« Comparing Federal Deficits: Bush Vs. Obama »

Source: CBO -- More detail inside.

In the first independent analysis, the non-partisan Congressional Budget Office concluded that President Obama's budget will rack up massive deficits even after the economy recovers, forcing the nation to borrow $9.3 trillion over the next decade.

Graphic courtesy of the Washington Post.

Two short comments: the numbers have already worsened since this graphic was produced in March, and the Obama administration is on the same prescription meds as AIG execs. Take a look at 2013-2019. Holy rosy scenario.

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Cutting the Deficit: Sacrificing Workers to Save the Rich

“There’s class warfare, all right, but its my class, the rich class that’s making war and we’re winning” Warren Buffet

The most important and popular social and tax programs in the United States are threatened by a self-styled “Bipartisan National Commission on Fiscal Responsibility and Reform”. Appointed by President Obama on February 18, 2010, co-chaired by two longstanding champions of Wall Street: ex Senator Simpson (R, WY) and former Clintonite White House Chief of Staff Erskine Bowles. The Commission Report issued November 10 proposes to slash social security payments, reducing recipients to poverty, raise the retirement age to 69 ensuring that millions of workers will die before they can retire, or enter retirement in ill health; reduce or freeze cost of living increases through inflation indexes which understate by half the rises in food, gas, hospital and education. The Commission proposes deep cuts in Medicare, increased Medicaid co-pays and slashing $54 billion from graduate medical education. The Commission proposes to eliminate tax breaks including deductions for home mortgage interest payments while taxing employer provided medical insurance.

The same Commission Report proposes to reduce capital gains and income taxes for the rich by up to 24%.

President Obama and the Republican leadership praised the Commission and wants “to give them space to work on it”.

The so-called crisis of Social Security is a result of the Republican and Democratic governments siphoning off payments into the general fund. The forthcoming shortfall (2030) can be easily remedied by lifting the payroll tax ceiling, for the rich, taxing all earned income.

Medical costs can be reduced by 50% by replacing the for profit corporate health insurance and pharmaceutical corporations with a non-profit national health system, similar to successful programs in Europe and Canada.

Both Medical plans and Social Security can be easily funded by imposing a 1% sales tax on the sale of stocks and bonds.

The deficit proposals put forth by Obama’s Bipartisan Commission threaten to push the one-third of retirees who depend mainly on their social security payments into the food kitchens or destitution. The added cost and reductions in health care will increase the mortality rate among working families. The increase in retirement age will result in “work until you die”, with no time for leisure, travel or grandchildren. It is time to send a message to Washington: cut Social Security and Medicare and home interest deductions and you will visit Washington on your own time.

The Environmental Impact Of War

IMAGES OF DEVASTATED battlefields are all too familiar. A German officer in 1918 described ‘dumb, black stumps of shattered trees which still stick up where there used to be villages. Flayed by splinters of bursting shells, they stand like corpses upright. Not a blade of grass anywhere. Just miles of flat, empty, broken and tumbled stone.’ The ploughs in Flanders fields still turn up human bones every year.

But twentieth century technology, busily applied to the practice of war, has ensured a more lethal harvest. For example, landmines: planted in millions in war-torn countries across the world, killing and maiming long after wars are over, and denying agricultural use of the land in which they lurk. A Khmer Rouge general called them ‘the perfect soldier’: cheap, efficient, expendable, never hungry, never needing sleep. But eighty percent of landmine victims are civilians, not soldiers; and nearly a quarter of those are children.

Clearing mines is laborious, dangerous, and 30 times the cost of the weapon itself. So is clearing unexploded ordnance of all kinds (including worldwide munitions dumps which leak toxic wastes). The most severe UXO contamination in the world is in Laos. Bomb disposal teams have no records to work from. ‘It was America’s secret war and we can’t get the information,’ says a team leader. ‘All you can do is teach people to live with the bomb.’

But it’s the testing and manufacture of the nuclear bomb which has been responsible for some of the most profound and persistent environmental damage to life on earth. “The complex mixture of contaminants found on many military sites is dynamically moving through the environment,’ says a medical expert. Radiation problems affect people near nuclear plants in every country that has them. Repair and maintenance of many installations and equipment are dangerously inadequate.

