The Weiner Component #133 – The Free Market & the Cost of Gasoline

English: A typical Valero gas station, in Moun...

English: A typical Valero gas station, in Mountain View. Photographed by user Coolcaesar on August 23, 2005. Category:Images of California (Photo credit: Wikipedia)

Valero Energy Corporation

Valero Energy Corporation (Photo credit: Wikipedia)

Not many weeks ago, on July 31st 2015, there was a short article in the Los Angeles Times entitled “Valero profit rises on high gas prices.  It stated that California’s sky-high gasoline prices brought about a record high second quarter profit for refiner Valero Energy Corporation, that operating income from its two California refineries had soared to $295 million for the quarter which ended June 30 or to more than eleven times more than the $24 million earned in that quarter a year earlier.  Valero had posted a second quarter profit net income of $14 billion up from $651 million for that quarter a year earlier.

About a week earlier, on July 26th there was a one paragraph blurb in the same newspaper: “Record profits at refineries – The surge in California’s gasoline prices this year, coming as oil prices have fallen and refining costs have remained stable, has helped refineries collect record gross profits on each gallon of gasoline – as much as $1.17 a gallon in May.  That compares with a more typical gross profit (equal to refinery costs plus profit) of 49 cents a gallon in recent years, state data show.”

With Exxon Mobil’s Torrance refinery operating at less than 20% of its capacity other refineries in the state have seen a dramatic increase in their profits.  The capacity of the Torrance refinery is ten percent of the state’s total and twenty percent of Southern California’s total refined oil.  The Torrance refinery had an explosion in February of this year and probably will not return to full service until the end of the year.  It seems that one or another refinery in California is always partly or completely off line and there always seems to be a shortage of gasoline in the state.  Presumably these problems seem to continually raise the cost of gasoline at the pump to about one dollar or to one dollar and fifty cents higher that in the rest of the country.  We are supposed to be living in a free market economy where the consumer gets the best product at the best price.  Is this true?

At the end of July of 2015 the price of gasoline at the pump had dropped to slightly less than four dollars a gallon while the price of crude oil had gone down to under fifty dollars a barrel.  About a year ago a barrel of crude oil was one hundred dollars or more.  There are generally 42 gallons of refined gasoline that comes from one barrel of crude oil.  At $4 a gallon that means that $168 is the amount made from each barrel of oil.  That is a profit of over 66 percent on each barrel of crude oil.   Valero has its own gasoline stations and sells its gasoline retail at the going price.

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The Free Market as envisioned by the Scottish economist, Adam Smith, in his 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, was a reaction to the accepted economic system of the day.  At that time mercantilism was considered a proper approach to economics.  That theory stated that the wealth of a nation consisted of how much gold that country possessed.  The more gold it had, the richer it was.  And these economic systems then were usually controlled by the kings.  Smith’s theory brought about the modern development of capitalism and the market economy.

Briefly and simply: The nation’s true wealth is based upon the productivity of the country.  This is all the goods and services produced within a given time, a fiscal year expressed in the currency of the nation, which was mainly gold.  Money, at that time, being precious metals, mainly in the form of gold coins.  The value of goods and services, that is, all the productivity would be exchanged for their specific value in precious metals.  The value of the specific goods and services would be determined by both the levels of skill of the population, the extent of natural resources that are available or can be acquired by the particular nation, and what other people were willing to pay for the product or service.

In terms of what is going to be produced Smith’s theory of production was based upon the concept of supply and demand.  Entrepreneurs would supply certain goods and services in return for the profit they could make by doing so.  This was Smith’s “invisible hand,”  the profit motive which caused the system to operate.  If the item or service was highly desired then the price people were willing to pay for the item would rise because the supply was below the level of demand.  The higher price, in turn, would bring more producers into the field greatly increasing the supply of the particular item.  As the amount of the item increased beyond the demand the price would drop.  It could actually drop below the cost of its general production.  This would force the less efficient producers out of business and the price, as the supply dropped below the demand, would rise again.  Eventually a state of equilibrium would be reached where the supply would equal the demand.  With a large number of product producers it would be difficult to maintain the equilibrium and the price would continually oscillate.

The consumers, on the other hand, would attempt to get the goods or services at the lowest price possible.  Presumably the lower the price the greater the demand.  This would be their part of the “invisible hand.”  Both sides would be motivated by profit and cost.  There would be a continual process of exchange going on that would allow the consumers to eventually have most of their needs met by getting the goods and services they need at the best possible price and at the most efficient level of production.  Both the successful entrepreneur and the consumer would emerge positively from this exchange.  The inefficient entrepreneurs would have gone bankrupt.

To work properly this system requires a very large number of producers so that the consumers would have a large variety of choices as to how to spend their money and acquire the various products they require.  Today outside of regional agriculture, which produces perishable food products, and the stock market, which can work on rumors or general assumptions that may or may not have any relationship to reality, the principles of supply and demand only function in a very general way or not at all.

The reason for this is the fact that the number of producers of goods and services is limited.  Product manufacture is expensive, setting it up requires large amounts of money.  Consequently the factory system was developed from the 19th Century on.  Having limited producers or factory owners gave them more control over price than the consumer had over demand or price.  This, in turn led to monopolies toward the end of the 19th Century.  These gradually fell under partial control from the governments of the countries in which they existed.  Outside of the two examples of the free market has never really existed.

It is also important to realize that monopolies are not just giant concerns like Standard Oil was at the beginning of the 20th Century, they can also be regional or contained within a small city.  If a city contains only one hospital or only one supermarket, or, for that matter, one anything that provides some product or service, then that is a monopoly and it can charge virtually any amount for the good or service.  Of course it can’t be so high that it will force the consumers to go to other areas to acquire the good or service, but the price could be higher than it would cost in other places.  And that, it seems, is the situation with gasoline in the state of California.  To a slightly lesser extent it is the situation with gasoline throughout the United States.

Presumably the goods and services, the productivity of the country would constitute the wealth of the nation and the people of the nation would determine by their demands for the various products of what that wealth would consist.  Is this theory true?  The answer is obviously sort-of.

The products needed for a society to exist can be rated as necessary, pleasurable, and extravagant.  Necessary services and products are what is needed for life: food, clothing, a proper shelter, in most areas of the country an automobile for necessary transportation.  Anything that is required to maintain a functional standard of living would fit into this category.  Pleasurable items would be raising the necessary items to a higher level of comfort.  The choice of foods would be much more varied and expensive, clothing and housing could be carried to the level of ostentation.  The automobile would be far more fancy and expensive and there would probably be additional vehicles for every member of the family.  The extravagant level would mean that he or she could afford to have anything that money could buy.  All this would be bound to levels of income or in the case of many executives to their level of compensation.

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In the United States during the period after the Civil War (1865) to shortly after the turn of the 20th Century, 1917, when the U.S. entered the Great War (W.W.I), the country underwent a rapid movement into industrialization.  The railroads were extended westward from shore to shore, the westward movement occurred, the country changed from being mostly a rural nation to an urban centered one, and the factory system developed and became universal.  It was during this time that the country moved from being a nation of multitudes of small concerns to oligopolies and monopolies.  Virtually every major industry had become a monopoly or oligopoly.  John D. Rockefeller, the owner of Standard Oil, had a reputation of refining not only oil but also many of the state legislatures and even parts of the Federal Government.

It was at this time in 1913 that the 17th Amendment to the Constitution was passed bringing about the direct election of U.S. Senators by the citizens of each state.  Prior to that time the Constitution had the Senators directly elected by the State Legislatures.  The Senate was originally set up as the direct agent of the individual states and represented the states.  What had happened was that by the late 19th Century the Senators had become agents of the monopolies and oligopolies elected by bribed legislatures to represent the companies to which they were originally and still operated as their lawyers.  The monopolies and oligopolies had subverted many of the state legislatures through bribery.  The 17th Amendment was a reform amendment by the Progressive Movement to return the government of the United States to the People.

The Sherman Anti-Trust Act of 1890 went into operation around the turn of the century when both the Progressive Movement and Teddy Roosevelt became President after the assassination of former President William McKinley.  During his term in office Roosevelt became known as a Trust Buster.  The Reform Movement would end with the emergence of World War I in 1914 and would not begin again slowly with the Great Depression of 1929.  It would emerge strongly with the Administration of Franklin D. Roosevelt from 1933 on.  The Great Depression would not end completely until about 1940 with the emergence of World War II.

Since 1945, the end of World War II, the United States has gone continually in and out of social reform.  The Republicans generally have represented big business and the Democrats generally have pushed social reform.  Currently many large companies (corporations today) have been going through mergers and getting bigger.  Even though the Federal Government watches and attempts to keep monopolies from coming into being we seem to be moving in that direction with, it seems, an ever-growing tendency toward companies that are “too big to fail.”

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In the United States and in many other industrial countries of the world the individual owned automobile has become a necessity for general existence.  The distances are too great to walk from one place to another.  The children are taken to school and brought home by car or bus; general shopping requires an automobile; going to and coming home from work requires an automobile.  Virtually most of the general population requires a car.  And, of course, the key to having a car is availability and price of gasoline (oil).  As an example, I have spent my entire working life driving to and from work.

During my lifetime the cost of gasoline has gone up from well under a dollar a gallon to a high of five dollars a gallon.  It currently dropped from over four dollars a gallon to  under three dollars a gallon.  The price of o barrel of oil is currently under $50 a barrel and going down.  If the agreement with Iran is ratified and becomes a treaty there will be a major increase in the world’s oil supply.

In the state of California just enough oil is refined to just meet the demand.  If one of the refineries has to limit its production for any reason then there is a shortage and the price of gasoline and oil profits goes up.  If this isn’t price gouging then I don’t know what is.  Either we need more refineries in Southern California or enough gasoline storage so that the price can follow the supply.  Perhaps the State or Federal Government needs to set up its own storage and supply facilities or/and its own refinery.  After all, the biggest employer in the country is the government.  They sell water and electricity in many municipalities directly to the consumers.  The Federal Government also run agencies like the Tennessee Valley Authority.  If the so called Free Market gouges consumers for their own profit why can’t the Government equally provide the needed goods or services at a reasonable price?

The Weiner Component #132 – The Iranian Nuclear Deal

During the second week of July 2015, slightly past the set deadline for the negotiations between Iran and P5+1 to end, the two sides finally came to terms on a potential agreement that now has to be sanctioned by all the countries involved in the settlement.

After a period of about two years of negotiations between P5+1 (The five permanent members of the United Nations plus Germany,) and Iran a potential treaty has emerged that will allow Iran to develop and utilize atomic energy to produce essentially pollution free energy in its country but stop her from being able to produce an atomic bomb.

The nations that have been directly negotiating with Iran are China, Russia, the United Kingdom, France, and the United States. They all have permanent seats on the Security Council.  The Plus 1 is Germany.  These nations have been negotiating with Iran to keep her from developing her own atomic bomb, which Iran has continually stated she is not doing.  But Iran has continually refused to allow inspections of all her possible sites.  The fear is apparently that if Iran succeeds this will start the other Middle East nations doing the same thing and an arms race will result.

In July of 2006 China, Russia, and the United States joined with the other permanent members of the Security Council to expand harsh sanctions on Iran.

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Under the terms of the agreement Iran will get rid of practically all its centrifuges that are used to enrich lower grade uranium and all of her enriched uranium and all regions within the entire country will be open for inspection.  The agreement is over one hundred pages, detailing every possibility.  As the treaty terms are carried out the sanctions by all these nations will be gradually lifted.  If at any point or at any time Iran backs off its agreement the sanctions will be immediately re-imposed.  This treaty is far more extensive than any previously agreement between nations during peacetime.

Among the numerous sanctions that will be gradually removed there is one that has been mentioned numerous times and that cannot be rescinded and that is the assorted Iranian government bank accounts that were frozen by the various industrial countries which Iran had originally dealt with.   On November 4, 1979 the Iranian Hostage Crisis began.  Sixty-six American diplomats and citizens were taken as hostages by Iranian students from the American Embassy in that country and held for four hundred forty-four days.  Some were released earlier but fifty-two were held until January 20, 1981.

Oil exports from Iran to the U.S. ended November 12, 1979.  President Jimmy Carter issued Executive Order #12170 which froze all Iranian assets in the U.S. on November 14, 1979 by the office of Foreign Assets Control.  It was eight billion dollars.  This money was in the hands of assorted banks and has gained interest since that time. Later the Iranian financial assets of many United Nation members were also frozen. According to Western financial experts the amount today is at least 100 billion dollars. The Iranian Finance Minister places it at 28 billion dollars.  Either way this much money could noticeably raise the standard of living of all Iranian citizens.  It could also be used to shore-up Hezbollah and other Shiite movements in the Middle East.

Another advantage, in this case to countries of the Western World, is that Iran rests upon ¼ of the world’s oil deposits. This resource would then be available to all the countries that had imposed sanctions upon Iran lowering the present price of oil that is currently under $50 dollars a barrel.  This could substantially reduce the price of gasoline in all the western industrial nations and upset a number of bank executives in institutions where the money has been stored.

