Uncensored Opinions

The Sins of Alan Greenspan

2010-12-13T04:59:00.001-07:00

When Mr. Greenspan appeared on a recent BBC documentary and was forced to concede to major misunderstandings of certain market phenomena, he was being quite modest. He not only had misunderstood many economic factors, but had wittingly committed every single major blunder leading up to our current “great recession”. He bet the future of the American working class against the interests of his supporters and lost. He kept his job and the country (and half the world) went belly up. He faced the same situation as Mr. Churchill when he, as Chancellor of the British Exchequer, had to reestablish the exchange rate for the British pound when Britain rejoined the gold standard regime after the First World War (in 1926). During the war Britain had suffered a major relative productivity loss via the rest of the world (to the U.S. in particular), and should have devalued the pound to preserve British wage rate competitiveness. But the rich, Churchill’s major supporters, did not want that to happen. So he went with the rich and failed to devalue the pound, and the British economy went into a tailspin. Churchill had the decency to face the facts that he had blundered, calling this decision the second biggest mistake of his career (Gallipoli being the first). He was well aware of what he was doing but took his chances. Mr. Greenspan was also well aware of the chances he was taking, and chose to likewise support his rich backers. The only difference is that he has refused to admit his mistake and, worse yet, is continuing to encourage our current financial leaders to follow the same practices. This article covers each and every move he made and the consequences.

It’s all about the foreign exchange rate, and the desire of Mr.Greenspan’s rich friends to maintain a high value of the dollar. The dollar has been maintained at a highly-overrated value for the last 30-some years in order that the rich could buy foreign luxury goods on the cheap, take inexpensive luxurious foreign vacations, and hire foreign labor at exploitative rates (to do the manufacturing work that American workers had previously been doing.) The exchange value of the dollar had been manipulation by the FED and foreign central banks for decades, and more recently by China, leading up to the dustup over China’s meddling in exchange values! What hypocrisy! These manipulations had produced a wide and distorted difference in exchange values between Western currencies and the currencies of countries of Southeast Asia, virtually guaranteeing that all tradable goods would be produced overseas. Mr. Greenspan must share at least some small credit for this lamentable circumstance with the (uncontrolled) hedge fund traders who managed to further drive down the currency values of many otherwise financially-sound countries of Southeast Asia These practices have led to the continuing and unaddressed mammoth U.S. trade deficits which will shortly impoverish America (except, or course, the very rich).

The major screw-ups started when George W. took office. During Mr. Clinton’s presidency Greenspan had maintained interest rates at around 5 percent. A Democrat was in office and he did not want to make a Democratic president look too good, so he kept the interest rates relatively high. But in order to create a healthy economy under a clueless Republican president (who needed all the help he could get) he started in early 2001 to drastically lower interest rates, finally reaching 1-1 ½ percent around mid-2001. Establishing this ultra-low rate was foolish. Bankers will normally not want to lend money to even the most credit-worthy businesses at a rate of, say, 4 percent (a reasonable 3-percent spread over the 1 percent cost of funds). This was amply demonstrated by our recent experiences with U.S. banks facing the same circumstances. At the then-current ultra-low interest rates they could make plenty of money simply by buying risk-free U.S. government securities. It would have been more responsible if Mr. Greenspan had lowered interest rates to, say 2 ½ percent, but hey, anything to help a friend.

The banks were not anxious to lent any money to businesses based upon a 1-percent interest rate considering that interest rates had nowhere to go from there but up, and an increase of just a few percent would quickly wipe out most profit spreads from most of their loans, and could very-well quickly lead to mammoth loses. But there was one exception, loaning money at ultra-low rates against real estate. It had no obvious risk because price increases would cover any shortfalls in interest payments even if the borrower was a flake. But even this contingency was covered. The banks, thanks to Wall Street’s creation of mortgage-backed securities, were now able to lay off risk on these ill-considered loans to outside investors (as well as with other unsuspecting gulls like Fanny May and Freddy Mac). The rating agencies were also compliant, and all those risky loans blossomed. Now the stage was set for Alan to make his big bet.

The problem with low U.S. interest rates, short term as well as long term, was that foreign investors would not be content with these returns, given their exchange rate as well as interest-rate risks. When foreign investors (individual and government) began to resist purchasing bonds and bills at these ultra-low rates (around late 2005), Mr. Greenspan feared that the dollar would fall on the foreign exchange markets, given the outlandish foreign trade deficits which needed to be resolved. Alan’s employers, the rich, did not want the dollar to drop at all. When the dollar’s exchange value went down, they called it “inflation”. Of course it had very little to do with the type of stateside “inflation” everyone worried about, that caused by too much money in the hands of the general public, driving up the prices of consumer goods. In order to prevent a fall in the dollar, Mr. Greenspan started raising interest rates to prevent a fall in the dollar, citing “inflation” as an excuse, pretending the inflation he was invoking was the kind leading to consumer price increases. That kind of inflation was nowhere in sight, evidenced by the market-driven low interest rates previously prevailing, and by the prevalent sluggish wages and stagnant money supplies experienced over the preceding decades. Proof that he was well aware that inflation was not really the issue was provided when he constantly mused at the time about whether the rate hikes would cause a recession! To worry about “inflation” and “recession” simultaneously is like a physician worrying that a bulimic patient he was treating might become obese. It’s insulting and dishonest!

But he went ahead and quickly jacked up interest rates in 2005-6 to the 5-6 percent level, well aware that it could very well push an economy already on the verge of recession into a full-blown one. This was a blunder of far greater impact than even Mr. Greenspan had expected. Raising interest rates have more consequences on the economy than just the cost of credit to businessmen. What Mr. Greenspan should have been aware of, as a banker, was that low interests rates were the driving force behind years of sub-par (“liar” as well as adjustable rate) loans whose owners could only survive if housing prices went up, and a rate hike would (and did) put a screeching halt on rising real estate prices. These rate hikes doomed these home-buyers, as he should have known it would.

As a banker he should also have been well aware that as changes in the bank’s cost of money (short term usually) went from 1 percent to 5 percent, as bank examiners forced the banks to value their loan collateral to “market”, bank equity would immediately disappear and the balance sheet would show the banks to be insolvent (bankrupt). Even if the bank examiners refused/failed to do this, equity would be slowly siphoned off as money income derived from their loan portfolio would be more than consumed by the costs of funds. This would occur regardless of whether these loans were performing or not. There was no way out when banks were collecting even 6 percent on mortgage loans when their costs of funds jumped to 5 percent. What would they be paying their employees with? their oh-so-valuable executives? A margin of 3 percent would normally have been minimal (even for prime rates loans) to keep a bank viable.

Perhaps Mr.Greenspan was not aware that when the value of the collateral backing any investment or loan instrument heads south, the value of the investment does as well. And many investors depend on the earnings of their investments for normal operations (endowments, brokerage firms, local governments, and insurance companies, et. al.). Those holding mortgaged-backed securities would not receive even reasonable dividends/interest on securities backed by non-performing loans, as well as experiencing the permanent loss of the principal. He should have known of the horrendous consequences to these entities as well. As one of the most trusted public servant he was irresponsible if not criminally negligent.

So that’s the sordid story of Mr. Greenspan’s involvement in our (and the world’s) current mess. To make matters worse, he is still trying to stop the dollar’s decline in the interests of the rich, and has apparently persuaded even Mr.Geithner, the Treasury secretary, to take up the call. By citing the danger to long-term interest rates caused by recent money-supply expansion by Mr.Geithner, he is again promoting the same actions that caused our current crisis. Ratchet up interest rates once again in an economy in recession? Can’t he be content with having caused the worst financial crisis in 80 years? Does he want to repeat his generous gift to the rich with little regard that it will further impede an escape from the current mess?

An associated situation jeopardizing the future success of the country is one involving the establishment media in the U.S. They have not only never called him on these screwups but now, even after he has publicly confessed some complicity, are again soliciting his economic advice. Don’t those media types listen to the news? Didn’t they hear him confess? Paul Krugman, arguably the finest economist alive today, has strongly criticized his actions and pointed out his responsibility in this crisis. What more do these pampered and overpaid media types need to get it straight? The answer to this puzzle is that the rich have taken control of the media (as well as the Congress, the courts and the FED.)
The media pretend that only a few select “gurus” have valid opinions (and these gurus consist almost unanimously of lackeys of the political elite.) So the establishment media continue to solicit their opinions and pretend that they have any credibility.

Amazingly, no one, not even our beloved congressional representatives, has contested the notion that the chairman of the FED should be a conservative, preferably a Republican. Mr. Greenspan, in his book “The Age of Turbulence” makes no bones about his allegiance to the Republican Party and its programs. He was an ardent supporter of Ayn Rand and her advocation of selfishness, which goes well with Republican “virtues.” Does anyone really want someone devoted to his own selfish interests, over and above that of anyone else, to make decisions affecting the well-being of all the citizens of the entire world?

What is badly needed is a change in the role of the FED as well as in the choice of its directors. What are needed are public spirited individuals (what a novel idea), perhaps chosen by ballot, who will be subjected to public scrutiny and control (no, not that type of insulting act that Mr. Greenspan put on for Congress’s sake but a real grilling).

Fox News – The Spin Stops and the Lying, Distortions, and Insults Begin

2010-10-23T05:02:00.000-06:00

Fox News has created the finest propaganda machine since the glorious days of that favorite Nazi propagandist Joseph Goebbels. And done it in the time-honored Republican way, using big bucks provided by the crowd whose sole interests they will pursue, the idle and greedy rich. The coming election has been purchased long before the voting begins by a master plan to gull the public with false claims, ridicule of liberal candidates, mischaracterization of the issues and who caused them, and lavish spending on entertainment designed wholly to keep the viewing public’s attention while indoctrinating them with a totally dishonest version of the truth.

Bill O’Reilly starts the lineup presenting a “no spin” version of events according to how he perceives them, selectively presenting versions differing from his views, that is, until the other guy starts getting the truth out, at which time he is referred to as a “pinhead” or “bloviator”. Everyone at Fox should be very familiar with “bloviators”. They have and all-star lineup of them featuring Sean Hannity, Glenn Beck, Rush Bimbaugh, ops!, I meant Limbaugh, and pinch-hitter Newt Gingrich, by far the finest group of “bloviators” money could buy. But still many viewers (too many) fall for the “no spin” “fair and balanced” reporting Bill O’Reilly claims for Fox’s team, and are passed on to Sean, preconditioned for further gulling. Sean shifts the attack to a middle level of pretence, managing to throw the concept of “socialism” into the mix, and, now that the elections are fast approaching, slip in the word “Marxism”. Wow! One can only wonder who is still hanging in there after this blatant mischaracterization of reality. Frighteningly, there appears to be many still hanging in there and begging to be gulled.

So you end this set with Glenn Beck, a buffoon of the highest caliber, whose act would make P.T. Barnum green with envy. His homey, down-to-earth presentation of outlandish claims and insults are designed to put an exclamation point on the wild (but slick) assertions of Sean. If you keep telling the same lies over and over again, sooner or later they will be received as gospel truths.

After Glenn’s grotesque burlesque of reality is finished, those viewers who have had the stomach to make it that far will be treated to an assortment of blond talking heads. Don’t those guys at Fox know any brunettes, or did some wild peroxide salesman find himself trapped at the Fox News site? But of course it’s just more of the “playing to the gullible” that is Fox’s trademark. Blonds, beer, and big boobs are what attract the general guy-in-the-street, and that’s the crowd to which the whole performance is directed. Sean, as part of his act, throws a small football around just to look like one-of-the-regular-guys. Sorry guys, he’s goes to bed with a suit on and real football would certainly mess his expensively-coiffed hair. I’m just hoping they don’t throw in boob jobs for those blonds, to complete the seduction of the public.

The last ploy they use is just plain “I’m just one of you down-home guys” when they hire the most popular current entertainers to put on free shows for the public. It costs big bucks I’m sure but when you are buying an election, money is no consideration. Everyone who puts up the dough will be quickly (and quietly) paid off many-times-over as soon as those whose offices have been purchased get down to business.

What is missing from this whole scheme is any attempt to deal with news of any substance, or a discussion of what can be done to correct the current mess previous administrations got us into. The main thrust seems to be to convince a gullible public that after 28 years of “conservative” government misrule and screw-ups, 20 of which were under Republican administrations, and the last 8 years under a clueless Republican president, that any administration can turn things around in little over 22 months. After the last great depression it took 4 years to even come close to solving the problems caused by the 12 year rule of similarly-incompetent Republican presidencies. And the programs implemented then were responsible for social benefits we all share and can be justly proud of, like social security, welfare for the disadvantaged and unfortunate, and freedom from fear of poverty in old-age or due to unanticipated disabilities. FDR’s programs were popular and successful, saving capitalism from its excesses during a similar period of capitalist-inspired greed, but it took money, and lots of it. The current mess involved far more serious financial problems and the Fox crowd would have you believe that it won’t take a lot more money to be corrected.

What they don’t discuss is how and why we got into this mess in the first place and what can be done to avoid similar problems in the future (and just how much money would be appropriate to remedy our current mess). It suspiciously occurred when the rich were becoming filthy rich, and the working and middle classes were just getting by. Could it be because of globalization? Fox appears to be unaware of even the term “globalization”. I have never even heard it mentioned by Fox “reporters”. Uncontrolled capital flows? Laws that made it easy to move production overseas? Laws that gave legal status to foreign workers taking over American jobs (and sending the proceeds back home)? Practices which allowed foreign corporations, setting up operations in the U.S., to evade their fair share of taxes? Or even laws that allowed U.S. corporations to similarly evade taxes? Or failure to establish rules to prevent or penalize U.S. corporations from moving their headquarters overseas simply to avoid U.S. taxes? Tax cuts for the superrich even when we were running mammoth fiscal deficit? These are the issues which any honest news organization should be investigating because they are the real issues. Budget deficits are simply the result of the give-aways (well paid for) that Republican administrations have been granting for years and that are the direct cause of our current problems, problems that won’t go away until they are addressed. The Republicans created them, have no intention of correcting them, and which, to hear them talk, they apparently believe will correct themselves, costing nothing! These are the questions sadly missing from the Fox News reportage.

Money, the Root of All Evil

2009-10-26T05:28:00.000-06:00

All recent 'bubbles' including the current one in real estate have had two (avoidable) causes. One was the result of tax policies instituted under President Reagan, the other was one of the unfortunate consequences of Globalization. The politics of greed, the basis of these actions, has place the entire middle- and working-classes at risk of becoming the 'second nation' warned of by John Edwards in his bid for the presidency. Both policies have lead to unchecked asset inflation worldwide. The ultimate consequence of this worldwide will be societies of rich and poor, with no middle class, similar to most poor countries today. The poor will be outbid in trying to obtain access to any of the activities or privileges currently enjoyed by our elites and a slowly-dwindling middle class. In trying to participate in any public event the average citizen will simply have not the funds.

Over the past decade or so the prices of admission to the most commonplace of events, like sports events, theater tickets, or just local social activities, have already increased to the point of unaffordability by the general public. Activities which used to be of the order of 5 dollars now cost 25 dollars, too much for many middle class families today. This is thanks to President Reagan's tax policies in the 80s allowing the rich to avoid paying even the government's expenses at that time (even though they were the main beneficiaries of government spending.) Changes in estate taxes during this same period have added to this problem. The rich are getting richer and the poor poorer. These same policies unfortunately were adopted by the Brits under Margaret Thatcher and later, to a lesser extent, by most other western European nations. Bush Jr. has further supported and extended these policies, justifying tax giveaways to the rich on the discredited supply side 'theories' of the Ronald Reagan administration.

Globalization, a scheme to 'equalize' worker wage levels worldwide, is in the process of driving western workers' wages down to those of the poorest of countries. The low bidders of the entire world will have the privilege of performing the world's labor as the world's population increases and the efficiencies of automation minimize labors’ part in production. For western workers to compete with Chinese and Indian workers today (whose wages are in the 65 cents to a dollar fifty range) would require hourly wages of 3 or 4 dollar at best (regardless of productivity differences.) So eventually these western workers will either have to be supported by the dole, or end up living in the street if they are unlucky enough to not have a friendly relative with a basement available. It is only a matter of time before this sad event takes place, 20 years at most. What will happen with the children of the current middle class will be a real tragedy. In many poor countries 'death squads' have been frequently employed to solve the problem of those unemployed and aggravating street people.

The recent stock market ‘bubbles’ and current real estate one are the direct consequence of these two policies. The rich worldwide with trillions (9+ trillion dollars in U.S. money markets alone) of financial capital, looking for even minimal returns, have participated worldwide in purchasing whatever real estate they could get their hands on, and along with financial institutions (also foreign as well as local), have purchased the (securitized) mortgages underlying most of this same real estate. Thanks to Globalization, American dollars have provided foreigners the funds to participate in this speculation in U.S. real estate and financial assets. They have driven up prices on what should be a home for a family, turned it into a speculative asset in which the actual inhabitant has little equity (only has to pay the interest on an exorbitant loan) while the real owners are the rich throughout the world and the financial institutions who have underwritten them. Unfortunately this speculation by the world's rich have put the banks into the unpleasant position of being the real risk-takers in this enterprise and are inhibiting them from currently making much-needed new loans. When all said and done, the banker took the risk and is now left holding the bag. Wall Street and the bond-rating agencies are just as guilty if not more so, but the rating-agencies have at least not suffered (except in credibility). The Wall-streeters were unfortunately victims as well, apparently believing their own sales pitches.

What needs urgently to be done is to reverse these two policies and remove the excess capital which is the real culprit in this entire mess. This would require a highly-graduated income tax and heavy estate taxes and an end to the consequences of unbridled globalization. Under a democracy, tax policy should be designed to collect the amount necessary and appropriate for the needs of the entire citizenry. Lightly taxed capital gains should be limited to only that amount of capital necessary for real sustainable capital investment. Any remaining capital gains are simply unnecessary and would result in undesirable speculation and foolish consumerism. They should be highly taxed. Estate taxes should be limited to a reasonable amount for remaining heirs, not supportive of the unborn in perpetuity. The current population should not remain in debt to the no longer living. These measures, which may seem unfair or impracticable to many, are simply a variant of those tax policies adopted during the Second World War and continued until the Reagan economic fiasco. Even while under these highly-graduated estate and income taxes, the U.S. became the richest country in the world.

In order to save western workers from the same exploitative wages and substandard lifestyles currently prevalent in S.E. Asian economies, one of two things need be done. The U.S. Government should either require their foreign trading partners to require employers to provide a worldwide living wage and worker- security laws (something the ILO, the labor-regulating agency of the U.N., should have done long ago), or the U.S. government should unilaterally impose import duties to effect the same. The U.S. government's primary duty under the Constitution is to protect the interests of all its own citizens, not the interest of foreign citizens under WTO rules. To argue over 70 percent duties on imports when there are differences of 900 percent in labor rates is truly amusing if t were not so pathetic. The WTO’s ‘free trade rules’, under these conditions, are truly a joke. No decent employer anywhere in the world should be allowed to pay an exploitative wage to its employees. If a worker does his best, working in good faith, he should be entitled to a living wage sufficient to raise and educate a family. Good governments worldwide should accept this responsibility as their paramount goal.

