Archive for July 28th, 2010
Chuck Schumer: We Have To Extend Unemployment Past 99 Weeks
July 28th, 2010 | 
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From an article in the HuffingtonPost today:
After Senate Democrats broke a 50-day filibuster and restored unemployment benefits to the long-term jobless, Sen. Chuck Schumer (D-N.Y.) vowed to do more.
“There are a number of people who have maxed out, they’ve been looking and looking for work and haven’t found it, and there is a separate act that would extend the unemployment benefits to them,” Schumer told New York’s WENY-TV. “Extending this was really important. There are some people who go beyond the 99 weeks and we’re going to try to do that next.”
Last year, Congress enacted several pieces of legislation that ultimately gave the unemployed in some states 99 weeks of benefits. With nearly 15 million unemployed competing for just three million jobs available, 99 weeks isn’t enough time for some people to find work. Hundreds of thousands had already joined the ranks of the “99ers” in April. The Washington Post reported recently that the total had reached 1.4 million.
While it is admittedly extremely hard to get a job these days, exactly when is the point at which this ceases being unemployment and merely becomes ‘permanent welfare’ – the 49% of the people in this country working to support the other 51%? It’s already more lucrative to stay on unemployment rather than take a minimum wage job. How long before the 49% say, ‘I’m done with supporting all these other people’ and they decide to just stop working?
Unemployment was designed to temporarily be a bridge between jobs. It has now become a crutch. Since the government has shown absolutely no intention of discontinuing continual financial support of failed and insolvent institutions and a complete lack of desire to prosecute the fraud and corruption, there certainly isn’t going to be any creation of new jobs. So, I guess the answer is to pay people not to work, since the government is hell-bent on destroying any inkling of entrepreneurship that might remain in this country – and with it, the promise of any new job creation.
Woe to you that continue to slave at your job to support others….apparently, indefinitely. Just remember who’s at fault here:
- The government incentivized outsourcing, which not only resulted in a loss of jobs but also resulted in the lowering of wages because of global wage arbitrage
- The government allowed financial institutions to gamble with your money by caving to bank lobbyists who convinced Congress to remov all leverage limits
- The government looked the other way while these banks designed fraudulent financial instruments and sold them to every unsuspecting entity they could find, including private and public pension funds and retirement accounts – these iinstruments drove the housing bubble that made consumers think their house was worth far more than it ever was in real terms, and also put home prices out of the reach of the average wage -earner (refer to 1st bullet-point); so, wages were going down while home prices went up
- When everything blew up in the financial institution’s faces, instead of prosecuting the fraud and corruption, they took American’s tax dollars and made YOU liable for their fraud
- To add insult to injury, government then passed ‘healthcare’ reform, and buried inside the more than 2,000 page document, was a mandate that this reform be administered by the IRS, and what was purported to bring the cost of healthcare down, will increase the cost of healthcare and decrease options and quality – but in the meantime, it’s just a great big new tax across the board (and yes, this means you too – you low-income earners)
- Then government passed another bill in excess of 2,000 pages in the name of ‘financial reform’ – yet this bill punishes no one for wrong doing, but instead places even more authority into the hands of the same regulators that willfully looked the other way when the banking institutions were peddling their fraudulent investment vehicles
- Soon, government will contemplate Cap & Trade, which was designed so that the same banks that sold fraudulent financial products can soon sell the ‘rights’ to pollute by trading carbon credits, which carbon credits are deemed ‘imperative to save the planet from global warming,’ which is based on a scientific model that has been proven to be….fraudulent….without so much as a formal investigation by Congress. The result of Cap & Trade will be more restrictions, restraints and taxes on all businesses (well except for the chosen few who will have lobbyists lining the pockets of Congress). The result of all this will be exactly the same as what happened to housing prices: ‘energy prices will necessarily skyrocket’ — Barack Obama
- So, having destroyed the real economy, and with plans in place to decimate what is left of it, Congress must now must redistribute the wealth of those, who by some miracle still have a job, to those who do not, in order to avoid the mass riots that surely would have occurred by now if not for the promise of indefinite government hand-outs
Welcome to the new America. FedUp yet?
Posted in Corruption, Economic Crisis, Economy, Financial System, Fraud, Government, Unemployment, Unemployment Benefits | 
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Oh, They DO Intend To Steal From You
And what’s better, now the lapdogs of Wall Street are immune from FOIA requests!
