What Will the Rich Do With the Extra Money They Get With Mitt Romney’s Proposed Tax Cuts?

Mitt Romney’s proposed tax cuts for the rich will destroy jobs. That’s because the 1 percent invest their money in things like derivatives. According to Wikipedia, “A derivative is a financial instrument whose value is based on one or more underlying assets.” In other words, the value of derivatives and the money the owner of the derivatives receives comes from such underlying assets as car loans, mortgages, student loans, other commodities, stocks, bonds, interest rates and currencies. Currently, there is an estimated 200-500 trillion dollars in derivatives.

The rich invest mostly in derivatives. None of these derivatives create jobs, except on Wall Street; most help to destroy jobs by pressuring CEO’s to ship them overseas. The very existence of derivatives often place pressure on corporations to force employees to work longer while earning less per hour. Virtually every derivative forces the 99 percent to pay more for things, and the difference between the old, lower rate at which people paid for things and the new, higher rate goes into the pockets of the 1 percent via their derivatives.

Take student loans, for example. When somebody on Wall Street created a bond backed by student loans more than thirty years ago, Wall Street placed pressure on politicians to cut Pell and other government educational grants, so as to force students to take out more loans, which served the interest of Wall Street investors, which Wall Street’s President, Ronald Reagan was happy to comply with. Since business leaders insist that education is the key to a strong economy, the government made a move against the interests of the US, and they did it all to appease rich investors. Student loan debt now exceeds $1 trillion, which is more than total credit card debt. That’s why we now pay more in student loans; it’s thanks to the development of the derivatives market.

Derivatives attract investors, and therefore they compete with stocks and bonds, which also need investors, otherwise the value of these assets will plummet to zero. To keep stock prices competitive with derivatives, CEOs are forced to ship jobs overseas, and the difference between the old higher pay in the US and the new lower pay over there goes into the pockets of the 1 percent. The middle class people who lose their jobs pay the price. But it’s worse than that because when jobs are shipped overseas, part of the tax base that supports schools, police, road building and repair, fire fighters and other jobs are shipped oversea, or so it appears. In reality, the lost part of the tax base is shipped into the wallets of the 1 percent. That’s why there’s so many cuts in education nowadays, kindergarten through universities.

That’s how rich investors have become parasites to the 99 percent. And that’s the kind of havoc that Wall Street Mitt the Twit’s tax cuts will wreck on the US economy. They will also redistribute massive amounts of income from the 99 to the 1 percent, and utterly destroy the demand for goods and services in the process. His economic plan is a disaster waiting to happen.

Derivatives are where the rich will invest much of their newly available cash if they get a tax cut from President Mitt. And we’ll all be paying for those cuts, not benefiting from them. By the way, what I have outlined here is also why trickle down economics is really trickle up economics.

According to Wikipedia, “Under US law and the laws of most other developed countries, derivatives have special legal exemptions that make them a particularly attractive legal form to extend credit. The strong creditor protections afforded to derivatives counterparties, in combination with their complexity and lack of transparency however, can cause capital markets to underprice credit risk. This can contribute to credit booms, and increase systemic risks. Indeed, the use of derivatives to conceal credit risk from third parties while protecting derivative counterparties contributed to the financial crisis of 2008 in the United States.

Financial reforms within the US since the financial crisis have served only to reinforce special protections for derivatives, including greater access to government guarantees, while minimizing disclosure to broader financial markets.

Read Full Post »

Financial crisis: 25 people at the heart of the meltdown – where are they now?

In 2009 the Guardian newspaper of the UK identified 25 people – bankers, economists, central bankers and politicians – whose actions had led the world into the worst economic turmoil since the Great Depression. On the fifth anniversary of the credit crunch, the Guardian asks, “What are they doing? As for the politicians on the list, Bill Clinton, George W. Bush, Phil Gramm and a few others, you’re looking at the politics of corruption. Too much money in politics bought presidents, senators and congressmen, like Wall Street Fetchboy Ron Wyden. And that immoral incompetent Federal Reserve Chairman Alan Greenspan is on the list. Other than that, it’s a wall street gang, more or less. Click the link below to read the Guardian’s findings.

Financial Crisis: 25 People at the Heart of the Crisis–The Guardian UK

Read Full Post »

The Middle Class Is Shrinking. Is it because of tax cuts for the rich?

Tax cuts for the rich are destroying the American middle class. When the rich receive their tax cuts, CEO’s find ways to attract that cash to their stocks by increasing their profits. Rising profits normally mean increasing dividends and share prices. Investors are inclined to sink their newly available tax money into investments with higher rates of return.

That’s why CEO’s race to ship jobs overseas, create jobs overseas and place downward pressure on the compensation of their US employees. The difference between the old wages and the new is redistributed into the pockets of the already affluent via higher dividends and share prices.

This allows the 1 percent to purchase more legislation that redistributes even more income from the 99 to the 1 percent, such as free trade treaties and deregulation. Free trade treaties result in more and more jobs being shipped oversea, or created over there rather than here. The difference between the old and new wages goes into the pockets of the rich.

