Guest Post: Middle Class? Here's What's Destroying Your Future

Tyler Durden's picture




 

Submitted by Peak Prosperity contributing editor Charles Hugh Smith

Middle Class? Here's What's Destroying Your Future

According to the conventional account, the Great American Middle Class has been eroded by rising energy costs, globalization, and the declining purchasing power of the U.S. dollar in the four decades since 1973. While these trends have certainly undermined middle-class wealth and income, there are five other less politically acceptable dynamics at work:

  1. The divergence of State/private vested interests and the interests of the middle class
  2. The emergence of financialization as the key driver of profits and political power
  3. The neofeudal “colonization” of the “home market” by ascendant financial Elites
  4. The increasing burden of indirect “taxes” as productive enterprises and people involuntarily subsidize unproductive, parasitic, corrupt, but politically dominant vested interests
  5. The emergence of crony capitalism as the lowest-risk, highest-profit business model in the U.S. economy

Higher Energy Costs = Lower GDP, Lower Incomes

Let’s start with the conventional forces of higher energy costs.  The abundance or scarcity of energy is only one factor in its price.  As the cost of extraction, transport, refining, and taxes rise, so does the final price.  EROEI (energy returned on energy invested) helps illuminate this point. In the good old days, one barrel of oil invested might yield 100 barrels of oil extracted and refined for delivery.  Now it takes one barrel of oil to extract and refine 5 barrels of oil, or perhaps as little as 3 barrels of unconventional oil.

It doesn’t matter how abundant oil might be; it’s the cost that impacts GDP and income. Here we see that GDP in relation to the price of gasoline hit bottom in the wake of the 1979 oil shock. GDP soared in the late 1990s when oil plummeted to $15/barrel. It spiked lower when oil hit $140/barrel in 2008, and popped back up when oil dropped (briefly) to $40/barrel. (FRED charts courtesy of B.C.)

Here we see the cost of oil’s impact on wages:

As oil costs rise, wages and GDP decline. If we read between the lines, this chart reflects an economy that has become less dependent on oil for its GDP growth than it was in the 1970s, but oil’s influence on growth and income is clearly still fundamental.

This fifty-year history of oil, GDP, wages, and household debt reveals that GDP and wages only rose smartly in brief eras of depressed oil prices.  Households compensated for the stagnation of their wages by borrowing.

The Middle-Class Work-Around: Substituting Debt for Income

The key idea here is that real income can only rise if the productivity of labor and capital investment increases.  If productivity of labor and capital is flat, any increase in income is a mirage; i.e., a rise in nominal income that is not an actual increase in purchasing power.

Here we see that labor productivity has risen steadily, more than doubling since 1970.

Wages also rose—but household debt rose at a much higher rate than wages.

I have been asked by readers to use only “adjusted” or “real” measures of GDP, wages, etc., but sources rarely compare apples to apples, and the high probability that “official” inflation has been understated leaves even “adjusted” data suspect.

In nominal terms, the ratio of these two lines is what’s important.  From the point in time when they began diverging (1983), wages tripled but household debt rose sevenfold. (According to the Bureau of Labor Statistics’ (BLS) inflation calculator, $1 in 1983 is equal to $2.31 in 2012 dollars.)

If we dead-reckon that “real” inflation is probably more like $1 in 1983 = $3 in 2012, this still suggests that wages doubled in the past 30 years.

The increase (however you calculate it) flowed entirely to the top 10% of households.

That the bottom 90% of wage earners lost ground has been well established.  This summary from the New York Times encapsulates the stagnation:

According to the Census figures, the median annual income for a male full-time, year-round worker in 2010 — $47,715 — was virtually unchanged, in 2010 dollars, from its level in 1973, when it was $49,065. Overall, median household income adjusted for inflation declined by 2.3 percent in 2010 from the previous year, to $49,445. That was 7 percent less than the peak of $53,252 in 1999.

The decline in earnings isn’t just income inequality at work. Labor’s share of the national income has plummeted to historic lows.

Clearly, the middle class (whatever way you choose to define it, it can’t be the top 10%) compensated for stagnating income with a “work-around” that was heavily incentivized by tax deductions of interest and declining interest rates: borrowing money.

Meanwhile, corporate profits have risen sevenfold since the early 1980s (as did household debt—an interesting coincidence).

