Saturday, January 14, 2012

Romney: Income Inequality Is Just 'Envy'

According to Mitt Romney, the nation's growing focus on income inequality is all about envy.
"You know, I think it's about envy. I think it's about class warfare," the leading Republican presidential candidate said Wednesday on The Today Show.When asked if there are any fair questions about wealth distribution, Romney replied, "It's fine to talk about those things in quiet rooms and discussions about tax policy and the like."Romney has accused President Obama of promoting the "bitter politics of envy." The president is ramping up his talks about the nation's growing income divide and the shrinking of the middle class. He is focusing on the tax benefits afforded to millionaires and executives.Romney, who is one of those millionaires, is taking a different path. He says he's distancing himself from what he calls "a very envy-oriented, attack-oriented approach."Instead, he is talking about making America a merit-based society, rather than an entitlement society."I believe in a merit nation, an opportunity nation where people by virtue of their education, their hard work and risk taking and their dreams -- may be a little luck -- could achieve great things," he said Thursday at a campaign rally in Florida.A growing number of Americans are latching onto the idea of income inequality, which prompted thousands of people to participate in Occupy Wall Street-type protests around the nation last fall.About two-thirds of the public believes there are "very strong" or "strong" conflicts between the rich and poor, according to a Pew Research Center report released Tuesday. That's up 19 percentage points since 2009.

France loses AAA rating as euro governments downgraded

France has lost its top AAA credit rating from Standard & Poor's and eight other eurozone governments have also been downgraded by the ratings agency.
Italy, Spain, Cyprus and Portugal were cut two notches, with the latter two given "junk" ratings. Germany kept its AAA rating, and with a stable outlook.
S&P blamed the failure of eurozone leaders to deal with the crisis, or even diagnose its causes correctly.
Rumours of S&P's move prompted stock markets to fall earlier in the day.
Misdiagnosis Austria, like France has lost its top AAA rating, and been downgraded to AA+. Its economy exports a lot to recession-struck Italy, while its banks are facing losses on subsidiaries they own in financially troubled Hungary.
S&P's rating of Italy - currently at the epicentre of the crisis - has been cut two notches from A to BBB+.
Spain was also cut two notches from AA- to A, as was Portugal, whose rating fell from BBB- to a "junk" rating of BB - indicating a very high level of risk for lenders.

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The downgrades increase the dependence of the big banks on finance from the ECB - and for the economic recovery of the eurozone, that's a very bad thing”
Apart from Germany and lower-rated Slovakia, all the other countries being reveiwed were given a "negative outlook", meaning there is a 30% chance of a further downgrade.
"Today's rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone," said S&P in its statement.
The agency said the plan currently being discussed by eurozone leaders - to limit governments' future borrowing - was based on a misdiagnosis of the cause of the financial crisis.
It said the crisis was more to do with trade deficits and a loss of competitiveness by "periphery" eurozone economies such as Italy and Spain, than excess borrowing by governments.
The agency also praised the ECB for taking action to stop a total collapse in market confidence in the eurozone late last year.
'No catastrophe' French Finance Minister Francois Baroin confirmed the news about his own country ahead of S&P's announcement on Friday night.


