Posts Tagged ‘Republican Party’

The red line in the graph below represents borrowing to buy corporate shares. The blue line represents the growing value of the S&P 500 stock index. Notice the growth in the financial markets is being fueled by record amounts of debt. The growth of both clearly mirrors each other.

Eight months ago, I wrote, “The latest in a long line of stock market bubbles is being fueled by record amounts of debt according to the New York Stock Exchange. This debt is called “buying on margin” (BOM). Notice the acronym of BOM, which is pretty close to bomb, and this current bubble is going to explode. Total BOM hit a record high of $528.2 billion in February 2017.”

By November 2017 (the latest data that is available), total BOM hit nearly $581 billion. Stock prices, in other words, have been bid up with borrowed money, like at an auction.

Once the lunatic Trump tax cuts were passed, the already dangerously obese stock market bubble began expanding even more in anticipation of more after-tax cash going to the rich and corporations, to whom the vast majority of those tax cuts were targeted. This has given corporations and the rich the leverage to borrow on margin even more in anticipation of future increased after-tax earnings.

That is not necessarily always a big problem early in a business expansion when the market is going up, but it’s now late in the ball game. Our economic expansion is 103 months old (as of January 2018), making it the third longest in US history. In terms of numerous indices, such as job, GNP, and wage growth, this is one of the weakest expansions in US history. The vast majority of new income and wealth have gone to the top 1 percent, and not to the 99 percent.

All of this suggests the coming crash is long overdue. When we hit this soon to arrive recession, it should be a train wreck worse than the so-called Great Recession of 2007-09.

November’s total BOM was nearly $80 billion more than twelve months before. This increase is a sign of optimism or foolishness. People and institutions like hedge funds want to get in on the action while the stock markets are rising. What is going to happen when the bubble pops?

Suppose you have $10,000 to invest, so you purchase 100 shares of Home Depot at $100 per share. The market crashes and the share price drops to $40. Now your investment is worth $4,000. That is not a good result, but your investment is still worth something, and can potentially recover if you hang on to it in the long run.

Let’s say you borrow an additional $20,000 from your broker to buy another 200 Home Depot shares at $100 each for a total of 300 shares and at a total cost of $30,000. The market crashes and the share price quickly drops to $40. Now all 300 shares are only worth $12,000 — but you owe your broker $20,000 (plus interest) for borrowing money to buy the stock. The broker calls in his loan. You are forced to sell your shares to get the funds to pay your broker but at the lower share price. You lose $18,000 of your $30,000 investment. But your broker wants the rest of his $20,000 plus interest. You only have $12,000 remaining of your original $30,000 investment, so you owe more than $8,000 to your broker.

So your original $10,000 is wiped out, your loan of $20,000 is annihilated, and you need to come up with $8,000 plus interest to pay back your broker.

During most recessions, it is much more difficult to get credit to pay your broker back, so you may both be out of luck, although you’ll likely be in court defending against him, her or it.

On a massive scale, say trillions of dollars of investments, that’s a recipe for absolute disaster for the whole economy. Corporations of all types (which often borrow to purchase their own shares in order to jack up their share prices), as well as hedge funds, governments, investment banks, commercial banks, small businesses, other wealth management firms, etc…, will likely need to lay off employees in order to pay back the money they owe.

Side Notes

***Let’s also get something straight which the corporate media doesn’t want us to know; tax cuts for corporations are the same as tax cuts for the rich since corporations in great measure pass on their tax cuts to the wealthy via higher after-tax corporate profits, rising share prices and surging dividends.

***As an aside, your government has allowed a conspiracy in restraint of trade in the housing market to be the primary fuel that ignited this current stock market bubble. See The Big Banks Are Manipulating the Housing Market–JohnHIvely.wordpress.com.


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“With its financial contributions and grassroots organizing, the labor movement helped give Democrats full control of the federal government three times in the last four decades. And all three of those times — under Jimmy Carter, Bill Clinton, and Barack Obama — Democrats failed to pass labor law reforms that would bolster the union cause. In hindsight, it’s clear that the Democratic Party didn’t merely betray organized labor with these failures, but also, itself.”