Nuclear waste is a global problem that won’t go away, threatening environmental disaster on a vast scale: its poison, and toxic chemicals which accompany all weapon production, have travelled round the globe in the atmosphere and ocean currents; as well as water and air, they harm earth, plants that grow in it, and subsistent livestock and wildlife. Human exposure to nuclear and chemical tests and factories, or via the food chain, results in miscarriages, malformed foetuses, high infant mortality and congenital disorders, leukaemia and other cancers, tumours, thyroid disorders, and complex debilitating and life-shortening syndromes. The number of reports of such harmful effects on health, habitat and culture – always at risk in war – continues to grow.


Because war disrupts social structures, ecostructures are neglected and abused, with lasting and costly consequences.

All along the coast of Somalia huge sand dunes, 20 miles across, have crept from the sea towards the main coastal highway. ‘When the dunes hit the road, a new road will need to be built,’ says a Red Cross agronomist. ‘There used to be government plans to stop them. Now there’s nothing. The communication breakdown will be a social disaster.’ The ICRC, encouraging self-sufficiency and seawater fish in the conservative Somali diet, provided boats, nets, hooks and training – only to discover another of war’s ecological chain effects: the coastal waters off Somalia had become a free-for-all, all protocols for international fishing rights ignored. Resources are being fished unsustainably – ‘almost a mining operation,’ says a UN observer. Illegal fishermen now go armed, to protect what they perceive as their property rights.

It’s widely agreed that Sudan’s 1988 famine was caused by its protracted civil war. Southern Sudan has some of the most productive land in Africa; its people are hardworking farmers and herdsmen. If fighting stopped, they’d manage to survive. Instead, thousands have been forced out of their homes, thousands have died, and their land is uncared-for.

‘Most disasters are like this: a mess of war, displacement, hunger and ignorance,’ says Africa specialist John Ryle. ‘To feed the hungry and treat the sick in such circumstances is to become part of the war economy. Part of what aid workers do involves clearing up the chaos left by the global arms trade. They say they are saving lives – but for what? To be lost in endless wars that feed on aid?’

Meanwhile the worst outbreak of sleeping sickness this century has been spreading through the south-west; disease follows war everywhere.

The earth’s environment is battered by war, its preparation, practice and aftermath. It is destroyed as an act of war; it is used as a weapon of war; and its destruction is expensive and sometimes irreversible. Its integral involvement with war is often secret, widely ignored, and easily forgotten – until now.

Now, some people are beginning to talk and listen. Some people are beginning to act. There is a treaty to ban landmines now. There are moves towards tackling the problems of nuclear waste and weapon stockpiles. There is a growing global awareness – with charters to prove it – that war has created consequences which cross boundaries and ignore territories. Natural disasters are costly enough; the cost of war damage is much higher. Even if politics don’t achieve change, economics might.

It’s the natural tendency of governments to suppress or talk down bad news. So it’s the duty of the rest of us – to uncover and publicise it wherever possible. Without the facts, there can’t be informed public opinion, nor a corporate will to deal with the disasters that war creates – dangerous not only for combatants but for civilians, not only for the duration of the war but far into the future, not for warring countries alone but for the whole world.

In one way or another, everyone is already affected. In one way or another, the still-quickening rush to even greater disasters must be stopped.

And the first thing to go must be war

U.S. Applies Pressure In China Currency Feud

Is calling China a currency manipulator and imposing tariffs the right approach?

As Chinese Premier Wen Jiabao rejected American pressure outright, Japan has taken advantage of the tension to seek its own advantage, intervening in currency markets for the first time in years. Even Brazil has threatened its own, self-interested currency interventions. These are dangerous trends, threatening adverse economic and market effects-significant risks that recommend a less heavy-handed, bullying approach.