The French downgrade is terrible news for President Sarkozy, who has only 100 days before the elections to claw back his yawning poll deficit behind the Socialist Francois Hollande.
It may be that in the short term the economic effects of the downgrade are quite limited. The markets have long assumed this was coming, so may already have absorbed the impact on France's cost of borrowing.
But the political fall-out could be very disagreeable for the president.
His pitch ahead of the elections has been to tell the voters that - though he acknowledges they may not warm to him personally - he has what it takes to battle through the crisis.
France is in the midst of an economic storm, he is saying, so best to entrust the ship of state to a proven captain.
But this argument looks a little thin when the country has just lost its gold star status, and under his watch. And he can't say it doesn't matter that much - because for most of last year he was telling the French that safeguarding the triple-A was an absolute necessity.
To be fair, the French are not especially impressed either by the prospect of a President Hollande. But that is meagre comfort for Sarkozy.
It's the first rule of politics: if you're in charge, you take the rap.
"It's not good news, but it's not a catastrophe," Mr Baroin said following emergency talks called by President Nicolas Sarkozy with the prime minister and other key ministers.
He said the French government was not planning any additional spending cuts or tax rises as a result of the downgrade: "It's not ratings agencies that decide French policy."
Meanwhile, European economic affairs commissioner, Olli Rehn, said that he regretted "the inconsistent decision [by S&P]... at a time when the euro area is taking decisive action in all fronts of its crisis response."
France is being downgraded just one notch by S&P, to AA+.
The country still has a top AAA rating from the other two main ratings agencies, Moody's and Fitch.
Spooked Earlier, the euro hit a new 16-month low against the dollar of $1.263 on rumours of the multiple downgrades, before rebounding.
It also dropped against the pound, hovering at about 82.9 pence.
Markets were also spooked by news that talks between Greece and its private sector lenders over a restructuring of its debts - including a 50% forgiveness - had broken down.
An agreement is a precondition for Greece receiving its next round of bailout money from the European Union and International Monetary Fund, without which it faces the risk of running out of money to repay its debts, and a possible exit from the eurozone, in the coming months.
London's FTSE 100 ended the day down 0.5% and Frankfurt's Dax 0.6%, while the Dow Jones in New York fell 0.4%, although it was widely expected that the ratings cuts were coming.
Borrowing cost Credit ratings are used by banks and investors to decide how much money to lend to particular borrowers.
The cut in the so-called sovereign ratings of governments is likely to lead to most other borrowers domiciled in the same countries - including banks and companies - being downgraded.
Crisis jargon buster
Use the dropdown for easy-to-understand explanations of key financial terms:
Credit rating
The assessment given to debts and borrowers by a ratings agency according to their safety from an investment standpoint - based on their creditworthiness, or the ability of the company or government that is borrowing to repay. Ratings range from AAA, the safest, down to D, a company that has already defaulted. Ratings of BBB- or higher are considered "investment grade". Below that level, they are considered "speculative grade" or more colloquially as junk.
Although the move has been widely expected, it is still likely to make it somewhat more difficult and expensive for borrowers from those countries to raise money, including for the governments themselves.
Italy's 10-year implied cost of borrowing in bond markets jumped by a third of a percentage point after the rumours emerged, but ended the day largely unchanged at just over 6.6%.
France's borrowing cost rose slightly, from 3.03% to 3.07%. Germany - considered the safest borrower in the eurozone - saw its borrowing cost fall from 1.83% to 1.76%.
The downgrades may also have an impact on the eurozone's rescue fund.
The European Financial Stability Facility (EFSF) - which has already been used to rescue Portugal and the Irish Republic - is guaranteed by the eurozone governments.
The fund is supposed to contribute towards future bailouts of Greece.
It was already having trouble borrowing money needed to provide its rescue loans. S&P's announcement may make that task even harder.
Country Old Rating New Rating Cut
One notch, loses top rating
Two notches to junk
One notch, loses top rating
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One notch
Two notches to junk
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Palin Advises Romney On Bain

The Romney campaign's "Bain problem," which is also now the Republican party's problem, doesn't look like it's going away anytime soon. Sure, Republicans are figuring out that this is not a winning issue for them. Thus they've circled their wagons around Romney, and even tried to get Newt to turn it down a couple of notches. Even the funder who gave Newt the money to green-light "When Mitt Romney Came To Down" is having second thoughts.

But never mind all that. The story has now gotten big enough to draw Sarah Palin out of an extended break from her bus tour, to advise Romney to open up the books on his tenure at Bain.

Republican star and Fox News political analyst Sarah Palin said criticism of Mitt Romney's record at Bain Capital by some Republican rivals is fair game and that voters should get "proof" of the 100,000 jobs Mr. Romney said he helped create while he headed the private equity firm.

