imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Bazooka Economics

by Stephen Lendman Saturday, Aug. 04, 2012 at 8:59 PM
lendmanstephen@sbcglobal.net

class war

Bazooka Economics

by Stephen Lendman

Did he or didn't he? ECB president Mario Draghi promised "whatever it takes." Great expectations arose. August 2 was D-Day.

Fizzle followed sizzle. Bazooka plans stalled. More on Draghi's pronouncement below and what it means.

Europe's economy is broken. Monetary intervention solved nothing. Core problems fester and grow. Contagion spreads everywhere. Effective solutions are absent.

Bankers are prioritized over sound economics. Western policy makers march to the same drummer. Ordinary people suffer. Poverty, unemployment, and deprivation grow exponentially. Nothing ahead looks promising.

On August 2, Draghi spoke. Markets want instant gratification. Disappointment followed. Der Spiegel headlined "ECB Disappoints Investors with No Euro Action," saying:

Promises became hope and uncertainty. It doesn't matter what Draghi said. He can't deliver. At best he can delay an eventual day of reckoning. Unaddressed systemic rot draws it closer.

Draghi said "(t)he Governing Council....may undertake outright open market operations of a size adequate to reach its objective. We will consider further non-standard....measures....In the coming weeks, we will design the appropriate modalities for such policy measures."

Implementation takes time, he stressed. Markets "only adjust once success becomes clearly visible." Governments must "activate the EFSF/ESM (European Financial Stability Facility/European Stability Mechanism)."

EFSF borrowing authority exists. It's capped well below what's needed. The late Bob Chapman estimated trillion. What's available and likely is a drop in the bucket. Chapman predicted a certain train wreck. Only its timing is unknown.

ESM authority is proposed. It's not in place. It's a permanent bailout fund. Creation depends on Germany's Constitutional Court and parliament. Judges must agree to change German constitutional law.

Doing so requires national referendum approval. Perhaps legal requirements will be twisted to avoid it.

Parliament must then act. Doing so is planned for September. Betting odds suggest surrender. Chancellor Merkel long ago sold out to Brussels.

Draghi wants authority to buy toxic sovereign debt. Doing so reshuffles a sinking ship's deck chairs. ECB's mandate prohibits it. Draghi's back door strategy failed.

He loaned Eurozone banks .2 trillion. Hoped for sovereign debt purchases didn't materialize. Plan B calls for Draghi to do what troubled banks won't.

Conservative opposition is vocal. Senior German Finance Committee member Hans Michelbach said:

"The central bank under the leadership of Mario Draghi has pursued increasingly adventuresome contortions to get around the prohibition against state financing."

According to Christian Social Union general secretary Alexander Dobrindt:

"If the ECB buys sovereign bonds, it would be akin to state financing through the back door. The ECB would be leaving the path of monetary stability."

Concern is over triggering an inflationary spiral. Germans know their troubled history. Cooler heads want repeating what preceded the Great Depression, Hitler, and WW II avoided. Anything is possible when policy makers are unrestrained.

Draghi is a predatory banker. Once a Goldman Sachs alum, always one. People needs aren't his concern. Sovereign debt buying has strings. Crushing austerity is mandated.

Nations accepting aid must agree to Memorandum of Understanding terms. Doing so means surrendering fiscal sovereignty. Lower wages, higher unemployment, fewer social benefits, gutted pensions, and perhaps blood in the streets follow.

Key also is that everything tried so far failed. New policies rework old flawed ones. Failure again is certain. Half life successes get shorter.

Germany's Bundesbank opposes Draghi's scheme. So do conservative Bundestag legislators. Free Democrats (FDP) finance spokesman Frank Schaffler called the ECB "a state within a state, beyond any legal and political accountability."

Draghi goes his own way with full money power backing and most politicians willing or cowed to go along.

Reports from Germany say people are spending old D-marks. Retailers obligingly take them. The longer Europe's debt crisis festers, the more likely reinstatement is possible.

On January 1, 2002, euros officially replaced D-marks. They lost their legal tender status. Billions were retained. Germans again use them.

They'd gladly trade euros for D-mark stability. Germany appears more willing. The late Bob Chapman said authorities began printing them months ago. The hand writing's on the wall. Growing numbers think the game is up.

Draghi schemes delay day of reckoning time but can't stop it. He may be gone when it arrives. Germany is Europe's funder of last resort. Draghi depends on its resources.

Throwing good money after bad puts Germany's financial stability in play. Perhaps its solvency if it goes too far. Greece died months ago. Spain's on life support and expiring.

