Right now, millions of Americans are still struggling to recover from the 2008 financial collapse.
That collapse was fueled by the housing crisis, when Wall Street banksters were running around betting on risky mortgage-backed securities that they could sell to investors and make billions from.
They were able to do that because the Graham-Leach-Bliley Act and the Commodities Futures Modernization Act had blown up rational banking regulations, and, as a result, we saw things like the so-called mortgage “liar loans”.
Banksters were able to turn billions of dollars in risky mortgages into trillions of dollars in derivatives.
And then everything went to hell.
Fast forward to today, and because of Dodd-Frank there are no more “liar loans.”
Banksters can’t run the same scam as they did during the housing crisis.
So, they’ve found a new way to come up with real-estate-backed securities that can be turned into derivatives, worth billions in profits.
How? They’ve become landlords.
Austerity measures imposed by international creditors on member states are eroding the social and economic rights of people, says human rights watchdog, the Council of Europe.
“The crisis is both a context and a constraint on government policy but some responses to the crisis have created much collateral damage to human rights,” Nils Muiznieks, the commissioner for human rights at the Strasbourg-based watchdog, told reporters on Tuesday (3 December).
Muiznieks, who presented a report on safeguarding human rights in times of economic crisis, said cuts in public expenditure and selective tax hikes aimed a curbing public deficits have not achieved their stated aims.
Instead, the rights to decent work and adequate standards of living have rolled back, contributing to deepening poverty in Europe.
The report notes civil and political rights have also eroded as some governments exclude people on having any say in austerity proposals, provoking large-scale demonstrations.
Hunger in Britain has reached the level of a “public health emergency” and the Government may be covering up the extent to which austerity and welfare cuts are adding to the problem, leading experts have said.
In a letter to the British Medical Journal, a group of doctors and senior academics from the Medical Research Council and two leading universities said that the effect of Government policies on vulnerable people’s ability to afford food needed to be “urgently” monitored.
A surge in the number of people requiring emergency food aid, a decrease in the amount of calories consumed by British families, and a doubling of the number of malnutrition cases seen at English hospitals represent “all the signs of a public health emergency that could go unrecognised until it is too late to take preventative action,” they write.
Despite mounting evidence for a growing food poverty crisis in the UK, ministers maintain there is “no robust evidence” of a link between sweeping welfare reforms and a rise in the use of food banks. However, publication of research into the phenomenon, commissioned by the Government itself, has been delayed, amid speculation that the findings may prove embarrassing for ministers.
- Eternal austerity makes complete sense – if you’re rich
- More than 5 million people in the UK are paid less than the living wage
- Recession has led to spending on food falling by 8.5%, say researchers
- Iain Duncan Smith ‘targeting seriously ill claimants’ in benefits overhaul
- Labour: We’ll scrap benefits for under 25s
- Britain’s poorest and most deprived areas hit hardest as society becomes ”unacceptably more divided”
- Malnutrition cases almost double in last five years as poorer families struggle to survive the economic downturn
- Council report recommends ‘using all available by laws’ to ban Croydon soup kitchen
- Gravesend man hangs himself after sickness benefits were cut
- Civil servants told to judge whether disabled deserve benefits by Googling their illnesses
- Paying benefits ‘does not make unemployed lazy’
- Cut benefits cap to £20,000, say Tories
- U.K. Food-Bank Users Return What Needs Cooking as Bills Rise
- Dying man ‘has only 12p a day to eat’
- Foodbanks ‘are a sticking plaster’ in poverty epidemic
The fast food industry is notorious for handing out lean paychecks to their burger flippers and fat ones to their CEOs. What’s less well-known is that taxpayers are actually subsidizing fast food incomes at both the bottom — and top — of the industry.
Take, for example, Yum Brands, which operates the Taco Bell, KFC, and Pizza Hut chains. Wages for the corporation’s nearly 380,000 U.S. workers are so low that many of them have to turn to taxpayer-funded anti-poverty programs just to get by. The National Employment Law Project estimates that Yum Brands’ workers draw nearly $650 million in Medicaid and other public assistance annually.
Meanwhile, at the top end of the company’s pay ladder, CEO David Novak pocketed $94 million over the years 2011 and 2012 in stock options gains, bonuses and other so-called “performance pay.” That was a nice windfall for him, but a big burden for the rest of us taxpayers.