Of course, the United States and China have feuded over trade for years, particularly about the foreign exchange value of China's yuan. As early as 1993 the Clinton White House contemplated how China's cheap currency gave its exports unfair pricing advantages on global markets. At that time, the administration began to pressure Beijing for an upward yuan revaluation. The notion was so thoroughly rejected that in January of the following year, Beijing devalued the yuan by almost 50% in one sudden, orchestrated move-an action, incidentally, that contributed in no small way to the Asian financial and economic crisis of 1997 and 1998. After Clinton, the Bush administration fared better in getting China to yield. Even so, in 2005, after the European Union (EU) made the same complaints and it looked as though Congress had run out of patience, Beijing did allow some yuan appreciation. The appreciation, however, was more cosmetic than substantive.

The intensity of American pressure has ramped up in this latest round. By labeling China a currency manipulator, Congress will have made it easier to impose special tariffs on Chinese goods that would offset the presumably artificial advantages of Beijing's currency management. It speaks to Washington's unity of purpose that Treasury Secretary Geithner also has called for some mechanism to force countries like China to revalue their currencies and "abandon export-oriented policies."

From the European Union, Jean-Claude Juncker, speaking for a group of finance ministers, has echoed American complaints.

Rather than appease those concerns, China's Premier Wen has warned (in his words) of the "chaos" that would ensue from a yuan revaluation. Even his seemingly conciliatory gesture of buying Greek government bonds effectively rejects the currency demands, since the global flow of yuan to make such purchases would only depress its value next to euros and dollars. Even if Premier Wen wanted to accommodate America and the EU, China's economic realities would tie his hands.

The country simply cannot abandon export support-at least in the near term. That's because growth in the area is the only way it can create jobs for the approximately 1 million people a month who leave farms in China's hinterland in search of a better life in China's cities. Beijing knows that a failure in exports would halt the jobs growth and risk violent social unrest. Chinese authorities got a sobering taste of the prospect during the recent global recession, when a decline in exports impelled layoffs that led quickly to rioting across the country. From Beijing's perspective, and with some justice, the risk of abandoning the cheap yuan policy is simply too great, whatever threats the Americans and Europeans level.

In the meantime, it is not apparent that such tariffs would do much to help the American economic situation. Certainly, tariffs would hurt the average American consumer by raising the price of Chinese imports, as well as living costs across the country. Moreover, China has such a huge cost advantage over its American competitors, that even in the face of high tariffs it might well sustain its export flow to America. Even if tariffs could block Chinese goods, they would hardly protect American industry and jobs from foreign competition. Vietnam, Indonesia, and other low-cost producers would just step in where China was excluded.

Rather than insist on the impossible and raise the cost-of-living in the bargain, the United States might do better to seek what common ground it has with China. Here, there is promise in a longer-term perspective. For all their immediate differences, Washington and Beijing both want a reorientation in China, from export-led growth to a more broad-based, domestic, consumer-oriented economy. The Americans see such an adjustment as a way to increase the sales in China and balance trade between the two economies.

China's leadership wants broad-based domestic development to moderate socially explosive income disparities between geographic regions and social classes. It also wants to avoid Japan's fate, and sees efforts to develop across the nation's continental size as a way to avoid the problems that arise when an export-dependent policy lasts too long. China's commitment to such ultimate objectives was strong enough to direct much in the country's massive, anti-recession stimulus of 2008.

LIES ACROSS AMERICA

“Every single empire, in its official discourse, has said that it is not like all the others, that its circumstances are special, that it has a mission to enlighten, civilize, bring order and democracy, and that it uses force only as a last resort.” – Edward Said

The increasingly fragile American Empire has been built on a foundation of lies. Lies we tell ourselves and Big lies spread by our government. The shit is so deep you can stir it with a stick. As we enter another holiday season the mainstream corporate mass media will relegate you to the status of consumer. This is a disgusting term that dehumanizes all Americans. You are nothing but a blot to corporations and advertisers selling you electronic doohickeys that they convince you that you must have. Propaganda about consumer spending being essential to an economic recovery is spewed from 52 inch HDTVs across the land, 24 hours per day, by CNBC, Fox, CBS and the other corporate owned media that generate billions in profits from selling advertising to corporations schilling material goods to thoughtless American consumers. Aldous Huxley had it figured out decades ago:

“Thanks to compulsory education and the rotary press, the propagandist has been able, for many years past, to convey his messages to virtually every adult in every civilized country.”

