[The] man of sin [shall] be revealed, the son of perdition, who opposeth and exalteth himself above all that is called God, or that is worshipped, so that he as God sitteth in the temple of God, shewing himself that he is God. (2 Thessalonians 2:3-4 KJV)
Jesus saith, "I am the way, the truth, and the life: no man cometh unto the Father, but by me." (John 14:6 KJV)
For whosoever shall call upon the name of the Lord shall be saved. (Romans 10:13 KJV)
May 31, 2011
UNICEF Last Year Spent $757 Million for 2.5 Bllion Doses of Vaccines to 99 Countries, Reaching 58 Percent of the World's Children
AP - UNICEF is for the first time publicizing what drugmakers charge it for vaccines, as the world's biggest buyer of lifesaving immunizations aims to spark price competition in the face of rising costs.
On Friday, UNICEF posted on its website the actual prices that it has paid individual drugmakers for 16 vaccines purchased over the last decade. It's a move that a few Western pharmaceutical companies don't support. Novartis AG and Merck & Co., which only sells one of its many children's vaccines to UNICEF, both declined to have their prices published.
UNICEF said it will continue to disclose pricing of future vaccine deals, with the hope that the transparency will push drugmakers to cut prices and thus allow the organization to vaccinate more children and save more lives.
"Transparency will also help foster a competitive, diverse supplier base," said Shanelle Hall, director of UNICEF's supply division.
She noted that it also will help UNICEF's partners and those governments that buy vaccines on their own to make more informed decisions in price negotiations with drugmakers.
UNICEF last year spent $757 million to provide 2.5 billion doses of vaccines to 99 countries, reaching an estimated 58 percent of the world's children.
Its price list shows significant disparity, with Western drugmakers often charging UNICEF double what companies in India and Indonesia do. Just as striking is the steady rise in prices in the last decade, with the cost of vaccines against measles, polio and tetanus roughly doubling between 2001 and 2010. Prices of a few vaccines have remained flat or declined as additional competitors entered the market.
There's also a huge spread in prices among various vaccines.
As might be expected, shots that have been around for some time and those vaccines made by multiple companies cost just pennies per dose, such as tetanus and tuberculosis shots and oral polio vaccine. But a combination shot for immunization against diptheria, tetanus, whooping cough, hepatitis B and haemophilus influenza can run UNICEF $3 or more per dose. The dual vaccine against 10 or more strains of pneumococcal disease, which causes ear infections and meningitis, costs $3.50 a shot. And some of the vaccines require more than one booster shot, adding to the cost.
The cost is partly justified by the complex manufacturing process used to make combination vaccines. And UNICEF still pays far less than the $71 and $114 per dose, respectively, that is charged in the U.S. for those two vaccines.But given that the organization's mission is to immunize entire populations of at-risk children, any savings means more can be vaccinated.
British drugmaker GlaxoSmithKline PLC said in a statement that,
It "always offers UNICEF our vaccines at our lowest price as they are targeted at the people who need them the most, but are least able to pay. We welcome UNICEF's move to publish retrospective prices for tenders and hope that this will help inform decisions for future vaccine procurement."
Messages left with other Western vaccine makers seeking comment weren't immediately returned Saturday afternoon.
Daniel Berman, deputy director of the Doctors Without Borders Campaign for Essential Medicines, called the new price disclosures "a real step forward."
"By getting access to these prices, buyers will be able to take advantage of the increasing capacity of emerging countries to develop and produce quality vaccines at significantly lower costs," he said in a statement.
He added that GAVI, the Global Alliance for Vaccines and Immunization, "should flex its purchasing muscles to encourage manufacturers" to produce vaccines that don't require refrigeration and can be administered through patches or liquids, rather than needles.
GAVI, which is supported by contributions from developed nations and the Bill & Melinda Gates Foundation, is the primary funder of vaccines purchased by UNICEF. Helen Evans, interim CEO of the GAVI Alliance, said in a joint statement with UNICEF that GAVI "strongly believes in timely, transparent and accurate information on pricing."
Many of the largest global pharmaceutical companies — most recently Johnson & Johnson — have jumped into the vaccine business in recent yearsto diversify revenue as many of their blockbuster pills are facing generic competition. Vaccines are all but immune from generic competition in developed countries, and some newer shots, such as Pfizer Inc.'s Prevnar pneumococcal vaccine, now bring in billions of dollars in revenue each year.
Those big companies are looking to less-developed countries for future sales growth, and vaccines against crippling and deadly childhood diseases are cost-effective purchases for countries with small health budgets.
AIDS groups and advocates for affordable health care in developing countries have campaigned for years for big pharmaceutical companies to sell their patented medicines to those countries at drastically reduced prices, or to allow generic drug makers in countries such as India to do so. They've had some success, so UNICEF's new price plan is a logical strategy.
UNICEF's Hall said the organization hopes to expand the transparency initiative to other essential products that it buys for children. UNICEF supports child health and nutrition, good water and sanitation, and quality basic education for boys and girls across the globe.
925 million people go hungry every day, according to Oxfam report
May 31, 2011
MSNBC - Food prices could double in the next 20 years and demand in 2050 will be 70 percent higher than now, U.K. charity Oxfam said on Tuesday, warning of worsening hunger as the global food economy stumbles close to breakdown.
"The food system is pretty well bust in the world," Oxfam Chief Executive Barbara Stocking told reporters, announcing the launch of the Grow campaign as 925 million people go hungry every day.
"All the signs are that the number of people going hungry is going up," Stocking said.
Food prices are forecast to increase by something in the range of 70 to 90 percent by 2030 before taking into account the effects of climate change, which would roughly double price rises again, Oxfam said.
"Now we have entered an age of growing crisis, of shock piled upon shock: vertiginous food price spikes and oil price hikes, devastating weather events, financial meltdowns and global contagion," Oxfam said in a report.
"The scale of the challenge is unprecedented, but so is the prize: a sustainable future in which everyone has enough to eat."
The report assigns part of the blame to commodities traders, saying three companies control 90 percent of the trade in grain.
"Financial speculation must be regulated, and support dismantled for biofuels that displace food," it said.
Stocking said she favored the introduction by regulators of position limits in agricultural commodities futures trading, noting that financial speculation aggravated price volatility.
The report said:
"The vast imbalance in public investment in agriculture must be righted,redirecting the billions now being ploughed into unsustainable industrial farming in rich countries towards meeting the needs of small-scale food producers in developing countries."
The report said the failure of the food system flowed from failures of government to regulate and to invest, which meant that companies, interest groups and elites had been able to plunder resources.
"Now the major powers, the old and the new, must cooperate, not compete, to share resources, build resilience, and tackle climate change," it said.
"The economic crisis means that we have moved decisively beyond the era of the G8, when a few rich country governments tried to craft global solutions by and for themselves.
"The governments of poorer nations must also have a seat at the table, for they are on the front lines of climate change, where many of the battles — over land, water, and food — are being fought."
U.S. wheat prices are on their way to their biggest weekly gain
May 20, /2011
MSNBC - Drought from Paris, France to Paris, Texas has farmers and grain dealers looking upwards. The farmers are looking to the skies for rain and the dealers are wondering where rising grain prices are going to stop.
U.S. wheat prices are on their way to their biggest weekly gain and European benchmark wheat futures have jumped just under 30 percent in the past nine weeks as wheat belts on both sides of the Atlantic show signs of irreversible drought damage.
"We need Mother Nature's help to save a crop, which whatever happens will be mediocre," said a senior European trader, referring to France, the EU's biggest wheat producer.
