I cite

Off the Charts Blog | Center on Budget and Policy Priorities | Blog Archive | The United States Is a Low-Tax Country, Cont.

via www.offthechartsblog.org

The implications of the Shanghai truckers’ strike

The three-day strike last week by thousands of Shanghai truck drivers over rising fuel prices and fees has once again raised fears in ruling circles in China and internationally about the prospect of a broader rebellion of the country’s massive working class.

After police intimidation and arrests failed to end the protests, Shanghai municipal authorities announced a reduction in port fees, rather than risk the strike spreading to other workers. The protests came to an uneasy end last weekend, but none of the underlying issues has been resolved.

The world’s major corporations are acutely aware that global production and profits are heavily dependent on the exploitation of Chinese cheap labour and any disruption to the flow of parts and finished products could have calamitous economic impact. As the New York Times warned on Thursday, China’s “export juggernaut has been fed by highly efficient factories, low-cost labour and a fleet of container ships”, but a weak link is the trucking system that connects factories to seaports.

Despite heavy government investment into infrastructure, the cost of trucking in China’s two main export zones―the Yangtze River Delta near Shanghai and the Pearl River Delta around Hong Kong―is far higher than in the US, even though Chinese drivers earn as little as 25 cents per hour.

As a result, independent truck operators are squeezed. Despite the rising cost of fuel driven by higher international prices and cutbacks to government subsidies, factory owners refuse to pay more to truckers. With 10 million trucks on Chinese roads, there is a vast oversupply of drivers competing for hauling orders.

The truckers’ strike is symptomatic of the extreme social tensions throughout Chinese society. As around the world, rising prices for food and fuel are impacting on working people throughout China. A new Asian Development Bank (ADB) report found that global food prices increased by 40.4 percent from June 2010 to February 2011, with sugar up 85.9 percent, cereals by 67.9 percent and edible oils by 65.9 percent.

The ADB report concluded that, if food prices increased by 10 percent this year, an additional 64 million people in developing countries in Asia would fall below the poverty line of $1.25 a day. Many of those will be in China, where an annualised food inflation rate of 11.7 percent was recorded in March. Chinese workers are also being hit hard by rising housing costs―the product of rampant property speculation.

The misnamed Chinese Communist Party (CCP), which presides over the country’s frenzied and unstable capitalist development, regards any independent movement of the working class with trepidation. Millions of workers joined student demonstrations in Beijing’s Tiananmen Square and other cities in 1989 because of anger over rising prices and official corruption.

Everything in China is writ large. The army and security apparatus that violently repressed workers and students in Tiananmen Square is substantial, but is dwarfed by the Chinese working class which has grown in size and as a proportion of the population over the past 20 years. The latest census puts the urban population at 665 million people or nearly 50 percent of the total, up from 298 million people or 26 percent in 1990.

via www.wsws.org

The Real Birth Certificate

(this is a reblog of a post of mine from July 30, 2009)

Deflecting attention from health care and doing whatever it takes to undermine Obama's popularity are not surprising conservative political tactics.Pursuing an old theme, already debunked, and circulating primarily on the fringe is maybe a bit more surprising, particularly insofar as the claims are empirical ones that are easily disproved. So why does the birther conspiracy have legs?

The most obvious answer is racism. An African-American isn't really an American. Ergo, an African-American must be born in Africa. The birther conspiracy, then, expresses whites' sense of threat to their own identities as it seeks to shore up a line between one of us and one of them.

I don't think this answer is false, but I don't think it's compelling. It's not compelling because it doesn't account for why the story persists in the face of evidence to the contrary.

A better answer needs to account for this persistence. A better answer, then, has to take into account the decline of symbolic efficiency. The 'evidence' of the certificate of live birth, the birth announcement in the papers, doesn't register. It doesn't appear as or seem real. And it doesn't appear as Real because there is no functioning symbolic order that can legitimize or guarantee it. The problem of the decline of the symbolic is the loss of the Real.

