Labor Unions: Beware

Although support for the TDC power plant may look like a chance to support jobs, the reality it that it is an environmental disaster.

When you support a disaster, you eventually lose….

Labor Unions will lose public support if this TDC center goes through….   Withholding the environmental dangers from the public may work short term and get approval, …

But once built, and when ash particles the size of golf-balls begin to fall on Newark, Stanton, Elsmere, Wilmington and Claymont, the public will ask,,, how on earth could this have been approved?

The truth will come out at that point, that bad people sneaked it through using bad ways…..

You will eventually lose prevailing wage if this TDC goes through…. The public will turn on you.  I almost turned on you before I calmed down. Economics are a strong suit. But one’s life trumps economics.  The environmental consequences of this TDC are gigantic.  Everyone who gets cancer will blame you…  Anything they can do to hurt you will become their dying wish, if you know what I mean….

What to do….

• Support a data center without a power plant.
• Support building a data center in a rural area close by so we get the same jobs… 20 miles into Cecil County or east of Middletown would do the trick.
• Support something else being built on the same location…. One that has no environmental impact.

Putting your loyalty and support behind the Data Center, is like putting your loyalty and support behind a candidate who unknown to you committed child abuse 25 years ago…  At some future point, you lose all your investment…… and are left to fight a defensive war to keep more from being taken away by business groups…..

You did not know this would turn on you.  But it has, and will get worse….   Now is the time to sneak out of the back of the crowd while no one is really looking or counting…..

Signed:  Your most ardent supporter.

K

 

Economic Stagpression

It’s a pun off of the word stagflation which was short for stagnant inflation.  Stagpression is short for stagnant depression.  It is the most accurate indicator of our economic situation today, and tomorrow, and tomorrow, and tomorrow…

We seem to be in a Depression. but we aren’t.  The Housing market is recouping, jobs are consistently growing, energy costs have dropped,  corporate profits are now at record, higher than just before the 1929 crash, and an all time record high stock market..  We should be booming. But we aren’t.  We still have too high of an unemployment both on and off the books, we still have depressed low wages, we have lost massive wealth within the middle class over this century so far, we have record high student loan debt, we have low consumer confidence,  Hence, one class of America is booming.  The other class is still in Depression mode.  Hence we are in Stagpression….

It is easy to see why.

Here is a chart showing the free cash flow of businesses……

Record highs. See?  Record highs.  We should be growing faster than China, we have so much investment money at our fingertips. But no.

Here is our investment track record…

Ironically as we gave our businesses more and more money with lower taxes, less regulation, tax funded price supports, hand-tied their unions, and made free new technology at our taxpayers expense, despite all these perks and incentives, they invested less.  So what are they doing with their money?   Pick up any financial publication and read the headlines. They all will let you know.

Rather than invest in plants and equipment, businesses are primarily using their funds to repurchase their own stocks in order to boost management earnings and ward off hostile take-overs, pay dividends to stockholders, and accumulate large cash and bond holdings.

None of which help our economy. It is as if we work hard, buy their products, and they put that money into a mattress. Soon, we are going to run out of money. Fortunately the Fed has filled the gap by printing more and giving it to banks for free. It too, filters though the system, and when it gets to the top, it goes into the mattress.

Instead of recycling money, we are letting the tap flow from our printing presses to the top echelon of our society… Now do you get it?

What is missing is a system that recycles the materials back into our economy so we have less money we need to print. If we were talking about paper, we would be saying we need to recycle paper to keep from cutting down more and more trees simply to fill up our landfills….

We need a system to return that money to the bottom so it can rise again and again and again.

Here are the options that have been tried.

• Price and pay freezes.
• Government set and regulated prices.
• Lower tax rates.
• Cash incentives from taxpayers to reinvest.
• Pleas and entreaties from the Oval Office.
• Higher marginal tax rates.

Only one of these has worked.  Can you guess which one?    If you guessed higher tax rates spur reinvestment you are absolutely correct.

