Cutting through the B.S. on Cyprus

25 Monday Mar 2013

Posted by xraymike79 in Capitalism, Corporate State, Neo-Colonialism, Wall Street Fraud

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American Oligarchy, Bill O'Reilly, Capitalism, Corporate Mouthpiece, Corporate State, Corporatocracy, Cyprus Debt Crisis, Economic Collapse, Empire, Financial Elite, Fox News, Gross Inequality, Inverted Totalitarianism, Mano Singham, Neoliberal Capitalism, Poverty, Privatization, Regulatory Capture, Resource Wars, Social Unrest, The Elite 1%, unwashed public, Wall Street Fraud

I was researching a bit on the Cyprus meltdown and found the usual exaggerated talk of Russian “black money” and the spendthrift Cypriots, but cutting through the noise are two articles on this subject of the Cyprus debt crisis. The first is by theoretical physicist Mano Singham:

What the Cyprus crisis reveals about oligarchic control

“…Ordinary Cypriots, like ordinary citizens in the Netherlands and Germany and anywhere else, had little or no say in how their governments and banks operate. They just go about their lives, working and putting some money away in savings. But governments and big banks set policies that favor the global financial oligarchy and enable them to send vast amounts of money rapidly around the globe in order to get high returns, by lending to governments through the banks.

But when things go sour and governments cannot repay, what they do is pit ordinary people of the donor countries against the ordinary people of the recipient countries in their efforts to make sure that the oligarchy in untouched. By causing people to think that ‘hardworking’ Dutch and Germans are subsidizing ‘lazy’ Greeks and Spaniards and Cypriots, and throwing in ‘greedy’ Russians into the mix, they manage to obscure the fact that they are all getting exploited because the allegiance of all their governments is to the big banks, and that the global oligarchy is really calling the shots through its puppets in the IMF and the ECB.

One sees this over and over again in other contexts. In the US we see how the oligarchy pits Chinese or Mexican workers against American workers, making them see each other as the enemy and fight with each other, when the real winners, all the time, are the global oligarchy, while the real losers, all the time, are the workers in each country…

As we well know, when you[the Oligarch class] own the media, then you can spin reality anyway you want it and have the plebs fighting amongst themselves. This is why the informed person will never win with brain-washed people quoting Bill O’Reilly and other such talking heads of the corporate-owned media. Just smile and roll your eyes.

The other article is by Yves Smith at naked capitalism which goes more into detail on the American Oligarchy and dispels much of the myths surrounding Cyprus.

Why Does No One Speak of America’s Oligarchs?

…Now notice how much space I’ve devoted to showing that major parts of the conventional narrative about Cyprus are not all that they are cracked up to be. But see another implicit part of the story: that Russia’s oligarchs and “dirty money” are a distinctive national creation. Do you ever hear Carlos Slim or Rupert Murdoch or the Koch Brothers described as oligarchs? To dial the clock back a bit, how about Harold Geneen of ITT, which was widely known to conduct assassinations in Latin America if it couldn’t get its way by less thuggish means? (This is not mere rumor, I’ve had it confirmed by a former ITT executive)…

…there’s been a peculiar sanctimonious reluctance to apply the word oligarch to the members of America’s ruling class. Some of that is that we Americans idolize our rich, and the richer the better. No one looks too hard at the fact many of our billionaires started out with a leg up, parlaying a moderate family fortune (for instance, in the case of Donald Trump) into a bigger one, or having one’s success depend on other forms of family help (Bill Gates’ mother having the connection to an IBM executive that enabled Gates to license MS-DOS to them).

But the fact that some people have advantages and are able to make the most of them, isn’t the reason to pin the “o” word on America’s top wealthy. It’s that, like Simon’s prototypical emerging market magnates, they increasingly dominate our society and are running it strictly for own self interest and devil take the rest of us. And the results on important metrics are worse than in Russia. The Gini coefficient is a widely-used measure of income inequality. The Gini coefficient is worse (higher) for the US than for Russia…

…Top executives have operated in a manner that is less obviously thuggish than the violent ways of some of Russia’s richest, but the hollowing out of labor and shortened job tenures have come with high costs across broad swathes of society. And the oligarchs that Johnson singled out, the elite that control the biggest financial firms, have become singularly, systematically predatory. We discussed long from in ECONNED the scale and nature of the looting that produced the global financial crisis.

And let us not forget that people are dying thanks to bank-related abuses, even though it’s not as direct or obvious as by assassinations. On the mortgage front alone, we’ve discussed for three years how many foreclosures are simply unwarranted, some created by servicers for their own profit, many of the others unjustified because it would have been better for everyone, the borrower, the mortgage investors, the broader community, for the borrower to get a modification, but the servicer put its own bottom line first and foreclosed. There have been cases of suicides on the eve of foreclosures, and even a courtroom death that was attributed to the stress of fighting a dubious foreclosure. But in addition to these clear cases of death by bank, there are many more cases where the financial distress of a foreclosure leads to a later suicide, or the curtailment of spending on health measures that shorten lifespans. The major servicers have blood on their hands as much, likely much more, than the demonized Russian oligarchs, but everyone here is too polite to say so out loud.

Confucius said that the beginning of wisdom was learning to call things by their proper names. The time is long past to kid ourselves about the nature of the ruling class in America and start describing it accurately, as an oligarchy…

The colonization of the language by the corporate media is a large part of the way the masses can be controlled without firing a bullet, as illustrated by a commenter to the above article:

It’s absurd to call the crooks who have robbed or attempted to rob the Russian people of their wealth “oligarchs”, but then to turn around and call the cut-throat corporate vultures of Wall Street elite stewards of capitalism or “philanthropists” or merely “wealthy”.

The Western press has masterfully perpetuated this hypocritical view of the wealth accumulated in the West vs. Russia and vs. China as well. Notice that the press doesn’t dare call the Chinese billionaires in the communist party “oligarchs”.

It’s interesting how these terms get latched on to certain nations and cultures in pop-foreign-affairs discussions. It’s entirely originated by Western journalists pushing a corporate narrative of Americana that excludes the harsh reality of both the inequality and injustice of our modern system.

I’ll add that oligarchy as a term and a topic of political discussion goes back to Aristotle and the Greek philosophers.

