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Posts Tagged ‘immigration’

Home mortgage applications

To one my stories about how income had finally begun going up in 2016, somebody wrote, “Yes the 80 bucks more a month I’m getting now completely covers the hundreds of dollars my rent has gone up due to rich developers moving in and gouging us all.”

There are a few things to be said about the comment above. As you can tell by the graph above, applications for home mortgages peaked in 2005 and have dropped quite a bit since then. So why are home and rental prices still shooting through the roof?

The big banks in 2007-11 conspired together to keep over 50 percent of vacant houses off the market so as to jack up prices. Home prices have artificially risen since then. The banks have allowed an increasing dribble of these homes back onto the market as prices have artificially and illegally risen.

Rents are artificially high as well, and for the same reason. What the big banks have done is commit a crime called “a conspiracy in restraint of trade.” This collusion redistributes income from home buyers and renter (the 99 percent) to share and bondholders of the 1 percent.

90 to 95 percent of US population growth is due to immigration. When population constantly increases while large amounts of housing units are illegally taken off the market, the result jacks up housing prices and rents. See Shadow Inventory: More Houses Will Soon Be Available for Sale–Rismedia.com. See also The 7-Million Housing Shadow Inventory Could Trigger A Price Avalanche–Business Insider.

The government has changed the way it measures inflation twenty times since 1981 so as to reflect a lower rate of inflation than actually exists. This means real wages are actually higher than they would have been under the old methods of measuring inflation, so that when the government tells us wages have been stagnant for thirty-six years, it really means real wages have gone down significantly.

Meanwhile, increases in home and rental prices are not actually counted in the inflation rate. See How to Fix the Housing Component of CPI–Slate. Food and energy prices are not included either, but they used to be. There’s a reason for this; inflation measured against wage increases would demonstrate real US wages have plummeted over the last three and a half decades, rather than stagnated. Both Republicans and Democrats in public office don’t want you to know the real story, and neither does their corporate news media.

Both major political parties are controlled by big corporations, billionaires, hedge funds and Wall Street investment banks, and most of these benefit from this conspiracy in restraint of trade. So don’t expect the US government to do anything about this illegal manipulation of prices. It isn’t going to happen until we get honest government back to Washington.

Editor’s note;

The big banks have conspired against Federal law and supply and demand to withhold product from the market in order to manipulate prices and profits upward so it is the renters and buyers who are ripped off. Much, if not all, of this conspiracy has to do with mortgage backed bonds, and the profits and losses to be had from them. A loss in value of 8 percent in the housing that backs triple B rated bonds sends the value of those bonds down to zero, according to Michael Lewis in The Big Short. Likewise, he writes, a 20 percent slump in the price of housing sends the value of AAA home mortgage backed bonds to zero. A lot of billionaires and millionaire investors lose in this instance. So the big banks conspired to keep over 50 percent of the vacant housing off the market in order to prop up the value of those bonds. However, there are other significant benefits to those banks to keep houses off the market. Buyers and renters pay the price of this conspiracy because the obvious result of the actions of the big banks is to redistribute hundreds of billions, if not trillions of dollars, every year from the 99 to the 1 percent.

Dear Democrats, please note then President Bill Clinton refused to sign legislation that would’ve regulated derivatives. Home mortgage backed bonds are a derivative, since their value is derived from an underlying asset. That’s why they’re called derivatives.

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In the video above, in 2009, Bill Gates testifies that the United States needs more foreign high tech workers. He wants more of the “best and the brightest” from around the world to come to the United States and take jobs from US citizens, who are often forced to train their H1B Visa replacements.

Gates testifies that we should allow an “unlimited amount” of H1B immigrants. What Gates doesn’t mention is that wages have been stagnant in the US high tech industry since 1990. At least one study shows that 2/3rds of US high tech workers were unemployed in their field, as of 2012.

That’s precisely why Gates wants “unlimited” H1B visa recipients. The more the merrier for the bottom line of Microsoft. Reducing wages by increasing the labor supply increases corporate profits, share prices and dividends. This benefits the 1 percent at the expense of the 99 percent who are trying to make a living in the high tech sector. That’s the real story in a nutshell for the position of Bill Gates.

