Article 43


Tuesday, April 30, 2013

Lessons From Italy


Poor Italy! Same people running same show

By Adrian Salbuchi
RT News
April 30, 2013

After learning that Enrico Letta is Italy’s new prime minister, I offer my sympathies to Italians. To say the usual suspects are back is to underline the plight of the Italian people as they are made poorer by the politicians who run their country.

In the game of Italian prime ministers: the Trilateral Commission’s European Chairman Mario Monti is out; and Trilateral Commission Member Enrico Letta is in. Long live the Trilateral Commission! 

It seems that there is just nothing any country in the West can do to free itself from the shackles of the Global Power Masters and their Megabankers.

No matter what elections are held; NO MATTER WHAT MASS DEMONSTRATIONS bring citizens on to the streets; no matter how many signs are shown on millions of TV screens accusing the MEGABANKERS of being the worst crooks, THE TRUTH is THERE for ALL TO SEE: the Global Power Masters have taken over governments in country after country, enslaving all nations to their Megabankers.

The mainstream media broadcast it; the alternative media POINT OUT the sheer inhumanity of it all, even in the European Union where double-digit unemployment is rampant, banks are fraudulently bailed-in by stealing account holders money, and millions of worker’ houses are foreclosed on.

There just does not seem to be anything anybody anywhere can do about it.

It all basically boils down to the vast majority of working people in just about every country suffering the most perverse, unfair and blatant discrimination of all: when small but extremely powerful, unelected and illegitimate minorities discriminate against the vast majority of disorganized and as-yet-unawakened citizens.

This is not a conspiracy theory or any such rubbish. This is something thats right before our eyes. All you need to do is look in the right places, see who are running this “greatest show on Earth,” and then think with your own commonsense mind instead of letting CNN or Rupert Murdoch do the thinking for you. 

After three-time premier Silvio Berlusconi sank Italy to new depths of decadence where its workers have been sucked into an economic Eurocratic maelstrom that finally led to his resignation in November 2011, the Megabankers decided at the time to take over Italy outright.

That was when they replaced Berlusconi with Mario Monti of Trilateral Commission glory as Italy’s prime minister, as we then explained on RT.

Now, after Italys recent elections we saw its aging President Giorgio Napolitano again put a Rockefeller/Rothschild Boy in power; because Enrico Letta too is a Trilateral Commission member. And to make sure that Megabanker theft is duly supplemented by traditional Italian political mafias, Letta’s coalition government includes members of Berlusconis party. After all, his uncle Gianni Letta was/is Berlusconi’s right-hand man. So, yes indeed: Poor Italy!

Who are these people?

The Trilateral Commission brings together Rockefeller, Morgan, Warburg, Rothschild, Lazard, Goldman Sachs and Soros banking interests under the aegis of global power elite geopolitical planners like Sir Henry Kissinger, Zbigniew Brzezinski, Dominique Mosi, Richard Perle, Philip Zelikow and Paul Wolfowitz, amongst many others.

Notably, both PMs, the outgoing Mario Monti and incoming Enrico Letta, serve the Trilateral Agenda shoulder-to-shoulder with the top-brass from such global megabanks as CitiCorp, HSBC, Barclays, Nomura, Banco Santander, BBVA Bank, UBS, NM Rothschild, Deutsche Bank, BNP, Commerzbank, Goldman Sachs, Lazard, Mediobanca, Morgan Stanley, Warburg Pincus, Bank of Nova Scotia, Bank of New York Mellon, and Bank of Tokyo-Mitsubishi and Overworld banking agencies like the International Monetary Fund (IMF), Federal Reserve Bank, Bank of England, European Central Bank, Dutch Central Bank, Bank of Greece, and Bank of Japan.  Just a sampling to show that this is a most powerful high-class money club if ever there was one.

At 70, Monti is an elderly man; at 46, Letta is a promising young politician. In Italian politics it seems that the more things change, the more they stay the same.

The key question that should once again be on every Italians mind is: will Enrico Letta work to improve the plight of the Italian people or to promote bankers interests? Former Argentine President Juan Pern once said that all nations presidents and premiers have a foremost decision to make: they either govern to promote and protect the interests of their people over and above those of the global megabankers, or they merely work for the global megabankers and against their own people.

It’s a political coin that has had to be tossed by leaders time and again since the times of Jesus Those making the right decision for their people often end up ousted, assassinated and demonized

Looking at the list and track records of Trilateralists who have been catapulted into the highest echelons of power in government - Papademos in Greece, Monti in Italy, Cavallo in Argentina, Bill Clinton and George HW Bush in the US, Horst Kohler in Germany, Toomas Ilves in Estonia, Condoleezza and Susan Rice (yes, both of them!) in the US one can see a pattern. 

So, yes: friends, Romans and countrymen everywhere, the Trilateral Commission certainly does nave enormous clout and leverage to promote its globalist agenda over and above every country’s national interest.

Who decides?

Lettas ascent to become Italy’s new prime minister a country with huge economic, financial, social and political problems ֖ once again raises the question: Who decides? 

Is it the Italian people who have freely and democratically chosen to have an elite megabanker-friendly bureaucrat run their country or as in Greece, France, the UK and so many other countries - is there a hidden hand that discretely catapults its own servants into the highest places of power? 

Do “We, the People” EVER REALLY DECIDE anything or are we just asked to legitimize through some high-profile election, decisions they have already taken? Do our real political choices thus boil down to two, maybe three, elite candidates? A sort of “you-can-have-Coke-or-Pepsi” non-choice?

If this only happened in Italy, we could say that it’s some sort of Italian problemђ.  But, no: theres clearly a pattern whereby global power-brokers first recruit and then very discretely promote their chosen players to the top echelons of entities like the Trilateral Commission where they are suitably groomed, positioned, prepared, coached and politically and financially armed. Normally, such individuals have little or no allegiance to their countries of origin and countrymen, but rather are align to the supranational globalist agenda.

And they plan well in advance too!  An April 27 FoxNews TV report just aired a pro-Bush Family program showing that The Powers That Be are already busy toying with the idea that Jeb Bush - another Baby Bush - might just be the right guy to run for president of the United States on the Republican Party ticket in 2016’s presidential elections.

Not surprisingly, many powerful Democrats are, in turn, already working to put Hillary Clinton as their candidate for those presidentials.

