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The ‘Hunger Games’ Economy

Memo Pad Politics

The ‘Hunger Games’ Economy

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US Senate Minority Leader Mitch McConnell, Senate Majority Leader Harry Reid (C), and Speaker of the House John Boehner, attend a ceremony at the US Capitol, Washington, DC, December 10, 2014 (AFP/Saul Loeb)

That our Congress is intent on taking from the many to enrich the few was on full display during passage of the new $1.1 trillion federal spending bill, as five provisions show.

In a Washington run by and for oligarchs, official theft happens suddenly and without warning. No public hearings. No public debate. Instead, as we saw in North Carolina and Wisconsin, it occurs with just abrupt moves to shift power and money from the many to the richest few.

And with little focus by our best news organizations on the consequences for people’s lives, especially if they are in the 90 percent, many people have no idea they just got officially mugged.

The continuing resolution to fund the government was combined with an omnibus spending bill to create a 1,603-page statutory monster called the “cromnibus.” Among the provisions that show how both political parties help corporations pick the pockets of the vast majority, while far too many mainstream journalists help obfuscate the awful truth:

• Already retired blue-collar workers who belonged to unions can now be cheated out of some of their pension money, with only those age 80 and older fully protected.

• Another $345.6 million will be cut from the budget of the Internal Revenue Service, in a favor to big corporations and the rich that will have little effect on workers, whose taxes are withheld before they are automatically processed via computer. The cuts mean fewer audits of corporations and rich individuals. Top corporate auditors earn at most about $150,000 a year, but find on average $19 million of taxes owed. To Congress, that $126 to $1 ratio is not worth the political cost, but shifting more of the burden of government to you is cheap and easy.

• Another $60 million was cut from the Environmental Protection Agency, in a boon to companies that pollute the air and water, and instead of cleaning up after themselves, shove the expense onto all Americans.

• Despite a 2-1 vote to legalize marijuana in the District of Columbia, Congress said no, revealing again how Washington does not trust the states or local governments.

Cromnibus – Just Another Word for Theft

And then there is the biggest and baddest provision, the one that could sink the economy again the way reckless behavior on Wall Street cost trillions of dollars in 2008.

The big banks are now free to enjoy their winning bets in the derivatives casino, while forcing taxpayers to pick up the losses if they grow so large that they threaten to bankrupt any bank. Majorities in the House and Senate evidently forgot that such gambling sank the economy six years ago.

The Wall Street bailouts infuriated voters, surveys show, but when it came time to vote, the citizenry seemed not to be able to connect the dots between senators and congressmen who collect their pay from taxpayers but regard Jamie Dimon of JP Morgan Chase, Lloyd Blankfein of Goldman Sachs, and other big bankers as their real bosses.

The cromnibus repealed a portion of the Dodd-Frank bill, which prohibited buying derivatives with regular bank deposits, like your paycheck money, which the Federal Deposit Insurance Corporation insures up to $250,000. If banks place a lot of bad bets, the FDIC will now have to step in to cover them.

Senator Elizabeth Warren, Democrat of Massachusetts, tried to stop this massive giveaway to the five biggest banks in America, which do 95 percent of the derivatives business. But even Warren’s moral authority and deep expertise in how banks operate with disregard for the general welfare were not enough to overcome the power of their campaign contributions and connections.

Dimon, the boss at JPMorgan Chase, was whipping votes for the provision. Backing him up was President Obama, whose administration has refused to prosecute the “Too Big to Fail” banks and whose attorney general, Eric Holder, repeatedly lied when he claimed to be pursuing the bankers.

So powerful is the influence of Wall Street money that the provisions Warren railed against were literally written by Citigroup, as Mother Jones revealed. The Senate voted 56-40 for the cromnibus, including the Citigroup language.

In what could have been a scene in the Hunger Games movies, the big banks and our elected leaders joined together to steal from blue-collar workers.

For the first time in 40 years, since the Employee Retirement Income Security Act was adopted in 1974 to ensure workers would collect pay they deferred into pension plans for their old age, Congress decided that benefits already earned can be taken away.

This historic shift got one sentence in The New York Times: “It allows certain multi-employer pension plans to shore up their finances by cutting retirees’ benefits.”

Notice the focus on the money and the pension plan without mentioning that up to 1.5 million workers and retirees will be affected, or that the first big plan failures are not expected for more than a decade.

Elitist Journalism

That this provision got almost no news coverage shows just how much our leading news organizations cater to economic elites favored by advertisers, and how the current generation of reporters at the best news organizations comes heavily from the upper economic tiers of American society.

Reporters and editors whose parents were coal miners, truck drivers and clerks have given way to those with degrees from elite schools, some with trust funds that insulate them from the realities of American life for the vast majority. With that shift comes a predicable change in perspective, from “there is plenty that needs fixing” to “the world generally seems quite just.”

In the late 1990s I suggested a story about how a family gets by on two grand a month. A prosperous colleague at The Times said, “No one in New York City lives on $25,000.” When I offered to take my colleague to the subway stop at 74th St. and Roosevelt Ave. in Queens, saying we could easily find such people on the streets, the reply shifted to this: “Oh, those people. Nobody cares about those people.”

The Times has, of course, written a great deal about the poor, but in the daily report about the cromnibus and other legislation, the tone and the specific details often focus on the institutional — as with the single line above about strengthening balance sheets — rather than the unbalancing of retirees’ meager finances.

Next month a new Congress will begin. Expect more of the same – rapid and major changes, and cuts and repeal of longstanding laws that have in common one element found in the preamble to our Constitution: promoting the general welfare.

AFP Photo/Saul Loeb

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David Cay Johnston

David Cay Johnston won a 2001 Pulitzer Prize for his coverage of taxes in The New York Times. The Washington Monthly calls him “one of America’s most important journalists” and the Portland Oregonian says is work is the equal of the great muckrakers Ida Tarbell, Lincoln Steffens and Upton Sinclair.

At 19 he became a staff writer at the San Jose Mercury and then reported for the Detroit Free Press, Los Angeles Times, The Philadelphia Inquirer and from 1995 to 2008 The New York Times.

Johnston is in his eighth year teaching the tax, property and regulatory law at Syracuse University College of Law and Whitman School of Management.

He also writes for USA Today, Newsweek and Tax Analysts.

