time when domestic demand is collapsing at a harrowing pace.

Latvian officials have countered that heavy euro-denominated debts among households and companies would make a devaluation suicide. It also would put off the day Latvia could adopt the euro.

But critics point out that the current policy of budget and wage cuts is no cakewalk either.

Latvia is trying to rebalance an economy that shrank by 18 percent in the first quarter of this year by cutting government spending and wages, a process known as an “internal devaluation.”

It wants to reduce a budget deficit, which could hit 10 percent of gross domestic product this year, to 3 percent by 2012, a vital threshold for euro membership. But that has proved political dynamite in Latvia.

The E.U. delayed disbursement of a €1.2 billion, or $1.7 billion, portion of the rescue fund, which it eventually provided, until the Latvian Parliament passed a package of budget cuts in June. The I.M.F. has not yet provided a $200 million loan that was due in March.

The differences between the I.M.F. and the E.U. appear to boil down to an assessment of the political will in Latvia to reduce government spending, with the E.U. more sanguine than the fund.

The fund is also haunted by memories of Argentina, which had pegged its currency to the U.S. dollar with I.M.F. support before defaulting in 2001, while the E.U. is standing behind one of its smallest members.

“It is so clear that Latvia’s peg is ultimately unsustainable, all protestations by Latvian government officials notwithstanding,” said Kenneth Rogoff, a former chief economist at the I.M.F.. “But ultimately unsustainable pegs can go on for years before crashing and burning, and Brussels seems to be willing to pay a lot to get past the financial crisis before cutting the cord on Latvia.”

Crazy: Some in CIA wanted to create fake Saddam Hussein sex video, report asserts

A little-noticed blog post by a veteran intelligence reporter averred Tuesday that the CIA's Iraq Operations Group weighed a plan prior to the 2003 Iraq invasion that sought to discredit Saddam Hussein by portraying him as gay.

According to Jeff Stein, a longtime intelligence reporter who first revealed that FBI officials had eavesdropped on a sitting Democratic congresswoman, the CIA's Iraq Operations Group considered creating a video that would the then-Iraqi leader having intercourse with a teenage boy.

“It would look like it was taken by a hidden camera,” a former CIA official purportedly told Stein. “Very grainy, like it was a secret videotaping of a sex session.”

The CIA would have then “flood[ed] Iraq with the videos,” the official added.

A third former CIA official said that the plan was shot down, in part, because others in the agency thought that claiming Saddam had sex with boys would do little to undermine him.

“Saddam playing with boys would have no resonance in the Middle East -- nobody cares,” another purported CIA official is quoted as saying. “Trying to mount such a campaign would show a total misunderstanding of the target. We always mistake our own taboos as universal when, in fact, they are just our taboos.”

A current U.S. official told Stein he couldn't confirm or deny the former CIA employees' claims.

"While I can't confirm these accounts, if these ideas were ever floated by anyone at any time, they clearly didn't go anywhere," the official told Stein.

Stein notes, however, that the CIA did make a video in which a fake Osama Bin Laden enjoys a campfire and the company of his associates while bragging about their juvenile paramours.

The agency actually did make a video purporting to show Osama bin Laden and his cronies sitting around a campfire swigging bottles of liquor and savoring their conquests with boys, one of the former CIA officers recalled, chuckling at the memory. The actors were drawn from “some of us darker-skinned employees,” he said.

Eventually, “things ground to a halt,” the other former officer said, because no one could come to agreement on the projects.

They also faced strong opposition from James Pavitt, then head of the agency’s Operations Division, and his deputy, Hugh Turner, who “kept throwing darts at it.”

Fundamentalists in Iraq have shown disdain for their gay compatriots since Saddam's fall. In some cases, according to human rights activists, they've resorted to grotesque violence.

The television news agency Al Arabiya reported last year that a prominent Iraqi human rights activist asserted that some men have died after gruesome anal torture.

"A prominent Iraqi human rights activist says that Iraqi militia have deployed a painful form of torture against homosexuals by closing their anuses using "Iranian gum,” the network said. "Yanar Mohammad told that, “Iraqi militias have deployed an unprecedented form of torture against homosexuals by using a very strong glue that will close their anus.”

