The ECB Is The Central Bank Of Europe In Name Only

So Peter Morici, here:

“The real problem is the European Central Bank doesn’t have the tools it needs to guarantee the solvency of these (European) banks,” Peter Morici, Professor at University of Maryland’s Robert H. Smith School of Business, told CNBC Asia's "Squawk Box".

“The Federal Reserve put two trillion dollars into banks. The European Central Bank has to, in a crisis, be empowered to do that by some sort of emergency consensus and take up the role of the Federal Reserve’s place in the United States. It simply does not have these powers right now,” Morici said.

Does The Fed Have The Guts To Let The Market Prove Itself, Now That Operation Twist Is Ending??

I doubt it. Capitalism died here long ago. But we'll see.

Meanwhile Zero Hedge had this chart in May showing the coincidence of stock market rises with the onset of the various tranches of quantitative easing efforts by the US Federal Reserve.

Story here.

Chicago Mob Violence: If The Problem Were Truly Controlled Last Year, Why Do You Have To Get Control Again This Year?

The reporting on uncontrolled black mob violence in Chicago is as absurd as the excuses for it:

Police Supt. Garry McCarthy pointed out earlier this week that there were similar mob attacks last summer, and his department was able to get the problem under control. He said he believes they’ll be able to do it again this year, and it’s a matter of making sure his officers are where they’re supposed to be, to prevent these incidents from happening.

One thing is clear: Rudy Giuliani Rahm Emanuel is not.

Rumors of Grexit Leading to Spanic Might Prompt Quitaly and Finally Fixit

The Euro humor, coming from Matthew Lynn, here, is deadly serious:

“A fresh panic in Spain might be followed by rising demands for Italy to quit if it doesn’t get the same terms its Mediterranean neighbor has been offered, followed by a Finnish departure from the single currency that might finally bring the whole saga to a climax,” he said.

A game of dominoes, started by Greece.

Weez All Bruthas In That Great Fraternity The Mystic Knights Of The Sea

Global Fascism: Casually Described, Matter of Factly Accepted

Today's must-reading comes from The Wall Street Journal, where a libertarian correctly describes the current state of affairs as a global fascist order, but uncritically accepts it as a fact which explains things rather than as a disease to be cured:

The Greek tragedy began with a fiscal crisis—brought on by the government spending more money than it took in—that became a banking crisis. In Spain, there is a fiscal crisis that exacerbates a banking crisis.

Fiscal and banking crises are often linked because in modern economics the state and banking are joined together. Banks purchase government debt, supporting the state, and governments guarantee the liabilities of banks. When one party is weakened, so is the other. ...

The banks, not fiscal deficits, will be the undoing of the euro.

The author believes federal union as in the US should have come first in Europe before the common currency, in order to equalize structural differences in labor markets among other things, for example taxes and spending.

Yes, it should have, the more securely to anchor the foundations of fascism. Somehow ancient memories kept that from happening in Europe, and Spaniards and Greeks still think of themselves as such and not as Europeans who answer to Brussels and the European Central Bank.

But unlike Europe federal union in the US has allowed the partnership between government and banks to run the show unfettered, the more ominously so since 1913 with The Federal Reserve Act, a measure which concentrated power in the hands of the few and took it away from the many.  The bankers were put first in line for Federal Reserve Notes. Citizens last. Like sheep they turned in their gold.

Augmented by the growth of the imperial presidency which got its impetus first under Wilson and then under FDR, the Congress claimed its role in the new cabal in the 1920s by stopping the natural and constitutionally prescribed growth of representation, enhancing nothing but its own importance. Trading on insider information, election to the US House or Senate has become a path to wealth and power, if not fame.

These all act in concert to protect their gig, not yours, not America's.

In its fecklessness and greed, however, the government by turns has lost control of the money creation process, most notably since 1971, and has ceded it to the banking interest and cannot get it back. Our national debt may now surpass our $15 trillion GDP and gold may be $1,600 the ounce, but it takes a banker to really screw things up and create an over the counter market in derivatives with a notional value in excess of $600 trillion. 

