Category: Economy

The Washington Post reports that while most of the United States was distracted by the bank bailout legislation in late-September as the markets melted, U.S. Treasury Secretary Henry Paulson quietly and illegally deregulated the tax law for the U.S. banking industry.

Paulson gave away a Quiet windfall by issuing a five-sentence notice.

The change to Section 382 of the tax code — a provision that limited a kind of tax shelter arising in corporate mergers — came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

The reason it would look like a corporate giveaway is because it is a corporate giveaway — as much as $140 billion. Most tax lawyers think Paulson acted illegally, but Congress seems unwilling to call foul so not to risk being blamed for worsening the financial mess.

They can stuff all the retraining they want into a  5 lb. sack; but until they create jobs, the unemployed are doomed.

For the first time in my entire life, I actually know people, not a person but people, who are not only unemployed, but unemployed, in foreclosure, and filing for Chapter 13 bankruptcy.  WTF!

Table D. States with statistically significant employment changes from September 2007 to September 2008, seasonally adjusted

————————————————————————-

| September | September | Over-the-year

State | 2007 | 2008(p) | change(p)

————————————————————————-

Arizona…………………..| 2,670,700 | 2,611,500 | -59,200

Florida…………………..| 8,014,500 | 7,899,000 | -115,500

Georgia…………………..| 4,153,900 | 4,092,800 | -61,100

Michigan………………….| 4,249,500 | 4,171,600 | -77,900

Nebraska………………….| 965,800 | 978,600 | 12,800

Rhode Island………………| 490,800 | 478,200 | -12,600

Texas…………………….| 10,394,700 | 10,642,600 | 247,900

Wyoming…………………..| 290,100 | 298,300 | 8,200

Cross posted at dailykos

“Now is not the time to experiment with socialism,” said Republican vice presidential candidate Sarah Palin at a rally in Loveland, Colo., on Oct. 20. She was wrong. This is exactly the time to experiment with socialism.

When everything is going as it should, that’s the time to play it safe. When things are bad and getting worse, doing the same thing you’ve always done is a death sentence. It’s plain to see that things are bad and getting worse; capitalism is not working as it should. It’s not creating prosperity — not even for the tiny few who were enjoying it while the rest of us worked more productively than ever yet saw our wages stagnate or fall. It’s not creating jobs. It’s not helping people start businesses and stay in their homes. It’s failing on every score except one: allowing us to cling to the idea that we’re a capitalist nation, and because we’re the best, capitalism is the best too. Our confidence in our economic system now rests solely on a faulty syllogism.

But before we can talk about experimenting with socialism, we have to get clear in our minds what “socialism” means.

Now that we’ve had a couple days to rest up from the long presidential campaign, it’s time to get busy again.  President-elect Obama is not going to govern from the left, or even that mythological “middle” everyone seems content to obsess over – he’ll govern from the hard right, only subtly, as Bill Clinton did.  Those who thought to use him as a springboard to enacting progressive policy failed to understand that Obama is a user, not someone who lets himself be used.  Let’s begin the work of making that fanciful notion so many of us held a reality.

I’ve done my criticism, and I’ll continue to criticize, because I take Theodore’s admonition regarding presidents to heart.  But this entry is about offering up ideas and starting points; future ones shall be along this line of argument.  We absolutely must organize, unite, and apply pressure before the tiny window of opportunity between now and January closes.  We cannot afford a repeat of the Clinton years.

A good first step is in redirecting oil policy away from the industry and more toward independence – alternative, renewable sources of energy, naturally, but in other areas as well.  The September-October issue of Science Illustrated contained a piece on bioplastics, that is, plastics made with chemicals derived from plant-based chemicals instead of petroleum.  I wasn’t able to find a direct link to the magazine article, unfortunately, but I did locate links pertaining to the subject.

http://findarticles.com/p/arti…

http://www.justchromatography….

From the first link:

Scientists are one step closer to replacing crude oil as the main source for plastic, fuels and scores of other industrial and household chemicals with inexpensive, non-polluting renewable plant matter (Science, vol. 316. no. 5831, pp. 1597-1600, June 15, 2007). “What we have done that no one else has been able to do is convert glucose directly in high yields to a primary building block for fuel and polyesters,” says Z. Conrad Zhang, senior author who led the research and a scientist with the PNNL-based Institute for Interfacial Catalysis (UC; iic.pnl.gov). That building block is hydroxymethylfurfural (HMF), a chemical derived from carbohydrates such as glucose and fructose and that is viewed as a promising surrogate for petroleumbased chemicals.

Glucose, in plant starch and cellulose, is nature’s most abundant sugar. “But getting a commercially viable yield of HMF from glucose has been very challenging,” says Zhang. “In addition to low yield, until now, we always generated many different byproducts,” including levulinic acid, making product purification expensive and uncompetitive with petroleum-based chemicals.

Zhang, lead author and former post doc Haibo Zhao, and colleagues John Holladay and Heather Brown, all from PNNL, were able to coax HMF yields upward of 70% from glucose and nearly 90% from fructose, while leaving only traces of acid impurities. To achieve this, they experimented with a novel nonacidic catalytic system containing metal chloride catalysts in an ionic liquid capable of dissolving cellulose. The ionic liquid, enabled the metal chlorides to convert the sugars to HMF.

What this means is that scientists are making glucose-derived plastics a viable alternative to the petroleum-based variety we commonly use.  As the first step toward moving away from reliance on fossil fuels, funding and regulations could be implemented so as to grow the bioplastics industry.  Glucose can be gotten from straw and saw dust – waste products generated by the agricultural and wood industries – for example, meaning freeing up more farmland for food production.

Combined with passing laws raising fuel efficiency standards, improving public transportation, and creating advertising campaigns to promote carpooling and energy efficiency, pushing bioplastics may be used to start us on the road to energy independence.  With fossil fuels dwindling, and wars to obtain control over sources increasing in frequency and intensity, this is a matter of genuine pragmatism and economic sensibility.  It’s also something to press our elected officials over.  President Obama will not be so stupid as to oppose his own political party if it passes progressive legislation.

The first, Top Economic Strategist warns of ‘Catastrophe and Revolution’ by Rob Sewell looks at warnings from a leading strategist of capitalism in the City:

We are facing the worst economic crisis since the 1930s. Despite all the efforts to bail out the banking system, the economic crisis has only just started to bite. How deep or long the crisis will last is difficult to estimate, but given the financial house of cards built up in the last world boom, the capitalist system has entered unprecedented times, in which a depression cannot be ruled out.

The current global economic crisis has taken us into an extraordinary new realm of irresponsibility. It is being depicted as a man-made calamity so vast and complex that nobody can be held accountable for it. This makes sense only to those who are afraid of being held accountable. As James Howard Kunstler puts it in his current blog post:

In the typhoon of commentary that’s blown around the world a step behind the financial tsunami that’s wrecking everything, two little words have been curiously absent: “fraud” and “swindle.”

The usual suspects in the authoritarian, “conservative,” and libertarian precincts of the blogosphere are united in proclaiming that this global meltdown, which may end up costing taxpayers trillions of dollars, is one big accident, in which no punishable acts have been committed. The reason for this strange claim of global amnesty is that that the most powerful players in government and business committed so many potentially punishable breaches of trust that nothing less than a wholesale turnover of the world’s leadership elites is called for. Because the commentariat works for these elites, they have declared that the guilty parties are effectively too big to jail. Here is a summary of the sophistries that are being deployed.

1. No individual/company/government is fully responsible.

2. The global financial system is too complicated for a cause to be found.

3. All political parties were implicated.

4. Everyone was doing it.

5. Nobody could have predicted the magnitude of the disaster.

6. Punishing people will not do any good.

A Stars Hollow Gazette

Wheeeeeeeeeeee!

When we left our story I had predicted a dead cat bounce and a sell off into the weekend.

How’d I do?

Madam Zelda!  Madam Zelda!  Is it true this house is haunted?!

SILENCE!!!  The spirits are about to speak…

In his October 20, 2008 essay, James Howard Kunstler gazes into his crystal ball and tries to answer the question: What now? Not surprisingly, he sees a devastating economic reboot.

So, that’s what I think we will get: an interval of deflationary depression followed by a destructive wave of inflation that will wipe out both constructed debt and constructed savings, scraping the financial landscape clean. There’s no question that stage one is underway. But we can be sure the giant wave of money recklessly loaned into existence in just a few weeks time will wash back through the global economy leaving a swath of destruction.

And then what? The societies of the world will be faced with the task of rebuilding systems of fruitful activity, i.e., real economies based on productive behavior rather than the smoke-and-mirrors of Frankenstein-finance con games.

Kunstler thinks people will quickly soon catch on and become an “angry peasant mob” demanding some sort of justice be dealt to the economic Frankensteins who jump started the collapse.  

I was born in ’48 and grew up in the time after WWII and the rapid growth of not only a Great Economic Expansion but the Envy of the World to the American Worker and our Products and Services. We had the power and wealth hungry who tried to suppress but we also had intelligent business minds and workers willing to fight that brought about growing wages, safety in the work place, respect for the worker, and so much more, which gave respect and expansion to not only the employer but the companies, The company owners, the executives, the worker, and for those public companies shareholders were all reaping the rewards of that wealth sharing, that’s what built the strong and ever expanding middle class and helped some break out of that and join the upper crust of the wealthy. It was the Only Successful way a true capitalist society that can achieve and expand further. Decent expanding wages for a workers hard work and company dedication gives them the ability to purchase goods and services which in turn gives growth and prosperity to other companies and workers.

Gosh darn it, the liberal media elite in this country is really makin’ it hard for me to communicate with the American people I love so much.  They twist my words about the danger of Russians invading Alaska, the dangers of William Ayers, the dangers of rollin’ out the red carpet for me at hockey games, blah, blah, blah.  So today I want to take my Vision For America directly to you, the real American people, without havin’ to worry about my words being made to look stupid.

I envision an America with a much smaller government that doesn’t get in the way of our patriotic spirit.  To cut the size of government, I propose eliminating a bunch of states that aren’t carrying their weight in the ol’ patriotism department.  States like California, New York, Illinois, Massachusetts, and Vermont are no-brainers – they’re out.  This election will be a test for some states that are unsure of their patriotism and they better think REAL HARD about whom to vote for if they want to remain in this great country of ours.  I’m watching you, Pennsylvania!  Also Virginia, Nevada, Michigan, New Hampshire, Colorado, Iowa, North Carolina, Ohio, Florida, Michigan, Indiana, Missouri, Wisconsin, North Dakota, and Montana.

Badgered by lawmakers, former Federal Reserve Chairman Alan Greenspan denied the nation’s economic crisis was his fault on Thursday but conceded the meltdown had revealed a flaw in a lifetime of economic thinking and left him in a “state of shocked disbelief.”

Former Federal Reserve Chairman Alan Greenspan, describing the current financial crisis as a “once-in-a-century credit tsunami,” acknowledged Thursday that the crisis has exposed flaws in his thinking and in the workings of the free-market system.

Duh, do you think?   Maybe now we can drive a stake through the hearts wallets of the free market, federal reserve, and Alan Greenspan.

Man oh man, if there ever was a prime example of a revelation of the greatest flaw in libertarian economic theory, it had to be Alan Greenspan’s speech.  For those not in the know, the former Federal Reserve Chairman spoke before a Congressional committee yesterday.  Long one of the grand proponents of laissez fair capitalism, his decisions, ironically, probably has lead to the complete discrediting of such economics.