In an interview with Fox host Sean Hannity Wednesday, Ms. Palin was asked about Texas Gov. Rick Perry's comments that Mr. Romney had practiced "vulture capitalism" rather than venture capitalism at Bain. Fox and The Wall Street Journal are owned by News Corp.
"I don't agree with attacks on free-market capitalism at all but I don't believe this is really what is at the heart of Gov. Perry's criticism of Romney and his time at Bain," the former Alaska governor replied. "This isn't about a politician making huge profits in the private sector. I think what Gov. Perry is getting at is that Gov. Romney has claimed to have created 100,000 jobs at Bain and you know, now people are wanting to know is there proof of that claim."

In a similar vein, Palin called on Romney to (finally) release his tax returns.

Former Alaska Gov. Sarah Palin suggested Wednesday that Republican presidential candidate Mitt Romney should release his tax returns, as well as records from his time at Bain Capital.
"What I heard was a little bit what's going on today is some inoculation of the candidate himself, the frontrunner, and what it is that he's going to face when he comes up against Barack Obama. Nobody should be surprised that things about Bain Capital, and maybe tax returns not being released yet, and maybe some records not being as transparently provided to the public as voters deserve to see right now, don't be surprised that's all coming out today," she told Sean Hannity Wednesday on Fox News. "Let's get it out there, let's hear the defense of the candidates who are being charged with some of this. It's kind of like some come-to-Jesus moments for these candidates, and that's good, that's healthy."

The problem is, "free enterprise" is not on trial, and Bain isn't so much the representative of capitalism as the Frankenstein monster of capitalism stitched together and brought to life by conservative policy.

As a former manager at Bain made plain in an LA Time interview, job creation was never the mission at Bain Capital. So, there's very little evidence to support Romney's claim of creating 100,000 jobs at Bain. Bain won't release its overall record of jobs lost or created. Probably because it wasn't anybody's job to create jobs at Bain. Ask them about how much they returned to investors they can probably do that. Creating wealth was the job at Bain, not creating jobs. And we've already had a decade of the Bush tax cuts benefiting the wealthy, the rich getting richer, and zero job growth to teach us that creating wealth doesn't necessarily lead to job creation.

Warren Buffet, in a Time Magazine interview, made clear another reason why Romney couldn't follow Palin's advice if he wanted to.
When I ask whether Mitt Romney is a job creator or destroyer, Buffett says that while businesses shouldn't keep people they don't need, "I don't like what private-equity firms do in terms of taking out every dime they can and leveraging [companies] up so that they really aren't equipped, in some cases, for the future."

Even without a release from Bain, we what we know about one of Bain's acquisitions — in which Romney was a very hands-on manager — is exactly what Buffet described.

But an examination of the Dade deal, which Mr. Romney approved and presided over, shows the unintended human costs and messy financial consequences behind the brand of capitalism that he practiced for 15 years.
At Bain Capital’s direction, Dade quadrupled the money it owed creditors and vendors. It took steps that propelled the business toward bankruptcy. And in waves of layoffs, it cut loose 1,700 workers in the United States, including Brian and Christine Shoemaker, who lost their jobs at a plant in Westwood, Mass. Staggered, Mr. Shoemaker wondered, “How can the bean counters just come in here and say, Hey, it’s over?”

Why release records on jobs created or destroyed and risk confirming stories like the one above?
That brings me to why Romney can't exactly follow Palin's advice on taxes. Certainly not now, anyway, with a majority of Americans citing economic inequality as a source of conflict, Newt shining a spotlight on Mitt's vulture capitalism, and voters in the 99% steering clear of him.
If he releases his tax returns Romney runs the risk, in the current climate, of revealing just how rich he is. For the record, according to Wealth-X, he's one of the 10 richest people to run for president in the last 20 years. His net worth of $250 million makes him the third richest person to seek the oval office, after Ross Perot (#1) and Steve Forbes (#2).

