by Stephen Zarlenga and Greg Coleridge
http://www.opednews.com/articles/2/How-Can-Obama-Invest-in-th-by-Greg-Coleridge-110128-901.html
President Obama presented worthy economic goals during his State of the Union address of investing in our physical and social infrastructure and increasing employment. Absent was any specific plan of how to achieve these ends without further increasing the national debt.
We have a specific plan President Obama. Take public control of our money system.
A bill was introduced at the end of last year that can put people to work by building and repairing our nation's infrastructure without adding to the debt. The details are contained in the National Emergency Employment Defense (NEED) Act (HR 6550 in the last Congress) by Rep. Dennis Kucinich (D-OH).
While the bill focuses on the unemployment crisis, it contains the three essential monetary measures proposed by the American Monetary Institute in the American Monetary Act (AMA). The AMA's recommendations are based on decades of research and centuries of experience, are designed to end the current fiscal crisis in a just and sustainable way, and are aimed to place U.S. money under our constitutional system of checks and balances.
The three essential monetary measures of the NEED Act are:
1. Incorporate the mostly private Federal Reserve System into the US Treasury Department. The Fed would no longer be a virtual fourth branch of government, unaccountable to the public. Their important financial research functions would continue. But the Fed would no longer make unilateral monetary policy decisions beyond the reach of We the People.
2. End the banking systems "fractional reserve" accounting privilege in a gentle, elegant way. Fractional reserve lending allows banks to lend many times more than they possess, thereby issuing our money supply as interest bearing debt and dominating the financial system, taking wild risks as they did in creating the crisis. Instead, we should use our Government's Constitutional power (Art. 1 sec. 8) to provide the nation's money supply as interest free money, not interest bearing debt. This has immense benefits.
3. Use the US governments money power -- creating and spending money into circulation -- to address pressing infrastructure needs such as repairing our crumbling roads, bridges, rails and highways. The government also would be enabled to invest in health care and education. These projects would provide a huge numbers of jobs without going into debt and having to repay interest on debt to financial institutions. Economist Kaoru Yamaguchi's advanced system dynamics computer model shows that basing the system on money instead of debt will allow the national debt to be repaid and the funding of infrastructure (thereby solving the unemployment crisis) without inflation! (see http://www.monetary.org)
The irony is that these three provisions would institutionalize what most Americans falsely believe already exists: That the Federal Reserve is public. That banks only loan money that they possess. And that the government creates our money. Wrong on all counts.
Decades of distortion and deception can be remedied by this bill.
Public control of money is not a new practice. The American colonists issued "Continentals" and the Lincoln administration "Greenbacks" to fund the Revolutionary and Civil Wars respectively -- all debt and interest free. More than 200 prominent economists during the Great Depression of the 1930s developed and endorsed "The Chicago Plan" -- which declared that only the government should create money -- to address that crisis.
Ask your US representative to cosponsor the NEED Act when it is reintroduced. Ask your two US Senators to contact Rep. Kucinich about becoming a Senate sponsor. Last year's bill can be read at http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.6550
This bill alone cannot solve all our current economic problems. But it will end the private/corporate control of what should profoundly be a public democratic function of any society -- issuing the nation's money. Maybe more importantly, the Act will serve as a beacon of hope to a beleaguered citizenry who are seeking long term solutions to unemployment, debt, crumbling infrastructure, and need to take power over their lives and their society.
Zarlenga is Director of the American Monetary Institute and author of The Lost Science of Money. Coleridge is Director of the Northeast Ohio American Friends Service Committee.
Monday, January 31, 2011
Predictions Plus-Minus Update
In April 2009, we began keeping track of how accurate all of our predictions have been since January 2008, providing updates for our readers once a quarter ever since.
Today, it's time once again to update our prediction accuracy score, in which we make use the most unforgiving metric ever developed for measuring performance: the plus-minus statistic from hockey and basketball!
Using this system, we gain a point if we're right, lose a point when we're wrong, and score a zero for when the outcome of a prediction either cannot yet be determined or, in the case where we make multiple predictions, when we have contrary results that cancel each other out. Like a game of horseshoes, close doesn't count where near misses are involved!
Ultimately, our plus-minus score will reveal the number of times we scored hits rather than misses in making predictions of the future. If we're no better at predicting the future than a coin toss, our plus-minus score will gravitate toward zero. If we're better at predicting the future than that, our score will rise over time, and if we're really bad, our score will surely fall.
Three months ago, our plus-minus score was +35. Here's how we stand today:
- Number of Predictions Made Since January 2008: 113
- Number of Correct Predictions: 72
- Number of Incorrect Predictions: 34
- Number of Outcomes Not Yet Determined or No Decisions: 7
Overall, for the predictions where we've been able to establish the outcomes to date, our plus-minus score has risen to +38. Measured as a percentage, our prediction accuracy rate is 67.9%.
The table below updates the status of all the predictions that we've successfully determined the outcomes during the last three months, as well as those for which we are still waiting for the outcome. The blow-by-blow commentary is just a bonus that you'll hopefully find to be entertaining!
| Political Calculations' Predictions Plus-Minus Score Update, 31 January 2011 | |||
|---|---|---|---|
| Date | Prediction | Outcome | +/- Score |
| 21 December 2009 | Using incomplete data for the month of December 2009, economy would dip in the second quarter of 2010, with a slow recovery afterward. We anticipate that meaningful growth in the number of jobs would likely begin with the third and fourth quarters of 2010. We anticipate that the NBER will declare the recession they found to have begun in December 2007 to have ended in the third quarter of 2009, but we make a case for 2010Q2 as a more realistic alternate. | Too soon to tell. It will be a while before we get a full confirmation for these predictions. On the potential plus side for us, different branches of the Federal Reserve have used their own models for predicting what the NBER will do to find that July 2009 is the month they will most likely declare to be the ending date for the recession. Update: We were a bit off in calling July 2009 as the end of the recession, since the NBER declared June 2009 as the bottom, but we nailed 2010Q2 as being exceptionally slow, making this batch of predictions a split decision so far. We're still waiting to see if meaningful growth in the number of jobs happens through the fourth quarter, but so far, we're on track with that last part of the prediction as the number of people counted has having jobs has risen since July 2010. Update: There was no meaningful improvement in the number of employed Americans after March 2010. That final part of our prediction now counts as a miss. | -1 |
| 30 July 2010 | When we updated our forecast for where the finalized GDP for 2010Q2, we snuck in a prediction for 2010Q3 in our chart. Although we expect our greatest accuracy when we used the newest, finalized GDP data for the preceding quarter, we're testing out how well projecting the next quarter's GDP based on the advance release data works out! | We'll see if we're anywhere close in October 2010, and won't know for sure until December 2010. We'll also offer a more routine prediction when the 2010Q2 data is finalized in September 2010. Update: The clock is still ticking with the advance release GDP data coming out on Friday, 29 October 2010. Update: Our forecast was for GDP to be $13,317.7 billion - the advance release data put GDP at $13,260.7 billion, an error of 0.4%, which falls within our typical 2% target range for scoring a correct prediction for GDP. | +1 |
| 25 August 2010 | Can we predict what average health insurance premiums will turn out to have been in 2010? If single coverage falls between $5,098 and $5,265 and family coverage falls between $14,166 and $14,452, then yes, we can! | We won't know until next year when the Kaiser Family Foundation releases its 2010 Annual Survey of Employer Health Benefits. Update: It turns out we should only have waited a month! The KFF's 2010 Annual Survey of Employer Health Benefits was released in September 2010, putting the average health insurance premiums for single coverage at $5,049 (a miss, even if just $49 below our target range) and for family coverage at $14,038 (a more substantial miss), as it appears the recession took a bigger bite out of the growth rate of health insurance premiums than we anticipated. | -2 |
| 28 September 2010 | We create a tool that predicts that the average cost of tuition and required fees at a four-year institution of higher learning (aka "college") will rise to $14,541 in 2009, $15,394 in 2010, $15,869 in 2011, $15,538 in 2012 and $16,212 in 2013. We modify these predictions for 2009, 2010 and 2011, taking the "under" for each of these years. We would anticipate being within 2% of the values for 2012 and 2013. | These predictions will take some time to play out. The confirmation will be provided by the annual Digest of Education Statistics produced by the U.S. Education Department. | +0 |
| 5 October 2010 | Using the finalized GDP data for the second quarter of 2010, we project GDP for the third quarter of 2010 will be within 2% of $13,284.3 billion chained 2005 U.S. dollars, giving nearly 70% odds that real GDP will actually be between $13,115 and $13,424. | This is our "official" prediction for where real GDP will be in 2010-Q3, which we'll "officially" find out on 22 December 2010. Our first indication of how close we are will come as early as Friday, 29 October 2010 when the advance estimate of GDP is released by the BEA. Update: Officially, the third GDP estimate for the third quarter of 2010 came in at $13,278.5 billion, 0.44% away from the center of our target range! | +1 |
| 8 October 2010 | Applying our tool that relates the rate of economic growth to the rate of unemployment in the U.S., we project that real GDP will be about $13,272.3 billion for 2010-Q3. Assuming that figure is correct (or nearly so), we use that result with our "official" method to project that the GDP growth rate for 2010-Q4 will fall from about 2.4% in the third quarter to 2.0%. | To be determined. It's pretty interesting to have an entirely different method of projecting future GDP give such close results to our "official" approach, where we've consistently been within 2% of our target value. Update: Officially, the final GDP estimate for the third quarter of 2010 came in at $13,278.5 billion, 0.05% away from what we forecast here using unemployment data - we may be onto something here! Unfortunately for us, the advance estimate of GDP for the fourth quarter of 2010 came in at 3.6%, which hopefully means the economy is turning the corner in a more positive direction. Altogether, we net a zero on this combination of predictions. | +0 |
| 25 October 2010 | A week before the month to which it will apply even arrives, we forecast that the average of daily closing stock prices in November 2010 will be in a range between 1182 and 1218. | With October 2010 very much on track to hit our target range for that month, this change would mark an upward move in stock prices. We went back over the data for the S&P 500 since January 1871 and found that on a month-to-monthy basis, "up" has happened some 56.1% of the time. Of course, that figure also means there's a 43.9% chance stocks will fall, so there's plenty of opportunity to be wrong. Right now, we're at the cusp for what direction the market will have moved a month from now, so here's hoping for a not-so-noisy month!... Update: The average daily closing value of the S&P 500 in November 2010 was 1198.89 - score! | +1 |
| 1 November 2010 | Using tax receipt data, we anticipate that U.S. household median income fell in 2010. We estimate it fell to a level around $47,211 from $49,777 in 2009. | We won't officially know until the U.S. Census releases the data for 2010 in September 2011, but we should have an early indication in March 2011 when it releases its Current Population Survey income data. | +0 |
| 2 November 2010 | We forecast that the number of new jobless claims for the week of 30 October 2010 will be between 411,000 and 508,000. | The actual number of initial unemployment insurance claim filings was finalized at 459,000! | +1 |
| 4 January 2011 | We recount the story of the most challenging prediction we've ever made (for where the S&P would be in December 2010), before cryptically hinting that the S&P 500 would go somewhere between 1268 and 1313, "in the absence of an excessive amount of noise or a change of fundamental outlook." | We pull off the impossible for December 2011, having predicted that the average of the S&P 500's daily closing value would fall between 1225 and 1257 "next" at Barry Ritholtz' site in early November 2011 (it averaged 1241.53 in December 2011.) As for the 1268-1313 range, there's no question that we'll hit this value for January 2011, with the S&P 500 having averaged 1282.43 through 28 January 2011. | +2 |
| 21 January 2011 | After seeing the price-dividend growth rate ratio spike in December 2010, we anticipate that we'll see a trough in stock prices by the end of February 2011. | While the 1.8% dip in stock prices on Friday, 28 January 2011 suggests a correction may be in the offing, we won't know if the S&P 500 will have passed through a trough in February 2011 until March 2011. | +0 |
We're coming up on the end of this project, which we'll terminate with our two-year predictions plus-minus score accounting anniversary in April 2011. As part of the grand finale, we'll unveil just how we rank among the community of financial and economic analysts and gurus!
Previously on Political Calculations
The following links will take you to our previous prediction outcome reports, which we've presented below in the order they've appeared here approximately every three months beginning with April 2009. You can get the most recent status updates by clicking the "track record" tag at the bottom of the post.
- Plus-Minus for Predictions - 16 April 2009
- Our Plus-Minus Is Now Seventeen! - 16 July 2009
- Predictions Plus-Minus Update - 15 October 2009
- Predictions Plus-Minus Update - 21 January 2010
- Predictions Plus-Minus Update - 26 April 2010
- Predictions Plus-Minus Update - 30 July 2010
- Predictions Plus-Minus Update - 29 October 2010
- Predictions Plus-Minus Update - 31 January 2011
Sunday, January 30, 2011
MONETARY HISTORY CALENDAR January 31- February 6
FEBRUARY 2
2010- DEATH OF EUSTACE MULLINS, AUTHOR, SECRETS OF THE FEDERAL RESERVE
"The Nation magazine was the only public organ so far as I can find out which printed out that the issue of the money of the U.S. was being turned over to a body of men who were neither elected nor answerable to elections."
FEBRUARY 3
1913 – RATIFICATION OF THE 16TH AMENDMENT, ESTABLISHMENT OF THE US FEDERAL INCOME TAX
The income tax provides a guaranteed and consistent source of income for the payment of any federal government function, including payment of interest on national debt. It was ratified earlier in the same year as passage of the Federal Reserve Act which turned over the nation’s money power to a private central bank. Many economists believe the dollar holds its value better than the Euro in times of economic crisis since US interest payments from debt can be covered by US income taxes. There is no equivalent European income tax to cover Euro debts. This provides investors greater confidence in the dollar over the Euro.
1924 – DEATH OF WOODROW WILSON, 28TH PRESIDENT OF THE UNITED STATES AND SIGNER OF THE FEDERAL RESERVE ACT
"Some of the biggest men in the United States in the field of commerce and manufacture are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so passive, that they had better not speak above their breath when they speak in condemnation of it."
“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. (1911)
[Note: Despite such misgivings, Wilson signed the Federal Reserve Act two years later]
______________________________________________________
Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscibe or to comment on any entry, contact monetarycalendar@yahoo.com
For more information, visit http://www.afsc.net/economiccrisis.html
2010- DEATH OF EUSTACE MULLINS, AUTHOR, SECRETS OF THE FEDERAL RESERVE
"The Nation magazine was the only public organ so far as I can find out which printed out that the issue of the money of the U.S. was being turned over to a body of men who were neither elected nor answerable to elections."
FEBRUARY 3
1913 – RATIFICATION OF THE 16TH AMENDMENT, ESTABLISHMENT OF THE US FEDERAL INCOME TAX
The income tax provides a guaranteed and consistent source of income for the payment of any federal government function, including payment of interest on national debt. It was ratified earlier in the same year as passage of the Federal Reserve Act which turned over the nation’s money power to a private central bank. Many economists believe the dollar holds its value better than the Euro in times of economic crisis since US interest payments from debt can be covered by US income taxes. There is no equivalent European income tax to cover Euro debts. This provides investors greater confidence in the dollar over the Euro.
1924 – DEATH OF WOODROW WILSON, 28TH PRESIDENT OF THE UNITED STATES AND SIGNER OF THE FEDERAL RESERVE ACT
"Some of the biggest men in the United States in the field of commerce and manufacture are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so passive, that they had better not speak above their breath when they speak in condemnation of it."
“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. (1911)
[Note: Despite such misgivings, Wilson signed the Federal Reserve Act two years later]
______________________________________________________
Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscibe or to comment on any entry, contact monetarycalendar@yahoo.com
For more information, visit http://www.afsc.net/economiccrisis.html
Friday, January 28, 2011
Campaign Financing after Citizens United v. Federal Elections Commission
Community Forum, First Unitarian Church of Cleveland, Shaker Heights, Ohio
January 23, 2011
Citizens United vs Federal Elections Commission is one of the worst decisions ever rendered by the US Supreme Court – right up there with upholding that slaves are property in Dred Scott (1857), asserting African Americans could be treated as separate but equal in Plessey vs Furguson (1896) and declaring money is speech in Buckley vs Valeo (1976).
It was a political decision trumped up as law rendered by five activist appointed-for-life justices based on a fraudulent, baseless, and bizarre notion that corporations are people possessing inalienable First Amendment Bill of Rights protections that were intended by this nation’s founders only for human beings – natural persons, real people.
The controversial decision permits corporate treasury funds to be spent for or against specific political candidates. Four times more money was spent in the 2010 midterm elections from outside groups than in the 2006 midterm elections ($296 million to $68 million – according to the Center for Responsive Politics). Much of this can be attributed to the decision.
I don’t particularly feel we had four times more democracy as a result. What we had instead were the election of more corporate friendly candidates who support the Republican Pledge to America and other corporate friendly rules, laws, budget giveaways and tax breaks.
Many claim the decision didn’t change very much. I actually tend to agree.
Corporations have been dominating our political system prior to Citizens United. The political speech of corporate PACs and lobbyists has drowned out the voices of people without money for decades.
Prior to Citizens United, did We the People control our elections? Our health care? Energy policies? Trade policies? Environmental policies? Our money and banking system? Were communities able to keep big box chain stores, cell phone towers or gas drillers out of our communities? Or toxic trash from being imported into our communities?
President Obama’s 2008 campaign raised $745 million under the old campaign finance rules. Among his largest contributors (or investors – depending on your perspective) was the FIRE (Finance, Insurance and Real Estate) industry. Wall Street gave $14.9 million to Obama’s election campaign, the most for any campaign in history, with Goldman Sachs alone chipping in $1 million. Nineteen of 22 members of the Senate Banking Committee of both major political parties received donations/investments from Wall Street in 2009. Each of those up for reelection in 2010 received large political investments.
In just the past two years, corporate cash accounted for watering down consumer and environmental protections and diluting health-care and financial reform. Remember Sen. Dick Durbin’s comment about the power of the big banks in the financial reform debate last year? “They frankly own the place,” he asserted. Though troubling, it was refreshingly honest.
Corporations have been largely running the place economically and politically for more than a century prior to Citizens United.
This is not to diminish the impact of the decision. Citizens United has reduced what was already more or less our democratic theme park – with many of the trappings of a real democracy but just not much substance.
Citizens United was not the first time corporations achieved the ridiculous distinction of having inherent constitutional rights – on par with human beings.
The Revolutionary War was in no small part a reaction against the Crown’s chartered corporations. The most (in)famous incident was the dumping of goods, including tea, in the colonies by the British East India Company.
Thomas Jefferson thought ill of corporations: “I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”
Corporations were intended by the nation’s founders to be an artificial creature of the law, with no additional powers than what its charter granted.
US Supreme Court Chief Justice John Marshall wrote in an 1819 case, "A corporation is an artificial being, invisible, intangible…It possesses only those properties which the charter of its creation confers upon it."
Nowhere in the constitution are corporations mentioned. Nowhere. We the People were sovereign. Corporations were created to be subordinate to humans. The nation’s founders feared corporations gaining too much power. That’s why they placed the defining powers to control them at the state level.
Charters were democratic instruments, issued by state legislatures one at a time. They rigidly established what corporations could and could not do. It was focused on business, period. Political or inalienable rights weren’t granted. Those were reserved solely for people.
Corporations couldn’t claim as they do now both constitutional rights of human beings as well as the special corporate privileges unavailable to human beings – such as limited liability.
The notion that corporations are people is a radical concept concocted by the Supreme Court based on a fraud.
The 1886 Santa Clara vs Southern Pacific Supreme Court decision is often attributed as the foundation, the pillar that all subsequent corporate rights case are built upon. Yet the court in its ruling never actually concluding that corporations were people. Chief Justice Morrison Waite (from Ohio) said at the time that the case had settled no constitutional issues. Nevertheless, that conclusion was placed by the Court Reporter in the headnotes, or brief summary, at the very beginning of the case. Many members of the court at the time agreed with the sentiment that corporations were persons but the text itself did not actually address corporate personhood. The case only dealt with the issue of taxes on railroad fences.
The fraudulent Santa Clara decision was consecrated in 1889 when the court cited the case as a precedent for corporate personhood in Minneapolis & St. Louis Railway Company v. Beckwith.
All subsequent corporate personhood cases are built on Santa Clara.
However in 1906 the court ruled in United States v. Detroit Timber and Lumber Co. that headnotes did not carry any legal weight.
This makes Santa Clara, the rock solid pillar of corporate constitutional rights, nothing more than a fraud and illegitimate -- a legal house of cards build on a pile of sand. By extension, Citizens United is a fraud and illegitimate.
Justice John Paul Stevens, dissenting in Citizens United, said, “… corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings…But they are not themselves members of “We the People” by whom and for whom our Constitution was established.”
Retired Supreme Court Justice Sandra Day O’Connor stated, “Citizens United has signaled that the problem of campaign contributions in judicial elections might get considerably worse and quite soon.”
What sounds more reasonable? The above opinions of Stevens and O’Connor or these, the majority views from the Roberts court: "The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt," and the “appearance of influence will not undermine public faith in (American) democracy."
“Only if we pretend that corporations are ‘persons’ under the Constitution, is limiting corporate ‘speech’ a constitutional infringement,” says corporate anthropologist Jane Anne Morris
Only if we pretend that corporations are persons under the constitution are we faced with the dilemma that many of us many feel, as Morris explains: “Must we limit speech in order to have free and fair elections? Or, must we accept corporation-dominated political debate in order to preserve free speech? This false dilemma disappears if we reject corporate personhood.”
Slavery is the legal fiction that people are property. Corporate personhood is the legal fiction that property are people. The first was abolished. The second one needs to be.
Free speech is for people. Not corporations. Period.
Abolishing corporate political speech is essential. Overturning Citizens United…and in fact, all so-called inherent corporate constitutional rights, the goal of the Move to Amend campaign, is also essential to protect what little is left of our democratic republic.
While this decision was a democratic disaster, its blatant overreach presents a unique opportunity to seek profound change.
An August 2010 Survey USA poll found that 77 percent of all voters - including 70 percent of Republicans and 73 percent of independents - view corporate spending in elections as akin to bribery. Broad majorities favor limiting corporate control over our political lives.
A coordinated effort can unite progressives, good-government reformers and conservative libertarians in a fight to restore democracy.
But it’s not enough. Even without corporate constitutional rights, campaign financing would be skewed. We can’t have a political democracy is a nation that defines money as speech. Defining money as speech means those with the most money have the most speech. Elections have become sales. That’s not a prescription for democracy but of a plutocracy.
According to sociologist William Domhoff, as of 2007, 1% of people in this country possess 43% of its financial wealth, the next 4% - 29%, the next 5% - 11%, the next 10%, 10%. That leaves the bottom 80% owning a mere 7% of the wealth in this country.
Ours is much closer to a plutocracy than democracy. The only way out is to break the link between economic and political inequality is to abolish the doctrine that money is speech. Without it, campaigns like voluntary systems of public financing or limiting the size of individual contributions, while helpful, are mere examples of triage. They keep what’s left of our democracy barely alive but little more.
Is all this radical? Is democracy radical? People in this nation fought a revolution for real self-governance. People of color and women organized social movements to drive themselves into the constitution to be recognized as persons. All this now is fundamentally at risk is in a political system were money is speech, elections are for sale, and corporations are people.
It’s time once more to become part of a social movement for real self-governance. What’s left of our democracy is at stake.
January 23, 2011
Citizens United vs Federal Elections Commission is one of the worst decisions ever rendered by the US Supreme Court – right up there with upholding that slaves are property in Dred Scott (1857), asserting African Americans could be treated as separate but equal in Plessey vs Furguson (1896) and declaring money is speech in Buckley vs Valeo (1976).
It was a political decision trumped up as law rendered by five activist appointed-for-life justices based on a fraudulent, baseless, and bizarre notion that corporations are people possessing inalienable First Amendment Bill of Rights protections that were intended by this nation’s founders only for human beings – natural persons, real people.
The controversial decision permits corporate treasury funds to be spent for or against specific political candidates. Four times more money was spent in the 2010 midterm elections from outside groups than in the 2006 midterm elections ($296 million to $68 million – according to the Center for Responsive Politics). Much of this can be attributed to the decision.
I don’t particularly feel we had four times more democracy as a result. What we had instead were the election of more corporate friendly candidates who support the Republican Pledge to America and other corporate friendly rules, laws, budget giveaways and tax breaks.
Many claim the decision didn’t change very much. I actually tend to agree.
Corporations have been dominating our political system prior to Citizens United. The political speech of corporate PACs and lobbyists has drowned out the voices of people without money for decades.
Prior to Citizens United, did We the People control our elections? Our health care? Energy policies? Trade policies? Environmental policies? Our money and banking system? Were communities able to keep big box chain stores, cell phone towers or gas drillers out of our communities? Or toxic trash from being imported into our communities?
President Obama’s 2008 campaign raised $745 million under the old campaign finance rules. Among his largest contributors (or investors – depending on your perspective) was the FIRE (Finance, Insurance and Real Estate) industry. Wall Street gave $14.9 million to Obama’s election campaign, the most for any campaign in history, with Goldman Sachs alone chipping in $1 million. Nineteen of 22 members of the Senate Banking Committee of both major political parties received donations/investments from Wall Street in 2009. Each of those up for reelection in 2010 received large political investments.
In just the past two years, corporate cash accounted for watering down consumer and environmental protections and diluting health-care and financial reform. Remember Sen. Dick Durbin’s comment about the power of the big banks in the financial reform debate last year? “They frankly own the place,” he asserted. Though troubling, it was refreshingly honest.
Corporations have been largely running the place economically and politically for more than a century prior to Citizens United.
This is not to diminish the impact of the decision. Citizens United has reduced what was already more or less our democratic theme park – with many of the trappings of a real democracy but just not much substance.
Citizens United was not the first time corporations achieved the ridiculous distinction of having inherent constitutional rights – on par with human beings.
The Revolutionary War was in no small part a reaction against the Crown’s chartered corporations. The most (in)famous incident was the dumping of goods, including tea, in the colonies by the British East India Company.
Thomas Jefferson thought ill of corporations: “I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”
Corporations were intended by the nation’s founders to be an artificial creature of the law, with no additional powers than what its charter granted.
US Supreme Court Chief Justice John Marshall wrote in an 1819 case, "A corporation is an artificial being, invisible, intangible…It possesses only those properties which the charter of its creation confers upon it."
Nowhere in the constitution are corporations mentioned. Nowhere. We the People were sovereign. Corporations were created to be subordinate to humans. The nation’s founders feared corporations gaining too much power. That’s why they placed the defining powers to control them at the state level.
Charters were democratic instruments, issued by state legislatures one at a time. They rigidly established what corporations could and could not do. It was focused on business, period. Political or inalienable rights weren’t granted. Those were reserved solely for people.
Corporations couldn’t claim as they do now both constitutional rights of human beings as well as the special corporate privileges unavailable to human beings – such as limited liability.
The notion that corporations are people is a radical concept concocted by the Supreme Court based on a fraud.
The 1886 Santa Clara vs Southern Pacific Supreme Court decision is often attributed as the foundation, the pillar that all subsequent corporate rights case are built upon. Yet the court in its ruling never actually concluding that corporations were people. Chief Justice Morrison Waite (from Ohio) said at the time that the case had settled no constitutional issues. Nevertheless, that conclusion was placed by the Court Reporter in the headnotes, or brief summary, at the very beginning of the case. Many members of the court at the time agreed with the sentiment that corporations were persons but the text itself did not actually address corporate personhood. The case only dealt with the issue of taxes on railroad fences.
The fraudulent Santa Clara decision was consecrated in 1889 when the court cited the case as a precedent for corporate personhood in Minneapolis & St. Louis Railway Company v. Beckwith.
All subsequent corporate personhood cases are built on Santa Clara.
However in 1906 the court ruled in United States v. Detroit Timber and Lumber Co. that headnotes did not carry any legal weight.
This makes Santa Clara, the rock solid pillar of corporate constitutional rights, nothing more than a fraud and illegitimate -- a legal house of cards build on a pile of sand. By extension, Citizens United is a fraud and illegitimate.
Justice John Paul Stevens, dissenting in Citizens United, said, “… corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings…But they are not themselves members of “We the People” by whom and for whom our Constitution was established.”
Retired Supreme Court Justice Sandra Day O’Connor stated, “Citizens United has signaled that the problem of campaign contributions in judicial elections might get considerably worse and quite soon.”
What sounds more reasonable? The above opinions of Stevens and O’Connor or these, the majority views from the Roberts court: "The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt," and the “appearance of influence will not undermine public faith in (American) democracy."
“Only if we pretend that corporations are ‘persons’ under the Constitution, is limiting corporate ‘speech’ a constitutional infringement,” says corporate anthropologist Jane Anne Morris
Only if we pretend that corporations are persons under the constitution are we faced with the dilemma that many of us many feel, as Morris explains: “Must we limit speech in order to have free and fair elections? Or, must we accept corporation-dominated political debate in order to preserve free speech? This false dilemma disappears if we reject corporate personhood.”
Slavery is the legal fiction that people are property. Corporate personhood is the legal fiction that property are people. The first was abolished. The second one needs to be.
Free speech is for people. Not corporations. Period.
Abolishing corporate political speech is essential. Overturning Citizens United…and in fact, all so-called inherent corporate constitutional rights, the goal of the Move to Amend campaign, is also essential to protect what little is left of our democratic republic.
While this decision was a democratic disaster, its blatant overreach presents a unique opportunity to seek profound change.
An August 2010 Survey USA poll found that 77 percent of all voters - including 70 percent of Republicans and 73 percent of independents - view corporate spending in elections as akin to bribery. Broad majorities favor limiting corporate control over our political lives.
A coordinated effort can unite progressives, good-government reformers and conservative libertarians in a fight to restore democracy.
But it’s not enough. Even without corporate constitutional rights, campaign financing would be skewed. We can’t have a political democracy is a nation that defines money as speech. Defining money as speech means those with the most money have the most speech. Elections have become sales. That’s not a prescription for democracy but of a plutocracy.
According to sociologist William Domhoff, as of 2007, 1% of people in this country possess 43% of its financial wealth, the next 4% - 29%, the next 5% - 11%, the next 10%, 10%. That leaves the bottom 80% owning a mere 7% of the wealth in this country.
Ours is much closer to a plutocracy than democracy. The only way out is to break the link between economic and political inequality is to abolish the doctrine that money is speech. Without it, campaigns like voluntary systems of public financing or limiting the size of individual contributions, while helpful, are mere examples of triage. They keep what’s left of our democracy barely alive but little more.
Is all this radical? Is democracy radical? People in this nation fought a revolution for real self-governance. People of color and women organized social movements to drive themselves into the constitution to be recognized as persons. All this now is fundamentally at risk is in a political system were money is speech, elections are for sale, and corporations are people.
It’s time once more to become part of a social movement for real self-governance. What’s left of our democracy is at stake.
ODNR tries to reassure; crowd wary
I testified last night at this event -- making 3 points.
1. The issue of hydrolic fracking has been framed as a state issue. Yet for years, the decision to drill was a local issue. It was only when local communities began resistance that the oil and gas corporations ran to the state level, contributed/invested in state politicians and passed a law, House Bill 278 in 2004, which stripped local control. [This was quite ironic since many of those in Stark Co and elsewhere who voted for the bill are generally big "local control" advocates.] Corporations don't like people flexing their democratic muscles. HB 278 is illigimate.
2. The Ohio Deparment of Natural Resources (ODNR), the agency established to "regulate" drilling has an inherent conflict of interest. They're hardly a neutral or impartial player since their budget is linked to approving permits to drill -- the more permits they approve, the more money they make. Their new state director, David Mustine, spent most of his career working for oil and gas corporations. He's worked for American Electric Power and Bechtel Industries, specializing in oil and gas ventures. Besides, the solution to this problem is not to "regulate" the harms, the poisions, the threats to community health and safety -- it's to abolish it. The only way to accomplish this is to prevent this controversial and dangerous form of drilling.
3. Respect, honor and trust local communities' right to decide. Those who are being impacted by this decision should have the major role in the shaping of the decision -- not industry, not regulators, but the residents of the area.
http://www.cantonrep.com/topstories/x1145628433/ODNR-tries-to-reassure-crowd-wary?photo=2
The Contribution of Student Loans to the U.S. National Debt
W.C. Varones solved a math problem with the U.S. national debt that had been troubling the econoblogosphere since September 2010. At the end of the U.S. federal government's fiscal year in 2008, the total public debt outstanding for the United States was $10,024,724,896,912 (or more simply, over 10 trillion dollars). In 2009 and 2010, the U.S. government ran annual budget deficits of $1.416 trillion and $1.294 trillion respectively. During that time, the amount of money the government "borrowed" from itself (mainly from Social Security) rose by $141.9 billion (in 2009) and $180.8 billion (in 2010).
If you add those numbers together then, the amount of the full U.S. public debt outstanding at the end of the government's 2010 fiscal year should total $13,057,320,272,842. Instead, the total public debt outstanding for the United States was $13,561,623,030,892, over $504 billion more than what the combination of the federal government's annual budget deficits and "intragovernmental" borrowing should put it.
That more than $504 billion would then account for 14.3% of the total increase in the United States' national debt from 2008 through 2010, or roughly 1 out of each 7 dollars that the government borrowed during those two years.
Finally getting to the bottom of the matter with Econbrowser's Menzie Chinn's assistance, W.C. discovered that much of the 504 billion dollar disparity could be accounted for by the government's direct loan financing activities, where the U.S. Treasury directs money it borrows for the purpose of loaning it out to individuals and organizations in support of government-backed or subsidized loan programs operated by other government agencies.
The biggest portion of those programs are run through the Department of Education, in the form of the government's student loan programs. We thought we'd go back through the U.S. Treasury's historic data to see just how much the Federal Direct Student Loan program has grown since 1997.
The results are presented in the chart below, which shows the net outflows, which increase the national debt, or net inflows, which reduce the national debt, resulting from the federal government direct student loan program:
What we find is that since 2008, the net outflow of money the federal government borrowed to provide direct student loans has exploded, rising by $89.7 billion dollars, or 17.8% of the $504 billion discrepancy. In terms of the total increase in the national debt from FY2008 to FY2010, the explosion in student loans would account for 2.5% of the entire increase above and beyond the deficits the government ran in those years, both with the public and with itself.
We should also note that this explosion in the Federal Direct Student Loan program is not a recession-driven phenomenon. There is no similar spike, or for that matter, there's not any spike, corresponding to the recession year of 2001.
At first glance, it might seem as if the U.S. government is going to quite some extremes to keep a bubble in higher education going, but we don't think that's really what's behind the federal government's motivation for its actions. As for what we suspect might be the real motive for why the federal government has suddenly become so keen to loan money directly to U.S. students in recent years, well, we'll revisit the topic at greater length on a future date.
Update 9 May 2011: We've since revisited the topic in The Transformation of Student Loans Into Taxes!
Data Sources
U.S. Treasury. Monthly Statement of the Public Debt of the United States, September 30, 2008.
U.S. Treasury. Monthly Statement of the Public Debt of the United States, September 30, 2010.
Thursday, January 27, 2011
Are U.S. Ethanol Producers Profitable?
Ethanol consumption in the United States has been rising exponentially for more than a decade. You might think then that U.S. ethanol producers are making money hand over fist. But are they?
At first glance, you would certainly think so, thanks to the especially generous assistance they've received from the U.S. federal government over that time. That assistance has come in the following forms:
- The government mandates that their product, ethanol, be added to the gasoline used by the overwhelming majority of motor vehicles in the United States. In 2011, the federal government will require oil companies to use over 12 billion gallons of ethanol, which will rise to 15 billion gallons in 2015 and 36 billion gallons per year in 2022.
- Their production costs are very generously subsidized. U.S. ethanol producers receive a tax credit of 45 cent per gallon for the fuel ethanol they produce. And that doesn't include the subsidies received by the agricultural interests for producing the crops, such as corn, that are used in domestic ethanol production.
- They are protected from international competition with foreign-based ethanol producers who are capable of producing ethanol more economically than U.S. producers through tariffs imposed by the U.S. government. The tariff adds 54 cents to the cost of each gallon of fuel ethanol that is be imported to the United States and sold to U.S. consumers.
Cole Gustafson, a biofuels economist at North Dakota State University, wondered just how profitable U.S. ethanol producers are. In doing that, he generated the following chart which estimates how profitable U.S.-based ethanol producers were throughout the years of 2008 and 2009:
Gustafson concludes that the fuel ethanol production industry is "close to operating breakeven." Note that "close to operating breakeven" really means "nearly or occasionally profitable."
But clearly, it isn't. Not really. After all, it takes the federal government raising the price of the fuel ethanol produced by non-U.S. producers by 54 cents per gallon and a gift from taxpayers to the tune of 45 cents per gallon to get U.S. ethanol producers "close to operating breakeven."
In 2011, that means that U.S. taxpayers will be required to give U.S. ethanol producers some 5.4 billion dollars, or if we assume there are 118 million households in the U.S., roughly $45.76 per household.
As an alternative measure, if we assume the annual burden of federal spending is $31,000 per household, eliminating the $5.4 billion in subsidies for ethanol producers would be the equivalent of freeing 174,193 American households entirely from the burden of the federal government's spending in 2011.
But then, it gets better. Because fuel ethanol could be obtained more cheaply, if the tariff on imported fuel ethanol were also eliminated, a total savings of $6.48 billion or $54.92 per household would be the result for American consumers for the 12 billion gallons of ethanol that the EPA will require to be used in the U.S. in 2011.
Those, of course, are all savings that could then be put toward more productive uses that would only help to enhance the United States' competitiveness in the world, rather than mandating that the nation's valuable resources be mired down in wasteful activities.
Sources
Environmental Protection Agency. EPA Finalizes 2011 Renewable Fuel Standards. November 2010. Accessed 24 January 2011.
Doggett, Tom and Abbott, Charles. Senate votes to extend ethanol subsidy for 2011. Reuters. 15 December 2010.
Gustafson, Cole. New Energy Economics: Are Ethanol Producers Making Money Now?. NDSU Agriculture Communication. Accessed 24 January 2011.
Rudolf, John Collins. End Ethanol Subsidies, Senators Say. New York Times' Green Blog. 30 November 2010.
Wednesday, January 26, 2011
A Visual Guide for 2011's Federal Spending Debate
If you want to quickly see how President Barack Obama and the Congressional Democrats' federal government spending proposal for 2011 stacks up against what Congressional Republicans have in mind, shown against a background illustrating the trend in U.S. federal government spending since 1967, here you go!
References
1 Obama, Barack. The State of the Union 2011: Winning the Future. White House. 25 January 2011.
2 Sonmez, Felicia and Kane, Paul. House Votes to Cut Spending to 2008 Levels. Washington Post. 25 January 2011, 6:25 PM.
3 Independent Institute. Aim at the Zero Deficit Line. 13 January 2011.
4 Political Calculations. How Much Federal Spending Can Americans Afford? 7 December 2010.
Tuesday, January 25, 2011
Booming Ethanol Consumption in the U.S.
What happens to the amount of ethanol consumed by Americans when the federal government simultaneously mandates that an ever-increasing percentage of ethanol be added to gasoline while also subsidizing its production?
Well, perhaps unsurprisingly, what you get is what you see in the chart below happens:
The dividing line is 1993, following the Energy Policy Act of 1992, which required specified car fleets to purchase alternative fuel vehicles capable of operating with E-85, an 85%/15% blend of ethanol and gasoline. In addition, the Clean Air Act amendments of 1990 required the wintertime use of ethanol in 39 major metropolitan areas and full-year use in 9 others that had not satisfied the Environmental Protection Agency's imposed standards for carbon monoxide.
After that, it was off to the races for the ethanol-government industrial complex! Simply projecting a straight line from the trend between 1981 and 1993 would place 2010's ethanol consumption level below 5,000 thousand barrels per month. Instead, thanks to the federal government's subsidies and mandates benefiting ethanol producers, it has risen to be over 25,000 thousand barrels per month.
Data Sources
U.S. Energy Information Agency. Fuel Ethanol Overview. Accessed 24 January 2011.
U.S. Energy Information Agency. Energy Timelines - Ethanol. Accessed 24 January 2011.
Monday, January 24, 2011
MONETARY HISTORY CALENDAR - January 24-30
JANUARY 24
1939 – STATEMENT MADE BY ROBERT H. HEMPHILL, CREDIT MANAGER OF THE FEDERAL RESERVE BANK OF ATLANTA
"We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied...”
JANUARY 27
2010 — DEATH OF HOWARD ZINN, HISTORIAN
"The challenge remains. On the other side are formidable forces: money, political power, the major media. On our side are the people of the world and a power greater than money or weapons: the truth. Truth has a power of its own. Art has a power of its own. That age-old lesson – that everything we do matters – is the meaning of the people’s struggle here in the United States and everywhere. A poem can inspire a movement. A pamphlet can spark a revolution. Civil disobedience can arouse people and provoke us to think, when we organize with one another, when we get involved, when we stand up and speak out together, we can create a power no government can suppress. We live in a beautiful country. But people who have no respect for human life, freedom, or justice have taken it over. It is now up to all of us to take it back."
JANUARY 29
1737 -- BIRTH OF TOM PAINE, US REVOLUTIONARY
Commenting on the value of colonial-issued money, the “Continental”...
"Every stone in the Bridge, that has carried us over seems to have a claim upon our esteem. But this was a corner stone, and its usefulness cannot be forgotten."
1956 — DEATH OF H.L. MENCKEN, US JOURNALIST
"The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary."
JANUARY 30
1835 — ASSASSINATION ATTEMPT AGAINST US PRESIDENT ANDREW JACKSON
Three years earlier, Jackson called for an end to the Second National Bank of the United States by calling on Congress not to renew its charter. He vetoed a bill to renew the bank’s charter, saying the bank was guilty of fraud, corruption, controlling the money supply (expanding and contracting the supply of money to economically and politically benefit the bank) and because “beyond question...this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money.” Jackson ordered the US government to move its money out of the Second Bank. In response, the bank called in all its loans and ceased issuing new loans. An economic panic followed. In 1835, Richard Lawrence fired 2 guns at Jackson but both misfired. He claimed his assassination attempt was because, in part, "money would be more plenty.”
1882 — BIRTH OF PRESIDENT FRANKLIN D. ROOSEVELT
"the real truth is…that a financial element in the large centers has owned the government ever since the days of Andrew Jackson."
______________________________________________________
Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscibe or to comment on any entry, contact monetarycalendar@yahoo.com
For more information, visit http://www.afsc.net/economiccrisis.html
1939 – STATEMENT MADE BY ROBERT H. HEMPHILL, CREDIT MANAGER OF THE FEDERAL RESERVE BANK OF ATLANTA
"We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied...”
JANUARY 27
2010 — DEATH OF HOWARD ZINN, HISTORIAN
"The challenge remains. On the other side are formidable forces: money, political power, the major media. On our side are the people of the world and a power greater than money or weapons: the truth. Truth has a power of its own. Art has a power of its own. That age-old lesson – that everything we do matters – is the meaning of the people’s struggle here in the United States and everywhere. A poem can inspire a movement. A pamphlet can spark a revolution. Civil disobedience can arouse people and provoke us to think, when we organize with one another, when we get involved, when we stand up and speak out together, we can create a power no government can suppress. We live in a beautiful country. But people who have no respect for human life, freedom, or justice have taken it over. It is now up to all of us to take it back."
JANUARY 29
1737 -- BIRTH OF TOM PAINE, US REVOLUTIONARY
Commenting on the value of colonial-issued money, the “Continental”...
"Every stone in the Bridge, that has carried us over seems to have a claim upon our esteem. But this was a corner stone, and its usefulness cannot be forgotten."
1956 — DEATH OF H.L. MENCKEN, US JOURNALIST
"The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary."
JANUARY 30
1835 — ASSASSINATION ATTEMPT AGAINST US PRESIDENT ANDREW JACKSON
Three years earlier, Jackson called for an end to the Second National Bank of the United States by calling on Congress not to renew its charter. He vetoed a bill to renew the bank’s charter, saying the bank was guilty of fraud, corruption, controlling the money supply (expanding and contracting the supply of money to economically and politically benefit the bank) and because “beyond question...this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money.” Jackson ordered the US government to move its money out of the Second Bank. In response, the bank called in all its loans and ceased issuing new loans. An economic panic followed. In 1835, Richard Lawrence fired 2 guns at Jackson but both misfired. He claimed his assassination attempt was because, in part, "money would be more plenty.”
1882 — BIRTH OF PRESIDENT FRANKLIN D. ROOSEVELT
"the real truth is…that a financial element in the large centers has owned the government ever since the days of Andrew Jackson."
______________________________________________________
Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscibe or to comment on any entry, contact monetarycalendar@yahoo.com
For more information, visit http://www.afsc.net/economiccrisis.html
End Corporate Rule
Talk at Rally in Columbus, Ohio on Anniversary of Citizens United US Supreme Court decision, January 21, 2011
Ohioans Banner, Rally and March for Real Democracy on Citizens United Anniversary
END CORPORATE RULE
Ohio Actions on Anniversary of the Citizens United vs FEC Supreme Court decision
MEDIA coverage (Athens, Columbus, Cleveland and Akron)
Protesters: Real citizens’ names don’t end in ‘Inc.’
Athens News, Monday, January 24, 2011
http://www.athensnews.com/ohio/article-33042-protesters-real-citizensrs-names-donrst-end-in-lsincrs.html
Citizens United Still Dividing
Columbus Dispatch, January 21, 2011
http://www.dispatch.com/live/content/local_news/stories/2011/01/21/citizens-united-still-dividing.html?sid=101
Rush hour drivers see protest banner
WEWS TV, Cleveland, January 20, 2011
http://www.newsnet5.com/dpp/news/local_news/group-protests-during-morning-rush-hour
Pic of the Day: Protest Banners for Rush Hour
Cleveland Scene, January 20, 2011
http://www.clevescene.com/scene-and-heard/archives/2011/01/20/pic-of-the-day-protest-banners-for-rush-hour&cb=e1c30c2a7aa1ca4bc8ecbe98ac90921e&sort=desc#readerComments
Election Forum
Akron Beacon Journal, January 17, 2011
http://nl.newsbank.com/nl-search/we/Archives?p_product=AK&p_theme=ak&p_action=search&p_maxdocs=200&s_site=ohio&s_trackval=AK&s_search_type=keyword&p_text_search-0=greg%20AND%20coleridge&s_dispstring=greg%20coleridge%20AND%20date(all)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no
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PHOTOS (Cleveland highway banners and Columbus march)
http://www.facebook.com/photo.php?fbid=10100382982746425&set=a.10100380736093735.2993558.12410011#!/media/set/?set=t.100001055953397
[please send additional photos to gcoleridge@afsc.org. We’ll add them to the website]
Ohio Actions on Anniversary of the Citizens United vs FEC Supreme Court decision
MEDIA coverage (Athens, Columbus, Cleveland and Akron)
Protesters: Real citizens’ names don’t end in ‘Inc.’
Athens News, Monday, January 24, 2011
http://www.athensnews.com/ohio/article-33042-protesters-real-citizensrs-names-donrst-end-in-lsincrs.html
Citizens United Still Dividing
Columbus Dispatch, January 21, 2011
http://www.dispatch.com/live/content/local_news/stories/2011/01/21/citizens-united-still-dividing.html?sid=101
Rush hour drivers see protest banner
WEWS TV, Cleveland, January 20, 2011
http://www.newsnet5.com/dpp/news/local_news/group-protests-during-morning-rush-hour
Pic of the Day: Protest Banners for Rush Hour
Cleveland Scene, January 20, 2011
http://www.clevescene.com/scene-and-heard/archives/2011/01/20/pic-of-the-day-protest-banners-for-rush-hour&cb=e1c30c2a7aa1ca4bc8ecbe98ac90921e&sort=desc#readerComments
Election Forum
Akron Beacon Journal, January 17, 2011
http://nl.newsbank.com/nl-search/we/Archives?p_product=AK&p_theme=ak&p_action=search&p_maxdocs=200&s_site=ohio&s_trackval=AK&s_search_type=keyword&p_text_search-0=greg%20AND%20coleridge&s_dispstring=greg%20coleridge%20AND%20date(all)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no
---------
PHOTOS (Cleveland highway banners and Columbus march)
http://www.facebook.com/photo.php?fbid=10100382982746425&set=a.10100380736093735.2993558.12410011#!/media/set/?set=t.100001055953397
[please send additional photos to gcoleridge@afsc.org. We’ll add them to the website]
Friday, January 21, 2011
Time for a Correction
As we write this at 12:00 PM Eastern Standard Time in the U.S., the S&P 500 is up a bit over three points from its previous day's closing value of 1,280.26, and has been up most of the morning. The market has been performing largely as expected over the past several months, rising 100 points in a very orderly fashion since the end of November 2010. And it's a really nice day outside, so we were going to spend some time there.
And yet, Barry Ritholtz's Spidey Sense is tingling (Why Cash Is King):
We think he's right. Here's how we see it.
In December 2010, our indicator of distress in the stock market, the price-dividend growth ratio, spiked:
It has since backed off, however a spike in the price dividend growth ratio is well correlated with short-term troughs in stock prices. Here are the updated statistics we have for that:
| Coincidence of Price Dividend Growth Rate Spikes with Market Troughs | ||
|---|---|---|
| Data Item | Number of Occurrences | Percentage of Total |
| Total Number of Spikes | 323 | 100.0% |
| Number of Spikes Exactly Coinciding with Trough | 78 | 24.1% |
| Number of Spikes Within One Month of Trough | 192 | 59.4% |
| Number of Spikes Within Two Months of Trough | 263 | 81.4% |
Since January 1871, whenever the price-dividend ratio has spiked in a given month, stock prices passed through a trough (a short term bottom) 24.1% of the time during the same month as the spike, 59.4% of the time within one month of the spike and 81.4% of the time within two months of a spike.
Because there is no trough in average monthly stock prices in the months leading up to December 2010, that correlation suggests that there is a very high likelihood of one occurring by the end of February 2011.
Meanwhile, we don't see any significant deterioration in the fundamentals underlying today's stock price valuations, which indicates to us that the market will soon go through a short term correction, with stock prices rebounding quickly afterward.
Consequently, we view today's upward movement in stock prices as a selling opportunity. We would expect a buying opportunity to follow in the near future.
And since we missed out on enjoying Friday to produce this post, we'll take Monday off and see you on Tuesday!
What If the Largest Countries Had the Biggest Populations?
Strange Maps' Frank Jacobs sets the stage:
What if the world were rearranged so that the inhabitants of the country with the largest population would move to the country with the largest area? And the second-largest population would migrate to the second-largest country, and so on?
Here's the result:
Oddly enough, the people of four countries wouldn't have to pull up stakes and move if the world was reorganized this way: Brazil, Ireland, the United States and Yemen.
Thursday, January 20, 2011
Ohioans Demand: End Corporate Rule on Citizens United Anniversary
Today and tomorrow, Ohioans across the state are marking the first anniversary of the Citizens United vs. FEC Supreme Court decision with educational events and actions demanding an End to Corporate Rule.
Events are taking place in Akron, Athens, Cleveland, Columbus and Wilmington.
Above are photos showing banners stretched across 2 bridges during morning rush hour heading in to downtown Cleveland. More than 20,000 cars passed. A Cleveland TV station and news photographer attended — which hopefully will result in further publicity.
Tonight, a Caring Citizens Freedom Rally will take place in Wilmington.
http://movetoamend.org/events/wilmington-oh-caring-citizens-freedom-rally
Also tonight, a community forum is scheduled in Akron.
http://movetoamend.org/events/akron-oh-we-people-not-we-corporations
Tomorrow, on the one year anniversary, a noon rally in Columbus takes places followed by a march to the statehouse. (Dress warmly!)
http://movetoamend.org/events/columbus-oh-end-corporate-rule-rally-and-march
Also in Athens, a 2 pm rally sponsored by Ohio University students and community activists is slated for the Athens County Community Courthouse. For more information, contact John Howell at howell@frognet.net.
Please consider attending the event/action closest to you...or one that may not be so close but sounds interesting!
Check MovetoAmendOhio.org for the latest updates after tomorrow.
The Ohio events are a portion of more than 100 local activities across the country.
In Washington, D.C., there will be a rally tomorrow in front of the U.S. Capitol, located across from the U.S. Supreme Court, followed by a delivery to Congress of over 700,000 petition signatures calling for a constitutional amendment to overturn Citizens United. A “For the People” summit, focused on the harmful effects of the decision and efforts to overturn it, will take place immediately after.
These events are part of a nationwide effort led by Move To Amend, Backbone Campaign, Public Citizen, and other national groups, to raise awareness of the corrupting influence of corporate money in politics and to organize people to mobilize support for a constitutional amendment to reverse the Citizens United decision and, in the case of Move to Amend, end all corporate constitutional rights.
We Were Wrong
Specifically, we were wrong when we speculated back on 29 November 2010 that the trend in new jobless claims that has existed since 21 November 2009 might be breaking down.
At the time, we were optimistic that the sudden decline in the number of weekly jobless claims that coincided with the first week that employers would have been able to alter their employee staffing and retention plans following the U.S. election results of 2 November 2010.
Using our "control chart" method of analyzing new jobless claims data, we would have recognized that to be the case if the weekly number of jobless claims had moved and stayed below the statistically-determined lower "control limit" line.
Instead, the data in subsequent weeks continued to fall within the boundaries of the statistical limits defined by the trend we've observed since November 2009, when the introduction of HR 3962, the legislative precursor of the Patient Protection and Affordable Care Act, derailed the then rapidly improving trend in the rate of layoffs in the U.S. as employers reacted to the increased likelihood of having higher costs imposed upon their businesses by the proposed health care reform law going forward.
What we find then is that the weekly number of new jobless claims are continuing to follow a slow, but positive downward trend, with the variation we observe being the result of what we would consider to be common causes - the kind of variation that we would likely see occurring naturally as employers respond to a variety of typical daily business events, such as weather conditions. These kinds of events may have a small impact from week to week, but not a large enough impact that can significantly affect an overall trend.
As for the overall trend that we do observe, the average rate at which the number of new unemployment insurance claims are being filed is falling is approximately 763 per week, which means that from the initial estimate of 404,000 new jobless claims that were filed this week, it will take an additional 110 weeks, or 2.1 years, for the amount of weekly new unemployment insurance claim filings claims to equal the average 319,711 per week that was typical for the U.S. economy prior to the 2007 recession.
That's a long time before the number of layoffs, the events that directly lead to the new unemployment insurance claim filings that the government tracks, would go back to levels that are consistent with a comparatively healthy U.S. economy.
Wednesday, January 19, 2011
Why Are Americans Driving Less?
The Associated Press thinks it's because gas prices are rising at the pump and because of bad weather:
Americans are driving less, with the holidays behind them and gasoline at two-year highs.
Gas costs around $3.10 a gallon, the highest price since mid-October 2008. Americans usually drive less in the winter, and recent bad weather across the country was further incentive to stay home. And money needs to go towards paying off holiday credit card bills.
But the AP seems to think that despite the views of an expert who, we couldn't help but notice, was the only named expert quoted in their entire article. Oddly enough, he doesn't seem to think that bad weather can be fingered as a culprit in what's behind what's driving Americans off the road, but is instead pointing the finger at low demand:
Drivers are "pulling back on gas right now but you can't tell whether it's weather-related," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. "Unless you're in Boca Raton, Fla., or San Diego, you're seeing pretty sleepy midwinter demand."
We'll save you the trouble of reading the rest of the article to see if the AP ever bothered to back up their claim that bad weather was responsible for Americans driving less, because they didn't bother to do so. But that raises a good question: how has the demand for gasoline changed over time?
To find out, we've updated our chart tracking the approximate number of gallons Americans consume in oil products every day with the most recently available data which extends through October 2010 as of this writing.
What we see is that compared to the long term average of 2.56 equivalent gallons of oil products consumed per day for each U.S. resident, since late 2008, Americans are consuming an average of approximately 2.3 of oil products per person. That's approximately a 10% decline.
Which turns out to be something that even the Associated Press has noticed! In an article published in mid-December 2010, the AP reported that:
Americans are burning an average of 8.2 million barrels — 344 million gallons — of gasoline per day in 2010, a figure that excludes the ethanol blended into gasoline. That's 8 percent less than at the 2006 peak, according to government data.
Which, the AP reports, has made environmentalists very, very happy:
Environmentalists are looking at the trend with a mixture of disbelief and delight. A decade ago they thought demand would continue to grow 1-2 percent a year far into the future.
"Now you look and, wow, we've actually bent the curve," says Roland Hwang, transportation director at the Natural Resources Defense Council.
So could the AP in January 2011 be right about the price of oil having something to do with that?
As it happens, the average price of gasoline in the U.S. peaked during the summer of 2008 over $4 per gallon, when Americans were consuming more than the long term average of 2.56 gallons per day before falling to $1.75 per gallon by January 2009, before recovering and somewhat stabilizing at $2.75 per gallon through much of 2010. Prices began slowly rising again in October 2010 and are now over $3 per gallon in much of the nation.
But through most of those gyrations in the price per gallon of gas over the last few years, individuals Americans appear to have come to settle on consuming an average of 2.3 gallons of oil products per day. And from what we can tell, the price of oil only seems to be a minor factor affecting American oil consumption patterns - it has some effect, but not the effect the AP would have it claim. Especially if we go back and look how stable oil consumption has been in recent years (or at least up to 2008) with respect to how volatile gasoline prices have been over that time.
We do however have a more likely culprit for why Americans are consuming 8% less oil by the AP's measure which excludes added ethanol. Here is a chart from the U.S. Bureau of Labor Statistics indicating the percentage of American workers who are being counted as either unemployed or underemployed (the U-6 measure of unemployment) from January 2007 through December 2010.
What we see is that the percentage of unemployed and underemployed Americans has doubled from an annual average of 8.2% in 2006, when U.S. oil consumption peaked, to an annual average of 16.8% for 2010. Or rather, an increase of 8.6%.
We then observe that a sudden increase in the total unemployment and underemployment rate of 8.6% directly coincides with the period in which an 8% decrease in the actual amount of oil per person being consumed in the United States occurred.
That's because Americans who lost their jobs or who have had to accept employment at lower levels during the last few years are pretty unlikely to be out consuming the same levels of oil that they would if they had jobs or were working in jobs that pay what they are capable of earning in a healthy economy.
And that would seem to be the real reason why the environmentalists of the National Resources Defense Council are so unbelievably delighted. To them, that's a real unexpected success!
Elsewhere
Jim Hamilton quantifies the effect of rising gas prices on U.S. consumer sentiment.
Sources
Associated Press. Pump prices eyed as reason Americans driving less. 16 January 2011.
Associated Press. US Gas Demand Should Fall for Good After '06 Peak. 20 December 2010.
U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey. Table A-15. Alternative Measures of Labor Underutilization. U-6 Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers. Accessed 18 January 2011.
U.S. Energy Information Agency. U.S. Finished Petroleum Products Supplied (thousands of barrels per day). Accessed 18 January 2011.
U.S. Energy Information Agency. Weekly U.S. All Grades All Formulations Retail Gasoline Prices. Accessed 18 January 2010.
U.S. Census Bureau. Monthly Population Estimate, Resident Population. Accessed 18 January 2011.
Hansen, Ole S. The Economic Impact of Higher Oil Prices. Trading Floor. 17 January 2011.
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