Johnston is the immediate past president of the 5,700-member Investigative Reporters & Editors (IRE) and is board president of the nonprofit Investigative Post in Buffalo.

His latest book Divided: The Perils of Our Growing Inequality an anthology he edited. He also wrote a trilogy on hidden aspects of the American economy -- Perfectly Legal, Free Lunch, and The Fine Print – and a casino industry exposé, Temples of Chance.

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114 Comments

  1. kenndeb December 15, 2014

    We have a corrupt government, now led by a communist fraud.

    Reply
    1. sanford943 December 15, 2014

      kenndeb stop throwing that crap out about Obama being a communist. it is stupid. Yes the government is corrupt. It probably always been. There has always been money in politics, although it is probably worse today. Perhaps a parliamentary system would be better where there would be representation of different people.

      Reply
      1. plc97477 December 16, 2014

        I most certainly is worse now thanks to the “supreme court”.

        Reply
      2. BillP December 18, 2014

        Sanford tis is Ken’s typical troll rant, resident Obama is a communist or an emperor or a socialist or the evil. Whenever presented with how the country is doing better than in 2008. job growth, US Dollar is up versus most of the other currencies, unemployment down to 5.8%, he claims the data is all fraudulent That is the simple troll reply to any data they don’t want to believe.

        Reply
    2. bobnstuff December 16, 2014

      If he was a communist e would be taking money away from big business not giving it to them. What you might be right. If he is not a communist he would be a communist fraud or a capitalist.

      Reply
    3. Independent1 December 16, 2014

      But fortunately, our government is no where near as corrupt and devious as your are.

      Reply
      1. kenndeb December 16, 2014

        HA. Seems you are alrigiht with having your rights and freedoms trampled on, but then you ARE a good little communist already.

        Reply
        1. Independent1 December 16, 2014

          Having MY RIGHTS AND FREEDOMS TRAMPLED ON?? How so??? Please be specific!

          You don’t mean like the GOP nitwits in every state trying to pass legislation that allows companies to trample on the rights of every woman by being able to deny covering contraceptives for them, do you??

          Or that nitwit state GOP idiots passing legislation that allows companies to discriminate against gays??

          Or that nitwit GOP legislators in Red State after red state have passed Voter Suppression legislation that tramples on the rights of every American to vote??? Is that what you mean??

          Or were you thinking of all the NITWIT GOP LEGISLATORS IN RED STATES who have passed legislation BANNING EVERY WOMAN’S RIGHT TO CONTROL HER OWN BODY by banning Obortion clinics EVEN THOUGH ROE VS WADE SAYS THEY’RE SUPPOSED TO BE LEGAL???

          Were you thinking of all t hose ways IT’S THE GOP WHO IS TRAMPLING ON EVERY AMERICANS’ RIGHTS???

          OBAMA HAS TRAMPLED ON NO ONES RIGHTS!!!!!!

          Reply
          1. BillP December 18, 2014

            That’s a typical Ken reply, his rights are being trampled on though he never mentions any of them. He has also claimed that his grandchildren will be enslaved, he seems a bit paranoid.

            Reply
  2. SZwartz December 15, 2014

    One correction. The danger is not that Wall Street takes RISKS. The danger is FRAUD. The Credit Default Swaps are used in intentional fraud — where Wall Street executives have no risk at all. The concoct defective investment vehicles which they know will fail and then take our bets that the concocted investment vehicles will fail. Of course, they fail. It is no different than drugging a race horse and then betting that the horse will lose. There is no risk in that.

    Read William K Black about Accounting Control Fraud.

    The reason Wall Street wants the FDIC to pick up the tab for the huge losses which their companies will face is not to protect the companies but to make certain their companies have a pipeline to enough cash to pay the crooked executives who concoct the scams.

    Once again, here is how it works.

    1) Executive A invests a worthless investment.

    2) Executive A has his company issue “insurance” on the worthless investment so that people will buy it. Last time it was bundled mortgages, but it can be almost anything they invent.

    3) Executive A and all his buddies buy this “insurance (credit default swap) so that when the investment collapses, they all get paid by Executive A’s company.

    4) Executive A’s company goes BK as it can never pay out on all the credit default swaps, UNLESS

    5) and this is where Congress and Obama are riding to the rescue — unless the FDIC kicks in and makes all the depositors whole. In other words, the duty to pay all the bogus credit default swaps falls on the US taxpayers.

    Nice Xmas present from Congress and Obama.

    Reply
    1. davidcayjohnston December 16, 2014

      Columnist here…

      Yes fraud is rampant on Wall Street, as I have written about at length going back years, citing Bill Black’s work and the studied refusal of both the Obama Administration and Congress to even listen to him about how to prosecute bank fraud.

      But banks are not seeking to lose money in derivatives bets, as you seem to think. Their desire to is to make a profit and, when they lose, to have taxpayers pick up the losses.

      Reply
      1. SZwartz December 16, 2014

        We have to face the true situation going back to Equity Funding. I had just started in life insurance sales when I head about Equity Funding, but it was immediately obvious to me that it was mathematically impossible to have insurance premiums based on income from stocks. Since this was before their crash, no one listened to me — and why should they as I was just a kid starting out? How could I know more than Wall Street?

        I will give Equity Funding excutives the benefit of the doubt and I will even giv it to Bernie Madoff — that self-deception and ego lead them into a mathematical nightmare and they lacked the integrity to end.

        After the S&L Scandal in the 1980’s, there is no basis to give the architects of the securitized bundled mortgages with their concomitant security default swaps any benefit of the doubt. They started out ab initio as frauds — looting one’s business is not a new phenomenon.

        Insurance executives do it every day by hiring defense firms which give them kickbacks and then over charge the insurance companies. The difference between the massive frauds on Wall Street and the insurance executives is that the insurance guys have been smart enough not to be too greedy.

        Of course, the crooks on Wall Street would like to avoid the trouble of their companies crashing as it takes so long to re-establish their scams. It is much easier to find a pipeline to the federal tax payers in order to keep the money flowing even when they BK their companies.