The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.” Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.
That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings.”
Mr. President, you’re a lying sack of crap.
Nor is this theoretical either. Fox News has already had an FOIA denied:
The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network.
Nice.
Oh, by the way, this would mean that a Madoff or Stanford “thing” would leave the SEC immune from FOIA requests by the Press (including the “mainstream” along with media folks like myself) to discover whether they had effective and early notice that they intentionally ignored.
Isn’t that convenient, given that they did exactly that with Madoff and, it can be argued, Stanford as well?
Indeed, the SEC, The Fed, and Treasury have all tried to refuse compliance with FOIA requests into the backstories of the financial meltdown.
FOIA requests that could (and in some cases have, when they were forced to be complied with via lawsuits) reveal double-dealing, “sweetheart” treatment, and even willful blindness that, in many people’s opinion (including mine) reaches the level of intentional collusion that, in a private context, would lead to civil and/or criminal racketeering charges.
To President Obama and CONgress for sticking this in FinReg (and yeah, I missed it, even though I read the entire damn thing):
Posted in Banks, Corruption, Debt, Economic Crisis, Financial System, Fraud, Government |
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CBO Director: A Somber Warning
File this in the “no, really?” box:
With U.S. government debt already at a level that is high by historical standards, and the prospect that, under current policies, federal debt would continue to grow, it is possible that interest rates might rise gradually as investors’ confidence in the U.S. government’s finances declined, giving legislators sufficient time to make policy choices that could avert a crisis. It is also possible, however, that investors would lose confidence abruptly and interest rates on government debt would rise sharply, as evidenced by the experiences of other countries.
So let’s see…. if you buy bonds today there’s a chance you could lose some of your money, or there’s a chance you could lose a whole lot of your money.
That sounds comforting, doesn’t it?
But it’s the next sentence that ought to make you sit up in your chair:
Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States.
Right.
This is what history tells us. It is also what I have been trying to amplify now for the past three years. The reason is this graph:
What I find amusing is that the CBO is flapping its jaws over only the government’s liabilities. It, by the way, is also looking only at the debt held by the public (and not the games played with FICA and Medicare):
Note: The extended-baseline scenario adheres closely to current law, following CBO’s 10-year baseline budget projections through 2020 (with adjustments for the recently enacted health care legislation) and then extending the baseline concept for the rest of the long-term projection period. The alternative fiscal scenario incorporates several changes to current law that are widely expected to occur or that would modify some provisions that might be difficult to sustain for a long period.
It never ceases to amaze me that Congress and others will flap on about this (as CNBS is this morning, as they have many mornings), but none of them want to talk about the real gorilla in the china shop that is blasting everything in sight – that’s this graph:
That’s total systemic debt compared to GDP – both public and private. The breakdown looks like this:
See that nice pink slice at the top? That’s all the federal government is responsible for.
So…. why are we focusing only there again?
Oh, maybe it’s because we don’t want to talk about the rest – especially not on “business pump-monkey” television that is sponsored by all the big businesses that CREATED this crap-pile of trouble, which incidentally is focused in the following areas:
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Household credit. That’s “bigger mortgage, bigger house” BS. It’s “A Lexus and a BMW in the driveway, so long as I can barely make the payments, because that makes me speshul”, driven, of course, by the advertising revenues on that same pump TV.
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Non-financial business credit. This is the “small businesses need to go broke faster with their credit cards” game. It’s the “borrow your money, rather than make it” to expand your business. It’s “growth at any cost, whether you can actually make a profit after all the stripping of your money by the very same big banking and business interests that run that very same pumptastic media.
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And, of course, the big daddy, Financial Instruments. That’s all the fun stuff. It’s the banks “creating money” – well, not really money. The illusion of money. The naked short of unbacked credit issuance against nothing at all. And of course these very same pumptastic crap-spewers on our airwaves are all companies that have a very, very vested interest in seeing that bubble continue.
The problem is, it can’t.
Oh sure, government has tried. It has spent and spent and spent, none of which it had, in a puerile and futile attempt to avoid truth-telling – that the above three sectors of the economy must shrink dramatically or our economy is headed straight for a collapse.
Indeed, what history tells us in both Iceland and Greece is that it is precisely when a captured government tries to protect the above three sectors of borrowing from the just desserts of their foibles that a sovereign debt crisis erupts – at least in modern economies.
