How private is your personal life? If you answered, “not very,” you would still be far from the truth. The fact is, with the invention of the internet and social media platforms, privacy is almost extinct. Some of this is because we put all of our personal information out there for the world to see. Going on vacation? Sure, let’s tell all our 300-plus friends on Facebook and broadcast it to burglars that our home will be vacant while we sip Mai Tais and catch some sun rays. But, constitutionally, by way of the Fourth Amendment, we do have a right to privacy, and according to the courts, Big Brother has been taking advantage of that.
Just in case we need a little reminder on the Fourth Amendment:
“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
In 2018, a Foreign Intelligence Surveillance Act (FISA) court ruling found that the FBI had been searching records that had been collected by the National Security Agency’s (NSA) surveillance program. The now recently redacted documents say American citizens’ constitutional rights may have been violated because the FBI searched millions of records without warrants.
The NSA’s program, which has been in play since 2008 (and made known to the world by Edward Snowden in 2013), was supposed to capture communications between Americans and foreigners, but only as long as the foreigners are the main ones under scrutiny. The agency is supposed to target data once it leaves the country, but in so doing much of our domestic communication is captured as well.
An update in 2018 to the act makes it so that the FBI is required to obtain a warrant whenever it wishes to use data in connection with a criminal investigation, as that apparently hasn’t been happening. In 2017, the FBI ran approximately 3.1 million searches on American citizens and foreign nationals residing in the US, and then the NSA and CIA conducted 7,500 searches.
To make matters worse, many of the searches were not even related to ongoing criminal investigations. In fact, in one example, the agency apparently searched for data associated to 70,000 people related to the FBI, which essentially means spies were spying on each other. Another instance claims an agency contractor actually conducted a search on himself and relatives, and at other times, staff routinely searched for potential witnesses and informants who were not even involved in any criminal cases.
The FBI doesn’t appear to agree that what they are doing is considered abusing the system and refer to the actions as “fundamental misunderstandings” of the FISA. It also claimed that having to justify each warrantless search would “hinder the FBI’s ability to perform its national security and public safety missions.”
The ruling suggests that the FBI was using the NSA’s database to spy on people first to see if they wanted or needed to get a warrant to get the information they already have as well as look deeper. To most, this isn’t really surprising; there’s a reason the government is referred to as Big Brother. The deeper question is: Now that the courts have ruled and apparently found them guilty of violating the Fourth Amendment, will anything be done about it?
Schwab Will Soon Allow Investors To Buy And Sell Fractions Of Stocks
When the discount brokerage houses announced a few weeks back that one after another they would take their brokerage fees to zero, some – this website included – suggested that this is not merely the latest deflationary side-effect of chasing market share at all costs (even zero costs), but an indication that demand for stock ownership among the retail class was tumbling whether due to loss of faith in capital markets, or simply an inability to participate in a pastime that is increasingly dominated by the 1%.
Today, we received another confirmation that retail investors are getting priced out of the stock market when Schwab announced that it would let investors buy and sell fractions of shares in what, the official explanation goes, is an effort to attract younger clients.
Chairman Charles Schwab told The Wall Street Journal Thursday that “fractional share trading would soon be introduced, along with several other new programs, as the online brokerage looks ahead after it eliminated trading commissions earlier this month.”
It would appear that the kneejerk response to the elimination of trading fees did not result in a favorable response among the investing public that was anywhere close to what the company was anticipating, and so it was forced to come up with even more creative ways of suckering in the greatest fool.
“I wanted to take commissions out of the formula,” Schwab said. “We’ve been on that path for 40 years,” he said, reflecting back on the company’s start as one of the first discount brokerages. Now, he said, Schwab is focusing on efforts to win business from young people.
While the ability to buy fractions of cryptocurrencies has been available for years, Schwab’s move would be the first by a major online brokerage to allow investors to buy and sell fractions of stocks. To be sure, there is some merit to Schwab’s argument: shares of Berkshire Class A aside, some of the most popular companies – which refuse to pursue stock splits – have very high price tags, making owning even one share impossible for poorer wannabe investors. One share of Amazon.com, for example, costs $1,792.
Then again, if one can’t afford to buy even one whole share of Amazon, is investing in the stock market really something that person should be considering? Clearly, to the brokerages the answer is yes.
