Posts Tagged ‘recession’

Successful parasites do not kill their hosts

April 13, 2011 9 comments

parasitesIn biology there are life forms known as parasites. Parasites are organisms that live off the “life energy” of other host organisms feeding on these hosts to sustain their own existence. These parasites cannot live without the “life energy” they take from the host and are therefore totally dependent on them. A host is an organism that is capable of surviving on its own and therefore represents a food or energy source for the parasite. Generally if the host dies, the parasite will also die making it not in the interest of the parasite to kill its host. Even if the death of the host does not cause the death of the parasite, it will keep them from being able to further exploit the host.

So why are we mentioning biology in reference to economics? It is because there are parallels between economic and biological systems that can help to illuminate what is presently happening on our economy. In our economy we have 2 classes of people, the PRODUCERS and the PARASITES. The producers are people or business entities that create things that can be sold or exported. These people create wealth. These people can be likened to the hosts in biology. They create wealth (life energy) and are capable of surviving on their own. Examples of the jobs or sectors that have these people include manufacturing, mining, software, movies, timber, agriculture and others. Again what these people have in common is that they produce goods or wealth for the economy.

Parasites on the economyThen we have the parasites in our economy. These are people that cannot survive without the producers. Not all parasites are bad, many do provide useful services such the delivery of goods to markets, and as well as other services needed by the producers, however they still require producers for their sustenance. However there is one class of parasites that include bankers, financial analysts, stock brokers, pit traders and others. These financial people are parasitic because they survive by manipulating the hard earned money of producers and skimming a percentage for themselves, much as a mosquito does to its host. THESE PEOPLE PRODUCE NOTHING AND CREATE NO WEALTH. They cannot survive without the money or “life energy” of producers. If there are no producers, then there is no need for a financial sector since there is nothing to finance. Some of these financial parasites have siphoned billions of dollars in bonuses by creating fraudulent financial statements, packaging trillions of dollars of bad loans into securities, and selling these securities to other parasites. These fraudulent activities gave the nation the illusion of wealth, however we now know the truth and we need to end this illusion and take back our nation. They also lied about these securities and sold them to hosts who were wisely putting money away in retirement accounts for the future or a rainy day. Of course not all parasites have engaged in fraudulent activities, however they still cannot survive without the energy (wealth) they take from the hosts or producers. They cannot exist without producers.

In the end, by placing themselves so close to such large amounts of producer saved money, some of these financial sector parasites have enormously enriched themselves and exhibited greed to the point that it threatens to kill their hosts. The worst part of this is that not only will these parasites walk away unscathed, they will end up even wealthier than before. They will have the means to buy up resources such as homes, property, and other goods at firesale prices as the economic downturn continues. They will hunker down in their mansions and yachts to ride out the economic storm, while the producers will be left to twist in the wind. As if this is not bad enough, these parasites resent having to give even a small part of their bonuses to their neighbors to help their hosts recover from the massive number of foreclosures that lie at the very heart of this economic crisis. Many of these foreclosures were not the result of bad decisions, but the result of circumstances beyond their control such as health problems, loss of jobs, falling home prices, divorce, or other factors.

According to Countrywide, based on information from its servicing portfolio — when “cause of foreclosure” is known (80.3%), the breakdown is as follows:

•Curtailment of income: 58.3%
•Illness/Medical: 13.2%
•Divorce: 8.4%
•Investment Prop./Unable to sell: 6.1%
•Low regard for property ownership: 5.5%
•Death: 3.6%
•Payment adjustment: 1.4%
•Other: 3.5%

Rick Santelli greedOf course there is some irresponsibility involved, but as you can see, most of the causes are related to the economic downturn and other factors outside of the control of the home owner. Yet the parasites continue to use the corporate controlled media to feed the myth of the “irresponsible homeowner”. For an example of how some parasites manipulate the media for their own ends, take a look at this video from CNBC and listen to these parasites as they bemoan having to take a small share of their exorbitant compensation and do their share to bring our economy back from the brink they helped to bring it to. Take a look at the speaker in this video and all those around him, what wealth do these parasites produce? Could they survive without the producers? They even have the audacity to believe that they should continue getting their lavish bonuses despite the fact that they have utterly failed the nation and contribute nothing to its wealth.