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Israel’s Prime Minister, Benjamin Netanyahu, has opposed this treaty since its inception, calling it a bad deal.  In fact, well before it was completed, with an invitation from the United States Speaker of the House of Representatives, John Boehner, he stated so to a joint session of Congress.  He has, since the treaty has been agreed upon, reiterated this position, saying that the deal will enable Iran to develop its own atomic weapon.

Currently President Barak Obama has diplomats from the State Department in Israel reassuring Netanyahu that even with the treaty the United States is a closer ally of Israel than ever.  Not everyone in Israel supports their Prime Minister’s position.  I get the impression that Netanyahu would like to see Iran at war, preferably with the U.S., and certainly not with Israel.  And in this way, see her ability to produce an atomic bomb totally destroyed. Is his position realistic? Certainly not in the long run.

Many Republicans have vociferously denounced the treaty without reading it as soon as its completion was announced.  In fact many of them had done so well before it was completed.  Scott Walker, the Republican 2016 presidential candidate from Wisconsin, stated in one of his primary speeches that he is willing to go to war with Iran as soon as he becomes president.  The House of Representatives Republicans have threatened to pass a bill denouncing and invalidating the treaty.  Interestingly the Constitution only gives the Senate the “advice and consent” powers.  With the House of Representatives involved they would be stretching the Constitution and changing its definition of the government, changing the organization of the Federal Government by taking over a good percentage of the executive powers and making future presidents ceremonial figures.  President Obama stated that if this were done and the bill was passed in Congress he would veto it.  The Republicans do not have enough of a majority in either the House or Senate to override a veto and even if they did the issue would go before the Supreme Court and they would be forced to declare the law unconstitutional.

It should also be remembered that young Senator Tom Cotton, a Tea Party Republican who was elected from the state of Arkansas in 2014, and whose name sounds like that of a Disney character in a full length cartoon, wrote a letter to Iran’s Ayatollah Khamenei, that was also signed by 46 other Republican Senators, denouncing the negotiations and saying any settlement would cease to exist once President Obama’s term ended in 2016.  Lately he has stated that the Secretary of State, John Kerry, sounds like Pontius Pilot.

Ted Cruz, who is currently not ranking very high in the national poles as a potential presidential candidate in 2016, has stated on Tuesday, July 27, 2015, to reporters in Washington, D.C. that “millions of Americans will be murdered by radical zealots” if the treaty is approved.  He also laid out a doomsday prediction that if Iran acquires an atomic bomb it will drop it over Tel Aviv. It seems that he feels he can clearly predict the future without any real evidence.  It also seems that he has not read the treaty which according to President Obama will hamstrung Iran’s nuclear ability to produce an atomic bomb.

And by not signing the treaty the United States would be accelerating Iran’s ability to make a bomb.  Also we have no control over the behavior of the other five nations that were negotiating with Iran and the probability is that some or all of them would go along with the treaty. The remaining sanctions would then be partial and frozen funds being held in these countries would then be released. There is also the possibility that the rigid boundaries imposed by this treaty would be relaxed if P5+1 is broken up.  This could place Iran fairly close to developing its own atomic bomb.

Mike Huckabee, the former pastor, former Republican governor of Arkansas, former Fox News anchor, and former presidential candidate, is again running for the presidency in 2016. Saturday, June 26, 2015, Huckabee stated in an interview with a conservative news outlet that the nuclear agreement would be a bad deal for Israel and will “take the Israelis and march them to the door of the oven.”  After facing intense criticism for this statement Huckabee refused to apologize for this remark.  He further stated, “This president’s policy is the most reckless in American history.  It is so naïve that he would trust the Iranians.  By doing so, he will take the Israelis and march them to the door of the oven  This is the most idiotic thing, this Iran deal.”  At a later date Huckabee the 2016 Presidential candidate stated that the Iranians cannot be trusted to ever carry out an agreement. He implied that they would never carry out any treaty.  I suspect that Mr. Huckabee would rather go to war with them.

Perhaps the greatest charlatan of the protesting Republicans is Donald Trump, whose father probable named him after his favorite Disney character.  He has said that when he becomes president he is going to beat-up the world so that every nation and group within those nations will do what he, President Donald Trump, wants them to do.  He has stated, among many other bits of idiocy that he feels sorry for ISS because of what he is going to do to them.  Trump called the Iran deal “terrible,” on Tuesday, July 27, 2015.  And he probably came to this conclusion without even reading the terms of the treaty.  After all, it is over 100 pages long.  He also said the President negotiated the agreement “from desperation.”  It’s amazing how much innate knowledge these Republicans have with no facts to back their conclusions.

Trump also stated earlier: “First of all, we’re giving them billions in this deal, which we shouldn’t have given them. We should have kept the money.”  Apparently he was referring to the gradual sanctions relief for Iran under the parameters of the agreement. “Second of all we have four prisoners over there. We should have said ‘Let the prisoners out.  They shouldn’t be over there.”  He also stated that any deal should also stipulate that inspectors have 24 hour immediate access to all nuclear sites in Iran.

Interestingly we’re not giving the Iranians any money.  These were Iranian funds that were frozen in the United States during the 1980s and have gathered interest since then.  The funds belong to the Iranians.  They are their monies, held and used by American banks for profit since that time.  This is also true for funds frozen in other countries.

One of the most important treaties in years, a document that could stabilize the Middle East and make the entire planet safer to live in, is being used as an attention-getter by Republicans, particularly by aspirants for the 1916 Presidential campaign.  A large number of Republican hopefuls are competing to see who will be the Republican presidential candidate in 2016.  To them nothing is more important than attracting Republican voter’s attention in the Republican primary elections and being chosen the Republican candidate for the presidency of the United States.  Anything that helps them achieve this goal, even if it means further destabilizing conditions in the Middle East and bringing about a war with Iran, is okay as long as they get chosen to become the Republican candidate for president in 2016.

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It is important to remember that the current treaty is over 100 pages long.  President Obama has urged everyone in Congress, particularly in the Senate, to read the treaty before deciding what to do.  It needs a 2/3ds “advice and consent” vote from the Senate before it can go into effect.  The treaty also needs the concurrence of the five other negotiating countries and of the Ayatollah Khamenei and the Iranian Parliament

President Obama has given the Senate 60 days to study the treaty and vote upon it.  It will take a 2/3 positive vote to pass. The probability is that if it is voted down the he will pass it as an agreement with another county by executive order.  It could then be kept that way or re-voted upon by the next administration in 2016.

The President has stated innumerable times for everyone to read the treaty before evaluating it.  He has also said that many of the Republicans who are loudly against it had very strongly advocated the invasion of Iraq to stop it from using its weapons of mass destruction that never existed.  The members of Congress and particularly those in the Senate have sixty days to read the 100 plus pages that make up the treaty and then make up their minds whether to approve or disapprove it.

Presumably they can then give reasonable reasons for their decisions.  Early in July of 2016 the major comments against it were: It’s not a good idea or a bad deal.  Those are very generic and meaningless reasons.  He has asked for alternative reasons.  Scott Walker has proposed war as his alternative.  Other Republicans have not stated this solution but have implied it in their rejection comments.  Is this what the Republican Party wants?  War with Iran?  I suspect the other five United Nation members, who also negotiated this treaty, have different thoughts about it.  The United States could end up standing alone against Iran.  I would suspect that that is a position that Scott Walker nor any other possible Republican president would want to be in a position to cope with.

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The one aspect of this agreement that no one seems to have made or considered is that with this treaty it will take Iran at least ten years to develop an atomic bomb.  Ten years is a long time.  Within that period, with no sanctions and utilizing its wealth in oil Iran will change or grow considerably.  Its people will have better lives.  Their standards of living and expectations will grow considerably. They will positively be connected to the rest of the world.  In essence they will have no need of having any atomic bombs.

Still another consideration is that if they were to use atomic weapons then atomic weapons would be used against them.  Even though Iran has four times the population of Iraq and is a much larger territory they could be totally destroyed as a nation if an atomic war broke out.  And it is an open secret that Israel has had atomic bombs for a number of years.  Also, perhaps the craziest nation in the world today that has atomic weapons is North Korea. They have not threatened anyone with their atomic weapons. North Korea having the bomb is the same as North Korea not having the bomb.  It is a weapon that cannot be used because using it would be an act of suicide.

President Barack Obama and Israeli Prime Minis...

 

English: A group photograph of the former host...

English: A group photograph of the former hostages in the hospital. The 52 hostages were spending a few days in the hospital after their release from Iran prior to their departure for the United States. Location: WIESBADEN AIR BASE (Photo credit: Wikipedia)

 

The Weiner Component #131 – Texas & the United States

Many Texas Republicans, and this includes the present governor, Greg Abbott, seem to have a variety of problems with President Barak Obama and the United States Government. They believe that they are constantly being plotted against by either or both of these entities.

Currently there are two major fears in their minds. One has to do with the Jade Helm 15 military training exercise.  According to the U.S. Army website this is a training exercise that will take place from July 15 to September 15 utilizing members of the U.S. Army Special Command and service members from the military’s four branches.  The training will take place over seven states.  Primarily the exercise will occur in Texas because the Special Operation Command requires large areas of underdeveloped land as well as access to towns.

The far right wing of the Republican Party in Texas have organized Operation Counter Jade Helm.  The state is rife with conspiracy theories.  The newly elected governor, Greg Abbott, has called out the state guard, at taxpayer expense, to keep an eye on the U.S. Military as it carries out its training.  Abbott stated that “It is important that Texans know their safety, constitutional rights, private rights, and civil liberties will not be infringed upon.”

The Republican candidates for the presidency are unwilling or don’t want to denounce right wing extremism.  Marco Rubio, Scott Walker, and Jeb Bush have been silent on this issue.  Rick Perry, Rand Paul, and Ted Cruz all stated something to the effect of that they would look into the matter.

In Texas and some of the other southern states, where the exercise is currently occurring, there have been public protests.  Republican leaders continue to embrace these conspiracy theories.  One is that President Obama plans to declare martial law in Texas and deprive the population of their guns.  Another, which is even crazier is that President Obama is getting ready to make himself Dictator of the United States for life and cancel the 2016 Election.  And to these people, if none of this happens that will be proof that it was planned and their objections stopped it from happening.  We go from the ridiculous to the totally insane!

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On the last Friday in June of 2015, shortly before the June 30th end of their session, the Supreme Court decided by a 5 to 4 decision that same sex marriage was constitutional. In Texas both Houses of the State Legislature went ballistic. They considered making that decision null and void within the state. They threatened to pass a law making same sex marriage illegal in Texas.  So far they have not acted upon this threat.  And then apparently took their case to the ultra-conservative Fifth Circuit Court which had overturned the Texas voting ID decision from a lower Court that had declared that law as being the same as a modern day poll tax.  The Fifth Circuit Court, which is lower than the Supreme Court but higher than the first court, declared the same sex marriage decision as the law of the land.   The Texas legislature is very unhappy with this current situation and some are still threatening to pass a law making it unconstitutional in the State of Texas.

The only way this could work was if Texas went back to being the Lone Star State.  She would first have to secede from the Union.  The last time that was tried was in the 1860s and she was forcibly brought back into the United States at the end of the Civil War.

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Currently Texas does not trust the United States monetary policy, apparently she feels that the value of the dollar may crash at any time, and she wants to be ready in case that happens.  Texas would like to have a gold backed currency ready if this were to happen.  She will develop in Huston a state owned Fort Knox. Obviously neither Governor Abbott nor the members of the Texas Legislature have recently read the Constitution, particularly the first paragraph of Section 10, Article I, wherein it states that “No state shall, without the consent of Congress . . . coin Money, make any Thing but gold and silver Coin a Tender of Payment of Debts;”

On June 12, 2015 the Texas legislature passed a law setting up a “Texas Bullion Depository.” The newly elected Governor Greg Abbott’s office stated that the facility would increase “the security and stability of our gold reserves.” The bill’s sponsor, state Representative Giovanni Capriglione, a Republican Tea Party member, said that the depository will give Texas a hedge if there are problems with the U.S. economy.  The law was passed in the Texas House by a vote of 140 to 4.

This law will repatriate over one billion dollars, worth of gold bullion from the vault of the  HSBC Bank in Manhattan to Huston where the depository is to be built underground. There are two big pension funds in Texas that together own more than one billion dollars’ worth of gold. One is the Teacher’s Retirement System and the other is the University of Texas. The Teacher’s Retirement Fund made headlines in 2011 when its board made the decision to take delivery of its money reserves in gold bars. The other gold holdings belong to the University of Texas Investment Management Company which was created in 1996 to oversee investments for the University of Texas and Texas A&M University systems.

The Texas Management Company (UTIMCO) pays about $600,000 a year to store the gold.   Its officials are amenable to moving any gold that is part of their portfolio, but under conditions which would limit the cost to no more than they are currently paying, if the depository does come into being, and the depository is a ”robust member” of the Chicago Mercantile Exchange.  The Teachers’ Retirement System also stores its gold bars at the same place and, I assume, pays additional funds for the privilege.

The question then arises as to who will own and control the gold?  Is it to be the Board of the Teachers’ Retirement System and the University of Texas Investment Management Company or the State of Texas?  Clearly it is owned by the University Management Company and the Teachers’ Retirement System and not by the State of Texas.  Can they legally usurp possession of the gold?  Apparently from statements that have been issued by the legislature and the governor’s office they seem to believe that they control the gold bullion.

