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Economic Warfare (70)
By Stephen Lendman
Baseball great Yogi Berra was right. "It ain't over till it's over." More on this below.
On Friday, House members rejected fast track (Trade Promotion Authority - TPA) by a convoluted process explained below.
If enacted, it would let Obama ram through Congress with minimal hearings and no debate anti-consumer, ecosystem-destroying trade legislation global justice advocates call NAFTA on steroids.
Trans-Pacific Partnership (TPP) trade legislation empowers corporations over national sovereignty, domestic laws and popular interests. It's nightmarish by any standard.
Not according to Obama. On April 25, he lied claiming TPP is "the highest standard trade agreement in history."
"It's got strong provisions for workers and the environment…(I)t fixes a lot of what was wrong with NAFTA…"
It's "a race to the top…If I didn't think this was the right thing to do for working families, I wouldn't be fighting for it."
False on all counts!! TPP makes NAFTA look tame by comparison. It's an anti-consumer, environmentally destructive jobs killer - a boon for corporate predators at the expense of ordinary people in all 12 TPP countries.
The battle to defeat fast track and TPP isn't over. Here's what happened Friday.
Late May enacted Senate legislation included fast track (TPA) and Trade Adjustment Assistance (TAA) authorizing funding programs for workers displaced by jobs-killing imports.
On Friday, the Republican-controlled House voted on TPA and TAA separately. Minority Leader Nancy Pelosi (D. CA) called for slowing down fast track to ensure more transparent and accountable to the public negotiations.
Democrat opposition followed. TAA was overwhelmingly defeated 302 - 126. Many Republicans rejected it.
May 31, 2015
It took just a few days after the stunning defeat of Obama’s attempt to fast-track the Trans Pacific Partnership bill in the Senate at the hands of his own Democratic party, before everything returned back to normal and the TPP fast-track was promptly passed. Why? The simple answer: money. Or rather, even more money.
Because while the actual contents of the TPP may be highly confidential, and their public dissemination may lead to prison time for the “perpetrator” of such illegal transparency, we now know just how much it cost corporations to bribe the Senate to do the bidding of the “people.” In the Supreme Court sense, of course, in which corporations are “people.”
According to an analysis by the Guardian, fast-tracking the TPP, meaning its passage through Congress without having its contents available for debate or amendments, was only possible after lots of corporate money exchanged hands with senators. The US Senate passed Trade Promotion Authority (TPA) – the fast-tracking bill – by a 65-33 margin on 14 May. Last Thursday, the Senate voted 62-38 to bring the debate on TPAto a close.
Those impressive majorities follow months of behind-the-scenes wheeling and dealing by the world’s most well-heeled multinational corporations with just a handful of holdouts.
Using data from the Federal Election Commission, the chart below (based on data from the following spreadsheet) shows all donations that corporate members of the US Business Coalition for TPP made to US Senate campaigns between January and March 2015, when fast-tracking the TPP was being debated in the Senate.
The result: it took a paltry $1.15 million in bribes to get everyone in the Senate on the same page. And the biggest shocker: with a total of $195,550 in “donations”, or more than double the second largest donor UPS, was none other than Goldman Sachs.
By Paul Craig Roberts
May 30, 2015
There are no free financial markets in America, or for that matter anywhere in the Western word, and few, if any, free markets of any other kind. The financial markets are rigged by the big banks, the Federal Reserve, and the Treasury in the interests of the profits of the few big banks and the dollar’s exchange value, which is the basis of US power.
There is a contradiction between a strong currency on one hand and on the other hand massive money creation in order to sustain zero and negative interest rates on the massive debt levels. This inconsistency is revealed by rising gold and silver prices.
When gold hit $1,900 an ounce in 2011 the Federal Reserve realized that the precious metal market was going to limit its ability to provide enough liquidity to keep the thoughtlessly deregulated financial system afloat. The rapid deterioration of the dollar in terms of gold and silver would sooner or later spill over into the exchange value of the dollar in currency markets. Something had to be done to drive down and to cap the gold price.
The Fed’s solution was to take advantage of the fact that the prices of gold and silver are determined in the futures market where paper contracts representing gold and silver are traded, and not in markets where the physical metal is actually purchased by people who take possession of it. The Fed realized that uncovered short sales provided enormous leverage over the prices of the metals and that it would be profitable for the bullion banks, such as JPMorgan, Scotia, and HSBC, to short the market heavily and then cover their shorts at lower prices produced by selling as a result of triggering stop-loss orders and margin calls.
Dave Kranzler and I have shown on numerous occasions that the bullion banks and the Federal Reserve make profits and protect the dollar by suppressing the prices of gold and silver. They do this by illegally selling huge numbers of uncovered shorts in the futures market. This illegal operation is supported by the so-called “regulatory authorities” who steadfastly refuse to intervene.
It has just happened again. Dave Kranzler describes it in detail here: http://investmentresearchdynamics.com/bullish-news-for-precious-metals-and-goldsilver-get-paper-smashed/
Social anthropologist Janine Wedel, author, most recently, of Unaccountable: How Elite Power Brokers Corrupt Our Finances, Freedom, and Security , has spent decades getting to the bottom of how powerful people wield influence. In her view, old ways of talking about formal systems of power and corruption don't begin to capture new realities. Truth and transparency, she warns, have devolved into performance art. The buck stops nowhere. Could women be particularly suited to disrupt the unaccountability structured into the DNA of many of today's financial, corporate and governmental organizations? Wedel weighs in. (Accountability is a key topic in a May 5-6 conference sponsored by the Institute for New Economic Thinking, " Finance and Society ," which features Brooksley Born, Elizabeth Warren, and other influential women who have challenged corrupt systems of power.)
Lynn Parramore: You've discussed a fascinating new kind of power broker on the world stage—a nimble, opportunistic person who floats between private and public institutions. How has this figure operated in the financial arena? Are such players different from lobbyists and other traditional influence peddlers? Can you give some examples?
Janine Wedel: In the financial arena, a well-known duo is Robert Rubin and Larry Summers, both former treasury secretaries. Rubin reached the heights at Goldman Sachs. He then went to Treasury in the 1990s, then on to Citigroup. In the lead-up to the financial crash, both Goldman and Citigroup earned billions on the unregulated derivatives he and Summers (and others) championed while in public office.
Summers has been even more influential: Treasury in the '90s, then back to Harvard, where as president, he invested some of the endowment in derivatives — a disastrous move. He then went to Wall Street hedge fund work, and then back to Washington with a top perch advising the Obama White House.
Both Rubin and Summers have moved among advisory and corporate boards, think tanks and the like. Summers, especially, maintains an active media presence. Their worldview and life experiences are enmeshed with Wall Street. Neither are lobbyists. It's not that they are beholden to Wall Street in the manner of a traditional lobbyist, but that Wall Street and Washington have substantially merged. Goldman had an express policy of placing its alumni in Washington jobs, earning it the nickname of "Government Sachs."
This is not the old revolving door, which has only one exit point. Today's revolving door has four or five or more: a player exits to an academic role, a media role, a government role, a business role, a think tank role, and straddles two or more at the same time. Traditional financial lobbyists are still out there fighting for their Wall Street clients, but they have to register. The most elite players generally do not, and their hugely important influence activities are much harder to measure and trace.
By Michael Snyder
Economic Collapse Blog
January 1, 2015
Who is to blame for the staggering collapse of the price of oil? Is it the Saudis? Is it the United States? Are Saudi Arabia and the U.S. government working together to hurt Russia? And if this oil war continues, how far will the price of oil end up falling in 2015?
As you will see below, some analysts believe that it could ultimately go below 20 dollars a barrel. If we see anything even close to that, the U.S. economy could lose millions of good paying jobs, billions of dollars of energy bonds could default and we could see trillions of dollars of derivatives related to the energy industry implode. The global financial system is already extremely vulnerable, and purposely causing the price of oil to crash is one of the most deflationary things that you could possibly do. Whoever is behind this oil war is playing with fire, and by the end of this coming year the entire planet could be dealing with the consequences.
