A Different Time

"I don’t want to be a prophet of doom -- and I really don’t believe that we are approaching doom -- but I think we’re going to slide into intensified social conflicts, social hostility, some forms of radicalism, there is just going to be a sense that this is not a just society."
-- Ex-National Security Advisor Zbigniew Brzezinski

Think back to six years or so, before the financial crisis began.

I wonder how many of us would have honestly expected to see credible individuals appearing on mainstream television programs talking about the growing threat of social unrest in the United States?

Not many, I bet.

Now, of course, things have changed. In fact, I would argue that the oddballs nowadays are those who don't see domestic upheaval as a very real possibility in the not-so-distant future.

With that in mind, here is an interview with Mr. Brzezinski from MSNBC's "Morning Joe," in which he expounds on the likely fallout from rising income and wealth inequality and a heightened sense of social injustice.

Visit msnbc.com for breaking news, world news, and news about the economy

Comments

[Robert]

Mr. Brzezinski states one of the groups still coming to this country are the ones who are willing to do the work most Americans are not willing to do. What he fails to do is to complete the sentence with "for the wages being offered" My question is why do we continue to import one to two million people into this country legally(and who knows how many illegally) when there is already too much competition for the jobs that are available. Our immigration policies are completely insane and why this issue is overlooked by so many is beyond me.

[roger]

Sugar coating the prophecy's of doom,
they all do it,the world is rotten and
going to hell and then they add,but I
believe people will learn and things will
be OK. Even Karl Marx fell into this trap.

[WK]

I don't agree with Zbigniew's ideology, but I do agree with his general assessment of the upcoming direction for the USA. What was not discussed is hopelessness, people may resort to civil unrest and violence when they feel that their situation has no chance of improvement, in their eyes. There is more hopelessness in the United States to me than at any time in my 55 years. Sure, there have been and always will be political issues. But the suffering that many people are experiencing are not even properly discussed in the MSM outlets any more, as the MSM attempts to present what they think Americans want to see instead of what they should see. Look at the fascination with titillating programs and reality shows that pull high ratings. Compare it to any serious discussion of an issue, or perhaps an Obama prime time address, and guess which one gets more viewer attention. That is a sickness in our society, reflective bordering on ignorance sadly. Americans want to be in denial about all of this, sure it is unpleasant but does being in denial help anything? Problems can't be addressed, if people do not agree a problem does exist, or politicize it to make someone else look bad which happens all too often in our sick society any more. We have lost the ability to make life better for our countrymen, and it will take an inner strength from all of us to change that direction for the USA. Or the Financial Armageddon that Michael Panzner constantly posts about will indeed become that much closer to reality. It may be too late already, or perhaps not.

[Sam]

The Department of Justice is holding a conference call tonight on H1B visas. Go to the DoJ website.

[Give it all away]

"he expounds on the likely fallout from rising income and wealth inequality and a heightened sense of social injustice."

Nothing sinking in...

The "Debt Compromise" ... Another Pass for the Rich and a Fleecing for Everyone Else

Bruce Krasting writes:

One aspect of the “compromise” talk is a story about how changing inflation calculations could generate significant new revenue for the IRS. The technical description is a change from CPI-W to the Chained CPI for the purposes of indexing various aspects of the tax code.

The Joint Committee on Taxation did a review of this. I was surprised with the results. The consequences are measured in the following chart that looks at things out in 2021. Look at what income groups have a tax increase as a result of this. Those making Less Than $100k would get hit by the highest percentage. Those that make $500k-1mm do pay 0.1% more, but the really fat cats making over a Mil don’t feel it at all.

http://georgewashington2.blogspot.com/2011/07/debt-compromise-another-giveaway-to.html

[Virtual wealth]

Can little people do this?

How do you borrow 200 billion against $1 and make 10 billion doing it

http://maxkeiser.com/2011/07/08/how-do-you-borrow-200-billion-against-1-and-make-10-billion-doing-it/

[Restore balance]

the Trade Imbalance Dilemma; Gold's Honest Discipline Revisited

Bankers and Wall Street benefit from "too big to fail" and monetary printing. Unions buy votes from corrupt politicians.