"According to her," the report added, "the new substance 'is known as the American hum, which is an Iranian-manufactured glue that if applied to the skin, sticks to it and can only be removed by surgery. After they glue the anuses of homosexuals, they give them a drink that causes diarrhea. Since the anus is closed, the diarrhea causes death. Videos of this form of torture are being distributed on mobile cellphones in Iraq.'"

Correction: Because of an editing error, the gender of the Democratic representative referenced in the second paragraph was incorrect in the initial version of this story. It has been corrected: the congresswoman in question was Jane Harman (D-CA).

Dow Jones Industrial Average

Real-Time Quote
-108.67 / -1.08%
Today’s Change
Today|||52-Week Range

Quote Details

Previous close10,066.57
Day high10,061.66
Day low9,774.48
Today's volume184,450,050
Average daily volume (3 months)218,547,246
Average P/E15.8
1 year change+20.15%
Data as of 2:44pm ET, 05/25/2010

Companies in the Dow Jones Industrial Average

PriceChange% ChangeP/EVolumeYTD
MMM 3M Co78.74-0.85-1.07%--100.0K-5.00%
AA Alcoa Inc11.14+0.05+0.45%--2.7M-31.27%
AXP American Express Co38.40-0.64-1.64%--849.6K-5.38%
T AT&T Inc24.06-0.37-1.51%--3.4M-14.31%
BAC Bank of America Corp15.21-0.19-1.23%--16.2M+0.66%
BA Boeing Co62.46-0.69-1.09%--174.4K+15.07%
CAT Caterpillar Inc58.43-0.79-1.33%--460.4K+2.30%
CVX Chevron Corp71.71-1.73-2.36%--1.3M-7.01%
CSCO Cisco Systems Inc23.12-0.25-1.07%--7.0M-3.59%
KO Coca-Cola Co50.56-0.90-1.75%--706.2K-11.40%
DD E I du Pont de Nemours and Co35.01-0.39-1.10%--649.9K+3.77%
XOM Exxon Mobil Corp59.18-1.01-1.68%--2.9M-13.37%
GE General Electric Co15.80-0.21-1.31%--6.9M+4.30%
HPQ Hewlett-Packard Co45.48-0.21-0.46%--1.7M-11.80%
HD Home Depot Inc33.75+0.53+1.60%--1.7M+16.49%
Data as of 2:44pm ET, 05/25/2010
Page 2) {this.value = 2;} common.updateQueryString('page', this.value);" type="text"> of 2

The Global Economic Crisis, The Great Depression of the XXI Century.

The following text is the Preface of
The Global Economic Crisis. The Great Depression of the XXI Century, Michel Chossudovsky and Andrew Gavin Marshall (Editors), Montreal, Global Research, 2010, which is to be launched in late May.

Each of the authors in this timely collection digs beneath the gilded surface to reveal a complex web of deceit and media distortion which serves to conceal the workings of the global economic system and its devastating impacts on people's lives.

The complex causes as well as the devastating consequences of the economic crisis are carefully scrutinized with contributions from Ellen Brown, Tom Burghardt, Michel Chossudovsky, Richard C. Cook, Shamus Cooke, John Bellamy Foster, Michael Hudson, Tanya Cariina Hsu, Fred Magdoff, Andrew Gavin Marshall, James Petras, Peter Phillips, Peter Dale Scott, Bill Van Auken, Claudia von Werlhof and Mike Whitney.

Despite the diversity of viewpoints and perspectives presented within this volume, all of the contributors ultimately come to the same conclusion: humanity is at the crossroads of the most serious economic and social crisis in modern history.

For details on the book click here. The book can be ordered directly from Global Research

Clear Thinking About the Minimum Wage

Everybody knows that the minimum wage is a good policy, right? Problem is, they’re all wrong. Economists proved long ago that price controls can’t work—they only create shortages and surpluses. The minimum wage is a price floor: if it is set above the market wage it will create a surplus, leaving some workers unable to sell their labor. The overall popularity of a minimum wage is perhaps the best example of ecognorance, and it can only be corrected through economic education. Some simple reasoning will go a long way towards clearing up the minimum wage confusion.