You can’t sustain a democracy in an oligarchic state. The writers on Athenian democracy understood that 2000 years ago,”

– Chris Hedges, “The World As It Is: Dispatches on the Myth of Human Progress

The rich in the US are controlling policy. Since the 80′s they’ve been rigging the tax and regulatory framework to redistribute wealth upward.

The reality is that conservatives have been quite actively using the power of the government to shape market outcomes in ways that redistribute income upward. However, conservatives have been clever enough to not own up to their role in this process, pretending all along that everything is just the natural working of the market. And, progressives have been foolish enough to go along with this view.”

– Dean Baker, “The Conservative Nanny State

It started with Reagan, got worse in Clinton, and was maintained and finalized with the W. Bush tax cuts and benign neglect which Obama has continued (the exception are cases like Enron and Madoff, where rich people got hurt).

Oligarchy in its most basic definition is one where the ruling class protect and grow their wealth in their rule of a nation or society. Is there any doubt that, given the trends since the 80′s in both market deregulation, tax expenditures for the wealthy, and the growth in inequality and destruction of the middle class, that we have been in an oligarchal rule under the bankster corporate overlords and the military industrial complex, which includes all the moguls of Wall Street in energies, insurance, and banking.

It’s worth noting that Simon Johnson, someone who has demonstrated his competence in academia and policy at the IMF, and who has also tirelessly attempted to inform the public of the misdeeds of the powerful money changers, has focused specifically on the American oligarchs in the finance industry, as early as 2009:

http://www.npr.org/templates/story/story.php?storyId=103122382

In times of crisis, if the government doesn’t stand up for the people and use taxation and spending to fix the gross inequality that comes about from forms of unfettered capitalism, then the result is a massive wealth grab…

I think that sums up the situation quite nicely, and in a world of depleting resources we’ll see more of this greedy scramble for the last few slices of the economic pie as it shrinks. Get ready to pitch a tent in an American shanty town coming near you.

Chomsky Poses a Question

07 Thursday Mar 2013

Posted by xraymike79 in Capitalism, Climate Change, Corporate State, Wall Street Fraud

≈ 3 Comments

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Addiction to Fossil Fuels, ALEC – American Legislative Exchange Council, Capitalism, Climate Change, Climate Tipping Points, Collapse of Industrial Civilization, Consumer Culture, Corporate State, Corporatocracy, Eco-Apocalypse, Environmental Collapse, Extinction of Man, Financial Elite, Gross Inequality, Henry Bemis, Inverted Totalitarianism, Mass Die Off, Noam Chomsky, The Elite 1%, The Twilight Zone, unwashed public, Wall Street Fraud

In his latest essay, Chomsky asks the simple question, “Can Civilization Survive Capitalism?” And when he says “capitalism”, he means the true capitalism we have today here in America in which capital has corrupted and usurped government regulation and legislation to the (N)th degree. Crony capitalism is the same as unfettered capitalism which is the end result of all types of capitalism if they are left to play out to their inevitable conclusion, something Chomsky calls “really existing capitalist democracy” or RECD for short.

First, Chomsky proclaims the obvious fact that RECD is incompatible with true democracy and that civilization cannot survive under RECD with its corporate-run government passing as faux democracy. He then asks whether a functioning democracy under a capitalist system would make a difference.

For the litmus test, Chomsky confronts the most apparent and grave danger facing mankind – environmental catastrophe, an unfolding crisis we here at this site are very familiar with. As is often the case in an RECD, what the public wants and what the corporate forces ruling the country demand are two very different things. To illustrate this divergent reality, Chomsky quotes from recent studies by Kelly Sims Gallagher in the current issue of Daedalus, the journal of the American Academy of Arts and Sciences. In contrast to well over a hundred countries which have enacted renewable energy policies and targets, the U.S. “has not adopted any consistent and stable set of policies at the national level to foster the use of renewable energy.”

And it’s not by lack of public desire that such renewable energies have not been enacted. On the contrary, the vast majority of Americans have favored such action in order to avert the very environmental catastrophe currently threatening life as we know it. But as Chomsky wryly comments:

The fact that the public is influenced by science is deeply troubling to those who dominate the economy and state policy.

Now to combat this influence of science on the minds of the common people, our corporate overlords have used one of their lapdog lobbyist groups, ALEC, to enact legislation with the Orwellian title “Environmental Literacy Improvement Act” which would actually cast a cloud of doubt over the science of climate change by forcing schools to allow alternative interpretations, i.e. climate change denial:

The ALEC Act mandates “balanced teaching” of climate science in K-12 classrooms. “Balanced teaching” is a code phrase that refers to teaching climate-change denial, to “balance” mainstream climate science. It is analogous to the “balanced teaching” advocated by creationists to enable the teaching of “creation science” in public schools. Legislation based on ALEC models has already been introduced in several states.

Of course this “balanced teaching” won’t include the views of those much more astute scientists who have accurately said that the IPCC’s climate models and forecasts have been and continue to be much too conservative and optimistic. The corporate intrusion into America’s classrooms will undoubtedly include viewpoints from people who say that CO2 is good for the planet and that God would not allow man to destroy himself.

Again, Chomsky explains that such dumbing down of the populace is done intentionally to serve the short-term profit motives of our corporatocracy. Keeping the masses ill-informed and living within a cloud of propaganda and infotainment is the primary objective of the ALEC legislation. Creating a country full of Al Bundys and Homer Simpsons has been an ongoing process since the inception of a post-World War II Consumer Culture. When the primary tool for constructing a nation’s identity – “The Media” – is motivated by money, society is destined for a meltdown. We are following the doctrine of ‘preordained destiny’ right into the annals of extinction alongside the dinosaurs and the Dodo bird.

…Within the RECD system it is of extreme importance that we become the stupid nation, not misled by science and rationality, in the interests of the short-term gains of the masters of the economy and political system, and damn the consequences.

These commitments are deeply rooted in the fundamentalist market doctrines that are preached within RECD, though observed in a highly selective manner, so as to sustain a powerful state that serves wealth and power.

Chomsky compares the corporatocracy’s willful ignorance on human-induced climate change to that of the ongoing banking crisis and the financial sector’s criminal behavior in disregarding “systemic risk”, i.e. the risk of collapsing an entire financial system or entire market. The systemic risk of continuing to exploit fossil fuels is more blatantly obvious every week, month, and year that passes. Enjoying 20/20 hindsight and taxpayer-funded bailouts won’t be an option for a crash of the global biosphere.

