For Detroit, a Crisis of Bad Decisions and Crossed Fingers

By MONICA DAVEY and MARY WILLIAMS WALSH

Published: March 11, 2013

DETROIT — This city was already sinking under hundreds of millions of dollars in bills that it could not pay when a municipal auditor brought in a veteran financial consultant to dig through the books. A seasoned turnaround man and former actuary with Ford Motor Co., he was stunned by what he found: an additional $7.2 billion in retiree health costs that had never been reported, or even tallied up.

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Cindy Darrah, a Detroit resident since 1967, protesting the emergency manager decision last week.

Related

• A Private Boom Amid Detroit’s Public Blight (March 5, 2013)

• Michigan Naming Fiscal Manager to Help Detroit (March 2, 2013)

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Mayor Dave Bing in his office in February.

“The city must take some drastic steps,” the consultant, John Boyle, warned the City Council in delivering his report at a public meeting in 2005. Among the options he suggested was filing for bankruptcy.

“I thought all hell would break loose — I thought the flag would finally be raised,” Mr. Boyle recalled in an interview last week. But his warning drew little notice. “It was utterly astounding,” he said.

The financial crisis that has made Detroit one of the largest cities ever to face mandatory state oversight was decades in the making, a trail of missteps, of trimming too little, too late, of hoping that deep-rooted structural problems would turn out to be cyclical downturns that might melt away as the economy picked up.

Some factors were out of the city’s control. As auto industry jobs moved elsewhere over the decades, for example, Detroit lost much of its affluent tax base. Lower than expected state revenue sharing did not help, nor did corruption allegations in the administration of Kwame M. Kilpatrick, a mayor who resigned in 2008 and was convicted on Monday of racketeering and other federal charges.

But recent findings from a state-appointed review team and interviews with past and present city officials also suggest a city that over the years was remarkably badly run.

The state review team found in recent months that the city’s main courthouse had $280 million worth of uncollected fines and fees. No one could tell the team how many police officers were patrolling the streets, even though public safety accounted for a little more than half the budget. The city was borrowing from restricted funds and keeping unclaimed property that it was required to turn over to the state. In some city departments, records were “basically stuff written on index cards,” as one City Council member put it.

“This was bad decisions piled on top of each other,” Gary Brown, the Detroit City Council president pro tem, said the other day. “It has all been a strategy of hope. You keep borrowing where every piece of collateral is already leveraged. You have no bonding capacity — you’re at junk status. You’re overestimating revenues and not managing the resources. Now the chickens have come home to roost.”

Once the nation’s fourth-largest city, Detroit had grown up around the auto industry, booming right along with it in the 1950s. City workers gained ground with pay increases intended to keep pace with those the United Auto Workers won for its members, analysts said.

“It was easy to do so back in the 1950s,” said Joseph L. Harris, Detroit’s former auditor general. “The city had 1.8 million residents then.”

But as auto jobs moved elsewhere and the region aged, Detroit’s labor costs — retiree health care costs, especially — ballooned.

At the same time, officials papered over growing deficits with more borrowing. Finally Detroit’s legal debt limit, which is linked to the total value of real estate in the city, fell when the mortgage bubble burst and property values plunged. Today the city says its debt limit is $1 billion, and it has effectively lost its ability to issue debt in the name of its taxpayers.

When a city cannot borrow, it cannot function; New York City showed that in 1975, Cleveland in 1978. But even as Detroit has approached the critical limit, some city leaders have seemed unaware, quarreling over smaller, symbolic issues like whether to lease a city-owned park to the state.

“It is peeling an onion,” Mayor Dave Bing said of his growing understanding after he took office in 2009 of the depths of the city’s financial woes. “You dig and you dig and you dig, and you really start to find out how bad the problem was. “

Mr. Bing knew plenty about the city’s struggles before taking office and ran on a platform of reversing the spiraling finances. Still, within his first six months in office, the city came close to not making payroll.

“That’s a scary moment,” he recalled in an interview. “You’ve got people living from paycheck to paycheck, week to week, and you’re about to run out of cash. You can only imagine what kind of impact that that’s going to have just on the life of the average person.”