Its needs exceed what deep pockets can provide. Its crisis is threefold - banking, sovereign and regional. Troubled Catalonia is Spain's most indebted region.

It's broke. It suspended social service payments. Hospitals and other medical priorities go begging. Earlier budgets were slashed sharply.

Other Spanish regions have similar problems. Crisis grips the country. Madrid is insolvent. So are major banks. They need hundreds of billions of euros to meet liquidity needs. What's possible under ideal conditions isn't enough.

Massive capital outflows highlight the problem. On July 31, new Spanish central bank figures showed May amounts quadrupled year-over-year.

Since summer 2011, the equivalent of about one-fourth of Spain's GDP sought safer havens elsewhere. It sounds like an obituary - a run on the entire country.

It's bad and worsening. The ECB and Eurozone countries haven't enough firepower to address it. Italy, Greece, and other troubled countries need help. Banks and sovereigns need massive amounts.

EFSF funds are capped. They're far below needs. If ESM is established, Spain and Italy must provide 30% of its funding, Germany another 30%.

How can troubled countries contribute anything? What's ongoing reads like a Shakespearian tragedy. Bad endings are easy to predict. SNAFU defines them: situation normal all f..ked up.

Bazooka economic promises are hollow. Eurozone dissolution is inevitable. Only its timing is unknown. Imagine how much worse things will be when day of reckoning time arrives.

It's not confined to Europe. Troubled America faces its own moment of truth. It'll replicate troubled Eurozone countries when it arrives.

A Final Comment

The late Gore Vidal got it right. He called The New York Times the "Typhoid Mary of American journalism." It proves it daily.

It cheerleads US imperial wars. It ignores mass slaughter and destruction. It's silent on banksters stealing us blind. It's comfortable with money power running America.

It supports wealth, privilege and power. Its August 2 editorial headlined "Manana Bankers" showed it.

It asked "(h)ow bad do conditions have to get before" central bankers intervene. It's mindless of the ocean of easy money they created irresponsibly. It went to bankers, not economic growth.

They used it for speculation and greater consolidation. They stole public funds for their own benefit.

The Times wants more of a bad thing repeated. Failure "means trouble for everyone," it said. What are they waiting for, it asked?

Instead of explaining what's wrong and how to fix things, The Times endorses what helps bankers most. Let ordinary people eat cake....if they can afford it.

A Final Comment

The July US jobs report beat expectations. At the same time, it woefully underwhelmed. The headline U-3 number was 163,000. Report details were soft.

The private payroll diffusion index fell for the second straight month. At 56.4, it's down from 56.8 in June and 61.3 in May. Despite last month's headline number beating June's, breadth was lower in July.

Hours worked were flat. Up 0.1%, average hourly earnings barely budged. Work-based income gained the same meager amount. In real terms, wages contracted.

Hourly earnings year-over-year fell from 2% in June to 1.7% in July. The comparable weekly pace dropped from 2.3% to 2%.

Incomes are declining. Jobs created are poor ones. They're mostly low pay/low benefit part-time or temp ones.

Economic uncertainty prompted greater savings. The opposite effect is less spending. In real terms, it's negative.

U-3 unemployment rose from 8.2% to 8.3%. U-6 stands at 15%. Real unemployment as calculated in the 1980s approaches 23%. It adds uncounted long-term (one year or more) discouraged workers U-6 figures ignores.

Without fictitious birth/death ratio over-counting, U-3 gained 120,000 jobs or less. The broader Household Survey was dreadful. It fell 195,000.

Virtually all jobs lost were full-time. They dropped 228,000. They're down for three of the past four months. The employment rate dropped from 58.6% in June to 58.4%. Labor force participation fell from 63.8% in June to 63.7%.

Small downward revisions showed May and June combined created 12,000 fewer jobs.

The U-3 headline number belies economic decline. Soft data confirm it. Expect continued weakness ahead.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

http://www.claritypress.com/Lendman.html

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour

Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

Two Podcasts on fbi corruption A06 10:13PM

Fbi assassins assault & try to kill DAVID ATKINS A06 7:29PM

EPA Head Scott Pruitt: Of Cages And Sirens A06 2:15PM

The Shortwave Report 04/06/18 Listen Globally! A05 4:25PM

Nicaraguas Conflic with native Peoples on the Caribbean Coast Near Bluefields in Decade80 A05 12:14PM

Millions Boycott The Sponsors Of Laura Ingraham A05 11:36AM

THE CONSERVATIVE THREAT A05 6:51AM

The US, the Dollar, IS and Saudi Arabia A05 3:34AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy