How The Economic Elite Made Off With $46 Trillion
Lord James of Blackheath, House of Lords February 16 2012
By David DeGraw
Editor’s Note: The following report includes adapted excerpts from David DeGraw’s book, “The Road Through 2012: Revolution or World War III.” Release Date: September 28, 2011.
Despite increasing personal financial hardship, most Americans remain unaware of the economic world war currently unfolding. An all-pervasive corporate and government propaganda campaign has effectively obscured this blatant reality. After extensive analysis, it is evident that World War III is a war between the richest one-tenth of one percent of the global population and 99.9 percent of humanity. Or, as I have called it, The Economic Elite Vs. The People. This war has been a one-sided attack thus far. However, as we have seen throughout the world in recent months, the people are beginning to fight back. The following report is a statistical analysis of the systemic economic attacks against the American people.
The American public has sustained intensive economic attacks across broad segments of the population. While the attacks have been increasingly severe in scale over the past four years, they have been implemented with technocratic precision. They have been incrementally applied thus far, successfully keeping the population passive and avoiding any large-scale civilian unrest, while effectively reducing living standards for the majority of the population. As you will see in this report, the 55 million Americans that have been hit the hardest have thus far acquiesced due to temporary financial assistance, such as food stamps and extended unemployment benefits.
The global Economic Elite have been much more strategic in handling the American public, as they are potentially the greatest threat to their continued consolidation of wealth, resources and power. National populations that are not as powerful, and on the periphery of the Economic Elite’s global empire, have been dealt with in much harsher fashion. In many smaller and less powerful countries the dramatic rise in food prices and costs of living have led to all-out revolt — Tunisia, Algeria, Albania and Egypt were among the first to rebel. While the contagion of rebellion has rapidly spread throughout Northern Africa and the Middle East, it is also spreading in a decentralized manner throughout most of the world, now threatening popular rebellion throughout Europe. Like the US population, the geographically clustered European nations represent a potentially powerful countervailing force to the Economic Elite’s continued domination.
Within the United States, the technocratic suppression of the population has been extensive. Increasingly severe economic and governmental policies have systematically eroded civilian wealth, power and rights. Intensive propaganda has effectively distracted, confused, isolated, marginalized and divided the US population. Despite the success of these efforts thus far, given the severe, prolonged, unsustainable and escalating level of economic suffering, outbreaks of civil unrest are inevitable. The US population, if a critical mass is reached, represents the greatest threat to the Economic Elite. In this regard, the American people are their primary adversary.
In writing this report, I will clearly demonstrate the severity and scale of the deliberate systemic economic attacks against the US population, in hope that we can urgently build a critical mass of aware and engaged citizens.
Snapshot: According to most recent Census Bureau data, from 2005 – 2009, average US household wealth declined by 28%. This represents a loss of $27,000 per household. Currently, at least 62 million Americans, 20% of US households, have zero or negative net worth.
The Census figures cited above are based on statistics that have been consistently proven to be lowball estimates. The government and corporate media spread propaganda on vital economic statistics that mask the severity of our economic crisis. Deceptive inflation, unemployment, poverty and GDP measures, which cast the illusion of recovery, are easily exposed with some research and a closer look at the data. Throughout this report, we will explore significant examples of government economic propaganda. In several cases, the government has been forced to revise their numbers due to proven inaccuracies. The government’s “revisions” are most always for the worse, and are usually just a footnote correction that the public is rarely ever aware of. All that being said, for many statistics we are forced to use government data, as there are not any other extensive data sets available from alternative sources.
The Census Bureau poverty rate is a horribly flawed measurement that uses outdated methodology. The Census measures poverty based on costs of living metrics established in 1955 – 56 years ago. They ignore many key factors, such as the increased costs of medical care, child care, education, transportation, and many other basic costs. They also don’t factor geographically-based costs of living. The National Academy of Science measure, which gets little if any corporate media coverage, gives a much more accurate account of poverty, as they factor in these vital cost of living variables.
The most current Census data revealed that 43.6 million Americans, 14.3% of the population, lived in poverty in 2009. While that is a staggering number that represents the highest number of American people to ever live in poverty, and a dramatic increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008National Academy of Sciencefindings, I estimated that the number of Americans living in poverty in 2009 was at least 52 million. Recently, the National Academy of Science released their latest findings, backing up my claim by revealing that 52,765,000 Americans, 17.3% of the population, lived in poverty in 2009.
The poverty rate for children is even worse. According to Census data, a total of15.5 million American children lived in poverty in 2009, which is 20% of all children. The number of children in poverty increased 28% since 2000, and jumped 10% from 2008 to 2009. Extrapolating data from the 2009 National Academy of Science poverty rate, in relation to the Census childhood poverty data, the number of American children living in poverty in 2009 is more accurately 18.8 million, which is 24%, or nearly one in four.
Other than this rapidly increasing number children who are in families that have recently fallen into poverty, “every day in America 2,573 babies are born into poverty.”
As the chart to the right shows, even with the lower Census numbers, nine major American cities have a poverty rate over 25%.
It is important to note, based on many key indicators, as you will see throughout this report, the overall poverty totals haveincreased since 2009. Also consider that the recent deficit reduction plan is going to cut “anti-poverty” programs that currently assist tens of millions of Americans. A study by the National Bureau of Economic Research estimates that “the poverty rate would double without these programs.” It is predicted that the new deficit deal will cut the funding for these programs in half, which, based on these estimates, would bring the total number of Americans living in poverty up to 80 million people, 26% of the population.
For another revealing statistic, which has been quickly increasing, we can look at the number of Americans currently surviving off of food stamps. In 2005, 25.7 million Americans needed food stamps, currently45.8 million peoplerely on them. As the chart to the right shows, the number of people in need of food stamps has been rapidly increasing year-over-year.
Meanwhile, Congress is cutting the funding for the food stamp program at a time when the Department of Agriculture estimates that an additional 22.5 million people will need them, bringing the total number of Americans in need of food assistance to a stunning 68.3 million people.