An unusually dry and hot spring in top EU wheat producers and severe dryness in U.S. states Texas, Kansas and Oklahoma, have revived memories of the dry summer of 2010, which ravaged Russian and Ukrainian wheat harvests and choked off supplies from the key exporters.
Food security is a global concern and the UN's food body has issued repeated warnings about food price inflation since last year's Black Sea drought.
Rising food prices helped fuel the unrest which toppled the heads of Egypt and Tunisia earlier this year, triggering protests in many Arab countries.
Black Sea wheat may this year go some way to meeting lost production from EU and U.S. fields but governments and consumers anxious to secure reliable food supplies will be sensitive to anything that threatens the flow of grain.
"Clearly a return of Russia would relieve pressures on demand, at least temporarily, capping the wheat market's upward trend, but the overall picture would still remain dominated by the drought and a still sturdy economic cycle," said Franck Nicolas, head of global asset management at Natixis AM.
Russia, once the world's third-largest wheat exporter, halted grain exports from mid-August last year, while Ukraine imposed export quotas, causing a grain vacuum which European and U.S. farmers happily filled.
In a reversal of fortunes, Russia's crop has been developing in rather positive conditions so far this year, with slow snowmelt in the spring bringing abundant soil moisture, making international traders believe Moscow may gradually start exporting again this summer.
Parched Europe
Parts of central Europe had under 40 percent of their long-term average rainfall from February to April and drought in much of Europe looks set to continue with little relief until June at the earliest, forecasters say.
"From northern to central Europe, rainfall deficits have been remarkable in March and April," said Meteo France analysts.
The drought has prompted the French government to impose curbs on water use in a third of the country — after Environment Minister Nathalie Kosciusko-Morizet said France was in a "situation of crisis" — and leading analysts to slash output forecasts.
Agritel analysts said this week they expected France's soft wheat output to fall 11.5 percent this year to 31.7 million tonnes — while European traders bet on a harvest of 33-34 million tonnes after 35.6 million in 2010/11. Strategie Grains was more conservative with an estimate closer to 35 million tonnes but the analyst said it could cut it further if the drought continued.
Unless sustained relief rainfall helps turn the situation around in June, this could potentially halve France's soft wheat export potential to 6 or 7 million tonnes — a scenario that is worrying traditional north and west African clients.
In Germany, the EU's second largest wheat producer, the Farm Cooperatives Association cut by 3.2 million tonnes its estimate of the country's wheat harvest from last month, to 22.31 million tonnes, now down 7.2 percent on the year.
"The continued dryness in Germany means that we have reduced our (harvest) expectations in terms of both volume and quality," said Germany's largest flour mill VK Muehlen. "Wheat will remain expensive and flour will also remain expensive."
The condition of HRW — a high-protein variety which accounts for nearly half of U.S. wheat exports — has steadily deteriorated throughout the spring in Texas, Oklahoma and in key production areas of Kansas, the top U.S. winter wheat state where production may be the smallest in 15 years.
"It is pretty bad," said Kansas state climatologist Mary Knapp. "For a lot of these areas... the last significant rainfall was in July of last year."
The U.S. Department of Agriculture on May 11 forecast that Kansas would harvest 261.8 million bushels of wheat this summer, down 27 percent year on year. The Texas and Oklahoma wheat crops are seen down more than 50 percent, causing the overall U.S. winter wheat crop to be estimated as the smallest in five years.
"Quality-wise, we're looking at a crop that has deteriorated tremendously due to all this rainfall. It's looking like there will certainly be a lot more feed-quality wheat coming out of the soft red areas than we were thinking a month ago," said Telvent DTN meteorologist Mike Palmerino.
But in drought-traumatised France grain farmer Pascal Seingier cannot see the clouds, let alone any silver lining.
"It's all dry. We have had almost no rain in weeks and it's now clear I will not have the same harvest as usual," he told Reuters on a tour of French grain fields. "Usually Mother Nature repairs what it has broken but it won't happen this year."
IMF Reforms Will Give Emerging Economies Increased Voting Rights to Reflect a Shift in Global Economic Power in Developing Giants Such as India and China
Reuters - The 187-member IMF has approved reforms that will give emerging economies increased voting rights and board seats by the end of 2012. More than 6 percent of voting power at the fund will shift to developing countries such as China, which will become the third-biggest member nation.
In Brazil on Monday, French Finance Minister Christine Lagarde kicked off a worldwide tour to win support for her candidacy to head the Washington-based IMF. She said that the fund "must continue the reform process it began under Dominique Strauss-Kahn," who quit as IMF chief after being charged with the attempted rape of a hotel maid in New York this month.
Lagarde's visit to Brasilia is the first in a hastily arranged global tour that will also take her to India, China, Russia and Saudi Arabia. The IMF has a June 30 deadline to pick a successor.
The resignation of Strauss-Kahn has led to calls from developing countries to end the traditional European lock on the job.
EU nations are strongly backing Lagarde, arguing that a European leader is crucial at a time when the IMF is working with the euro zone to avert the risk of Greece defaulting on its loans and sparking wider financial fallout.
But some emerging economies have objected to another European IMF head, saying it is time to give other nations a turn to reflect a shift in global economic power to developing giants such as India and China.
South African Finance Minister Pravin Gordhan criticized the rich nation support for Lagarde, saying it breached a decision by the G20 group of leading economies for a more open selection process.
Brazilian Finance Minister Guido Mantega said Brazil had yet to decide whether to support Lagarde or her only declared rival, Mexican central bank chief Agustin Carstens. Mantega reiterated Brazil's stance that the next IMF leader should be chosen on merit rather than nationality, and that the growing influence of emerging economies should be recognized in the process.
Lagarde's main obstacle is the possibility of an inquiry into her role in a 2008 legal settlement involving paying 285 million euros ($408 million) to businessman Bernard Tapie, an ally of French President Nicolas Sarkozy.
May 30, 2011
While Teachers' Unions Organize Protests to Protect Their Wages and Benefits, the Public School System Increases Student Fees
Outside district headquarters in Los Angeles on Tuesday, May 24, 2011, A.J. Duffy, president of the teachers' union United Teachers Los Angeles, talks to teachers, students and others at a rally against proposed budget cuts that would eliminate many teaching and staff positions and educational programs throughout the Los Angeles Unified School District.
May 24, 2011
DailyBreeze.com - With thousands of jobs at stake, the rhetoric between Los Angeles Unified officials and the teachers union heated up Tuesday as each side accused the other of not negotiating in good faith over plans to close a $408 million budget gap.
Superintendent John Deasy lamented that United Teachers Los Angeles has rejected an agreement that six other unions have signed, calling for six furlough days in exchange for saving thousands of jobs. If signed by all nine unions, the deal would save about 5,700 jobs, although the district would still make about 1,900 layoffs.
UTLA argues the district can now afford to save every job and have no furloughs whatsoever after Gov. Jerry Brown released a revised state budget that increases school funding statewide by $3 billion.
"We are very much against the clock on this issue," Deasy said. "We have met 16 times with UTLA since March 24 and I am still looking for a counterproposal from UTLA."
UTLA leaders denounced Deasy's suggestion that they are dragging their feet in negotiations and accused the schools chief of trying to make his case through the media rather than at the table.
"He's negotiating in public, albeit subtly," UTLA President A.J. Duffy said during an interview. "And that forces us into an uncomfortable position."
Deasy has been superintendent for less than six weeks, but the tension between him and Duffy has been building recently over issues that include LAUSD's proposal to try out a new teacher evaluation system and the district's decision to give charter schools rights to operate some low-performing district campuses.