Under the current tax code, corporations can deduct unlimited amounts of such “performance pay” from their federal income taxes. In other words, the more corporations pay their CEO, the lower their tax burden. Novak’s $94 million payout, for example, lowered YUM’s IRS bill by $33 million. Guess who makes up the difference?
Combined, these firms’ CEOs pocketed more than $183 million in fully deductible “performance pay” in 2011 and 2012, lowering their companies’ IRS bills by an estimated $64 million. To put that figure in perspective, it would be enough to cover the average cost of food stamps for 40,000 American families for a year.My new Institute for Policy Studies report calculates the cost to taxpayers of this “performance pay” loophole at all of the top six publicly held fast food chains — McDonald’s, Yum, Wendy’s, Burger King, Domino’s, and Dunkin’ Brands.
After struggling for a minute to answer the question on an LBC radio phone-in, Johnson also failed two questions from a quiz presented like an IQ test and refused to attempt to answer a third, saying: “No one said IQ is the only measure of ability”.
It was his first public appearance since he caused controversy by suggesting some people struggle to get on in life because of their low IQs, adding that the bigger cornflakes tended to end up at the top of the packet.
[...] Johnson sought to defend his speech last week that was interpreted by some as saying greed is a good motivator and needs to be encouraged.
“There is too much inequality,” he said. “My speech was actually a warning against letting inequality go unchecked.” He then said that “in last 20 years there has been a widening of income between rich and the poor”.
He added: “What hacks me off is people with ability have found it very difficult to progress in the last 20 years. The key thing I said is inequality is only tolerable in our society if you look after those who are finding it tough to compete and where people have ability they are allowed to get on.”
The crisis facing the younger generation across the Eurozone worsened last month as youth unemployment hit a new record high of 24.4% with under-25s in Spain, Italy and Portugal finding it harder to get jobs.
Ratings agency Standard & Poor’s said on Friday that weakening growth prospects showed the country would struggle to improve its financial stability and generate new jobs.
The Group of Thirty (or G-30) describes itself as “a private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia,” which “aims to deepen understanding of international economic and financial issues, to explore the international repercussions of decisions taken in the public and private sectors, and to examine the choices available to market practitioners and policymakers.”
Its membership consists of roughly thirty major figures in the global financial world, from central banks, academia, international institutions and major private financial institutions. These figures hold regular meetings, conduct research and produce highly-influential reports through various “working groups,” providing a forum for top policy makers and private sector market “actors” to meet and hold discussions, while helping shape consensus and give recommendations to policy makers on issues of finance and governance.
This institution, though not widely discussed, is enormously influential. And here’s why.
The history of the Group of Thirty goes back to the Rockefeller Foundation, which provided the organization’s initial funding. In its 1978 annual report, the Rockefeller Foundation – which represents the interests of highly centralized corporate and financial power – recalled that it was created in 1913 as a response to “the Populist assault on the massive concentration of wealth in the hands of few.” (Annual Report, 1978, Rockefeller Foundation.)
Boris Johnson has launched a bold bid to claim the mantle of Margaret Thatcher by declaring that inequality is essential to fostering “the spirit of envy” and hailed greed as a “valuable spur to economic activity”.
In an attempt to shore up his support on the Tory right, as he positions himself as the natural successor to David Cameron, the London mayor called for the “Gordon Gekkos of London” to display their greed to promote economic growth.
Delivering the annual Margaret Thatcher lecture, Johnson also called for the return of a form of grammar schools.
He qualified his unabashed admiration for the “hedge fund kings” by saying they should do more to help poorer people who have suffered a real fall in income in recent years. But he moved to forge his own brand of Conservatism, which contrasts with the early modernising of the prime minister, by claiming that it was “futile” to try to end inequality.
In highly provocative remarks, Johnson mocked the 16% “of our species” with an IQ below 85 as he called for more to be done to help the 2% of the population who have an IQ above 130.
The dossier, compiled by the businessman Lawrence Tomlinson, entrepreneur in residence at the Department for Business, Innovation and Skills, alleges that the bank deliberately forced companies into default so that it could seize their properties.
Allegations contained within the report were considered so serious that Vince Cable, the business secretary, passed it to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). RBS has hired the law firm Clifford Chance to look into the claims.