parasitesThese financial parasites are not finished with you yet. They believe that they are worth more than a base $500,000 salary and that financial companies would not be able to attract their talents for that paltry figure and would suffer because of this unreasonable earnings ceiling. They are busy devising new ways to separate the hosts from their money and collect more bonuses so that they can have more for themselves. (Like they do not enough already?) They know that very few of them will ever be prosecuted for their crimes and will again attempt to create financial instruments to further enrich themselves since they have nothing to lose. They are busy either supporting or soliciting additional government support where even more producer money is used to subsidize their mistakes. The damage that these parasites have done to the nation and this world cannot be calculated. Foreign investors will certainly be far more reluctant to again invest in securities and other instruments that have been created in the United States. This will hurt our nation for decades to come.

There is a difference between bailouts and stimulus.

•Bailouts of the financial system provide producer earned money to the parasites who created this economic mess.
•Economic stimulus however will have at least some of the benefits going to the producers.

Redirected anger

March 17, 2011 3 comments

I heard this recently at a rally and it pretty much explains how the financial and corporate elites have successfully divided what is left of the middle class in this nation and have redirected the anger away from them, but instead have us turning on each other:

3 people come to a table with 12 cookies on it, a wealthy financial elite, a Tea Party member, and a union member.

The wealthy guy immediately takes 11 of the 12 cookies. He then looks at the Tea Party guy and says “watch out for that union guy or he will take a bigger piece of that cookie than you”

We care about our elderly citizens, see they are dining on seafood!

That pretty much sums up what the corporate controlled media message is being put out there. It is a classic case of divide and conquer.

None of the Wall Street elite have ever been prosecuted for the economic meltdown.
None of the bankers who committed the fraud have ever been prosecuted.
None of the hedge funds or insurance company executives have ever been prosecuted.

Why is this? Because they have bought the puppet politicians and they own the government. That makes it OK to have been part of the greatest heist of wealth in human history and then to have the taxpayers pay for it when their “bets” turned bad. It is OK to rip off America’s working people for $billions and serve no time in jail.

The only guy who was prosecuted was Bernie Madoff. His big mistake was that he ripped off the wealthy!

And that is why Madoff is in jail.

Wrong Question!

March 15, 2011 3 comments

The people are asking why the state bus mechanic has benefits.

They should be asking why they do not.
Exxon pays NO TAX!The wealthiest pay an effective tax rate of only 17%, which is less than their secretaries, nannies, chauffeurs, and gardeners pay.
2 out of 3 corporations pay no tax at all. Exxon pays no tax! GE received a tax rebate of $1 BILLION! Bank of America pays no tax!

Because the puppet politicians whom they bought, have created a 7,000 page tax code full of loopholes that favor these same wealthy elites.

If these financial elites and the corporations paid their fair share (currently 35%), then the states would not have any budget deficits, the federal deficit would be significantly reduced.

So we need to change the MESSAGE from what programs do we need to cut to pay for the deficits, to how can we make the uber rich pay their fair share.

Student Debt Burden Solution Part 3

March 10, 2011 11 comments

From those who need it the most, to those who need the leastIn the first video, we showed you the huge wealth gap between the richest and the average working person. We also showed you how the richest individuals have an EFFECTIVE TAX RATE far below that of a person making only $34,000 per year and how this is creating deficits at both the state and federal levels.

In the second video, we showed you how most US corporations are not paying any US taxes at all, while receiving local services such as police, fire, road maintenance, and federal services such as State Dept. and US military protection. Since the corporations are not paying for these extremely expensive services, this means YOU ARE paying for them! They are taking from those who need it the most, and giving to those who need it the least!

