Politics What is happening????

Baraka_Guru · Sep 17, 2012

redux said: ↑

A report released last Friday by the non-partisan Congressional Research Service really comes as no surprise.

Tax Cuts for the Wealthy Linked to Income Inequality... but do not spur economic growth.

Repeat.

There is no evidence to suggest that tax cuts for the wealthy stimulate savings, investment, or economic growth but do contribute to growing income inequality.
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This isn't news; it's merely the continued failure of the hypothesis of trickle-down economics.

I call it a hypothesis knowingly because most people erroneously call it a theory.

A theory is a hypothesis supported by repeated testing or observation.

redux · Sep 17, 2012

I call it a belief in a supply side santa clause and a trickle down tooth fairy.

Baraka_Guru · Sep 17, 2012

redux said: ↑

I call it a belief in a supply side santa clause and a trickle down tooth fairy.
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Reality #1: Well, trickle-down economics has worked so far, so let's keep at it!

Reality #2: Trickle-down economics would work if only we'd cut taxes!

Also, could someone rigorously fact-check this please? I want it to be ridiculously wrong:

rogue49 · Oct 9, 2012

A turn-around that's not considered a turn-around.
An improvement that's not considered an improvement.
A ratings agency that is biased and ignored...versus before when it was biased by conflict of interest...and paid attention to or taken for granted.

Up is down, down is up.
You lie you're rewarded, you tell the truth you're punished.

I can only hope that the rational and common sense powers that be take note and act...much less get their message across.
Or that the perversion's consequences collapse under it's own weight...and the people see it for what it is.

Only that I would prefer the former to the latter...because even if there is justice,
dealing with the impact of those consequences will be a challenge, if not significant.

U.S. Downgrade Seen as Upgrade as U.S. Debt Dissolved
By John Detrixhe - Oct 9, 2012

U.S. debt has shrunk to a six-year low relative to the size of the economy as homeowners, cities and companies cut borrowing, undermining rating companies’ downgrading of the nation’s credit rating.

Total indebtedness including that of federal and state governments and consumers has fallen to 3.29 times gross domestic product, the least since 2006, from a peak of 3.59 four years ago, according to data compiled by Bloomberg. Private- sector borrowing is down by $4 trillion to $40.2 trillion.

Reduced borrowing means there is less competition for the U.S. Treasury Department as it sells debt to fund spending programs to help the nation recover from the worst financial crisis since the Great Depression. Credit-rating firms are discounting the improvement even as debt, equity and currency markets suggest the U.S. is more creditworthy than before Standard & Poor’s stripped the nation of its AAA grade in 2011.

“Most people don’t pay much attention to ratings when it comes to Treasuries, as they are still considered to be risk- free assets,” Donald Ellenberger, who oversees about $10 billion as co-head of government and mortgage-backed securities at Federated Investors in Pittsburgh, said Oct. 5 in a telephone interview. “Until that perception changes Treasuries will continue to be” in demand, he said.

Record Bids

The U.S. government, which is scheduled to sell $66 billion of three-, 10- and 30-year bonds this week in three auctions starting today, has attracted a record $3.16 in bids for each dollar of the $1.59 trillion of securities it has sold in 2012, according to data compiled by Bloomberg. That exceeds the previous high of $3.04 set last year.

Deleveraging in the private sector may allow households to boost spending, which accounts for about 70 percent of the economy, and increase their capacity to pay taxes. Household wealth in the U.S. rose to $62.7 trillion as of June 30 from $51.2 trillion in early 2009, the Federal Reserve said Sept. 20.

Rising wealth would bolster the ability of the government to service its debt, even after the amount of Treasury securities outstanding soared to a record 71 percent of GDP from 36 percent five years ago.

Yields on 10-year Treasuries rose 11 basis points last week, or 0.11 percentage point, to 1.74 percent, according to Bloomberg Bond Trader data. The price of the benchmark 1.625 percent note due August 2022 fell 31/32, or $9.69 per $1,000 face amount, to 98 30/32. The yield was 1.71 percent at 8:49 a.m. in New York.

Downgrade Rejected

Even with last week’s increase and the jump in marketable Treasuries outstanding since 2007 to $10.8 trillion from $4.5 trillion, 10-year yields are down from 2.56 percent when S&P cut the U.S. one step to AA+ on Aug. 5, 2011. Egan-Jones Ratings Co. has downgraded the nation three times since July 2011, assigning it a AA-ranking on Sept. 14. Moody’s Investors Service said it may follow suit next year if the government can’t decide on a plan to reduce federal debt to GDP.

Downgrading the U.S. is premature when the two-thirds of American debt that is private is shrinking, according to Jim Vogel, head of government agency-debt research at FTN Financial in Memphis, Tennessee.

“When one trend goes counter to the only one that they seem to be looking at, that throws up a flag,” Vogel said in a Sept. 27 interview in reference to the ratings firms. “If private debt is getting on a much firmer credit foundation, why do we have a 2013 deadline for one of the thorniest fiscal problems of an entire generation?”

Fiscal Cliff

The U.S. faces a so-called fiscal cliff of $1.2 trillion in mandated spending cuts and tax increases starting Jan. 1 if Congress can’t agree by Dec. 31 on ways to reduce the deficit.

America’s ability to weather the potential drop in fiscal stimulus and rise in taxes improved last week, as the Labor Department said unemployment fell to 7.8 percent in September, the first time it was below 8 percent since January 2009.

A Pew Research Center survey of likely voters conducted Oct. 4 to Oct. 7 gave Republican nominee Mitt Romney a four- percentage point lead over President Barack Obama. A Gallup poll of registered voters Oct. 1 to Oct. 7 showed Obama advancing over Romney by five points one day after, in a shorter tracking survey of three days immediately following their Oct. 3 debate, it called the race a tie.

“We’re seeing a good debate for Romney, a good jobless number for Obama and I don’t think that fundamentally changed the race,” said Evans Witt, chief executive officer of the nonpartisan Princeton Survey Research Associates.

Growth Forecasts

While economic growth is forecast to slow to 2.1 percent in 2013 from 2.2 percent this year, that would still be better 0.5 percent contraction in the euro area, the 1.2 expansion in Japan and the U.K.’s 1.2 percent growth, separate surveys of economists by Bloomberg show.

When assessing the strength of U.S. credit, “you have to look more broadly than simply the debt-to-GDP ratio,” Zach Pandl, the Minneapolis-based senior interest-rate strategist at Columbia Management Investment Advisers LLC, said Oct. 1 in a telephone interview. The firm oversees about $166 billion in fixed-income assets.

Bloomberg compiled quarterly data on federal, non-financial corporate, financial company, state and local government and household borrowing from the New York Fed and Washington-based Fed and compared that with year-end figures earlier than 2011. The gross-domestic-product data is from the Bureau of Economic Analysis.

Declining Debt

Consumer debt declined to $11.4 trillion at the end of the second quarter, from a peak of $12.7 trillion in 2008. The market for commercial paper, a form of short-term corporate IOUs, has shrunk to $975 billion from a record $2.22 trillion in July 2007, central bank data show.

Net U.S. taxable debt issuance, which includes corporate, mortgage and Treasury securities, is forecast to fall to $821 billion in 2012, the least since 2000 and less than half the record $2.28 trillion in 2007, according to Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York. The firm is one of 21 primary dealers that trade directly with the Fed and is obligated to bid at Treasury auctions.