Environmental catastrophe is far more serious: The externality that is being ignored is the fate of the species. And there is nowhere to run, cap in hand, for a bailout.

In future, historians (if there are any) will look back on this curious spectacle taking shape in the early 21st century. For the first time in human history, humans are facing the significant prospect of severe calamity as a result of their actions – actions that are battering our prospects of decent survival.

Those historians will observe that the richest and most powerful country in history, which enjoys incomparable advantages, is leading the effort to intensify the likely disaster. Leading the effort to preserve conditions in which our immediate descendants might have a decent life are the so-called “primitive” societies: First Nations, tribal, indigenous, aboriginal.

The countries with large and influential indigenous populations are well in the lead in seeking to preserve the planet. The countries that have driven indigenous populations to extinction or extreme marginalization are racing toward destruction.

Over four centuries of commodifying the planet and two centuries of wallowing in a fossil fuel high have turned the industrialized world into crazed drug addicts marching towards their own destruction. It is only the planet’s unindustrialized “primitive people’ who remain clear-minded enough to act rationally and wisely. By all estimations, having even a semi-functioning democracy under a capitalist system would exponentially improve our odds of survival; but under the current regime, no living thing will get out alive when glorified apes dressed in suits are flinging shit and wielding weapons of mass destruction.

This observation generalizes: Throughout the world, indigenous societies are struggling to protect what they sometimes call “the rights of nature,” while the civilized and sophisticated scoff at this silliness.

This is all exactly the opposite of what rationality would predict – unless it is the skewed form of reason that passes through the filter of RECD.

Our present predicament is best described by a commenter in regards to the short film ‘Time Enough at Last‘:

At the Mercy of Capital Accumulation

05 Tuesday Mar 2013

Posted by xraymike79 in Capitalism, Corporate State

≈ 2 Comments

Tags

Capitalism, Corporate State, Financial Elite, Forbes 2013 List of the World's Richest People, Gross Inequality, Inverted Totalitarianism, Privatization, Regulatory Capture, Social Unrest, The Elite 1%, Wall Street Fraud

In my post ‘Eat the Rich‘, reader Aptitude Design posted a video that deserves a place of its own. The video illustrates the shocking disparity of wealth(as of 2009) in America compared what the general population thinks is the current situation and what they believe the ideal situation would be. And the gross inequality is continuing to get even worse:

I notice the Koch brothers are tied for 6th place. These are the people who control government legislation and regulation. The lust for profits perverts everything from the food we eat (Salt, Sugar, Fat) to the choices made on energy policy. You could say that the fate of mankind on planet Earth is at the whim of capital accumulation and those few at the top of that heap.

The blurring of the line that separates profit from state,” I wrote, “has had a far more devastating effect on American values — indeed, on the very notion that anything besides a good financial buzz even has value — than the blurring of that more famously wobbly line that separates church from state.”

I fear this isn’t simply about occasional and inevitable corruption, but the righteous, for-profit gaming of a broken social system in the name of a privatized world. The driving force is privatization, and it seizes on divisive, us-vs.-them “ideals” as moral pretexts for intensifying the profitable breakup of the human commons — that which belongs to all of us, such as “human rights” and “justice.“
~Robert Koehler

The Separation of Profit and State

While I take some time off to recuperate from the stomach flu, chew on this video:

[youtube:https://www.youtube.com/watch?v=QPKKQnijnsM%5D

Eat the Rich

02 Saturday Mar 2013

Posted by xraymike79 in Capitalism, Climate Change, Corporate State, Ecological Overshoot, Environmental Degradation, Inequality, Pollution, Wall Street Fraud

≈ 10 Comments

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Barack Obama, Capitalism, Class War, Climate Change, Collapse of Industrial Civilization, Corporate State, Corporatocracy, Eat the Rich, Ecological Overshoot, Economic Collapse, Environmental Collapse, Financial Elite, Gross Inequality, Inverted Totalitarianism, Jacob "Jack" Lew, Privatization, Regulatory Capture, Resource Wars, sequestration, The Elite 1%, unwashed public, Wall Street Fraud, War for Profit

The Sequester has been the big topic in the news as of late. What it amounts to is austerity for the masses in America. Obama created this stealth austerity maneuver with his newly appointed Secretary of Treasury, Wall Street shark Jacob Lew:

…President Obama and a host of administration spokespersons have condemned the Sequestration, explaining how it will cause catastrophic damage to hundreds of vital government services. Those of us who teach economics, however, always stress “revealed preferences” – it’s not what you say that matters, it’s what you do that matters. Obama has revealed his preference by refusing to sponsor, or even support, a clean bill that would kill the sequestration threat to our Nation. Instead, he has nominated Jacob Lew, the author of the Sequestration provision, as his principal economic advisor. Lew is one of the strongest proponents of austerity and what he and Obama call the “Grand Bargain” – which would inflict large cuts in social programs and the safety net and some increases in revenues. Obama has made clear that he hopes this Grand Betrayal (my phrase) will be his legacy. Obama and Lew do not want to remove the Sequester because they view it as creating the leverage – over progressives – essential to induce them to vote for the Grand Betrayal…

In a rare case of truth-telling, a San Francisco news station spells out exactly what this stealth austerity is intended to do – strip away what is left of the social safety net and the remnants of the New Deal:

So while the financial elite are protected by wealth security insurance programs, aka quantitative easing and endless bailouts, the carcass of Main Street is picked clean by various asset grabs. Conservatives are correct in that you cannot have endless growth of debt and spending, but their demand of government cuts as the way to bring back growth and renew the economy will not work. It will serve only to further push down an already devastated middle class, hastening America’s fall into a barbaric neo-feudal society in a world of resource-scarcity and environmental devastation.