While the “official” unemployment rate hovers around 9%, 14 million people, the government’s numbers are deceptively low once again. The only reason unemployment has stayed below 10% for the past few months is because millionsof long-term unemployed, and part-time workers who are looking for full-time work, are not included in the baseline government unemployment rate. John Williams, from ShadowStats.com, has a consistently proven method of tracking unemployment that provides a much more accurate view of the overall situation. As shocking as it may sound, when you apply his SGS method, counting the total number people in need of employment, you get a current unemployment rate of 22.5%, which is an all-time record total of 34 million people currently in need of work. Here is how the SGS rate is calculated:
On top of these shocking figures, the labor force participation rate, which measures the percentage of the total population currently working, has fallen to a 27-year low of 63.9%.
Currently, an all-time record 6.3 million people have been unemployed for over six months. As the chart to the right shows, the average time it takes for a person to find a job has also just hit an all-time high of 40.4 weeks.
As companies continue to downsize and shift jobs overseas, unemployment is once again accelerating. Private-sector job cuts in July surged 60% to a 16-month high. When accounting for population growth within the total labor force, from December 2007 to present, we have lost 10.6 million jobs.
With the implementation of state and federal budget cuts, public-sector unemployment is accelerating as well. According to the Center on Budget and Policy Priorities, since August 2008, state and local governments have cut577,000 jobs. The Economic Policy Institute estimates that cuts in the new deficit deal will lead to an additional 1.8 million job losses.
Of the new jobs that have been added in 2010, 60% of them are in low-wage fields. Since December 2007, the official unemployment rate has masked the fact that 2.8 million of the news jobs created have been part-time jobs.
Breaking down the data, over the last 12 months, the National Employment Law Project found that well-paying jobs are rapidly decreasing, while low-paying jobs are helping to mask an increasingly dire employment crisis:
While the cost of living from 1990 – 2010 increased by 67%, worker income has declined. According to the most recent available IRS data, covering the year of 2009, average income fell 6.1%, a loss of $3,516 per worker, that year alone. Average income has declined 13.7% from 2007 – 2009, representing a $8,588loss per worker.
The decline in worker income is due to the dramatic increase in CEO pay. CEO pay has consistently increased year-over-year since the mid-1970s. From 1975 – 2010, worker productivity increased 80%. Over this time frame, CEO pay and the income of the economic top 0.1% (one-tenth of one percent) of the populationquadrupled. The income of the top 0.01% (one-hundredth of one percent)quintupled.
To understand the affect CEO pay increases have had on workers’ declining share of income on an annual basis, after analyzing 2008 tax data, leading tax reporter David Cay Johnston summed up the situation with these revealing statistics:
As shocking as that is, over the last two years, workers have lost an even higher share of income to CEOs. In the last year alone, CEO pay skyrocketed by 28%. Looking at 2009, according to a recent Dollars & Sense report, workers lost nearly $2 trillion in wages that year alone:
As bad as these numbers are, consider that the attack on American workers has increased significantly since 2009. From 2009 to the fourth-quarter of 2010, 88% of income growth went to corporate profits (i.e. CEOs), while just 1% went to workers.
As the NY Times reported in an article entitled, “Our Banana Republic,” from 1980 – 2005, “more than four-fifths of the total increase in American incomes went to the richest 1 percent.” Again, as bad as that was, since 2005 it has gotten even worse, as Zero Hedge recently reported, labor’s current “share of national income has fallen to its lowest level in modern history.” This chart shows how workers’ percentage of income has been rapidly declining:
The bottom line, as statistics clearly demonstrate, these trends are getting worse and the attacks against us, as severe as they have been over the past four years, are dramatically escalating.
“There’s class warfare, all right, but it’s my class,
the rich class, that’s making war, and we’re winning.”
While 68.3 million Americans struggle to get enough food to eat and wages are declining for 90% of the population, US millionaire household wealth has reached an unprecedented level. According to an extensive study by auditing and financial advisory firmDeloitte, US millionaire households now have $38.6 trillion in wealth. On top of the $38.6 trillion that this study reveals, they have an estimated $6.3 trillion hidden in offshore accounts.
In total, US millionaire households have at least $45.9 trillion in wealth, the majority of this wealth is held within the upper one-tenth of one percent of the population.
If all this isn’t obscene enough, to further demonstrate how the global economy has now been completely rigged, Deloitte’s analysis predicated, based on current trends, that US millionaire households will see a 225% increase in wealth to $87.1 trillion by 2020. Accounting for wealth hidden in offshore accounts, they are projected to have over $100 trillion in total within the next decade.
Most people cannot even comprehend how much $1 trillion is, let alone $46 trillion. One trillion is equal to 1000 billion, or $1,000,000,000,000. To put it in perspective, last year the entire cost of feeding all 40 million Americans on food stamps was $65 billion.
Now consider, according to the latest IRS data, only 0.076% of the population, less than one-tenth of one percent, earned over $1 million in 2009.
The graph below, based on data from the Tax Policy Center, shows how much income is earned by a household at any given percentile in income distribution:
The highest bracket for annual income is $50 million or more. Only 74 Americans are in this elite group. The average income within this category was $91.2 million in 2008. As astonishing as that is, in 2009 they averaged$518.8 million each, or about $10 million per week. This means, in the depths of the recession, the richest 74 Americans increased their income by more than 5 times within this one year. These 74 people made more money than 19 million workers combined.
In context, overall, the richest 400 people in the US have as much wealth as 154 million Americans combined, that’s 50% of the entire country. The top economic 1% of the US population now has a record 40% of all wealth, and have more wealth than 90% of the population combined.
Here is an analysis from an investment manager with mega-wealthy clients breaking down the economic top 0.5% of the population, recently published by William Domhoff, sociology professor and author of Who Rules America?:
To get into the top economic 0.01% (one-hundredth of one percent) of the population, you have to have a household income of over $27 million per year.
If you look at some of the central players who caused this economic crisis, you will see that they are among this Economic Elite group.
Former Goldman Sachs CEO and Bush Treasury Secretary Hank Paulson had already amassed at least $700 million prior to moving to the US Treasury in 2006. Current Goldman Sachs CEO Lloyd Blankfein and a few other top executives at Goldman Sachs just received $111.3 million in bonuses. Blankfein just took home $24.3 million, as part of a $67.9 million bonus he was awarded. Goldman’s President Gary Cohn took home $24 million, as part of a $66.9 million bonus he was awarded. Goldman’s CFO David Viniar and former co-president Jon Winkelried both took home over $20 million in bonuses.
