Tuesday, July 9, 2013

Obamacare Is Now a “Slow-Motion” Train Wreck For Fraud… Just Lie To Verify Eligibility

Guest Post by Mara Zebest
ABC’s Rick Klein gets it right when he stated the following:
“[...] having the Democrats saying that implementing Obamacare has the potential to be a train wreck. Well now you have the prospect of a ‘Slow-Motion’ train wreck.”

Forbes is reporting: Not qualified for Obamacare’s subsidies? Just lie — Govt. to use ‘Honor System’ without verifying your eligibility. Sounds a lot like the same process for how Obama got elected.
Forbes goes on to report the following:
If you thought the delay in the employer mandate was bad news for Obamacare, just wait. On Friday, Sarah Kliff and Sandhya Somashekhar of the Washington Post discovered that the Obama administration had buried in the Federal Register the announcement that the government won’t be able to verify whether or not applicants for Obamacare’s insurance exchange subsidies are actually qualified for the aid, in the 16 states that are setting up their own exchanges. Instead, until at least 2015, these states will be able to “accept the applicant’s attestation [regarding eligibility] without further verification.” [...]
Read more here.
Another Forbes article explains Obamacare’s Dark Secret: The Individual Mandate is Too Weak:
Here is a chart from the Kaiser Family Foundation that breaks out the exemptions. The grey bars are people who are exempted from the mandate. The large white area in between represents the people who are eligible for the exchanges.
Read more here.
The WashingtonExaminer is sporting a headline that HHS gives up on Obamacare’s anti-fraud measures.
Also from the WashingtonExaminer is this side note observation regarding the most transparent adminstration: White House vetoes public seeing Obama’s thanks to librarians. Translation: Obama made a video to thank librarians for helping to sell Obamacare while the same White House bans the public from seeing the video.

Dodd-Frank executive pay rule still in limbo amid pushback from corporate America

Charles Dharapak/AP - President Obama stands with Sen. Christopher Dodd (D-Conn.), center, and Rep. Barney Frank (D-Mass.), right, after signing the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, 2010.
Soon after Congress approved the largest overhaul of financial regulation in generations, the Securities and Exchange Commission moved to enforce what it considered one of the simpler parts of a mammoth and complicated law.
The provision required companies to disclose how much more their chief executives made than other employees. All the agency had to do was write a rule telling firms how to comply.
Nearly three years later, the rule remains unfinished, with no sign of when it will be done.
Within six months of the law’s passage in 2010, SEC staffers had circulated an early blueprint for the pay rule. They set a deadline for completing it by the end of 2011. The public was outraged over runaway executive compensation, and the pay disclosure seemed relatively straightforward, at least compared with many of the law’s other requirements.
What the agency did not count on was the resistance mounted by big business. A lobbying campaign waged by business executives and the nation’s most prominent corporate associations undercut the momentum and effectively brought the agency’s work on the rule to a standstill, according to interviews with SEC insiders and others familiar with discussions about the requirement.
The efforts of business groups to influence the SEC’s work was especially effective because of their success in pressing a court challenge to another part of the financial overhaul legislation — in essence, an extension of their lobbying efforts. The threat of additional lawsuits has hung over the discussion between lobbyists and agency officials about the pay rule, and some opponents have warned that the agency could be sued again if it enforces it.
“I don’t think folks anticipated the complexity or controversy. . . . The corporate community pushed back,” said Scott Kimpel, former counsel to Republican SEC commissioner Troy A. Paredes and now a partner at Hunton & Williams. “The lobbying alerted [the commissioners] to the fact that there were issues and dissensions. . . . People back-burnered it.”
SEC officials, who had hoped the pay rule would be completed quickly, missed their 2011 deadline. Then they missed another self-imposed deadline a year later.
As the third anniversary of the financial overhaul legislation known as Dodd-Frank approaches this month, the fate of the executive compensation provision exemplifies the problems dogging one of President Obama’s signature accomplishments.
Designed to prevent a repeat of the 2008 financial meltdown, the law grants broad powers to federal watchdogs to rein in Wall Street abuses and other corporate practices. Yet the regulators who must enforce it are far behind. Federal agencies writing the specific rules to carry out the law have missed nearly two-thirds of the deadlines set by Congress, according to numbers compiled by Davis Polk, a law firm that represents many financial companies.
Dozens of provisions — pertaining to banking, trading in financial securities, mortgage lending and other areas — have run into delays for reasons that experts say include their complexity and understaffing at agencies.

41 IMF Bailouts And Counting – How Long Before The Entire System Collapses?

Broke nations are bailing out other broke nations with borrowed money.  Round and round we go – where we stop nobody knows.  As of April, 41 different countries had active financial “arrangements” with the IMF.  Sometimes they are called “bailouts” and sometimes they are called other things, but in every single case they involve loans.  And most of the time, these loans come with very stringent conditions.  It is a form of “global governance” that most people don’t even know about.  For decades, the IMF has been able to use money as a way to force developing nations to do what it wants them to do.  But up until fairly recently, this had mostly only been done with poor nations.  But now an increasing number of wealthy nations are turning to the IMF for help.  We have already seen Greece, Portugal, Ireland and Cyprus receive bailouts which were partly funded by the IMF, Spain has received a bailout for its banking sector, and as I noted yesterday, it is being projected that Italy will need a major bailout within six monthsHow long can this go on before the entire system collapses?

