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Our Economic Decline


Economic Decline  

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  1. 1. Have you been affected by this global economic crisis?

    • Very much so.
    • Yes.
    • Sort of.
    • Not at all.
  2. 2. Are you employed?

    • Yes, full time.
    • Yes, but only part time.
    • No, I can't find a job.
    • No, I have the privledge of not having to work.

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Come on, Redrum, let's gear up and hit the streets and march. We're sick and tired of this, and we're not gonna take it anymore!!!!

If you lean right the media will totally ignore you. Crackpots! How dare they protest against our beloved Barack. :rtfm:

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  • 2 weeks later...

Dagong lowered its ratings for US local and foreign currency credit from A to A-

GM got bailout, now ships jobs to China

Chase Bank Limits Cash Withdrawals, Bans International Wire Transfers

*It should also be noted that JPMorgan Chase runs most of the welfare system and EBT cards and really constitutes the top of the pyramid in the corporate-banking-governmental structure.

This doesn't look too promising.

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These articles are from a week ago or so...it is sometimes a pain for me to copy and paste articles here, which is why I am not always able to post them here promptly. But I think it illustrates perfectly some of what ails our economy lately: 1) The raping of our money and taxpayer dollars by the corporate-elite and government; and 2) The hardships and obstacles faced by small businesses versus Big Business.

First, another chapter in the nefarious misdeeds of our banks and financial institutions:

Tell me again why Jamie Dimon is still chairman of JPMorgan

By Michael Hiltzik, Los Angeles Times October 11, 2013

The toll of JPMorgan Chase's relentless lawbreaking under Chairman and CEO Jamie Dimon may finally be getting real for shareholders.

According to the bank's third-quarter financial results, released Friday morning, its litigation expenses of more than $9 billion (pretax) more than wiped out its third-quarter profits -- and then some. The bank booked a loss of $380 million. In the year-earlier quarter it made a profit of $5.7 billion.

More hits from legal and regulatory problems are coming. Federal regulators are seeking a settlement over JPM's misdeeds in the mortgage market that could be as high as $11 billion. The bank's 2012 annual report listed legal exposure in no fewer than 19 categories, including the mortgage mess, alleged manipulation of international interest rates, involvement in the Bernie Madoff ponzi scheme, an allegedly fraudulent bond deal involving the city of Milan, Italy, and Morgan's manipulation of the California electricity market, which I've documented here and here.

Federal energy regulators let the bank off with a fine that looks like a big number but really amounts to chump change for the big bank, as I observed at the time. But federal prosecutors in New York are now looking into whether Morgan employees criminally obstructed the regulators' investigation.

And that's not even counting the $6 billion the bank lost in poorly supervised trading in its London office, the so called "London whale" debacle. The bank last month agreed to pay nearly $1 billion in regulatory fines in connection with the episode, which Dimon dismissed when it first surfaced as "a complete tempest in a teapot."

As the Wall Street Journal observed in May, "No large U.S. bank is operating under more regulatory sanctions" than JPM. So Dimon's reign at JPM should be coming to an end, right?

Of course not. I'm only funnin' ya. Dimon's position as chairman and CEO looks more secure than ever. He easily fended off an attempt at this year's annual meeting to force him to give up one of the two posts.

It's not hard to see why. The bank's shares have risen more than 61% since he became CEO in 2006--22% this year alone. This quarter's loss is the bank's first under Dimon. His admirers are already saying that it's no big deal -- a one-time charge, nothing to see here, move along.

Yet Dimon's JPMorgan has been at the center of pretty much every crisis-making scandal that has afflicted the international financial system over the last decade. There's obviously something wrong when a bank can profit from this sort of chicanery and fraud and the ringleader gets lionized for it. (You won't hear a discouraging word about Dimon from his claque at CNBC.)

Dimon hasn't merely presided over this lawbreaking; he's done almost nothing about it. No shakeup of management. Almost no changes in JPM's board.

The problem raised by the Dimon case isn't managerial so much as regulatory. Dimon's continuing role is the harvest of a disciplinary system that punishes white-collar crime by exacting corporate fines, not personal responsibility. A chief executive sensitive to his moral and practical responsibility for JPMorgan's record would voluntarily step down.