. Without these changes, each year more than $1 trillion (from foreign and U.S. investors) will be added to the mountain of financial asset currently available for investment in the U.S. They will be available to purchase already-overvalued assets causing new 'bubbles' wherever they are invested. Appropriate federal tax policy should limit federal budget deficits, which have been a major cause of this otherwise superfluous capital. 'Fair trade' policies under Globalization should be designed to entirely eliminate those current trade imbalances which have resulted in these destabilizing investments in the U.S. If these policies were implemented, all future speculative crises could be avoided. If not, they will continue to plague the U.S. and world economies, becoming even greater in the future

Government Deficit Spending is America's Last Best Hope for Recovery

2009-10-18T08:25:00.000-06:00

It was most amusing for me to see Alan Greenspan explaining on the BBC to an otherwise trusting viewing audience that the world economies would experience severe economic crises every few years as a matter of course, and this was quite 'normal' and inevitable. Although the economies of the world will experience many ups and downs over the years, they are not at all 'normal' but usually the consequence of central bank and government screw-ups. If the government would try to support their average middle- and working-class individuals and not just their rich 'sponsors', future economic crises could be avoided. The government simply must accept the basic realities and paradoxes of capitalism and abstain from following those 'voodoo' economic theories proven time-and-time-again not to have worked as advertised ( but profitable to the rich). If they would simply regulate the economy in accordance with sound economic principles the consequence and extent of future crises would be significantly reduced and workers worldwide could experience the high standard of living that they deserve.

The factor of capitalism most misunderstood is that, if people want to get richer in money terms, someone else must take on debt. Capitalism is all about getting richer. Financial assets are obligations assumed by some second party, individual or institution. There is no invisible genie who borrows from the rich and will magically pay then back in the future from some secret funds source. Rich Republican's claim that they don't want the U.S. government to take on more debt is simply a misunderstanding about what has made them rich. The greatest increases in wealth always occur when governments assume large deficits, most commonly during a war or recession. Private individuals and businesses have limits to the amount of debt they can assume. The U.S. government has fouled its own nest by sitting idly by while Americans lose their jobs, savings, and the ability to take on further debt. Businesses likewise have been put in a position in which they no longer wish to take on debt by investing in the U.S., this situation also caused by government mismanagement of the economy. The U.S. government doesn't have these borrowing limitations and, if it is unwilling to take on more debt, capitalism in the U.S. is in serious trouble.

But of course there are non-financial assets to consider. People get wealthier by buying shares in profitable businesses and in the purchase of other assets such as real estate. In the case of real estate, these assets are limited by nature and have values now primarily based upon speculative demand and far in excess of reasonable valuations. In the case of shares in a going business, value depends upon earnings, which in times of recession normally decline. The wealth of U.S. citizens in this case is limited to its share in the value of going businesses. The U.S. has, for some time, been losing ground in this area due to the deindustrialization of the U.S. economy while jobs and production move offshore. The middle- and working-classes possess few assets of this sort, and real estate was their last substantial asset. We all know how that turned out. This loss of capital is evidenced by international balance of payments accounting which shows the U.S. economy is losing around $700 billion per year in assets. That will continue lacking any government action. In this case, capitalism in the U.S. has not only been stopped dead in its tracks, but what capital assets are remaining will soon be taken over by foreigners.

Both Lord Keynes and Milton Friedman were aware of the fundamental facts underlying a capitalist economic system. If the economy in general and stock markets were to survive and prosper, yearly consumer spending had to increase over the previous period. Likewise the GDP. They both knew this would require a greater money supply. Consumption (and GDP) have held a fairly constant relationship to the money supply over the years by a factor called 'V' (the turnover velocity of money) which varies little over time. According to Friedman's basic theory, called 'monetarism', the only thing necessary to increase consumption was to increase the money supply. That is correct as far as it goes. Friedman simply thought an increase in the amount of bank reserves by the FED would in itself be enough to stimulate the banks to increase their loans to businesses and individuals, thereby spurring increases in spending. He did not contemplate a situation in which the banks would not lend it out or that someone would not be willing or able to borrow it. Keynes knew about the importance of the FED's expansion of the money supply some 40 years before Friedman postulated it. He not only was aware of it, but suggested how it could be done. Keynes knew what our current economists have learned the hard way, that the FED alone could not increase the money supply. Almost half of M1 (the simplest measure of our money supply) is money lent by the banks (creating bank deposits), the rest being cash. For every dollar the FED supplies the banks in terms of reserves, the banks can lend anywhere from 7 to 10 times as much to its potential borrowers, namely businesses, individuals, or the federal government. Lately the FED has provided the money but he banks have not lent it out. This brings us back to the basic problem. If the banks will not extend credit to businesses and private individuals, then the money supply and consumption (and production and profits) will not increase unless government itself borrows it. Lacking this, the U.S. money supply would remain constant and the country would remain in recession. So Keynes solution was that whenever the private sector (businesses and individuals) would or could not go into debt, the only other borrower remaining was the federal government, which would have to assume more debt to keep the economy healthy. The banks are more than happy to lend to the U.S. Government.

The reason that businesses have resisted making substantive investments in the U.S. is two-fold. First and foremost is the fact that the U.S. consumer is plagued by past debts and his job at risk because of the current credit crunch. In addition, actions by the FED under Alan Greenspan, and continued by Ben Bernanke, designed to reduce consumption (and preserve the value of the dollar), had severely damaged the economy. These consisted in successive claims of non-existent inflations 'forcing them' to raise interest rates, which brought on the ever-more-serious recessions leading to the final collapse in the economy. Secondly, foreign competition stimulated by Globalization has made it unprofitable for most businesses to invest in the U.S. U.S. multinationals are borrowing and investing primarily in South- and S.E Asia. Foreign Direct Investments (FDIs) in the U.S. are minimal and pretty well limited (80%) to the purchase of going businesses in the U.S. (i.e., little additional foreign capital investment). With wage rates in these Asian countries 10% of those in the U.S., who wouldn't be setting up shop overseas. Hint, the answer is nobody.

Workers in the U.S. have lost their high-paying industrial jobs and have had to accept service sector jobs at considerable decrease in wages. In order to sustain their lifestyles (generally fixed costs assumed when times were good), they had to take on further debt (credit card as well as real estate) to cover this income shortfall. Many have had to cash their IRA's, Keoghs, and 401-Ks as well as saving previously put aside for their retirement and children's education. Now that the middle- and working-classes are reaching insolvency and can't take on further debt, a further increase in spending by them is highly unlikely. So if the political elites, supported by their major propagandist (Fox News), think we can pull out of this recession without government deficit spending they are living in LaLa Land.

Properly regulated deficit spending can create a positive economic environment in which American businesses and workers will be able to resolve their debts and resume consumption and spending. This must include a solution for the problems caused by Globalization and by limitations on Federal Reserve meddling with interest rates (which should depend solely on market conditions). Lacking these government actions, the economy will be entirely dependent on continuing government deficits. That is, if the rich want to increase their wealth they will have to accept some changes in the way the government does business.

For this reason I hope those chronic carpers on Fox News and their paymasters will stop their attacks on government deficit spending and harping on the taxes their children purportedly will be saddled with. If this crisis is not solved, many of their children won't be saddled with high taxes at all. They won't have jobs. The entity previously known as the middle class will likewise be paying little or no income taxes, having had to accept minimal wages in the service sector (or will be a further drag on the economy if unable to find employment at all). Under current tax laws, a family of 4 with a yearly income of $22,000 pays no federal income taxes, and would have little ability to pay for tax increases caused by interest on future government deficits. Unchecked globalization will ultimately result in all those engaged in world commerce to accept wages at this level (or lower). Service sector wages will likewise be adversely affected by the disappearance of previously high-paying jobs in the U.S., in this case producing a valid 'trickle down effect' on incomes. Who then will pay for any and all taxes necessary to run the federal government in the future? The rich, who are resisting increases in current government deficit spending (one of the remedies necessary for recovery), will end up paying for everything! Fox News and their rich patrons will find that they have simply been shooting themselves in the foot with their tirades against current deficits. As the old ad went 'you can pay me now or you can pay me later'. Later may very well be too late.

Globalization and its Contribution to America’s Economic Catastrophe

2008-12-30T03:47:00.003-07:00

The promoters of Globalization, in their headlong and single-minded lust for profit, have exhibited one major flaw, a complete ignorance of the basic economic principles underlying capitalism. While marginally lowering prices on products by replacing decently-paid western workers with third world workers at exploitative wages, they have killed the proverbial “goose that laid the golden egg.” The displaced workers, those middle income western wage earners, were the backbone of world consumption. The exploited workers could not buy the products which they created. Now, as his wages are being increasingly undermined by product outsourcing and tariff policies (NAFTA, CAFTA), the previously middle class wage earner is gradually becoming unable to keep up the consumption necessary to support production. Only the rich, beneficiaries of the increased profits generated by these policies, can afford these products. They have the gold but the goose has been cooked. This article explains the phony “principles” supporting Globalization, the reasons for its “success”, and the danger that it represents.

Practically all well-known U.S. economists and policymakers have supported Globalization as if it were the Holy Grail, resulting finally in our current international economic crisis. There were two well-publicized reasons proposed to justify Globalization, and one (secret and undisclosed) which was the real reason for their wholehearted and sycophantic support. One of the former was the concept that free trade under Globalization would end trade competition among nations leading to world peace. The other was based upon an ideological concept derived from one of Ricardo’s economic theories called the Law of Comparative Advantage. This “law” was predicated upon the idea that the world as a whole would benefit when each country produced only those goods that it was most efficient in producing and leaving to other countries those products they excelled in. Both of these concepts have been proven unworkable in actual practice, but the economists and politicians have not given up on them regardless, mainly because they really were only pretexts for Globalization and whether they worked or not was immaterial. Why let reality stand in the way of a good story? The third and real reason that these "professionals" endorsed Globalization was that it was profitable for them to do so. Few writers or economists can propose anything contrary to the interests of the politically connected and be published or promoted. Only writers of inordinate prestige and integrity, such as Naomi Klein and Paul Krugman, can afford to take the risk. Naomi’s The Shock Doctrine: The Rise of Disaster Capitalism and Paul’s The Conscience of a Liberal are among the few books which dare to disclose the truth about the U.S. government’s unfair and damaging policies and practices. Conversely, the way to riches is by puffing lazy and incompetent “elites” and touting any program financially rewarding to them. Most honest economists, columnist or reporter will eventually end up poverty-stricken under these circumstances.

In dealing with the premise that world peace would be assured under free trade and Globalization, there is a claim that World War II was caused by excessive tariffs among the combatants causing a lessening of trade and friction between them. In reality, the war in Europe was contested between countries which had considerable friendly trade prior to the war. Germany and Great Britain were major trading partners. In the case of the Pacific conflict, it was not tariffs but an embargo against the Japanese established in response to their aggression against China. Tariffs took no part in the conflict. Imperialism was the culprit in the Pacific as well as in the European conflict. Today, thanks to an economic imperialism over third world countries resulting from policies forced upon them by the IMF (as directed by the U.S.), no country need attack the resource rich countries fought over in the past. For the most part, their assets are already owned by the multinationals, in the interests of the world’s shareholders. Economic Imperialism under Globalization is no less offensive and improper as Imperialism by force.

Another convenient claim, the concept that tariffs established by the U.S., the famous Smoot-Hawley in particular, were the basis of the economic collapse worldwide ultimately leading to the war, was also specious. The Fordney-McCumber Tariff (a Republican tariff) was passed in 1922 and had been in effect without problems for 7 years before the stock market’s collapse. Smoot-Hawley was just the last of a series of high-tariff law in the U.S., simply a continuation of U.S. trade policies prevalent throughout the history of the U.S. and primarily responsible for our great economic successes.

Many countries will be peace loving and friendly to the west as long as they are doing well economically. If not, they can be expected to revert to “uncooperative” competition and to acts offensive to competitor governments. What is happening in Russia today is an example. Public dissatisfaction caused by poor government policies and corruption, but blamed upon the U.S., has resulted in “unfriendly” acts by the current government. The gap between "have" and "have nots" worldwide, regardless of the causes, will tend to cause instability and aggression in many countries. The idea that Globalization will miraculously change this is pure fantasy.

The concept that the entire world will benefit from “free trade”, as derived from Ricardo’s laws, had been soundly refuted prior to the current world economic meltdown. Alan Greenspan in his paean to Globalization, greed, and the Republican Party, The Age of Turbulence, cited “well-documented evidence that competitive markets over the decades have elevated standards of living for the vast majority of Americans and much of the rest of the world”. He apparently had never seen or heard of Detroit, Bethlehem, or any of the eastern cities ruined by the loss of entire industries (textiles, shoes, electronics, steel, autos, et.al.) which had been the direct result of Globalization prior to the current economic debacle. Certainly with the economies of the entire world in disarray he would not now be able to claim this improvement in the standard of living for practically anyone, anywhere.

Ricardo's Law of Comparative Advantage was based upon the concept that countries share production, with each concentrating on those products for which it had a relative advantage, and relinquishing to its trading partners those which they were best at. It was based upon a balanced trade with each country trading enough of its products to afford those of their trading partners. If this tradeoff was not observed, there was no problem in those days, There being little else to swap for, such as the shares of corporations, government and corporate bonds, commercial properties, and “bundled” assets (such as REITs) which are currently available, the balancing factor was invariably money. The country experiencing a sustained trade imbalance would quickly run out of money, and the trade imbalance would automatically disappear (simultaneously bankrupting the country involved). Ricardo did not even contemplate that happening in his day. No government would survive if it allowed it to happen. Trade had to be based on comparative advantage, not absolute advantage, with a balanced (equal) trade between all countries. Each had its own specialties which their trading partners had to respect. An unfortunate result of this needed “reciprocity” was the forced opening of China to the opium trade by the British in the mid 19th century. Great Britain was running out of sterling having few products to sell to China in exchange for its silk, tea, spices, etc. If citizens of the U.S. had not possessed substantial non-monetary assets, accumulated throughout the history of the U.S., the U.S. money supply would have disappeared long ago, with a corresponding drop in the American citizens’ standard of living. Today, these assets are now being sacrificed for the benefit of foreign corporations, as the trade deficit problem remains unresolved.

In dealing with the “efficiency” issue supposedly leading to such great improvements in worldwide standards of living, much of what has been claimed, such as the actual across-the-board implementation of “free trade” and its purported benefits, is fallacious or distorted. The low cost of foreign goods is not due to fair competition based upon the productive capacity of individual workers, but strictly upon worldwide wage levels determined primarily by international exchange rates. These exchange rates have been consistently manipulated by foreign governments in order to make their tradable products more competitive, a practice called “beggaring thy neighbor” in the past. This practice is a direct and significant violation of “free trade”. Japan’s spectacular economic success over the past 50 years was based upon the establishment of an undervalued Yen (established by U.S. authorities) designed to reestablish it as a powerful U.S. ally in the East. China‘s devaluation of the Yuan in 1993-1994 and peg to the dollar was not contested by the U.S. government although it was obvious that it would allow China to gain (and hold) a long-term supremacy over the U.S. in most manufactures. That too was done to “pacify” China. As a side “benefit”, these devaluations were the principle initiating cause of the Asian financial crisis of 1997, ultimately resulting in drastic losses of assets by other Asian countries, and deterioration of their already exploitative wage rates. If giving up worldwide supremacy in manufacturing (and its associated world economic and political leadership) is the cost of gaining friends, the U.S. has made a splendid bargain. The folly of this policy will become painfully evident when China’s GDP (and consequent military strength) overtakes that of the U.S. (about 2028 according to recent studies).

The major consequence of Globalization and “free trade” will be a lowering of wage rates (and worker and environment standards) to an exploitative one worldwide. Exploitative wage rates are simply rates insufficient to provide workers a "living wage", one that will not compel them to force their children to work and sufficient to provide money for their education. In Asia almost all workers have been exploited because of massive unemployed or underemployed populations in these countries. Each country has been desperately trying to employ its citizens at whatever wage rates are offered, and foreign multinationals (exploiters) have taken advantage of this.

In the interest of fairness for all workers worldwide, “equalizing” tariffs should be imposed by all countries on all imported goods which the home country itself could produce. An “equalizing” duty should be levied on all internationally-traded manufactures at a level designed to compensate for differences in worker’s wages and benefits. Those citizens unsatisfied with the quality or price of products produced locally would be free to buy foreign-made products but would have to pay duties in cases of unfair wage rate differentials. If no substantial wage differentials existed, there would be no duties. An equalization of effective worldwide labor rates was, in fact, a major feature of the Fordney-McCumber Tariff Act.

The manufacturing advantage enjoyed by current low-wage countries would be eliminated as the leaders of these countries realized that they were contributing funds to foreign governments (in the form of duties) which would not be necessary if they arranged equitable wages and benefits for their own workers. For all countries, local competition should result in the hiring of the most competent workers but at wages appropriate to any worker worldwide. Any worker anywhere, working in good faith, deserves a living wage. Anything short of this should be recognized as obscene. In addition, innovation would increase because new products developed under local competition would augment products developed abroad. The resulting income policies, coupled with fair tax policies, should eventually provide wage levels appropriate for workers worldwide.

One other consideration need hardly be mentioned but has dire consequences. Under Globalization, it will be necessary to “homogenize” the economic policies and social practices of the entire trading world, a relinquishing of sovereignty in many areas of government and society. It will require social-welfare oriented countries and conservative capitalistic ones to find common economic ground; religious and ethnic groups to agree on social policies contrary to long-held beliefs and traditions. To accomplish this will prove to be not only illusory but dangerous. How would the U.S. be better off by adopting those “international” wage policies which have left workers in the rest of the world poverty-stricken and unhealthy?

Globalization is 100 percent baloney. Globaloney, a term coined by Claire Booth Luce more than 60 years ago when it was first proposed, was baloney then, and is baloney now, only packaged in a different wrapper. Each country must be able to choose and support its own culture and be free to independently choose its own interests, pursuits, and way of life. Universal decent and fair trade practices will permit this independence and will do it without sacrificing these sovereign rights. If the U.S. government fails to face up to the consequences of its current policies of “free trade” under Globalization, we can all kiss off the “American way of life” that we have created and been so proud of.

How to Regain Control of Our Government

2008-10-28T06:22:00.011-06:00

The following are a few quotes from William Greider's book Who Will Tell The People. "When incumbent officeholders begin to perceive a real threat developing to their power, that is the moment when election politics can begin to become serious and interesting again. When the organized presence of citizens can deprive others of power, all the deeper power relationships surrounding government will be put to risk too." This article will explain how you can win back power from Congress and have representatives interested in your welfare rather than the welfare of the political elites.

If in the coming election the candidates that you are to choose from have been selected by various "special interests" groups, the winner will, when in office, simply do the bidding of these groups without regard for any other interests. If that is the case, what would be the point in voting? Many people believe that this is the case and will either not vote, or vote for a third-party candidate who has no chance of winning, both simply a repudiation of the candidates selected by others. But, in both of these cases, the "winner" will not care a hoot because he is well aware that no matter how disillusioned or angry these voters are, they haven't the power to affect him in any way.

But voters can do something that will make a difference. They have the power to vote the entire Congress out of office, if they vote in concert. They should be doing this whenever they are dissatisfied with the government's performance. They only need vote against all incumbents, whatever their party affiliation.

What the public is missing in this election is that, even if they vote into office a populist like Barack Obama whose intention is to promote policies and actions beneficial to the general public, if the Congress won't go along with his program, Barack will be powerless and ineffective. That's what happened to Jimmy Carter, another populist. Jimmy's campaign promises were all frustrated by Congress with the active concurrence of fellow Democrats beholden to their benefactors, those rich and powerful folks who financed their campaigns.

The public has to realize that it must break up the Congress's power blocks before Barack will be able to serve the public in the ways that he has promised. The only way to break up these power blocks is by voting out all incumbents, regardless of party. The remaining part of this article is a reprint of a previous article of mine explaining how this can be done.

