Walking:From Grand Central To East 4th And Avenue C Thinking About Anarchism and Gentrification

Yesterday,I was walking to the east village from Grand Central in Manhattan thinking about Anarchism,gentrification,young people,my future and old friends.I came down on the train from Saugerties,N.Y to see a number of old friends from elementary school.As I was riding down,I was planning what I was going to do to "kill" three hours before our meeting.I had planned to go to the Museum of Modern Art but I decided against it because it cost $20 to get in. The state or federal government should fund this and many other museums in the country and stop charging citizens to see and explore the arts. Artists should be on salary just like a dentist,doctor and an assortment of jobs now in the private sector.So the question for me was what to do in Manhattan for three hours.I thought about walking through Central Park(love the green) from the east side(72nd ) to the west side winding up at the Beacon Theater. I wanted to people watch and see what the west side had to offer these days.With this rejected,I decided to just walk to the east village because I wanted to explore the Murry Hill section south of 42nd street for a possible relocation in the future. As I walked down Park Ave. passing The Kitano Hotel(Japanese..with a nice jazz club inside), I decided to go down to 3rd to see the type of stores that were in the area.Again,I'm looking to see if I could relocate from the country to live with my beautiful wife after I retire from teaching in a year or two. I picked this area because it's one stop from LIC(Queens) where my daughter lives. I wanted to be close to her yet live in Manhattan so I could cab it on late nights from jazz clubs in the village or the upper west side(The West Village,Battery Park City are also on my list as well as LIC).

As I'm walking down 3rd towards to east village(I walked more than 60 blocks total),I began to realize there are only a few citizens older than me. Most of the people are in their 20's and early 30's, talking on phones and eating brunch at an assortment of overpriced restaurants.It was also very crowded and the stores didn't hold my interest.Eating out and drinking is a the main activity for a lot of New Yorkers,especially young ones.Something inside of me was not adjusting to this scene so I carried on to the east village. The atmosphere was better (organic food stores,etc.) but again where were the people my age. Every bar was packed with very young people(Halloween costumes) eating and drinking as if they were in a glorified college town.Where were the freaks and aging hippies in this mecca of anarchism(Williamsburg)?Football was on the screens instead of discussions on how to undermine the capitalists pigs who have run America into another recession.In the bar where I met my old friends,we were 35 yrs. older than the "kids" who wore revealing outfits as they discussed reality shows and stocks(really don't know what they were talking about).

I walked down to Avenue C/4th just to see what had changed over thirty-forty years.In the early seventies, this was a rough neighborhood due to poverty and drugs.Time has changed a lot since then because the east village has been gentrified and I understand this can be positive but it's also boring.As I walked through the streets, I realized living in Manhattan might be a problem for me.It is very congested and overpriced.Stores don't interest me in general and even the ones in the east village didn't seem inviting except one guitar store with $2,000 axes.A few years ago, I wanted to live in Manhattan and had no doubts. Those doubts are growing since I turned sixty.I'm enjoying my upstate environment more and the space it provides. I would like to have the best of both worlds.LIC does have a little slower pace than Manhattan.My daughter expressed that thought last week and now I tend to agree with her.I feel fortunate that I have some choices because most Americans don't.

One of my old friends is an anarchist.I recently did some research concerning their approach to community problem solving. It's my understanding that anarchists don't want the two party system we have in America. They want a problem solving system that enables the most informed citizens to lead committees(all democratically elected through modern technology). Each committee would make recommendations for the citizens in a given area(village,town) to vote on.Once the recommendations are approved and ideas applied,the committee could be disbanded if it isn't needed.Tax money might be more transparent and controlled under this system.The information leaders would not have party affiliation like we do today. Elections would only be for the person with the best information.If you think about this approach,it makes sense for small communities.Everyone could have ownership through the voting process. This process can be made efficient with new technology(computers,phones,passwords,etc.).Anarchism could be taught in schools to solve related problems to give ownership to the students.Students might turn up with the best research for a given problem and share it with the larger community.The possibilities are endless. This process is good for towns and small cities. As the population increases, the social problems become more complicated and might be difficult to manage.It would be interesting to try regardless of the outcome.Our present system,with one or a group of individuals elected for terms,seems outdated in the era of new technology.Citizens also need transparency and ownership of tax money due the failures of capitalism to bring prosperity to the majority(middle class losing members each day).

A New Capitalistism In America And The World Must Prevail

The government will have to play a central role in restructuring the economy in the future.The financial crisis showed that financial markets are not self-correcting and the role of government is essential. The "Reagan-Thatcher Revolution" denigrated the role of government and the end result was having government play a bigger role than this unregulated prescription.We will now have to reconstruct a society with a better balance between government and the market. Any vision for America going forward must be part of a global vision.The most dramatic problem is global demand and supply.Another problem is global unemployment(240 million) and billions don't have the education to reach their potential as workers and consumers. Global imbalances is another problem that hinders stability. One part of the world is living well beyond its means;the other part produces in excess of its consumption.America has been borrowing from the rest of the world($800 billion in 2006 alone) and this isn't sustainable in the future.Some 40 % of the world's population still lives on $2 a day and there is a massive need for investments to improve their opportunities.

The growing inequality contributes to the problem of lack of global aggregate demand-money is going from those who would spend it to those who have more than they need.The financial crisis has put downward pressure on wages throughout the world that has hindered global consumption. Developing countries have exacerbating the problem by holding on to their reserves to protect themselves from a future fiscal crisis.What is needed,according to Stiglitz(Freefall), is more consumption by the poor,including China,and less by the rich(America)to reduce the scale of global imbalances.

Our country has a manufacturing conundrum due to successes in productivity increases and off shoring to China and elsewhere,reflecting a shift in comparative advantage.This adjusting to this shift will not be easy. It is easier to lose jobs in areas where competitiveness has been lost than to create new jobs in new areas. America has to create high paying jobs by creating competitive high tech industrial and manufacturing sectors using our research from our valuable universities.We should be trying to figure out what our comparative advantages would be in a global economy.Public owned firms can be just as efficient as private ones(South Korea,Taiwan's steel mills).Private firms must have the right incentives for themselves and the general society.The Employment Act of 1946 recognized that maintaining the economy at full employment was a national goal and one for which government had to take responsibility.The government should promote innovation(solar power),provide social protection and insurance and prevent exploitation.New capitalism will require trust between Wall St. and the rest of society unlike deregulation and lack of trust during the Reagan revolution.

More from "Freefall" to come.

Current Black Unemployment Crisis: Nothing New

The University of Wisconsin-Milwaukee's Center for Economic Development recently put out some startling unemployment numbers for black men in their city.The study showed that 53% of the men were jobless and is the largest figure since the statistics were available in 1970.The “jobless rate” is a measurement that includes men who are officially unemployed as well as those who are disabled, incarcerated, voluntarily unemployed or retired and discouraged workers who have given up looking for work. This more-inclusive measurement is higher than the official unemployment rate.Joblessness among black men in their prime working years, between 25 and 54, jumped from 36% to 44% from 2008 to 2009.Improved high-school graduation rates aren’t holding down black male unemployment. The number of high-school graduates for those over the age of 25 has increased from 34% in 1970 to 75% in 2009. But the jobless rate for black men in their prime earning years has tripled during the same period.

Professor Marc Levine’s study shows that the greatest factor in the persistent racial gap is “entrenched segregation,” as he put it.
As of 2008, 38% of the city of Milwaukee’s population is African American, while 25% of Milwaukee County is African American.
Compare that to the 2000 U.S. Census figures for Waukesha County, which is 96% white and 0.73% African American; Ozaukee County, which is 97% white and 0.2% African American; and Washington County, which is 98% white and 0.4% African American.
“We have the lowest rate of black suburbanization of any large metropolitan area in the country,” Levine said. “Since job growth has been a bit better in suburban areas than in central cities, the fact that we have so few African-American males living in the suburbs means that blacks don’t have ready access to where the jobs are.”
Levine also pointed to the high incarceration rate for black men in Milwaukee.
“We have a criminal justice policy for young black men, not an employment policy,” Levine said.
Levine suggested that improved regional transit, job training and a “Marshall Plan” for public works jobs would help to boost black men’s job prospects.
Local businesses and governments should have a “buy locally, hire locally” policy, Levine added.
In 2009, the Milwaukee Common Council passed the MORE Ordinance, which had been spearheaded by the Good Jobs and Livable Neighborhoods Coalition.
The ordinance requires all private development projects seeking more than $1 million in public assistance to prioritize the hiring of workers from the city who are unemployed or underemployed and to seek contracts from emerging or local businesses before contracting with other vendors.

