Why America is a bank-owned state

Al Jazeera - 12 Jun, 2009

Samah El-Shahat, Al Jazeera's resident economist, will be writing a regular column analysing key elements that have contributed to the global financial downturn and its impact across the world.

In my last column I introduced the idea that America's handling of the financial crisis, and in particular the way it has refused to deal with the banks, is more in keeping with how an "emerging" economy might behave and act.

So this week, I will say that America has become a bank-owned state, allowing its banking oligarchs to suffocate the economy so they can survive at any price.

As a development economist, what always made developing and poorer countries stand out was the level of inequality between individuals.

That is, the difference between how a small percentage, usually the country's capitalists, oligarchs and those close to people in power, were overdosing on wealth as the rest struggled to make ends meet, or even survive.

Everyone in the country knew it, from the poorest farmer on the street to the richest oligarch. It was in your face, unashamed, unabated and highly discomforting.

Discomforting because it made all of us who witnessed it feel crippled at the power of the status quo, ruing the unfairness of life when merit always comes last, relative to who you know and who you are.

We took some relief from believing that this only happens because these countries were authoritarian, and not so accountable to their electorate.

Yet, if we look closer at the leading capitalist economies such as those of America and the UK, we will find that inequity raises its ugly head equally, and as starkly, when you look at the numbers.

Kept in the dark

Here too, a small percentage have the lion's share of national income in their hands, while the rest of the population experience stagnant incomes, all within a democratic, rather than an authoritarian, political regime.

Yet the real difference here is that, away from the numbers, the wider population and the electorate were mostly kept in the dark about this.

In 2006, the top one per cent of American households' share of all disposable income amounted to almost a quarter of all households' disposable income, according to Robert Hunter Wade, professor of political economy at the London School of Economics.

In crude terms, one per cent of the population have a quarter of all the wealth.

Moreover, Wade found the average income of the bottom 90 per cent of the population remained almost stagnant after 1980, although consumption kept rising thanks to the build-up of private debt.

This means that 90 per cent of the American economy were financing their American dream on debt.

In the UK, Wade found the pay gap between the highest and average earners had widened alarmingly.

Back in 1989, chief executives pocketed 17 times more than average earners.

By 2007, those same "captains of industry" were earning 75 times more than the average worker.

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The U.S. and the U.K. will both default on their debt by the end of summer

As anticipated by LEAP/E2020 as early as October 2008, on the eve of summer 2009, the question of the US and UK capacity to finance their unbridled public deficits has become the central question of international debates, thus paving the way for these two countries to default on their debt by the end of this summer.

(1) At this stage of the global systemic crisis' process of development, contrary to the dominant political and media stance today, the LEAP/E2020 team does not foresee any economic upsurge after summer 2009 (nor in the following 12 months)

(2) On the contrary, because the origins of the crisis remain unaddressed, we estimate that the summer 2009 will be marked by the converging of three very destructive rogue waves.

(3) illustrating the aggravation of the crisis and entailing major upheaval by September/October 2009. As always since this crisis started, each region of the world will be affected neither at the same moment, nor in the same way

(4) However, according to our researchers, all of them will be concerned by a significant deterioration in their situation by the end of summer 2009

This evolution is likely to catch large numbers of economic and financial players on the wrong foot who decided to believe in today's mainstream media operation of "euphorisation".

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9/11 FEMA videographer at Ground Zero goes public

As official videographer for the U.S. government, Kurt Sonnenfeld was detailed to Ground Zero on September 11, 2001, where he spent one month filming 29 tapes: “What I saw at certain moments and in certain places … is very disturbing!” He never handed them over to the authorities and has been persecuted ever since. Kurt Sonnenfeld lives in exile in Argentina, where he wrote « El Perseguido » (the persecuted). His recently-published book tells the story of his unending nightmare and drives another nail into the coffin of the government's account of the 9/11 events. Below is an exclusive interview by Voltairenet.  The book's ISBN is 978-950-49-2057-1 and it seems to be available (Spanish only) here: http://www.libreriapaidos.com/libros/1/950492057.asp . The official website for the book is here: http://elperseguido.wordpress.com

    “It was very odd to me when I learned that FEMA and several other federal agencies had already moved into position at their command center at Pier 92 on September 10th, one day before the attacks.”
    — Kurt Sonnenfeld, former Director of Broadcast Operations for FEMA's National Emergency Response Team

Introduction

Kurt Sonnenfeld graduated from the University of Colorado (USA) with studies in International Affairs and Economics, as well as in Literature and Philosophy. He worked for the United States government as official videographer and served as Director of Broadcast Operations for the Federal Emergency Management Agency (FEMA)'s National Emergency Response Team. Additionally, Kurt Sonnenfeld was contracted by several other governmental agencies and programs for classified and “sensitive” operations at military and scientific installations throughout the United States.

On September 11, 2001, the area known as “Ground Zero” was sealed from the public eye. Sonnenfeld, however, was given unrestricted access enabling him to document for the investigation (that never took place) and provide some “sanitized” pool video to virtually every news network in the world. The tapes that reveal some of the anomalies which he discovered at Ground Zero are still in his possession.

Accused of a crime that did not occur in a manifest frame-up scenario, Kurt Sonnenfeld has been persecuted across continents. After several years of fear, injustice and isolation, he has decided to take a public stand against the Government's official story and is prepared to submit his material to the close scrutiny of reliable experts.

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SCOTUS allows waste dumping in Alaska lake

In a major setback for the people and wildlife of southern Alaska, the Supreme Court ruled 6 to 3 today that the Coeur d'Alene Mines Corporation can legally under the Clean Water Act dump more than 4.5 million tons of “slurry”—a mining waste byproduct that's a mixture of crushed rock and water—in the Lower Slate Lake in Alaska's Tongass National Forest. The ruling overturned a May 2007 decision by a lower appeals court denying Coeur d'Alene's permit, which applies to its Kensington Gold Mine north of Juneau, Alaska's capital city.

But isn't the Clean Water Act supposed to protect our lakes and rivers and other water sources? Well, yes. For nearly 30 years, the CWA expressly prohibited pumping harmful waste materials into waters, allowing only "fill material" for building structures like seawalls and levees to be dumped, and only then with permits from the Army Corps of Engineers. But in 2002, the Bush Administration tweaked the definition of "fill" to include dangerous waste products with an EPA memo that the public never saw. The memo's expansion of the "fill" definition permitted harmful slurry dumping into lakes and other water sources. In making its decision today, the Supreme Court relied on this memo.

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Seed sales spring up

...This spring, sales at Landreth are “up 75 percent over last year,” said Barbara Melera, a former venture capitalist who bought the company in 2003. Moving between the shelves of bulk seed containers in her warehouse in New Freedom, Pa., she pointed out varieties that are almost sold out: Detroit Dark Red beets, Danvers Half Long carrots, Bloomsdale Long Standing spinach. She had no kale or a popular beet variety, Lutz. “We have a modest amount of beans left.

Seed producers and merchants across the United States are reporting the same phenomenon of crazy demand and even some shortages, especially of staples like beans, potatoes and lettuces. Sales of seed packets picked up last year and have grown significantly again this season, which runs from January to June.

Industry observers attribute the boost in sales to a concern for food safety following outbreaks of E. coli and salmonella poisonings and a desire by consumers to be a part of the local food movement. Michelle Obama's new vegetable garden at the White House may also be inspiring people, they said.

But the primary reasons, they speculate, are the recession, income loss and the need for people to lower their grocery bills by growing their own.

In late April, Greg Frandano, a 35-year-old bartender, ripped up part of his lawn to extend his vegetable garden in the rear yard of his brick Cape Cod in Falls Church, Va. “We hardly buy any produce when things are cooking,” he said, as he worked composted leaves into the clay soil before planting. He started the garden four years ago and has enlarged it every spring since to feed his family of four.

At four community gardens in Reston, Va., coordinator Deana Demichelis said the wait list for 250 plots has climbed to 140 names, a backlog of about three years. “New gardeners are begging to get in because of the recession and the fact they can save money growing their own food,” she said. ...

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