Citigroup CEO Vikram Pandit just took home $80 million, in what may eventually total more than $200 million in compensation and bonuses. Coming in at the top of the list is JP Morgan Chase CEO Jamie Dimon, who just took home $90 million.
If you think people in this income level don’t control the US political process, you are not paying attention. After they caused this economic crisis, they got the government to give them trillions of dollars in taxpayer support, and then, after taking our tax dollars, they gave themselves all-time record-breaking bonuses. 2009 was an all-time record-breaking year for Wall Street executives bringing in a total of $145 billion. And then, in 2010, they raised the bar even higher, breaking the all-time record set the year before by pulling in another $149 billion. The audacity of it all is stunning.
Finding people more grotesquely greedy than Wall Street executives would seem to be impossible. However, health insurance CEOs are giving them a run for their money. As the LA Times reported:
Aetna CEO Ron Williams has recovered from his down year in 2009 by making$72 million in 2010.
Given this level of obscene profiteering within the health care industry, it is not surprising that Americans pay more for medical care than any other nation in the world. In fact, Americans are forced to pay twice as much as most nations, and get lower quality care in return. As health insurance companies admitted, they have been reaping windfall profits because people with health insurance plans still cannot afford to go to the doctors and have stopped going unless it is an absolute emergency. With well over 50 million people unable to afford health insurance and the skyrocketing costs, it is not surprising that over 60% of all personal bankruptcies are the result of medical bills. In fact, 75% of the medical bankruptcies filed are from people who have health insurance.
Within this Economic Elite group, you also have the war profiteering oil companies, which themselves are in large part owned by the big Wall Street banks. The biggest five oil companies, while gas prices have been skyrocketing, reaped$36 billion in profit last quarter. These companies also receive an average of $6 billion per year in tax subsidies.
To further demonstrate how the mega-wealthy have seized control our political process, consider that the richest 400 Americans paid 30% of their income in taxes in 1995, but they now pay only 18%.
In fact, 1,470 Americans earned over $1 million in 2009 and didn’t pay any taxes.
The average tax rate for millionaires was 22.4% in 2009, down from 30.4% in 1995. The average millionaire saves $136,000 a year due to reduced tax rates.
Looking at the tax rate from a long-term perspective, the amount of money the richest people and most profitable corporations pay in taxes has fallen dramatically since 1955. Corporate tax accounted for 27.3% of federal revenue in 1955. In 2010, corporate tax accounted for only 8.9% of federal revenue. Corporate taxes accounted for 4.3% of overall GDP in 1955, in 2010 they accounted for only 1.3%.
(Inequality = Debt = Austerity = Civil Unrest = Inflation + Deflation = Stagflation)
The cuts in taxes for the mega-wealthy have led to record wealth inequality and resulted in a record national deficit. Meanwhile, to make up for the deficit that the richest one-tenth of one percent of the population has created, Democrats and Republicans are committed to making draconian budget cuts to vital social services, which target the poor, middle class, elderly and sick, while handing out billions more in corporate welfare annually. (Inequality = Debt = Austerity)
Just as the government has done, to make up for tax revenue lost to the mega-wealthy, Americans have made up for the decline in income by taking on large amounts of debt as well. (Inequality = Debt)
In a severely unequal society, massive debt will always be created, thus forming a vicious cycle of increasing inequality and increasing debt, until the fragmentation of society reaches a breaking point when those in debt cannot afford to pay back their debts without starving to death. We are now reaching that breaking point. (Inequality = Debt = Austerity = Civil Unrest)
The Indentured Servant Has Become The Indebted Citizen
As for statistics on Americans being buried in financial debt, the indentured servant has evolved into the indebted citizen. As mentioned before, from 1990 – 2010 costs of living have increased 67%, while wages have stagnated and declined. As the national debt has reached a record $14.6 trillion, total personal debt is now over $16 trillion. Consumer debt is $2.5 trillion. Credit card debt is $805 billion and student debt now exceeds $1 trillion.
Obviously, the more severe your debts are, the more you have to cut back in spending and the less money you have to buy new items. (Debt = Austerity)
Meanwhile, a perfect storm circles overhead as society breaks down and falls into an economic death spiral – health care, food and gas costs are skyrocketing, while income and home values are plummeting. (Inflation + Deflation = Stagflation)
Given these conditions, it is not surprising that over 250 million Americans, another record-breaking number, are currently living paycheck-to-paycheck struggling to make ends meet.
The following charts, from Advisor Perspectives, show the increase in costs of living since 2000:
As you can see, the price of basic necessities are consistently increasing, only clothing (apparel) has declined. The second chart highlights the crucial skyrocketing cost of energy:
The third chart highlights the pernicious skyrocketing cost of education:
The cost of education essentially buries a young person in a debt that they will spend a significant portion of their life attempting to get out of. Given the increasing costs of living, and the decreasing ability to make an expected income from such an expensive level of education, this young demographic will most likely live an entire life locked into spiraling levels of debt that they will never be able to get out of.
When reporting on inflation, the Bureau of Labor Statistics has twice, since 1980, revised their methodology to mask the severity of inflation, similar to how they mask the severity of unemployment. In their Consumer Price Index (CPI), which measures inflation, they have heavily discounted the measurement weight of energy, food and education – three of the most significant costs for most American households.
To understand the significance in their revised methodology, current “official” CPI is at a 3.6% annual rate. However, if calculated the way it was before former Federal Reserve Chairman Alan Greenspan altered it in 1980, it would be 11.1%, three times worse than officially stated.
The increase in gas cost over the past one-year masks the severity of total gas price inflation, which is currently 125% more expensive since December 2008, increasing from $1.67 per gallon to $3.75.
The Hidden Tax
The Federal Reserve’s strategic policy known as Quantitative Easing (QE) has been a significant factor in the rising cost of basic necessities by deliberately stimulating inflation, while decreasing the value of the dollar. Looking at their recent QE2 program, the dollar lost 7.5% of its value from January 2010 through March 2010. From August 2010 through March 2010, the dollar lost 17% of its value. To understand how this acts as a hidden tax, consider if you had $10,000 in the bank, over this time frame you would have lost $1700 in purchasing power. So your $10,000 would now be worth $8300. At the same time, the cost of gas and food drastically increased.
