Posts Tagged ‘Ponzi scheme’

You only need to look at the Bush tax cuts of almost 15 years ago to recognize how tax cuts for the rich destroy jobs and redistribute income from the 99 to the 1 percent in the process. George W Bush was the first president since Herbert Hoover to experience negative job growth during his presidency. Now Trump will be the second president since Hoover to experience negative job growth. Here’s how the scam works.

The tax cuts for corporations will increase their after-tax profits. This will be handed out to the rich in the form of higher stock prices (capital gains) and dividend payments.

Meanwhile, the tax-cuts for the rich will deliver them more after-tax income with which to purchase more speculative investments. Both corporations and the individual wealthy will then inflate the current stock market bubble by purchasing more stocks, futures options, and other things of those natures. (A futures market is an auction market in which participants buy and sell commodity and futures contracts for delivery on a specified future date)

Naturally, this will bid up the price we pay for commodities, such as food, natural gas and oil. The difference between the current prices and the new higher (inflated via tax cuts for the rich) prices we will pay means that more of our income will be redistributed from us to the 1 percent.

In other words, we will be made to pay more to the rich for the food we eat, the natural gas we use to heat our homes, and the gasoline we need to power our cars, as well as other things, and that extra money we will be forced to pay will go straight into the pockets of the billionaires, people like Warren Buffett, the Koch Brothers, and Donald Trump.

The stock market bubble, perhaps the biggest in US history, will now continue to grow as both corporations and the individual wealthy have more money to bid stock prices up. The stock market bears a remarkable resemblance to a Ponzi scheme. A Ponzi scheme is a form of fraud in which belief in the success of a nonexistent enterprise (or artificially high stock prices) is fostered by the payment of quick returns to the first investors from money invested by later investors. In this case, the rich will be paid more and more for so long as the bubble continues to inflate, and for so long as it takes for the bubble to fizzle out. Corporate management will feel the pressure to export more and more US jobs in order to pay what is necessary to prop up their stock prices.

In other words, the tax cuts will produce greater pressure on corporate managements to export more US jobs to low age nations whenever possible. The difference between the old higher US wages and the new lower overseas wages will go straight into the pockets of the superwealthy. The rich will get all the increasing returns on investment from us, the stakeholders, rather than later investors. In that way, along with one other way which I shall not go into now, the stock market closely resembles a Ponzi scheme.

Trump’s disastrous tax cuts will cause a one trillion dollar increase in the federal deficit over the next ten years. Naturally, in order to reduce the deficit, Republicans will demand reductions of federal expenditures on education, road maintenance, social security payments to the elderly and disabled, Medicare, Medicaid, Welfare, food stamps and other programs that benefit the middle class and the poor, because of the deficit they have created with their tax cuts for the rich. In this way, the billionaires will become richer at the expense of everybody else, thanks to the unnecessary tax cuts.

Meanwhile, quite naturally, Republicans will insist on increased federal military expenditures and expanded deportations of undocumented immigrants because these programs are highly profitable to their base, which is the billionaires who control the party, and not the grassroots. The US currently spends more on its military than the next 26 nations combined, 25 of who are US allies. Talk about overkill or unnecessary.

The tax cuts are unnecessary inasmuch as the 1 percent are stealing a record amount of the total national income, going from 8 percent in 1980 to 37+ percent nowadays. Three people, (Jeff Bezos, Warren Buffett, and Bill Gates now own wealth (assets) than the bottom 50 percent of the US population. The top 1 percent now own more wealth than the bottom 90 percent. In addition, corporate profits are at record levels. So neither corporations or the rich need the money except as a way to steal more money from the rest of us, and the money from their theft will keep those stock markets, futures market, and other markets boiling upward until the bubbles pop. And that will produce a disaster for Trump, the Republicans, and us.

Every Republican who voted yes on the bill knows everything that I have written above. Yet, they still voted yes. This shows that the billionaires are their real constituents and not the grassroots. They all know the bill was passed on a series of lies.

Read more: Futures Market https://www.investopedia.com/terms/f/futuresmarket.asp#ixzz507u73Y1m The d
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“A network of Republican lawmakers and their rightwing corporate funders are battling behind closed doors to block minimum wage increases in cities across the US, in a step-by-step counter-attack that could cut back the incomes of millions of Americans despite an economic upswing.

According to strategic details obtained by the Guardian, the American Legislative Exchange Council (ALEC) – along with its localized sister organization, ACCE – is trying to prevent elected city representatives from raising the minimum wage to levels above those set by their states. The group has launched an aggressive dual-track mission that combines legislation and litigation in what Alec calls a “new battleground” over worker compensation.”