…It follows that neoliberal leaders of governments and their corporate masters view the ongoing economic contraction as a temporary deviation from the “natural” pattern of wealth accumulation-to-elites-trickle down-to-the-masses economics made possible by constant growth. Therefore, economic elites see an “opportunity” to use austerity as a cover to increase upward wealth transfer.[xi] A bonus is to accomplish the long-standing atavistic goal of rolling back[xii] the gains of the New Deal and Great Society.[xiii] Hence the massive governmental and corporate propaganda assaults on Social Security, Medicare and Medicaid –and other social benefits programs- as “Entitlements” that allegedly weaken the collective moral character, fiscal integrity and work ethic of the nation. The central premise of this attack -which is arrantly false yet widely disseminated without skepticism by mainstream media- is that these entitlements[xiv] for the “Lesser People”[xv]place the United States government at high risk of debt[xvi] default[xvii] or bankruptcy.[xviii]

Sixty years ago Karl Polanyi anticipated the present crisis when he wrote that belief in “free market forces” –a dogma at the core of neoliberalism[xix]– is a direct threat to the “natural environment…[which also] would result in the demolition of society.”[xx]…

…It is vital to remember that on the whole, they do not yet understand why modern societies -right now- are entering a post-growth world, which augers a context where government public policy –if it overcomes neoliberalism,[xxxv] which is not guaranteed- faces the central challenge of justly divvying up a shrinking economic pie. (Remember that almost every public health lecture, article and discussion in the United States ends with some variation of this exhortation: “We’re the wealthiest and greatest nation on earth. We’ve got the technology, know-how and resources to do the job; we just need the determination to commit them…”)

Neoliberal governments are blind to the emerging world of degrowth and continue apace facilitating the 1% to impoverish and cannibalize widening segments of the 99%, in essence producing more and more socioeconomically and politically superfluous people in the process. Neoliberalism can only operate in a social world where as the economy contracts -for thermodynamic reasons- wealth and other economic benefits continue to flow upwards, while the costs and burdens fall upon those outside the tiny elite economic… – source

In other words, capitalism is cannibalizing itself – eating the underclass and environment to keep this unchecked growth of wealth accumulation intact for the upper class, as scientist Brad Jarvis also explains:

The big news of the week was, of course, the “sequester,” one of several attempts by radical government-haters to open the door to unrestrained pillage of nature and society; it will cut back on many of the means we currently have for limiting and adapting to environmental damage. The scale of that environmental damage includes, of course, more than climate change: recent research shows that wild bees are more critical to our food supply than honeybees, and being wiped out by the top mechanism of extinction, habitat loss…

…I recalled something I learned a few years ago about what is perhaps the key driver of business operation, pursuit of profit. Profit must continuously increase, preferably at an exponential rate, for a business to be considered successful. There are several ways to do so: add value to what you produce, increase demand for what you’re already making, and reduce costs. The first two approaches increase consumption if the business can provide supply to meet demand, which is bad enough in a resource-constrained world. The last approach, however, is the most damaging when applied exponentially, because there is always a minimum cost required – you can’t get something for nothing – and if you’re “successful,” you are likely just good at forcing someone else to eat that cost. Many of the mechanisms directly causing unhealthy income and social inequality in this country and elsewhere may be directly tied to the application of this approach, but it has even more far-ranging effects. Because business is the most powerful human enterprise, society and the planet’s other species are effectively being forced to give more than they can afford and still survive. We are all dying as a result. – source

What else can I say, but that we will eventually have to eat the rich.

Down by Law

17 Sunday Feb 2013

Posted by darbikrash in Capitalism, Consumerism, Corporate State

≈ 5 Comments

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America's Collapsing Middle Class, “Inland Empire”, Blackstone Group, Capitalism, Class Consciousness, Corporate State, Financial Elite, Governor Jerry Brown, Gross Inequality, Jim Jarmusch’s 'Down By Law', Oaktree Capital Management, Political Economy, Real Estate Bubble, Regulatory Capture, Rentier Class, Ronald Reagan, San Bernardino County, Southern California, The Elite 1%, Wall Street Fraud

Jim Jarmusch’s 1986 masterpiece “Down by Law” with its rolling panorama of bleak pre-Katrina Louisiana, and distant, blank character stares suggesting inchoate malaise, effectively captured the unarticulated angst of the ascendant Reagan generation.

Like canaries in a coal mine, Jarmusch and other artists of the era anticipated the contemporary assault on class consciousness with pinpoint precision-decades in advance of the more cognitive punditry in evidence today.

This brings us to an interesting development in today’s post crash histrionics, which provides a conveniently compact diorama on display for all to view and interpret. We begin with what is intuitively obvious to any who care to observe, and that is the dynamic change in the character of the residential real estate market in most parts of the country, but especially evident in those areas hardest hit by the bursting bubble of speculative real estate.

This can be nicely cataloged by examining the infill areas of Southern California know as the “Inland Empire”.

Pre-2008 crash, these areas offered semi-affordable buying opportunities for homeowners priced out of the highly desirable coastal California markets, as well as respite for inner city residents looking to escape gang violence. Properties could be had for 1/3-1/2 of the price of a comparable dwelling in the more desirable areas near the coast and employment centers, but in return a 30-50 mile one way commute was extracted as compensation. In the era of $2/gal gas, this was deemed acceptable, especially as around the water cooler scuttlebutt yielded the notion that such a property could be bought and sold at a 50% profit 3 years later, with the proceeds used to buy a house closer to the employment centers thereby rendering the commute temporary.
This became a de rigueur business plan of many lower middle class workers, who one must acknowledge otherwise had a 1 in 10,000 chance in aggregating enough savings to achieve even a modicum of survivability in retirement.

I would make the case that the motivations were at the very least in line with the conventional bourgeoisie wisdom of bootstrapping one self’s upward in the social mobility chain by taking on some risk and making investments to better one’s life standing.

This explanation of course runs afoul of the current bourgeoisie narrative, which seeks to demonize those that participated in such shenanigans as irresponsible slobs and layabouts, lying on loan applications in a blatant attempt to defraud the salt of the earth folks in the financial industry of their hard earned capital. Because to concede that these people were simply following the time tried examples set forth by their more well endowed peers would be to point out structural cracks in a system that is perennially corrupt and unworkable.

So it goes something like this, if I do it and succeed, I shall be valorized, if you do the same thing and fail, it’s because you’re a dishonest layabout gaming the system.

OK, so now here is where it gets interesting.