‘Notable Improvement’

“All you have to do is look at the total debt to GDP to see that there’s notable improvement since the crisis of 2008,” Jeffrey Caughron, an associate partner at Baker Group LP in Oklahoma City, said Oct. 3 in a telephone interview. The firm advises community banks on investments exceeding $42 billion.

S&P cited political risks and the worsening “likelihood that Congress and the Administration will agree upon a credible, medium-term fiscal consolidation plan in the foreseeable future” when it downgraded the U.S.

After the Treasury Department said S&P made a $2 trillion error in its calculations, the ratings company switched the budget projections it was using and proceeded with the downgrade. S&P denied it made a mistake and said using the government’s preferred fiscal scenario didn’t affect the credit rating.

Moody’s and Fitch Ratings give the U.S. their top rankings. Like S&P, the firms have a “negative” outlook on the U.S.

Private-sector debt is considered in S&P’s economic and external indebtedness scores, which are among the five factors it uses to consider a nation’s creditworthiness. S&P’s calculation of its sovereign debt-to-GDP ratio includes state- and local-government debt, according to the company’s rating criteria.

Moody’s View

“As our reports indicate, despite increased revenues from anticipated GDP growth, there isn’t a plausible scenario for the U.S. to grow its way out of the deficit,” John Piecuch, a spokesman for S&P, wrote Oct. 5 in an e-mail.

Moody’s said its Aaa rating for the U.S. will probably be cut one level next year unless the government agrees on a plan to reduce the ratio “over the medium term.” The firm considers debt levels in the whole economy in its sovereign ranking, said Steven Hess, the senior vice-president and lead analyst covering the U.S. at Moody’s in New York.

“As the household deleveraging goes on, because consumption is the biggest part of GDP, as long as that continues it’s harder for the federal government to reduce its deficit, to reduce its debt ratio,” Hess said Oct. 3 in a telephone interview.

‘Serial Offender’

Sixty-seven percent of 1,031 global investors in a Bloomberg Global Poll in September 2011 said S&P’s move was justified. Pacific Investment Management Co.’s Bill Gross, who runs the world’s biggest bond fund, said last week the U.S. will no longer be the first destination of global capital in search of safe returns unless fiscal spending and debt growth slows.

“The U.S., in fact, is a serial offender, an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth,” Gross, who manages the $277.7 billion Total Return Fund (PTTRX), wrote in his monthly investment outlook posted Oct. 2 on Newport Beach, California-based Pimco’s website.

Gross eliminated government-related debt from the Total Return Fund in February 2011 and said in March of that year that Treasuries needed to be “exorcised” from portfolios. The fund lost against 70 percent of its peers that year, prompting Gross to capitulate and buy U.S. government debt. The company’s flagship fund has beaten 97 percent of its peers this year, Bloomberg data show.

Dollar, Stocks

Treasuries returned 9.8 percent in 2011, the most since 2008 when including reinvested interest, Bank of America Merrill Lynch Indexes show, as yields overall have fallen 43 basis points to 0.96 percent since the S&P cut.

IntercontinentalExchange Inc.’s Dollar Index (SPX), which tracks the currency against those of six major trading partners, has climbed 6.7 percent since the cut to 79.55, above its average for the past five years of 78.96. The S&P 500 Index has rallied 24.5 percent including dividends.

Credit-default swaps tied to U.S. debt, which typically fall as investors’ perceptions of creditworthiness rise and increase as they deteriorate, have fallen to 41.2 basis points from 55.4 basis points on the day of S&P’s downgrade and a record 100 in February 2009, according to data provider CMA. The firm is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.

Toss Up

Predicting the reaction to rating changes by S&P or Moody’s is little more than a toss up, with yields moving in the opposite direction than suggested 47 percent of the time, according to data compiled by Bloomberg in July. Yields were measured after a month relative to U.S. Treasury debt, the global benchmark.

The U.S. isn’t the only nation to see its bonds rally after a downgrade. France’s 1.08 trillion euros ($1.40 trillion) of debt maturing in a year or more gained 8 percent since it was cut by S&P to AA+ on Jan. 13, more than double the gains for the rest of the global government-bond market.

Ratings companies, which a congressional panel said helped ignite the financial crisis by inflating grades on securities backed by subprime mortgages, are no longer trusted by the world’s biggest investors, according to the former head of structured finance at S&P.

David Jacob, who was fired from S&P in December, said in a June interview that grading government bonds is outside ratings companies’ traditional areas of expertise because “you’re talking about politicians, you’re talking about legislators, you’re not talking about credit risk.”

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Joniemack · Oct 9, 2012

The left has long been accused of falsely portraying southern right wing Christian Republicans as bigots. Ann Coulter's new book claims that it's the Republicans who care, and have always cared about the plight of the downtrodden. No bigots on the Right, according to Ann. A good part of it, from what I hear (I'll neither read it nor plug it) delves almost completely into Liberal racism and the Left's agenda to destroy the African American race by forcing entitlement and anti-poverty programs upon them in an effort to prevent them from becoming productive equals in society.

A few years ago I might have questioned whether the portrayal was a worn out stereotype. SRWCRs did seem to be turning the corner. I think it's become clear of late that corner was never turned by many. All they'd been doing was hiding their bigotry in a political and social environment that had become intolerant of it.

Welcome to the new America where bigotry and racism have been allowed to come out of hiding.

Recent comments or writings by Republican politicians:

Ark Rep. Jon Hubbard "Slavery may have been a blessing"
Jon Hubbard, Arkansas Legislator, Says Slavery May 'Have Been A Blessing' In New Book

Ark Rep. Charlie Fugua " Deport all Muslims" " Create a system that allows parents to seek judicial consent to kill rebellious children" "Liberals are the Anti-Christ"
Charlie Fuqua for Arkansas State Representative - Blogs

Rep Loy Mauch "If slavery were so God-awful, why didn’t Jesus or Paul condemn it, why was it in the Constitution and why wasn’t there a war before 1861?"
Loy Mauch, Arkansas Lawmaker, Defended Slavery In Letters To The Editor

Ohio Sec of State Jon Husted (regarding his decision to open early voting locations on weekdays only - he thought he was speaking off the record) "I guess I really actually feel we shouldn't contort the voting process to accommodate the urban - read African-American - voter-turnout machine,"
Ohio Republican Party: GOP Chairman Made Racist Remarks Because He Thought He Was Speaking Off the Record

SC Rep. Alan Clemmons "Amen Ed" in response to one of his constituents who was praising Mr. Clemmons for his voter ID legislation. Mr. Ed Loziol, commenting on a Democratic proposal to compensate people who might struggle financially in obtaining the ID, remarked that if it was adopted "It would be like a swarm of bees going after a watermelon." The Rep's emailed reply "Amen Ed"
SC lawmaker said ‘Amen’ to supporter’s racist email | The Raw Story

Newt Gingrich

“Really poor children in really poor neighborhoods have no habits of working and have nobody around them who works. So they literally have no habit of showing up on Monday. They have no habit of staying all day. They have no habit of ‘I do this and you give me cash,’ unless it's illegal.”

There's plenty more.