Military fighting for corporationsOne of the responses to this artificially induced deficit is to blame the public worker, the poor, the sick, the elderly, and the pensioners instead of taxing the rich and corporations according to their APPARENT TAX RATE. The corporate media has tried to whip up a frenzy of animosity towards public workers saying they still have decent benefits and the taxpayer has to pay for them. This is a classic divide and conquer where the elites turn the workers on each other as a diversion while they continue to amass huge fortunes and continue to buy the politicians through campaign contributions to write even more tax breaks into the already huge 71,000 page tax code. Instead of the people asking why the state bus driver still has benefits, they should be asking why they do not. Do not forget that it was NOT the elementary teachers and public hospital nurses, and police that caused this economic mess and the subsequent decline in tax revenues. The crisis was caused by massive bank fraud, Wall Street over leveraging, and speculator derivative trading. So why are the victims of this economic mess being blamed and asked to pay for the mistakes of the wealthy elites?

In Great Britain, one reaction to this attack on the working middle class has been the formation of a populist movement that shows there is an alternative to making the poor and middle classes shoulder the costs to pay for the mistakes by the wealthy elites. This movement has changed the conversation in government from cutting services to the middle class and poor, to one where the people are demanding an end to corporate welfare and making the elites pay their full share of taxes. This is happening despite the fact that conservatives are in power in Britain and have tried to impose draconian cuts. The same forces at work in Egypt where people were takinhg their country back from the corrupt elites are now at work in the UK.

In Britain as in the United States, people were also wondering why there was no outpouring of anger at how the rich were getting richer and richer while the rest of the country were enduring extreme cuts in government spending. Well, a group of a dozen citizens sitting at a pub decided to do something about it.

These people discovered that one of the largest cell phone companies in the UK, Vodaphone owed an outstanding bill of over $9,700,000,000 using a lame tax code technicality to avoid paying the bill. Yes that is $9.7 BILLION! With over 200,000 people in London being forced out of their homes because of government cuts, how many people could have beeen kept in their homes with this money? How many student grants would this money have provided? How many cuts could have been prevented? So they called themselves UK Uncut, setup a Twitter account and announced a time and place where people could meet. This is somewhat similar to the “flash mobs” we have been reading about recently. However, these “flash mobs” have a very specific social purpose in mind. They were to meet ahead of time and then on a specific cue, they would simply sit down in front of the store to prevent people from getting in. People who were going to be customers in the store actually joined in when they were explained that because Vodaphone was not paying its taxes, how it would affect them directly.

Banks should pay taxesThe first protest did not receive much media attention, but the protests grew and it was not difficult to get people to join in once the issue was framed that they were paying their fair share of taxes and that Vodaphone was not. The protests then expanded to other large corporations. By relating to other people specifically what it was that they were losing because of the tax avoidance, it was easier to get more and more people involved. This direct relating to local concerns is one of the keys to the success of this movement.

Once the media stopped taking the corporate view, the conversation in the government shifted from what program cuts were needed to how to get these rich elites to pay their fair share of taxes. It is not difficult to see how this will help college students from becoming victims of even more cuts to education. In fact a similar organization called US Uncut, has been started in the United States and has already held events across the nation.

So, what can you do to make this happen in the United States?

1. Read this compelling story detailing the rise of the movement in the UK.

2. Visit the US Uncut website.

3. Read the call out on the US Uncut website and either join an event or start one of your own.

So, are you going to continue to accept the government lies that these cuts are necessary to balance the budget, making YOU pay for the greed and fraud perpetrated the wealthy elites, while they continue to receive huge tax cuts?

Or, are you going to become involved in this movement and take control of your future?

Student Debt Burden Solution Part 2

Student Debt Burden Solution Part 2 from Illusionist on Vimeo.

Wealth GapIn the last video we presented information on how the gap between the wealthy and the rest of us has been growing wider and wider, and how the financial elites were not only NOT suffering but were actually thriving in this economic environment, while the rest of us struggle to make ends meet and endure draconian cuts in the social safety net programs and aid to education. All while the financial elites showered themselves with huge tax cuts. Well, unfortunately the situation is even worse than the first video presented.