Consider the following thought experiment: suppose that the minimum wage is raised to $1000/hour. What are the implications? Evidently, most employers can’t pay that much and they’ll go out of business. If that weren’t so, we could all become fantastically wealthy just by decreeing a ridiculously high minimum wage. Now suppose that the minimum wage is lowered to $0.01/hour. Again, employers won’t pay that wage (even though they’d like to) because other firms are bidding for the same workers, and this drives wages up. The reason employers don’t pay the decreed wages is that wages are determined by supply and demand, not government edict. Firms hire workers with the goal of earning profits, while wages are costs. They competitively bid wages up to the point where the wage (cost) equals the benefit or extra profit gained from hiring that worker. So competition for profits practically ensures that workers get paid according to their productivity, according to the value of their labor. (In economics jargon, they get paid their discounted marginal revenue product.)

Now let’s trace out the effects of an increase in the minimum wage on the employers affected (e.g., those hiring unskilled labor). First, the increased labor costs lead some firms to lay off workers and others to shut down, since demand for their goods and hence their prices have not changed. But the downsizing and shutdowns reduce the supply of the goods, increasing their price. This new, higher price justifies the higher wage for those who kept their jobs, since they are now producing a more valuable product. The end result is that some workers lose their jobs, while the rest enjoy the higher wage. Consumers lose because prices are now higher.

Since workers are paid according to their productivity (like all factors of production), all the minimum wage does is to make it illegal to buy or sell labor beneath the price floor. The government is essentially saying: “You must be this productive to legally work in our country.” This is most harmful to the least skilled of workers, the ones we want to help most. They will be the first to be fired, and will be cut off from the chance to gain the work experience and job skills needed to earn a legal wage. Allowing such people to work for lower than minimum wages gives them a chance to work their way to a better life. To deny them the freedom to negotiate their own wages and to leave them legally prohibited from working is a moral outrage.

Some clever economists might argue that the minimum wage can increase the total wages paid to all workers. This could happen if the amount of workers unemployed was more than offset by the increased wage. But what is this except human sacrifice?! They would knowingly unemploy the most needy in order to increase the aggregate income of workers. This position is morally bankrupt and an insult to those who genuinely want to help the less fortunate.

In sum, the minimum wage harms the very people it intends to help. It’s a moral outrage that ought to be instantly abolished. Freedom is the best policy to help the poor.

Recommended learning:

  • Gene Callaghan’s excellent analogy, in which he compares the minimum wage with a hypothetical “minimum stock price”. Find it in his book, Economics for Real People (free online), pages 189-194.
  • Roger Garrison’s Mises University lecture. You can follow along by downloading his powerpoint.
  • Mary Ruwart, Healing Our World (free online). A great book for leftists, Ruwart shows how government restrictions hurt the poorest to the benefit of the wealthy and politically connected.

California is planning to bankrupt itself

Click this link .....

Marc Faber: Greece Is Just a Write-off

Click this link .....

Alex Jones: Canadian conspiracy

Click this link .....

Oil reaches Louisiana shores

Over one month after the initial explosion and sinking of the Deepwater Horizon oil rig, crude oil continues to flow into the Gulf of Mexico, and oil slicks have slowly reached as far as 12 miles into Louisiana's marshes. According to Louisiana Governor Bobby Jindal, more than 65 miles of Louisiana's shoreline has now been oiled. BP said it will be at least Wednesday before they will try using heavy mud and cement to plug the leak, a maneuver called a "top kill" that represents their best hope of stopping the oil after several failed attempts. Based on low estimates, at least 6 million gallons of crude have spewed into the Gulf so far - though some scientists have said they believe the spill already surpasses the 11 million-gallon 1989 Exxon Valdez oil spill off Alaska as the worst in U.S. history. (39 photos total)

A dragonfly tries to clean itself as it is stuck to marsh grass covered in oil from the Deepwater Horizon oil spill, in Garden Island Bay on the Gulf Coast of Louisiana near Venice on Tuesday, May 18, 2010. (AP Photo/Gerald Herbert)

A Greenpeace activist steps through oil on a beach along the Gulf of Mexico on May 20, 2010 near Venice, Louisiana. (John Moore/Getty Images) #