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If the gold was purchased prior to 2005 the cost was about $400.00 per ounce.  If some of it was purchased at a later date then the price gradually rose to about $1,800.00 per ounce by 2011.  It then descended to $1,155.21 an ounce where it closed on Monday, July 13, 2015.  I would imagine that the Texas Investment Management Company has done quite well on its investment, even with the heavy fees paid to the N.Y. bank for storage but the Teachers’ Retirement System has taken a financial bath on its investment.  Still the question remains as to who actually owns the gold, the University or the State of Texas?

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The current new law will build an underground depository.  It’s not quite clear who will pay for this construction.  Many critics accuse Governor Greg Abbott of playing to the secessionist right.  Apparently a large percentage of Texas Republicans support the move, seeing the depository as the first step in a declaration of state independence.  It can be a step in the establishment of a currency system and bring about independence from Washington, D.C.  The independence sentiment surfaced after the governor signed House Bill 483 into law in June of 2015 and issued a statement declaring that the Texas Bullion Depository was to become “the first state level facility of its kind in the nation.”

This move has massive support among advocates of a return to the gold standard. Many of these people believe that the Federal Government and the Federal Reserve have mismanaged the dollar and are afraid for the security of their holdings. They see this as a hedge against their fear of the collapse of the dollar.

The initial Depository Bill was first introduced in 2013.  It failed because of the expense involved.  It was estimated then that moving the gold would cost $23 million.  In 2015 the bill was rewritten by State House Representative Giovanni Capriglione, a Tea Party Republican, allowing private companies to move the gold and manage the depository with no cost to the state of Texas.  The bill provides for the Depository but does not spend any money to bring it about.

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The concept of going back to gold backed currency is both interesting and crazy.  In the second half of 1969, then President Richard M. Nixon removed the last vestiges of gold that was presumably held behind all paper money.  Currency from that point became only backed by the word of the issuing country, in this case the United States. Today there is no precious metal behind any currency issued throughout the world.  The basic reason we went off the gold standard in 1933, the lowest point of the Great Depression, was that there was not nor had been enough gold in existence to supply the currency needed for all the possible business transactions necessary for the economy to function properly.  In point of fact, essentially the industrial world went off the gold standard in the 1930s and created the fiction thereafter that all the paper money was backed by buried hordes of gold bullion.   There was never enough gold bullion to really back the amount of money in circulation.  This was particularly true after World War II because during the war all the American Allies had shipped their gold to the United States for safekeeping and had spent it there during the war.

In late 1969 the U.S. Federal Government began selling gold for $36.00 an ounce, which at that time was the legal price of gold in the country. The price rose rapidly as buyers rushed to invest their money and the value of gold gradually rose to $800 an ounce, then it dropped slowly to about $200 an ounce.  By 2005 it was at $400 an ounce, then by the seventh or eighth month of 2011 it had risen to over $1,800 an ounce. From there, with gyrations it gradually dropped to 1,131.90 an ounce by Friday, July 17, 2015. By the end of July 2015 gold had decreased to a little over one thousand dollars an ounce.

Unfortunately the Teachers’ Retirement System bought their gold in 2011. They have lost over $700 an ounce on their retirement fund, not to mention the cost of storing it in the New York bank vault. The good-old-boys on the Teacher’s Retirement Board had probably dealt with a bunch of good-old-boys who sold gold on a commission basis. The size of the Teacher’s Retirement Fund has dropped over thirty-three percent.  That doesn’t do much for teacher retirement in Texas.  This is doubly true if the state usurps the gold bricks for its new money system, which the state will have to do if it puts out its own money.  Remember, according to the Constitution states can’t print money; they can only mint it. The state would have to melt down the bricks and turn them into coins. Currently a one ounce coin would be worth about $1,100, a half ounce coin would be worth $550. It would be difficult to get most stores to make change on these coins for shopping.  In addition gold seems to be still in the process of decreasing in value.

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The Republican Party of Texas has shown a distrust for the Federal Reserve and the Treasury of the United States. They want a return to the so-called gold standard of the 1930s and beyond when the American dollar was backed by buried bricks of gold and silver and they would like an end of the Federal Reserve. Many of these people are arguing that Texas can eventually set up a system of currency exchange that could eventually supplant that of the U.S. Government.  Obviously they haven’t read or intend to change the U.S. Constitution.  Interestingly the U.S. dollar internationally has not only maintained its value but has also increase in worth against other currencies.

The State Comptroller of Texas, without any separate funding, is currently in charge of the gold transfer and depository project.  The law doesn’t state where the Depository will be or how it should be built or secured.  According to the law there is a provision allowing ordinary people to deposit their individually owned gold or silver into the facility.

Currently the Comptroller’s office has a four man task force working out all the details of building the Texas Billion Depository without any special funding.  Presumably securing and moving the gold from New York City to a Texas’ city, not yet designated, is estimated to run into millions of dollars and building the Depository will cost additional millions of dollars.  All this will be done by private enterprise and then run by private enterprise charging the State of Texas and the assorted individuals using the gold fees for storing their gold and other precious metals and making a profit.  Somehow it all sounds like fancy day-dreaming.  The fees that would have to be charged by the private company would be prohibitive for it to recover its gold moving, maintenance, and protection costs if it were to make a profit.  And this would be true even if Texas were to be able to secede from the Union and become a lone star state again.  The probability is that nothing can come from this move.  It is just Texas Republican paranoia, or to use a trite phrase, Pie in the sky by ultra conservative Texans.

(Footnote: I will be away on vacation for the next two weeks.  The next blog will appear after the middle of August.)

 

The U.S. Gold Bullion Depository at Fort Knox.
The U.S. Gold Bullion Depository at Fort Knox. (Photo credit: Wikipedia)

 

 

English: Seal of Texas

English: Seal of Texas (Photo credit: Wikipedia)

 

Seal of the United States Mint. The design is ...

Seal of the United States Mint. The design is the same as the Treasury seal with a Mint inscription. (Photo credit: Wikipedia)

 

Highway Map - State of Texas

 

The Weiner Component #130 – The World Economies & the Greek Crisis

On Monday, June 29 2015, the leading indicators on the American stock market took a sharp dive; the DOW dropped 350.33 points and the NASDAQ went down 122.04 points.

All this because Greece was at the point of near bankruptcy, with a massive payment that was due Tuesday June 30, which the government couldn’t and didn’t meet. Negotiations for a new loan broke down the Friday before, when the Greek negotiating team walked out of the meeting. The Greek Prime Minister, Alexis Tsipras and the leftist Syriza party who were elected to end austerity, called for a referendum to be held a week later, letting the people decide what to do. The next day, Tuesday June 30th 2015, Greece defaulted on its debt.  On Wednesday, July 1, the Greek government attempted to come to an agreement with the European Central Bank. When the referendum was held a week later the majority of Greek citizens voted against paying back the debt.

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The Greeks through nefarious practices for the last decade or so were able to hide the fact that the government was spending far more than it was taking in in taxes. They continually kept spending far more than the GDP (Gross Domestic Product), the amount of wealth the country produced. In addition Greece apparently has a lot more tax cheaters than any of the other European nations, consequently they estimate that about 20 million euros worth of taxes and their earnings were/are going into numbered Swiss bank accounts.   The American firm, Goldman Sacks, had earlier engendered creative economics for multi-million dollar fees and allowed the government and people of Greece and other countries, some of which were part of the 19 nations of the Eurozone, to engage in picturesque bookkeeping and spend far more than they should have.

At the beginning of 2010 it was discovered that Greece had paid Goldman Sacks and other banks millions of dollars in fees since 2001 for arranging transactions that hid the actual level of borrowing. The most notable is a major currency swap that hid billions worth of Greek debts and loans which were factiously converted into yen and dollars, thus hiding the true extent of the debt. The purpose of this and similar actions was that these various Greek governments could continue spending. An interesting short term solution to an ever growing long term problem that would eventually explode.

The process of paying back its debt, currently set at 270 billion dollars, began toward the end of 2008 with a massive economic collapse. The financial crash that occurred at this time in the United States and beyond, diversely effected Greece, Portugal, Spain, and Italy of the Eurozone Nations. These countries had been working since that time to get themselves out of debt. They have not succeeded, actually Greece has significantly increased her level of debt.

Greece has now essentially defaulted on a repayment instalment of 1.7 billion dollars that was due on June 30, 2015. She could only meet this payment if she borrowed all of the funds from the European Central Bank plus an addition 50 to 60 billion dollars to keep herself functioning.  It’s a movement of figures in different columns of the banks bookkeeping that seems to go on forever with the debt never disappearing but continually growing.

On the first Saturday in July the people of Greece voted on a referendum determining whether or not they should pay back their debt to the nations of the Eurozone.  I understand that the referendum was fairly complex and that a lot of people had a problem determining exactly what it meant.  Also the government recommended a no vote.  They came out with a strong no vote.  Consequently the Greeks defaulted upon their debt but may still un-default it.

Currently Greece’s unemployment level is over 25%.  For the last six years the government has been paying back this debt without really diminishing the principle because she has to borrow to do so.  And the country has undergone ever increasing levels of privation in order to do this and accomplished nothing.  The banks were closed in Greece by government order and the amount of cash that could be taken out of ATM machines was very limited. The country essentially limped along close to total bankruptcy.  Much more money was needed than the country had in order to make the installment payments that Greece seemed to have or could reasonable get.  A real solution to this matter seemed highly problematic.

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One of the major basic questions dealing with Greece and the Eurozone is what is really National Wealth?  Is it money or the goods and services produced within a given amount of time, usually a fiscal year, stated in terms of money value?

Money, for about the last fifty years has had nothing behind it but the word of the government issuing it.  Its domestic value is determined by what people will sell or take for it and internationally by what other countries will trade for it.  Basically, today, it is a tool, which allows the exchange of goods and services within the particular nation and throughout the world.  In essence it is the grease that allows the economies to function. Without an acceptable form of currency a nation faces complete economic disaster.

The problem with printing more money, which is a power the Greek Government does not have as a member of the Eurozone, is that too much money in circulation tends to force up the price of goods and services as people compete for these items.  It will eventually bring about a depression.  On the other hand too little money in circulation tends to reduce the amount of goods and services needed, as people are limited in what they can afford.  This can also bring about a recession leading to a depression. The trick is to have enough in circulation so that maximum productivity can be reached and maintained.  This also has to be gradually increased as the population of the nation increases.  In Greece today there is not enough funds left to service either the needs of the country or the debt.

People are taking their funds out of the country leaving the banks with a shortage of cash. The banks were closed several weeks ago to end a run on them with long lines waiting to withdraw their cash. The country was either days or hours away from total bankruptcy when the banks were closed.  Currently Greece is trapped in an ever increasing cycle of growing debt in order to just maintain its existence.

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The Eurozone today is in a situation fraught with contradictions.  When the Eurozone were first formed in 1999 the 19 nations agreed to function as a single economic unit with a single currency working through a central bank.  Meanwhile, with the exception of currency control, each of the 19 independent states gave up none of their sovereignty and still continued to act as an independent entity. Some of these 19 nations were far more economically secure than others.  Greece was one of the poorer nations that acted like the wealthier states and continually spent more money than it could realistically afford.

Up until the end of 2008 the U.S. and other industrial nations were a-flow with money. Then, starting with the United States, the Housing Bubble burst and property values in that country went down the toilet.  Internationally the flow of money tightened.  Suddenly Greece and these other countries were heavily in debt.  In order to meet these debt payments the governments had to divert a good percentage of their taxes.  An ever larger percentage of the GDP left these countries and there was not enough left to perform the regular services which the governments ordinarily provided.  This in turn forced the governments to lay off large numbers of government employees which, in turn, exacerbated unemployment and decreased the GDP.  In order to meet these payments Greece had to borrow more funds from the European Central Bank, actually increasing its debt.  With a shrinking economy the government had to further economize in an attempt to meet its payments.  This caused more and more economic shrinkage in the country.

What currently exists in Greece is a lose, lose situation with no hope in sight and well over 50% of the population in the referendum have voted for permanent default.  But if the Central Bank in the Eurozone grants this then Portugal, Italy, Spain and Ireland may demand the same treatment.  In fact it could become a pattern with some of its members.  Yet if it doesn’t grant relief they also face an impossible situation.  Greece is currently just days ahead of its banks running out of money and going into bankruptcy. It’s quite a dilemma.

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In the United States toward the end of 2008 a similar situation existed.  This was caused by the explosion of the Real Estate Bubble brought about by the large banks in the country over a thirty year period.  The banks had divided each of the many home mortgages into hundreds of pieces and the different pieces were combined and sold in a multitude of different Hedge Funds.  Actually no one owned the mortgages, just fractional pieces of them.  The large banks financed or refinanced the mortgage paper, then sold the pieces, administered everything and charged fees for everything they did. Once the mortgages were sold the money was lent out again.  It was an endless process with the banks collecting multimillions in fees. In this way a million dollars could fund one hundred million or more in mortgages.  The banks were in such a hurry to continue the process that they devised an unbelievable sloppy system of record keeping that was fraught with error.  This meant there was no accurate record keeping of the multitude of transactions.

