Double Dip Rescission Inbound: Dow Falls Below 12,000 and is Declining

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The Dow fell below the 12,000 as nervous investors continued to sell off their stocks. This is the six consecutive day of losses in the stock market, destroying tentative gains made since the recession. The only Fortune 500 companies who successfully made gains were AT&T and Proctor and Gamble. All the other blue chip companies suffered hard losses; the worst was Travelers losing falling 135 points and losing 1.1% of their stock value. Motor company Toyota announced a loss of 1.6 billion in profits, due to the earthquake-tsunami double punch that has crippled the Japanese economy. The S&P and the NASDAQ Composite both fell by roughly 1.1% throughout the course of the day, contributing to their sixth consecutive week of losses. Safer investments, such as US back bonds, surged; driving down the interest rate by 0.04%. The stock market is in the opening stages of a second massive sell off, which will damage the international economy even more than the latest recession.

Why is the Double Dip Recession Happening?

The United States economy needs to get its act together before investors lose their nerve completely and sell everything. The international socioeconomic relies on trust and confidence. As long as everyone can pay of their debts people will gladly invest in any number of derivatives and stocks because it is a profitable thing to do. However, when massive blows to the stock market hammer that confidence consumers quickly stop buying stock, driving down the price. This is bad for the economy because companies rely on selling stocks to the market and their employees to fund their operations. Without the core faith in the stock market investments in new companies grind to a halt. This prevents new companies from entering the market, which further inhibits the economy.

It is a dangerous spiral that quickly stagnates the economy. New businesses cannot form to enter the market and existing companies cannot get the necessary funds to meet market demands. The circular movement of money halts, starving consumers and producers alike. This is the fear of what will happen should this double dip recession ensue; the only issue is that faith in the stock market and investments will be even harder to retrieve because of the recent 2008 recession. The economy could stagnate near indefinitely. One major aspect of this relates to economics, fiat money. The world relies on fluctuating currencies that are valued only compared to each other, they have no value themselves. This is good because it allows for large amounts of money to be utilized.

How Could This Hurt the Economy?

This is potentially disastrous because the money is prone to rapidly inflate and deflate, making counties rich one day and comparatively broke the next. Currencies are traded throughout the international economy, if the American dollar falls do to the currency trading markets driving it down Americans will be hard pressed. They will not be able to pay the mortgage, send their kids to college, or even by grocers if inflation rises too high too quickly. The unstable stock market could toss America into a recession instantly should there be a massive selloff. There is also the threat of a slow transition to a recession; as the American economy is strangled by the reduced investments they produce even less and then there are even fewer investments. This vicious circle is compounded ten times over by the banks leverage working against them, for every dollar they lose in their reserves they lose nine dollars they could invest. The double dip recession would attack America on two fronts, bringing misery to all.

The Rise of American Plutocracy

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Recessions have plagued America for the last forty years because of reckless behavior by the rich.  In the latest recession major corporations swindled innocents out of billions of dollars with faulty stocks, derivatives, and sub-prime loans they knew were going to fail.  After the economy failed these men were generally unaffected, still receiving million dollar bonuses despite the economic distress of the rest of the population. These men are plutocrats, the ruling class in America.

These financial titans still remain largely unrecognized despite the fact they have been ruling the United States, a plutocracy where governmental policy is determined by those with the most money, since the Gilded Age.  it is during that time period that the plutocrats first rose to power.  The laissez-faire mindset ruled the American economy in the late nineteenth century, launching massive industrial expansions and technological revolutions; this formed largely unregulated industries with purely capitalistic purposes that dominated the industrial, financial, and political spheres of America and made the country a plutocracy.

Laissez-faire conducted economic activity in America during the late 1800’s. The first factories in America were rare, but they created colossal quantities of goods at cheap costs.  Audacious entrepreneurs and sage investors recognized that factories had greatest potential for mass profits, but they also knew any level of government regulations would hurt their incomes.  Government inspectors would prevent installation of innovative technologies that would increase outputs but endanger workers.

To protect their interests and investments the upper class pushed for deregulation of industry throughout the Gilded Age, both though legal and illegal methods.  The presidents of this era are often referred to as the “do-nothing presidents” because they did not create any major changes.  The first roots of plutocracy arose here during this inaction.  Unwritten agreements were made by politicians and these emerging industrial leaders.

Those industrial leaders who funded politician’s campaigns, to get them into office, would be favored by these politicians once they were in office, instead of these politicians exclusively looking out for the Americans who voted them into office and who they are supposed to represent.  As time wore on plutocracy continually eroded democracy in the American government, with each passing election allegiances of numerous politicians switched from their people to their sponsors.  Laissez-faire served as a front for big business and plutocracy to expand rapidly in America.  Meanwhile the common man was learning that he did not like this new system of government, despite the fact he did not yet know it exists.

As the corporate leaders became millionaires, people across America suffered and were regularly injured in the factories. Industrial giants greatly profited from the lack of regulations, expanding industry in America to rival that of the European superpowers like Britain, France, and Germany.  In order to maintain high volumes of production safety standards were removed.

The Jungle, by Upton Sinclair, was a novel written in the Gilded Age which muckraked conditions of meatpacking factories in Chicago and exemplifies the best and the worst of industry in America.  The factories had terrible working conditions, in one meatpacking factory, “the place ran with streaming hot blood – one waded in it on the floor.  The stench was almost overpowering,” (53-54).  Workers fared poorly in the factories, there are numerous incidents in the book where workers die, one was, “killed in an elevator accident,” (83).  Another man was killed when a, “wounded steer had broken loose and mashed him against a pillar,” (85).  These industrial accidents came from the unmonitored technologies that were used in the factories, which were deliberately made unsafe so they could produce goods at a faster rate.

Dangerous tools and equipment were used in every factory in the country; they produced more goods but at the expense of worker safety.  The industrial leaders uniformly decided to pick profits over people, laissez-faire allowed them to do this with the blessing of the government they virtually own and the curse of the people they were injuring in the name of a better profit margin.

Outside of work the labors fared little better, they had no capital because they were financially cheated by the factory owners.  Immigrants coming to America could no longer stake a claim on the plains; the land had been almost entirely bought up by settlers or railroad companies.  Their only viable options where they could move to were the cities, where they could get a job in a factory.

Even in the cities work was scarce; for each worker position there were dozens of desperate immigrants vying for it.  The factory owners could pay their employees virtually nothing and the immigrants would gladly work anyway, the alternative was starving to death.  All the immigrants could do was grumble and call the industrial leaders names, like robber barons. Workers lived in poverty, in addition to working in inhumane conditions, because the alternative was to starve.  The workers were financially dependent to the company, but the company did not care at all about them; unions began to emerge to combat this problem.

In response to encroachments on basic human rights and liberties unions slowly emerged, despite violent rebuffs by the robber barons.  Union members only wanted decent pay and a safe working environment; this would not have been a problem but it would have been at the expense of the robber barons.  Every modest request was denied by the company owners.  As unions became even more and more desperate they resorted to strikes to improve their jobs and wages.  Sometimes the unions won, most of the time they lost because the corporations had far greater assets.  During the Great Strike of 1877 the strikers were able to shut down nearly all railroad traffic across the US.  In response President Rutherford B. Hayes, at the request of notable railroad owners, called out federal troops to successfully quell the strike. In this display of force plutocracy revealed itself to be the ruling force in the country. Democracy had given way to plutocracy, no longer were the concerns of the many were the center of focus for the government, now only those with money were valued.  The worst tragedy of this coup was the common people were misled into believing the plutocrats were heroes.

The public adored the robber barons, despite the grievous toll they were extracting on the common man, because of unfortunate striking incidents and well placed charitable donations.  Union leaders continued to press forward with strikes, hoping they would gain enough leverage to force the corporations to bow to their demands.  They suffered numerous setbacks, notably during the Haymarket affair strikers were blamed for a bomb that killed seven police officers.  Public opinion swiftly turned against the strikers; nobody wanted to support anarchy.  The industrial leaders amplified this outrage using their newspapers to spread the word of the attack.

Weakened by violent incidents, the unions resorted to discrediting the robber barons, criticizing their unethical habit of hording money while their own workers starved.  In response millionaires donated absurd amounts of money to various charities; for example, John D Rockefeller donated $55 million dollars over his lifetime, enough money to build hundreds of buildings, construct numerous foundations, and buy him a pristine public image that no scandal could tarnish.  Instead of demanding his arrest people everywhere believed the man was virtually a saint and had the right to be rich.  Social Darwinism, a belief that in a laissez-faire economy the fittest businessmen are the ones who thrive, was created to explain why Rockefeller and men like him had succeeded where countless other people had failed.