When Bill Clinton became president he took the party straight into the loving arms of Wall Street executives and investors, and the best way to do that was to get rid of labor unions by exporting tens of millions of labor union jobs to poverty wage nations. It began with Clinton and his Wall Street wife, Hillary, and NAFTA. The difference between the old US wages and benefits and the poverty wage workers in poverty-wage nations have always gone straight into the pockets of the rich via higher corporate profits, rising dividends, and surging share prices.

President Barack Obama followed the Clinton’s footsteps in redistributing income and wealth from the 99 to the 1 percent via this and other legislative paths. Of course, they were assisted in this massive redistribution of income and wealth by such Democrats as Wall Street Senator Ron Wyden, who was ever so happy to join the Republican party stalwarts in doing this. The result was ominous, for the Democratic Party, the nation, and the 99 percent.

Between 1978 and 2017, the union membership rate in the United States fell by more than half — from 26 to 10.7 percent. Naturally, this decline coincides with the redistribution of income and wealth engineered by the entire Republican Party, as well as the Wall Street controlled Democratic Party with such luminaries as Ron Wyden, Earl Blumenauer, Bill Clinton, Hillary Clinton, Barack Obama and Joe Biden. The decline in labor union membership due to exported jobs also fuels the massive income and wealth inequality the United States suffers from today, thanks in large part to Bill and Hillary, Barack and Wyden and other Democratic Wall Street loyalists as Earl Blumenauer.

In a new study that will soon be released as a National Bureau of Economic Research working paper (NBER), James Feigenbaum of Boston University, Alexander Hertel-Fernandez of Columbia, and Vanessa Williamson of the Brookings Institution examined the long-term political consequences of anti-union legislation by comparing counties straddling a state line where one state is right-to-work and another is not. Their findings should strike terror into the hearts of Democratic Party strategists: Right-to-work laws decreased Democratic presidential vote share by 3.5 percent.

This could have been a golden age for American liberalism. The Democratic Party — and the progressive forces within it — have so much going for them. The GOP’s economic vision has never been less popular with ordinary Americans, or more irrelevant to their material needs. The U.S. electorate is becoming less white, less racist, and less conservative with each passing year. Social conservatism has never had less appeal for American voters than it does today. The garish spectacle of the Trump-era Republican Party is turning the American suburbs — once a core part of the GOP coalition — purple and blue.

If the Democratic Party wasn’t bleeding support from white working-class voters in its old labor strongholds, it would dominate our national politics. Understandably, Democratic partisans often blame their powerlessness on such voters — and the regressive racial views that led them out of Team Blue’s tent. But as unions have declined across the Midwest, Democrats haven’t just been losing white, working-class voters to Republicans — they’ve also been losing them to quiet evenings at home. The NBER study cited by McElwee found that right-to-work laws reduce voter turnout in presidential elections by 2 to 3 percent.

The Democratic leadership had a choice; side with the 99 percent or side against them and with the 1 percent. Obama, the Clintons, Wyden and other Wall Street Democrats chose to side with Wall Street and corporate parasites against their own grassroots. Now many of the grassroots have abandoned the Party that no longer represents them. Who can blame them? Oh, that’s right! The Democratic Leadership and their corporate news media blames the grassroots and calls them “deplorables,” but only after the leadership has exported tens of millions of working-class jobs.


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The Wall Street Journal reported a few days ago that the Securities Exchange Commission (SEC) has significantly reduced the number of regulations it is supposed to enforce. Quite naturally, as was shown in 1929, 2007-09, 2001, the entire 1980s and 1990s, as well as many other times in US and world history, Wall Street millionaires and billionaires will break the law while redistributing income from the 99 percent to themselves. Then the taxpayers (that’s us folks) will bail them out after the financial disaster, and this will make the rich even richer, and not a soul will go to jail.

The Journal reports that Trump’s appointees to the SEC have significantly slowed down on enforcement. Trump, along with every Republican office holder in the US congress, wants to eliminate the weak Dodd-Frank legislation that makes it a little bit harder than before to screw over the US public.

The Republicans chief economic policy is to unleash Wall Street as a destructive force in the world, allow it to wreck financial on everybody else, in order to knock the economy flat on its face. That is the Republican Party economic policy in a nutshell.

