Category: #OccupyWallStreet

‘The pitchforks are coming’

~ susie ~ 7 Comments

Torches & Pitchforks

One of my friends just sent me this piece from Politico written by Nick Hanauer, a .01%er, “to my fellow zillionaires”:

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.
***
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.

Here we go again

~ susie ~ 1 Comment

Auto Loans Rock Hill SC 1st Capital Car Title Loans

Does this sound familiar? I thought it would!

WASHINGTON—Intense competition in a slow-growth, low-interest-rate environment is continuing to fuel riskier lending by banks, a top U.S. regulator warned in a report released on Wednesday.

The Office of the Comptroller of the Currency highlighted two areas in particular where banks took on more risk in pursuit of profits: high-yielding loans issued to more speculative borrowers and indirect auto loans, in which banks provide financing through a car dealer. Banks also are easing lending standards in commercial loans, the report said.

The report cites “erosion in underwriting standards” for leveraged loans and said banks have taken on other kinds of risks, such as offering longer terms, in the area of indirect auto lending.

“The OCC sees signs that credit risk is now building after a period of improving credit quality and problem loan cleanup,” according to the report, which looked at bank data during the second half of 2013.

That buildup comes despite an effort by regulators to clamp down on so-called leveraged lending by warning banks against funding debt-laden deals. Leveraged-loan issuance reached a record in 2013, the report said, noting that the largest OCC-supervised banks reported the highest share of loosening underwriting standards among various size groups.

Too bad

~ susie ~ 1 Comment

I really enjoyed the political coverage at Pando:

Over the weekend, Pando fired two of its hardest-hitting editorial staffers, David Sirota and Ted Rall, both nationally syndicated veteran journalists. Sirota recently broke a big story about Chris Christie’s administration awarding pension contracts to hedge funds, private equity groups, and venture capital firms whose employees to donated to the governor’s reelection.

In February, Pando raised $1.2 million in financing from some powerful venture capitalists, including Accel Partners and Founders Fund, both of which invested in prior funding rounds.

Sirota’s scoop about Chris Christie breaking anti-corruption laws was shared and liked 10,000 times on Facebook. According to Quantcast, Pando is only pulling in 859,000 monthly uniques globally and 579,000 uniques in the U.S.

An anonymous source alerted Valleywag to the firings. Neither Rall nor Sirota would comment on why they were fired. But there was a consensus among sources that the decision was not related to budgetary concerns. “It was completely from Sarah Lacy. Paul was the executioner. Apparently it came from complaints from investors in Pando,” according to one Valleywag source. “Sarah basically said there was not enough tech and too much politics.”

I am not certain about the terms of their departure, but I heard Rall was fired without severance but will be compensated through the pay period.

In response to questions from Valleywag, Sirota said: “I had an amazing time working with Pando to break huge stories and never once received any negative feedback from my editors, including when they let me go.”

Rall is a popular political cartoonist. His tenure at Pando lasted less than a month. Within those few weeks, he broke the story that some Uber drivers made less than minimum wage contrary to the company’s claims.

If you have any doubt there’s a class war, read this

~ susie ~ 2 Comments

With Former White House Advisor Robert Gibbs @ President's Circle Conference

I wish I could say I was surprised, but after all, they did work for the president who has done more to cripple public education than even George Bush:

Teachers unions are girding for a tough fight to defend tenure laws against a coming blitz of lawsuits — and an all-out public relations campaign led by former aides to President Barack Obama.

The Incite Agency, founded by former White House press secretary Robert Gibbs and former Obama campaign spokesman Ben LaBolt, will lead a national public relations drive to support a series of lawsuits aimed at challenging tenure, seniority and other job protections that teachers unions have defended ferociously. LaBolt and another former Obama aide, Jon Jones — the first digital strategist of the 2008 campaign — will take the lead role in the public relations initiative.

The involvement of such high-profile Obama alumni highlights the sharp schism within the Democratic Party over education reform.

Teachers unions have long counted on Democrats as their most loyal allies. But in the past decade, more and more big-name Democrats have split with the unions to support charter schools, tenure reform and accountability measures that hold teachers responsible for raising students’ scores on standardized tests.

The national legal campaign is being organized by Campbell Brown, a former CNN anchor who told POLITICO that she has spent hundreds of thousands of dollars in recent months to get the effort off the ground. She intends to start with a lawsuit in New York, to be filed within the next few weeks, and follow up with similar cases around the country. Her plans for the New York lawsuit were first reported by The Wall Street Journal.

Brown’s campaign will be modeled on the recent Vergara v. California trial, which dealt a major blow to teachers unions. In that case, a judge earlier this month struck down California’s tenure system and other job protections embedded in state law, ruling that they deprived students of their constitutional right to a quality education because they shielded even the most incompetent teachers from dismissal. Teachers unions have said they will appeal.

The Vergara trial cost the plaintiffs’ team several million dollars, most of that bankrolled by Silicon Valley entrepreneur Dave Welch.

An embarrassment of riches

~ susie ~ 1 Comment

Crown-jewels / Lopezia coronata

So much good stuff in the Sideshow, I hardly know where to begin. Here’s an appetizer!

Lina Khan in The Washington Monthly, “Thrown Out of Court: How corporations became people you can’t sue […]All this may seem like an archetypical story of our times, combining corporate misconduct, cyber-crime, and high-stakes litigation. But for those who follow the cutting edge of corporate law, a central part of this saga is almost antiquarian: the part where Target must actually face its accusers in court and the public gets to know what went awry and whether justice gets done. Two recent U.S. Supreme Court rulings – AT&T Mobility v. Concepcion and American Express v. Italian Colors – have deeply undercut these centuries-old public rights, by empowering businesses to avoid any threat of private lawsuits or class actions. The decisions culminate a thirty-year trend during which the judiciary, including initially some prominent liberal jurists, has moved to eliminate courts as a means for ordinary Americans to uphold their rights against companies. The result is a world where corporations can evade accountability and effectively skirt swaths of law, pushing their growing power over their consumers and employees past a tipping point.” Khan discussed the article with Sam Seder on The Majority Report.

Another secret trade agreement

~ susie ~ 1 Comment

This one, for the international banking community. Geeze, I didn’t even know about this one! And they get to keep it secret for five years after they pass it?

The text of a 19-page, international trade agreement being drafted in secret was published by WikiLeaks on Thursday as the transparency group’s editor commemorated his two-year anniversary confined to the Ecuadorian Embassy in London.

Fifty countries around the globe have already signed on to the Trade in Service Agreement, or TISA, including the United States, Australia and the European Union. Despite vast international ties, however, details about the deal have been negotiated behind closed-doors and largely ignored by the press.

In a statement published by the group alongside the leaked draft this week, WikiLeaks said “proponents of TISA aim to further deregulate global financial services markets,” and have participated in “a significant anti-transparency manoeuvre” by working secretly on a deal that covers more than 68 percent of world trade in services, according to the Swiss National Center for Competence in Research.

The real scroungers

~ susie ~ 2 Comments

The BBC political shows are so much more interesting than ours, aren’t they?

Salma Yaqoob called Tory bigwig Iain Duncan Smith a “scrounger” on Thursday’sQuestion Time, attacking the secretary for works and pensions over austerity measures that have left “13 million Britons living below the poverty line”.

“I’m sitting next to Iain Duncan Smith who labels poor people as scroungers when you {IDS} claim £39 for a breakfast, like you can’t afford your own breakfast, and you live on your wife’s estate and have taken a million pounds of taxpayers’ money, that’s what I call scrounging,” the Birmingham chair of Stop the War and the former leader of the Respect party said.

“What a load of old nonsense,” replied the angered Tory, before dismissing his attacker with a wave of the hand. “I have never, ever labelled them as scroungers at all,” he said, shaking his head. He also denied that he had claimed the money for breakfast.

Earlier, Yaqoob had called Duncan-Smith “patronising” when he spoke about poverty.

“There are people in this country, 13 million people, who are now below the poverty line. People in one of the richest countries in the world face the indignity of relying on food banks,” she said.

“My full-time job is in mental health and I have seen myself how people have become suicidal. I have counselled people who have lost members of their family who did not want to go on, because they didn’t want to be a burden after having their support taken away. These are very, very real issues.

“We have this drive on people called ‘scroungers’ but half the people on welfare benefits are pensioners. Our pensioners are not scroungers. And 60% of people claiming benefits are in work, because their wages are not paying enough.

Oh, and here’s the receipt for the breakfast he insists he didn’t claim:

Pope Francis does it again

~ susie ~ 3 Comments

pope-francis2

Says out loud the things American politicians would never dare to say:

At a Vatican conference on ethical investments on Monday, the pope urged investors to put their money where their mouth is by choosing responsible lenders that focus on social good instead of profits. “It is important that ethics once again play its due part in the world of finance and that markets serve the interests of peoples and the common good of humanity,” Francis told the crowd.

“It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences,” he added.

Why is the pope saying this now? Francis’ pronouncements are not far from what he’s said previously, but now he’s taking a particularly active approach to promote ethical investing, and for good reason.

His comments come at the heels of a global increase in food prices, which many have attributed to financial market speculation. According to the United Nations Food and Agriculture World Food Price Index, food prices jumped up 2.6% in February and 2.5% in March before easing in April and May, interrupting a 17-month decline.

Living up to his moniker as “the people’s pope,” Francis said he was concerned about how these financial tactics would impact the weakest and most vulnerable. “Speculation on food prices is a scandal which seriously compromises access to food on the part of the poorest members of our human family,” the pope said during the two-day symposium.

What’s the message of a $549K watch?

~ susie ~ 2 Comments

gf05_pt_0

Barry Ritzhold:

But it wasn’t a car or a diamond necklace or a house that made me realize that perhaps the ultra rich have become a bit tone deaf; it was a watch — or a “timepiece,” as the brochure describes them. In an advertisement in last week’s New York Times, I saw a picture of the Greubel Forsey GF05. As the picture showed, it’s a busy little number in platinum and black. A quick Google search revealed a selling price of $549,000.

I half expected to see a tagline that read “For when you need to tell the time, but you just can’t do it without spending the equivalent of 36 years of minimum wage salary.” A timepiece that costs almost triple the U.S.’s median existing-home price ($201,700) does seem a tad pricey to us peasants.

Not too long ago, in the latter days of the financial crisis and the early part of the slow and painful economic recovery, conspicuous consumption became a bit of an embarrassment. The world had sidled up to the abyss, peered over. That look into eternal darkness seems to have chided some of the wasteful spending of the 0.01 percent. Ultra-lux goods saw sales plummet. It almost seemed that people began to reassess their lives and priorities.

Just kidding, that was an image issue. The stock-market rally of almost 200 percent since then has emboldened the biggest of the big spenders to return to their profligate ways. And who can blame them, now that the Federal Reserve’s Flow of Funds has reported the total household net worth of the U.S. is now $81.8 trillion dollars.

That is a lot of expensive cars, houses and watches. We have money to burn, apparently — and we are.

What does the spending with reckless abandon actually mean? Are we back to business as usual in America in the midst of the fifth year of recovery since the crisis? Does frivolity with enormous sums of money represent the sort of mania we only see at bubble tops?

I have no idea. But it certainly makes me a bit nervous to see the very, very wealthy party like it’s 1999. Like the VIX, the Shiller cyclically adjusted price-earnings ratio and venture-capital investing, the spending habits of the 0.01 percent are a data series worth watching.