        Accounting Control Fraud is rampant in Los Angeles where well over $1 Billion has been diverted to developers based on false claims of profitability of TODs and mixed-use projects. The mayor and city council lie about how mnuch benefit the development will bring to the City and then funnel billions of tax dollars to the projects. When the courts finally had a chance to look at the actual data, Judge Goodman said the mayor and city council based their actions on fatally flawed data and wishful thinking. If we had alleged Fraud and Deceit rather than CEQA, the judge could have used words showing a criminal state of mind. Rather, he used parallel words found in CEQA cases. “A Rose by any other name … “

        Reply
  3. Melissa Newton December 16, 2014

    Social Security’s unfunded liability is around 23 trillion dollars – approximately $77,000 of liability for each US inhabitant.

    Reply
    1. davidcayjohnston December 16, 2014

      Columnist here…
      Compared to other government programs, Social Security is exceptionally well funded and currently has a huge and growing surplus. Run the numbers on the unfounded liability for the Defense Department or the total national security bill (including Homeland Security, State, etc.) for the same time period and then take into account that while SS has a dedicated tax, these other programs do not. You will see SS’s problems are minor and easily fixed, unlike these other costs under current policies.

      If we returned to the Reagan era policy of applying the SS tax to 90% of wages (instead of closer to 80% this year), and if government policies that hold down wages were reversed (the median is basically unchanged since 1999) SS would to infinity be just fine.

      You may want to read the forthcoming book “Social Security Works!” by two staffers on the Reagan era changes. I wrote the forward. The book will be about early next year from the nonprofit publisher The New Press.

      What your post has to do with my column about how Congress taking from the many to give to the already rich few escapes me.

      Reply
      1. Irishgrammy December 16, 2014

        I often wonder when untrue comments like that one by Melissa Newton attacking Social Security and/or any of the usual attacks on Social Security by the right, just what do these people think would be happening in this country to the elderly 65 and older who are retiring in numbers of 10,000 a day, THAT IS IF THEY COULD consider retiring???!!! Most have no clue what happened to the elderly prior to the advent of Social Security or the blessings of Medicare…….I would like to meet the person who coined “Golden Years”…..surely reality had nothing to do that turn of phrase!!!!! With what congress just did, slapping the repeal of this important part of the Dodd Frank legislation at the “eleventh hour” and now allowing, “we the people” to “bail out” the bad boys on Wall Street when they screw up AGAIN, which they will, I have to admit I got physically sick and completely disheartened, here we go again, money is power and the ones that have it are buying what they want, MORE MONEY for them, less for everyone else, and the stagnation continues to get worse and the income disparity seems insurmountable …..

        Reply
        1. davidcayjohnston December 16, 2014

          Columnist here…

          This lack of historical perspective afflicts broad sections of our public policies because anyone born since 1960 has only known Reaganism, not what went before. You may want to read the column I wrote when I was with Reuters for year about the cat food ladies of yore: http://blogs.reuters.com/david-cay-johnston/2011/09/20/more-for-the-rich/

          or see this link from The Ed Show two years ago:

          https://www.facebook.com/edshow/posts/392426120840365

          Reply
    2. Eleanore Whitaker December 16, 2014

      Give it up already. If it’s unfunded…maybe that’s because half of the south, southwest and midwest collect it before they are even eligible. That’s why it’s “unfunded.” How in the world can you possibly make such a hideous statement that it’s unfunded, when I know for 4+ decades my paycheck funded it? Try telling the truth.

      I had 9 siblings. Of those 9 not a single one collected SS at retirement age. Why? They died before they were eligible to collect even though all 9 paid into SS for more than 4 decades. Where the hell is all that” unfunded money?

      Reply
      1. kenndeb December 16, 2014

        WHAT DO YOU KNOW ABOUT TRUTH?

        Reply
        1. Independent1 December 16, 2014

          One Heck of at Lot More than you ever will!!! You wouldn’t know the truth if it slapped you in the face!!!

          Reply
          1. kenndeb December 16, 2014

            You’re as stupid as she is.

            Reply
    3. Jambi December 16, 2014

      Where in the hell did you get your “23 trillion dollar” figure?…it’s gotta be FOX NEWS or pulled right out of thin air…

      Reply
    4. Independent1 December 16, 2014

      How did someone come up with the notion that Social Security was unfunded and had a 23 trillion dollar pay-out liability when it’s a pay-as-you-go benefit?? And there is absolutely NO WAY anyone could possibly model SS’s current benefit liabilities with any degree of accuracy given the numerous caveats related to whether an American ever qualifies for an SS benefit, how much they may qualify for, whether a spouse my qualify for a benefit, whether a disability may be involved and for how long benefits may be payable, etc. etc .

      But in any case, even today, SS benefits are almost completely being covered by current SS tax collections. Some reasons why current taxes don’t fully cover current benefits is because the economy is down, a lot of today’s jobs are low pay resulting in lower than usual SS tax collections and baby boomers have started collecting benefits.

      If Congress would lift the current cap on earnings subject to SS taxes (which is around 113,000), or the economy created more and more higher paying jobs, it’s quite likely current SS tax collections would cover current benefit payouts with the excess being added into the SS Trust Fund which is currently close to 2.8 trillion dollars. And even though the SS administration is having to dip into the trust fund to pay current benefits, they’re taking out less than the interest that is accruing on the fund, so that the trust fund is still continuing to grow.

      Reply
  4. Dominick Vila December 16, 2014

    The big question is why did the Democrats support a Bill that paves the way to a widening of the inequality gap, increases in deficit spending, and deregulation that guarantees another Great Recession? I suspect the reason for that is because they know that starting in January these outrages would have seemed mild compared to what the new Congress is going to push for. From de-funding the ACA to cuts in education, to lowering the tax rates of the wealthiest Americans, to creating more loopholes for the rich, more subsidies for corporations, to gutting social programs that help the poor and the middle class, Republicans are going to be in a position to push their agenda the way they did during W’s first six years in office.
    To their credit, the current leadership – Republicans and Democrats – did whatever they could to minimize the chances of impacting our recovering economy, as well as political damage. The GOP establishment is as concerned as everyone else about the impact of Tea Party excesses on their chances to win the White House in 2016, and retain their current Senate majority. This was a pre-emptive move designed to minimize, or at least delay, policies that mainstream Americans may object to.