Perhaps a more accurate measure of corporate profits is to view them as a share of GDP:

Corporate profits as a share of GDP zoomed to historically unprecedented levels in the credit-bubble era following the brief 2001 post-dot-com recession.

What accounts for this unprecedented rise in corporate profits and equally unprecedented decline in labor’s share of the national income?  The forces at work can be summarized in one word: financialization.

The Perverse Incentives and Feedback of Financialization

Financialization is the incentivization of debt, leverage, speculation, and regulatory capture (i.e., “deregulation”) that enables graft, fraud, and collusion as the “business model” for low-risk profits.

From the long view, modern-day corporate/State capitalism (Neoliberal Capitalism) ran aground in the 1970s on two shoals: the rise in energy costs and the exhaustion of consumerist demand driven by rising wages. After stumbling badly through the 1970s (adjusted for inflation, the S&P 500 stock index lost 67% of its value in that high-inflation decade), Neoliberal Capitalism developed a financialization model for growing profits.

As the cost of borrowing fell, a stagnant income could leverage (serve as collateral) for larger amounts of debt.  This new debt-driven demand boosted the value of assets such as houses and stocks, which then provided new collateral for even more debt.  Restrictions on leverage and speculation were loosened or gutted via State-mandated financial deregulation.

This created a self-reinforcing “virtuous cycle” of ever-rising debt, leverage, speculation, asset valuations, and financially derived profits.  In the final stages of this debt-based “prosperity,” auto manufacturers were booking most of their profits on auto loans; the actual manufacture of vehicles was merely a step in the origination of new debt.

This increasing reliance on debt for “growth” and “prosperity” aligned perfectly with the interests of the stagnating middle class, which had turned to debt as a substitute for income to support its lifestyle.  Thus in the early stages of financialization, the interests of the financial sector and the middle class borrowers were aligned, as were those of the Central State, which saw tax revenues climb as income and profits rose. 

Ever-expanding debt rose faster than income, however, so leverage had to constantly increase if debt were to continue rising.  This is why by the end of the financialization cycle in 2006, the housing bubble was being driven by “zero down payment” mortgages ($0 down leveraging a $500,000 loan) and “no-document” mortgages (“liar loans”), where phantom income served as collateral for phantom assets.

The “virtuous cycle” ends once leverage cannot be extended any further.  As overall debt expansion ceases, the asset bubbles created by debt-dependent demand implode, and the cycle reverses into deleveraging: as assets decline in value, assets must be sold off and debt either paid down or repudiated/written off.  The assets were phantom, but the debts left behind were real, and the losses were real, too.  Real income must be devoted to paying down debt that was based on phantom assets.

The middle class gorged on debt for 30 years as a “work-around” for stagnant income, and its wealth rose as its investments in housing and stocks reached bubble heights. Now that the credit-based expansion of asset valuations has reversed, middle class wealth has been gutted even as its income is largely devoted to servicing underwater mortgages, high-interest student loans, and other household debt.

The interests of the middle class have now diverged from the vested interests of the Central State and the financial sector, which used its expanding profits to capture regulators and buy political protection of its financialization rackets. Even now, four years after the implosion of the financialization model, we are treated to headlines such as “Rigged Rates, Rigged Markets.”

The Neofeudal Colonization of Home Markets

The use of credit to garner outsized profits and political power is well-established in Neoliberal Capitalism.  In what we might call the Neoliberal Colonial Model (NCM) of financialization, credit-poor developing world economies are suddenly offered unlimited credit at very low or even negative interest rates. It is “an offer that’s too good to refuse,” and the resulting explosion of private credit feeds what appears to be a “virtuous cycle” of rampant consumption and rapidly rising assets such as equities, land, and housing.

Essential to the appeal of this colonialist model is the broad-based access to credit.  Everyone and his sister can suddenly afford to speculate in housing, stocks, commodities, etc. and live a consumption-based lifestyle that was once the exclusive preserve of the upper class and State Elites.  (In developing nations, this is often the same group of people).

In the nineteenth-century colonialist, model, the immensely profitable consumables being marketed by global cartels were sugar (rum), tea, coffee, and tobacco—all highly addictive, and all complementary:  tea goes with sugar, and so on.  (For more, please refer to Sidney Mintz’s landmark study, Sweetness and Power.)