When the Real Estate Bubble burst in late 2008 the large banks began foreclosing on properties that they did not own.  It took a while for the courts to realize the fraud and all the large banking houses were fined heavily for these and other illegal actions.  What the country faced was a possible twenty years or more of insane confusion in the housing industry and a depression greater than that of 1929.  With the addition factor that most of the large banking houses in the U.S. could go under and the movement of money throughout the country would become a trickle.

The first actions were taken by President George W. Bush during his last few months in office when the Federal Government began the process of bailing out most of the banks. This was followed by President Barak Obama who successfully continued bailing out most of the large banking houses and also the auto industry and avoided a deep depression.

The housing crisis was largely solved by the Federal Reserve under the sterling leadership of Ben Bernanke, who for a period of over two years bought 45 billion dollars’ worth of mortgage paper every month, spending well over a trillion dollars.  The mortgages came from all 50 states and were all fractional shares of an endless number of properties.  In essence what the FED did was to contribute well over a trillion dollars to this enterprise with no way of collecting any of it back.  In fact it contributed this amount of money to the general welfare and growth of the economy.  And the process brought back a level of prosperity and solved the mortgage dilemma in a period of just a few years.

The difference between this solution and the current problem in the Eurozone is that no one in the United States has ever mentioned what was being done.  All that the FED announced was that they were buying back mortgage paper.  There was never any discussion about the morality of the issue or the fact that they would never be able to cash these mortgages.  To my knowledge no one questioned the meaning of this statement.  If the country and Congress had been aware of what was happening we might still be in the middle of the mortgage crisis that the banks in their greed caused. People do not like someone else to get something for free even if it indirectly benefits them.

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Over the July 4th Weekend the majority of the Greek population voted to reject the current austerity negotiations with the other Eurozone nations.  As a result the European, American, and other stock markets dropped on the following Monday.

Basically the issue is with what is the Central European Bank dealing? Is the issue the Greek default on an impossible debt?   Or is it a problem the Eurozone is facing regarding one or some of her members?  If it’s the former then default is inevitable sooner or later with the lack of stability that would follow this action.  If, on the other hand, the issue is the latter then it becomes a problem of the entire Eurozone and its solution is one involving all the states of the Eurozone.  The result of this could be a new stability for all the states within the Eurozone.

We’ve seen that dealing with this issue totally as a Greek problem is insolvable from any aspect.  If other members of the Eurozone want to punish Greece for excess spending over a decade that ended 6 or 7 years ago they are not only hurting Greece but also themselves and their own futures.  But if this issue is dealt with as a Eurozone problem then there are possible solutions from which all of the Eurozone states can benefit.

What is required is a consortium of all the Eurozone states to handle not just Greece’s economic problem but also that of Spain, Portugal, and Italy. They are also in debt to the European Central Bank. If it is everyone’s problem they all need to participate in its solution.

Basically what these states have to deal with is the setting up of a central legislative body representing all of the states that can determine what is best for all of the states. They need to bring about a United States of Europe that has the authority to function for the benefit of all the states within the Eurozone.  And all the states need to give up some of their sovereign rights for the good of the union. This, incidentally, was their original goal

Numerous problems will have to be faced and resolved, particularly in terms of the extent of representation each state will have in this new union.  With a union each state would be stronger than it currently is and the euro would be back on a solid footing as one of the world’s safest forms of money. The European Central Bank would be the European version of the American Federal Reserve and the world’s stock markets would again be more stable.

Is this possible? That’s a good question. There are innumerable problems that have to be solved before this can come about.  But if the answer is, yes, then there would be more stability not only in the Eurozone but also throughout all the industrial nations.

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It would seem that the interests of Germany, France, and some of the other members are against Greece defaulting and exiting from the Eurozone.  Rather than fall out of the Eurozone on Thursday, July 9, 2015 the Greek government capitulated by delivering a new package of economic reforms to the ECB, raising taxes and the retirement age. Faced with the collapse of the country’s banking system and total economic catastrophe the government yielded on the issues that led to the previous collapse on a new rescue plan.  The retirement age is being pushed to 67 and government pensions are being cut by 15% for government workers who retired at age 62 after 40 year of employment.  The government will also withhold more taxes from state salaries and pensions and deduct a 6% healthcare premium from retirees’ checks.  The reforms are projected to generate at least 13.2 billion dollars in revenue over the next two years.

Currently the Greek debt is over 175% of its GDP.  It needs to be reduced or rescheduled over a longer period of time with the interest rates kept low to prevent the debt from growing. The Greek people need to take a more realistic attitude about repayment.

On Monday, July 13, 2015, after long hours of deliberation, with some states of the Eurozone arguing that the Greek prime minister’s word could not be trusted, the other states agreed to bail out Greece with a loan of about 50 billion euros.  Presumably Greece will pass further economizing measures and the loan will be implemented gradually. There is a payment due on the debt in about two years and Greece will be able to reduce her debt somewhat at that time if she adheres to her agreement.

The problems that the Greek government has to meet at this time is to economize enough to at least make a payment on her debt and also to restore the confidence of her own population in her banking system. The probability is that as soon as the banks are reopened within the country there will be at least a light run on them.  Presently the Greek Government’s solution is to reopen the banks and only allow very limited withdrawals.  Many people with large enough incomes may deposit the salaries in other countries, fearing that the bank closure could happen again.  It will take time for domestic confidence to be restored.  And a payment must be met in about two years.

Another problem which effects the entire Eurozone is one dealing with the declining value of the euro. The euro when it first appeared was worth about 1.5 dollars.  Last year with the infusion of a large amount of euros by the European Central Bank into the national flow of the Eurozone it dropped to about 100.3 percent of the dollar. On Monday July 13 with the current solution to the Greek Crisis the euro was worth 90.51 cents to the dollar. On Tuesday, July 14, the euro had risen to 1.1034 to the dollar. What will happen to its value in the future?  I suppose that is dependent on how well the Eurozone continues to function.

Greece will have a payment due in about two years. If she is able to make a payment  and not have to borrow more money then, the Eurozone will function properly and the value of the euro will have risen.  If, on the other hand, Greece has to borrow money again to just stay alive then there is no telling what the disaster will be for the Eurozone.

On Monday, July 20, 2015 the banks in Greece reopened; but the amount that could be withdrawn from any account was severely limited. What does this portend for the immediate future?  We’ll have to wait and see.

(Footnote:  To my readers: you must forgive me for not responding to your enquiries.  I get innumerable requests daily.  If I answered all of them I wouldn’t have time left to write the blog.  Virtually all your enquiries are answered in The Weiner Component #122 – Responding To Your Enquiries.)

English: Alexis Tsipras in a press conference ...

English: Alexis Tsipras in a press conference in Komotini. Ελληνικά: Συνέντευξη Τύπου του Αλέξη Τσίπρα στο ξενοδοχείο Ξενία στα πλαίσια της επίσκεψης του στην Κομοτηνή 13.11.2008 (Photo credit: Wikipedia)

 

English: Greece's recent debt history, between...

English: Greece’s recent debt history, between 1999 and 2010. (Photo credit: Wikipedia)

 

The Weiner Component #129 – The South Carolina Hate Crime & its Consequences

African Methodist Episcopal Church

African Methodist Episcopal Church (Photo credit: Wikipedia)

 

On Wednesday afternoon during a Bible Study session on June 17, 2015, a young man, Dylann Roof, visited the Emanuel African Methodist Episcopal Church in Charleston, South Carolina, spent about an hour there watching a bible class, then during the prayer session that followed he took out his new pistol with a laser sight and shot nine parishioners, killing them all.

Dylan Roof, who had recently turned 21 years of age, was an unemployed high school drop-out. He had failed and had to repeat the ninth grade of high school. To look at a photograph of the youngster one would guess that he was about 16 or 17 years old.  He had purchased the pistol probably after receiving a money gift from his father as a birthday present on his 21 birthday.

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Looking at a picture of this youngster and reading about him one gets the impression of a total loser.  High School had been too much for him.  He had been unemployed, very possibly incapable of holding a simple job.  At 21 he was an absolute nobody, dependent still upon his father for support.  He is the perfect example of what Southerners would call “white trash,” a nobody, a nothing.

I remember being stationed during my two year stint in the military during the second half of the 1950s, shortly before the Civil Rights Movement took off in the U.S. in both Georgia and South Carolina.  And I remember that the raunchiest and poorest white man considered himself superior to the richest and/or best educated black man in the cities of Augusta, Georgia or Aiken, South Carolina, the two major cities located near the bases where I served in the military.

It seems, even with the Civil Rights Movement and the 1965 Voting Rights Law, that racial superiority is alive and still flourishing in the United States, particularly in the Southern States.  This nothing youngster, who had his own hate sight on the internet, in which he showed himself wearing white symbols of former ruling Black States in Africa and burning an American flag while waving the Southern battle flag with his other hand, apparently felt that it was his mission to help purify the white American race by killing a number of Blacks, who in his words “were raping white women and taking over the country” from superior Whites. What confused me about this act of so-called purification was why he shot more women than men.

Dylann Roof apparently had thought of killing himself directly after the shooting but changed his mind or didn’t have the nerve to carry it out.  Instead he fled the scene and was picked up over two hundred miles away from Charleston.  He had been captured on television in the Church and readily admitted his deed.

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The news media has been vigorously covering this story and following all its ramifications.  One of the items they seem to have missed was the question of to what extent was his father responsible by giving his unemployed, high-school drop-out son enough money to buy an expensive pistol?  I’ve read nothing about the father other than he exists and that his wife left him at some point in the past.  Is this a standard operation in South Carolina, to allow your son to arm himself when he turns 21, regardless of his mental state?  Is the boy an extension of his father or did he develop his superior attitude by himself?  Are these questions being investigated and is it still too early to answer them?

Another question that has developed is the questioning of the Civil War flag flying from the front of the state capital.  This flag was readapted in 1962 by the State of South Carolina as a protest against the 1962 lunch counter sit-in by Blacks in that state. It was a reaction to one of the first Civil Rights protest actions in the South.  It continued to fly until recently at the state capital.  It still flies throughout many states in that part of the country and exists on the automobile license plates of several Southern states.

Initially Senator Lindsey Graham of S. Carolina stated that the flag denotes to the people of the state who they are.  Days later, after the governor of the state, Nikki Haley, had stated that it was time to get rid of the flag which is a symbol of slavery and segregation or hatred by the two groups.  She also stated that it is time to reconcile the entire population as one people.  Graham agreed that it was time that the flag came down.

Other Southern states, North Carolina and Virginia are going to take the flag off of their automobile license plates as soon as possible and one of these states is going to remove a commemorative statue of a Civil War hero and Klansman that stands in the area of its capital building.

Interestingly I’ve heard no comments from the National Rifle Association but it may be too early for them to comment.  They usually wait for the emotions to die down in mass shooting incidents before they say anything, which usually consists of having the pastors or teachers or whomever go around armed in case of an emergency.  Can you see college or high school students walking around their compasses with concealed weapons?

These statements by the NRA are understandable when one realizes that a part of their Board of Directors is made up of gun, magazine, and ammunition manufacturers.  These companies fund them with millions of dollars each year.  They would love to extend their base of customers.  Particularly since most of these companies that have been around for a long time are not doing well on the stock market.

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One would assume that there are some laws about gun ownership in South Carolina. And they would be right there are some. There are none for rifles or shotguns but there is one for handguns. There is no permit, registration, or licensing required but a non-drug police arrest record is required for carrying a concealed handgun.  Apparently anyone purchasing a handgun has to wait three days to be cleared by the F.B.I.  Root had been picked up a year or so earlier for drug possession but somehow the F.B.I. never found this out within the three business days and he was given the weapon. Apparently the F.B.I. receives twenty to thirty thousand requests for this type of information per day.

Because of an error Dylann Roof, who had been arrested several times, once for drug possession, and was a white supremacist with his own internet blog, was able to purchase a pistol with a laser sight.  I would assume that much of what he believed he had heard not only from his friends but also from his father and his father’s friends. The statement that Blacks are always raping white women and taking over the country would be generic among his group and the white supremacist’s blogs he, no doubt, followed on the internet.  Apparently derogatory statements of hate can go a long way with some people!

This brings up an interesting question: How far does freedom of speech extend?  There are libel laws where an individual can sue someone who wrongly libels him.  But to what extent is someone on the internet calling for mayhem and violence responsible for an act committed by one of their adherents?  If someone is targeted for death by a hate group and then someone else commits the crime then is only the perpetrator guilty? Where does responsibility for verbally proposing hate end?  Are there or should there be limits on this type of free speech?  Does change always have to follow tragedy?

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There have been positive responses to the shootings.  South Carolina has taken down its Civil War flag by the capital building.  Other Southern states are in the process of taking similar actions. No doubt many Ku Klux Klan heroes of the past will now fade and many street names will be changed.  Apple sells Civil War games at its stores.  These apparently all contain the Civil War flag and have all been removed from Apple stores. Walmart is no longer selling anything that contains images of the Civil War Battle Flag.