Ever since the price of oil started falling, people have been pointing fingers at the Saudis. And without a doubt, the Saudis have manipulated the price of oil before in order to achieve geopolitical goals. The following is an excerpt from a recent article by Andrew Topf…
We don’t have to look too far back in history to see Saudi Arabia, the world’s largest oil exporter and producer, using the oil price to achieve its foreign policy objectives. In 1973, Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.
It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt.
The Saudis and other OPEC members have, of course, used the oil price for the obverse effect, that is, suppressing production to keep prices artificially high and member states swimming in “petrodollars”. In 2008, oil peaked at $147 a barrel.
Turning to the current price drop, the Saudis and OPEC have a vested interest in taking out higher-cost competitors, such as US shale oil producers, who will certainly be hurt by the lower price. Even before the price drop, the Saudis were selling their oil to China at a discount. OPEC’s refusal on Nov. 27 to cut production seemed like the baldest evidence yet that the oil price drop was really an oil price war between Saudi Arabia and the US.
If the Saudis wanted to stabilize the price of oil, they could do that immediately by announcing a production cutback.
By Devon Douglas-Bowers
November 3, 2014
The debtors’ prison is an old, decrepit institution that many thought was abolished in the 19th century, something little more than a relic of the past. This is a problematic view for two reasons. One, debtors’ prisons are rarely explored in the classroom or the larger society. And two, these prisons are making a serious comeback in the United States, which is deeply problematic for the poor and working class.
The History of Debtors’ Prisons
The traditional view of debtors’ prisons in the U.S. is one of wretched incarceration where debtors were hung out to dry. While this is true, there is also more to the story.
In early colonial America, English law had an influence on colonial law – and laws regarding debt. In 16th century England, creditors had the legal power via the Law of Merchant to regain their money from insolvent debtors. They had this same power in Pennsylvania where, in 1682, the law stated that anyone who was in debt and had been arrested would be kept in prison, or “the debtor [could] satisfy the debt by servitude as the county court shall order, if the creditor desires." While debt servitude was problematic, it provided a way for a debtor to obtain eventual release.
The situation was worse in Massachusetts, which ruled in 1638 that “delinquent taxpayers be jailed, but provided that the Council or any court within Massachusetts could free the prisoner if it found him incapable of paying his taxes.” However, as early as the next year, private debtors were being imprisoned as well, and in 1641 the courts ruled that “anyone who failed to pay a private debt could be kept in jail at his own expense until the debt was paid.” Laws like these resulted in people dying in prisons when they were unable to pay off their debts.
By Bob Adelmann
September 9, 2014
The city of SeaTac, which holds the Seattle-Tacoma International Airport, raised the minimum wage to $15 an hour starting January 1 for some businesses. Within weeks of the beginning of the SeaTac “experiment,” the impact of the passage of Proposition One had become evident. Despite the fact that the new law impacts only about 1,600 employees in this town of 27,000, major changes and shifts were already taking place in reaction to it.
For example, a customer using the Master Park Airport valet parking service at SeaTac will note an extra line on his bill for $.50 entitled “living-wage surcharge.” In December the 215-room Clarion Hotel closed its full-service restaurant, laying off 15 people. The hotel also terminated the employment of a night desk clerk and a maintenance employee, and according to general manager Harry Wall, the hotel was considering a 10-percent increase in room rates just in time for spring visitors. Wall said that without this reduction in workforce, the hotel’s annual payroll costs would have increased by $300,000 thanks to the new minimum-wage law.
WallyPark, an airport parking services that employs about 80 people at three different locations in SeaTac, is being flooded with applications from people outside the city looking to take advantage of the new law, claimed Homer Ignacio, the assistant manager. As these new applicants are interviewed, Ignacio will be faced with the prospect of being able to hire more highly skilled workers and pay them what he is paying some of his current less-skilled employees. Those present employees face the threat of having their jobs being taken away by a new employee.
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