The combination of rising gasoline prices, massive job losses and a real estate market in free fall meant that the “Inland Empire” was to become a major epicenter in residential foreclosures. To add insult to injury, the daily commutes to employment centers had become traffic nightmares, with a typical 40 mile commute taking 2 hours each way, so naturally private companies put in toll roads and toll lanes on state owned freeways and charged substantial toll fees to avoid this congestion.

As is well documented today, when 15 homes in a tract of 40 homes goes into foreclosure, no one else can sell their home either.
So guess what happens? Groups of institutionalized investors swoop in to buy these properties for pennies on the dollar, paying for them in cash as no realistic mechanism for property appraisal exists when such a large percentage of homes are in foreclosure.

All this anguish comes in pursuit of a modest home in the exurb of San Bernardino County, the epicenter of the Southern California housing crash. Plummeting values here sparked a vicious wave of foreclosures.

But it’s precisely because prices fell so far here that Sepe can’t buy a house now. In a sharp irony, many would-be homeowners in hard-hit markets can’t compete with a flood of all-cash offers from investors, some backed by Wall Street war chests.
So they’re missing out on the only upside of the real estate crash: historically low prices and interest rates.

The repeated rejections come despite Sepe’s solid qualifications: a stable job as a cell tower technician and a pre-approved home loan. He watches as houses hit the market, then get scooped up within an hour. He offered a battle metaphor to describe his plight.

“I am this little country,” he said. “And it’s like this huge country is coming and attacking my country, and I can’t win.”

No one thinks to consider this effect in terms of class consciousness, as the investors are of course valorized and the free market is commended for saving the real estate world in general, and those hapless former homeowners in particular. It is important to realize what is happening here, before our very eyes, and that is a.) the erasing and transference of an entire generation of home owners into permanent renters, and b.) the beginning of capital consolidation into the rentier class, effective displacing mom and pop rental property owners by big investment conglomerates like Blackstone Group and Oaktree Capital Management.

San Bernardino County, as well as two of its largest cities, Ontario and Fontana, stirred a national controversy when it recently considered — then shelved — a plan to use eminent domain to seize and restructure underwater mortgages. In a testament to the lasting effects of the crash, about 40% of borrowers in the region still owe more on their properties than they’re worth, according to mortgage tracking firm CoreLogic.

But a turnaround is well underway, thanks in part to deep-pocketed investors snapping up bargains with cash. The housing supply is now so tight that it’s common for home shoppers to put in 20 or 30 offers before securing a house, real estate agents say.

Aware of the destructive dynamic and further slide down the slope of income inequality, the county (with support from the State under Jerry Brown) put forth a proposal to seize the blighted properties under eminent domain laws, and then once owned by the county, to issue a county bond to provide funds at below market rates to loan back to the foreclosed homeowners allowing them to keep their homes.

Note the issue here is not so much below market loan rates, but availability of a lender (the county) to fill in for private mortgages, who will not loan under any circumstances into these blighted neighborhoods.

But of course this well meaning effort was drowned in the bathtub by the small gubymint crowd, you can well imagine the hew and cry of the conservative bourgeoisie when faced with such an obvious interference in the “free market”. Imagine the perceived travesty of a government entity intervening to prohibit free market evangelists from extracting their pound of flesh and smashing down an entire generation of the middle class back to the stone age and, I hope it goes without saying, perpetually converting these hapless suckers into a permanent revenue stream while they pay rent.

Private equity groups, including Oaktree Capital Management and Blackstone Group, have formed or partnered with companies dedicated to buying single-family homes. Unlike the flippers made famous by the housing boom, these institutional investors are in it for the long haul. They’re buying homes in bulk, then renting and holding them to reap long-term price appreciation.

Some of these private equity giants and Wall Street firms have employed former homebuilding pros and partnered with big apartment managers. Their plan is to transform the single-family home rental business, once a largely mom-and-pop affair, into a full-scale industry.

The Santa Monica real estate investment firm Colony Capital, founded by Tom Barrack, last year won an auction by the federal government to purchase 970 foreclosed homes in California, Arizona and Nevada from mortgage titan Fannie Mae for $176 million. Most of the California properties were in the Inland Empire.

Carrington Mortgage Holdings, based in Aliso Viejo, has partnered with Oaktree to buy and rent out single-family homes. Carrington spokesman Rick Sharga acknowledged that cash buyers have an advantage. But he said competition has helped revive a depressed market.

As promised, this neatly packaged diorama shows the full circle of exploitation and alienation of a full blown class war, in one easy to grasp trajectory:

– Financial capital consolidates and exploits the residential home mortgage market, securitizing these lousy loans for huge profits.

– When the boom goes bust, the same actors campaign aggressively to prohibit any mortgage relief, forcing widespread bankruptcies and foreclosures.

– The marketing arm of the financial capitalist spends tens of millions of dollars socializing the idea that these homeowners were and are morally deficient, and deserve no recourse. They are to be punished for their transgressions.

– These same financial capitalists with prey now firmly trapped then look for ways to further exploit their captives, and find examples in privatizing freeway systems to extract more revenue from commuters trapped in gridlock.

– The conservative and tea party fanatics interrupt their sheet-less Klan party long enough to advance the popular notion that further deregulation is needed, and demonize any government participation that might circumvent capital’s relentless desire to crush all but the few. In their capable hands, it becomes fashionable to decry government of any kind with a full throated call of Statism, and a groundswell is created to “restore liberty” and allow unfettered capitalism to thrive.

– Having discouraged any state intervention by conflating ideological association to diminished freedom, the mark is ready for the takedown. Large groups of investors swoop in with pennies-on-the-dollar all cash purchases of distressed properties en masse, displacing large segments of the population, and sometimes even renting the properties back to the original homeowner.

The upshot of this large scale displacement by capital effectively unwinds 70 years of New Deal and post WWII governance. State encouragement of home ownership was thought to be a useful means to ensure “skin in the game” for the working class, as in encouraging home ownership, labor strikes were thought to be less likely to occur with heady financial commitments hanging overhead, as well as community ties, might discourage labor activism.

They were right.

So this leaves a vulnerability and an internal contradiction, as large groups of former homeowners become permanent renters, they are disinclined to invest in the community, local economic spending goes way down (what renter will invest in the property?) impacting local business, and property crimes go way up as alienation and other side effects of visible and blatant exploitation percolate to the surface for the working class. Ironically, the size and magnitude of police state intervention will rise significantly as compared to the aborted eminent domain intervention, as now the upper middle class and general bourgeoisie will demand increased police (State) action to knock down property crimes and lawless behavior. Think police checkpoints and constant aerial drone surveillance of these communities.

The other effect as mentioned is the consolidation of the rentier class, wherein these large investment groups begin to “brand” the single family residence as part of a larger portfolio of related revenue streams, e.g. grouping big box stores nearby corporate owned rental developments in backdoor revenue sharing arrangements, eventually degrading to a truck system to more efficiently extract any remaining surplus from the working class. This large scale consolidation will bring the capitalist death spiral to small scale rentiers who own only a few rental properties, they will face exclusionary tactics wherein associated mercantilist outlets will give discounts to large company renters, but not to renters of the small independently owned properties. Further, the coercive laws of competition will be brought to bear on the independents, wherein access to community pools and other trinkets will be offered free or nearly free by the large corporate rent factories, and marketed as “lifestyle” destinations with corporate parties for renters only extending into the domain of social reproduction.

The demise of the independent rentier, or more aptly, the petite bourgeoisie, will follow almost as quickly as the former homeowner himself.

The Violence and Coercion of the So-Called free Market (Guns, Slaves, & Steal)

31 Thursday Jan 2013

Posted by xraymike79 in Capitalism, Climate Change, Corporate State, Empire, Environmental Degradation, Inequality, Military Industrial Complex, Neo-Colonialism, Peak Oil, Pollution, Wall Street Fraud

≈ 3 Comments

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Capitalism, Climate Change, Collapse of Industrial Civilization, Corporate Neo-Colonialism, Corporate State, Corporatocracy, Economic Collapse, Empire, Environmental Collapse, Extinction of Man, Financial Elite, Globalization, Gross Inequality, Hydro-Colonialism, Inverted Totalitarianism, Mass Die Off, Military Industrial Complex, Neoliberal Capitalism, Peak Oil, Peak Water, Poverty, Resource Wars, Roberto De Vogli, The Elite 1%

My internet is still down, but will hopefully be back up by tomorrow night so I can put out a few posts I was contemplating. In the mean time, an interesting excerpt from a new book by Roberto De Vogli, associate professor in global health at the University of California Davis and University College London.

Excerpt…

And of course it continues today as has been discussed in previous posts on this site. So much for the “free market”.

The Illusion of Money and the End of Nature

27 Sunday Jan 2013

Posted by xraymike79 in Capitalism, Climate Change, Consumerism, Corporate State, Ecological Overshoot, Empire, Environmental Degradation, Inequality, Pollution

≈ 8 Comments

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Addiction to Fossil Fuels, Austerity for the Poor, Barack Obama, Capitalism, Climate Change, Collapse of Industrial Civilization, Consumerism, Corporate State, Corporatocracy, Ecological Overshoot, Economic Collapse, Economic Growth, Empire, Environmental Collapse, Extinction of Man, Financial Elite, Globalization, Gross Inequality, Inverted Totalitarianism, Mass Die Off, Privatization, Regulatory Capture, The Elite 1%, The Illusion of Money, unwashed public, Wall Street Fraud, War for Profit

In order to understand why the world is locked into a blind stampede over a cliff, you have to understand how the world runs, i.e. its socio-economic system. A large percentage of the population doesn’t understand that the world is ruled by multinational corporations or that the citizenry are simply disposable pawns with no voice in their fate.

The capital that flows around the world, betting on essential staples of life and demanding that barbaric austerity measures be imposed upon the masses, is an entity of its own. It’s a massively destructive force that enslaves people and rips apart the environment. In the Banana Republic of America where a once thriving middle class was sold down the river, nearly half of workers will have a budget of $5 per day when they reach retirement age. Maybe McDonald’s will create a 99 cent meal to cash in on that starving demographic. Oh, they already have…

As far as the environment goes, it is a doormat for the creation of money:

To get a better understanding of America’s place in the global corporatocracy which is ushering in the social and environmental apocalypse, we turn to the author of ‘The Elements of the Corporatocracy‘ and his blog where he posted ‘How the U.S. Corporatocracy Fits in the Global Scheme‘, an excerpt of which follows:

When you have such an immovable supersystem of puppet governments and marauding transnational corporations running the show, radical movements questioning and trying to change the status quo are easily co-opted or crushed, a recent example being the Occupy movement. In a world where extinction of the human species is guaranteed by climate chaos and the myriad of other crises created by industrial capitalism, a slow and incremental regimen of change is not what is needed to stave off collapse. Unfortunately, the entrenched interests of the financial elite and the nation-states they control won’t allow for any sort of abrupt and profound transformation. As Professor Julian Cribb has correctly identified, a culture of money worship and the mass delusion of money’s illusory value is at the heart of the global crisis. The high priests of money are protected at the expense of all else:

Show me a democracy that has an impoverished public life and I will show you one dominated by oligarchs and plutocrats driven by profit maximization that will do anything to get over. Gangster activity is what it is. Scandal after scandal and when you get caught, you PAY MONEY, you don’t go to jail. Plutocrats wage class war, getting away with CRIMES (mortgage fraud, market manipulation, insider trading, securities fraud) every day. But get caught with a bag of weed in the hood and you are in the system, for LIFE. ~ Cornell West

For humans living under such a capitalist society, money determines whether you can eat or not, whether you have shelter or not, whether you can clothe yourself or not, or whether you can afford medical treatment or not. Quite literally, if you have no money in a capitalist society, you die. Money in today’s globalized capitalist system is everything.

When President Obama speaks about confronting climate change, he does so with the mindset of keeping the current capitalist power structure in place. Because of this self-defeating approach, everything he says is rendered useless rhetoric.