How to Win an Election, Any Election

All of us have just about had our fill of unconstitutional and corrupt actions by our representatives in Congress and, considering their current extremely low "favorable rating" from the public, this is an ideal time for the public to take charge and dislodge them from office. This should be done en mass because they are jointly responsible for laws passed on their watch, and all recently passed legislation that I am familiar with has been in the interest of the rich patrons sponsoring their campaigns.

Some will claim that his own representative is serving him well, and will only attempt to toss out the other guys rep. For your "hero" to say that he is not party to this lamentable mess is like Frank James saying he really did not believe in what brother Jesse was doing and tried to prevent him from doing it. Laws are passed(and laws are at times not enforced) with the cooperation of all members of Congress.To protect your own rep simply will not work. The incumbents almost always win, considering that the big money is on their side. The 'democracy' which everyone so enthusiastically extols simply does not exist today for the working classes of the U.S. The sole democratic tool left to the public is the ballot box.

I have a sure-fire method for the people to again gain control over their representatives. It consists of simply voting against any incumbent on the ballot, regardless of party. The last election, won by George Bush with a 3 million vote majority over John Kerry, was contested by less than 57 percent of the qualified voters. More than 90 million qualified citizens failed to vote, mainly because they felt that their votes would not count. This figure roughly corresponding to the number of adult citizens without jobs(i.e., the job "participation rate" of U.S. workers is now around 66 percent (34 percent 'not participating') with another 5 percent 'officially' unemployed). If a person is not employed, he is, by definition 'unemployed'. Only our government can not understand this concept. There are about 85+ million 'unemployed' people of working age now in the U.S. The results of this particular election are typical for most elections, where the winner has less than a 5 percent majority. If only ten percent of these 90 million citizens who failed to vote were to vote against any incumbent he would stand little chance of winning. A simple ten percent increased participation in the Bush/Kerry election could have changed the popular vote margin of 3 million in favor of Bush (a solid majority) to a margin of 6+ million votes in favor of Kerry(a pretty respectable whompin').

If this proposal could become a reality the pols would finally take the public very seriously, that is, if they wanted to be reelected! The sole problem is one of getting these citizens to vote and providing them with a candidate who could win. The fundamental problem for those interested in placing a candidate responsive to the general public in office has always been the choice of an alternative candidate who had a chance of winning. We all now pretty well agree that the incumbent politician's opposition is also one who has his snout firmly affixed to the money trough and in many cases is following the same policies as his opponent.

But the charm of this solution is that it should be applied in every election in which the Congress has failed to do what was promised in its platform or was inherent in its party policies. After a very short time the pols would get tired of serving just one term(losing seniority and committee representation), and start paying attention to the needs of their all their constituents, including the American working classes.

A coordination of candidate selection and election such as this differs little from what the Religious Right has been doing for the Republican party, providing an "en bloc" vote which has biased recent elections enough to get our current pathetic officeholders installed. In the future, when the public becomes aware of their power at the polls, it will be able to select its own candidates for a "peoples party" by setting up sites on the Internet. These sites would collect suggestions for the party's candidates and provide the consensus candidate at election time.

If we all could get behind this movement, we would at last obtain the government we deserve. Other efforts to regain control of Congress, such as that of amending the Constitution under Article V of the Constitution, could well be the ultimate solution but will take time. A project such as this could very well speed up the process. So I encourage all of those voters who have been disregarded or damaged by their current representative to vote in this coming election. Vote for the opponent of the current incumbent or, if he has left office, for the candidate of the opposite party. Encourage all your friends to do likewise. If each of you will do this I believe that we can win back our government in this election.

Causes and Cures for our Current Debt Crisis

2008-09-27T07:48:00.003-06:00

It is touching to see Mr. Bernanke and Mr. Paulson getting credit for their proposed solution to the financial crisis we now face, especially since it was caused by policies which they and previous government officials had purposely followed knowing full-well that this current calamity could be the result.

FED chairmen, in particular Alan Greenspan in his erstwhile promotion of the interests of America's rich, have constantly flirted with a depression by employing interest rate and monetary policy practices designed to support an overvalued dollar or to cause a recession in order to reduce purchase of foreign-made goods. The FED, under Mr. Greenspan, has constantly increased interest rates during otherwise normal business cycles, under the pretext of preventing an undesired inflation which he alone supposedly understood (or experienced), when his true interest were in preventing a market-induced devaluation of the dollar. These interest rate increases simply shut down needed business activities and, together with corresponding monetary policies designed to decrease consumption, created systemic weaknesses increasing the possibilities of a depression.

This may seem quite preposterous to you, the reader, so I will briefly explain the reasons for these policies.

When “globalization”, the scheme of multinational corporations to extend the exploitation of laborer's wage rates to the entire world (beginning 30 years ago), began to produce unsustainable trade deficits in the western world there were, practically speaking, only 3 ways to resolve the resulting trade imbalances. They were protection (tariffs, quotas,etc.), a devaluation of the nation's currency, or a recession, which would cause unemployment and a resulting loss of consumer's purchasing power (hopefully for foreign products).

U.S. legislators, in the interests of U.S. multinationals who were manufacturing goods overseas to sell in the U.S. (the ever-increasing outsourced products and services), were “persuaded” to discontinue these tariffs, quotas, subsidies, etc. protective of American industries (a process known as “globalization”). They also were directed by U.S. wealthholders, their sponsors, to resist any devaluation of the dollar, and to cooperate with our trading partners in their efforts to keep their own currency values lower (ignoring the fact that their industries would, as a consequence, gain a major portion of the world's product manufacturing and services.) The sole solution left to resolve the trade deficits , in the opinion of the U.S. policymakers, was to drive the U.S. into what turned out to be a series of low-level recessions. This would not only tend to limit U.S. consumer's purchases of foreign products and services (unfortunately products made in the U.S. as well) and would (presumably) result in a decline in the trade deficits. In this scheme, only the wealthy could afford considerable purchases of foreign-made goods. This would not alone solve the fundamental trade problems, however. The trade imbalances would continue until America's workers could again compete fairly with their foreign counterparts.

Under these policies, U.S. wage rates would be expected to fall. Unfortunately, they would have to fall to around $3/ hour to effect any change in the trade imbalances. It did not happen (and could not happen given living costs in the U.S.). As long as trade protection was not allowed (a cornerstone of globalization), the only solution remaining to correct trade imbalances was for the dollar to depreciate. This solution was resisted by the rich and was not resorted to until recently (and grudgingly). This solution to the trade imbalance was, in effect, done “too little too late” . By having forced serial recessions for 30 years without trade deficit resolution, the middle class in the U.S. had been essentially pauperized by mounting debt. Instead of decreasing consumption during these “recessions” the middle class attempted to “keep up with the Jones” on borrowed money or previous savings. This finally culminated in the sub-prime lending fiasco and current debt crisis. These practices had essentially wiped out any “cushion” of accumulated financial assets, credit card loan limits, and home equity loans, culminating in a $1 trillion credit card debt and extensive non-performing home loans. There is no longer any way to avoid facing the fact that the middle class is no longer able to sustain an adequate consumer demand for a healthy growing economy.

The only solution possible now, short of trade protection policies, is for the government to provide the consumption dollars necessary to sustain a healthy economy which,current tax policy being what it is, will result in substantial deficit spending. Unfortunately, the rich don't like this solution either, now contesting the “last, best, chance” for the survival of a high American standard of living, the proposed bailout. As soon as the rich realize that this “consumption-supporting” deficit will have to be continued indefinitely, now that the middle class's resources have been permanently compromised, they will be even more unwilling to provide this needed financial support. Consequentially, unless a new administration “gets serious” about serving the interests of the general public rather than the short-sighted and ultimately destructive policies demanded by the rich, the U.S. will be facing a never ending decline in it's standard of living ( a fact well understood by Wall Street.)

I have a solution which would eliminate the sub-prime interest rate problem as well as the “BTC” (before the crisis) fiscal deficit as a bonus. U.S. citizens now pay about $3,800 per person more than the citizens of their prosperous (western) trading partners for health care services. This amounts to an outlay of about $1.2 trillion more for our insurance-dominated , “pay for as you go” health services than other western countries citizens pay in their single-pay health systems. The U.S. citizen, as a further insult, experiences a far-lower quality of health care than citizens in these (government administered) “single pay” systems. The U.S. health care system was rated 26 in the quality of health services among the developed western nations by the World Health Organization in 2008. Of the resulting $1.2 trillion excess payments, the U.S. government pays about 40 percent, and the private citizen 60 percent. This amounts to $480 billion from the government (via taxes) and $720 billion from U.S. families, about $500 per month more per family.

By reverting to a single-pay health care system the projected $480 billion fiscal deficit would disappear. With $720 billion more in the pockets of American consumers (and mortgage holders), the proposed $700 billion federal bailout of our financial sector would be unnecessary.
These problems could be solved in a single day by the U.S. congress. They only need to give up the AMA's, ADA's, hospital's, insurance company's, and pharmaceutical companies' more-than-generous “contributions” to their political campaigns and vote for a single-payer health system developed in the interest of all the country's citizens.

An even-more important single law would quickly solve the U.S. trade imbalance (at least eliminating the unfair wage advantage of foreign workers over their their counterparts in the U.S.). The U.S. congress simply needs to promote legislation requiring a worldwide (living) minimum wage for workers producing internationally-traded goods, with a proviso that products of non-complying countries be subject to an “equalizing” tariff based upon wage and benefit differentials. Not only would U.S. and other western countries' trade imbalances disappear, but workers worldwide would benefit. It's time for all good people everywhere to demand a living wage for workers of all countries. Every man working in full faith for 40 hours a week deserves, as a matter of morality and justice, to receive a living wage for himself and his family! Anyone tolerating or condoning less than this should be recognized as an “exploiter” and suffer the disdain of his fellow citizens.

Popular Scams of the Rich and Famous

2008-09-16T21:22:00.033-06:00

There are an ever-increasing number of linkages between politicians, big businesses, and rich individuals designed to promote their joint prosperity at the expense of the general public. Money flows in both directions between these “players” under various “pay for play” schemes. Because they unfairly absorb federal tax revenue or deprive the general public of legitimately earned benefits, I refer to these schemes as “scams'. Most are technically “legal' being based upon law or statute, or founded upon government policy and practice, but have been set up in ways designed to benefit favored individuals. In most cases, these practices are promoted by Republican politicians serving their primary clients, rich individuals and “big business”. Hopefully, in the coming elections, legislators will be chosen which will have the courage to rectify these abuses. The following are just a few of the more popular scams.

Social laws, uncertain as to constitutionality, have been passed to control the general populace, and are generally ignored by those creating them, as evident in many recent court cases. Prostitutes do quite a brisk business during political party conventions, and a “madam” recently interviewed claimed that the "family values" group, the Republicans, are the the best customers. But all this has been pretty well hidden from public awareness by the establishment media, and grudgingly and belatedly disclosed, if at all, after previously promulgated on blogger sites. This situation was not reported during the 2004 conventions by a single major U.S. media, and I read about it only in foreign news sources, the Guardian and Reuters. So much for the fearless American press! But news media in the U.S . practice self-censorship because they are fully aware of what they can and cannot report. Anything critical of the rich and famous is forbidden.

There has been no effort to contain medical expenses that have caused a great many of the financial problems currently plaguing the U.S. The AMA and ADA have so well financed the campaigns of our legislators that we are now facing multiple financial crises substantially directly cause by health care costs. The 2007 federal government deficit of approximately $180 billion would have become a $300 billion surplus simply with a reform of this sector. Americans pay, on average, nearly $7,000 per person for medical costs, whereas citizens in the next-highest-cost developed pay around $3,200 per person. Bringing the U.S. health costs in line with those of the rest of the western world would save U.S. citizens directly $720 billion and the federal government $480 billion more. The U.S. physician's claim is that costs are so high because we get the best health care in the world. This is a real con job. The World Health Organization ranks the U.S. 26th in quality of health care of the advanced countries. The major problem is that a monopoly has been created by limiting the number of teaching hospitals as well as the number of students who are entitled to enroll. The selection process for medical school positions involves the usual custom of picking predominantly children of those politically connected. The "special" qualifier for positions in the few medical schools places offered, that determines appointment more often than demonstrated academic excellence, is participation in extra-curricular activities indicating "leadership" abilities. This is a standard trick for all appointments in this vast conspiracy, made to benefit unqualified candidates supported by political elites. It avoids the serious business of determining the truly deserving (who are frequently passed over because they are considered “nerds” (because they study so much)) and for admission committees to give preference to candidates whose academic performance is not quite up to par. George W. qualified as a possible “leader” because he was a cheerleader at Andover, and others are selected because of their participation in college political activities. When training people for highly technical and critical jobs (e.g., physicians), the last thing the candidate should be doing is playing political tricks or scheming for political office. They should be studying.

The whole system of "globalization" is simply a way to exploit workers worldwide thereby maximizing the profits of essentially western-owned multinationals. The results are now coming in, as demonstrated by the current disinflation in the western countries. By allowing multinationals special tax breaks and accounting practices the U.S. government has encouraged the transfer of almost all high wage U.S. jobs overseas to low wage(exploited) workers. By simply calling these lost jobs "low skilled" they have convinced U.S. workers that they really deserve less for their labor, which in many cases were the most stressful and demanding in the country, Soon middle level professional jobs will be moved overseas as well, and similarly described, no doubt, as "low skilled". This includes engineering and product design, paralegal and brokerage back office jobs, and accounting and auditing jobs as well. Even radiologists will miraculously end up as "low tech" workers.

Still extant farm subsidies unfortunately not only violate those “economically sacrosanct” principles of globalization but result in higher prices for the American consumer as well as increased cost to the American taxpayer. As a bonus, they frequently produce serious economic consequences for other "global" players, especially for our South American "partners" (and incur their resentment).

The U.S. government has made no effort whatsoever to assist in providing support for displaced U.S. workers by demanding reciprocity of employment opportunity with those countries whose citizens are flooding the U.S. labor market. While surveying foreign papers in Europe and Australia/New Zealand for jobs in the IT business, I found loads of ads promising unlimited amount of IT opportunities in the U.S. But ads for IT jobs in these same countries all ended with statements that these local jobs are reserved for their own citizens. Recently the U.S. government passed an amendment to its visa rules allowing other country's workers to enter the U.S. for 6 months without a prior job offer. Most other western countries did the same I believe, offering job opportunities for U.S. workers. But there was a limit to the ages of these workers, 27 years I believe, suspiciously approximating the average age of the children of our current members of Congress. These job opportunities can not possibly benefit those most damaged by U.S. outsourcing policies, those who had irreplaceable (at their ages) experience, without finances to retrain, and facing huge and continuing family bills in the U.S. They still have no realistic possibilities to work overseas even though the great god “globalization” based its legitimacy on the free movement of capital and labor. What a joke!

The entire USAID program has become an excellent way to feed money to political supporters. This scam involves granting taxpayers money as USAID “aid money” to friendly foreign governments with "tied" aid (agreements to purchase in most cases U.S.-made products and services). The so-called "aid" money never reaches the country supposedly receiving it. The "receiving" country gets products and "advice" from U.S. corporations and individuals selected from the U.S. governments "preferred list" of suppliers. The organizations providing these services and products are basically weapons suppliers and "international" accounting and law firms providing "advice" to the recipient country's government. These “select” suppliers and “advisers” are, of course, those companies and individuals who are the major suppliers of campaign finance funds. The recipient country gets weapons systems and armaments used by the local military to control discontented locals (and also expected to support U.S. regional political goals). The result is a lot of money is transferred to American multinationals and private companies located in the U.S. with the bill payed out of taxpayers funds. This is an excellent way to create campaign finance funds with the bill paid by U.S. taxpayers.

Flight of capital from the U.S., (unrestrained by laws regularly established by other more prudent governments) is increasing the risk of a banking default in the U.S. and a drastic drop in the dollar. It is accelerating at the same time that foreigners dollar holders (private and public) are thinking twice about keeping their funds here because the U.S. government has shown no interest or willingness to restrain this process.

The much ballyhooed one-man, one-vote election under a democracy simply does not exist. With the caucus system still being practiced in many states, the candidates the public finally gets to vote for (essentially one of 2 choices) have been chosen by the powers-that-be within each state, and under these conditions, the private citizen's vote is practically meaningless.

Most of the efforts of the U.S. government to contain Communism have involved the setting up of American-friendly foreign governments who were willing to turn a blind eye to exploitation of their country's resources and populace by U.S. corporations. To make matters worse, the U.S. Government, which has established these regimes, insist on calling the resulting U.S.-friendly governments (oligarchies of the rich at best) as "democracies" when,in reality, the government which it replaced was far more democratic than the one established by the U.S. government. This was all done under the pretext of constraining Communism, but was also a handy scheme for U.S. businesses to gain possession or control of the few assets these poor countries possessed and a new supply of exploitable local workers. Now that Communism is no longer a realistic treat there is no longer any pretext for doing this. No governments should be overthrown by actions of the U.S. government regardless of its having a political or economic system inimical to presumed western interests, and certainly no one should be going around bragging about setting up a "democracy" when the opposite occurred.

Bidding on all levels of government contracts is also riddled with ways to allow the contract manager to give the contract to a friend. If the manager's friend is not the low bidder, the manager can simply reopen the bidding on any number of pretexts and advise his friend what he needs to bid to get the contract. Bids can be thrown out as "non-serious" bids without notice, on the basis that the bidder is incapable of performing at that price. This device is used when the winning bid is so low that even the manager's friend can't compete even knowing the prospective winning bid price. This is because he is really a 'prime contractor', won't be doing the work, and needs extra funds to cover his “cut” and to cover possible gratuities for the contract manager. The government has even set up a separate agency, at taxpayer expense, to "prove" this type of fraud can not occur. All the public exposure over the years of these practices puts the lie to the honesty of this organization.

The FED's constant claim of incipient inflation over the last 18 years (when none has ever materialized) has finally resulted in our current economic crises. The latest FD-sponsored recession might well be the final straw that breaks the back of U.S. consumers. There is a serious "moral hazard" involved in improper disclosures of these continuing, unpredictable, and totally uncalled- for adjustments in interest rates as well.

The federal government has been playing footsie with fascism for quite a long time, supported only by the inability of the general public to recognize it. Ecclesiastic appointments, corporate management, charity, "brain trust" ,foundations, university appointments, and even scholarship awards are controlled by political elites, with the consequent assurances that these appointees will play ball with the politicians and their “sponsors”. The Pols now essentially control everything under the direction of the rich and famous.

No one needs reminding that the lobbying crowd and PACs are distorting the legislative process, but every effort of reform is soundly trounced. The lawmakers will not vote against their own power bases and the "favors" they can offer and receive under this system. The only attempt to remedy this was the establishment of limits on 'hard money" campaign money while leaving the door wide open for "soft money" contributions with their oh-so-easily-evaded prohibitions. The “attempt” to control the "revolving door" practice of members of the government (receiving miraculously-compensated position by lobbying organizations upon retirement) by restricting the period in which they could be hired to one year after leaving office is a real joke. There seems to be no sincere effort to restrict members of Congress and the agencies from accepting high-paying jobs from the companies they had previously regulated. Likewise, the law limiting "gifts" while politicians are in office, with no restraint on them after leaving office, is an even bigger joke. The results of these practices have demonstrated their fundamental dishonesty in too many well-publicized instances.

