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Let’s assume that tariffs are raised in the near future to 35 percent on the goods US corporations export to the United States from their manufacturing facilities abroad. What would happen? Think Nike, Ford, United Technologies, Microsoft, Dell, Campbell’s Soups and thousands of other corporations.

The corporate news media will lie to you and say prices would go up, or the economy would tank. Totally wrong. Lies.

If select tariffs were enacted, the stock market bubble would deflate since corporate profits would decline. On the other hand, the Parasites of Wall Street are now so big that they are sucking the life out of the 99 percent. This means the stock markets are going to tank anyway, and sooner than you might expect. See The New Recession Is Knocking at the Door, and It’s Going to Be Worst Than the Last One–JohnHIvely.Wordpress.com.

The things that make up the wealth of nations are the things that are manufactured. The stock markets are a tool to redistribute income from those who actually produce the wealth of nations to those who produce nothing save for political and financial power. A vast decline in the stock markets would redistribute economic and political power back to those who produce the wealth of the United States.

The bond markets would tank too, if select tariffs were enacted. That means wealth inequality would decline in the USA. Currently, the top 1 percent own more wealth than the bottom 90 percent. Wealth are the things that you own, like houses, stocks, bonds, gold, cars, toys, smart phones, etc…. The video above was made years ago and the statistics the moderator uses are skewed even more to the ultrarich now than when the film was produced.

US manufacturing jobs would come home, probably by the millions. Wages would be forced up with so many jobs coming home. Demand for goods and services would accelerate and power the economy forward. The days of the bubble economies would be over. In other words, it would give life to the host that the Parasites of Wall Street, including all those hedge fund managers, have been sucking dry.

wealth-inequality1

Income inequality would decrease because more people would have decent paying jobs, while the rich would see their share of income decline. The rich now steal roughly 36 percent of all the income created every year in the United States, up from 8 percent in 1980. That’s precisely why the current economic expansion is the worst in modern US history in terms of job and wage growth, as well as growth in the Gross Domestic Product.

Our social safety nets, such as social security, medicare and medicaid, as well as our roads, schools, and other infrastructure would be financially strengthened.

The rich would have less money to corrupt government and both political parties. Let’s face it. Income and wealth inequality is produced by political inequality.

Foreign governments would not need to retaliate since the products of their nation’s businesses would not be subject to the tariffs.

The time has come for placing tariffs on the goods of US corporations which have exported jobs to China, Mexico and elsewhere, and then exported the goods those jobs produce to the USA.

After the Ford Motor Company announced it was exporting thousands of US jobs to Mexico, where it will manufacture all of its small cars, Presidential candidate Donald Trump has forcefully argued that, if elected president, he would slap a 35 percent tax on Ford’s small cars coming into the United States from Mexico. That tax is called a tariff and critics are in an uproar over such a proposal.

According to CNN, “It would immediately make Ford cars more expensive for Americans.” This was dead wrong and intended to distract you from other answers.

Let’s get one thing straight. If the US imposed a 35 percent tariff on Ford’s Mexican made vehicles it wouldn’t make their vehicles more expensive.

Instead, it would force Ford to keep those jobs in the United States and pay middle class wages. That tariff would also do another thing the corporate propaganda machine doesn’t want you to know about.

Ford CEO Mark Fields told investors, “Over the next two to three years, we will have migrated all of our small car production to Mexico and out of the United States.” Notice Fields told investors what they should expect.

Moving small car production to Mexico was a sales pitch to entice investors into purchasing Ford shares in sufficient numbers to prop up the sliding share price. The announcement failed in its objective to appease large institutional investors such as JP Morgan/Chase and a variety of hedge funds.

So moving small car production to Mexico is pointless since it failed to achieve its goal before the first US job was ever exported.

A tariff on these Mexican made Ford vehicles would keep the jobs in the United States and have no impact on Ford’s share price. In addition, this tariff would help in some small way in the battle against income and wealth inequality that has taken place since tens of millions of US jobs have been exported.

