Posts tagged State of the Union

Okay Mr. President, you want to talk about “inequality”? Let’s talk about it.

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Source: http://www.againstcronycapitalism.org

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Okay Mr. President, you want to talk about “inequality”? Let’s talk about it.

 

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I woke up this morning to Steve Liesman on CNBC explaining the theme of tonight’s State of the Union Address. You see, since 1980 middle class wages have only gone up only 50% in inflation adjusted terms whereas for the top 1% of earners income has gone up by 210%. Something clearly must be done. How can such a disparity be? This is unfair. Can’t the government “solve” this?

The new narrative which has likely been crafted by John Podesta super crony capitalist extraordinaire, is that Congress (specifically the Republican controlled House) isn’t letting the president address the issue of income inequality.

“It’s those old guys who don’t care about you who are holding back the manna from heaven aka Washington DC. It’s their fault not mine. I’m not incompetent and way out of my league even after 5 years in the White House. Not my fault. It’s the selfish and rich Republicans. They want you to remain poor.”

Rally the base when times are bad is the old political wisdom, and they are very bad for this president. Shore up the folks who will defend you no matter what and change the conversation from Obamacare. Anything but Obamacare.

Given that the ACA is Obama’s chief “achievement” to date this is a particularly sad state of affairs. The president’s “pivot” (the word is right up there with “optics” in my book) toward income inequality is a cynical political move. The White House is desperate to regain at least some momentum in the face of a 2013 which was one failure after another.

But since Mr. Obama seems keen on bringing it up, let’s talk about inequality.

Despite what the establishment #oldmedia always say, the increased income inequality that we see is not the result of the “rich” taking advantage of unfettered markets and then making a mint at the expense of everyone else. Capitalism, free markets, free thinking, entrepreneurship, innovation, is not the problem. Capitalism is in most respects the cure. No, the problem is that business and government have increasingly partnered with one another to make some very rich and to shut out others. It’s too little capitalism which is the problem.

Let’s take a look at the most obvious example, Wall Street.

Has Wall Street reaped the windfall it has over the past 5 years because of the free market, because of capitalism?

Absolutely not. Had the free market been allowed to work in 2008 Goldman Sachs, AIG, Citi, Bank of America, and Morgan Stanley would probably be history. These banks leveraged themselves out too far and got caught exposed. Their greed did them in. Mr Market made a margin call and many “masters of the universe” turned out to have feet of clay after all. The banks should have been allowed to collapse so that better managed banks could fill in the space.

The banks weren’t too big to fail. They could have failed and life would have gone on. ATMs would have kept working. The sun would have still risen in the east. The economy after a period of adjustment would have righted itself and emerged much healthier for having jettisoned the poorly managed firms. Lloyd Blankfein would have been out of a job, but he’d have survived somehow in the Hamptons.

But that isn’t what happened as we know. The managers of these institutions knew how to manipulate the levers of power. They were able to engineer a massive bailout, which started at $700 billion and just grew from there. In the years after the bailout bonuses were paid out at the big banks with abandon. These bonuses were for the most part paid for by the American taxpayer. No wonder people are angry.

But the bailouts weren’t capitalism. The bonuses which were paid to Jamie Dimon and friends weren’t a result of “free markets.” They weren’t the just rewards of building a better mousetrap, or even building a better derivative algorithm. They were the result of crony capitalism, a soft form of fascism, which is of course a form of socialism. The bankers made millions because the state redistributed the income of everyday Americans and gave it to Wall Street.

Or take for example the sell off of the taxpayer’s (forced) position in GM at a loss last year. In addition to losing $10 billion on the deal for the taxpayers, the deal done by Treasury unleashes the executives which so long as money was still owed to the taxpayer couldn’t go nuts with executive compensation. Now, after the $10 billion taxpayer loss they and the GM board are free to do as they wish in the pay department.

Or what about the huge percentage of so called “green” energy initiative grants and loans which went to politically connected people in 2009. Folks made millions, in wind, solar, algae, and who knows what else, all again courtesy of the US tax payer. Almost none of the ventures were economically viable. But lots of people got paid that is for sure.

There are probably thousands of other examples over the last 10 years or so (and many more going back way before the past decade,) ranging from war profiteering of all sorts, to cronyism in the new healthcare law, to draconian copyright laws which are a subsidy to Hollywood, to, well, there are many other examples which we have chronicled at Against Crony Capitalism.

So we shouldn’t be surprised that there is so much income inequality. Business and government in this country have partnered up. Sometimes the government has the upper hand. Sometimes business does. But both parties engage in the crony capitalism waltz to enrich themselves, to the exclusion of a large part of the American population.

And at the heart of it all, is the Federal Reserve.

Nothing creates illegitimate inequality (there is legitimate income inequality which exists in a free price system) like the Federal Reserve.

0% interest rates are for the most part pretty good for rich people. Money which is super cheap can be used to speculate and invest at almost no cost. In theory such low rates are also good for home buyers. Low rates keep monthly payments lower. More people buying homes (with lower payments) spurs the economy and then the economy roars back to life as we all buy Sub Zero freezers and SUVs. This was the logic behind the housing boom in the mid 2000s and it is the same logic the Fed is using now (with less success.)

But 0% rates also means that savers are hung out to dry. The prudent middle class is hammered. Those who have a nice nest egg built up over a lifetime of hard work and thrift find that unless they take on significant risk there is no return for their money. $500,000 in a CD not so long ago yielded an yearly payout of $25,000. Now because of the Fed keeping money cheap artificially that same $500,000 might yield $5,000 on an annualized basis if one is lucky.

Over time granny finds that $5000 per year isn’t enough to get by on even though her house is paid off. She finds she must dip into her nest egg a little more each year, which also in turn lowers her already modest yield. Soon the nest egg is gone.

Of course she can always seek increased yield in other places like the stock market, (which though they won’t say it is exactly where the Fed wants granny to put her money) but widows and orphans really have no business there. It’s bad enough for granny to lose her pool of wealth over years. Losing much of it in an afternoon is tougher to take. But that is what our current monetary policy encourages.

Not so long ago granny could keep up. She could beat inflation and pay her living expenses. When she died her wealth was passed on to the next generation.

But now, thanks to the Fed and it’s policies which benefit the hedge fund guys instead of the average saver it is unlikely that much of granny’s wealth will be passed on. Wealth has been pulled from the middle class.

“Inequality” has been exacerbated by a government which is too large. The only way to get the economy on track is to lessen the footprint of government. Free prices. Free markets. Let people create. Make it easier to start businesses

But tonight Obama is unlikely to talk about how after years and years of failure government must now get out of the way. (Boy how great would that be?) Or how government sponsored public/private partnerships steal money from the average American. Or how the government enabled the biggest bonus binge Wall Street has ever seen. Or how granny is getting clobbered because of loose monetary policy.

No, my bet is that he will talk about how the economy has worked for the “rich” while others have fallen behind. But he won’t call for freer markets and an end to price fixing at the Federal Reserve. He will instead insist that government “do something.” What that something is I’m not sure but the term “shovel ready” will likely make an appearance tonight along with its old buddy “infrastructure improvement.”

The president will probably wag his finger at the House GOP a bit and threaten to use executive actions to go around them. He’ll try to look like he means business.

Obama will also talk about the need to raise the minimum wage, which is basically economic suicide but makes for good sound bites. He will give hope to people who are hurting but who unfortunately may not understand that if the minimum wage is raised they may soon be out of a job.

In short Obama will be long on proposals, long on rhetoric, but woefully short on understanding. Pretty much the to story of his presidency.

Image credit: http://www.againstcronycapitalism.org


Nick Sorrentino
About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.

 

 

Newly Discovered Eighth Grade Exam From 1912 Shows How Dumbed Down America Has Become

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Source: http://endoftheamericandream.com

By Michael Snyder

Newly Discovered Eighth Grade Exam From 1912 Shows How Dumbed Down America Has Become

 

1914-Schoolhouse-300x225Have you ever seen the movie “Idiocracy”?  It is a movie about an “average American” that wakes up 500 years in the future only to discover that he is the most intelligent person by far in the “dumbed down” society that is surrounding him.  Unfortunately, that film is a very accurate metaphor for what has happened to American society today.  We have become so “dumbed down” that we don’t even realize what has happened to us.  But once in a while something comes along that reminds us of how far we have fallen.  In Kentucky, an eighth grade exam from 1912 was recently donated to the Bullitt County History Museum.  When I read this exam over, I was shocked at how difficult it was.

Could most eighth grade students pass such an exam today?  Of course not.  In fact, I don’t even think that I could pass it.  Sadly, this is even more evidence of “the deliberate dumbing down of America” that former Department of Education official Charlotte Iserbyt is constantly warning us about.  The American people are not nearly as mentally sharp as they once were, and with each passing generation it gets even worse.

Just check out some of the questions from the eighth grade exam that was discovered.  Do you think that you could correctly answer these?…

-Through which waters would a vessel pass in going from England through the Suez Canal to Manila?

-How does the liver compare in size with other glands in the human body?

-How long of a rope is required to reach from the top of a building 40 feet high to the ground 30 feet from the base of a building?

-Compare arteries and veins as to function. Where is the blood carried to be purified?

-During which wars were the following battles fought: Brandywine, Great Meadows, Lundy’s Lane, Antietam, Buena Vista?

A copy of the exam is posted below.  Today, it would be a real challenge for many college students to correctly answer most of these questions correctly…

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If you would like to know what the correct answers to these questions are, you can find them right here.

One of the areas that Americans are horribly deficient in today is geography.  If you give them a blank world map, most Americans can only identify a very limited number of countries.  In fact, according to a survey that was conducted by the National Geographic Society several years ago, only 37 percent of all Americans between the ages of 18 and 24 could find the nation of Iraq on a map of the world even though the United States was actively fighting a war there at the time.

Our young people are also horribly deficient when it comes to math and science.  At this point, 15-year-olds in the United States do not even rank in the top half of all industrialized nations when it comes to math and science literacy.

How do we expect to thrive as a nation with these kinds of results?

In a previous article entitled “Dumb As A Rock: You Will Be Absolutely Amazed At The Things That U.S. High School Students Do Not Know“, I discussed some more survey results that show how dumb our high school students have become…

*Only 43 percent of all U.S. high school students knew that the Civil War was fought some time between 1850 and 1900.

*More than a quarter of all U.S. high school students thought that Christopher Columbus made his famous voyage across the Atlantic Ocean after the year 1750.

*Approximately a third of all U.S. high school students did not know that the Bill of Rights guarantees freedom of speech and freedom of religion.

*Only 60 percent of all U.S. students knew that World War I was fought some time between 1900 and 1950.

Even more shocking were the results of a survey of Oklahoma high school students conducted back in 2009.  The following is a list of the questions that were asked and the percentage of students that answered correctly….

What is the supreme law of the land? 28 percent

What do we call the first ten amendments to the Constitution? 26 percent

What are the two parts of the U.S. Congress? 27 percent

How many justices are there on the Supreme Court? 10 percent

Who wrote the Declaration of Independence? 14 percent

What ocean is on the east coast of the United States? 61 percent

What are the two major political parties in the United States? 43 percent

We elect a U.S. senator for how many years? 11 percent

Who was the first President of the United States? 23 percent

Who is in charge of the executive branch? 29 percent

So why is this happening?

Well, for one thing, our system of public education is a complete and total joke.  We have millions of kids “graduating from high school” that can barely read, that have almost no ability to speak in public, that cannot write a decent essay and that cannot balance a checkbook.

It also doesn’t help that Americans (especially young Americans) are absolutely addicted to entertainment.  Americans spend an average of 153 hours watching television each month, and when we aren’t watching television we are watching movies, playing video games, surfing the Internet, etc.

When is the last time that you saw a young person actually reading a book that was not required for school?  Yes, it does happen once in a while, but it is so rare that it is kind of startling when you spot it happening.

But it is not just our young people that have been “dumbed down”.  Even our presidents have been “dumbed down”.  If you doubt this, just check out this amazing graphic which shows how the reading level of State of the Union addresses has steadily declined since the beginning of our nation.

Personally, I have an awareness that I should be able to think much more clearly than I am able to right now.  I can feel the effect that our society has had on my own mental abilities, and it frustrates me.

A lot has been written about the decline of our health here in America, but very little gets written about our mental decline.  That is a shame, because our ability to think clearly and rationally is so very critical to our future.

So what do you think about all of this?

Do you agree that America has been “dumbed down”?

Please feel free to share your opinion by posting a comment here

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Image credit: http://endoftheamericandream.com

Prof. Murray Sabrin Addresses the State of the Union

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Source: http://rtr.org

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Ron Paul Says Santorum Can’t Beat Obama

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Source: http://news.yahoo.com

Ron Paul said he doesn’t think that Rick Santorum can defeat President Obama in a general election. “I don’t see how that’s possible,” he said on Sunday on CNN’s State of the Union.

Paul also jabbed at Santorum for his aim “to control peoples’ lives” and what he framed as Santorum’s hypocrisy on the birth control issue.

Santorum admitted in a 2006 interview on Fox News that he supported Title X, a government program that provides funds for family planning services, including access to contraceptives. Santorum said he voted for it during his time as Pennsylvania Senator, and though he believes in access to contraceptives, he personally feels they’re harmful to women and that abstinence education is a “healthier” option.

“I don’t see how anybody can get away with that inconsistency—pretending he’s a conservative,” Paul said in reference to Santorum’s vote.

Paul dismissed the recent debate over contraception entirely, saying that while the other candidates discuss birth control, he’s concerned with “the undermining of our civil liberties, the constant wars going on” and the debt.

Paul said the focus on social issues is a fundamental problem and an unwise fight for the GOP.

“I think it’s a losing position,” he said. “I talk about it because I have a precise understanding of how these problems are to be solved,” on a state-specific level, he said.

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[CIM Comment]

Now more than every we need the Champion of the Constitution!

Please visit Ron Paul’s official campaign site by following the link below and donate today!

Ron Paul on CNN’s State of the Union on American Fascism

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Ron Paul on CNN’s State of the Union on American Fascism – Feb 19 2012

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Thanks to YouTube user http://www.youtube.com/user/VoteRonPaul12 for this fantastic video!!! It doesn’t get any better than this! Thanks to all of those who ardently support Ron Paul and his quest to restore the Constitution and our Republic! Please donate anything you can to the Paul campaign so we can awaken as many people as we can.

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[CIM Comment]

Now more than every we need the Champion of the Constitution!

Please visit Ron Paul’s official campaign site by following the link below and donate today!

We Are on the Road to Bankruptcy

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Source: http://www.realclearpolitics.com

By John Stossel

President Obama said in his State of the Union speech, “We’ve already agreed to more than $2 trillion in cuts and savings.”

That was reassuring.

The new budget he released this week promises $4 trillion in “deficit reduction” — about half in tax increases and half in spending cuts. But like most politicians, Obama misleads.

Cato Institute economist Dan Mitchell cut through the fog to get at the truth of the $2 trillion “cut.”

“We have a budget of, what, almost $4 trillion? So if we’re doing $2 trillion of cuts,” Mitchell said, “we’re cutting government in half. That sounds wonderful.”

But what the president was talking about is not even a cut. The politicians just agreed that over the next 10 years, instead of increasing spending by $9.48 trillion, they’d increase it by “just” $7.3 trillion. Calling that a “cut” is nonsense.

Mitchell gave an analogy: “What if I came to you and said, ‘I’ve been on a diet for the last month, and I’ve gained 10 pounds. Isn’t that great?’ You would say: ‘Wait, what are you talking about? That’s insane.’ And I said: ‘I was going to gain 15 pounds. I’ve only gained 10 pounds, therefore my diet is successful.’”

Democrats use this deceit when they want more social spending. Republicans use it for military spending.

And the press buys it. The Washington Post has been writing about “draconian cuts.”

“The politicians know this game,” Mitchell said. “The special interests know this game. Everyone gets a bigger budget every year. … And we wind up, sooner or later, being Greece.”

We are definitely on the road to bankruptcy.

“We have maybe 10, 15 years’ advanced notice. And what’s frustrating is that we’re not taking advantage of that, even as we see these other countries collapsing into social chaos and disarray.”

The Complete Story

Ron Paul on CNN State of the Union 01/29/12

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Please visit Ron Paul’s official campaign site by following the link below and donate today!

Ron Paul on State of the Union CNN 10/30/11

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Ron Paul “What We Have Now Is People With Pseudo Educations & Massive Debt! You’ve Indentured Them!

Ms. Crowley tries baiting Ron Paul into putting down his fellow candidates which would serve him no good and he is smart enough and has a high integrity to not play that insult game.  Happy Ron Paul got the media time but difficult to watch an interview where the answers are constantly interrupted by the interviewer.   Ms. Crowley’s attempts equal a failure for CNN.

 

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