    Reply
    1. dtgraham December 16, 2014

      The Republicans were going to push for all of the outrages that you mentioned after the new year, even if the Dems had been successful in negotiating a few changes to that continuing resolution omnibus bill. It wouldn’t have mattered. They would have likely revisited those changes, while pushing for a lot more as you say. By then though, Obama would be freer to veto without the threat of a government shutdown. I still think more of an effort should have been made last Thursday to get those changes. I understand a government shutdown is obviously something to be avoided, but at any cost? A shut down may have lasted only days with any luck at all. Over 100 Democrats in Congress felt that way.

      Obama just seemed to me a little too eager to sign virtually anything, as though it was more a case of not wanting his Hawaiian Christmas ruined than any grand preemptive strategy. That’s only a perception and I hope I’m wrong about that. I may be. If he’s just going to phone it in these last two years, what kind of legislation is he going to sign on to next September when the government has to be funded again?

      For the average American, Obama achieved the same kind of compromise with Boehner that Custer reached with Sitting Bull. He was probably missing his watch and lunch money later.

      Reply
      1. Dominick Vila December 16, 2014

        I think President Obama’s decision to compromise with Boehner on this issue has more to do with a desire to cut his losses than Hawaiian vacations. I agree with you, however, in that this piece of legislation is unlikely to be an obstacle to Tea Party obstructionism and efforts to under fund the ACA and other social programs. Looks like he learned nothing from his efforts to pacify the GOP with strong anti-immigrant and anti-abortion language in the ACA, his decision to capitulate on raising the tax rate for those earning over $250K when confronted with robust GOP opposition, his decision to do the same when the GOP accused him of appeasement after he announced an early withdrawal from Iraq and Afghanistan, his capitulation on his plan to bring Gitmo prisoners to the USA for trial and imprisonment in Federal high security prisons, and so many other examples of olive branches that only elicited more opposition by an emboldened GOP. The problem with presidential vetoes is that they often boomerang, politically, when the congressional majority packages their schemes in a way that appeal to the general populace.

        Reply
        1. dtgraham December 16, 2014

          What a tribute to the power of the right wing media that they have conservatives believing he’s an emperor and a dictator, when actually he’s tried to pacify the GOP and accommodate them so much that he used to have the nick name President Cave-in if you remember.

          I really think that he truly believed his no red state no blue state rhetoric when first assuming office. He sincerely wanted to reach out as a good faith liberal. As admirable as the concept is, it was a terrible mindset to start off with given who his opposition was. They are hard line ideologues and absolutely vicious. This is not a normal political party interested in compromise and it took him too long to figure that out.

          Besides dropping the public option from health care, I always thought it was a mistake in not bringing back the Clinton tax rates whenever it was appropriate to do so in those first two years. 2009 may not have been the best year to do it, although there’s no evidence that moderate changes in marginal tax rates within a given range are either an economic panacea or dampen growth…normally. 2009 was exceptional though.

          The one major factor that led to those surplus budgets in the late 90’s was 1993’s budget and reconciliation act that boosted tax rates across the board. Those balanced budgets would not have happened without it. Clinton hit the fiscally correct sweet spot in the tax rates with that budget. To hear Republicans claim that it was their Congress that did it is nauseating, considering that they didn’t come in until January 1995. Obama only managed to reverse a tiny percentage of W Bush’s tax cuts and I always thought that was a mistake.

          Reply
          1. silas1898 December 16, 2014

            At the time, the wingnuts screamed that Clinton’s “biggest tax increase EVER!!” would totally destroy America in a matter of months. It passed with zero Rethuglican votes and led to the first budget surplus in a generation.

            Then they impeached him for it.

            Reply
          2. dtgraham December 16, 2014

            I remember that. You’d think they’d still be living that down. Hell, they try to take credit for it. They’ve got basketballs.

            Reply
          3. kenndeb December 16, 2014

            He was impeached for lying. Something the Emperor should have happen.

            Reply
    2. plc97477 December 16, 2014

      I understand your feelings but the gotp hasn’t figured out yet that Obama still holds the veto pen. The gotp will try to defund the parts of our improvements they dislike (which is everything Obama was for) but they will hopefully be vetoed and the gotp’s brains will explode to be turned to impeachment attempts. Could get pretty humorous soon.

      Reply
  5. Eleanore Whitaker December 16, 2014

    Here is proof of why those unfunded “Derivatives” that Wall Street plays with is the cause of Americans losing their retirements they save a lifetime for…Remember what happened in 2008 in Sept. when those unfunded derivatives crashed and caused Bush’s Financial Meltdown? Well, guess what? Now, the GOP has deregulated them again after 6+ years of the same banks who stole money from taxpayers for bailouts refused to comply with the 2009 banking reforms.

    If you think this has NO effect on public worker pension funds look no further than the debt this caused in NJ among public worker pensions. It was the direct fault of the high rollers on Wall Street hoochie cooing with every dime public workers put into their pensions. Free fall Wall Street style on every one else’s money. Pigs just swill. They never believe there are limits to their engorging at the trough.

    Reply
    1. johninPCFL December 16, 2014

      The last time, the derivatives bet on mortgage futures. This time they bet on oil futures. The crash has already begun with the decline in oil prices. The banks are already overexposed on drilling risk, on future price risks, on lease risks, etc. The only choice is to boost the price of oil (which the banks can’t control) or allow the banks to ‘hedge their bet’ on continuously increasing oil cost with a concurrent bet through a derivative (or ‘default swap’) on declining prices.
      I wonder who the plutocrats have set up to play AIG in this round?

      Reply
      1. dtgraham December 16, 2014

        The junk rated energy companies are in real big trouble right now and that’s going to reverberate beyond that sector.

        Junk bonds in the U.S. energy sector are getting hammered. These energy companies sold $50 billion dollars in junk bonds through October and they’re desperately trying to raise new money to service old debt or to fund fracking and offshore drilling operations. They’re highly leveraged and if they can’t roll over their debts due to collapsing oil prices, then many will default which of course is going to negatively impact the broader market.

        They had been getting resistance from the exposed banks but now that they suddenly have a lot more government insured funds to hedge with, who knows? There’s too much speculation financing the U.S. economy.

        Reply
        1. Eleanore Whitaker December 17, 2014

          One of the things that Americans didn’t focus on during the Sept. 2008 Financial Meltdown was that all of those mortgaging banks took the precaution of insuring loans they not only knew would fail, but approved in the tens of thousands. What really is a loss when you push derivatives you know are going to fail but you know isn’t going to ever be a loss because they were insured to fail. But the worst and skankiest part of what these mortgaging banks did was after the foreclosure fallouts. More than 90% of the properties and homes foreclosed on brought in additional profits to these banks. Banks owned them, sold them to high stakes developers for a song and then earned the 3rd leg of their profits. This is why that Financial Meltdown was a finely crafted banking scam and why these bankers belong in prison.