The Phantom Recovery
By decreasing the value of the dollar, the Federal Reserve is also inflating the stock market by creating the impression that stock prices are rising, which, when measured in dollars, they have. However, in real terms, their overall value hasdecreased. To understand how deceptive this strategy has been in giving theappearance of a rising market, instead of measuring overall stock value in dollars, let’s look at their overall value when measured in terms of gold:
Dow/Gold Chart from January 1, 2003 – August 8, 2011
As investor Michael Krieger explains:
Dollar Vs. Gold
When comparing the value of the dollar to the value of gold, the dollar has lost a stunning 84% of its value since 2000. In 2000, gold was worth $279 per ounce, as of August 8, 2011, gold is $1,725 per ounce. In fact, the dollar continues to fall in value while gold continues to rise.
All these factors together create a perfect storm of stagflation. As 90% of Americans experience income declines, and the value of the dollar declines, the price of necessities are rising, while the one major asset many Americans have, a house, is also declining in value. Already, thanks to declining home values, 28% of US homeowners owe more on their mortgages than their home is currently worth. With 10.4 million American families having lost their homes to foreclosure since 2007, Amherst Securities, a leading broker/dealer focused on mortgage-related investments, estimates that another 10.8 million homes are at risk of default over the next six years. This will obviously continue downward pressure on home values.
Confronted With Severe Financial Hardship, Why Do Americans Remain Passive?
With an unprecedented sum of wealth, tens of trillions of dollars, held within the top one-tenth of one percent of the US population, we now have the highest and most severe inequality of wealth in US history. Not even the Robber Barons of the Gilded Age were as greedy as the modern day Economic Elite.
As famed American philosopher John Dewey once said, “There is no such thing as the liberty or effective power of an individual, group, or class, except in relation to the liberties, the effective powers, of other individuals, groups or classes.”
In The Economic Elite Vs. The People, I reported on the strategic withholding of wealth from 99% of the US population over the past generation. Since the mid-1970s, worker production and wealth creation has exploded. As the statistics throughout this report prove, the dramatic increase in wealth has been almost entirely absorbed by the economic top one-tenth of one percent of the population, with most of it going to the top one-hundredth of one percent.
If you are wondering why a critical mass of people desperately struggling to make ends meet are still not fighting back with overwhelming force and running the mega-wealthy aristocrats out of town, let’s consider two significant factors:
Considering the first factor, it is obvious that people have become beaten down psychologically and financially. A report in the Guardian entitled, “Anxiety keeps the super-rich safe from middle-class rage,” suggests that people are so desperate to hold on to what they have that they are too busy looking down to look up: “As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery.”
Considering the second factor, people do not understand how much wealth has been withheld from them. The average person has never personally experienced or seen the excessive wealth and luxury that the mega-rich live in. Wealth inequality has grown so extreme and the wealthy have become so far removed from average society, it is as if the rich exist in some outer stratosphere beyond the comprehension of the average person. As the Guardian report mentioned above also states:
In fact, the average American vastly underestimates the severe wealth disparity that we currently have. This survey, featured in the NY Times, reveals that Americans think our society is far more equal than it actually is:
Here is a chart showing the results from their survey:
The fact of the matter is that the overwhelming majority of US population is unaware of the vast wealth at hand. An entire generation of unprecedented wealth creation has been concealed from 99% of the population for over 35 years. Having never personally experienced or known of this wealth, the average American cannot comprehend what is possible if even a fraction of it was used for the betterment of society as a whole.
In fact, given modern technology and wealth, not a single American citizen should live in poverty. The statistics clearly demonstrate that we now live in a Neo-Feudal society. In comparison to the wealthiest one-tenth of one percent of the population, who are sitting on top of tens of trillions of dollars in wealth, we are modern day serfs, essentially propagandized peasants.
The fact that the overwhelming majority of Americans are struggling to get by, while tens of trillions of dollars are consolidated within a small fraction of the population, is a crime against humanity.
The day the average American fully comprehends how much wealth is consolidated within just the top one-tenth of one percent of the population, there will be a massive uprising and all the paid off politicians will be run out of town.
The next time you are stressed out, struggling to make ends meet and pay off your debts, just think about the trillions of dollars sitting in the obscenely bloated pockets of one-tenth of one percent of the population. The first step in overcoming your peasant status is to understand that you are indeed a peasant. This is a bitter pill to swallow and most will prefer to, as they have been conditioned to do, continue on their path of media-induced delusion, denial, apathy and ignorance.
However, I still cling to the hope that once enough people become aware of this hidden and obscured fact, we can have the non-violent revolution we so urgently need. Until then, the rich get richer as a critical mass with increasingly dire economic prospects desperately struggles to make ends meet.
Other than driving large segments of the American population into poverty, and pushing the majority into massive debt and a state of financial desperation, there is an ever darker side to what is unfolding today. The Economic Elite have turned America into a modern day fascist state.
Fascism is a very powerful word which evokes many strong feelings. People may think that the term cannot be applied to modern day America. However, as Benito Mussolini once summed it up: “Fascism should more properly be called corporatism, since it is the merger of state and corporate power.” In the early 1900s, the Italians who invented the term fascism also described it as “estato corporativo,” meaning: the corporate state.
Very few Americans would argue the fact that corporations now control our government and have the dominant role in our society. Through a system oflegalized bribery – campaign finance, lobbying and the revolving door between Washington and corporations – the most power global corporations dominant the legislative and political process like never before. Senator Huey Long had it right when he warned: “When fascism comes to America, it will come in the form of democracy.”
As President Franklin D. Roosevelt once described fascism: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes strong than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or any controlling private power.”
The most blatant modern example of this was the bailout of Wall Street, when the “too big to fail” banks got politicians to promptly hand out trillions of tax dollars in support and subsidies to the very people who caused the crisis, without any of them being held accountable.
Another shocking example of how far we have descended into fascism is the American Legislative Exchange Council (ALEC), which is a group of corporate executives who literally write government legislation. They have gone as far as setting up a system that imprisons the poor and then puts them to work, instead of paying living wages to non-imprisoned workers. Make no mistake, this is a modern day system of slavery unfolding before our eyes.