The union has filed several complaints with the state's public employee relations board and a court injunction to block the new evaluation system.
Deasy has sent critical messages via Twitter about UTLA's inability to agree to furloughs and its desire to block some reforms that union leaders have criticized.
"My good friend Mr. Deasy, ... when I see certain comments in the media, it seems like you're saying that we're not negotiating, and we have been for weeks," Duffy said during the board meeting.
"My very good friend, Mr. Duffy," Deasy replied. "You know I take your advice and only believe nine-tenths of what I read in the newspaper. ... You and I both know what really happens at the table."
Whatever the talks behind closed doors have been, in public UTLA leaders are refusing the idea of agreeing to any furlough package that doesn't save all educators' jobs.Officials said the 1,900 layoffs are still necessary because of the district's declining enrollment.
During a picket and protest at the school district's downtown headquarters Tuesday, several hundred educators chanted and held signs demanding that the district rescind the more than 5,000 layoff notices sent to educators.
Diana Cervantes, a fourth-grade teacher at Eshelman Elementary School in Lomita, said she received a layoff notice this year after teaching for seven years. She said it is stressful not knowing whether a deal will be reached and her job will be saved. But Cervantes said she understands the union's reasons for taking a hard position at the bargaining table.
"The district needs to justify why we need these furloughs," she said. "Up until this point they haven't been able to do that yet."
The union believes that the state's updated budget plan, which reported increases in state revenue and included a $3 billion increase for school funding, will bring at least $300 million to LAUSD.
Deasy said Tuesday that he is going to be cautious about counting on any money when state officials have said that, without the approval of a series of tax extensions, schools could still see more cuts. However, he said he has agreed to count on the state repaying $154 million in IOUs that it has previously failed to make good on.
School board member Richard Vladovic said he supported Deasy's cautious budgeting approach.
"Deasy is already taking a risk," Vladovic said. "When people say let's save all our employees, I'm going to say we have done everything possible. ... Now we need our union's help."
The unions that have agreed to the furlough deal represent administrators, school police, building and trades and other nonteaching positions.Teamsters and the CSEA, representing office workers, campus aides and custodians, have also not agreed to the furlough deal.
The Teachers' Union Mantra: It's for the Kids!
The nation’s public schools employ more than 6 million workers, and instructional staff receive about $295 billion in salary and benefits, according to federal estimates ... All told, personnel costs—the salaries and benefits that sustain the K-12 workforce—consume about 80 percent of school districts' budgets, and many policymakers are determined to drive those expenses down. Yet reducing those costs is not as simple as chopping away at the state or local education budget, or eliminating programs or services. State pension systems, which typically cover teachers, generally are protected by state constitutions and other laws, and courts have made it difficult to reduce benefits for current enrollees. And teachers’ salary schedules and health-care costs are often protected by hard-fought collective bargaining agreements at the local level. There’s a lot of money at stake. [Sean Cavanagh, Personnel costs prove tough to contain, Education Week, January 12, 2011]
While Los Angeles students, teachers and others rallied against proposed budget cuts that would eliminate many teaching and staff positions throughout the Los Angeles Unified School District, public school districts want to stick it to the parents by charging registration and instruction fees [Doug DeYoung, Senator Walker’s Forum Letter on Education, North Michigan Business Blog, May 27, 2011].
May 25, 2011
The Lookout - Whatever problems may now dog our public education system, at least every child can get a free education, right? Well, not exactly.
Crafty K-12 administrators who are battling budget cuts have found creative ways to bring in extra revenue through fees for anything from enrolling in honor courses to mandatory "registration" or "instruction" fees, The Wall Street Journal's Stephanie Simon writes.
Simon reports that some schools are asking parents to pay for honors and specialty classes up-front, saying they would otherwise have to eliminate those courses altogether.Parents have also been asked to pay for biology-lab goggles, workbooks--sometimes even printer ink. (In some cases, administrators waive the fees for low-income students, but there is still the possibility that the fees can scare poorer kids away from honors courses.)
At Blue Valley School District in Kansas, it costs $235 just to enroll, as administrators hiked fees more than 50 percent this year. Simon profiled an Ohio family who spent nearly $4,500 enrolling their children in basic courses, electives, and extracurricular activities at Medina Senior High.
In most states, it's illegal to charge for core classes, but schools can charge for broadly defined "supplemental materials."
The Lookout - Could the dire fiscal situations in which many states have found themselves lately be set to ease up a bit? There's new evidence that this could be the case--but the states aren't out of the woods yet.
Preliminary data on state tax collections show that revenue from major tax sources increased by 9.1 percent in the first three months of this year, compared to the same months in 2010. That represented the third straight quarter of increased revenues. The data was compiled by the Rockefeller Institute of Government, and included 47 early-reporting states.
The biggest proportional boost to state coffers came from personal income taxes, which spiked by 12.4 percent--the biggest jump since the middle of 2006, near the peak of the boom. Michigan's rose by over 200 percent.
Meanwhile, corporate income tax revenue rose by 6.9 percent, and sales tax revenue by 5.6 percent.
The increased revenue will go some way toward fixing states' budget shortfalls, which have led many states to institute far-reaching spending cuts in order to balance their books. For instance, California, which has made cuts to education among other services, saw tax revenue rise by $1.4 billion--or around 15 percent of its $9.6 billion budget gap.
Still, many state budget are a long way from healthy. Even with the increase, tax collections remained 3.1 percent below the level they were at in early 2008, as the recession was beginning.
The larger take this quarter wasn't primarily the result of tax hikes. Rather, as the economy recovers, income and spending increase, with a corresponding effect on tax revenue. Similarly, the major budget gaps that many states have faced in recent years were mainly caused by the Great Recession and its aftermath, which reduced economic activity.
Citing Japan’s nuclear crisis as a concern, Germany announces long-term plan to become the first major industrialized power to shut down its atomic energy program. Electricity prices are certain to rise as the government pushes more expensive and less reliable renewables to make up for the nuclear gap. The manufacturing sector – which relies heavily on electricity – could lose its competitive edge. German industry and utilities have reacted strongly against the policy change. One utility has filed a legal suit against the government; another one plans to sue. They seek billions in damages now that the 2036 date is off. Of course, energy prices were going to rise anyway, given fees related to reducing carbon emissions and the world’s increasing demand for fossil fuels. But Merkel’s move will compound the problem. - Germany's costly decision to give up nuclear power, Christian Science Monitor, June 2, 2011
May 30, 2011
Fox News -Germany on Monday announced plans to become the first major industrialized power to shut down all its nuclear plants, with a phase-out due to be wrapped up by 2022, the government agreed Monday.
Environment Minister Norbert Roettgen announced the decision by the center-right coalition, which was prompted by the Japan nuclear disaster, in the early hours of Monday morning, describing it as “irreversible.”
He said the vast majority of Germany’s 17 reactors would be offline by the end of 2011.
Roettgen was speaking after a meeting of the ruling coalition led by Chancellor Angela Merkel, which lasted from Sunday evening into the small hours of Monday.
Germany has 17 nuclear reactors on its territory, eight of which are currently off the electricity grid. Seven of those offline are the country’s oldest nuclear reactors, which the federal government shut down for three months pending a safety probe after the Japanese atomic emergency at Fukushima in March. The eighth is the Kruemmel plant, in northern Germany, which has been mothballed for years because of technical problems.
Already Friday, the environment ministers from all 16 German regional states had called for the temporary order on the seven plants to be made permanent.
Roettgen said Monday that none of the eight reactors offline would be reactivated.