Notice the rates of reinvestment climbing in each of these presidencies:  Eisenhower, Kennedy-Johnson,  Carter,  Clinton each time  Congress legislated higher marginal tax rates.  Also notice the drops under Nixon, Reagan, and George W. Bush as Republicans cut the taxes…  The Bush Tax Cuts held through Obama’s first term, and account for today’s sluggish reinvestment. More precisely, the reinvestment turned upwards under Obama  until 2010 when Republicans took over Congress, and has fallen since. I can’t wait to see 2013’s numbers, for I expect to see real investment increase there as well. However those higher tax rates on the top half percent implemented at 2013’s beginning, sent financiers scurrying and bargain empty homes were bought up by investors with lots of cash which brought up the floor of the housing market (perhaps to our future peril).  It also accounts for stocks becoming an area of liquidity to hold cash,..explaining the record highs ….

So we have an opposite relationship:  cutting taxes increases corporate profits which go elsewhere other than reinvestment back into the ecnomy.

Increasing taxes, cuts into the Free Cash Flow, and funnels some of that flow over to reinvestment projects.

Ever wonder how Delaware’s 3 banks lasted for decades and then all disappeared very close to each other?  Bank of Delaware, Delaware Trust, and Wilmington Trust. are now owned  by other entities. (Wilmington Trust had some hand in cutting off its own foot).  Commerce Bank, which was New Jersey based had the same fate.

They lasted for years because big banks never had enough free money to buy them out.  Just think.  In Delaware there are now 3 less bank presidents.  18 less bank officers,  and who knows how many clerical workers are missing because the work goes to the owners headquarters, not located here…. One still wonders if our state could be better off, had MNBA not been bought up by an outside conglomerate.

So giving more money to businesses and corporations in this case, cost us jobs… and destroyed 3 long termed Delawarean corporations…

That was one example.  Across this nation, in every city,  every county, every state are millions more….

Raising the tax rates drives re-investment.  It is the only thing we know of so far that consistently works to drive re-investment.   Everyone who insists on cuts and de-regulation, no matter how they spin it, is pursuing a policy that has been completely disproven by reality and fact and of course, recent history..

Are you better off than you were under Clinton?  Your income level will probably determine your answer…..  Because yes, some people are indeed, a lot better off.   John Carney.  Tom Carper.  Chris Coons,  Jack Markell, to name 4 off the top of my head….  Better off too, are those who these four represent… the 1%.  Much better off!

If you find someone willing to raise taxes, stick to them like glue. They are the ones who will lead us back to prosperity…..

Until then, economic stagpression will continue…. continuing through tomorrow, and tomorrow, and tomorrow….(at a) petty pace that creeps from day to day….

Walmart Stumbles, Warns on Profits

Saw this headline across quite a few feeds this morning…. Can’t say it enough… I told you so….

Do you know the real reason?  It’s 3/4th of the way down.  In case you didn’t know, if you are short on time and just need to skim.  always go to the 3/4ths mark, and you can get the gist of almost anything, in seconds….

“Regarding U.S. same-store sales for the company’s fourth quarter, ending Friday, Wal*mart said it expects sales, excluding fuel, to be “slightly negative” to its earlier guidance of flat sales at Wal*mart stores “

Why are those sales negative?

Chief financial officer Charles Holley said Wal*mart saw a greater-than-expected negative impact from reductions in the Supplemental Nutrition Assistance Program, or food stamps. The cuts went into effect on Nov. 1.

Then it provides some right wing political cover by also blaming storms… But as anyone will tell you, the excessive buying before a storm overcompensates for the loss of business from the storm, and that storm days are the primary money makers for those selling groceries… (No other food company is blaming storms, it should be noted.)

The economic impact of the Republican decision, and all their attempts to rebuff Democrat’s attempts to keep that SNAP option at a higher rate, is very real. If you owned 10,000 shares of Wal*mart stock, this morning in hours you lost $5,500… All because of Republicans… If your town has a million shares owned by all its citizens who invest in the stock market, your town just lost $550,000 dollars collectively, thanks to Republicans…

Republicans only called out those eating with government money; called them lazy.. and unAmerican. Those seeing the whole picture, were more concerned with how the economy would react… We predicted that some businesses would experience a 10% decline in food sales, matching the 10% decline in food stamps….

