November 2009

12-Nov-2009
2012: What is Happening?

October 2009

28-Oct-2009
Disclosure: Why It is a Must

September 2009

21-Sep-2009
The Financial Crisis: Not Over Yet

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Yes, indeed, Fannie Mae and Freddie Mac have just been bailed out to the tune of hundreds of billion dollars of debt that has been transferred right onto the backs of us, the American people. And now Lehman Brothers, after making--and pocketing--billions of dollars in profits by securitizing mortgages and other consumer loans, is about to be rescued to the tune of at least another thirty billion dollars of your debt.

You think you owe Visa! You owe Wall Street a whole lot more, because these federal guarantees are based on your future ability to pay your taxes. And, believe me, if you should become unable to pay, you won't get any bailout. They'll come in and throw you right out of your house in the clothes on your back, and your family along with you.

When an American gets in financial trouble and can no longer pay his loans, he doesn't get a bailout. Far from it, he gets an immediate, and gigantic, bill from the IRS. Here's how it happens. Say you have excellent credit and a prime 30 year mortgage. You haven't played any games, you've paid a good down payment and you are on time with every payment.

Then you lose your job because your company is outsourcing to India. So you can no longer afford your home and you decide to sell and move into a smaller place.

Problem is, the house you bought in 2002 for $300,000 is now worth only $180,000--theoretically. And, if you have tried to sell a house recently, you know just what I mean by 'theoretically.' Your real estate agent will tell you that it could be six months to a year before you find a buyer. Or longer. Or never.

So now you can't move because you can't sell your house, and you can't wait much longer or you'll be destitute.

You've discovered that there are no jobs in your town at anything like what you were getting. Guys in Mumbai are doing the same work for a third what you were paid. And this is not blue collar work. You were a white collar employee with a hundred thousand dollars invested in your education. You were a pillar of the community, your kids are making good grades in school, and you are, in every way, the finest America has to offer.

In desperation, you try a workout with the bank. And the bank is accommodating. They agree to let you sell them the house short. Being an honest, hardworking American, you scrape together every dollar you can and you get your bank $20,000. In return, they cancel your mortgage and you leave for a small rental unit, your family in tow.

When tax time rolls around you open your mail to find a 1099 from the bank. It shows you receiving income of $280,000, the difference between what you paid on your mortgage and what you owed. Now, notice, the bank was able to ignore the fact that your house wasn't worth any $300,000. It assumed none of the risk. You had to take it all. And that's the law, written that way because congress belongs to banks and big companies, not to us, not anymore.

You may know your congressman, perhaps your senator. But I can assure you of this: Democrat or Republican, it doesn't matter. He does not work for you. He works for whatever corporate lobby buys him.

By this time, you are working at a fast food restaurant for a third of what you made before, and even that job is in jeopardy because your friends, whose jobs have all gone to India and China, too, can't exactly afford hamburgers anymore.

But you have a huge problem. You owe the IRS on that $280,000, and you owe it in IRS time, which is NOW NOW NOW.

Frantic, you call them for a workout. No dice. You can't arrange payments for anything over $25,000, but you owe $80,000.

So what happens? I'll tell you what happens: the IRS takes every penny of cash you possess, and all of your salary except what you need for food, shelter and clothing--and they decide what that is--and possibly anything that is easily salable. You are left with little or nothing, and you STILL owe them every single penny you have not yet paid.

You have to leave your little apartment for public housing. You have to resort to food stamps, if there are any. And if you should get sick, you will have to throw yourself on the charity of the doctors and the hospitals.

What does that mean? This is what it means: when my wife was in the hospital and needed a platinum coil in her brain to repair her aneurysm, the doctor sent word: who's going to pay for this coil? If I had not been insured, or had not had cash, the answer would have been, no coil.

This is real. It happens every day, as desperate Americans struggle after being tricked into life-destroying workouts with their banks.

So, what's the solution?

One thing would be to return the bankruptcy laws to what they were before Tom DeLay rammed through a bill that had been stalled in committee for six years that revised the law and made it, essentially, impossible to go bankrupt. He did this after receiving a $500,000 contribution from the banking lobby.

Under the old laws, you could vacate your debts and start over. The law was designed to encourage entrepreneurs to take risks, people like Steve Jobs and and Steve Wozniak, who started Apple in a garage. Would they have taken that risk if they had known that failure would mean that the debt would stay with them for the rest of their lives? The answer could not be more clear: there would be no Apple today, and all the wealth and innovation this company has brought to the world would not exist.

When the new bankruptcy law was being passed, I was shocked to see that conservatives were in favor of it. But I should not have been, because conservatism has changed in our country, and gone from being something that I loved to something that I do not even recognize.

Back when I was a boy in the fifties, we had an organization called the John Birch Society. Now, I was not a member, but I knew a lot of members, and I was in favor of many of their positions.

In those days, for example, the left was trying to impose water fluoridation on American cities, and the John Birch Society, and the conservative movement, were against it. They opposed it because it forced something on the individual, thus compelling him to bow to the collective and abandon his own individual freedom.

Then, in the year 2002, I heard another, new story about fluoridation from conservatives. Suddenly, the churches and the Republican party were saying that this was something we needed to do for our kids.

What?

I looked into this, and discovered that Mosanto, which makes the fluoride used in municipal water systems, was approaching Christian leaders and municipalities all over the country and offering them various incentives to go along with this.

In 1952, the conservative movement would have rejected these overtures from a big company with contempt. And did, as a matter of fact. But by 2002, the conservative movement had ceased to be about preserving individual freedom and had become about enhancing corporate profit, taken there by cynical leaders who put their own wealth first and their ideals far, far behind.

I am not against corporations. That's not what this is about. I am against abuse of the individual and the destruction of his freedom, and no matter what entities are favored over him. When the individual is made second to big institutions, be they corporate or governmental, then this is no longer America.

We have seen over the past twenty years a total abandonment of the Sherman Anti-Trust Act, an incredibly important piece of legislation conceived and shepherded into law by a dedicated conservative Republican, Senator John Sherman. It was signed into law by Benjamin Harrison in 1890, and was intended not to prevent monopolization by companies who achieved their monopolies by the excellence of their offerings, but to prevent the creation of artifical monopolies that operate by combination, such as the recent Sirius-XM satellite radio merger, or the monopolistic practices of Microsoft, which gained a stifling monopoly over operating system software using practices that would appear to be specifically prohibited by the act.

And recently, Alan Greenspan actually had the gall to condemn the Sherman Anti-Trust Act as being anti-corporation, and was applauded by Wall Street, many congressmen, and, of course, the corporate world that would like to see the act repealed. (But it doesn't need to be repealed, actually. It has already been abandoned by the courts.)

What we have seen over the past fifty years, is the invasion and subversion of the conservative movement in America by a cabal of political and corporate profiteers, and they have run roughshod over the individual and his freedoms. We no longer live in a democracy, but in a corporatocracy, and what is worse, the average company doesn't look ahead to the future, but only to the next quarterly report.

The result of this is that it means nothing to them to toss Americans out of work and send their jobs abroad, or, as also happens, to bring in guest workers from other countries and literally put them in offices that have been vacated by Americans.

A real conservative stands first for individual freedom, second for the value of the enterpreneur, and third for the economic welfare of the country.

Globalization is anathema to conservatism. Globalization is about corporate socialism, and the transformation of the first world into a new third world. What is happening is that the average American is becoming a serf or a beggar, while these strange new socialists, the corporate owners, are becoming a new aristocracy--and, of course, there is a historical precedent for this.

It comes from ancient Rome. Now, I know that America does not respect history. But this is only because we do not KNOW history. It has a lot to each us, so listen up. One of the things that enabled the establishment of the Augustan prinicpate was that large landowners were bought off by exempting them from taxes. In modern terms, this is the 15% corporate tax, and all the bailouts, first of banks and financial institutions and soon, have no doubt, of other industries as well. Meanwhile, is YOUR tax even close to 15%. I doubt it, not if you make a living income.

And if you do, you're lucky, because so much work has been transferred abroad by companies in search of profits. It's not entirely their fault. If they kept their American employees, they would not be able to compete with, for example, Chinese and Indian companies that employ de-facto slave labor.

And I am not talking just about factory workers, here. I am talking about the hundreds of thousands of white collar employees who have lost their jobs.

When you pick up the phone to talk to your computer company, you don't talk to an American. You talk, most likely to someone in the Philippines or India or southeast Asia or some such place. The American who had that job, and did it carefully and intelligently rather than reading from some instruction booklet, is now pushing pipe at the local Home Depot, if he's lucky.

So, what do we need to do about all this. First of all, no matter who wins the presidency in November, there will be no change. That's why Barack Obama won't say exactly what he intends to change: he intends to change nothing. And John McCain and the much maligned Sarah Palin are not conservatives at all. They are supporters of the corporate socialist state, and they will set about just what the Roman emperors set about fifteen hundred years ago, when Rome began to fail.

They literally crushed the taxable class--read you and me, folks--by saddling them with confiscatory taxation, to the point that people who could not raise enough money were often beaten to death.

Meanwhile, the landowners, the equivalent of the big corporations of today, got richer and richer. So, of course, when the barbarians showed up at the gates, people could not have been more delighted.

But there was a profound disconnect, as a result. When the Roman Empire died, so did commerce, literature, art, civility and any vestige of prosperity.

It was nearly a thousand years before anything approaching a decent civil life reappeared in Europe.

It's fair to ask, at this point, what we can do. For starters, we need to take a new look at globalization and the whole idea of an American empire. George Bush entered office, in part, by promising fewer entanglements abroad. He lied, of course, because the corporatocracy needs entanglements abroad to feed its profit gods.

We need to abandon globalization and go back to a proper tariff-protected enconomy that keeps the money and the jobs right here at home. We also need to pull in our imperial horns and just forget the rest of the world. Let it do whatever it wants to do, but without us. We are not the policemen of the world, and we don't have some sort of manifest destiny to bring democracy to those who don't want it and don't understand it.

Let's manufacture here, farm here, build here and live here. We can certainly find adequate energy sources here. Oil drilling techniques have changed radically in the forty years we've been forbidding drilling in environmentally sensitive areas. We can have our cake and eat it, too. Similarly, atomic energy has changed. It's safer now and we need to embrace it. If it wasn't safer, France would be destroyed, but that is emphatically not the case. The French are mostly nuclear powered, and they do just fine, thank you. So can we.

And then there are alternative energy sources. Let's use some of that great American initiative to develop them. Return to our entrepreneurs the same incentives that their pioneer forefathers had, which was to dare the whirlwind. And if they miss the brass ring--then yes, let the big bank share the risk with the government, and give the entrepreneur another chance.

We need to change our priorities, and return the individual to his traditional place in the conservative movement: as the single most important player in the game.

We are going down a very slippery slope right now. Every day that passes, more people are being destroyed. Out of one side of its mouth, the government is telling the corporations that there is a safety net, that, ultimately, the full faith and credit of the United State will bail them out.

That is YOUR full faith and YOUR credit, because the debts of these big outfits are being stuffed right into your pocket. And if you can't pay--well, you know what will happen to you.