That would mean that in 2016 the American people just might have to choose between Jeb Bush (son of Trilateral member George HW Bush) and Hillary Clinton (wife of Trilateralist Bill Clinton).  I know, I know: just a coincidence.

Come to think of it, maybe the title of this article should not just be “Poor Italy,” but rather Poor Italy and Greece and Argentina and Germany and USA and Estonia and…

Benjamin Disraeli - British Queen Victori’s prime minister in the 19th century - once said that “The world is governed by very different personages from what is imagined by those who are not behind the scenes.”

A lucid vision from someone who was in a position to know.  Add to this 21st century trillions of money-sloshing politics and, once again, we see that on the global political stage, money does indeed make the world go around.


Posted by Elvis on 04/30/13 •
Section Revelations
View (0) comment(s) or add a new one
Printable viewLink to this article

Sunday, April 28, 2013



Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix.

By Matt Taibbi
Rolling Stone
April 25, 2013

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three and perhaps as many as 16 - of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history - MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks - including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland - that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

The Scam Wall Street Learned From the Mafia

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

“It’s a double conspiracy,” says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. “It’s the height of criminality.”

The bad news didn’t stop with swaps and interest rates. In March, it also came out that two regulators - the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks - many other benchmarks - are legit areas of inquiry,” CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March - though if you follow these matters closely, it may not have been so shocking at all - when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants’ incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

“A farce,” was one antitrust lawyer’s response to the eyebrow-raising dismissal.

“Incredible,” says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings - in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation’s GDP are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it’s increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati - this is the real thing, and it’s no secret. You can stare right at it, anytime you want.

The banks found a loophole, a basic flaw in the machine. Across the financial system, there are places where prices or official indices are set based upon unverified data sent in by private banks and financial companies. In other words, we gave the players with incentives to game the system institutional roles in the economic infrastructure.

Libor, which measures the prices banks charge one another to borrow money, is a perfect example, not only of this basic flaw in the price-setting system but of the weakness in the regulatory framework supposedly policing it. Couple a voluntary reporting scheme with too-big-to-fail status and a revolving-door legal system, and what you get is unstoppable corruption.

Every morning, 18 of the world’s biggest banks submit data to an office in London about how much they believe they would have to pay to borrow from other banks. The 18 banks together are called the “Libor panel,” and when all of these data from all 18 panelist banks are collected, the numbers are averaged out. What emerges, every morning at 11:30 London time, are the daily Libor figures.

Banks submit numbers about borrowing in 10 different currencies across 15 different time periods, e.g., loans as short as one day and as long as one year. This mountain of bank-submitted data is used every day to create benchmark rates that affect the prices of everything from credit cards to mortgages to currencies to commercial loans (both short- and long-term) to swaps.

Gangster Bankers Broke Every Law in the Book

Dating back perhaps as far as the early Nineties, traders and others inside these banks were sometimes calling up the company geeks responsible for submitting the daily Libor numbers (the “Libor submitters") and asking them to fudge the numbers. Usually, the gimmick was the trader had made a bet on something a swap, currencies, something ֖ and he wanted the Libor submitter to make the numbers look lower (or, occasionally, higher) to help his bet pay off.

Famously, one Barclays trader monkeyed with Libor submissions in exchange for a bottle of Bollinger champagne, but in some cases, it was even lamer than that. This is from an exchange between a trader and a Libor submitter at the Royal Bank of Scotland:

SWISS FRANC TRADER: can u put 6m swiss libor in low pls?…
SWSISS FRANC TRADER: ive got some sushi rolls from yesterday?…
PRIMARY SUBMITTER: ok low 6m, just for u
SWISS FRANC TRADER: wooooooohooooooo… thatd be awesome

Screwing around with world interest rates that affect billions of people in exchange for day-old sushi - it’s hard to imagine an image that better captures the moral insanity of the modern financial-services sector.

Hundreds of similar exchanges were uncovered when regulators like Britain’s Financial Services Authority and the U.S. Justice Department started burrowing into the befouled entrails of Libor. The documentary evidence of anti-competitive manipulation they found was so overwhelming that, to read it, one almost becomes embarrassed for the banks. “It’s just amazing how Libor fixing can make you that much money,” chirped one yen trader. “Pure manipulation going on,” wrote another.

Yet despite so many instances of at least attempted manipulation, the banks mostly skated. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level flunkies overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution.

Two of America’s top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it’s dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to “collateral consequences” in the economy.

The relatively small sums of money extracted in these settlements did not go toward reparations for the cities, towns and other victims who lost money due to Libor manipulation. Instead, it flowed mindlessly into government coffers. So it was left to towns and cities like Baltimore (which lost money due to fluctuations in their municipal investments caused by Libor movements), pensions like the New Britain, Connecticut, Firefighters’ and Police Benefit Fund, and other foundations ֖ and even individuals (billionaire real-estate developer Sheldon Solow, who filed his own suit in February, claims that his company lost $450 million because of Libor manipulation) to sue the banks for damages.

One of the biggest Libor suits was proceeding on schedule when, early in March, an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York to argue an extraordinary motion to dismiss. The banks’ legal dream team drew from heavyweight Beltway-connected firms like Boies Schiller (you remember David Boies represented Al Gore), Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer.

The presence of Covington & Burling in the suit - representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew - was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, “Our goal here is not to destroy a major financial institution.”

In any case, this all-star squad of white-shoe lawyers came before Buchwald and made the mother of all audacious arguments. Robert Wise of Davis Polk, representing Bank of America, told Buchwald that the banks could not possibly be guilty of anti- competitive collusion because nobody ever said that the creation of Libor was competitive. “It is essential to our argument that this is not a competitive process,” he said. “The banks do not compete with one another in the submission of Libor.”

If you squint incredibly hard and look at the issue through a mirror, maybe while standing on your head, you can sort of see what Wise is saying. In a very theoretical, technical sense, the actual process by which banks submit Libor data ֖ 18 geeks sending numbers to the British Bankers’ Association offices in London once every morning is not competitive per se.

But these numbers are supposed to reflect interbank-loan prices derived in a real, competitive market. Saying the Libor submission process is not competitive is sort of like pointing out that bank robbers obeyed the speed limit on the way to the heist. It’s the silliest kind of legal sophistry.