And all of this considered acceptable discourse as far as their supporters are concerned. Get enough of these creatures elected into office and they'll have to exhume Lincoln, Johnson and MLK to get things back on track.

rogue49 · Oct 18, 2012

Everyone I talk to is feeling it.
Frankly I think we're being fee'd to death...death by a thousand cuts.

An Inside Look at the Middle-Class Squeeze
By David Francis | U.S.News & World Report LP – Tue, Oct 16, 2012

The decline of the middle class has become a focal point of this year's presidential election. Each candidate claims their plan would put an end to the middle-income slide that accelerated during the Great Recession and still shows no signs of abating.

But lost in the rhetoric about the decline of the middle class is the reality of the decline. Nearly everyone is aware that the middle class is struggling, but few understand how the struggle plays out in everyday life.

According to experts, the decline is fundamentally reshaping the U.S. economy. The Great Recession has affected the way the middle class feels about higher education, government, and the future. Even their health has suffered as a result of the decline.

"Their economic future isn't very bright," says Timothy Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin--Madison. "Wages and income are flat. Transportation, childcare costs, and healthcare costs are going up, and your income isn't."

Smeeding calls the current state of the middle class "the squeeze." Even people who have jobs are being forced to squeeze more and more out of their income, despite the fact that incomes aren't growing. "These people live on earnings. They're working on not great wages and their jobs are threatened," he says. "They don't see any hope in the future of things getting better."

By the numbers. Hard numbers paint a stark picture of the middle-class decline. According to an August 2012 Pew Research Center report, only half of American households are middle-income, down from 61 percent in the 1970s. In addition, median middle-class income decreased by 5 percent in the last decade, while total wealth dropped 28 percent. According to the Economic Policy Institute, households in the wealthiest 1 percent of the U.S. population now have 288 times the amount of wealth of the average middle-class American family.

The income decline has caused many people to accumulate high levels of debt. And as the cost of college increases, more people are saddled with tens of thousands of dollars in student loans after they graduate.

Only 23 percent of people were confident they had enough money to get them through retirement, according to the Pew report. It also found that fewer people believe hard work will get them ahead in life.

"You have far less disposable income and increasing levels of debt," says David Madland, director of the American Worker Project at the Center for American Progress. "You have this fundamental squeeze on most members of the middle class. It's impacting their quality of life and their outlook for the future."

Behind the numbers. These are the kind of statistics used by politicians to sell policies, but they tell little about the realities behind the numbers--or how the decline of the middle class plays out in people's everyday lives.

More and more middle-income families are turning to government programs such as food stamps, Medicaid, and unemployment insurance. According to a recent Senate Budget Committee Report, "Among the major means tested welfare programs, since 2000 Medicaid has increased from 34 million people to 54 million in 2011 and the Supplemental Nutrition Assistance Program (SNAP, or food stamps) from 17 million to 45 million in 2011. Spending on food stamps alone is projected to reach $800 billion over the next decade."

People are also saving less. Wage increases have not kept up with increases in the cost of living, forcing people to dig deeper into their savings to make ends meet. Meanwhile, many middle-class workers who lost their jobs during the recession remain unemployed.

"The most pressing worry is the diminished economic security of middle-class families. The long-term unemployed have completely drained their savings," says Kristen Lewis, co-director of Measure of America, a project of the Social Science Research Council that explores the distribution of opportunity and well-being in the United States. "Those who are working have jobs without healthcare or sick leave. They have no retirement savings plan. There's no end in sight to that."

Lewis adds that the economic state of the middle class takes its toll on their health. A series of recent reports found that life expectancy for whites without a high school diploma--once the backbone of the middle class--has dropped faster than for other groups. The reports linked the decline in large part to the lack of access to healthcare.

Can the middle class come back? According to Lewis, current economic and political conditions won't provide the middle class with the same security it needed to rebound in the years following World War II. "In the post-war period, there were a lot of programs put in place to help people," such as education and homeownership assistance, says Lewis.

Madland says increasing the minimum wage and improving entitlement programs like Social Security are key to rebuilding the middle class. "[After the Great Depression], we made major policy changes to ensure we have a strong middle class. We let too much of it wither on the vine," he says. "We need something approaching that kind of effort."

But for Wisconsin's Smeeding, one thing has to happen before these policy changes can occur: "We have to get the economy growing again."
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ASU2003 · Oct 18, 2012

People need to really work on reducing their expenses. Like by a lot. Yes, fees are everywhere, but if you can't find a thousand or two of waste in your budget, you aren't trying hard enough. Now, part of the reason the economy is different today than it was in 2007 is because a lot of people aren't borrowing money from credit cards to fund a higher standard of living than they could afford. But, there are cheaper alternatives to most of the money decisions people make. They just don't choose them for one reason or another.

Oh, and people don't plan for the worst. Unemployment isn't that bad if you are prepared for it and have a plan for what to do (along with a few months living expenses saved up). Maybe you will need to find another job, maybe you can start a business with other unemployed people and come up with some new ideas, maybe you just sell the excess stuff you have and do some real cheap travel around the world. You should have a plan for what you will do the first day, weekend, month, and year that you don't have a job. Both to keep yourself busy and productive, to relax a little because you deserve it, to better your own life, to do your own research into the issues, and to help others.

rogue49 · Oct 22, 2012

What I'm hoping...and what Wall Street is likely half scared of...is that if Obama wins a 2nd term,
then untethered from having to win another...he'll start taking quite a few into account.

We'll see, but my sense of justice has not been satisfied.

How to Crash an Economy and Escape the Scene
By William D. Cohan - Oct 21, 2012

Is it time to put the Great Recession behind us?

Not in terms of the economy -- which remains bogged down with high employment, low growth and other aftershocks -- but rather when it comes to demanding a rigorous effort to hold Wall Street bankers, traders and executives accountable for their role in causing the financial crisis.

Should we just chalk it up to such simplified explanations as “animal spirits ran amok” and “these things happen occasionally”? Or should we continue to expend scarce political and law-enforcement resources trying to get to the bottom of what happened, and why, with a goal of holding the right people legally and financially accountable?

It’s a conundrum, especially since many Americans have lost enthusiasm for the fight. But the path we ultimately take will reveal to us and the world much about who we are as a people and what ethics, values and morality we stand for. It will also have serious lasting implications if we hope to avoid a rerun of what happened over the last five years.

At the moment, the message we are broadcasting far and wide is: There will be no justice; there will be no accountability; let’s return to the status quo as quickly as possible.

Moving On

There are, not surprisingly, powerful and articulate voices in favor of moving on. In his book “Unintended Consequences,” Edward Conard, a former Bain Capital partner of Mitt Romney (who is willing to say the things Romney wouldn’t dare and has given $1 million to a political action committee that supports the Romney campaign), argues forcefully that occasional market collapses such as 1929 and 2008 are a small price to pay for a system of capital allocation that has produced vast sums of wealth, extraordinary technical and financial innovation, and an incentive system that rewards people handsomely for taking risks.

For better or for worse, Conard writes, this is the country that produced Apple Inc. (AAPL), Google Inc. (GOOG) and Facebook Inc. (FB), among the most admired corporations in the world. Conard believes the sooner we get back to untethering Wall Street’s animal instincts the better. That means modest regulation, at best, and an end to any efforts at meting out justice for those personally responsible for the financial crisis because, hey, stuff happens.