Since no one expects Dimon to do so, it's up to the authorities to force the issue. But that approach has been off the table for years, and the harvest is JPMorgan, the outlaw. As experts in white-collar crime have pointed out repeatedly -- every time a company like JPMorgan pays a few millions, or even hundreds of millions, to paper over its misdeed -- corporate fines have no deterrent effect whatsoever.

Leaving aside that they're always a fraction of the real costs that corporate wrongdoing imposes on customers and the general public, they impose the cost of wrongdoing on shareholders, not the responsible executives. They send a signal to all corporate executives that prosecution for fraud is just a business expense; since the potential profits from fraud are so great, why not take a flyer?

That's been the ethos at JPMorgan under Jamie Dimon. The record shows that as long as he's in place, more scandal will ensue. As long as he's in place, we'll all be paying.

Second, the legal chicanery that targets small businesses:

Start-up founder sees a troll behind patent lawsuit

By Michael Hiltzik, Los Angeles Times October 13, 2013

Kevin O'Connor, founder of Findthebest.com, is fighting a patent holder's demand for money to settle patent infringement claims.

To Kevin O'Connor, the first straw was also the last straw.

In May, a start-up company he founded, Findthebest.com, got a letter from a Connecticut law firm explaining that it had filed a lawsuit accusing the start-up of infringing an obscure software patent and offering to discuss an out-of-court settlement. The letter also threatened, however, that if Findthebest so much as filed an answer to the lawsuit, the price of settlement would go up.

For each motion Findthebest filed, the letter warned, "Plaintiff will incorporate an escalator into its settlement demand."

O'Connor smelled a troll. "It was written in this Stalinist way," he said recently. "It said, you've committed a crime but we're not going to tell you how or why, just come clean and write us a check."

The result is one of the most closely watched patent cases in the technology world. Instead of folding and settling, as do most young tech companies faced with the prospect of spending hundreds of thousands of dollars to fight off a patent claim even if they're sure of winning, Findthebest is fighting back. In September the firm sued Lumen View, the shadowy plaintiff behind the demand letter, for racketeering and extortion.

O'Connor's strategy of fighting purported patent trolls with RICO, the federal Racketeer Influenced and Corrupt Organization Act, is an unusual one, in part because it hasn't been successful in the past. But he thinks Lumen View's demands were so outrageous and its claims so threadbare that he has a chance of success.

Plenty of people in the high-tech world are cheering him on. That's because patent trolls have become a multibillion-dollar burden for small companies. Trolls, loosely defined, are firms that own patents but don't use them to make or sell anything. (The technical term for them is "non-practicing entities," or NPEs.)

Not all patent-owning companies are trolls; some exist legitimately to help inventors profit from their patented inventions, as inventors have a right to do. Nor is it entirely plain that Lumen View qualifies as a troll. That question depends on whether it's trying to enforce its software patent against companies it genuinely has reason to believe are infringing.

Among the hallmarks of trolldom are lawsuits brought largely for the purpose of exacting hasty out-of-court settlements from defendants who can't afford to fight. These lawsuits are often sprayed out like machine-gun fire, aimed at dozens of companies at a time. Typically the plaintiffs do minimal research to determine if they have a legitimate case. Often, at the first sign of return fire in court, they withdraw — after all, pursuing a lawsuit to enforce a patent can run up six-figure legal fees. That's not the trolls' business model.

"Trolls do a really good job of targeting start-ups at their most vulnerable moments," says Julie Samuels, a staff attorney at the Electronic Frontier Foundation and holder of its Mark Cuban Chair to Eliminate Stupid Patents. That's not a joke: Cuban, the high-tech entrepreneur and owner of theNBA Dallas Mavericks, has been campaigning to outlaw software patents, the trolls' lifeblood.

"Dumb-ass patents are crushing small businesses," he told an interviewer earlier this year. Several of his own start-ups have been fired at, he said.

O'Connor feels almost as strongly. Findthebest, which offers online ratings of consumer goods from smartphones to mountain bikes, doesn't have the money in its corporate coffers to carry on an open-ended lawsuit. So he's putting up his own money — as much as $1 million of his take from the $3.1-billion sale of the online advertising service Doubleclick, which he co-founded, to Google in 2008.