The attempts to trick the public by entering legislative bills that their sponsors know will be voted down (but designed to pacify offended parties) are so widespread and well known as to be an open scandal. But with the media's connivance, these practices (tricks) are never fully understood by the public. I hope that the never-quite-successful attempt to reform the health care system is finally recognized as this type of trickery. The attempted reforms of education,drug abuse, and campaign finance should likewise be recognized as fundamentally dishonest. In every case, one house can take credit for a valiant effort to effect a reform ... and the other house fail to pass it, as planned. Another great trick which is quite effective is to set up a panel, committee, or specially selected individual to deal with a problem, with the understanding that the party so selected will simply sits on its duff until the issue is no longer current.

The “justness” of the U.S. legal system can be compromised by anyone with unlimited funds. The Constitution certainly would not have countenanced the use of multiple lawyer (with political connections) for any one case, for jury selection advisors, and the abusive use (and misuse) of expert witnesses.

Failure to properly assess federal income taxes result in increased prices not reflected in the COLAs used to adjust retirement,pension, and social-welfare payments. These increased prices affect the middle class the most because they are stuck with buying overpriced real estate and a broad range of items otherwise not included in COLA adjustments. They try to maintain an average standard of living by patronizing various civic, sports, and charities whose prices have been, over the past decade, driven up 4-fold while their incomes have been stagnant or falling. The FED is forceful in suppressing price increase on normal necessities while any many items previously affordable by the middle classes soar out of the reach of any but the rich. Inflation in these newly-created luxury items is around 15 percent while inflation in those broad range of standard necessities (and the salary levels of those people supplying them) is prudently restrained by the FED at 2 to 3 percent.. Purchasing power for citizens worldwide will remain stagnant as long as these globalization, tax, and FED policies continue.

Foundations, “brain trusts”, charities, and other non-profits are the most dangerous potential source of political influence-buying of all these “scamers”. Foundations, formed by individuals to avoid inheritance taxes, can provide jobs, grant contracts, and purchase goods and services from a large number of politically-sponsored individuals and companies. They pay no taxes even when they accumulate funds, which they call “surplus”. These surpluses can be invested with the proceeds not subject to taxes. Their employees are well compensated and live quite luxuriously while on 'company business'. Contract awards and grants tend be generous, and the foundations can purchase supplies and services without oversight. Most recipients of this largess are politically-connected and are expected to promote political goals and to funnel funds to political campaigns.

There are literally hundreds of thousands of other varieties of non-profits,categorized as NGOs, which conduct their businesses in essentially the same way. They are set up to perform certain socially-beneficial services, but after all the above-mentioned expenses, only a small percentage of their income are used in this way. Typically, 30 percent of their income (tax deductible write offs from corporations and individuals, and government giveaways) are spent on salary and payroll taxes to top employees and their generous “business expenses” (5-star hotel accommodations, chic restaurant and 1st class air travel costs). The remaining 70 percent can be used for “public relation fees” (to supporters) and some is even spent on legitimate promotion programs. What is left, perhaps 50 percent, can, by the “50 percent rule” be passed on to another tax-exempt having similar expenses, with the result that the claimed public-service, used to obtain tax-exempt status, can end up with practically nothing. Certain charities are particularly offensive perpetrators of this same scheme, disbursing for political purposes the monies donated for the most-needy individuals of all, the poor and defenseless, mostly children. Principles of those organizations practicing this blatant “welfare to the rich” scheme should be, but seldom are, prosecuted.

Government workers in the state and defense departments regularly abuse per-diem TDY privileges. Congressmen on "boondoggles" to exotic foreign locations also are in on the act. These government employees receive $250-$300 per day (tax free and unaccountable) when providing government "services" overseas. The trick is to assume this status even when their overseas assignment may last for years. In practice they rent out luxurious but low cost apartments while living in low-cost countries instead of using their big per-diem allocations for hotel quarters, and live high on the hog on peanuts, pocketing the difference. Congressmen use their "boondoggles" to visit exotic sites under the pretext of the need to be there and having legitimate work to do at the site. They generally go first class air, stay at the fanciest and most expensive hotels, and patronize the best restaurants. Their expenses, if not covered directly by U.S. Government agency or international organization money, are well financed by lavish per-diem allowances.

No real effort has been made for he past 30 years or so to pass legislation that the congress acknowledges are necessary. Health care reform, educational reform, drug reform, and term and campaign election reform have been continually proposed throughout this period, and not one of these issues has been satisfactorily resolved. It is painfully evident that the Congresses involved were acting in bad faith in proposing them.

The president elect has the right to grant 3000 top-level federal (patronage) jobs as payoffs to friends and supporters, and federal judgeships control quite a few more. Top officials in all agencies and government departments are chosen in this way and each lucky appointee in turn picks other friends-of-the-family for subordinate jobs. The results are a government completely under the control of the “in” party and manned by appointees with little or no substantive administrative experience. The consequences of this practice have been the mishandling of the Katrina disaster and security, defense, and other government screwups. This is however, a sure- fire guarantee of easy (if any) work with generous salary for otherwise inexperienced and uneducated wives, relatives, and friends of all sorts.

I just mention contract fraud briefly because it is so well-known by now that I need little elaboration. The GAO has, as yet, 5 years later, not done anything about the letting of the most-well-known and abusive "no-bid" contract, that to Halliburton subsidiary Kellogg, Brand, and Root for a variety of services which could have been provided by anyone, but which were granted on the basis that only they could perform them (e.g.,serving meals to servicemen). Evidence was proffered long-ago that most of these "services" were finally performed simply by the lowest biding subcontractor irrespective of capability, and at a fraction of the price given to the prime contractor This is a common way of "whitewashing" a blatant fraud, the "problem" being "handled by" some agency/committee, which essentially buries it until the issue is no longer on anyone's radar scope. The latest estimate of no-bid contracts for 2008 is in excess of $150 billion.

Trickery and favoritism in the granting of Small Business Administration loans is, likewise, never investigated or prosecuted. Big organizations set up "small business" subsidiaries that, not so surprisingly, get many the loans meant for genuine small entrepreneurs. The practice of forgiving defaulted loans lets the door wide open for fraud as well.

All in all, most of the American populace's problems derive from a lack of understanding of how
their job opportunities and financial success are being jeopardized by these practices. A great deal of the blame for these scam's success can be attributed to the establishment media's self-censorship on these important issues, with a consequent inability of the public to correctly determine what is going on. Thankfully, there is now a self-appointed group who are now providing the news so instrumental in allowing the public to make necessary political decisions. They are called "blog sites" and are America's version of the old soviet "samizdat". Hopefully the government can be prevented from meddling with them.

A Flagrant Violation of the Constitution

2007-12-14T15:38:00.000-07:00

The U.S. Constitution was the first written agreement in history guaranteeing the citizens government protection of basic human rights as reflected in its Bill of Rights. It was the realization of the fundamental human rights espoused by philosophers such as Voltaire, Rousseau, and Locke, but which had never before been granted by any previous government to its citizens. By virtue of the sacrifices of life and fortune by our ancestors, citizens of the U.S. had inherited those rights as stipulated in our Constitution. Now, the rightful admiration and acclaim of the world for this monumental accomplishment has been destroyed by our current government. By invalidating the last protection of the people from government abuse, that offered by Article V of the Constitution, the people no longer have any remaining protection from possible abuse. The sole other protection of the people’s rights provided in the Constitution was via the ballot box, which has been “neutered” by the influence of money in the election process, and is one of the very abuses necessitating an Article V Convention.

By refusing to grant the legitimate requests of the states for an Article V Convention (to propose amendments to the Constitution), all three branches of the U.S. government are now operating as a "rogue" government outside the law. Under Article V of the Constitution, the states may request the Congress to establish a Convention to propose amendments to the Constitution. The states have done this by submitting over 500 requests to the federal government.

Congress has refused to convene a convention, the President has failed to initiate action against Congress for this violation, and the Supreme Court has refused to force them to do so. I will, in the process of explaining the Constitutional duties of each body, make clear the basis of the laws that have been broken, and the remedies open to the public if the government continues in its violation of these laws.

The "sovereignty" of the people was first established during the Continental Congress when, under instructions from John Adams, the states established themselves as separate sovereign states under state constitutions (established in conventions by their own citizens). This occurred prior to the Declaration of Independence, and as a necessary precursor to the federal Constitution. The Constitution was a contract between these newly-sovereign states (the previous colonies) to establish a federal government under a federal Constitution and delineated the rights and responsibilities of this new entity with respect to the citizens of these states.

As these constitutions were being created by the independent states, the Declaration of Independence was promulgated to formally declare the colonies no longer under British rule, and to enumerate the grievances which had led to this event. It was drafted by Jefferson and contained the natural "rights of man" which George III had violated and which served as a pretext for the legality of the colonies to secede.

The United States Constitution was drafted by James Madison but failed to include these natural “rights of man”. It was a document designed primarily to establish the form of the new government and entirely excluded reference to the rights violated by the king and the supposed cause of secession. In the process of ratification of the Constitution, the states demanded an explicit statement of the rights of man, which many had included in their own constitutions. This resulted in the Bill of Rights, the first ten amendments to the constitution. The Preamble to the Constitution was created after the Constitution had been drafted, and was meant to define the principles underlying it. The final phraseology contained only generalities such as “secure the blessings of liberty” and “promote the general welfare” which were so broad that they could be construed to encompass almost anything. Unfortunately, the only substantive and explicit protections for the people, in fact, were those established by the Bill of Rights, which consisted in freedoms which were not to be contravened by statutory law (freedom of speech, assembly, the press, etc.)

But there was no underlying philosophy regarding the intent and nature of the statutory laws allowed under the Constitution or the principles which were to underlie them. Thomas Jefferson was convinced that the government so established was one of a democracy in which the government and its laws had been created for the benefit of “the people”. Lincoln was among later presidents who likewise believed the Constitution had established a democratic government when he used the phrase 'of the people, by the people, for the people' in his Gettysburg Address. Other delegates to the Convention thought otherwise. They maintained that the government established was simply a Republic consisting of a bicameral legislature, an independent judiciary, and an elected president. In their opinion, in establishing these three bodies the Convention had not, at least by the strict wording of the Constitution, established a democracy(the word “democracy” did not appear anywhere in it). The (male) landowning classes were the only citizens allowed to vote. The selection of the president was further controlled by an Electoral College which precluded the choosing of the President by popular vote. The Senators were appointed by the state legislatures (not elected by "the people"), and the Supreme Court was not subject to selection by the voting public but appointment by the president (with the "advice and consent" of this same "appointed" Senate). The right of filibuster resided in both the House and Senate as a further means to prevent the passage of any law contrary to any interest represented by either body. It still resides in the Senate.

The principles and philosophy under which successive governments were to operate depended entirely upon the philosophy of the party in power. John Adams (a Federalist) presided over a governing party interested in a strong federal government administered by an oligarchy of landowners whereas Thomas Jefferson (a Republican) believed in federal powers strictly limited by rights reserved to the states and in a popular democracy. Since then, the Federalists have disappeared and the current Republicans believe in a limited role of the central government and rule by an oligarchy (the Aristocracy of the Rich). Currently both parties of Congress as well as the President have indicated by the nature of recent legislation that an oligarchy of the well-connected is the form of government they want. They all have been seduced by the money which assures their continuation in power. The Democrats still pretend to believe in extensive control by the government and a popular democracy but have in fact supported a government catering to the wealthy and displaying little interest or effort in serving the public at large. Both parties dance to the same tune, played by the same band.

The public (through their respective state governments) have requested the establishment of a convention under Article V of the Constitution in order to reestablish a more democratic government in which the laws passed and enforced will be in the interests of the general public, and not that of our current oligarchy. The Congress has refused to grant these requests and the President and Supreme Court have not forced them to do so. This has occasioned a realization that there is a serious flaw in the Constitution. That is, who can prevent the three federal government bodies so established to collude in a violation of the Constitution?

The Constitution established a republican form of government consisting of the President, Congress and Supreme Court. These three bodies were designed to "check and balance" each other so that there could not be an assumption of absolute power by any one party or political group. The judiciary was to pass judgment on the constitutionality of the laws passed by the Congress and could void these laws as "unconstitutional." The President administered the Constitution and statutory laws created by the legislature. If the President failed to properly perform these duties he was subject to impeachment by the Congress. The Supreme Court, once appointed, is under the control of no one. No one can force them to perform their duties under the Constitution (short of impeachment), and they are allowed to remain in office for life. The Congress has ignored the requests by the states for this Article V Convention. The President has not performed his executive responsibilities as administrator of the laws. The Supreme Court has denied a writ of certiorari petitioned for by a private citizen, Bill Walker, to force Congress to comply with their Constitutional duty of granting this Convention. All have violated their oaths of office in doing so.

What has lead up to the present crisis has been the ever-increasing role of money in the selection and election our legislators. This began back in the sixties when Richard Nixon and John Kennedy ran for President and was commemorated in the book "The Making of the President" by T. H. White. In the past, prior to extensive use of television advertising, the candidates typically had to appear before their constituents in public forums, and the electorate had a better chance of determining their political positions and principles firsthand. All candidates were limited by their ability to be in only one place at a time to present their messages. Now, with the widespread use of TV advertising and PAC documentaries, the candidate can virtually sit at home and have unlimited exposure to the public. The candidate can present his best image using make-up artists, style coordinators, and poll-tested slogans and policy platforms (which he has no intention of following). If he has enough money, he can deluge the viewing audience (the voters) in a way that his opponent, if lacking an equivalent amount of cash, has no way of contesting. The candidates are marketed in the same way as Coke and Pepsi. The advertising execs know that whoever has the most extensive public exposure (Coke or Pepsi) will be purchased by the public.

Likewise with a political candidate. It all depends on who is willing and able to spend the most money. Unfortunately, both political parties understand this and have had to promote their candidates in the same way. Money has bought the candidature and election of members of both parties. So the U.S. government now is simply an oligarchy of the rich and well connected. What is now needed is equal access to the TV for all candidates, paid for by the government, with no other means of moneyed interests to control the outcome of the elections. The present Congress is contented with the current arrangement and the only way to effect change is by means of a Constitutional Convention under Article V. The oligarchy of the rich is well aware of this and has apparently "encouraged" all branches of government to prevent it.

The reason I have taken care in explaining this history is that the country could be facing the first major Constitutional crisis in its history and the public should be well aware of the laws that are being violated. First of all, the President of the U.S. has failed to do his sworn duty to "support and defend" the Constitution by demanding that the Congress bow to the legitimate requests of the states to hold this convention. The Supreme Court and the Congress have likewise violated their respective duties under the Constitution as well as their oaths of office. The President knows full well that Article V is not being complied with by Congress and that this is an illegal act. The Supreme Court should know that it is guilty of misfeasance of office in denying the writ of certiorari.

These actions have broken the contract between the individual states and the Federal government known as the U.S. Constitution. The usual remedies of law pertaining to broken contracts are not operative. Damages are not appropriate, and the courts have made it clear that they will not force "specific performance" (the establishment of a convention under Article V). What we now have in the U.S. is a "rogue" government operating outside the law. Under these circumstances, the only valid laws still operative and enforceable are the state laws. By actions contrary to the explicit Constitutional rights of the states, our current government has nullified the Federal government's right to rule.

But first, perhaps it is necessary to try to understand the reasons these government bodies may have chosen to ignore their duties.

The Supreme Court could possibly (but not plausibly) use the excuse that time spent on this issue could detract from their efforts in deciding truly "important cases". They needn't worry about this. This issue could be settled in the cloakroom. The law is crystal clear. It does not “conform to” principles in the Constitution. It is explicit in the Constitution itself. The facts are equally clear and irrefutable. The states are of record of having made these requests. What's to arbitrate?

It is claimed that people are afraid of changing the Constitution because it has proved to be perfect as it has evolved, and should not be changed. If it is such a perfect document, then the Supreme Court should have no fear in forcing Congress to do its duty and establish this Convention. If it is not perfect, then there is a legal remedy available under the Constitution, that of amendment. But good luck with that one because an amendment must be approved by the very legislative bodies (the state legislatures) that have requested the Convention. The court must take one position or the other. Either the Constitution is perfect and unalterable, or it is flawed and must be changed. It faces a Hobson's Choice in this case because either would lead to a convention under Article V. That is, as long as the courts are interested in complying with the law.

In the process of ignoring their Constitutional duties, the court has made a mockery of the two most fundamental and sacred legal concepts of a capitalist economy under a republic. In ignoring contract law, they violated the most fundamental law underlying a capitalistic economy. In ignoring their oaths of office they have violated the foundation of all jurisprudence within the U.S. legal system. If members of the courts flagrantly violate their own oaths, how can they expect any ordinary citizen to take his oath-taking seriously in any court of law?

Any person reading this article should be offended by these illegal actions by its representatives. So I am encouraging you all to inform your representative that you are aware of your rights under the Constitution and depend on him or her to enforce them. If he refuses, lacking the capability to remove him from office (as explained in this document), citizens must work diligently to force the establishment of an Article V convention. An organization has been established to do just this, and I encourage all of you to support it. Their website is at www.foavc.org.

America the Next Great Banana Republic

2007-10-04T11:58:00.000-06:00

After 30 years trying to defy economic gravity, the US is well on the way to becoming the world's largest banana republic. If the current level of government mismanagement continues, within 20 years the US economy will be comparable to that of Mexico. With a more modest level of mismanagement, this will occur in less than 10 years but under much better economic circumstances. This article will disclose the uncanny (but to be expected) similarities between the circumstances preceding the downfall of Mexico during its periodic crashes over the last 50 years with similar circumstances prevalent in the US today. The government of the US, unfortunately, does not seem to believe that all countries are subject to the discipline of the marketplace, regardless of their demonstrative wealth and seeming invulnerability. The sad part is that the bigger the country is, the harder it will fall. The US will drag down the entire world with it if it persists in its current flagrant economic profligacy.

First I will explain how the Mexican people (as well as the people of many other Latin American peoples) ended up in their current poor economic conditions of low income and general poverty. The term "Banana Republic" was used to describe a country with a low level national production whose sole foreign exchange earnings came from only a few products. The resulting lack of export earnings combined with a considerable level of imports inevitably lead to a drain of the assets from the banking system. The imports of essential goods not locally produced from the rest of the world, accompanied by luxury goods of a non-essential character procured by the small percentage of rich, overwhelmed the amount of exports. This results in a current account deficit, which is the amount of money leaving the country consequent to shortfalls in trade, services, and returns on asset purchases/loans incurred during previous current account deficits. If the Mexican government did not want to completely lose control of its money supply, resulting in a devaluation of the peso and drastic fall in the living standard of the working classes, it had to modify its policies.

There are basically only three ways to remedy a current account deficit. One is to impose trade barriers in order to force a balance between exports and imports. This is what the IMF and US government have discouraged Mexico from doing. The IMF and US government are committed to "free trade" and are advising all countries to do likewise. In many cases this is not in the best interest of these less-developed countries because they will continue to need protection for their infant industries if they are to survive. The second way to remedy a current account deficit is to allow a devaluation of the currency making it more costly for its citizens to buy foreign products and making its exports more competitive overseas. The third way is adopt economic policies designed to create recession, which undermines the public's ability to buy foreign-made goods. Unfortunately, if this is done when a country in already in recession, it simply creates a depression with widespread unemployment instead of simply less purchasing power.

Whenever a country depreciates its currency the purchasing power of imported goods of its citizens declines. This is usually the final remedy the IMF imposes upon these countries as a condition of granting it those loans needed to avoid a collapse in the value of their currencies. The people are pushed down into ever lower levels of poverty by doing so. The IMF usually insists on continuing "free trade" although this may have been a major cause of the foreign trade imbalance in the first place. The IMF normally begins "reform" by impressing "austerity measures" on the government such as privatization of publicly-held companies and a downsizing of workers on the government payroll. All of these IMF-imposed "corrections" result in a substantial reduction in the standard of living in Mexican workers and the consequent rioting whenever the IMF, or their partners-in-crime, the WTO meet.