          Reply
      2. Eleanore Whitaker December 17, 2014

        John…I can’t agree more. I’ll tell you what really scares me. I live only 45 minutes from Wall Street in NJ. Every day at the crack of dawn, I see the Wall Street sheep boarding buses with the WSJ under their arms and that look on their faces that tells me they’ve not been playing a straight game for decades. They push and shove at each other as if there’s a mass rush to be Numero Uno. When they get to the floor of the Dow, they look like a bunch of rabid roaches.

        There’s a reality here these lunatic manics don’t seem to see for themselves. They automatically believed in their annual multi-million dollar bonuses they get for a sliver of any tiny little profit that’s earned. How was that EVER supposed to equate to sound economics? When corporations hand CEOs 1/3 of every annual budget, you just know that’s a recipe for disaster. Already the IMF is on the watch for all those tax free havens with more than $38 trillion sitting untaxed in them. The GOP knew this for more than 2 decades and did zip. In fact, this is precisely what they encouraged their campaign donors to do. I don’t say that Dems weren’t also in on this. But, the problem in Congress today is WHO the GOP really is. 17 red states are located in states that pound the economy year after year to keep their relic industries in existence. What on earth are they thinking? All businesses like tides rise and fall eventually. But forcing taxpayers to support businesses that don’t, of their own natural evolution, support themselves is going to have blowback. No American is going to work an entire lifetime with ZERO to show for their labors.

        Reply
    2. kenndeb December 16, 2014

      If only you were as smart as you think you are.

      Reply
  6. Joe T December 16, 2014

    REPUBLICANS AND DEMOCRATS ARE TURNING OUT TO BE A BIG DISAPPOINTMENT TO THE PUBLIC/ VOTERS MANDATE..

    WE (USA) categorically NEED a third political party with sincerity, integrity and conservative humanistic ideals that won’t lie/cheat/steal to the public for their own purpose and gain.There are plenty of qualified persons with $$$$$$$$$$$$$ to do this.
    Both the Republican and Democratic parties are jaded, START WITH TERM LIMITS (2) ONLY…..
    because after 30/40 years in political office they are arrogant and think they are GOD like HUMANS…..they’re NOT……
    BE BOLD….name the NEW PARTY…. “USA Coalition Party”
    Definition…….noun:coalition plural noun coalitions
    an alliance for combined action, especially a temporary alliance of political parties forming a government or of states.alliance union partnership bloc caucus federation league association.

    Reply
    1. johninPCFL December 16, 2014

      The part you’re missing is that the Democrats and the GOP have controlled state legislatures for so long that you cannot get any unaffiliated person on the ballot. The paltry few ‘independents’ that you can name all were elected from a party, then defected and could run as incumbents.

      Reply
      1. Joe T December 16, 2014

        Yeah….I know….but there has to be a way sooner or later,
        don’t you think? The govt is like a runaway train and getting worst year after year……..best regards, Joe T

        Reply
        1. silas1898 December 16, 2014

          The only way is to take over the Democratic Party from the grass roots up. The entire system is stacked against a third party a la Ross Perot. Look what the Teabaggers have pulled off.

          Reply
          1. bobnstuff December 16, 2014

            The democrats are the only party with grass roots, The republican party is run from the top down and any grass root movement causes major problem a we are seeing now.

            Reply
          2. silas1898 December 16, 2014

            Yes, but it’s the DLC Corporatists running the party.

            I just watched the NJ Democrats lay down and hand Christie re-election on a platter last year. It was pathetic.

            Reply
          3. bobnstuff December 16, 2014

            In my district the Democratic local party is local, they don’t win elections but they have a good time. The county and state take things in a more business like way but the still listen to the locals. I have been active in the local republican party and they are no fun at all. The state party tells the county party and the county party tells the local.

            Reply
          4. tdm3624 December 16, 2014

            I don’t like the Tea Party at all but they are grass roots. They may not be able to see the Koch brothers operating behind the scenes but they have real angst about the direction of the country and do something about it by showing up at the polls. They are more active than the majority of apathetic Americans.

            Reply
          5. bobnstuff December 16, 2014

            They started out as grass roots but now they are just the tool of Kochs and Fox. In the beginning I thought there may be something to them until they had a rally in a local park, Bushy Run State Park. They paid nothing to use the park but
            they had been working real hard to try to get the funding taken away from it. They were mostly a group of old men complaining about the taxes they didn’t pay any more and the government hand outs that they had no problem taking. Don’t get me wrong I like the idea of an efficient government. I hate government waste but I also know that the job of the government is to take care of it’s people, to protect
            them and to serve them.

            Reply
          6. Joe T December 16, 2014

            Yeah….I remember, although it appeared that Perot had a real chance to succeed, and then he dropped out,,,,saying…”someone was being minatory (sic) to his family”…remember that? Who really knows!
            best regards, Joe T

            Reply
  7. sunflower52 December 16, 2014

    Why is anyone surprised by this? We, the American working class, had our chance. It was a movement called “Occupy Wall Street” and we ignored it and ridiculed it. True, it lacked leadership, but perhaps that would have evolved had we come out in force. I am as guilty as anyone for sitting comfortably in my home on my computer bemoaning how the treatment of the average American gets worse and worse. When will we have the courage and the outrage shown by the protesters involved in the Brown/Garner cases, to leave our homes and hit the streets in protest? It better be sooner than later or another economic meltdown may. Take that house.

    Reply
  8. Theodora30 December 16, 2014

    Thanks for your focus on the “liberal” media. I think their support for charter schools despite the evidence that they do not outperform public schools except in a few cases and those generally are models that are not replicable on a large scale comes from the fact that most of these people did not got public schools and assume, based on test scores, that they got a superior education. (The research comparing public and private schools that matches students on family background does not support this widely held belief.) They also buy the “unions are to blame” despite the fact that states without unions or with very weak ones have the same problems or do worse. But supporting the pseudo private school charters lets these people feel virtuous and concerned for the poor which ironic since so many are actually for profit schemes.