But Wise eventually outdid even that argument, essentially saying that while the banks may have lied to or cheated their customers, they weren’t guilty of the particular crime of antitrust collusion. This is like the old joke about the lawyer who gets up in court and claims his client had to be innocent, because his client was committing a crime in a different state at the time of the offense.

“The plaintiffs, I believe, are confusing a claim of being perhaps deceived,” he said, “with a claim for harm to competition.”

Judge Buchwald swallowed this lunatic argument whole and dismissed most of the case. Libor, she said, was a “cooperative endeavor” that was “never intended to be competitive.” Her decision “does not reflect the reality of this business, where all of these banks were acting as competitors throughout the process,” said the antitrust lawyer Sokol. Buchwald made this ruling despite the fact that both the U.S. and British governments had already settled with three banks for billions of dollars for improper manipulation, manipulation that these companies admitted to in their settlements.

Michael Hausfeld of Hausfeld LLP, one of the lead lawyers for the plaintiffs in this Libor suit, declined to comment specifically on the dismissal. But he did talk about the significance of the Libor case and other manipulation cases now in the pipeline.

“It’s now evident that there is a ubiquitous culture among the banks to collude and cheat their customers as many times as they can in as many forms as they can conceive,” he said. “And that’s not just surmising. This is just based upon what they’ve been caught at.”

Greenberger says the lack of serious consequences for the Libor scandal has only made other kinds of manipulation more inevitable. “There’s no therapy like sending those who are used to wearing Gucci shoes to jail,” he says. “But when the attorney general says, ‘I don’t want to indict people,’ it’s the Wild West. There’s no law.”

The problem is, a number of markets feature the same infrastructural weakness that failed in the Libor mess. In the case of interest-rate swaps and the ISDAfix benchmark, the system is very similar to Libor, although the investigation into these markets reportedly focuses on some different types of improprieties.

Though interest-rate swaps are not widely understood outside the finance world, the root concept actually isn’t that hard. If you can imagine taking out a variable-rate mortgage and then paying a bank to make your loan payments fixed, you’ve got the basic idea of an interest-rate swap.

In practice, it might be a country like Greece or a regional government like Jefferson County, Alabama, that borrows money at a variable rate of interest, then later goes to a bank to “swap” that loan to a more predictable fixed rate. In its simplest form, the customer in a swap deal is usually paying a premium for the safety and security of fixed interest rates, while the firm selling the swap is usually betting that it knows more about future movements in interest rates than its customers.

Prices for interest-rate swaps are often based on ISDAfix, which, like Libor, is yet another of these privately calculated benchmarks. ISDAfix’s U.S. dollar rates are published every day, at 11:30 a.m. and 3:30 p.m., after a gang of the same usual-suspect megabanks (Bank of America, RBS, Deutsche, JPMorgan Chase, Barclays, etc.) submits information about bids and offers for swaps.

And here’s what we know so far: The CFTC has sent subpoenas to ICAP and to as many as 15 of those member banks, and plans to interview about a dozen ICAP employees from the company’s office in Jersey City, New Jersey. Moreover, the International Swaps and Derivatives Association, or ISDA, which works together with ICAP (for U.S. dollar transactions) and Thomson Reuters to compute the ISDAfix benchmark, has hired the consulting firm Oliver Wyman to review the process by which ISDAfix is calculated. Oliver Wyman is the same company that the British Bankers’ Association hired to review the Libor submission process after that scandal broke last year. The upshot of all of this is that it looks very much like ISDAfix could be Libor all over again.

“It’s obviously reminiscent of the Libor manipulation issue,” Darrell Duffie, a finance professor at Stanford University, told reporters. “People may have been naive that simply reporting these rates was enough to avoid manipulation.”

And just like in Libor, the potential losers in an interest-rate-swap manipulation scandal would be the same sad-sack collection of cities, towns, companies and other nonbank entities that have no way of knowing if they’re paying the real price for swaps or a price being manipulated by bank insiders for profit. Moreover, ISDAfix is not only used to calculate prices for interest-rate swaps, it’s also used to set values for about $550 billion worth of bonds tied to commercial real estate, and also affects the payouts on some state-pension annuities.

So although it’s not quite as widespread as Libor, ISDAfix is sufficiently power-jammed into the world financial infrastructure that any manipulation of the rate would be catastrophic - and a huge class of victims that could include everyone from state pensioners to big cities to wealthy investors in structured notes would have no idea they were being robbed.

“How is some municipality in Cleveland or wherever going to know if it’s getting ripped off?” asks Michael Masters of Masters Capital Management, a fund manager who has long been an advocate of greater transparency in the derivatives world. “The answer is, they won’t know.”

Worse still, the CFTC investigation apparently isn’t limited to possible manipulation of swap prices by monkeying around with ISDAfix. According to reports, the commission is also looking at whether or not employees at ICAP may have intentionally delayed publication of swap prices, which in theory could give someone (bankers, cough, cough) a chance to trade ahead of the information.

Swap prices are published when ICAP employees manually enter the data on a computer screen called “19901.” Some 6,000 customers subscribe to a service that allows them to access the data appearing on the 19901 screen.

The key here is that unlike a more transparent, regulated market like the New York Stock Exchange, where the results of stock trades are computed more or less instantly and everyone in theory can immediately see the impact of trading on the prices of stocks, in the swap market the whole world is dependent upon a handful of brokers quickly and honestly entering data about trades by hand into a computer terminal.

Any delay in entering price data would provide the banks involved in the transactions with a rare opportunity to trade ahead of the information. One way to imagine it would be to picture a racetrack where a giant curtain is pulled over the track as the horses come down the stretch and the gallery is only told two minutes later which horse actually won. Anyone on the right side of the curtain could make a lot of smart bets before the audience saw the results of the race.

At ICAP, the interest-rate swap desk, and the 19901 screen, were reportedly controlled by a small group of 20 or so brokers, some of whom were making millions of dollars. These brokers made so much money for themselves the unit was nicknamed “Treasure Island.”

