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    • The Technology of Violence and its effect on prosperity and freedom
        Prosperity is two things: 1) How much you can produce with your technology and social organization; 2) Who gets how much.   The second is determined by a number of factors, but the simplest is the structure of violence.  Those who aren’t good at fighting, don’t get as much of the surplus created by [...]
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How you know the End is Nigh

We’ve been living with out of control capitalism, now in New Accelerated Format, for almost five years now.  It’s a quickened version of what’s been happening over the last 30 years.  Ever since Reagan, the media has bamboozled the public into giving the rich whatever they damn well please with the expectation that the rich will let us keep our jobs.  The evidence has shown that this does not work but you’ll have to read Krugman for the wonky stuff and teensy (or completely absent) labels on the x and y axises of his graphs.  I guess economists don’t need labels and units but it drives this chemist crazy.

I’m not here to talk about all the overwhelming evidence of wrongdoing that has been going on since 1980, or the massive layoffs that have probably permanently impoverished my generation or the fact that all of this has happened with the complicity of an older generation of seniors who thought the whole world revolved around what happened between women’s legs.  No, I am here to talk about the end times.

In this case, it will be the period of time when the strip miners of Wall Street have taken the top off the mountain almost completely and there is very little wealth left to extract and more and more middle class people are waking up to discover that “we wuz robbed” and there’s just no THERE, there anymore.  Where will the excess gobs of cash come from then?  I mean, after the obscenely rich have cornered all of the disposable income, and then some, in their underground lairs surrounded by their faceless, nameless goons in cold and modern chic livery, do they sit around with their heads in their hands weeping like Alexander that there is no more money in the world to conquer?

Heck no!

NOW, they get in on the payday loan scam.  It’s fricking brilliant!

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

Subrina Baptiste of Brooklyn says JPMorgan Chase allowed payday lenders to seize child-support funds in her account.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.

What are the chances that Barack Obama will look up from scheming with his 25 year old male senior advisors to “help” the Congress “win” in 2014 by focussing all of their PR efforts on a couple of distracting issues instead of fixing the problem of chronic unemployment and gross exploitation of average Americans, or directly challenging the Republicans with muscular Liberalism, and actually develop some sense of outrage that is strong enough to prod his justice department to actually, you know, DO something to the banks besides taking them to the back bedroom, closing the door and instructing them to wail loudly as he smacks the bed with his belt?

Yeah, I didn’t think so either.

By next year, when we’re all on Obamacare (sorry, Democrats, you’re going to have to own this one in an election year.  Hope you’re ready, but all indications are that you are not.) and trying to pay all of our bills on time, with a heaping side of gigantic health insurance thrown in for good measure, there will be an increasing number of us vulnerable to the siren song of the payday loan.  “Borrow now against your paycheck, pay 500% interest later!”  What could be more natural?

The big banks are investing in it heavily, wouldn’t you know.  So, this has to be one of the signs of the end.  Now that the MBAs have skillfully evolved the work place every two seconds in accordance to their bonus shortened attention span, AND severely crippled productivity by putting all the burden of getting things done on the shoulders of a few, and because they have so completely decoupled the cause and effect relationship of work with positive reinforcement, given the fruits of labor to the shareholders, closed the pension funds, and divested themselves of all responsibility to the people who, you know, WORK,  now that they’ve scraped every last penny out of every last bank account, it is now time to reserve all incoming pennies for their own purposes too.

All our monies are belong to them.

And then what?

I’m not sure but I suspect it ain’t going to be pretty.

Ok, here’s my theory about why the Masters of the Universe want to kill the social insurance programs

Remember what I said about Wall Street workers?  Let me refresh your memory:

The finance class actually consists of a bunch of overqualified strip miners.  They’re overworked, which might explain the number of bad decisions they make, and their compensation system decouples the consequences of their actions from the actions themselves.  They are being paid to make “deals” and the purpose of those deals is to extract “wealth”.  In a way, it’s not that much different from getting into the cab of some giant piece of earth moving equipment and mowing down the side of the mountain and then loading that potential ore onto a conveyor belt to be separated from dirt.  They live in a “company” town and are paid “company scrip”.  It’s a truck system for them as well.  The compensation is not proportional to the amount of work they do, they can be fired at will and they’re never going to leave that mountain because they owe their souls to the company store.  The more they work, the more compensation in bonuses they are promised but it’s never enough.