If you look at the current tax rates, it appears that the millionaires and billionaires have to pay a tax rate of 35%, but this figure is very misleading. It assumes a level playing field for all taxpayers, however, that is not really the case.

Apparent Tax Rates

If you take a look at the number of pages in our tax code, you will see that the size has been growing rapidly until the current tax code is an astounding 71,684 pages in length. So how is it that the tax code has become so large? The answer is very simple, the wealthy elites contribute to the political class and therefore they ultimately control the government and have the clout to have these bought politicians write loopholes into the tax code that enable them to take huge deductions on their taxes. So you end up with a situation where you have an illusionary apparent tax rate, but you also have a real world effective tax rate once all of the deductions are taken. Our 71,000 page tax code is totally riddled with these loopholes. The KEY TERM here is the Effective Tax Rate.

According to Forbes Magazine, the highest-earning taxpayers in the U.S. paid an income tax rate of only 17%–the lowest rate paid by the richest elites during the 15-year period covered by the IRS statistics. So their Effective tax rate is lower than someone who only makes $34,000 a year! They pay a smaller share in taxes than their secretaries, gardeners, nannies, and chauffeurs!

Now while wealthy individuals pay an extremely low effective tax rate, we have a similar situation with the corporations. The largest corporations in the US are supposed to pay a tax rate of 35%. While the corporations bemoan this rate, the reality is that due to the loopholes in the 71, 000 page tax code, depending on what specific industry you are in, the effective rate can actually go into negative territory. For example: Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a “tax benefit” of $1.1 billion back into its reported earnings. The actual amount in corporate taxes that the government collects (“the effective tax rate”) is lower than those of Germany, Canada, Japan and China, among others.

Exxon-Mobil paid no taxes. Despite benefiting from this corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. The corporate owned media parrots these complaints convincing the average person that corporate taxes hurt everyone. Whay was the saying that Joseph Goebbels, Hitler’s propaganda minister said: “If you repeat a lie often enough, it becomes the truth.” In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.

Military fighting for corporationsSo there we have most corporations in the US not paying any tax at all, while they suck local services such as police and fire protections, road maintenance so they move they products or services, as well as international protection by the US State Department and the US Military. These services do not come cheaply and since they are not paying for them, WE ARE!
These corporate executives sit there with their “patriotic” flags on their lapels, while they scheme how to avoid paying their fair share of taxes, cut deals to ship American jobs overseas, and setup tax havens in the Caribbean. Is it any wonder that the rest of the country is mired in this economic misery while they prosper?

So there you have it, the wealthy elites are not paying their fair share, the corporations are not paying their fair share, and the rest of us are struggling.

Foreclosed and evictedSo why am I mentioning this? Because those loopholes will cost the U.S. government $628.6 billion over the next five years, according to a 2010 report from the Tax Foundation.

If all of those loopholes were closed, we could provide every one of the 11-1/2 million college students in the nation with a $54,600 grant.

Or we could provide every one of the 43 million people on food stamps with a check for $14,600.

Think about this, we are taking money away from those who need it the most, so that we can give to the corporate and financial elites of this country, the very people who need it the least.

In the last video, we mentioned that we would show you what YOU can so about this and how this already being successfully done in Britain. However, this video was needed to supplement the first one to better illustrate and drive home the astounding depth of the wealth inequality. In our next video we will show the success story in Britain and explain how students here can start to organize and achieve the same success.

Click here for Part 3 of this article

Student Debt Burden Solution Part 1

February 17, 2011 35 comments

Student Debt Burden from Illusionist on Vimeo.

Crushing student debt burdenStudents are deeper in debt today than ever before and two out of three college students graduate with significant debt burdens . While most colleges are struggling to keep costs under control, the cost of a college education is rising faster than the cost of medical care and as much as three times as fast as consumer prices in general.

Click here to view the 2nd video in this series.

Students borrow because they see little choice. They see college education as a key to success. However In the case of student loans, there is no walking away. Unlike most other forms of debt, student loans carry almost no consumer protections and little ability to refinance. By law, they can’t be wiped out in bankruptcy. These draconian laws would make a mobster envious.
These huge debt burdens threaten the vitality of our nation as they leave our future productive workers mired in debt and are certainly not good public policy. So is there any way the nation could help our future workers to become well educated and become productive members in our society?

Consider the following facts:
According to a congressional analysis which was published in the Washington Post , the recently enacted plan to extend the tax cuts for the rich would add more than $36 billion to the federal deficit next year — and transfer the bulk of that cash into the pockets of the nation’s millionaires.

An analysis by The Wall Street Journal found that pay and benefits at the top 25 publicly traded banks and security firms on Wall Street hit a record of $135.5 billion.

Let’s just take a look at some of the compensation that some of these people are receiving:

Wonder if they worry about the minimum wage?

These people are making more than people who win the lottery jackpot and they make millions every year, year after year. These people on the average make more in one day than average worker makes in a year. And some of these same bankers received government bailout money while now they are making millions every year in compensation and bonuses.

Should we give them a tax cut?
It seems the government has trillions of dollars, that would be thousands of billions of dollars to bail out the bankers and Wall Street, but want to make cuts that help students and schools.

Should we gave these people a tax cut?<The government has trillions to bail out the bankers and Wall Street, but they are talking about cutting 100’s of billions which would include aid to education placing additional burdens on students.

Now these people we saw earlier are not even close to being the richest in the nation. In fact there are people that are making significantly more than they are. In fact the amounts of money that these people make are staggering:
John Paulson, the manager of Paulson & Company made a estimated 2.3 billion in personal earnings in 2009.

James Simons, the manager of Renaissance Technologies, made an estimated $2.5 billion in personal earnings in 2009.

George Soros, manager of Soros Fund Management, made an estimated $3.3 billion in personal earnings in 2009

And the top earner was David Tepper, manager of Appaloosa Management. He made $4 billion dollars in one single year in 2009.

Now consider this:
David Tepper makes $456,000 per hour for every hour of every day in the year. Hmm, I wonder if he worries what the minimum hourly wage is?

If David Tepper goes to a 2 hour movie, he will pay about $15, but he will make $912,000 in that time.

If David Tepper plays a round of golf at the country club, he will pay around $500, but will make over $2 million that afternoon.

David Tepper can purchase a $100 million yacht with under 2 weeks worth of earnings.

David Tepper can purchase an oceanfront mansion worth $100 million for under 2 weeks worth of earnings.

These people cannot spend money as fast as they make it!

So why are we pointing all this out?

The rich are getting most of the tax cuts
Because once all of the tax cuts are finally phased in, a staggering 52.5 percent of the benefits will go to the richest 5 percent of taxpayers.

A remarkable study (Norton & Ariely, 2010) reveals that Americans have no idea that the wealth distribution (defined for them in terms of “net worth”) is as concentrated as it is. Just take a look at the wealth distribution in the United States. A staggering 87% of the wealth is held by the top 10% in the nation.

So do these people really need these tax cuts when our students and their families are groaning under the weight of student loans, home foreclosures, unemployment, and other results of the economic crisis? Why are we taking good from the people who need it the most, and giving it tp the people that need it the least?

Consider this: if the recent tax cuts for the rich were repealed and the rich paid their fair share, we could have enough revenue to give every single one of the 11-1/2 million college students in the US a Pell grant for $3,130 and that would be repeated for every year they attended college.

Student protest
Certainly these wealthy elites can afford to pay their fair share. Now wouldn’t helping our future productive workers be a better way to invest in our nation’s future than giving the elites more money?

In a future video, we will explore how we can make this happen. It is already happening in Great Britain.

Click here to view the 2nd video in this series.

%d bloggers like this: