How to get our money back

http://www.authorsden.com/visit/viewshortstory.asp?id=53990&authorid=121255

How Does the Middle Class Get Back What Was Taken From it by the Banks? 

Updated: Bank Transfer Day and Greece is being Foreclosed On. What is going on and how will it affect Americans? 11-6-11

In another blog on this site I have addressed the issue of dumping the big banks and have recommended that citizens take their money out of these large predatory banks and put them into municipal banks, state banks, credit unions, coops and the like. 

In this way our economy becomes sup portative of local jobs, local communities and reverses the concentration of the last thirty years.

This will work and will work fairly quickly.

The big banks will try to kill this movement because it directly threatens the source of their power--our money.

Amazingly, Americans every day send virtually every dime they have, pension money, paycheck, savings, checking, city and state taxes--and deposit these monies into these few large predatory banks thereby

giving them the source of their power--our money. This is what must be stopped.

Thirty-eight percent of our 13 trillion dollar economy (five trillion) goes to Wall Street each year. Amazing.

30 years ago it was only 12 percent. Today we have  become a finance- dominated economy where our own money has been used to dominate our lives-where wall street produces nothing and gets rich.

But taking money out of the predatory banks is only the first step. 

There is more work to be done.

The next step is getting back the money stolen from tax payers.

Note: we are still poor even if we change banks. 

We next have to take steps to retrieve the money Wall Street has in its vaults.

But, how to do that?

This is to be our ultimate goal-don't let the banks keep our money-otherwise not much has changed.

Here is what has to be done:

1-Have the loan principal on all home mortgages be written down to the current market values of those homes, and cease and desist on all home foreclosures. 

This keeps people in their homes, provides dollar stimulus to the economy, reclaims neighborhoods blighted by foreclosures and gives the middle class a fighting chance to survive. 

It also amounts to a refund of money stolen from these home owners and tax payers. The value of this rebate is about 6 trillion.

2-Tax capital gains and speculators and hedge fund profits at 15%.
These monies should go to fund jobs, education, infrastructure and social needs. This would produce 3.25 trillion dollars. This taxation rate is actually low compared to the 21-32 percent tax rate most of us pay. And to boot many corporations don't pay any taxes. Among the ones who pay that rate they average only 18% since they shelter their profits overseas and invest there in acts which border on economic treason. Americans love their country but tolerate this kind of disloyalty among the wealthy.

3-Increase the social security taxes on those with incomes over 117k. Why should these people not pay social security taxes above this income? This is the current situation.  This would realize about 450 billion dollars.

4-Increase taxes on speculators and hedge-fund managers who currently control about 600 trillion dollars with no taxes, and no regulation. This is the famous hidden derivatives market. Yes, not taxed and not regulated. There are two banking systems in the world, the one we know about and the shadow banking system run by the central banks of the world.

The enormity of this becomes apparent when you realize that the global GNP for all countries today is only about 70 trillion per year.

You ask then how can there be 600 trillion in these hedge funds? The answer is that this is the leverage-debt bubble-derivatives spliced up fraudulently where the same mortgage is sold and resold, many to the European Banks, which is why we had to give them money from the Federal Reserve; which is partially why Europe's big banks are in trouble now. We sold them worthless derivatives and had to reimburse them. 

But also in this unregulated market in order to purchase stock, options and puts, derivatives, and reinsurance schemes you only have to put 10% down or so. And note these huge wall street firms are using our money to make these bets-our money meaning that paycheck you deposited today and our money in the form of tax subsidies.

These hedge funds, banks, wall street and the federal reserve itself are leveraged to this incredible 600 trillion amount. It is the amount in the kitty owed but not yet paid for and/or worthless derivative stocks.

Banks are 40 to one debt to assets; the Federal Reserve is 60-to one. These hedge funds are essentially debt mills operating in the hundreds of trillions of dollars and all this is totally uncontrolled. 

They have borrowed the money (using our money for collateral) to make wild investments in derivatives, third world ventures and in the IMF and the World Bank and in gold. And the rest is paper debt.

But most of the 600 trillion is toxic derivative investments which are backed by nothing at all, and will collapse--unless the central banks decide to print paper money which in turn will result in massive inflation. Best to get our money out before that occurs.

5-Default. Yes, default,  There is not enough money in circulation in all the world to pay 600 trillion. The amount of paper money in circulation in the United States is only about 3.3 trillion. 