At the leadership of ALEC and various other Economic Elite organizations, poverty has essentially become a crime. To demonstrate these attacks against the poor, there was $17 billion cut from public housing programs, while there was an increase of $19 billion in programs for building prisons, “effectively making the construction of prisons the nation’s main housing program for the poor.” Before laws began to be rewritten in 1980, with direct input from ALEC, we had a prison population of 500,000 citizens. After laws were rewritten to target poor inner city citizens with much more severe penalties, the US prison population skyrocketed to 2.4 million people.
We now have the largest prison population in the world. With only 4% of the world’s population, we have 25% of the world’s prison population. As I reported previously, in a report entitled, “American Gulag: World’s Largest Prison Complex“:
The dramatic increase in poverty has obviously torn many families apart and caused a devastating psychological toll, but consider the increase in deaths as a result of poverty and severe wealth inequalities. This is a very difficult statistic to accurately measure, but Columbia University’s School of Public Health conducted an intensive examination of mortality and medical data and estimated that “875,000 deaths in the US in 2000 could be attributed to a cluster of social factors bound up with poverty and income inequality.”
As a report by Debra Watson sums up the study, “There is no reason to believe, after a decade that has seen sustained attacks on social programs and consistently high unemployment rates, that the social mortality rate has declined. On the contrary, it has likely risen.” Indeed, poverty and income inequality have skyrocketed since 2000.
Now, let’s consider the fact that, according to the Census Bureau,31.1 million people lived in poverty in 2000, and according to Columbia’s study 875,000 deaths came as a result. This means that 1 out of every 35.5 people living in poverty dieannually as a result of their impoverishment. If you extrapolate this data to the 2009 total of 52.8 million people living in poverty, you get an estimate of 1,486,338 deaths within that year. Even if you use the lower poverty totals from the Census Bureau, 43.6 million people, you get an estimate of 1,228,169 deaths in 2009.
The dramatic increase in economic inequality and poverty, along with the unprecedented rise in wealth within the top one-tenth of one percent of the population has not happened by mistake. It is the designed result of deliberate governmental and economic policy. It is the result of the richest people in the world, and the “too big to fail” banks, using the campaign finance and lobbying system to buy off politicians who implement policies designed to exploit 99.9% of the population for their financial gain. To call what is happening a “financial terrorist attack” on the United States, is not using hyperbole, it is the technical term for what is currently occurring.
Compare the million people who die annually as a result of these economic attacks, to the 2,977 that died on 9/11. As someone who lived three blocks from the World Trade Center, as tragic as 9/11 was, these economic attacks are much more severe and damaging to us as a nation, albeit a much slower and unseen death toll. Nonetheless, the result is ofgenocidal proportions. One can statistically compare the economic attacks on the US to the invasion of Iraq, which some estimate as leading to one million deaths. Once again, many of those deaths came in brutal and spectacular fashion in bombing campaigns known as “shock and awe.” However, the death toll compares to the hidden brutality of a four-year campaign of economic “shock and awe.” Just as Iraq was invaded, the US has been invaded by a global banking cartel.
As shocking as that is to realize, consider that this is happening throughout the world. While the US poverty death rate is probably higher than in most European countries, the Federal Reserve’s economic policies — along with policies from the International Monetary Fund, World Bank and Bank of International Settlements — have caused rioting and uprisings over skyrocketing food prices and costs of living throughout the world. The fact of the matter, and very harsh and unfortunate reality of this crisis, is that the global economic central planners are deliberatelycarrying out genocidal economic policies.
As Che Guevara, a man who took on the global financial elite, once said, “The amount of poverty and suffering required for the emergence of a Rockefeller, and the amount of depravity that the accumulation of a fortune of such magnitude entails, are left out of the picture, and it is not always possible to make the people in general see this.”
When tens of trillions of dollars deliberately flow to the top economic one-tenth of one percent of the global population, while large percentages live in poverty, you have to conclude, in technical terms, that a Neo-Feudal-Fascist state is upon us. The rich have never been richer, while their paid off politicians make budget cuts for the poor and middle class, and cause the cost of basic necessities to skyrocket.
You can call me extreme, but the reality of this is extreme, these people, the global economic topone-tenth of one percent, are genocidal fascists carrying out a holocaust. Fascism has evolved. There is no need to get blood on your hands while rounding up people and putting them into concentration camps when you can do it through economic policy while sitting in a jacuzzi on a corporate jet, or in a three-piece custom-made Armani, completely detached and insulated from the world in which you plunder.
However, as what happens with all empires, greed and arrogance makes them overreach. The beaten down masses get to a point where they literally can’t live under these conditions. This desperation spreads throughout the population until it reaches a critical mass, then, suddenly, they rise up and the empire begins to collapse… Tunisia, Algeria, Egypt, Israel, (Northern Africa, the Middle East), Albania, Greece, Spain, Britain (Europe), Wisconsin…
The Economic Elite are overreaching and their empire is collapsing.
The decentralized global rebellion has begun…
Welcome to World War III.
Which side of history do you want to be on?
As a wise old friend once said, “You can’t be neutral on a moving train.”
David DeGraw, a regular contributor to The Public Record, is an investigative journalist whose work has been featured in numerous publications and websites. He is the founder and editor of AmpedStatus.com, editorial director ofMediaChannel.org and author of The Economic Elite Vs. The People of the United States.
Republican Paul Ryan’s Budget: Cruel and Unusual Punishment
What Democrats endorse isn’t much better. Timing mostly differs to get past November elections.
For starters, Obama and Democrats agreed to the following cuts over the next decade:
Priority Pentagon items remain untouched to assure annual budget increases, generous supplemental add-ons, and secret open-checkbook intelligence allocations for numerous lawless purposes.
Bipartisan complicity assures people needs are on the chopping block for reduction or elimination to satisfy the insatiable appetites of Wall Street, war profiteers, other corporate favorites, and America’s super-rich. If reelected, Obama will rubber-stamp them.
Moreover, he’s on board for more, including slashing corporate and super-rich tax rates. At the same time, he OK’d Medicare co-pays increases, raising retirement age entitlements eligibility, and reducing or eliminating other vital benefits America’s poor need most.
They and ordinary Americans will be burdened to let corporations and super-rich elites end up better off than ever. Bipartisan complicity assures it.