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Let’s look at what the EU commissioners call the sacred “four freedoms”: the free movement of goods, capital, services and people. Notice something strange about the list? Goods are manufactured things, capital is money, services are transactions, but people are of a different category, are they not?

Human beings have cultural ties, feelings, attitudes, patterns of behaviour, social assumptions and… add all the other obvious words you can think of. But to CEO’s of corporations, or hedge fund managers, they’re all inputs into the production process.

Not only does the free movement of labor in unlimited numbers in the European Union present a much more complex and potentially delicate problem, but it seems quite wrong to lump people in with manufactured goods and commercial services. Is this the dream of conservative and liberal politicians of Europe: to build an economic and political system that shunts people around a continent to fill whatever quotas big business requires at any given moment?

The answer is yes. And so British corporations have exported jobs to lower wage EU nations, like Hungary. In turn, Eastern European labor has been given unrestricted access to immigrate anywhere in the EU they desire, and for many, that means higher wage nations, which includes Great Britain.

As jobs leave Britain for lower wages elsewhere, hundreds of thousands of immigrants have entered Great Britain and placed downward pressure on wages and benefits there. That puts upward pressure on corporate earnings, stocks prices and dividends, which go mostly to the rich.

The EU is politically constructed so as to ensure the rich get wealthier by redistributing income from the 99 percent to themselves.

That’s precisely what globalization is all about.

The United States has followed this pattern with hyper-immigration over the last thirty-five years, and with massive international income redistribution scams falsely marketed as international trade agreements, which have lead to the exportation of tens of millions of US jobs. Notice real US wages have stagnated during these years while the stock markets have exploded, and the rich have gone from stealing 8 percent of all income produced in the US to 37+ percent today. That’s precisely what globalization has brought us.

In the meantime, the corporate press of both the US and Great Britain cry out against the success of Brexit on behalf of their fellow corporations and advertisers. However, the people of Great Britain knew what they were doing.

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In other news about Brexit from the June 27, 2016 Investor’s Business Daily, winner of the Pulitzer Prize in journalism in 2009, the editors laid out the case for Brexit.

British citizens will enjoy “higher wages.”The editors didn’t explain why wages would rise, but reduced immigration means fewer workers to compete with British workers, which means a lower labor supply, which typically translates into higher wages.  That means corporate profits will decline, or not grow as briskly. That means three things; dividends, stock prices, and income inequality will all slow or decline in Britain.

The editors also claim British citizens will have “lower food costs” with Brexit. That’s good for working people, and bad for rich shareholders.

In addition, European Union regulations cost “5% of the UK’s GDP. That’s to say nothing of the loss of control that the country faces to increasingly arrogant bureaucrats in Brussels.”

The editors didn’t mention that the lower value of the British pound vis-a-vis other currencies will lower the profits of British companies that have exported British jobs overseas to lower wage nations, and then export these goods into the UK. This may force some jobs exporters to bring jobs back to Britain.

Finally, the fall of the British pound acts as an incentive for British corporations to not export any more jobs.

All of these things are bad for rich investors, but they are good for the 99 percent of Britain. Perhaps this is why British politicians and mega investors weren’t happy with Brexit.

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H1B

The US government regulates the wages, salaries and benefits of US citizens in virtually all sectors of society in any number of ways, and the government has regulated wages, salaries and benefits downward for the last thirty-five years.

Sign a treaty, call it a trade agreement, and watch millions of jobs get exported overseas. The job losers contend for the remaining jobs, putting downward pressure on wages. The rich benefit because exporting jobs expands profits, dividends and share prices. The government also uses immigration to regulate US wages, salaries and benefits.

As you read this, US businesses are pushing congress and the white house to expand the H-2B program so that they can import more semi-skilled and low skilled foreign labor to replace US citizens. This is another case of the US government enacting a program to bring downward pressure on wages, and increasing unemployment among US citizens.

According to the Economic Policy Institute;

“…employment and wage data show no labor shortages in industries that employ H-2B workers. Many business groups have advocated for expanding the H-2B visa program to fill so-called labor shortages with low-skilled temporary guest workers. The report suggests that businesses support expanding the H-2B program because they can pay H-2B workers less than comparable U.S. workers. “It’s clear that there are not national-level labor shortages in H-2B jobs that would justify expanding the H-2B program or watering down rules requiring that employers first recruit U.S. workers before hiring an H-2B worker,” said Daniel Costa, the report’s author.

Costa reports, “Wages were stagnant or declining for workers in all of the top 15 H-2B occupations in 2014.” Many of these industries have been experiencing declining wages for a decade or more.

Hopefully, given the current US political climate, an expansion of the H-2B visa will not come about. That would be devastating to the 99 percent, but the rich would reap the benefits of lower wages.

The H1-B guest worker visa has been used to keep the wages of US high tech workers down for nearly thirty years. Wages in the high tech industry have been in the doghouse since the inception of the program, and three out of four US high tech workers are unemployed in their fields.

If the government was truly serious about raising US wages, and that time is nearing, both the H-1B and the H-2B programs would be curtailed or eliminated. The Trans Pacific Partnership would not become a fact of law. In addition, immigration would be curtailed until long-term wage growth became a reality, and the income and wealth gaps closed significantly.

During the last three decades and a half, immigration into the US has been explosive. That’s because the US government has been regulating wages downward. The folks at the Pew Research Institute call this hyper-immigration. According to some estimates, 90-95 percent of all US population growth since 1981 is due directly or indirectly to immigration.

Now I’m not suggesting immigration is a bad thing most of the time, especially if worker compensation is going up. But it does become a problem for the 99 percent, and a treasure chest for the 1 percent, if compensation is going down. When this occurs, such a process redistributes income to the super rich from the 99 percent. Let’s face it. Average real US wages have declined in real terms during this period of hyper-immigration while the US stock markets have exploded. Much, and perhaps most, of this is due to shipping jobs overseas, but a fair amount is due to hyper-immigration. Just look at wages in the US high tech sector.

 

To read the EPI report click here.

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The governors of the Federal Reserve Bank voted to keep interest rates at historic lows in their September 17, 2015 meeting. The bank has not raised interest rates in nearly a decade. Lucky us, or maybe unlucky us.

Chairwoman Janet Yellen cited a number of reasons why the bank decided to keep rates low. She mentioned, for example, the weakness of manufacturing in China.

However, she didn’t mention that nearly 50 percent of US manufacturing is done in China, which, quite naturally, indicates a slowing down of US outsourced manufacturing, which certainly impacts the US. Like a good politician, she also did not mention that the evil US trade deficit is fueled by US manufacturers exporting jobs overseas, like Microsoft, Apple, Nike and Adidas. These and hundreds of other companies manufacture their products in China and elsewhere, and export their stuff to the US.

a-group-of-economists-wrote-an-open-letter-in-favor-of-janet-yellen-and-the-list-of-names-is-stacked

This is precisely and the only reason why the US has a trade deficit. The US trade deficit, in other words, is with US job exporters, not with China, Pakistan, Mexico or elsewhere.

Anyway, keeping interest rates low was a good thing for the US economy. Typically, the Fed waits to raise interest rates until just after the US economy begins to slide into recession.

That process begins when US corporations see a slowdown in their earnings growth, in the aggregate. These businesses begin to lay people off, which jacks up their profits. Perhaps the folks running the Fed take this as some sort of sacred signal that everything is all right. However, laying enough people off throughout the economy ignites recessions in the process of jacking up those profits, because the demand for goods and services slackens, jobs and profits decline, and a recession begins even while corporate earnings expand.

This is why I mentioned the slowdown of Chinese manufacturing, which in all likelihood, represents something of a slowdown of US manufacturing abroad. Profit growth has been shaky the last two years, though still growing in fits and spurts with sudden quarterly declines followed by rapid growth.

In other words, the US and world economies are still quite weak, especially since the rich have stolen 95 percent of all income growth in the US since 2009, an historic high by a wide margin. This has meant sluggish US and world economic growth since the more money the 1 percent steal in the US and elsewhere, the weaker the demand for goods and services by the 99 percent.

Yellen has the brains to understand all of this. This is likely why the Fed has kept interest rates at historic lows for years. To maintain their standards of living, the 99 percent had to keep borrowing because they haven’t gotten a raise in 35 years on average and in real terms. Raise interest rates and the demand for goods and services begins to die.

Raising interest rates will likely be the straw that sends the world economy into the monstrous fangs of the biggest economic crisis since the Great Depression. This crisis may already be in its early less visible stages.

Not a single world leader has learned the lesson from the last Recession. The current US economic expansion is fueled by the same artificially created housing and stock market bubbles as the last recession. Wall Street executives are calling the economic shots in the White House, on Capital Hill and the US Supreme Court. That’s why nobody who could do anything did squat about the corrupt forces that brought about last recession, and now the bill is coming due.

The last recession was the worst since the Great Depression. The next one, as I have pointed out in my book, The Rigged Game: Corporate America and a People Betrayed, will be far more hideous.

The Fed has literally no tools to fight off this coming Great Depression, but it will print trillions of dollars to save billionaires and others from their foolish investment decisions. See breakdown-of-the-26-trillion-the-federal-reserve-handed-out-to-save-rich-incompetent-investors-but-who-purchase-political-power–JohnHively.wordpress.com

The federal government will be forced to expand the deficit, and instead of having 48 million people permanently on food stamps, the US will have 60 to 100 million, unless the madness of redistributing income from the 99 to the 1 percent via job exporting trade treaties, unsustainable and illogical immigration policies (both legal and illegal, HB1 visas), and privatization scams.

Much of this can be reversed simply by amending income redistribution schemes known as international trade agreements, limiting immigration by restricting the flow of people moving into the USA at least until wages begin to rise, enforcing current immigration laws, and putting a halt and reversing many privatization follies.

All three of these policies have stolen jobs from American citizens, while enriching the politically and financially affluent in the process, all at the expense of people who produce goods and services.

Of course, that is precisely what the corrupt US government (all three branches), and both corrupt major political parties, have been driven to do by the money unleashed in the political markets since and because of the Reagan tax cuts for the rich.

The ultimate end game of Reaganomics is coming to its ugly conclusion.

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Today, Main Street Democrats achieved a signal victory for the middle class by successfully filibustering President Obama’s demand for Fast Track Authority, which would have made it easy for congress to pass the Trans Pacific Partnership (TPP), the largest income and political power redistribution scam in US history.

The TPP has been negotiated to raise pharmaceutical prices, offshore jobs, drive millions of Latin American immigrants into the USA illegally, eliminate your state and local voting rights on certain issues, increase already bloated income and wealth inequality, override Wall Street regulations, and lots more stuff that benefit the 1 percent at the expense of the 99 percent.

Fast track would have limited debate on the TPP, forbidden a senate filibuster on it, and not allow any amendments to the income redistribution scheme.

Led by Harry Reid, the Democrats tried to force the Republicans to accept four other bills in tandem with Fast Track Authority. These included provisions against child labor and currency manipulation.

Shockingly, even Wall Street Senator Ron Wyden stood with fellow Democrats in voting against Fast Track. Wyden had negotiated a deal with Wall Street Republican Senator Orrin Hatch that gave him some sort of self decided green light to vote against the 99 percent on Fast Track Authority on behalf of his Wall Street masters. His influence on Fast Track legislation was largely smoke and mirrors to fool the Democratic base. The base wasn’t fooled however.

Wyden is up for reelection in the state of Oregon next year, and grass root Democrats are organizing against him on an unprecedented level.

This defeat does not mark the end of the war against the middle class. So keep fighting against fast track and the TPP.

See more at barack-obama-fails-trade-deal-trans-pacific-partnership–Political.com

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