Imagine. This means that there is not enough money in the whole country to pay the bills even if we had the money. The rest of the 13 trillion in our economy is in debt, created solely by computers. (Remember banks manufacture debt money each time we make a loan.  These is no actual dollars backing this up. (See my blog on banks and how they create money in a gigantic Ponzi scheme.)

So, it is inevitable debts will have to be written down and/or not paid. The banks know this.

They know these loans can never be repaid even if we try; all that will occur is that we become indentured debt slaves-working all our lives to pay a debt which is structured such that it can never be fully repaid. 

Banks and countries on the other hand default all the time, or they declare bankruptucy (General Motors?) But note the terrible fact is that banks don't really have our money, it is loaned out or exists in debt they owe and can't pay (derivatives.) 

But we lowly citizens are taught that debts are sacred obligations and must be paid, while banks owe us and will simply default on us closing their doors. This is no idle claim. It happened in the 70's with the savings and loan debacle when thousands of people lost their savings and over 1,500 bankers went to jail. But none today. Why is that?

Most of us anyway simply don't have the money to pay the banks   Wall Street and the usurious interest rates they now enforce.

All of this will likely then cause many of the large banks to crash. 

So be it. My advice though is to get your money out of the large banks first because the huge wall street banking structure is not sustainable. Smaller banks will survive.

Besides we need a decentralized banking structure which, if we move our money, will be in place to replace the crooked banks on wall street.

The summary point is that it is not enough to stop the banks from stealing our money-we need to get the stolen money back in order for the middle class to survive--the middle class needs those funds.

I will have more tomorrow with more detail and additional ideas.

Sometimes the times require straight talk. 

If none of the above is done, the middle class in this country will be impoverished for generations to come.

11-5-11
The "Move Your Money" movement and "Bank Transfer Day" are now launched. First word is that over 650,000 people have moved their accounts into credit unions and the like and hundreds of thousands more have pledged to do so. 

Saturday is not the best day to change banks, so next week the picture will become more clear. 

The amount of money involved so far is about 4.5 billion dollars.

The implications of this include two big ones: 

First 14 states are looking to create state banks. 

California alone, if it did so, would bring on the domino effect among the large banks.

The banks then would run to the Federal Reserve (which is the chairs of all the big banks) and have more paper money created because they don't have California's money; it has been lost in derivative schemes or loaned out. 

(So you see why I am advising the average citizen to get their money out.) 

If not, when you get to the ATM it may happen that your card won't work.
The banks will declare a bank holiday, keep what money they have and declare a bank holiday and close permanently, with our money in their hands. It happened just this way in the crash of 1929.   

This can happen FDIC or no FDIC. 

What most people don't know is that the FDIC is tax-payers money and the US doesn't have the money to give to the banks in this kind of scenario, and additionally, the United States government does not control money.
The big predatory banks do via the Federal Reserve Bank. They are the Federal Reserve. 

So there will be no FDIC rescue in this situation especially since the budget of the FDIC is paid by the same large banks under discussion here. They will not fund an agency which under these conditions, participates in their own demise and who will be collecting from a closed bank? No one.

Chaos here. 

It all could be brought on also by the fall of Greece via the domino effect.
ECM and American banks are the ones who bought many of these Greek bonds, the same ones which will not likely be repaid. 

Yes, we are on the hook for Greece too-since our Federal Reserve loaned trillions to these European banks and they used some of that to buy Greece debt. So we are involved if these banks do not pay us back, which is the case, since a deal has been struck where Greece has had 50 percent of its debt forgiven. That affects us and our bank will have to take the haircut as well. That is why all of the governments and banks have joined together to make the populations involved take the austerity, so that they, the banks, don't have to take profit losses. 

Now the European Common Market is looking for money from China at least two trillion, but that will not be enough even if they get it because Greece is a small country with a small debt (320 billion) compared to Italy and Spain. These latter two are in trouble as well and there is nothing this side of heaven that the ECM can do to save those two countries. 

Their debts are astronomical-eight times those of Greece. Italy alone has debt in the trillions.

So you see trouble looms here.

We are now seeing Greece auctioned off, their water, their factories, their schools, their monuments are all to be sold to private investors (American hedge fund people and the central banks) as a way of paying off the Greek debt-this In addition to lower wages, no health care, and impoverishment of their middle class.

That is why there are riots in the streets. An entire country is being sold to these "investors" who are using our money to get rich literally buying up Greece. Their young people are leaving the country in droves--no jobs and no income.

This has happened for years to third world countries but this is the first set European countries including Ireland and Iceland to literally be taken over by the predatory hedge funds and the predatory banks. 