Once you think about this metaphor of Wall Street doing the work of strip miners, the present set of circumstances will start to make a lot of sense.

We know that Social Security does not add to the deficit.  In fact, we have a trust fund worth almost $3 trillion dollars.  Sure, that trust fund has taken a hit in the past four years because so many people are out of work and can’t pay their taxes but once people are working again, the kitty will start to grow again.  And if all that is needed is a couple of tweaks to solve the minor shortfall, it’s really not as damaging to the economy or rich people’s ability to spend ungodly amounts of money on themselves as they pretend.

So, it’s not a deficit problem- at least not from the government’s side of things.  Sure, Medicare does need to be fixed but that requires some spine stiffening on the part of the Democrats to crack down on providers.  Did I tell you about my lab partner’s husband’s 4 hour hernia operation and recovery in the hospital?  $70,000.  No, that is not a mistake.  There’s something truly out of whack when if comes to costs and payments to hospitals, doctors, insurance companies.  It’s a real problem.  And since the rest of the developed world has found reasonable solutions at much lower costs, it’s moronic for our elected officials to tell us that the costly ACA, with downstream repercussions they failed to study, is the best we can do.  Please, do we look stupid to you?

Anyway, back to Wall Street.  The Social Security trust fund is solid and fixable and millions of us late boomers paid into the surplus funds to cover our own retirements.  What isn’t solid and fixable is the 401K system, which really is a Ponzi scheme.  Pretty soon, a lot of aging baby boomers will be taking money out.  That’s going to hurt someone’s bottom line.  The bonuses and skimming going forward isn’t going to be nearly so lucrative as it was over the past two decades.  After the Baby Boom came the Baby Bust in the late 60’s.  Looks like The Pill really caught on in a big way.

In the past couple of decades, many companies ditched their pensions for the 401K.  Let the kids pay for their own retirements.  None of this deferred compensation crap.  And life was good for the shareholders and the bankers.  But once that money starts to get withdrawn, the salad days will be over.  So, Wall Street must get more people into 401Ks or they won’t be able to continue strip mining.  The problem is that most people are already in one if their employer offers it.  The market is finite and pretty soon will plateau.  At some point, the investment portfolios are also going to reach a steady state.

BUT, if you raise the retirement age and keep a lot of older people working, they will be forced to put their money back into the market.  Well, they won’t be able to retire until they’re much older than their parents were at retirement.  If they have any hope of ever taking time out to go travel or garden, they’re going to have to risk their money in the market, hope that it will pay off so they can get out of the job market before they’re dead and forget about social security.

My theory is that raising the retirement age forces more savings to stay in the market longer and that with a pool of people who can’t retire yet still working, the amount of money going into 401Ks and IRAs is going to go up. Stripville!

It makes sense from a timing perspective.  There’s really no need to cut a deal with Republicans right now.  The Democrats have enough seats to keep things pretty much unchanged.  If the tax cuts expire, it’s going to look bad for Republicans to hold middle class tax cuts hostage in order to satisfy their rich friends.  In fact, just about anything the Republicans stamp their feet and insist on is going to look bad for them.

But Obama still wants to cut a deal and make us all a lot poorer as a nation and as individuals.  And he really doesn’t have to do this.  So, why do it?  I think it’s because the strip miners have told him that if he doesn’t, the market is going to start to drop and it will pick up speed and saving the banks is the most important thing ever!!!  All serious people agree about this.  If he doesn’t cut the social insurance programs in order to prop up the 401K system, it will be all his and the Democrats’ fault when the market finally starts to fall.

Yep, that would suck for seniors who are about to retire so if I were them, I’d start looking around for other places to put that money.  But history has shown that Obama and his droogs at Treasury will bend over backwards to please bankers even if it means opening a revolving line of credit for the bankers to the taxpayer cash stream in perpetuity.  (Read Neil Barofsky’s book for more horrific details).

It’s been my feeling that the 401K is behind a lot of what’s really messed up in our economy and for some reason, we never hear anyone of sufficient gravitas talking about it.  But just imagine what would happen to the economy if we tried to phase it out even if most of us hate it with a white hot passion.

All hell would break loose.

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