Now the recent cut agreed by the House just this week, will cut into that further…

So why is Wal*mart the most affected? The answer is because it is cheaper. If one is receiving SNAP (or Food Stamps) one is already poor and on a tight budget. It makes good sense if one has only $700 to spend a month, to try and get as many calories as possible for that amount of money. The best place to do that is Wal*mart.

Wal*mart did this to themselves. As one of the biggest funders to the Tea Party, Wal*mart is one of the few corporations responsible for putting the Tea Party Republicans in office. Ironic that the Tea Party chose to cost a few Wal*mart executives their jobs, by cutting SNAP… Wal*mart should have lobbyied their friends harder to shelve or vote against it. They and all other grocery chains now, should both advertise to the public and lobby the Senate, NOT to pass the Farm Bill with 8 billion of further cuts to that program….

The damage caused to all of society by not fully funding SNAP is severe compared to the consequences that would occur, if that money was saved by raising taxes on the wealthy….

Retail Food is a huge engine of our economy. Putting water into the gasoline that feeds that sector, will have dire consequences,of which we are beginning to now see. Wal*mart and other grocers need to get on the Hill now, lobby against any SNAP cuts in the Farm Bill, threaten to withdraw funding for all rural conservative candidates,.. or face a rather dismal, ten year slump…..

Note To Newark: Avoid Slick Brochures And All Robocalls

Someone is worried about the Newark mayor’s race.  Nancy’s evidence shows that  financing for Polly Sierer’s campaign is coming out of One Commerce Center, 1201 Orange Street in Wilmington.  This building is the home to over a 100, 000 shadow corporations.

Here is what Nancy has:

The address listed on the Polly Sierer mailer is the Cambridge Drive, home of Mike Mullen. It says to visit elections.delaware.gov for more information on “I Like Polly’s Plan.” The Department of Elections says a PAC was just created but has not yet filed any reports so we will not know until the end of year report who is financing this effort. The PAC had the minimal information legally required, which was the treasurer’s name and contact information. The treasurer is Mike Mullen and his cell was listed – 392-893-7832. I have tried calling but it does not ring and simply says “The person you are trying to reach is not accepting calls at this time. Please try your call again later.”

Here is the location of that area code…..

Two islands in the middle of the Pacific Ocean 5000 miles East of Australia….  (it is probably a default; there is no area code for 392 other sources state.)  It appears this number is off a spoofer, one of those machines that can fake a number.  Here are a list of random complaints made over that area code….

We now have a violation of election law.  The deliberate misleading of who is sponsoring a candidate is not allowed.  A known illegal phone number was given to the Department of Elections for the treasurer of a small municipal mayoral election….  It is not a mistake.  It was provided by a spoofer. It was purposefully hidden.

What happens now.

The Superior Court has jurisdiction over Election Law.  All entreaties must go through the Attorney General.  Due to the timeliness of the election,    “(a) The Attorney General shall immediately prosecute to final judgment all complaints which may be made of a violation of this title.   

Furthermore, a complaint can be further made to the Elections Office on Monday, and the complainer require them to notify the Attorney General of this violation. (b) Each department of election and all election officers shall notify the Attorney General of all violations of this title.

Election filings are considered perjury if misfiled.  There is no mistake that his was intentional…..

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But that is really an offshoot.  What is important for Newark is that a giant corporation, with over hundreds of billions in assets, is using surreptitious means to overthrow Newark’s elections for one reason.  To approve the largest gas burner in the state of Delaware which will be only 200 feet from resident’s homes. And use the umbrella of providing jobs … to do it.

Would they be doing this if this was really a good plan?  Or would they be doing this because time is running out, and the threads are being followed, and soon the truth will show?

Gas burners shower their surrounding ten miles with elements normally kept miles underground.  Radon is one.  Radon detectors in everyones home will now go off non stop.  Lead is another.  Imagine a micron depth of lead over your cars, you lawn furniture, your pets, every morning you wake up. Uranium is a third.

There are very good reasons the investors of the largest gas burner in Delaware, which will run 24/7, do not want you to know this.  Likewise, there are very good reasons corporations choose to register in Delaware, where no one can find their owners and hold them accountable…..

