Thursday, July 21, 2011
- Chancellor calls for greater fiscal union in U-turn on traditional Tory policy
- Crunch talks in Brussels could lead to death of euro if there's no agreement
- Failure to stop Greek debt default may also cause 'European Black Friday'
- Osborne calls for single eurozone bond, with UK outside 'two-speed' Europe
- He says debt crisis could lead Britain into recession as serious as 2008
- Nicolas Sarkozy makes 'pact' with Angela Merkel in bid to gain German help
- Setback for Treasury as Britain borrows £400million than expected in June
Last updated at 10:21 PM on 21st July 2011
Call for action: George Osborne, pictured at Downing Street, said EU leaders must find a solution to the crisis. The FTSE, shown below below via a live monitor, initially dipped in response to fears that no deal will be reached before climbing up amid hope that the French and Germans would take action
George Osborne urged European leaders to 'get a grip' when they meet in Brussels today in a bid to resolve the debt crisis and save the euro.
The Chancellor of the Exchequer warned that if action was not taken, 'we see the potential for a set of economic events that could be as damaging as 2008' and that Britain would not be spared.
Also, in a dramatic move away from traditional Tory reticence over a more centralised Europe, Mr Osborne called for greater fiscal union among eurozone countries.
He insisted Britain should remain outside the euro, but said the 'remorseless logic' of the single currency meant issuing a single bond for those 17 member states 'worthy of serious consideration.'
The central problem facing the the currency bloc is that the most indebted nations, principally Greece, are approaching a stage where they cannot service debts taken out through the issuing of separate sovereign bonds.
The interest payments that markets demand in from these weaker economies for these loans has been rising.
Read more: http://www.dailymail.co.uk/news/article-2016775/Brussels-summit-Last-ditch-talks-save-euro-amid-debt-crisis.html#ixzz1SndwY5Wn
Climate change 'threatens peace', UN official warns
Climate change poses a major threat to future peace and security, a senior UN official has warned.
Achim Steiner from the UN Environment Programme said climate change would also "exponentially" increase the scale of natural disasters.
His comments followed a UN declaration of famine in parts of Somalia.
Meanwhile, Russia rejected a Security Council statement backed by Western nations which asserted the link, but later agreed to a weaker text.
The Russian envoy Alexander Pankin said he was sceptical about the implications of putting climate change on the security council's agenda.
Security Council members finally agreed to a text which spoke of the "possible security implications" of climate change.'Exponential growth'
Mr Steiner warned that an increase in the frequency of natural disasters across the globe could prove a major challenge in the coming decades.
He said recent crises, such as in Somalia, illustrate that "our capacity to handle these kinds of events is proving a challenge, particularly if they occur simultaneously and start affecting, for instance, global food markets, regional food security issues, displacing people, creating refugees across borders".
Peter WittigGerman Ambassador
This is a good day today for climate security”
"Clearly the international community - if the scenarios in climate change for the future come true - will face an exponential growth of these kinds of extreme events," he added.
His comments came as the Security Council formally debated the environment for the first time in four years, with Germany pressing for the first-ever council statement linking climate change to global peace and security.
Diplomats said there were intense negotiations between Germany and Russia, which initially opposed any council action, before a statement on the issue was agreed to.
Speaking as negotiations were continuing, Mr Pankin argued that the move was unnecessary and opposed by many countries.
Videos: Libya: SIRTE, 21th July 2011 - Massive Protests against NATO-Aggression
July 21, 2011
Recently, the bond rating agencies that gave junk derivatives triple-A ratings threatened to downgrade US Treasury bonds if the White House and Congress did not reach a deficit reduction deal and debt ceiling increase. The downgrade threat is not credible, and neither is the default threat. Both are make-believe crises that are being hyped in order to force cutbacks in Medicare, Medicaid, and Social Security.
If the rating agencies downgraded Treasuries, the company executives would be arrested for the fraudulent ratings that they gave to the junk that Wall Street peddled to the rest of the world. The companies would be destroyed and their ratings discredited. The US government will never default on its bonds, because the bonds, unlike those of Greece, Spain, and Ireland, are payable in its own currency. Regardless of whether the debt ceiling is raised, the Federal Reserve will continue to purchase the Treasury’s debt. If Goldman Sachs is too big to fail, then so is the US government.
There is no budget focus on the illegal wars and military occupations that the US government has underway in at least six countries or the 66-year old US occupations of Japan and Germany and the ring of military bases being constructed around Russia.
The total military/security budget is in the vicinity of $1.1-$1.2 trillion, or 70% -75% of the federal budget deficit.
In contrast, Social Security is solvent. Medicare expenditures are coming close to exceeding the 2.3% payroll tax that funds Medicare, but it is dishonest for politicians and pundits to blame the US budget deficit on “entitlement programs.”