A ship's wake cuts through a pattern of oil near the site of the Deepwater Horizon oil spill in the Gulf of Mexico Monday, May 17, 2010. (AP Photo/Charlie Riedel) #

Oil reaches the marshlands on the northeast pass of the Mississippi Delta May 23, 2010. (REUTERS/Daniel Beltra/Greenpeace) #

A dead Northern Gannet covered in oil lies along Grand Isle Beach in Grand Isle, Louisiana May 21, 2010. A member of Tri-State Bird Rescue and Research tagged the spot of the location of the incident. (REUTERS/Sean Gardner) #

A BP cleanup worker rakes oil from the beach on May 22, 2010 on Elmer's Island, Louisiana. Authorities closed the popular tourist beach to the public and media wishing to visit the beach must be escorted by a BP official. (John Moore/Getty Images) #

Oil cleanup workers bring in a load of contaminated oil-absorbent booms from the Gulf of Mexico on May 20, 2010 near Venice, Louisiana. (John Moore/Getty Images) #

Bridget Hargrove of Baton Rouge, Louisiana, her four-year-old son Ayden and one-year-old daughter, Emma, wade in baby pools away from the oil contaminated Gulf of Mexico on Grand Isle beach in Grand Isle, Louisiana on May 21, 2010. Grand Isle Mayor David Camardelle said the town has closed its beach effective from noon Friday due to the presence of oil on the beach. (REUTERS/Sean Gardner) #

Specks of oil stick onto the foot of Maggie Grace Hurdle, 8, of Rosedale, Louisiana, as she walks along a beach in Grand Isle, Louisiana May 21, 2010. (REUTERS/Sean Gardner) #

A reddish egret, its legs and tail feathers coated with oil, flies above the water in Grand Isle, Louisiana, May 20, 2010. (U.S. Coast Guard photo/Petty Officer 3rd Class Patrick Kelley) #

Natural gas siphoned from the BP oil leak burns off on the Discover Enterprise on May 21, 2010 in the Gulf of Mexico off the Louisiana coast. Ultra-deepwater rigs and other equipment are being assembled at the site, preparing for a procedure called a "top kill" that BP hopes will stop the flow of oil from the well. (John Moore/Getty Images) #

Natural gas from the damaged Deepwater Horizon wellhead is burned off by the drillship Discoverer Enterprise May 16, 2010 in the Gulf of Mexico off the coast Louisiana. (Patrick Kelley/U.S. Coast Guard via Getty Images) #

Collected oil burns on the water in this aerial view seven miles northeast of the Deepwater Horizon site over the Gulf of Mexico, May 18, 2010. (REUTERS/Daniel Beltra/Greenpeace) #

Oil is seen on the surface of the Gulf of Mexico about six miles southeast of Grand Isle, Louisiana May 21, 2010. (REUTERS/Sean Gardner) #

Protective booms surround islands near mouth of the Mississippi River south of Venice, Louisiana from an oil spill Monday, May 17, 2010. (AP Photo/Charlie Riedel) #

Oil floats around booms and through marshlands of the Mississippi Delta on May 23, 2010. (REUTERS/Daniel Beltra/Greenpeace) #

Maura Wood, Senior Program Manager of Coastal Louisiana Restoration for the National Wildlife Federation takes a sample of water in a heavily oiled marsh near Pass a Loutre, Louisiana on May 20, 2010. (REUTERS/Lee Celano) #

An oil-stained pelican leaves its nest as oil washes ashore on an island that is home to hundreds of brown pelican nests as well at terns, gulls and roseated spoonbills in Barataria Bay just inside the the coast of Louisiana, Saturday, May 22, 2010. (AP Photo/Gerald Herbert) #

A Plaquemines Parish employee lays oil absorbent boom as pelicans leave their nests on an island in Barataria Bay, Louisiana, Saturday, May 22, 2010. (AP Photo/Gerald Herbert) #

A Louisiana Fish and Wildlife officer unsuccessfully pursues an oil soaked pelican in Barataria Bay, Louisiana on Sunday, May 23, 2010. (AP Photo/Gerald Herbert) #