Monday’s decision is effectively a return to the timetable set by the previous Social Democrat-Green coalition government a decade ago.
And it is a humbling U-turn for Merkel, who at the end of 2010 decided to extend the lifetime of Germany’s 17 reactors by an average of 12 years, which would have kept them open until the mid-2030s. That decision was unpopular in Germany even before the earthquake and tsunami in March that severely damaged the Fukushima nuclear facility in Japan, prompting Merkel’s review of nuclear policy.
Her zig-zagging on what since the 1970s has been a highly emotive issue in the country has cost her at the ballot box. Merkel herself has blamed the Fukushima nuclear disaster for recent defeats in state elections. In the latest, on May 23, the anti-nuclear Greens pushed her conservative party into third place in a vote in the northern state of Bremen, the first time they had scored more votes than the conservatives in a regional or federal election.
Monday’s decision will make Germany the first major industrial power to give up atomic energy.
But it also means that the country will have to find the 22 percent of its electricity needs covered by nuclear reactors from another source.
For-profit College Enrollment Soared 418 Percent; as Much as 80 Percent of Their Total Revenue Comes from Federal Student Loans
The Lookout - The number of bachelors degrees given out by for-profit colleges skyrocketed by 418 percent since 2000, according to data from the National Center for Education Statistics.
Of the 4.4 million students who enrolled in college between 2000 and 2009, 27 percent of them enrolled in private for-profit institutions. The decade before that, only 7 percent of new undergrads enrolled in for-profit schools. The industry's success is partly due to its unorthodox focus on advertising and recruitment.
For-profit schools such as the University of Phoenix and ITT Technical Institute have drawn criticism from education wonks and lawmakers for aggressive recruitment tactics targeting low-income students. Detractors note that many for-profit schools hire recruiters working on commission to tap into people's "pain" and feelings of inadequacy.
Many for-profit colleges get as much as 80 percent of their total revenue from their students' federal loans--and a good deal of that money goes right back into the schools' advertising campaigns.
While for-profit students only account for about 12 percent of all college students, they take up a quarter of all federal grants and represent 43 percent of all defaults,according to data from the federal Department of Education. The industry is currently fighting a bevy of new restrictions from the Department of Education, and argues that its default rate is high simply because its schools serve more low-income students. Officials at for-profit universities also point out that many community colleges--which typically cater to a lower-income student population--are overcrowded, and that for-profits provide an alternative.
But the Department of Education study calls into question whether for-profit schools are worth their relatively high price. For-profit schools are more expensive than public schools, yet spend far less per student than those institutions on average. From 2000 to 2009, for-profits devoted 24 percent of their total expenses to instruction, while nonprofit public schools spent 28 percent and nonprofit private schools spent 33 percent on instruction.
Overall, for-profit institutions spend less money per full-time student, as you can see in the chart below:
Yet for full-time students, four-year for-profit schools charge more in tuition and fees than public schools:
A larger share of for-profit undergrads take out loans to pay for school, compared to their peers at other schools. More than 80 percent of students at for-profit four-year colleges have a student loan, compared to 49 percent of all undergraduates. And many of those students won't have a degree to show for their debt.Over six years, only 22 percent of students at for-profit institutions graduate with a degree, compared to 65 percent at private non-profits and 55 percent at public schools, according to the study. (Two-year for-profit programs out-performed two-year public schools in graduation rates, however.)
DHS's FAST Checkpoints Could be Used to Snag Political Dissidents Who Commit 'Thought Crimes'
Infowars.com - Chilling technology straight out of Minority Reportthat would subject Americans to pre-crime interrogations and physiological scans to detect “malintent” at sports stadiums, malls, airports and other public places has moved closer to being implemented after Homeland Security’s FAST program passed its first round of testing.
“Future Attribute Screening Technology (FAST), a US Department of Homeland Security (DHS) programme designed to spot people who are intending to commit a terrorist act, has in the past few months completed its first round of field tests at an undisclosed location in the northeast,” reports Nature.
The system works by using a computer program that studies physiological indicators of a person, such as heart rate and the steadiness of a person’s gaze, and then uses the data to make a judgment on whether that individual has “malintent.”
Of course, the mere sight of TSA goons conducting grope-downs, radiation-firing body scanners, iris-scanning devices and the routine stresses of travel are all likely to raise heart rates and cause anxiousness in people, so the program will undoubtedly snag innocent travelers. The well-trained, cool and composed terrorist will slip right through, rendering the entire exercise obsolete.
But this isn’t really about catching terrorists, if it was then the DHS would mimic Israel’s highly effective human intelligence system that is far more likelier to spot real bad guys. This is about guilty until proven innocent, and forcing every American to prove that they are a well-behaved drone who won’t complain about a low grade pervert sticking his hand down their pants.
FAST’s primary purpose is to chill dissent about harassment, dished out by TSA goons, by intimidating travelers into thinking they will be prevented from flying, taking the train, entering a mall or a sports stadium, unless they accept the grope down or the body scan with complete subservience.
Steven Aftergood, a senior research analyst at the Federation of American Scientists, a think-tank based in Washington DC that promotes the use of science in policy-making, is pessimistic about the FAST tests. He thinks that they will produce a large proportion of false positives, frequently tagging innocent people as potential terrorists and making the system unworkable in a busy airport.
“I believe that the premise of this approach — that there is an identifiable physiological signature uniquely associated with malicious intent — is mistaken. he says. To my knowledge, it has not been demonstrated,”“Without it, the whole thing seems like a charade.”
The report claims that, “FAST relies on non-contact sensors, so it can measure indicators as someone walks through a corridor at an airport, and it does not depend on active questioning of the subject,” and yet in DHS’ promotional video for the program, participants are bombarded with questions to ascertain whether they are terrorists.
The clip above shows individuals who attend “security events” being led into trailers before they are interrogated as to whether they are terrorists while lie detector-style computer programs analyze their physiological responses. The subjects are asked about their whereabouts, and if they are attempting to smuggle bombs or recording devices into the “expo,” proving that the technology is intended to be used at public events and not just airports. Individuals who do not satisfy the first lie detector-style test are then asked “additional questions.”
The fact that Homeland Security’s own internal reports list supporting political candidates like Ron Paul, flying US flags, owning gold, displaying political bumper stickers, or owning firearms as signs of behavioral malintent that could be linked to terrorism or extremism tells you all you need to know about how FAST checkpoints could be used to snag political dissidents who commit the thought crime of believing they still had any rights under the US Constitution that Janet Napolitano is gleefully ripping to shreds.
DHS has already announced that TSA agents and VIPR teams will be expanding their mobile radiation-scanning checkpoints from rest stops to highways and roads in general, as Big Sis accelerates Soviet-style levels of control over the population.
With corrupt politicians there is always a sense of urgency (to fund bailouts, raise debt ceilings, sign draconian bills into law at midnight), so why should the new Greek bailout be any different
May 30, 2011
Reuters – The European Union is working on a second bailout package for Greece in a race to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday.
Greece's conservative opposition meanwhile demanded lower taxes as a condition for reaching a political consensus with the Socialist government on further austerity measures, which Brussels says is needed to secure any further assistance.
Moves to plug a looming funding gap for 2012 and 2013 were accelerated after the International Monetary Fund said last week it would withhold the next tranche of aid due on June 29 unless the EU guarantees to meet Athens' funding needs for next year.
Senior EU officials held unannounced emergency talks with the Greek government over the weekend, an EU source said.