As O'Connor describes the genesis of the case, it looked like trolling from the outset. The patent cited by the demand letter from Damian Wasserbauer, a Lumen View attorney, didn't seem to apply to Findthebest's business. The patent covered the use of a computer to match two or more parties each listing their preferences — two users of a dating service, for example. Findthebest seeks preferences from only one user — the person looking for that best smartphone. O'Connor doubted the patent would survive a court challenge, anyway.

The letter was excessively threatening. It advised Findthebest to collect and safeguard all its electronic messages and documents going back six years (the company was founded in 2009) including personal messages sent and received by employees they might "regard as personal, confidential, or embarrassing."

Lumen View, which had acquired the patent from its inventor, Eileen Shapiro, a Cambridge, Mass., business consultant, didn't seem to have an existence outside of the 20 lawsuits it had filed alleging infringement. (All but two have been settled out of court.) When Findthebest executives called Wasserbauer, "he couldn't tell us how we were infringing," O'Connor says. "All he wanted to talk about was a settlement check for $50,000."

O'Connor did reach Shapiro, who said only that she was the inventor, he says. A few days after that call, he says, the company got an email from Wasserbauer accusing him of a "hate crime" for having called Shapiro a patent troll in a message left on her phone. Lumen View wanted a payoff by the end of the day, he said, or he would seek criminal charges against O'Connor. (He never followed through on the threat.)

Neither Shapiro nor Wasserbauer returned my calls asking for comment.

O'Connor's RICO action won't be easy to win. Tech giants Cisco Systems, Netgear, and Motorola tried the same tack last year against Innovatio, a company trying to enforce a patent claim over WiFi by suing hotels and coffee shops that offered the service to customers using those companies' routers. They lost, although a case challenging Innovatio's patents is still on.

For a RICO claim to succeed, Samuels says, the infringement claims must be "objectively baseless." That's a high bar because issued patents have a presumption of validity even when "the patents are so crappy and so broad," as she puts it.

Aggressive countermoves like Findthebest's do tend to scare patent trolls off. A study by Georgetown law school found that counter challenges against non-practicing entities succeeded in court more than 90% of the time — but that most defendants settled before reaching that point.

But the trolls won't really go away until there are changes in the law and U.S. Patent Office practice. Samuels and others argue that software patents are typically too vague, which allows their owners to exploit them on claims that shouldn't really apply.

Their 20-year terms may also be too long. In the pharmaceutical industry, where it can take years and more than $1 billion to bring a drug to market, it makes sense to provide enough time to make a profit. "Software just doesn't need that," Samuels says.

Whether software should be patentable at all is still a controversial question. It wasn't until the 1970s that the U.S. started issuing patents for computer applications, and not until 1996 when the patent office codified the rules for examiners. Patents were ruled out only on "abstract ideas, laws of nature or natural phenomena."

Congress could resolve the question but hasn't chosen to take it up. The next battle may be waged before the Supreme Court, which has been asked to hear two cases, including one involving a patent for showing an advertisement on the Internet before showing copyrighted content. (Hulu is the defendant in that case.)

Until that happens, it's up to people like O'Connor to stand their ground. Lumen View may have picked the wrong company to threaten with a lawsuit. On the other hand, given how unpredictable patent cases can be, maybe it will win.

Michael Hiltzik's column appears Sundays and Wednesdays. Read his new blog, "The Economy Hub," at latimes.com/business/hiltzik, reach him at mhiltzik@latimes.com, check outfacebook.com/hiltzik and follow @hiltzikm on Twitter.

Copyright © 2013, Los Angeles Times

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Thanks for these two articles Strider. Both very interesting to me. Patent laws have not been overhauled in decades and definitely need to be to stop these kinds of suits.

Mr. Dimon is something else. This is what I would call the perfect storm between the lawmakers and corporations. Just pay the millions in fines and you are good to go. The government makes money and the corporation keeps doing what it's doing so the government can make money. This bait and switch has been going on for a long time. It reminds me of what the die hard Clinton supporters said about his "affair" with Ms. Monica: "He didn't do anything illegal." My retort was always: "No, he didn't do anything illegal, but it was definitely immoral."

They would look at me like I was crazy. Just pay the fine and you are off the hook - no one needs a moral compass any longer, just money. As far as the RICO statute goes, anything and everything gets tucked under that. It really has no meaning anymore.

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I think the race to that finish line is too close to call.