Sir Andrew was commissioned by the bank alongside the management consultant Oliver Wyman. Initial findings and recommendations earlier this month raised concerns over “serious” allegations of poor treatment by firms in financial disress. Sir Andrew also said that RBS had failed to meet even the bank’s own lending targets or the expectations of its customers.
[...] Stories such as Conceição’s are increasingly common in South America’s largest country, whose economy has been fueled in recent years by consumer spending — often financed at sky-high interest rates. Economists say many shoppers have reached the limits, and many in Brazil are waking up to a credit hangover.
Government-controlled banks led the charge, issuing payday loans and credit cards to juice consumption and help power the nation through the 2008 financial crisis. Private banks got in on the act, helping to expand loans for cars, household appliances and electronics.
Credit soared. Over the last five years, the ratio of outstanding debt to gross domestic product jumped to 56% from 31%. But in a country where credit cards have annual interest rates of 120% or more, defaults have risen and credit expansion has slowed, particularly among the middle class and working poor.
[...] Until recently, credit was off-limits to average people. More than 40 million Brazilians have risen from poverty since center-left Luiz Inácio “Lula” da Silva took over as president in 2003. His administration urged state banks to open up the spigot to consumers, an emphasis that continued under his successor, Dilma Rousseff.
Economists say Brazil’s government was right to expand consumer credit as a stimulus during the crisis. But many say the country would have benefited more from higher state spending on education, healthcare, roads and other infrastructure to raise living standards over the long term.
“If you try to speak out to management [...] they cut your hours,” Andrea Williams told St. Paul’s Union Advocate. Like Walmart workers across the country, the women—who make $8.40 and $9.50 an hour and are thus reliant on public assistance programs to support their families—are calling on the billion dollar chain to pay them a living wage, offer full-time hours and benefits, and put an end to the rampant acts of retaliation.
Protest organizers estimate that employees will boycott over 1,500 locations on Friday, disrupting what many call the ‘largest shopping day of the year’ to bring awareness to the company’s culture of low pay and intimidation.
Amid the growing unrest, Walmart CEO Mike Duke announced his retirement Monday. According to reports, he is going to be replaced by veteran Walmart employee and CEO of Walmart International Doug McMillon.
Goldman Sachs may have provided the Government with a “knockdown” valuation of the Royal Mail – losing the taxpayer more than £1bn when it was privatised last month, according to critics.
Yet the giant US investment bank has proved remarkable adept at deciding when to cash in shares in the historic institution on behalf of its clients.
A new analysis of Royal Mail’s official share register by The Independenthas found that Goldman Sachs offloaded around 4.5 million Royal Mail shares worth at least £25m between 31 October and 11 November – at the top of the market. The decision by the bank, which received millions of pounds from the Department of Business to price the Royal Mail at £3.30-a-share when it floated last month, would have made its clients up to £12m if the shares were sold at the £5.87 peak.
Pope Francis has attacked unfettered capitalism as “a new tyranny”, urging global leaders to fight poverty and growing inequality in the first major work he has authored alone as pontiff.
The 84-page document, known as an apostolic exhortation, amounted to an official platform for his papacy, building on views he has aired in sermons and remarks since he became the first non-European pontiff in 1,300 years in March.
In it, Francis went further than previous comments criticising the global economic system, attacking the “idolatry of money” and beseeching politicians to guarantee all citizens “dignified work, education and healthcare”.
He also called on rich people to share their wealth. “Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills,” Francis wrote in the document issued on Tuesday.
With Italy’s unemployment at an all-time high of 12.5% and youth unemployment at a dismal 40.4%, young Italians might well think that now would be a good time to go back to school.
They might well be wrong.
A college or advanced degree may actually put young Italians at a higher risk of unemployment, according to economic data gathered by the European Union’s statistical agency, Eurostat.
What they recommend is shocking to some, and ringing alarm bells around the finance world.
Sovereign nations are facing shortages of tax revenues, and public finance is in shambles. Multi-national corporations have offshored their assets to avoid paying taxes. The IMF report addresses ideas of how to tax the dodgers that are hurting public finance.
Defending their pensions from the threat of ever-deepening austerity cuts, as many as ten thousand off-duty police officers and state security agents in Portugal found themselves on the other side of the barricades Thursday night as they faced down their on-duty colleagues in riot control gear.