And now that Schwab has broken the seal, expect everyone else to follow. Zero cost startups such as Robinhood helped popularize the zero-commission model in the online-brokerage business, which has now been adopted by virtually all online brokers; others have already allowed for fractional share trading: among them is M1 Finance, a Chicago-based online brokerage that splits every share into one-one hundred thousandth of a share.
One final point: while we applaud the brokerages desire to get virtually everyone hooked to the stock market, it’s not out of some altruistic, capitalist motive for everyone to get rich. The true motivation is simple: to sell the data of as many “traders” as possible to HFT shops, just so that the CEO of frontrunning giants such as Citadel, can buy even more $100+ million houses.
Mulvaney Revises His Statement, Says There Was “Never” Any Quid Pro Quo For Ukraine Aid
After earlier on Thursday, acting White House chief of staff Mick Mulvaney set off a media firestorm when in a press briefing he said that the the Trump administration held up military assistance to Ukraine in part because Trump wanted Kiev to investigate allegations about Ukraine’s involvement in the hack of the Democratic National Committee server in 2016, later on Thursday Mulvaney revised his remarks, maintaining that there had never been any quid pro quo between the hold the administration put on aid to Ukraine and Ukraine’s cooperation on an investigation into allegations surrounding the DNC server.
In a statement late on Thursday afternoon, Mulvaney accused the media of “misconstruing” his earlier remarks to the press at the White House “to advance a biased and political witch hunt against President Trump”, and explained that the aid was held over concerns about a lack of financial support from other nations, especially in Europe, for Ukraine: the “only reasons we were holding the money was because of concern about lack of support from other nations and concerns over corruption.” He had cited that rationale in the earlier briefing before adding that the server was an issue that the president wanted investigated before aid was forthcoming.
“Multiple times during the more-than 30 minute briefing where I took over 25 questions, I referred to President Trump’s interest in rooting out corruption in Ukraine, and ensuring taxpayer dollars are spent responsibly and appropriately,” Mulvaney said in the statement.
“There was never any condition on the flow of aid related to the matter of the DNC server,” Mulvaney said in the later statement, which is reposted below:
Mulvaney’s earlier comments represented the first official acknowledgement of a link by the White House between the aid and investigations the president wanted Ukraine to pursue. He said then that Trump’s concerns about corruption in Ukraine— including an unfounded suspicion the president has expressed that the hacked DNC server from the 2016 U.S. election has since been hidden in Ukraine — were partly responsible for Mr. Trump’s order to withhold nearly $400 million in aid to Ukraine in July.
“Did [Trump] also mention to me in the past that the corruption related to the DNC server? Absolutely, no question about that. But that was it. That’s why we held up the money,” Mulvaney told reporters at the earlier afternoon briefing.
Another factor in the decision to withhold the aid, Mulvaney said in his earlier comments, was whether Ukraine was cooperating in a Justice Department review of the origins of the investigation of Russian interference in the 2016 election, a probe that was later taken over by Special Counsel Robert Mueller.
“The look back to what happened in 2016 certainly was part of the things that he was worried about in corruption with that nation. And that is absolutely appropriate,” Mulvaney continued, suggesting Trump wanted assistance with an ongoing investigation by the Justice Department.
However, according to the WSJ, a senior DOJ official said the department wasn’t aware of any effort to hold up aid in return for better cooperation by Kiev in its review. If the White House was withholding aid for that reason, “that is news to us,” the official said. The official declined to say whether the DNC’s computer server is a focus of the review.
And in another outburst of truthiness, Mulvaney also told reporters that there would be “political influence in foreign policy” and that they needed to “get over it.” Needless to say, that comment did not go over well:
The “it” in “get over it” is the U.S. Constitution. Just so we’re all clear about the stakes here.
Mulvaney’s earlier comments surprised senior aides in the White House, where officials said they had never heard Mulvaney describe Trump’s decision to suspend military aid as conditioned on new investigations by Ukraine. Mulvaney had been tasked by Trump with halting that aid.
A media firestorm erupted on Monday afternoon, after Mulvaney’s initial claim that the held aid was explicitly linked to investigations came in stark contrast to Trump’s repeated denial of any quid pro quo—a central focus of House Democrats’ impeachment inquiry. In recent days, several U.S. diplomats have testified to House committees that they believed it was necessary for Ukraine to commit to certain investigations before Mr. Trump would agree to meet with Ukraine’s president.
Trump’s personal legal team also distanced itself from Mulvaney’s remarks on Thursday: according to the WSJ, Jay Sekulow, a lawyer for Trump, said: “The president’s legal counsel was not involved in acting chief of staff Mick Mulvaney’s press briefing.”
Trump has repeatedly said that the driving force behind his decision to hold up the aid was that he felt European nations weren’t doing enough to help Ukraine, a concern that Mulvaney repeated on Thursday. The Europeans are “really, really stingy when it comes to lethal aid,” Mulvaney said.
That said, Mulvaney also noted that Mr. Trump’s desire for Ukraine to investigate former Vice President Joe Biden and his son Hunter Biden wasn’t related to the hold on aid. That call prompted House Democrats to begin an impeachment inquiry last month.
Mulvaney’s backtracking was prompted by the vocal response by Democrats to his original comments. Adam Schiff, the chairman of the House Intelligence Committee and the de facto leader of the impeachment inquiry, said Mulvaney’s comments on Thursday indicated that “things have gone from very, very bad to much, much worse.”
In addition to denying the existence of a quid pro quo publicly, Trump also did so in at least two private conversations. He told Sen. Ron Johnson in August that there was no link between the hold on aid and new probes by Kiev regarding U.S. elections, Johnson told The Wall Street Journal. Johnson said Mr. Trump told him: “No way. I would never do that. Who told you that?”
Trump also told Gordon Sondland, the U.S. ambassador to the European Union, that there was no link between investigations and aid, Mr. Sondland told House committees Thursday. He said he asked the president: “What do you want from Ukraine?” Mr. Trump responded, “Nothing. There is no quid pro quo,” Mr. Sondland said.
At the same time, Mulvaney said that quid pro quos and political considerations are a standard practice in foreign policy. “We do that all of the time with foreign policy,” he said. “I have news for everybody: Get over it,” he added. “There is going to be political influence in foreign policy.”
Mulvaney also defended the administration’s right to discuss the president’s political opponents with foreign leaders, and said that the White House in no way tried to cover up Mr. Trump’s July phone call with Ukraine’s president.
Attention also turned to Rudy Giuliani, as several diplomats in House committees have raised concern about the former NYC mayor’s efforts to conduct “shadow diplomacy” and cut out the State Department, National Security Council and the Department of Defense in dealing with Ukraine.
Mulvaney said the president is free to appoint anyone he wants to conduct foreign policy. He noted that Mr. Trump never asked him personally to work with Giuliani, but confirmed that the president asked Energy Secretary Rick Perry to work with Giuliani. On Thursday, Rick Perry officially handed in his resignation.
Also on Thursday, Sondland, in his testimony to House committees, criticized Mr. Trump over his efforts to enlist Ukraine in investigating a political rival and said he and other U.S. officials were “disappointed” by the president’s directive to work with Giuliani on Ukraine matters.
When earlier this year Whiting Petroleum announced it would cut a third of its workforce, the news did not make a huge splash as it was lost among other cost-cutting efforts in the industry.
But when earlier this month Halliburton said it was cutting 650 jobs, the signal became clearer: the U.S. shale boom is slowing and businesses are preparing for a bad-case scenario where the slowdown extends.
Indeed, the U.S. oil and gas industry is bleeding jobs. Reuters’ John Kemp reports, citing official data, that the oil and gas support segment had shed 14,000 jobs between October last year and August this year. That’s a 5-percent decline and while it might not be worrying in itself, combined with other data from the industry, it does suggest a slowdown is in motion.
New drilling rig additions between September 2018 and August 2019, Kemp wrote, fell by as much as 20 percent, or 176, according to data from Baker Hughes. Part of that may be better drilling efficiency, of course, but there is also the issue of drilled but uncompleted wells, or DUCs, that the EIA includes in its production forecasts as they can be completed and out into production relatively quickly.
Source: Bloomberg
These forecasts, according to industry insiders, could be misleading precisely because of the DUCs. In an energy industry survey by the Federal Reserve of Dallas, half of the respondents from the oil industry said the EIA had been overestimating the number of drilled but uncompleted wells in the Permian. What’s more, a quarter of these respondents said the overestimation was significant, S&P Global Platts reported in late September. Some oil executives blamed this on the loose definition of a DUC.
Kemp, for his part, notes the slowdown in completions as well. Earlier this year, he wrote, completions of wells drilled last year kept the ball rolling and production growing. Yet recently the number of completions has started falling as has the number of DUCs, which declined by 11 percent between January and August.
In April this year, Pioneer Resources and Laredo Petroleum announced plans for job cuts. The pressure then came mostly from shareholders who insisted on getting their promised returns despite the decline in oil prices. Now, with prices stuck between $50 and $60 a barrel, additional pressure is mounting on the industry.
Production is still growing, though. At the end of September, the EIA reported Texas had added 40,000 bpd during the month and had topped 5 million bpd for the first time ever. In North Dakota, production spiked to 1.41 million bpd, also a record-high.
For this month, the EIA expects production in the Permian alone to add another 63,000 bpd in production and while later data based on actual reported output may be lower, chances are oil production in the star play will continue rising over the observable future. However, the workforce employed in this production and oil production in other shale plays may continue to shrink unless price trends change and the change lasts for more than a couple of days. There are investors to make happy and bank loans to repay, all while the outlook for global oil demand becomes gloomier.
“Click To Pray eRosary” – Vatican Launches Smart Device That Tracks Your Prayers
The Vatican is leaping into the 21st century, and that means the Pope wants to track your prayers through a wearable smart device that links to a smartphone, reported Vatican News.
The Pope’s Worldwide Prayer Network launched the “Click To Pray eRosary” device and a smartphone app at a press conference on Tuesday in the halls of the Vatican.
The “smart and app-driven wearable device serves as a tool for learning how to pray the Rosary for peace in the world. It can be worn as a bracelet and is activated by making the sign of the cross. It is synchronized with a free app of the same name, which allows access to an audio guide, exclusive images, and personalized content about the praying of the Rosary,” stated the press release.
The smart device will retail for approximately $110, will be available on Amazon and the Vatican’s e-commerce store in the near term. There was no information about the exact launch date of the device.
The Vatican believes the smart device is affordably priced and can reach many people around the world.
The secret purpose behind the app, not explained in the press release (of course), is that growth rates in the Christen population across the world are slowing.
So what better way in attracting new members than to target the world’s millennials through smartphones and smart devices.
Think what the printing press did for the bible in the mid-1450s, it allowed the teachings of Our Lord and Saviour Jesus Christ to spread through the world, one book at a time.
And with nearly 2 billion smartphone users across the world, the Pope is thinking big and high-tech. There will be a limited distribution of bibles via books in the future; it’ll be delivered electronically via a smartphone.
On top of that, we’re not quite sure why the Pope wants to track your every prayer.
The Affordable Care Act continues to be anything but affordable.
In fact, the healthcare system in the US is in terrible financial shape.
A new study has revealed that waste and needless spending in America’s healthcare system could amount to almost $1 trillion each year. This exceeds the total US military expenditures in 2019 – the world’s largest defense budget – and as much as all of Medicare and Medicaid combined.
This news should not shock anyone.
If you are one of the hundreds of thousands of Americans who are in serious debt due to medical expenses, you are likely not surprised by the new study’s findings. As we recently reported, 66.5 percent of all bankruptcies in the US are tied to medical issues, either because of high costs for care or time out of work. An estimated 530,000 families turn to bankruptcy each year because of medical issues and bills.
The cumulative waste in US healthcare ranged from $760 billion to $935 annually – or 25 percent of what Americans spend each year on health services. And we spend a lot – approximately 18 percent of the gross domestic product (GDP) or more than $10,000 per individual a year on average.
The US healthcare system is bleeding billions of dollars.
For the study, researchers reviewed data from January 2012 to May 2019, with a focus on the 6 waste domains previously identified by the Institute of Medicine and Berwick and Hackbarth.
Computations yielded the following estimated ranges of total annual cost of waste for each domain:
failure of care delivery: $102.4 billion to $165.7 billion
failure of care coordination: $27.2 billion to $78.2 billion
overtreatment or low-value care: $75.7 billion to $101.2 billion
pricing failure: $230.7 billion to $240.5 billion
fraud and abuse: $58.5 billion to $83.9 billion
administrative complexity: $265.6 billion
There have been significant efforts over the years to reduce this waste. Current efforts save $191 billion to $282 billion annually, reducing the net effect of waste to perhaps $478 billion to $744 billion, lead author William H. Shrank, MD, MSHS, told Medscape Medical News.
The study breaks down where those savings occurred:
The estimated annual savings from measures to eliminate waste were as follows: failure of care delivery, $44.4 billion to $93.3 billion; failure of care coordination, $29.6 billion to $38.2 billion; overtreatment or low-value care, $12.8 billion to $28.6 billion; pricing failure, $81.4 billion to $91.2 billion; and fraud and abuse, $22.8 billion to $30.8 billion. (source)
Administrative issues are the largest source of waste.
Administrative complexity, which includes time and resources spent on billing and reporting to insurers and public programs, is the largest source of waste. It is concerning that despite the astronomical costs associated with this domain, the authors found no studies that evaluate approaches to reducing it.
The reason for this may be related to the “complex interplay within these estimates of waste and savings with efforts to combat it,” as Medscape Medical News explains:
Insurers count on prior authorization, for example, to try to rein in overtreatment and what they call low-value care, such as use of expensive drugs when there are cheaper equivalent treatments. Yet prior authorization also contributes to what the authors term “administrative complexity,” the biggest category of wasteful spending identified in their paper, according to Shrank.
“The providers’ administrative complexity represents the payers’ effort to reduce waste,” he told Medscape Medical News. “It’s a perfect example of where the incentives are perfectly misaligned and it creates administrative complexity that just sucks value out of the system.” (source)
Dr. Donald Berwick, CEO of the Institute for Healthcare Improvement, told CBS News that “There are so many different payers, kinds of coding, billing products, recordkeeping requirements, that when you get a system that complicated it adds tasks and paperwork.”
Indeed, a 2016 study funded by the American Medical Association found that doctors spent almost twice as much time on administrative work (49% of their time) as they did seeing patients (27%). Physicians also took another one to two hours of clerical work home with them each night.
The existing fee-for-service payment system, under which each provider bills for the services they deliver, is another major source of complexity and waste.
“Right now you’re billed for the hospital room, by the ambulance company, by every doctor, rehab facility — everyone is keeping their own records and doing their own billing and dividing it up into tiny pieces, which makes it hard for the patient and hard for the caregivers,” Berwick said. “It has long since outlasted its usefulness.” (source)
The government has a history of making healthcare unaffordable.
Asking the government to repair our broken healthcare system is like asking a fox to guard the henhouse.
Government involvement in healthcare is a major reason it is so expensive. The details are complex and beyond the scope of this piece, but if you would like to learn more about the role government plays in rising healthcare costs, I recommend the following in-depth articles:
After reviewing the history of the healthcare system in the US and how the government damaged it beyond repair, it appears there is only one viable solution: removing government from the equation completely. A truly free market system in which healthcare providers and patients make decisions without interference from middlemen (the government and insurance companies) would likely bring costs down to a reasonable level for most Americans.
There are already medical practices like this across the country. They are usually referred to as “concierge care” or “direct primary care (DPC)” practices. Generally speaking, these business models are membership-based, meaning that patients pay an annual or monthly membership fee in exchange for services. A unique feature of these practices is that the patient and doctor get to spend more time together. Some medical practitioners who offer concierge or DPC services take insurance, some do not. Both business models can allow physicians and patients more freedom because approval from a third party (insurance company) is not required for services and treatment.
Many direct primary care practices offer fees on a sliding scale and some offer special rates for low-income families. Others provide charity care.
In Why I Chose Concierge Medicine, Dr. Simon Murray writes that he believes the concierge business model “will save primary care and will ultimately reduce the cost of healthcare in the United States because doctors with more time will refer less, prescribe, test less, and keep people out of the hospital more.”
Another possible solution to our healthcare crisis comes from a surprising source.
Imagine being able to go to one place to get the following healthcare services:
Primary care
Dental
Counseling
Labs & x-rays
Health screening
Optometry
Hearing
Fitness & nutrition
Health insurance education & enrollment
Now, imagine those services were offered at prices ranging from $20 to $40 for office visits and annual exams, $10 to $20 for lab tests, $45 for counseling, $25 for dental exams (including x-rays), $25 for teeth cleanings, and $45 for a vision exam.
The Walmart Health center will offer low, transparent pricing for key health services to provide great care at a great value, regardless of insurance coverage. Customers will be notified on the estimated cost of their visit when they book their appointment.
The Walmart Health center will be operated by qualified medical professionals, including physicians, nurse practitioners, dentists, behavioral health providers, and optometrists. Walmart Care Hosts and Community Health Workers onsite will help customers navigate their visit, understand resources and be a familiar presence for regular visits.
Working in partnership with wellness organizations, the Health center will offer specialized community health resources, online education and in-center workshops to educate the community about preventive health and wellness. (source)
Walmart offers Care Clinics in 19 stores, but those facilities are much smaller (1,500 square feet) and are more limited in service.
A single Walmart health clinic on the outskirts of Atlanta isn’t going to fix any of the big problems with the American health care system. But you’d be foolish to think that the people running one of the world’s most efficient and successful companies aren’t going to come up with better solutions than the men and women trying to get elected. (source)
CVS and Walgreens are also offering outpatient healthcare services through various models and things appear to be going well for both companies so far.
The best way to avoid medical debt is by taking care of yourself.
Accidents are often not preventable, and neither are some health conditions.
But many of the health issues that lead to massive medical debt are preventable, including obesity, Type 2 diabetes, and heart disease.
A 2014 study published in The Lancet revealed that
…chronic diseases are the main causes of poor health, disability, and death, and account for most of health-care expenditures. The chronic disease burden in the USA largely results from a short list of risk factors—including tobacco use, poor diet and physical inactivity (both strongly associated with obesity), excessive alcohol consumption, uncontrolled high blood pressure, and hyperlipidaemia—that can be effectively addressed for individuals and populations. (source)
If you’d like to improve your health (and hopefully reduce your risk of accruing medical debt), here are some resources that may help.
Rand Paul Blocks Senate Democrats’ Rebuke Of Trump’s Syria Pullout
Sen. Rand Paul (R-KY) shut down an effort by Democrat Chuck Schumer (NY) to rebuke President Trump over his decision to withdraw US troops from northern Syria.
Schumer attempted to get consent on Thursday to bring up the House-passed resolution, arguing that “we’re in real trouble,” according to The Hill.
On Tuesday, the house voted 354-60 “opposes the decision to end certain United States efforts to prevent Turkish military operations against Syrian Kurdish forces in Northeast Syria.”
Paul blasted Schumer, saying “He should come to the floor and say that we are ready to declare war.We are ready to authorize force, and we are going to stick our troops in the middle of this messy, messy, five-sided civil war where we would be ostensibly opposed to the Turkish government that has made an incursion.”
The Kentucky Republican added that the House-passed resolution would do “nothing to fix the problem.”
On Wednesday, Paul told CNN‘s Jake Tapper that pulling US troops from Northern Syria “may be the best thing that ever happened to the Kurds,” adding “This was [President Donald Trump’s] decision … It was the best thing not only for our troops, but it’s also the best way to adhere to the Constitution.”
“The Constitution says you don’t declare a war unless Congress votes on it, and who are we going to declare a war against — our ally, Turkey, the Free Syrian Army that used to be our ally, [Syrian President Bashar] Assad?”
“He was told by the Turks they were coming one way or another, and they had 50 troops. Fifty troops don’t stop 10,000 troops … I think he made the right decision. I’m reminded of Beirut [Lebanon] when we made the wrong decision and had 300 Marines in a barracks that weren’t well protected. … So I think he made the right decision,” Paul said, adding “This may be the best thing that ever happened to the Kurds, because they need a protector in Syria willing to stay.”
“We had been preventing having them talk to Assad. Now they’ve made an alliance with Assad, and the irony of this is: It may end up being the best thing that ever happened to them.”
If we want to make real progress, we have to properly diagnose the structural sources of the rot that is spreading quickly into every nook and cranny of the society and culture.
It seems my rant yesterday (Let Me Know When It’s Over) upset a lot of people, many of whom felt I trivialized the differences between the parties and all the reforms that people believe will right wrongs and reduce suffering.
OK, I get it, there are differences, but if the “reform” doesn’t change the source of the suffering and injustice, it’s just window-dressing that makes the supporter feel virtuous. Want an example? Let’s take the the “cruel and unusual punishment” for drug-law offenders, many of whom are African-American males whose lives are effectively hobbled by felony convictions and long sentences in America’s Drug War Gulag.
You want a “reform” that actually gets to the root and solves the source of the injustice? It’s simple: decriminalize all drugs and recognize drug use as a medical and social issue rather than a criminal-justice / Gulag issue. But that won’t happen because too many people are making too much money off the Gulag, which is now a public and private-prison Gulag.
(Other advanced nations have had success with this structural change. Maybe we could learn something from their examples?)
If you’re not ready to demand the full decriminalization of all drugs, then you’re not really interested in solving the problem; you’re just seeking virtue-signaling “reforms” that don’t upset the power structure. And since any real solution necessarily disrupts the power structure benefiting from the status quo, all the painless “reforms” are ineffective.
In other words, either go big and change the power structure or go home and stop promoting your own virtue. This is why the economy is floundering despite all the warm and fuzzy headlines about stocks rising due to the Federal Reserve lowering interest rates: we collectively refuse to consider structural changes in the way “money” is created in our perverse system–perverse because the way “money” is created guarantees soaring inequality.
If you don’t change the way “money” is created and distributed, you change nothing. Did the thousands of pages of financial regulations passed after the 2008-09 debacle reverse wealth and income inequality? The answer is no, wealth inequality is rising even faster after all the feel-good “reforms.” The net result of the “reforms” is the costs of compliance for banks went up substantially, and that regulatory moat simply pushed risky lending outside the banking system.
In other words, the sources of systemic instability and wealth inequality weren’t even touched by the “reforms.” If the financial system were actually stable, why was the Federal Reserve only able to “normalize” interest rates and its bloated balance sheet for a few months after a decade of “growth”? Why is the Fed reverting to “emergency measures” again after a few brief months of “normalizing”?
If all these “reforms” were worth more than a bucket of spit, why isn’t wealth inequality reversing?
Here’s the way our “money” system works: banks borrow trillions of dollars into existence and loan it to debt serfs at high rates of interest. Central banks create “money” out of thin air and distribute it to the very top of the wealth-power pyramid: banks, financiers and corporations.
The only way to change this corrupt, exploitive system that generates inequality as its only possible output is to eliminate central banks and fractional reserve banking, and ban the aggregation of “too big to fail” entities: a system of 1,000 small banks is structurally far less vulnerable than five mega-banks that are tightly bound to virtually every risk-on asset in the entire system.
if you don’t change the way “money” is created and distributed, you change nothing.
Since we’re incapable of changing the sources of financial instability, fragility and inequality (because it would destabilize those benefiting from the status quo), we’re doomed to watch our social and political systems decay and implode.
If we’re honest–an increasingly rare and hazardous condition–we’d admit that the purchasing power of wages has fallen sharply for the bottom 95% in the past 19 years, while the concentration of wealth in the hands of the top .01% has skyrocketed, leaving the bottom 80% with few if any meaningful assets and only the top 5% reaping the gains in our “winner take most” economy.
This systemic decay in social mobility, positive social roles and financial security has eroded the social fabric as the implicit social contract between the powerful and the disenfranchised has unraveled: all the phony “reforms” of the past 19 years simply locked in insiders’ “legal” pillaging.
The failure of the political system to recognize and rectify the broad-based decline of America’s economy as experienced by the bottom 80% has eroded trust in politics as a “solution.” Instead, people see the same powerful corporations buying influence with both parties, and tens of thousands of lobbyists in Washington DC writing the legislation passed by both parties (recall Nancy Pelosi’s brief flash of honesty: “We have to pass the bill to know what’s in it.”). Anyone who believes this manifests the ideals of democracy is delusional.
To those I offended: please pardon my frustration with all the phony “reforms” that change nothing and thus serve to tighten the grip of the self-serving power structure on the throat of the nation.
Here’s the unpalatable reality: The financial rot spread to the “real” economy two decades ago, and now the economic rot is decaying the social and political orders.
If we want to make real progress, we have to properly diagnose the structural sources of the rot that is spreading quickly into every nook and cranny of the society and culture. If we’re not willing to disrupt those reaping the outsized benefits from the existing structures of wealth and power, we’re deluding ourselves if we believe we’re solving any problems at the source.
“Credibility At Stake”: Maduro’s Venezuela Given Seat On UN Human Rights Council
Despite US ally Costa Rica mounting a last minute effort to block the possibility, Venezuela has won a seat on the U.N. Human Rights Council, in a shock that will outrage anti-Maduro governments throughout the West, especially Washington.