    Reply
    1. bobnstuff December 16, 2014

      The problem is you can’t lump all private school together or even all charter schools. I’ve seen the full range in both. Some are very good and some stink.

      Reply
      1. Theodora30 December 16, 2014

        That is also true for public schools which will always have lower average test scores because even the more affluent ones still serve a more diverse population since they serve all kids including ESL and those with serious physical and intellectual problems. No matter how well these schools educate their strong students their average scores will always be lowered. And there is no measure of the value in getting to know a diverse group of kids.
        For our society to divert seriously research to an experiment that is not proving to outperform our existing public schools is questionable to say the least, especially since Republicans are doing all they can to make sure regulation and oversight are re weak to non existent.

        Reply
    2. davidcayjohnston December 16, 2014

      Columnist here…
      I think you confuse well-marketed data that obscures key facts, combined with reporters lacking experience in data analysis and how institutions operate, with “support.” I have also read many smart, critical stories about charters, including how some subtly cream the market. But of course that is NOT what my column above is about.

      Reply
  9. James Bowen December 16, 2014

    Excellent column. It is pretty obvious that both major political parties are bought and paid for. We need a viable third party that appeals to both the middle and working classes.

    Reply
    1. davidcayjohnston December 16, 2014

      Columnist here….
      What makes you think, under our current rules, that third party candidates wouldn’t fall victim to the same system?

      Reply
      1. James Bowen December 17, 2014

        They might well; there is certainly no guarantee that they wouldn’t. However, in order for a third party to succeed, it would presumably need a message that appeals to disenchanted voters in both parties. Right now, the middle class, which is the base of the GOP, is not happy with the GOP; and the working class, which since the New Deal has formed a large part of the Democratic base, is not happy with the Democrats. Those voters are ripe for the picking for a politician with a message that appeals to working Americans. It would also be more expensive and more difficult for big business and other special interests to lock down three parties as opposed to two.

        Finally, it could also have the effect of causing the two other parties to not take their voters and ordinary Americans for granted. This has happened before. The populist movement of the 1890’s had a major effect on both major parties. It propelled William Jennings Bryan’s technically unsuccessful but nonetheless very influential candidacies on the Democratic ticket in 1896, 1900, and 1908. It also motivated the rise of the Progessives in the Republican Party which found their way into the White House with Theodore Roosevelt.

        Reply
    2. Michael Ross December 17, 2014

      A third party would just divide liberals and allow the Tory whores (better known as the Tea Party) an even greater chance of overturning our democracy.

      What we need to do instead is go all Tea Party on the Democrats: To challenge them at the primaries for not being liberal enough, starting with every blue dog coward who ever disavowed everything they stood for just to try to win reelection.

      Reply
      1. James Bowen December 17, 2014

        I disagree. I don’t think the problems with the parties are that one is too conservative and one is not liberal enough, or vice versa. I think the problem is that both parties are totally corrupt and cater to an agenda that benefits a few at the expense of most Americans. I get very leery when I hear about how the two parties need to “compromise” and “get things done”. That usually means enacting laws and policies that are going to make the rich richer and screw the middle and working classes. This CRomnibus was a classic example of that.

        Reply
      2. GregoryC December 17, 2014

        We need a second party. The republicrats support many of the same agenda: evisceration of civil liberties, surveillance of the global community, drone assassinations, perpetual war, bank bailouts, immunity from prosecution for those committing war crimes or torture and financial fraud, the repeal of Section 716 of the Dodd-Frank bill. They support the Bush-Obama tax cuts for most Americans (the richest are free to hide their wealth offshore in tax havens, evading taxation). Both parties support military expenditures even though the Pentagon can’t face an audit (which may change soon, we’ll see).

        Reply
  10. mah101 December 16, 2014

    The general welfare doesn’t include us. And what journalists? We don’t have journalism in this country any more, just mouthpieces for the corporate bosses.

    Reply
    1. tdm3624 December 16, 2014

      We do need really good journalists who are willing to dig deep to uncover corruption and smart enough to write about it in a style that the average American can understand. But, to blame it all on the journalists isn’t quite fair; we Americans should share the blame as well. How many Americans can get past more than two paragraphs without being bored? How many Americans are more concerned with what celebrity is having a baby than what Congress is doing? Apathy won’t be a good market for hard hitting journalism. Getting off my soap box now… 🙂

      Reply
      1. davidcayjohnston December 16, 2014

        Thank you, tdm3624. Comments like those of mah101 lack a basis in reality since there are many excellent reporters, just too many who are not, which is quite different than what he or she wrote. Nobody, for example, familiar with my work would call me a “mouthpiece for the corporate bosses.”

        Reply
    2. jointerjohn December 16, 2014

      Just look who owns the news outlets in this country today. Even the thousands of smaller newspapers, radio and television stations that used to be independently owned have been swallowed up by the big boys. There are very few places from which strong outspoken young journalist can work up, and even fewer positions to which to work up.

      Reply
      1. Irishgrammy December 16, 2014

        SO sadly true. There are also a few “older” journalists that won’t give in or up!!! They should all be applauded and supported for making every effort to keep the American people “informed, aware, and educated ” !

        Reply
        1. davidcayjohnston December 16, 2014

          Columnist here…

          There are younger ones too, some of whom benefit from scholarships I fund to attend training from Investigative Reporters & Editors, of which I am immediate past president. But it will be very hard to make al giving going forward (much less raise eight children as I did) because the 400-year-old model for financing news is collapsing.

          Reply
          1. jointerjohn December 17, 2014

            I’ve been an elected representative to small local government for twenty-seven years, first City Council and now County Board of Commissioners. In the 1980s each meeting was attended by reporters of two daily papers and three radio stations. Now it is rare if anyone shows up at all, and when they do will not report anything that might be uncomplimentary to the controlling majority.

            Reply
          2. davidcayjohnston December 17, 2014

            Columnist here…

            The lack of beat coverage is a serious problem which I have written about in the British book “Investigative Journalism: Dead or Alive?) (it is alive and doing well, unlike beat reporting) and in various articles like this one:

            http://niemanreports.org/articles/its-scary-out-there-in-reporting-land/

            Reply
          3. jointerjohn December 17, 2014

            Great article, thanks for referring me. I nearly slapped my forehead into oblivion some years ago as Katie Couric made her rise in television infotainment. She became the queen of the pointless, ghoulish, melodramatic interview. She would say, “so the killer threw a burning jar of kerosene into the car containing your four children while you watched helpless to stop it”? The hysterical mother would blubber, “yes Katie, oh yes, God YES!” And then Katie would say, “so, how did that make you feel”? I never wanted to choke anyone as much as I wanted to throttle her when she did that.

            Reply
    3. S.J. Jolly December 19, 2014

      Real journalism costs money, cuts into corporate profits Much less expensive to hire a few pretty faces to read news ripped off the wire services, corporate press releases, and political handouts.

      Reply
  11. EaglesGlen December 16, 2014

    I understand the fed did not bail out over 125 financial institutions that bankrupt and the fed by a huge bias only bailed out big ones that are “too big to fail”.

    Reply
  12. tdm3624 December 16, 2014

    It’s stuff like this that gets me so frustrated with our current, corrupt, two-party system.

    Reply
    1. davidcayjohnston December 16, 2014

      Columnist here….
      So organize and vote in a new Congress and state legislatures. We got rid of slavery, got suffrage, child labor laws, etc., because people worked at it, often for decades before achieving their goals. Democracy requires work.

      Reply
      1. Schadenfreudian December 16, 2014

        Voting against slavery got us a civil war when the South realized that they would lose slavery by peaceful exercise of the ballot. Why would you think these corrupt oligarchs will go quietly?

        Reply
        1. Michael Ross December 17, 2014

          They won’t. And we know it too. But we’re better than they are and are content to wait for them to fire the first shots as they so love to threaten to (I’m looking at you, Texas).

          After which they’ll find out that liberals, despite their aversion to firearms, are actually very capable of using them.

          Reply
          1. 1standlastword December 19, 2014

            The Hunger Games illustrates citizens fighting for a rights to liberty, justice and the pursuit of happiness.
            It seems today fewer Americans are happy, justice is viewed as biased in favor of the privileged and liberty is constantly under assault with voter suppression tactics, women’ reproductive rights infringed, LGBT rights infringed, minority civil rights infringed, workers rights infringed, debtors rights infringed….We are on our way there. The modern political class and corporate class are walking America towards the edge of a social condition where oppression and economic hardship is a felt reality going deeper in the culture. I think there are just enough crumbs on the table that political gimmicks can still appeal to divide us but if the greed and corruption level continue to rise at the current rate with legislation like citizens united, cromibus, deferred prosecutorial privilege for the political class, and muscular legal privilege for government and corporate classes to run roughshod of citizens and private property, we will have a real life Hunger Games situation

            Reply
        2. S.J. Jolly December 19, 2014

          They didn’t go quietly in the 1880 — 1920 era. And they certainly won’t go quietly today. Their plans to fight the inevitable citizens revolt would explain the current drive to build a domestic surveillance state.

          Reply
      2. kenndeb December 16, 2014

        When we actually have a democracy. What we now have is looking more like the old soviet union.

        Reply
        1. davidcayjohnston December 16, 2014

          Columnist here…

          You mean like the Rand Paul/Mitch McConnell deal to soak the taxpayers and waste money that I dissected in Newsweek (note the quote about Soviet central planning):

          http://bit.ly/1aS3kjW

          Reply
  13. David December 16, 2014

    I am of the belief that only carnage will slow our demise, and so we have elected to sail away from the US and only return after the civil war. Good luck.

    Reply
    1. davidcayjohnston December 16, 2014

      Columnist here…

      I sure hope you are wrong, dead wrong, per my observations here in an interview with Salon:

      http://bit.ly/Tz7zzh

      Reply
    2. S.J. Jolly December 17, 2014

      Something like the Progressive revolt against the Robber Barons of the 1880’s — 1920″s, only bloodier?

      Reply
  14. Whatmeworry December 16, 2014

    Social spending now consumes 80% of every federal dollar how much is toooo much. For libs they will never run out of other people’s $$ to spend

    Reply
    1. Daniel Max Ketter December 17, 2014

      Noo. Quit being silly. 85% of every dollar winds up in the hands of the corporate republicans. Thank you teabaggers for nutting

      Reply
    2. Michael Ross December 17, 2014

      Did you not read the article, tea-bagger? It’s your corporate masters that tanked the economy and are now chomping at the bit to do it all over again. And it’s you and your ilk who are threatening to shut down the government again if we don’t let them do it.

      Kick and scream all you want, tea-bagger. Reality’s well-known liberal slant will remain unchanged.

      Reply
      1. Daniel Max Ketter December 17, 2014

        I agree with that!

        Reply
      2. Whatmeworry December 17, 2014

        Its a typical wing nut article by some one who doesn’t understand economics ala Warren. Dem’s have managed to add $10T to the debt in just 6+ years. That works out to $150,000 for every new born and Barak’s new amnesty program he’ll pile on another $250B in incremental debt each year

        Reply
        1. S.J. Jolly December 17, 2014

          Don’t forget Obama’s failure to repeal the Bush tax cuts. Doing that would have largely wiped out the deficit.

          Reply
          1. Whatmeworry December 18, 2014

            Must not read any newspapers where your live

            Reply
          2. Independent1 December 19, 2014

            You better find yourself a new newspaper source – the one you’ve been reading is telling you one lie after another!!!

            Reply
          3. Whatmeworry December 19, 2014

            Your right its the federal govt news so since Barak has his finger in it the chances that they are true is nonexistant

            Reply
          4. Independent1 December 20, 2014

            Wrong again!! You lose!! Immigrants, including illegals, between the farm related work they do which native-born Americans refuse to do at the wages farmers can afford to pay, and the thousands of small businesses that they run (immigrants are running more than 30% of American small business); the CBO estimates that immigrants, including illegals) ARE KEEPING AT LEAST 8,000,000 Americans working.

            So along with paying tons more for a lot of what you buy in the grocery store, getting rid of immigrants, including illegals, could well put 8,000,000 Americans onto the unemployment rolls — costing America billions in unemployment payments and easily throwing America into another recession!!!