The MORE Ordinance is a step in the right direction.I would take a bigger step in NYS by writing legislation to mandate the buying of products made within the state. I would like to see unemployed, low income workers make designated products throughout the state where unemployment is very high. NYS citizens would have to buy these products or face a stiff tax(2-5% of yearly income).These products could be drawn from common purchases( home improvement,new appliances) that the majority of the citizens buy.The state production facilities would have a large start up(maybe the same as incarceration costs) cost but it would be run like any business for profit and expansion.Starting salaries would be $15/hr. and training would be provided at each center.Retail outlets would provide additional employment for the same population. Any designated products already being produced in NYS would be compensated and welcomed to join the state production association.Private business would be paid to share technology and expertise in the areas of production.Consumer costs would be higher than today's market but the payback in human enhancement would be great.Eventually, the state would save on numerous social service costs in the long run.

US Banks:The Great American Robbery(Robert Stiglitz)

When the government went about rescuing the banks, they should of thought about accountability.Capitalism can't work if private rewards are unrelated to social returns.Unfortunately, American- style capitalism didn't care about the public as fees increased their wealth beyond imagination. The incentives to undermine society was so great that they could have been living in the USSR during the Nixon administration as party leaders. When the great recession came, they tried to blame everyone but themselves.They became strangers to ethical behavior and led a nation to ruin.As the destruction entered every home,the bankers knew the safety net was waiting for their rescue. First,President Bush and later,President Obama, caved in to the "to big to fail" banks that laughed their way down the road to executive bonuses and refrains of "lets try do it again". These costly mistakes rank among the most of any modern democratic government at any time.The U.S guarantees and bailouts approach 80% of US GNP,some 12 trillion.

Both administrations decided against exercising any control over the recipients of massive amounts of taxpayer money.They claimed that to do so would interfere with the workings of a free market economy.What a farce. Bank executives acted as they are supposed to act in a capitalist system. They acted in their own self-interest by getting as much money for themselves and the shareholders. This self- interest wasn't in the nation's interest.The bankers didn't want to admit that there was anything fundamentally wrong with the system.(blamed government laws and regulations,poor,uneducated public).Politicians and deregulators(Reagan,Bush,Clinton,Bush again) didn't want to admit failure and stated that they just had to tweak the system. Obama didn't bring a fresh approach that was needed(Wall St. Reform and Consumer Protection Act came later).He wanted to provide confidence and continuity to the crisis so he didn't ask the right questions about what our country needed from the financial sector.

This legacy of debt will compromise economic and social programs for years to come.In months after the bailouts, the size of the deficit was being used as an excuse for reducing the scale of the health care reform.The deficit hawks went on a vacation beginning late summer of 2008 when the banks needed hundreds of billions only to return for health care and extension of unemployment benefits.We will never  recover what was given the banks.They claimed a return on investment but that is a big pipe dream floating down the halls of Wall Street.

More from Stiglitz in the days to come.

Do White, Older Conservatives Discriminate Against the NBA?

Well,today is the opening of the 2010-2011 NBA season and I can't wait to see what the off season trades will bring.The teams have been searching their rosters in pre-season for the right combination to start and come off the bench .This is called rotation for the less seasoned and some coaches have different philosophies concerning the matter. The favorite team to win it all is Miami with three stars and strong support players. I'm a Knick fan because I like to root for the underdog and it seems they are going to need all of my support to break even in the won and loss column.I stopped watching them after half of the season last year because they were so bad.But this is a new season ,with new hope and motivation to take NY back again.

The white ,older conservatives I'm talking about loved basketball as kids.They played on high school and college teams during the fifties,sixties and early seventies.They are the same age as the current Tea Party activists that follow Palin or Beck to Washington ,Boston or Louisville.Now,I might be far off the mark with this one (no statistical data) but my gut is telling me there is a correlation between not liking the current set of NBA players and  racism. Why would a former player become so disinterested in the sport they were so associated with in their youth?When you participate in a sport at a high level,you can understand the game much more than the occasional viewer.I bring this perspective up because I've had many conversations with conservatives that I know understand the game at a high level and tell me that the players lack intensity or don't play defense,etc. They have an excuse that doesn't make sense to me or anyone watching the game today.I believe they are turned off to black culture.They can't handle they way the players dress(I believe the players have been forced to wear a jacket to games now),act on or off the court(violence,relationships),or the amount of money they make. I see a lack of respect for these players that are so much better each year in every way.At the same time,the older conservatives highlight Steve Nash or the assortment of European players that have come into the league who are also much improved over the sixties stars.

The Tea Party followers and my basketball conservatives have something in common. They don't like the 21st century demographics and the new culture it is bringing to America.I might agree with them that our culture is too material and voyeuristic.Conservative values have a place at my table at times but I will never reject the general culture because America has always demonstrated an acceptance of the new and a reverence of the old. NBA players are the best in a very competitive market.They might not look like the Boston Celtics of Bill Russell but they play better and work just as hard.To turn your back on the sport of your youth for another sport because of the players skin color is pathetic.To turn your back on a president because of skin color is unpatriotic and a form of treason.Now if we could only convince the league to lower ticket prices so the average income earner could afford to go, I would be completely happy. Watch tonight and every chance you can or read a book how we can nationalize the energy sector in America.

Vote Left:Do the Right Thing

This post is a summary of the forty-nine previous posts with a little reflection.I know everyone is gearing up to vote in the November election and the right  wants to get back the power they lost in the last two elections to steer our country back to normalcy with reduced taxes,less government and a strong defense.They had the House for twelve years(1994-2006)(Senate from 2000-2006) until the left took control  and tried to nationalize tooth paste and tomato juice.Under the Left's leadership, the great depression crystallized in 2008 with Bush and Paulson trying to stop the economic nightmare with corporate welfare scams(TARP) that helped the banks deny their securitization disasters.The country chanted"socialization" and FOX news blamed low income,party animal citizens for being greedy and taking advantage of the bank's Christian ways.The" do nothing",market loving right also blamed Obama for trying to stimulate an economy,giving tax brakes to small business,providing health care for all our citizens and trying to regulate Wall Street.Unemployment is still high and everyone is still feeling low(except bankers,hedge fund managers,insurance tycoons,the 10% that own America).It's time to waddle down to the election booth and vote in the Republicans but here are some reasons I feel you shouldn't take this path.