The powers of the union receded, except for isolated victories they were held at bay by the robber barons.  Little progress was made to benefit the workers.  The labors were forced to work dangerous jobs or suffer with unemployment.  Robber barons ruled America, hoarding money while their political puppets did their bidding to get them even more money; the Age of Plutocracy had begun.

Today America is a plutocracy.  Elected officials win modern elections primarily because they spend more money than their opponents.  As the middle class collapses, and more and more Americans fall in poverty the plutocrats continue to demand deregulation of key America commerce sectors, such as meatpacking industry or the stock market; without regulations these industries will continue to endanger the health and stability of America.  Laissez-faire is alive and well, recklessness allowed by this guiding principle is responsible for the last four recessions.  The only threat left to the plutocracy is itself; should the recessions of increasing magnitudes continue, due to plutocrats insatiable greed, there will come a day when the common men as one to no longer be play things of the plutocrats.  They will call the fallout of this uprising the Second Civil War, and it will be a hundred times more costly than the first.

Unemployment Benefits Cut: Why They Will be Reinstated (and Why That is Misguided)

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I am generally excited whenever one of my Massachusetts senators makes headlines, but I was feeling disconcerted after it was announced that Republican Senator Scott Brown, who replaced the Senator Kennedy, blocked Unemployment Compensation Extension Act of 2010 that would maintain unemployment benefits.  Those benefits have now expired and two million Americans have lost their benefits, being left to fend for themselves.  While researching this topic it was discovered that his patience may save the American Tax payers 56 billion dollars that they did not need to spend.

Why Have Unemployment Benefits Been Cut?

Every year the Senate votes to reinstate increased levels of unemployment benefits; whether this action passes of not has traditionally based primarily on unemployment levels.  America is suffering from the infamous 2008 recession, so there are roughly 15 million Americans who currently receive unemployment benefits.

In this current round of unemployment benefits 2.5 million Americans are in danger of losing their benefits.  Should reinstatement of unemployment benefits not happen there will not be enough money in the budget to support these Americans.  Those that would be cut are those who would best be able to deal with this additional cut in benefits, although in this economy these people will fall on hard times.

Why do we have Unemployment Benefits?

Nobody who applies for unemployment is well off, it supports those without a job and usually without a long-term plan.  The unemployment benefits of this program give them the opportunity to make plans, get a sufficient job, and reestablish themselves. People are more likely to continue to look for work as long as they are support by the government.  Without any unemployment benefits most people who lose their jobs are forced to quickly take unsavory, lower wage jobs just to pay the bills.  Others turn to crime to support their families.  Both paths deny these unlucky Americans the opportunity for employment that would give them a lifestyle equal to or even better than the one they had working at their last job.  Unemployment benefits are an excellent

Is Scott Brown Permanently Blocking Unemployment Benefits?

No.

He is simply asking for more time to consider the 56 billion dollar legislation the Democrats hastily proposed.  Scott Brown’s chief concern was that he simply did not know what the bill was proposing; he did not vote against the bill, he put off the vote.  Republicans were not negotiated with or even notified that this legislation was being prepared; they do not want to add any unnecessary expenses to the immense 13.3 trillion dollar national debt.  Scott Brown is unwilling to vote on an issue that he “just found out” about.  Once he fully comprehends all major aspects of the Unemployment Compensation Act of 2010 he will most likely vote for the benefits and the legislation will most likely pass.

Why will Unemployment Benefits Shortly and Certainly be Reinstated?

Both parties support unemployment benefits; the core ideology behind them is sound and has been backed up by over forty years of positive statistical results.  Republicans and Democrats instead disagree on how many Americans should be given support.  Historically the Republicans favored supporting smaller percentages of Americans, as too conserve federal money.  The Democrats have always pushed for strengthened unemployment benefits, hoping to one day be able to support all Americans who are out of a job.