Putting aside the gross social inequalities and injustices of our current system, you tell me how we can avert disaster with the following realities:

Without changing the socio-economic system under which we live, no real solutions for the multiple civilization-ending crises we face can be properly addressed. There is an expiration date for this unending conversion of the natural world into fake symbols of wealth hoarded and squandered by a greedy few…

Capitalism, Population Growth, & Climate Change

14 Monday Jan 2013

Posted by xraymike79 in Capitalism, Climate Change, Corporate State, Ecological Overshoot, Empire, Environmental Degradation, Pollution, Wall Street Fraud

≈ 23 Comments

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'A Great Aridness', Capitalism, Climate Change, Climate Chaos, Collapse of Industrial Civilization, Corporate State, Corporatocracy, Ecological Overshoot, Economic Growth, Financial Elite, Gross Inequality, Inverted Totalitarianism, Montana governor Brian Schweitzer, Overpopulation, Phoenix Boomburbs, PIMCO's Bill Gross, Regulatory Capture, The Elite 1%, Urban Sprawl, William deBuys

I mentioned earlier that I’d talk about my reading list. I’ve got a few books I’ll review for this site. The one I’m reading currently is about how the U.S. Southwest, where I live, will be affected by anthropogenic climate change. The book is ‘A Great Aridness‘ by William deBuys.

A few excerpts from the intro:

As deBuys mentions in his intro, the housing market in the Southwest, in particular Phoenix, took a hit in 2008 but is expected to get back on the [population] growth track in the near future.

I will go so far as to say that not only growth but capitalism itself may be in part dependent on a growing population,” Pacific Investment Management Co.’s Bill Gross wrote. – link

Capitalism is fueled by population growth. More people = more consumption = increased GDP and tax revenues.

Elliott D. Pollack, CEO of the economic and real estate consulting firm Elliott D. Pollack & Co., said Arizona’s economic growth depended on adding 100,000 people every year. The population boom fueled growth in “people–serving” jobs, such as doctors, real estate agents and salespeople, he said.

Pollack said he doesn’t expect Arizona to return to the job growth of 2007, just before the crash, until 2015.

“It will be almost a lost decade,” he said. – link

The following satellite pictures tell the tale of the exploding population in Phoenix, even coining a new phrase to describe such explosive growth suburbs as “Boomburbs“…

In the early twentieth century, when big American cities spawned satellite cities, those satellites were often downscaled mimics of the cities they surrounded. Like New York City, for example, its suburb Newark, New Jersey, had its own downtown. In the second half of the twentieth century, however, a different kind of satellite city emerged: a populous suburb with no central business core. “Boomburbs”—suburbs with populations of 100,000 or more that have maintained double-digit growth over decades—are primarily a phenomenon of the southern and western United States….

…Like much of the American Southwest, southern Arizona is arid, and agriculture depends on irrigation. As a result, cultivated fields—rectangles of green and brown—contrast with the pale tan of the naturally bare desert soil. In the 1989 image, most of the land east of Chandler is agricultural. Between 1989 and 2009, however, most of the fields give way to the blue-gray colors of buildings and pavement. In 2009, only a small number of agricultural fields remain, mostly east and south of Route 202. Because many of the United States’ boomburbs occur in the arid Southwest, planning for their water needs is particularly challenging for metropolitan and municipal governments. – link

Getting back to the book’s theme of climate change and the U.S. Southwest, a ballooning population is running headlong into a future characterized by a “new form of desertification… [brought on by] industrial society’s abuse of the atmosphere.” Radical transformation of our corporate-monopolized economy is the only way that climate change can effectively be dealt with. This would, however, appear all but impossible when any form of true government oversight and responsiveness to the citizens has been thoroughly corrupted and sidelined by corporate interests. According to a review in Truth-Out, deBuys illustrates in detail how corporate power is preventing any such changes:

…Of all his stories documenting the choppy and chaotic effects of global warming in the Southwest, especially the rising temperatures and the plagues of droughts, fires, and bark beetles killing thousands of acres of forest trees, I found the natural history and political drama of Mount Graham the most compelling. This is an example where political corruption and higher temperatures collude in unleashing the decline and fall of the Southwest…

…DeBuys sums up both the science and the biopolitics (ruthless politics) sealing our fate. He sees the triumph of corporate power as a resurrection of the 1520 Requerimiento, Spain’s legal justification for the enslavement and murder of the resisting indigenous people to clear the way for Spanish plunder and political control in the Southwest and Latin America. Indeed, the Requerimiento marked “the momentum of Spain’s imperial impulse,” no different than “the momentum of contemporary climate change today.”

The connection of past colonialism with its present variety, triggering and making global warming possible, is an insight into and a lesson on how the future is likely to be…

There are two major differences between the avarice of the Gilded Age Robber Barons and that of today’s all-powerful multinational corporations. Firstly, the corporations of today are much more omnipotent and control society through a form of despotic rule called ‘inverted totalitarianism‘. As Montana Governor Brian Schweitzer exclaimed last summer, “They were pikers compared to what we’re doing now.” Secondly, an egregious wealth gap and the political disenfranchisement of the worker do characterize both periods, but now the world must contend with climate chaos along with a host of other environmental problems, any one of which can bring down modern civilization.

Earth to Humans: “Get Off Your Merry-Go-Round Ride to Extinction”

11 Friday Jan 2013

Posted by xraymike79 in Capitalism, Climate Change, Consumerism, Corporate State, Ecological Overshoot, Empire, Environmental Degradation, Inequality, Military Industrial Complex, Peak Oil, Pollution, Wall Street Fraud

≈ 17 Comments

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Capitalism, Climate Change, Collapse of Industrial Civilization, Consumerism, Corporate State, Corporatocracy, Devon G. Peña, Drought in America's Bread basket, Droughts and Fire in Australia, Droughts in Brazil, Ecological Overshoot, Economic Growth, Empire, Environmental Collapse, Financial Elite, Gross Inequality, Inverted Totalitarianism, Kulturecritic, Mass Die Off, Military Industrial Complex, Overpopulation, Peak Oil, Poverty, Privatization, Sandy Krolick, The Elite 1%, unwashed public, Wall Street Fraud, War for Profit

Hello dominant life form of planet Earth. Yes, that means you Homo Sapiens. I’ve watched as over the millennia you evolved from a primitive ape-like hominid species, surviving purely by instinct, to the technology-wielding, sophisticated-thinking creature of today. Truly, the planet became your smorgasbord and you have partaken freely. As a matter of fact, you have very nearly emptied the planet’s entire refrigerator and cupboards and are now preparing to lick your plate clean. I’ve been throwing up some warning signs, especially this past year, to try to get your attention and perhaps make you reconsider your current omnivorous appetite. After all, you do share the planet with other life forms who have been hoping someone or something will put an end to your callous industrial rampage. I’ve even set in motion a sort of evolutionary check-and-balance, a doomsday device if you will, in the form of atmospheric heat-trapping gases, ensuring your demise just in case you don’t get the message of behavior modification. In other words, your dominant socio-economic paradigm of capitalism is fatally flawed.