Inflation benefits those with first access to money. Who has that first access? Banks and the already wealthy.

http://globaleconomicanalysis.blogspot.com/2011/07/hugo-salinas-price-and-michael-pettis.html

[Vested Interests win again]

I.R.S. Drops Audits of Political Donors

The memo was a sharp reversal for the tax agency, which had invoked a rarely used, 30-year-old ruling to warn the five donors in February that they might owe gift taxes on their donations. Organizations heavily financed by conservative donors like David Koch, or in the case of Crossroads GPS, tied to top Republican strategists like Karl Rove, would have come under such newly enforced rules, were they to be imposed across the board.

http://www.nytimes.com/2011/07/08/business/irs-drops-audits-of-donors-to-political-groups.html

[Do the right thing comes with bad consequences]

Caterpillar Accused of Demoting Executive Discovering $2 Billion Tax Dodge

Caterpillar Inc. used offshore subsidiaries in Switzerland and Bermuda to avoid about $2 billion in U.S. taxes from 2000 to 2009, boosting its earnings through a “tax and financial statement fraud,” according to a Caterpillar executive’s lawsuit.

The company, the world’s largest construction-equipment maker, sold and shipped spare parts globally from an Illinois warehouse while improperly attributing at least $5.6 billion of profits from those sales to a unit in Geneva, according to the suit filed by Daniel J. Schlicksup. He was a global tax strategy manager for Caterpillar from 2005 to 2008.

http://www.bloomberg.com/news/2011-07-08/caterpillar-accused-of-demoting-tax-whistleblower.html

[Alice Finkel]

The problem is being badly framed by Brzezinski. The government is "too big to fail" so naturally the close friends and supporters of government are also "too big to fail." What is so surprising about that? If social disorder results from that type of pervasive corruption, what is the solution?

Can the government enforce "income equality" without completely destroying the economy? Of course not. Income equality and inequality is not the question -- inequality is the state of nature and the state of a world built on biology.

The solution comes in the form of drastic reductions in the size and budget of governments, explicitly removing the governmental protections and benefits which "too big to fail" bankers currently enjoy. Change the rules, change the game.

As for the IRS, a corrupt IRS was used in the 90s to punish donors for the opposition party, and was being used by the current US administration for the same purpose. Best to stop that nonsense before it becomes a habit. Best to defund the IRS entirely.

[The world's built on bs]

No fink...do the crime..do the time..if organized, try rico..forfeit assets...if you laissez faire types want laissez faire stop everything!

Not Prosecuting Corporate Crime Aggressively Has Been US Government Policy Since 2008

Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.

Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.

http://jessescrossroadscafe.blogspot.com/2011/07/not-prosecuting-white-collar-financial.html

[Mud pie recipe]

Does Wall Street Win?

It is the high rollers on Wall Street and their friends in the media and D.C. establishment who want to put Social Security on the table. The funders of the "we can solve our budget problems by cutting Social Security and Medicare and Medicaid" PR campaign are people like Wall Street billionaire Pete Peterson. Billionaires and multimillionaires demanding that retired people getting an average of $14,000 a year in Social Security get their benefits cut has always struck me as just a little wrong. Especially when these wealthy and powerful elitists figure out how to shelter their own income so they can avoid paying the same rate as their secretaries. But these hypocritical powerbrokers are exactly the ones for whom the entire Republican Party is fighting so hard. The question now: will Obama join them in screwing the middle class?

http://www.huffingtonpost.com/mike-lux/does-wall-street-win_b_892485.html

[don lebeau]

The worst and most destructive change since 2008 is the CDS market. It continues to grow and there is no there. If a major bank or country blows up there really is no money behind the CDS bet to payout the insurance owner. The world will implode when CDS counter parties begin to fail!!!

[I, Me, Mine and what do you do with corruption?]

The Shape of Things To Come

3. The unstable double-bind of rule by Financial Plutocracy. A funny thing happens when a nation allows itself to be ruled by kleptocrats: such rule is intrinsically destabilizing, as there is no longer any center to bind the nation together. The public sees the value system at the top is "I, Me, Mine" greed fed by complicity/corruption, and they follow suit by pursuing whatever petty frauds and corruptions are within reach: tax avoidance, cheating on entrance exams, gaming disability, lying on mortgage and job applications, and so on.

Meanwhile, the diverting of national income into a few power centers is also destabilizing, as Central Planning and Market Manipulation (TM, Federal Reserve, all rights reserved worldwide) are intrinsically unstable as price can no longer be discovered by unfettered markets. As a result, imbalances grow until some seemingly tiny incident or disruption triggers a cascading collapse.

The double-bind is two-fold: the Power Elites can't bear to part with any of their power or wealth, so their resistance guarantees systemic collapse. The political "leadership" cannot challenge the Power Elites' grip on the nation's throat because the entire Status Quo has been co-opted/sold out and is now wedded to the Oligarchy as their guarantor of financial security.

http://www.oftwominds.com/blogjuly11/shape-of-things6-11.html

[Don't touch that dial]

@don lebeau..you're right..they're hiding something and more

David Einhorn: There's A "Much More Ominous Problem" In Greece Than The Possibility Of Default
He believes the efforts so far "aren’t really designed to prevent what most people would recognize as a default or losses to bondholders. They are designed to hide a much more ominous problem."