From The Economic Collapse Blog:
Well, that would depend on how much money the lender has.
And so where does the IMF get their money?
The IMF gets their money from a bunch of nations that are absolutely drowning in debt themselves.
The IMF is funded by “wealthy” nations that dominate the global economy.  The following is how Wikipedia describes the IMF’s quota system…
The IMF’s quota system was created to raise funds for loans. Each IMF member country is assigned a quota, or contribution, that reflects the country’s relative size in the global economy. Each member’s quota also determines its relative voting power. Thus, financial contributions from member governments are linked to voting power in the organization.
These are the five largest contributors to IMF funding…
United States – 16.75%
Japan – 6.23%
Germany – 5.81%
France – 4.29%
UK – 4.29%
But those countries are in trouble themselves.  The U.S. has a debt to GDP ratio of over 100%.  Japan has a debt to GDP ratio of over 200%.
The truth is that these countries are funding the IMF with borrowed money.
So what happens when the contributors run out of money and can’t contribute anymore?
All over the globe, an increasing number of countries are reaching out to the IMF for help.  For example, on Thursday we learned that Pakistan is getting a new bailout from the IMF…
Pakistan and the International Monetary Fund have reached an initial agreement on a bailout of at least $5.3 billion.
Pakistani Finance Minister Muhammad Ishaq Dar and IMF mission chief Jeffrey Franks announced the agreement at a press conference Thursday.
And the new government in Egypt is hoping that the revolution that just occurred will not stop the flow of IMF funds…
In recent months, a handful of neighboring countries such as Qatar have been keeping Egypt’s economy afloat by loaning the country’s central bank cash. That has bought Morsi government time to delay implementing the politically-sensitive measures the IMF has sought as a precondition before it gives Cairo a $4.8 billion credit line. In particular, the IMF had said that Egypt must raise taxes and begin phasing out fuel subsidies.
It’s not the only cash at stake. Other international donors have vowed another $9.7 billion for the country once the IMF program is in place. Roughly $1.55 billion in bilateral aid from Washington could also be held up: under U.S. law, the administration can’t loan money to countries where the military is involved in an unconstitutional change in government.
But what often happens with these bailouts is that the “conditions” that are imposed prove extremely difficult to meet.  For example, Greece has not implemented all of the “reforms” that they were ordered to implement, and so the flow of future funds may be threatened…
As Greece looks set to miss a key reform deadline set by international lenders, which could jeopardize further financial aid, a Greek government minister said it wasn’t Greece’s fault that it couldn’t live up to the demands of a flawed bailout program.
“There are failures [by Greece],but you assume that the program that has been effectively imposed on us is perfect, which is far from the case,” Nikos Dendias, minister of Public Order and Citizen Protection, told CNBC on Thursday.
His comments come after Greek finance ministry officials said on Wednesday that Greece would not meet targets on reforming its public sector by the deadline set by international lenders, putting further financial aid in jeopardy.
Once a nation gets hooked on bailout money from the IMF or from other international sources, it can be very hard to get off of it.  But that is what these globalist organizations like – they want to be able to use money as a form of control.
As we saw with Greece, sometimes a nation will need bailout after bailout.  And it appears that is also going to be the case with Portugal.  The Portuguese government is on the verge of collapsing and their financial situation is being described as “very fragile”
Portugal had been held up as an example of a bailout country doing all the right things to get its economy back in shape. That reputation is now harder to sustain and even before this latest crisis, the International Monetary Fund reported last month that Lisbon’s debt position was “very fragile”.
Coming soon after the near-collapse of the Greek government, which has been given until Monday to show it can meet the demands of its own EU-IMF bailout, the euro zone may be on the brink of falling back into full-on crisis.
Right now, Portuguese bond yields are absolutely soaring and the Portuguese economy is rapidly heading into depression.
Portugal is going to desperately need the assistance of the IMF.
But what happens when the nations that primarily fund the IMF start failing themselves?
The U.S. is a complete and total financial disaster and so is Japan.  Much of Europe is already experiencing a full-blown economic depression and even China is showing signs of trouble.
So if the “wealthy” nations fail, who is going to be there to help the “poor” nations?

Obama declares War on Terror Financing (WTF); microcredit is now terrorism

President Obama announced at a White House press conference today that microcredit, small loans to the very poor and the topic of the 2006 Nobel Peace Prize, would now be considered terrorism because maximizing public benefits of credit is a threat to the US financial system, and lives saved today might become terrorists in the future. The president opened the War on Terror Financing (WTF). Press conference excerpts:
President Obama: As a Nobel Peace Prize winner, I know what is and is not peaceful. Microcredit, uncollateralized loans to people Goldman Sachs wouldn’t let into their lobby, is both a threat to our financial order and a threat to world peace. Therefore, microcredit is now considered financial and global terrorism, a direct threat to US national security, and subject to our new war: War on Terror Financing (WTF).
Q: How is helping poor families work their way out of poverty a WTF threat to anyone?
Obama: Microcredit is financial terrorism because 90% of families work their way out of poverty, over 95% of the loans are repaid, and microcredit earns a profit as it ends poverty. We obviously cannot tolerate this attack on our debt-based banking and financial systems. It’s US banking leaders like Goldman Sachs who are doing God’s work, folks, and they maximize shareholder profits by maximizing and increasing debt, not by people working out of debt.
Q: I’m sorry, Mr. President; I still don’t understand WTF problem is with ending poverty and debt.
Obama: That’s ok: it’s my job to sell this. Our economic job-creators work together as oligarchies to maximize their own profits: about $30 trillion in off-shore tax havens in current total holdings. They need this profit to motivate their job-creating. If we allow microfinance to continue, folks might start thinking about banking structures that maximize public benefits rather than bank profits. This thinking would be the beginning of the end of our financial system. The public might think about debt-free money that ends national debt, demand the return of the trillions we’ve taken from them for “investments” in CAFRs, and not stop until they had full-employment for infrastructure investment.
Q: That’s a lot, sir: can you put that into a sound bite?
Obama: Yes. US financial oligarchs are asset-holes. Finance that helps the 99% rather than our asset-holes’ profits is terrorism. We kill terrorists.
Q: WTF solves other problems of families having futures brighter than poverty?
Obama: As you know, the US has always taken the lead to prevent poverty from being ended. We do this because lives saved today might become living terrorists tomorrow.
Q: WTF... wait, what?
Obama: (smiles) I know, I know, these ideas take some time to understand. Even though some other Nobel Prize laureates disagree, I stand firm with President Bush that our leadership for humanitarian work is best, as major US universities are coming around to recognize. That’s why the job of corporate media is so important to communicate these ideas. The sooner Americans embrace our agenda, the sooner 22 American veterans will stop committing suicide every day.
Q: Sir, I’m sorry: could you go over WTF benefits are for average Americans?
Obama: Sure. For example: US freedom requires increasing government debt to buy two Hellfire missiles. We’ll drone-fire one to destroy a microcredit meeting of low-income women, then another to double-tap rescue workers who make themselves “terror associates” with so-called “help.” On a related note, we’re working-up an Executive Order to make so-called “love” illegal, too, because it has people come to the aid of terrorists. But the only benefit Americans need to know is this: “Better dead than terrorist-led!
Q: And we understand America’s children are WTF helping with propaganda?
Obama: Yes. We’re receiving hundreds of responses from school children to help people understand how drone kills around the globe protect America’s freedoms. We’ll put this catchy-one on-screen from an elementary school student for everyone to sing-a-long: it’s called the Drone drone (everyone stands to chant):
D is for death that comes from the skies!
R is for respect in all the world’s eyes!
O is for Obama - bringer of peace!
N is for niceness - what the US seeks!
and E is for everyone under control!
(non-satiric note): Explore the links for historical connections and Orwellian acts of US government in the present. The most elegant solution is for Americans in military and government to recognize “emperor has no clothes” unlawful orders, refuse them, and arrest those who issued them.
As a teacher of history, government, and economics, here’s my attempt to most accurately frame US history compared with corporate media texts.

