Wall Street WARZONE

Global Economy Won’t Recover in 2011, Not by 2020. Not Never! Yale Scholar Warns Capitalism is Dying, Fast, Taking Down Global Economy With It!

by Paul B Farrell, JD, PhD
| Discuss | Print | 2/1/2011

Warning, you’re being conned, again! Wall Street pundits tell us the next recovery’s on track, in the early stages, moving along nicely.

So start investing, trading, betting on stocks, bonds, etfs, commodities. At least that’s what those crafty Wall Street gamblers want you to think. Yes, the same million dollar bonus babies whose hi-risk bets triggered the 2008 meltdown.

Wrong. Bad advice. Don’t listen. Americans lost over 50% after the 2008 meltdown, next one will be far worse.

Not only won’t the economy recover soon, Yale’s Immanuel Wallerstein, the leading scholar on “world systems” analysis, says the global economy will never recover. Yes, never.

The conventional wisdom says markets and economies move in cycles, ”upturns always occur after downturns.” Wallerstein warns: “All systems have lives … the capitalist world-economy has been in existence for some 500 years … functioned remarkably well. But … it has moved too far from equilibrium … in structural crisis. The only sure thing is that the present system cannot continue. The fundamental political struggle is over what kind of system will replace capitalism, not whether it should survive.” 

Capitalism is dying. Don’t say you weren’t warned. (For the complete Wallerstein article see Foreign Policy)

10 Predictions: America’s Worst Decade Ever 2011-2020: Rich Get Richer, Market Crashes, Revolution, Class Warfare, Ending of the American Empire

by Paul B Farrell, JD, PhD
| Discuss | Print | 1/27/2011

Dateline December 2020. Let’s look back on the 2011-2020 decade, at what historians call the “Worst Decade in American History.” Totally predictable, totally denied. Back in January 2011 we made 10 predictions of a chain of events that would reach a critical mass and consume America in a torrent of “creative destruction,” crippling capitalism and other outmoded institutions, forcing new power players to step out of shadows and assume leadership in a time of extreme crisis.

“The U.S. economy appears to be coming apart at the seams,” warns Columbia Professor Robert Lieberman in the new Foreign Affairs Journal. Unemployment remains at nearly ten percent, the highest level in almost 30 years.” A long trend of “ballooning incomes at the very top and stagnant incomes in the middle and at the bottom. The share of total income going to the top 1% has increased from roughly 8% in the 1960s to more than 20% today. … a level of economic inequality not seen in the United States since the eve of the Great Depression.”

And yet, here we are being conned again, like before the 2008 meltdown. But the same crooks we bailed out. Warning: Forget all Wall Street’s hoopla about a 2011 bull market with the Dow rocketing to 15,000. Think long-term. Wall Street lost an inflation-adjusted 20% of your money the last decade. They will lose another 20% by 2020. Today’s new “Gilded Age” bubble will end in a crash worse than 1929, triggering a new depression that will wreak havoc on your retirement portfolio. Yes, Lieberman is warning of class warfare dead ahead: “Income inequality in the United States is higher than in any other advanced industrial democracy … It breeds political polarization, mistrust, and resentment between the haves and the have-nots and tends to distort the workings of a democratic political system in which money increasingly confers political voice and power.” A costly new “Civil War” makes our enemies cheer.

So here are my 10 predictions for 2011-2020, a flashback, a retrospective, a year-by-year look back from 2020 at a decade of increasing battles between the haves and have-nots, where there is no longer room for “compromise” between the two ideologies destroying America from within. “The Gap,” the divide, the greed, the entitlements, the hostilities are now so entrenched that “negotiations” are impossible and only a catastrophic 1929-style collapse of our self-destructive capitalism and a descent into economic hell will force America to restructure. Here’s the 10-year timetable:

2011. Wall Street’s super-rich spend billions to control Washington
Thanks to the conservative takeover of America’s so-called democracy the past three decades, from Reagan to Obama, our activist Supreme Court delivered the coup de grace into America’s psyche last year, overturning long-established precedent giving rich owners of zombie corporations absolute rights of live humans, a decision that would have gotten a failing grade in my constitutional law class at the University of Virginia.