The demand for goods and services has declined in the US because less people have money to buy stuff, unless they’re using their homes as ATMs during a housing bubble. Once that bubble burst, the demand sector was squashed, meaning less jobs can be created, and there’s still downward pressure on middle class wages and salaries.

The process means the destruction of local bases, layoffs of teachers, fire fighters, police and other government employees. The economy begins to collapse in slow motion over a period of several years. Only the New Deal and the Great Society programs hole the economy up.

That’s why, “In 1979 the middle three household income quintiles in the United States—that is, the population between the 21st and 80th percentiles on the income scale— earned 50 percent of all national income. But by 2007 the income share of those in the middle shrank to just 43 percent. Between 1979 and 2007 the Gini coefficient including capital gains, in the United States, climbed from 48 to 59, ranking the United States in the top quarter of the most unequal countries in the world.”

Tax cuts for the rich are also why the 1 percent received 93 percent of total US income growth from 2009 to 2011.

See Related Story

The Shrinking Middle Class–From The Center for American Progress

Read Full Post »

Senate Candidate Elizabeth Warren Calls for Ouster of NY Fed Chief

Massachusetts Senate candidate Elizabeth Warren (D) is calling for JP Morgan CEO Jamie Dimon to resign from his position at the New York Federal Reserve Bank to acknowledge that he was in a position of trust after his company revealed that it had recently lost $2 billion as a result of bad bets on derivatives.

“I’d like to see some real accountability here,” Warren told CBS host Charlie Rose on Monday. “I’d like to see Jamie Dimon, for example, resign from his position as a Class A director of the New York Federal Reserve Bank.”

During a Sunday interview on NBC, Dimon had explained he had been “dead wrong” to dismiss concerns about his company’s banking practices.

“In hindsight, we took far too much risk,” the CEO said. “The strategy we had was badly vetted. It was badly monitored. It should never have happened.”

See Full Story and Video Below

Senate Candidate Elizabeth Warren Demands Ouster of NY Federal Reserve

Read Full Post »

College Graduates Face Bleak Job Pictures and Years of Indentured Servitude to the One Percent

College graduates are facing a life time of indentured servitude to the one percent. That’s what the student loan scam is all about, and that’s what free trade treaties are all about. When the government ships jobs overseas via free trade treaties, the difference between the old wages here and the new wages there go into the pockets of the one percent via higher corporate profits, rising dividends and soaring share prices. In other words, these treaties are a bunch of income redistribution scams. So are student loans.

The Associated Press reported that the job outlook for college graduates in 2012 is bleak. One out of two will be underemployed or unemployed. The report doesn’t mention why. The reason is simple. The jobs have been shipped overseas. The list of jobs gone or going away via free income redistribution treaties is long; jobs in manufacturing,computer programming jobs, engineering, call center jobs, and way more.

It’s easy to understate what we lose with the loss of manufacturing jobs. Every seventy jobs making stuff with your hands supports about thirty other kinds of jobs, like management, accounting, book keeping, attorneys, computer programmers, engineering, etc…. You ship away seventy manufacturing jobs and that means you ship away thirty other jobs that usually require a college degree. That doesn’t count all the engineering and computer programming jobs not directly associated with manufacturing employment. Those jobs are being shipped away, as well, at least a fair percentage of them.

This means the federal government is redistributing much of the tax base from working people to Wall Street and the wealthy by shipping away the jobs that support public services. This is why there are routine and continuous cut backs in education (teachers), librarians, nurses, counselors, accountants, lawyers, public administrators and other jobs that require college degrees. That’s what free trade does; it freely redistributes income and wealth, turning the rich into parasites and the 99 percent into the hosts.

The kids getting out of college today not only have dim job prospects, but they also have a ton of debt via student loans. The government wants to offer students more loans rather than grants. The reason is simple. The loans are bundled the same as home mortgages, and are then sold to Wall Street brokerages like Goldman Sachs. Investment firms slice and dice the government guaranteed loans, and then issue bonds backed by the loans. When students make their payments, most of it winds its way into the pockets of the bond owners, which are almost always members of the one percent. Remember, because the US government guarantees student loans, the bonds backed by student loans are also guaranteeing large profits to the one percent, with absolutely no risk of loss. None. Zero. That’s a pretty good scam.

He who has the gold makes the rules. That’s why grants are limited nowadays more so than in decades past. Student loans are where the money is. There is more student loan debt outstanding than total US credit card debt. And that pile will continue to grow.

One of the reasons for this continued growth are free trade treaties. As more free trade treaties are enacted, more of the tax base will be shipped overseas, state governments will be forced to raise tuition, which will force students to take out more student loans, which will force them into ever longer periods of indentured servitude to the wealthy, who have more money to buy politicians, who then enact more free trade treaties, which force state governments to raise the price of tuition, and hopefully by now you see all the interacting relationships.

On other point needs to be made; student loans have nothing to do with providing an educated work force. They’re all about redistributing income from the 99 percent to the one percent. Just like free trade treaties. They both financially weaken the 99 percent to strengthen the one percent.

And that’s why every member of the ninety-nine percent should call their congressmen and senators and oppose the largest free trade treaty since Nafta, the Trans Pacific Free Trade Agreement. That’s a treaty being negotiated by the US government to continue to redistribute income and wealth from the 99 percent to the one percent.

Associate Press Report on the Job Propects for College Graduates

Read Full Post »

Boycott the Oregonian newspaper, A Propaganda Conduit of the One Percent

The Oregonian newspaper is the primary propaganda organ of the one percent in the state of Oregon. The newspaper reported today that the Beaverton School District is going to lay off 344 employees. The district is the third largest in the state. What is conspicuous is what the Oregonian chose not to mention; much of the tax base has been shipped overseas via free trade agreements. It’s true that most school funding in Oregon is derived from property taxes, but it’s equally true that if thousands of jobs have been shipped overseas because of free trade agreements, the people who lose those jobs can’t usually afford a house, or their property taxes. Just look at your country. Where is the housing market going? Down. That’s where.

The same thing occurs when an American based company decides to create jobs overseas, rather than here, when free trade agreements open the door to do so. The people that lose their jobs may get unemployment checks and a foreclosed house.

The Oregonian also doesn’t mention that the difference between the old higher wages here, and the new lower wages there, are pocketed by the one percent via higher corporate profits, enhanced dividends and rising share prices. That’s why the free trade agreements are an income redistribution scam. But the Oregonian staff doesn’t want you to know that. The exact same thing holds true when jobs are created overseas by US companies that normally wouldn’t occur without the free trade agreements.

The Oregonian also hides the fact that they endorse politicians such as Congressman Earl Blumenauer and Senator Ron Wall Street Wyden. Wyden has never met an income distribution trade treaty that he hasn’t liked, because his buddies at the Oregonian and on Wall Street like them. Blumenauer votes for most of them.

Apparently, the folks at the Oregonian think the sole purpose of the US economy is to enrich the one percent at the expense of everybody else. The Oregonian is the Fox News of Oregon. It is the propaganda wing of the one percent in the state. Save yourselves, your school districts, your police and other public services. Save your jobs, save your neighbors. Put the Oregonian out of business by not buying it. Boycott!

Related Stories

Beaverton School District to Lay off 344

Why Are Teacher Cut Backs Coming? Blame Free Trade Agreements

Read Full Post »

Market jitters all round as eurozone woes return

Markets rattled as the Eurozone faced the renewed Euro crisis. In Ireland, the people have decided not to pay a property tax earmarked to save the banks and rich investors from their own stupidity and bad investments in mortgage backed bonds.

click here for the full story

Read Full Post »

Pepsi and Coca Cola End Relationship With the One Percent’s Misinformation Front Group

PepsiCo, the world’s second largest beverage company, ended its sponsorship of ALEC, the controversial right-wing group of the one percent that lobbies for voter suppression efforts. Their goal is to limit the ability of the 99 percent to vote, at least as much as possible. Pepsi’s move may also have had a role in compelling Coca-Cola to drop its support for ALEC.

Click here for the full story

Read Full Post »

Koch Brothers Puppet Governor Scott Walker Will Not Use the Foreclosure Settlement Money to Help Homeowners

Wisconsin’s Koch Brothers Puppet Governor Scott Walker has no intention of using the foreclosure settlement money gotten by the US Justice Department to help homeowners. He intends to balance his budget. What that means is simple, and it’s not as simple as it seems, at least at first glance.

When Walker became governor of Wisconsin back in 2010, he inherited a nearly balanced budget. So he decided to give his rich buddies big tax breaks. That meant Wisconsin’s budget went from nearly balanced to a terrible shortfall. Walker decided public employees should reduce their compensation (as well as give up their labor union organizing rights) to bring the budget in balance. In other words, rich people got wealthier because income was transferred from the government middle class workers.

Now Wisconsin has a budget shortage this year. The Koch Brothers, through their puppet governor, have decided to use the foreclosure funds to balance Wisconsin’s budget. This way he won’t have to rescind the tax cuts for his wealthy buddies to make up the budget shortfall, no matter how much pressure is brought to bear against him to do the Christian thing.

In other words, the Koch Brothers have decided to redistribute the foreclosure funds intended for middle income Americans, to their affluent buddies, using their puppet governor.

Click here for the complete story

Read Full Post »

Banks agree $25 billion deal for U.S. homeowners

The banks got trillions in loans from the Federal Reserve that they claim they paid back, although it is statistically impossible for them to have done so; but now the banks are willing to pay billions to homeowners, which isn’t all that much when divvied up among all the homeowners the deal is supposed to help. $25 billion is a drop in the bucket, but it is an election year, so Obama fans the illusion that he cares about working people. No doubt about it, he does care, but only during an election year. Otherwise, President “Wall Street” Obama would have done something to help homeowners a long time ago.

click here for the full story

Read Full Post »