So countries are being treated just like the average citizen; Greece is being foreclosed on.

How will all this end? More on that tomorrow, along with a few suggestions as to the way out of the mess.

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The Middle Class, The Poor and America’s Future

This essay looks at why American politics has the contours that it exhibits. It asks the question what political stances do the poor, the middle class and the rich take in our political system and why. 
Second, a comparison with European political systems is made looking at these same class groups and the similarities and differences we see there and why. 
  

The Middle Class Holocaust Coming.

In the recent mid-term elections in the United States political debate excluded two enormous topics of obvious import: the two wars in Iraq and Afghanistan and the plight of the poor and middle classes in the United States.

The economy was discussed but not its real impacts on real people now short of resources and whose life chances are declining. Rather, we were treated to debates about tax cuts, deficit reductions, "big government" and "socialism."

Why should these discussions take on these contours?

We will have a look at the middle classes and the working poor in the American political landscape and how they place themselves in the political spectrum and why.

We shall also compare that to the multi-party system and the coalition patterns extent in Europe. There we find distinctly different political patterns and outcomes: we ask how do these  two systems compare and why and with what political outcomes.

Let's start with a quote from two European scholars who ask the questions; do political coalitions between the middle class and the working poor explain the nature of political structures in Europe? Why are there no coalitions between the poor and the middle class in the United States?

The scholars Iversen and Soskice are quoted from a paper given by Phillip Manow in Seoul, Korea in March of 2007 gives us some clues as to why such coalitions exist in Europe but not in the United States. See link below.

http://www.korea.ac.kr/~kwon/Conf/Manow.pdf

Here is a longish quote from that paper.

"Iversen and Soskice start from the basic observation that in multi-party systems the left is in government more often whereas the right more often governs in two-party systems. Why is this so?

In a multi-party system the lower and the middle classes together can tax the rich and share the revenue. In a two party system the middle class can either vote for a Centre-left party or a Centre-right party. If the left
governs, the middle class has to fear that the left government will tax both the upper and the middle class for the exclusive benefit of the lower class. If a right party governs, the middle and upper class will not be taxed and redistribution will be marginal. Therefore, in a two-party
system the middle class has the choice either to be taxed and to receive no benefits, or not to be taxed and to receive no benefits. Obviously, it would prefer then not to be taxed.

From this simple and highly stylized account it is clear that the middle class will more often vote together with the lower class in multi-party systems – or to be more precise: middle class parties will more often enter into coalitions with lower class parties in multi-party systems than in two party systems.2"

Underlying this analysis is a stark premise: Politics is about money and resources--who gets what, when, where and how.

Another premise, equally important and less apparent, seems to be that prosperity must be shared for a culture to flourish. A peaceful means to accomplish this must be identified and institutionalized. Otherwise, the rich will greedily absorb a disproportionate share of everything, refuse to give it up, and the society ultimately is thrown into riots, anger, social dislocations, revolution and all things bad and not so incidentally, the destruction of the middle class.

Well lets see how these principles do and do not apply to America, especially since at this critical juncture, these are precisely the questions which our country now confronts, even as political discourse ignores them altogether--if we take the last election as an indicator.

Next time. Who is getting what, when, where, why, and how in the United States.

Nov 29, 2010

I make the argument that the systematic attack on the middle class in this country involving so-called deficit cut backs, privatizing social security, cutting Medicare, cutting education spending, cutting wages, contemplating millions of unemployed indefinitely, also constitute opportunities. There are now opportunities for the middle class, in seeing itself becoming lower middle class, to begin to see and form a coalition with the working poor classes and to see it has common interests with even the current poor. 

From this an ethos of common prosperity can emerge and the country can get back on the right track again. 

Having most wealth the hands of the rich is an unsustainable idea.

This opportunity for the middle class to finally see that all the money in this country is money they themselves supply to Wall Street institutions who translate those funds into political power which has been used to ransack that very same middle class--taking from them in just three years, their home values, their savings, their jobs--and their futures even unto retirement--all under the guise of deficit reduction. This is a middle class holocaust.

This is and will become even more devastating. It in fact, it turns America into a true welfare state: The rich controlling most wealth in a Neo-Dickens world where most will have to depend upon alms from a government controlled by those very same rich classes.

http://www.nytimes.com/2010/12/05/us/politics/05states.html?ref=todayspaper

Fish are having trouble identifying water.
 

More tomorrow: where we will focus on "deficit reduction" and the agenda behind it.

Dec 4, 2010
Actually, I started another blog on deficit reduction on this site. Refer to that blog.

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The Alternatives to the Big Banks

The American Public is fed up and looking for alternatives to big banks. Below are a few ideas being put forward.

If we are fed up with the big banks what are the alternatives?

Surprisingly there is a lot of material on this topic with many different alternatives being put forward. 

Below are several links which explore ideas in this area.

But first know that Nov 5th has been designated "Bank Transfer Day" where the Occupy Wall Street folks and other Americans plan to march to the local giant predatory bank and withdrawn their funds. 

But where to put those funds once they have been withdrawn?

But first see the links below:

on the "Bank Transfer Day."

on how to close out your bank account -a guide.

on the various kinds of non-profit banks and calls for state and community banks-even to break up the big banks.

on new ways to finance local communities and local merchants-not allowing Wall Street to finance Walmarts of the world who come in and drive local merchants out of business.

Finally there is a link to a radio show which documents the deliberate plan to destroy this country financially, by a former Bush Administration official.

Then tomorrow we go over the detail and I make suggestions.

Here are those links:

The Credit Unions prepare for all the new customers on Bank Transfer Day
  http://www.cutimes.com/2011/10/28/bank-transfer-day-community-banks-cus-gear-up
A Nation-wide Movement to Install Local, State and Community banks:
http://www.yesmagazine.org/people-power/occupy-the-banks-strategies-for-transformation

How to Close Out Your Account at the Big Predatory Bank:
http://www.yesmagazine.org/new-economy/a-field-guide-to-closing-your-bank-account

New Ways to Finance a Come-back for Local Communities:
http://www.yesmagazine.org/issues/the-new-economy/new-economy-new-ways-to-do-finance

Interview with Former Bush Administration Official Who Tells All
http://www.kpfa.org/archive/id/74534

 7/8/13

 How the big banks are moving to kill credit union competition.

http://www.truth-out.org/buzzflash/commentary/item/18073-monopolistic-too-big-to-fail-banks-try-to-crush-credit-unions-as-competition-by-removing-tax-exemption

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Taxes, Deficits and Elections

Here we go. There will be no turns in Washington for the next two years because noses will be growing longer and longer. 
Updated: Nov 5, 2010-"There Will Be No Jobs Soon" 
Update: Nov 6, 2010 "Now Let Me Get This Straight--Give 600 Billion to the Banks?" Who Thought This Was A Good Idea? 
Update: Dec 2, 2010 Bullocks Anyone?

November 3, 2010

Here we are the day after the elections and the pundits are out in force spinning the results. The Republicans are planning a January trip to Washington to put an end to debt, government spending, the health care bill, and all things Obama.

The Democrats are pointing to silver linings, doing "mi culpa" and basically saying that "we did some good things"  but secretly happy that they don't have to take heat before the 2012 presidential election when the big money gets back in play.

This is not to minimize the results of the elections for both, but the fact remains that both sides have sold out to wall-street, the banks, and the corporations.

So nothing will change except the increasing impoverishment of the middle classes, a deepening recession, unto a depression, huge banks playing blackjack with depositor’s money and a volatile angry, American politics where little is actually accomplished; thereby maintaining an entrenchment of the status quo. And this is precisely the outcome which benefits Wall Street.

No change or loans for us thank you very much. 
 

The banks are taking our money, (add to this 600 billion from the Federal Reserve) and using it to cover their own toxic assets, increase our debt to them, and trying to reduce the value of the dollar to raid the central banks of other countries, buy up their real estate and other assets with these cheaper dollars. It will ignite a currency war.

But meantime back home, here are a few important items of note which will have an immediate impact in the next few months.

Let's see what the deeper meanings underlie, not only the election, but the next 60 days.

1-This election essentially involved the loss of 35 or so blue dog democrat seats in mostly red states. Therefore, there is a resetting the clock back to the pre-Obama period. These blue dog democrats were way right of the center of the party and now what has occurred is the democrats have a much more left party caucus pressing Obama from the left. There will be fewer moderate republicans to please, because they are gone from the party so now there is a clarification of the battle lines for 2012.
  Moreover, since 55% of the electorate did not show up for these mid-terms, things will look very different when the mass of these voters show up in that presidential year in 2012. Both parties know this and the next two years are a waiting period as they both try to appear busy.

