Recommened viewing: The Queen of Versailles

I recently saw this movie about this rich guy named David A. Siegel whose timeshare business, Westgate Resorts was very badly impacted by the 2008 economic collapse.

Near the beginning of the movie Mr. Siegel mentions that he had a hand in George W. Bush  winning the 2000 Presidential election.  The same President whose economic policies that led to the "Great Recession" at the end of his second term in office.  Based on what he said in the movie, I think Mr. Siegel should be subject to a criminal investigation, but I doubt anyone would take up that cause thirteen years after the alleged fact.

Now Mr. Siegel  is a guy that in my opinion should wake-up and realize the importance of Keynesian economics, which basically states that the masses need to be employed and have enough money to feel confident enough to make purchases in order to pump more money into the economy which allows the economy to then in turn grow.  When they do not have money, they cannot afford to invest in things like timeshare resorts and no bank will give them a loan no matter how desperately they want to do so.

Mr. Siegel and the other heads of businesses and industries that depend on the fact that the masses need money to spend in order for their businesses to be profitable should be lobbying the American government to return to Keynesian economics to keep people employed and ready to spend money.  Instead they are just riding things out and hoping that the governments usual supply-side response (or non-response in some cases) will rectify things.  Well, it hasn't in five years and most likely won't any time soon.

According to his wife Mr.Siegel's wife, Jackie, in an August 27, 2013 Orlando Sentinel article written by Hal Boedeker, Siegel was able to salvage his business by selling one of his properties, therefore he was able to come out if this with only some damage to his business and the mega-mansion that he is building will continue to be built in spite of the minor setback depicted in the film.  Therefore I am very doubtful that Mr. Seigel or any person of means will come out on the side of Keynesian economics anytime soon.

If you have a Netflix streaming subscription, at the time of this posting, the movie is currently available for streaming.

You can also buy it from Amazon.com here:




or the physical DVD from Amazon here:



Really worth checking out, if you are interested in finding out more about what is really wrong with this country.

Layoffs and more layoffs and the latest job reports.

Although the Bureau of Labor Statistics had good news when it came to the month of May's unemployment claims and job creation, all I have heard in the news lately are stories about layoffs. 

IBM is allegedly sacking at least 3,000 employees worldwide.  There was big hoopla over a Manhattan law firm, Weil, Gotshal & Manges, laying off 60 attorneys and 110 support staff, something that was unprecedented in its 82 year history.   The construction vehicle and equipment company, Caterpillar, has laid off about 800 works starting last month.  And many banks and other businesses are allegedly laying off workers in spite of record profits.  Also not to mention all of the layoffs that have and will result from congresses budget sequester.

These layoffs will have ripple effects as all of these people loose their spending power and can no longer pump their dollars into the economy.  Businesses that once served them will stop getting a regular money in and they will eventually be forced to close their doors.  Layoffs like the ones reported above are likely to have a strong ripple effect on other jobs and the economy as a whole.

On a side note, I think that companies are starting to realize that they can work much more efficiently with today's computer and networking technology and there is no point in keeping around workers that they don't have to keep around.

To me it looks like we are getting ready for recession round-two and I think it is going to be a scarier bout than the first one. 

This is where the government should step in and create more jobs, but the Ayn Rand disciple Republicans will have none of that,  as they make sure the government sequester takes away even more jobs.

Another scary bit of news I have heard that it is getting harder and harder for Harvard Law School graduates to find jobs.  A Harvard Law degree was an almost certain path to employment years ago,  I have heard that as much as 30 percent of their graduates cannot find jobs.

I am not sure why so many people want to go into law and not study medicine.  Law must be an easier way to earn money, but now that lawyers seem to be tripping over each other you would think that at least some people would want to choose medicine for a guaranteed well paying job and career.  One thing that scares me about the glut of lawyers is that they have to find ways to drum-up business which will mean a future of a lot of unnecessary lawsuits.

I hope all of these layoffs stop at some point, but I get the feeling that this is only the beginning.

Recommended Reading: "Pity the Billionaire" by Thomas Frank.

Here is another book by Thomas Frank that explores the crazy political and economic situation we are in now.  Frank deftly explains how after the 2008 economic crash many people expected a return to Keynesian economics.   You know John Maynard Keynes, he basically said that in order to have a strong economy the common folk have to remain employed in order to in turn have the money to spend to pump up the economy and create economic growth.  This has to be done at all costs, even if the federal government has to be the employer of last resort, creating jobs where the private sector just won't.   Of course the government would have to tax the wealthy to pay for all this, and this has now become a taboo topic.

What happened after 2008 was pretty much the opposite the bailout was a supply side solution basically giving money to banks and other financial institutions that were too big to fail.  This of course never trickled down to the common folk an we still have high unemployment today. 

Frank illustrates how adamantly the right-wing yahoos and the wealthy wan to keep the United States on the same course of tax cuts for the wealthy, a government that is shrunk down into an ineffectual peanut, and big business given a wide berth to do what every the hell it wants. 

Recently the Huffington Post had a blended picture of George W. Bush and President Obama calling him George W. Obama to illustrate how the Obama administration is pretty much just a continuation of the Bush administration.  Obama certainly wasn't the agent of change he promised to be.  So are Titanic of an economy is not getting turned around we are just headed for the same iceberg over and over again. 

I wish more people would read Frank's book.   You can buy a copy from Amazon.com here:

Pity the Billionaire by Thomas Frank.

Recommended reading: "The Wrecking Crew" by Thomas Frank.

I am going to try to recommend books on this blog since there are many people who can understand and explain the predicament the United States is in much better than I can.  Even if you do not want to read my stupid blog, you should really check-out the authors that I will be recommending as required reading.

I am not a professional writer, I am not a professional anything really.  I am a poor working schlub who is disheartened by the current economic decline and how the wealthy bullies of the world have stacked the cards of the game of life against us.

I wanted to start a blog because I felt that not enough people are talking about these issues and the corporate controlled media is disturbingly silent about the causes of our economic decline. 

Also I felt that there are not enough people who are looking to help working class people and/or shine a light on the devious right-wing activities that have the United States as we know it on a path to ultimate destruction.

I have found an author who is trying to do just that, it is Thomas Frank.  And the only talk show that I have seen him on is on Bill Moyers Journal on PBS.  I wonder why he is not on more main stream talk and news shows.

In his book "The Wrecking Crew," Frank describes how the wealthy corrupt government with their money and then turn around and complain that the government is corrupt and must be reduced in size or come as close as possible to be eliminated altogether.  Ronald Regan and the two Bushes ran up big spending deficits, cut taxes on the wealthy and then complained that government spending was out of control and big government needed to be reigned in.   And as James Carville put it, "The rich want small government for the same reason criminals want fewer cops on the street, so they can get away with murder. [This quote I got from the Internet and is probably paraphrased]" 

Frank goes on to explain how the lobbyists of Washington DC's K Street are the ones who are truly running the United State government and through this abuse of the constitutional rights America has become a plutocracy.

He also tells of the horror story of Saipan, a small island that is a United States territory.  In the 1990's was turned into basically a corporate controlled labor camps where guest workers had no rights and extremely low wages.  And all to keep the "Made in America" label on clothing.  The factories were eventually shut down for humanitarian reasons.  I believe what happened in Saipan is what the rich have planned for all American citizens eventually.

You must read this book is order to see the horrors that right-wingers like John Boehner have planned for us.  Even if you do not care for my blog, Please read this book.   The link to purchase it from Amazon is below:

Buy a Copy of "Wrecking Crew" from amazon.com

Koch brothers' attempts to buy up major media.

It looks like the oil billionaire Koch brothers are allegedly trying to buy-up newspapers and such in major markets to, I would speculate, make them all right-wing, free-market, and supply-side economics propaganda machines.  I think this is something that Rupert Murdoch has been doing with Fox for quite some time now.

We are somewhat lucky that people get their news from so many different sources today, not just newspapers, radio and television, but also Internet sources like search engines, Facebook, and even blogs...

Say....if the Koch brothers wanted me to stop writing this blog, all they would have to do is pay me $300,000, chump change for them.  I could change it from "Middle Class Massacre" to something like "Plutocrat's Party."  And say things like,  "What we really need is more tax-breaks for the wealthy individuals, and large corporations, yeah, and have an open door to immigrants to keep labor costs down, and deregulating banks and letting Wall Street do whatever it wants is best for the economy, yeah that sounds good."    Or perhaps just stop writing it altogether.   I'll be waiting for my check...

Hopefully, the right-wing won't be able to buy up every possible media venue, but it is amazing what you can do with a lot cash and determination. 

The immigration reform and its potential impact on employment

A while ago, I was surfing the net to get more information about "The Border Security, Economic Opportunity, and Immigration Modernization Act of 2013" the latest in immigration reform, and one that has been touted by the media as good one.

You know who likes this bill, Grover (I wish he could be as nice as his namesake Muppet) Norquist.  I saw an opinion piece he wrote for the British newspaper, "The Guardian."  He says that the bill will be good for the American economy.

 

Why does he like the bill? For the same reason all the Republicans like the bill (but some do pretend to hate it), because it basically opens the flood gates for immigration.   With more available people to compete for jobs, wages will go down, it is the simply law of supply and demand.  Republicans will not be happy until Americans are making the same wages as the Chinese and Indians (of India not Native Americans).  

The bill does call for more border security, but only across Mexico as many of the states that border Mexico have pleaded for.  I do not believe the bill does much for the Canadian border or any other way someone can enter this country illegally.  

In times of economic prosperity, when America has a growth economy, it makes sense to allow for immigration, but in the shrinking economy that Americans are living in, it would make sense to freeze immigration until unemployment dips below 4% or so.

Australia, which has a very strict anti-immigration policy, and no countries bordering it, currently has only 5.6 percent unemployment as opposed to America's 7.6.

Wealthy Americans will not be happy until unemployment is around 26% as in Greece which would eventually enable them to drive wages down to a fraction of what they currently are at least as low as mainland China's. 

Then why are some Republican politicians opposed to the bill?  Perhaps it is to appeal to some of their racist constituents or perhaps they just want to keep President Obama from appearing to move things forward with immigration and by doing this they make him look even more inept than he already does.

President Obama is behind giving Visas to highly-skilled foreigners in order to help grow the economy, but I think this also hurts opportunities for American citizens.  If we had a strict anti-immigration policy, companies would be forced to pay to train Americans to fill the jobs they need.  This would benefit the American worker who would gain a useful skill set and make him employable as well in demand in the workforce.  It would also benefit the college or institution that has to train him.  The only one that looses out is the company that has to pay for the training.  It is much easier and cheaper to import foreign laborers that already have the skill sets that American companies need.  It is even cheaper if the company can off-shore the jobs altogether.

And then there is the issue of security.  While America has always been a country made great by immigrants who have left their oppressive countries to be free in the USA, the times have changed greatly.  While immigrants love to come here to enjoy a higher quality of life, there is much hate and envy of the United States.  We have to make sure that at all entry points,not just the borders, that we are not letting in foreign terrorists.  Any immigration reform act should have strict provisions for this, but of course it does not.

In summary I think we should keep the doors to immigrants closed as much as possible until our economy makes a full recovery.  I think that it is awful that there are liberal groups pushing for both lax immigration and raising the minimum wage, because the influx of cheap labor, especially in hard economic times, would only keep wages down.

 

The sequester

I know I should have chimed in on this weeks ago, but who has the time these days, and I really have to admit I don't understand the sequester on government spending.  Apparently it has something to do with a budget act that Obama had signed into law that calls for massive spending cuts that will result in the loss of around 750,000 jobs in a time when we cannot afford to loose one job. At least that's my understanding.  However, it does cut quite a bit from defense which is something that I think America should be doing now that the cold war is over.

If this was going to be problem, why did Obama sign it into law in 2011?  Government should be spending money now to create jobs rather than worrying about the deficit.  They should be acting as the employer of last resort in order to get Americans back to work. 