Already, there are some reports that brokers of Treasure Island did create such intentional delays. Bloomberg interviewed a former broker who claims that he watched ICAP brokers delay the reporting of swap prices. “That allows dealers to tell the brokers to delay putting trades into the system instead of in real time,” Bloomberg wrote, noting the former broker had “witnessed such activity firsthand.” An ICAP spokesman has no comment on the story, though the company has released a statement saying that it is “cooperating” with the CFTC’s inquiry and that it “maintains policies that prohibit” the improper behavior alleged in news reports.

The idea that prices in a $379 trillion market could be dependent on a desk of about 20 guys in New Jersey should tell you a lot about the absurdity of our financial infrastructure. The whole thing, in fact, has a darkly comic element to it. “It’s almost hilarious in the irony,” says David Frenk, director of research for Better Markets, a financial-reform advocacy group, “that they called it ISDAfix.”

After scandals involving libor and, perhaps, ISDAfix, the question that should have everyone freaked out is this: What other markets out there carry the same potential for manipulation? The answer to that question is far from reassuring, because the potential is almost everywhere. From gold to gas to swaps to interest rates, prices all over the world are dependent upon little private cabals of cigar-chomping insiders we’re forced to trust.

“In all the over-the-counter markets, you don’t really have pricing except by a bunch of guys getting together,” Masters notes glumly.

That includes the markets for gold (where prices are set by five banks in a Libor-ish teleconferencing process that, ironically, was created in part by N M Rothschild & Sons) and silver (whose price is set by just three banks), as well as benchmark rates in numerous other commodities ֖ jet fuel, diesel, electric power, coal, you name it. The problem in each of these markets is the same: We all have to rely upon the honesty of companies like Barclays (already caught and fined $453 million for rigging Libor) or JPMorgan Chase (paid a $228 million settlement for rigging municipal-bond auctions) or UBS (fined a collective $1.66 billion for both muni-bond rigging and Libor manipulation) to faithfully report the real prices of things like interest rates, swaps, currencies and commodities.

All of these benchmarks based on voluntary reporting are now being looked at by regulators around the world, and God knows what they’ll find. The European Federation of Financial Services Users wrote in an official EU survey last summer that all of these systems are ripe targets for manipulation. “In general,” it wrote, “those markets which are based on non-attested, voluntary submission of data from agents whose benefits depend on such benchmarks are especially vulnerable of market abuse and distortion.”

Translation: When prices are set by companies that can profit by manipulating them, we’re fucked.

“You name it,” says Frenk. “Any of these benchmarks is a possibility for corruption.”

The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It’s not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever’s in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing and it’s only just coming into view.


Posted by Elvis on 04/28/13 •
Section Dying America
View (0) comment(s) or add a new one
Printable viewLink to this article

Saturday, April 27, 2013

Long-term Unemployed And Long-term Neglected

How to Save the Long-Term Unemployed
More stimulus, incentives, and direct government hiring

By Matthew O’Brien
The Atlantic
April 25, 2013

Long-term unemployment is our most urgent crisis, and we’re doing nothing about it.

In fact, Congress can barely be bothered to even talk about it. As Niraj Chokshi of National Journal reports, only four lawmakers showed up for the Congressional hearing on long-term unemployment on Wednesday. And three of them got there late.

In Congress’ defense, there is a new Bowles-Simpson plan out.

For the first time since the 1930s, there are millions of people who want work who can’t find it, no matter how long they look. That’s what what happens when a downturn goes too long and a recovery doesn’t go far enough. You can see that depressingly enough in the chart below that compares job openings and layoffs the past decade (which is as far back as the data goes). After Lehman failed, and it looked like everyone might need to brush up on their farming skills, there were more people getting fired each month than there were jobs available. But even after the panic passed, the jobs have been slow to return given the depth of the hole.


Look at how few job openings there were six months after Lehmangeddon. It was just incredibly tough for people who got laid off during the depth of the crisis to find work soon afterwards—or even years later. The chart below, via Megan McArdle, shows the cumulative effect of our horribly dysfunctional labor market: there were over 6.5 unemployed people per job opening in 2009, and that dismal ratio has since only gradually declined to something approximating a less complete disaster.


In other words, there are lots of people who have been out of work for six months or longer who only made the mistake of losing their job at the wrong time. But that’s unfortunately been enough to make them finding a new job a long shot.

SOMETHING HAPPENS when you’ve been out of work for half a year. Employers ignore you completely. That was the conclusion of a new field study by Rand Ghayad, a visiting scholar at the Boston Fed and a PhD candidate at Northeastern University, that showed that resumes with otherwise identical qualifications get called back far less if they list six months of unemployment. As Matt Yglesias points out, the problem is this kind of statistical discrimination against the long-term unemployed is pretty rational. Companies with a big stack of resumes to get through (which is all of them nowadays) will still have more than enough strong candidates left over if they screen out the long-term jobless, who presumably would have gotten a job before if they themselves were strong candidates. Now, this heuristic makes sense, but it makes less sense in the aftermath of the worst crisis in 80 years—and much less sense on a macro level. After all, it makes us collectively poorer if the long-term unemployed become unemployable.

What is to be done about this unemployment trap? Well, there are two possible policy approaches: macro or micro. In other words, trying to reduce unemployment in general, or long-term unemployment in particular.

Mike Konczal, for one, thinks we should just focus on the economy, stupid, since nothing helps the long-term unemployed like a tighter labor market. As you can see in his chart below, people out of work for a year or more were 40 to 80 percent more likely to get a job during the tech boom as they are today.


This is true, but being true isn’t enough. It’s not as if Congress is about to do more fiscal stimulus anytime soon or the Fed is about to do much more monetary stimulus beyond its already open-ended easing. In the meantime, long-term unemployment threatens to consign people to lives permanently at the fringes of the labor market. We can’t wait for more stimulus.

There are some smaller-bore things we can and should do to help the long-term unemployed. Indeed, that’s exactly what the sparsely-attended Congressional hearing was about. Former Romney economic adviser and current American Enterprise Institute fellow Kevin Hassett thinks it’s time for a whatever-it-takes approach. Practically-speaking, that means the government should introduce work-sharing programs like Germany’s Kurzarbeit, give businesses tax incentives to hire the long-term jobless, and hire the long-term jobless itself if nobody else will. Congressional Republicans probably wouldn’t go along with this last idea, but the first two are the kind of thing that, in a sane world, shouldn’t be ideologically polarizing. Now, these kind of targeted policies would admittedly only help at the margins, but helping at the margins is better than not helping at all. (Or, in the case of the sequester, actively hurting).

More stimulus and more direct help for the long-term unemployed are two great tastes that go great together. Either or both would be a welcome change from our malign neglect of the urgent crisis all around us.


Posted by Elvis on 04/27/13 •
Section Dying America
View (0) comment(s) or add a new one
Printable viewLink to this article

Friday, April 26, 2013

Rethinking Social Security


“The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have too little.”

Elite conventional wisdom is losing on Social Security
The crowd calling for cutting benefits is being overtaken by another movement: A proposal to expand the program

By Michael Lind
April 26, 2013

In the past two weeks, two radically different proposals for the future of Social Security have provoked widespread discussion in the media.

One proposal was made by President Barack Obama, as part of his proposed budget. This called for using inflation adjustments to deprive the middle-class elderly of nearly 10 percent of their promised Social Security benefits if they lived to their 90s, while only the poor would be shielded from the cuts. Obamas proposal was angrily denounced by progressives and conservatives alike.

The rival proposal came in a policy paper called ”EXPANDED SOCIAL SECURITY,” written by Steven Hill, Robert Hiltonsmith, Joshua Freedman and me, and published by the New America Foundation’s Economic Growth Program. Our plan called for a major expansion of Social Security benefits, on the grounds that Social Security is far more efficient and reliable than the other two legs of the RETIREMENT security stool - employer PENSIONS (both defined-benefit pensions and 401Ks) and tax-deferred private savings accounts like IRAs.

Robert Kuttner PRAISED THE PLAN in a column for the Huffington Post:

If you don’t read any other piece of policy wonkery this year, you owe it to yourself, your parents, and your own golden years to read “Expanded Social Security.” It provides a politically serious blueprint for expanding the retirement income of the elderly, rather than selling them out. If we had a Democratic Party worthy of the name, it would get behind this proposal and change the entire dynamics of the Social Security debate.

A NUMBER OF CONGRESSIONAL PROGRESSIVES have defended their support for Social Security by citing our report, AS DID the AFL-CIO. Chris Hayes PRAISED THE REPORT on MSNBC. On Washington Posts “Wonkblog Ezra Klein” WROTE:

This is the other, perhaps more pressing, Social Security crisis: It’s not generous enough to counteract the sorry state of retirement savings nationwide. In a report for the New American Foundation, Michael Lind, Steven Hill, Robert Hiltonsmith and Joshua Freedman survey this data and conclude that the ongoing debate over how to cut Social Security is all wrong: We need to make Social Security much more generous.

“Expanded Social Security” also received favorable mentions in the WASHINGTON POST, the DAILY BEAST, the AMERICAN PROSPECT, THE NATION, MOTHER JONES, DAILY KOS and OTHER venues.

Nor has interest been limited to the center-left. The Expanded Social Security Plan was DISCUSSED seriously by Reihan Salam at the conservative magazine National Reviews blog AND Andrew Biggs of the American Enterprise Institute.

That makes it all the more important to note the weakness of most of the criticisms that Biggs levels against proposals like ours to expand rather than cut Social Security in response to the disappearance of traditional pensions, the FAILURE OF 401Ks and the inadequacy of private savings.

The first two of his arguments are trivial. According to Biggs: “Raising the payroll tax from 12.4% to 15.0%” - about what would be needed to restore 75-year solvency - would reduce annual hours worked by around 6% for middle-aged individuals and even more for near-retirees. Even if these estimates were correct (all such calculations are questionable) the effect on labor force participation would be minor and most likely swamped by other effects, like the cycle of booms and recessions. In our proposal, most of the benefit expansion would be funded by non-payroll taxes that would fall disproportionately on the rich, who derive much or most of their income from capital gains, not labor.

His second argument: “Social Securitys benefit formula punishes individuals who choose to delay retirement.” A typical near-retiree receives only 2.5 cents in extra lifetime benefits for each dollar of additional taxes he pays into the program.” At best, this is an argument for tweaking the Social Security benefit formula. It is not an argument against making Social Security benefits more generous for all Americans, as we propose in “Expanded Social Security.”

Third, Biggs argues that Social Security “lowers personal saving.” But there is nothing wrong with this. Reducing the need to save is the whole point of social insurance, like Social Security. Instead of trying to hoard enough money to live in retirement, we pay taxes to the program that will pay benefits to us when we are retired.

Biggs thinks the economy would be better off if we hoarded more money for retirement. Because were not amassing enough in bank savings accounts and mutual funds, he thinks, “the capital stock is a lot smaller - and the economy weaker - due to these incentives.”

The idea that more savings leads to more investment, which automatically leads to higher economic growth, is a staple of conservative economic theory. But the COMPARATIVE INTERNATIONAL DATA show no correlation between high levels of economic growth and stingy social security systems that force citizens to save more, like the U.S. And the idea that forcing low- and middle-income Americans to stash more cash in 401Ks would be more important for economic growth than, say, investment in R&D and productivity-enhancing infrastructure or sound macroeconomic policy is dubious.

Ironically, the final criticism made by Biggs backfires on him and other proponents of greater tax-favored private retirement savings. He thinks Social Security is depressing the American birthrate: “Roughly half the decline in birth rates in developed countries may be attributable to the increasing size and cost of pay-as-you-go pension plans. Other research finds that an increase in government old-age pensions is strongly correlated with a reduction in fertility.”

Correlation does not equal causation, so it may be a mistake to explain declining fertility rates in advanced industrial countries in terms of public retirement security schemes, as opposed to feminism, the availability of contraception, and other causes.

But lets assume, without argument, that a declining FERTILITY RATE is necessarily bad for a country, and let us also stipulate that the availability of Social Security reduces the importance, in decisions to have kids, of a bad reason - you want to have kids so they will keep you out of poverty in your old age - compared to a good reason: You want to have kids for the sake of having kids.

If this is a criticism of Social Security, it is also at the same time a criticism of any and every proposal that seeks to expand private savings or private insurance to increase retirement security. After all, the salient factor is not whether the insurance or savings is public or private; it is the amount of old-age income security. If plans like the partial Social Security privatization plans that Biggs and others have proposed over the years were to increase retirement security for most Americans, they would, according to Biggs’ own theory, reduce the incentives for Americans to have children who will bail them out of indigence in old age.  In other words, if Biggs is right, then to promote higher fertility rates we should cut Social Security - and also cut pensions, 401Ks, IRAs and private annuities at the same time!

The arguments of those who want to cut Social Security, then, are pretty weak. But that may not matter, because big money is backing the side that wants to cut Social Security. Proposals like ours to expand the public, pay-as-you-go Social Security system would make a lot of private retirement savings unnecessary - and that would cut into the fee income extracted from 401Ks and IRAs by the money management industry. Whereas the money managers would make hefty profits from the success of proposals to cut Social Security while beefing up tax-favored retirement savings .

Proposals like ours to address the American retirement security crisis by expanding Social Security have logic, facts and public opinion on their side. But they dont allow the politically-powerful financial industry to maintain or expand its share of the economy, and that may be their fatal defect.



Expanded Social Security
A Plan to Increase Retirement Security for All Americans

By Michael Lind
New American Foundation
April 3, 2013

Executive Summary

The conventional wisdom about Social Security is profoundly misguided. According to today’s mistaken consensus, the U.S. as a society cannot afford to allocate the money to pay for the present level of Social Security benefits for retirees in future generations. The solution, it is widely argued, is to CUT BENEFITS - either directly by means-testing or indirectly by raising the retirement age or allowing inflation to erode their real value over time. In this narrative, tax-favored private savings vehicles like 401(k)s and IRAs should be expanded in order to compensate for the allegedly necessary cuts in Social Security.

This consensus is not only misconceived in its diagnosis but also mistaken in its prescriptions and potentially disastrous in its consequences. Retirement security is often thought of as “three-legged stool” consisting of Social Security, employer retirement plans, and private savings. Social Security has been far more stable and successful than the other two legs of the stool. The reliance on these other legs of the system has resulted in a retirement security crisis for most Americans, shifting costs and risks onto individuals, even as the benefits of these programs go overwhelmingly to upper-income earners. Yet the current debate is arbitrarily restricted to the chief public component of the American retirement system, Social Security.

In reforming Americas retirement security system, we should build upon what works. Instead of compounding failure by expanding private benefits, a category that includes rapidly-disappearing defined benefit pensions, employer-provided 401(k)s and individual retirement accounts (IRAs), we should substantially expand the successful, purely public Social Security program.

In this policy paper, we offer one possible way to increase the overall public component of retirement security in the U.S. that we call Expanded Social Security. Just as Medicare already has different components called Medicare A, B, C, and D, the Expanded Social Security program that we propose would have two elements: Social Security A and Social Security B.

Under our proposal for Expanded Social Security, todayҒs Old Age and Survivors Insurance (OASI), commonly known simply as “Social Security,” would be retained, possibly with modifications, as an earnings-based defined benefit program. This would be renamed Social Security A. The expected shortfall in funding for promised benefits that is predicted to occur in the 2030s would be made up for by revenue increases, not benefit cuts.

To supplement Social Security A, we would add a universal flat benefit for all retirees eligible for OASI called Social Security B. Social Security B could be funded by revenues other than the payroll tax. Todays Supplemental Security Income (SSI), a means-tested antipoverty program that helps poor children and the disabled as well as the elderly, has always been funded out of general revenues. SSI thus provides a precedent for expanding the funding base for Social Security B. Indeed, one option would be to convert SSI into Social Security B.

The two components of Expanded Social Security, Social Security A and Social Security B, in combination would provide a much greater share of pre-retirement income than todayҒs OASI does by itself for most Americans. This expansion of the public share of the average Americans retirement income would make both tax-favored employer-based pensions and tax-favored individual savings accounts less necessary, allowing federal tax expenditures for those private programs to be reduced or eliminated. Combining major reductions in tax-favored private retirement savings programs with a substantial increase in the public portion of the American security system would make the retirement security system as a whole more progressive, more efficient, and more stable. Designed properly, a new retirement security system could substantially boost public retirement benefits for most Americans without increasing the percentage of GDP devoted to the combined public and private elements of our nation’s retirement system as a whole.

In addition to increasing the public contribution to the retirement security of most Americans, Expanded Social Security would have other benefits for individuals, businesses and the economy. Unlike employer-provided pensions or 401(k)s, Social Security B would be universal and would not depend on the generosity of particular employers. At the same time, funding Social Security B with revenues other than payroll taxes could maintain or increase the publicly-funded share of retirement security without expanding the payroll tax beyond the levels needed to maintain benefits under Social Security A (todays OASI).

Other reforms might achieve similar results by different methods. Any strategy that expands the reliable and efficient public share of retirement security in America would be an improvement over today’s system, which is biased toward the affluent and skewed toward private savings. Our purpose in proposing the Expanded Social Security Plan is to challenge the conventional wisdom about Social Security and to provoke a debate about whether and how to expand the public element of the American retirement security system. At present the discussion is dominated by those who want to privatize or shrink Social Security and those on the defensive who propose merely incremental reforms to preserve it. We seek not merely to move the ball, but also to move the goalpost in order to enlarge the boundaries of the national conversation about the future of retirement security in America.

Click HERE or HERE to read the full paper, “Expanded Social Security: A Plan to Increase Retirement Security for All Americans,” by Michael Lind, Steven Hill, Robert Hiltonsmith, and Joshua Freedman.

This paper is part of the series “Renewing the American Social Contract.” To view the full list of papers in this series, click HERE.



Unconventional Wisdom
A special anniversary report challenging the world’s most dangerous thinking.

By James K. Galbraith
Foreign Policy
January/February 2011


The most dangerous conventional wisdom in the world today is the idea that with an older population, people must work longer and retire with less.

This idea is being used to rationalize cuts in old-age benefits in numerous advanced countries—most recently in France, and soon in the United States. The cuts are disguised as increases in the minimum retirement age or as increases in the age at which full pensions will be paid.

Such cuts have a perversely powerful logic: “We” are living longer. There are fewer workers to support each elderly person. Therefore “we” should work longer.

But in the first place, “we” are not living longer. Wealthier elderly are; the non-wealthy not so much. Raising the retirement age cuts benefits for those who can’t wait to retire and who often won’t live long. Meanwhile, richer people with soft jobs work on: For them, it’s an easy call.