With a march through Lisbon that ended at the steps of parliament, the angry police and security union members broke through security fences, and even briefly occupied the entrance to Parliament before the night was over.
The proposed cuts in public pensions are being demanded by the nation’s creditors in exchange for a government bailout package received in 2011.
Europe’s unemployment crisis, now in its sixth year, has had a profound impact on young people across the Continent, and has become among the biggest economic, political and social challenges facing European leaders. Joblessness among young people is at historic highs, forcing many of them to leave their families and countries in search of jobs abroad, to accept temporary and underpaid work that often has little to do with their education and skills, and to readjust their expectations for their future. There is some evidence that Europe’s economies are starting to recover, but there is also growing concern that members of this generation may never recapture the opportunities they have lost. Their stories are about hardship, but also about creative adaptation and in some cases unexpected opportunity.
The New York Times asked young people in Europe to share their stories about how the crisis has affected them. Here is a selection of their responses; they have been edited and condensed.
Since the global banking crisis in 2007, commentators across the political spectrum have confidently predicted not only the imminent collapse of the euro, but sooner or later an unavoidable implosion of the European Union itself. None of this has come to pass. But the European project, launched after the devastation of the second world war, faces the most serious threat in its history. That threat was chillingly prefigured this week by the launch of a pan-European alliance of far-right parties, led by the French National Front and the Dutch Freedom party headed by Geert Wilders, vowing to slay “the monster in Brussels”.
Of course, the growth in support for far-right, anti-European, anti-immigrant parties has been fed by the worst world recession since at least the 1930s – mass unemployment and falling living standards, made worse by the self-defeating austerity obsession of European leaders. Parties that skulked in the shadows, playingdown their sympathies with fascism and Nazism are re-emerging, having given themselves a PR facelift. Marine Le Pen, leader of the French NF, plays down the antisemitic record of her party. The Dutch far-right leader has ploughed a slightly different furrow, mobilising fear and hostility not against Jews but Muslim immigrants. Like Le Pen, Wilders focuses on the alleged cosmopolitan threat to national identity from the European Union. It is a chorus echoed in other countries by the Danish People’s party, the Finns party and the Flemish Vlaams Belang, among others.
For now, the French and Dutch populists are carefully keeping their distance from openly neo-Nazi parties such as Golden Dawn, whose paramilitary Sturmabteilung has terrorised refugees and immigrants in Greece, and the swaggering Hungarian Jobbik, which targets the Roma minority.
According to some pollsters, the far right might win as many as a third of European parliament seats in elections next May. That would still leave the centre parties – Christian Democrats, Social Democrats and Liberals – with many more members. But for the European parliament to form a credible majority, all of these parties might well be forced much closer together than is good for democracy.
Business activity in the euro zone slowed in November, a closely watched survey of purchasing managers showed, while consumer confidence fell for the first time in a year, underscoring concerns that the region’s already tepid recovery is fizzling.
Thursday’s figures, from data firm Markit, also highlighted a widening gap between Germany and France, the euro zone’s two biggest economies that account for half the bloc’s gross domestic product.
Business activity expanded in Germany at its fastest clip in 10 months, led by its export-sensitive manufacturing sector. France’s fell, fanning concerns that it could slide back into its third recession in five years.
Spain is on the verge of passing a draconian measure that threatens fundamental values of free speech. Faced with ongoing protests over economic conditions, the Spanish government is about to make insulting police officers and protesting without permission crimes punishable by fine greater than dealing drugs or prostitution. Not since Franco has the country turned so decidedly against civil liberties and free speech.
Once passed by the Spanish Parliament, citizens who dare to protest without permission will face fines up to $810,000. It would be better to sell drugs which are subject to less than five percent of that fine.
Harassment or insults can be charged with fines as high as €600,000. An insult to a police officer is now treated as a “serious offense” with fines of €30,000. Most people consider insulting the government or police to be a core exercise of free speech.
The concern is that, as economic and social tensions grow, such measures may expand throughout Europe.