One way that most countries(including the US) employ to avoid a current account problem is that of selling off its assets to foreign creditors whenever they experience a trade deficit. Unfortunately, Mexico found itself in such dire economic straits in the first place because of a lack of productive enterprises creating those manufactured goods needed for export. The only assets Mexico had to sell were their natural resources, which were the sole patronage of its people. So, wisely, it typically has refused to sell them(as it should) and their bank deposits immediately have came into jeopardy. To avoid a currency collapse, Mexico was finally forced to comply with the harsh rules set down by the IMF, with a consequent drastic fall in their people's standard of living.

The US government has been following this same path due to ever-increasing balance of payment problems. It has managed to give away, or allowed and encouraged US multinationals to move, manufacturing facilities from the US mainland to foreign locations. These industries previously provided the backbone of US exports to the world and the reason that the US had become the most prosperous country in the world. These industrial losses have resulted in the almost unbelievable current account deficit seen(much less contemplated) in the history of the world. But, because the US government apparently believes that the economic factors that have ruined Mexico do not apply to it, the government has done nothing to remedy the situation. Consequently we find ourselves now in the beginning stages of an inevitable substantial devaluation of the dollar and decrease in American standard of living. The recent rapid drop in the value of the dollar with prospective further devaluations are simply an unavoidable consequence of these cavalier government policies.

The US government can establish protective trade measures or establish a managed trade regime. But it is committed to "free trade" (which is far from free) mainly because the imports which are causing our current account deficit simply are those products which our own multinational corporations are manufacturing overseas(after laying off the US workforce stateside which had previously made them). Ninety percent of the export coming to us from China are made by companies owned or party-owned by foreign-owned companies, twelve percent of which are American, with the rest predominantly shared by the EU, Japan, and Taiwan. The US government has been kind enough to give the earnings from these exports by our multinational(to us) favorable tax treatment to make it even more lucrative to move production from the US to overseas locations.

Now for the good part. The US government assumes that it can do something that Mexico couldn't do, that is to completely offset the trade deficit by the sale of US assets to foreign dollar holders. This will take the pressure off of US bank assets and avoid the necessity to devalue the US dollar. They have been doing this for quite some time and can continue for quite some more time, perhaps for as long as 20 more years. But even US assets are ultimately limited. With the current yearly transfer of US assets of more than $2 trillion, these assets(stocks,bonds,real estate, and money market) will eventually become entirely foreign-owned and the US will be the world largest banana republic. The FED will have lost control of the currency and the dollar will go into free-fall. If this folly continues, the dollar may lose all value caused by a hyperinflation.

But here is the kicker. If the US government takes no action while these asset transfers are occurring, within 20 years essentially all US assets will be under foreign control or ownership. So I suggest that if the US government is just able to mismanage the economy a little better it will, as Mexico tried to do, preserve US ownership of a major portion of our assets. By prevent substantial capital asset transfers to foreigners, the US government will shorten the time for the draining of bank assets and the eventual massive devaluation of the dollar. Citizens of the US will suffer a drastic drop in their standard of living but will at least not be completely poverty stricken. They will also have avoided the need in the future to pay the substantial interest payments on foreign-owned assets which is causing so much pain for the Mexican public today. The US government will also avoid being in the unenviable position of having to petition or coerce foreign owners to support the US in times of international troubles.

But wait, why not avoid the major consequences of these unfortunate circumstances? Why not adopt the austerity policies that the US(via the IMF) has so enthusatically imposed upon other countries? If the US still wants "free trade" then it should be willing to adopt those "austerity" measures that the IMF forced upon Mexico. All it has to do is adjust federal expenditures in a way to effectively decrease excess spending on foreign-made goods. The government could accomplish this by imposing the very graduated income taxes which had served us so well in the past. And downsizing the federal government by laying off many in our current bloated bureaucracy whose inflated salaries and pensions have played and will in the future play havoc with federal budgets. While they are at it, why not stop the subsidies to those "special friends" like the big farm groups. And the big government "no bid" contracts to their corporate cronies. And last but not least, stop subsidizing the education and salaries of those "lucky ones" who manage to get into medical schools. These measures would go a long way toward correcting the foreign trade deficits, with an added bonus of rationalizing our budget deficit. But the beneficiaries of this government largess are all well connected politically so there is no hope of that happening. So, hello recession.

How to Win an Election, Any Election

2007-09-11T12:29:00.000-06:00

All of us have just about had our fill of unconstitutional and corrupt actions by our representatives in Congress and, considering their current extremely low "favorable rating" from the public, this is an ideal time for the public to take charge and dislodge them from office. This should be done en mass because they are jointly responsible for laws passed on their watch, and all recently passed legislation that I am familiar with has been in the interest of the rich patrons sponsoring their campaigns.

Some will claim that his own representative is serving him well, and will only attempt to toss out the other guys rep. For your "hero" to say that he is not party to this lamentable mess is like Frank James saying he really did not believe in what brother Jesse was doing and tried to prevent him from doing it. Laws are passed(and laws are at times not enforced) with the cooperation of all members of Congress.To protect your own rep simply will not work. The incumbents almost always win, considering that the big money is on their side.

The 'democracy' which everyone so enthusiastically extols simply does not exist today for the working classes of the U.S. The sole democratic tool left to the public is the ballot box.

I have a sure-fire method for the people to again gain control over their representatives. It consists of simply voting against any incumbent on the ballot, regardless of party. The last election, won by George Bush with a 3 million vote majority over John Kerry, was contested by less than 57 percent of the qualified voters. More than 90 million qualified citizens failed to vote, mainly because they felt that their votes would not count. This figure roughly corresponding to the number of adult citizens without jobs(i.e., the job "participation rate" of U.S. workers is now around 66 percent (34 percent 'not participating') with another 5 percent 'officially' unemployed). If a person is not employed, he is, by definition 'unemployed'. Only our government can not understand this concept. There are about 85+ million 'unemployed' people of working age now in the U.S.

The results of this particular election are typical for most elections, where the winner has less than a 5 percent majority. If only ten percent of these 90 million citizens who failed to vote were to vote against any incumbent he would stand little chance of winning. A simple ten percent increased participation in the Bush/Kerry election could have changed the popular vote margin of 3 million in favor of Bush (a solid majority) to a margin of 6+ million votes in favor of Kerry(a pretty respectible whompin').

If this proposal could become a reality the pols would finally take the public very seriously, that is, if they wanted to be reelected! The sole problem is one of getting these citizens to vote and providing them with a candidate who could win

The fundamental problem for those interested in placing a candidate responsive to the general public in office has always been the choice of an alternative candidate who had a chance of winning. We all now pretty well agree that the incumbent politician's opposition is also one who has his snout firmly affixed to the money trough and in many cases is following the same policies as his opponent. But the charm of this solution is that it should be applied in every election in which the Congress has failed to do what was promised in its platform or was inherent in its party policies. After a very short time the pols would get tired of serving just one term(losing seniority and committee representation), and start paying attention to the needs of their all their constituents, including the American working classes.

A coordination of candidate selection and election such as this differs little from what the Religious Right has been doing for the Republican party, providing an "en bloc" vote which has biased recent elections enough to get our current pathetic officeholders installed.

In the future, when the public becomes aware of their power at the polls, it will be able to select its own candidates for a "peoples party" by setting up sites on the Internet. These sites would collect suggestions for the party's candidates and provide the consensus candidate at election time.

If we all could get behind this movement, we would at last obtain the government we deserve. Other efforts to regain control of Congress, such as that of amending the Constitution under Article V of the Constitution, could well be the ultimate solution but will take time. A project such as this could very well speed up the process.

So I encourage all of those voters who have been disregarded or damaged by their current representative to vote in this coming election. Vote for the opponent of the current incumbent or,if he has left office, for the candidate of the opposite party. Encourage all your friends to do likewise. If each of you will do this I believe that we can win back our government in this election.

Congress must resort to Fair Trade

2007-08-23T13:53:00.000-06:00

"Fair Trade" must be adopted as the trade policy of the U.S. for the sake of the survival of the U.S. working classes. If implemented correctly, it will result as well in an improvement of the living standard of workers throughout the world. This article will describe the deceptive and false premises used as an explanation of the need and justification for Globalization.The real motivation is an even more intensive exploitation of workers and resources worldwide. "Fair Trade" needs to be accepted worldwide as the only suitable and equitable means of sustaining a high standard of living in the U.S., as well as an improvement in living standards worldwide. I will end the article with some of the changes in trade policy necessary to implement "Fair Trade".

The theory of `Globalization` is based upon the premise that there are three practices which are necessary to ensure optimal worldwide trade. They consist of `free trade(the trading of goods and services with no duties, quotas, or other hindrances), free flow of capital, and the free flow of labor. The following paragraphs consists of a history of the evolution of "Globalization" and a description of the consequences to the working classes in the U.S. and overseas as these practices are implemented.

Our "new"system of world trade, called "Globalization" is nothing more than "old wine in new bottles". The world has practiced "free trade" on and off for over 200 years starting with Great Britain`s industrialization and the desire for uninhibited trade during this period. The British were at least astute enough to pursue it only at the times when they were the world`s premiere trading nation. The U.S. started promoting it in 1944 under GATT, when the U.S. itself had become the worlds premier trading nation. But now, when it has become the worlds least competitive trading nation, it still persists in pursuing this practice. The continuation by the U.S. of "free trade"will eventually result in the drain of all major assets from U.S.(including ultimately the money supply), and the pauperization of its working classes.

The second most fundamental practice which constitutes Globalization, namely the free flow of capital, has likewise been an issue during this same period. It was a concomitant to free trade necessary to facilitate it. It was, and still is, the method of financing trade deficits caused by free trade policies. This had resulted in the stripping of assets from those foreign nations who were unable to compete with the high-tech mechanized production of the Western developed economies and were forced to relinquish assets to finance their trade. This group includes the U.S. now that it too cannot compete with low-cost foreign producers.

The financial problems of LDCs of today are the result of this takeover of assets. It had become clear that the advanced manufacturing countries would soon own all the natural resources of the LDCs which essentially represented the only inheritance of future generations. Some of the governments of these LDCs attempted to protect these assets by refusing foreign ownership of their most valuable properties, mainly those producing petroleum and minerals. Ultimately however, as these few assets were obtained by foreigners, these countries have had to borrow money from the west in order to further participate in world trade .

The flow of profits from foreign-owned companies, as well as the proceeds from foreign debts, have resulted in a situation where almost all export earnings of these countries are consumed by these payments. The workers in export-oriented industries are simply working to support the citizens of other countries. That is the reason that the meetings of the WTO and IMF are accompanied by mass demonstrations whenever they convene around the world. These capital flows, if uncoordinated and uncontrolled, invariably lead to currency crises causing the ruination of the value of the currencies and the debasement of living standards of the citizens involved. The U.S. dollar will ultimately suffer this same fate, leading to a fall in the living standard in the U.S. as well as a decline in the prestige and power of the government.

The last `necessary` practice of Globalization is that of the "free movement of labor". Its sole intent is to create a pretense of equality and balance to these other (unfair)practices, created for the "benefit" of the working classes( who are in reality the victims of the scheme). The workers are told they can, or must, move to those countries where the work is currently being done if they want to work in those industries in which they have had their training and experience. Otherwise, they will have to work in the "service industries" which should, in the future, be called "servant industries" because they will eventually mainly consists of people working as servants to the rich.

In the first place, this `free movement of labor` is a flagrant and serious betrayal of the working classes by the U.S. government in that it is in violation of the spirit and intent of all law relating to the governments responsibility to provide suitable and maximum employment for American workers, enacted over the past century. It is in violation of the Fair Employment Act of 1941, the Employment Act of 1946, and of the spirit of numerous legislation in the sixties and seventies including the Civil Rights Bill of 1965. These Acts all stipulated that the government had the responsibility to support in every way employment of U.S. citizens. These laws have been flagrantly abused, and Globalization has completely invalidated them.

As a matter of practicality, even if a U.S. worker could work overseas, somewhat like many Filipinos,Turkish, and South Koreans workers do currently, leaving their families behind to live off their foreign remittances, how could these remittances possibly pay for American workers normal current outlays such as for mortgages payments, health care expenses, and the provision of a college fund for their children? Overseas workers salaries are, for the most part, at best $4 or $5 per hour, which allow these workers, if they share quarters at the work site with 5 or 10 other foreign workers, to remit to their families perhaps $400 or $500 per month. This could hardly cover the expenses of an American family stateside. The only way to successfully effect this `free movement of labor`would be for the worker, along with his entire family, to move overseas. This is absolutely the only way for the `free movement of labor`to succeed considering the current worldwide wage scales.

The U.S. government has, in effect, suggested to the American worker to `go east young man` with an added suggestion to `don`t bother to stop at the Atlantic` because there really aren`t any jobs available for him here in the U.S. Implementing a international minimum wage would go a long way to avoid this brazen exploitation of labor and provide a level playing field for American workers. An international minimum wage would obviate the need for many workers worldwide to leave their families and attempt to acquire entry into the Western high-wage countries, as well as solve many of the recipient countries immigration problems.

Just as a side issue, the U.S. government has done absolutely nothing to facilitate the securing of work overseas by U.S. workers, even if they had the the desire and finances to do so. While tons of foreign workers in certain select professions are flooding into the U.S., their counterparts from the U.S. are denied access to jobs overseas in the same countries whose citizens are acquiring work here. Their governments, or corporations(with the acquiescence of their governments) routinely prevent Americans from working there because they are intent on preserving the jobs for their own citizens. Of courser, that is exactly what every government should be doing. The U.S. government, at the least, should be requiring reciprocity from these foreign governments. They are not making any attempt to do so.

A "Fair Trade" program can be effected by three policy changes. First, `free trade`should be modified to allow a true float of the dollar and the establishment of an international minimum wage rate. This will prevent wage rate discrepancies to develop and the tendency of all production work to go to the `lowest bidder`( the most poverty stricken and beaten down). Secondly, the free flow of capital should be regulated to prevent capital flight from destroying the money supplies of countries suffering from chronic trade deficits. For the LDCs in particular, this has caused an unwarranted and unfair drop in an already ultra-low prevailing wage rate. Thirdly, the free movement of labor should be limited to only those cases where trained workers are unavailable(not just highly paid!), and immigration policies should ensure this. All workers should have the opportunity to pursue their chosen profession in a fair competitive environment within their own country.

It is time to throw out a government that has consistently ignored the interests of its own citizens. The Congress,as a body, must take responsibility for the poor treatment and betrayal of its working classes. If the Congress continues on this course the country will be ruined. My intention is to encourage the removal from office of all current members of Congress as a warning to future officeholders that the public will hold them accountable and have the power to do so. This can only be accomplished in the short run via the ballot, truly the sole democratic means currently available. I will be submitting a further article on this site suggesting how this can be done.

Fairness in a Globalized World

2007-04-28T04:16:00.000-06:00

After reviewing Jeffrey Sachs' public lecture on Globalization and Employment , I have a concern that a few major issues were not successfully dealt with. It is true that workers of the world will benefit overall and those from the LDCs will be on the road to wage equality with their counterparts in the west. Every decent person should applaud this result of globalization. It will go a long way in stopping wars, terrorism, and other lamentable social consequences of poverty. But the pace of wage equalization will be simply too slow and workers from the LDCs will continue to be exploited over a much longer time period than is appropriate and necessary. Another more serious consequence of "globalization", as it is being currently promoted, will be the impoverishment of the American middle class and a loss of political and economic power worldwide for the U.S. The economic theory supporting globalization is that the world's resources will be utilized more efficiently by direct competition among all the workers of the world with the lowest priced products being those made most efficiently. But this is a false assumption. The lowest priced products are simply those that whose total cost of labor and materials used in their manufacture in one country are less than that of other countries, the quality being the same. For example, if a hard disk is made in China, labor costs may be $3 representing 2 hours work,and the material cost could be, say, $3. The same disk, made in the U.S. could cost $12 in labor representing 1 hour of labor, and material costs could be just $2 representing a better management of raw material and recycling practice. The total costs for this product would be $6 if made in China and $14 if made in the U.S. If efficiency were the consideration that supports globalization, then this product should be made in the U.S. where labor is more efficient and materials are better utilized. But the multinational of the world are currently using China for their manufactures because their costs there are less. Unemployed and underemployed workers there are so abundant that the multinationals can exploit them, paying barely subsistence wages, and get by with it. But they still want to use the "efficiency" story to justify moving production there. It's plain and simply a lie. The labor rate in China is about $1.60 per hour for manufacturing workers and that in the U.S. is about $13 per hour. From what I think I understood from Jeffrey Sachs' lecture, the rate of convergence between LDCs and western wage rates is about 6 percent annually. Current GDP growth rates of 3 percent in the U.S. and 9 percent in China support this. At this rate it would take 36 years for Chinese wages to equalize with those currently paid to American workers. The consequences of this long time frame would be catastrophic to western workers desiring and trained to work in manufacturing industries as well as to the nation as a whole. Almost two generations of workers in the U.S. could be jobless. Until wage rates more closely equalize, all manufacturing will be done in China, and there will be a yearly drain of over $2 trillion of assets from American ownership to those of foreigners. This is my estimate of current asset transfer derived from the Federal Reserve Board's U.S. International Transactions (of $1.75 trillion in 2006). By my estimation, the net worth of major salable assets in the U.S. including all stocks,bonds(corporate and government),real estate, and money market assets currently are worth around $60 trillion, with approximately $15 trillion already foreign owned. With asset transfers averaging $3 trillion to $4 trillion annually for the foreseeable future, essentially all major U.S. assets could be under foreign ownership long before 36 years, perhaps in as few as 20 years. If that happens, one quarter of all taxes collected from U.S. citizens would be needed to pay off just the interest on government bonds held by foreigners. Interest and dividend payments to foreigners would add another $5 trillion to our trade deficit. I propose a better solution for both worldwide wage differentials and the exploitation of foreign workers, a worldwide minimum wage. If implemented quickly, it would avoid the dire consequences of globalization to the American wage earners and the American taxpayer. My article entitled Saving the Western Worker from Extinction, dealing with the benefits of a worldwide minimum wage has been previously posted on this site. What is needed is not a "low bidder" war between the workers of the world driving wages to subsistence levels worldwide, but a fair wage for everyone, with each country's workforce given a fair chance to compete.

The United Nations Fiasco

2007-03-21T09:28:00.000-06:00

It is time for the U.S. To get out of the U.N. It has become the world's most ridiculous toothless and faithless debating society in the history of the world. I have to qualify this distinction because its predecessor, the League of Nations, was equally impotent. I excluded it only because the current U.N. was simply a further and equally ineffective extension of this previous organization.

The League of Nations could claim as an excuse that it really had no commitment of force from members supporting it. The U.N. can make no similar claim. It has the force necessary but has no sincere interest or intention of using it. Why anyone would bother to establish, train, and finance a military force and not use it demonstrates its faithlessness.
The League of Nations was completely unsuccessful in preventing or influencing second world war, watching from the sidelines while Hitler grabbed Austria, Czechoslovakia, and finally Poland. The U.N. has been equally incompetent in preventing or stopping any war that I am aware of. It prides itself on discussing (interminably) possible resolutions to problems but always ends up “observing”, while Tutsi and Hutu slaughtered each other, and was equally circumspect not to intrude in the killings in Bosnia and Somalia. During the past 50 years,only the U.S.(supported thankfully by Great Britain) has made any timely and substantive effort to stop the killings in South Korea, Kuwait, and Kosovo.