2012. Super-Rich gain absolute power over Washington
That bizarre decision destroyed legalized political bribery. Now billions pass through lobbyists to politicians in all parties, with one goal: A guarantee that all politicians (President, Congress, Fed, regulators and state governments), all adhere to Reaganomics and the ideology that money talks and wealth rules. As a result, America is no longer a democracy, not even a plutocracy. America is an Anarchy. Our middle class is in a rapid spiral down into third-world status, while the rich get richer and “the gap” between the richest and the rest widens. Worse, it’s irrelevant who wins the 2012 race, because money corrupts all in Washington and Obama is already a puppet of America’s super-rich conspiracy.

next: 2013-2020 on MarketWatch

Warning, “The More You Trade, The Less You Earn:” Stick to These 8 Winning Rules for America’s 95 Million “Predictably Irrational” Investors, Direct from Princeton’s Daniel Kahneman, Nobel Economist & Behavioral Scientist

by Paul B Farrell, JD, PhD
| Discuss | Print | 1/20/2011

The Buttonwood Agreement was signed in 1792 near Wall Street, creating what is now the New York Stock Exchange. For two centuries after that, the industry lived with a “rational man” theory. Recent research by behavioral economists and neuroscientists proves conclusively that investors are actually quite “irrational and woefully uninformed, especially when they’re betting against Wall Street. Wall Street’s theory of the “rational investor” was actually pure propaganda, purposely intended to mislead investors. Today, the new theory of the “irrational investor” has set the “law of unintended consequences” into motion—instead of helping Main Street investors get a grip on their irrational behavior, it has opened new opportunities for Wall Street to exploit and turn the research, tools and technology of behavioral finance against investors, putting Main Street investors at an even bigger disadvantage than they were before, because Wall Street’s arsenal is growing stronger, while Main Street is last in denial.

The English playwright Harold Pinter, well-known for his long mysterious “pregnant pauses,” won the Nobel Prize in Literature a few years ago. A rarity, only the third playwright in a century. Equally rare, a few years earlier Princeton psychologist Daniel Kahneman won the Nobel Prize in economics. What do the two have in common? (more)

“Grow or Die?” Or “Grow & Die!” The Global “No-Win” Scenario: Economists Push Growth Even as the Planet Explodes with 50% Population Growth to 9 Billion by 2050. Yes, Destroying America’s Capitalism AND China’s Socialism

by Paul B Farrell, JD, PhD
| Discuss | | 1/17/2011

What do we do, oh great zenmaster? “When you get to a fork in the road … take it,” replies the wise one, Yogi Berra, greatest Yankee catcher of all time. His sage advice to economists, politicians and investors everywhere: “The future ain’t what it used to be. We made too many wrong mistakes. You’ve got to be very careful if you don’t know where you’re going, because you might not get there.”

At the crossroads: “Growth!” Capitalism’s most sacred commandment, “Grow OR Die” may itself be on death row. With us since 1776, it’s being challenged by a “New God of Reality” that’s flashing relentless strobe warnings of an emerging new command from critics, contrarians and eco-economists: “Grow AND Die.” Yes, you heard right:

· “Grow OR Die.” Traditional economists: We need 3% GDP “Growth” to support 100 million new Americans in the 21st century. Drill Baby Drill. New jobs to fuel slow recovery. Worse, exploding growth demands as the rest of the world adds 2.9 billion new humans all chasing their unique “American Dream.”
· “Grow AND Die!” New eco-economists: They see Big Oil’s destruction of our coastal economies, the rape of West Virginia’s coal mountains, the unintended consequences of uncontrolled carbon emissions and ask: “When will economists, politicians and corporate leaders stop pretending Earth’s resources are infinitely renewable?” Unfortunately, even the new eco-economists fail to factor population growth, the big 800# Gorilla, into the equation.

A “No-Win” scenario: Yes, we are all at a crossroads, all facing a dilemma, all confronting the ultimate no-win scenario: “Growth” is essential to support the global population explosion. “Growth” is also killing our world, wasting our planet’s non-renewable natural resources. As a result, the “Growth” mantra will eventually destroy civilization. We are the horns of a very sharp no-win dilemma: We’re damned if we grow. Damned if we don’t. Growth.

Ultimate political sin: Turning a blind’s eye, failing to seek real solutions is suicide

“When you get to a fork in the road … take it.” But which fork? Flip a coin? Same result either way: Heads you lose, tails you lose. A no-win situation. Not just  America, but Ireland, Greece, Brazil and China. All politicians, all economies, all trapped in Capitalism’s most sacred, rarely challenged, commandment: “Growth OR Die” … but the real issue is, “Grow & Die,” because the planet will increase its population by 50% to 9 billion in a generation, and self-destruct …

Read complete essay: MarketWatch

“Kamikaze Capitalism:” Can GOP Destroy Obama? Without Destroying the American Economy Too? What a Dumb Plot: Capitalism Loses, China Wins!

by Paul B Farrell, JD, PhD
| Discuss | Print | 1/11/2011

Foreign Policy’s journal is inspiring: Don’t miss their annual issue on “Failed States” listing the 25 worst dictators: “The Committee to Destroy the World.” Next, think domestic policy. Think of Mitch McConnell’s “Mission Impossible” vow to do anything, including kill our economic recovery for the next two years – anything to make Obama look bad, make him a one-term president. Call it “Kamikaze Capitalism!”

Go Mitch! You stir my cinematic imagination. Made it go into hyper-drive last week when your GOP team decided to defeat Reagan’s signature national security victory, the nuclear disarmament treaty with Russia. You guys sure have a bizarre suicidal idea of leadership and governing. Ol’ grumpy Mitch also led his GOP saboteurs in killing the unemployment benefits extension, while making an even more bizarre claim that billionaires “need” a $800 billion bailout (that’ll trickle down to unemployed Middle Americans?). Then he played his ace, calling the GM IPO a failure that should have been left to the bankruptcy courts, with more jobless millions. Yes folks, ol’ grumpy would definitely get on a domestic list like “The Committee to Destroy American Capitalism.”

Folks, this is the stuff of great movie plots. Not an Oliver Stone or Michael Moore film. No, this is a true Eastwood thriller. Think “Magnum Force,” Dirty Harry killing real bad guys. Better yet, “Absolute Power.” Imagine: What if McConnell’s GOP gets their wish? Game on. The hunt begins. The GOP tried once before under Bush. Now they want a new shot at that old adage: “Power corrupts, and absolute power corrupts absolutely.”

Eastwood brilliantly reveals why power corrupts. Why it blinds. Why it self-destructs. In “Absolute Power” we see an arrogant President convinced he’s untouchable, surrounded by Secret Service officers who will do anything to protect him, hide affairs, even murder. Until the unexpected, what economist Paul Krugman calls the “great unraveling.”

“Kamikaze Capitalism:” GOP stars in Eastwood “destroy the presidency” thriller?
Eastwood plays Luther Whitney, a small-time crook. Just wants enough from one last job, before retiring in the American Dream. His victim is out. But as luck would have it, the President, Gene Hackman, suddenly appears with the lady, upsetting Luther’s cleverly planned robbery. Luther hides in a secret room, a voyeur behind a one-way mirror. This President’s into kinky sex. But sadomasochism consumes him, he kills her.

Luther is what economists call a Black Swan, every thriller has them. Unpredictable events you never see coming, can’t plan for. They blindside you, taking a thriller into new dangers. Filmmakers love them. Tittilated, Luther watches the lurid sex, the murder, the cleanup by the Secret Service. They dispose of the body. But later, a new twist, they find evidence of Luther. Then frantic spinning, blaming a home invasion robbery gone bad. The hunt for Luther begins … and ends … absolute power corrupts absolutely … the presidency falls. Yes, Eastwood planned this … but McConnell can’t … no trick mirrors.

 …. read column on Marketwatch

22 Reasons Your Federal, State & Municipal Taxes Must Keep Rising, in 2011, 2012, even 2020 … And Nobody, Not Boehner, McConnell, Palin, the GOP nor TeaParty Will Stop Debt From Growing!

by Paul B Farrell, JD, PhD
| Discuss | Print | 1/1/2011

Social Security and Medicare equal $65 trillion of unfunded debt. Add in the Bush/Cheney/Obama War debt from Iraq and Afghanistan, Paulson’s TARP Plan, the Obama Stimulus, plus add in Bernanke’s estimated $23.7 trillion in secret credits, loans, writeoffs and guarantees to Wall Street’s “too-greedy-to-fail” banks … now add in the costs of the new healthcare reforms and it looks like my early ’09 prediction is unfolding right on schedule.

Subtitled “Tax Bomb Dead Ahead: Former GAO Chief says your taxes will double” is now worth a second look, especially when you consider states and local governments are already desperately adding taxes to make up for lost property tax, sales and income revenues. The New York Times warns: “As Revenue Slump, States Look to Tax Services, From Head to Toe.” If you wonder whether we really are in an economic recovery, take a look at the bigger picture unfolding across America, at the 22 reasons all taxpayers at all levels of government will be impacted for years to come …

Imagine doubling your taxes: Yes, that’s what David Walker, the former U.S. Comptroller General and GAO chief warned on CNN: “Why Your Taxes Could Double: The federal government has spent more money than it takes in at an increasing rate. Total federal debt almost doubled during President George W. Bush’s administration and, as much as we needed some stimulus spending to boost the economy, the nonpartisan Congressional Budget Office now estimates total debt levels could almost double again over the next eight years based on the budget recently outlined by President Obama,” with our “tax bill doubling over time.” Don’t say you weren’t warned!

Debt is killing the American Dream. We’ve mortgaged our future, and now Obama’s adding a new $1.84 trillion federal deficit. That’s four times Bush’s record deficit his last year. Plus deficits over $500 billion annually for the next decade. The president’s gambling, doubling down, betting the farm, going “all in” with a huge bet that could break the bank. Is this America’s “last hand” in high-stakes poker game? More grim tax facts: A few years ago Peter Orszag, Obama’s Budget Director warned: “Balancing the budget would require a 41% cut in spending on Social Security and Medicare, a 47% cut in discretionary spending, or a 17% cut in all non-interest spending.”  

Secretary Geithner gave us an update: “The longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be.” Those two trust funds already eat up more than a third of the federal budget and are increasing $2 trillion a year. Still, AARP and other lobbyists resist all benefits cuts (that affect Boomers) more than tax increases (paid by younger workers), despite a new study telling us: Medicare surpluses will run out in 2016, Social Security by 2037, both earlier than previously estimated. Together they account for roughly $80-to-$120 trillion in unfunded liabilities, with Medicare 80% of the total … and please note, America’s debt now exceeds the $50 trillion GDP of all economies in the entire world! (more)

America’s Failed 30-Year “War on Drugs” is Sabotaging Our Economy, Our Future As a World Power, War on Terror & Wars in Afghanistan, Iraq, Mexico

by Paul B Farrell, JD, PhD
| Discuss | Print | 12/20/2010

“Civilizations die from suicide, not by murder,” said Arnold Toynbee, whose 12 volume Study of History traces the rise and fall of civilizations. Get it? The “fall” is an “inside job.” Attitudes, behavior, values die first. The soul is left for dead. Oh, some outside force may push the button, pull the trigger, or, as in ritualistic hara-kiri, some stranger may bring the sword down upon our neck. But we set the ball in motion. We create the world around us, including our enemies, as individuals and as a nation, we are totally responsible for our karma, our fate, our destiny, our demise.

“Suicide, not murder:” Toynbee’s chilling warning came to mind a few years ago as I read three reports of dangerous economic trends, all tied directly to America’s addiction to drugs and how they are destroying us from within, rendering our borders vulnerable, giving our enemies billions to buy weapons and attack us from without. These three reports highlight threats far more ominous than any threats from terrorists, nuclear war, energy shortages, entitlement failures, global warming, or government deficits, as bad as they all are. Why? Because we are creating an inner world that is far darker, far more lethal. The reports cover these three areas:

1. “The Lost War on Drugs.” America’s failed 30-year “War on Drugs” that’s now sabotaging our “War on Terror.”
2. “Weakening Defenses.” America’s leaky borders that expose us not just to terrorists, but openly invite transnational drug syndicates, mobsters, criminals.
3. “Prescription addiction.” America’s out-of-control addiction to prescription drugs, with Big Pharma as the main pusher.

These three trends have been exposed in recent media reports as three separate trends with significant economic impact. However, they are very much linked together in the inner workings of the American soul. So why does the media treat them separately? Very simple: The media (like people in general) is also trapped in America’s ubiquitous state of denial, denial of a disease so cunning and powerful that most Americans refuse see the underlying disease, either as individuals or as a nation: In her writings noted psychotherapist Anne Wilson Schaef aptly describes America as a “Nation of Addicts.” Once “in” the disease we can no longer see ourselves objectively, we become zombies, like pod people in “The Invasion of the Body Snatchers.” (more)