Any certificate that is on the internet or reprinted in print media is of course a copy. To say that one has seen the certificate is to say that one has seen a copy. But what can make the copy Real, particularly if one disrupts all the mechanisms of verification. The rupture of the conditions of possibility of credibility prevents verification from guaranteeing any copy that might appear. Differently put, there is NO piece of paper or certificate that could assuage the birthers. Their skepticism goes all the way down; they lack the basic dimension of trust necessary for a statement to qualify as valid.

via jdeanicite.typepad.com

Largest Banks Likely Profited By Borrowing From Federal Reserve, Lending To Federal Government

A newly-released study from the Congressional Research Service bolsters claims that the nation's largest banks profited off the Federal Reserve's financial crisis-era programs by borrowing cash for next to nothing, then lending it back to the federal government at substantially higher rates.

The report reinforces long-held beliefs that the banking system in essence engaged in taxpayer-financed arbitrage: They got money for free, then lent it back to Uncle Sam while collecting juicy returns. Left out of the equation are the millions of everyday borrowers, like households and small businesses, who were unable to secure loans needed to tide them over until the crisis ended.

The Fed released records under pressure in December and March that showed the extent of its largesse. The CRS study shows for the first time how some of the most sophisticated financial firms could have taken the Fed's money and flipped easy profits simply by lending it back to another arm of the government.

The report was requested by Sen. Bernie Sanders (I-Vt.), who likened the crisis-era emergency loans to "direct corporate welfare to big banks," in a statement. The cash likely was lent back to Uncle Sam in the form of Treasuries and other debt "instead of using the Fed loans to reinvest in the economy," Sanders added.

In all, more than $3 trillion was lent to financial institutions from the Fed, and terms were generous. Junk-rated securities were pledged as collateral for taxpayer-backed loans. The Fed did not provide conditions for how the money was to be used.

As part of one Fed program, on 33 separate occasions, nine firms were able to borrow between $5.2 billion and $6.2 billion in U.S. government securities for four-week intervals, paying one-time fees that amounted to the minuscule rate of 0.0078 percent.

In another, financial firms pledged more than $1.3 trillion in junk-rated securities to the Fed for cheap overnight loans. The rates were as low as 0.5 percent.

via www.huffingtonpost.com

The S&P; debt warning: Wall Street extortionists demand savage cuts

Five days after the US Senate Permanent Subcommittee on Investigations released a voluminous report detailing the criminal activities of the banks and credit rating firms that precipitated the 2008 Wall Street crash and global recession, one of the named culprits, Standard & Poor's Credit Ratings Services, issued an ultimatum to the White House and Congress demanding an agreement on savage austerity measures ahead of the 2012 elections.

In lowering its outlook from "stable" to "negative" on the top AAA rating for US Treasury bonds, S&P spoke Monday for the entire financial mafia that is headquartered on Wall Street. The ratings firm declared in a press release that failure to reach an agreement in the coming months to reduce the federal deficit by at least $4 trillion over the next decade "could lead us to lower the rating."

This amounts to a threat to crash the US and global economy and undermine the status of the dollar as the world reserve currency. The move is part of an internationally orchestrated drive by the major banks and speculators to push through devastating attacks on the living standards of the American working class.

They are applying to the United States the extortionate methods used previously to stoke up speculative attacks on the sovereign debt of a number of European countries, including Greece, Ireland, Portugal and Spain. S&P and its major ratings rivals Moody's and Fitch have issued strategically timed credit warnings and downgrades to create a crisis atmosphere, which governments have then utilized to override popular opposition and impose mass layoffs and wage cuts and shred social programs.

John Chambers, chairman of the sovereign ratings committee at S&P, virtually admitted as much, according to a report in Tuesday’s Wall Street Journal. The Journal wrote: “If the US reaches a British-style resolution, S&P will restore the US outlook to stable, Mr. Chambers said.”

In May of 2009, S&P lowered Britain’s credit outlook. It reversed the action 17 months later after the newly elected Conservative-Liberal Democrat coalition government announced a program of draconian cuts that will shatter the country’s social safety net.

via www.wsws.org

Nothing to report

Eleven days into my fiftieth year I have nothing to report.