An obvious and necessary question is why the U.N. is so incapable and ineffective. This is not a difficult question. The truth is that a majority of the member countries constituting the General Assembly simply want to use the U.N. to promote their own interests which, unfortunately, consist mainly of actions designed to undermine the efforts of other member states to accomplish anything of substance. This practice derives from the jealousy and ill-will of poorer countries toward rich countries, and their attempts to hinder whatever the richer countries wish to accomplish. The governments of these countries are unable to sufficiently provide a successful working economy for their own citizens, and attempt to deflect blame for this failure toward other countries more successful in providing for their citizens. All the hot air generated in the General Assembly is designed to do just that.

George Bush is criticized for not paying sufficient attention to this body but it is to his credit that, after attempting to get consensus in the U.N., he had the courage to act, much like Clinton had in Kosovo. You have to give him credit for going ahead and doing what he felt was his duty as president and ignoring the temporizing attempted by other Assembly countries intent on pursuing their own(oil) interests with little genuine concern for Iraq. Only history will tell whether President Bush was right or wrong in doing so, and he will eventually have to accept the consequences of what he has done.

The only potentially effective (and necessary) body in the U.N. is the Security Council, which has been hamstrung in its ability to act as well. Because each permanent member has a veto over all proposed actions(which it has too often used to effect political objectives rather than preventing unjust international acts), it too has become essentially powerless. What is needed is an expansion of the Security Council to nine members, with only a two-thirds majority necessary to pass resolutions(and without anyone having a veto power). If Brazil, India, Singapore, and Japan, for example, could be included as permanent members, the Council would have a chance of becoming an effective organization. If some changes of this sort are not made, the U.N. might just as well close its doors and turn off the lights.

The Globalization Hoax

2007-03-16T22:03:00.000-06:00

Globalization, in theory at least, was an economic philosophy which espoused a more efficient production of the world's manufactures for the benefit of the world at large. It is based upon an economic theory proposed, I believe, by Adam Smith that if each manufacture was produced by the most efficient worker in the world, production would be maximized with the best use of the world's resources(manpower,materials,etc.). In theory this concept is sound except for the fact that it was based upon the presumption of full employment. Full employment these days does not exist and in the U.S. hasn't for some time. Unemployment is especially prevalent in the more populous countries of the world, especially those in southeast Asia. There is widespread unemployment throughout the world, becoming more serious in western countries as work moves to southeast Asia. The inapplicability of this premise(full employment) completely invalidates the benefits of globalization and the conclusions proposed and being supported by establishment-paid economists. These economists still have high hopes that the public will not become well-informed enough to understand this. So far, with the help of the controlled media, they have succeeded. This has culminated in the current serious financial crisis facing the U.S. today, a trade deficit that soon will ruin the U.S. economy(also conveniently overlooked by the media).

A result of this disregard of unemployment problem in the western world is that soon most of the world's products will be manufactured in China. Containing 25 percent of the world's population,it is easily able to manufacture all the world's products and still have 500 million more citizens not suitably employed. This is leaving other wage-earners worldwide with no opportunity for work except for those willing and financially able to “retrain” in other occupations. In the U.S. a job in the construction trades or in agriculture is still possible, mainly because U.S. businessmen have been unable so far to find the means to ship these jobs overseas as well. The only other jobs left that are available from a perusal of yellow pages of the major U.S. newspapers are those in “service industries” such as burger flippers and sales clerks. The only positive aspect about this is that the “retraining” that is encouraged by establishment economists need be truly of short duration, and the uprooted worker need not spend much time and money in doing so. But I really don't think these available new jobs are really as high paying as these economists might have one believe. In reality there are very few well-paying jobs available, or that will be available in the near future, offered to this ever-growing element of the society.

What is apparent to all reasonable persons is a situation in which most of the workers of the western countries will soon be working in “service jobs . It is true that the total production of goods worldwide may possibly expand marginally, and that many products will be manufactured more efficiently but most probably by hard-working southeast Asian workers. Those who fail in this worldwide contest will simply have to accept positions with salaries qualifying them as the “working poor”. This will, if things don't change, will be the fate of the great majority of workers in the western (previously-industrialized) countries.

All the laws created to produce a globalized world, those establishing zero duties, free trade zones, and special tax laws for multinational, have simply resulted in the ruin of western worker. What needs to be done now is to reverse the consequences of this fraud against western workers by the creation of international laws establishing a division of the worlds manufacturing proportionately throughout all countries of the world. Citizens of all countries should also have to accept the same proportion of “service jobs” western workers are having to accept. The most efficient workers in their own societies can compete for the manufacturing jobs available as their country's share in world production.

One final issue is that the U.S. government, having improperly manipulated the dollar for so long, now has established relative exchange rates which make it almost impossible for American workers to compete with their foreign counterparts. This has been taking place since the 1970s when a floating exchange rate regime was established to presumably correct a large trade imbalance. The rich weren't happy with allowing the dollar to adjust so they directed their minions in the FED to prevent this assuring the continuation of large trade deficits. Since the dollar was not convertible into gold or redeemable by the FED anymore, this meant that foreign dollar-holders would simply have to trade their dollar holdings for other American assets resulting in the stock market and real estate bubbles we have been experiencing ever more often.

This is the origin of the current justification of raising interest rates comes in. The FED pretends that we are experiencing “inflation”. This is simply a ruse to continue maintaining an overvalued dollar even though this practice does(and is meant to) decrease employment and create the possibility of a recession. In the meantime, any remaining U.S. Assets as yet not foreign-owned continue to revert to foreign ownership. A consequence to the American worker of maintaining n overvalued dollar is a decrease in the money supply (needed to hold interest rates high), and he making of a recession a good possibility. How the FED has the nerve to talk about fighting inflation while at the same time claims to being concerned about a “slowdown” in the economy is really a laugher. And the media, as usual, just dutifully write this hogwash down without calling Bernanke on it.

I mention this because globalization, combined with an overvalued dollar, causes other problems. Oh what a tangled web we weave... One problem is that not all American jobs can be shipped overseas. Workers in these industries are plagued by the an international wage too high to compete worldwide just like their brothers in the manufacturing industries. American agriculture, although the most efficient and mechanized in the world, still has a problem selling its products in world markets simply because wages are, even with these advantages, still too high for their products to compete worldwide.. So the government subsidizes this industry(what great belief and commitment to globalization!) It hasn't and won't provide similar subsidies to help manufacturing workers, so why should it do it for farmers? If the government really is convinced that globalization is good for all workers throughout the world, then it should remove these subsidies to the farmers. If not, then give every American worker a chance for decent employment by creating subsidies for them as well. This won't happen because the manufacturing jobs lost by American workers are being given to low-cost foreign workers employed by the very same American firms who have laid them off. If American workers were again able to compete, these American manufacturers would lose the cost advantages they so ardently pursued(and received) by moving manufacturing jobs offshore and their efforts to financially exploit foreign workers would have been useless.

And finally, what a coincidence it was that the shifting of work overseas started right about the time that the FED started seriously manipulating the “floating” dollar. Could someone have advised these multinationals that the dollar would never be allowed to fall to a level that American workers wages could compete fairly worldwide? American workers have been screwed “every which way they could”!

Saving the Western Worker from Extinction

2007-03-14T00:54:00.000-06:00

What is urgently needed in the new age of a “globalized “ economy is an international minimum wage. If the western worker is to survive he must compete on an even basis salary-wise with workers in the LDCs. Currently only the International Seaman's union has established this minimum standard, and the rest of the workers in tradable goods should be provided equivalent wages. Currently the minimum wage for this union is around $5.50/hour which I propose be a suitable international standard. This wage level would not be so excessive to seriously erode the current competitive wage advantage of workers of the LDCs, but would give western workers the possibility of obtaining employment in cases where they could demonstrate superior productivity capabilities.This will provide a win-win situation worldwide because the advantages obtained would far exceed the few disadvantages. Foreign governments now having significant cost advantages for their workers but concerned with a loss of their share of world manufacturing need not worry. Even a $5/hour wage would still provide their workers with a significant advantage over their foreign counterparts. Western workers would have to provide significant productivity capabilities to overcome this. Trade imbalances for western countries would become more sustainable, as they urgently need to, and all governments involved would have less labor problems.It is true that the costs of tradable goods would increase everywhere in the world. But the only significant element of any society effected would be western country retirees having no significant shareholder interests in international companies. Retired shareholders having meaningful stock investments, direct or through pension funds, would experience a short temporary decrease in their share prices caused by labor wage increases. Share prices would recuperate shortly afterward caused by an even larger increase in profits due to increases in worldwide revenues. No multinational with a well-know brand name need to be concerned about where the world will spend their increased incomes. Even the poorest of wage earners worldwide want the best they can buy. Their saying is “we can't afford cheap products”. The resulting revenue and profit increases would be, in addition, accompanied by a significant increase in the quality of all shareholdings because they would be based upon profits due to increased production revenues rather than being increasingly dependent on restructuring and layoffs detrimental to the societies involved.
The advantages to a minimum wage are phenomenal in contrast:
Foreign workers in tradable goods industries will have considerable more income. This will spread out over their economy in general causing a widely-based increase in the standard of living. Their governments will have a large increase in tax revenues allowing them to expand social programs for the less-fortunate in their societies(e.g., farmers). Overall, most communities worldwide will have a significant increase in purchasing power which can be spent by the citizens of the LDCs on the very tradable goods they are producing but previously unable to purchase..
Foreign governments will not need to go begging to the WTO or IMF(or do their bidding) because they will no longer need the loans these organizations reluctantly dole out. Instead they will be paying off their outstanding international bank loans allowing export earnings to be used to pay for import of the foreign-made goods they are so fond of, rather than simply providing for interest payments to foreign banks. Foreign investments and bank loans will be far more secure. There will be less chance of turmoil at WTO and IMF meetings, and less need for internal security and stability for foreign governments under all conditions.
American and foreign workers will be better able to fairly compete for the right to do the world's manufacturing and, with a worldwide increase in money supplies, increased consumption would lead to an overall increase in production and employment of workers worldwide This would result in an increase of pride and self-respect for all production workers, foreign and western alike, previously underemployed or unemployed. Social cost (e.g., unemployment,welfare) would significantly decrease, providing more opportunity for further governmental support for other elements of their societies.
Multinational companies worldwide will experience an initial decrease in profits caused by increased labor costs. Subsequent increases in revenue from both foreign and western consumers would provide profit gains far exceeding these costs resulting in a real increase in shareholder values based on production, capital equipment improvements, as well as a concurrent improvements in technology.
And finally, the establishment of a minimum wage would end the most egregious and ever-increasing exploitation of workers worldwide. International manufacturers have continually moved production to the countries with the lowest wage levels to reduce costs, taking advantage of the most poverty-stricken members of the world. American companies moved production from Mexico to China because the Mexican workers' $3/hour wage was just too generous in comparison with the $1/hour prevalent in China. This practice has forced other countries to effectively lower their own wage levels to compete, resulting in an ever-increasing spiraling downward of wage levels already far below that what an average family presently needs to survive on. This is a despicable practice effecting workers worldwide and needs to be stopped.
This proposal is based upon my desire to effect two goals, one to roughly equalize worldwide wages so that western workers would have an opportunity to once again find meaningful employment, the other to end the exploitation of foreign workers caused by the practice of multinational companies and their partner's practice of paying subhuman wages. Enough is enough! So I have done a simple “trial balance” of the consequence of an implementation of a minimum wage rate of $5/hour. Results are based primarily on a change in the distribution of profits and wages earned for products manufactured for export in the LDCs. So my proposal involves basically in the consequences of a change in the profit margins for products manufactured in these countries. It is too complicated to envision what product price increases would effect. In light of current wage levels, they would be unnecessary and simply represent a continuing arrogance and cynicism on the part of these manufacturers. So I conclude that if you pay these foreign workers just $5/hour, increasing labor rates fivefold, the following would result:
Profit margins of foreign-made products in the LDCs would decrease from 60 to “just” 40 percent.
The number and price of exports to the U.S. from southeast Asia, for example, would remain around $1 trillion.
Profits for multinational and their local partners would decrease by $200 billion, and foreign workers would have received this as increased income. Since well-run foreign governments normally require 50 percent participation, by (local) government or private partners, the "loss" of profit to the multinational firms would be approximately $100 billion. Because of U.S. laws, created to promote this "end run" around hiring U.S. workers, these multinationals have been not only exempt from U.S. taxes, they have not been required to repatriate these funds. If some have been inadvertently repatriated, they have been most-probably just investment in U.S. stock market speculation and have contributed almost nothing to U.S. production and employment.
Of this income now available to foreign workers, $40 billion would be collected by foreign governments as taxes, to be used to increase the services and benefits to other citizens.
Out of the remaining $160 billion available to consumers, foreign workers would be buying western-made products of perhaps $50 billion, leaving over $110 billion dollars in consumer dollars to be spent locally. An increase in money supply in consumer's hands and spent locally usually results in six times as much local spending(i.e., the “multiplier effect”), each purchase allowing further purchases from other people in the community. This would increase the GDPs in these countries by upwards of $600 billion, resulting in perhaps a 50 percent increase in living standards for many of these people.
The $50 billion going into the purchase of foreign-made (western made) products could potentially result in respectable employment of upwards of 2 million more western workers.
Western workers would be competing for worldwide production against foreign workers making $5/hour instead of the current wage rates of 65 cents(India) to one dollar(China) with which they have no chance to compete. The playing field would be leveled to the point that productivity would again be the determining factor in choosing who deserved to be employed.
This proposal deals solely with America's trade with the LDCs. When combined with similar benefits obtainable for the workers of LDCs through trade with other western countries, the potential benefits are tremendous.
I am well aware that many countries will resist this proposal in anticipation of gaining a trade advantage over those who would be willing to comply. The answer to this is quite simple, one that has been commonly used as a basis of duties in the past. Importing countries complying with the rules would be required to impose import duties for products manufactured in the non-complying countries equal to what the labor costs should have been. This would be a significant windfall to the complying countries because it would provide their governments with an increased income available to provide better living standards to their own citizens. The non-complying ones would simply be giving up income which would otherwise be paid to their own citizens and experiencing a loss of government tax revenue.

America is a Democracy?

2007-03-06T21:28:00.000-07:00

Joel Hirschhorn in his most recent articles on OpEdNews has encouraged the American public to petition for a constitutional convention under Article V of the constitution in order to rectify the ever-increasing creation of laws harming the interests of the working classes of the U.S. His article, "An Open Letter to John Edwards" supported Mr. Edwards' opinion that America has become a country of two nations, the rich and the poor, which I call the Privileged and the People. Many people believe that the Constitution of the U.S. established a democracy in which all citizens had an equal say in the running of the government and in the creation of suitable laws. This is simply not true. The Constitution simply set up a republican form of government based upon a separation of powers between congress, the judiciary, and the executive. Nowhere do the words "democracy'' or "democratic" appear in this document, which is the sole basis of our federal laws. The word "republican" appeared only in Article 4 in the context of state's rights. The original drafters of the Constitution wanted a government selected and run by the landowners and other rich folks of that day. Only as an afterthought were any explicit rights of the working classes included when the Bill of Rights was added as a series of amendments to the constitution explicitly spelling out various rights for the general public. Unfortunately these "absolute" rights were limited, and excluded people of color and women from the franchise and various other civil rights. It took another 150 years or so for these groups to finally gain the franchise, after persistent demands by both groups. The amendments authorizing these rights had to be explicit because the lawmakers(and judiciary) were ignoring the constitution's implications inherent in the word "justice" which did appear in the preamble if not in the body of the Constitution. But these new amendments simply established the right of the public to "democratic election" of their choice of candidates(put up by moneyed interests). The closest any early document came to granting equality for all people was in the Mayflower Compact which stated very concisely what the Constitution failed to do, containing the phrase "just and equal laws". Unfortunately this phrase or anything like it did not appear in the Constitution. A major flaw was the omission prohibiting discrimination on the basis of class or occupation. This omission allowed the legislature to consistently pass laws directly favorable to the rich, and harmful to the working classes. And all this was done without violating the Constitution.
We are now living under a plutocracy of the rich as resulting legislation have amply demonstrated. The lawmakers need not have paid any attention to the rights and interests of the working classes and have passed laws which were not at all "equal" favoring businesses and securities holders. Until the 17th amendment was passed in 1913 the general public had absolutely no control at all over any legislation(both houses must pass any proposed bill and the senate, prior to that time, was selected by state assemblies). This article will explain why the constitution should be changed to better reflect a democracy concerned with the well-being of all its citizens. I will provide some examples of legislative changes which would in my opinion further perfect our constitution. There have been only 26 amendments of the constitution over a period of over 200 years. The first ten were passed immediately after the original document was created to correct the obvious omission of explicit protection of citizen's rights not specified in the original document. The two amendments related to prohibition canceled each other out leaving only 14 actual changes to the Constitution to this date. That averages about one every fifteen years. If the Constitution were perfect, as much literature and opinion has subsequently implied, a lack of changes would appear to affirm it. But no document,person,or institution has ever in the history of the world proved to be perfect and sufficient during an extended period of a time. The truth is that those in power, having gained the most from its opportunities, don't want any changes. But there are serious reasons that dictate the need for change. The Constitution was established at a time when the U.S. was essential an agricultural society, with no extensive corporation interests and influences, no extensive trade, no large amount of financial capital, no cheap and efficient transport, and no sophisticated international communications(telephone,TV, or Internet). Especially significant was the shortage of resources(including especially manpower) available for an improving productive capacity, rather than the superabundance now prevalent in the world today. The under utilization of capital machinery and underemployment and unemployment of current manpower alone are causing and will cause in the future the major problems which will have to be faced by all the world economies.
All the fancy economic principles which the rich use against the working classes currently are no longer valid because they were all based upon suitable employment available for all persons desiring it. That is no longer the case. Working people around the world, under globalization, are competing for the same limited jobs and only the low bidders are winning, resulting in an ever-increasing exploitation of the working classes because of their dire need of adequate wages to support their families. The superabundance of financial capital allows something that was not afforded the founding fathers, the ability to apply tremendous money pressure in the political process. To deal with these entirely new institutions and circumstances the Constitution must change. The lesson learned from the necessity of including a Bill of Rights was that the constitution must explicitly spell out the basis of new laws protecting the rights of the working classes. So with that in mind I am proposing explicit changes designed to do just that.
1) Needless to say, money plays too big a role in the creation of new legislation. All one has to do to confirm this is to examine the laws that have been passed recently. NAFTA, CAFTAN, TWO(and GATT), Immigration Laws (applicable to both legal and illegal immigrants) and all of the laws supporting globalization, are without doubt simply for the benefit of the shareholders of multinational corporations and have directly deprived American workers of their jobs. The "story"that American workers are ill-trained, lazy, and cannot compete productively with foreign workers is simply a convenient and insulting pretext for shipping work overseas. To make matters worse, these jobs are said to be only those requiring "low skilled" workers. The workers previously employed in the steel, auto,electronic,shoe making,etc. were all skilled workers. Just because they were classified as " blue collar" does not automatically imply low skill level. It does imply that these people were actually working and not just sitting behind a desk checking out their personal e-mail which a great part of the so-called "skilled" office and government workers are typically engaged in . And what about the hi-tech multitude who have been cheated out of their jobs by the fraudulently created and implemented Immigration laws opening the doors to foreign workers? Are they presumed to be "low-tech" as well, needing to "retrain"? In any case, the "story" the businessmen(though their supporters, the congressmen) have been promoting for both blue and while collar displaced workers is that these people must retrain themselves for more skilled jobs. Excuse me, these groups were already skilled. And what hi-tech jobs are currently available for these millions who would have to (once again) fork out thousands of bucks to qualify themselves for? The only fields I know of which are understaffed are those of various classifications of highly-paid health care related positions created as government monopolies only available to "friends-of-the-family". All this fraud has been created by the fact that money now completely controls all legislation. Campaign finance laws and term limits are long overdue.
2) Reform of the Supreme court is long overdue. Many laws have been created by congress which have completely exceeded their Constitutional jurisdiction(e.g.,recreational drugs use and abortion) and others directly violating legitimate state laws(i.e.,marijuana in California). The supreme court should as a matter of its Constitutional duty review all these laws without being coerced to doing so. The justices claim that they have only a limited time to review any laws because of an extensive work load. If the original supreme court had only 9 justices dealing with legal issues for a simple farm-based population of perhaps 13 million citizens, we now have a population of 300 million in a far more complicated society necessitating far more justices. Currently, out of thousands of requests for judicial review, less than 200 are determined yearly. The justices claim these cases have been chosen because they affect fundamental legal principles. This years cases included the Anna Nicole Smith case concerning the legal aspects of the marriage of a young woman to an older man and her expectation of receiving inheritance from his estate. I was shocked to learn that a young women would ever pursue an older man for his money! This is really startling news and obviously has important legal implications, but I would have thought that any issues of this matters would have been resolved when the first cases of this sort were encountered, about 3000 years ago. One has to come to the concussion that the other (not so important) lawsuits submitted for review during this period were not important enough to be considered for judgment by the court. So much for American justice! So I propose an increase in the number of justices to the extent that at least half of those cases presented to it must be reviewed. And considering the very obvious partisan politics practiced by the court(as exemplified by the 2004 presidential election in particular), it is time to make these offices subject to voter choice, and with time limits to their tenure. Surely there are more than 9 people in the entire U.S. capable enough to dispense legal judgment.
3) The president is hogtied in passing any legislation when his party in not in power. The opposition party doesn't want any meaningful and important legislation passed which would cast credit on the incumbent. This results in no substantive laws being passed in the interests of the public but gives comfort to the conservative elements of both parties who want nothing to change. In Great Britain this is not the case because the prime minister is simply chosen from the party in power and, when legislation proposed by his party is rejected, the government is changed to provide another which is more in accord with the legislation deemed necessary at the moment. The most important legislation of the Clinton administration(health care reform) was stymied and will continue to be so in the future because of this disgraceful practice. Something has to be done to rectify this.