The one exception seems to be Governor Scott Walker of Wisconsin.  He just signed a bill that ended the waiting period for the purchase of handguns.  Originally anyone buying a pistol in Wisconsin had to wait 48 hours before receiving his merchandise; now the individual can just walk out with his new pistol at the time of purchase.

There is a very happy looking picture of Walker posted on the internet signing the bill, which he said, had been planned before the Charleston incident.  He saw no reason to delay this planned event.

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President Barak Obama gave the eulogy for the nine murdered individuals at the Emanuel African Methodist Episcopal Church in Charleston, South Carolina.  He said, among other things, that the Lord works in strange ways.  The killings strongly indicated that the South consists of two societies, one White and one Black; and that all the symbols permeating the societies engender strong negative feeling among the White population.  Beginning with the Civil War flag and going on to all the statuary of Klansmen and the streets and boulevards named after these individuals have and are engendering lasting bigotry and racial hate, feelings of superiority and inferiority.  It is time to follow what Republican governor, Nikki Haley stated, it is time for the Southern states to become a government of all its people.

The Weiner Component #128 – The 2016 Presidential Election

If one looks at the Constitution of the United States of America one discovers that it consists of seven articles and twenty-seven amendments.  Of these the first three articles set up the organization and functioning of the Federal Government.   Article 1 deals with the legislative bodies, Article 2 with the presidency, and Article 3 with the Supreme Court.

In the first Article the two legislative bodies, the Senate and the House of Representatives, are defined, organized, and their powers enumerated.   Article 2 sets up the presidency and describes the general powers of the President, and Article 3 essentially states that there shall be a Supreme Court.

According to the Constitution, Congress alone has the power to make the laws.  The President is the chief administrator; he carries out the laws that exist and that the current Congress has brought or brings into being.  The President can issue executive orders, which if they are not in contradiction of existing laws, will exist during his term in office.  But his acts can be curtailed by specific acts of Congress or, for that matter, by decisions of the Supreme Court.  He is mainly the chief administrator of the United States. He runs the country.

During Presidential Elections one gets the impression that most candidates and the general public are totally unaware of what the basic document of the United States contains.  In the current pre-election campaign for the Presidency in 2016 the overly large number of Republican candidates state what they will do if elected.  These individuals sound like they are running to be kings and explain how the country will function if one of them is elected.  What new laws they will decree.  The ignorance is pathetic.

Barak Obama was elected in 2008 on a platform of change.  When he assumed office in 2009 he inherited, from the former President, George W. Bush, a potential economic collapse that would have been greater than the Great Depression of 1929.  By using the resources of the Federal Government, he and his administration were able, over his first two years in office, to turn the economic situation around and totally avoid disaster. Even with the full use of the government for this he was able, with a Democratic Congress, to bring about Affordable Health Care (Obamacare).  In the 2010 Midterm Election a goodly number of the people who had voted for him in 2008 were disgusted with his lack of “change” and stayed at home and didn’t vote.  That combined with Voter Suppression in Republican dominated states gave control of the House of Representatives to the Republicans and the chances for change in the U.S. dropped to zero.

The probability of a Republican being elected in 2016 and both Houses of Congress maintaining their Republican majority is slim.   But even if it were to happen the possibility of a Republican president agreeing completely with a Republican Congress is even slimmer.  In fact the two Republican Houses of Congress agreeing is even slimmer than that, seeing that the current Republican House of Representatives is much farther to the right in their positions than the Republican dominated Senate.

What is needed at this time is a realistic look at elections and an understanding of the importance of voter continuing participation.  Elections are important.  Their results helps determine the direction in which the country proceeds.  Being not bothered to vote or a protest non-vote is actually a vote for the minority party, the Republicans.

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There are currently a plethora of Republican candidates vying for the Presidency in 2016.  In fact the leadership of the National Republican Party seems bankrupt of power since they don’t seem to have any control over the choice of one or a few possible candidates.

For the Republicans there are currently fifteen announced candidates and seven additional potentially pending candidates.  This makes a total of twenty-one people who are vying for the presidency from the Republican Party.

The stated candidates are:

Jeb Bush officially as of June 15, 2015

  1. Ben Carson as of May 4, 2015
  2. Ted Cruz as of March 23, 2015
  3. Carly Fiorina as of May 4, 2015
  4. Lindsey Graham as of June 1, 2015
  5. Mike Huckabee as of May 5, 2015
  6. George Pataki as of May 28, 2015
  7. Rand Paul as of April 7, 2015
  8. Rick Perry as of June 4, 2015
  9. Marco Rubio as of April 13, 2015
  10. Rick Santorum as of May 27, 2015
  11. Donald Trump as of June 16, 2015
  12. Bobby Jingle as of June 24, 2015
  13. Chris Christie as of June 30, 2015
  14. Scott Walker as of July 13, 2015

Also announced are Mark Everson & Jack Fellure

Other potential candidates are:

  1. John Kasich
  2. Bob Ehrlich
  3. Jim Gilmore
  4. Peter T. King

That makes a total of 21 potential presidential candidates

The next question is: How will they debate one another?   If they were all present in a single debate, the answers to each question would last for more than an hour and many TV viewers would forget at least half the answers before the question was answered. Fox News, the formal propaganda agency for the Republican Party, had a formula to just allow a certain number of the candidates leading in the national polls to debate but that’s been rejected by several state parties.  Whatever happens here will be colorful and interesting.

If you’re interested in any of the multitude of Republican candidates, look them up on the internet or, if you’re patient wait to see who’s left when we get to November of 2015. I suspect many of these individuals don’t and won’t have the organization, funding, or ability to mount 50 plus campaigns and will gradually fade away.

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For the Democrats there are also a host of candidates but only two or three of them seem to have the organization to hold elections in each of the 50 states and each of the Federal Territories held by the United States.  They are, in the order of national poll preference, Hillary Rodham Clinton, Bernie Sanders, and Lincoln Chafee.

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Of the Democratic candidates, Hillary Rodham Clinton is the best known.  She is the wife of former President Bill Clinton, a former well-functioning U.S. Senator, and President Barak Obama’s first Secretary of State.  No one running for the Presidency for the first time has been as experienced as she.  Hillary Clinton is running on a liberal platform.  For her to bring about her agenda she will need a majority in both the House and Senate.

Bernie Sanders is 74 years old.  Politically, he is a Democratic Socialist, who caucuses with the Democratic Party.  He has served in the Senate since January 2007.  Sanders favors policy proposals similar to those of social democratic governments in Europe, particularly Scandinavia, such things as free medical care for all and free college education for all.  His basic premise is that the U.S. is the richest country that has ever existed but the bulk of this wealth is going to the one percent who are not even paying their fair share of taxes.  He is currently the voice of many frustrated Americans who feel there is an extreme need for change in the United States but don’t see any of this occurring.  Sanders is running for the presidency as a Democrat.  Like Hillary, if he is elected he will need a Democratic Congress to bring about any change or he will spend four frustrated years as President not being able to do much.

Lincoln Chafee’s father, John Chafee, was the Republican Senator from Rhode Island where he died in 1999.  His son, Lincoln, was appointed by the governor of the state to finish his term.  Lincoln Chafee had entered politics in 1985 as a delegate to the Rhode Island Constitutional Convention.  The following year he was he became a member of the Warwick City Council, where he served until he was elected mayor of Warwick in 1992.  He served in that office until his father’s death in 1999 when he was appointed to the U.S. Senate to finish his father’s term.  In 2000 he won a full term to the U.S. Senate, defeating his Democratic rival.

Lincoln Chafee was a liberal Republican whose beliefs stood to the left of some conservative Democrats.  He opposed eliminating the estate tax, voted to increase the top federal income tax rate, was against allowing drilling in the Arctic National Wildlife Refuge, supported an increased minimum wage, and was the only Republican to vote against the invasion of Iraq.  He is pro-choice, supports same-sex marriage, affirmative action, gun control, and opposes the death penalty.

In 2007 Chafee left the Republican Party and became an Independent.  He supported Barak Obama in 2008.  In 2010 he became governor of Rhode Island.  Chafee was a co-chair of Obama’s 2012 re-election campaign.  In May of 2013 he announced that he was switching to the Democratic Party.  He formally announced his campaign for the presidency on June 3, 2015.

What are his chances of becoming the Democratic candidate?  An interesting question. He doesn’t seem as nationally well known as either Clinton or Sanders.  And both of them have wide recognition and positive reputations with Hillary, probably leading.

With the senseless murder of the nine church members in the leading Black church in South Carolina Hillary Rodham Clinton has taken on the terms of leading a Crusade across the country which the majority of the American population seems to want.  Of course, if she is elected, her success will depend upon the makeup of the two Houses of Congress.  The Democrats need not only a majority in both Houses of Congress but also a filibuster-less Senate, that is a 60 vote majority in that House. Then if the Democrats can work lock-step a Crusade to change America positively can be carried out.

U.S. Senator Bernie Sanders of Vermont

 

 

English: First page of Constitution of the Uni...

English: First page of Constitution of the United States Česky: První strana originálu Ústavy Spojených států amerických Español: La página primera de la Constitución de los Estados Unidos de América (Photo credit: Wikipedia)

 

The Weiner Component #127- North Carolina’s New Religious Law & the Supreme Court’s Same Sex Marriage Decision

On Friday, June 25, 2 015 by a 5 to 4 decision the Supreme Court decided that same sex marriages were constitutional. Prior they were legal in 33 states. Earlier on Thursday, June 11th 2015 the state of North Carolina passed a law that made the First Amendment to the Constitution primary over the Fourteenth Amendment, giving licensing registrars and Justices of the Peace the power to refuse to license or carry out civil marriages if they went against their religious beliefs. It seems that the state of North Carolina now has a serious problem dealing with homosexual or lesbian marriages which are now constitutionally legal throughout all of the United States.

To specifically pass a law making same sex marriages illegal within that state would be discriminatory and unconstitutional. Consequently, North Carolina passed a law that allows both the registrar, who issues marriage licenses, and/or the Justice of the Peace, who can legally marry couples, to be able to discriminate on the basis of their religious beliefs and therefore to deny either the issue of marriage licenses or performance of the marriage ceremony.  Presumably this is a constitutional way of ignoring a constitutional judicial decision.

Both Houses of the State Legislature have voted to do this and both have overridden the Republican Governor, Pat McCrory’s veto. This is the second state to pass such a law.  Utah passed a similar law earlier in 2015.

This means that some of the workers in the register of deeds offices and magistrates who perform civil ceremonies to solemnize civil marriages can refuse to perform these functions if they hold a “sincerely held religious objection.”  The law “protects sincerely held religious beliefs while also insuring that magistrates are available in all jurisdictions to perform lawful marriages” that go along with their individual religious beliefs.

Somehow we seem to have a contradiction in legal concepts. If we look at the first amendment to the United States Constitution’s Bill of Rights it states that “Congress shall make no law respecting an establishment of religion, or prohibit the free exercise thereof…” This was passed in 1789. In section one of the 14th Amendment of this same document it states that “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States;” . . . “nor deny to any person within its jurisdiction the equal protection of the laws.”  This was added to the Constitution in 1868.

We have a clear contradiction between the First and Fourteenth Amendments to the Constitution.  Which should predominate?  The issue of limited rights was debated during the mid to late 19th Century by numerous philosophers and the overall conclusion which the courts have also upheld was that an individual’s religious freedom extends to the point where it limits someone else’s rights.  From there on it is abuse rather than religious freedom.  Basically to allow municipal employees this unlimited religious right is to “deny to any person within its jurisdiction the equal protection of the laws.”

The civil clerks and magistrates do have a right to their beliefs and the practice thereof. They can resign their positions and allow others who will carry out the laws to replace them.  But to maintain their positions and refuse to carry out the law is simple hypocrisy.

The Utah and North Carolina law allow for this practice of hypocrisy.  Also with the late June decision of the Supreme Court specifically making same sex marriages legal throughout the United States all the various antics against these marriages also become nonsense.  In essence sections of the United States are now asking some of their civil employees to not perform their legal duties.

I suppose the problem for these righteous misguided people is: How do you disobey the law without disobeying the law?  And their answer was to base it upon the true religious belief of a number of their citizens.  But if all their registrars and magistrates are good simple Protestant Christians then aren’t they showing illegal favoritism in their state hiring practices?  Which is illegal.

If some of these state employees happen to be sincere practicing Catholics or Jews, or, for that matter, Muslims, then aren’t they opening up a can of worms that they, the legislators, will find hard to digest.  For these people can voice objections based upon people of different religions marrying, or even different so-called races intermarrying.  Or for that matter, heathens, generally known as Christians, marrying.

For the State Legislature to clearly or otherwise state that they find homosexual or lesbian marriages unacceptable according to their individual interpretations of the Old and New Testaments is discriminatory and therefore illegal. They can’t even imply that this is their true purpose in this law.  Thus they open up a Pandora’s Box based simply upon the religious beliefs of their state employed registers and magistrates.

It should be interesting if some of their magistrates don’t have “sincere religious beliefs” about anything.  Will they perform these ceremonies and keep their jobs?  And, of course, if only “fire-eating” Christians hold all these positions then isn’t that discriminatory hiring practices?