Why would rich people want to stop poor people from earning more money? The answer is simple.

The financial markets are Ponzi schemes. More and more money has to be pumped into the financial markets, or the values of corporate shares that are traded on those markets will crumble into nothingness. For example, if shares of Weyerhauser climb to $50 per share, yet profits go down, more sellers will enter the market than buyers, and the value of the shares go down. However, the process is also true if profits stay the same from one quarter to the next. In which case, there might be exactly as many buyers as sellers of Weyerhauser shares if other stock prices are rising.

Why hold a static stock when when you can sell and purchase shares that are on the rise? The result of static corporate profits (and profits are the key to whether or not share prices rise), is to send share prices down. Weyerhauser’s stock plummeted from $50 to $1 per share from 1929 to 1933, which is when the Ponzi Scheme known as Wall Street collapsed. I demonstrated this in greater detail in The Rigged Game: Corporate America and a People Betrayed.

This is why ALEC opposes increasing the minimum wage anywhere except for shareholders, CEOs and corporate lobbyists. If corporations need to pay workers higher wages, that will reduce profits and potentially send share prices lower. This is also why the 1 percent wage war against the middle class, corrupt government at all levels with their ill-gotten gains, and have their legislators push legislation to redistribute income from the 99 to the 1 percent. This is also why we have much greater inflation today than the government lets us know about, but that’s another story.

Check out the rest of the story from the Guardian by clicking on the link below.

How a powerful rightwing lobby is plotting to stop minimum wage hikes–the Guardian

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Pope Francis called for “the legitimate redistribution of economic benefits” on Friday, arguing that the Bible demands an economic system that cares for the “poorest and those most excluded.”

“In the case of global political and economic organization, much more needs to be achieved, since an important part of humanity does not share in the benefits of progress and is in fact relegated to the status of second-class citizens,” Francis said.

Francis grounded his argument in biblical the story of Zacchaeus, a rich (and likely corrupt) tax collector who dramatically altered his economic behavior after encountering Jesus Christ. According to Luke 19:1-10, Zacchaeus was overcome by Jesus’ kindness, prompting the wealthy man to publicly proclaim that he would give half his possessions to the poor and pay back anyone he defrauded four times over.

“…Zacchaeus made a radical decision of sharing and justice, because his conscience had been awakened by the gaze of Jesus,” Francis said of the story. “This same spirit should be at the beginning and end of all political and economic activity.”

The problem with the Pope’s position is that the US economy is grounded in Wall Street, which is a Ponzi scheme. Redistribution of wealth would led to the utter collapse of Wall Street.

Pope Francis Says the Bible Calls For the Redistribution of Wealth–Thinkprogress.org

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The answer to the title above is simple; constant population growth equals constantly growing corporate profits. That’s not necessarily a good thing for the 99 percent.

The US economy is dominated by a Ponzi Scheme known as Wall Street. As corporate earnings rise, stock prices generally rise. If aggregate corporate profits go down, as they always must in time, then that 15,000+ value we see today with the Dow Jones Industrials can drop to 8,000 or less, as it did during the Great Recession.

Now imagine what would happen if the economy never came out of the Great Recession, like during the Great Depression. In October 1929, the Dow Jones was close to 400, up from less than 100 in 1921. The Depression hit that month, the economy entered into a sustained decline, the Dow dropped and dropped until it was less than 50 in October 1932. That’s a lot of speculative profits that were wiped out. The Dow began climbing with the election of FDR on November 8, 1932. But what if FDR didn’t win and the US continued down the same path? There’s a good chance the Dow would’ve dropped to a value of zero.

One way to avert such a calamity is to have constantly increasing population. As population grows, there are more people to feed, which means constantly growing demand for goods and services, which helps corporate profits rise, which keeps the Dow growing. The government will even feed and house tens of millions of people in order to keep demand up.

If, however, the US population was to decline, especially in the long-run, so too would the demand for goods and services. That means corporate profits would begin a long term drop. The financial markets would plummet in the long run. Paper profits that have grown over decades would vanish like smoke.

The birth rates of US citizens began to slow a few decades ago, and to compensate, your government opened the floodgates of immigration to compensate for that. Of course, there were other factors for doing this, as well. More immigrants meant a downward push on wage growth. The difference between what wages would’ve been in the absence of higher immigration and what they became with greater immigration went into the already fat wallets of the super rich via higher corporate profits, share prices and rising dividends.