Likewise, in a recent speech at the Council on Foreign Relations in Washington, Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase & Co. (JPM), returned to many of his favorite themes. One was how little he cares for much of what is in the Dodd-Frank law and the proposed Volcker Rule which limits banks’ ability to trade for their own account. He reiterated his belief that the right kind of financial regulation is necessary, in the vein of laws preventing drunk driving. But, like Conard, Dimon said the new regulatory environment is holding back economic growth.

He said he had discussed the topic with business owners and executives around the country: “They all say it’s terrible. So it’s not just banks. We’ve done it to ourselves, folks. We’re shooting ourselves in the foot and we’re doing it every day. Get rid of that wet blanket and this thing will take off.”

Even Lloyd Blankfein, the chairman and chief executive officer of Goldman Sachs Group Inc. (GS), has started to make noise again after a few years of laying low. As part of what the press has nicknamed his No Apologies Tour, which has taken Blankfein to forums and media outlets across the country, he has also called for jettisoning the wet blanket. “Getting rid of some regulations and rules that are impairing people from investing vast pools of liquidity that are on the sideline, that are not owned by the government, that are theirs to invest but are just sitting on the sideline” will help get the economy humming again, he told CNBC.

Volcker Rule

The Wall Street Journal reported last week that while the rest of us have moved on when it comes to the nitty-gritty details of what, say, the Volcker Rule will end up looking like when it is finally written, lawyers and lobbyists for Wall Street firms are working the regulators over with renewed intensity. JPMorgan Chase and Goldman Sachs have spent, respectively, $12.7 million and $8.3 million since the passage of the Dodd-Frank law in July 2010 on lobbying the regulators who are still drafting the final regulations. Goldman asked last week for an exemption for certain investments from a Volcker rule proposal that would limit a bank’s total investment in hedge and private-equity funds to 3 percent of Tier I capital. Why? Goldman makes a boatload of money investing this way.

On the other side of the debate are people like Elizabeth Warren, the Democratic U.S. Senate candidate from Massachusetts, who still believes that accountability for the bad behavior that occurred years ago on Wall Street is essential. “People feel like the system is rigged against them,” she said at the Democratic National Convention in September. “And here’s the painful part: they’re right. The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs -- the same ones who wrecked our economy and destroyed millions of jobs -- still strut around Congress, no shame, demanding favors, and acting like we should thank them. Anyone here have a problem with that? Well I do.”

I’m no fan of Elizabeth Warren -- I fear that her populism and condescending tone will make her an ineffective Senator (should she win) -- but I agree with her completely that we cannot give up the fight to hold people responsible for what happened on Wall Street in the years leading up to the financial crisis.

Milking Banks

No one -- no one -- on Wall Street has paid a serious price. The one criminal prosecution -- of the Bear Stearns hedge-fund managers Ralph Cioffi and Matthew Tannin -- failed miserably. Every bank has received its slap on the wrist, has had its insurance carrier or its shareholders cough up a few hundred million dollars -- the cost of doing business, don’t you know -- and moved on. And governments, most recently New York State, have decided to milk the banks for badly needed cash rather than charge the miscreants themselves.

Once upon a time, prosecutors were vigilant about prosecuting bad financial behavior on Wall Street. According to the Financial Times, during the savings-and-loan crisis of the mid 1980s, some 3,500 bankers were jailed for their transgressions. I still haven’t heard a good reason why the number of successful prosecutions in the wake of our most recent financial crisis remains at zero.

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Baraka_Guru · Oct 22, 2012

What is the goal of Wall Street but to squeeze as much wealth out of the economy as possible? The nice precondition/side effect is providing the economy access to capital, which certainly makes things happen, but when those in charge have no one to answer to and no consequences for reckless actions, one can only expect to see the system stumble and crash when things get out of hand.

One can also expect the burden of such negative outcomes to be shifted to those whose only wrongdoing was trusting those making the decisions.

rogue49 · Oct 29, 2012

cue Liza & Joel signing "Money makes the world go around..."

hmm...I love the name of this headline.

Billionaires Going Rogue
By THOMAS B. EDSALL - October 28, 2012

If there is one rule of thumb governing campaign finance regulation, or the lack thereof, it is that the consequences of any changes in the system are unpredictable.

In 2002, when Congress enacted the McCain-Feingold law barring large "soft money" contributions from corporations, unions and rich people to the political parties, many observers assumed that the Democrats would suffer more. The party had never fully cultivated a small donor base and had consistently been more dependent on mega-contributions than the Republican Party.

In less than two years, this assumption was proven wrong. First, in the 2004 election, small donors in droves gave their credit card numbers to the Democratic campaign of John Kerry, and Kerry was able to keep pace with George W. Bush, dollar for dollar. Four years later, the cash flow to Barack Obama swamped John McCain. The Internet, and with it the ability of campaigns to inexpensively reach millions of prospective donors, permanently transformed fundraising.

In 2010, campaign finance law was turned on its head. The Supreme Court decision in Citizens United v. Federal Election Commission, and appeals court decisions such as Speech Now v. F.E.C., opened the door to unlimited contributions to technically independent political action committees (super PACs) from corporations, unions and individuals.

The result has been a stupefying array of PACs, 501(c)4s and 501(c)6s that even professionals can barely keep track of. The future that Buckley v. Valeo set in motion almost 40 years ago has arrived, and the current multiplicity and multidirectionality of "reform" has overwhelmed both the people and the parties.

The virtually unanimous view throughout the course of four decades of revised regulation was that the Republican Party and its candidates would be the major beneficiaries, and, so far, that has been true.

The first chart, provided by the Center for Responsive Politics, shows that outside spending tilted left in every year from 2000 to 2008, but that in 2010 - in the aftermath of deregulation - the balance skewed decisively to the right. In the current 2011-12 election cycle, it shifted overwhelmingly to the right:

The movement rightwards of almost half a billion dollars in this cycle alone - signified by the red bar on the graph representing Republican donations - is not, however, the pure gold that analysts on both sides expected.

While, the rapid growth of well-financed and autonomous competitors threatens all existing power structures, the bulk of the costs are likely to fall on the Republican Party. The right wing of the Republican Party has more disruptive potential than the left wing of the Democratic Party because it is more willing to go to extremes: see the billboards showing Obama bowing down before an Arab Sheik, or the ads and DVD claiming that Obama is the bastard son of the African American communist, Frank Marshall Davis.

There are, furthermore, structural and historical differences between the parties: the Republican Party and the conservative establishment is institutionally stronger than the Democratic Party, with an infrastructure that served as a bulwark through the 1960s and 70s - the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Olin Foundation, etc. - when Republicans appeared to be a permanent congressional minority. Its financial prowess enabled the party to enforce more discipline on its consultants and elected officials. The Republican establishment also exercises more authority over policy and candidate selection than does its Democratic counterpart.

In recent years, the Democratic Party organization has gained some strength and it plays a much more active role in campaigns at all levels than in the past, but as an institutional force capable of command and control, it remains light years behind the Republican Party.

Republicans, in contrast to Democrats, prefer hierarchical, well-ordered organizations, and are much more willing to cede authority to those in power. Democrats, despite the discipline of individual campaign efforts, tend more toward anarchy than hierarchy. Historically, one result of this partisan difference is that the Republican establishment has tightly managed candidate selection at the presidential level. With extraordinary consistency, the party has crushed insurgent candidates and selected the next in line. Ronald Reagan and Bob Dole, for example, both had to wait until it was their turn.