An oil-soaked pelican takes flight after Louisiana Fish and Wildlife employees tried to corral him on an island in Barataria Bay on Sunday, May 23, 2010. (AP Photo/Gerald Herbert) #

Oil is scooped out of a marsh impacted by the Deepwater Horizon Oil Spill in Redfish Bay along the coast of Louisiana, Saturday, May 22, 2010. (AP Photo/Gerald Herbert) #

A sheen of oil sits on the surface of the Gulf of Mexico close to the site of the BP oil spill as a boat uses a containment boom to gather the oil to be burned off approximately 42 miles off the coast of Louisiana May 18, 2010 (REUTERS/Hans Deryk) #

Crews try to clean an island covered in oil on the south part of East Bay May 23, 2010. (REUTERS/Daniel Beltra/Greenpeace) #

A BP cleanup crew removes oil from a beach on May 23, 2010 at Port Fourchon, Louisiana. (John Moore/Getty Images) #

An oil-covered crab crawls past a blob of oil on the beach on May 22, 2010 on Grand Isle, Louisiana. (John Moore/Getty Images) #

A boat travels between marsh and oil-stained boom near the mouth of the Mississippi River south of Venice, Louisiana Wednesday, May 19, 2010. (AP Photo/Charlie Riedel) #

Oil from the Deepwater Horizon oil spill is seen clumped on roseau cane in the Northeast Pass of the Mississippi River on the coast of Louisiana near Venice, Tuesday, May 18, 2010. (AP Photo/Gerald Herbert) #

A ship maneuvers and sprays water near a rig in heavy surface oil in this aerial view over the Gulf of Mexico May 18, 2010, as oil continues to leak from the Deepwater Horizon wellhead. (REUTERS/Daniel Beltra/Greenpeace) #

These Kemp's Ridley turtles, photographed on May 23rd, 2010, are considered the smallest marine turtles in the world and are being held at the New England Aquarium in Boston, Massachusetts because they cannot be released in the wild, due in part to the Gulf Coast oil spill. (Dina Rudick/Boston Globe) #

The sun rises over an oil-soaked beach on May 23, 2010 on Grand Isle, Louisiana. (John Moore/Getty Images) #

Greenpeace Senior Campaigner Lindsey Allen attempts to save a small crab covered in oil walking along the shore of the breakwater in the mouth of the Mississippi River where it meets the Gulf of Mexico in Louisiana, May 18, 2010. (REUTERS/Sean Gardner/Greenpeace) #

An outboard boat motor breaks up a thick layer of oil as Louisiana Governor Bobby Jindal and Plaquemines Parish President Billy Nungesser toured the oil-impacted marsh of Pass a Loutre on Wednesday, May 19, 2010. (AP Photo/Gerald Herbert) #

A shrimp boat is used to collect oil from the Deepwater Horizon oil rig explosion in the Gulf of Mexico in the waters of Chandeleur Sound, Louisiana on May 5, 2010. (AP Photo/Eric Gay) #

Volunteers from the Grassroots Mapping project made a trip in a small boat (upper left) to the the Chandeleur Islands near Louisiana's Misissippi Delta on May 9th, 2010, taking with them a balloon (green tether seen at left) and photo equipment to help document the impact of the oil spill. Public domain photo provided by Jeff Warren and Grassroots Mapping project. #

Dr. Erica Miller, a member of the Louisiana State Wildlife Response Team, cleans a pelican of oil at the Clean Gulf Associates Mobile Wildlife Rehabilitation Station on Ft. Jackson in Plaquemines Parish, Louisiana, May 15, 2010. (REUTERS/U.S. Navy/Justin Stumberg) #

A helicopter flies over surface oil in this aerial view over the Gulf of Mexico, May 18, 2010. (REUTERS/Daniel Beltra/Greenpeace) #

A young heron sits dying amidst oil splattering underneath mangrove on an island impacted by oil from the Deepwater Horizon oil spill in Barataria Bay, along the the coast of Louisiana on Sunday, May 23, 2010. (AP Photo/Gerald Herbert) #

Boat captain Preston Morris shows the oil on his hands while collecting surface samples from the marsh of Pass a Loutre, Louisiana on Wednesday, May 19, 2010. (AP Photo/Gerald Herbert) #