In the Neoliberal Colonial Model , the addictive substances are credit and the speculative consumerist fever it fosters.

In the financialization model, the opportunities to exploit “home markets" were even better than those found abroad, for the simple reason that the U.S. government itself stood ready to guarantee that there would be no messy expropriations of capital or repudiation of debt by local authorities who might decide to throw off the yokes of credit colonization.

In the U.S. “home market,” the government guaranteed that lenders would not lose money, even when they loaned to marginal borrowers who could never qualify for a mortgage under any prudent risk management system.  This was the ultimate purpose of Freddie Mac, Fannie Mae, and now the FHA, which is currently guaranteeing the next wave of mortgages that are entering default.

In my analysis, the Status Quo of “private profits, public losses,” and the incentivization of gargantuan household debt amounts to a modern financialized version of feudalism, in which the middle class now toils as debt-serfs.  Their debt cannot be repudiated (see student loans), their stagnating disposable income is largely devoted to debt service, and their assets have evaporated as the phantom wealth created by serial credit bubbles has largely vanished.

Subsidizing a Parasitic Central State and Crony Capitalist Cartels

In broad brush, financialization enabled the explosive rise of politically dominant cartels (crony capitalism) that reap profits from graft, legalized fraud, embezzlement, collusion, price-fixing, misrepresentation of risk, shadow systems of governance, and the use of phantom assets as collateral.  This systemic allocation of resources and the national income to serve their interests also serves the interests of the protected fiefdoms of the State that enable and protect the parasitic sectors of the economy.

The productive, efficient private sectors of the economy are, in effect, subsidizing the most inefficient, unproductive parts of the economy.  Productivity has been siphoned off to financialized corporate profits, politically powerful cartels, and bloated State fiefdoms.  The current attempts to “restart growth” via the same old financialization tricks of more debt, more leverage, and more speculative excess backstopped by a captured Central State are failing.

Neofeudal financialization and unproductive State/private vested interests have bled the middle class dry.

In Part II: The Middle Class Survival Guide, we look at what we can do to avoid serfdom and collaborating in an unjust, exploitative, and ultimately doomed system.

We are not powerless simply because we are not individually wealthy and politically powerful.  The Status Quo depends on our passivity, complicity, and collaboration.  Just as each vote we cast in an election supports or resists the Status Quo, every dollar we spend is a “vote,” too. Every dollar we don’t send to a cartel or quasi-monopoly is a dollar we can spend locally or invest in our own life.

Click here to access Part II of this report (free executive summary, enrollment required for full access).

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 07/12/2012 - 11:16 | 2609971 fightthepower
fightthepower's picture

All a part of the Rothschild's plan. 

Thu, 07/12/2012 - 11:27 | 2609999 SheepDog-One
SheepDog-One's picture

NAH the key is to dump money faster down the black hole....backfill theory.

Thu, 07/12/2012 - 11:29 | 2610007 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Still middle class?

Save your purchasing power by investing in gold and silver bullion.  It will never go away unlike gains from stocks.  Stock has huge counter party risk because you are investing in a corporation you are not running.  Look at BP!

Buy silver!

Thu, 07/12/2012 - 12:14 | 2610138 Raymond K Hessel
Raymond K Hessel's picture

I really, truly, without hesitation, H.A.T.E. it when people talk about the middle class when they really mean the median class.  

Middle Class is not a dollar amount.  

It's a way of life.  It means you either work hard on your business or get the best education you can't afford so that you can work for a high salary.  It means you want more out of life than just existing.  

Median class is a much larger demographic but it has nothing to do with Middle Class.  

There are Rich, Middle Class, Working Class, and Poor.  That's it.

Based on the same quantitative foundation that sunk the global economy, yes, most people are Working Class and they are getting rolled.  

The downturn in the economy effected the Middle Class but most people making less than $250,000 are probably not Middle Class people.  Most of them are Working Class.  Most Americans and Most Europeans are Working Class.

 

Thu, 07/12/2012 - 12:22 | 2610168 Conrad Murray
Conrad Murray's picture

Got any numbers to go with this? An infographic perhaps?

Thu, 07/12/2012 - 12:38 | 2610204 Raymond K Hessel
Raymond K Hessel's picture

To expand on what I meant that the Middle Class is not the Median Class:  The Middle Class is a QUALITATIVE demographic in that there are cultural distinctions that make a person a member of the Middle Class.  