At a time 25 million are unemployed, millions more underemployed, poverty’s at record levels, home foreclosures exceed 12 million, one in eight homeowners either face foreclosure or are past due 30 or more days, 11 million homeowners are “upside down on their mortgages,” eight million homes are either unsold or vacant, prices keep falling, unmet public needs are rising, corporate profits are at record levels, and super-rich elites are better off than ever, Republicans passed a budget inflicting more pain on households least to tolerate it.
Rep. Paul Ryan (R-WI) chairs the House Budget Committee. He wants Social Security privatized, its benefits reduced, Medicare abolished, Medicaid sharply cut, food stamps and other safety net essentials decreased, and taxes slashed for corporations and America’s super-rich.
On March 29, his proposed budget passed 228 – 191 along party lines as expected. No Democrats supported it. Ten Republicans defected. According to Ryan:
“It is so rare in American politics to arrive at a moment in which the debate revolves around the fundamental nature of American democracy and the social contract, but that is exactly where we are today. Today’s budget is a vote of confidence for the American experiment.”
For millions of vulnerable households, it’s nearly a death sentence. It harms their ability to get by, and Ryan plans more cuts. Already, income inequality and poverty are at record levels.
According to the Center on Budget and Policy Priorities, 62% of Ryan’s cuts come from “programs for lower-income Americans.” Over 10 years, it slashes $5.3 trillion from non-defense areas. At the same time, he allocates an additional $200 billion for defense and imperial wars with automatic add-ons annually plus unknown tens of billions in black budgets.
Specific proposed cuts include:
(1) $2.4 trillion from Medicaid and other low or moderate household income healthcare programs. Medicaid loses $810 billion. By repealing Obamacare’s Medicaid expansion and subsidies for those most in need to buy health insurance, he gets another $1.6 trillion.
(2) $1.2 trillion from programs other than Social Security, Medicare, Medicaid, and other healthcare programs.
(3) $134 billion from Supplemental Nutrition Assistance Program (SNAP) food stamp aid. If enacted, up to 10 million recipients would be entirely shut out.
(4) At least $463 billion from other programs serving America’s most needy, other than Medicaid and SNAP.
(5) At least another $291 billion in low-income discretionary programs, including Pell Grant tuition aid for needy students.
Ryan directs his cuts at vulnerable households unable to get by on what he wants reduced or eliminated. Millions will lose healthcare. Millions more won’t have enough to eat and will be dependent on what food banks provide. Education will suffer more than already. Poor students will have to forego it altogether.
Mitt Romney called it “an excellent piece of work.” Rick Santorum said it’s not enough. Households most harmed had no say. Opposition Democrats plan coming on board post-election. So does Obama with precise cuts to be agreed on then. For now, Senate Democrats will block Ryan’s plan. Post-election, they’ll go along.
Capitalism’s Cancer Stage
What’s ongoing fits John McMurtry’s explanation of capitalism’s cancer stage. He calls it “a world-system disorder which becomes cumulatively worse the longer it is unrecognised.”
Cancer’s defining nature is it “advances when not recognised by its life-host.” Its a mutant degenerate system. It’s evident in many ways. Ryan’s budget proposal is symptomatic. The problem’s much greater.
Predatory capitalism’s a “contagion” model. Its victims spread the disease. “No distinction is ever made between destructive and productive capital sequences. ‘Contagion’ conceals every moment of the cancer system at work.”
Victims are blamed for what predators cause. Few explain how Wall Street hijacked “government’s constitutional money-and-credit issue to speculate and debt-enslave others at endless costs for them and equally endless growing riches of the big banks.”
Ordinary people are scammed. They’re deprived of their rights. At the same time, Wall Street, other major financial interests, and corporate favorites are licensed to steal.
“The inner logic is very simple. The people must pay for the money-sequence cancer growth, and so more public wealth and individual savings must be taken away to do so. The principal mechanism is debt multiplication of governments and individuals managed by private banks’ issuing longterm compounding debts without the money to back the loans.”
Government, major financial interests, and other corporate giants partner for self-enrichment at the public’s expense. In the process, communities and national economies are destroyed. Predators profit on their road to ruin. Political Washington goes along.
“As in any cancer system, the life host is increasingly plundered, but the cancer is masked from immune recognition or response.”
Ryan and others like him serve wealth and power only. Hollowing out America and most households in it makes them richer and more able to plunder grab all they can, then move on to new hosts or pillage many simultaneously.
It’s not surprising that cancer became epidemic under capitalism. It thrives on illness and deplores good health.
“Yet once (it) become(s) aggressively invasive, (it’s) the blocked out by the life host at every turn on the social as well as individual plane. That is how the cancer system spreads, masking itself every move at both levels. Uncontrolled money-sequence multiplication and invasive growth into organic, social and ecological life-hosts is undeniable once the dots are joined.”
Suggesting it is taboo. Media scoundrels say nothing. Disease proliferates. Greed is its genesis. Political Washington’s on board facilitating it. Reelection and self-enrichment’s their motive.
Ryan’s a willing agent, a capitalist tool. So are most others in Congress and all presidents. The end game’s predictable. America’s heading for banana republic harshness, tyranny and ruin. Along the way, ordinary people are being trampled.
The cancer system’s at fault. A disproportionate number of America’s privileged share wealth and power. Ordinary people are exploited. Profits are privatized, debt socialized. Working households and future generations bear it.
Criminals run a kleptocracy. It’s corrupt, rotten to the core gangsterism. Politicians are in bed with business. Ordinary people haven’t a chance. Personal freedoms and other democratic values are illusions. What’s left after corporate crooks grab everything and bribe Congress and presidents to go along.
Money power runs America. Political Washington’s complicit letting it. Its criminal class is bipartisan. What can’t go on forever, won’t, but until then will transfer maximum wealth one way to those already with too much.
McMurtry’s “cancer system” explains it. This one’s likely to destroy itself along with its host, and maybe humanity in the process.
The food bubble is now starting to implode. What does it all mean? It means that as these economic and climate realities unfold, our world is facing massive starvation and food shortages. The first place this will be felt is in poor developing nations. It is there that people live on the edge of economic livelihood, where even a 20% rise in the price of basic food staples can put desperately-needed calories out of reach of tens of millions of families. If something is not done to rescue these people from their plight, they will starve to death.