Jon Corzine will not face criminal charges over MF Global

If you are a billionaire former Goldman Sachs CEO, ex-governor, and one of Obama’s biggest donors and steal $1.2 billion directly from the accounts of your customers and cover-up that theft, then you are not a criminal. If you reveal the un-Constitutional spying on all American citizens by the government, you are a traitor and face life imprisonment. This is your American Republic in a nutshell. Anyone that doesn’t believe we are a corporate fascist oligarchy run by the ultra-wealthy for the benefit of the ultra-wealthy, just isn’t thinking. And the beat goes on.
There will be no criminal charges for former New Jersey Governor Jon Corzine over the use of customer funds leading up to collapse of MF Global.
The criminal probe into whether there was wrongdoing on the part of Corzine by the Department of Justice will now be dropped due to lack of evidence, said a report in The New York Post, citing a person with knowledge of the matter.
But the former CEO of Goldman Sachs is not out of the woods.
Corzine is facing civil charges by the Commodities Futures Trading Commission for illegally using customer funds in the last few days of MF Global to help keep the company afloat. The firm’s former assistant treasurer Edith O’Brien is also caught up in the scandal and charged by the CFTC for making the transfers.
Ultimately Corzine was charged by the regulator for failure to segregate and misuse of customer funds and failure to supervise diligently. O’Brien was charged with one count failure to segregate and misuse of customer funds.
To support the allegations, the CFTC used a recorded telephone conversations to support their charges that Corzine was fully aware of the transfers.
Both Corzine and O’Brien have denied any wrongdoing.

America’s Lowest Class

By Bill Boyarsky
The homeless are a powerful example of economic injustice and the failure of all levels of government to provide for the nation’s poorest.
Yet Washington’s only response has been sequestration budget reductions that are cutting funds for housing—the best cure for homelessness—for more than 100,000, the majority of whom are families with children, mentally and physically disabled people and veterans.
That is a substantial number of the approximately 635,000 homeless people in the United States, a figure compiled by the National Alliance to End Homelessness. That estimate is more than the population of Washington, D.C., Seattle, Denver or Miami.
A disproportionate number—almost 50 percent—are African-Americans, who make up about 13 percent of the general population. In Los Angeles County, widely considered America’s homeless capital, the number of homeless increased by 16 percent to more than 58,000 in the past year.
“When we have so many people struggling, we need every resource,” said Va Lecia Adams Kellum. She is executive director of St. Joseph Center, which provides assistance to about 6,000 poor, including homeless, in the Venice area of Los Angeles, not far from the beach. “We do not have adequate housing. We do not have enough housing stock.”
I had visited Kellum and two of her colleagues after reading the report on the increase of homelessness. I’m a resident of the so-called homeless capital and the report confirmed what I see every day.
In the mornings, my wife Nancy and I walk along Westwood Boulevard toward the UCLA campus, through one of Los Angeles’ more affluent neighborhoods, past restaurants and expensive food markets. In doorways, alleys, on bus stop benches and seated on the sidewalk we pass homeless men and women in a state of poverty, looking confused or even deranged.
That’s nothing compared to Skid Row, a kind of homeless ghetto in downtown Los Angeles. We drove through it the other night, taking a shortcut from a freeway gridlocked by Dodger baseball traffic. Men and women were packed on the sidewalks, a terrible sight in one of America’s richest cities. With shelters filled, they’d be there for the night unless they were arrested for some minor offense.
That would take them to the county jail, a couple of miles to the north, a grim facility best known for its twin towers, eight- and nine-story structures that house the mentally ill awaiting trial or who have committed a crime. With 2,200 such inmates, Los Angeles County Sheriff Lee Baca calls it the nation’s largest mental hospital.
A few weeks ago, James Coley and Robert Warfield, caseworkers for assistance organization Integrated Recovery Network, took me through the place. On the top floors, men pounded the locked doors and shouted. Some, drugged, lay senseless on their bunks or in a corner of their cells.
On lower floors, it was quieter, although overcrowding had packed the day rooms of cellblocks with bunks. Coley and Warfield interviewed inmates to see whether they were interested in the recovery network’s approach—settling them in housing, linking them up with counseling and drug rehabilitation and, hopefully, jobs. It’s an intensive strategy, requiring great patience by Coley, Warfield and their colleagues.
The same sort of personal outreach is practiced by the community teams of St. Joseph Center as they prowl the streets, parks and beaches of Venice, befriending the most distressed and long-term homeless, bringing physicians and psychologists to them, persuading them to visit the organization’s facility for food and a shower. Eventually, some would be placed in housing.
It takes a lot of effort. But St. Joseph and the Integrated Recovery Network have statistics showing that finding housing for the homeless can end their downward spiral.
That’s why it was so discouraging to hear St. Joseph’s Kellum tell of how the sequester cuts are devastating federal housing funds. It is also infuriating to see how the sequester has slipped from the notice of the attention-challenged news media. I hadn’t heard of the housing cuts until she told me, and I doubt if very many other people had either.
This isn’t the only government policy that is exacerbating homelessness.
Michael Arnold, executive director of the Los Angeles Homeless Services Authority, said the foreclosure crisis has been especially damaging. He noted that banks are buying foreclosed homes, raising rents and flipping houses for profit. “We have a lot of empty foreclosed homes because people can’t afford them,” he said. The continuing high level of unemployment makes things worse. “If people had jobs and made a living wage, they could afford housing,” Arnold said.
Housing isn’t a cure-all. The causes of homelessness are complex and go back more than half a century when well-intentioned reformers in Washington and state capitals, appalled at “One Flew Over the Cuckoo’s Nest” mental institutions, closed them. They were to be replaced by community care centers, where the mentally ill could be treated near home. But few of such centers were ever built. As the 1970s began, the mentally ill drifted from the hospitals to the streets, the beginning of what we see today in cities big and small and in the suburbs. These are shattered people, too often beset by the twin curses of mental illness and substance addiction, their families long gone.
Some are incurable. But a great many can turn their lives around if given a chance. That chance begins with housing of their own and accessible medical care and counseling—opportunities that Washington seems determined to deny them.