4) I believe no new amendments will be allowed to pass designed to correct these patent legislative abuses because, as a consequence of money pressure, both parties as well as the executive are now serving the interests of the rich. Each wants to score points by being the prime mover behind legislation solely designed to benefit this group, and have no time or interest in issues important to the working- and middle-classes . F. Lee Baily said in an interview with Newsweek in 1967 "Can any of you seriously say the Bill of Rights could get through Congress today? It wouldn't even get out of committee". That is doubly valid with today's flood of capital looking for influence. Both political parties are working on the same political campaign platform, which is the "status quo" or "family values" one so dear to the people who are now prospering. And there is absolutely no doubt about who is benefiting from the laws as they now stand. All one has to do is look at the widening income gap between the rich and the poor (which increasingly include the middle class). This is the absolutely indispensable reason and justification for a Constitutional Convention. The congress has not in the past, and will not in the future, pass legislation resolving health care problems,education reform,campaign finance reform, meaningful gun control laws, laws controlling corporate management abuses, or any other laws effecting the financial interests of its patrons. All recent laws have benefited the rich to the detriment of the working classes, and the entire government has been guilty of collusion.

These are but of a few of the major issues which should be address in any convention. I have quite a few more issues needed to be scrutinized in the interest of better government but hope you readers will assist me in pointing out other important ones needing attention. The primary purpose in all proposed reform should be one of making the Constitution(and government) a democratic one. Abe Lincoln, in the Gettysburg address, spoke of a government "of (all) the people, by (all) the people, and for(all) the people". Today we have a government only "of(applicable to) the common folk, by the rich(or their supporter), and for (the benefit of) the rich" and supported (legally) by laws not unlawful with respect to the current U.S. Constitution but very definitely not in the interest of the working public! It is imperative that these abuses be stopped. Only when we can wake up the general populace with concrete suggestions for changes benefiting them can we expect them to take an interest in any sort of action.

Congress's betrayal of the American worker

2006-12-21T00:27:00.000-07:00

The following Acts of congress were ostensible made in order to keep American workers fully employed and to create a healthy economy:

The Full Employment Bill of 1946 was designed for the federal government to "promote maximum employment, production, and purchasing power". Amendments removed a guarantee by the government to explicitly provide full unemployment, but certainly the intent of the bill was to provide this as indicated by it's title.

The Full Employment and Balanced Growth Act of 1978 was designed to attain full employment, growth in production, price stability, and balance of trade and budget. Goals were established including a maximum of 3% to 4% unemployment rate, an attempt to balance the federal budget, and the avoidance of trade deficits. If private business interests did not attain these goals the government was entitled to create a "reservoir of public employment." The Act explicitly prohibits discrimination on the basis of age as well.. .

There was no effort to carry out the intent of these Acts. They were passed to create an appearance that these goals were being pursued while congress passed laws which did just the opposite. "Gloabalization" was intended to allow American businessmen to replace American workers with low-priced foreign ones. Since american corporations own much of the foreign manufacturing businesses, a foreign worker is simply an employee of an american firm hired overseas to replace an american worker stateside. The congress threw in an added tax sweetener to further facilitate this givaway. NAFTA and CAFTA had the same intent. So much for "promoting" full employment for U.S. citizens. Immigration policy, legal and illegal as well, was designed to do the same. No real serious efforts were made to stop the border crossings. The proof of this is in the number of illegal immigrants who suceeded. Legal immigration in the high-tech sector was a fraud from the get-go. Businessmen simply wanted younger,less expensive, and more pliable employees. Those older native ones wanted to be fairly treated and paid appropriately for a highly-trained engineer. Again, it was the government that legally made this jobs givaway possible. The age-discrimation laws were ignored and tons of young (inexperienced) but low-salaried foreigners came surging in. The immigration laws themselves were violated from the very beginning, proof being that high-tech salary levels immediately took a big dip violating the law's requirement that immigrants were to be paid equal wages. When it was obvious that wages were falling, the congress did nothing. The following is a excerpt of the law regarding age discrimination :

The Age Discrimination in Employment Act of 1967
PROHIBITION OF AGE DISCRIMINATION SEC. 623.
SEC. 2.
(a) The Congress hereby finds and declares that:
(1) in the face of rising productivity and affluence, older workers find themselves disadvantaged in their efforts to retain employment, and especially to regain employment ....
(b) It is therefore the purpose of this Act to promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment...
Section 4
(a) It shall be unlawful for an employer- (1) to fail or refuse to hire or to discharge any individual orotherwise discriminate against any individual with respect to hiscompensation, terms, conditions, or privileges of employment, because ofsuch individual's age; (2) to limit, segregate, or classify his employees in any way whichwould deprive or tend to deprive any individual of employmentopportunities or otherwise adversely affect his status as an employee,because of such individual's age;

Again the government claimed to be interested in "promoting" employment for this group when it was blatently passing laws giving away the jobs of these older persons(younger ones as well). No effort was made to modify or reform these immigration laws even after it was obvious that american businessmen were violating them on a massive scale.

But the primary reason behind these givaways was really not disclosed. The dollar's exchage rate has been manipulated over the last 30 years in order to suit the wishes of the rich causing american worker's wages to become progressively less and less competive. This ultimately resulted in american manufacturing wage levels , on average, of ten times those of foreign workers in those less-developed countries which had been perfecting their manufacturing capabilities. Only if an american wage earner agreed to work for $2-$3/hr. would he have been competitive.

In contrast to this policy of overpricing american workers, Japan has built the world's third largest economy by consistently doing just the opposite. Every time the Yen's exchange rate appreciated, causing a potential loss in production(and employment), the Japanese reserve bank acted to lower its exchange rate. Thailand has recently attempted to do the same when the appreciation of it's currency caused a possible overpricing of the Thai worker's wage levels. Investors reacted negatively but Thai worker's jobs may ultimately prove to have been saved. The U.S. government, by doing just the opposite, has not only caused U.S. jobs to surge to overseas locations, but has resulted in the massive trade deficits which may ultimately threaten a catastrophic fall in the value of the dollar.

This exchange rate manipulation resulted in the failure of one of the major goals of the aforementioned Full Employment and Balanced Growth Act of 1978 , a balanced trade. The other goals of that Act, concerning employment and and a "balanced budget", have failed as well. Needless to say, an effort to establish a "reservoir of public employment" went nowhere.

The public's inability or unwillingness to face up these betrayals will result in the destruction of the working class in the U.S. The people will get the government that they deserve.

The Betrayal of the American Worker

2006-12-05T02:04:00.000-07:00

The american working class has been betrayed again by the Federal Reserve Board and the current administration. The FED has been raising interest rates for the past year solely to support the american dollar's exchange rate. They have been telling the public that it is because of an incipient inflation. This is a patent lie which should be obvious to anyone who knows the slightest bit about economics. The FED did this in 1980-1983 in order to stop an inflation which was serious at that time. How did the people at the FED know that the economy was overheating then? It was easy. Interest rates were sky high reflecting a great demand for the money needed to purchase the new equipment and support the increased consumer spending characteristic of an inflation. Interest rates at that time were in the 8 percent range. They were in the 1-2 percent range when the FED started the current interest rate increases. They were that low for a reason. The U.S. has been in recession for quite some time due primarily to poor government policies over the past 20 years, including previous and persistent fiddling with the exchange rate. First for some history.
The exchange rate actually increased in the 1980-1983 period just at the time that large trade deficits indicated it should be decreasing. The rich were overjoyed and the government did nothing for 3 years to correct it. The result was a further increase in america's trade deficit and a downsizing of american (stateside) production which has continued to this day. Globalization hasn't hurt the interests of the working classes as much as this exchange rate tinkering.
So why is the government doing this? Just so that the rich can maintain their purchasing power. During the past 45 years inflation in the U.S. has decreased the dollar's purchasing power stateside. But the rich wouldn't allow this inflation to affect it's purchasing power over foreign-made goods. So they kept the exchange rate high even though foreign trade deficits indicated that it should be lowered. That's the reason production has moved overseas. But the government pretends that it is working in the interest of all the people. The media have helped to spread the myth that inflation hurts the poor most of all. What a joke that is on the public. Inflation is the result of more production and employment, and more money in the hands of the workers. Yes, prices go up as well. They go up for a very good reason. The working classes have more money to spend!
By continuing the "tight money" policy implemented by interest rate increases the FED will most probably "save the dollar". It will also without doubt cause continued (and unsustainable)american trade deficits and the resulting asset transfers to foreigners. It will also prolong the recession in the U.S. and stifle any business recovery or expansion (that's what interest rate increases are suppose to do.) The american worker's large wage differentials will continue to cause jobs to leave the country. And the greatest insult of all is another great myth spread by the rich in america, that american workers have only themselves to blame when they become unemployed. They have refused to train themselves properly or to retrain themselves in different high-tech careers. The sad truth is that the U.S. government has been betraying its working classes for the benefit of the rich mainly because the rich have the money and money keeps them in office. The U.S. is no longer a democracy, if ever it was one. The government is no longer one "of the people, for the people, and by the people". It is now a government "of the people, by the rich,for the rich". The government passes laws that are meant to control the people(working folks), which the rich believe should not apply to themselves. Any problems arising from their breaking of these laws are resolved legally by tricky high-paid lawyers. Other laws are simply designed to directly benefit the rich. David Cay Johnston, in his book Perfectly Legal explains many of the ways these gifts to the rich have been done legally. The congress has passed laws that have made it legal for the rich to exploit the american working class. NAFTA, CAFTA, tariff "reform", legal immigration, and globalization were all designed to teach the american worker a lesson, and the lesson was "Don't keep demanding a bigger slice of the pie". This lesson has been a good one for the american worker. He knows that now , if he wants to have a job, he must work at an "international" wage level. And the trade unions that past reformers worked so hard to create have been crippled.
So it is now time for the government to end this "lesson". Americans cannot survive on the $2-3 per hour "international" wages necessary for them to compete in a "global" economy. Government policy must change to reestablish high wages for these workers who are really the bulk of the middle class. The establishment of international unions and international minimum wages would go a long way to accomplish this. If something isn't done quickly the american working classes will fail, and the country will fail along with them.

Why American Corporations will not hire American workers

2006-12-04T01:14:00.000-07:00

American corporations have been moving their export-oriented jobs overseas and will not be hiring American workers until differential wage rates decrease substantially. U. S. Wage rates, as well as EU wage rates, are considerably above the wage rates of those of workers in Asia. At the end of the second world war this may have been appropriate because the productivity of foreign workers was greatly diminished with the destruction of plant and equipment during the war, but things are different now. There is an abundance of capital throughout the world and foreign workers have access to the same advanced production technology and equipment previously enjoyed only by western workers. Low productivity of foreign workers had resulted in low wage rates in order for these workers to be competitive worldwide. Now, with foreign productivity nearly equal to that of western workers, these foreign workers should be paid more. But they are not. This results in the wage disparity between them and western workers, resulting in the movement of jobs overseas. If this wage disparity is not corrected all jobs which can be done by overseas workers will reside overseas . Now, after most blue collar production work has been moved overseas, white collar workers as well as many professionals in the U.S. will see their jobs disappearing as well. This group includes accountants, lawyers, researchers, engineers, scientists, microbiologists, biologists, and so on. Anything which a person can do at a desk in the U.S. can be done at a desk in Asia(and at a third of the cost in the U.S.), and any interaction with others can be done via teleconferencing or facs/telephone.
The big questions are: how this occurred in the first place, what will be the consequences, and how it can be resolved.
This problem started with the failure of the international exchange rates to adjust to
changes in the productivity of foreign workers. This was due to the failure of the U.S. government to allow the dollar exchange value to adjust properly to trade imbalances. After 1970, the exchange rates needed to float in order to prevent the loss of bank assets(especially gold) in the U.S . Floating exchange rates would have corrected the trade imbalances by a reduction in wage differential between U.S. and foreign workers and consequent enhanced price competitiveness of American-made goods. Various administrations allowed increases in the dollars exchange rate, but stopped it from falling. A particularly egregious one occurred in 1980-1984 during the Reagan years. In effect, the dollar was allowed an unhampered rise but not allowed to fall, completely undermining the effectiveness of floating exchange rates. This caused substantial(international) price increases for U.S.-made goods. This period initiated the vast increases in trade deficits we are currently experiencing. The foreign trade imbalances increased but the U.S. Federal Reserve was not required to give foreign dollarholders gold to offset these imbalances. Instead, these foreign dollarholders have accepted government IOU's(treasuries) and have been spending the remainder of the vast excess of dollars on U.S. real estate(causing the current bubble) and U.S. stocks and bonds(further exacerbating the stock market bubble and crash of 2001). But even real estate and stocks/bonds are not unlimited and these overseas buyers will soon run out of things to buy. In the meantime, jobs will be steadily ending up on foreign shores.
The ultimate consequence of these government policies will be a 'hollowing out" of the productive capabilities of the U.S. and the demise of the middle class(and serious damage to the profession classes). Worse yet, ultimately the U.S. will run out of assets to sell to foreigners and the dollar will will be bypassed as a hard currency. If this happens, the exchange rate will experience a drastic fall and the standard of living of all citizens will fall with it. But unluckily for all, current government policy being what it is, this will occur only after the great majority of assets in the U.S. are foreign-owned.
Many workers in the U.S. do not care who they work for, but foreign ownership has many pitfalls. Foreign owners of large manufacturing facilities can simply slow down production improvements and efficiency in the U.S. so that manufacturers in their home country will have a competitive advantage over their U.S. counterparts. They may also move the company headquarters overseas, diminishing already insufficient U.S taxes collections. They could undermine wartime manufacturing to benefit their home countries. These actions would cause: increased unemployment in the U.S., decrease social spending in the U.S., and increased production problems during potential world conflicts. For this reason, most foreign countries restrict foreign ownership of home corporations to less than 50 percent, and greatly limit the extent of foreign investment(to avoid stock market/real estate bubbles). They also severely restrict foreign ownership of a host of strategic manufacturing, mining, and petroleum-based businesses. The U.S. government should be doing the same.
I will leave what can be done to correct these circumstances for a future article. A good start would be to reverse those policies which have caused these problems, one of which is exchange rate manipulations which undermine U.S. worker's ability to earn a living. While China refuses to raise its exchange rate, the U.S. refuses to allow its to fall, which ultimately would have the same effect. Other policies which would enhance U.S. worker's chances to compete internationally would be the establishment of international minimum wage and work standards, and the establishment of penalties for non-compliance by our competitors. The establishment of an international minimum wage would solve not only the American worker's dilemma, but would increase the standard of living of citizens throughout the world . The first step which should be taken, however, is to make the American public aware of those policies that have got us into this mess, and to encourage them to take action to prevent them from occurring again.

Poor poor Jesus

2006-11-30T21:39:00.000-07:00

I have lived in Denver part time during the last year and recently discovered posters in the downtown mall area suggesting that people not give handouts to street people, instead making contributions to organized charities. Subsequently I have read about a law in Oregon making it an offense to give food to street people. Now I read about a similar law in Las Vegas. And these are all cities located in christian communities. I'm not that familiar with the new testament, but I thought that Jesus's teachings were of charity to all and a universal brotherhood(of all as well, not just of so-called "good people".) If so, where is the public outcry from those christian sects that profess the gospel to be the true teachings of Christ. Poor Jesus should certainly view these acts as blasphemy and be insulted that they are perpetrated by people professing to be christians.
As far as giving to "established" charities so that these gifts would be used to directly benefit those in need, I tried to locate one after the tsunami in Indonesia. I checked out those recommended on internet sites who claimed to give the largest percent in direct (material) aid to those who had suffered. After checking out one of the "recommended" organizations I found the following. Out of approximately $60 million collected, a maximum of $65 thousand dollars went directly to provide material aid to those poor and starving people(somewhere around one tenth of one percent). The rest was spent on salaries and the considerable travel and living expenses of the administrators and employees. These people apparently felt that just their presence was enough to alleviate the tsunami's effects. Now, after learning of these new programs denying direct aid to people who are definitely suffering and in need of support(the street people), I returned to the quest for an organization who would "wisely" provide just this support.
I picked out a suggested organization from another internet site providing assistence in finding a"worthy"charity. The organization I selected was CARE, which it was claimed only spent approximately 9 percent for administration and fund raising and the rest as direct aid. After reviewing CARE's government- mandated Form 990 for fiscal year 2005, I found the following: Out of approximately $600 million collected, more than $100 million went for employee salaries alone( a whopping 16 percent ); the 8 highest-paid administrators in their Atlanta office were receiving an average of $180 thousand per year and one was apparently receiving money for education. You'd think that a seniior person making that sort of money would already be trained, but apparently not. The only money that could have been spent directly on any beneficiaries was a lump sum grant of $94 million, and who knows how much of that really reached someone in need(the recipient had his own "administrative" expenses I am sure). One last item, a $74 million disbursement of agricultural commodities looked as if (finally) CARE actually shelled out something substantive. It turned out that this "gift in kind" actually came directly from the U.S. government. CARE did not deign to purchase anything else of this nature to suppliment the government gift, apparently determined to keep their record clean.
If you check out all the other so-called reputable charities you will find somewhat the same. These organizations are just one more type of charties for the rich.