2- Secondly the Tea-Party people will, even before January, have to witness the current republican establishment face several critical dilemmas:

    A.  The Federal Debt ceiling has expired. The current Republicans have to decide whether to let the government come to a halt, ala Newt Gingrich in 1994, and risk immediate public anger and probably face Tea-Party pressure to let it happen. They will, if unwise, let the ceiling expire and government come to a halt pretending they are the new more tea-party Republican Party and to hell with the public; they look conservative and responsible.

They could decide to extend last year’s budget which would require no debt ceiling legislation; or increase the debt limit of the republic, up to perhaps over 15 trillion dollars-this would have to be done by early spring--or do it with some fancy accounting tricks, or  they could steal the money from the social security trust fund which they have done in the past to pay for wars.

But these are unavoidable dilemmas, so expect an avoidance in an off the books accounting gambit to hide an increase in the debt ceiling.

What will also likely happen is an extension of the current budget until after January when the Tea-Party people show up. But they will show up angry because the Republican establishment essentially voted to keep the current deficit budget and spending going.

The current Republican establishment could whack off huge chunks of the current budget in the next 60 days (not likely) like social security, the pentagon budget, health care, the poor; but where would such cuts come from in the amount of money to make a real difference? No where, that's where. Expect a freeze to keep up appearances.

Also, if possible, expect the Republicans to punt to the Tea-Party people who come in January--if they cannot get Obama to join with them in a secret pact agreement about what to cut.

3-Then there are the Bush Tax Cuts which expire December 31, 2010. What to do about that? Ignore it, extend the deadline, or cut a deal with Obama to have all tax cuts extended?

At issue here is that among the tax cuts is the Alternative Minimum Tax cuts which benefit the middle class. If the cuts are not extended it will end that tax cut for the middle classes who will scream bloody murder, even as they might like to see the tax cuts for the rich expire.

Complicated, huh?

So you can see what the horse-trading is likely to be. My prediction: all tax cuts will be extended--the Democrats to protect the middle class and the Republicans to protect the rich.

Then there is the health care bill and its implementation aspects, some of which have to be decided in committee. This is ugly, but any hearings will also make it clear that the bill has lot in it which benefits the middle class and to air that would help the democrats and Obama. So we will see a lot of general talk, seeking to keep resentment going, but few real changes.

And then there is the unemployment extension for the 99 month people. Congress left town without doing anything about that and the deadline to do so is here in November.  December is urgent. If they don't act you'll have a chunk of people upset, and unemployed for the holidays; not to mention the loss of consumer purchasing power to help the economy recover. The Republicans and TP people will have to wear Scrooge Hats around Christmas time if they don't act.

The Economy: Here we are at the economy. What can the Dems and Reps do about the economy in the next sixty days? Not much. The ideological lines of demarcation are so rigid there is little room for compromise. The Dems will claim slow progress and the Reps will claim the Dems made the unemployment mess and both of their noses will grow longer and longer.

Finally, to boot, the Tea-Party people will be looking over Republican shoulders in the next 60 days making their views known about what to do about the above items, and being ideological purists that they are, they will come to town angry no matter what the Republican establishment types do.

So the scene is set.

So what is likely to happen in the next two years? The Republicans will overplay their hands and subpoena everyone, threaten to shut down the government, back off of massive cuts, especially in the military (too many republican votes there, back off social security, too many republican votes there etc.) all the while claiming massive victories for the benefit of the back home crowd.

In the end only Wall-street and the banks will in fact, be left standing dusting off their checkbooks for the 2012 elections to make sure that nothing in Washington changes-once again.

This blog is not for the faint of heart.

Nov. 5, 2010

Just note here to be amplified upon tomorrow. All the talk today is of the economy and of jobs.
The truth is that "putting America back to work" is a flawed strategy. Think of it this way. At the present rate of job accretion, it will take five to fifteen years to recover the 11 million jobs lost since the recession began.

It will not happen. It takes a 100 thousand jobs a month just to keep pace with population growth and 150 thousand jobs a month is minor compared to the need. 

Add to this the fact that the long term unemployed are not employable and may have to be given re-training which will cost billions we don't have.  Add this to the returning vets who need jobs, housing etc. whose medical costs are high in an already aging population; add to this that many of the jobs created are low-paying service jobs and you have a bleak outlook on jobs. 

Jobs will not happen- and that is the real problem--especially if you understand the real unemployment and underemployment rate is 17%.

So what to do? For a short answer see my blog on this site on "A Report Card On Obama" and a companion blog on this site called "What America Needs to do to Survive." See the Nov 5th entry where this discussion begins.

More detail tomorrow.