AP/Jae C. Hong

Republished with permission from: TruthDig

CEO Salary Justification Season Is Open

Proxy season is over. Then comes the annual compilation of executive compensation data. Equilar and the Times, for example, reported that the compensation of the median CEO at a large public company was more than $15 million in 2012.
This means that now we are into the season of justifying these stratospheric numbers—and particularly the high rate of growth of those numbers. (2012 median compensation was 16 percent higher than in 2012.) For example, there was Steven Kaplan’s unconvincing attempt to justify high CEO pay by comparing it to . . . high pay among the top 0.1% (see Brad DeLong for a summary).
This ground has been trodden over a million times, and there’s little new that anyone can say about the issue. The common defense of high CEO pay is that it’s a justifiable investment given the market for talent. This is how Robert Shiller put it in Finance and the Good Society (p. 22):
“So it is plausible in turn that the board of Corporation B would offer a really attractive package to lure the CEO—a package that might, say, offer options on the company’s stock potentially worth $30–50 million if he is successful. That amount is not enormous relative to the earnings of a large company. A diligent board . . . might consider a highly qualified, proven CEO worth all of this.”
Let’s pause for a moment to note that “$30–50 million if he is successful” is actually a pretty miserly compensation package by today’s standards. The 2012 median compensation of $15 million reflects the current value of stock and option grants, not their value “if he is successful,” which is much higher. And $15 million is the median annual compensation, not the total for the CEO’s tenure.
Moreover, the standard argument that the market forces you to pay people what they are worth to your company is simply wrong. A very good developer can be worth millions of dollars a year to a software company. But she can’t command that much in salary because there are plenty of almost-just-as-good developers (and probably some just-as-good developers) who will work for, say, $150,000 per year. When you buy anything, you compare its value to that of the next best available alternative. Or, at least, that’s what you’re supposed to do.
How does this work for CEOs? Let’s assume for the moment that there is some potential CEO who, on an expected basis, can make the company worth $100 million more than it is worth under the current CEO. Should you be willing to pay her up to $99 million to work for you? No—because there are probably lots of other people out there who can also make the company worth $100 million more, or at least some large fraction thereof. It’s not the $100 million that matters—it’s $100 million minus the value of the next best available alternative.
Now, you might think that only one person in the whole world—let’s call him Ron Johnson—can increase the value of your company by $100 million, and no one else can come close. But unless Ron already has some deep connection to your company (e.g., Steve Jobs returning to Apple—and even in that case, his success was hard to foresee), you are almost certainly wrong. The marginal impact of a CEO is extremely hard to estimate in advance, and any expected value you come up with will be swamped by the standard deviation. The only honest answer is to say that there are a bunch of people who could probably help your company a lot, and that implies that you should hire the one who will do the job for the least money.
Instead, however, the directors manage to convince themselves that Ron is the only person who can save their company, and saving the company is worth $100 million, so he should get $99 million. They do this by making all sorts of basic errors of thinking, like converting their vague, irrational intuitions into certainties. Then they justify a specific transaction—overpaying Ron—by referring to a conceptual possibility.
Sure, CEOs are important, and some are highly valuable to their companies. But we’re not talking about LeBron James or Leo Messi here—there are a lot of people who can do the same job roughly as well as each other. There’s no reason the rules of ordinary labor markets should be suspended for them.
Republished with permission from: Truth Out

Temps Become Fixture of US Economy: Workers Across America Are Getting Stuck In Crappy Temp Jobs…. America’s Second-Largest Employer Is A Temp Agency… 2.7 Million Temporary Jobs And Growing

The ‘Just-in-time Workforce’: Temps Become Fixture of US Economy 
Hiring is exploding in the one corner of the U.S. economy where few want to be hired: Temporary work.
From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them — about 12 percent of everyone with a job.
Hiring is always healthy for an economy. Yet the rise in temp and contract work shows that many employers aren’t willing to hire for the long run.
Workers Across America Are Getting Stuck In Crappy Temp Jobs
In cities all across the country, workers stand on street corners, line up in alleys or wait in a neon-lit beauty salon for rickety vans to whisk them off to warehouses miles away. Some vans are so packed that to get to work, people must squat on milk crates, sit on the laps of passengers they do not know or sometimes lie on the floor, the other workers’ feet on top of them.
This is not Mexico. It is not Guatemala or Honduras. This is Chicago, New Jersey, Boston.
The people here are not day laborers looking for an odd job from a passing contractor. They are regular employees of temp agencies working in the supply chain of many of America’s largest companies – Walmart, Macy’s, Nike, Frito-Lay. They make our frozen pizzas, sort the recycling from our trash, cut our vegetables and clean our imported fish. They unload clothing and toys made overseas and pack them to fill our store shelves. They are as important to the global economy as shipping containers and Asian garment workers.
Many get by on minimum wage, renting rooms in rundown houses, eating dinners of beans and potatoes, and surviving on food banks and taxpayer-funded health care. They almost never get benefits and have little opportunity for advancement.
Read more: https://www.propublica.org/article/the-expendables-how-the-temps-who-power-corporate-giants-are-getting-crushe/#ixzz2YUVKQDRt
Recovery woes: America’s second-largest employer is a temp agency
Behind Wal-Mart, the second-largest employer in America is Kelly Services, a temporary work provider.
Friday’s disappointing jobs report showed that part-time jobs are at an all-time high, with 28 million Americans now working part-time. The report also showed another disturbing fact: There are now a record number of Americans with temporary jobs.
Approximately 2.7 million, in fact. And the trend has been growing.
Why Underemployment May Be Worse Than It Looks
The level of underemployed workers looks bad on its face but even worse when it’s not the government doing the counting.
When the Labor Department released its monthly nonfarm jobs report Friday, it was all sunshine and roses except for one glaring weakness: A big jump in theunderemployment rate that includes those who have quit working as well as those who have had to take part-time jobs even though they’d rather work full-time.
That rate, which economists call the U-6, jumped from 13.8 percent in May to 14.3 percent in June—a 3.6 percent increase and indicative that the 195,000 new jobs created in the month weren’t exactly of the highest caliber.
(Read MoreJob Growth Posts Large Gain in June; Rate Holds)
But what often doesn’t get as much attention is the monthly labor count that the experts at Gallup conduct.
According to the pollster’s results, the underemployment situation is even worse.
Gallup reports that 17.2 percent of the workforce is underemployed, a startling number compounded by its divergence from the government’s count. While the rate is down from the 20.3 percent peak in March 2010, it has remained maddeningly high over the past three years even as economists tout the strength of the U.S. economic recovery.
From a broader perspective, the Gallup measure actually has increased from its 15.9 percent multi-year low in October 2012.

Marc Faber – Sell Equities And Buy Physical Gold Now While Prices Are Low

Marc Faber: China Puts Global Markets at Risk
Faber said it’s a good idea to take money out of the stock market.
“I don’t think there is a lot of upside potential, but I think there is considerable downside,” he said.
However, he said that markets are now seeing emerging markets and their currencies go lower, and “It could be that all the money in the world flows in to U.S. stocks and avoids emerging markets.”
Gold can eventually be a source of profit, according to Faber. He said it’s possible the price of gold can go somewhat lower, even though he thinks it’s now at a reasonable level. “I keep on buying gold and I have faith that gold prices will eventually be higher,” Faber said.
Faber said that, in general, corporate earnings will disappoint.

The One Chart That Proves We’re Not in a “Recovery”

by Phoenix Capital Research

The US economy continues to fall to pieces, though accounting gimmicks make our employment numbers look better than reality.
As I’ve alerted subscribers of our Private Wealth Advisorynewsletter, most of the new “jobs” being created are part-time, not full time positions. Indeed, we’ve added over 500,000 part-time jobs to the US economy in 2013 so far. An incredible 360,000 of this came last month. And all in all we’ve now got a record 28+ million people working part-time in the US.
As for full-time jobs, well, we LOST 240,000 last month. And despite all the rhetoric coming out of Washington about a “recovery,” we’ve actually only added 130,000 in 2013 so far. To put this into perspective, we need to create at least 90,000 new full-time jobs PER MONTH to maintain employment levels based on population growth.
This is why the employment population ratio (take the number of people employed and divide it by the number of people who are of working age) hasn’t really moved in the four years since the Great Recession allegedly “ended.”

This is the #1 reason all the talk of “recovery” and “jobs growth” is totally bogus. If you are willing to fudge numbers and adjust measurements, then sure, things look much better. But the reality is that since 2009, there hasn’t been anywhere NEAR the job growth needed to claim we’re in a recovery.
With that in mind, the US stock market has rallied to retest its former trendline. This is a classic breakdown pattern. If we do not reclaim this line and go to new highs then the markets are set for a sharp decline, like to 1,550 if not more. And if you account for where stocks should be based on bonds, the S&P 500 should be down near 1,200.