Wealthy nations like America, Canada, the U.K., and others will be able to absorb the price increases, so you won’t see mass starvation in North America any time soon (unless, of course, all the honeybees die, in which case prepare to start chewing your shoelaces…), but it will lead to significant increases in the cost of living, annoying consumers and reducing the amount of money available for other purchases (like vacations, cars, fuel, etc.). That, of course, will put downward pressure on the national economy.
But what we’re seeing right now, is just a small foreshadowing of events to come in the next couple of decades. When gasoline is $10 a gallon in the U.S., how expensive will food be around the world? The answer, of course, is that it will triple or quadruple the current price. And that means many more people will starve.
One thing that has become abundantly clear in all this is that the era of cheap food and cheap fuel is over. Add to this the fact that global climate change is already underway, altering weather patterns and creating floods, droughts and other agricultural calamities, and you start to get the picture of just how bad things might get. That’s not even to mention the very serious problem of collapsing honeybee populations due to a mysterious condition called colony collapse disorder that’s devastating honeybee populations across North America. Honeybees, in case you didn’t know, pollinate plants that represent about 30% of all the calories consumed by Americans. That’s about one out of every three bites of your dinner, and it all depends on the “free” work performed by honeybees — bees who are apparently going on strike by refusing to keep working for us.
The U.S. Is Broke But Somehow Finds $1 Trillion To Operate New F-35 Fighter, China Makes A Killing On Gold, Muni Default Chart, Wall Street Pay Watch, Nil Baby Nil (LINKS)
The global economy is doomed to implosion, and here are four charts which explain why.
Though the complexities may appear endless, the global economy's coming implosion is really fairly easy to understand: here are four charts which do the heavy lifting. It boils down to these basics:
1. When money is dear and difficult to borrow, then productivity and capital accumulation are encouraged, speculation, malinvestment and debt-based consumption are discouraged.
2. When money is "free" (zero-interest rate policy) and liquidity is unlimited, then the opposite conditions hold: speculation in risk assets, malinvestment and debt-based consumption are all encouraged, and productivity and capital accumulation are heavily discouraged.
3. When debts exceed the value of the underlying assets, the only way out of the Tyranny of Debt is to write off the debt on both the borrower and lender's balance sheets, wiping out their capital via liquidation and bankruptcy.
4. The "extend and pretend" policy pursued by all major nations is simply transferring the impaired debt from private hands to the taxpayers (public debt), crippling the economy with higher taxes and higher debt service.
5. The Central State's "extend and pretend" policy requires heavy borrowing every year to prop up the status quo, pushing the Central State (or equivalent, i.e. the Eurozone) in an inescapable double-bind: either continue increasing public debt and cripple the economy with high taxes and high public-debt servicing costs, or let the financial status quo of "profits are private, losses are public" implode.
The first path leads to default, as the Tyranny of Debt cannot be masked for long, while the second path wipes out the Financial Power Elite which feeds the politicians.
Here are the charts. Note how the speculative economy created the illusion of rising wealth for the bottom 90%, an illusion stripped away by the Default Economy.
In essence, the Financial Power Elites profited immensely from creating this illusory wealth which gave the bottom 90% the false sensation that their declining earnings and purchasing power were being offset by the "magic" of asset bubbles.
Then, when the bubble popped, the Financial Power Elites transferred the impaired assets to the taxpayers, a process which is still underway. The politicos of both parties are complicit; behind the simulacra of toothless "reforms," this process proceeds in myriad ways (Bank of America transferring toxic debt to Fannie/Freddie, etc.) Behind the smokescreen of conjuring a "wealth effect" to foster more consumption, the Fed's purchase of Treasuries (QE2) serves this transfer-of-debt-to-the-public process.
This same process is playing out throughout the global economy: Greece, Ireland, the U.S., and eventually, in China when its monumental property bubble pops.
These images, by photographers of the Farm Security Administration /Office of War Information, are some of the only color photographs taken of the effects of the Depression on America’s rural and small town populations. By 2012, the photographs and captions will haunt this generation as the cyclical downturn worsen due to high unemployment and huge tax burden.
Florence Thompson with three of her children in a photograph known as "Migrant Mother." This famous image is one of a series of photographs that photographer Dorothea Lange made of Florence Thompson and her children in early 1936 in Nipomo, California. More on the photo here. (LOC/Dorothea Lange) #
U.S. poverty totals hit a 50-year high Census Bureau’s grim statistics show recession’s lingering effects, as young adults move back home and 1 million more Americans go without health insurance … In a grim portrait of a nation in economic turmoil, the government reported that the number of people living in poverty last year surged to 46.2 million — the most in at least half a century — as 1 million more Americans went without health insurance and household incomes fell sharply. – Los Angeles Times
Dominant Social Theme: These things happen. No reason. Depressions spontaneously occur. They are “market mistakes.”
Free-Market Analysis: We’ve spent considerable time in the past three years (the past decade, actually), analyzing how the powers-that-be have reorganized society, especially American society, in a way that relentlessly reduces prosperity. Figures released yesterday from the US Census provide a startling illustration of just how effective elites have been. (See excerpt above.)
Why would a handful of wealthy central banking families want to impoverish the US and render its citizens penniless? Our conclusion is simple: World government is on the way and the American culture is still resistant to the kind of hyper-regulatory corporatism that is necessary to support this kind of governance.
America (the West, generally) has apparently been under attack by an organized cabal of inter-generational banking families and corporate, business and military enablers for at least 200 years now, and perhaps 300 years. In the past 50 years, the pace has accelerated.
One by one, the UN, IMF, World Bank, BIS, ICC (international court), WHO and countless other globalist organizations have been put in place. The mainstream media treats this evolution as inevitable. It cannot be. Each evolution must be planned, funded and promoted. When it comes to politics of this sort, there are no coincidences, as FDR once observed.
We have taken to calling what has evolved “directed history” – in which events including wars are planned to ensure maximum destruction of the culture as it is in order to further militarize, globalize (and impoverish) what remains.
Because America was a “great exception” – founded as a republic with a culture that was relentlessly entrepreneurial and agricultural – America has been under sustained attack to ensure that its culture is Europeanized and recreated as what we call “regulatory democracy.”
Regulatory democracy is one word for what has evolved. Corporatism is another. Fascism (of a sort) would be a third. No matter what word is used, the current Western model for nation states relies heavily on unelected bureaucrats, intelligence agencies and a military industrial complex that basically reports to the aforementioned elites and is not affected by voting or other democratic elements.
The modern nation state is funded by central banks, also seemingly controlled by these elite families, and the ultimate goal is formal global governance. Some question why a formal international government is necessary. The answer is that the elites like to work within a “lawful” environment of their own creation. The more that reality corresponds to their notions and plans, the easier it is to continually consolidate power.
Nothing else – no other sociopolitical model – seems to explain what has happened to America and Europe. The EU is a disaster and the euro has proven to be a currency that has brought ruin on the Southern crescent of that artificial entity. The one-size-fits all central banking policies of the union continue to collapse jobs and economies – something we’ve been forecasting for several years now.
European elites are on record as anticipating the disaster and welcoming it because it will allow for the creation a closer “political union.” But in the Internet era, people are not so easily manipulated as they were in the 20th Century. The pushback to elite plans is extreme. The fate of the EU is by no means pre-determined. Events could easily spin out of control.
In the US, the great merger between Canada, Mexico and America has been all-but-abandoned – for the time being. However, one of the primary figures behind that putative merger is Texas governor Rick Perry who spent much time and political energy in the early 2000s trying create a “North American Union.” In our view it is no accident that he is a front-runner for the presidency at this juncture.
The Rick Perry story is certainly illustrative of how the elites work. Perry actively supported a superhighway of some 20 lanes plus railroad tracks that was (and is) planned to bisect the US, running from Mexico to Canada. It would effectively turn the country into two separate halves, both of which would be economic backwaters, as trade and prosperity flowed between Canada and Mexico.
Perry also supported a kind of international health-care in which the US would subsidize medical treatments for Mexicans. He tried to portray this as a rare opportunity to address flaws in the health care system that a bi-national program would counteract. But in reality, it was more internationalism.
Perry was and is a globalist; he is likely a candidate of the elites and it is perhaps no coincidence that he is suddenly a leading GOP choice to run for president. Perry’s globalist sympathies were so evident in Texas that he had to write a book renouncing them.
In his book, from what we can tell, he basically repurposes most if not all of libertarian presidential candidate Ron Paul’s message of small government and reliance on the private sector. Perry’s statements were so extreme, however, that he has made himself a target on both sides of the aisle.
Perry is just one more unmoored and unprincipled politician, willing to undermine his country and its hundreds of millions for personal gain. (Some have compared him to a used car salesman and claimed in another, less corrupt era he would never have achieved his current position.) He has become a millionaire several times over during his political career, and no doubt millions more await him if he does by some chance become president.
Meanwhile, the larger American economy continues to suffer. Critics in the mainstream media will have plenty of explanations for how their country came to be in the shape that it is in. But from our humble perspective, there can only be one explanation; it’s part of a larger plan, at least to some degree. Here’s some more from the article, above:
The poverty rate for all Americans rose in 2010 for the third consecutive year, matching the 15.1% figure in 1993 and pushing many more young adults to double up or return to their parents’ home to avoid joining the ranks of the poor. Taken together, the annual income and poverty snapshot released Tuesday by the U.S. Census Bureau underscored how the recession is casting a long shadow well after its official end in June 2009 …
The total number of Americans who fell below the official poverty line last year rose from 43.6 million in 2009. Of the 2.6-million increase, about two-thirds of the people said they did not work even one week last year. Those with jobs were much less likely to be poor, but the recession and weak recovery have wiped out income gains of prior years for a broad spectrum of workers and their families.
Inflation-adjusted median household income — the middle of the populace — fell 2.3% to $49,445 last year from a year ago and 7% from 2000. “It’s a lost decade for the middle class,” said Sheldon Danziger, a poverty expert at the University of Michigan. The number of poor children younger than 18 reached its highest level since 1962, said William Frey, a demographer at the Brookings Institution.
This is an unmitigated disaster, and it is hitting young people the hardest. Overall, the number of 25- to 34-year-old men and women who were living with their parents last spring totaled 5.9 million, the article tells us, and this is a 25.5% increase since the recession began in 2007.
Of course, we note the words that are used in the article to describe the current conflagration, specifically the “R” word, recession. This is no recession, from what we can tell. Nor has there been a “weak recovery.”
With 50 million or so Americans relying on food stamps and unemployment realistically hovering at least in the 20 percent area (we think its closer to 30 percent), one can use any words one wants to – even “banana” – but a depression is a depression.
The elites, of course, fear depression. While it is important to remove prosperity from people’s lives in order to make them malleable, too much hardship can cause social chaos and the kind of pushback that puts “civilized” institutions at risk. During the Great Depression, the elites were most worried about armed insurrection in America and Europe, especially because there were so many young men with military experience as a result of World War One.
But depression is the logical outcome of the economic system now in place throughout the West. Driven by central bank fiat money divorced from underlying value, powered by taxes, visible and invisible, that take up to 50 percent of the average person’s income, and rigorously controlled by a blizzard of incomprehensible and destructive regulations, the system in place now is Babylonian in its devious intricacy and seemingly beyond redemption.
Add in five or six regional wars in the Middle East and Africa (with more doubtless coming) and the general militarization of the population and the larger model of corporatism, and the results become clear. The economy of the West has been so distorted that price signals are simply not available. No one knows what to invest in because government subsidies, regulation and fiat money have made it impossible to tell a healthy enterprise from a fraudulent one.
There is an easy way out of the depression that is gradually lengthening over the West like a malevolent shadow. Return to free and unregulated markets, disband central banks and let money freely compete and circulate, especially gold and silver.
Stop distorting the economy with endless government fixes, phony wars and the saddlingof the larger culture with the inevitable failing prescriptions of “wise men.” These are simple solutions. They have worked in the past and sooner or later they will work again. The elites, as powerful as they are, cannot forever hold back the logic of the larger market.
It is, in fact, inevitable in our view. In this era of the Internet Reformation, it is likely impossible for the elites to fully complete their globalist campaign. Too much is known about what’s planned and as a result, the great families are turning more and more (ineffectively) to repression, wiretapping and violence to achieve their ends.
Conclusion: This is evidence of the weakness of their position and we have seen no evidence that their situation can much improve either in the long or short term. In the 21st Century we would tend to believe that people may not prove so malleable as the elite has hoped.