The Republican establishment has a full arsenal of weapons at its disposal, including endorsements, favored speaking engagements at key party gatherings, leverage over top consultants and a signaling process to show who has been anointed from on high.

The most powerful weapon of all was always the oversight exercised by party leaders over the flow of money to candidates. Every four years when the nomination process began, business leaders, Republican-leaning trade associations, top corporate law firms and investment bankers slowly formed a consensus behind a favored candidate.

The establishment snuffed out insurgencies, including candidates from the social right - Pat Buchanan, Pat Robertson and Gary Bauer - and candidates from the economic right like Jack Kemp and Steve Forbes. None of these outsiders rose past marginal status, although their presence in primary contests often forced the mainstream candidate to make concessions that proved damaging in the general election.

Compare that history of unbroken authoritarian dominance to the 2012 Republican nomination fight.

Unleashed by Citizens United, a handful of renegade billionaires made life miserable for Mitt Romney, the establishment candidate. More importantly, it only took four men - Sheldon Adelson, the Las Vegas and Macao casino mogul; Harold Simmons, a Dallas-based leveraged buyout specialist; Foster Friess, a conservative Christian and a successful investor; and William Dore, a Louisiana energy company C.E.O. - to stun traditional party power brokers during the first four months of 2012.

The millions of dollars these men put into the super PACs associated with two clearly marginal candidates, Newt Gingrich and the former Pennsylvania Senator Rick Santorum, turned the primary process into an open contest, giving full voice to the more extreme wings dominated by the Tea Party and the evangelical right.

The newly empowered billionaires are positioned to challenge the Republican Party at its point of greatest vulnerability, during the primaries. The three major party organizations - the Republican National, Congressional and Senatorial Committees - cannot, except in unusual circumstances, intervene in primaries. Those are to be decided by voters, not the party.

The new class of financial bosses, equipped to legitimate primary candidates at all levels, has no such restriction over participation in primaries. Instead, the incentives are substantial to engage full force in the nomination process where the marginal value of each dollar is higher and more likely to influence the outcome than in the general election.

These new players, along with their super PACs, undermine the influence of the parties in another crucial way. Before Citizens United, the three major Republican Party committees exerted power because their financial preeminence gave them the final word on the award of contracts to pollsters, direct mail, voter contact, and media consultants - very few of whom were willing to alienate a key source of cash.

The ascendance of super PACs creates a separate and totally independent source of contracts for the community of political professionals. Super PACs and other independent groups already raise more than any of the political party committees and almost as much as either the Republican or Democratic Party committees raise in toto.

This chart shows the rapidity of the growth of independent spending:

And this chart shows the amounts raised so far this year by the party committees:

Nathan Persily, a professor at Columbia Law School and a political scientist, made the point to me with a question: "Who is the Republican Party in the Citizens United age? If you had to point to the 'Republican Party' would you be more likely to point to Reince Preibus (and implicitly the R.N.C.) or Karl Rove (and Crossroads G.P.S.)? I think candidates might consider Rove more important."

Preibus is the chairman of the R.N.C.; Karl Rove founded American Crossroads, a super PAC, and Crossroad GPS, a tax exempt independent expenditure organization that is not required to disclose donors. So far in the 2011-12 election cycle, American Crossroads and Crossroads GPS have spent $174.28 million, a sum two million dollars greater than the $172.2 million spent by the Republican Congressional and Senatorial Committees combined.

By now you may have the question in the back of your mind: who cares about the political parties? Aren't they just agents of the status quo at a time when innovative thinking is needed? Maybe diminishing their role will help lessen polarization and open up the system?

There may be some truth to this and perhaps the benefits will outweigh the costs. Conversely, the diminishment of the parties means that the institutions with the single-minded goal of winning a majority will be weakened. When parties are influential, they can help keep some candidates and office holders from going off the ideological deep end. The emergence of independently financed super PACs give voice to those with the most extreme views. An ad like this is likely to alienate as many citizens as it motivates:

Predictions are notoriously dangerous, given the multitude of possible outcomes. If the parties are eviscerated, the political system could adjust itself and regain vitality. But I doubt it. For all their flaws, strong political parties are important to a healthy political system. The displacement of the parties by super rich men determined to flex their financial muscles is another giant step away from democracy.

Thomas B. Edsall, a professor of journalism at Columbia University, is the author of the book "The Age of Austerity: How Scarcity Will Remake American Politics," which was published earlier this year.

Copyright 2012 The New York Times Company
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Joniemack · Oct 29, 2012

This close to the election, questions about voting machine tampering are inevitable. But even if no chicanery occurs, negative perceptions remain.
Romney Family Investment Ties To Voting Machine Company That Could Decide The Election Causing Concern - Forbes

rogue49 · Nov 3, 2012

Apparently...Same Old Shit

Tough campaign? Much worse in 1800

As the mud starts to fly in the last days of Campaign 2012, historian and author David McCullough tells Morley Safer that the current name-calling pales in comparison to the days of old. Recounting how Thomas Jefferson defeated John Adams in 1800, McCullough says Jefferson paid a journalist to write that his opponent was a mentally unbalanced hermaphrodite. Adams spread the word that a Jefferson victory would mean murder, rape, and robbery in the streets. But the two candidates never got along apparently.

Philadelphia's historic Carpenter's Hall is a backdrop for this "60 Minutes" story that looks at elections and the country's current state through the prism of history.
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Nice to know The Founding Fathers stood above it all.
Not quite the same vision from history class...

No wonder they didn't trust ANYBODY and set up the system they did.

rogue49 · Nov 6, 2012

Compliments of this year's campaign...
We have the "excellent" lessons learn, in case your kids want to go into American politics.

Lessons for kids from a long campaign
By Richard Cohen, Published: November 5

As (something) of a public service, I now offer my Children’s Guide to the 2012 Elections — or lessons young people can learn from American politics. I offer this in the spirit of bipartisanship for which I am noted and with absolute faith that — eight years of George W. Bush notwithstanding — the people are never wrong. Okay, kiddies, here are the lessons:

Never Give Up. The person who best exemplifies this is Todd Akin, the senatorial candidate in Missouri who enriched the English language with the phrase “legitimate rape.” When such a thing happens to some unfortunate women, he claimed, conception is impossible. But should the rape be illegitimate, that is a different story entirely and either a boy or a girl might be born. For some reason, Akin’s fellow Republicans demanded he quit the race, but he steadfastly refused. Like a mule, he would not budge. (Lance Armstrong also could be cited in this category, but he is not a politician . . . yet.)

Say You Have a Plan. Richard Nixon did this in 1968 when he said he had a secret plan to end the Vietnam War. He did, and the war ended only seven years later — just as he presumably planned. This year, boys and girls, Mitt Romney said he has a plan to revive the economy, balance the budget and, I think, get rid of acne. His plan is a secret. You, too, can have secret plans — like how to get into college or straighten up your room. Try this out on your mom to see if she is as gullible as the American people. Let me know.

Remember, No One’s Crazy Anymore. The clear winner in this category is the Senate candidate from Connecticut, Linda McMahon. In two tries, she has spent about $100 million of her own money to reach the Senate. To spend $100 million for your own proclaimed greatness ought to be in the Diagnostic and Statistical Manual as a mental disease. Try something similar with your mom and dad or with your teachers. Say you’re great. Repeat it over again. Also say you have a jobs plan. Let me know if it works.

It Doesn’t Matter What You Believe as Long as You Believe Something. Say small government is best. Is this true? It doesn’t matter. You believe it. Say state government is better than the federal government. Is this true? Not in New York or California or Illinois or Texas, but everyone believes it anyway. Kiddies, you have to say these things with conviction, strongly, emphatically. In your own life, pick something that’s stupid and cling to it. It will work.

Only a Hypocrite Denounces Hypocrisy. Listen up, children. Just because you once said you believed something doesn’t mean you have to still believe it. Google “Romney on abortion” or “Obama on the health-care mandate.” First, say you never said it and then, if you have to, say you changed your mind. Quote Emerson: “A foolish consistency is the hobgoblin of little minds.” No one remembers what you said, anyway. Take it from me, the Hypocrisy Imperative is stronger than the sex drive — and with conservatives, often linked.

Silence Is Golden. Once again, we have to turn to Romney. He refused to make public the bulk of his tax returns, and while he was criticized for a lack of candor, he was not criticized for what is on those returns. (More horses?) This is similar to having a secret plan but a bit different. If you want to know how, I can’t tell you. (See, it works.)

Lying Works. Notice, kids, I did not say that lying is right, just that it works. Stand before a mirror and practice. Say the lie over and over again. Have a friend call you a liar. Practice not blushing or blinking. Make up facts. Finally, turn away from the other guy dismissively. Make him look small and petty.

Never Challenge a Myth. For instance, every Republican cites Ronald Reagan as a great president. Reagan never asked anyone to sacrifice anything and had contempt for conservation. Republicans now preach sacrifice, a balanced budget and the greatness of Reagan. Remember, a nice smile is better than good math any day.

The Bogeyman Is Real. See how the candidates used China or Russia or the undeserving rich to their own benefit. You can do the same thing in your own lives. Choose a sibling for this — or maybe a teacher. Everyone fears something. Find out what it is, exaggerate and repeat. If you don’t think this works, study the war in Iraq.

Richard Cohen Is Always Kidding. Maybe...

© The Washington Post Company
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samcol · Nov 6, 2012

Joniemack said: ↑

This close to the election, questions about voting machine tampering are inevitable. But even if no chicanery occurs, negative perceptions remain.
Romney Family Investment Ties To Voting Machine Company That Could Decide The Election Causing Concern - Forbes
Click to expand...

people have been trying to bring these questionable machines up every election, but it never catches on. there are quite a few accounts of vote flipping on each individual vote cast, and the ability to flip entire vote totals at the precinct level reported. plus many machines have ties to politicians themselves. that's why i don't have a lot faith in the voting system.

there are already youtube videos of them malfunctioning for whatever reason this election.

rogue49 · Nov 8, 2012

Actually, I'm putting this up here...because it's not just a GOP issue...but any party, especially the Dems should learn from it.
Money just causes havoc.

And I agree with one of the pundits this morning...it's not the Presidential or Senatorial elections that if affects more,
those are have shown to be more about the candidate and campaigns...not the money,
but it is likely to have more significance on the House elections... more bang for the buck.

Since they all go every 2 years...they're always hustling for cash...and the smaller venues makes a difference against their opponents resources.
Super-PAC can REALLY have some tug & pull influences on these.

At least, if you can't restrict the funds under "free speech" (barring a Constitutional amendment...)
make it transparent ...no more anonymous donations. If you pay...you have to show you played.
This will get rid of the dark around the "shadow money". Plus remove any illegal money laundering (something they're prosecuting in CA)

Little to Show for Cash Flood by Big Donors
By NICHOLAS CONFESSORE and JESS BIDGOOD - November 7, 2012

At the private air terminal at Logan Airport in Boston early Wednesday, men in unwrinkled suits sank into plush leather chairs as they waited to board Gulfstream jets, trading consolations over Mitt Romney’s loss the day before.

“All I can say is the American people have spoken,” said Kenneth Langone, the founder of Home Depot and one of Mr. Romney’s top fund-raisers, briskly plucking off his hat and settling into a couch.

The biggest single donor in political history, the casino billionaire Sheldon Adelson, mingled with other Romney backers at a postelection breakfast, fresh off a large gamble gone bad. Of the eight candidates he supported with tens of millions of dollars in contributions to “super PACs,” none were victorious on Tuesday.

And as calls came in on Wednesday from some of the donors who had poured more than $300 million into the pair of big-spending outside groups founded in part by Karl Rove — perhaps the leading political entrepreneur of the super PAC era — he offered them a grim upside: without us, the race would not have been as close as it was.

The most expensive election in American history drew to a close this week with a price tag estimated at more than $6 billion, propelled by legal and regulatory decisions that allowed wealthy donors to pour record amounts of cash into races around the country.

But while outside spending affected the election in innumerable ways — reshaping the Republican presidential nominating contest, clogging the airwaves with unprecedented amounts of negative advertising and shoring up embattled Republican incumbents in the House — the prizes most sought by the emerging class of megadonors remained outside their grasp. President Obama will return to the White House in January, and the Democrats have strengthened their lock on the Senate.

The election’s most lavishly self-financed candidate fared no better. Linda E. McMahon, a Connecticut Republican who is a former professional wrestling executive, spent close to $100 million — nearly all of it her own money — on two races for the Senate, conceding defeat on Tuesday for the second time in three years.

“Money is a necessary condition for electoral success,” said Bob Biersack, a senior fellow at the Center for Responsive Politics, which tracks campaign spending. “But it’s not sufficient, and it’s never been.”

Even by the flush standards of a campaign in which the two presidential candidates raised $1 billion each, the scale of outside spending was staggering: more than $1 billion all told, about triple the amount in 2010.

Mr. Obama faced at least $386 million in negative advertising from super PACs and other outside spenders, more than double what the groups supporting him spent on the airwaves. Outside groups spent more than $37 million in Virginia’s Senate race and $30 million in Ohio’s, a majority to aid the Republican candidates.

The bulk of that outside money came from a relatively small group of wealthy donors, unleashed by the Supreme Court’s Citizens United decision, which allowed unlimited contributions to super PACs. Harold Simmons, a Texas industrialist, gave $26.9 million to super PACs backing Mr. Romney and Republican candidates for the Senate. Joe Ricketts, the owner of the Chicago Cubs, spent close to $13 million to bankroll a super PAC attacking Mr. Obama over federal spending.

Bob Perry, a Texas homebuilder, poured more than $21 million into super PACs active in the presidential race and the Senate battles in Florida and Virginia, where Democrats narrowly prevailed. A donor network marshaled by Charles and David Koch, the billionaire industrialists and conservative philanthropists, reportedly sought to raise $400 million for tax-exempt groups that are not required to disclose their spending.

Mr. Adelson’s giving to super PACs and other outside groups came to more than $60 million, though in public Mr. Adelson did not seem overly concerned about the paltry returns on his investment.

“Paying bills,” Mr. Adelson said on Tuesday night when asked by a Norwegian reporter how he thought his donations had been spent. “That’s how you spend money. Either that or become a Jewish husband — you spend a lot of money.”

Flush with cash, Republican-leaning groups outspent Democratic ones by an even greater margin than in 2010. But rather than produce a major partisan imbalance, the money merely evened the playing field in many races.