It seems that the Republican controlled House of Representatives wants nothing more than to be thorn in Obama's side, and make sure that there is complete gridlock when it comes to moving this country forward.  I hope the Democrats can take control of the House after the 2013 election, then there might be a slim chance of Obama making some progress in restoring this country's economy.

Bloomberg publishes internal memos leaked from Walmart...something is fishy....

Ok, I don't believe this.  Bloomberg news leaked internal memos allegedly from Walmart saying that February sales are the worst ever and they are trying to pin it on the payroll tax hike.  This sounds like phony journalism to me.

I went to Target today (as I do try to avoid Walmart like the plague, but it is not always possible).  I bought a couple of things, but I was prepared to buy more stuff, but it looks like a lot of their supply of certain things, especially toys hasn't been replenished since December.

How can consumers buy anything if there is nothing on the shelves?  Walmart's issue may be not meeting demand with enough supply or they have run out of supply particularly for the items that people want to buy.  Retailers anticipate slower sales and do not bother to restock too many items and sales slow down because shelves are empty not because there is a lack of people able or willing to spend money.

There is also a possibility that Walmart executives want to short-sell their stock, so they leak a couple of memos and a month or two later they will buy their stock back shortly before they announce that they had record profits in the first quarter of 2013.

Whatever the case may be, I don't like it.  It looks like the wealthy are trying to use the media to get Americans to join the GOP in their anti-tax rantings.  I do not think the payroll tax would have that big of an impact on spending so quickly.  I think mega-companies like Walmart are just promoting their anti-tax, anti-government and anti-middle class agenda. 

Social Security a simple solution.

With the recent grumblings of the Congressional GOP to cut Social Security and Medicare benefits left and right and the restoration of our Social Security deduction in our paychecks, I came across a fact that I was totally unaware of. 

The payroll tax that funds Social Security only comes out of the first $113,000 of income.  People earning more than $113,000 annually do not have to pay anything additional for Social Security.  All the government would have to do would be to extend the tax to apply to all income levels including those well beyond $113,000 and we wouldn't have to talk about cuts or Social Security running out of money after all the Baby Boomers retire. Unbelievable!

The wealthiest Americans have shown once again that they do not care about the common good.  For them common is bad and only rich is good.  They do not want to pick-up the bill for Social Security or anything else for that matter.  They would rather see the elderly poor and homeless. 

The fact there is not politician one getting behind extending the Social Security tax to all income levels is very disturbing to me.  It shows that both the Democrats and Republicans are merely puppets of the wealthy.

Already I have seen corporate controlled media blaming recent reportedly sluggish retail sales on the restoration of the Social Security payroll tax.  They are quick to point the finger at higher taxes causing problems, but always manage to fail to show how higher taxes particularly on the wealthy would create solutions.  Taxing the wealthy to pay for Social Security to would be a great solution to a looming problem.

The so called "fiscal cliff deal" and the connection between higher taxes on the rich and lower unemployment.

Well, they made a deal, but I am not sure of all of the ramifications.  I think it would have been better to go off the "fiscal cliff' instead of taking the miserable deal that President Obama agreed on.

Taxes will increase on people making over $400,000 and everyone will have to pay social security tax on the first $113,000 they earn every year. 

I heard a lot of rich people belly-aching that increase taxes on them will prevent them from creating jobs (perhaps in China, as we all know they are not creating any here). 

This is in spite of the fact that traditionally as taxes go up on the wealthy unemployment goes down.  While economists have not been able to find a logical correlation for this it still has happened historically.  I have a theory,  I think when the wealthy start getting extra-taxes dumped on them, they create jobs in order to have the tax burden shifted off of them and back on to the middle-class and poor. 

If my theory is correct and the increased taxes on people making over $400,000 a year is sustained, I think we could see unemployment drop within the next year or two.

I think things would have been even better if they had raised taxes on people making over $250,000 per year as originally proposed.  Unless you live in California or the Northeastern/Mid-Atlantic United States, $250,000 per year is a lot of money.  In any other place in the United States you would really be considered rich, because your cost of living is so low.

We will see how things will go with this deal, but frankly, I'm not very optimistic.