Romney's wealth makes him one of the 3,140 wealthiest people in the country — that's the richest 0.001 percent of Americans. So, he's not just the candidate of the 1 percent, but the candidate of the 0.001 percent.

Releasing his tax returns would just confirm to many American voters that Romney got rich by practicing the very brand of vulture capitalism Buffet criticized, which is exactly what Newt accused him of.

Unfortunately for Romney, I think all of this is already but confirmed for a good many Americans.

Iran: a quickly evolving geopolitical imbroglio – part IV

The USS Carl Vinson
Madison Ruppert, Contributing Writer
Activist Post

Last night James Corbett and I discussed on his show Corbett Report Radio the situation with Iran and the Persian Gulf, which is progressing at a blinding pace.

Since then, a considerable amount has happened and that was less than 24 hours ago. It is nearly impossible for one person to round up all of these events for you but I am doing the best I possibly can if I miss something please do not hesitate to contact me at

If this is the first part of the series you have come across, please take a few moments to go over parts one, two and three to get a better sense of what is going on here and the events leading up to what we are now witnessing. You also might want to read parts one and two of the “U.S. and NATO are on the march worldwide” series to get a better sense of the global scale of this geopolitical strategy.

Today, a significant step forward was taken (or backward, depending on your point of view) when a NATO Parliamentary Assembly member made some heated statements regarding Iran, Kuwait, and the region in general. The first jab at Iran in the piece published by Kuwait News Agency (KUNA) comes in the opening sentence in calling the Persian Gulf “the Arabian Gulf.”

The Deputy Chairman of the NATO Parliamentary Assembly Defense and Security Committee Francesco Buzzi addressed the Iranian threats to close the critical Strait of Hormuz, which Corbett rightly characterized as a flashpoint, while telling Tehran “to observe international treaties and laws and to respect the sovereignty, territorial integrity and borders of its Gulf neighbors, ‘mainly the friendly State of Kuwait.’”

 The following choice of words should be noted: “The veteran NATO MP voiced total solidarity with the State of Kuwait versus the Iranian move.”

This shows they are already creating the alliances and regional infrastructure required to wage war with Iran.

Furthermore, it clearly shows which side Kuwait is on, while highlihgting the fact that these individuals believe Iranian aggression is not only inevitable but already occurring.

Buzzi also pushed for a more aggressive political and diplomatic approach on the part of the European Union, in which the Italian government would take a more active role.

This shows just how divorced from reality these NATO bureaucrats are. With Italy’s immense domestic woes weighing heavily upon the Italian people, Buzzi actually thinks the government should be focusing on the non-threat that is Iran.

Buzzi is also apparently an advocate of European economic sanctions against Iran, which will likely be discussed in the meeting of European Union Foreign Ministers at the end of the month.

This – of course – is Iran’s red line, which they said would force them to close the Strait of Hormuz.

As I said on Corbett Report Radio, I find this prospect quite unrealistic, due to the fact that the Iranian government is well aware of the fact that they would be leaving themselves open to a massive attack from the United States.

When they first threatened to close the Strait, the United States Fifth Fleet, based out of nearby Bahrain, countered with threats of their own.

I do not believe the Iranian leadership is foolish enough to believe that the United States military would not make good on their threats, especially when it comes to a resource like oil.

Another Italian, Pieradrea Vanni, president of the Kuwaiti-Italian Friendship Society, expressed a similar sentiment to that of Buzzi in calling “on the Italian government to support an EU initiative for a decisive action against Iran, which he said is seeking to destabilize the Gulf region.”

I would counter Vanni’s claim that it is Iran destabilizing the region by asking him why the United States is moving even more naval forces into the region, making a concerted and public push to arm neighboring states and holding the largest joint Israeli-American drill in history at a time like this.