Greece took a 110 billion euros ($158 billion) rescue package from the EU and IMF last May but has since fallen short of its deficit reduction commitments, raising the risk of a default on its 327 billion euro debt -- equivalent to 150 percent of its economic output.
The tax cuts sought by conservative New Democracy leader Antonis Samaras could aggravate the revenue shortfall, but he argues they are essential to revive economic growth.
EU officials said a new 65 billion euro package could involve a mixture of collateralized loans from the EU and IMF, and additional revenue measures, with unprecedented intrusive external supervision of Greece's privatisation program.
"It would require collateral for new loans and EU technical assistance -- EU involvement in the privatisation process," one senior EU official said, speaking on condition of anonymity.
Extra funding for Greece faces fierce political resistance from fiscal conservatives and nationalists in key north European creditor countries -- Germany, the Netherlands and Finland -- complicating EU governments' task.
Greek daily Kathimerini said finance ministers of the 17-nation single currency area may hold a special meeting next Monday on a new package. European Commission spokesman Amadeu Altafaj dismissed the report as "unfounded rumours, once again."
The next scheduled meeting of euro zone finance ministers is on June 20 in Luxembourg, having been pushed back a week from its original date. It will be followed three days later by a summit of EU leaders to assess the 18-month-long debt crisis.
Mass unemployment and wage and benefit cuts due to the EU/IMF austerity plan have triggered spontaneous youth protests in Greece as well as a series of one-day strikes by powerful trade unions.
Weekend comments by an Irish minister that Dublin too may need a second rescue package may also fuel opposition to further bailouts among lawmakers in Berlin, the Hague and Helsinki. Transport Minister Leo Varadkar told The Sunday Times newspaper that Ireland was unlikely to be able to return to capital markets next year as foreseen in its EU/IMF program.
"It would mean a second program (of emergency loans)," he was quoted as saying.
Irish central bank governor Patrick Honohan acknowledged at a news conference on Monday that debt market conditions were worse now than when Ireland took an 85 billion euro bailout last November but said they would improve.
Uncertainty over whether Greece will receive the next 12 billion euro aid tranche required to meet 13.4 billion euros in funding needs in July continued to rattle financial markets.
The Greek 10-year bond spread over safe haven German Bunds rose by 20 basis points to 1,387. Two-year yields were up 58 bps to 26.23 percent.
The European Central Bank maintained a drumbeat of pressure against any attempt by EU politicians to restructure Greece's debt mountain, even by asking investors to accept a voluntary extension of bond maturities.
ECB board member Lorenzo Bini Smaghi said in an interview published on Monday the idea that debt restructuring could be carried out in an orderly way was a "fairytale," saying it was the equivalent of the death penalty.
"If you look at financial markets, every time there is mention of a word like 'restructuring' or 'soft restructuring' they go crazy -- which proves that this could not happen in an orderly way, in this environment at least," Bini Smaghi told the Financial Times.
He also warned against a debt 'reprofiling', or voluntary extension of Greek bond maturities, saying it would be hard to get investors to agree to such a deal without the use of force.
Euro zone governments are actively studying options for changing the maturities on Greek debt, officials say, although German Finance Minister Wolfgang Schaeuble acknowledged in an interview last week that it was very high risk.
"The Eurogroup is doing research for reprofiling -- what can you do on reprofiling? Is it possible without a credit event?" Dutch Finance Minister Jan Kees De Jager told reporters on Saturday in Cyprus. "It's an investigation, and we have to wait for the outcome of it.
EU officials contend that Greece could do much more to help itself by selling off a treasure trove of state assets.
ECB executive board member Juergen Stark told Welt am Sonntag newspaper that Athens could raise as much as 300 billion euros from privatising state property.
Greece currently aims to raise 50 billion euros from privatisations by 2015 to help stave off a fiscal meltdown, but the country lacks a proper land registry and ownership of many potentially lucrative assets is legally uncertain.
Athens is setting up a sovereign wealth fund to pool real estate assets and state stakes in companies such as telecom company OTE, Post Savings Bank and ports.
Top EU officials have asked Greece to step up privatisations urgently and suggested creating a trustee institution to help the process similar to the body that privatised East German firms after the fall of communism.
KeepTalkingGreece.com - For sixth consequent day Greek ‘indignants’ are gathering in front of the Parliament in Athens downtown.
The spontaneous movement that emerged through a call on Facebook has thousands of Greeks flocking daily to Syntagma Square to express their outrage about the austerity measures and politicians going unpunished for the huge debt.
While on the first days the government showed a kind of perplexity about the mass gathering, and main stream media tried to play them down, the huge numbers of demonstrators could not but provoke a governmental reaction or even two…
Yesterday Deputy Prime Minister Theodoros Pangalos criticized and tried to downgrade the mass protests describing them as ‘just a fashion among fans of the new thechologies. Today, government spokesman Giorgos Petalotis distanced himself from the Deputy PM saying that,
“What is happening during the last days shows what really are the people’s needs today.”
Speaking to private television network ANT1, Petalotis said that,
“Even the fashion of new technologies is ideology” and that “indignant citizens are indeed politically motivated when they come to the streets.”
May 29, 2011
15 of the 104 Nuclear Plants in the U.S. are Located in the New Madrid Earthquake Zone, the Other Sleeping Giant
Outside of the west coast, the New Madrid seismic zone is the highest earthquake risk in the United States. Although not as active as the San Andreas Fault in California, when this sleeping giant awakens, the destruction covers 20 times the punch because of the mere scope of the geographic area it encompasses. According to some scientists, the possibility of a major earthquake measuring 7.5 or greater happens every 200 years. The last time it occurred in this region was the Great New Madrid Earthquake of 1811-1812, so we are right on schedule should the giant awaken from his 200-year slumber. With the active fault lines not visible to the naked eye, it may be difficult with 100% accuracy to speculate when the next “Great Quake” will occur. If it does occur within our lifetime, it is estimated that its effects would damage 20 or more states. It is hard to fathom the devastation of such an event. Something like this could literally split the U.S. in two, causing the economy to plummet further; and the loss of life would be enormous.
When many people hear the name “New Madrid,” they automatically think it is located somewhere in Spain; however, this sleeping giant's fault line actually lies smack dab in the middle of the Midwestern and Southern United States.
The name does however share some Spanish roots, as it is named after the town of New Madrid (located in the state of Missouri). Back in 1788 when this town was part of the Louisiana territory, it had been a colony of Spain. Historically, this town is best known for notoriously being ravaged by 1000 earthquakes between 1811-1812 when the “Great Quakes” measuring magnitude 7+ rattled the region. It is from this town's name, and the infamous wrath that plagued it, that the name “New Madrid Seismic Zone” was born.
The New Madrid Fault Line runs 150 miles and lies beneath the states of: Alabama, Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee. It not only crosses five state lines, it also cuts the Mississippi River in three places and the Ohio River in two places.
Although hidden, the fault is active, and measures more than 200 measured events a year. Outside of the west coast, it is the highest earthquake risk in the United States. Although not as active as the San Andreas Fault in California, when this sleeping giant awakens, the destruction covers 20 times the punch because of the mere scope of the geographic area it encompasses.
Recently, Arkansas was (for the most part), the area along the fault that saw the most recent seismic activity. In fact, the number of quakes Arkansas experienced in 2010 was almost equivalent to what the state experienced in the entire twentieth century.
The active faults within the NMSZ are poorly understood and cannot easily be studied like other active fault regions (like California) because they are not expressed at the ground surface. Complicating matters further, the faults are hidden beneath a couple hundred feet of thick layers of soft river deposited soils called alluvium. Since alluvium is very soft, it erodes in a very short time or may be quickly covered over by new deposits, thereby quickly hiding evidence of earthquake fault lines.