- The great Spain robbery: Pensioners protest as they watch their life savings vanish into the banks’ black hole
- Moody’s says no ‘clean bill of health’ for Spain banks
- Spain’s Economy Is Main Risk for Nation’s Banks, EU Says
- Spain’s economy strengthens but gloomy mood lingers
- Caja Madrid ‘ordered staff to hide’ preferential share details from customers ‘duped’ into signing their savings away
- CAM bank former ‘top two’ jailed with 1.9-million-euro bail release
- EU bank VP probed in Spanish corruption scandal
- PM: ‘Spain is out of recession but not out of the crisis’
- Large rally opposes moves for Catalan independence
- Madrid seeks talks with Catalonia to avoid independence referendum
[...] The low flotation price has turned into a major political headache for the Government – particularly when its rival, JP Morgan, valued Royal Mail at between £6.8bn and £8.5bn. Vince Cable opted for Goldman and UBS because they offered to do the job for £13m – a saving of just £1m from the nearest competing bid. The fact that Goldmans is now a significant shareholder, a fact first reported by Private Eye, will prove embarrassing for the Business Secretary.
Today the Bow Group think-tank led by Sir John Major called for an inquiry into the flotation. It said the company had been “catastrophically undervalued”, claiming that the privatisation was a “short-sighted firesale”, which has deprived taxpayers of a “valuable national asset”.
Other substantial Royal Mail shareholders listed by Equiniti, the firm handling Royal Mail shares bought via the Government’s website, include banks ABN Amro and JP Morgan, and leading hedge funds such as Hargreaves Lansdown. However, the identity of most of the shareholders remains shrouded in secrecy as their interests are held by an array of nominee companies.
Donald Sutherland wants to stir revolt. A real revolt. A youth-led uprising against injustice that will overturn the US as we know it and usher in a kinder, better way. “I hope that they will take action because it’s getting drastic in this country.” Drone strikes. Corporate tax dodging. Racism. The Keystone oil pipeline. Denying food stamps to “starving Americans”. It’s all going to pot. “It’s not right. It’s not right.”
Millennials need awakening from slumber. “You know the young people of this society have not moved in the last 30 years.” With the exception of Occupy, a minority movement, passivity reigns. “They have been consumed with telephones.” The voice hardens. “Tweeting.”
We are high up in a Four Seasons hotel overlooking Beverly Hills, sunlight glinting off mansions and boutiques below, an unlikely cradle of revolution. Sutherland, resplendent in a dark suit and red tie, is pushing 80. But he is quite serious about the call to arms. “We did it in ’68.”
The Canadian actor has a venerable record of leftwing activism dating back to support for the Black Panthers and opposition to the Vietnam war, but this latest foray into subversion dovetails with promoting The Hunger Games: Catching Fire, the second instalment in a series of four films based on Suzanne Collins’s bestselling novels for young adults. It takes forward the story of Katniss, played by Jennifer Lawrence, who must fight other oppressed proles to the death as part of a tyrannical government’s strategy of rule through fear. The dystopia, called Panem, is built on the ashes of the US, and Sutherland wants young audiences to respond to the allegory. “Hopefully they will see this film and the next film and the next film and then maybe organise. Stand up.”
George Osborne’s claims to be prudent with the nation’s finances have been brutally undermined by the fact he has added more to Britain’s £1.2 trillion debt pile in his three years as Chancellor than Labour did in thirteen.
The latest economic figures from the Office for National Statistics showed that the coalition has borrowed £430.072 billion, whereas the last Labour government managed to borrow just £429.975 billion.
The Tories have rushed to distract attention from this awkward economic fact by blaming Labour, saying: “it takes time to cut Labour’s deficit. But we have borrowed a lot less than Labour planned and you have repeatedly demanded.”
Is Walmart’s request of associates to help provide Thanksgiving dinner for co-workers proof of low wages?
The storage containers are attractively displayed at the Walmart on Atlantic Boulevard in Canton. The bins are lined up in alternating colors of purple and orange. Some sit on tables covered with golden yellow tablecloths. Others peer out from under the tables.
This isn’t a merchandise display. It’s a food drive – not for the community, but for needy workers.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
The food drive tables are tucked away in an employees-only area. They are another element in the backdrop of the public debate about salaries for cashiers, stock clerks and other low-wage positions at Walmart, as workers in Cincinnati and Dayton are scheduled to go on strike Monday.
Is the food drive proof the retailer pays so little that many employees can’t afford Thanksgiving dinner?