The banks won't be the undoing only of the Euro.     

Read the entire column here.

John Hussman Describes The Recent Victory Of Global Fascism, Without Using The Term

Just yesterday, in his column, here:

[O]ver the past 15 years, the global financial system . . . has been transformed into a self-serving, grotesque casino that misallocates scarce savings, begs for and encourages speculative bubbles, refuses to restructure bad debt, and demands that the most reckless stewards of capital should be rewarded through bailouts that transfer bad debt from private balance sheets to the public balance sheet.

What is central here is that the government policy environment has encouraged this result. This environment includes financial sector deregulation that was coupled with a government backstop, repeated monetary distortions, refusal to restructure bad debt, and a preference for policy cowardice that included bailouts and opaque accounting. Deregulation and lower taxes will not fix this problem, nor will larger "stimulus packages."  

New Federal Reserve Capital Requirements May Doom Savings and Loans

And putting savings and loans out of business will dramatically reduce competition in the mortgage business, which is negative for housing, and borrowers, going forward.

Moral hazard. Picking winners and losers. Fascism, American-style.

Story here.

FDIC's New Liquidation Authority Under Dodd-Frank Latest Example Of Obama Fascism

It's not fascism when we do it.

Peter Wallison for Bloomberg.com doesn't come right out and say it, of course, but the FDIC's new liquidation authority under Dodd-Frank is the very embodiment of Obama's fascist vision for America and a crucial instrument for its implementation:

Under the plan, the agency would create a bridge institution to assume the assets and liabilities of a failed firm and could force some creditors to take equity in place of their debt holdings. ...

The powers granted by the liquidation authority to the secretary of the Treasury are unprecedented. With the concurrence of the Federal Reserve and the FDIC, the secretary can seize any financial firm -- not just the largest ones -- if he believes its failure would cause instability in the U.S. financial system.

If the firm’s directors object to the seizure, the secretary can apply to a U.S. district court for an order authorizing him to appoint the FDIC as receiver. The court has one day -- yes, one day -- to decide whether the secretary’s judgment was correct. If the court takes no action within this window, the firm is turned over to the FDIC. It’s a felony to disclose that the secretary has applied for the court order. The constitutional issues here are obvious and breathtaking. ...

Essentially, there’s no appeal. The secretary’s seizure isn’t subject to a stay or injunction, and once the firm has been delivered into the arms of the FDIC, it’s as good as dead.

Read the entire column, here.

Thomas Sowell Agrees With Us: Obama Is A Fascist

Thomas Sowell for Investors.com correctly locates Obama's socialism in the fascist vein:

What President Obama has been pushing for, and moving toward, is more insidious: government control of the economy, while leaving ownership in private hands. That way, politicians get to call the shots but, when their bright ideas lead to disaster, they can always blame those who own businesses in the private sector. ...

One of the reasons why both pro-Obama and anti-Obama observers may be reluctant to see him as fascist is that both tend to accept the prevailing notion that fascism is on the political right, while it is obvious that Obama is on the political left. ...

What socialism, fascism and other ideologies of the left have in common is an assumption that some very wise people — like themselves — need to take decisions out of the hands of lesser people, like the rest of us, and impose those decisions by government fiat.

Read the complete column, here.

Liberal Massachusetts Town Institutes Fines For Public Swearing

The move actually de-criminalizes public swearing in order to remove it from the penumbra of First Amendment applications, as reported here:

Middleborough, a town of about 20,000 residents perhaps best known for its rich cranberry bogs, has had a bylaw against public profanity since 1968. But because that bylaw essentially makes cursing a crime, it has rarely if ever been enforced, officials said, because it simply would not merit the time and expense to pursue a case through the courts.

The ordinance would decriminalize public profanity, allowing police to write tickets as they would for a traffic violation. It would also decriminalize certain types of disorderly conduct, public drinking and marijuana use, and dumping snow on a roadway.

Just another expression of the reactionary impulse and not really a bona fide idea, an irritable mental gesture which only resembles an idea, right?

Americans' Net Worth Drops 40%, 55% For Those Whose Home Is Their Primary Savings

So says the Federal Reserve in a just released report here:

[T]he decreases in median net worth appear to have been driven most strongly by a broad collapse in house prices. ... The decline in median net worth was especially large for families in groups where housing was a larger share of assets, such as families headed by someone 35 to 44 years old (median net worth fell 54.4 percent) and families in the West region (median net worth fell 55.3 percent). ... Although the overall level of debt owed by families was basically unchanged, debt as a percentage of assets rose because the value of the underlying assets (especially housing) decreased faster.

Meanwhile, Obama has focused his laser-like vision on his golf game and mucking with your healthcare while blowing off the real crisis in America. 

So much for not letting a good one go to waste, eh Rahm?

Hey Obama! I Got Your Private Sector Right Here! Jerk.

Wow. Now The Obama "Cool" Is Racist, Too.

What isn't?

Story here:

"There's an ad, talking about [how] the president is too cool, [asking] is he too cool? And there's this music that reminds me of, you know, some of the blaxploitation films from the 70s playing in the background, him with his sunglasses," Rye said. "And to me it was just very racially-charged. They weren't asking if Bush was too cool, but, yet, people say that that's the number one person they'd love to have a beer with. So, if that's not cool I dont know what is.

She added that "even 'cool,' the term 'cool,' could in some ways be deemed racial [in this instance]."

Under Obama, Federal Government Hiring Actually Is Up 0.85 Percent, State/Local Down

Calculated to date from February 1, 2009, federal hiring under Obama is actually up almost 1 percent even though federal tax revenues are broadly down.

State and local governments have cut payrolls by 2.2 and 3.5 percent to date from Feb. 1, 2009, respectively, in an environment of declining revenues due to income stagnation, massive unemployment in the private sector, and declining property tax revenues due to the implosion of housing values.

View the data here, here, and here.

It doesn't make sense that state and local governments are doing their fair share while the federal government is not.

Obama should practice what he preaches.

John Tamny Exposes National Review's Conservatism As Monetarist Currency Devaluation

For Forbes.com, here:

Beckworth and Ponnuru . . . seek money creation to achieve economic growth, or to quote them directly, “central banks would be required to try to keep nominal spending growing at a certain rate” through 5% annual money growth. They bemoan “nominal spending” that “is currently far below the pre-crisis trend”, and remarkably they believe the Fed can remedy this by virtue of gunning the money supply.

Of course missed by the writers is that all demand in any economy results from the provision of supply first (Say’s Law, as one would expect, merits no mention in their manifesto), so to boost the demand, you don’t devalue the currency as they would like to; instead you stabilize the currency so that liquid investors feel comfortable offering up capital to producers. Schumpeter understood that there are no entrepreneurs (and no production) without capital, but if the desire is to devalue the currency then investable capital is naturally going to dry up; that or migrate toward the inflation hedges of yesterday as it did in the ‘70s and since 2001.

An Historicist Explanation Of Fascism Which Unintentionally Describes America

Seen here:

"Fascism resulted from the mobilization of mass armies, the creation of command economies, and the problem of reintegrating veterans into war-torn societies."

Is there a better explanation than this for what happened in America since The Great Depression, whose presidents have drawn their inspiration, now more, now less, from the strong men of Europe as mediated through the legacy of FDR?

In America the creation of the command economy preceded the mobilization for the world war, but the twin developments set the conditions for the state's new role in American life. 

American-style fascism bloomed in The Great Depression and Second World War and then grew through the post-war cult of education, with its original GI Loan Program writ ever larger year by year with newer names and until finally nationalized under Barack Obama, who owes his political success not to the Marxist socialists who inspired and bank-rolled his education but to Chicagoans whose financial success in real estate depended upon government planning, cooperation and exploitation of the poor. He is the epitome of the strangely blended system. 

The proliferation of American fascism occurred through the decades-long expansion of minor educational institutions, cow colleges and junior colleges into degraded and degrading universities which came to elevate the promise of mere vulgar employment to the status of an educated person's learned and wise perspective. A Bachelor's Degree in Physical Education became the equivalent of one in mathematics, and the sixth grade teacher seriously asks the students today to bring an empty white business "envelop" to the next class.

If an education no longer results in gainful employment, we are told, a sin has been committed against education's one and only commandment: Thou shalt get a credential for a job. From fund-raisers who call university alumni to the Rush Limbaughs and Dave Ramseys of the world, an education in a traditional department of human knowledge which fails to lead to employment is useless and worthless.  

Today there are hopeful signs of acute crisis in this consensus even as it reaches its zenith.

Participants graduate with crushing loads of debt in a new environment of depressed wages, long before they have good jobs, spouses, homes, cars and children.

And while the fields of graduates are white unto harvest and they continue to be recruited on-site by big businesses, many of which are responsible for key program funding for the system itself, the number of available jobs has shrunk dramatically as low American GDP resembles present day Europe more than it does its own much more vibrant past. It's as if the system has reached its limit to perpetuate itself.

The lesser products of the universities end up as functionaries in government union shops in the public school system or as media mouthpieces whose job it is to promote the jobs message, but declining tax revenues in the states and diffusion of media due to technology change the calculus for career-minded teachers and "information" workers. As we've seen in Wisconsin, the people who must pay and pay and pay again have had enough. And today's pad will doubtless become yesterday's laptop.

Those not yet quite up to the college experience who can't get an assembly line job because there aren't any may hope to join the military with the promise of money for education later, after the tour of duty. But the prospects for duty look less likely to include personnel-rich adventurism going forward as drone-war proliferates. Out-of-shape teenagers and malcontents in any event will find it increasingly difficult to join a shrinking all-volunteer military.

The failure of faith in the cult of education will necessarily precede the demise of the system, and it appears to be accomplishing this all by itself by not delivering on its promise. It wouldn't be the first time, but you'd need a useless degree to appreciate that. 

Romney Will Say Anything To Get Elected, Whether It's 1994 Or 2012

Not our guy in 1994. Not our guy in 2006. Not our guy now.

Not our guy ever.

Obama's All Wee-Wee'd Up Because Total Government Employment Is Down 1.03 Million

Government employment at all levels reached its zenith in 2010 at 22.997 million, spiking up dramatically very briefly under Census hiring between April and May 2010, after which it steadily declined. Today it stands at 21.969 million, a drop of 1.028 million from that one-off peak, or 4.5 percent.

More to the point, today's level of government employment was reached for the first time just a few years ago, in 2006, so what's happened is not much of a contraction compared to what happened in private employment, the recent nadir of which was 106.8 million at the end of January 2010.

That level of private employment last prevailed way back in 1998, and from peak to trough is a 7.6 percent decline, over 1.5 times worse than what happened in government jobs.

Private employment today stands at March 2005 levels, no thanks to Obama, but when it comes to shared sacrifice, government today could actually stand to give up some more jobs, say 229,000 more, all things being equal, to match where the private sector stands historically, which is still behind.

But you won't be hearing that from the Whiner In Chief About Fairness. 

Obama Lies About Private Sector: 4.6 Million Without Jobs Aren't Doing Fine

Private sector employment has plummeted from its peak in late 2007 by 4.6 million. Back then, 115,647,000 worked in the private sector. Today just 111,040,000 do.

Since the recent nadir of private employment in January 2010, 4.2 million have re-entered the work force.

Unfortunately since the beginning of 2008, part-time employment has skyrocketed from 4.9 million to 8.1 million today, calling into question how good are the jobs recovered over the entire period. As recently as September 2011, part-time employment was as high as 9.3 million.

In any event, private employment is back to 2005 levels, which for its time was no achievement. The growth trend in jobs first reached that level back in 2000 and 2001, only to suffer the slings and arrows of the dotcom bubble and 911.

America has not really recovered from that time, otherwise private employment would be far in excess of 120,000,000 today.

The current president has no imagination, despite not being named Bush.