The Demise of the American middle class

2006-11-28T02:30:00.000-07:00

American as well as all western white and blue collar workers will soon realize that they will either have to decrease their wage demands to conform with "global standards" or chose jobs in the service sector. These global standard wages are now being set by worker in India and China, where average hourly wages are about 65 cents and one dollar respectively. The high paying jobs created in Mexico under NAFTA, the whopping $3.50 per hour ones, are moving to China because even this princely wage level is much too generous according to U.S. businessmen. So currently unemployed workers and anyone laid off in the future better get their applications into McD and Wal-Mart in a hurry because these will be the premier jobs of the future. But, if American workers are willing to accept these "global standard wages" (adjusted for transportation costs), no more than $4.00 per hour, perhaps they can get work here in the U.S., but only if their employers believe these wages will be maintained in the future. Unfortunately no one an live on $4.00 per hour in the U.S. unless he doesn't mind living on a subsistence level without car or medical coverage(even if minimum wage laws were waived to allow them to do so).
So the middle class worker unwilling or unable to accept this wage level has been disappearing into the limbo of the " having chosen leisure over work" class. The (establishment) economists have so labeled those 25 percent of the labor force(about 70 million people) who are of working age but not working. Forty(40) million of these 70 million "loafers" are between age 50 and 62(surprise!), still too young to be receiving social security.
So what are these "leisure choosers"doing? Some have legitimately retired, being beneficiaries of retirement plans(civil servant ones being the most generous.) But the great bulk of them are simply limping along on their accumulated savings, or, if they are not so well off, have applied and been accepted as "disabled' under SSI or SSD programs. The children of all these American workers ( those displaced by foreign workers) will not see a dime of whatever savings they had made prior to this time.
Who can we thank for this disaster? The pols have paid their (personal) economists to say that it is the wage earner's own preference for leisure. Other current myths, created in the same way and by the same people, claim that American workers are uneducated or too lazy to retrain themselves, or simply too lazy. In other words, the workers have only themselves to blame.
The truth is that establishment politicians have engineered this demise of the middle class via globalization, NAFTA, CAFTA, and legal immigration laws benefitting their clients, the rich. All of these programs have proven to be against the interests of the American working classes but none has been revoked or revised. NAFTA alone is currently costing the U.S. treasury $40 billion dollars yearly but the pols still insist on CAFTA. The immigtation laws affecting high-tech jobs have not only ruined the prospects for many American hi-tech workers, but have precipitated the loss of an entire industry. And the pols continue doing absolutely nothing, even after recognizing daily the adverse consequences of their policies.

American Monetary Policy Will Ruin the Economy of the EU

2006-09-17T01:33:00.000-06:00

The FED has been engineering the continuance of a strong dollar and the EU has been forced to follow suit although both countries are facing an ongoing or incipient recession. This article will explain why this policy will fail with the ultimate effect of impoverishing the working classes in both the US and the EU. In the interest of the rich in the US, the FED has pursued monetary policies designed to keep them rich but will ruin the working classes (and ultimately ruin the rich as well.) The foreign trade deficits which are the result of this policy will, within a short period, cause a catastrophic fall in the value of the dollar resulting in a worldwide financial implosion and worldwide recession. First it is necessary to explain the history of the economic policies which caused these deficits.
When the Second World War ended the US was producing approximately seventy percent of the manufactured goods in the western world. The manufacturing capability of the countries comprising the current EU and Japan had been ruined by the war and these countries initially needed modest exchange rates in order to maintain their money supplies as they competed with US manufacturers. As these countries recovered their manufacturing capabilities their exchange rates should have been adjusted to reflect their increased competitiveness with the US. Absent an appropriate adjustment in exchange rates, manufacturing shifted to the EU and southeast Asia and the US began experiencing ever-increasing trade deficits. Until 1970 the US was on the gold exchange standard which meant that current account balances were to be resolved by an exchange of gold between central banks when these balances were not offset by net foreign investment. This mechanism was designed to correct trade/current account balances by a decrease in the money supply of a deficit country resulting in lower prices and wage levels. In practice, because of wage inflexibility, a decrease in the money supply actually caused a corresponding decrease in production/employment resulting in a recession. So President Nixon took the US off the gold exchange standard by refusing to transfer gold to resolve the current account deficit, and implemented a managed float of the dollar. Under this system the dollar was allowed to float within a severely restricted range, which in effect allowed ever-increasing trade deficits to continue. Foreign dollar holders were forced to buy other US assets such as real estate and stocks and bonds, including the purchase of US government securities. Because the mechanism to prevent/alleviate large trade deficits was insufficiently adjusted, the trade deficits actually increased as foreign products increased in sophistication. To make matters worse, the western governments and the IMF sat mutely by as western hedge funds ruined the money supplies of the developing countries of Southeast Asia resulting in even lower (unjustified) wage levels for workers in these countries and making western worker's wage levels even less competitive. The result was that no one wanted to hire western workers, and white collar as well as blue collar manufacturing jobs began moving to Southeast Asia.
As a result, US and EU workers have little chance of finding work, and wages in these countries will have to fall perhaps as much as eighty percent before they again become competitive. Given the costs of living in the US, it is unlikely that US workers will agree to a wage decrease of this amount. Because the western governments have chosen to "free" the movement of capital and labor, their worker are competing against similarly trained workers whose mean wages are about fifty cents per hour. In this "free trade" environment the only way for western workers to compete will be for their governments to allow their exchange rates to fall to a level where their workers' wages are competitive with worker's wages worldwide. Under these conditions, the trade deficit could be resolved as US made goods again became competitive. This would require, for long term viability, a reduction in the annual trade deficit by one trillion dollars, involving a substantial decrease in the current dollar exchange rate.
Many policy-makers as well as economists believe that the US can continue these trade deficits by means of offsetting investment flows into the US by foreign dollar holders. If US citizens had unlimited assets perhaps this would be a valid option. But investment flows simply amount to the transfer of US assets such as stocks, bonds, and real estate from US citizens to foreigners. No country/population has unlimited assets. Most people want to hold onto their assets(which are a source of their income.) When foreign dollar holders have finally purchased from American citizens all assets which are offered for sale, what will foreign dollar holders do with their trade proceeds? They will have to be resolved by a draining of assets from the American banking system and a dumping of these dollars on the foreign currency exchanges. When this happens the dollar will fall, ultimately stabilizing at a level in which US worker's wage level are competitive in worldwide manufacturing. This will have the same outcome as allowing a true float of the dollar's exchange rate until trade balances are reestablished. The predominant differences will be that, if the western governments fail to act now, this adjustment will occur only after foreigners have gained control of most of the wealth in the US and EU and the US working classes will have experienced another seven/ten years of underemployment. With the current account deficit now approaching one trillion dollars, and profitable and purchasable US assets available for sale of ten trillion dollars at the most, a fall in the dollar will occur within the next seven years to ten years. The IMF may alleviate the situation but not avoid it by the issuance of mammoth tranches of special drawing rights. They will quickly tire of this when they will have to do this annually and at a level which will cause inflation problems in the other hard currency countries of the world.
All that will be necessary to start a run on the dollar is for any one of the players holding large dollar denominated assets to panic, realizing that to continue supporting an overvalued dollar will only result in greater loses down the pike. These include the petrodollar crowd, foreign central banks, foreign investors, foreigners holding large balances in US banks, and Eurodollar account holders, among others. There is no longer a question of "if" but "when" this will occur and how far the dollar will fall. The British pound experienced a drop in value relative to the dollar of about seventy percent over a fifty year period, and it's deficits were miniscule compared to those of the US today.
Having explained the history of what has compromised the US economy and the future of the workingman in the US, I can now get around to explaining how current monetary policy in the US will ruin the EU. To begin with, US policymakers are claiming the dollar to be undervalued based upon its purchasing power. The purchasing power of the dollar is undervalued only because of infrastructure and marketing advantages available in the US. These factors result in a high level of market competition and in lower prices generally on foreign tradable goods at the retail level. Any halfway competent economist looking at the trade deficit knows that the dollar is tremendously overvalued on the basis of the wage levels of US workers, which determine the employment and production of a country. The IMF, the worldwide "expert" in foreign currency values, is well aware of the "structural" problem in the value of the dollar and the fact that it is seriously overvalued. If any country currently under it's supervision were to experience similar trade deficits the IMF would force it to devalue it's currency. The bogus claim of an undervalued dollar gives the policymakers an excuse to hold the dollar at an unsuitable level, and is causing the ruination of the manufacturing workers in the US. Jobs of white collar and tech workers will soon be affected as well.
Now for the real folly(and betrayal.) The FED has been raising interest rates for the past year or so claiming that it is "fighting inflation". The inflation that the FED wants the public to believe it is referring to is one of increased prices of consumer goods sold in the US. But this kind of inflation is not present and is unlikely to reappear again soon because of some very fundamental changes in the US economy. Tariff reductions, transportation efficiencies, and a shift away from union membership and a decrease in union bargaining power have made "cost push" as well as administered inflations increasingly unlikely. The increasing number of competitive foreign goods for sale in the US will inhibit stateside price increases indefinitely and will continue as long as 200 million skilled workers in southeast Asia remain unemployed.
Currently, the "inflation" claimed by the FED simply doesn't exist. The federal reserve people are using the word "inflation" as an excuse to do what the rich want them to do, namely to support the dollar's value even while it is ruining the American workingman. The rich call a decrease in the value of the dollar "inflation" because it increases the prices of imported goods. But a decrease in the value of the dollar won't necessarily increase the prices of local-made goods and therefore needn't cause the inflation which the Fed is pretending to be so concerned about. Based upon this pretence, the FED has been raising the interest rate not in order to control inflation but solely to keep the dollar from falling in value. This increase in interest rates will encourage foreign dollar holders to keep their money in savings accounts in American banks (in the US money markets). This "investment" will decrease pressure on US international bank reserves thereby avoiding any U. S. balance of payments problems which may arise.
The FED are effecting the increase in interest rates by means of a decrease in bank reserves. This will result in a decrease in the money supply driving the US economy into recession.
The EU is in even worse shape employment-wise. At a time when it is facing an ongoing recession EU policymakers are compelled, by increases in US interest rates, to raise their interest rates in order to avoid losing bank assets. In other words, the US interest rate policy forces the EU to do the same, ensuring a drop in production and employment there as well. As the FED continues to raise interest rates, the EU will follow suit going further and further into recession. They will continue to lose jobs to Southeast Asia, unemployment will continue to increase, and their high standard of living will slowly disappear. Until the US government decides to support its working classes, the EU governments will be unable to support theirs as well.

"Unemployment" in the United States

2006-03-23T23:18:00.000-07:00

The following is a comment I made to an editorial about choosing the ideal career written by the editor, Paul-V, of the Web journal Brainshrub.

I'm sorry that I may sound like the "bitter guy" in your article but I take his position as well. There are approximately 70 million people in the U.S. who are of working age but apparently have no job. The government has these figures as well. They publish the "participation rate" which is currently less than 66% of all people between the ages 15 and 62 in the U.S. The other 33 or more percent are the real people currently unemployed in the U.S. Granted that includes a lot of teenagers that haven't families to support who shouldn't be counted to be fair. Likewise there are, lets say, 15 million housewives remaining at home taking care of their family's needs and maybe 5 million more incarcerated or in poor health. So lets just say that only 40 million are unemployed(leaving out the zillions underemployed). But the govenment keeps pretending that the unemployment rate is 5%(around 6 million)! They either claim these unaccounted-for millions are lazy or, the worst insult of all, that they have voluntarily chosen "leisure" rather than work! Like, someone having spent 8,12,or 16 years in school and shelled out perhaps $60,000 if he/she has attended college, suddenly decides "I think I'll just relax around my shack in the woods,parents house, welfare office,etc. Yea, that sounds good!". The real culprit here is the U.S. government which has continually passed laws giving away American jobs(NAFTA,CAFTA, the legal immigrant IT giveaway)to say nothing about their sitting around mute while millions of manufacturing jobs disappeared overseas. They have suceeded superbly in turning tens of millions of American citizens into the indigent unemployed! But simultaneously they exhort the public to retrain themselves(for the same jobs they have given away). This pretence is indeed obscene.

2006-03-17T23:13:00.000-07:00

Another Nail in our Coffins

I read now that the U.S. government is restricting purchases of strategic properties by foreigners. It's about time! All other countries have been restricting ownership of their country's businesses for years, normally allowing only 49 percent foreign ownership and local control. China has recently restated this policy regarding foreign purchase of their companies. But, in the case of the U.S., this will now unfortunately advance the day of reckoning when America will have no more properties or assets for foreign purchase and the dollar(and U.S. living standard)will drop like a rock. Read my article on 01/06/2006 about "The U.S. Current Account Catastrophe" to better understand these comments.

An Attempt to Support Dutch Immigrant Practices

2006-03-17T22:58:00.000-07:00

The following article was a comment I made in response to an article published in the Singapore Times regarding a country's rights to ask a lot of what at times appeared to be unnecessary and intrusive questions of a prospective immigrant. The article was not used by the newspaper which is unfortunate because I believe it has implications for all immigrant policies worldwide.

Regarding the article "Dutch migrants to take 'attitude test''', it is entirely proper and necessary to require these tests. Each society has developed it's own cultural values which it has every right to protect. By allowing a large number of people of any other culture to enter any country, given laws protecting all residents against discrimination, will legally open the door to attempts to change the local culture to one more in line with the immigrants own culture. Britain has suffered this with Muslim Imams who, after accepting the right to immigrate there ungraciously turn right around and suggest that their disciples are justified in killing British citizens(among others). The poor British authorities have bent over backwards to resist the prosecution of one Imam because of their fear of been accused of "racism" or religious intolerance. Finally they had to prosecute, which is what any country would/should have done from the start based upon their own laws, and now this person is jail and the taxpayers will be footing the bill for his extended incarceration.

This is similar to the conditions prevalent in the United State in the states of Florida and California with respect to immigrants from Cuba and Mexico respectively. In both cases the immigrant's culture is fast becoming the norm of these states, at least in localized areas. They demand certain things of the local officials such as making Spanish the official language of their community. Fortunately these people come from non-theocratic countries and are able to adapt to the U.S. culture well and are a contributing and law abiding group which are readily accepted by the U.S. citizens. If this were not the case the U.S. officials would indeed be fools to allow them to immigrate.

The bottom line for allowing any foreign national from entering any other country should be "Will this person fit in with our own culture" or "Will this person say or do things disruptive of community harmony". The only way to determine this is on a personal basis and should be required of all potential immigrants and should consists of just those questions regarding whether the person will indeed "fit in".

2006-01-06T05:21:00.000-07:00

Open Letter to Alan Greenspan

It would be decent and proper to explain to the American public just why interest rates are currently being raised when the U.S. is really(despite the propaganda) in recession. Australia too is raising their interest rates but at least has the decency to confess the reason why so that the public can rightfully judge whether it is in the best interest of the average citizen, and if not, in whose interest it is being done.

2006-01-06T05:16:00.000-07:00

Problems with the Economy

There are many serious problems not being addressed today in the U.S. economy, namely under-funded private pensions, the social security puzzle, tax problems facing current workers as baby boomers begin receiving social security and Medicare payments, and the federal budget and current account deficits. The administration at best simply provides versions of the final (positive) financial results its programs will provide. Not one administration official or government representative to my knowledge has come forward with a real proposal in any of these areas and supplied an even rudimentary financial statement providing the basis for these claims. The response, when attempted, is simply "this will decrease the shortfall/deficit in the (fill in any program you wish) by 70 billion dollars". This is because they haven't a clue how to resolve any of them. The tremendous problems for the economy and the value of the dollar will be upon us soon and, if we are not prepared, will result in the rapid impoverishment of the American taxpayer and a drastic reduction in the public's standard of living. The public, and especially the newest members of the workforce who will be the biggest "victims" of a failure of this sort, deserve better than this.

2006-01-06T05:08:00.000-07:00

The U.S. Current Account Catastrophe

This article will point out the consequences of a continuation of the U.S.'s mammoth current account deficit. Some believe that stock market and direct capital investments will continue to resolve this problem. These investments, in the long run, make matters worse. They simply represent an asset transfer to compensate for excess consumption. Repatriated profits and dividends will in fact result in a permanent increase in the current account imbalance. The same reasoning applies to government bond and real estate purchases. In a surprisingly short time period this will result in the ruination in the value of the dollar and consequent drastic reduction in the standard of living in the U.S. for rich and poor alike.The U.S. current account deficit will soon exceed seven hundred billion dollars and ,considering present trends, will continue to grow. China's automobile manufacture,which is now in its infancy but growing rapidly, may provide serious competition to U.S. manufacturers if only on a local level. Also China's agricultural products which are just now beginning to be widely available worldwide could quickly provide serious competition overseas for american producers. At the same time, the industrial base in America continues to shrink with a steady loss to China and other Southeast and South Asian economies.If the current account deficit stabilizes at “only” 700 billion dollars and continues for just 14 more years, U.S. citizens will have experienced net debt or asset transfers of close to 10 trillion dollars. If all the stocks on all the U.S. stock markets are valued at 14 trillion dollars, and if current ownership of these stocks is about 25 percent foreign, with the 10 trillion dollars of accumulated current account dollars the holders of these dollars could purchase outright every single U.S. stock-market listed company. The companies generating the bulk of the U.S. GDP would then be foreign-controlled with potential serious political consequences(and potential tax revenue consequences as well). To make matters worse, control of any company can be effected with only 25 or 30 percent ownership of the company's shares. That would mean that foreign dollar holders, instead of needing 10 trillion dollars to attain control of all the current companies listed, would require less than 3 trillion dollars, an attainable goal within 5 years.This result is premised upon a concerted effort by the current-account beneficiaries to spend all their current account surplus on these stock market securities. Currently, most of these dollarholders are purchasing U.S. Government debt securities with their current account earnings but, at these ultra-high current account losses, even these government securities could be quickly bought up or otherwise unavailable for purchase. That is, unless the U.S. Government is willing to go into much higher levels of the Federal budget deficit, now standing at less than 300 billion dollars.Debt instruments issued to cover the federal budget deficit are currently being used as banking assets by the U.S. Federal Reserve in its efforts to regulate the U.S. money supply. The Fed competes with these foreign dollar holders and commercial banks in the purchase of these government debt issues. In fact, the Fed can only purchase these debt securities in the open market after they are originally auctioned off. This problem, a shortage of purchasable high-grade securities, could be alleviated somewhat if both the Fed and foreign dollarholders would accept blue-chip corporate bonds as official assets. In any case, both government and corporate debt instruments have finite limits and, based upon these ultra-high current account deficits, could be quickly exhausted. As the various options of where to place foreign earnings run out, these foreign dollar holders will resort to buying U.S. real property, putting home ownership even further out of reach for the first-time American buyer.A last resort would be the dumping of these dollars on the foreign currency markets causing a drastic drop in the value of the dollar. No one wants that, especially the foreign dollarholders. Most foreign governments want a highly-valued dollar in order to maintain their relative advantage in world trade.If nothing is done over the next 20 or 30 years, all these various assets in the U.S., namely real estate, government debt securities, and corporate shares, will be largely foreign-owned. The typical U.S. citizen will be working for a foreign-owned and foreign-managed company. With few purchasable dollar assets available, any further current account deficits would most-likely result in a decrease in the international value of the dollar. The dollar would start to appear “worthless” and would drop in value irrespective of actions by foreign governments or the U.S. administration. Overseas, this would result in the ruination of the money supplies of a considerable numbers of countries whose reserve assets are in dollars. And, last but not least, it would result in a drastic lowering of the standard of living for all American citizens.The big question is when will the current government face up to this problem and do something about it.