According to some scientists, the possibility of a major earthquake measuring 7.5 or greater happens every 200 years. The last time it occurred in this region was the Great New Madrid Earthquake of 1811-1812, so I guess we are right on schedule should the giant awaken from his 200 year slumber.
FEMA (Federal Emergency Management Agency) is conducting a National Level exercise within the New Madrid region on May 16th. The purpose of this training exercise is to simulate the catastrophic nature of an earthquake of this magnitude within this region. With 2011 being the bicentennial anniversary of the great quakes of 1811-1812, holding these exercises at this time is quite fitting.
Other conspiracy theorists warn that several nuclear facilities lay along the New Madrid Fault Line and that what recently occurred in Fukushima Japan could actually occur on US soil. Other bloggers point out the striking resemblance of geographic flooding in the NMSZ region as almost identical to that depicted in a future map of the USA (put by the US Navy) that shows the US West Coast, the New Madrid Seismic Zone area, as well as the Eastern seaboard, as being all submerged under water.
Others speculate that the US Geological Centre (USGC) is taking down larger scale earthquakes in the NMSZ as quickly as they prop up on their website, and that there is an ever growing mass media “black out” on mysterious events that have plagued the USA.
With the active fault lines not visible to the naked eye, making it difficult for scientist to study, it may be difficult with 100% accuracy to speculate when the next “Great Quake” will occur. If it does occur within our lifetime, it is estimated that its effects would damage 20 or more states, with the state of Missouri alone having sustained at least $6 billion in loss and damages.
It is difficult to fathom the devastation of such an event. Something like this could literally split the US in two, causing the economy to plummet further; and the loss of life would be enormous.
Only Mother Nature knows when “Her Giant” will awaken, but I do hope that this “Giant” will remain asleep for a very long time, experiencing only dreams of awakening.
Homeland Security Newswire - There are 104 nuclear plants in the United States, and fifteen of them are located in what is known as the New Madrid Seismic Zone, a region defined by a fault line of the same name.
While the U.S. earthquake zone is active, scientists say the ingredients do not exist there for a Japan-style nuclear disaster.
“There is that uncertainty when you hear that something has happened because you don’t understand,” said Jeff King, interim director of the Nuclear Science and Engineering Program at the Colorado School of Mines. “I would say Americans should actually be very comfortable (about) those plants.”
King, a former Department of Energy nuclear facility on-site inspector, is not working directly with officials on the Japan disaster, and he noted that it will be some time before a final report is completed.
He told Fox News that the early diagnosis for the nuclear accident in Japan had more to do with the tsunami that followed the 11 March earthquake and the power loss to the Fukushima Daiichi nuclear facility than the 8.9 magnitude temblor.
“The distinction — the earthquake and the tsunami — is kind of an important one,” he said. “The plant survived the earthquake with minimal problems; there’re some questions about the spent fuel pools, but minimal problems. And then it was an hour later when the tsunami hit and they lost all of the their backup power.”
Fox News reports that DHS is scheduled to conduct a large-scale, interagency disaster response exercise in the New Madrid Seismic Zone this spring. It is an annual exercise held by the federal government, and Homeland Security secretary Janet Napolitano’s office said the location of this year’s drill is not connected to events in Japan.
“With respect to the United States, we are constantly practicing” disaster response, Napolitano recently told an audience in Denver.
Robert Williams, a scientist with the U.S. Geological Survey’s Hazards Team, said the New Madrid Seismic Zone involves eight states, and it is an active earthquake area in the central United States that follows the Mississippi River between Missouri, Kentucky, Arkansas, and Tennessee.
“It’s an area that is currently experiencing earthquakes and has a history of magnitude 7 to 8 earthquakes,” Williams said. “But the shaking from a New Madrid quake would involve a much larger area. So it runs along that border, and it’s of concern to those communities in the Mississippi River valley as well as Memphis and St. Louis.”
Should a large seismic event strike this part of the country, seismologists offer Christchurch, New Zealand, rather than Japan, as an example of what to expect. In February, Christchurch suffered a 6.3 magnitude quake and billions of dollars in losses.
“Christchurch has a building infrastructure that’s a lot like what you find in the central U.S. main street: 100-year-old brick buildings, no reinforcement, no consideration of earthquake shaking,” Williams said.
King, who used to live in the New Madrid region, agreed that infrastructure outside the nuclear plants is the bigger concern. “
If I still lived in that area, my biggest worry would be the loss of my utilities, the loss of my power and water,” he said. “The real tragedy in the case of a natural disaster is going to be the natural disaster, not the nuclear power plant.”
The Great Financial Crisis of 2008 and Its Causes: We Have Now a Commodities Bubble and Even More Too-Big-to-Fail Banks
Having taken a long, hard look back, I asked Morgenson and Rosner about what worries them today and looking forward.
Too Big to Fail: Now, Even Bigger!
"We have even more 'too big to fail' institutions; more politically interconnected, very deep and wide institutions that could create another systemic event," says Morgenson, a Pulitzer Prize-winning columnist at The New York Times. "It's almost as if the situation that brought us to Fannie Mae and Freddie Mac having to be bailed out has now been squared or quadrupled. It's worse, not better."
Rosner, an analyst at Graham Fisher, wholeheartedly agrees.
"The risks are enormous" because there's even more concentration of assets among the biggest banks, which are "too big to analyze and manage," he says.
If the financial system was a "house of cards" before the crisis, the situation is worse today because back then investors had "some sense the numbers being given in annual reports and quarterly filings were accurate," Rosner says. "Now we know the government seems to be [complicit] in allowing them to fudge those numbers."
Toil & Trouble
Another issue which keeps Rosner up at night is the Fed's uber-easy monetary policy.
"The Fed is still under the assumption all they have to do to revive an economy is blow a new bubble," he says, suggesting commodities and emerging market bubbles have replaced housing, which in turn filled in after the Internet bubble collapsed.
At the same time, the Fed is creating "a lot of interest rate risk" by keeping rates at zero for so long.
"As interest rates rise we'll see which banks are in trouble," he warns.
Speaking of trouble, Morgenson takes some solace that government regulators are (finally) starting to investigate alleged Wall Street crimes.
"It's hard to imagine a crisis this large, which created trillions of losses, was nobody's fault," she says.
Amen.
The Federal Government, a Complete and Absolute Private Entity with Its Own Agenda, Is Coming After Your Retirement
I hate to use the “S” word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers’ retirement accounts. Now, even Uncle Sam isn’t that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans. House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created “guaranteed retirement accounts” for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5% of pay into the accounts, to which the government would pay a measly 3% return. Rep. Jim McDermott, a Democrat from Washington, said that since “the savings rate isn’t going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.” - James Pethokoukis, Will Obama And The Democratic Majority Congress Kill Your 401k Retirement Plan?, October 23, 2008
Teresa Ghilarducci would force all workers to save 5% of their annual income in a new type of retirement vehicle, which she calls a Guaranteed Retirement Account. These savings could not be controlled by workers like IRAs and 401(k) assets, but would instead be deposited with the government. Workers could not touch the money until retirement, she says, and even then the savings could not be drawn out any way workers might desire, but would be converted to an annuity -- a guaranteed stream of income for life. Ghilarducci argues that these new accounts would avoid stock market risks; the government would guarantee that the savings earn a 3% annual return on top of inflation. The government would also pay each worker $600 a year in the form of a tax credit, which would help workers who now earn too little to take advantage of a tax deduction because they owe little or no federal income tax anyway. At the Oct. 7 hearing, Ghilarducci further proposed that Congress address the recent stock market drop by allowing workers to trade their existing 401(k) or IRA accounts for her proposed Guaranteed Retirement Accounts. (Her words can be heard starting at 33 minutes and 23 seconds into the video of the hearing.) - IRAs, 401(k)s and You, FactCheck.org, November 26, 2008
George Carlin was right: They'll get it, they'll get it all.