Entitlements are funded with a payroll tax. Wars are not funded. The criminal Bush regime lied to Americans and claimed that the Iraq war would only cost $70 billion at the most and would be paid for with Iraq oil revenues. When Bush’s chief economic advisor, Larry Lindsay, said the Iraq invasion would cost $200 billion, the White House Moron fired him. In fact, Lindsay was off by a factor of 20. Economic and budget experts have calculated that the Iraq and Afghanistan wars have consumed $4,000 billion in out-of-pocket and already incurred future costs. In other words, the ongoing wars and occupations have already eaten up the $4 trillion by which Obama hopes to cut federal spending over the next ten years. Bomb now, pay later.
As taxing the rich is not part of the political solution, the focus is on rewarding the insurance companies by privatizing Medicare at some future date with government subsidized insurance premiums, by capping Medicaid, and by loading the diminishing middle class with additional Social Security tax.
Washington’s priorities and those of its presstitutes could not be clearer. President Obama, like George W. Bush before him, both parties in Congress, the print and TV media, and National Public Radio have made it clear that war is a far more important priority than health care and old age pensions for Americans.
The American people and their wants and needs are not represented in Washington. Washington serves powerful interest groups, such as the military/security complex, Wall Street and the banksters, agribusiness, the oil companies, the insurance companies, pharmaceuticals, and the mining and timber industries. Washington endows these interests with excess profits by committing war crimes and terrorizing foreign populations with bombs, drones, and invasions, by deregulating the financial sector and bailing it out of its greed-driven mistakes after it has stolen Americans’ pensions, homes, and jobs, by refusing to protect the land, air, water, oceans and wildlife from polluters and despoilers, and by constructing a health care system with the highest costs and highest profits in the world.
The way to reduce health care costs is to take out gobs of costs and profits with a single payer system. A private health care system can continue to operate alongside for those who can afford it.
The way to get the budget under control is to stop the gratuitous hegemonic wars, wars that will end in a nuclear confrontation.
The US economy is in a deepening recession from which recovery is not possible, because American middle class jobs in manufacturing and professional services have been offshored and given to foreigners. US GDP, consumer purchasing power, and tax base have been handed over to China, India, and Indonesia in order that Wall Street, shareholders, and corporate CEOs can earn more.
When the goods and services produced offshore come back into America, they arrive as imports. The trade balance worsens, the US dollar declines further in exchange value, and prices rise for Americans, whose incomes are stagnant or falling.
This is economic destruction. It always occurs when an oligarchy seizes control of a government. The short-run profits of the powerful are maximized at the expense of the viability of the economy.
The US economy is driven by consumer demand, but with 22.3% unemployment, stagnant and declining wages and salaries, and consumer debt burdens so high that consumers cannot borrow to spend, there is nothing to drive the economy.
Washington’s response to this dilemma is to increase the austerity! Cutting back Medicare, Medicaid, and Social Security, forcing down wages by destroying unions and offshoring jobs (which results in a labor surplus and lower wages), and driving up the prices of food and energy by depreciating the dollar further erodes consumer purchasing power. The Federal Reserve can print money to rescue the crooked financial institutions, but it cannot rescue the American consumer.
As a final point, confront the fact that you are even lied to about “deficit reduction.” Even if Obama gets his $4 trillion “deficit reduction” over the next decade, it does not mean that the current national debt will be $4 trillion less than it currently is. The “reduction” merely means that the growth in the national debt will be $4 trillion less than otherwise. Regardless of any “deficit reduction,” the national debt ten years from now will be much higher than it presently is.
Dr. Roberts was Assistant Secretary of the US Treasury, Associate Editor of the Wall Street Journal, and professor of economics in six universities.
The competition for jobs in the United States is absolutely brutal right now, and it is about to get worse. A new wave of layoffs is sweeping across America. During tough economic times, Wall Street favors companies that are able to cut costs, and the fastest way to "cut costs" is to eliminate employees. After a period of relative stability, the employment picture in the U.S. is starting to get bleaker again. New applications for unemployment benefits have now been above 400,000 for 15 straight weeks. Finding a good job is kind of like winning the lottery in this economy. Our federal government and the state governments have made it incredibly complicated and extremely expensive to have employees on the payroll. It is getting harder and harder to get a large enough return to justify the time and expense that hiring employees requires. So many firms now find themselves trying to do more with the employees that they already have. Other companies are turning to temp agencies as a way to reduce costs and increase workplace flexibility. A lot of the big corporations are sending as much work as they can overseas where the wages are far lower and where the regulatory environment is much simpler. All of this is really bad news for American workers that just want good jobs that will enable them to provide for their families.