Second, many workers retire because they can’t find jobs. They’re unemployed—or expect to become so. Extending the retirement age for them just means a longer job search, a FUTILE waste of time and effort.

Third, we don’t need the workers. Productivity gains and cheap imports mean that we can and do enjoy far more farm and factory goods than our forebears, with much less effort. Only a small fraction of today’s workers make things. Our problem is finding worthwhile work for people to do, not finding workers to produce the goods we consume.

In the United States, the financial crisis has left the country with 11 million fewer jobs than Americans need now. No matter how aggressive the policy, we are not going to find 11 million new jobs soon. So common sense suggests we should make some decisions about who should have the first crack: older people, who have already worked three or four decades at hard jobs? Or younger people, many just out of school, with fresh skills and ambitions?

The answer is obvious. Older people who would like to retire and would do so if they could afford it should get some help. The right step is to reduce, not increase, the full-benefits retirement age. As a rough cut, why not enact a three-year windowduring which the age for receiving full Social Security benefits would drop to 62—providing a voluntary, one-time, grab-it-now bonus for leaving work? Let them go home! With a secure pension and medical care, they will be happier. Young people who need work will be happier. And there will also be more jobs. With pension security, older people will consume services until the end of their lives. They will become, each and every one, an employer.

A proposal like this could transform a miserable jobs picture into a tolerable one, at a single stroke.

James K. Galbraith is author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too.


Posted by Elvis on 04/26/13 •
Section American Solidarity
View (0) comment(s) or add a new one
Printable viewLink to this article

Privatizing Europe


Remember what went on in the EUROZONE this past December? 

We all know AUSTERITY weakens an economy. 


Public confidence in the European Union has fallen to historically low levels in the six biggest EU countries, raising fundamental questions about its democratic legitimacy more than three years into the union’s worst ever crisis, new data shows.

RT NEWS today:

Nearly 20,000 disabled people who receive aid from the UKs Independent Living Fund (ILF), which will be abolished in 2015, are deeply concerned about their future. Many fear life could become unbearable without the support.


The number of jobless people in France hit an all-time high in March, piling more gloom on cash-strapped households and fresh doubt on the government’s pledge to reverse the unemployment trend by year-end.


With more than 6 million people unemployed for the first time, Spain’s jobless rate shot up to a record 27.2% in the first quarter, the National Statistics Institute said Thursday, in another grim picture of the recession-wracked country.

So why?

GLOBALIZATION - the PRIVATIZATION of EVERYTHING, EVERYWHERE - the end of the world as we know it.


Privatizing Europe
Nick Buxton: A massive European fire sale is one way finance is using the crisis to entrench neo-liberalism

The Real News
April 24, 2013

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore.

As Europe settles in for an even deeper recession, many countries of Europe, in Greece, now of course CYPRUS, in Spain, in Portugal--and we’ll see it soon, probably, in other countries, even France--a big sale is on. Some people have called it a fire sale. And what are they selling? Public assets, in order to pay off their debts.

Now joining us to talk about all of this is Nick Buxton. He’s a communication manager for Transnational Institute, which provides analysis for movements working for social and environmental change.

Thanks for joining us, Nick.


JAY: So how big or widescale is this fire sale, as you’re calling it? And why is it happening?

BUXTON: It’s very widespread. We’ve been looking at some of the memorandums of agreement signed by the European Commission and the European Central bank with each of the countries as it’s come forward for issues with their debt to get loans from the European Central Bank. And each of them have had to sign these memorandums of agreement with the European Commission.

When we’ve looked at the details of those agreements, it’s not just about making cuts that we most famously hear about; almost in every agreement there is a demand for privatization of key national assets and key public services. And this is not just happening in countries that we all know are at the epicenter of the crisis, such as Greece and Portugal, but many other countries across Europe are now using this as a way of pushing for it, most notably the U.K., which was a pioneer of privatization. It’s really pushing through another wave of privatization, particularly now, in fact, in the national health service.

So the economist Paul Krugman perhaps has put this best, that the crisis--austerity is not about solving the crisis; it’s about using the crisis. And that’s what our report tried to look at, how the crisis has been used to push for privatization.

JAY: Now, a group of unions and other organizations sent a letter to Commissioner Rehn, European commissioner, and asking him for their position on this issue of privatization. Here’s what Rehn wrote back to them:

As you know, the privatization of public companies contributes to the reduction of public debt, as well as to the reduction of subsidies, other transfers of state guarantees to state-owned enterprises. It also has the potential to increasing the efficiency of companies, and by extension the competitiveness of the economy as a whole, while attracting foreign direct investment.

So the commissioner seems to be saying this isn’t just about dealing with bank debts or state debts or the financial crisis. This is kind of more overarching objective of theirs. And maybe this lends some credibility to taking advantage of the crisis. In other words, crisis or no crisis, they want more privatization.

BUXTON: Yeah. And actually by itself that’s rather shocking, because if you look at the European treaty, it says that the European Commission remains neutral on whether companies and enterprises are in public or private hands, whereas if you read that letter, it’s very clear that they’re not at all neutral and they’re not even pretending to be neutral on this key issue. So there’s quite clearly an agenda, a very clearly marked out and publicly spoken agenda to privatize and deregulate.

JAY: And it’s kind of ironic given it’s privately owned banks that have created--have triggered this whole crisis.

BUXTON: Exactly. And it still comes back to that argument that continues, the myth that this was a crisis created by public debt, whereas if you look at all the figures and the stats, the debts’ levels were very low, and they actually still remain well below U.S. levels even now across Europe, until you have the banking crisis. And it was only as the bailout of the banks--I mean, it was EUR 4.5 trillion went to bail out the banks from E.U. money. That’s aside from all the U.S. federal money that went into bail out European banks. All that money was what created the debt crisis. And yet we’re still getting the argument very much that this is a problem of public debt and public spending.

JAY: So give us some examples of the kind--the scale and types of privatizations that are taking place or plan to take place.

BUXTON: Well, perhaps the largest is Italy, where they’re expecting, projecting up to EUR 570 billion of money coming from sales, largely of huge amounts of heritage and state national assets being sold off, but also energy, transport, most of the sectors you’re talking about. Water is almost universally tackled, despite the huge controversy that there’s been for many decades now about water privatization. But also energy, transport, water, electricity, health, and a whole group of other services, and any kind of national companies, like telecommunication companies, airlines, bus companies, and so on. So it’s right across the whole sector. I think Greece is obviously where you’re seeing some of the most extensive privatization being pushed through.