For more market insights and commentary, visit us at:
Best Regards
Graham Summers

VIDEO: Here’s what college tuition buys you, people. College kids completely ignorant of their own country’s history

650,000 government employees furloughed

By Mandi Steffey

Starting Monday 650,000 U.S. Defense Department employees will be furloughed. The move stems from the sequester.
Civilian Pentagon workers will be forced to take one unpaid day off each week. This will result in a 20 percent reduction of their income.
It will last until September 21.
On March 1, $85 billion in federal spending cuts began. The furloughs are expected to save nearly $2 billion in defense spending.

Bank of America Wants My Family Homeless — You Wouldn’t Believe the Dirty Tricks They’ve Used to Take Our Home

Warning:  While completely horrifying, the story of how the Mata family had its lives turned upside down is not harrowing just because of what happened to them — but also for how it represents the quiet story of so many other Americans, as well.
Gisele Mata, her husband and three children have lived in the same home in Whittier, Calif., for 10 years. They fell victim to the Great Recession in late 2009, when she and her husband were both laid off within six months of one another; Gisele had been at her retail job for 23 years before the dismissal. Determined to stay current on their home loan, both she and her husband cashed in their 401K plans.
What follows is a story of how seemingly illegal, but very common, bank machinations affect ordinary homeowners — who, after bad luck or an accident of timing, turn to their bank for help, only to get caught up in a nightmare. There’s a tremendous amount of shame put upon homeowners, who are unaware of the institutional forces working against them, and who think they somehow deserve this treatment. And there’s a risk that others will fall prey to the same scheme.
Within a year or so of floating between temporary jobs and a home-based business, none of which earned the same wages as before the layoffs, the money had run out for the Matas. They could no longer afford the mortgage payment. So Gisele contacted Bank of America in January of 2012, seeking a loan modification.
Eighteen months later, she has applied and reapplied six different times for modifications, without success. And many of the tactics she has had to deal with match perfectly with what bombshell Bank of America  whistle-blowers have revealed was standard practice inside the loan modification unit. “They claimed I didn’t send in paperwork after I did, then they claimed I didn’t send in the right paperwork, and then they claimed I had a tax lien on the house which didn’t exist,” said Mata, 43.
I’ve heard lots and lots of these stories over the years, but making up a tax lien out of whole cloth is actually a delaying tactic I’d never heard before. Mata had to go through the city of Whittier to prove to Bank of America that the claimed tax lien was imaginary.
Part of the problem for Mata was that changes in her family’s income situation would habitually kick them back to the beginning of the loan modification process. Her husband found permanent work inspecting aircraft equipment (making an entry-level wage of $12 an hour) and over time received a couple of raises and promotions, and each time, Gisele had to inform the bank of the change in income, which would prompt Bank of America to restart her application, delaying the final decision even further. This also happened when one of her daughters entered the workforce as a massage therapist. “And we’d have to send in new forms, new financial documents, the whole thing,” Gisele told Salon. The Mata family still couldn’t secure a modification, despite three incomes.
Every time Gisele would reapply for a loan, she would get a new single point of contact (SPOC). She would receive letters from different people inside the bank with contradictory information, some from an old SPOC saying she was denied a modification (without explanation), others from a new SPOC saying that her paperwork was in the underwriting process. This matches what Bank of America whistle-blowers have stated, that customer service representatives would facilitate delay by claiming that applications were “under review,” when they weren’t.

 Republished with permission from: AlterNet

Marc Faber: Fed Wants Stock Market To Decline, Will Call For More QE

Recovery woes: America's second-largest employer is a temp agency | WashingtonExaminer.com

Recovery woes: America's second-largest employer is a temp agency | WashingtonExaminer.com

Behind Wal-Mart, the second-largest employer in America is Kelly Services, a temporary work provider.
Friday's disappointing jobs report showed that part-time jobs are at an all-time high, with 28 million Americans now working part-time. The report also showed another disturbing fact: There are now a record number of Americans with temporary jobs.
Approximately 2.7 million, in fact. And the trend has been growing.
In the first quarter of 2013, U.S. staffing companies employed an average of 2.86 million temporary and contract workers, or 2 percent of all non-farm employment in the United States, according to the American Staffing Association. This represents a 2.9 percent growth from the same period in 2012. For just the month of June, there was a 6.7 percent growth in the number of staffing jobs than last year.
Temp jobs made up about 10 percent of the jobs lost during the Great Recession, and because of high turnover (the average length of temp employment is 3 months before a worker moves on to a permanent job), one in 10 non-farm workers were employed by a US staffing firm at some point during the past year, according to ASA. In fact, nearly one-fifth of all jobs gained since the recession ended have been temporary.
It's a sad state of affairs for our country. While part-time and temp jobs reached highs last month, full-time jobs decreased by another 240,000. The recovery, or lack thereof, is being fueled by a shift from full-time to part-time work.

Euro crisis returns

Martin Walker
July 8, 2013
For the beleaguered small countries of Europe, the euro crisis has become a form of torture, a death by a thousand cuts.
The Portuguese government stumbles on but was weakened by the resignation of the finance minister and the foreign minister.
The former admitted that he had underestimated how deeply his spending cuts would bite into overall economic output and therefore of tax revenues. The latter leads one of the parties in the governing coalition and in his departing speech said that the austerity imposed by Portugal’s eurozone partners couldn’t go on.
The next tranche of Greece’s bailout money has been held up because the Greek government wasn’t meeting its pledges to cut the number of state employees and to privatize state assets.
Ironically, some of the same European governments that insist on the cuts were also those that complained when the government announced the closure of its state broadcasting service to save money. Greece’s Supreme Court then said the government had no powers to close it, which simply makes the funding gap all the wider.
The Irish economy is back in recession after a brief period of hope. New car registrations in May were down 11 percent on the previous year and the bad loans ratio is 25 percent, the same as in Greece.
The release of tape recordings of Irish bankers, boasting to each other of the way they had tricked the government into bailing them out, has soured the public mood, already depressed after five years of crisis.
The country’s budget deficit this year looks to be 7.5 percent of gross domestic product, the worst in the European Union, and public debt is forecast to reach 123 percent of GDP by the end of the year.
This level of debt is dismaying since interest rates are creeping up, after the Federal Reserve in the United States hinted that the days of cheap money could be drawing to a close, with its monthly bond purchases under review.
If interest rates climb, business in the European countries still in recession will cut back in investment. And governments like Ireland will find the burden of debt all the more onerous. Portugal, for example, looks to be reaching a public debt level of 134 percent of GDP.
At least these countries have become more competitive. Unit labor costs in Spain, Ireland and Portugal have fallen more than 5 percent since the crisis began but at a cost of achingly high unemployment. But in Italy, unit labor costs have risen 5 percent, even as the economy stagnates.
And now a new challenge has arisen. Interpol, the international bureau that coordinates crime fighting efforts, says organized crime has expanded dramatically since the recession with 3,600 criminal syndicates active across Europe. As well as narcotics and human trafficking, the new crime boom covers money laundering, counterfeit medicines, online and credit card fraud. Fraud in value-added tax alone is estimated at $128 billion a year in Europe.
“[Organized crime] is having a particularly negative effect on government’s attempts to recover from the economic recession by draining away these resources in taxpayer’s revenue,” Europol Director Rob Wainwright said.
Interpol recently concluded a 2-year study of organized crime in Italy, where the Calabrian Ndrangheta are estimated to generate illicit revenues of up to $56 billion a year.
“The Italian Mafia-style groups are among the most threatening in Europe and in order to fight them, a pan-European approach is needed. Those of us in the law enforcement community need to step up our cooperation in tackling the most dangerous criminal groups,” adds Wainwright.
The euro crisis isn’t as desperate as it was when the interest rates that Spain and Greece had to pay to borrow money were spiking into double-digits, thanks to the pledge of European Central Bank President Mario Draghi to buy as many sovereign bonds as required. But his ability to continue doing so could be limited by the verdict expected from the German constitutional court, which has been asked to rule whether the bank has the legal right to land Germany with the resulting debt and possible losses.
And the bill is mounting. Adding together the direct bailouts of Greece and the packages issued to Ireland and Portugal, plus purchases of Spanish and Italian bonds and bank support package for Spain, the total is now $870 billion.
And there is no end in sight.