The difference between the old higher US wages and the new lower Mexican wages would go straight into the pockets of rich shareholders via rising Ford profits and higher dividends. In this case, it is a unlikely Ford’s exporting jobs south will impact its already crummy share price. Ford is simply a bad investment.

The tariff is the way to go.

Besides, what’s an economy for? Is it for having shared prosperity for everybody, or for just making super rich people wealthier while impoverishing everybody else?

“It’s gutless leadership,” US Senator Warren told Wells Fargo CEO John Stumft at a senate hearing over how he led the bank to fool investors. Want to get angry? Listen to the video above. We need Warren to be the next US president!

On twelve occasions between 2012 and 2016 Stumpf told investors that Wells Fargo was doing great because the bank had record and increasing numbers of cross-selling, which is the number of accounts opened by the same customers. In this case, approximately two million accounts were opened by customers without their knowledge. Stumpf lied when he denied the bank committed these crimes to fool investors.

The Consumer Financial Protection Agency fined Wells Fargo $185 million for this latest Wall Street scandal, which is a drop in the bucket for the bank, and a small token of doing business-as-usual.

This scam impacted negatively the credit ratings of Wells Fargo customers even if they didn’t use the accounts they didn’t know they had. Meanwhile, Stumpf received over $200 million in stock options in part because of this scam, which drove the bank’s share price upward.

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According to Business Insider, “Carrie Tolstedt, the head of the community banking division, was the executive directly responsible for overseeing the retail banking sector of the company, where the fake accounts were created.

In July, Tolstedt retired from Wells Fargo, holding roughly $96.6 million in various stock awards. Numerous times during the testimony on Tuesday, Stumpf was asked why Tolstedt wasn’t fired and whether the bank would use its clawback provision to take back some of that compensation.”

Warren called for Strumpf to be criminally investigated for the fraud he likely ordered. This wasn’t something engineered by some branch manager, not with two million phony accounts. The order had to come from way up.

Who in the bank is accountable? The CEO hasn’t resigned. He hasn’t fired one senior executive. Instead, Wells Fargo’s definition of “accountable” is to push blame on low-level employees who don’t have the money or PR firms to defend themselves. A bank cashier who steals $20 would be facing theft charges, but the department of justice has failed to hold any Wall Street executives accountable for any of the crimes they’ve committed for decades.

On the other hand, CNN reported that a number of Wells Fargo employees were fired for refusing to open the phony accounts, or if they complained about it to higher bank officials. See Wells Fargo Fired Workers in Retaliation For Reporting Fake Accounts–CNN

I should point out that Wells Fargo unofficial and perhaps under the table employee happens to be Wall Street Senator Mitch McConnell. He is unhappy with the Consumer Financial Protection Bureau because it is doing its job, so he’s been trying to defund it since the scandal broke. McConnell and his wife hold more Wells Fargo stock than any other senator. What a sore loser!

income-inequality

The next recession will hit sometime during the next twelve months, most likely by June of 2017. It will be worse than the last one, and the impacts of it will last longer than the Great Recession of 2007-2009. The effects of that recession are still being felt. Median household income, for example, is still below what it was in 2007. That is one of the reasons why the next recession will be worse than the last.

99 percent of all US income growth from 2009 to 2014 went to the top 1 percent. They invest their money in the bond, stock and political markets. This does not create demand for goods and services. It destroys that demand by using financial and political leverage to export US jobs to low wage countries.

So all of this means that roughly 23 to 36 percent of all income produced in the United States has been stolen by the 1 percent, depending on whose figures you’re using. This inequality is destroying the demand for goods and services. Back in 1980, the 1 percent were able to steal only 8 percent of all US income. That’s why job and wage growth was much greater then than now.

Nowadays, the 99 percent earn roughly 62 to 77 percent of all income, down from 92 percent in 1980. This means demand for goods and services will be weak, much weaker, in fact, during the next recession than might be imagined.