 Income inequality in America has gone back to the levels of the roaring twenties,a few years before the "Great Depression"Incomes have been stagnant since the late seventies in addition to basic inflation rates that  diminish our purchasing power.Ten percent of America owns 90% of the income assets while forty percent of the population don't have to pay Federal taxes because they don't earn enough money under our tax laws.Republicans are always crying about the estate tax as if it pertains to the majority of Americans.In reality,only 1.6% of all of us receive more than $100,000 in inheritance. the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P.R. reasons -- would take a huge bite out of government revenues for the benefit of less than 1% of the population. (It is noteworthy that some of the richest people in the country oppose this ultra-conservative initiative, suggesting that this effort is driven by anti-government ideology. In other words, few of the ultra-conservatives behind the effort will benefit from it in any material way.) Republicans also support individuals and corporations that hid their money in the Cayman Islands and Bermuda.One of the most glaring examples of this continues to be the ability of corporations to cheat the public out of tens of billions of dollars a year by using offshore tax havens. Indeed, it's estimated that companies and wealthy individuals funneling money through offshore tax havens are evading around $100 billion a year in taxes -- leaving the rest of us to pick up the tab. And with cash-strapped states all across the country cutting vital services to the bone, it's not like we don't need the money.This obnoxious behavior exists as thirty five million citizens live below the poverty level(24.6 white,9.1 black and Hispanic).Conservatives will answer this statistic with their message of "not trying hard enough" or "they are lazy and want to remain on welfare".Living below the poverty level doesn't mean you are on welfare. Less than 2% of our population receives checks for the aid of children without appropriate parent income.The vast majority work at jobs that don't pay enough to take them above the income guidelines.They supplement their income with food assistance. About half of all American children will receive SNAP(Supplemental Nutrition Assistance Program) benefits at some point before age 20. Among African-American children, 90 percent will enroll in SNAP before age 20. Instead of supporting the lower class, Republicans like to sit close to the upper class and write legislation that helps them keep as much profit as they can so they can isolate themselves from the hapless majority.They help coordinate government subsidies in the billions each year while fighting extensions to unemployment insurance.They support companies that ship jobs overseas because America has a minimum wage,so large that keeps people close to poverty and supplemental programs are needed(payed by the taxpayer) to keep their heads above water.With all this,they are silent about the banks who caused the great recession of 2008. Not one word against the objectionable,gutter actions of these bankers who only care about their earnings and dam the rest of society. No regulations for these fat boys who should be taken to prison and left there to read books on Marx and Lenin.

The Republicans love public spending even if they say they don't. They love to privatize government spending(one third of GNP).The Pentagon(largest percentage of our budget with debts to the injured) has 500 companies surrounding it and privatizing every step of their system. They have their hands all over the prison system.The next push is education and we see private companies undermining public schools in order to gain lucrative taxpayer money.The process also wants to rid the government spending of unions and collective bargaining(more money for them).All of this privatization is a strategy,not to reduce taxes, but to get the tax money for their own profits on the backs of the only segment of our working population that has any freedom and authority(35% of government employees are unionized).Health care is another system they want to keep private because they make so much money on our poor souls. The mouthpieces for this sector(Republicans) want to roll back any advances President Obama has accomplished. This strategy is to insure(not serve) the healthiest,low ball providers,and throw individuals off their roles when they are sick through their wordy contracts with numerous loopholes.

Republicans ignore work and environmental regulations because they negatively affect profits.Companies leave America so they don't have to pay workers,abide by environmental laws or provide safe working environments.If they stay here,they play communities against each other(subsidies,no taxes)for their franchises in localities across the country.

They want government out of their lives but want it in our bedrooms.They are against a woman's right to control their own body.The lovers of freedom and liberty want to restrict our right to get married or have an abortion because they know what is right for you and your body.They hid behind the constitution and interpret it for they own needs and feel semi- automatic weapons are appropriate for a modern society while police organizations put their life on the line each and everyday.

Lastly,some Republican leaders want us to believe that some individuals in America are more patriotic and love our country more than others.They try to divide us by putting out false information on a number of issues. The left and right perspectives should have one thing in common and that's our love of this country.For some Republican leaders to tell the media the left doesn't love America is politics at its lowest and sends a distorted message to our enemies.Please vote and consider the implications of a victory for the Republicans this November. Your vote might made a big difference and it's time to do the right thing.

Affordable Housing Needs In America:Statistics

Affordable housing is a significant problem for a great majority of citizens and this issue will continue to get worse if new developments don't include a large number of units to serve the lower class.Habitat For Humanity has researched Americas needs and has developed numerous statistics to make their case for a drastic increase in affordable houses and apartments in our communities.

More than 30 million U.S. households face one or more of the following housing problems:

Cost burdens: paying an excessively large percentage of income on housing costs. More than 13 million households pay more than 50 percent of their income for housing.

Overcrowding: the number of people living in the house is greater than the total number of rooms in the house. About 6.1 million households live in overcrowded conditions.1

Physical inadequacy: severe physical deficiencies, such as having no hot water, no electricity, no toilet, or neither a bathtub nor a shower. One out of every seven poor families lives in severely physically inadequate housing.2

MORE THAN 11 MILLION AMERICANS FACE WORST-CASE NEEDS

According to a report prepared for Congress in 2003 by the U.S. Department of Housing and Urban Development (HUD), 5.1 million American households face "worst-case housing needs." These families:

• are renters receiving no government assistance; • make less than 50 percent of the area median income; • pay more than 50 percent of their income for rent and utilities and/or live in housing with severe physical deficiencies; • include some 3.6 million children, 1.6 million elderly adults and 1.3 million disabled adults.3

GOVERNMENT AID IS NOT HELPING MOST OF THOSE IN NEED

Of the 30 million households with housing problems, 14.5 million qualify for government aid, yet only 4.1 million are actually receiving any.

In fact, most of the U.S. government's housing subsidies do not benefit the poor. For example, in 1995, homeowners earning more than $100,000 per year received a total of $28.9 billion in federal income tax deductions on mortgage interest payments. By comparison, the entire 1999 budget of HUD was only $25 billion.4

AFFORDABLE HOUSING IS GETTING HARDER TO FIND

For every 100 very low-income renters, only 76 affordable rental units are currently available. Between 1997 and 2001, the number of available units declined 13 percent; there were 1.8 million fewer units that very low-income renters could afford. 5

To afford the fair-market price of the average U.S. two-bedroom rental unit, renters working full-time need to earn at least $15.28 per hour. That's almost three times the current federal minimum wage, and 37 percent more than renters needed to earn in 1999. 6

For the 14.8 million U.S. households that make $10,000 or less per year, a year's rent costs about 70 percent of their annual income.7

More than 2 million housing units have "severe physical problems." This includes 1.4 million that have severe plumbing problems. About 1.6 million have one or more rooms without electrical outlets.8

These statistics are not the latest but with this information ,one can see the overall problem in America.I will seek newer statistics and compare them with the ones presented.Poor Governor Christie must have missed this information while covering for his brother's felony case.

Governor Christie Doesn't Understand Bruce Springsteen

Governor Christie loves Bruce Springsteen and has gone to numerous concerts to see one of the finest musicians in the country. He has good taste in this area and I kind of like his straight forward approach to politics. I only wish he was a Democrat with compassion for the low income workers in his state. He is a market capitalist who believes privatization cures all the injustices of our society.Unions,collective bargaining,low income housing,environmental and worker protections,public advocates,and public transportation improvements(train lines) are anathemas to this newly elected Republican.Twenty-one days after taking office,Christie placed a ninety day freeze on the Council of Affordable Housing.This council is responsible for ensuring that all 566 New Jersey municipalities provide their fair share of low and moderate housing.Christie wants to dismantle it because he feels the market will fulfill these needs.The Council was established after The Fair Housing Act of 1985 was passed and established the need for helping low income citizens find appropriate housing. The need is very much alive,especially in our current environment.Bruce wouldn't like this move.He believes everyone in society,especially the poor, need to be listened to with compassion and commitment.

Two days later, Christie signed executive order#14,which declared a state of fiscal emergency due to a $2.2 billion budget deficit.He withheld $475 million in state aid and told the school districts to use their surpluses to bridge the gap. State subsidies to NJ Transit, higher education and hospitals were also cut.He also suspended funding for the Public Advocate and wants to eliminate it completely.The Department of the Public Advocate is part of the Executive branch and acts as a voice on behalf of the people. It is responsible to make government more accountable and responsive to N.J. residents through legal advocacy,policy research and reform and community and legislative outreach.Christie should check out the lyrics to "Land of Hope and Dreams","American Skin","If I Should Fall Behind"""Youngstown""or "Badlands"to get some insight into the importance of government in the lives of  low income Americans.Why does he continue to "believe" in a system that doesn't take everyone on the train to prosperity.The 30 to 40 % of Americans who want the best for their families are ignored by Christie types who are fundamentalist kneeling at the alter of capitalism. They want to destroy any vehicle(collective bargaining,government programs for the poor,support for hospitals who take care of the lower class,public transportation,N.J.Dept. of Environmental Protection,money for higher ed.that helps the underprivileged,school districts struggling to educate the children in most need,etc.) that tries to establish some kind of level playing field so our youth can grow and prosper like the upper class.Christie wants to protect the rich and lobby(his previous job that got him into politics) for legislation that takes from the poor to give to the wealthy. He stands center stage with the banks who caused the great recession of 2008.Never a word of disgust for the cause of N.J.budget deficit. Christie is always in attack mode against any public employee because he wants to privatize every department or bury the "beast". The good citizens of N.J. will see through this obnoxious bully who doesn't want anyone sniffing around his house for his hands are dirty with deals from the past(deferred prosecution agreements) and the ones to come in the future.