The idea behind the "Middle" part is that these people are not Nobility but they are also not Poor.  Over time, as people migrated from an agricultural to an industrial economy, it becomes necessary to create a new class of people called the Working Class.  

It's my assertion that the Working Class makes up most of the population.  Politicians have successfully convinced people that they are Middle Class when in fact they are Working Class.

I hope I was able to "draw you a picture" with my words.  I'm not Banzai!

Thu, 07/12/2012 - 12:44 | 2610245 prains
prains's picture

the richest 400 americans hold more wealth than the bottom 150 million americans that's all that needs to be said right there

Thu, 07/12/2012 - 12:54 | 2610283 Raymond K Hessel
Raymond K Hessel's picture

When someone says "that's all that needs to be said" or "there's no more arguing" or anything that's supposed to end the debate without there being any real resolution, I know I'm talking to someone who believes in socialism / communism / fascism / corporatism / social justice / statism / tyranny.

I think there is more that needs to be said about the wealth gap and about how the economy got to be where it is.  

Thu, 07/12/2012 - 17:29 | 2611173 MillionDollarBoner_
MillionDollarBoner_'s picture

Let me simplify it fer y'all.

There's upper class, middle class and lower class. Upper class have good accountants so they pay jack sheet; lower class are unproductive, bloodsucking, baby breeding clients of the state so they pay jack sheet; the "middle" class pay for everything.

Got it now?

Thu, 07/12/2012 - 18:56 | 2611318 prains
prains's picture

couldn't be more wrong Raymond but nice try, if there is more to be said then please say it

all i stated was a simple verifiable fact the conjecture is all yours but i do believe you already live under all your above stated isms

called the united states of oligarkistan

Thu, 07/12/2012 - 12:23 | 2610174 Ghordius
Ghordius's picture

+1 though a Median Class lifestile has a price tag, too, as for the Middle Class.

The pricetag for middle class lifestile (as per statistics, etc.) in China is 10'000 USD per year, with 240m "partecipants"

Thu, 07/12/2012 - 12:37 | 2610216 Raymond K Hessel
Raymond K Hessel's picture

Ghordius, the point is that it's not a number.  It's a lifestyle that incorporates accummulating wealth, among other things.  

Some of these things include: acquiring a college education, starting a business, a sense of family and community, etc.

I think you get where I'm going with this.

Thu, 07/12/2012 - 12:48 | 2610252 Cathartes Aura
Cathartes Aura's picture

your point of view is similar to mine, with maybe a slight bitter twist. . .

in my observations, "middle class" are the aspirational class, always aspiring to more, better, faster - they're the shoppers and the ones with "toys" in their driveways, they wear the brand name labels, carry i-gadgets, and are well versed with media memes and sports scores - all the better to be recognised with. they are to be found taking courses to acquire "new workplace skills" or degrees to climb the corporate ladders.

just high end working class, schemin' & dreamin' - believing the "trickle down" is on its way, always lookin' up, with hope.                                                                       

Thu, 07/12/2012 - 12:57 | 2610299 Raymond K Hessel
Raymond K Hessel's picture

That's a little bitter and I think you're right about how the working class has used debt and toys to feel like they're middle class.

But you're certainly getting my point about these classes being at best economic lifestyles or attach some other tag to the qualitative differences between classes of people that carry with it direct economic consquences or features.  That's all I'm really saying.  

The post is a quantitive discussion about the Working Class.  Not the Middle Class.

Thu, 07/12/2012 - 17:06 | 2611120 Cathartes Aura
Cathartes Aura's picture

I agree with you - in fact, I'd say, if you're working. . . then you're working class.

the "middle" was just a story sold to get those who love to compete to work harder.

more taxes, happy IRS, the FED's strong arm, mafia model, WooHoo!

Thu, 07/12/2012 - 20:13 | 2611539 Anusocracy
Anusocracy's picture

The middle class is a group of people that wishes to run other people's lives without actually having to do so.

 

They are the wannabes, fools, and useful idiots, and only do the right thing when every idea or belief they can come up proves to be wrong.

 

 

Thu, 07/12/2012 - 13:37 | 2610451 ZeroAvatar
ZeroAvatar's picture

If I recall, it was CHS that wrote something, coupla' years back, about how there WAS no more middle class, people thinking they were 'middle class' were simply deluding themselves.  I'd have to look through a LOT of notes to find the reference.

 

Thu, 07/12/2012 - 11:47 | 2610003 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

A preminent University sociology Professor best known for writing books on the Occult told me back in the Fall of '08 that the reason for the designed economic collapse was to squeeze the last of the middle class into the lower class.

This was her last point after discussing Bohemian Grove and rituals, how David Rockefeller had said he, "Did not care what religion anyone had, as long as they have one and are fanatical about it" - this Rockefeller had said in the 70's - and where society will be going, at least as planned by these grand white wizards of fortune.

Thu, 07/12/2012 - 11:40 | 2610039 optimator
optimator's picture

Time to read the "Protocols" again.  For a fake document it sure has bin coming true for the last hundred some odd years, huh?

Thu, 07/12/2012 - 11:45 | 2610048 ITrustMyGut
ITrustMyGut's picture

exactly..

 

much like "The Report from Iron Mountain.."

Thu, 07/12/2012 - 11:59 | 2610083 SMG
SMG's picture

Just remember that wasn't a Jewish plan, it was a Luciferian Illuminati plan.

Want to make sure the pitchfork and torches get pointed in the right direction.

Thu, 07/12/2012 - 12:19 | 2610155 Ghordius
Ghordius's picture

very good article. Smith is at his best when he writes about what he knows (less so when he writes on europe)

fightthepower: duh! your comment "All a part of the Rothschild's plan" is exactly what makes me despair whenever I read ZH comments. Hello? Do you really need to believe in some hidden conspiracies when there is plenty of overt shenigans going on? Is this some kind of spiritual need for a "Devil"? Did you read the article at all? Rothschild my hat...

Go back and read what is eating up the US middle class (plenty of zero-sum games exemplyfied), and this time please put your thinking cap on.

Thu, 07/12/2012 - 12:55 | 2610287 Raging Debate
Raging Debate's picture

I remember being in High School in the 1980's and my history teacher talking about the Tri-Lateral Commission. The world globalized into a giant pyramid like all structures do, becuase it is in our evolutionary programming to think in pyramids and build them. This pyramid was made of paper rather than stone but the same lessons of Egyptian empire apply. The outcome in physics of pyramids is to split into two parts. Back to East vs. West again.

Thu, 07/12/2012 - 12:55 | 2610288 Raging Debate
Raging Debate's picture

I remember being in High School in the 1980's and my history teacher talking about the Tri-Lateral Commission. The world globalized into a giant pyramid like all structures do, becuase it is in our evolutionary programming to think in pyramids and build them. This pyramid was made of paper rather than stone but the same lessons of Egyptian empire apply. The outcome in physics of pyramids is to split into two parts. Back to East vs. West again.

Thu, 07/12/2012 - 13:31 | 2610422 Praetorian Guard
Praetorian Guard's picture

...and yet, people do nothing to change this. We can blame the bankers, business owners, and even the top 1%, but what are the others doing to better their lives? Most don't even want to work. It is scary to see the amount of young people who cannot even read a tape measure, or calculate simple mathematical problems. Logic is gone. The only thing that seems to pre-occupy these individuals are the newest tech gadgets, reality tv, and music. Most of the young, are pussies. Perhaps that was the "Rothchilds" plan, the de-stabilization/centralization of the individual from self to state. In any event, I believe people should stop whinning and bitching about "woa is me" and do something to improve their lives. ...but when 50% of the nation are sucking the welfare titty, what does that tell you? At some point the remaining 50% will capitulate, not because they want to, but because they are tired of dragging ass to get no further ahead than the rest of the slugs.

Thu, 07/12/2012 - 11:19 | 2609980 ich1baN
ich1baN's picture

I just got off the phone with SilverSaver and they are telling me that they are seeing unprecedented demand for physical gold and silver right now..... No wonder it is in backwardation. People, the physical PMs are experiencing huge volumes for the long side; this could mark one of the last great moments to buy physical before the miracle September Surprise, coinciding with the Indian Wedding surge. 

This is going to be one interesting month to month action. 