Mangan's - Quantitative easing, i.e. money printing by the Federal Reserve, looks like it's set to continue forever, there being no other source of large amounts of money with which to fund the government's huge and growing deficits.
But wait, maybe there is another source of funds: your retirement accounts.
What pool of money is just sitting there, not doing much, while being legally barred from its owners? What pool of money is easily accessed, yet is large enough to fund the deficit?
The retirement accounts of the American people: Both individual private accounts, and pension funds.
After all, the total for all pension monies is roughly 100% of GDP (this includes Social Security). And the Federal government has already raided the “Social Security lock box”—that box is stuffed with Treasury IOU’s.
So the Federal government might well turn to the private sector for cash. The Federal government might conceivably claim that ongoing funding needs require that every single 401(k) and IRA divest from its portfolio of stocks and bonds, and be fully invested in Treasuries.
This could be accomplished very easily, from a practical standpoint — just inform banks, and have them turn over to the Federal government all your mutual funds and stocks you agonized over, and get long-term Treasury bonds of nominal equal value in exchange.
401(k)’s and IRA’s would be the first ones the Federal government would go after — for the obvious reason that union pension funds have the union’s political muscle. But individuals? They have no political machine. So they’re screwed. [...]
There might be short-term political damage, but like losing your virginity or carrying out state-sponsored torture programs, it would be the necessary start for a slide that will never end. After this first “retirement asset swap” carried out on the 401(k)’s and IRA’s, the Treasury department would start doing more of this to ever-bigger pension funds, until eventually all retirement assets would be converted into Treasury bonds.
Hey, they did it in Argentina. And as Yves Smith always sez, America has become Argentina, but with nukes.
I'm not so sure about the lack of political damage; it seems to me that a huge public outcry would ensue, which doesn't mean that it couldn't happen. The wealthy — and that means just about anyone who's been reasonably frugal and saved their money for retirement — are a huge target; the 51% of the population that has little money would love to get their hands on it, and the elite on Wall Street and in Washington will help them do so.
An article at Lew Rockwell's site recommends a number of actions to take for those who believe that this threat is real. For starters, stop contributing to your retirement account — that's an action I've already taken.
As if we didn't have enough to worry about, now we have to worry about America becoming another Argentina.
NaturalNews – When it comes to your retirement account, you probably keep an eye on Wall Street and the financial markets because when they lose value, your account loses value. Little did you know you are going to have to keep an eye on Uncle Sam as well, because he’s eyeing your retirement too, and he could soon take what he will claim is his fair share of it.
If you think that sounds absurd, think again. In fact, it’s a concept that is already being used by some governments, the most recent of which is Ireland.
“It’s truly disgusting logic to force private workers to pay for years of political incompetence while absolving government employees,” writes Simon Black, entrepreneur and founder of SovereignMan.com, a Web site about financial and practical independence.
Black says the idea of robbing private pension funds by broke governments to pay for existing or expanding government programs is an idea that is catching on.
“Pension funds are attractive targets for politicians who have wide eyes and the most carnal thoughts at the site of any large pool of cash,” he says, noting that the French government last year adopted laws “allowing politicians to steal retirement funds from the public in order to pay off other debts.”
It’s an idea that is catching on in the United States too, mostly because there are trillions of dollars in private retirement accounts, and the federal government is trillions of dollars in debt — with trillions more promised in benefits like Social Security, Medicare and now a massive new health care law.
Black says it’s likely any attempt by the U.S. government to seize private retirement accounts would be preceded by a cataclysmic economic event similar to the 2008 financial crisis, only worse. This time, lawmakers will respond by changing investment law that may force retirement account holders to invest a portion of their savings in, say, 30-year Treasury notes.
Some lawmakers are onto this, however. Rep. Michele Bachmann, R-Minn., has recently criticized such efforts in a letter to the Obama administration warning against attempts to confiscate Americans’ retirement accounts.
First Up Greece, and Then Will Follow the Other Nations Backed by the IMF
By creating economic crises and the collapse of a nation's economy, the Illuminati force those nations indebted to them to trade their assets -- gold, natural resources, and land -- for the backing of the International Monetary Fund, which they created and control. Once they own a nation's land and resources, they own and control that nation. They have made much progress toward this goal. Already every nation in the world is backed by the International Monetary Fund except the United States. Brazil, Argentina, Costa Rica, and other countries have been forced to trade assets and land to exonerate their debt. The specific plan to bring the U.S. under this monolithic control includes economic disruption, the collapse of more banks, and national bankruptcy. They believe that under these conditions most Americans will clamor for the "help" they offer, willingly trading our nation's land and resources for the backing of the International Monetary Fund to bail us out of our predicament. - Liberty Lost, F. Gregory Anderson, Circa 1993
According to lastest poll by ALCO, which will be published tomorrow in weekly Proto Thema, among the Greeks:
75% believe that “the government measures are wrong”
82% say that “they can’t stand more taxation”
54% want layoffs in public administration
75% are against granting citizenship to migrants
More than 100,000 Greeks gathered in front of the Parliament at Syntagma Square on May 29, 2011, to protest austerity measures and express their discontent about politicians. The protests will continue and Athens is expected to burst with people again on May 31 as academics have called for an open meeting outside the Athens University to inform the public about the constitution violation of the loan agreements between Greece and the IMF/EU/ECB lenders. - Unprecedented! 100,000 Greeks Protest in Athens, May 29, Keep Talking Greece, May 29, 2011
May 28, 2011
LewRockwell.com - [Insert name of nation here] has a sovereign debt problem. The bonds of the government have been downgraded by a major rating service. Their prices have fallen sharply in the market. This means that the risk is high that the government will default on its sovereign debt.
The interest rates that the government must pay in order to borrow have risen sharply. This is worsening the government’s solvency and budget problems.
The government faces default. The government’s various spending cutbacks haven’t solved the problem.
They cannot solve the problem. It’s apparently too late. The government would have to restructure its debt by renegotiating with its multiple lenders. That’s a difficult and time-consuming process. It would have to work out repayment while simultaneously altering government policies so that the country’s private market economy could expand. This involves knotty political and economic issues that take years to resolve. The government doesn’t have this time.
The problem traces back to the earlier fact that for some years the government was able to borrow heavily at low interest rates. This means that it was able to sell its bonds at high prices. The problem arose because these market prices were too high.
The sovereign debt of the nation became overvalued due to central bank/banking system money inflation. This inflation, it should be strongly emphasized, originated in the fiat dollar system of the United States and the Federal Reserve.
The central banks of the world and the world money supply are heavily influenced by what the Federal Reserve does through a kind of multiplier effect, because foreign central banks respond to Fed inflation with inflation of their own. Ronald I. McKinnon explained this important process in his June 1982 article in the American Economic Review. We see it happening today when foreign banks have to inflate in reaction to QE2 in order to prevent their currencies from strengthening too much against the depreciating dollar.
The high bond prices encouraged the government to borrow too heavily and to raise government spending. But since its spending was not productive, it didn’t produce high enough tax revenues to service the debt. In time the government faced the problem it now has, which is not enough tax cash flows or income to service the debt.