But at best it comes to character… Who in the hell hires a treasurer they don’t know, who has a phone number showing up in the middle of the Pacific Ocean?  Ostensibly so as not to answer questions?  So as not to be accountable?  So as not to be up front?

A patsy. A pawn. A slave to someone else’s interests… That is who.  Seriously.  If YOU were running, and  YOU are the one who fills out the application form to run, YOU are the one who puts down your treasurer, YOU are the one who types in their phone number in the slot that says after treasurer …. Phone Number….  and YOU didn’t know it was a fake, or you knew and agreed with it,  wouldn’t YOUR character be suspect?

Newark.  You are so lucky.  Consider yourself warned just in the nick of time.  Regardless of how you feel about the Power Plant, and now that evidence is rushing in on how damaging it will be you should be concerned, just on character alone, is reason not to “Vote For Polly.”  Character alone.  Doesn’t Newark deserve better?

Why is Polly’s Treasurer’s number a fake area code?

The answer is in One Commerce Center, 1201 N. Orange Street, Wilmington, Delaware, 19801…….

So vote:  Shall it be Wall Street?  or Main Street, that is… both the East and West versions of Newark’s Main Street….. And if by chance you are wondering who is squeaky clean and willing to represent all of Newark, and won’t be cowed, intimidated or bought out by the persuasive giants of Wall Street?  You should already know it is Amy Roe… She has stood up to them many times. I think that now, at least till this data center passes, someone who is pro-business-as-long-as-it-does-not-kill-residents in its process, is what Newark should have. Actually for now, it kinda appears what Newark really needs.

Unless  later, whenever you have a complaint with the city, you want to call the Pacific Ocean….. “Ariel, Ariel… is that you?”

Full Employment And the kavipsian Economic Theory

Economic theory, which is basically bullshit, is often coached in mathmatical terms to disguise the fact that it is pure bull.  However there are some very simple concepts which make very good common sense, and if one looks at that, instead of how to use current data to justify one’s action politically, one comes up with obvious surprising results.

Labor Demand < Labor Supply

That is why so many people are out of work.  Now here are the players.

1. Workforce Market
2. Corporations
3. Commodity Market
4. Foreign Investments
5. Financial Markets
6. Households
7. Government

Government is our last option.

So our workforce if we compare the same counting today as was during the Great Depression, is running at 85% capacity.  Meaning 15% are unemployed.

Going down the list then,

Corporations are at their best ever. Corporate profit the highest percent of GDP ever.

Financial Markets also are at their best ever.  Dow Jones is at record highs.

Commodities are performing well, all indications are of a long term bull market.

Foreign Investment is at an all time high.  Never have we had this much outside money.

Real Household Income is declining.  We are headed downwards and are currently tied with 1994 as it rose out of the 91 recession, and prior to that, tied with 1984 as we were coming out of the 1982 Recession.

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Bottom line with government out our equation, we have the investment side of our economy all doing spectacularly well, and the household side going down.

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Proof enough that the free market system, or capitalist system does little for the good of any nation, just as little good it did prior to the legislation that became law after the crash of 1929 when Democrats swept the Federal Government.

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Government is the great equalizer.  For a fix, government needs to step up and side with We the people (or households), and as a referee would in any sporting event, make the playing field fair.

It can to it in either of two ways. It can impose necessary restrictions upon businesses which increase their demand for labor at the expense of their corporate profits.  For example, pass legislation to imprison CEO’s for malfeasance. Only then in order to keep their heads out of hot water, they hire environmentalists, social engineers, accountants, and other highly trained personnel whose prime function is to make sure the company is not doing anything shady.

It can also split the corporations into multiple smaller ones, each now requiring a new president, several new vice presidents, new HR’s, new financial planners, etc and with one fell swoop, increase the demand for labor.  This too, comes at the expense of corporate profits, which are currently huge primarily due to economies of scale.

And it can indirectly create demand by raising taxes.  When taxes go up on profit- earned, less profit gets earned by design; less “reported” profit, less money handed over in taxes.. Meaning the bulk of that money is now spent being reinvested into the business just so it can’t be taxed.  Building projects, higher wages, more R&D gets spent into the economy,  This too, comes at the expense of corporate profits on the books.

But that is why higher tax rates are actually the best alternative.  Higher tax rates tend to create less taxes, so government still needs to stay small.  The revenue collected is lower for the simple reason that if there was absolutely no tax, all the money earned would belong to me.  But if more of what I earn goes to you, then I will figure out a legal way to keep more for myself, and report less.  So whereas as tax rates go up, total tax revenue comes down;  the net effect is that more money goes into our economy thereby creating more demand.

The demand for labor then gradually rises to equal the supply and if it continues on its upward path, yes, yes, so there are more jobs than workers, then competition begins pushing the individual wage rates higher.

Which adds to the increased demand.

Using tax rates works best for now instead of the government interfering with day to day operations of all businesses, it actually creates an environment where each business can operate independently to its own best interest, and as they do, the demand for labor rises even more…..

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Anyone who argues for less government input into the economy is in the wrong century and can’t read economic figures that are plain as day.  So how does one interpret the cries for less regulations that are hurting corporate profits?  Easily. One realizes that sooner or later corporate profits have no choice but to fall, so our household income can increase. Loss of corporate profits is a “good thing”.

One should mention in the same breath, that labor’s percent of wages is deteriorating all across the world.  It is a world wide phenomenon.  The answer is simply that deference of all governments over the past decade and a quarter, has been given to those in charge of investment.

Policies favoring Investment must now take a back seat to those which put people back to work, which if done, raise the incomes of all of us… Even those of  the 1% , though not as much as they have been lately been accustomed.  But everyone still benefits.

Raising taxes is where we need to go.

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Apologies To Bryan Townsend

Bruce Ennis put forth a bill (SR8) requesting Delaware go forward with formally supporting Glass Steagall re-implementation by the US Congress.

Bryan Townsend kind of came out against it. Here is Nancy’s copy of his emailed response to her.

One must understand all legislative members in Delaware are somewhat compromised. We are a banking state. In the words of Gov. Howard Dean, MD. himself… ” Any candidate who challenges Wall Street’s status quo is going to come under an avalanche of hateful attack ads this year –“

So there is considerable reason not to be an ardent Delaware fan of the return in 2013 of Glass Steagall….. One must give the courageous Bruce Ennis a plug for being one.

But it makes so much sense. There are times in our life when one can willingly chose a very risky path of action which will occupy 100% of ones attention, as in driving a mountain road along the cliffs in Montenegro at over 100 km/h. Or, we can choose to put ourselves into a safety bubble, such as cruise control on a major interstate highway, and relax and enjoy the other things in life, since all our effort is not involved on monitoring what otherwise could become a life or death scenario.

I have read Mr. Townsend’s statement and it is accurate. However my criticism is that it deals with banks. His and our responsibility is to the people whose money is in those banks. And who are on the hook when those banks fail.

The FDIC insures deposits now up to $250,000. It should not be responsible for funds placed in hedge funds, As Elizabeth Warren accurately stated:

Banking should be boring. Savings accounts, checking accounts — the things that you and I rely on every day — should be safe from the sort of high-risk activities that broke our economy.

If we are going to insure the people’s money, it should be kept in safe investments. What point have we in insuring by default hedge funds, swaps dealing, and other risky investment banking services. When the same institutions that take huge risks are also the ones that control your savings account, the entire banking system is riskier.

The funds for checking and savings accounts of America’s families and businesses, should not be handed over to the London Whale. If a crash occurs, and the money is safe, then the losses are only on paper. But when yours and my monies are in Bangledesh, China, or Antarctica on some risky get-rich scheme, and fail… our tax money needs not be thrown away because our American Banks were involved.

Banks cried the economy was safe enough for the repeal of Glass Steagall.. History showed them wrong. Even the most vibrant time of economic growth ever seen in America (92-00), could not prevent the collapse 9 years later after 8 years of Republican control..

The only way to keep citizens money safe, is to insure it. We are lucky we have a rich nation which can do that. We barely survived the financial collapse of late 2008. Our employment numbers still show the cost.

Yes, one can take the bank’s side and say things were different in 1932 than they are in 2013. But doing so, puts one in contrast with what is best for We, the people. The simple solution is to make it clear to all, that the FDIC will only insure safe investments used for checking and savings accounts. For risky investments banks are on their own. For them a bank must use other funds it can easily afford to lose if it wants to play at the crap table… It should not be throwing our money away because it assumes the taxpayers will simply replace their losses for free.

We should not be in the business of arguing what or what not banks should or should not do. They can do that within whatever parameters we choose to give them. However our concern is simply over how much we should insure. The new Glass Steagall Act of 2013 will make that clear.

The June 30th Coup

A bill was placed on the docket to change Delaware Law.  It was supposed to slip through the last minute when no one was watching.    That is Blevins SB 151 regarding the Treasury…   Since it was a surprise, a lot of hoopla as been thrown  in the fire by pundits reacting to the impact of first impressions.   In their defense that was all they had to go on…

Due to time constraints this investigation will take a series of small steps, probably spread across Delaware’s official blog circuit, with help from Starkey of the News Journal…

But to back up the word coup in my title,  I first want to show you how the original language was written then show you how it looked with the changes after SB 151.  Of course this was stated as necessary to keep the state treasure in line, a ploy that El Som and Cassandra seem to have swallowed hook, line and sinker.

First the original bill:

For those who follow along (you all are great) here is the passage number  Title 29; 2716(a)(2)

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(1) Require as a condition to any deposit of such funds in any state or national bank or savings and loan institution that such deposits be continuously and fully secured by direct general obligations of or obligations the payment of the principal and interest on which are unconditionally guaranteed by the United States of America or other suitable obligations as determined by the Board;

(2) Require that the selection of financial institutions to provide banking and investment services pursuant to this section be conducted on an open and competitive basis; and

(3) Require that temporary clearing accounts as well as major disbursement accounts be established in a bank or banks whose principal office is located within the State.

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That was the original piece of legislation.  Patty’s bill seeks to amend the section 2 of that piece, the embolden area.  From SB 151…

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(2) Require that the selection of financial institutions to provide banking and investment services pursuant to this section be conducted on an open and competitive basis as defined by the Board.; It shall be the responsibility of the Board to approve the selection of each of the said financial institutions by a majority vote of the members of the Board. The Board, by a majority vote of its members, shall be responsible for setting the policy as to the allocation between short and long term investments and the allocation of funds to the respective financial institutions selected through the open and competitive process; and

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Notice a “lot” of new language. In the synopsis this was sold as a clarification of the responsibilities of the board and the trimming of the responsibilities of the Treasurer. Instead, in what is now typical Markell modus of operandi, this if more of a surreptitious law-change than a clarification.

Previously the directive was this should be done in on an open and competitive basis. The previous directive specifically states this further down: 2716 (e)(1)

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The investment of money belonging to the State shall be made by the State Treasurer in accordance with policies established by the Board and subject to the terms, conditions and other matters, including the designation of permissible investments relating to the investment of the money belonging to the State,

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It is obvious to all that the existing law separates the Treasurer specifically out from all other board members when it comes to the investment of the state’s finances.

And that was really all existing code says in regards to the investment portfolio of the state’s money.

But, the new law, the one proposed by Blevins titled SB 151, makes HUGE changes. Now the board must make that decision. The board which according to Title 29; 2716(c)(4):

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The Board shall meet as often as shall be necessary to properly discharge its duties; provided, however, that the Board shall meet at least 2 times annually; and provided further, that the State Treasurer or the Chairperson of the Board shall be authorized to call special meetings of the Board.

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and 2716 (c)(2)

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a quorum of 5 members shall be necessary to hold a meeting of the Board.

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and 2716 (d)(5)

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The use of teleconferencing or videoconferencing is authorized for use in conducting meetings of the Cash Management Policy Board.

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Even now under existing policy only 3 people out of nine, if they time their conference-call correctly, can decide the future investment strategy of this state. Patty Blevin’s law would now give those three people (whomever they might be) unprecedented power and remove the current oversight of the only elected official responsible to the public.

“Coup” is the proper term for it.

False Faces of America’s Reform

Its been half a year, and we’ve seen, even after an overwhelming mandate from the people in the past election, our executives running opposite the trend, and becoming more conservative.