When we first started seeing huge numbers of layoffs a few years ago, I encouraged people to look into government jobs because I thought that they would be a lot more stable in this economic environment.
But today that is no longer true. In fact, state and local governments all over the United States are responding to massive budget problems by slashing payrolls in an unprecedented fashion.
Sadly, the reality is that the number of "secure jobs" is rapidly declining in America. If you have a "job" ("just over broke") right now, you might not have it for long. That is one reason why everyone should be trying to become more independent of the system.
Once upon a time the U.S. economy produced a seemingly endless supply of good jobs. This helped us develop the largest and most vibrant middle class in modern world history.
But now employees are regarded as "costly liabilities", and businesses and governments alike are trying to reduce those "liabilities" as much as they can.
This summer the pace of layoffs seems to be accelerating all over the nation. Just check out what has been happening over the past few weeks....
-Lockheed Martin has made "voluntary layoff offers" to 6,500 employees.
-Detroit is losing even more jobs. American Axle & Manufacturing Holdings has told the remaining 300 workers at its manufacturing facility in Detroit that their jobs will be ending in early 2012.
-Layoff notices have been sent to 519 employees of Milwaukee Public Schools, and more than 400 open positions are going to go unfilled.
-The Gap has announced that up to 200 stores will be closed over the next two years.
-Cisco has announced plans to lay off 9 percent of their total workforce.
-Chicago Mayor Rahm Emanuel says that 625 city employees will be losing their jobs as a result of cutbacks.
-Pharmaceutical giant Merck recently dumped 51 workers from an office in Raleigh, North Carolina.
-Perkins has revealed that they will be closing 58 restaurants.
-This week, Goldman Sachs announced that they will be eliminating 1,000 jobs.
-Cracker Barrel is rapidly reducing staff at its headquarters.
-Telecommunications and web marketing firm Crexendo has announced that it will be laying off about 30 percent of its workforce.
-Borders has announced that they will be shutting down their remaining 399 stores and that 10,700 employees will lose their jobs.
-Now that the space shuttle program has ended, thousands of NASA employees will be losing their jobs.
Sadly, there are hundreds of more examples of recent layoffs and job losses. One website that tracks these layoffs daily is Daily Job Cuts. It is pretty sad when there are entire websites that are devoted to chronicling how fast our economy is bleeding jobs.
What is worse is that it looks like the pace of layoffs is going to keep increasing.
One report that was recently released found that the number of job cuts being planned by U.S. employers increased by 11.6% in June.
That is not good news.
Things don't look good for employees of state and local governments either.
State and local governments have eliminated approximately 142,000 jobs so far this year.
That is bad, but this is just the beginning.
UBS Investment Research is projecting that state and local governments in the U.S. will combine to slash a whopping 450,000 jobs by the end of next year.
Barack Obama and Ben Bernanke keep trying to tell us that the economy is improving, but that simply is not the case. Yes, some of the largest corporations have announced big earnings, but that is not translating into lots of jobs for American workers.
Today, most large corporations only want to have as many U.S. workers as absolutely necessary. In a world where labor has been globalized, it just doesn't make sense for corporations to shell out massive amounts of money to American workers when they can legally get away with paying slave labor wages to workers on the other side of the globe.
So if it seems like it is far harder to get a good job in America today than it used to be, the truth is that you are not imagining things.
Our entire system discourages job creation inside the United States. Every single year, even more ridiculous job-killing regulations are being passed on the federal and state levels. It has become extremely expensive and ridiculously complicated to hire people.
So how are American families surviving? Those that still do have jobs are finding that wages are not going up but the cost of living rapidly is. Many American families are making up the difference by using their credit cards more.
In June, credit card purchases in the U.S. increased by 10.7 percent compared to the same month a year ago.
It looks like a whole lot of people have not learned their lessons about how bad credit card debt is.
Millions of other American families have fallen out of the middle class completely. Today, one out of every six Americans is enrolled in at least one government anti-poverty program. The level of economic suffering in this country continues to soar.
In fact, the number of Americans that are now sleeping in their cars or living in tent cities remains at staggering levels.
What we are witnessing in this country is not just a "recession" or an "economic downturn". What we are witnessing are fundamental economic changes.
Until there are fundamental policy changes in the United States, there will continue to be huge waves of layoffs and millions of jobs will continue to be shipped out of the country.
In the old days, one could go to college, get a good job with one company for 30 years and retire with a big, fat pension.
Now, that way of doing things is completely and totally dead.
Today, there is virtually no loyalty out there. It doesn't matter how long you have been working at a particular job. When it becomes financially expedient to get rid of you, that is exactly what is going to happen.
It is a cold, cruel world out there right now. Don't assume that you will always have a good job. The world is rapidly changing.
Don't get caught in the trap of believing that the way that things were is the way that things are always going to be in the future.