For the last seven years both parties have routinely support increases and reinstatements of unemployment benefits.  This is despite excessive military spending, major budget cuts, and the second largest recession in human history.  In addition, for the last forty years unemployment benefits have never been cut as long as American unemployment is under 7.2%.  Today, American unemployment rests at 9.6%.  This is a pressing issue, the Republicans will soon approve Unemployment Compensation Act of 2010 and despite a minor glitch 2.5 million Americans will once again be receiving unemployment benefits.

Personal Perspective: Most Unemployment Benefits Should be Reprioritized to support Entrepreneurs

I believe that the government should support Americans who are out of work.  I also believe that the unemployment benefits system should be reconstructed.

Currently the Federal government throws money at those who are unemployed, hoping they will find a job quickly.  This encourages the unemployed to be slothful; they have little incentive to find work when the government is paying for their bills and groceries.  This system creates increased government spending while not helping the unemployed all that much.

The United States should instead focus primarily funding in programs that help create new companies and new jobs.  Entrepreneurs constantly come up with new ideas all the time, everything from turning the turning the Ipod Nano into a watch to using ATM’s to recycle old phones.  There are tens of thousands of new profitable ideas, the problem is that there is not enough money from the private sector to fund all of them.  Government funding would allow thousands of new ideas, and the economy, to flourish.

There is dual benefit from this program for the government.  The first result of this new initiative is that there will be more jobs in the economy, since there are more businesses.  These jobs will be varied across all fields, new businesses will only be held back by creativity.

The second result is the United States will have more financial assets, useful when combating the national debt.  Since the Federal government funded these companies they would own all or partial stock in these businesses.  While some business will fail others will inevitably succeed, with bountiful dividends.  The United States will be able to sell off their shares in the company to meet budgetary constraints and to help stabilize the stock market.

Both would be excellent defenses against possible future recessions and would help mitigate the current one.

Sources: ThinkProgress, USGovInfoBoston.Com, and ThePoliticalCarnival,

Dead Peasant’s Insurance: Your Worth More to Your Employer Dead

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Contrary to popular belief, many notable corporation here in America would love to see their employees dead.

What? THIS IS INCONCEIVABLE! 1

It is true.  Several notable companies take out large life insurance policies on most of their employees, which means every time one of their employees dies they get money.  This is not just minor refunds for their lost labor, they receive up to 1.5 million dollars. Here are the most notable offenders-

  • American Express Co.
  • AT&T Communications
  • Bank Of America
  • Citibank, N.A.
  • Citizens Bank
  • Coca-Cola Company
  • Hershey Foods Corporation
  • NationsBank
  • Nestle Enterprises
  • Panera Bread Co.
  • Procter & Gamble Company
  • Southwest Bank
  • TYCO International
  • Union Bank
  • Wachovia Corporation
  • Walgreen Company
  • Wal-Mart Stores
  • Walt Disney
  • Wells Fargo, N.A.
  • Winn Dixie
  • York Water Co.

This is not the entire list of known companies that buy Dead Peasant Insurance, life insurance policies by corporations on employees.  The full list, comprised of about 215 companies can be found at deadpeasent.com.  Despite the fact you may not work for the listed corporations your company may still practice this ignoble insurance scam.  These companies are the known ones ,there are hundreds of undocumented companies that “insure” as many as ten million Americans.

Many people question the legality of this shady practice.  It is a conflict of interest, the corporations want their employees to die and to the best of my knowledge those same employees do not want to die.  Taking out dead peasant’s insurance is similar to a friend of yours taking out fire insurance on your house, so if it burns down for any reason (including them setting it on fire) they will reap the benefits.

Someone is getting a Camaro. 2

Technically, this is legal. After all these corporations have an investment in their employees, they should receive some funds, that way they can replace their employees and get on with their job of being a callous corporation.

What about the families of the deceased?

What about those who pay as much as a hundred thousand in medical fees associated with the hospital not saving a loved ones life?

What about the cost of the funeral?

The companies give the families of the deceased the cold shoulder, these fees are the sole responsibility of the family, who may have their income halved if not completely eliminated. As they struggle with debt and bankruptcy, the corporations go on to employ someone else, preferably young and unhealthy.  That way they get the “most” out of their loyal workers.