The current economic expansion is the weakest in modern US history because of that lack of demand. It’s also been illegally contrived.

Home mortgage applications

The big banks withheld 3.4 million homes from the market by 2011. This is a violation of a variety of US laws, and is called a conspiracy in restraint of trade. As you can tell from the graph above, demand for home mortgages have been historically low compared to the last housing bubble, yet prices continue to bounce up because that 3.4 million homes represented more than 50 percent of the entire available housing stock, according to Bloomberg news. Click the following link for the Bloomberg report $382B Shadow Inventory Weighs on U.S. Housing-Bloomberg News.

This has driven home builders to construct more homes in the USA, and panicked people into purchasing overpriced homes that the banks illegally benefit from. This illegal housing bubble is what has powered this economy forward, and also to its doom.

The above suggests a few ominous things.

  1. The big banks can’t take many more houses off the market during and after the next recession, leaving them unable to create another housing bubble sufficient to power the next economic expansion forward.
  2. Earning 63 to 78 percent of total US income will not allow the 99 percent sufficient financial strength to power the US out of the recession.
  3. Instead, people who have borrowed against the rising value of their homes and used credit cards to sustain their standard of living will be trying to dig out of their debt.
  4. The value of housing will drop, as it always has done during recessions. This time the drop could be 30 to 50 percent in many areas. Maybe 60 percent.
  5. Deflation, caused by a lack of demand, will likely happen.
  6. Expect negative interest rates.
  7. The stock markets will fall more than they did last time. Expect major stock indices like the S&P 500 and the Dow to plummet 50 to 90 percent.
  8. The Federal Reserve will bail out the big banks and rich investors to the tune of tens of trillions of dollars, like during the last recession. But the Fed won’t bail out the 99 percent.
  9. The government must bail out the rich, or the 99 percent, but it can’t bail out both. The politicians will chose to bail out the rich, just like last time.
  10. Unemployment will be in double figures at some point, and perhaps for a long time.
  11. A political revolution will likely be forced into place at some point to replace the current corrupt government, and the corrupt politicians of the Republican and Democratic Parties.

As a final note, it should be pointed out that very few news sources have reported the housing conspiracy. No politician of note has mentioned it to my knowledge. This suggests something ominous, and this is only a suggestion.

It is possible the CEOs of the big banks gathered together, either in person or electronically, with Republican Party, Democratic Party and Federal Reserve officials, to conspire to engineer this housing bubble in order to power this historically weak economic expansion, and to make certain they wouldn’t face federal charges in doing so.

Now this is just a suspicion, so don’t get all heated up. But since the government has made it a point not to do enforce US laws against drug money laundering and other criminal activities on the part of the bankers, it might also be reasonable to assume this housing bubble has been created with a nod and a wink from the politically powerful.

When this recession begins, there will be virtually nothing to power us out of it except a political revolution of some kind. We’ll need a new FDR. Are you listening Senator Warren?

 

tpp-protest-oct-2015

Tens of thousands of people protested in European cities on Saturday against planned free trade deals with the United States and Canada they say would undermine democracy and lower food safety, environmental and labor standards. The Trans Atlantic Trade Investment Partnership (TTIP) would also redistribute trillions of dollars from working Europeans to the rich folks, and wreak Europe’s labor unions in the process. That is precisely what this treaty has been negotiated to do.

Organizers from an alliance of environmental groups, labor unions and opposition parties said 320,000 people took part in rallies in seven German cities, including Berlin, Hamburg, Munich and Frankfurt. Police put the figure at around 180,000.

Smaller protests were also planned in other European cities, including Vienna and Salzburg in Austria and Gothenburg and Stockholm in Sweden.

In Berlin, demonstrators waved banners reading “STOPP CETA – STOPP TTIP”, another placard said “People over profits”.