In Delaware, we saw the port almost privatized.  Public education sold out to Wall Street’s highest bidders,  the Delaware refinery almost voided the Coastal Protection Act,  We saw a minimum wage raise first watered down, then killed by committee. We saw only the wealthy get a tax break.  We saw draconian wage freezes on public employees.  We saw a medical board replaced, so it could then approve a sweetheart deal for an cutthroat Alabama (allegedly) medical firm.  We saw private corporate education plans being imprinted over the current fine teaching policies of Delaware’s institutions.

On the Federal Side, we saw bargaining superiority on higher taxes, pared away for nothing. We saw the continued allowance  of Republicans to veto very necessary appointments by use of a filibuster. We saw drone use increase, even as we discussed it’s ramifications.  We had the final admission of what most of us already had known, that the NSA was collecting everyone’s data to be stored and used for blackmail later if ever needed.  We are undergoing a sequester now, and it is simply accepted and all are silent, therefore complicit.   We keep getting abortion legislation even 40 some years after Roe versus Wade… We were supposed to improve the voting lines of last November, not make them harder.  We were going to get rid of guns, and couldn’t, so we’ve stopped talking about it..

None of these were the direction the majority of voters sought.  What they clamored for, was more power be given to the people, and taken away from giant firms with money…   The promise of freedom has morphed from a land where people can achieve their wildest dreams (they can’t do that now) to a land, where any corporation can instead achieve it’s wildest dream.   If you are part of that lucky corporation, you may be doing well;  if you are not, too bad.

The overall trends are unmistakable.  America wants it’s dream back. The dream that corporate America has stolen in the form of giving us lower wages and higher living costs.

No one has to get hurt.  We just need to pay people more.

It’s as if you were doing a  yearly corporate budget.  One classification has an overage every year and another is always running short by the same amount as that previous overage,   Let’s move that line here, so more falls where it is most needed…….

Those two classifications in our economy are our corporate profits and labor costs… Moving the money from profits to labor solves a lot of problems…

One, it increases demand for goods and services.   Buying things creates demand.  It is obvious that 300 million buyers can do more purchasing than the richest 1000 people.  And they will buy different things; things that help grow the economy.  Here is one example that works well to illustrate how this is.  Since the recession very few people have yet to change their toothbrush (have you?)  One is instructed to change it every 6 months.   Having 300 million people rush out to buy a new toothbrush does a lot more oomph for the economy, than a corporate tycoon flush to his gills with excess dollars, buying out toothbrush factories left and right just so he can set the price…

Using a car as an analogy, we are filling up our gas tank, then keeping it full by crimping the line that feeds the engine.  The engine sputters and fluts, barely pulling us forward, but we are happy our gas tank is full….

America knows this and voted anti-corporate in 2012.  Romney was corporate.  He could have (and maybe did) star in the movie Great Gatsby.  The refutation of Romney was America’s refutation of all Wall Street stands for….

Egyptians have no qualms with not succumbing to bad masters.  Americans should learn from them and begin do the same.

Driving In The Wedge

Diane picked up that the Chicago Sun-Times is reporting Wall Street investors are getting a little shaky with UNO, a quasi-government-private partnership that was supposed to rapidly expand charter schools in and around Chicago.

An expansion that was to be partially funded by $37.5 million of Wall Street’s money.

A crack has just opened in the impenetrable fortress wall. A pinpoint of light is shining through.

The easiest way to stop the charter school process may not be through legislation, but by an actions far simpler to achieve: Make charter schools unprofitable… A philanthropist will invest in a charter if it earns no money. But Wall Street investor certainly will not.

That is the problem they have with Chicago.. Chicago points the way on how to organize and hit Wall Street where it hurts…

A. Picket Charter Schools as unfair to Labor. Who wants to sign their children up in a school with picket signs outside protesting the destruction of the middle class by Wall Street? What kind of status symbol would that be, to have to tell your boss where your kids go to school? An embarrassment, that’s what.