Hitting the reset: NSA spying targeted BRICS

Reuters / Eric Thayer
Reuters / Eric Thayer

Members of BRICS featured high on the list of countries singled out for special consideration by the National Security Agency’s intensive Prism program, which collected data on billions of telephone and internet records globally.
An article published at the weekend in Brazil’s O Globo newspaper makes the observation that "Brazil…appears to stand out on maps of the U.S. agency as a priority target for telephony and data traffic, alongside nations such as China, Russia..."

Brazil, Russia and China are three prominent members of the international association, which goes by the acronym BRICS, which also includes India and South Africa.

Brazilian Foreign Minister Antonio Patriota expressed "deep concern” that electronic and telephone communications of citizens are being collected by the American intelligence community. The report did not specify how much traffic was monitored by the NSA, but it did emphasize that in the Americas, Brazil was second only to the US in the number of communications intercepted by the spy agency.
Patriota said Brazil will ask the UN for measures "to impede abuses and protect the privacy" of internet users, laying down rules for governments "to guarantee cybernetic security that protects the rights of citizens and preserves the sovereignty of all countries."

"There are many more populations of non-adversarial countries which have been subjected to the same type of mass surveillance net by the NSA: indeed, the list of those which haven't been are shorter than those which have," wrote Glenn Greenwald, who originally broke the Snowden story in the Britain's Guardian newspaper, as quoted in the O Globo report.

Reuters / Thomas Peter
Reuters / Thomas Peter
The report did not provide details on the type of data the NSA collected, but much of the focus has been on the retrieval and storage of so-called ‘metadata’, which gives intelligence-gathering agents the records of message times, identities, addresses and other information – but not necessarily the content of the messages themselves.

Russia on the NSA radar

That Russia was a prime target for NSA surveillance became evident when NSA contractor turned whistleblower Edward Snowden exposed the details of a massive ‘data-mining’ surveillance operation, known as Prism, which collected details on billions of telephone, email and internet communications both at home and abroad.

Although the full extent of the NSA’s spying activities against Russia lacks a precise numerical figure, the tentacles of the global ‘data-mining’ operation is known to have penetrated into the highest levels of the Russian government, even eavesdropping on the top-secret communications of former Russian President Dmitry Medvedev, during his visit to Britain for the G20 summit in London.
Medvedev arrived in London on Wednesday 1 April. That same day, the NSA intercepted communications from his delegation, according to the NSA paper, entitled: "Russian Leadership Communications in support of President Dmitry Medvedev at the G20 summit in London – Intercept at Menwith Hill station."

The details of the intercept were allegedly shared with officials from Britain, Australia, Canada and New Zealand.

Dmitry Medvedev holds a press briefing in London on April 2, 2009 (AFP Photo / RIA Novosti / Kremlin Pool / Vladimir Rodionov)
Dmitry Medvedev holds a press briefing in London on April 2, 2009 (AFP Photo / RIA Novosti / Kremlin Pool / Vladimir Rodionov)
The NSA interception of the Russian leader’s G20 communications came just hours after Presdient Obama and Medvedev met for the first time, and in the midst of the much-hyped ‘reset’ between the former Cold War foes. During their meeting, the two discussed a wide range of thorny issues, including the global financial crisis, nuclear disarmament and Washington’s controversial decision to build a missile defense shield in Eastern Europe.

Now, Russia finds itself in the position of playing host to the individual responsible for what many believe to be the most damaging leak of US intelligence ever.

Last month, Snowden boarded a plane from the United States to Hong Kong with a mountain of sensitive US documents, which he released once safely inside the China-owned territory. On June 23, the American whistleblower boarded a plane for Moscow, where he has been holed up in Sheremetyevo Airport’s transit zone ever since.

Judging by statements coming out of Moscow, however, it seems Mr. Snowden is at risk of overstaying his welcome, and potentially worse.

As Venezuela became the third South American country to hold out the offer of political asylum, even placing a deadline of Monday before their offer expires, one high-ranking Russian politician strongly suggested that Snowden consider the invitation.

Alexei Pushkov, who heads the international affairs committee in Russia's parliament, posted a message on Twitter saying: "Venezuela is waiting for an answer from Snowden. This, perhaps, is his last chance to receive political asylum."
Venezuelan authorities say they have not heard from Edward Snowden since the country offered the NSA whistleblower asylum, but would wait until Monday for his response.

“There has not been any type of communication,'' Foreign Minster Elias Jaua said on state television. “We are waiting until Monday to know whether he confirms his wish to take asylum in Venezuela.”
Robert Bridge, RT

Indiana hospital chain fires 865 employees because of Obamacare

More job losses because of Obamacare.
J.K.Wall reports for Independent Business Journal, June 28, 2013, that St. Vincent Health — the second-largest hospital system and the 6th-largest employer in Indiana, with 22 hospitals employing about 17,300 people — announced it will eliminate about 865 jobs to reduce its labor costs by 5%.
The job cuts are to save money as Obamacare (Patient Protection and Affordable Care Act) and Congressional budget cuts promise to take a bite out of hospital reimbursement rates. Obamacare calls for $155 billion in cuts to hospitals’ Medicare payments over 10 years. Then the fiscal-cliff deal on Jan. 1 of this year chopped out another $15 billion. And the budget sequester, which hit March 1, looked ready to sap another $10 billion.

All hospitals are trying to cut expenses drastically, by as much as 25%, in order to prepare for a future they expect to be far more austere than the past. With personnel typically accounting for 60% of hospital expenses, staff reductions are an inevitable part of that process.
But St. Vincent’s layoff announcement is the largest single reduction to date among Indiana’s largest hospitals. People familiar with the cuts said the reductions are heavy in the administrative ranks.
St. Vincent Health’s outgoing CEO Vince Caponi said in a statement: “We know the lives of many people have been affected by our decisions, and we made it a priority to treat all employed and contracted associates with kindness and respect. As these decisions were difficult, we are confident that our ministry will be positioned to continue to lead in the areas of quality, safety and patient experience in service to our communities across the state. We are praying for all associates and their families.”
H/t California Political News & Views
Dr. Eowyn is the Editor of Fellowship of the Minds and a regular contributor to The D.C. Clothesline.
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Unemployment benefits cut big time by sequester: Wallets of unemployed hit hard

Unemployment benefits take sizable cut with sequester starting this month.Examiner – by Roz Zurko
Unemployment benefits took a sizable hit when the sequester federal spending kicked in on July 1. The 11.7 million Americans still unemployed are seeing a cut in their unemployment benefits, with some states feeling it more than others, according to “Fox and Friends” live on Monday, July 8, 2013.
CNBC reports that other business have seen this sequester trickle in, but the unemployed will perhaps feel the first big “jolt” as their wallets are going to be a bit lighter when their benefits are doled out this month.  
Starting in July the average weekly benefit of $289 will fall by $43 a week, which is a good chunk out of weekly income, especially during a time when jobs are still scarce and the labor market has yet to show signs of the strong recovery needed to fix the unemployment problems in the country.
Some states will see more of a hit from the unemployment benefit decrease than others. According to the National Employment Law Project, New Jersey’s 120,100 unemployment insurance recipients will see their average compensation drop 22.2 percent. The Garden State’s average weekly unemployment compensation is $382 this will be reduced by $85, dropping the average benefit in New Jersey to under $300.
New Jersey and Maryland are the two states seeing the steepest decrease in their unemployment compensation, with cuts of 22.2 percent each. Next in line is Montana (19.6 percent), Connecticut (19.2 percent), followed by Arizona and Illinois, both at 16.8 percent.
Then there are the states that have more jobs to go around like Texas, but their is reduction for a typical unemployment benefit is only 10.2 percent. This is less than half of what New Jersey and Maryland will experience. Texas has a 6.5 percent jobless rate, which is well below the national level. The state has 118,500 on unemployment insurance.
Unfortunately for the folks who live in New Jersey and Maryland, their states will take more of a chunk of their unemployment benefits than folks who live in Texas will give up. The amount realized from an unemployment compensation benefit is almost impossible for most families to live on. Cutting this amount is only offering more hardship to the people that are struggling already.

Trader Alert: Stock Prices Could Come Down Very Fast And Furious – It’s All About Interest Rates, And It Keeps Moving Higher

Bond Yields Creep Closer to the Pain Threshold
The scale of the sell-off in U.S. government bonds has taken market watchers by surprise and yields are now fast approaching a “pain threshold” that could make the Federal Reserve think twice about unwinding its monetary stimulus too soon, analysts say.
Yields on benchmark 10-year U.S. Treasurys soared after Friday’s stronger-than-expected U.S. non-farm payrolls data heightened fears among bond investors that an unwinding of the Fed’s monetary stimulus could come sooner rather than later.
(Read More: One Eye on Earnings, the Other on Bonds)
“I think 3 percent is the key threshold, but if you’d asked me a few weeks ago, I would have said 2.5 percent – it keeps moving higher and yet there doesn’t seem to be an imminent impact on the U.S. economy,” Frederic Neumann, co-head of Asian Economics Research at HSBC Bank told CNBC Asia’s “Squawk Box.”
“But 3 percent is likely to be, not just a material threshold, but a psychological line in the sand for [Fed Chairman Ben] Bernanke at the moment,” he added.
Very Scary Short-Term Charts
United States Government Bonds
GOLDMAN: 3.0% On The 10-Year Next Year, And 4.0% By 2016!!
What Bernanke Could Say This Week To Really Spook The Market
The big show this week will be a speech on Wednesday from Fed Chair Ben Bernanke.
It’s titled: “The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospects for the Future” and there’s going to be a Q&A.

So he could really talk about anything, including, perhaps, his own future (fingers crossed).
Fedspeak is always a market obsession, but lately that obsession has been turned to 11, given all of the concern about slowing the pace of QE, and how far we are from the first rate hike. Lately the “ZIRP4EVA” crowd has gone pretty silent, and markets are pricing in the possibility of a rate hike sometime in late 2014, in part due to shifts in the Fed’s language, and in part because the pace of job creation has accelerated. In recent months, the economy has been averaging nearly 200K jobs created, which is a nice step up from the approximately 150K pace from months’ previous.
So Bernanke’s speech on Wednesday will be watched ultra-closely.
What will he say?
Citi’s Steven Englander has some thoughts about what he could say that would spook markets the most.
A hawkish Bernanke is much less likely than a dovish one, Hawkish comments could take the form of:
·         The Fed is not surprised or concerned by the bond market moves
·         The economy is outperforming their expectations
·         The Fed does not think the bond market moves will affect activity much
Most likely his comments take the form  of ‘all according to plan’ and ‘market way too aggressive in expecting FOMC hikes’ which will have be supportive for bond markets and USD negative, but have a half-life of impact until the next major data point.(retail sales on July 15).
At his last press conference, a comment about not being concerned by bond market moves was what really spooked the markets and sent yields soaring.
Read more: http://www.businessinsider.com/what-bernanke-could-say-this-week-to-really-spook-the-market-2013-7#ixzz2YSTcpsO3
Key Macro Events In The Coming Week
Debt Crisis: US Borrowing Costs Now Running Right Around $360 Billion A Year

Egypt not to sell more state-owned companies: Morsi

CAIRO — Egypt would not sell any more state- owned companies, President Mohamed Morsi said Tuesday.
In his speech to steel industry workers in Helwan district in Cairo on the eve of Labor Day, Morsi said there will be no more selling of the public sector again, stressing that the private sector could not be an alternative for the public sector.
“Egypt encourages the private sector, but this does not mean disregarding the public sector,” he said.
“We will continue the way of late President Gamal Abdel-Nasser who wanted to establish a huge industrial castle in Egypt,” Morsi said, noting that manufacturing and exporting are real indicators for the development of a country.

Secret TPP Deal Would Void Democracy

TPP talks held in British Columbia in June were kept secret, but Canadian activists learned about them the day before from an article in the Peruvian media. Opponents hustled to hold an emergency teach-in and to project messages about the TPP on downtown Vancouver buildings. More talks will take place July 15-25 in Malaysia. Photo: Citizens Trade Campaign.
Many people know NAFTA has cost U.S. workers 700,000 jobs. But how many know another effect was to drive Mexican small farmers out of business?
In the brave new world of free trade, Costco makes tortilla chips and salsa in the U.S. and trucks them to its stores in Mexico.
Congress will soon debate whether to “fast-track” a trade deal that would make job-killers like NAFTA look puny. The Trans-Pacific Partnership would give corporations the right to sue national governments if they passed any law, regulation, or court ruling interfering with a corporation’s “expected future profits.”
They could also sue over local or state laws they didn’t like. The TPP would cover 40 percent of the world’s economy.
Existing laws and regulations on food safety, environmental protection, drug prices, local contracting, and internet freedom would all be up for challenge. And the decision-makers on such suits would not be local judges and juries; they’d be affiliated with the World Bank, an institution dedicated to corporate interests.


Citizen groups believe they can stop the TPP if there is enough outcry. They point to previous victories over the WTO (World Trade Organization) and FTAA (Free Trade Area of the Americas).

What Is the TPP?

It might as well stand for “Take Power from the People,” a Detroit postal worker said.
The Trans-Pacific Partnership has been under hush-hush negotiations since 2008. It includes the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and, soon, Japan.
A “docking mechanism” would allow other countries, including China, to join over time.
The contents have not been made public, but are known to the 600 “corporate advisors” helping write it, such as Chevron, Halliburton, Walmart, Ford, GE, AT&T, Cargill, Pfizer, and the Semiconductor Industry Association. Some information has come to light through leaks.
Like most trade agreements, the TPP is mostly not about trade but about giving corporations more rights to interfere with local laws.
TPP tribunals staffed by corporate lawyers, outside the control of any government, would rule whether a country’s taxpayers must pay monetary damages to wronged corporations.
Negotiations begin in July on a Trans-Atlantic Free Trade Agreement between the U.S. and the European Union. Stopping TPP would help derail it, too.
Most unions, however, have been slow to get on board—even though the TPP would jeopardize, according to the AFL-CIO, millions of jobs. The Teamsters and Communications Workers have been the most active. Greg Junemann, president of the Professional and Technical Engineers, says unions have given up, certain that “what Obama wants to do, they [Congress] are going to do.” Junemann, with other union heads, sits on a labor advisory committee (LAC) on trade—which, he said, has been completely ignored.
In a June 6 letter, LAC chair Thomas Buffenbarger of the Machinists sharply criticized the administration for “restrictions on information that is shared with LAC members,” “unwillingness to share bracketed text or tabled positions from our negotiating partners,” and “refusal to include labor representatives on Industry Trade Advisory Committees.”


Over the opposition of many unions, President Obama signed corporate-friendly trade agreements with South Korea, Panama, and Colombia in fall 2011.
He singled out the TPP as a priority in this year’s State of the Union speech and wants Congress to give him “fast-track” authority.
Veterans of the fight against Bill Clinton’s NAFTA will remember fast track—Congress gives away its ability to amend an international agreement, in favor of a simple up-or-down vote. Each house may debate the bill for no more than 20 hours.
Fast track is likely to come up in late summer or early fall. But most Democrats in the House are opposed to fast track and the TPP, says Arthur Stamoulis of the Citizens Trade Campaign, and many Republicans will also vote against it (some because they want to deny Obama any appearance of success).
Junemann counters that, in the end, doing what big business wants will weigh more with Republicans than hurting Obama.
In any case, “there is no way they can get TPP through without fast track,” Stamoulis said. “When we defeated the FTAA [in the early 2000s], the first step was cross-border people’s movements dragging the proposal out of the shadows, shining a light on it, and introducing accountability and scrutiny to the negotiations.”
Light and scrutiny have both been sorely lacking thus far, but leaks about TPP’s contents are alarming.


Corporations could sue governments over laws not to their liking. They are already doing so under existing “trade” agreements, but TPP would vastly expand the number of corporations and countries involved.
For example, Australia passed a law requiring plain packaging for cigarettes (no Joe Camel). U.S.-based Philip Morris is in court over predicted lost sales.
After the Fukushima disaster, Germany enacted a moratorium on nuclear power; a Swedish energy company is now suing the German government. Bechtel sued Bolivia for undoing the privatization of its water supply.
Corporations have already collected $365 million by suing governments, usually in developing countries, under existing treaties, and $13 billion more is pending in suits under NAFTA and the Central America (CAFTA) and Peru FTAs.
Most suits thus far are over environmental issues. But in June 2012, the French firm Veolia sued the Egyptian government for raising the minimum wage.
Under TPP, the corporation would sue the federal government, whether the case pertained to a federal, state, or local law or court decision. If the tribunal awarded damages to the corporation, the federal government would pay.
So if the government doesn’t want more suits, it has to change its laws (or pressure the local government to do so). Under NAFTA, the U.S. chemical company Ethyl Corp. sued Canada because it had banned the use of a gasoline additive called MMT, as a public health measure. Canada backed down, allowed MMT, and paid Ethyl $13 million.
  • TPP would give international firms equal access to federal government contracts.
  • TPP would include aggressive intellectual property rules to protect Big Pharma’s patents and restrict access to generic medicines. The consequences for those unable to afford HIV drugs, for example, especially in poor countries, would include hundreds of thousands of deaths.
  • The U.S. Department of Energy has the authority to regulate exports of natural gas—but not to countries that have free trade agreements with the U.S. TPP would mean stepped-up natural gas exports, without review, to Japan, the world’s largest importer of natural gas, and therefore increased to find that gas.
And presumably, when U.S. states, counties, and cities ban fracking, energy companies from any interested country could try to get those bans overturned. (Domestic oil and gas companies are already suing over local fracking bans, such as in Longmont, Colorado, and Dryden, New York.)


These new rights for corporations are horrifying, but the most widespread effect of TPP would be job loss. The minimum wage in Vietnam, for example, is $2.23 a day, so labor-intensive industries are already eager to move there. The TPP would accelerate that process:
  • It would remove U.S. tariffs on goods produced in Vietnam and any other TPP country.
  • Manufacturers in capital-intensive industries (heavy machinery factories, paper mills, semiconductors), who might be reluctant to risk investment, would be protected against the threat of other countries’ passing new environmental or regulatory costs.
  • TPP’s protections against loss of “intellectual property” would reassure investors about building in Vietnam, where the majority of college grads are in math and science. Such concerns are currently a major disincentive for IT or research work in Vietnam, as its intellectual property practices are far looser than those in the U.S.
Through arm-twisting and over the objections of the unions who’d worked to get him elected, Bill Clinton pushed through NAFTA in 1993. But by the early 2000s, “free trade” had a track record.
The Free Trade Area of the Americas would have extended NAFTA to 31 more countries in the hemisphere. Some Latin American countries, notably Brazil, said no. Big protests were held in Quebec City in 2001 and in Miami in 2003, and the FTAA died.
To stop fast track and the TPP, Citizens Trade Campaign suggests three actions: Contact your Congressperson and urge a “no” vote. Spread the word widely about the TPP, through all channels. And if TPP negotiations are held in North America, mobilize to greet the bargainers—à la Seattle 1999.
See Expose the TPP. The Citizens Trade Campaign site has fact sheets, monthly briefings, and more. See a video interview on “Democracy Now!”
A version of this article appeared in Labor Notes #412, July 2013. Don't miss an issue, subscribe today.