Americans were given the mental capacity to critically think. Sadly, a vast swath of Americans has chosen ignorance over knowledge. Make no mistake about it, ignorance is a choice. It doesn’t matter whether you are poor or rich. Books are available to everyone in this country. Sob stories about the disadvantaged poor having no access to education are nothing but liberal spin to keep the masses controlled. There are 122,500 libraries in this country. If you want to read a book, you can read a book. The internet puts knowledge at the fingertips of every citizen. Becoming educated requires hard work, sacrifice, curiosity, and a desire to learn. Aldous Huxley describes the American choice to be ignorant:

“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.”

It is a choice to play Call of Duty on your PS3 rather than reading Shakespeare. It is a choice to stand on a street corner looking for trouble rather than reading Hemingway. It is a choice to spend Black Friday in malls fighting other robotic consumers for iSomethings, the latest innovative, advanced TVs, flashy Rolexes, and ostentatious Coach bags rather than spending the day reading Guns of August by Barbara Tuchman, a brilliant Pulitzer Prize winning history of the outset of World War I, which would provide insight into what could happen on the Korean Peninsula. It is a choice to watch 6 hours per day of Dancing With the Stars, American Idol, Brainless Housewives of Everywhere, or CSI of Anywhere rather than reading Orwell or Huxley and discovering that their dystopian warnings have come true.

Conspicuous Consumption Conquistadors

Americans have chosen to lie to themselves. They have persuaded themselves that buying stuff with plastic cards while paying 19% interest for eternity, driving BMWs while locked into never ending indecipherable lease schemes, and living in permanently underwater McMansions bought with 0% down on an interest only liar loan, is the new American Dream. They think watching the boob tube will make them smart. They soak in the mass media hype, misinformation and lies like lemmings walking off a cliff. Depending on their political predisposition, they watch Fox or MSNBC and unthinkingly believe the propaganda that pours from the mouths of the multi-millionaire talking heads who read Teleprompters with words written by corporate media hacks. They tell themselves that buying stuff on credit, giving them the appearance of success as measured by the media elite, is actually success. This is a bastardized, manipulated, delusional version of accomplishment. Americans have chosen to believe the lies because the truth is too hard to accept.

Becoming educated, thinking critically, working hard, saving money to buy what you need (as opposed to what you want), developing human relationships, and questioning the motivations of government, corporate and religious leaders is hard. It is easy to coast through school and never read a book for the rest of your life. It is easy to not think about the future, your retirement, or the future of unborn generations. It is easy to coast through life at a job (until you lose it) that is unchallenging, with no desire or motivation for advancement. It is easy to make your everyday troubles disappear by whipping out your piece of plastic and acquiring everything you desire today. If your brother-in-law buys a 7,000 sq ft, 7 bedroom, 4 bath, 3 car garage, monolith to decadence for his family of 3, thirty miles from civilization, with no money down and a no doc Option ARM providing the funds, why shouldn’t you get in on the fun. It’s easy. Why sit around the kitchen table and talk with your kids, when you can easily cruise the internet downloading free porn or recording every trivial detail of your shallow life on Facebook so others can waste their time reading about your life. It is easiest to believe your elected leaders, glorified mega-corporation CEOs, and millionaire pastors preaching the word of God for a “small” contribution to their mega-churches.

Americans love authority figures who act as if they have all the answers. It matters not that these egotistical monuments to folly and hubris (Bush, Obama, Paulson, Geithner, Greenspan, Bernanke) have committed the worst atrocities in the history of our Republic, leaving economic carnage and the slaughter of thousands in their wake. The most dangerous man on this earth is an Ivy League educated, arrogant ideologue who believes they are smarter than everyone else. When these men achieve power, they are capable of producing catastrophic consequences. Once they seize the reigns of authority these amoral psychopaths have no problem lying to the American public in order to achieve their objectives. They know that Americans love to be lied to, so the bigger the lie, the more likely it is to be believed.