Of course, the Republicans have always had help from the Democratic Party, which is largely, if not completely, controlled by Wall Street billionaires. Many Democrats have been instrumental in helping the Republicans achieve the desires of their Wall Street masters. President Clinton signed legislation repealing Glass-Steagal, as well as NAFTA. The president was supported in this by Hillary Clinton. Wall Street Senator Ron Wyden. These folks continued to serve Wall Street’s interest under then Wall Street President Barack Obama.

The Clinton’s get $225,000 a piece for making speeches from Wall Street, while Obama gets $400,000.


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Wall Street Democrats, such as Wall Street-owned president’s Bill Clinton and Barack Obama, as well as Wall Street’s senator’s Hillary Rodham Clinton and Ron Wyden, have led the way toward trade deals that have exported tens of millions of US jobs overseas, with the difference between the old higher US paying jobs and the new lower paying US jobs going directly into the pockets of the rich via higher corporate earnings, rising share prices and surging dividends.

These income redistribution scams are the primary reason income and wealth inequality have grown so lopsided in favor of the billionaires over the previous 35 years or so. Most of the Republican Party have stood right behind the Clinton’s, Wyden and Obama on these income redistribution scams. 86 percent of Republican voters understand these trade scams are intended to export US jobs, compared to 52 percent of Democratic voters. So the Republican leadership is happy to negotiate with the Wall Street DNC Democrats to take the lead on these trade scams. In fact, the two sides have worked together to create the income and wealth inequality in which we now suffer. That’s why Donald Trump is president.

So how do the Democrats get out of being blamed for exporting tens of millions of jobs and creating such massive income and wealth inequality? They lie and spread these lies using a number of corporate news outlets and fake academic studies that come from real universities.

When Barack Obama became president, and for a few years afterward, the US failed to create any net jobs. And so members of the Democratic Party came up with the ingenious lie; automation killed the jobs. Since then the economy has created twelve million new jobs, and you will notice automation hasn’t killed those jobs. Nor has automation killed the tens of millions of US jobs that have been exported to China, Vietnam, Mexico and elsewhere.

I’ve written about this Democratic Party lie many times.

Now in a new report, economists Lawrence Mishel and Josh Bivens of the Economic Policy Institute challenge the Democratic Party lie that the pace of automation is accelerating and that the use of robots will lead to much higher unemployment and greater inequality. They also point out that there is not one shred of evidence in any study showing that technology and automation are killing more jobs than they are creating. The authors argue that if automation actually led to higher overall joblessness, the United States would have seen consistently increasing unemployment over the last 70 years. That didn’t happen because technology and its offshoot called automation actually create more jobs than they displace.

Likewise, if automation were indeed surging and leading to joblessness in recent years, we would not have been able to reduce the unemployment rate from 10 percent in 2010 to under 4.3 percent now. The authors encourage policymakers to focus on the immediate need to create good jobs and robust wage growth—instead of getting worked up about a hypothetical “robot apocalypse.”

The imbalance of political power between the 1 and the 99 percent are the current reason why income and wealth inequality has grown over the last 3 1/2 decades.

For more information, click on the report at “The Zombie Robot Argument Lurches On; There is no evidence that automation leads to joblessness and or Inequality–Economic Policy Institute


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The U.S. Supreme Court on Monday turned away a Republican Party challenge to a federal campaign finance restriction that prevents political parties from raising unlimited amounts of cash to spend on supporting candidates.

The Republican Party of Louisiana had argued that a provision of the 2002 Bipartisan Campaign Reform Act violates free speech rights under the U.S. Constitution. But the justices let stand a lower court’s ruling that rejected the Republican challenge.

Apparently, the Court’s corrupt class warfare corporate wing (John Roberts, Anthony Kennedy, Neil Gorsuch, Clarence Thomas and Samuel Alito) has decided that only corporations and people have constitutionally guaranteed free speech rights and not political parties. This is stunning inasmuch as corporations and political parties are not mentioned in the US Constitution, and the only reason why any court would approve of giving corporations any kind of personhood rights is to shift the balance of political power from individual voters to the rich and powerful via their wealth accumulation legal tools known as corporations.