Somehow all of this is extremely stupid. There is a distinct possibility that these two laws in Utah and North Carolina will be overturned by the Courts.  However it strikes me that our legislators have to be called to account for particularly idiotic laws that hamper the functioning of a presumably free society. This would include anyone else who is in a position to effect same sex marriages in any state.

The basic weapon that the public has that can be felt anywhere in the nation is economic restraint or boycott in any section of the United States. The public, by the way it spends its money, can determine the behavior of the legislatures.  Since government functions on tax dollars then if that amount is significantly reduced the state government doesn’t continue to function that well.

If you find the behavior by the North Carolina and Utah legislatures absurd, or, for that matter in any municipality equally ridiculous and are a member of one of those two states or of communities that are strongly opposed to what is now the law of the land, and you live near the borders of the state, then I would suggest that you begin doing your grocery shopping across the state or county line.  If you have to make a major purchase like an automobile, a refrigerator, furniture, or any other major item then buy it in a state other than North Carolina, Utah, or the municipality that is protesting what you disapprove of.  In essence, boycott spending money in either of those two states or communities. This would also include any type of business practice.

The pressure upon the local merchants will have an adverse effect upon the legislature. Ultimately if they hold out and refuse to change their position, regardless of how much business the state loses, then be sure not to vote for any of them in the 2016 elections.

In addition, to use a slightly historical example: during the Vietnam Police Action (War) many high earning celebrities who opposed the war refused to pay their income taxes to the nation that perpetrated that war. What they did was to put the money that they would ordinarily pay in taxes into a separate bank account and thereby force the federal government by way of the IRS to get a court order to seize those funds.  It was a symbolic way for these people to object to a war they thought was unjust.

The people living in North Carolina and Utah or in some city or county whose actions they disapprove of can do the same thing. When they figure out their state income taxes they can put that money into a separate account and then inform the state that on the basis of their religious belief they object to paying the salaries of registrars who refuse to issue certain licenses and magistrates who refuse to perform certain marriage ceremonies but that they have put the tax money aside in a separate bank account so they won’t accidentally spend it. (In fact if they put those funds in a Wells Fargo bank they will be helping the bank clerks keep their jobs since they are under a quota system for registering new bank accounts.)

The state franchise board can get court orders to release these funds, even though they would be going against the religious beliefs of the people who deposited these monies. Of course the individuals can each bring suit against the state for the sacrilege the state would then be performing.

It all should make interesting headlines in local and national newspapers. And that doesn’t consider the effect it will have on Fox News and the other TV news programs or the late night comedians.  It would be something interesting for the nation to talk about for a while.

English: 14th Amendment of the United States C...

English: 14th Amendment of the United States Constitution, page 2. (Photo credit: Wikipedia)

 

 

 

English: The Bill of Rights, the first ten ame...

English: The Bill of Rights, the first ten amendments to the United States Constitution Česky: Originál Listiny práv, prvních deseti dodatků k Ústavě Spojených států amerických Deutsch: Die Bill of Rights genannten ersten zehn Zusatzartikel zur US-amerikanischen Verfassung, die den Bürgern bestimmte Grundrechte garantieren Español: La Carta de Derechos de los Estados Unidos, el término por el que se conocen las diez primeras enmiendas de la Constitución de los Estados Unidos de América (Photo credit: Wikipedia)

 

The Weiner Component #126 – The Current American Political System

On Thursday, June 4, 2015, Hillary Rodham Clinton, the Democratic frontrunner for the 2016 Presidential nomination, at a speech at a Texas Southern University, a historic Black college in Huston, accused the GOP (Good Old Party) of dividing Americans over voting rights by attempting to limit the vote among minorities, racial and otherwise, the elderly, and the young, generally college students. Clinton stated that a group of current and former Republican governors have and are “systematically and deliberately” have tried to prevent millions of Americans from voting.

She cited Governor Chris Christie for vetoing a bill in New Jersey to extend early voting. Clinton said that then Governor Jeb Bush had conducted, just prior to the 2,000 Presidential Election, a “deeply flawed purge of eligible voters in Florida by having the names of people who were mistakenly thought to be felons removed from the voting rolls. She accused Scott Walker of Wisconsin of cutting early voting and making it harder for college students to vote. He also passed ID laws which tend to discriminate against minorities who don’t have the required identification.   Rick Perry of Texas, she stated, approved laws that mainly discriminated against minorities.

”It was the first time a presidential candidate had named her potential Republican rivals by name and criticized Governors Scott Walker, Jeb Bush, Rick Perry, and Chris Christie.

She called for automatic registration for all people reaching the voting age of 18. This is similar to what presently exists in the state of Oregon, where anyone with a driver’s license from age 18 on is now automatically registered to vote and is mailed a ballot at election time. The choice to vote rests totally with the individuals.

The following day, Friday, June 5, a number of Republican governors verbally attacked Clinton for running a divisive campaign and favoring tax control on voting. Whatever that means?

The governor of New Jersey, Chris Christie, vociferously stated that Clinton didn’t know “the first thing about voting rights in New Jersey” and wanted to have an opportunity “to commit greater acts of voter fraud” around the country. Ohio governor John Kasich stated on Fox News that Clinton was “dividing America.”  Wisconsin governor, Scott Walker denounced her for denouncing him.

Basically the Republican argument is that they are fighting voter fraud.  Even though voter fraud is a small fraction of one percent of the millions of votes cast many Republicans know instinctively, with no other evidence, that that figure is wrong. They argue that what they are doing limits and virtually stops voter fraud.  Sometimes, I get the feeling that voter fraud, in their minds, is any vote cast that is not Republican.  It should also be noted that many Republicans have on occasion admitted publically that they are trying to suppress the vote.

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There are two major political parties in the United States that can successfully field a presidential election, since this means running fifty separate elections in each of the 50 states and separate federal elections for all the territories and the District of Columbia, with the exception of the island of American Samoa where the population consists of residents rather than citizens of the United States. These two major political parties are the Republican and Democratic Parties.  Of these the majority party is the Democratic one.

One of the major ways the Republicans have been successful in winning political elections has been by suppressing the vote of minorities, women, the aged, and college students. This has been done in numerous ways. Their object is to get certain groups, one way or another, not to vote.

Among the various dirty tricks used in suppressing the vote misinformation about voting procedures is not uncommon. In the recall election for the Wisconsin State Senate, Americans for Prosperity, a conservative organization that supported Republicans, sent many Democratic voters a mailing that gave incorrect deadlines for absentee ballots. Voters who relied on the deadline in the mailing sent their ballots in too late to be counted. The organization said that the mistake was a typographical error.

In the 2002 New Hampshire Senate election phone jamming scandal Republican officials attempted to reduce the number of Democratic voters by paying professional telemarketers in Idaho to make repeated hang-up calls to the telephone numbers used by the Democratic Party’s ride-to-the-polls phone line on election day.

In several states a private Republican group, Voters Outreach of America, which had been authorized in a number of states to register voters, collected and submitted Republican voter registration forms but discarded Democratic ones.  The Democratic voters discovered on Election Day that they were not registered and could not vote.

In the 2006 Virginia Senate Election Democratic voters received phone calls informing them that if they voted it would lead to arrest; there were numerous calls fraudulently claiming to be volunteers of the Democratic candidate falsely telling voters that their location had changed; fliers were issued in the Black communities, paid for by the Republican Party, stating, “Skip This Election.”

In the 2008 Presidential Election a review of states records by the New York Times found that there had been numerous illegal actions leading to voter purges.

In the United States there is partisan election administrations in 33 of the 50 states. The majority of the world’s democracies use independent agencies to monitor elections but not the U.S.  These party affiliations can and do create a conflict of interest.  For example, Katherine Harris, Florida’s Secretary of State served as state co-chair of the Bush-Cheney campaign during the Presidential Election of 2000.

In Georgia wait times of two to ten hours were reported during early voting at many locations.  In Florida this happened at multiple locations on Election Day during the 2012 Presidential Election.  Various factors, including the reduction of early voting days, reduction in the number of polling places, and an extremely long ballot that included numerous constitutional amendments all combine to add to long waiting times.  It is estimated that 201,000 potential Florida voters were unable to spend the hours needed to be able to vote and thus had their votes suppressed.

In the 2010 Maryland gubernatorial election the Republicans placed thousands of Election Day robocalls to Democratic voters telling them that the Democratic candidate had won, although the polls were still open for two more hours. The Republican phone call was worded as though it came from Democratic headquarters.  It told the Voters to relax, that everything was fine.  All they had to do was watch the victory on TV that night.  The phone calls reached 112,000 voters in the African-American areas of the state.

In 2011, the Republican campaign manager was convicted of fraud and other charges because of the calls. In 2012 he was sentenced to 30 days of home detention, a one year suspended jail sentence, and 50 hours of community service over a four year period of probation with no fine or jail time.

A Florida law, that has been repeated in a number of Republican dominated states, both reduced the number of days for early voting and barred voter-registration activities by such group as the League of Women Voters, teachers in high school and others, making it more difficult to register to vote in those states.

These constitutionally granted voting rights have been and are under nationwide attack, particularly in those states where the Republicans hold the governorship and control of the legislature. The laws lead to significant burdens for eligible voters. These measures include cuts to early voting, voter ID laws, and purges of voter rolls. It also includes dirty tricks. Democratic lawyers have filed legal challenges to voting changes, particularly in Ohio and Wisconsin.

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Among the various forms of voter suppression are photo ID laws. Supporters contend that the photo ID, such as state driver’s licenses or student IDs from state universities are nearly universal and that presenting them is a minor inconvenience, when weighed against voter fraud.  Opponents argue that these requirements disproportionally affect minority, handicapped, and elderly voters who do not normally maintain driver licenses. There is also almost no evidence of voter fraud.  Legislation to impose the restrictive IDs has been prepared by the conservative organization ALEC and sent to conservative state legislatures.

In the U.S. felons are disenfranchised.   In fact the United States is the only democracy in the world that regularly bans large numbers of felon from voting after they have served their sentence.  In 2004 5.3 million Americans were denied the right to vote because of previous felony convictions. Thirteen states permanently disenfranchise convicted felons, eighteen states restore voting rights when after completion of prison, parole, and probation time, four states re-enfranchise convicted felons after they have been released from prison and served their parole, thirteen states allow felons who have been released from prison to vote, and two states do not disenfranchise them at all. This form of voter suppression disproportionally affects minorities, particularly Blacks and Hispanics who it seems make up a good percentage of the prison population.

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In former Governor Rick Perry’s state, Texas, the voter suppression laws have wide sweeping effects. The U.S. Justice Department estimated that between 600,000 and 800,000 Texans were disenfranchised of their vote by the Texas voter ID law implemented in 2014. While the law accepts seven forms of personal identification it was crafted to make sure that poor African Americans and Hispanics would have a very difficult time producing any of those forms of accepted ID.

The accepted forms of ID are: a concealed handgun license, a U.S. military identification card containing the person’s photograph, a U.S. citizenship certificate containing the person’s photograph, a U.S. passport, a Texas driver’s license issued by the Texas Department of Public Safety (DPS), a Texas Election identification certificate issued by the DPS, and a Texas personal identification card issued by the DPS. In addition college student IDs are not acceptable forms of identification.

Poor people, as a rule, do not have concealed handgun licenses.  My birth certificate was issued at my birth; it does not contain my picture. The majority of young men do not join the military.  Many poor Texans do not have cars or driver licenses.  A passport cost money to acquire.  Of the other possibilities most poor workers, mainly African Americans and Hispanics do not possess those either.

The official state offices that issue these IDs are not located in every town, and those that exist do not operate every day of the week. None of them are open on weekends when people are off work.

Poor Texans living in a rural area need to take a day off work to go to a town or city where the Department of Public Safety offices exist and they have to pick a day when the office will be open.  If they can find or afford transportation it will take them at least three hours to get to a government office that will issue an ID if it is open and then after they finish it will take them at least three more hours to get home.  They will have lost at least a day’s pay.

The Federal Court in Corpus Christi declared the ID law unconstitutional, in 2014 a Federal judge struck down this law finding that the law was “an unconstitutional poll tax” that had “an impermissible discriminatory effect against Hispanics and African-Americans;” but on appeal the more conservative 5th Circuit Court of Appeals overturned this decision.

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Voter disenfranchisement in the 2014 election was apparent; it will certainly be an issue in the 2016 Presidential Election.  Wherever possible various Democratic organizations will be and are bringing law suites to limit or stop this practice; but many of the federal judges were appointed by Republican presidents and are partial to Republican demands.  Such, obviously was the case in Texas.

In a number of 2014 races, like North Carolina, Kansas, Virginia, and Florida, the margin of victory was very close to the margin of disenfranchisement.  With an honest election the results might have been the opposite.

A joint report from the Center for American Progress (CAP), the NAACP Legal Defense & Education Fund, and the Southern Elections Foundation found that four out of five states that had introduced at least one new restrictive voting measure in 2014 “experienced sharp decreases in voter turnout from the 2010 midterm election, likely due, at least in part, to these laws that made it harder to vote in 2014.  33 states have recently introduced bills that would restrict access to voter registration.