They are all dirty dogs.

I'm reading 'The Real Revolution' by Marc Aronson and even back in the 1700's the Brits were the biggest bunch of greedy money grubbers. So nothing new is under the sun by any means when it comes to capitalism. But I'll take capitalism over communism any damned day. :^)

'The rich get richer and the poor get drunk!'-------Jackie Gleason in 'Requiem For A Heavyweight'

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I'm reading 'The Real Revolution' by Marc Aronson and even back in the 1700's the Brits were the biggest bunch of greedy money grubbers. So nothing new is under the sun by any means when it comes to capitalism. But I'll take capitalism over communism any damned day. :^)

'The rich get richer and the poor get drunk!'-------Jackie Gleason in 'Requiem For A Heavyweight'

A government that stalks its citizens day-and-night to ensure fairness is worse than everyone leaving everyone else alone.

I'll take capitalism too.

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A global minimum wage system

July 18, 2011 10:41 amby Financial Times
By Thomas I. Palley

The global economy is suffering from severe shortage of demand. In developed economies that shortfall is explicit in high unemployment rates and large output gaps. In emerging market economies it is implicit in their reliance on export-led growth. In part this shortfall reflects the lingering disruptive effects of the financial crisis and Great Recession, but it also reflects globalisation’s undermining of the income generation process. One mechanism that can help rebuild this process is a global minimum wage system. That does not mean imposing US or European minimum wages in developing countries. It does mean establishing a global set of rules for setting country minimum wages.

The minimum wage is a vital policy tool that provides a floor to wages. This floor reduces downward pressure on wages, and it also creates a rebound ripple effect that raises all wages in the bottom two deciles of the wage spectrum. Furthermore, it compresses wages at the bottom of the wage spectrum, thereby helping reduce inequality. Most importantly, an appropriately designed minimum wage can help connect wages and productivity growth, which is critical for building a sustainable demand generation process.

Traditionally, minimum wage systems have operated by setting a fixed wage that is periodically adjusted to take account of inflation and other changing circumstances. Such an approach is fundamentally flawed and inappropriate for the global economy. It is flawed because the minimum wage is always playing catch-up, and it is inappropriate because the system is difficult to generalise across countries.

Instead, countries should set a minimum wage that is a fixed percent (say 50 per cent) of their median wage, which is the wage at which half of workers are paid more and half are paid less. This design has several advantages. First, the minimum wage will automatically rise with the median wage, creating a true floor that moves with the economy. If the median wage rises with productivity growth, the minimum wage will also rise with productivity growth.

Second, since the minimum wage is set by reference to the local median wage, it is set by reference to local economic conditions and reflects what a country can bear. Moreover, since all countries are bound by the same rule, all are treated equally.

Third, if countries want a higher minimum wage they are free to set one. The global minimum wage system would only set a floor: it would not set a ceiling.

Fourth, countries would also be free to set regional minimum wages within each country. Thus, a country such as Germany, that has higher unemployment in the former East Germany and lower unemployment in the former West Germany could set two minimum wages: one for each. The only requirement would be that the regional minimum wage be greater than or equal to 50 per cent of the regional median wage. Such a system of regional minimum wages would introduce additional flexibility that recognises wages and living costs vary within countries as well as across countries. This enables the minimum wage system to avoid the danger of over-pricing labour, while still retaining the demand side benefits a minimum wage confers by improving income distribution and helping tie wages to productivity growth.

Finally, a global minimum wage system would also confer significant political benefits by cementing understanding of the need for global labor market rules and showing they are feasible. Just as globalisation demands global trade rules for goods and services and global financial rules for financial markets, so too labor markets need global rules.

In sum, globalisation has increased international labour competition, which has contributed to rupturing the link between wages and productivity growth. That rupture has undermined the old wage based system of demand growth, forcing a turn to reliance on debt and asset price inflation to drive growth. It has also increased income inequality. Restoring the wage – productivity growth link is therefore vital for both economic and political stability. A global minimum wage system can help accomplish this.

This proposal is drawn from Chapter 12, “The Challenge of Globalization” in Thomas Palley’s book, From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of Economic Ideas, Cambridge: Cambridge University Press, forthcoming 2011.

Thomas I. Palley is an associate on the economic growth programme at the New America Foundation, based in Washington, DC.


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