Is it really Iran that is seeking to destabilize the region, which is so critical to their infrastructure; or perhaps could it be that it is the United States, NATO and the West in general that is destabilizing the region in order to firm up their grip on the Gulf and exploit the unmatched oil resources?

An event which just served to reinforce the assertion that the United States is in fact the nation destabilizing the Gulf was the announcement of additional warship movement in the region.

Of course the United States is not alone. Indeed, as I previously mentioned, the British are moving their most advanced warship into the region as well, far from what this tense situation needs.

Unsurprisingly, like in the previous instances of American naval vessels entering the region, United States officials deny this has anything to do with tensions over the Strait of Hormuz.

Speaking of the USS Carl Vinson aircraft carrier, Pentagon spokesman John Kirby said, “Her deployment in that area is routine, long-planned – there’s nothing unusual about that.”

According to RT, the USS Carl Vinson has yet to go through the Strait of Hormuz and has a capacity of up to 80 planes and helicopters and is accompanied by a cruiser and destroyer.

The Pentagon says that the ships are “not in the Gulf,” but instead in the Area of Responsibility of the United States Fifth Fleet.

Other than the Persian Gulf, this includes the Gulf of Oman, the Red Sea and some of the Indian Ocean.

The United States is now claiming that the USS John C. Stennis aircraft carrier is not expected to return to the Gulf after it recently passed through the Strait of Hormuz – a move which infuriated Iran.

However, the American Navy has indeed stated that the USS Carl Vinson will be joined by the USS Abraham Lincoln, yet another aircraft carrier which is currently in transit from the Indian Ocean.

The United States is also stepping up the sanctions war against Iran, with Japan agreeing to adopt harsh sanctions against importing Iranian oil today.

“We plan to start reducing this 10 per cent share [of Iranian oil imports that make up the Japanese energy market] as soon as possible in a planned manner,” Japanese Finance Minister Jun Azume said.

One interesting piece in this international jigsaw puzzle I discussed with Corbett last night is the duality of India’s approach to Iran.

As I have been outlining in my series, “U.S. and NATO are on the march worldwide,” India is becoming increasingly close with the United States in the Western bid to control the Asia-Pacific region.

While India is growing closer to the United States and NATO by the day, they still have a considerably tight relationship with Iran.

According to RT, Reuters reports via sources in the Indian cabinet that their government is not looking “to waver” from the American approach to Iran.

India currently pours a whopping $12 billion per year into Iranian oil and is the largest purchaser of Iran’s oil after China.

However, India has chosen to deal with Iranian oil outside of the United States dollar, a move which the US has oddly left unaddressed.

Oddly enough, it is not just India that is now dealing with Iran outside of the dollar, indeed Russia, China and surprisingly even Japan have decided to make the same move, according to Iranian Fars News Agency.

It’s quite interesting that Japan would get on board with the Western oil sanctions against Iran seeing as they have opted to deal with the supposedly dangerous nation outside of the dollar completely.

There is also the matter of the Fujairah pipeline, the construction of which has been accelerated and is now slated for testing in May.

This pipeline is set to be able to move 1.4 million barrels per day of oil, bypassing the Strait of Hormuz bottleneck.

Interestingly, RT points to a possible spark which could ignite the flames of World War III as being the killing of an American citizen convicted of espionage in Iran.

They link this to the infamous assassination of Archduke Franz Ferdinand in 1914 which many argue sparked World War I.

They also posit that the Strait of Hormuz might be the spark; something which I think is more likely, especially given the upcoming massive Israeli-American drills which might coincide with Iranian military exercises in the region as well.

They rightly point out, “Right now it is a war of words,” and I do not think that Iran will take the first step unless they are forced to do so or backed into a corner and truly feel threatened.

I believe that it is not Israel that should be speaking of an “existential threat,” instead it should be Iran which is becoming increasingly encircled, isolated and threatened by a massive navy and powerful group of allied nations.

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Science in Action: Crow Intelligence