In several competitive Senate races, high spending by outside groups was offset to a large extent with stronger fund-raising by Democratic candidates, assisted at the margins by Democratic super PACs. For much of the fall, Mr. Obama and Democratic groups broadcast at least as many ads, and sometimes more, in swing states than Mr. Romney and his allied groups, in part because Mr. Obama was able to secure lower ad rates by paying for most of the advertising himself. Mr. Romney relied far more on outside groups, which must pay higher rates.

Haley Barbour, a former Mississippi governor who helped Mr. Rove raise money for American Crossroads and its sister group, Crossroads Grassroots Policy Strategies, said that without a blitz of coordinated anti-Obama advertising in the summer, the campaign would not have been as competitive.

“I believe that some of that money actually kept Romney from getting beat down by the carpet-bombing he underwent from the Obama forces,” Mr. Barbour said. “I did look at it more as us trying to keep our candidates from getting swamped, like what happened to McCain.”

Some advocates for tighter campaign financing regulations argued that who won or lost was beside the point. The danger, they argued, is that in the post-Citizens United world, candidates and officeholders on both sides of the aisle are far more beholden to the wealthy individuals who can finance large-scale independent spending.

“Unlimited contributions and secret money in American politics have resulted in the past in scandal and the corruption of government decisions,” said Fred Wertheimer, the president of Democracy 21, a watchdog group. “This will happen again in the future.”

But on Wednesday, at least, the nation’s megadonors returned home with lighter wallets and few victories.

As the morning wore on at Logan Airport, more guests from Mr. Romney’s election-night party at the Boston Convention and Exhibition Center trickled in, lugging garment bags and forming a small line at the security checkpoint.

“It’s going to be a long flight home, isn’t it?” said one person, who asked not to be identified.

The investor Julian Robertson, who held fund-raisers for Mr. Romney and gave more than $2 million to a pro-Romney super PAC, arrived with several companions. Mr. Robertson spotted an acquaintance: Emil W. Henry Jr., an economic adviser and a fund-raiser for Mr. Romney, to whom Mr. Robertson had offered a ride on his charter.

“Aww, group hug,” Mr. Henry said.
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rogue49 · Nov 9, 2012

Are we finally holding our politicians accountable??

Will integrity come around again?

Ethics in Play, Voters Oust Incumbents Under Inquiry
By ERIC LIPTON - November 8, 2012

WASHINGTON — It turns out that ethics really do matter here in Washington, at least according to some of the nation’s voters.

In races around the country, an unusually large number of lawmakers facing charges of wrongdoing were unceremoniously ousted from their jobs on Tuesday — which is quite rare, because more than 90 percent of the incumbents seeking re-election to Congress typically return for another term.

The list of those who lost this year includes Representative Laura Richardson, Democrat of California, who was reprimanded in August by the House Ethics Committee for illegally forcing her staff to help her run for re-election and then obstructing the investigation by altering or destroying evidence. There is Representative David Rivera, Republican of Florida, who last month was charged by the Florida Commission on Ethics with concealing a $1 million consulting contract with a Miami gambling business while serving in the State House.

Of those defeated, perhaps the one with the highest profile was Representative Shelley Berkley, Democrat of Nevada, who was seeking a seat in the United States Senate. Her opponent was the only Republican Senate candidate to win in a state that President Obama also won.

Ms. Berkley spent much of her campaign on the defensive after the House Ethics Committee opened a formal investigation into allegations, first raised in The New York Times, that she may have used her office to benefit her husband’s Las Vegas medical practice, in part by intervening with federal officials to prevent the closing of a kidney transplant center that his practice helped run.

Others defeated were Representative Joe Baca, Democrat of California, whose family ran a charity that took donations from corporations and other groups that have appealed to him for help in Congress, and Representative Joe Walsh, Republican of Illinois, who had long been plagued by financial questions, including about tax liens, a foreclosure on a condominium and failing to pay child support.

The ethics issues were not the only matters in the race. But in a number of cases, they appeared to play a role.

“Politicians ignore ethics issues at their own peril,” said Melanie Sloan, who runs a Washington-based nonprofit group that annually publishes a report titled the “Most Corrupt Members of Congress.” “Americans are overwhelmingly cynical about their government, but they still expect ethical conduct from their congressmen.”

In total, 11 of the lawmakers included in the “Most Corrupt” report over the last two years, out of a total 31 featured, have been defeated or are retiring, including New Hampshire’s only two House members: Representatives Charles Bass, a Republican, and Frank Guinta, a Republican.

For lawmakers facing Congressional ethics inquiries, there is at least one advantage to a political career cut short: the House and Senate ethics committees lose jurisdiction over them once they leave office, so no charges can be brought.

But there is a precedent for at least releasing reports on investigations even after lawmakers make their exit. The Senate ethics committee released a report about Senator John Ensign, Republican of Nevada, who helped his former chief of staff get a job as a lobbyist after Mr. Ensign had an affair with the aide’s wife. Mr. Ensign stepped down in April 2011, just before he was going to have to testify under oath to ethics investigators.

The hard luck this year started during the party primaries, when some incumbents under ethics clouds fell to challengers. They included Representatives Jean Schmidt, Republican of Ohio, who improperly allowed a Turkish-American group in Ohio to pay her legal fees, and Silvestre Reyes, Democrat of Texas, who is currently the subject of an ethics investigation and has been accused of paying nearly $600,000 to himself or his family from campaign funds. Also defeated in a primary was Representative Cliff Stearns, Republican of Florida, who was publicly accused by a Florida court clerk of trying to bribe a political rival into ending his campaign.

The list of winners on Tuesday included other lawmakers facing allegations of wrongdoing, like Representative Jesse L. Jackson Jr., Democrat of Illinois, who has been on medical leave for months and is also under investigation by federal authorities in the possible misuse of campaign money.

The Chicago Sun-Times reported on Wednesday that Mr. Jackson may be negotiating a plea deal. He is the subject of a separate House ethics committee inquiry into whether a longtime supporter improperly tried to secure him an appointment to the United States Senate after Mr. Obama was elected president.

Representative Robert E. Andrews, Democrat of New Jersey, who is accused of using $13,000 in campaign funds to pay for a family trip to Scotland for a wedding, also survived Election Day.

Ken Boehm, co-founder of the National Legal and Policy Center, a Virginia-based group that has filed ethics complaints, said some lawmakers under investigation come from districts dominated by one party. “These are people who it appears believe they are above the law and immune from defeat,” he said.
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rogue49 · Nov 19, 2012

HOW is this not illegal???
I would think the nations would be attacking this like crazy.

Sure, finally go after the hidden tax caches...but allow large entities to bank under the table. Why Not?
And they wonder why there are crisises, corruption and debt...

67 TRILLION!!!???

Shadow Banking Grows to $67 Trillion Industry, Regulators Say
By Ben Moshinsky and Jim Brunsden - Nov 18, 2012

The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight.

The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off- balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector.

“Appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks,” the FSB said in the report published on its website.

While watchdogs have reined in excessive risk-taking by banks in the wake of the collapse of Lehman Brothers Holdings Inc. in 2008, they are concerned that lenders might use shadow banking to evade the clampdown. Michel Barnier, the European Union’s financial services chief, is planning to target money market funds in a first wave of rules for shadow banks next year.

The FSB, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011. The share of activity based in the U.S. has declined from 44 percent in 2005 to 35 percent in 2011, moving to the U.K. and the rest of Europe.

Bypass Lenders

Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.

The FSB also targeted repurchase agreements and securities lending for tougher rules, recommending that regulators implement minimum standards for calculating losses on the different types of collateral used in the transactions.

Repurchase agreements are contracts where one investor agrees to sell a security and then buy it back at a future date and a fixed price. Securities lending agreements involve institutional investors such as pension funds lending financial instruments against cash collateral.

The group is also concerned that regulators are unable to monitor the scale of the trades. Supervisors should “collect more data on securities lending and repo exposures amongst large international financial institutions with high urgency,” the FSB said in the report.

More Disclosure

Large firms should disclose more information about the deals to investors, the FSB said, and may be required to publish regular statements detailing how much collateral they have and what it is used for.

A bankruptcy examiner’s report found that Lehman used so- called Repo 105 transactions to move as much as $50 billion temporarily off its balance sheet to convince investors it wasn’t carrying too much debt.

Final rules will be submitted to leaders of the Group of 20 nations at a summit in St. Petersburg, Russia, next year, the FSB said. Mark Carney, chairman of the FSB, said earlier this month that regulators are holding “intense discussions” on shadow banks.

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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Baraka_Guru · Dec 3, 2012

So, has anyone figured out what's happening?

Corporate Profits Hit Record High While Worker Wages Hit Record Low | ThinkProgress

Joniemack · Dec 3, 2012

Baraka_Guru said: ↑

So, has anyone figured out what's happening?
Click to expand...

I don't know, but blaming it on Obama makes it go away

rogue49 · Dec 4, 2012

What is happening?
Well, this is still happening...

The US companies are still sitting on their laurals...but their staffs are working harder than ever.
The EU still can't get their act together, nor can Japan. BRIC aren't showing much either.

Until the leaders of the world stop trying to CYA and move forward with intent...then things will continue to stagnate.
Not collapse, not do "bad"...but just feel like you're working with a C+ student...instead of a fully productive one.

Got one word for them,
INVEST

Four Reasons Why Companies Are Still Reluctant to Hire
NBC News | Monday, 3 Dec 2012

The job market has slowly been improving, but anyone who has looked for a job lately knows that it's still far from easy to land a position.

Economists say there's a good reason for that: Employers just aren't that eager to hire.

"Nobody is enthusiastic about hiring," said Ken Mayland, an economist with ClearView Economics who often speaks with chief financial officers at large U.S. corporations and also works with small businesses. "Everybody is just sitting on their hands."

The lack of enthusiasm about hiring is surprising in some ways. Businesses have built up hoards of cash in the last five years and have largely been running their businesses with minimal staffs who are being asked to work harder. Worker productivity grew at a 1.9 percent annual rate from July to September, which some experts say is a sign that employers are reaching the limits of how much they can squeeze out of their existing workers.

Still, experts say they aren't hearing much talk about hiring. There were 3.6 million job openings on the last business day in September, according to the Bureau of Labor Statistics, not much changed from August.

"These companies are sitting on big stockpiles so they have the wherewithal to hire, but to a company I'm not (hearing anyone) saying, 'Oh yeah … we're looking to gear up,'" Mayland said.

The unemployment rate stood at 7.9 percent in October, as companies added 171,000 jobs. That's certainly an improvement over a few years ago, but it's not enough to quickly get the more than 12 million U.S. jobseekers back to work. The November jobs report will be released on Friday.

There have recently been signs that some of the most troubled pockets of the economy, such as the housing industry, are starting to see improvements. To some, that should be the sign that it's time to expand your business and hire more people.

"You would think that businesses would be salivating," said Joel Naroff, economist with Naroff Economic Advisors. "What more messages could you get that this economy is turning (and) that you should start doing things? And instead, they're running around like Chicken Little."

Here are a few reasons why.

Uncertainty has been a big theme these last five years. Business leaders have at various times said they were uncertain about the recession, the fiscal stimulus programs, the recovery, the elections, the debt ceiling, the health care overhaul and the fiscal crisis in Europe.

These days, they're mainly feeling uncertain about the so-called "fiscal cliff," a series of tax hikes and government spending reductions to the tune of $600 billion that are set to take effect in 2013 unless Congress and the Obama administration can strike a deal.

That's got business owners worried they'll have to pay more taxes and investors fretting about whether capital gains tax increases will mean they take a major financial hit.

Federal Reserve Chairman Ben Bernanke also has warned that without a deal on the fiscal cliff, a term he coined, the economy could slow dramatically. But with a deal, Bernanke has said, the economy could perform well in 2013.

Naroff believes that the fiscal cliff is the biggest reason that companies have been hesitant to hire.

But a massive political squabble over spending and taxes is also a very effective reason for not hiring more workers even as more than 12 million Americans are out of work, he said.

"Business leaders like excuses for doing things that are unpopular. Everybody wants to blame somebody else for doing something that's unpopular. That's reality, right?" he said. "If you can blame the government for why you're not hiring, you'll blame the government for why (you're) not hiring."

Economists say many employers aren't really feeling that much pressure to hire new workers.

After all, many workers who have been able to hold onto their jobs these last few years will tell you that they are working harder than ever, either because business has picked up or because they are also taking on responsibilities for people who have been let go. And yet, not many people have received significant raises in recent years as wages have stagnated.

Because companies can push their employees to be more productive for the same or less pay, they don't have a great incentive to hire more workers. Instead, they're more likely to either push people harder or come up with technological solutions for getting more work done.

"All companies are operating very lean," Mayland said. "For many businesses, they're back up to the 2007 to 2008 levels of business activities, but what we find is they're doing it with significantly lower levels of employees."

James Paulsen, chief investment strategist for Wells Capital Management, said that back in the 1970s the first thing companies did in an improving economy was to boast about how they were hiring more workers and adding more factories.

"Now when a recovery starts the last thing they do is rush out and hire a bunch of people," he said.

Instead, employers will take their time adding employees, and work to figure out how much they can squeeze out of the workers and technology that they have.

And rather than talking about expanding, he said, they'll boast about "how much they're cut payrolls and how they're not going to build a thing. They're going to add more computers."

Paulsen thinks there's been a fundamental shift from believing that if you build good products, you could raise prices every year. Now, he notes, industries such as technology are facing consumers who expect prices to come down every year. That means adding to costs won't necessarily add to profits.

"We turned the CEO's world on its head," he said.

The recession and recovery also may have made some businesses nervous about taking a gambit on a new product, market or industry. Experts say some worry that if they get optimistic and add staff or move into new lines of work, it will backfire if the economy recedes once again. Then, they'll face the painful prospect of cutting staff and resources.

"They're willing to leave some stretch opportunities on the table and, you know, kind of be satisfied with, 'Oh, this what we've got,'" said Mayland.

Mayland noted that businesses have gotten very creative in adapting to changing circumstances, technology and economic conditions. But they've done that by focusing on making profits for their shareholders, not by trying to do what's best for job or income growth.

"That's what business does," he said. "Businesses will survive and maybe thrive, but they will do that in a way that's not necessarily good for the macro economy as you and I measure it."
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Politics What is happening????

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Joniemack Beta brainwaves in session

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