Local Economic Activism on the Rise

Last night someone let a breeze into my house. When we got home, the furnace was at redline as it vainly tried to keep the thermostat warm. The radiators were dangerously hot. And I was pretty sure that I didn't leave my cookbooks strewn across the pantry floor on a layer of shattered Victorian art glass. The responding officer mentioned that the holiday season is a hot time for those who use this method to encourage people to buy more stuff. Our neighborhood email newsgroup has had more buzz than usual about burglaries and car theft. One sign of a weak economy is a rise in material crimes. The poor become more desperate while the rich take shorter tropical vacations and drive last year's Lexus. These guys were in a studied hurry. They opened and dumped drawers, flipped mattresses, and opened every door. As near as I can tell, my super-zoom camera and new laptop computer were the only really significant items taken. Plus several hundred dollars, mostly in state quarters and other change. They found and collected the power supply and carry case for my laptop, each in a different location. I miss my vintage laptop bag more than the much pricier laptop. It was a classic Targus backpack that has been getting favorable comments for 14 years. I haven't seen another quite like it since the year I bought it. Fortunately, we were away with all our credit cards and my smaller (but now favored) camera. It appears that some jewelry of little economic value is also missing, and an older camera. And a set of house keys. Changing the locks is easy. But not having keys didn't seem to slow them last night.

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On the continuing loss of the middle class

Eliot Spitzer discussed the economy of the United States with Amy Goodman of DemocracyNow. Has the economy recovered? No:

[W]e have a major crisis in this nation, and that crisis is jobs. That crisis is that we are seeing the elimination of the middle-class job foundation that permits most Americans to do better year after year after year. The reality is median family income has been stagnant for forty years, and the policies of what I call financialization, which is major banks trading assets back and forth, the Wall Street banks, such as Goldman, which is rightly a lightning rod right now for much of what’s going on, buying and selling, playing with tax dollars in proprietary trading—they make huge money, nothing is added to the economy, jobs are sent overseas. All of this going on simultaneously. That is what our economy has become. And Ben Bernanke and Tim Geithner were the architects of this.
Spitzer also commented on AIG and credit default swaps:
AIG was, to a great extent—their financial products division—a Ponzi scheme supposedly guaranteeing hundreds of billions of dollars of CDS collateral, credit default swaps, with no collateral behind it. That is part of what brought us down. But that is the system that the Fed was overseeing. They specifically rejected the effort back in ’94, ’95 to regulate this swamp. The derivatives, that are a quintessential Wall Street creation, have some small utility at an economic level, but became an enormous revenue stream for banks, and they were unregulated. People made a fortune. We taxpayers hold the bag.

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Economic news on the street

Avert your eyes from Wall Street to see what is happening to America. These statistics are part of a terrifying article by Elizabeth Warren, who serves as the Chair of the Congressional Oversight Panel created to oversee the banking bailouts:

Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
There are many other statistics in this article. For instance, fully employed males haven't seen a pay increase since the 1970's. Warren also presents banks as villains in her story:
Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

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Law professor: Stiff the mortgage company

According to law professor Brent T. White, many of the home owners who currently owe more on their mortgage than the house is worth should stop paying their mortgages and walk away from their houses:

[F]ar more of the estimated 15 million U.S. homeowners who are underwater on their mortgages should stiff their lenders and take a hike. Doing so, he suggests, could save some of them hundreds of thousands of dollars that they "have no reasonable prospect of recouping" in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume, he says.

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Denialist Wall Street Journal admits Peak Oil has arrived

The trickle of Peak Oil articles has turned into a flood recently. First came the chief economist for the International Energy Agency (IEA), Dr. Fatih Birol, with the shocking announcement that "My main motto never changes, the era of low oil prices is over." Then there were the whistleblowers at the IEA who alleged that the IEA's rosy forecasts of rising production timed perfectly to satisfy rising demand had been rigged at the request of the United States. "We have entered the Peak Oil zone. I think that the situation is really bad," one whistleblower said. Then, Warren Buffet made his "all-in" wager on rail transportation. Now, even the Wall Street Journal has capitulated. Last week, they ran a front-page story titled "Oil officials see limit looming on production". The actual Wall Street Journal site requires a subscription, but it has been mirrored a number of places online if you're interested. The first paragraph of the story reads:

A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.

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