B. Call state legislators to complain about anything negative you can find out about the “new” charter school. Don’t be afraid to pick up the phone. Truly, you are doing that lawmaker a favor; you are saving his butt from being blindsided by parents back home. All he hears from lobbyists in his office, is how great charter schools theoretically are. Reality is far different…

C. Threat of unionizing all Charter School Teachers… And why not? Why not enlist Charter School teachers and help them get organized to demand higher wages or strike? Aren’t they people too? Why should they work for a lot less than public school teachers, when they could easily be making the same salaries if they would just organize into a union, as do public teachers? What Charter School teacher would say no to higher wages? What Charter School Teacher could say no to higher wages… It is time to aggressively recruit.

D. Investigate all transactions to insure no embezzlement. Check over state funding to Charters which is published and look aggressively for corruption, nepotism, and anything to taint the charter school in bad light, thereby jeopardizing state funding…

Arne Duncun said… we would learn a lot from Chicago… and he was right.

In short, UNO obtained $98 million from the state legislature to build new charters. It turns out that $8.5 million of that money went to companies owned by two brothers of UNO’s number 2 official, Miguel d’Escoto. When the scandal broke, he stepped down from his $200,000 job, resulting in then Governor Pat Quinn to halt payment on the balance still owed to UNO…. Investors got worried and question UNO in a conference call, over the scandal, over the unionization of Charter teachers taking place, over the halt of construction on one of the new schools for failure to pay the bills, The governor has suspended payments of the remainder of state money until satisfied that the Charter is performing as promised. And this just in, UNO spokesperson confessed to the Chicago Sun-Times that “future funding may be at stake..”

The lesson here, is that getting a legislator to part with his campaign money coming in, is a lot harder than making Wall Street’s return on investment extremely risky. When Wall Street starts consistently losing money each time it invests in education, it will move on to something more prosperous.

We see what we have to do,…. Now, lets make it happen…

Union leaders. Start pressing charter schools to join.

Bloggers. Start pouring over the balance sheets on line of your nearest Charter School.

Parents. Write you legislator on how much Charter Schools have destroyed the educational experience for you child…

Yes we can do this… We can learn a lot from Chicago.

Student Loans: Next Financial Crash?

On July 1st the interest rate on student loans rises  from 3.4 percent to 6.8 percent of this year.

One year ago, the trillion dollar mark was crossed for the amount owed and required to be paid back for a student’s education..

3.4 to a 6.8 is a doubling… Just on a gross scale, off a Trillion dollars, the interest per year is jumping from $34 billion to $68 billion.   On a $16 trillion GDP, that is nothing.  But when you look at other figures, that jump has shocking consequences for the world-wide banking system.

The post graduate boom is usually what drives our economy.  New cars, New electronics, New houses.  Dining out. Spontaneous purchases.  A study by the New York Federal Reserve shows that graduates are living austerely to pay of their gigantic debt, most of which are more costly than the mortgages owned by middle America.  Asking someone to buy a house while paying off their educational loan, is equivalent to asking then to buy a second house while still paying off their first,  How rich does one have to be in order to do that? What amount of yearly income is required to do that? +$125,000? Does this mean there will be no net new buyers of houses for 20 years?  Anyways, after July 1st, there will be $34 billion less with which to purchase houses.

The Department of Education predicts a default rate of 13.4%… Off a trillion that means $130.4 billion dollars will be the amount defaulted. $130.4 billion. 

So adding the two together, the upcoming shock on our economy will now cost $198 billion. Poof, right out the door, $198 billion. Gone from our economy. 

Tran Union a credit reporting agency says the data in it’s files show that almost half, or 43.5% of student debt is in deferment.  In dollars off that trillion total, that would amount to $435 billion dollars of debt not being paid in a timely fashion.

Particular concern must be paid here, because more than half of college graduates under the age of 25 are either unemployed or underemployed — the highest rate in 11 years, according to an analysis of government data.

Putting the two together, we have half of those required to pay $435 billion defaulted, who are either under or unemployed.

As we saw with mortgages, when people can’t pay, there is no notice, They just walk away.

A nation depends upon its newest generation to lead them forward with energy and enthusiasm, long after the previous ones are tired and ready for rest.  This generation is coming out on the playing field, weighed down like knights of old, in ancient armor….  The upcoming football game does not look promising…  Their best 100 yard dash is just under 10 minutes.