            Reply
          5. Whatmeworry December 21, 2014

            Jobs americans won’t do??? Sorry that’s the typical lib mantra to pamper the lazy 47% who don’t pay taxes.
            Illegals take over $400B more out 0f the economy than they put in

            Reply
          6. <Whatmeworry is Dan M Ketter December 22, 2014

            Steward Dan Max Ketter was lazy, and received all his income from the Ford Motors union assembly line workers contributions, along with making false claims for workman’s comp and disability! Never even served on active duty in the military either!

            Reply
          7. <Whatmeworry is Dan M Ketter December 22, 2014

            Dan got his paycheck from the unions!

            Reply
          8. Whatmeworry December 18, 2014

            And drove unemployment to even higher levels than Barak attained during his 1st term

            Reply
          9. Independent1 December 19, 2014

            I guess that’s why more jobs were created in 2014 than in any year since 1999; and why more jobs have been created in less than 6 years under Obama than were created in all 12 years of disaster governance under the two Bushes!!!)

            Reply
          10. Whatmeworry December 19, 2014

            Jobs being created you bet, jobs being lost you bet. There is nothing in the numbers released by the Labor Dept that makes that calculation. As of today there are the same number of people working today as when W left office.

            Reply
          11. Independent1 December 19, 2014

            More of your outright lies!!

            According to the BLS – the number of Americans employed in January 2009 was 142,099 – the number employed in November 2014 is 147,287; that’s 5,188,000 MORE JOBS NOW THAN WHEN OBAMA TOOK OFFICE!!!

            BUT, YOU CAN’T STOP A 900,000/MO JOB LOSS ON A DIME!!! Obama MAGICALLY, stopped the runaway train within 11 mos in December of 2009 when there were 137,792 Americans working. (And that’s despite SCUMBAGS like Mitt Romney and his worthless ilk buying up and destroying millions of American jobs during the Great Recession – as unAmerican action as it gets!!!)

            So, from the time when the BUSH’S JOB DESTROYING FREIGHT TRAIN ENDED, UNTIL NOVEMBER OF 2014, 9,495,000 MORE AMERICANS ARE WORKING!!!!!!!

            Reply
          12. Whatmeworry December 20, 2014

            You use the term “americans” sorry but the small increase only provided jobs to the increased illegals that have crossed the border

            Reply
          13. Whatmeworry December 22, 2014

            You use the term “americans” sorry but the small decrease only provided jobs to the decreased illegals that have crossed the border

            Reply
      3. Whatmeworry December 18, 2014

        Its a typical right wing nut article by some one who doesn’t understand economics ala Warren. Dem’s have managed to save $10T to the debt in just 6+ years. That works out to $150,000 for every new born and Barak’s new amnesty program he’ll pile on another $2T in incremental debt each year

        Reply
        1. 1standlastword December 18, 2014

          You are a hopeless phuck! AND from here on out on PERMANENT IGNORE

          Reply
          1. Whatmeworry December 18, 2014

            The only people on skid row are the left wing nuts who are incapable of creating jobs or income

            Reply
          2. Independent1 December 19, 2014

            I guess that’s why GOP -run states house more tnay 75% of Americans living below the poverty level!! And why it’s 14 ‘LEFT-WING STATES’ that are FUNDING AMERICA!!! (Virtually every red state sucks more money from Washington than they send to Washington in tax dollars!!!)

            Reply
          3. Whatmeworry December 19, 2014

            The governors don’t get to pick their demographics. The % of blacks and Hispanics determines the level of poverty

            Reply
          4. Independent1 December 20, 2014

            Sorry, what a governor inherits is no excuse for doing absolutely nothing to improve the lot of the people that elected them into office. Few, if any, GOP governors and legislatures have enacted any legislation whatsoever to improve the lives of their citizens – except for those who are already rich.

            All GOP governors have spent their time doing (and some red states have led the nation with people living below the poverty level for over a decade) is — to pass legislation that destroys unions with “right-to-work” laws that allows businesses in their states to pay their workers below poverty level wages for even 40 hours work; to ban abortion centers so more women will die getting illegal abortions from quacks (banning abortion clinics will DO NOTHING to reduce abortions); to allow businesses in their states to discriminate against gays; to allow businesses in their states to refuse to cover contraceptives (which would reduce abortions) for any made up whim; and on and on.

            All Red States do is pass one piece of worthless legislation after another. Demonstrating clearly that Republicans KNOW ABSOLUTELY NOTHING ABOUT RUNNING ANY KIND OF GOVERNMENT!!!!!

            Reply
          5. Whatmeworry December 21, 2014

            Glad you feel that way. So you agree that Barak is responsible for he $11T added to he national debt. The worst disparity in income between whites and blacks in our history. 23% real unemployment rate

            Reply
          6. <Whatmeworry is Dan M Ketter December 19, 2014

            Dan M Ketter
            2909 Elizabeth Champion Ct,
            Williamsburg, VA

            Reply
          7. <Whatmeworry is Dan M Ketter December 19, 2014

            Ole Dan is fat, farsighted, impotent, and estranged from his kids (they hate him). At his age he’s got nothing to live for except trolling and surfing porn online!

            Reply
    3. GregoryC December 17, 2014

      66% of the discretionary budget is spent on the Pentagon, VA benefits and the OCO budget (Overseas Contingency Operations).

      Reply
      1. Whatmeworry December 17, 2014

        Yea that $2.5T that we spend is nutting. DOD is 20% of the US budget

        Reply
      2. Whatmeworry December 18, 2014

        Yea that $2.5T that we spend is nutting. DOD is 80% of the US budget

        Reply
    4. 1standlastword December 18, 2014

      You are so smug and ensconce in your own hatred of people you think are taking from you (the poor) that you can’t see when it’s in your face or hear when it’s shouted in your ear who is REALLY taking from NOT just you but all of us.

      Wake up!

      This is not about you and them (the poor)….It’s about US and THEM (the elitists) and you are one of US and they are grinding YOUR bones and ours to make their bread.

      Reply
      1. Whatmeworry December 18, 2014

        The elitists haven’t ever taken a penny from me. Its the folks who think that society “owes” them is the issue. You can thank FDR, LBJ for the bulk of that mentality and then Barak is the crown prince of entitlement. He’s been on the dole all of his life

        Reply
    5. Whatmeworry August 21, 2015

      Yes, Linda Ketter is fugly enough to stop a clock

      Reply
  15. G26 December 21, 2014

    In the US, each inhabitant’s share of the interest on the central government’s debt is about $1,386 per year.

    Reply

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