There have been several major moves against this inhumane practice, suits have been filed and many of these companies have been take to court.  Always, the corporations have won.  They site one specific precedent, Santa Clara County V. South Pacific Railroad.  This supreme court case made it so corporations were legally viewed as individuals and therefore got all the rights citizens have. Freedom of Speech.  Protection of Private Property.  The Right to Due Process.

Also the Right to Wish Employees Dead (anything for a better profit margin, right?)

Dead Peasant’s Insurance should be used to benefit those most hurt by the loss of the deceased, the families.  If a company has the foresight to take out a life insurance policy on its workers that is all well and good.  As “individuals’ they have the right to protect their workers.  However, first they should pay off the debts the families would other wise take one, due to loss of income and related medical expenses.  That is what is ethical and morally correct.

This raises a poignant question: Should corporations be view as individuals?  I believe they should, on the condition that they are treated as individuals in all fields.  Today corporations stomp out the little people without a thought when things are going well and hide behind Santa Clara County v. South Pacific Railroad whenever they are in danger.

This verdict was cited in the most in Congress, as more than $700 billion was given to the same corporations that caused the economic recession.  Before they had been acting outside the authority of the government, ignoring restrictions that were in place to prevent a recession from happening.  As the recession broke they begged, and received, money from the government.  They argued that they deserved money because as individuals of America they should be protected and supported by America.

Thanks for the money! More cameros!

This is wrong and is criminal.  If these corporations want funding that is fine, as long as they have paid their dues before hand.  By handing out $700 billion the American government is rewarding recklessness and failure.  This is wrong and criminal.  Only corporations who, like regular individuals, prove that they are worthy of trust should be trusted.  This is fair and what should be done.

The US Deficit: Expensive (In Painful Ways) Spending

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Obama is pushing legislation through that will repeal some excessive Bush tax cuts.  These taxes only applied to the richest Americans and saved the citizens 70 billion a year.  It turns out that this was not such a good idea for the American economy, the deficit widened and dollar weakened.  That costs you more taxes, yip-ee.

No. I'd say go back to Texas, but I'd feel bad for the Texans.

They tax cuts will give the American government those extra 70 billion dollars to work with.  This is good for almost everyone, and those that are hurt by this tax repeal have enough money to cope with the situation.  They will have to cut back on the money bathes.

Except her, she can have all the tax cuts she wants.

However, critics of this policy highlights that all politicians are still increasing the deficit with other tax cuts.  These cuts remain unopposed.  The politicians logic is that if these tax cuts were repealed it would knock the American, and the world, economy back into a recession.  Nobody wants that, excpet perhaps my Aunt Sally.  Bitch owns Walmart (well some stock in it).

No. You may not help me or anyone else. I'm going to therapy, be back in twenty years.

Therefore, they are extending them for the next couple of years.  The trade off is that the deficit increased and the American government loses 3 trillion dollars every year.  This is unacceptable.

The American government is an irresponsible teenager who just received his first credit card.  Now they have a new car, some very slick technology, and everything they could ever want.  That is when the bill turns up, for 13.4 trillion dollars. But, just like a teenager, the American government pays the bare minimum interest and returns to having fun.  Short term, this is a perfect cheap solution.  Long term, this becomes costly mistake.

The American deficit is money that we borrowed from other countries and private entities, that is being slowly paid back over several years in bonds.  Bonds should only be used in times of extreme need, in times of war or crises.  Using them to fund a government at any other point is simply irresponsible.  It is irresponsible because there is interest on the bonds, just like the credit cards.  The government loses money on every bond they sell.  Big no-no.

SANTA JACKED MY ATV!!! (it's okay, I got his sled)

The solution to this dilemma, stop increasing the deficit.  Across the board there must be cuts, with exceptional exceptions, to make America be able to fund the American budget.  The military spending should be cut back, it is unnecessary to maintain such a large army for a country in peace time.

The exceptions should be spending that will yield beneficial taxes in the long term.  Spend money to make money.  An expansion of NASA and the space program will increase science growth in every field, so there will be more things to tax long term.  Environmental protection programs should also be expanded; they always bring additional employment opportunities.  Parks need rangers, animals need vets, and endangered forests need scientists.  This program will increase the employment rates in America, therefore it will also be profitable or at least this program will pay for itself.  Americans need to wake up and take care of the national deficit, before it takes care of them.

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