Thursday, July 18, 2013

40 Stats That Prove The U.S. Economy Has Already Been Collapsing Over The Past Decade

40The “coming economic collapse” has already been happening.  You see, the truth is that the economic collapse is not a single event.
It has already started, it is happening right now, and it will accelerate during the years ahead.  The statistics in this article show very clearly that the U.S. economy has fallen dramatically over the past ten years or so.
Unfortunately, there are lots of mockers out there that love to mock the idea of an economic collapse even though one is happening right in front of our eyes.  They love to say stuff like this (and I am paraphrasing):
“An economic collapse is never going to happen.  We can consume far more wealth than we produce forever.  We can pile up gigantic mountains of debt forever.
There is no way that the party is over.  In fact, the party is just getting started.  Woo-hoo!”  That sounds absolutely ridiculous, but “economists” and “journalists” actually write things that reflect these kinds of sentiments every single day.
They do not seem alarmed about the fact that our national debt is nearly 17 times larger than it was 30 years ago.  They do not seem alarmed about the fact that the total amount of debt in our country is more than 28 times larger than it was 40 years ago.  They do not seem alarmed about the fact that our economic infrastructure is being absolutely gutted and we are steadily becoming poorer as a nation.  They just think that the magic formula of print, borrow, spend and consume can go on indefinitely.  Unfortunately, the truth is that a massive economic disaster has already started to unfold.
We inherited the greatest economic machine in the history of the world, but we totally wrecked it.  We have been able to live far, far beyond our means for the last couple of decades thanks to the greatest debt bubble in the history of the planet, but now that debt bubble is getting ready to burst.  Anyone with half a brain should be able to see what is coming.  Just open your eyes and look at the facts.  The following are 40 stats that prove the U.S. economy has already been collapsing over the past decade…
#1 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001.  That number dropped to 21.6 percent in 2011.
#2 The United States was once ranked #1 in the world in GDP per capita.  Today we have slipped to #14.
#3 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#4 Since the year 2000, the size of the U.S. national debt has grown by more than 11 trillion dollars.
#5 Back in the year 2000, our trade deficit with China was 83 billion dollars.  Last year, it was 315 billion dollars.
#6 In the year 2000, about 17 million Americans were employed in manufacturing.  Today, only about 12 million Americans are employed in manufacturing.
#7 The United States has lost more than 56,000 manufacturing facilities since 2001.
#8 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#9 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
#10 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.
#11 In 2002, the United States had a trade deficit in “advanced technology products” of $16 billion with the rest of the world.  In 2010, that number skyrocketed to $82 billion.
#12 The United States has lost more than a quarter of all of its high-tech manufacturing jobs since the year 2000.
#13 The number of full-time workers in the United States is nearly 6 million below the old record that was set back in 2007.
#14 The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
#15 Throughout the year 2000, more than 64 percent of all working age Americans had a job.  Today, only 58.7 percent of all working age Americans have a job.
#16 The official unemployment rate has been at 7.5 percent or higher for 54 months in a row.  That is the longest stretch in U.S. history.
#17 The U.S. government says that the number of Americans “not in the labor force” rose by 17.9 million between 2000 and 2011.  During the entire decade of the 1980s, the number of Americans “not in the labor force” rose by only 1.7 million.
#18 The average number of hours worked per employed person per year has fallen by about 100 since the year 2000.
#19 The U.S. economy continues to trade good paying jobs for low paying jobs.  60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
#20 The U.S. economy lost more than 220,000 small businesses during the recent recession.
#21 The percentage of Americans that are self-employed has steadily declined over the past decade and is now at an all-time low.
#22 According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration
Bush Sr.: 11.3
Clinton: 11.2
Bush Jr.: 10.8
Obama: 7.8
#23 In the year 2000, there were only 17 million Americans on food stamps.  Today, there are more than 47 million Americans on food stamps.
#24 In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent.  Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.
#25 Since Barack Obama entered the White House, the average price of a gallon of gasoline in the United States has risen from $1.85 to $3.64.
#26 More than twice as many new homes were sold in the United States in 2005 as will be sold in 2013.
#27 Right now there are 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.
#28 The price of ground beef increased by 61 percent between 2002 and 2012.
#29 According to USA Today, water bills have actually tripled over the past 12 years in some areas of the country.
#30 In 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 55.1 percent are covered by employment-based health insurance.
#31 Median household income in the United States has fallen for four years in a row.
#32 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#33 Back in the year 2000, the mortgage delinquency rate was about 2 percent.  Today, it is nearly 10 percent.
#34 Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.
#35 Back in 2007, about 28 percent of all working families were considered to be among “the working poor”.  Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
#36 According to the Federal Reserve, the median net worth of families in the United States declined “from $126,400 in 2007 to $77,300 in 2010“.
#37 According to the New York Times, the average debt burden for U.S. households that earn $20,000 a year or less “more than doubled to $26,000 between 2001 and 2010“.
#38 Medicare spending increased by 138 percent between 1999 and 2010.
#39 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#40 Today, more than a million public school students in the United States are homeless.  This is the first time that has ever happened in our history.  That number has risen by 57 percent since the 2006-2007 school year.
Are there any other items that you would add to this list?  Please feel free to join the discussion by posting a comment below…
Crushed Car By UCFFool
Republished with permission from: The Economic Collapse

Nationwide banks sit-ins planned in UK

Anti-cuts campaigners will occupy branches of one of the leading British banks and set up fake food banks there to highlight the massive rich and poor divide and the huge hunger crisis in Britain.
The UK Uncut campaign group said they are targeting branches of HSBS multinational banking group to draw attentions to their role in the past years™ banking crisis, their rescue by the government using taxpayer money and the government™s continued tolerance of their tax-evasion.
A recent report by two leading British charities, Church Action Poverty and Oxfam, found that 500,000 people now rely on food banks to survive in Britain.
œThere are now over half a million people in the UK going hungry, forced by our government to make the choice between paying the bills or eating, feeding themselves or feeding their children,” UK Uncut said.
œThat™s why on Saturday 20th July UK Uncut will be setting up our own UK Uncut style food banks inside branches of HSBC – shutting down the UK™s biggest, bonus-munching, crisis-causing, tax-dodging bank,” it added.
The group said they want the government to stop œpropping up” the people who caused the current crisis to put an end to the need for food banks.
œThe banks got us into this mess, but this cabinet of millionaire men are forcing us to pay the price. And that™s not all – banks are some of the biggest tax dodgers out there,” UK Uncut said.
The group said the occupations will be staged nationwide.
Republished with permission from: Press TV

Mega Banks Go After Credit Unions

Liberty Bliztkrieg
The rampant hypocrisy in the position of the mega banks on the issue of credit unions is so glaring it’s almost hard to believe. Then again, there is nothing we shouldn’t assume when it comes to mega bank criminality and culturally destructive behavior after these last few years of unlimited nerve, gall and theft. Why? They are above the law and they know it. From the LA Times:  
WASHINGTON — Credit unions have been snatching customers from banks amid consumer frustration over rising fees and outrage over Wall Street’s role in the financial crisis.
Now banks are fighting back by trying to take away something vital to credit unions — their federal tax exemption.
Bankers long have complained the tax break is an unfair advantage for large credit unions. Now they see an opportunity to get rid of it as lawmakers begin work on a major overhaul of the tax code that is aimed at eliminating many corporate exemptions and lowering the overall tax rate.
Bankers complaining about an unfair advantage. Well isn’t that special.
Credit unions said the effort to take away their tax exemption was simply an attempt to stifle competition and remove one of the only checks on bank fees for consumers.
The tax exemption is crucial to credit unions, which by law can’t raise capital through public stock offerings the way that banks can, said Fred R. Becker Jr., president of the National Assn. of Federal Credit Unions, a trade group with about 3,800 federally chartered members.
“They’ll have to convert to banks, which is what the banks want,” he said. “Then they’d have, for lack of a better term, a monopoly.”
The industry has grown significantly since the 2008 financial crisis, boosted by outrage over Bank of America’s 2011 plan to impose a $5 monthly fee for debit card use.
Bank of America ditched the plan after protests from customers, lawmakers and the White House. But the controversy led consumer groups to launch an effort to get customers of big banks to switch to smaller institutions, such as credit unions. And the effort helped.
By the end of March, credit union membership surged to 95.7 million, an increase of 2.7 million from the start of 2012, according to SNL Financial.
“The banking industry has no problem with competition. We have problems with competition when it’s on an un-level playing field,” said James Ballentine, the American Bankers Assn.’s executive vice president of congressional relations.
Oh no problem with competition? Free markets right? Like they way you got down on your hands and knees in 2008 crying for a taxpayer bailout? Got it.
As I have warned about for years, this is what happens when you provide no-strings attached bailouts to sociopathic monopoly companies that control the government.
Full article here.
In Liberty,
Follow me on Twitter!

Judge Napolitano: Wall St Is Drunk On Bernanke's Free Cash

Gov’t Agency Wants to Geolocate Every Single Financial Transaction

The Consumer Financial Protection Bureau (CFPB) is looking to create a “Google Earth” of every financial transaction of every American, Sen. Mike Enzi (R-WY) warned today in a Senate speech opposing confirmation of Richard Cordray as CFPB director.
“This bill (creating the CFPB) was supposed to be about regulating Wall Street. Instead, it’s creating a Google Earth on every financial transaction. That’s right: the government will be able to see every detail of your finances. Your permission – not needed,” Sen. Enzi said.
“They can look right down to the tiny details of the time and place where you pulled cash out of an ATM,” Enzi warned.
And, there’s nothing you can do about, since Americans don’t have the ability to “opt out” or prohibit the government from collecting their personal financial data, Enzi said:
“You can’t tell ‘em to stay out of your records. It’s not possible. If your data is being collected, you do not have the option to opt out. Nor, does the CFPD need any kind of permission from you to gather your personal information.”
Enzi called for greater congressional oversight authority to ensure the CFPB does not abuse its power, but Republican still dropped plans to filibuster the nomination, caving to threats by Senate Majority Leader Harry Reid (D-Nev.) to change the filibuster rules.
Read more

Decrease in Starts Curbs U.S. Housing Rebound: Economy

David Paul Morris/Bloomberg
The decline was led by a slump in multifamily projects, which can be volatile, and the level of permits remained higher than starts, which may point to a rebound this month.
The residential real-estate rebound suffered a setback in June as housing starts unexpectedly fell to the lowest level in almost a year, curbing how much construction contributed to U.S. economic growth last quarter.
Work began on 836,000 houses at an annualized rate, the least since August and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington. The drop was led by a 26.2 percent plunge in multifamily projects, which are more volatile than work on single-family homes.
The figures were in contrast to a report yesterday showing homebuilders this month were the most optimistic in seven years as sales improved, indicating the reversal will probably prove temporary. The slump came as Federal Reserve Chairman Ben S. Bernanke said monthly asset purchases aimed at spurring the economy could be reduced or expanded as conditions warrant, with housing one area policy makers will monitor.
“As construction ramps up, we’re bound to have some hiccups along the way,” said Guy Lebas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. Having called for 915,000 starts, Lebas had the lowest estimate in the Bloomberg survey. “I don’t think this one data point is immediately concerning. The housing markets are going to be a driver of economic growth.”
In testimony before the House Financial Services Committee, Bernanke today said the central bank’s $85 billion a month in bond purchases “are by no means on a preset course.” He also said housing activity and prices seem likely to continue to recover, notwithstanding the recent increases in mortgage rates.

Bernanke’s View

If the jump in borrowing costs were deemed large enough to hurt the recovery, then “the current pace of purchases could be maintained for longer,” the Fed chairman also said.
The economy maintained a “modest to moderate pace” of growth in recent weeks, the Fed said today in its Beige Book business survey.
“Residential real estate and construction activity increased at a moderate to strong pace in all reporting districts,” the Fed said in the survey, which is based on anecdotal reports from its 12 regional banks. “Manufacturing expanded in most districts since the previous report.”
Stocks climbed on Bernanke’s comments. The Standard & Poor’s 500 Index rose 0.3 percent to 1,680.91 at the close in New York, and the yield on the benchmark 10-year Treasury note dropped to 2.49 percent from 2.53 percent late yesterday. Builder shares benefited from the drop in rates, with the S&P’s Supercomposite Homebuilding Index rising 1.6 percent.

U.K. Policy

Policy makers in the U.K. rallied behind new Bank of England Governor Mark Carney, voting 9-0 to keep the central bank’s bond-purchase program at 375 billion pounds ($570 billion), according to minutes of the Monetary Policy Committee’s July 3-4 meeting issued today. The outcome was the first unanimous vote for the panel since October 2012 after two policy makers dropped their call for additional stimulus.
Bank of Canada Governor Stephen Poloz today kept his main interest rate unchanged at his first policy decision and said there will be a “gradual normalization” of borrowing costs over time as slack in the economy disappears and inflation picks up.
The median estimate of 83 economists surveyed by Bloomberg projected U.S. housing starts would rise to a 960,000 rate in June. Forecasts ranged from a 915,000 to 1.03 million after an initially reported 914,000 annualized rate in May.

Apartment Construction

Work on multifamily projects such as apartment buildings slumped to an annualized rate of 245,000 last month, the least since August 2012, following a 28.2 percent surge in May, today’s report from the Commerce Department showed.
Construction of single-family houses fell 0.8 percent to a 591,000 rate, the fewest since November, from 596,000 the prior month.
Following the report, economists at Morgan Stanley in New York cut their estimate for last quarter’s gain in residential building to an 18.9 percent annualized rate from a prior forecast of 20.3 percent. That reduced their projected increase in second-quarter gross domestic product to a 0.3 percent annualized rate from 0.4 percent.
Building permits, considered a harbinger of future work, also declined last month, again led by 21.4 percent slump in multifamily units to a 287,000 rate, the Commerce Department data showed. Applications to begin work on single-family houses climbed 0.6 percent to a 624,000 rate, the most since May 2008.

By Region

All four regions had a decrease in starts last month, led by a 12.1 percent drop in the Northeast and a 12 percent decline in the South.
Unusually wet weather may have played a role. Last month marked the 13th wettest June on record for the contiguous U.S., according to the National Oceanic and Atmospheric Administration.
Eighteen states -- from Georgia to Maine, registered rain totals that ranked among their 10 wettest. New Jersey and Delaware had their wettest Junes on record.
The drop in activity last month came even as builders gained confidence. The National Association of Home Builders/Wells Fargo sentiment index climbed to 57 in July, the highest since January 2006, the Washington-based group reported yesterday. The gauge has climbed 13 points in the latest two months, the biggest back-to-back gain since January-February 1992.

AV Homes

AV Homes Inc (AVHI). is seeing “increased demand driven by recovery in the household formation, employment, and record affordability,” chief executive officer Roger A. Cregg said in a June 19 teleconference.
“We are seeing a more robust recovery in the primary residential segment of the housing market,” he said.
Rising prices may also be prompting builders to withhold supply from the market in order to boost margins, said Drew Reading, a Bloomberg Industries analyst covering homebuilding and home improvement.
“If they’re holding off supply, they’re gaining the benefits of the higher prices, so that’s helping their margins and profitability,” said Reading. “Even though interest rates are rising, as long as demand remains strong and inventories remain low, builders can drive prices.”

Mortgage Rates

Borrowing costs remain attractive even with the recent jump. The average rate for a 30-year fixed mortgage climbed to 4.51 percent, the highest level in two years, in the second week of July, McLean, Virginia-based Freddie Mac said in a statement. The rate reached a record low of 3.31 percent in November.
The recent increase may also spur people to enter the market to lock in rates while they’re still low.
The market remains shy of the heights reached at the peak of the housing boom. Builders began work on 780,000 homes in 2012, a 28 percent increase from the prior year and the third-straight annual advance. Starts peaked at 2.1 million in 2005, which was a three-decade high.

Second Quarter Looks Uglier and Uglier, The Fed’s Illusory Policies Are Paving The Way For A Market Collapse Worse Than 2008

Second Quarter Looks Uglier and Uglier
The first look at second-quarter gross domestic product won’t be released until July 31–the second day of the Federal Reserve‘s next Federal Open Market Committee meeting. But monthly data available make it clear the spring slump was, indeed, very very slumpy.
Monday brought disappointing news on retail sales and business inventories. Retail purchases increased just 0.4% in June, not the 0.8% expected, and May’s sales were revised down. The control sales group, which goes into GDP and which excludes vehicles, building materials and gasoline, rose 0.15% in June, half the gain forecasted.
In addition, businesses increased their inventories level by just 0.1% in May, and April’s increase was revised from 0.2% to 0.3%.
The list of economic shops now estimating real GDP grew by less than a 1% annual rate last quarter include Goldman Sachs (0.8% as of Monday), Macroeconomic Advisors (0.6%), Royal Bank of Scotland (0.5%) and Barclays (0.5%). (One caveat to the upcoming GDP data is that the Bureau of Economic Analysis will be releasing benchmark revisions and new methodology at the same time the second quarter GDP data are released.)
Markit Survey – Worldwide Business Confidence Drops to Post-Crisis Low
Thoughts of the Federal Reserves tapering its bond-buying stimulus this year are premature due to that lack of business confidence, says Markit Chief Economist Chris Williamson.
BOOM, BUST: Housing Starts Unexpectedly Fall to Lowest in Year, Permits Have Biggest Miss In History!
Starts (NHSPSTOT) of new U.S. homes unexpectedly fell in June to the lowest level in almost a year, indicating a pause in the industry’s progress.
Work began on 836,000 houses at an annualized rate last month, the least since August 2012 and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington. The reading was weaker than projected by any economist in a Bloomberg…
Following 45% Collapse, Mortgage Applications Are Back To 2011 Lows
For the 9th week of the last 10 mortgage applications fell (led by refis – down 55% from their peak). Now down an incredible 45% from its May highs – the largest 10-week plunge since December 2010 – overall mortgage activity is languishing around the lowest levels of the post-recession ‘recovery’. Year-over-year, applications have dropped 44% which is close to the worst on record as applications and mortgage rates track one another in their ‘whocouldanode’ perfectly correlated manner. It seems - for all those blinkered pollyannas - given this morning starts and permits disaster, that home sales are the next shoe to drop and judging by the empirical relationship with apps and rates, the ‘surprise’ could be significant for many who remain hopeful.
Not pretty at all…
The Fed’s illusory policies are paving the way for a market collapse worse than 2008
the Fed is between a rock & a hard place. If it does not increase the rates of interest, it will explode leading to high inflation, If it increases interest rates, the activities that are profitable only with very low interest rates will collapse
Thanks to QE, bubble of 2000 looks like ‘day at beach’

“When you think about how much you pay for a dollar’s worth of sovereign debt income in the United States or investment grade debt, if you create a PE multiple out of it, that would make the stock market bubble of 2000 look like a day at the beach. It’s really quite remarkable,” Olsen told CNBC Asia’s “Squawk Box” on Wednesday, referring to the dotcom bubble that burst in 2000.
A Nightmare Scenario
Most people have no idea that the U.S. financial system is on the brink of utter disaster.  If interest rates continue to rise rapidly, the U.S. economy is going to be facing an economic crisis far greater than the one that erupted back in 2008.  At this point, the economic paradigm that the Federal Reserve has constructedonly works if interest rates remain super low.  If they rise, everything falls apart.  Much higher interest rates would mean crippling interest payments on the national debt, much higher borrowing costs for state and local governments, trillions of dollars of losses for bond investors, another devastating real estate crash and the possibility of a multi-trillion dollar derivatives meltdown.  Everything depends on interest rates staying low.  Unfortunately for the Fed, it only has a certain amount of control over long-term interest rates, and that control appears to be slipping.  The yield on 10 year U.S. Treasuries has soared in recent weeks.  So have mortgage rates.  Fortunately, rates have leveled off for the moment, but if they resume their upward march we could be dealing with a nightmare scenario very, very quickly.
Will the Bond beating continue? Upside interest rate target is?

The chart above reflects how a variety of assets performed over a 70- day period of time, ending July 10th. As you can see the top performing asset was the inverse bond ETF TBF, as interest rates rose sharply during this time frame.
During this time window TBF made three times as much as the S&P 500 and made investors as much in two months as the S&P 500 has for the year!
The chart below reflects a pattern that suggested interest rates were about to “Blast Off and Bonds could get hurt”before it happened (see post here)

The above chart reflected a double bottom in yields and a bullish inverse head & shoulders in yields, suggesting a sharp rally in interest rates was about to take place…and it did.
Will the Bond Beating continue?
2013 The Crash of the US Housing Market

BREAKING: New York Fed’s Head Of Communications Resigns

NEW YORK—The Federal Reserve Bank of New York today announced that Krishna Guha, executive vice president and head of the Communications Group, conveyed his intention to resign from the Bank, effective September 6, 2013.   He will step down from his current position immediately, and serve as a senior adviser to President Dudley until his last day in the Bank.
It is somewhat ironic that a Federal Reserve which is now more committed to “forward guidance”, transparency and communication than ever in history, just announced the resignation of Krishna Guha, the head of NY Fed’s Communications Group, aka the head PR contact for all media. More importantly, the resignation took place without a handy substitute ready. Our advice to the Fed, if unable to find a worthy replacement: just hire Jon Hilsenrath – after all he already is the Fed’s mouthpiece.
FED: ‘Modest To Moderate’ Growth Across The Economy

Treasury: Debt Has Been Exactly $16,699,396,000,000.00 for 56 Days

According to the Daily Treasury Statement for July 12, which the U.S. Treasury released this afternoon, the federal debt that is currently subject to a legal limit of $16,699,421,095,673.60 has stood at exactly $16,699,396,000,000.00 for 56 straight days.
That means that for 56 straight days the federal debt has remained approximately $25 million below the legal limit.
Even though the portion of the federal debt that is subject to a legal limit has not changed in almost two months, the Treasury has continued to sell bills, notes and bonds at a value that exceeds the value of the bills, notes and bonds it has been redeeming.
Read full article

Big Pharma’s Lurid Tactics Under Fire In China – And In The US

At first it was just GlaxoSmithKline, the multinational mega drugmaker headquartered in the UK, that has been on the hot seat in China for a month. Four of its Chinese executives were arrested: China VP and operations manager Liang Hong, human resources director Zhang Guowei, legal affairs director Zhao Hongyan, and business development manager Huang Hong. GSK’s general manager in China, a Brit named Mark Reilly, absconded to London in June.
The company allegedly paid bribes, including “sexual bribes,” to “government officials, medical associations, hospitals and doctors,” by using travel agencies as conduit, explained Gao Feng, head of the economic crimes investigations unit at China’s Public Security Ministry. Apparently, these ingenious travel agencies invented conferences that never took place, but on paper required staff attendance. The resulting fake travel and meeting expenses – in total 3 billion yuan ($489 million) – were then rechanneled to bribe doctors into prescribing certain drugs. But the “sexual bribes” were not quantified in monetary units.
“We have sufficient reason to suspect that these transfers were conducted illegally,” said Gao Feng. “You could say the travel agencies and GSK were criminal partners.”
Now it turns out that GSK wasn’t the only one. In a sign of hyper-imaginative thinking, other drugmakers also used travel agencies as conduit. And once the investigation of GSK started, it also infected them. “As to whether these companies are also involved in illegal dealings, you can go and ask them,” Gao Feng added cryptically, without naming names or specifying how many firms were involved. “Of course they won’t answer. But you can ask them one question: ‘Can you sleep well at night?’”
They probably can’t. Because this might get expensive. Word is that four more multinational drugmakers are on the hot seat along with GSK.
With consequences in the US – where these acts would run afoul of the Foreign Corrupt Practices Act. GSK already conceded in its 2012 Annual Report that the SEC and the Department of Justice have been investigating its activities in a long list of countries, including China, since 2010!
This “industry-wide enquiry,” as the annual report called it, was trying to determine if drugmakers “may have engaged in violations of the Foreign Corrupt Practices Act relating to the sale of pharmaceuticals.”
And it wasn’t just the US Foreign Corrupt Practices Act, but also “the UK Bribery Act, or similar legislation in other countries,” the annual report pointed out. It “could expose the Group and senior officers to civil and criminal sanction” and could entail “fines, prosecution, debarment from public procurement and reputational damage, all of which could materially and adversely affect the Group’s financial results.” Ominously, it added, “No provision has been made for this matter.”
Ominously, because in 2012, GSK paid $3 billion in the US to settle a variety of charges, including that it promoted drugs for unapproved uses – a fact that Gao Feng specifically pointed out: “We were most shocked,” he said. “At the time, we were very puzzled as to what actually happened at the company and, through our investigations, we have found the answer.”
Yup, the lurid business of pushing drugs.
GSK tried to defend itself, with a statement, claiming that it suddenly “shares the desire of the Chinese authorities to root out corruption” and emphasized that “GSK has zero tolerance for any behaviour of this nature.”
The SEC and the Department of Justice are also probing other drugmakers, including AstraZeneca, as it admitted in its 2012 Annual Report, for “among other things, sales practices, internal controls, certain distributors and interactions with health-care providers and other government officials in several countries,” including China. And it too could “involve the payment of fines and/or other remedies.”
Then on Tuesday, Liang Hong, one of the four Chinese executives arrested over the allegations, was dragged on state-owned TV during the evening – looking “disheveled,” the BBC reported – and confessed that he’d paid bribes and that these bribes had served their purpose, namely selling drugs and pushing up prices. Unwittingly, he’d put his finger on the root cause of the worldwide morass which Big Pharma has been wallowing in with such consistency over so many years. At the expense of everyone else.
The China effect has been fearsome, destroying jobs and shuttering factories around the world. But in China, subsidies have created enormous overcapacity, inefficiencies, a wall of debt, and other challenges. Here are three eye-opening articles: Innovation Hurdle, China’s Ambitions in Excess, and Steelmakers Struggle to Shut Down Capacity. Plus John Mauldin’s excellent introduction. Read.... Outside the Box: Whither China?

The “McDonald’s Budget”: Laughably Unrealistic But Also Deeply Tragic

by Michael Snyder
The McDonald's Budget

Can you support a family on $2,000 a month?  Recently, McDonald’s and Visa teamed up to launch a website that is intended to help employees of McDonald’s manage their money.  The aspect of the website that is getting a tremendous amount of national attention is the “McDonald’s Budget” which is a sample monthly budget which is designed to help workers plan their spending.  You can see a copy of it for yourselfright here.  This budget is laughably unrealistic, but it is also deeply tragic, because there are tens of millions of American workers that are actually trying to raise families on this kind of an income.
The first thing that you will notice about the McDonald’s Budget is that it expects workers to have two jobs.  It is an open admission that working at McDonald’s is not enough to survive.  So this budget assumes that the worker will take on a second job which will pay nearly as much as the first one does.  Assuming that both jobs pay about the minimum wage, the budget will require about 70 to 80 hours of work every week.
People can put in those kind of hours for a time, but after a while your body starts to break down.  I have been there, and I have known many others that have been there.
But let’s assume that the hypothetical worker that this budget is for can work that many hours indefinitely.  The budget assumes a yearly income of about $24,000 after taxes, and that would make it a fairly typical budget for a typical working class American.
In the United States today, 47 percent of all U.S. workers make less than $25,000 a year before taxes.  So millions upon millions of U.S. workers are trying to make ends meet each month on very limited incomes.
Does the “McDonald’s Budget” provide any solutions for those workers?
Well, this budget allocates $0 for food, so if you plan on following this budget you might want to anticipate fasting a lot each month.
This budget also allocates $0 for gasoline.  So either you will have to ride a bicycle or walk everywhere you go.
This budget does not allocate any money for clothing either.  If you really need something to wear, perhaps you can take some cash from the “monthly spending money” category and go down to the local thrift store and get something.
In addition, this budget has no money for water, no money for child care and you might as well forget about saving for retirement.  But if you work yourself 70 to 80 hours a week, you probably won’t even make it to retirement age anyway.
So what are some of the things that actually are in the budget?
Well, it allocates $20 a month for health insurance.
Wow – where can I sign up for that health insurance plan?
As the Washington Post noted, nobody is going to be able to get health insurance that cheaply…
Low-income individuals receive assistance from Medicaid, but an after-tax income of $24,720 would put Medicaid out of reach in most states. The same point will likely apply to the subsidies offered by Obamacare: An individual with an income of $17,000 in California will be able to get a basic health insurance plan at no cost, but an individual making $28,000 will have to pay at least $137 per month.

So even a young, healthy person will have to pay $100 or more for an individual health insurance policy in most circumstances. Perhaps McDonalds is tacitly admitting that many low-income workers, including McDonalds employees, can’t afford health insurance and simply make do without it.
The original version of the budget also assumed that the worker would spend zero dollars a month on “heating”.
Perhaps McDonald’s just expects their workers to freeze all winter.
The new version of the budget now allocates $50 a month for heating.  Perhaps that may work for the state of Florida, but anyone that lives in a northern state knows that it takes a whole lot more than that just to heat up your home to a level that is barely livable during the winter.
This budget is absolutely crazy.  But perhaps even more patronizing then the budget itself is the following statement that is made on the website: “You can have almost anything you want as long as you plan ahead and save for it.”
Oh really?
Do they expect anyone to actually fall for that line?
Don’t get me wrong.  Working at McDonald’s is great for some people.  I worked there myself when I was in high school.  But the vast majority of adult Americans need jobs that will enable them to take care of their families.  And those kinds of jobs are rapidly disappearing.
Last month, the U.S. economy lost 240,000 full-time jobs.  We are about 6 million full-time jobs below the all-time record that was set back in 2007.  For much more on this, please see my previous article entitled: “The Decline Of Breadwinner Jobs Has Resulted In The Longest Bread Lines In American History“.
Today, one out of every four American workers has a job that pays $10 an hour or less.  A lot of very talented people are cutting hair, flipping burgers or working for temp agencies.  Those people should be doing something that takes advantage of their skills and abilities, but the U.S. economy is not producing enough of those kinds of jobs anymore.
Unfortunately, this is only just the beginning.  The next major wave of the economic collapse is rapidly approaching, and when it strikes unemployment in this country is going to get much worse.
So don’t put all of your faith in the system, because the system is failing.  Even if you do have a good job right now, you could lose it at any moment.
Whatever you can do to become more independent of the system is a good thing.  For example, starting up a side business is a wonderful thing.  It takes a tremendous amount of effort, but nobody can fire you if you are the boss.
So what do you think of the “McDonald’s Budget”?  Please feel free to share your opinion by posting a comment below…

American offshore accounts in foreign banks with more than 50.000 dollars have to be reported

 The US Treasury Department said it will postpone enforcement of a new law that cracks down on offshore tax avoidance by Americans by six months until July 1, 2014, giving foreign banks more time to determine how to comply.
The Foreign Account Tax Compliance Act, or FATCA, requires foreign banks and other institutions to supply information to the U.S. Internal Revenue Service about Americans’ offshore accounts worth more than $50,000.
The law, approved by Congress in 2010, stipulates that foreign financial institutions that fail to comply can effectively be frozen out of U.S. capital markets.
Since the law was passed, foreign banks and other businesses have complained about the costs of FATCA and its scope, saying in some cases that it conflicts with home-country banking laws that shield account holder information.
To help banks in countries with legal issues, Treasury and the IRS have been working on agreements that will let the home-country governments of foreign banks act as information-disclosing intermediaries to deal with the IRS.
“We are providing an additional six months to complete agreements with countries and jurisdictions across the globe,” said Robert Stack, Treasury deputy assistant secretary for international tax affairs, in a statement.
The United States has finalized intergovernmental agreements for FATCA compliance with Germany, Spain, Norway, Switzerland, Ireland, Mexico, Denmark and the United Kingdom. Dozens more of these pacts are in negotiation.
A new registration website for banks to sign up with the IRS and ensure they are complying with FATCA is now set to open on Aug. 19, the US Treasury said in its statement. The portal had previously been scheduled to open this week.

Hemp vs Cotton: The Ultimate Showdown

by Joe Martino

Hemp has been making a lot of noise lately, especially with the growing awareness surrounding the use of hemp oil for treating cancer. Although the word ‘hemp’ still often gets confused and lumped into the same definition as Cannabis, a similar but psychoactive plant, it’s important to realize hemp can be a major game changer for our world if used to its potential.

As we go through this post, you will be wondering ‘why don’t we use this stuff all the time...for everything?!’ Simple answer, farming hemp was banned in the US and other countries in the 1937 because of the threat it caused to certain companies and their businesses. More about that here.

Although hemp has many practical uses, let’s focus on one that would affect us every day; clothing. For this, we will compare hemp to cotton, as cotton is a very popular resource used in clothing production. We’ll need to focus on various areas that have to be taken into consideration when comparing the two so we can determine not only what is better for us, but also what is best for our environment as it’s important to view things holistically. Let’s do it.

Cotton: To grow cotton you require about 1400 gallons of water for every pound you intend to produce. That’s a lot of water! Some areas of the world that produce cotton are running out of fresh water due to the production of cotton as well as clothing. Some areas of the world have even experienced desertification as a result of producing cotton.

Hemp: You require about half the amount of water to produce hemp as you would if producing cotton. Hemp is a strong and reliable plant that grows very quickly. Not only that, hemp produces about 200% – 250% more fiber on the same amount of land compared to cotton.

The victor: Hemp


Cotton: One of the biggest downsides to cotton is how much pesticides are used to grow the plant. Although organic cotton farming is beginning to catch on a bit more, the production of cotton worldwide takes up about 25% of the world’s pesticide use. The other unfortunate factor is that these chemicals can end up being absorbed into our skin as we wear our clothing.

: The beauty of hemp is that it requires no pesticides to grow. In fact, it doesn’t require any chemicals at all to grow. The growing nature of the plant competes with weeds and overpowers their ability to sustain themselves. This allows the hemp plant to grow freely and quickly.

The victor: Hemp

Comfort & Longevity

Cotton: Generally very comfortable to begin with, as you continue to wear cotton it ‘breaks in’ to become even more comfortable. There is no denying how soft cotton can be, but it is also true that cotton fibers break down over time, and the more it is washed the faster it breaks down.

Hemp: The hemp fiber used in clothing is a strong natural fiber that, like cotton, gets progressively softer with each passing day you wear it and each time you wash it. Although it may not start off quite as soft, it is still soft and certainly would not be considered uncomfortable. The plus is that the fiber is much stronger and more durable. Repeated washing will not break the fiber down anywhere near as quickly as cotton. Creating more hemp clothing would mean we would need to produce much less clothing.

The victor: Hemp

Breathability & Wicking

Cotton: Breathability is certainly a strong suit for cotton. It also does not hold odors very much. This is quite possibly one of the biggest downsides to synthetic fibers; they don’t dispel odor well and don’t often deal with moisture well either. While cotton has a natural wicking system, it also holds moisture a little longer than what might be considered most desirable.

Hemp: Performs very well when it comes to breathability and wicks moisture away from the body effectively. Hemp also carries anti-bacterial properties that trump any other natural fiber. This means hemp will not mold or grow mildew very easily. Since it also does not hold odors, hemp clothing edges out cotton slightly on this one

The victor: Almost a tie, but hemp is our pal on this one again


: Without the use of dyes, cotton comes naturally in white, cream and off-white. Cotton can be dyed naturally or synthetically to achieve a desired color. The growing knowledge that cotton is very taxing on the environment and not healthy for our skin is creating quite the demand for organic cotton. In terms of the fashion market, organic cotton is showing up more and more.

Hemp: Given the various processes available to remove fibers from the stem of a hemp plant, hemp can be naturally creamy white, black, green, grey or brown. Without even requiring the use of dye, hemp comes in a variety of colors. Of course, you are still able to dye hemp both naturally and synthetically. Hemp is quickly becoming more and more popular in the fashion market as designers see the potential in the material while being a very environmentally sound option. Since it is durable and lasts a long time, it can be attractive to certain designers.

The victor: Hemp

Final Decision

Winner by knockout and growing undisputed champion of natural harmony, HEMP! This isn’t to say that cotton, especially grown organically, is not a good material; it simply isn’t better all around than hemp. In some cases, cotton could be a must use if something specific is being produced. The biggest differences are in the facts that hemp requires much less water and no pesticides to produce. Not only that, it boasts a lot more fiber per acre. Concerned about excess CO2 in the atmosphere? Hemp is spectacular at sequestering CO2! Take the time to check out some hemp clothing around the Internet or see if there are some local stores that sell it. Although options can sometimes be limited right now, look out for more hemp clothing as awareness continues to spread!

Collapse Of America - Stossel: America Now Is Starting To Look Alot Like Rome

The Problem with Social Security and Medicare – Projections Based On High Rates Of Endless Growth Are Delusional

by Charles Hugh-Smith
Projections based on high rates of endless growth are delusional. Those who embrace these projections are equally delusional.
I regularly receive rants that accuse me of a “blind spot” regarding Social Security and Medicare. The j’accuse trots out projections that the program is solvent until 2037 (or whatever, i.e. the distant future). Then they accuse me of ignoring the real cause of our national bankruptcy, defense spending (every “progressive’s” single-agenda cause of all our problems).
The ranters clearly count themselves among the “progressive true defenders of the poor and the working class” and critics like me as “enemies of the people,” heartless Libertarians or worse.
Meanwhile, the latest Summary Report of the Social Security and Medicare Boards of Trustees concludes with this warning:

The drawdown of Social Security and HI Trust Fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the seventh consecutive year, the Social Security Act requires that the Trustees issue a “Medicare funding warning” because projected non-dedicated sources of revenues primarily general revenues are expected to continue to account for more than 45 percent of Medicare’s outlays in 2013, a threshold breached for the first time in fiscal year 2010.Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible. Taking action sooner rather than later will leave more options and more time available to phase in changes so that the public has adequate time to prepare.
Allow me to take the ranters’ points one at a time.
1. I reject all ideological labels and boxes. My views do not align with any ideology. I am regularly accused of being right-wing, liberal, Marxist, Libertarian, all in the same week. I know this is frustrating to everyone with a desperate need to label others in order to dismiss them, but your labels mis-state my views.
2. There are few fiercer critics of unproductive defense spending on such programs as the F-35 or the Imperial Project than me. Here are a few of the dozens of entries I’ve written on these topics:
Are Empire and Democracy Compatible? (August 21, 2009)
The United States of Delusion (January 4, 2013)
If You Want Solutions, First Pin Down Where the Money Is Going (May 23, 2011)
Did The Roman Empire Have Corporations? (August 27, 2010)
How Empires Fall (April 17, 2013)
3. I do not object to social spending programs; what I object to is bogus accounting, delusion being fobbed off as reality, waste, fraud, embezzlement, profiteering, saddling future generations with unpayable debts and misleading projections that ignore real-world trends. There is a difference between blindly accepting what amounts to officially sanctioned lies about social programs’ sustainability and supporting sustainable social spending.
Ironically, perhaps, I am just the sort of low-lifetime-income worker Social Security is designed to benefit. If there is anyone who supports a sustainable Social Security program, it’s me.
The problem with Social Security is three-fold:
1. The so-called Trust Fund is an accounting illusion. The “safe, guaranteed” non-marketable bonds are merely markers for actual Treasury bonds which must be sold, and interest must be paid on. Social Security is as totally dependent on Federal borrowing as the Pentagon or any other program.
The brutal truth is the system is facing flat or declining revenues while its vast army of beneficiaries will rise from an already monumental 53 million. That’s significantly larger than the entire population of Spain (46.5 million) and will soon equal that of Italy (60 million) or Great Britain (62 million).
Social Security is entirely dependent on the Treasury’s sale of new bonds for its solvency. If interest rates spike and/or global buyers become wary of Treasury bonds, costs for borrowing will skyrocket, crowding out all other Federal spending.
Being dependent on Treasury borrowing, Social Security will be as impacted as any other program.
2. The demographics of the Baby Boom retiring and the skyrocketing cost of those getting lifetime disability payments from Social Security.
3. The projections of solvency are pie-in-the-sky fantasies in the End of Work. Government projections never predict a recession, much less a depression, and they always project growth rates from the last bubble into infinity, as if a bubble economy can expand forever.
Meanwhile, back in reality, the number of fulltime jobs is stagnant and almost 40 million workers earn less than $10,000 a year. Recent trends suggest that fulltime jobs are being axed in favor of part-time positions and flex-time contract labor. At least some of this dynamic relates to the soaring cost of sickcare, a.k.a. ObamaCare.
No government agency ever forecasts a recession or a systemic decline in fulltime jobs. How accurate have the Trustees’ projections been?

In 2010, the SSA Trustees had estimated $41 billion deficit (excluding interest income) and reality turned out to be $76 billion–almost double their guesstimate. Their estimate of total revenues was too rich by $50 billion as well.
If the SSA blew the estimate for the fiscal year ending in October this badly in August of the same year, what faith can we plausibly place in their estimates of what will happen in 2025 and 2037? The SSA numbers published in the August 2010 report estimated that outlays would not exceed revenues (excluding interest income) until 2015–yet outlays already exceeded income by a staggering $76 billion in 2010.
The projections are ungrounded in reality, and this cripples our collective ability to deal with brewing crises in some non-ad hoc fashion.
I have explained all this is great detail many times:
Where There Is Ruin II: Social Security (July 25, 2006)
The Fraud at the Heart of Social Security (January 17, 2011)
To Fix Social Security, First Ask Why It Is Deep in the Red (January 18, 2011)
How To Fix Social Security: A 4-Point Plan That Faces the Brutal Realities (January 19, 2011)
4. I do not object to social spending on healthcare. What I object to is a system that fails to provide health while squandering 40% of expenditures on paper-shuffling, profiteering and fraud, and a government program (Medicare) of which an estimated 40% of expenditures are squandered on outright fraudulent claims, counterproductive tests, drugs and procedures, unproductive defensive medicine and blatant profiteering.
Sickcare Will Bankrupt the Nation–And Soon (March 21, 2011)

To cite another example of the distortions which end up costing the nation twice as much for health care (as a percentage of GDP) as competing developed countries such as Australia and Japan: Pittsburgh has almost as many MRI machines as the nation of Canada.According to local media reports, Western Pennsylvania has about 140 MRI machines, while the 32 million residents of Canada share 151 MRI machines. And the machines are getting a lot of use: the number of CT and MRI scans (scans other than old-fashioned X rays) tripled from 85 to 234 per thousand insured people since 1999.
While proponents are quick to note that scans are cheaper than the alternative diagnostic procedures, one firm’s research found that a doctor who owns his own machine is four times as likely to order a scan as a doctor who doesn’t.
As if that wasn’t enough to highlight the self-serving nature of “fee for service” cartels, MRI scanner manufacturer General Electric waged a two-year lobbying campaign to roll back cuts in Medicare reimbursements for scans. While the effort proved unsuccessful due to the intense political pressure to reduce soaring Medicare costs, some critics claim that providers simply made up the reduced reimbursements by increasing the number of tests administered.
The only solution that actually addresses the systemic problem is to get rid of the entire fee-for-service structure and break up the cartels. Healthcare must be reconnected to diet, nutrition, fitness, lifestyle and community, and to education and emotional well-being.
The odds of any of this happening are essentially zero, and so we can safely predict that sickcare will bankrupt the nation (with a helping hand from the Pentagon) within a few years.
While healthcare costs are rising around the developed world due to the demographics of aging and more treatment options, the U.S. sickcare system costs twice as much as our competitors’ systems. In other words, we know that 50% of our sickcare costs are inefficiency, waste and fraud because other nations provide universal healthcare for half of what the U.S. spends per person.

That Which is Unsustainable Will Go Away: Medicare (May 16, 2012)
Healthcare: A Large-Scale Solution (January 4, 2011)
A Sustainable National Healthcare System: Prevention Only (August 20, 2012)
Why “Healthcare Reform” Is Not Reform, Part I (December 28, 2009)
Why “Healthcare Reform” Is Not Reform, Part II (December 29, 2009)
Attacking critics who have taken the time to study the data and trends is not going to magically make these programs sustainable or fix what’s broken. Placing one’s faith in government projections that always forecast high rates of endless growth (because “growth” fixes everything) is embracing delusion.
Reality trumps accounting trickery and delusional projections every time. Let’s see how accurate all the government agency projections (including the SSA Trustees) turn out in September 2015, at the end of fiscal year 2015.

Employers start slashing jobs ahead of Obamacare implementation

(NaturalNews) As we have reported regularly here at Natural News, Obamacare - which takes effect in its entirety January 1 - is going to be a mega-disaster for Americans. The law will create long lines at doctor's offices; it will create - and then worsen - a shortage of primary care physicians and providers; it will not control costs, as advertised; it will cause insurance rates to go up (which is already happening); and - perhaps most important - it will even worsen unemployment and underemployment in America.

Per the Washington Post's Ed Rogers:

Right now, small businesses across America are making the final determinations on how to reduce the working hours of their employees so fewer employees qualify for the mandated, employer-provided health insurance. Employers are also deciding whether it makes more economic sense to pay a fine to the government or pay for healthcare benefits for their employees. What this means is that hundreds of thousands - and perhaps even millions - of Americans will learn that they are being dismissed from their employer's healthcare coverage.

'No one is talking'

Rogers, along with other writers, analysts and policy experts, say the coming tsunami of "healthcare pink slips" are most likely coming by late summer/early fall. When that happens, many Americans will be shoved into healthcare exchanges established by the law and will - for the first time - have to start writing a check for their health insurance (especially younger, healthier Americans). And that will reduce take-home pay, which means "the negative effects on personal income and the overall economy will be undeniable," Rogers writes.

"Sometime next year, before the elections, the penalties associated with not having or providing health insurance will begin to pour in. Will the fines come in the mail? Will you be able to appeal? What happens if someone doesn't pay? No one knows. Or, no one who knows is talking. The consequences of ObamaCare are being hidden," he says.

It should be noted that this is what happens when one party or the other controls the lawmaking branches of power (the Legislative and Executive branches) - often we get bad law. During President Bush's first term, in response to the 9/11 attacks, dominant Republicans passed the USA Patriot Act, the impetus of which has been responsible for the NSA's sustained spying on Americans during the Obama administration.

As far as Obamacare goes, Democrats own it; where once they sang its praises as a "reform measure" that would make healthcare cheaper and more accessible, now - as the news about its eventual roll-out gets worse - they are being silent about its coming consequences.

As far as hurting employment, a recent poll of small business owners found that the law is already affecting hiring. Note that under the law, almost all companies with 50 or more full-time employees will have to either offer health coverage or face a fine of $2,000 per full-timer after the first 30 workers.

'There is no chance Obamacare will perform as promised'

"We were startled because we know that employers were concerned about the Affordable Care Act and the effects it would have on their business, but we didn't realize the extent they were concerned, or that the businesses were being proactive to make sure the effects of the ACA actually were minimized," attorney Steven Friedman of Littler Mendelson, which commissioned a Gallup poll to measure the effect of the law on employment, told CNBC.

"If the small businesses' fears are reasonable, then it could mean that the small business sector grows slower than what economic conditions otherwise would indicate. And small businesses have been a growth engine in the economy," he said.

According to the survey, 41 percent of businesses questioned said they had frozen hiring for the time being because of uncertainty over the affects of Obamacare; about one-fifth, or 19 percent, said "yes" when asked if they had "reduced the number of employees you have in your business as a specific result of the Affordable Care Act."

And 38 percent said they had scaled back growing their companies in the coming year because of Obamacare.

"Some of the Democrats' reactions will be predictable, i.e. blaming Bush and blaming Republicans, or for a while, denying the obvious. But that won't work forever," writes Rogers. "One of the worst sins you can commit in politics is to say something that's different from what people can see for themselves. There is no chance that Obamacare will perform as promised and when it doesn't, voters will be looking for relief."

Update: Many readers may already know that the president has decided to delay the so-called "employer mandate" for a year - a move most political observers say is due to the fact that Obama doesn't want fellow Democrats running for reelection to have to deal with Obamacare's fall-out during the 2014 midterm elections.

But business owners aren't stupid. They know the mandate is likely to return after the elections, so they're not going to be anxious to fill positions and expand their operations regardless of the one-year delay. They know that, eventually, they will have to deal with the employer mandate.

So, unless the mandate goes away altogether, don't expect to see massive hiring and improved job growth for full-time employment anytime soon.

Monetary Cocaine: How The Fed Steals America’s Savings

David Stockman, author of “The Great Deformation: The Corruption of Capitalism in America”, accuses the Federal Reserve of corrupting savings and the stock market by continually injecting liquidity, or as he calls it “monetary cocaine”, into the system. - See more at:

Dr. Ben Carson: 'This Is the Beginning of the Collapse' of Obamacare

Delaying implementation of key parts of the healthcare law and losing the support of labor unions are just the beginning of trouble for Obamacare, says Dr. Ben Carson.

"It's gonna be a lot worse than this. This is the beginning of the collapse," the retired Johns Hopkins neurosurgeon said on Fox News Channel's "Your World" on Tuesday.

"Usually when you roll out a big program, you roll it out bit by bit. You determine what's working. You can change things," Carson said. "But to try to roll out something this massive without really knowing what the intricacies are is quite foolish."

Editor's Note: Video Exposes Dangers of Obamacare Law

Carson said he spoke with a high-level White House official before the law was passed, telling the official that there were some things he liked and that Republicans would support. He suggested implementing those things first and then building on the program.

"Because if you just jam it through with one party in a rush-rush way you're going to create animosity," Carson said he told the official. "And basically the answer of this person was, 'This is Washington, and this is politics.'"

Democratic Party strategist Joe Trippi, appearing with Carson, admitted that Democrats passed the law in a rush fashion because that's when they had the votes. "Frankly, they wouldn't have had the votes today," Trippi said.

"They got it passed when they could," Trippi said. "That's what politics is about. Now they've got to fix it."

© 2013 Newsmax. All rights reserved.

DOJ Refuses to Prosecute Case of 'Willful' Tax Records Access

The Justice Department refused to act after being presented with evidence that a government official had "willfully" accessed private tax documents, it was reported Tuesday.

The evidence against the person was laid out in a letter from J. Russell George, the Internal Revenue Service inspector general.

He told top Republican Sen. Chuck Grassley he did not know why Justice had not acted, The Washington Times reports.

"We presented evidence of a willful unauthorized access to the Department of Justice, but the case was declined for prosecution," George wrote in a letter to Grassley.

George said there was evidence of three other cases of government officials accessing tax documents since 2006, but that all three appeared to have been inadvertent. His department suggested that one of those cases not be prosecuted, and the Justice Department agreed, he said.

Now Grassley, the ranking member of the Senate Judiciary Committee, is looking for answers.

"The public needs to know whether the decision not to prosecute these violations was politically motivated and whether the individuals responsible were held accountable in any other way," he told the Times.

Grassley has asked Attorney General Eric Holder to explain before July 26 why his department chose not to prosecute the case.

"The Justice Department should answer completely and not hide behind taxpayer- confidentiality laws to avoid accountability for its decision not to prosecute a violation of taxpayer-confidentiality laws," he said.

In his July 12 letter to Holder, the Iowa Republican wrote, "Although this may not be indicative of widespread targeting, any instance is cause for concern, the Times reported.

"Decisions such as these directly impact the political process and should be subject to the scrutiny of the American public," he added.

George told Grassley he is investigating two cases where the IRS may have improperly targeted political candidates for audit. He would not reveal the identity or the political party of the people involved in any of the cases.

© 2013 Newsmax. All rights reserved.

McDonald’s Math: You Can’t Survive Working for Us

Liberty Blitzkrieg
This ridiculously condescending budget put out by McDonald’s in partnership with Visa has been making the rounds today. I’ll allow excerpts from the Gothamist article on it and their corresponding video do most of the explaining, but the key point I want to hammer into people is that food stamps are corporate welfare. They actually are not welfare for the workers themselves, who undoubtably don’t have wonderful lives. What ends up happening is that because the government comes in and supplements egregiously low wages with benefits like food stamps, the companies don’t have to pay living wages. So in effect, your tax money is being used to support corporate margins.Even better, many of these folks who get the food stamp benefits then turn around and spend them at the very companies which refuse to pay them decent wages. Who benefits? CEOs and shareholders. Who loses? Society.  
I previously covered these topics in two popular posts:
Where Food Stamps Go to Die
The Stock Market: Food Stamps for the 1%
Guess what would happen if these companies failed to pay high enough wages and food stamps didn’t exist? There would be massive employee organizing and ultimately the companies would have to change tact. This of course doesn’t happen when the taxpayer makes up the difference, and that is exactly what they want. From Gawker:
Just in case you weren’t already aware of how difficult it is to survive on minimum wage, allow McDonald’s to lay it all out for you. The fast food giant has partnered with Visa to release a just-shy-of-condescending “budget journal” to help their employees manage their finances. In a hilariously obtuse budget breakdown, the Big Mac purveyor’s first piece of advice to employees: get a second job.Yup, even McDonald’s knows that workers can’t survive on the pittance they make flipping patties and fighting off customers.
So tallying up all of these totally realistic expenses, a McDonald’s employee would need to net $2,060 per month to make this budget work. Broken down, that would mean working at least 40 hours per week and making at least $15 an hour pre-taxes to earn the necessary $12.86 an hour. Currently, McDonald’s workers earn an average of $8.25 per hour, barring any funny business.
For more on how ridiculous this is, watch this video.  By the way, where can I sign up for $20 healthcare?

A Jobless Recovery Is a Phony Recovery

imageWall Street Journal – by Mort Zuckerman
In recent months, Americans have heard reports out of Washington and in the media that the economy is looking up—that recovery from the Great Recession is gathering steam. If only it were true. The longest and worst recession since the end of World War II has been marked by the weakest recovery from any U.S. recession in that same period.
The jobless nature of the recovery is particularly unsettling. In June, the government’s Household Survey reported that since the start of the year, the number of people with jobs increased by 753,000—but there are jobs and then there are “jobs.” No fewer than 557,000 of these positions were only part-time. The survey also reported that in June full-time jobs declined by 240,000, while part-time jobs soared by 360,000 and have now reached an all-time high of 28,059,000—three million more part-time positions than when the recession began at the end of 2007.  
That’s just for starters. The survey includes part-time workers who want full-time work but can’t get it, as well as those who want to work but have stopped looking. That puts the real unemployment rate for June at 14.3%, up from 13.8% in May.
The 7.6% unemployment figure so common in headlines these days is utterly misleading. An estimated 22 million Americans are unemployed or underemployed; they are virtually invisible and mostly excluded from unemployment calculations that garner headlines.
At this stage of an expansion you would expect the number of part-time jobs to be declining, as companies would be doing more full-time hiring. Not this time. In the long misery of this post-recession period, we have an extraordinary situation: Americans by the millions are in part-time work because there are no other employment opportunities as businesses increase their reliance on independent contractors and part-time, temporary and seasonal employees.
Even the federal government payroll is turning to part-timers: In June 2012, 58,000 federal workers were part-timers. This year it’s 148,000, and we still don’t know how the budget sequester will play out, for many agencies have resorted to furloughs rather than layoffs.
The latest unemployment report was as underwhelming as the Household Survey. The biggest gains in June came from leisure and hospitality industries, including hotels and fast-food restaurants. Of the 195,000 new payroll jobs, 75,000 were in restaurants and bars, where the average weekly paycheck is about $351, less than half the average for all other private industries. Not to mention that these positions offer fewer hours, especially in the restaurant world, which has averaged 26.1 hours per week versus 34.5 hours for all private employers.
What’s going on? The fundamentals surely reflect the feebleness of the macroeconomic recovery that began roughly four years ago, as seen in an average gross domestic product growth rate annualized over the past 15 quarters at a miserable 2%. That’s the weakest GDP growth since World War II. Over a similar period in previous recessions, growth averaged 4.1%. During the fourth quarter of 2012 and the first quarter of 2013, the GDP growth rate dropped below 2%. This anemic growth is all we have to show for the greatest fiscal and monetary stimuli in 75 years, with fiscal deficits of over 10% of GDP for four consecutive years. The misery is not going to end soon.
ObamaCare is partially to blame. The health-insurance law requires employers with more than 50 workers to provide health insurance or pay a $2,000 penalty per worker. Under the law, a full-time job is defined as 30 hours a week, so businesses, especially smaller ones, have an incentive to bring on more part-time workers.
Little wonder that earlier this month the Obama administration announced it is postponing the employer mandate until 2015, undoubtedly to see if the delay will encourage more full-time hiring. But thousands of small businesses have been capping employment at 30 hours and not hiring more than 50 full-timers, and the businesses are unlikely to suddenly change that approach just because they received a 12-month reprieve.
These businesses’ hesitation to hire is part of a larger caution among employers unsure about the direction of government policy—and which has helped contribute to chronic long-term unemployment that shows no sign of easing. Unlike those who lose a job and then find another one in a matter of weeks or months, fully a third of the currently unemployed have been out of work for more than six months. As they remain out of the workforce, their skills deteriorating, the likelihood rises that they will be seen as permanently unemployable. With each passing month of bleak job news, the possibility increases of a structural unemployment problem in the U.S. such as Europe experienced in the 1980s.
That brings us to a stunning fact about the jobless recovery: The measure of those adults who can work and have jobs, known as the civilian workforce-participation rate, is currently 63.5%—a drop of 2.2% since the recession ended. Such a decline amid a supposedly expanding economy has never happened after previous recessions. Another statistic that underscores why this is such a dysfunctional labor market is that the number of people leaving the workforce during this economic recovery has actually outpaced the number of people finding a new job by a factor of nearly three.
What the country clearly needs are policies that will encourage the modernization of America’s capital stock, where investment in modern production has plunged to the lowest levels in decades. Policies should also be targeted to nourish high-tech industries, which will in turn inspire the design and manufacture of products in the U.S. where they would be closer to the American market, spurring more hiring. This means preparing a skilled workforce, especially engineers suitable to work in manufacturing, and increasing the number of visas available to foreign graduate students in the hard sciences—who are now forced to leave America and who then work for foreign competitors.
Similarly, patent-application processing must be streamlined: The U.S. Patent and Trademark Office should be a channel for innovation, but instead has for too long been and an impediment to the swift introduction of new ideas. Finally, the country should engage in a major infrastructure program to improve airports as America once did for railroads and highways. Air cargo and air travel are linchpins of the economy, yet air-traffic-control technology is stuck in the last century.
It is imperative that the U.S. focus on innovative and creative policies. Otherwise, the five-year crisis in employment will continue even when the economy seems to be recovering. Without such a focus, millions of American families whose breadwinners are unemployed or underemployed will remain dispiriting and apprehensive about the future, especially the young who are entering the workforce. The country needs a real recovery, not a phony one.
Mr. Zuckerman is chairman and editor in chief of U.S. News & World Report.