JAY: Yeah, I think they’re planning to sell the two biggest ports in Greece.

BUXTON: The two biggest ports in Greece. It’s their main energy companies. The most controversial ones at the moment have been fought around water in Thessaloniki and Athens, where they’re pushing those things through.

And it’s also happening in--and perhaps one of the most controversial cases is--just to show how this is really an antidemocratic decision by the European Union is Italy. In Italy in 2011, June 2011, there was a massive referendum of the Italian population. Ninety-five percent of those who voted in the referendum voted against the privatization of water and public services. And what’s shocking is that just three months later, in August, the European Commission writes to the Italian government, saying, you need to liberalize and privatize these public services, completely ignoring Italian public opinion and really putting a sham on the argument they’re representing a democratic opinion. And it was really antidemocratic sentiments. And it was only as a result of huge public pressure that the Italian government didn’t cave in. And, finally, it was the constitutional court last year who said that actually it was illegal under the Constitution, because of the public opinion, for the Italian government to proceed with privatization. [crosstalk]

JAY: And I guess--. Go ahead. Sorry. Go ahead.

BUXTON: Yes, it’s causing--and this is something that’s not been accepted by a large amount of European people. So it’s something that’s been resisted very actively.

JAY: Well, I guess it’s one of the sectors left where capital can go. I mean, there’s so little place, in terms of the productive economy, that you can invest in, where the space isn’t already taken up, plus purchasing power is not really growing. So where’s capital going to go? It’s either going to go into derivatives and speculative areas, where people with money can kind of gamble against each other, or you can pry open these public resources with almost guaranteed markets. I mean, if you control a city’s water supply, you know you’re going to sell water.

BUXTON: Absolutely. Absolutely. And it’s almost a guaranteed ability for corporations to profit. I think that’s very much at the core of it, because it’s not about raising a lot of money.

It’s interesting. Greece was projected initially to raise EUR 50 billion through its sales. They’ve now revised that down to EUR 25 billion. That doesn’t mean less is being sold off, but they’re now expecting much less money to come in, because corporations know that Greece is in crisis. They’re able to get assets at very cheap prices, and they’re not going to pay more than they have to. So we’re not talking about a lot of money, but what they do then is have a guaranteed income stream.

And we see that very clearly with privatization that’s happening in places like the U.K., because if it’s about reducing state money, then why is it that the U.K. government in more than ten years, 15 years after railway privatization is still shelling out $4 billion or EUR 3 billion to private railway companies? It’s because those state subsidies continue, but rather than being invested in public services, it’s going towards shareholders and a few corporate executives. And what you see in U.K. and many privatized services across Europe is some of the highest prices, and much higher than public services that remain in public hands. So the money, the state money is still being given to these companies to survive, supposedly, but it’s now being funded towards shareholders and corporate bonuses rather than being invested in public services.

JAY: Yeah, it’s kind of a crazy mentality. They seem to have--they being the people that are driving this kind of agenda--they seem to have this faith that it’s, you know, only a matter of time till the economy comes back and everything will be growing again and then we’ll own all these great positions, where before their eyes they’re driving Europe into a deeper and deeper decade- or decades-long recession.

BUXTON: Yeah. I think there’s a lot of contradictions going on here. I think that suddenly this drive to deregulate and privatize, which we know is what led to the financial crisis and to the European crisis, now being used as, supposedly, a solution to it is in itself crazy. But it’s very much part of an agenda that’s being driven forward in Europe, and particularly within the European Union since the Lisbon Treaty a few years ago. It’s been a whole bunch of European measures. So this is really a continuation.

But we’re seeing that that policy is--and it’s a policy that’s pushed by some of the biggest business groups. What’s interesting is the European Commission positions are very close to that of Business Europe, which is the main--one of the biggest lobbying groups. And yet it is leading into this recession. It’s [incompr.] deep in it. It’s not resolving the crisis. And it’s likely in the end to affect corporate profits either way. But it seems that there’s an ideology here that we cannot let go of, and regardless of its costs.

And, unfortunately, its costs are not primarily economic at this point. It’s social. And we’re having some really disturbing pictures now unfolding in Europe. As part of our report, we looked at the unemployment figures, and youth unemployment in nearly all of these crisis countries that are going through the debt crisis most severely are now reaching 50 percent--that’s one in two young people under 25 unemployed. And the long-term costs of that are hard to judge, but it will actually be very severe.

JAY: And a large proportion of those young unemployed people are people that have actually graduated from university. It’s not like undereducated or underskilled or something. These are actually skilled and educated people that are unemployed.

BUXTON: And that’s going to have very long term costs, and those are--which are quite disturbing, and let alone all the other things that are being put aside, such as necessary needs for investment in green energy and in environmental conservation and so on. So there’s going to be some very serious long-term costs of this. This isn’t something that’s just about corporate profits. It’s also about the long-term future for many Europeans.

JAY: Right. Okay. Thanks for joining us, Nick.

BUXTON: Thank you.

JAY: And thank you for joining us on The Real News Network.


Posted by Elvis on 04/26/13 •
Section Revelations
View (0) comment(s) or add a new one
Printable viewLink to this article
Page 1 of 4 pages  1 2 3 >  Last »


Total page hits 12974584
Page rendered in 2.9148 seconds
40 queries executed
Debug mode is off
Total Entries: 3610
Total Comments: 341
Most Recent Entry: 04/02/2024 06:10 pm
Most Recent Comment on: 06/14/2023 06:21 pm
Total Logged in members: 0
Total guests: 12
Total anonymous users: 0
The most visitors ever was 588 on 01/11/2023 03:46 pm

Email Us


Login | Register
Resumes | Members

In memory of the layed off workers of AT&T

Today's Diversion

Mankind will not be reasoned out of the feelings of humanity. - Sir William Blackstone


Advanced Search



April 2013
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30        

Most recent entries

Must Read

RSS Feeds

BBC News

ARS Technica

External Links

Elvis Favorites

BLS and FRED Pages


Other Links

All Posts



Creative Commons License

Support Bloggers' Rights