In other words, the court’s corporate wing, whose members have historically come from well-to-do families, is playing class warfare by perverting the meaning of the great document in favor of the rich. By playing make believe that corporations have constitutionally guaranteed legal rights, the court is able to provide a legal lie that corporations have free speech rights, and then by insisting that spending money is free speech, they’ve effectively and deliberately given the airwaves to the only organizations and people who can afford to take them, which happens to be the corporations and rich people with all the money.

This is precisely why the corporate-leaning court in recent years has rolled back campaign finance restrictions. In 2010, the court paved the way to unlimited outside spending on elections in a case called FEC v. Citizens United that concerned corporate spending. Given its bias toward class warfare against the 99 percent, it is shocking the court turned this new case away.

Since the corporate wing of the Supreme Court is in the majority, the US Supreme Court is now a wholly owned subsidiary of the most powerful US corporations and billionaires. Actually, it has been for quite some time.


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The Republican Party is about to determine whether or not it will become the biggest death panel since Adolf Hitler and the Nazi Party tried to exterminate the Jews of Europe.

US House of Representatives leader Paul Ryan pulled out his new American Health Care Act last week, which he is hoping will be used to replace the Affordable Care Act. According to the Congressional Budget Office (CBO) yesterday, within a decade as many as 24 million US citizens will lose their health care coverage and premiums will go up for the rest of us if Ryan’s plan is passed, and especially for low income people and the elderly. Many grandmas and grandpas will have to chose between starving to death, or not paying their overpriced healthcare premiums, thanks to the Ryan plan.

Obamacare has only added slightly more than 19 million people to the rolls of the health insured. That means another 4 million US citizens beyond Obamacare may lose their coverage with Ryan’s carefully thought out health care bill. And it has been carefully thought out.

March 8, 2017

The primary purpose of this bill by all appearances is to provide tax cuts to the rich, the only people who have been the beneficiary of thirty-six years of economic expansions, and deliberately so. Currently, there is a 0.9 percent tax on income over $200,000 a year to help fund Obamacare. There is also a 3.5 percent tax on capital gains for the same purpose, such as the profits from the sale of stocks and bonds. This is why Wall Street hedge funds and big investment firms want Obamacare gone.

Many Republicans are prepared to make the Republican Party and all it stands for into a giant death panel in order to make its billionaire masters richer. Herr Ryan is one of these. Yet, other Republicans want to get reelected.

Florida Republican Rep. Ileana Ros-Lehtinen, for example, said Tuesday that she wouldn’t be able to support Ryan’s health care legislation after the CBO score revealed the high number of people who would lose insurance.

“I plan to vote NO on the current #AHCA bill. As written the plan leaves too many from my #SoFla district uninsured,” the Florida congresswoman wrote in two consecutive tweets. “As #AHCA stands, it will cut much needed help for #SoFla’s poor + elderly populations. Need a plan that will do more to protect them.”

This shows several things. The legislation is not likely going to pass. The Republicans are going to find it difficult to give their billionaire masters tax cuts by replacing Obamacare. So they will likely try a different tack.

The most likely scenario is simply keeping Obamacare largely intact, but shifting the tax burden from the rich to the middle and lower classes, and then marketing this plan as replacing Obamacare. One thing is certain; replacing Obamacare and taking health insurance from tens of millions of people in the process is not going to be politically palatable.


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Abolishing the Affordable Care Act will provide tax breaks for the rich. According to the LA Times, “the Affordable Care Act’s tax provisions, and the discovery that repeal would provide the wealthiest taxpayers with an immediate tax cut totaling $346 billion over 10 years. Every cent of that would go to taxpayers earning more than $200,000 a year ($250,000 for couples). As Nicholas Bagley of the University of Michigan observed a few days after the election, the imperative of handing their wealthy patrons a gift of this magnitude may well outweigh their solicitude for the mostly middle- and low-income constituents whose individual insurance plans would be at risk from repeal.”

All of the income gains of the last 35 years have gone to the 1 percent, and this has been achieved by government legislation and international trade scams that export jobs overseas, and the difference between the old higher US wages and the new lower overseas wages has always gone straight into the pockets of the 1 percent. Income from performing labor is taxed at a higher rate than just sitting on your ass doing nothing, and this has come about due to tax legislation.

See the link below for the whole story.

The Real Reason Republicans Want to Abolish the Affordable Care Act–LA Times


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