The demonstrations are against the Transatlantic Trade and Investment Partnership (TTIP) with the United States and the Comprehensive Economic Trade Agreement (CETA) with Canada, currently being negotiated by the European Union’s executive with the respective governments across the Atlantic.

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Ford announced Wednesday that it will move its entire small car operation from America to Mexico.

“Over the next two to three years, we will have migrated all of our small car production to Mexico and out of the United States,” said Ford CEO Mark Fields, during an investor conference it was hosting in Detroit, Michigan. Notice he told investors what they should expect.

Ford’s share price continued its slow decline anyway. The share price peaked back in 1999 at $37.14. It’s been up and down since then, but never back up to the peak. The share price plummeted to a $1.43 in 2009, reached $18.65 in 2011, hit another peak in 2014 at $17.72 and has been going down ever since. The shares traded at $12.11 on September 16, two days after Fields made his foolish announcement to investors.

Ford management has exported over half of its US jobs to Mexico since NAFTA. Thank you Bill and Hillary Clinton. This has been done to reduce its labor costs and increase its profits, share price and dividends. Ford’s decision will also increase income inequality and reduce its long-term per capita sales.

So what happens when virtually all of Ford’s jobs are overseas? What happens when the next recession hits sometime within the next twelve months, most likely by or before June 2017?

Ford management can’t export many more jobs to Mexico, so that avenue to increase earnings and share prices will soon close down. The next recession will be worse than the last one, which I will explain why in a day or so. Ford’s retained earnings peaked at $27.5 billion a year ago. That’s dropped by $11 billion in a year. In other words, Ford is running out of financial room to maneuver, especially during this coming economic downturn.

The company still gives a nice dividend of nearly 5 percent. But all that means is that Ford will run out of money sooner than later during the downturn.

Expect its share price to drop back down to a dollar something, or less. The company likely will be facing a financial crisis and possible insolvency within the next five years.

Ford is an unwise investment, even for billionaires and hedge funds. Even if the company doesn’t face insolvency over the next five years, its share price is going to continue to tank in the long-run, but CEO Fields hasn’t figured that out. He should be investing in US production rather than investors, and to hell with the share price.

labor unions

The U.S. Census Bureau released new numbers on Tuesday showing that, after a brutal economic recession and years of stagnation, real median household incomes rose from $53,718 in 2014 to $56,516 last year. That’s a 5.2 percent rise — the first statistically significant increase since 2007.

But, as NPR’s Pam Fessler notes, “the median household income was still lower than it was in 2007.”

The official poverty rate decreased to 13.5 percent for last year, a drop of 1.2 percentage points. That represents 3.5 million people who are no longer in poverty and is the largest annual percentage point drop since 1999, the Census Bureau says.

The supplemental poverty measure — an alternate way of gauging poverty, which takes more factors into account — also dropped significantly, falling by 1 percentage point to 14.3 percent.

“Poverty dropped for whites, blacks and Hispanics, as well as for children and seniors,” Pam reports.

Across the board, the Census Bureau’s 2015 numbers show significant signs of progress and reflect a recovering economy.

The 5.2 percent increase in median household income, in particular, was impressive — “one of the largest year-to-year increases that we’ve ever had,” Trudi Renwick of the Census Bureau said.

The income gains for most Americans are tied to growth in employment, as The Associated Press reports:

“The income gains and drop in poverty reflect ongoing gains in the job market, Renwick said. About 2.4 million more Americans found full-time, year-round jobs in 2015.

“Americans are also likely benefiting from an increase in middle-income jobs. Many of the jobs created in the early years of the recovery have been in low-paying sectors, such as fast food restaurants and retail.

“But according to a report from the Federal Reserve Bank of New York, in 2014 and 2015 the growth of middle-income jobs in sectors such as shipping and construction outpaced the gains in lower-paying and higher-paying work.”

Income rose in every region of the country, for every age group of household head, with statistically significant increases for almost every racial group.