Saturday, September 10, 2011


So President #Compromise has finally come out with a “jobs plan.” Never mind that he’s been in office for two years and he is just now aggressively addressing the fact that Americans need jobs, the timing for it perfectly aligns with his reelection campaign. Isn’t that amazingly coincidental?

"[The plan] will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business.”

Raw Story

And at least now that we know how the Federal Reserve works and have been clued in on how the government could actually completely eliminate income tax and still have the same amount of money (through “quantitative easing” and sales of treasury bonds, for example), I’m much less inclined to think he’s got any concern for American workers in this ploy. All he’s truly done is 1) made himself look good to workers, and 2) potentially made the Republicans look bad if they refuse to go along.

I hope that’s not too cynical for you, because it’s absolutely supported by the timing and the facts. So if the Republicans don’t come up with a way to deny him his jobs plan – and that’s a very big if – just remember when you are celebrating your huge windfall in tax reductions (where’s that sarcasm font when you need it?), that money will be going right out your other pocket in higher prices that sellers put on commodities because now you have more money to spend on them. I’m sorry. That’s just how it works. But boy does it sound good in a campaign when you say “lower taxes.”

Obama also proposed a $50 billion program to invest in highways, railroad and airport modernizations, which officials said would put hundreds of thousands of construction workers back to work.


He also proposed a $35 billion program to prevent layoffs of 280,000 teachers and to keep police officers and firefighters on the job.


-- A $30 billion project to modernize 35,000 public schools and tax credits to incentivise hiring of returning Iraq and Afghan war veterans.

-- A "returning heroes" tax credit to spur hiring of Iraq and Afghanistan war veterans

-- A $49 billion plan to reform an extend insurance payments for the long-term unemployed.

Now there’s some things we couldn’t have done two years – or one year – or six months - ago. I mean, we didn’t have the money, right? And suddenly we do.

It will be debt now. It probably could have been debt then just as easily.

He called on Congress to provide $10 billion to capitalize a national infrastructure bank to leverage private and public capital to invest in a broad range of projects.

Yes, that’s what we need – more banks to spread the funny money loan business around, keep that kite flying.

He has also warned that if the plan is blocked, he will seek to hold Republicans to account at the polls and accuse them of putting a desire to eject him from the White House above a patriotic duty to revive the economy.

And that is the whole point.

9/8/11 - Speaking over the heads of his audience directly to the Supercommittee, [Federal Reserve Chairman] Bernanke warned that “while prompt and decisive action to put the government’s finances on a sustainable trajectory is urgently needed, fiscal policymakers [i.e., you members of the Supercommittee] should not, as a consequence, disregard the fragility of the economic recovery.” In other words, it’s OK to do a little nibbling around the edges of government spending, but anything that would cut such spending seriously needs to be avoided altogether, at least until the economy gets back on its feet.

And that’s the problem. With the economy stalled, consumer spending slowing, factory production dropping, job growth at zero, 14 million Americans unemployed, jobless claims increasing, 42 million on food stamps, and consumer and investor confidence at its lowest levels in years, jumpstarting the economy is going to be a Herculean task even for the Fed.

New American

Meanwhile in Europe…

US stocks tumbled [Friday] more than two per cent after the top German official at the European Central Bank stepped down.

Juergen Stark resigned in protest of the bank's bond-buying programme, which has been a major tool in fighting the region's debt crisis.


"Stark's resignation is suggesting that there is a lot of pressure being built in the senior levels in the ECB," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"There is an increasing realisation that this is a major solvency issue in the banking system."


Speaking of banksters…my employer switched from offering health insurance to health savings accounts. I bank at a credit union which doesn’t handle HSAs, and I’m not allowed by law to hold that money in my checking or personal savings account. So my HSA money is deposited into a regular bank where the current $1700 draws a penny interest per month while the bank charges me $3.00 per month to hold it. And you know damned well they aren’t holding it. They’re using it. Spalding should have a racket that good.

The Creature from Jekyll Island:
A Second Look at the Federal Reserve
(2002 – G. Edward Griffin)

Regular type indicates text directly quoted from the book. Where the words are my own, type will be italicized.

Installment 10
Chapter 12

The exigencies of war in Europe [in 1914] required England and France to go heavily into debt. When their respective central banks and local merchant banks could no longer meet that need, the beleaguered governments turned to the Americans and selected the House of Morgan – acting as partners of the [European] Rothschilds – to act as sales agent for their bonds. Most of the money raised in this fashion was quickly returned to the United States to acquire war-sensitive materials, and Morgan was selected as the U.S. purchase agent for those as well. A commission was paid on all transactions in both directions: once when the money was borrowed and again when it was spent.

[In a few years, the] “Allies approached the brink of disaster, with no recourse other than to ask Germany for terms.” [Robert Ferrell, Woodrow Wilson and World War I]

Under these circumstances, it became impossible for Morgan to find new buyers for the Allied war bonds, neither for fresh funding nor to replenish the old bonds which were coming due and facing default.

On March 15, 1917, Ambassador [to England, Walter Hines] Page sent a telegram to the State Department outlining the financial crisis in England. Since sources of new capital had dried up, the only way to keep the war going, he said, was to make direct grants from the U.S. Treasury. But, since this would be a violation of neutrality treaties, the United States would have to abandon its neutrality and enter the war.

The Morgan group had floated one-and-a-half billion dollars in loans to Britain and France. With the fortunes of war turning against them, investors were facing the threat of a total loss. As Ferdinand Lundberg observed: “The declaration of war by the United States, in addition to extricating the wealthiest American families from a dangerous situation, also opened new vistas of profits.”

This makes me wonder what the relationship was between Prescott Bush, who helped finance Hitler, and the House of Morgan, financing England. That’s another research project that probably won’t happen.

Ten months before the election which returned [Woodrow] Wilson to the White House in 1916 “because he kept us out of war,” Colonel [EM] House negotiated a secret agreement with England and France on behalf of Wilson which pledged the United States to intervene on behalf of the Allies.

Some things never change.

....but hey, do what you will anyway.

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