That problem? A credit event that would "trigger the payout" on credit default swaps.

Read more: http://www.businessinsider.com/david-einhorn-dumps-yahoo-greenlight-investor-letter-june-2011-7#ixzz1RXEVtBZt

[History repeats]

QE3: It Will Merely Keep the Lights On

A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. …He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.

- Marcus Tullius Cicero (106 BC—43 BC)

http://www.zerohedge.com/article/mike-krieger-explains-why-qe-3-will-merely-keep-lights?

[Potemkin Prosperity]

QE, FED, INFLATION, WEIMAR GERMANY, INVESTOR CONFIDENCE & MORE - Rob Arnott:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/7/8_Rob_Arnott.html

[It's getting hotter]

Boiling Frog Alert: Congress Wants Automatic Wage Deductions To Pay Down The Debt

Folks… you just can’t make this stuff up.

On July 6th, just two days ago, at least a dozen busybody Congressmen sponsored the introduction of HR 2411, the “Reduce America’s Debt Now Act of 2011.” They always come up with fantastic names for these pieces of legislation… and rest assured, the better/more patriotic the name, the more ominous the bill. This one follows the pattern.

HR 2411 states that every worker in America should be able to voluntarily have a portion of his/her wages automatically withheld and sent directly to the Treasury Department for the purposes of paying down the federal debt.

“Every employer making payment of wages shall deduct and withhold upon such wages any amounts so elected, and shall pay such amounts over to the Secretary of the Treasury…”

http://www.zerohedge.com/article/guest-post-boiling-frog-alert-congress-wants-automatic-wage-deductions-pay-down-debt

[kevinearick]

funny what they say on their death-bed...

Organic Chemistry

The action occurs among electrons, surrounding a society of self-replicating protons, which act as the gravity counterbalance, with a semi-neutral buffer. What happens when an external proton meets a free radical?

You want electron flow through a circuit to sustain productive work. Some of those electrons pair up. Where do all the electrons come from? What is a resistor? What is a resistor to the resistor? What is the effect of Family Law on the circuit?

Installing a one-way circuit, attempting to force electrons down that path, on time, with no return, is pretty damn stupid, if you are looking to open the NPV window for constructive employment. On the other hand, if you are looking for a big bang as your last instruction in the loop…

DNA has a built-in instruction set that casts off addictive bonds. What happens if you disable it for 3 generations, and poison the food supply, to create a world addicted to scarcity? You ever notice how people/organizations behave when the welfare checks get distributed? Notice the similarity in these rolling recessions? It’s hard to pay attention, much less anticipate, on drugs, in an automated pharmacy.

So, now I am in a town where the 75% NPV excess capacity is strikingly obvious, where they readily sell their kids to $10/hr labor, which is just enough to keep the “non-profit” slumlord loss-leaders. Do you know what it is costing you to store all those houses, boats, and cars crammed into the pipeline?

They must hoard. They cannot help themselves, because they are genetically predisposed to do so as they enter an economy where all the traffic lights with the same momentum are green, and all the lights in the other direction are red. Inflate prices 3X and place a 30% off sale in the window. The herd comes running every time, seeking something for nothing, which is the inverse of effective investment.

Up until now, the market could stay irrational longer than the individual could remain rational. That is no longer the case, because you have an exit, but the market does not. You cannot fix a stupid economy in real time. How do you want to transform all that excess capacity?

From the market perspective, land is dear. From the individual perspective, land is cheap, unless you have been led to believe you are an immobilized proton.

[Tim]

There won't be any "Greek style" social unrest in the USA. We're to well controlled to assault the elites. We'll just rip each other apart while they play one side against another.

[Sink hole]

Marshall Auerback: Time to Panic (II)

Today’s unemployment data suggests that we are experiencing something far worse than a mere “bump in the road”, as our President described it last month. In fact, if last month was the time to panic, as Stephanie Kelton argued here, then today’s data should create real palpitations in the White House. This isn’t just a “bump,” but a fully-fledged New York City style pot hole.

Dig a bit deeper into the data and it looks absolutely awful: The household measure of employment fell by -445,000. Okay, it’s a noisy number. But, as Frank Veneroso has pointed out to me in an email correspondence, this measure of employment which is never revised now shows no employment growth over the last five months and very negative employment growth over the last three.