Republican officials have admitted that their efforts are aimed at disenfranchising Democratic voters. In the spring of 2012 the Pennsylvania House Majority Leader, Mike Turzai, told a gathering of Republicans that their voter identification law would “allow Governor Romney to win the state of Pennsylvania.”  There have been numerous statements by Republicans before and since the above statement was made indicating that the voter identification laws are mainly a way to suppress the vote of Democratic voters.

Republican generally argue that restrictions on registering and voting are about the integrity of elections; but they have never been able to prove that any American election has been stolen by voter fraud, (at least by the Democrats).

There is an interesting note of irony here. The Caucasian or White population in the United States no longer makes up the majority of the population.  It is a large minority among other large minorities.  And every year its number shrinks in comparison to the other large minorities. How long can the Republican successfully play their games? Even with several million voters across the United States deprived of their vote Barak Obama won in 2012.  The same is true for a lot of local, state, and federal elections. The Republicans may feel they’re riding high at present but every year there are less and less of them in the overall population.  It would seem that compared to the rest of the population they are largely sterile.

 

November 4: Barack Obama elected President
November 4: Barack Obama elected President (Photo credit: Wikipedia)

 

 

Official photographic portrait of US President...

Official photographic portrait of US President Barack Obama (born 4 August 1961; assumed office 20 January 2009) (Photo credit: Wikipedia)

 

The Weiner Component #125 – The Bush Presidencies

George H. W. Bush

Cover of George H. W. Bush

Barbara Bush stated, when her son Jeb said publically that he was going to run for the Presidency of the United States, that the country didn’t need another Bush president.

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George H.W. Bush (Daddy Bush) joined the Air Force as an 18 year old during World War II and served for the duration of the war. Shortly after he formed his own oil company and then became a Republican Congressman in the House of Representatives.  President Gerald Ford later appointed him as CIA Director on January 30, 1976.  He served in that office until January 20, 1977.  He became President Ronald Reagan’s Vice President on January 20, 1981 and remained in that position for eight years.  Toward the end of his term he ran for President of the United States and was elected.  He would serve one term as President and then be defeated by the Democratic candidate, William (Bill) Jefferson Clinton.

As Vice President, Bush would be involved in the Iran-Contra Affair that flaunted the Constitution of the United States.  Ronald Reagan was convinced that the Contras, a group of terrorists operating in Nicaragua, were really Freedom Fighters trying to free Nicaragua from its elected Socialist government.  Congress refused to fund this enterprise.  Reagan and his assorted Secretaries then decided to get the money needed to fund this operation by illegally selling arms to Iran.  Vice President George H.W. Bush was clearly involved in this enterprise.  He served as a courier for Reagan; the evidence clearly exists.  When Dan Rather, the CBS lead reporter in a televised interview tried to trap him into admitting this fact, President Bush refused to answer the question and Dan Rather was later fired.

As President, Bush sent a roving female ambassador-at-large or a plenipotentiary with very general instructions to Saddam Hussein, in Iraq.  Bush was obviously striking a blow for Women’s Rights.  In the Middle East, particularly at that time, women were considered second-class citizens that would never be entrusted with anything really important.  By sending a female Hussein understood that his forthcoming invasion of Kuwait was of low priority to the United States and he consequently invaded that country.  This resulted in Operation Desert Storm, the liberation of Kuwait by the United States and some of its allies.  Bush was smart enough to end the war at the border of Iraq.

To Hussein, George Bush had given a clear message and he reneged on it.  Impotently he threatened to have President George H.W. Bush assassinated.  Bush’s son, George W. Bush, would react to this threat later on when he went to war with Iraq.

The Kuwait rescue war called Operation Desert Storm would never have happened if President George H.W. Bush, who should have known better, had sent a male diplomat with clear authority to negotiate with Saddam Hussein.  He, Saddam, would have known that any Iraqi invasion would result in the U.S. and other Western Powers getting involved if Iraq invaded Kuwait or any other country.  Bush’s inability to properly handle this situation brought about a totally unnecessary war.

So much for the Presidency of George Herbert Walker Bush, a president we could have done without.

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In the entire history of the United States there were two men who became president with the majority of the population voting for the other candidate

The first was the Election of 1876 where the Republican Rutherford B. Hayes received 4,034,311 popular votes but ended up with 185 electoral votes to Samuel J. Tilden who received 4,288,546 popular votes and 184 electoral votes.  What happened was that 20 electoral votes were contested.  Several states had two sets of electors, one set of Democratic Electors and one set of Republican Electors.  Both groups claimed to have been directly elected by the public. The debate continued on until the night before the new President was to be sworn-in.   A compromise was reached literally hours before the new President was to take office. The Republicans wanted the presidency; the Democrats wanted to formally end Civil War Reconstruction.  Each political party got what they most desired: a Republican became President and the army was withdrawn from the Southern States.

The second instance was the election of George W. Bush in November of 2000.  He had 50,456,002 popular votes to Al Gore’s 50,999,897 popular votes.  The problem there was the State of Florida whose governor was George W. Bush’s baby brother, Jeb Bush.  The person in charge of that election was a staunch Republican.  Either Jeb Bush instigated or knew about a highly flawed voter purge of the voter registry, just prior to the 2000 Election that removed mainly registered Democrats from the voter lists in the state.  These were mostly minorities who would probably vote the Democratic ticket. The faulty purge was touted as removing felons from the list of registered voters.

In addition a number of election ballots came up faulty because of the way they were set up.  One had to punch out the candidate of his or her choice and the instructions were vague.  A goodly number of ballots were incorrectly or partially punched.  These had to be individually examined and the choices determined individually; a long, tedious process, which was terminated by the Chief Justice of the Supreme Court, William D. Rehnquist.  The majority of those ballots were never counted giving the electoral votes for the State of Florida to Bush, and giving him 271 electoral votes to Gore’s 266.  Thus George Walker Bush became the President of the United States.  Did his baby brother, Jeb help him get elected?  Certainly.

Since this was the second time this had happened, that the will of the majority had been thwarted there should have been a Constitutional Amendment doing away with the Electoral College and having the President named by the direct vote of the people.  After all the concept of the Electoral College was created in post-colonial times when communication was very difficult.  It is no longer needed.  And there also have been times when Electors voted for people for whom they had not been chosen to elect.  We seem to hang on to some tenants of government that are totally obsolete.

Will Rogers, the comic philosopher of the 1920s, among other things, said that the members of Congress are like children with hammers who have been let into a China Shop.   They make messes but don’t do much damage.  About Calvin Coolidge, who was President at the time, he said that it wasn’t that he did nothing, it was that he did it better than anyone else.  In George W. Bush’s case he did something and it was worse than anything else he could have done.  Without realizing what his actions would bring about he destabilized the Middle East and we are still attempting, not too successfully, to deal with this problem today.  Bush, in a manner of speaking, opened up a Pandora’s Box; and its reverberations have created ISIS and other functioning terrorist groups throughout the Middle East.

Through ignorance or naivety Bush destabilized the Balance of Power that existed throughout the Middle East.  He indirectly caused numerous deaths, both of American soldiers and Iraqis, and the mayhem which still exists.  Apparently he thought that the people of Iraq would be thankful to the United States if he got rid of Saddam Hussein. With no glimmer of understanding of the Middle East he invaded Iraq supposedly looking for weapons of mass destruction.

The choosing of Bush as President had done irrevocable damage to the world stage by creating what seems to be an unsolvable problem.  If Al Gore had been President, as he should have been, the U.S. would never have gone into Iraq.  At the time of the U.S. preemptive invasion the United Nations was sending inspectors to that country checking for weapons of mass destruction.  In fact, they asked the U.S. for more time in order to continue their inspections looking for evidence of weapons of mass destruction.  With Al Gore as president sanity would have prevailed.  There would have been no Iraqi war. The stability of the Middle East would have prevailed.  It seems Will Rogers was wrong about elected government officials; they can, at times, do irrevocable harm to their country and the rest of the world.

How will the current Middle East problem be solved?  That’s an interesting question to which nobody seems to have a real answer.  In essence the Republicans who are interested in running for the presidency in 2016 are talking about getting tough in the Middle East, whatever that means.  In essence George Bush junior and his cohorts screwed up a situation by going to war with Iraq with no real comprehension of what they were doing.

George W. Bush, Dick Cheney, his Vice President, and Donald Rumsfeld, his Secretary of Defense apparently conceived of war with Iraq as a win, win situation.  They thought the people of Iraq would welcome the U.S. with open arms for freeing them from the Dictator, Saddam Hussein.  They visualized that they could set up a democracy similar to that of the U.S.  In essence they visualized how they would behave if they were Iraqis and the U.S. invaded their country; but they aren’t Iraqis and the Iraqis had an entirely different psyche.  What they ended up bringing about was a situation that existed between the two major Islamic sects: the Sunni and the Shia.  What resulted in Iraq was a government we created but couldn’t control, where the Sunni majority actually persecuted the Shia minority.  It was a situation where the tail wagged the dog.  We created a government but couldn’t control it.  In fact it was similar to the situation that had existed in Vietnam.  Somehow this country never learns from its past mistakes.

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George Walker Bush had been born on July 6, 1946. He was 54 years old when he was elected to the presidency.  As a businessman he had not done too well in the oil business.  In fact he might have been known as “Dry Hole Bush,” as he was responsible for drilling many of them.  The Bush family was well to do having made lots of money in oil.  George W. became Texas governor in 1994 and was elected president in 2000. Eight months into his first term, September 11, 2001, a terrorist attack destroyed the Twin Towers in New York City and Bush responded by launching the War on Terror.

It was during this period of the War on Terror that the Afghanistan War against Al-Qaeda, who had destroyed the Twin Towers, began and was followed by the preemptive attack against Iraq, whose leader, Saddam Hussein, had threatened to have Bush’s “Daddy” assassinated that he inaugurated a major tax cut, mostly for the well-to-do.  Bush also inaugurated “enhanced interrogation” of prisoners (torture, usually water boarding), which apparently never really worked.  This type of treatment, with the exception of the last phase of the Spanish American War at the tail end of the 19th Century, had never existed before or since his administration in the history of the United States.

Water boarding is a process of taking the prisoner to the point of drowning.  Some prisoners were water boarded well over a hundred times.

To be fair Bush also inaugurated Medicare prescription benefits for seniors.  He also added funding for the Aids program.  Basically with his wars and everything he spent a lot more money, some wastefully, than the government took in in taxes, massively increasing the National Debt.

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When I look at a certain print hanging in a corner of my living room I think of George W. Bush’s 2004 political campaign when he ran against the Democratic senator, John Kerry.  The print was done by a 19th Century Spanish satiric artist, Francisco Goya.  It depicts a monkey painting a jackass white and is entitled “Neither more nor less.”  That is what happened in the 2004 Presidential Election.  John Kerry, a Vietnam War hero, who is currently Secretary of State, ran against George W. Bush.  Karl Rove, Bush’s senior advisor and deputy chief of staff ran the campaign for Bush.  He painted Kerry as a villain, ignoring his true military record and presented Bush as a military hero, even though Bush had never left Texas as a member of the state’s National Guard and had been AWOL a number of times.  In addition he had tested poorly for the flying school and had only been accepted because his father was in Congress.  It was an interesting version of painting a jackass white and a hero black.

In essence it would seem that George Walker Bush visualized himself as the sheriff who symbolically came to Iraq with his army, got rid of the bad guys, and allowed the so-called good guys to run the country.  He never left the U.S. during his presidency, and passed the problem of his wars on to his successor.  Also he never accepted responsibility for his actions.  He left a mess which can still take decades or longer to clean up.

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Since the beginning of the year of 2015 Jeb Bush has been vigorously campaigning for the presidency of the U.S. and avidly raising money for his super pact.  Since it is illegal for a candidate to be connected in any way with his super pact Bush had not announced that he is formally a candidate.  He didl not formally make up his mind until June 15, 2015, that is a little over six months into his presidential campaign.  From what I understand his goal was to raise 100 million dollars in his super pact before he made his announcement.

Bush is made a mockery of the current election system in this country.  He had been actively campaigning for over six months, with one careless exception, as a potential candidate who had not formally made up his mind.  In essence he has pushed the envelope to the extreme limit on the election laws.  What does this tell us about his integrity if he were to be elected president?

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Jeb (John Ellis) Bush is the second son of George H.W. and Barbara Bush.  He was elected Governor of Florida in 1999 and served two terms, eight years.  He was the first governor to serve two terms in that state.

On December 16, 2014 he announced that he would explore the possibility of running for President in 2016.  Since that time he had been energetically raising money for his presidential campaign of which he did not officially become a candidate until June 15, 2015.  That is six and ½ months after beginning his campaign.

Politically Jeb Bush is a Conservative Republican who envisions some movement to the Left by his party.  In April 2013 he authored an article for Newsweek Magazine in which he urged Conservatives to be a party of “growth and opportunity.”  He warned that America’s entitlement system risked collapse unless there was a correction in public policy.  Bush recommended a six point plan for the Conservative Movement.  This included tax reform, education reform, a welcoming immigration system, regulatory reform, and pro-family policies.  In October of 2013 he called for immigration reform. Obviously a lot of this did not go down with the Tea Party.