Monetary inflation, in other words, causes overvalued sovereign debt.This sets in motion larger government spending, higher debt loads, and an eventual fiscal crisis when tax revenues fall short of what is required to maintain government spending and service the debt.
This process goes on in addition to the business cycle effects, well-known in Austrian economics, that inflation produces. In keeping with the analogous finance literature on overvalued equity, I identify this process as one that involves agency costs of overvalued sovereign debt.
This process is only made worse when major lenders, such as large banks, have reason to believe that they occupy a privileged position and that their bond positions will be paid off by political means if necessary. These lenders then all the more become willing to buy overvalued sovereign debt.
This effect of inflation is important because of its broad applicability in an age of inflation. In particular, a number of other countries, including the U.S., have followed the Greek path.
Michael C. Jensen was the first to analyze the agency costs of overvalued equity. Everything that he says about the dire effects on a company’s behavior from having an overpriced stock find a parallel when a government issues overpriced debt. The parallels are not perfect, of course. In fact, every bit of analysis suggests that the problem will be worse for overvalued sovereign debt.
Intuition can be a misleading guide in these matters. We are taught that a high stock price is a good thing, and it is a good thing when it accurately reflects value creation in the enterprise. But not all high stock prices arise from value creation. Central bank money inflation fosters speculation. Speculation leads to asset price bubbles. Rising prices attract naive investors.
We have twice seen in recent memory how government/central bank inflation-produced speculation leads to a breakdown in critically important internal market practices and institutions.
First we had overvalued stocks break down in 2000 amid hundreds of cases of overstated earnings. Accompanying this were accounting and auditing scandals as well as law firm and investment banking misbehavior.
Second, starting in 2006 and continuing to the present, we have the real estate bubble. We have seen similar scandalous behavior pervading the mortgage and real estate businesses. This has included all the major banks, all major investment bankers, the government agencies like Fannie Mae, legislatures, law firms, bond rating agencies, insurance companies, and auditors. The scandal went even more deeply into the U.S. government and the Federal Reserve through their multiple bailout activities.
This breakdown in institutions that are supposed to act as professional agents finds its root cause in government that goes way beyond its appropriate bounds.
In the case of overvalued equity, Jensen points to “earnings management” that becomes lying about earnings as one means by which management becomes corrupted in order to come through with earnings numbers that justify its overvalued equity. The analogue is for governments to lie about the beneficial effects of the programs and activities that they are promoting and funding with their excessive debts.
We hear politicians today justify huge sales of overpriced government debt as worthwhile because they are fighting recession, producing jobs and green shoots, kick-starting the economy, and providing national security. Like phony accounting numbers for earnings, these are all myths and lies. We hear Federal Reserve officials peddling similar misinformation to justify their bond purchases that are helping to keep sovereign debt overpriced.
Jensen suggests that “manning the helm of an overvalued company feels great at first.” Among other things, the management bonuses rise steeply. Politicians likewise score among voters and secure campaign contributions when inflation stimulates some economic activity initially. They can point to housing projects going up or a falling unemployment rate or the numbers of people who are first-time homeowners. The financial and housing industries shower money on them. The Federal Reserve can build up its image by broadcasting how it prevented the financial system from collapsing.
But, when there is overvalued equity, Jensen says “massive pain lies ahead”. A company cannot produce real earnings to justify its overpriced stock. It turns to earnings manipulation and fraud. It turns to wasteful acquisitions. Nortel acquired 19 companies between 1997 and 2001.When Nortel stock fell by 95 percent, not only was its value destroyed but also that of these acquisitions. Companies seek out unworkable products and build up unusable capacity.
The same massive pain goes for governments that overextend themselves with excessive borrowing at then-low rates of interest. This is evident in Greece. It threatens to become evident elsewhere, including the U.S.When the nation does not produce enough income to service the government debt, some manner of default is bound to occur.
The U.S. is finding it extremely difficult to find a way out of the looming pain that its overvalued sovereign debt has caused. The U.S. has over-issued debt. Its “acquisitions” lie in every area of government spending, in particular, popular social spending programs and a huge military establishment. Huge numbers of Americans have been “acquired” and linked into programs like food stamps.
Huge numbers of Americans expect a future retirement safety net courtesy of Uncle Sam. This is looking less and less likely as time passes. As in the case of overvalued equity that eventually crashes and burns up phantom value, U.S. sovereign debt will crash and burn as the private market economy increasingly cannot produce sufficient revenues to pay the taxes required to service the debts.
The proximate cause of this likelihood is agency costs of overvalued sovereign debt.
That itself traces back to a faulty political system that has destroyed proper constraints on the funding of government and therefore on government size. This has three main aspects.
The central bank is able to enter the sovereign debt market at will and keep the price overvalued.
The government is able to impose a wide range of taxes in order to fund its programs and debts.
There are no limits to government spending and the demand for such spending is infinite.
Let’s look at each of these briefly.
The constraint on money creation has disappeared. Government no longer competes with markets for privately-produced and costly money in the form of gold and silver. When government debt promised and paid gold, government had no recourse but to tax its citizens in gold. Without that constraint, government can pay off debt by issuing more debt and more promises to pay off in paper.
The debt is supported in price by government’s powers to tax. As long as the people are able to produce enough income to pay these taxes and are willing to pay them, the system of debt expansion goes on because debts are serviced. The system is dynamically unstable, however. The larger that government becomes, the lower the ability of the private sector to produce real income becomes because government spending is unproductive and prevents capital formation. This undermines the ability of people to pay the required taxes. Debt grows but economic growth falls short of debt growth due to low growth in capital formation. Taxes then fall short of spending and deficits rise. The government and the country’s economy then get into an untenable position.
The third aspect is that the U.S. Constitution, as interpreted by the Supreme Court, does not limit government spending or government activities and size, and this lack of limitation is combined with an infinite demand for receipt of government funds among the population. In other words, almost everyone stands ready to rob his neighbor via government taxes and get the proceeds for himself through redistribution in government spending; and there are no limits on how large this thievery can become.
This system is dynamically unstable too.It eventually must run into a wall or limit because the parasitic activities will overwhelm the productive activities. This limit is now in view. The government’s unfunded liabilities ($200 trillion by some estimates) vastly exceed its capacity to tax at current levels. Only by outright expropriation of wealth in the form of saved assets (seizing pensions) or by high levels of taxation that sap human wealth can the promises be kept. Those routes spell massive pain.
If a society does not impose limits on its own parasitic activities, it will eventually destroy itself. If it crushes its productive activities, it will destroy itself. If the society’s people do not impose the proper limits on their own behavior, individually and collectively, then they are setting a course for massive pain.
At this time, Greece does look like the future of America. Is it too late for America? Just about. When I see this society impose some limits on its parasitic behavior and encourage productive behavior, I will become more optimistic. However, I’ve been waiting for that for 40 years and I’ve yet to see it.
When we lose our economic security, we also lose our freedom and are forced to survive any way we can. The subliminal, one-world religion is self-preservation — the survival instinct. It's basic to human nature. The Bible shows a coming world leader who will exploit this self-preservation instinct and will bring this religion to its logical conclusion. And, if possible, even some of the very elect will be deceived by this appeal to their pocketbook and personal security.
“Beloved, believe not every spirit, but try the spirits whether they are of God: because many false prophets are gone out into the world.” (1 John 4:1 KJV)
"And ye shall know the truth, and the truth shall make you free." (John 8:32 KJV)
"For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places." (Ephesians 6:12 KJV)
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