But it gets worse:

http://www.nakedcapitalism.com/2011/07/marshall-auerback-time-to-panic-ii.html

[No justice at all]

JP Morgan Chase Fine: Another Slap on the Wrist for Wall Street

This is one of the best examples we’ve had yet of the profound difference in the style of criminal justice enforcement for the very rich and connected, versus the style of justice for everyone else. This scam that Chase, Bank of America and UBS were involved with was no different in any way, really, from old-school mafia-style bid-rigging scams.

http://www.rollingstone.com/politics/blogs/taibblog/jp-morgan-chase-fine-another-slap-on-the-wrist-for-wall-street-20110708

[China Grove]

Who's putting the screws to who?

Jim Rickards

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/7/9_Jim_Rickards.html

[The truth will hurt the fraudsters]

Top "Reserve Managers Predicted that Gold Would Be the Best Performing Asset Class Over the Next Year"

As Joseph Schumpeter has said, “The modern mind dislikes gold because it blurts out unpleasant truths.”)

http://georgewashington2.blogspot.com/2011/07/top-reserve-managers-predicted-that.html

[Out of sight, out of mind, and out of money]

Somehow, the Unemployed Became Invisible

GRIM number of the week: 14,087,000.

Fourteen million, in round numbers — that is how many Americans are now officially out of work.

In 2010, some 46 percent of working Americans who were eligible to vote did so, compared with 35 percent of the unemployed, according to Michael McDonald, a political scientist at George Mason University. There was a similar turnout gap in the 2008 election.

No wonder policy makers don’t fear unemployed Americans. The jobless are, politically speaking, more or less invisible.

http://www.nytimes.com/2011/07/10/business/the-unemployed-somehow-became-invisible.html

[Start calling them out on their sanctimonious BS...they smile and take and take etc...]

politician-One who seeks personal or partisan gain, often by scheming and maneuvering.

Hey, Washington, I've Been Paying Into Social Security And Medicare For 48 Years--So How Much Are You Cutting From YOUR Benefits?

This letter points out that Sen. Simpson himself, along with many other career politicians, has spent his life sucking on the taxpayer's teat.

Read more: http://www.businessinsider.com/hey-washington-ive-been-paying-into-social-security-and-medicare-for-48-years-and-now-youre-screwing-me-2011-7?

[Spilling over]

Hot Coffee

You see, it turns out corporations like candidates who will push for laws which limit their liability. Corporations give those candidates tons of money. And politicians like money. Money gets them into office. Plus, as the Supreme Court has held: money is speech. Throw in 2010’s Citizen’s United decision, which held that corporate funding of independent political broadcasts cannot be limited, and that money-speech has no boundaries. So who has a bigger megaphone, you and I, or those with corporate backing?

One of the scary parts is the corporations aren’t satisfied with electing Representatives, Senators, Governors, and Presidents. Oh no. Those people only create and enact the laws. But the laws can be overturned by courts. So the corporations help fund the elections of judges too. Now that’s REALLY scary. Get enough judges on a state supreme court, and those laws will be upheld. And the corporations will save money. It’s a sound investment for the corporations, with a solid rate of return.

http://www.johngannonauthor.com/2011/07/02/review-of-hot-coffee/

[Rocky]

Tim: I wouldn't be so sure of no unrest against the elites. It's only a few miles from the public housing projects of Manhattan to the expensive co-op apartments of the Upper East Side. When the welfare checks stop coming, anything might happen. Of course, the Republicans have been very successful in distracting the religious with the gay marriage and abortion issues, as they plied themselves with tax cuts and military contractors enriched themselves at the public trough. Sooner or later, even the dumbest Republican will figure out he's been taken to the cleaners.

Two decades before the Nazis started shipping Jews to the East for "resettlement", the Freikorps were killing them on the streets of Germany's large cities. Hundreds perished after WWI until the end of 1923. It was only a hint of things to come. Germany's defeat in WWI and the subsequent harsh peace treaty had a devastating impact on the people's morale. The collapse of the German mark in 1923, and the Great Depression that followed a few years later, helped usher in the Third Reich.

[Real Deal]

Oh my my dear Dr. Brzezinski, you talk of "wealth inequality and a heightened sense of social injustice".

How dare you attack the wonders of American capitalism. The very measure of the success of the fantastic brand of US capitalism is precisely great wealth inequality and social injustice! Without these, America will fall into socialism! The current 25% un/under-employment is a fine reflection of the immense efficiency of US economy.

Today, America has reached the pinnacle of ideological success. The billionaires have won. Damn the rest.

[John]

If "wealth inequality and a heightened sense of social injustice" are imminent, you can be pretty sure that's exactly what Brzezinski and his Trilateralist buddies have had planned for this particular juncture in the social and economic collapse of the United States for at least twenty or thirty years. It's all part of the process.

[NO stocks 4 me]

So whoTF is it thats hurtin? I still see everybody walkin or drivin with a cell phone glued to their ear,I can't afford one, even a tracphone requires min every month used or not, I don't know many people like me still on dialUp (cause its cheap). And all I use is a 19" old model TV with basic cable no HBO or showtime, like those poor unemployed or college grad folks.

Yet I'm the group who is supposed to be living so high on those "entitlements" and needs more cuts. yeah right,.... my ass!!!

[THE WHOLE SYSTEM IS TOP HEAVY]

START CUTTING AT THE TOP WITH ALL THOSE ADMINISTRATIVE MILLIONAIRES; WHAT DOES THE CHANCELLOR AT BERKELEY MAKE?

California Cuts Weigh Heavily on Its Colleges

The compromise to close the state’s huge budget gap included cuts to state agencies of all kinds, but none were as deep as those to the state’s public colleges and universities. The state’s two systems were each cut by $650 million, and they each could lose $100 million more if the state’s optimistic revenue expectations do not materialize. For both systems, the $650 million is roughly a 20 percent cut of operating money from the state.

This fall, for the first time, the University of California will take in more money from student tuition than from state finances.
To a large extent, the wealthiest and poorest students fare better, either because they can afford the hefty increases or because they have enough financial aid to cover them. But students from families with incomes in the low six figures often feel the biggest pinch, taking out more loans with each tuition increase.

“It starts to feel impossible really quick,” said Alison Linton, 20, a sophomore at Riverside, who said she had taken out $30,000 in loans so far. “But there’s nothing you can do besides say, ‘I need more cash.’ ”
http://www.nytimes.com/2011/07/09/us/09uc.html

[Oops...guess they do!]

Cheney to Treasury: "Deficits don't matter"

Former Treasury Secretary Paul O'Neill was told "deficits don't matter" when he warned of a looming fiscal crisis.

O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.

O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired.

The vice president's office had no immediate comment, but John Snow, who replaced O'Neill, insisted that deficits "do matter" to the administration.
Source: [X-ref O'Neill] Adam Entous, Reuters, on AOL News Jan 11, 2004

http://www.ontheissues.org/2004/Dick_Cheney_Budget_+_Economy.htm

[Another way to leave you high and dry]

I wonder how much revenues the US raises through penalties as the economy weakens by having unemployed people tap into their retirements?

Laid off with a 401k? It might be better to put it in an IRA

Many South Floridians are contending with lost jobs -- and homeless 401k retirement accounts. Some companies require workers to move their money once they leave the firm.

A 60-year-old Fort Lauderdale man, who had just lost his job, discovered he could not even make a withdrawal unless he first moved his account.

http://www.sun-sentinel.com/business/blogs/money-sense/sfl-401k-withdraws-unemployed,0,1616968.story

[Expect more of this]

We can't hear you....

Ethics Commission limits public comments at public meetings

Instead of continuing to allow the public to weigh in on all items being considered at an Ethics Commission meeting, commissioners Thursday decided that the public won’t be allowed speak during final hearings where ethics rulings are being considered.

The public also won’t be allowed to comment on the board’s closed-door sessions, where commissioners decide whether ethics complaints should be pursued.

Local activist Suzanne Squire objected to the rule change that she argued would unfairly limit public participation at Ethics Commission meetings.

"Either free speech is free or it isn’t," Squire said.

http://weblogs.sun-sentinel.com/news/politics/palm/blog/2011/07/ethics_commission_limits_public_comments_at_public_meetings.html

[Pretty pathetic]

U.S. Payroll Stunner, Full "Pathetic"Jobs Report

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

Digging deeper into the Household Survey, we see some more interesting data. In the last year, the civilian population rose by 1,799,000. Yet the labor force dropped by 263,000. Those not in the labor force rose by 2,063,000.

Last month the labor force rose by 272,000. This month the labor force fell by 272,000. How's that for symmetry?

The 6-month labor force total for 2011 is +4,000.

Many of those millions who dropped out of the workforce would start looking if they thought jobs were available. Indeed, in a 2-year old recovery, the labor force should be rising sharply as those who stopped looking for jobs, once again started looking. Instead, the labor force is not expanding at all.

Were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.

http://www.mudraa.com/trading/95121/0/us-payroll-stunner-full-patheticjobs-report-analys.html