The current lie proliferating across the land of the free financing and home of the debtor is that austerity has broken out across the land. The mainstream media and the government, aided by various “think tanks” and Federal Reserve propagandists insist that Americans have buckled down, reduced spending, increased savings, and have embraced austerity.

Austerity – Circa 1932

Austerity – Circa 2010

They now proclaim that it is time to spend again. It is the patriotic thing to do, just like defeating terrorists by buying an SUV with 0% down from GM was the patriotic thing to do after 9/11. Defeating terrorists by going further into debt was the brilliant idea of those Ivy League geniuses Bush & Greenspan. Let’s critically examine the facts to determine how austere Americans have become:

• Consumer credit outstanding is $2.41 trillion, the same level reached in early 2007, and up from $1.5 trillion in 2000. This is a 60% increase in ten years. Personal income has risen from $8.4 trillion to $12.6 trillion over this same time frame, a 50% increase. Americans have substituted debt for income in order to keep up with the Joneses. The mass delusion lives.
• The MSM declares that the reduction in overall consumer debt from its peak of $2.56 trillion in 2008 to $2.41 trillion today proves that consumers have been cutting back and paying off debt. This is another media lie. Non-revolving debt, which includes car loans, education loans, mobile home loans and boat loans sits at $1.6 trillion, an all-time high matched in 2008. Credit card debt has “plunged” from $957 billion to $814 billion, not because consumers paid down their balances. The mega Wall Street banks have written off $20 billion per quarter since early 2009, accounting for ALL of the reduction in credit card debt. Clueless consumers continue to charge at the same rate as the peak in 2008.
• Average credit card debt per household with credit card debt: $15,788
• There are 609.8 million bank credit cards held by U.S. consumers.
• The U.S. credit card default rate is 13.01%
• In 2006, the United States Census Bureau determined that there were nearly 1.5 billion credit cards in use in the U.S. A stack of all those credit cards would reach more than 70 miles into space – and be almost as tall as 13 Mount Everests.
• Penalty fees from credit cards added up to about $20.5 billion in 2009.
• The national average default rate as January 2010 stood at 27.88% and the mean default rate is 28.99%.
• Total bankruptcy filings in 2009 reached 1.4 million, up from 1.09 million in 2008. Bankruptcies in 2010 are on pace to exceed 1.6 million.
• 26% of Americans, or more than 58 million adults, admit to not paying all of their bills on time. Among African-Americans, this number is at 51%.

Does This Look Like Austerity? Really?

This data clearly proves that austerity has not broken out across the land of delusion. The billions in consumer loan write-offs by the Wall Street banks that run this country have masked the fact that Americans have not cut back on their spending habits at all. GMAC (taxpayer owned) and Ford Credit continue to dish out car loans to anyone with a pulse and a 600 credit score. The Federal Reserve and the FASB have encouraged, if not insisted, that banks fraudulently value the commercial real estate loans on their books. The Federal Reserve has bought $1.5 trillion of toxic mortgage loans from the criminal Wall Street banks at 100 cents on the dollar. The government’s corporate fascist public relations firms then spread the big lie that the economy is recovering and consumers should join the party and spend, spend, spend.

If Americans were capable or willing to do some critical thinking, they would realize that those in power have created the illusion of a recovery by handing $700 billion of your money to the banks that created the financial meltdown, spending $800 billion on worthless pork barrel projects borrowed from future generations, dropping interest rates to 0% so that the mega-Wall Street banks can earn billions risk free while your grandmother who depended on interest income from her CDs edges closer to eating cat food to get by, and lastly Ben Bernanke’s blatant attempt to enrich Wall Street by buying US Treasury bonds in an effort to make the stock market go up, while the middle and lower classes are crushed under the weight of soaring fuel and food price increases that exceed 30% on an annual basis. The illusion of recovery is not a recovery. With a true unemployment rate of 22%, a true inflation rate of 8% and a real GDP of -1.5% (Shadowstats), we are in the midst of the Greater Depression. You are being lied to, but most of you prefer it.

The Little Lies We Tell Ourselves

“Our ignorance is not so vast as our failure to use what we know.” – M King Hubbert

When Jimmy Carter gave his malaise speech in 1979, Americans were in no mood to listen. Carter’s solutions were too painful, required sacrifice, and sought to benefit future generations. The leading edge of the Baby Boom generation had reached their 30s by 1979, and the most spoiled, pampered, egocentric generation in history could care less about future generations, long term thinking, or sacrifice for the greater good. They were the ME GENERATION. The 1970s had proven to be tumultuous episode in US history. M King Hubbert’s calculation in 1956 that U.S. oil production would peak in the early 1970s proved to be 100% correct.

The Arab oil embargo resulted in gas shortages and economic chaos in the U.S. Hubbert used the same method to determine that worldwide oil production would peak in the early 2000s. If long term planning had been initiated in the early 1980s, combining exploration of untapped reserves, greater utilization of natural gas, development of nuclear plants, more stringent fuel efficiency standards, increased taxes on gasoline, and more thoughtful development of housing communities, we would not now face a looming oil crisis within the next few years. Instead of dealing with reality, adapting our behavior and preparing for a more localized society, we put our blinders on, chose ignorance over reason and pushed the pedal to the medal by moving farther away from our jobs, building bigger energy intensive mansions, and insisting on driving tank-like SUVs, Hummers, and good ole boy pickups. Kevin Phillips in American Theocracy explained that hyper-consumerism, fear, and inability to use logic have left our suburban oasis lives in danger of implosion when the reality of peak cheap oil strikes:

Besides the innate thirst of SUVs, some of the last quarter century’s surge in U.S. oil consumption has come from Americans driving more – some twelve thousand miles per motorist per year, up almost one – third from 1980 – because they as a whole live farther from work. In consumption terms, exurbia is the physical result of the latest population redistribution enabled by car culture and the electorate that upholds it.

Family values are central – if by this we mean having families and accepting lengthy commutes to install them in reasonably safe and well churched places. In the 1970’s such households might have been fleeing school busing or central city crime; in the post – September 11 era, many sought distance from “godless” school systems or the random violence and terrorist attacks expected to occur in metropolitan areas.

We willingly believe the lies espoused by the badly informed pundits on CNBC and Fox that if we just drill in Alaska and off our coasts, we’ll be fine. The ignorant peak cheap oil deniers insist there are billions of barrels of oil to be harvested from the Bakken Shale, even though there is absolutely no method of accessing this supply without expending more energy than we can access. Environmentalists lie about the dangers of nuclear power, while shamelessly promoting the ridiculous notion that solar, wind and ethanol can make a visible impact on our future energy needs. Ideologues on the right and left conveniently ignore the facts and the truth is lost in a blizzard of their lies. Here is an explanation so clear, even a CNBC “drill baby drill” dimwit could understand:

When oil production first began in the mid-nineteenth century, the largest oil fields recovered fifty barrels of oil for every barrel used in the extraction, transportation and refining. This ratio is often referred to as the Energy Return on Energy Investment (EROEI). Currently, between one and five barrels of oil are recovered for each barrel-equivalent of energy used in the recovery process. As the EROEI drops to one, or equivalently the Net Energy Gain falls to zero, the oil production is no longer a net energy source. This happens long before the resource is physically exhausted.

After the briefest of lulls when oil reached $145 per barrel, Americans have resumed buying SUVs, pickup trucks, and gas guzzling muscle cars. They have chosen to ignore the imminence of peak cheap oil because driving a leased BMW makes your neighbors think you are a success, while driving a hybrid would make your neighbors think you are a liberal tree hugger. It boggles my mind that so many Americans are so shallow and shortsighted. According to Automotive News, at the start of 2008 leasing comprised 31.2% of luxury vehicle sales and 18.7% of non-luxury sales. This proves that hundreds of thousands of wannabes are driving leased BMWs and Mercedes to fill some void in their superficial lives.

I bought a Honda Insight Hybrid six months ago. It gets 44 mpg and will save me $1,500 per year in gasoline costs. I put 20% down and financed the remainder at 0.9% for three years. My payment is $450 per month. I will own it outright in 2 ½ years. I could have leased a 2010 BMW 328i with moonroof, bluetooth, power seats with driver seat memory, lumbar support, leather interior, iPod adapter, 17″ alloy wheels, heated seats, wood trim, 3.0 Liter 6 Cylinder engine with 230 horsepower for 3 years at $389 per month. At the end of 3 years I’d own nothing. In 2 ½ years I’ll be able to put $450 per month away for my kids’ college education and I’ll be saving more on fuel as gasoline approaches $5 per gallon. The self important egotistical BMW leaser pretending to be successful will need to hand over their sweet ride and move on to the next lease, never saving a dime for the future. I’m sure they’ll make a killing in the market or their McMansion will surely double in price, providing a fantastic retirement.

Delusional Practical

The delusion that cheap oil is a God given right of all Americans can be seen in the YTD data on vehicle sales. Pickups and SUVs account for 48.5% of all sales, while small fuel efficient cars account for only 16.5% of all sales. Americans will continue to lie to themselves until it is too late, again.

	Oct 2010	% Chg from Oct’09	YTD 2010	% Chg from YTD 2009
Cars	448,127	3.9	4,840,525		5.3
Midsize	220,998	-0.2	2,407,457		9.9
Small	142,983	9.7	1,616,840	-1.5
Luxury	78,487	9.7	742,278		7.2
Large	5,659	-31.9	73,950	-0.8
Light-duty trucks	502,038	23.5	4,730,196		16.7
Pickup	147,207	16.9	1,334,133		13.9
Cross-over	195,274	20.0	1,928,191		16.8
Minivan	55,596	21.0	561,736		15.1
Midsize SUV	51,494	86.6	443,922		37.9
Large SUV	23,946	1.5	202,806		12.1
Small SUV	14,861	53.6	146,000	-3.8
Luxury SUV	13,660	22.1	113,408		26.2
Total SUV/Cross-over	299,235	27.4	2,834,327		18.3
Total SUV	103,961	44.3	906,136		21.7
Total Cross-over	195,274	20.0	1,928,191		16.8

Americans are so committed to their automobiles, hyper-consumerism, oversized McMansions, and suburban sprawl existence that they will never willingly prepare in advance for a future by scaling back, downsizing, or thinking. Our culture is built upon consumption, debt, cheap oil and illusion. Kevin Phillips in American Theocracy concludes that there are so many Americans tied to our unsustainable economic model that they will choose to lie to themselves and be lied to by their leaders rather than think and adapt:

A large number of voters work in or depend on the energy and automobile industries, and still more are invested in them, not just financially but emotionally and culturally. These secondary cadres included racing fans, hobbyists, collectors, and dedicated readers of automotive magazines, as well as the tens of millions of automobile commuters from suburbs and distant exurbs, plus the high number of drivers whose strong self-identification with vehicle types and models serve as thinly disguised political statements. In the United States more than elsewhere, a preference for conspicuous consumption over energy efficiency and conservation is a signal of a much deeper, central divide.

M King Hubbert was a geophysicist and a practical man. He observed data, made realistic assumptions, and came to logical conclusions. He didn’t deal in unrealistic hope and unwarranted optimism. He knew that our culture had become so dependent upon lies and an unsustainable growth model based on depleting oil and debt based “prosperity”. He knew decades ago that we were incapable of dealing with the truth:

“Our principal constraints are cultural. During the last two centuries we have known nothing but exponential growth and in parallel we have evolved what amounts to an exponential-growth culture, a culture so heavily dependent upon the continuance of exponential growth for its stability that it is incapable of reckoning with problems of non-growth.” – M King Hubbert

Our country is at a crucial juncture. It is time for thinkers. It is time for realists. It is time to deal with facts. It is time to drive the ideologues off the stage. Are you tired of lying to yourselves? Are you tired of being lied to by the corporate fascists that run this country? It is time to wake up. Right wing and left wing ideologues will continue to spew lies and misinformation as they are power hungry and care not for the long-term survival of our nation or the unborn generations that depend upon the decisions we make today. It is time to see how we really are.

“Most of one’s life is one prolonged effort to prevent oneself from thinking. People intoxicate themselves with work so they won’t see how they really are.” – Aldous Huxley

Less Than a Tenth of Bank Of America's Assets Comes From Traditional Banking Deposits

I have long pointed out that the too big to fails make very little of their money off of traditional depository functions.

For example, last October, I argued:

Some very smart people say that the big banks aren't really focusing as much on the lending business as smaller banks.

Specifically since Glass-Steagall was repealed in 1999, the giant banks have made much of their money in trading assets, securities, derivatives and other speculative bets, the banks' own paper and securities, and in other money-making activities which have nothing to do with traditional depository functions.

Now that the economy has crashed, the big banks are making very few loans to consumers or small businesses because they still have trillions in bad derivatives gambling debts to pay off, and so they are only loaning to the biggest players and those who don't really need credit in the first place. See this and this.

So we don't really need these giant gamblers. We don't really need JP Morgan, Citi, Bank of America, Goldman Sachs or Morgan Stanley. What we need are dedicated lenders.

I just ran across an example for one of the TBTFs.

Specifically, Bank of America - the U.S. largest bank - has only $83 billion in deposit accounts (what they call "transaction accounts").

But B of A has between $1.3 and $1.5 trillion in total bulk assets and liabilities.

In other words, far less than a tenth of B of A's overall assets come from traditional banking functions.

Why do we need to save the too big to fails again?

Next Spain? Analysts consider country next in line for a bail-out

With Europe agreeing a €85bn bail-out for Ireland's banks, analysts consider who, if anyone, could be next.

Demonstrators burn a picture of Ireland's Prime Minister Brian Cowen in front of Leinster House in Dublin.

In a note outlining the 2011 outlook for European banks, analysts at Deutsche Bank said sovereign concerns were "top of the agenda".

"We expect this process to continue in early 2011, as Deutsche Bank’s economics team believes Portugal is highly likely to tap IMF / EU(ESFS) rescue mechanisms next year. But we believe that the dominoes should stop falling at Spain."

Their fixed income colleagues at Deutsche said in a note on Monday that they were not at all surprised to see concerns over Spain rising again.

"The market seems to think it's inevitable Portugal requests assistance next - perhaps in January? - and then after that Spain will be scrutinised with a fine tooth comb over the coming months. In doing the work for the Outlook we've increasing come to the conclusion that whether you think the Sovereign problems stop at Greece, Ireland and perhaps Portugal depends on whether you think this is a problem with the overall Western financial system or whether you think its only a problem with individual over-leveraged entities."

Simon Samuels, an analyst at Barclays Capital said in a note last week:

"The Irish crisis and subsequent bail-out have returned sovereign concerns to the forefront of investors’ minds. But is it simply the case that some harsh comments from Angela Merkel have made bond investors run for cover? We don't think so."

He added:

"Simply put, the Irish sovereign has been dismembered by its banking system...In September, Irish banks faced redemptions of €25bn of government guaranteed debt. Whilst the government could (and did) extend this guarantee, just like Iceland in 2008, it no longer looked credible to the market, bond holders became nervous, and the system began to implode."

Writing about who could be next, he said:

"Our view is that the challenges facing Spain remain substantial – with the likelihood of a positive outcome poor until at least the sovereign and the banks have successfully navigated their way over the funding hump facing them both in Spring 2011. The question marks over asset quality will likely last far longer. By contrast, we are far more sanguine on Italian prospects. The absence of an asset bubble, and limited wholesale funding reliance suggests the banks pose little incremental risk to the Italian sovereign."

He added:

"Many commentators have suggested that Spain is too big to be allowed to fail. Whilst concrete plans on how to resolve a full-blown Spanish crisis remain opaque, should the tail risk of a Spanish bail out materialise, it is likely that the (stronger) French and German economies will bear the brunt of rescuing Spain, and by extension, the Eurozone."