Thu, 07/12/2012 - 11:19 | 2609985 reader2010
reader2010's picture

 the Great Brainless American Middle Class is a piece of shit, and its most favorite passtime is shopping useless junk (more recently at dollar stores.) 

Thu, 07/12/2012 - 11:25 | 2609992 Unprepared
Unprepared's picture

Middle class is a thin myth.

Thu, 07/12/2012 - 11:34 | 2610025 Temporalist
Temporalist's picture

I read that at first as "thin mint."  It's wafer thin...

http://www.youtube.com/watch?v=rXH_12QWWg8

The American consumer

Thu, 07/12/2012 - 11:33 | 2610023 optimator
optimator's picture

Don't forget replacing three year old cars to get a no interest loan new car.

Thu, 07/12/2012 - 12:48 | 2610259 Metalredneck
Metalredneck's picture

From channel-stuffers.

Thu, 07/12/2012 - 11:35 | 2610029 Totentänzerlied
Totentänzerlied's picture

After WWII, the 20th century middle class in all advanced western nations came to be the embodiment of the phrase "more money (debt) than sense" (see: every Fed-enabled consumer-driven bubble), which was the money-power's Keynesian plan all along.

It's been said ten thousand times: one man's debt is another man's asset.

Thu, 07/12/2012 - 11:50 | 2610060 TaxSlave
TaxSlave's picture

There are two kinds of debt: value loaned out of previously produced savings against future productivity, and money created out of thin air against future productivity.

In the first kind, one man's debt is another man's asset.  In the second, not so much, because the value of the money created out of thin air was stolen from all members of the economy, never to be returned, but instead the value created to 'repay' it was skimmed off by bankers who never created a single fucking thing of value in their miserable lives.

So yeah, that was the plan all along.  People are waking up.  Little by little.

 

Thu, 07/12/2012 - 12:15 | 2610100 TruthInSunshine
TruthInSunshine's picture

One man's debt is another man's asset, except that it doesn't mean very much when the existing economic and monetary framework (controlled by a select few) essentially can mark one to the same value at its discretion, because the foundation for both is the same.

Just wait until we really find out how many creditors realize they're no better off than the debtors.

It's no conspiracy to say it's the literal game plan and has been rolling on schedule all along:

Harvest - From bubble to crash and boom to bust. Wash, rinse & repeat often.

Get almost all to be willing to pledge their real assets/wealth, that exists in tangible form and has productive value, in exchange for an illusory 'loan' of fiat that can be run up or run down in value with the stroke of a computer key, and then the real lenders of that fiat cull all those assets pledged for what is really just cotton/linen or a screen displaying digits.

Damn it must feel like omnipotence to be one who gets to feed off the Ponzi Scheme that is the world's debt-based monetary system, where debt can be created/issued in infinite amounts at zero cost by the fractional reserve central banks (at behest of their owners), and people and businesses must use this monetary system (taking on debt to conduct commerce and basic transactions) by force of law, and the debt that was created and issued at zero cost to they who make "the loan" can be used to seize real assets having inherent value.

Why doesn't everyone see that the global economic system based on fractional reserve banking and zero cost basis "money"/debt creation using full fiat notes, is the fundamental essence of a Ponzi?

 

The Secret of Oz (in my own words)


Thu, 07/12/2012 - 14:23 | 2610582 SmittyinLA
SmittyinLA's picture

actually you can get a lot of great bargains at the 99 cent store, in fact I get my least junkiest products there, hardcore basic food products, usually some blackberries, baby carrots, toffee peanuts and cashews, Toms chocolate oranges, and Snapple Peach Ice tea mix, and its right down the street from the gold and silver coin store.

Thu, 07/12/2012 - 11:27 | 2609995 PulpCutter
PulpCutter's picture

Wow - a ZH post that waited until NEARLY HALFWAY DOWN THE PAGE before it blamed the problem on 'liberals'!

Thu, 07/12/2012 - 11:33 | 2610010 SheepDog-One
SheepDog-One's picture

Sheepherding....all has to come back down to the phony as hell 'left/right' paradigm....red team blue team, got to pick a side and if you say you dont want to be on either fraud rigged team then they call you a 'freak'.

Thu, 07/12/2012 - 12:35 | 2610207 Euro Monster
Euro Monster's picture

Boink! I'm a freak!