In terms of economic expansion and human overpopulation:

Your voracious appetite for the world’s natural resources — fish, timber, potable water, arable land, minerals, et al. — continues unabated. And after consuming them, you leave behind mountains of waste and destruction. Does it always take a crisis before you creatures take action? Instead of waiting until you suffocate to death in a world of hypoxic oceans and dead forests, try listening to those lone voices of dissent screaming for your attention:

Look, I have news for you. The human economy does not take precedence over the Earth’s natural ecological processes which have evolved over millions of years to provide you with clean water, clean air, fertile land, and productive plant and animal life. All of these priceless necessities have been given to you at no charge to your accounting ledger. I guess free lunches are something no human can refuse, but the bill will come due no matter how you try to hide it by pushing it off onto the environment and future generations. In a planet without a stable biosphere, your glimmering metropolises with their megalithic concrete and steel structures reaching heavenward are nothing more than fleeting sand castles to be washed away by the next rogue wave of a surging sea… Sandy was just a warm-up event. Perhaps a new ‘Dust Bowl’ event and heat waves down under demanding a new color code on the weather map and droughts rendering useless a nation’s hydroelectric power will do the trick. I suppose as long as the $tock exchanges of the world are operable, your “business as usual” scheme of perpetual growth and converting all the natural world into capitalist symbols of wealth will carry on its merry way right over the edge of global extinction. And you thought the “fiscal cliff” was something to worry about?

As a mentor and intellectual peer of this site said recently, “tribes and societies that did master effective class consciousness thrived, for a very long time. Those that didn’t, don’t.” At today’s massive scale of production and consumption, the human and environmental exploitation characterized by modern industrial capitalism undermines the long-term existence of mankind along with every other living organism on the planet. Capitalism shoehorns everything into its profit-seeking regime, no matter if that means global genocide on a scale never heretofore seen:

…Actually, the more I reflect on it, the clearer I see the logic, the rationale, behind the bankers’ and the capitalists’ push for privatization. It is not just more profits they are after, not just share price or corporate valuation; no! They are after mass extermination, genocide on a grand scale – of the world’s needy, the under-funded, the unwanted, the uncivilized, the savages and the barbarians, the commies and the Islamists, in short, elimination of all of the Others.

The big boyz have seen all the data and crunched all the numbers, and it is clear to them – the earth is running out of resources, Mars is -50 C all of the time, and we can no longer afford to carry all of this excess baggage here on the planet — all of these miserable, thankless, do-nothing mouths to feed. So the plan is brilliant. You reduce the number from 7+ billion by at least 33% without firing one shot. You simply privatize all natural resources and then price access so that the bottom third of the globe’s population cannot afford it. And so, they die; it will be the biggest die-off of the Anthropocene epoch…

You ignore my overt signals at your own peril.

[youtube:www.youtube.com/watch?v=K-IHOEPrKNQ]

More on the Corporate State’s Fiscal Spiked Dildo and the End of the World

06 Sunday Jan 2013

Posted by xraymike79 in Peak Oil

≈ 4 Comments

Tags

Barack Obama, BP CEO Tony Hayward, Capitalism, Chris Hedges, Climate Change, Collapse of Industrial Civilization, Consumerism, Corporate State, Corporatocracy, Countrywide CEO Angelo Mozilo, Empire, Financial Elite, Gross Inequality, Homeland Security, Inverted Totalitarianism, Mass Media Propaganda, Matt Taibbi, Naked Capitalism, NYT Examiner, Police State, Poverty, Regulatory Capture, Security and Surveillance State, Social Unrest, Sociopaths/Psychopaths, The Elite 1%, unwashed public, Wall Street Fraud, War for Profit, Yves Smith

Dissecting some recent New York Time’s propagandist cheerleading on the fiscal cliff deal as “progressive taxation”, Yves Smith calls it as it is – ‘A Big Lie’. Her article appears in the NYT Examiner which is a site dedicated to analyzing the corporate spin of the New York Times.

Here’s an excerpt:

The Matt Taibbi piece she links to is also worth your time to read.

When you have an economic system that rewards those who can most effectively exploit society and the environment, then psychopaths invariably rise to the top of the socio-economic heap. That’s why Obama has no hesitation in carrying out extrajudicial assassinations, or that former Countrywide CEO Angelo Mozilo lead the charge on profiteering from sub-prime mortgages, or that BP CEO Tony Hayward can set off an epic ecocide in the Gulf of Mexico and call it “tiny” and then complain that he “wants his life back.” The book ‘The Wisdom of Psychopaths: What Saints, Spies, and Serial Killers Can Teach Us About Success’ lists the top four jobs for psychopaths as:

1. CEO
2. Lawyer
3. Media (TV/radio)
4. Salesperson

I can’t believe that politicians didn’t even make it into the top ten.

Politicians are more likely than people in the general population to be sociopaths,” says clinical psychologist and author Dr. Martha Stout…”I think you would find no expert in the field of sociopathy/psychopathy/antisocial personality disorder who would dispute this,” Stout continued. “That a small minority of human beings literally have no conscience was and is a bitter pill for our society to swallow — but it does explain a great many things, shamelessly deceitful political behavior being one.” – link

But since America is a corporation or corporatocracy, essentially captured 100% by business interests, you can interchange the number one spot of CEO for the POTUS. Corporations write the legislation through bought-off politicians, control public opinion through mainstream media and policy institutions, degrade the education system into a conveyor belt of unthinking corporate drones for a life of corporate consumerism, and manipulate society through all other levers of power while crushing any uprisings with its panoptic security/surveillance apparatus.

In the video below, Chris Hedges talks about sacrifice zones like mountain top removal for coal in West Virginia, but knowing what we know about the state of the biosphere, in particular climate change and ocean acidification, we can say that the entire planet will soon be one big sacrifice zone. The “rapacious, immoral elites” are on track to take the entire planet down. What makes this oppressive system so immovable is that everyone is a participant, whether by choice or not.