No insight. No epiphany. No wisdom.

My concerns are pretty much the same as they were a few ago: getting through the semester, getting writing done, trying to read more than just what I'm required to read. I recommend Tom McCarthy's Remainder. It's this year's Chronic City.

I am still older than my students and wondering how this seems to them. I'm older than untenured colleagues and wondering how this seems to them.

I am puzzled and a little disappointed when I look in the mirror, but just a little.

The larger question: how much reflection? What can I actually figure out? Can I get to a peaceful resolution by thinking, by reflecting on my life? Or does that arise as a side effect of actually living it? So is the joy in the business, the demands, the tasks accomplished, the talks given, that is to say, in the living the life I am in?  Or is this the recipe for waking up in 1o years filled with regret and sadness--why didn't I take more risk? more vacations? why didn't ask the important questions of my life (as opposed to the questions I already ask regarding our collective life).

I know I've posted on this already--I can't really shake it. Or I don't want to because I don't want to feel like things just happened to me and was basically unaware, just passing through.

We go to Texas tomorrow. My father is having a party for political theorists going to the WPSA. I am thrilled that he wants to do this. It should be a good party. Or it will be crazy tense for me as the streams are crossed. I'm glad it's happening.

Ratings agency S&P; downgrades outlook for US government debt

S&P, along with Moody’s one of the two major credit rating firms in the US and internationally, left little doubt that it was intervening in the official political debate over the budget for fiscal year 2012, which begins October 1, 2011, as the representative of Wall Street. In effectively issuing an ultimatum to the Obama administration and Congress to pass legislation imposing unprecedented cuts in social programs with devastating implications for working people, S&P was applying to the US the tactics employed by it and other rating agencies and the international banks to force through brutal austerity measures in Europe.

Over the past two years, strategic credit warnings and downgrades on the sovereign debt of countries such as Greece, Ireland, Portugal and Spain have been used to encourage speculative attacks on those countries’ credit and whip the respective governments into line. By fostering an atmosphere of intense crisis, these moves are intended to create more favorable political conditions for overcoming popular opposition to the gutting of social services, jobs and wages.

This is the first time in its 70 years of rating US debt that S&P has lowered its outlook for the US. Over this period, the US has always maintained the highest rating of AAA. Were its debt to be downgraded, the implications for the American and world economy would be far-reaching and convulsive. US Treasury securities have long been considered the safest investments in the world and are held in the trillions of dollars by banks and governments internationally. Their credit-worthiness is bound up inextricably with the role of the US dollar as the leading world reserve and trading currency.

via www.wsws.org

Senate report on Wall Street crash: The criminalization of the American ruling class

The overall picture is one of criminality on the part of the entire financial establishment that, with all levels of government serving as its co-conspirator, systematically looted the economy in order to further enrich itself. The result is a social tragedy for tens of millions of people in the US and many millions more around the world. And yet, the result of this historic crime is that the bankers and speculators are richer and more powerful than ever.

Not a single senior executive at a major US bank, hedge fund, mortgage firm or insurance company has gone to jail. Not one has even been prosecuted.

There is every indication that none will be criminally indicted in the future. As with the similarly damning report released in January by the US Financial Crisis Inquiry Commission, the Senate report has been largely buried by the mass media. It was reported perfunctorily on the inside pages of some of the major newspapers and barely mentioned by the broadcast and cable networks, and then dropped.

One day after the release of the Senate report, the New York Times published a long article on the failure to prosecute any of the Wall Street criminals. It recounted a private meeting between the then-president of the Federal Reserve Bank of New York (now Obama’s treasury secretary) Timothy Geithner and then-New York Attorney General Andrew Cuomo in October 2008 at which Geithner urged Cuomo to back off on investigations of the banks and rating agencies.

The article contrasted the absence of criminal charges against bankers today with the aftermath of the savings and loan debacle of the late 1980s, when government task forces referred 1,100 cases to prosecutors and more than 800 bank officials went to jail. It noted the precipitous decline in referrals by bank regulators to the FBI, from 1,837 cases in 1995 to 75 in 2006. Over the ensuing four years, at the height of the financial crisis, an average of only 72 a year have been for criminal prosecution.

The Office of Thrift Supervision has not referred a single case to the Justice Department since 2000, and the Office of the Comptroller of the Currency, a unit of the Treasury Department, has referred only three in the last decade.

How is this to be explained? Why are Goldman CEO Lloyd Blankfein, JPMorgan CEO Jamie Dimon, the former CEO of Washington Mutual, Kerry Killinger, as well as Treasury Secretary Geithner and his predecessor, Henry Paulson (previously CEO of Goldman), not in prison?

Such financial manipulators are being shielded while workers are being stripped of their jobs, wages, homes and basic social services to pay for the debts resulting from the transfer of trillions in public funds to the banks. Collective resistance to this attack is being criminalized in the form of anti-strike laws, imposing fines and jail terms for workers who fight back.

One reason for the absence of prosecutions is the power of the individuals involved, all of whom wield immense influence over politicians, the media and the legal system. But it goes deeper than the status of individuals, just as the sordid state of affairs as a whole arises not from individual greed, but rather from a profound crisis of the entire system.

via www.wsws.org

Senate committee details Wall Street criminality

Goldman Sachs and Deutsche Bank AG, two of the largest investment banks in the world, profited from the sale of securities they knew to be worthless, and Goldman later “misled” congress about its activities, according to a report published Wednesday by the United States Senate Permanent Subcommittee on Investigations.

The Senate committee, headed by Michigan Democrat Carl Levin, concluded that Goldman Sachs “used net short positions to benefit from the downturn in the mortgage market, and designed, marketed, and sold CDOs [mortgage-backed securities] in ways that created conflicts of interest with the firm’s clients and at times led to the bank’s profiting from the same products that caused substantial losses for its clients.”

Levin’s report goes further than the Financial Crisis Inquiry report, issued January 27, which stopped short of naming individual cases of malfeasance. The 635-page report offers specific details about offenses committed by Goldman Sachs, Deutsche Bank, Washington Mutual and Moody’s rating agency, but does not have the authority to call these actions criminal, according to Levin.

Levin’s report presents the doings of individual organizations―including credit rating agency Moody’s, subprime leader Washington Mutual, Deutsche Bank, and Goldman―as case studies, pointing to the much broader criminality throughout the whole of Wall Street.

In addition to selling worthless securities to investors, the report concluded that Goldman attempted to manipulate the mortgage-backed securities market as a whole in 2007 by artificially inflating prices in order to drive out competitors who had taken “short” positions on mortgage-backed securities.

Goldman traders were encouraged to offer prices that would “cause maximum pain” and “have people totally demoralized,” according to internal emails. In earlier testimony before Levin’s committee, Goldman traders denied that they had attempted to manipulate the market, and claimed that their emails to the contrary were exaggerations.

via www.wsws.org

Sarah Palin Baby Hoax

An interesting footnote has emerged to a theory that raged around the Internet during Sarah Palin's candidacy for Vice President:

The theory is that Sarah Palin is actually the grandmother of her purported son Trig, not the mother, and that she staged a gigantic hoax during the campaign to cover up this fact.

Professor Bradford Scharlott of Northern Kentucky University has looked into this story in detail and written a long academic article about it. He concludes two things:

• First, that the "conspiracy theory" is likely true--Sarah Palin staged a huge hoax, and, second,

• The American media is pathetic for not pursuing the story more aggressively

Scharlott's article walks through all the evidence supporting the theory, including the photos of Palin in what is said to have been a late-stage pregnancy, the leisurely 20-hour trip home that Palin took after she supposedly went into labor in Texas, the refusal of the hospital where Trig was supposedly born to even confirm that he was born there (let alone who was the mother), strange statements from Palin's doctor and the McCain campaign, and so on

via www.businessinsider.com