The big structural imbalance was hard to see building up, because until 2008, when a new accounting rule took effect, cities like Detroit were not required to keep track of their workers’ lifelong health care bills. That is why Mr. Boyle found a $7.2 billion promise that no one knew about. Detroit’s general-obligation debt to its bondholders, by contrast, was a little less than $1 billion that year, safely within the city’s legal debt limit, then $1.4 billion.

But while the numbers are particularly grim here, the basic story line is hardly unique. The same path, long and slow, can be found from Providence, R.I., to Stockton, Calif.

To preserve cash, the city resorted to increasing its workers’ future pensions at contract time, instead of raising their pay. That helped balance the immediate budgets, but set up a time bomb sure to explode as more workers retired.

The cost of the retirees’ pensions also grew because of an inflation-protection feature that compounds every year. Detroit cannot renege on paying the benefits, at least outside of bankruptcy, because the State Constitution makes it unlawful to reduce pensions after public workers earn them.

By the 2000s, Detroit was borrowing to solve budget shortfalls. Meanwhile, property tax revenues fell, not just because of departing residents, but also as values fell and some people quit paying. The city has reported collecting 84 percent of property tax levied, but a Detroit News analysis suggests a collection rate closer to half of property owners.

In recent years, city officials have made deep cuts in staff and operations, leaving residents complaining of darkened streetlights, slow police response times and bus delays. But while cutting workers can help reduce the current year’s costs, it moves many of those people into the ranks of retirees, putting heavy long-term pressure on Detroit’s two public pension funds.

By late 2011, a sense of crisis descended on Detroit. In November, Mayor Bing, a Democrat, addressed the city on live television, warning that Detroit would run out of money without concessions from unions, layoffs and privatization. A month later, Gov. Rick Snyder, a Republican, called for a review of Detroit’s finances, a first step in cases where the state is preparing to send an emergency financial manager.

City officials held off further intervention by committing to a legal agreement with the state in 2012 that laid out measures to save money. By fall, a board overseeing the agreement said progress was moving too slowly. While City Council members are contesting the matter during a hearing in Lansing on Tuesday, Mr. Snyder’s administration is preparing to name an emergency manager within days. Mr. Bing says his administration has drawn up a plan to spare the city, though he acknowledges that it has yet to be fully put into effect.

Under Michigan law, the emergency manager would ultimately have the authority to remove local elected officials from most financial decision making, change labor contracts, close or privatize departments, and even recommend that Detroit enter bankruptcy proceedings, a possibility that experts say raises the prospect of the largest municipal bankruptcy in the nation’s history, at $14 billion worth of long-term obligations.

None of the decisions, experts here say, will be simple, and some wonder whether Detroit can be saved at all. Some 700,000 residents now live in this vast 139-square-mile city that once was home to nearly two million people. That number may fall to close to 600,000 by 2030 before the population begins to rise again, one regional planning group projects. By pushing costs into the future while its population is shrinking, Detroit has left the people least able to pay with the biggest share of its bills.

“Detroit is a microcosm of what’s going on in America, except America can still print money and borrow,” Mr. Boyle said.

A version of this article appeared in print on March 12, 2013, on page A1 of the New York edition with the headline: For Detroit, a Crisis Born of Bad Decisions and Crossed Fingers.

Staring Armageddon in the Face But Hiding It With Official Lies

by Paul Craig Roberts
PaulCraigRoberts.org

Recently by Paul Craig Roberts: What If?