The Washington Post reports of the news that the Maduro government will now hold a key human rights related position at the United Nations in what Caracas officials boasted is an “important achievement”:
The Maduro government, no longer recognized as legitimate by the United States and around 50 other countries, had sought a return to the 47-member panel to counter an image of international isolation — and thwart investigations into its own alleged abuses.
“We celebrate, once again, the Bolivarian diplomacy of peace at the U.N.,” Venezuelan Foreign Minister Jorge Arreaza said after the vote. “This victory is historic, since we faced a ferocious campaign.”
Thus in a major irony a government not recognized by the US and its allies, and further accused of expansive human rights abuses, now holds a UN decision-making post over human rights. It will serve a customary three-year term.
The socialist state reportedly received key support during Thursday’s vote from China, Russia, Cuba and other allies, including some deemed ‘rogue’ states by Washington.
Supporters of Costa Rica, which attempted to win the seat in order to prevent Venezuela taking, decried thatthe United Nation’s “credibility” was at stake again.
Past awkward moments for the UN Human Rights council involved Saudi Arabia’s election to a seat in prior years, as well as other nations with deeply questionable human rights records and the Philippines and Cuba. Libya and Sudan also won seats Thursday alongside Venezuela.
“In case the people in this room didn’t know, the financial crisis of 2008, which I had been forecasting for some time, and the Great Recession that ensued, was caused predominantly by the Federal Reserve.”
This was the opening line of Peter Schiff’s talk at the Las Vegas MoneyShow.
The Fed managed to “rescue” the economy after the financial crisis, but in the process, it created an even bigger bubble than the one that popped in ’08. This bubble is about to burst and the Fed will try to repeat the process. The difference is this time it won’t work, as Peter explains.
The Fed facilitated the 2008 crash by pushing rates artificially low in the wake of the bursting of the dot-com bubble. In the runup to the financial crisis, most people didn’t realize we were in a bubble. Republicans were particularly blinded to the problems. George Bush was president. He had cut taxes. The economy was great. They didn’t recognize the bubble. But Peter was warning that a crash was imminent.
Most people were in denial — just like they are today.”
Peter said the problem is the bubble the Fed has created this time is bigger than the last one.
And the economic collapse that is going to follow the bursting of this bubble is going to be far more dramatic.”
That’s because the measures the Fed took after the 2008 crash were more extreme than the one that created that bubble. The central bank took rates all the way down to zero and held them there for seven years. It ran three rounds of quantitative easing. And although the Fed claimed it would eventually normalize rates and shrink its balance sheet, that never happened. In fact, the Federal Reserve has already launched a new round of quantitative easing, although it refuses to call it that.
The problems of 2008 were caused by an excess of debt. Artificially low interest rates encourage borrowing. After the financial crisis, the central bank doubled down. Now that the Fed has encouraged all of this debt, there is no way it can allow interest rates to rise.
So, I kept warning that these policies were going to be never-ending, that it would be QE infinity, that it would never stop.”
Donald Trump’s win created a lot of optimism. Everybody expected tax cuts and deregulation. Under those conditions, the Fed was able to do what it couldn’t under Obama and hike rates. The straw that broke the camel’s back was the rate hike in December 2018. At that time, Peter said it would be the last cut. That led to the “Powell Pause” and the subsequent rate cuts and QE.
We’ve never seen anything like this, I mean not even under Obama during the worst part of the Great Recession.”
Now the Fed is desperately trying to keep interest rates from rising. The problem is that it’s a much bigger debt bubble this time around and the Fed is going to have to blow a lot more air into it to keep it inflated.
The difference is this time it’s not going to work.”
Everybody thinks the Fed can do it again. They believe the central bank can rescue the economy.
The belief that the policy worked was completely predicated on the fact that it was temporary and that it was reversible, that the Fed was going to be able to normalize interest rates and shrink its balance sheet back down to pre-crisis levels. Well, when the balance sheet is five-trillion, six-trillion, seven-trillion; when we’re back at zero; when we’re back in a recession … nobody is going to believe it is temporary. Nobody is going to believe that the Fed has this under control, that they can reverse this policy. And the dollar is going to crash. And when the dollar crashes, it’s going to take the bond market with it and we’re going to have stagflation. We’re going to have a deep recession with rising interest rates and this whole thing is going to come imploding down.”