Bruce will never sing for your political events because he is embarrassed by you as a representative of his state.You really shouldn't pay a performer to sing about issues you stand against. Maybe you just don't understand the mystery of life and its purpose.You must have been late for Religious Studies class at Seton Hall as you watched your stocks across the T.V.screen.

Mortgage Scams: Why So Many People Went Under

Dick Parsons,the chairman of Citigroup,primarily blamed borrowers for buying houses or taking out home-equity loans they couldn't afford that lead to the burst in the housing market.He didn't mention the financial innovations all designed to maximize fees on the backs of those same consumers.Subprime mortgages were given to low or unstable income individuals who were less qualified than conventional ones.The 100% nonrecourse mortgage(no down payment),teaser rate mortgage(temporary low rates that exploded after a few years), and liar loans(falsified income by brokers) all contributed to a stampede of new scams to get consumers to buy their products.Many of these consumers trusted the advice of brokers and lenders who told them that the price value of their houses would increase yearly and could afford monthly payments.Banks exploited the poor and uneducated consumers and didn't care if they could pay the loans back because they were repackaging them as securities to sell to investors here and abroad. Home owners were also encouraged to refinance their loans to get cash to buy other consumer products.Some did so thirteen times in six years with no documentation of income.Each refinance brought considerable fees.

What happened to traditional banking?After the great depression,regulation ensured that the banks didn't take excessive risks.Banks loaned in the community they did business in and require a 20% down payment.If the loan couldn't be repayed, the bank was responsible and took the asset into its management.With FDIC and a rush to deregulate, incentives and opportunities for bad behavior multiplied. The repeal of the Glass-Steagall Act in 1999,integrated investment and commercial banking and set the stage for exploitation.The banks also got so big they knew the government would bail them out for their bad innovations and behavior.

The innovative products were designed to manage and take away risk as much as possible and to generate fees.Alan Greenspan in 2004 favored adjustable rate mortgages due to his lowering the interest rate to 1% in 2003.Many individuals bought into his advice only to see the rate rise to 5.25 by 2006.Unfortunately,many took out mortgages that overwhelmed them when the payments increased dramatically.Many mortgage brokers received kickbacks from the lenders and became part of the predatory lending system.The brokers got the biggest rewards for steering borrowers into the riskiest mortgages(adjustable-rate loans with prepayment penalties).Innovation responds to incentives and those incentives created products that generated fees that didn't manage risks properly.

Securitization diversified and shared the risks.Banks bundled numerous mortgages and sold them to investors (many to international investors)and pension funds.The credit rating agencies were part of the scam and received their fees to look the other way.When the bubble burst and unemployment rose,the banks knew they would be protected but the unfortunate citizens who believed the advice of the financial experts were left on the street looking for shelter.

More from "Freefall" in the days ahead.

American Recovery And Reinvestment Act:Was It Enough?

The American Recovery and Reinvestment Act was generally left to Congress to craft.Its size and shape didn't come from the Obama's administration but was left up to our representatives to make the dollar amounts and compromises according to Joe Stiglitz(Freefall).A well designed stimulus program should reflect seven principles according to Stiglitz.(1) It should be fast(Bush delayed and ignored the signs)(2) It should be effective(every dollar should give rise to a large increase in employment and output).(3)It should address the country's long term problems(huge trade deficits,decaying infrastructure,low national savings).(4)It should focus on investment(assets that increase the country's long- run productivity).(5)It should be fair(designed for the middle class not the upper class).(6)It should deal with the short-run exigencies created by the crisis(mortgage payments,health insurance,unemployment).(7)The stimulus should be targeted at areas of job loss(retraining workers for future jobs).

The stimulus was less than three percent per year of GDP.About a fourth of the money($800 billion) would go out the first year.This amount,according to Stiglitz, was hardly enough to offset the cutbacks in spending at the state and local levels. To reduce unemployment,the economy had to grow faster than the baseline(3 to 4 %).Cumulative growth in 2009 and 2010,with the stimulus, was under 1.5% and that is a big shortfall. The fraction of the working- age population that was employed, 58.5%,was the lowest since 1947. By mid 2009, there were six unemployed workers for every vacancy--a record, and twice the number at the peak of the previous recession.

A few months of the passage of the stimulus bill,it became obvious,according to Stiglitz,that it had not been big enough.The contraction in consumption as savings increased,combined with cutbacks in state and local spending, meant the $800 billion wouldn't do the trick.Just offsetting the state revenue shortfall would require federal stimulus greater than 1% of GDP per year.The first priority should have been to make up for the shortfall of state revenues.In September 2009 alone, government employment went down by 40,000. Making up lost revenue,state by state,would have been fair and had high multipliers. The next priority should have been filling in the holes in the safety net.The loss of health insurance( many couldn't pay for COBRA) and the inability to pay mortgage payments damaged the recovery for numerous citizens.Mortgage insurance(government paying for those who can't) should have been part of the stimulus until people got back on their feet with a new job. Investments should have went to high return investments in people and in technology. Tax cuts,(30%) of the stimulus, and cash for clunkers tried to encourage citizens to consume more but we really needed that money for more investment for long-term growth.

 The true measure of the stimulus is not the actual level of unemployment,but what unemployment would have been without the stimulus. Shock to the economy from the financial crisis was so bad that the stimulus wasn't enough.The Obama administration saved many jobs and stimulated the economy but Stiglitz and other economists feel it wasn't always the best responses and a clearer vision would have accomplished more .It was far better than any Republican response who undermined the stimulus when they negotiated with the Democrats before the act was finalized.

Should Music Be Played By Salaried Artists?

I saw a concert in this field yesterday for free by Levon Helm and his band.Levon was a member of the Band that some music experts feel was North America's best band in the sixties and most of the seventies.Levon is a southern American while the four other members were Canadian. He now lives in Woodstock,N.Y. which is the next town over from mine.Levon and his band has been giving concerts at Gill farm(SW of Kingston,N.Y.) for about five years.I believe it was originally payback for taking photos for one of his albums(Dirt Farmer)on Mr. Gill's land.Levon continues to give free concerts because he is a wonderful,beloved person in the Ulster Co.community and loves to do benefits for those in need.I've seen him numerous times for free and with the Band in large arenas(Jersey City in 1972 with the Allman Bro. and Grateful Dead) and at local bars in the community.He has an infectious,hard working spirit that makes every song joyous.There was a time when Levon fell on hard times before his career with this current band has become successful.People were doing benefits for him when he developed throat cancer.Luckily, Levon picked himself up with the help of other musicians and now fronts one of the best bands in the country again.Band members include Frank Campbell(played with Dylan for seven years),Jimmy Weider(originally replaced Robbie Robertson as lead guitarist of the Band),Jimmy Vivino(Tonight Show band leader for O'Brien),Donald Fagan(Steely Dan)and other great entertainers in their own right.

There is nothing better for me than listening to great music in a park or a beautiful corn field like I did yesterday.I believe,like the American Democratic Socialist Party,that our beloved musicians and artists should receive a salary just like a cop,teacher or any assorted state,municipal workers.Free concerts could be given all the time and artists could have the security of a regular salary with health benefits.I believe the majority of the artists would buy into this arrangement. The salaried artist could have a contract to do a number of free,quality concerts within the state with the understanding that they could also tour when that contract is fulfilled.Many artists struggle throughout their career even if they are successful like the musicians in this band.There are many lean years for outstanding artists and some end their careers due to the changing times and the control of the music business by corporations.People also spend money at free concerts and could contribute into a fund that would alleviate the taxpayer cost.Today's prices for tickets are very high for a large number of people in our communities and some artists make the majority of the money while equally good ones starve.Our salaries haven't kept up with the cost of quality entertainment.If the trend continues with distorted income inequality, our society should provide affordable entertainment that uplifts the citizens spirit. It shouldn't be another consumer item just for the wealthy to enjoy.