As Governor of Florida Bush was a proponent of school vouchers and charter schools, particularly in the areas of failing schools.  He firmly refused to raise taxes for schools. He obviously didn’t want to solve problems by throwing money at them.

In fact JED reduced taxes over his tenure by $19 billion, eliminated civil service protection to over 16,000 state jobs, issued an executive order that removed racial preference in state contracts, supporting over a dozen new protections for gun owners, led the first state in 2005 to pass stand your ground laws, and was opposed to abortion.

He was directly involved in the Terri Schiavo case.  This woman had massive brain damage and was on a feeding tube for over fifteen years.  Her husband and legal guardian wished to remove the tube.  Her parents were opposed to this move.  The governor signed a law, “Terri’s law,” that authorized him to keep Schiavo on life support. The case was appealed in the Federal Courts.  After the law was declared unconstitutional in the Florida Supreme Court the U.S. Supreme Court refused to hear the case.  By then Terri Schiavo had died.

Jeb Bush seems to be a progressive conservative Republican.  He has played games with the election laws which has allowed him to raise about 100 million dollars for his super pack.   He gave up control of that entity when he directly announced that he is running for the presidency.

Jeb has been touted as being the smartest of the Bush children.  During his pre-election campaign, which ended in the middle of June 2015, he emerged as a highly opinionated, righteous individual whose spoken word should always be taken as sacrosanct.  He seems to believe that it’s his turn to be President.  Fortunately a good percentage of registered Republicans do not agree with him.  He is not the frontrunner of the party.  In fact the number of possible Republican presidential candidates is overwhelming.  It seems to be open season for Republicans who want to be the next President of the United States.

Currently Jeb Bush’s advisors are the same individuals who advised his brother.  From his speeches and other remarks on foreign affairs he appeared to be not too cognizant of the rest of the world.  His experts are the same people who helped his brother George decide on invading Iraq.  This group could easily get us into another war in the Middle East, this time with Iran.  The U.S. fighting three different wars at the same time (Afghanistan, Iraq, and Iran) could bring back the draft and lead to oncoming and other disasters.

By his current actions one has to question Bush’s integrity.  Why play games with the election laws?  His actions just prior to the 2000 Election, both purging the registered voter list and the faulty ballots seem to be what got his brother elected to the presidency.  Would he act the same way if he were elected?

On Monday, June 15 2015, months after JEB officially announced to the world, surrounded by avid supporters, that he would run for the Presidency of the United States.  And all this after he had collected approximately $100 million dollars for his super-pact.  He stated that he was running because the country needs a competent President.

To my mind he didn’t mention the Terri Schiavo incident where he got the state to force her family to essentially keep a brain dead woman alive.  And no mention was made of the faulty purge of registered voters shortly before his brother’s election in 2000 under the guise that they were clearing the registration rolls of convicted felons.   Of course in his mind it is possible that all Democrats are potential felons and the real legal voters are or should be all Republican.

Do we need another Bush in the White House?  Is his mother, Barbara Bush, correct in her initial statement?  Do we need another Bush as President?  Haven’t we had enough unnecessary wars so far?  Do we need another Bush as President of the United States

 

 

 

Al Gore

Cover of Al Gore

 

 

 

 

 

The Weiner Component #124 – Justice in America Part3: The Big Banks & the Federal Reserve

The big banking houses, like Wells Fargo, Bank of America, and J.P Morgan-Chase to name a few, that have member banks throughout the United States, seemingly are sacrosanct, they can be fined for illegal or immoral actions but no perpetrator ever goes to prison.  Presumably the reason for this is that currently the country is dependent upon them for the movement of money throughout the national economy.  It is felt that if anything were to happen to them then the nation would go into a serious depression. Since they are presumably indispensable they can and do generally get away with actions that would cause people ordinarily to be sent to prison,

This condition exists because people are afraid of change; they are used to what they have and see anything different as too big a risk.

The banks exist in a free market economy as entities that persist for profit using money, people’s deposits, the safety of which the Federal Government guarantees, for their own general speculations.  In point of fact they are an oligarchy, which under the late 19th Century Sherman Anti-Trust Act is an illegal combination in restraint of trade.  It’s a no lose situation for the banks whose management have no morals in the use of the people’s money

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Following is an edited version of The Weiner Component #57D -The Federal Reserve,

It became obvious during the Panic of 1907 that the Federal Government had no controls over banking practices in the United States.  The Panic was caused by speculators attempting to corner the market on United Copper Company stock.  Failure to do this led to the collapse of the Knickerbockers Trust Company, New York City’s third largest trust.  The failure spread fear throughout the City’s Trusts.  Panic extended across the nation as large numbers of people withdrew their deposits from regional banks.  At the time the United States did not have a central bank to inject liquidity back into the market.  The following year a Senate commission investigated the crisis and proposed future solutions, leading to the creation of the Federal Reserve System in 1913.

The Federal Reserve (FED) is the central banking system of the United States.  It was created in December of 1913 by the passing of the Federal Reserve Act.  This was largely in response to a series of financial panics, particularly the Panic of 1907.  The Federal Reserve consists of twelve regional Banks located throughout the United States, with the main branch in Washington, D.C.  The chairman of the Federal Reserve heads this bank.  Over time the roles and responsibilities of the FED have expanded and its structure has evolved.  It is still in this process of evolution as new financial crises occur.

It was through the Federal Reserve and the Treasury, with the compliance of Presidents Bush and Obama that the nation was saved from total economic disaster caused by the Real Estate Debacle of 2008 that was brought about by the Financial Institutions within the United States.  The assorted banking houses had been bundling and selling mortgages for about the last thirty years; maintaining control over these mortgages with no cash investment in them and then continually using the funds from the sales to issue new mortgages.  The banks made fat profits from continually handling all this paper.

There had been a need for more funds in the National Cash Flow and, in this manner, the banks kept adding money to the economy.  By 2007 the level of money creation reach a point of insanity with a larger and larger percentage going to the banks.  At this point most bankers were in denial that the system could crash and the insanity continued until the crash came toward the end of 2008.

The problem that existed from the 1970s on was a great need for a continual increase in currency in the National Cash Flow to keep up with needed economic growth.  The FED was not in a position to fulfill this need; the banks did so by inflating the value of property, particularly owned homes; and the process became a way of life until it was abused and over-abused and the bubble burst to the point of destroying the economy, if the Federal Government had not interceded and saved it.

Paul Volcker headed a committee that proposed new laws that would reign in bank excesses and put the country on a solid financial footing again but bank lobbyists got these proposals watered down and since 2009 the major banking houses have again endangered the economy by their excesses.  This does not even consider the damage that has been done to a multitude of individual households where, in many cases, the homeowners have lost their homes through bank foreclosures, a number of which were illegal, mainly because the banks did not own the mortgages.  The Federal Government has responded with massive fines for malfeasance but with no criminal cases against any banks or individuals who have brought these abuses into being.  It is time for a change in the situation.  For one or many forms of reform to bring these banks into line with the needs of the American public.

In 2014 Senator Elizabeth Warren made a public statement which was that the big banking conglomerates should be broken up.  A similar situation had occurred at the beginning of the 20th Century when President Theodore Roosevelt had gone after a number of monopolies and caused them to break up.  John D. Rockefeller’s Standard Oil, among others, had been broken up into a number of companies, all with the title of Standard Oil of a particular state.  Each controlled by John D. Rockefeller.

The only way this process can be successfully done and end the irresponsible banking oligarchy in the United States is to upgrade the powers of the Federal Reserve so they can fully and effectively carry out their function of keeping the public safe from the excesses of the financial institutions and also keep the economy at a healthy level.

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How can this be done?  The major banking houses must once again become institutions that deal specifically with people and businesses.  They must become either commercial banks or investment banks; they can no longer be both.  And if some or many continue as investment banks then the FDIC (Federal Deposit Insurance Corporation) must no longer insure their deposits.

Also the Federal Reserve must have its power extended to be able to instantly add or subtract currency from or to the National Cash Flow.  Ben Bernanke did this as the FED chairman.  But he did it in a very interesting or sneaky fashion.  He added 45 billion dollars a month to the National Cash Flow by buying up mortgage paper within the 50 states and then ignoring the paper because they were fractional bits of mortgages which didn’t give the FED control of any of the properties. Instead they also solved the housing crisis mess that the banks created and put money in the pockets of a number of homeowners who had stopped paying their mortgages.  These people suddenly had money to spend.

In addition Congress needs to take a revolutionary step, it has to increase the power of the FED so that it is able to lend money directly to homeowners and small businesses. Each of the Twelve Federal Reserve Banks must also get the power to set up their own lending banks within each of the Twelve FED Zones.

After the 2008 & 2009 Bailouts the banks did not function as they had before the crash. They hoarded their funds and looked for investments that would give them large returns; these were largely in the futures market.  In essence from 2009 on the major banks, which had been saved by the Federal Government and indirectly the taxpayers, found ways to exploit the general public for their own benefit.  They actually worked against economic recovery.  The contention at that point in 2009 that once the Financial Institutions were saved they would return to their traditional roll was a myth since the large banks were solely motivated by the profit motif and could care less about the welfare of the individual worker and homeowner, or for that matter, the welfare of the country.

Since private enterprise, particularly private enterprise backed economically by the Federal Government cannot be trusted with the welfare of the nation it has become necessary for the Government to insure that welfare and that can only be done by the Government taking over the financial structure of the nation in the name of the “People” for the “Common Good” and not for profit.

There will be problems in establishing this system but they can gradually be resolved. There are the smaller banking houses and the Credit Unions that have generally functioned for the welfare of the general public.  Should they continue to be part of the system?  Do they continue to have FDIC insurance?  These questions will be answered as we go along.

The major banks in the United States, JP Morgan Chase, the Bank of America, Wells Fargo, to cite a few examples, have grown in size since the 2008 Disaster.  They are today too big to fail.  Their demise could bring down the economy of the United States and possibly also some of the European nations.  In essence they hold the world prisoner while they act making all sort of economic decisions for their own benefits using public funds.

We need, at this point, to take a closer look at the banks and their ownership and control.  The stockholders obviously own the financial institutions but the people who control these companies and make all the decisions would be the CEO and all the upper management.  The actual owners of the banking concerns have almost no say in what happens in these companies.

The compensation packages of the upper echelon runs into the multi-millions of dollars. The stock dividends of a company like the Bank of America runs into the pennies. The Bank of America pays one cent per share per quarter or four cents per share of stock each year, actually within the last year or so B of A raised its dividend 2 cents a year; it now pays 6 cents a year per share.  One hundred shares of stock that cost anything from $14 to $17 per share pays 6 dollars a year.  For an investment of approximately $1,500 the shareholder earns $6.00 per year.  So much for owning stock in The Bank of America!  The other major banks pay more but not significantly more in dividends.

What happens to all the fabulous profits that the Bank of America makes?  Most of it goes to management as salaries, compensation, and bonuses.  If the Bank of America is a true example of American banking then the financial institutions are making money for the sake of making money.

It is a sad commentary if one remembers President Franklin D. Roosevelt’s comment that he made once during the Great Depression and again later during World War II that an individual can only spend so much during a year, that to earn far more is a total waste in terms of society and that this excess should be taxed, which currently it is as an unbelievably low rate.

The heads of the various banks earn more, in many cases, in one year than they can reasonably spend in a lifetime.  Jamie Dimon, the CEO of JP Morgan Chase had his yearly compensation package cut, after bank losses, from 22 million to only 11 million a year.  This, then, becomes the function of banks in the United States and beyond. It is a silly or stupid reason for running the finances of a nation.

The American economy deals with the needs of over 350 million people.  This is a complex issue.  The large banking houses have failed the public.  To what extent should they be allowed to continue to exploit them?  Or should these major Financial Institutions go off on their own in a Free Market System, functioning within the law and succeeding or failing without protection from the Federal Government and the taxpayers?

Taken together all the games, illegal and otherwise, that the banks have played have been in the trillions of dollars, the fines that the banks have paid have been in the billions of dollars.  How many trillions have the banks extorted; how many average Americans have the banks ruined; and how many additional trillions will they extort before this current system is changed?  Even with new Volcker rules the current system is bankrupt, incapable of working for the welfare of the people.

It is time for a basic, realistic change in the way finance works within the nation.  The needs of the people are far more important than the quirks of the modern day bankers.

As a footnote: considering the blog before this one, the teachers who were found guilty of the RICO Act and given jail sentences and fines for cheating on their student’s tests were guilty of far less criminal acts than these bankers.  If any of the bankers were tried under the same RICO Law they would all get far greater sentences and fines than were given to the teachers.  It would seem that this is an excellent example of Justice in America.

 

 

Logo of the United States Federal Deposit Insu...

 

Description: Newspaper clipping USA, Woodrow W...

Description: Newspaper clipping USA, Woodrow Wilson signs creation of the Federal Reserve. Source: Date: 24 December 1913 (Photo credit: Wikipedia)

 

English: A map of the 12 districts of the Unit...

English: A map of the 12 districts of the United States Federal Reserve system. (Photo credit: Wikipedia)