In one sentence: Wake the hell up America.
Posted in Banks, Congressional Budget Office, Corruption, Debt, Economic Crisis, Economy, Federal Reserve, Financial System, Fraud, Government, Money, Sovereign Debt |
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Fallen Soldiers’ Families Denied Cash Payout as Insurers Profit
As the mother of a son who is serving his country honorably on the front lines in Afghanistan, I find the actions of the insurance companies here reprehensible.
I’m sure this has nothing to do with the solvency of the insurance companies in question that they would engage in this practice. </sarcasm>
July 28 (Bloomberg) — The package arrived at Cindy Lohman’s home in Great Mills, Maryland, just two weeks after she learned that her son, Ryan, a 24-year-old Army sergeant, had been killed by a bomb in Afghanistan. It was a thick, 9-inch-by- 12-inch envelope from Prudential Financial Inc., which handles life insurance for the Department of Veterans Affairs.
Inside was a letter from Prudential about Ryan’s $400,000 policy. And there was something else, which looked like a checkbook. The letter told Lohman that the full amount of her payout would be placed in a convenient interest-bearing account, allowing her time to decide how to use the benefit.
“You can hold the money in the account for safekeeping for as long as you like,” the letter said. In tiny print, in a disclaimer that Lohman says she didn’t notice, Prudential disclosed that what it called its Alliance Account was not guaranteed by the Federal Deposit Insurance Corp., Bloomberg Markets magazine reports in its September issue.
Lohman, 52, left the money untouched for six months after her son’s August 2008 death.
“It’s like you’re paying me off because my child was killed,” she says. “It was a consolation prize that I didn’t want.”
As time went on, she says, she tried to use one of the “checks” to buy a bed, and the salesman rejected it. That happened again this year, she says, when she went to a Target store to purchase a camera on Armed Forces Day, May 15.
‘I’m Shocked’
Lohman, a public health nurse who helps special-needs children, says she had always believed that her son’s life insurance funds were in a bank insured by the FDIC. That money — like $28 billion in 1 million death-benefit accounts managed by insurers — wasn’t actually sitting in a bank.
It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.
“I’m shocked,” says Lohman, breaking into tears as she learns how the Alliance Account works. “It’s a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier. Is there anything lower than that?”
Millions of bereaved Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing what they call “checkbooks” to survivors, instead of paying them lump sums, extends well beyond the military.
Touching Americans
In the past decade, these so-called retained-asset accounts have become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the U.S., and the industry holds $4.6 trillion in assets, according to the American Council of Life Insurers.
Insurance companies tell survivors that their money is put in a secure account. Neither Prudential nor MetLife Inc., the largest life insurer in the U.S., segregates death benefits into a separate fund.
Newark, New Jersey-based Prudential, the second-largest life insurer, holds payouts in its own general account, according to regulatory filings.
New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.”
No FDIC Insurance
The company’s letter omits that the money is in MetLife’s corporate investment account, isn’t in a bank and has no FDIC insurance.
“All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.
Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks with accounts insured by the FDIC up to $250,000.
Bank of New York Mellon Corp. handles the paperwork and monthly statements for customers with MetLife “checking accounts.” The insurance company, not the bank, most recently reported holding about $10 billion in death benefits, in 2008.
The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, who wrote ‘Stempel on Insurance Contracts’ (Aspen Publishers, 2009).
‘Bad Faith’
“It’s institutionalized bad faith,” he says. “In my view, this is a scheme to defraud by inducing the policyholder’s beneficiary to let the life insurance company retain assets they’re not entitled to. It’s turning death claims into a profit center.”
Prudential’s Alliance Account is helpful to families of soldiers, says company spokesman Bob DeFillippo.
“For some families, the account is the difference between earning interest on a large amount of money and letting it sit idle,” he says. Prudential follows the law, he says.
“We fully and regularly disclose the nature and terms of the account to account holders,” DeFillippo says. “We make it clear that the money can be withdrawn at any time by simply writing a draft.”
Read more at Bloomberg
I would say to those family members who find themselves in this situation, do not accept an insurance company giving you a ‘check book’. Whether you want the money or not, demand the lump-sum payout. Put it away and never look at it again if you don’t want to, but stop allowing the insurance companies and our government that bailed them out with your taxpayer money to profit from the deaths of those who gave their lives to protect our freedoms.