Wall Street Reform and Freefall,Its Aftermath

According to Stiglitz(Freefall),the reckless lending of the financial sector,fed the housing bubble which eventually burst.In October,2007,President Bush was still ignoring the housing market falling to a fourteen year low.He said it was just a ripple and the economy was strong and resilient.In December of 2007, the banking and real estate sectors continued to worsen and they economy went into a recession.Bush finally accepted the fallen economy and passed a $168 billion tax cut in February of 2008 to help the economy and consumption.By October,2008,Bush still was optimistic and stated he knew what the problems were and we have the tools to fix them.At that time 1.8 million jobs were lost and 6.1 million Americans were working part- time.The Dow Jones average was down 24%.Bush turned to a limited set of tools.He refused to help homeowners,unemployed and didn't increase government expenditure or call for another tax cut.His administration focused on throwing money at the banks but struggled to find a way to restart lending.Finally, Bush rushed to bailout the banks with TARP($700 billion) while ignoring the million of foreclosures around the country.

The Presidential campaign was in full swing at this time.Both candidates kept it simple and didn't delve into the root causes of the meltdown.Stiglitz writes one of the problems with recovery was the lack of global aggregate demand due to the saving pattern of developing countries around the world. We couldn't get out of the recession because countries weren't buying our exports.With the increase of pink slips and debt problems, Americans also couldn't consume like they did in the past.The Obama administration continued Bush's conservative approach when he tackled the recession(Summers,Geitner and Bernacke).The stimulus bill,according to Stiglitz,was Obama's first achievement but it only prevented things from getting worse.Many economics feel it was too small for full recovery but politics got in the way.Stiglitz compared the stimulus approach to the Powell doctrine in warfare...attack with decisive force and don't hold back extra ammunition.Stiglitz sees Obama as conservative,lacking vision and said little about the changes in the financial system and how that system might function.Without a vision, the financial sector might seize the reform process and leave it more fragile the next bubble occurs.

Obama did get the Wall Street Reform and Consumer Protection Act passed in 2010.This is a list of some of the major accomplishments of that act.

1. Stronger protections for consumers against unfair credit card practices like rate hikes for existing credit card balances.
2. Mortgage brokers will be prohibited from making higher commissions by selling mortgages they know consumers can’t afford.
3. Free annual credit scores so people can stay on top of their finances. [Clarification: free credit scores are available if you receive worse terms on a loan because of something on your credit report, or if you are rejected.]
4. No more taxpayer-funded bailouts. If a company can’t make it, it will have to liquidate. 
5. Greater input by company shareholders over how much a CEO gets paid.  And companies’ compensation boards are now required to be truly independent.
6. Brokers who offer investment advice will have to act in the best interests of their customers, not their own financial interests.
7. Financial firms won't be allowed to grow so large that if one fails, it will affect the entire financial system. 
8. There will be one agency whose sole job is to make sure that consumers get the protections they deserve and to set clear rules to hold banks, mortgage companies, payday lenders, and credit card lenders accountable.
9. Businesses can't be charged extra fees for debit card “swipe fees” that exceed the cost of processing transactions.

I know many individuals that I read have stated that the financial sector will find ways to get around this act but at least it's a start in the right direction.More to come down the road from Stiglitz and "Freefall".

Joseph Stiglitz on America's Economic Meltdown

This is a short video of Stiglitz who is the author of "Freefall" the current book I am reading.He was an economic advisor for President Clinton with Robert Reich,Robert Rubin,Larry Summers,Alan Blinder and Laura Tyson.That Council of Economic Advisers was diverse with Reich on the left,Rubin and Summers on the right, and Blinder,Tyson and Stiglitz in the center. According to Stiglitz,the right usually won the discussions with Clinton especially after the 1994 elections due to the realities of politics and money.Reich and Stiglitz argued with resources scarce,the role of government is to make the economy more efficient and help the poor and those who can't fend for themselves.I agree with this perspective wholeheartedly and feel it is the moral obligation of the government to carry out this model. To turn ones back and wave the flag of market capitalism to solve the problems of the poor is a denigration of every soldier who died for our country. It is a turning that can only bring a scar on the self worth of a nation and a message to all that our formal religions  that they have failed to open the hearts of the misinformed.

President Obama Tax Policy And John Boehner's Hypocrisy

John Boehner is lying again to the American public and especially his home district in Ohio. He states on his website that American families and small businesses will face a massive $3.8 trillion tax hike in 2011. That a family of four making$55,000 would pay an additional $2,100 in new taxes. The child tax credit would be cut in half costing families $1,033 per year.The 10% rate will be eliminated costing 88 million taxpayers $503 per year.The death tax will be reinstated with rates as high as 55%.

Before responding to Mr. Boehner concerning the 20011 budget, I would like to review the American Recovery and Reinvestment Act(Stimulus)of 2009.Under that Act, 95% of American families received a tax cut for $243.4 billion.$145.6 billion were distributed in contracts,grants and loans and $169 billion for entitlements.The Obama 2011 budget plans to raise taxes on incomes over $200,000(individual) and $250,000(families) and an estimate $700 billion in revenue will be raised over ten years.This increase only affects 2% of our population.He will increase the capital gains tax from 15% to 20%.That increase will affect more than the 2% of the population but the majority of the tax will come from high income earners.This would raise$24 billion over ten years.

President Obama wants to expand the child care tax credit by doubling it for families under $85,000.He also wants to permanently extend the American Opportunity tax credit for higher education.A permanent Lower Income tax credit will also be available to families with three or more children worth $5,657.The Make Work tax credit would also be extended to put a little more money in each paycheck for workers.He also wants to change the parameters of the Alternative Minimum Tax that was originally for high income earners.President Obama wants to make the Bush tax cuts permanent for 98% of the population.To increase investment in small businesses,he wants eliminate capital gains taxes for stocks bought and held (five years)since 2009. To raise revenue, he wants to tax hedge and private equity fund managers at the normal income rate(not at 15%).Also,limiting high income deductions at 28% will generate $291 billion over ten years.Finally,President Obama wants to keep the estate tax at a $3.5 million exemption level and a 45% rate(more generous than the current rate).

What can I say? Boehner fails to support his own constituency.I wonder if they know the real facts.

Corporate Issues:John Boehner's Dream

Our next majority leader,if America votes Republicans in, will continue to be a lackey for the corporate interests in America.I will try to list a few issues and respond accordingly. The first issue is energy and Boehner opens,in his website,that gas prices are to high and he proposed a bill this summer that would temporarily suspend federal gas taxes.Lowering the price of gas is what the major petroleum corporations want. By lowering prices, consumers will buy more gas and corporations will increase profits.This will also discourage innovation and investment in solar,thermal,wind,wave and electric car technology.No mention of gas mileage increases for cars or hybrid,battery technology,just the same line about cheap gas for our guzzling autos.Boehner wants America to increase its production of oil,gas and coal.He also wants to build more nuclear power plants and uses France as an example to illustrate their success. He wants to support these "old" unsustainable resources that have a limited lifespan and write legislation that helps deregulate them more than they are now.He doesn't care about the environment or the cost to taxpayers who continue to pay high,manipulated prices to feed this industry's corporate pockets.

Boehner wants to repeal the Affordable Care Act of 2010.He claims individual premiums will rise by $2,100,taxes will increase $570 billion and medicare will cut $523 billion.He also states that
small businesses will have a large increase supporting their employees health plans.His statistics reflect his desire to continue to give the health insurance corporations free reign to increase premiums the way they have for the last ten years.Again,he wants less regulation of the for-profit corporations that only care about stock price increases and management pay.The Act will decrease premiums by 14 to 20%.Starting in 2011,seniors will get a 50% reduction on brand name prescription drugs, receive free preventive care and an annual wellness visit under medicare.The Act also will eliminate Medicare Advantage overpayment's to insurance companies.It will also give a one time $250 rebate to help reduce drug costs.Up to four million small businesses will be eligible for tax for tax credits that will make it easier for them to provide health services for their employees. The CBO estimates that the Act will reduce the federal deficit by $143 billion over the next ten years.Lets remember the three strategies of the health care industry:(1) insure only healthy people (2)pay less to providers(3)make people ineligible for services. They do this to maximise profit because they are following a business model , not a service model.Boehner will write legislation to improve this strategy because he is a mouthpiece for their evil ways.

More in the future about this great American.

Who Could Have Foreseen The Crash OF 2008?

Many economists understood that the crash in 2008 was inevitable and would have global consequences.Nouriel Roubini,Paul Krugman George Soros,Robert Shiller,Stehen Roach,Robert Wescott and Joe Stiglitz had dire forcasts for the country and most were worried about the housing bubble.Nouriel Roubini focused on the risk posed by global imbalances to sudden adjustment of exchange rates.But these forecasts were an inconvenience:too much money was being made by too many people for their warnings to be heard.

Those who had engineered the bubble(Paulson led Goldman Sachs to the heights of leverage...Bernanke allowed the issuance of subprime mortgages to continue) maintained their faith in the ability of markets to self-correct--until they had to confront the reality of  a massive collapse. As late as March 2007,Bernanke claimed that the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.The housing bubble was unsustainable according to Stiglitz.When it burst,domestic aggregate demand declined considerably and shifted money from those who would have spent it to those who don't(upper 10% of incomes).The global aggregate demand  was weak at this time and caused more problems for any recovery.Developing countries accumulated reserves in the billions to protect themselves from a high level of global volatility in the era of deregulation.A half trillion was set aside in these reserves each year before the crash.The U.S. economy with its debt-based consumption became the world's customer but it wasn't sustainable.

The crisis quickly became global as nearly a quarter of U.S. mortgages had gone abroad. Global financial markets have become closely interlinked.Two of the top three beneficiaries of the U.S.government bailout of AIG were foreign banks.Spain and the United Kingdom had housing bubbles.Iceland  has 300,000 people and three banks that took on $176 billion in bought assets that is eleven times the country's GDP. It became the first developed country to turn to the IMF for help.Developing countries suffered from the decrease in "remittances"  that helped their individual economies.

Today the underlining trend in the U.S. is the move away from manufacturing into the service sector.This is partly due to the success in increasing productivity; so a small fraction of the population can produce all the toys,cars,and TVs that even the most materialistic and profligate society might buy.Globalization has meant the locus of production has moved to China,India and other developing countries.We can't go back to where we were before the crash.America must deal with the underlining problems and can't rely on the Federal Reserve as we have done in the past.An era of regulation must return because the "free market" can't correct itself today without government intervention.

More from "Freefall" in the coming days.

The Tea Party and Carl Paladino Seek The End To Fairness

What can you say about a man who states homosexuals are brainwashed while he forwards pornographic pictures a young French women(younger than one of his daughters)to "friends" to ogle and fantasize with. What if his ten year old daughter,from an extra-marital affair, saw those pictures by mistake. It might be far more damaging than a public parade of homosexuals in NYC. Paladino also forwarded racist videos regarding the inauguration of President Obama with pimp and whore costumes. The same man who threatens reporters(I'll take you out) because they ask him for proof about a statement concerning an opponents extra-marital affairs.A candidate that feels American Muslims are secretly trying to establish Sharia by building mosques and infiltrating our society. Paladino wants to disable the Affordable Care Act of 2010 because it will have minor regulations against for profit health corporations who run their business like insurance companies not health services. He wants to give a clear path to the corporations who want to mine the Marcellus Formation before environmental studies are analysed.Ten years ago,Paladino was hit with a felony charge and a $500,000 fine for not following a state law requiring his company to check for asbestos before demolition.I guess he feels he's special and environmental laws are just frivolous regulations that are not connected to citizen health.He is against the right of a women to control her own body by supporting adoption over abortion even when the individual was raped.

This wonderful man would repeal the NYS Assault Weapons Ban(I guess he doesn't care about cops).He carries a gun as much as possible due to the decrease in crime in NYS.He must be afraid of all 2% of the population on welfare.He wants to abolish  the Board of Regents, Lower Manhattan Development Agency,The Empire State Development Corp.,MTA, Adirondack Park Agency and the NY Power Authority.Labor unions are pigs,especially the NYS United Teachers, who have collective bargaining which is almost anti-American from his perspective.Paladino wants to start"Dignity Camps" for unemployed youth in prisons to re-educate them(sounds like  old Cambodia to me). He is against the Wicks and Taylor Laws that hinders his capital fundamentalism.

He would declare a "State of Emergency" and all state,municipal and school salaries would be frozen and the state budget cut by 20% in his first year as governor.He would cut the Medicaid budget by 30%(make those poor people suffer more).For the better off capitalists, he would eliminate the state capital gains and corporate franchise taxes. He is a great job creator with compassion for all.

Paladino is angry at just about everyone except those who work for a minimum wage and those of us who have it all in our little democracy.I guess he ignores the fact that 40% of the state doesn't earn enough to pay federal taxes and very little state taxes.Income inequality is at 1929 levels. He's a perfect little Catholic boy(this religion is fine) who loves to discriminate and label his fellow lifeless citizens. I only wish I had his insight and endorsement of the hypocritical Tea Party Movement so I could take money from the poor and give it to the rich.

Blame Game:Conservatives on 2008 Crash

I just started reading "Freefall"by Joe Stiglitz(Nobel prize winner in economics) and he wrote about the conservatives in our country trying to blame the government and poor people for the entire financial collapse in 2008. They have difficulty blaming the financial markets for the great recession so why not go after the big, old government and the folks who have  low incomes due to our nation's income disparity.Conservatives told us the government wanted to increase home ownership and the banks were just following orders. They blamed Fannie Mae and Freddie Mac(two private companies that had started as government agencies) and the infamous Community Reinvestment Act(CRA) which encourages banks to lend to undeserved communities. The CRA was started in the late seventies and I remember it well. Banks discriminated against poor people(mostly people of color) and red lined areas where they wouldn't give loans for any business or home. They actually circled areas and refused to give loans even when many of they citizens could pay. Everyone in that red lined area,regardless of income, was told to find other means to raise capital.The Bronx was falling apart at this time due to this strategy and discrimination. These areas were told "it's just business".As usual, the congress had to step in and encourage, through legislation, the banks to provide loans to people who were eligible under strict guidelines.

This litany of defenses is sheer nonsense. AIG's almost $200 billion bailout was based on derivatives(credit default swaps...see earlier blog)--banks gambling with other banks. The banks didn't need any push for egalitarian housing to engage in excessive risk taking.Nor did the massive over investment in commercial real estate have anything to do with government ownership policy.The default rates on CRA lending were actually comparable to other areas of lending. The most telling point though is that Fannie Mae and Freddie Mac's mandate was for "conforming loans", loans to the middle class. The banks jumped into sub prime mortgages,an area where Freddie Mac and Fannie Mae were not making loans at the time.

Advocates of home ownership meant permanent,long term ownership.The banks were putting someone in a home for a few months and then tossing them.They packaged these loans and securitized them with AIG insuring them. They didn't care if they could afford the high interest and transaction fees. No government official would have given the OK to predatory practices the banks practiced. Eventually,Fannie Mae and Freddie Mac(private companies with government guarantees) joined the fun and short lived profits by buying numerous securitized mortgages. With these purchases,they actually helped many of the banks from bigger losses.

More from Freefall in the days to come.

Race To The Bottom

I've just finished "Free Lunch" by David Johnson that was written in 2007.I'm going to review some of his points from chapters ten to twenty -six as best I can.Gerald Cassidy's firm invented the appropriation earmark,in which a specific amount of money for a specified recipient is written into a spending bill in the late seventies.Many earmarks identify the beneficiary as a hospital,college,or non-profit association,but they are just the entity the money passes through on its way to IBM,Johnson&Johnson,or Ford Motor.Cassidy is a demigod to those in the influence business.He is widely regarded as the premier lobbyist in the nation's capital.His personal fortune is well in excess of $100 million,including an imposing mansion on Chesapeake Bay.Cassidy&Associates was sold in 1999 to Interpublic Group,a worldwide firm with 43,000 workers who seek to influence the public and governments through advertising,lobbying,polling,and public relations.The Federal government spends about $5 million per minute.Arranging to divert even a few seconds of this spending to a client will justify a job,and one who can capture a few minutes will live very well indeed.All lobbyist are not out to undermine the taxpayer. David Ewald lobbies to oppose subsidies and works for Gander Mountain who doesn't take them. They are fighting Cabella's and Bass Pro who tries to squeeze communities for subsidy tribute.

Johnson wrote about a free lunch for the burgeoning burglar alarm business.In many cities and suburbs, one of every eight calls for police service come from a company that monitors burglar alarms. Taxpayers spent well north of $2 billion to respond to these calls, a subsidy to the alarm industry, which is spared the expense.More than a fourth of the subsidy goes to Tyco International.Tyco was at the center of the Wall Street stock scandals,with investors losing tens of billions(Dennis Kozlowski,Mark Schwarz stole $600 million).Tyco has there legal headquarters in Bermuda as a tax shelter to avoid helping to maintain the US government.After three decades of study,99% of the alarms are false.Over 60% of the false alarms are caused by the customers themselves(leaving door ajar,etc.)

Title insurance was the next topic.Americans paid $16.5 billion for title insurance in 2005.Five huge companies( title insurance) collect 92% of all premiums paid in America: Fidelity National Financial of Jacksonville;First American Corp. from Houston;LandAmerica Financial of Glen Allen,Virginia;Steward Information Services of Houston;and Old Republic International Corp. from Chicago. About 80% of the premiums is kicked back to the referral person(mortgage broker,real estate broker, lawyer,banker).In 2005 the industry paid $748 million in claims.This is about 6% of the total of premiums collected.They made 94% for operating expenses and profits.Europe and Australia have a government system to check land title. The citizens pay a small fee for checking and to fund insurance in the event a mistake is made.

There was a time when college in America was free,or nearly so.Now, the costs of college have grown faster than inflation with predatory leading practices becoming common.The growth of advanced education has slowed with more men earning doctoral degrees in 1975 than 2005.President Bush,"the education President",cut Pell grants for poor college students by reducing the grant and the amount of money in the pool for these students.Students borrow about $85 billion each year and a fourth of these loans come from Sallie Mae,EduCap and Nelnet that are free to charge any interest rate they want.An estimated 200,000 students do not attend college due to a lack of resources.

Johnson had a few chapters on energy and the influence Enron(Lay and Bush) had in de-regulating the industry.By the magic of markets, Enron sold(with the help of paid representatives..Senate Bill 7) a system to lower prices for big industrial users.In the past,the price for electricity was regulated by the government with producers and consumers getting appropriate,fair prices due to production levels and costs.Data(12 mon. in 2007)) showed that electricity where Enron style laws were adopted cost $48 billion more than the average cost in states that retained traditional regulation.That is $132 million per day in excess costs that act like a tax on customers paying the bill.A few years before,Cheney( with his secret energy committee) refused to examine a memo from Rep.Jay Inslee that stated the generating stations were manipulating prices by withholding supply to increase prices for consumers.At one point,California paid $600 for a kilowatt of power that cost $30 a year earlier.So much for free markets in the energy business.

The chapter on "Unhealthy Economics" reviewed the numerous problems created for citizens when non-profit health plans turn into profit making machines.No other modern country regards health care as an insurance business.The business sense of insurance includes the concept of examining claims to see if they fall within the contractual boundaries for payment.This is how we ration health care in America,through contracts that limit care and exclude coverage-and by having tens of millions of people go without any insurance at all.In Europe,Japan,Canada,Australia,and New Zealand, people doesn'give heart transplants to octogenarians.These countries care about the entire citizenry by making policies that will support everyone in the society. Giving a heart transplant to someone in their eighties takes away care from those much younger.No one is discriminated because of pre- existing illness or lack of money.The first strategy of corporate-run health insurance companies is to avoid marketing to employers and other groups where the need for health care is likely to be the highest.The second strategy is to pay providers less.Third is to deny care.A study showed two thirds of administrative costs for profit insurers are spent on care denial.Lastly,Americans spend six times the average of what 13 other modern countries do on health care.In 1994,California Blue Cross,a non profit ,paid top executive $922,000 for his services. A decade late as head of Wellpoint,for-profit company,paid him $19.2 million for his services to screw the customers.

Enough... there is more...read this book and see what our country is doing all of us in this time of need.

Cabela's,Wal-Mart And Corporate Socialism

The first Cabela's retail store(sporting goods) opened in 1987.The second one opened in 1987.Both stores were in Nebraska. In 1998.they started an aggressive nationwide expansion drive. They picked Hamburg,P.A. as a destination store. It had a faux museum that enabled it to be a nonprofit. This setup guaranteed it wouldn't have to pay property taxes for the life of the store.It had a "museum quality" display of stuffed and mounted creatures and an aquarium with bass,trout and other native game fish. The town agreed to this tribute because they were afraid to lose the store to another town in another state. Cabela's played off each towns fears to get the subsidies granted by the highest bidder.They got $32 million from Hamburg.After getting the property taxes, they went after the sales taxes and also got them.This tribute amounted to $8,000 for each man,woman, and child in town.Cabela's sold the town the idea that consumers would come from the surrounding states to buy sporting goods at this location and generate business for the entire community.Communities are desperate for any type of large business to help their sagging economies.(manufacturing is offshore) This subsidy covered more than half the cost of the entire construction of the building in Hamburg.Mining local and state governments for tribute turned into a business lucrative for Cabela's,more than selling sporting goods.In three years after it had become a company with publicly traded stock,2004-2006,Cabela's earned $223.4 million in profits.On the 10 stores and several distribution centers it opened outside Nebraska in those years it made deals for subsidies worth at least $293.7 million,a third more than its reported profits.

Sam Walton practiced  corporate socialism throughout his career. As much as he could,he put the public money to work for his benefit.Free land,long term leases below market rates,pocketing sales taxes,even getting workers trained at government expense were among the ways Wal-Mart took every dollar of welfare it could get. Walton had a particular fondness for government-sponsored industrial revenue bonds,which cost him less in interest charges than the corporate bonds the market economy uses to raise money.

In the previous decade,Wal-Mart has collected more than $52 billion in sales taxes from customers.It has been subsidised by the taxpayers by over a billion dollars to build their facilities around the country.Wal-Mart paid $4 billion in property taxes during the same period.This amounts to 25 cents out of each $100 dollars in sales.It is equivalent of someone making $50,000 and paying $120 a year in property taxes.

Wal-Mart earned greater profits (1.6 trillion)than it could produce on its own thanks to these forced payments.The tribute people were forced to pay,even if they never set foot in the stores,also meant  they gave up some of their tax dollars that could have gone to schools,roads and parks.They have fewer tools to advance themselves and fewer amenities to enjoy life.

More from "Free Lunch" in the next blog.

George W. Bush:Your Land Is My Land

I heard on the radio today that Janis Joplin died forty years ago.She was from Texas,just like the the greatest tax-shelter salesman in the history of the USA(George W.).She was a few years older than George but I heard George was in love with her because she could drink and do drugs like a man.He was into that type of entertainment in the early seventies just like Janis.They were sisters in arms doing anything that tasted good and could removed oneself from the thoughts that brought pain and misery.Janis sang the blues better than almost anybody on her short visit to the planet.George was giving the blues on his continuous stay with his taking from the poor to give to the rich.George took money from the taxpayers in Arlington,Texas and made his fortune on the backs of lower and middle class.He made a lot more for the high powered "free market" investors who came knocking at his door.This was a time when he was "born again" and not a bad ass drinking and doping around the valleys of Texas.

The Rangers investors(Bush had a 2% stake with money from his dad's friends) had pockets plenty deep to build a new stadium but Bush planned to have the taxpayers pick up the tab.First,he threatened to leave Arlington for another city.Second,he hired campaign pros to roll over the opposition before a referendum and arranged for a half-cent increase in the sales tax for the city to aid in building the new stadium..This group also wanted cheap land to build the stadium.The stadium required only 17 acres but they wanted over 200.They didn't want to buy fair market prices so they got the city government to use their power of eminent domain(good to have connections..George's father was President). Arlington created a sports authority to sell bonds to build the stadium.The Rangers negotiated a rent to own deal(interest free).Every dollar they paid in rent and maintenance was counted toward the purchase price.They could also buy the stadium for $60 million even when the cost was $180 million.The lawyer who represented the sports authority said the entire subsidy came to $202.5 million(money that was taken from education,parks and infrastructure). The investors paid $86 million(1989) for the Rangers..they sold it for $250 million nine years later. The $164 million profit was $38.5 million less than the subsidy.

Three decades of published research all point to one conclusion:subsidies for commercial sports teams never produce a net gain for society.They are just a government sponsored transfer of wealth from many to the few.Adjusted for inflation,the Arlington profit drops to $134 million.This means that the Bush investors captured less than two thirds of the money they took from the pockets of taxpayers.In 1998, Bush made $16.9 million for his connections and treated his investment as a capital gain which brings a 20% tax rate.He avoided the 39.6% rate and wasn't challenged by the IRS.When he became President,2000 and2001 were the record low years for audits for high income Americans.The richest taxpayers benefited mightily those years because,at the insistence of the most right wing Republicans in Congress,The IRS focused on tax returns filed by the working poor.In 1999,for the first time,those who made less than $25,000 were more likely to be audited than those who made more than $100,000.

More from "Free Lunch" in the near future. Janis wouldn't stand for this if she was around.

One Perception:One Life

As I tailgated at the historic West Point yesterday,my admired friend told me he was going to stop reading my blog because the facts I wrote about made him depressed. I agreed with him because the more I read about the negative,the positive becomes a distance that sometimes is hard to get back if our thoughts linger on what's wrong in our society.Today,I will stay positive and take a day off from the plight of our lost souls in America.

Frank Gerhy is a marvelous architect and the building on your left is in L.A...I believe it is a performance space.I go to Bard College a lot to see classical performances by the students in a Frank Gerhy building. It reminds people of a pre-historic animal with similar materials as the one you are seeing. I like modern buildings..I also like 1790 eyebrow farmhouses that surround the same facility. I like the majority of buildings I see(very positive).If I was enlightened,I would like all of them.

We are always alone.I interpret many of Nirvana's songs as a recognition that even with our numerous,edgy experiences,we are always alone in our own thoughts.Many of us try to escape with drugs and alcohol,but the reality of our brain visions take us back to the perspective that we are here all alone and must deal with our interpretations of the film we see.Many succeed,many fail as we spin around the sun on our mud ball.

Yesterday I was in a large crowd rooting for Army to beat Temple in football. It was a great spectacle with the cadets and their families,cheerleaders doing thirty push ups when Army scores,people eating,drinking,singing songs and watching other people stroll by. One of my friends went to Temple in the late sixties to play tennis on a scholarship.I looked at him many times and he wasn't looking at the field.He was in his own dream with his own thoughts.I had a slight headache from drinking beer in the sun and watched the game but reflected on the loud noise coming from the various fans who love to shout out at the referee when they made a bad call.Overall,I enjoyed myself and it was nice to be with friends and share an experience.

Life is wonderful for me because I've been fortunate in many ways. I had loving parents,caring brother, and a marvelous wife and children.I was blessed with a large curiosity that has lead me down numerous roads.Those roads have left me open as I wind my way to heaven.I don't want to die,I'm always having fun because there is so much to explore here.I feel I am an explorer in a modern way but many of us are.We want to learn about life with all its ups and downs.Beauty surrounds us in every way and it's there for the taking.

Alone we are in this journey to heaven..or are we in heaven now? Many feel we are but can't see properly.Even those of us in poverty and violence are in heaven now according to some philosophies.Obviously,it's hard to see straight if your world is troubled by negative thoughts and fears.A small percentage of us can overcome negative physiological damage to our inner visions.These visions are not free but caged in the minds of the lost and worried. Some want to die as an escape,a release from the burden of defeat and anguish.I'm a lucky one as I walk in the woods but I also have my bad times ."Sometimes the light is shinning on me,sometimes I can barley see" is a famous Grateful Dead line that is so right for the majority of us.Alone we are to fight the negative even if we are surrounded by the positive.We have to figure it out ourselves to smile and accept who we are and where our steps will take us.

The many facts I bring to this blog are negative but I bring them because I want to change the negative to positive. I have good intentions to help reverse the negative so all of us can see the positive with a little more clarity.The sky was beautiful yesterday.Blue,blue without a cloud as the sun surround us and the Hudson River water eased our pains.I guess in each holy step we take,we must be open to the light and wonder it contains.We are alone in our own perceptions as experiences come and go as the minuets flow down the river of life.We must stay afloat and reach down into the water to bring the drowning souls to shore.

Sister Morphine:Stop That Sway

As the plane landed in San Francisco,I looked out the window and saw her dancing in the rain,smiling from deep within,a journey similar to no one. The clock in the mind drifted to St.Mark's Place,the faces lit with joy,their shoes clean and polished for the road.Each sunrise and sunset on that road vanished into dreams split, sparkled with rainbows of my time here.The Stones played at the airport that day.Their music danced like the dancing, gypsy woman in and out of the corridors that shaped the palace.

Mick was singing "Sway" in a sweatshirt he bought in London the year before. The shirt was made in the suburbs of London by a family that sold organic pigs and chickens to the city(Mick was always into nutrition).I believe the color was orange and blue- black.Years later Mick would wear costumes made in the Philippines by their president's wife(Matilda). Matilda loved expensive shoes and Mick picked up the best ones in Milan,Italy for her. He overcharged her because he thought their government hid money in Switzerland for their own future. The dancing woman was symbolic of the West coast at the time.This was 1971 and the Hare Krishna folks danced with her as she swayed in and out of her body.She was beautiful, like a star born or a baby's smile.Everyone is physically beautiful at twenty-one.The rain brought everyone together at the airport as one.Same dream,same illusion draped in clouded mystery wasted on the thoughts of someone dying for our souls to be reborn.Children ran up to Keith with dead flowers that he immediately brought them back to life with his laugh and smile.As Charlie started drumming the opening of"Brown Sugar",fifty black girls from Oakland came out of the cafeteria to dance with the gypsy woman and the Hare Krishna souls who had eyes of gold.They all began to chant"which way you going Billy".

After the spacious fun at the airport,I went to Chinatown for some rice and beans(Puerto Rican Style).Did you know that the Chinese made the best rice in beans in California.They make it with a paste from a plant that grows upside down in the highlands of Chicago. Chinese women also love the Irish/German men who have long,long hair and freckles.Obviously,I had it made and ate all night for free. On the boulivard, I saw the same dancing woman dressed up like a clown.She smiled at me and drifted up into a cloud and I lost her(she returned in a dream). I slept out in Golden Gate park that night and met many people from around the world. It was four years from the summer of love and S.F. became a mecca for so many breathing hearts. I met a Muslim from Afghanistan that told me someday he would join the Taliban.He said he was agreat actor thereand the Taliban was a production company for the arts. He said he loved women but they had to be subservant to men because God loved men more for dying in holy wars.God is always on the side of holy people in a war or a play about adult relationships on cruise ships..In the morning,I went down to the ocean and saw seals playing with seagulls before breakfast.I was hungry(Chinese food doesn't fill you) so I began talking to the seals. They were way out in the waves so I think they didn't hear me. I sent a seagull out to talk to them about catching me some fish so I could have a "fish fry". Thankfully,the seals understood the seagulls and I got my fish to fry(Pacific flounder.) I took the fish to my girlfriends in Chinatown for lunch and it was the best fish fry I ever had(less the fry I had in Howard Johnson's in the Bronx by the Whitestoned Bridge).Heaven is a place where nothing ever happens.