According to the Bureau of Labor Statistics, the US economy created 236,000 new jobs in February. If you believe that, I have a bridge in Brooklyn that I’ll let you have at a good price.
Where are these alleged jobs? The BLS says 48,000 were created in construction. That is possible, considering that revenue-starved real estate developers are misreading the housing situation.
Then there are 23,700 new jobs in retail trade, which is hard to believe considering the absence of consumer income growth and the empty parking lots at shopping malls.
The real puzzle is 20,800 jobs in motion picture and sound recording industries. This is the first time in the years that I have been following the jobs reports that there has been enough employment for me to even notice this category.
The BLS lists 10,900 jobs in accounting and bookkeeping, which, as it is approaching income tax time, is probably correct; 21,000 jobs in temporary help and business support services; 39,000 jobs in health care and social assistance; and 18,800 jobs in the old standby–waitresses and bartenders.
That leaves about 50,000 jobs sprinkled around the various categories, but not in numbers large enough to notice.
The presstitute media attributed the drop in the headline unemployment rate (U3) to 7.7% from 7.9% to the happy jobs report. But Rex Nutting at Market Watch says that the unemployment rate fell because 130,000 unemployed people who have been unable to find a job and became discouraged were dropped out of the U3 measure of unemployment. The official U6 measure which counts some discouraged workers shows an unemployment rate of 14.3%. Statistician John Williams’ measure, which counts all discourage workers (people who have ceased looking for a job), is 23%.
In other words, the real rate of unemployment is 2 to 3 times the reported rate.
Nutting believes that the U3 unemployment rate has become too politicized to have any meaning. He suggests using instead the work force participation rate. This rate is falling substantially, reflecting the discouragement that occurs from inability to find jobs.
John Williams (shadowstats.com) says that distortions in seasonal factor adjustments overstate monthly payroll employment by about 100,000 jobs. The jobs data that is not seasonally adjusted shows about 1.5 million fewer jobs in the economy.
In a recent communication, statistician John Williams (shadowstats.com) reports that the rigged official annual rate of consumer inflation (CPI) of 1.6% is in fact, as measured by the official US government methodology of 1990, 9.2%. In other words, the rate of inflation is 5.75 times greater than the reported rate. If Williams is correct, the interest rate on bonds is extremely negative.
Over the years the official measure of inflation has been altered in two ways. One is the introduction of substitution for what formerly was a constant weighted basket of goods. In the former measure, if a price of an item in the basket (index) rose, the CPI rose by the weight of that item in the basket.
In the substitution-based measure, if a price of an item in the basket goes up, the item is removed from the basket, and a cheaper item is put in its place. For example, if the price of New York strip steak rises, the new CPI will substitute the price of a cheaper cut.
In this new measure, inflation is held down by measuring not a fixed standard of living but a declining standard of living.
The other adjustment used to restrain the measure of inflation is to re-classify many price rises as “quality improvements.” Price rises declared to be quality improvements do not translate into a higher measure of inflation. In other words, if a product rises in price, the price increase or some portion of it can be assigned to improved quality, not to a rise in component or energy costs. As the incentive is to hold down the inflation measure in order to save money for the government on Social Security cost-of-living-adjustments, quality improvements are over-estimated.
Consumers have to pay the higher prices, and as incomes, except for the 1 percent, are not growing, higher product prices, regardless of whether they are or are not quality improvements, mean a lower standard of living for the 99 percent.
The understated new measure of inflation allows the government to show real GDP growth and thus the end of the December 2007 recession, and it allows the government to show in the latest report real retail sales again matching the pre-recession level. However, when measured correctly, as by statistician John Williams, the true picture of retail sales shows a steep decline from 2007 through 2009 and bottom bouncing since.
The reason real retail sales cannot recover is that real average weekly earnings continues its downward path. Earlier in this new century, the lack of income growth for the bulk of the US population was masked by a rise in consumer debt. Americans borrowed to spend, and this kept the economy going until the point was reached that consumers had more debt than they could service.
John Williams report of real average weekly earnings shows that Americans are taking home less purchasing power than they did in the 1960s and 1970s.
Reflecting the dollar’s loss of purchasing power, the price of gold and silver in dollars has risen dramatically during the Bush and Obama regimes.
For the last year or two the Federal Reserve and its dependent banks have operated to cap the price of gold at around $1,750. They do this by selling naked shorts in the paper speculative gold market.
There are two gold markets. One is a market for physical possession by individuals and central banks. The rising demand in the physical bullion market points to a rising price for gold.
The other market is the speculative paper market in which financial institutions bet on the future gold price. By placing large amounts of shorts, this market can be used to suppress price rises in the physical market. The Federal Reserve, which can print money without limit, can cover any losses on its agents’ paper contracts.
It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the US dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the US financial bubble pops, with hell to pay.
To forestall armageddon, the Fed and its dependent banks cap the price of gold.
The Fed’s fix is temporary, and as the Fed continues to create ever more dollars, the price of gold will eventually escape the Fed’s control as will interest rates and inflation.
The Fed has produced a perfect storm that could consume the US and perhaps the entire Western world.

March 12, 2013

Paul Craig Roberts, a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal, has been reporting shocking cases of prosecutorial abuse for two decades. A new edition of his book, The Tyranny of Good Intentions, co-authored with Lawrence Stratton, a documented account of how americans lost the protection of law, has been released by Random House. Visit his website.

Copyright © 2013 Paul Craig Roberts

More CDC Nonsense About the Flu Vaccine

Mar. 10

More CDC Nonsense About the Flu Vaccine

The CDC just released its latest numbers on the 2012-13 flu vaccine effectiveness. (1)  The article was picked up by the mainstream media which reported that the flu vaccine was 56% effective against the flu.  The CDC states, “Confirmation of the protective benefits of the 2012–13 influenza vaccine among persons aged 6 months–64 years offers further support for the public health benefit of annual seasonal influenza vaccination and supports the expansion of vaccination, particularly among younger age groups.”  Is the flu vaccine really 56% effective and should it be expanded?  Maybe in the Land of Oz it is effective and should be expanded, but on our planet this vaccine is virtually worthless, especially for those who need it most—the elderly.
I thought it would take me a few minutes to pour through the data to write this blog.  I was wrong.  Slogging through the fog of this article took me two hours.  CDC’s articles are not for the faint of heart.  Some Oompa Loompa CDC employee must be saying, “I can’t report that the flu vaccine is worthless.  I have to manipulate the numbers to show the vaccine does work.”  Manipulate the numbers is what they did.  In fact, what the mainstream media reported was a vast misrepresentation of the actual data.  Let’s take a look at what I found.
The CDC enrolled 2,697 adults in this study.  Let’s first look at the first group—I will call them Group A– that did not get the flu. Group A consisted of 1,582 subjects who did not get the flu.  In Group A, 793 were given the vaccine in this group—50%.   So, the CDC can tout a 50% efficacy of the flu vaccine.  However, the other 50% of the subjects did not get the flu vaccine nor did they contract the influenza virus.  I say, these numbers show the ineffectiveness of the flu vaccine.  Since 50% of the subjects did not get the vaccine or get the flu, where is the effectiveness of the vaccine? As the old Wendy’s commercials stated, “Where’s the beef?”
Let’s move to Group B—those that were diagnosed with the flu.  The Group B data showed that of 1117 subjects who tested positive for the flu, 367 received the vaccine.  That means that 33% of those vaccinated still became ill with the flu.   If we take the 50% from group A who did not get the flu and had the flu shot and subtract the 33% from group B who got the flu vaccine and also became ill with the flu, we have a net benefit of 17%.  So, the flu vaccine is, at best, 17% effective from protecting you against the flu!  But, keep in mind, that 50% of the non-vaccinated subjects never became ill with the flu.  Again, “Where’s the beef?”   These numbers provide no information supporting the efficacy of the flu vaccine.
One final comment.  This study reported that roughly 50% of the subjects contracted the flu.  In the general population, only about 5-20% becomes ill with the flu.  This study was suffering from a selection bias—it was studying a population that was more prone to get the flu as compared to the general population.  This bias would only serve to show a false increased effectiveness of the flu vaccine.
What was not reported by the media was that the flu vaccine was totally worthless in the elderly.  This is the population that the flu vaccine was originally developed for.   Also not reported was that the flu vaccine still contains mercury—the third most toxic element known to mankind.
To mandate the flu vaccine for health care workers is idiotic.  It is best to avoid getting any ineffective vaccine or any vaccine that contains toxic elements.
(1) Accessed 3.10.13.  http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6207a2.htm

NOTE:  A few readers pointed out a (rare) mistake in my calculations in paragraph 4.  Thank you and sorry for the late night mix up. It is now correct. 3.11.13 db

Posted by David Brownstein | 4 Comments

US citing security to censor more public records

March 11, 2013 | Modified: March 11, 2013 at 5:46 pm
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This Tuesday, Feb. 19, 2013 photo shows Cryptome co-founder John Young in New York. "I'm a fierce opponent of government secrets of all kinds," says John Young. "The scale is tipped so far the other way that I'm willing to stick my neck out and say there should be none." (AP Photo/Seth Wenig)

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The Associated Press

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WASHINGTON (AP) — The Obama administration answered more requests from the public to see government records under the Freedom of Information Act last year, but more often than it ever has it cited legal exceptions to censor or withhold the material, according to a new analysis by The Associated Press. It frequently cited the need to protect national security and internal deliberations.
The AP's analysis showed the government released all or portions of the information that citizens, journalists, businesses and others sought at about the same rate as the previous three years. It turned over all or parts of the records in about 65 percent of all requests. It fully rejected more than one-third of requests, a slight increase over 2011, including cases when it couldn't find records, a person refused to pay for copies or the request was determined to be improper.
The AP examined more than 5,600 data elements measuring the administration's performance on government transparency since Obama's election.

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People submitted more than 590,000 requests for information in fiscal 2012 — an increase of less than 1 percent over the previous year. Including leftover requests from previous years, the government responded to more requests than ever in 2012 — more than 603,000 — a 5 percent increase for the second consecutive year.
When the government withheld or censored records, it cited exceptions built into the law to avoid turning over materials more than 479,000 times, a roughly 22 percent increase over the previous year. In most cases, more than one of the law's exceptions was cited in each request for information.
The government's responsiveness under the FOIA is widely viewed as a barometer of the federal offices' transparency. Under the law, citizens and foreigners can compel the government to turn over copies of federal records for zero or little cost. Anyone who seeks information through the law is generally supposed to get it unless disclosure would hurt national security, violate personal privacy or expose business secrets or confidential decision-making in certain areas.
The AP's review comes at the start of the second term for Obama, who promised during his first week in office that the nation's signature open-records law would be "administered with a clear presumption: In the face of doubt, openness prevails." The review examined figures from the largest federal departments and agencies. Sunday was the start of Sunshine Week, when news organizations promote open government and freedom of information.
White House spokesman Eric Schultz said in a statement that during the past year, the government "processed more requests, decreased the backlog, improved average processing times and disclosed more information pro-actively." Schultz said the improvements "represent the efforts of agencies across the government to meet the president's commitment to openness. While there is more work to be done, this past year demonstrates that agencies are responding to the president's call for greater transparency."
In a year of intense public interest over deadly U.S. drones, the raid that killed Osama bin Laden, terror threats and more, the government cited national security to withhold information at least 5,223 times — a jump over 4,243 such cases in 2011 and 3,805 cases in Obama's first year in office. The secretive CIA last year became even more secretive: Nearly 60 percent of 3,586 requests for files were withheld or censored for that reason last year, compared with 49 percent a year earlier.
Other federal agencies that invoked the national security exception included the Pentagon, Director of National Intelligence, NASA, Office of Management and Budget, Federal Deposit Insurance Corporation, Federal Communications Commission and the departments of Agriculture, Commerce, Energy, Homeland Security, Justice, State, Transportation, Treasury and Veterans Affairs.
U.S. courts are loath to overrule the administration whenever it cites national security. A federal judge, Colleen McMahon of New York, in January ruled against The New York Times and the American Civil Liberties Union to see records about the government's legal justification for drone attacks and other methods it has used to kill terrorism suspects overseas, including American citizens. She cited an "Alice in Wonderland" predicament in which she was expected to determine what information should be revealed but unable to challenge the government's secrecy claim. Part of her ruling was sealed and made available only to the government's lawyers.
"I find myself stuck in a paradoxical situation in which I cannot solve a problem because of contradictory constraints and rules — a veritable Catch-22," the judge wrote. "I can find no way around the thicket of laws and precedents that effectively allow the executive branch of our government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws, while keeping the reasons for their conclusion a secret."
The AP could not determine whether the administration was abusing the national security exemption or whether the public was asking for more documents about sensitive subjects. Nearly half the Pentagon's 2,390 denials last year under that clause came from its National Security Agency, which monitors Internet traffic and phone calls worldwide.
"FOIA is an imperfect law, and I don't think that's changed over the last four years since Obama took office," said Alexander Abdo, an ACLU staff attorney for its national security project. "We've seen a meteoric rise in the number of claims to protect secret law, the government's interpretations of laws or its understanding of its own authority. In some ways, the Obama administration is actually even more aggressive on secrecy than the Bush administration."
The Obama administration also more frequently invoked the law's "deliberative process" exception to withhold records describing decision-making behind the scenes. Obama had directed agencies to use it less often, but the number of such cases had surged after his first year in office to more than 71,000. After back-to-back years when figures steadily declined, as agencies followed the president's instructions, the government cited that reason 66,353 times last year to keep records or parts of records secret.
The Homeland Security Department, which includes offices that deal with immigration files, received more than twice as many requests for records — 190,589 new requests last year — as any other agency, and it answered significantly more requests than it did in 2011. Other agencies, including the State Department, National Transportation Safety Board and Nuclear Regulatory Commission performed worse last year. The State Department, for example, answered only 57 percent of its requests, down from 75 percent a year earlier.
U.S. Citizenship and Immigration Services drove a dramatic increase in the number of times DHS censored immigration records under exceptions to police files containing personal information and law enforcement techniques. The agency invoked those exemptions more than 136,000 times in 2012, compared with more than 75,000 a year earlier. Even though USCIS is not a law-enforcement agency, officials used the exceptions specifically reserved for law enforcement.
Under the law, a citizen can ask the government to reconsider its decision to censor or withhold materials. In the roughly 11,000 such instances last year where that happened, the government prevailed just under half the time. In about 3,400 cases the government turned over at least some additional information. These administrative appeals took about five months each.
The only recourse after such an appeal is an expensive lawsuit or to ask the government's FOIA mediator, the U.S. Office of Government Information Services, to intervene.
The AP's analysis also found that the government generally took longer to answer requests. Some agencies, such as the Health and Human Services Department, took less time than the previous year to turn over files. But at the State Department, for example, even urgent requests submitted under a fast-track system covering breaking news or events when a person's life was at stake took an average two years to wait for files.
Journalists and others who need information quickly to report breaking news fared worse last year. The rate at which the government granted so-called expedited processing, which moves an urgent request to the front of the line for a speedy answer, fell from 24 percent in 2011 to 17 percent last year. The CIA denied every such request last year.
Under increased budget pressure across the government, agencies more often insisted that people pay search and copying fees. It waived costs in 59 percent of requests, generally when the amount was negligible or the release of the information is in the public interest, a decline from 64 percent of cases a year earlier. At the Treasury Department, which faced questions about its role in auto bailouts and stimulus programs during Obama's first term, only one in five requests were processed at no charge. A year earlier, it granted more than 75 percent of fee waivers. The CIA denied every request last year to waive fees.
The 33 agencies that AP examined were: Agency for International Development, CIA, Agriculture Department, Commerce Department, Consumer Product Safety Commission, Defense Department, Education Department, Energy Department, Department of Health and Human Services, Department of Homeland Security, Department of Housing and Urban Development, Interior Department, Justice Department, Labor Department, State Department, Transportation Department, Treasury Department, Department of Veterans Affairs, Environmental Protection Agency, Federal Communications Commission, Federal Deposit Insurance Corporation, Federal Election Commission, Federal Trade Commission, NASA, National Science Foundation, National Transportation Safety Board, Nuclear Regulatory Commission, Office of Management and Budget, Office of the Director of National Intelligence, Securities and Exchange Commission, Small Business Administration, the Social Security Administration and the U.S. Postal Service.
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Your Kids — Like Your Money and Guns — Belong to the “Community”

Source: http://www.lewrockwell.com

MSNBC Cadre Member: Your Kids — Like Your Money and Guns — Belong to the “Community”

By William Grigg

Whenever a progressive refers to “investments,” he or she is referring to confiscation of private wealth.
Whenever a progressive invokes the “community,” that term refers to a state-engineered collective in which the individual has no rights.
Whenever a collectivist refers to “public education,” that phrase is shorthand for the process of destroying a child’s developing sense of self-ownership and indoctrinating them in the notion that they are the property of the “community.” This process is also known as “socialization,” which is the indefinable value-added element that supposedly makes “public education” superior to homeschooling.
Whenever an advocate of “public education” refers to “our children,” conscientious parents should take a quick inventory of their arsenals.
Melissa Harris-Perry, a slogan-spewing news reader for the Stalinist media outlet called MSNBC, ran the table of these collectivist nostrums in a recent installment in the network’s “Lean Forward” ad campaign. The “Lean Forward” spots feature various MSNBC luminaries holding forth like Communist Party functionary exhorting the cadres at a “struggle session” in the Chinese Cultural Revolution.
Harris-Perry is a collectivist of such passionate conviction that she regards opposition to Obama’s radical centralization of power to be a species of sedition. She considers private firearms to be a pestilence, but embraces a vision of social engineering that would require a great amount of gun-related violence by state functionaries. Although she is a credentialed academic, she has the odd and annoying habit, so common among adolescents, of ending every statement with a vocal inflection that suggests a question. In her “Lean Forward” ad, she uncorked this specimen of unfiltered collectivist cant:
“We have never invested as much in public education, because we’ve always had a sort of private notion of children – your kid is yours, and totally your responsibility. We haven’t had a very collective notion of, `These are our children.’ So part of it is that we have to break through our kind of private idea that kids belong to their parents, or kids belong to families, and recognize that kids belong to whole communities. Once it’s everybody’s responsibility, and not just the household’s, then we start making better investments.”
Like many others of her ideological persuasion, Harris-Perry is a stranger to concision. Someone who represented a slightly different strain of collectivism – albeit not as different as Harris-Perry would insist – stated the matter much more tidily almost exactly eighty years ago:
“When an opponent declares, `I will not come over to your side,’ I calmly say: `Your child belongs to us already…. What are you? You will pass on. Your descendants, however, now stand in this new camp. In a short time they will know nothing else but this new community.”
Those words were spoken on November 6, 1933 by the community-organizing, civilian-disarming, socialized medicine-promoting, government stimulus-peddling, unitary executive who presided over Germany’s National Socialist government. When Harris-Perry and her comrades demand that we “Lean Forward,” that’s the direction they have in mind.

Good observations and writing:

 

Guest Post: How Does This End?

Submitted by Tyler Durden on 04/18/2013 12:07 -0400



Originally posted at Monty Pelerin's World blog,
When Suckers Finally Realize
The fleecing of the American public continues.
The theft takes different forms, but it all serves one purpose — to transfer wealth from the average Joe to the crony corporatists and their political lackeys. Here are but a few examples of how this has been accomplished:

• Bailouts for the wealthy and well-connected are paid for by the unconnected middle class.
• Subsidies are provided for unworkable schemes submitted by political donors and favorites. These schemes inevitably fail and the tax-payer is left holding an empty bag.
• Laws are routinely ignored when “friends” need help. In identical circumstances, would you receive the same treatment as Jon Corzine?
• Despite the biggest theft in world history, no one was prosecuted. The Savings and Loan crisis in the 1980s was trivial in comparison to the recent financial crisis. More than a thousand S&L executives were prosecuted.
• Ever-increasing sacrifices in the form of higher taxes from the productive sector are demanded to continue the plush living of the ruling class.

Capitalism and free markets depend upon trust, integrity, property rights and the rule of law. Without these, there are no advantages to free markets. Nor are there any incentives to create wealth. Instead, an economy becomes little more than a massive plunder scheme where the powerful exploit the weak. No economic recovery is possible under such circumstances.

When Suckers Revolt
As people recognize what is happening, they alter their behavior. Three reactions are to be expected:

1. Some will become discouraged when they realize the game is stacked against them. They will diminish their efforts to succeed, even perhaps dropping out of the game altogether. Given the enhanced returns to not working, it should not be surprising that this alternative has become popular.

2. Others will adopt the same behavior as the ruling class. They will exploit those lower on the food chain than themselves.  Justice Brandeis warned of the implications of government misbehavior:

In a government of laws, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipotent teacher. For good or ill, it teaches the whole people by its example. If government becomes a lawbreaker it breeds contempt for law: it invites every man to become a law unto himself. It invites anarchy.

Daniel Patrick Moynihan described the process of declining moral values as “defining deviancy down.”

3. Others may resort to acts of violence. These reactions could be isolated domestic terrorist acts against government and corporations seen as the exploiters. Or the acts might be broader based where the poor see fit to attempt to take from the wealthy. They also could manifest in wide civil unrest against the government if it is seen as the cause of misery or if it is seen as intending to default on promises made. 

All of this behavior is anti-social and it is unproductive. It reduces the output of the economy, further exacerbating the problems. 
How Does This End? 
It is difficult to know how the current condition ends. Here are a few possibilities, with some opinion added: 

• Will our ruling class alter its behavior? That is very unlikely. History provides no examples where power is willingly relinquished.
• Will our economy collapse? That is a likely outcome, although the process could take years or decades. 
• Will social unrest occur? Probably. The government, at some point will be unable to honor its promises. It is broke and left with the printing of money as its primary source of funds. Stopping the printing means dishonoring promises and likely plunges the country into civil unrest.
• Will hyperinflation occur? If the government continues to print, that seems to be the inevitable result. 

Issues That Need To Be Solved

We are too far into this economic disaster to escape without an economic collapse of some sort. Return to normal economic times is impossible without a complete and thorough purging of the economic distortions and capital mis-allocations produced from decades of government interventions.
The following issues prevent a recovery:

• No economy can prosper without a strong middle class. They are the productive class in society. They are the small businesses and job creators. Without them, society does not produce. Without production, there is only poverty.
• Inflation, the cruelest tax of all, is driving up prices while wages and salaries do not keep pace. For those without wealth, there is no way to protect against this theft. For those with wealth, they can rearrange investments to take advantage of inflation, particularly if they are privy to what is coming next.
• The economy is dysfunctional. It no longer functions efficiently as a result of the burdens it is forced to labor under. The price system has been made less efficient as a result of inflation, manipulated interest rates, subsidies, penalties and other impediments. It no longer provides the information needed by economic actors to make proper decisions.
• Regime uncertainty discourages action. When economic actors are unable to judge the future, they pull back. Money goes to the sidelines or out of the country.
• US economic policy and the uncertainty of what comes next has been a great job creator for other countries.
• Economic growth cannot be forced by central diktats. It occurs only in a climate that is receptive and friendly to risk-taking. It is hard to imagine a worse environment than the current one. That is why there is no investment and no hiring.

What Is The Outlook?
There should be no optimism regarding government changing its ways. History suggests it never does.
The recent plunge in the gold market suggests government has gone all in in its attempt to continue exploitation. Chris Martenson commented on this event:

I am very disappointed by, but not surprised at, the latest transfer of weath to the bankers from everyone else. The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing.

Gold is considered a safe-haven against government plunder. It is one of the few escapes from fiat currency debauchery that the small investor has. Whether this latest attack on gold was to make the bullion bankers better off or to scare those trying to protect themselves against government exploitation is irrelevant. When government intervenes (assuming it did, and the circumstantial evidence is pretty strong) in markets in such a manner, it is no longer a referee. It has chosen a side and is a participant in the game. There can be no fair competition when one team owns the referee. That is what happens when government participates in markets.
Historians judge that it took Rome almost two hundred years to die. That determination depends very much upon what you mean by “die.” Arguably Rome died much earlier than historians acknowledge. Rome was dead-man walking before the couple of hundred years it took for it to fall down. 
The US is in similar position. Unless you believe in the miracle of sovereign resurrection, the US is over. The coroner-historians have not pronounced death yet, but they, like with Rome, are behind the curve. This dead man too will eventually fall down.

Video: Why the Government Hates Homeschooling/How Public Education Leads to Statism

Submitted by 1controversialchick on Tue, 04/16/2013 - 20:00

in

• Current Events
• Video

I've posted about the Romeike family before, but I had not seen this short video detailing their case. The father makes the link very clearly, between public education and loss of freedom in a nation.

http://youtu.be/TTw8x4Uuf8Y
If you have not signed the White House petition, there are still 2 days left to do so.
http://www.hslda.org/legal/cases/romeike/petition.asp
Thank you everyone!