This is not to suggest that immigration is always a bad thing, especially if there is a rising tide of prosperity for all. However, immigration during a time when there has been a massive redistribution of income and wealth flowing from the 99 to the 1 percent probably isn’t a good thing for the 99 percent. But it is good for Wall Street and the 1 percent, and for the reasons cited above.

If population growth continues to slow, and last year it grew only 0.7 percent, and middle class income continues to stagnate, then the current record rise in the Dow Jones Industrials suggests it is a bubble caused by redistributing income from the 99 to the 1 percent.

In other words, it is possible the current pathetic economic expansion is ambling down a road that ends at a very steep cliff. This brings us to a question.

Was the Great Recession just a blip on the road to an even greater Depression somewhere down the road a few years from now?

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As the chart below shows, the vast majority of American citizens want US corporations to pay more in taxes. They can since they’re getting record profits year after year. But is that ever going to happen outside of a major political revolution? Not likely.

Wall Street owns 80 percent of the Democratic Party, include the head honcho, President Barack Obama. Wall Street also owns the entire Republican Party, so it isn’t going to happen there.

A real increase in the amount of taxes corporations pay will reduce corporate earnings. This will lower share prices and maybe even negatively impact corporate bond prices. None of this is good for Wall Street and the 1 percent since share prices must go up and up. Otherwise, the entire Ponzi scheme known as Wall Street will collapse, as it did during the Great Depression.

The Public Be Damned! Where the public stands of corporate tax reform and what Obama, the Democrats and the Republicans intend to do about it.

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From the Economic Policy Institute:

“The U.S. trade deficit with Japan has increased steadily over the past four years, reaching $79.9 billion in 2012, an increase of $13.4 billion (20.2 percent). Last month, the United States and Japan agreed on language that could allow Japan to join negotiations to enter the Trans-Pacific Partnership (TPP), a proposed free trade agreement with 10 other Asia-Pacific countries (a new round of negotiations on the TPP began in Singapore last week ).

Exports support U.S. jobs but the larger volume of imports displaces even more jobs. Trade deficits such as the one we have with Japan have cost the United States millions of jobs, most of them high-paying jobs in manufacturing. Signing trade deals is an ineffective way to create jobs, in large part because they usually result in higher trade deficits. One of the biggest causes of our trade deficits is currency manipulation, which acts as an artificial subsidy to other countries’ exports and a tax on U.S. exports. Japan has a history of currency manipulation, and Japanese Prime Minister Shinzo Abe announced that he intended to weaken the yen when he was elected in December. The yen has declined 11.9 percent since then.”

The US also has a trade deficit with China, but that’s not quite the truth. The US has a trade deficit with US corporations that do their manufacturing in China, such as Nike, Apple and Microsoft. The worse thing is that the Obama man may force US textile manufacturers to move their facilities to China, as well. On the other hand, it should be pointed out that there are plenty of US textile manufacturers in China, already.

The TPP is being negotiated by officials from the Obama administration. Obama’s policy preferences, like George W. Bush before him, have been to redistribute income and political power from the 99 to the 1 percent, or at least the slice of the 1 percent that Obama represents, such as the Crown Brothers of General Dynamics. That’s what the TPP is all about.

The TPP will off shore more US jobs and continue a deadly race to the bottom in order to support the Ponzi Scam known as Wall Street. That’s because US corporations must experience long-term rising share prices, which means profits must continually rise, more or less. And the best way for that to occur is if wage rates are reduced more and more. And so the TPP is an engine not only to get around the US Constitution (That’s another story), but also to depress wages and other compensation worldwide. So naturally Obama is aiming to destroy US textile jobs and redistribute the wages of the people who actually do the work to the 1 percent via higher corporate earnings, rising share prices and surging dividends.

Within the framework of the Trans-Pacific Partnership Agreement, the government of Vietnam is demanding “preferential rules of origin to use raw materials from China.” This includes yarn, thread and fabric.

Central American textile businesses are also worried that Vietnam will get more flexible terms to import its apparel into the US, such as an end to tariffs on apparel goods. In which case, some estimates suggest El Salvador alone will lose 200,000 textile jobs. These jobs are located in large part within Maquila zones, which are zones in which US companies are allowed to assemble goods and then export them duty free to the United States.

Once these zones were established, US corporations sent jobs to Central America. The difference between the old wages in the US and the new lower wages in Central America went into the pockets of corporate CEOs and rich shareholders. The people whose jobs were shipped away as part of the Democratic and Republican Party’s war against the 99 percent were lucky if they got unemployment insurance. The Central America Free Trade Treaty (CAFTA) did the same thing, only on a grander scale.

Nowadays, every year, the 1 percent legislatively steal about 32 percent of the income of the United States compared to about 7-8 percent thirty-two years ago. That means the 99 percent have less money to burn, which creates less jobs. And guess what else? The 1 percent destroy jobs by pressuring the government to enact more and more free trade treaties because they wipe out American jobs and redistribute the income from the lost jobs into their own pockets.

It just so happens that textile workers in the El Salvador Maquila zones earn .78 cents per hour, compared to .60 cents of their Vietnamese counterparts. However, the Maquila Zones in Central America have a cost advantage over their Vietnamese rivals since there are no tariffs for their products exported to the USA. If Vietnam is allowed to ship their apparel products into the US duty free, El Salvador will have a labor cost disadvantage vis-a-vis Vietnam.

Now here’s the real problem.

“U.S. textile manufacturers produce yarn, thread, and fabric for apparel, home furnishings, and for various industrial applications. In 2011, the U.S. textile industry generated $53 billion in
shipments and directly employed about 238,000 Americans, accounting for 2% of all U.S. factory jobs. Approximately one-third of U.S. textile production is exported, with the bulk of the exports
going to Western Hemisphere nations that are members of the North American Free Trade Agreement (NAFTA) or the Central American-Dominican Republic Free Trade Agreement
(CAFTA-DR), like El Salvador and Honduras.

Both free trade agreements provide that certain exports from member countries may enter the U.S. market duty-free only if they are made from textiles produced in the region. This has encouraged manufacturers in Mexico and Central America to use U.S.-made yarns and fabrics in apparel, home furnishings, and other products. Exports to the NAFTA and CAFTA-DR countries contributed to a U.S. trade surplus of $2.5 billion in yarns and fabrics in 2011.”

So the TPP has the potential to affect U.S. textile exporters in at least two ways. As mentioned earlier, it could enable Asian apparel producers, principally Vietnam, to export clothing to the United States duty-
free.” Roughly 40 percent of Nike’s products are produced in Vietnam. Guess what corporation is lobbying US politicians to support the TPP and eliminate the import duties from Vietnam?

“This (TPP) would eliminate much of the advantage now enjoyed by Western Hemisphere apparel producers in the U.S. market and, because Vietnamese manufacturers make little use of U.S.-made textiles,” will likely “reduce demand for U.S. textile exports,” killing US jobs, and redistributing income from the 99 to the 1 percent in the process. Second, it is possible the TPP will allow Western Hemisphere apparel manufacturers to use yarn and fabric made in any TPP member nations, such as China, which is where Vietnam gets its yarns and fabrics.”

In other words, Vietnamese apparel makers could wipe out El Salvador apparel makers, and that’s how Obama’s scam would destroy a couple of hundred thousand textile jobs in El Salvador. But this process would eliminate tens of thousands of US jobs in the textile industry, since the jobs in El Salvador are dependent on yarn, thread and fabric made in the USA.

In other words, Obama’s TPP scam is intended to make the 1 percent richer at the expense of the 99 percent, precisely because all free trade treaties are negotiated with this as the intended consequence. And this is just one of the income redistribution scams hidden within the negotiations of the TPP.

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How do you like to spend your money? Did you pay to see the movie Spider Man at Regal Cinemas? Or any other movies? Then you paid for a right-wing attack ad. Have you paid to stay at the Marriott Hotel? Then you paid for a right wing attack ad. More to the point, you paid to defend or elect politicians who want to redistribute your income to the rich via free trade treaties, deregulation, as well as via profitable and permanent wars. The latter is another way they use government as an appendage to their profit making schemes; never ending wars redistribute our money and lives as they suck us financially dry and also use the 99 percent as high profit margin cannon fodder.

In other words, the owners of these businesses want to destroy the American dream for the 99 percent by redistributing it to the 1 percent. That’s because the only thing stopping the Ponzi scheme known as Wall Street from collapsing is to keep corporate profits moving upward. They do this by using government legislation to suck the 99 percent dry, like any good parasite. Ergo, right-wing attack ads further this agenda.

There are plenty of Democratic Party business supporters that want the same things, but I don’t have the list, and this story isn’t about them, anyway. General Dynamics, for example, a maker of stuff for fighting profitable wars, is a primary supporter of President Obama.

Click the link below for a list of consumer companies that support the right-wing corporate takeover of your government and supreme court, which by the way, has already been done. Only they want complete control.

Think Progress–A Guide to Consumer Brands Helping Bankroll Right-Wing Attack Ads

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