Yes! The Neolibs, Banksters & Wall Street Are Becoming Terrified Of Bernie's Momentum

Bernie Sanders has now become the next thing to Count Dracula to the scheisters of Wall Street and the Neloibs.

NO, it wasn't surprising to read in the WSJ yesterday that the Democrats on the Hill, feckless wusses that they are, refuse to support any of Bernie Sanders' proposals in their 2016 platform. These were Nancy Pelosi's own words, quoted: "We have no plans to include any tax increases in our platform!"  Oh yeah, Nancy?  Then what will you and the other Neolib Dems do when Bernie starts a campaign roll with twin wins in Iowa and New Hampshire then moves on to take SC, Nevada and other key states. Still gonna piss and moan about socialism?

But it isn't just the traitorous Dems, who now only give token support to the Middle Class, having abandoned the working class.  As long ago as ten years, Michael Tomasky observed ('Dems Fightin' Words' in The American Prospect) that the pussified, wussified Dems had lost the will to fight for the working class and even most of the middle class. He observed, accurately I believe - from what I have witnessed - that the Dems eschewed political point-making and "hard nosed", no-holds barred political partisanship sometime in the early 70s. They replaced it with discussing fact-based policy points, which appeal to "reason" and "temperance" but do little or nothing for core partisans. The very people Dems need to get out to the polls each mid-term election.

As he wrote:


Quote:
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Apart from judicial battles, the Democrats don't have much fight in them. --------------------------------------------------------------------------------

So it isn't really surprising now these Milquetoasts would all be lining up behind Hillary especially as they're all terrified of the Republicans' scare mongering about Sanders' socialism being a millstone round their miserable necks in the election. They should be so lucky!

But what is more obvious is how the Neoliberal and corporate press has come out against Bernie. Including the Washington Post, one of the most Neoliberal whore rags of all - ever since Phil Graham took it over back in the 80s. Recall Graham made profit more important than genuine investigative journalism,  such as evidenced in the Watergate era (with Bob Woodward and Carl Bernstein's work). So no wonder the WaPo has come out whining about Bernie "creating his own brand of fiction". No one should be surprised at the propagnda cant of these PR bootlickers for the Neoliberal State.

Then there are the WSJ nabobs like Burton Malkiel ('The Bernie Sanders' Attack on Stock Trades', Jan. 22), who have tried to tear down Bernie's plan to pay for free public college by imposing a 50 cents transaction tax on stock trades. Malkiel basically claims Sanders' plan would distort the capital markets making it more difficult for capital to flow and essentially creating a "hidden tax" to further undermine the economy. But as one WSJ letter writer already pointed out (today, p.A10), if  Malkiel was truly worried about reducing comparative advantage and creating societal distortions he need "look no further than the effect on markets of high speed trading".

As author Michael Lewis (of 'Big Short' and 'Flash Boys' fame) already pointed out,  these high frequency trades basically render the stock market a rigged game. The FT guys can literally make millions of  bucks in redemptions before Joe Schmoe can even get his hands on his cell phone to his mutual fund co. Look, these fuckers (and their apologists)  full well realize how many billions would be reaped via this tax each day given most of these SOBs now use flash trading to turn ten thousand trades in a few minutes with special algorithms and computers, see e.g.
http://brane-space.blogspot.com/2014/03/losing-in-stock-market-blame-flash.html

As the WSJ letter writer critic observed:

"If the exchanges and regulators clamped down on the 'flash boys' corrupting markets, the only domestic employment it affects would be their own. Mr. Sanders's income transfer is the right tax to levy.It would never affect the markets all the way out to our economic expansion and employment at Malkiel claims."

Apologists like Malkiel yap as if Sanders' proposal is revolutionary but it was offered as long ago as 1992 by William Greider in his book, 'Who Will Tell The People - The Betrayal of American Democracy'  and then some years later in Greider's book : One World Ready or Not - The Manic Logic of Global Capitalism,  Simon & Schuster,1996.

Among the proposals advanced in the latter book:

1.  Independently writing off, liquidating debt of poorer nations, e.g. as France has done in the case of Honduras' destruction by Hurricane Mitch.

2. Imposing transaction taxes on all capital that crosses a national border, whether electronically or other. Impose yearly In situ taxes on all capital  parked in a safe haven or country regarded as such. Fifty percent of all collected taxes to be earmarked for national health insurance plans to assist the uninsured, in the U.S..

3. Requiring all banks to have 100% reserves for deposits at all times, to prevent 'pyramid scheme' abominations like the 1997 hedge funds bailout. (Long Term Capital Management)

 Then there are the disinformationists and obfuscators like Megan McCardle of Bloomberg News ('Sanders' Health Plan Is Missing the Price Tag') who, using a series of ignoratio elenchi arguments, concludes that Sanders' plan would bust all future budgets if allowed to pass. The ignoratio elenchi argument, as we know, puts forward a preposterous premise and then draws irrelevant conclusions from it, hence the term "ignorance of the refutation". This is analogous to the misleading argument made by Burton Malkiel on Bernie's stock trading tax.

One of the irrelevant, bogus conclusions of McCardle is that single payer would only cost less if you make hospital staff "accept less pay". In fact, this is horse manure. The plan costs less because there is one single payer administrator - say much like CMS in Medicare- instead of hundreds of private insurers each taking their piece of the pie.   She also doesn't even factor in the fact that a "Medicare for all" system would not be 100 percent "free" in any case. Just like actual Medicare, it would not cover any dental expenses, or eye exams, glasses, and in addition would cover only 80 percent of actual treatment costs with the patient paying the other 20 percent. So all her numbers end up being inflated.

She also yaps about "raising money for single payer",  totally oblivious that it is already expected that NO private insurance exists to enhance those medical costs. Hence, one is already ab initio cutting out the private parasites' cuts! Sanders' $1.35 trillion a year estimate then, is predicated on removing $2 trillion in private premiums, costs. McCardle's arguments also betray ignoratio elenchi  overtones when she says "if you make health care absolutely free to patients and refuse to allow insurers to deny treatments then people are going to use more health  care"...and break the system. No, they won't because again, the single payer Sanders is advocating is not absolutely free, as I noted.  Because they are not absolutely free, patients will be more inclined to be circumspect in their use of health care than reckless.

But nothing tops the rhetorical hysteria of WSJ editorial writer, Allysia Finley from yesterday's Journal (p. A13) when she accused Bernie of resorting to "Orwellian speech" merely because he refused to accept the "big government" PR hit tag for his tax proposals, instead vowing to defend the American people against rising inequality. Finley evidently doesn't understand that if one chooses not to accept a disparaging label that doesn't mean one is resorting to Newspeak. If I decline to accept the trash tag "commie" or "libtard" that doesn't mean I am "Orwellian", but rather that I refuse to fall into a facile PR framing trap set by unscrupulous labelers

Finley also portrayed him as wanting to "overthrow the U.S. political and economic order". The histrionics were so palpable that one had to wonder what sort of meds she was on, or whether she OD'd on MJ candies - like Maureen Dowd did sometime last year. In fact, Bernie is not trying to "overthrow" anything other than the chains of false consciousness that ensnare too many Americans.

'False consciousness' is the term given to a false information system that's been absorbed in part or whole, osmotically or via direct mental ingestion, by the majority of a population. It has specific uses in our Corporatocracy to mislead a population about how things actually work, and also on the basic economic and other data which are used to formulate policies. I touched on a number of the inherent economic lies and disinformation ploys in my earlier blog:

http://brane-space.blogspot.com/2011/09/economic-lies-distortions-and.html

But realize these are just the tip of the iceberg.

For example, the effects of language and PR debasement of reality (the REAL Orwellian Newspeak!) extends to the whole political system which can best be described as one of legalized, corporate-fuelled bribery. While citizens do get to vote every two or four years, in reality it's only to choose their next set of Overseers, errr....Overclass masters. Once the votes are in, the true powers - the corporate ones- take over and direct (via their money and lobbyists) the real choices and possibilities. All Sanders is trying to do is to fracture this unholy nexus and liberate the public consciousness to choose its own best outcomes that favor the general welfare not the corporate (or military) welfare 

As for Finley's idiotic claims that Sanders is mistaken about our economy being rigged, I invited her to check out the examples in the link above as well as the increasing use of stock buybacks by corporations. Why the yen for corporate buy backs?  First they make management's stock options more valuable - so what better way to compensate the Street's honchos?  Secondly, they jack up PE ratios, thereby increasing stock share values. Strangely, as investing expert Jonathan Clements has noted, all this has selectively blinded investors to the lack of dividends.

Why? Why aren't the little guys more aware of how they're being shafted in a rigged system? Maybe for the same reason, as former trader Michael Lewis observed two years ago (CBS Early show to promote 'Flash Boys'), they're not paying attention to how flash trading is ripping them off via "millisecond" advantage and thereby gaining pennies on the dollar with each trade made. The FT'ers essentially gain those pennies (which add up to billions over time) by getting shares redeemed before you can via that slight micro-time advantage.

Why doesn't the SEC do anything to stop this baloney? According to Lewis, because once they leave the SEC they will be looking for jobs on the Street so don't want to alienate it with antagonistic regulations or judgments.  So don't look for the SEC honchos for any guidance or alerts to help you with navigating the swamps of Maul Street. You are literally on your own - with maybe this blog and a few others to try to provide some heads ups.

But will people pay attention, or will they submit to mind fucks by the likes of the WaPo, or the WSJ's Finley and Malkiel? Or other nefarious propagandizers? Only time will tell and the litmus test will emerge Monday with the Iowa caucus. An uncontested, unambiguous 'W' for Bernie Sanders will show there are still enough sentient Americans left to ward off the zombies and their spokepersons.

$26 Trillion In Wealth Added - But Almost All To The One Percent

The article 'The Asset Rich, Income Poor Economy' (WSJ, June 20, p. A13) was a shock and wake up call for any ordinary citizen hoping the economy will favor them at some point. The evidence, instead, is that the richest have continued to make out like bandidos while the rest of us suck salt.

Let's again get our terms straight here: "asset rich" means bountiful in terms of stock or mutual fund ownership, including dividends and capital gains arising therefrom. It also includes real estate, for example owned and then flipped, or owned for later profit at re-sale.  "Income" means basically what it implies, any and all income - say from labor (where wages have stagnated since 1973) or from bank savings interest. Since the Fed has kept interest rates near zero, the latter group has had to not only suck salt but sand as well.  Thus, "income poor".

Meanwhile, the stock owners are doing well, thanks to the Fed - including under Janet Yellin now - continuing the misplaced quantitative easing program. According to the article cited above:

"The Fed assures us that long term rates need not move higher - even with improving inflation dynamics, credit markets priced for perfection and stock prices at record levels."

Indeed, the stock market (DOW, specifically) is in serious bubble territory and I personally would take every last cent out if I saw it hit or surpass 17,000. It is just a matter of time before that bubble pops  from some external shock (e.g. oil prices skyrocket over Iraq) even if the Fed keeps up its QE crack infusions. Meanwhile, as the authors (Kevin Warsh and Stanley Druckenmiller) observe:

"The aggregate wealth of U.S. households, including stocks and real estate holdings, just hit a new high of $81.8 trillion. That's more than $26 trillion in wealth added since 2009. No wonder most on Wall Street applaud the Fed's balance sheet recovery strategy. It's great news for those households and businesses with large asset holdings, risk tolerances and easy access to credit."

And that group is precisely the 1 percent, against which Occupy Wall Street so vigorously protested a mere three years before. It is this group that is benefiting from the Federal Reserve's QE crack infusions, and which also has the "risk tolerance" by virtue of having the disposable income to sustain sudden market dives (and losses) which most of us lack. They also have the easy access to credit and often hold real estate as well as stocks. In addition, they are often the beneficiaries of flash trading so can buy and sell before the hoi polloi can even pick up a phone. Hence, they will make more money on any redemptions, even as they will be able to pick up cheaper stocks before the ordinary bloke can say 'buy'.

As the authors note the current conditions "provide little solace for families and small businesses that must rely on their income statements to pay the bills."

They also point out that "about half of American households don't own any stocks" -  but I'd say the aggregate stats are even less asset -based. That is,  perhaps 75 percent of the half that DO own stocks (as mutual funds) don't have the disposable income to cover losses. We saw that play out back in 2008 with the crash incepted by the housing meltdown and credit crisis.

The bottom line is the Fed is not stimulating the real economy but the speculative one. It is playing a dangerous game of feeding a giant asset bubble via cheap money that will also hurt the real, Main St. economy if and when it bursts. (The Bank of England has already recognized the danger which is why they plan to raise interest rates.)

The authors are thus correct when they state: "Asset wealth is sustainable only when it comes from earned success, not fiat. Wealth comes from strong, sustainable growth that turns a proper mix of labor, capital and know how into productivity..."

The danger of feeding asset wealth to the exclusion of income is that the speculative economy then makes the whole economy unstable. A critical tipping point has already been identified by none other than stats guru Nate Silver.   In his book, his book, The Signal and the Noise- Why So Many Predictions Fail But Some Don’t , he writes (p. 347):

"Of the eight times in which the S&P 500 has increased at a rate much faster than its historical average over a 5-year period , five cases were followed by a severe and notorious crash, such as the Great Depression and the Black Monday crash of 1987”.

Already we are well into this treacherous territory.

George P. Brockway, author of  The End of Economic Man’‘ has written that any given Bull market's purpose is to suck the savings and nest eggs from the ordinary investor and transfer it into the hands of the richest speculators who know the small fry will never be able to resist rapidly rising share prices.  The longer the Fed feeds the stock market to the exclusion of helping income-based people the closer we come to yet another re-enactment of the collapsing Bull.