Thu, 07/12/2012 - 18:26 | 2611280 Patriot Eke
Patriot Eke's picture

Fight club is full of freaks, and I'm thankful for it.  The Brotherhood of the Aware would be another good name for it.

Thu, 07/12/2012 - 11:49 | 2610050 PulpCutter
PulpCutter's picture

Smith is correct that overleverage of the banks is what's destroying our future.  But he misses the corallary: it's the GOP that's led the charge on watering down banking regulation - and no one more than the Tea Party Caucus.  Forget what they say, LOOK AT THEIR VOTES:

The banks "bought" the Tea Party. ALL FIFTEEN of the freshmen Tea Party Caucus members to substantial money from "financial services" industry PACs.  Was it just handly campaign money?  Bullshit; 11 of the 15 went on to COSPONSOR HR3461 "THE FINANCIAL INSTITUTIONS EXAMINATION FAIRNESS AND REFORM ACT".  The GOP, led by the Tea Party, has pushed to slash funding for the WallSt regulators and prosecutors with every budget crunch.

http://www.marketwatch.com/story/a-year-more-of-bank-reform-debate-likel...

Before Boehner, ABA President Edward Yingling told bankers that the longer that the Senate lawmakers can't come to an agreement on the bank-reform bill, the more leverage Sen. Richard Shelby, R-Ala., the banking committee's ranking member, has to prompt concessions.

"Every day that passes gives more leverage to Shelby," Yingling told bankers.

Boehner argued that a Senate bill that is approved will be "way, way, way" to the right of bank-reform legislation approved by the House in December, leaving the two chambers far apart from each other on key pieces of the bill.

It doesn't matter - red team is same as blue team?  BULLSHIT.  Look at the votes.  Pull your head out of your ass.

 

Thu, 07/12/2012 - 12:01 | 2610090 Overfed
Overfed's picture

Bullshit. Clinton signed the repeal of Glass-Steagal. Clinton signed NAFTA. O'bomb-a extended the "Patriot" act. O'bomb-a insisted on indefinite detention.

Republican, Democrat doesn't matter. They're all against US.

Thu, 07/12/2012 - 12:05 | 2610110 knukles
knukles's picture

Right on.
They just put on red and blue jerseys for the public scrums

Thu, 07/12/2012 - 12:26 | 2610179 Problem Is
Problem Is's picture

Fallacy of the False Dichotomy... The phoney left/right paradigm...

Thu, 07/12/2012 - 20:30 | 2611576 Anusocracy
Anusocracy's picture

public scrotums

Thu, 07/12/2012 - 12:13 | 2610112 PulpCutter
PulpCutter's picture

Actually, Obama vetoed the detention bill. 

House roll call on Gramm-Leech-Bliley (repealing Glass Steagall): 57 no votes; 51 Democrats, 5 Republicans

Senate roll call on GLB: 8 no votes; 7 Democrat, 1 Republican

House roll call on 2006 extension of Patriot Act: 138 no votes; 124 Democrat, 13 Republican

Senate roll call on 2006 extension of Patriot Act: 10 no votes; all Democrat

But don't let the facts get in the way of your bullshit.

Thu, 07/12/2012 - 12:18 | 2610154 Raymond K Hessel
Raymond K Hessel's picture

Idiot, are you saying that there were only 10 Democrats in the Senate for the 2006 extension of the Patriot Act?

The tallies are planned by each party so that legislators that are weak in their districts can appear to be centrist in the hopes of reelection.  None of the Republicrats or Demopublicans vote their conscience.

Thu, 07/12/2012 - 12:49 | 2610262 bobnoxy
bobnoxy's picture

Yes! And give old Bill credit for winning that epic battle, dragging the Republicans like Dick Armey, Phil Gramm and the rest of them in Congress kicking and screaming to get them to agree to deregulation! Who would have thought anyone could get the Republicans to agree on that?!

Moron. Read a fucking book instead of wasting your time posting nonsense.

Thu, 07/12/2012 - 12:14 | 2610139 WillyGroper
WillyGroper's picture

>>>>>it's the GOP that's led the charge on watering down banking regulation 

Let's see -  the Glass–Steagall Act was repealed through the Gramm-Leach-Bliley Act in 1999 by President Bill Clinton

didn't know Willy went Rep.

Do NOT follow this link or you will be banned from the site!