Richest lawmakers grew wealthier as economy faltered

The rest of the country is still struggling with high unemployment amid a sluggish-at-best economic recovery — but the wealthiest members of Congress are in high cotton. Indeed, the top 50 wealthiest lawmakers saw their combined net worths increase last year, according to the Hill’s annual analysis of financial disclosure documents.

Combined, the 50 lawmakers were worth $1.4 billion in 2009 — an $85.1 million increase over their 2008 total — the Hill reports. The members’ total combined assets depreciated by nearly $36 million last year — but Congress’ well-to-do set also reduced their debts by a combined $120 million.

The list of 50 lawmakers spans both parties (27 Democrats and 23 Republicans) and both chambers of Congress (30 House members, 20 senators), the Hill reports.

Democratic Sen. John Kerry of Massachusetts topped the list for the second year in a row; Republican Rep. Michael McCaul of Texas made his debut in the top 10.

Here are profiles for the 10 most flush Hill power-and-money brokers:

1. Sen. John Kerry (D-Mass.): $188.6 million. Kerry’s worth, which grew by $20 million in 2009, stems from his wife’s assets. Teresa Heinz Kerry, of the Heinz ketchup family, inherited hundreds of millions upon the death of her previous husband, Sen. John Heinz.

2. Rep. Darrell Issa (R-Calif.): $160.1 million. Issa actually saw his minimum net worth drop by $4 million, partly due to the poor performance of a single investment fund. Issa’s fortune stems from investments he and his wife made in the electronics market. Their company eventually became the largest producer of car anti-theft devices in the country. They sold the business in 2000.

3. Rep. Jane Harman (D-Calif.): $152.3 million. Harman is married to audio-equipment mogul Sidney Harman; stock holdings from his company, Harman International Industries, helped Harman’s net worth grow by $40 million last year. Sidney Harman is in the process of purchasing Newsweek; the magazine’s massive debts will presumably drag down Harman’s 2010 disclosure numbers a bit.

4. Sen. Jay Rockefeller (D-WVa.): $83.7 million. No surprise here: The Rockefeller family name has for generations been a byword for fabulous riches. (Rockefeller’s great-grandfather John Rockefeller was an oil magnate; inflation-adjusted figures still peg the founder of the Rockefeller fortune as the wealthiest man in history.) But the senator’s uptick in personal wealth last year came mainly from his wife’s investments.

5. Rep. Michael McCaul (R-Texas): $73.8 million. McCaul saw his net worth double last year, mostly owing to stocks held by his wife. McCaul’s father-in-law founded the radio empire Clear Channel Communications.

6. Sen. Mark Warner (D-Va.): $70.2 million. Warner made millions through investments in the cell phone industry, including the Nextel company.

7. Rep. Jared Polis (D-Colo.): $56.5 million. Before his 2008 election to Congress, Polis made a fortune in online enterprises, transforming his family’s greeting card company into BlueMountain.com and founding ProFlowers.com.

8. Rep. Vern Buchanan (R-Fla.): $53.5 million. Buchanan grew wealthy as the owner of multiple auto dealerships in Florida.

9. Sen. Frank Lautenberg (D-N.J.): $49.7 million. Lautenberg co-founded a payroll services company in the 1950s that became one of the industry’s global leaders.

10. Sen. Dianne Feinstein (D-Calif.): $46.1 million. Most of the California lawmaker’s wealth comes from real-estate holdings and investments made by her husband.

Conspiracy Theories, the Lure of Collectivism and the Cycle of Abuse

I read an interesting piece the other day about mass delusion and the economy. It got me to thinking about, of all things, conspiracy theories. It suddenly occurred to me that maybe, just maybe, the reason the powerful can get away with conspiracy, the reason they can cause so much harm and consternation is because they know how to create and manipulate mass delusion. Maybe the main mass of the population disregards conspiracy theories so off handedly simply because they don’t want to believe they’re true, not because facts or evidence point to said theories being false. Read more

If You Think Your State is Broke Now, Just Wait Til The Pension Bomb Explodes!

Unless you’ve been pulling a Rip Van Winkle for the past few years, you know that your state is more busted than Larry Craig in an airport toilet. The only possible exception is the state of Denial, and it closed its borders to new arrivals sometime in late 2008.

One of the main drivers of this sorry state of affairs is the massive disparity between public-sector and private-sector compensation, especially when it comes to benefits such as pensions. Various studies have found anywhere between a 70 percent and a 34 percent differential in total compensation, with public-sector employees getting not just more pay and benefits but near-absolute job security and early retirement. Consider California, where Reason magazine reports,

“A bipartisan bill…passed virtually without debate unleashed the odious “3 percent at 50″ retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, “3 percent at 50″ and the forces behind it have only become more entrenched.

In the midst of California’s 2008–09 fiscal meltdown, with the impact of deluxe public pensions making daily headlines, the city of Fullerton nevertheless sought to retroactively increase the defined-benefit retirement plan for its city employees by a jaw-dropping 25 percent. What’s more, the Fullerton City Council negotiated the increase in closed session, outside public view.”

Unfunded state pension liabilities run in the neighborhood of $1 trillion.

There is a solution to this mess, the same solution that has been adopted by the private sector over the past several decades: switching from defined-benefit retirement plans to 401(k)-style defined-contribution plans. In a state such as Ohio, which is facing a $8 billion budget deficit and where state and local employees earn about 34 percent more in total compensation than their private-sector counterparts, bringing public-sector compensation into line with the private sector would cut the state’s deficit by about 28 percent.

The alternative? Well, there isn’t really one, other than destroying your state’s economy. The politics of cutting public compensation are never easy but they have also never been more critical.

Go to http://reason.com/blog/2010/08/27/if-…
for more info and resources.

Video produced by Josh Swain. Approximately 23 seconds.

Bernanke: Fed will take action if economy falters

Bernanke: Fed will take action if economy falters

Ron Paul : Audit the Gold!

Ron Paul : Audit the Gold!

Bancor: The Name Of The Global Currency That A Shocking IMF Report Is Proposing

08-24-2010 • TheEconomicCollapseBlog.com

Sometimes there are things that are so shocking that you just do not want to report them unless they can be completely and totally documented. Over the past few years, there have been many rumors about a coming global currency, but at times it has been difficult to pin down evidence that plans for such a currency are actually in the works. Not anymore. A paper entitled “Reserve Accumulation and International Monetary Stability” by the Strategy, Policy and Review Department of the IMF recommends that the world adopt a global currency called the “Bancor” and that a global central bank be established to administer that currency. The report is dated April 13, 2010 and a full copy can be read here. Unfortunately this is not hype and it is not a rumor. This is a very serious proposal in an official document from one of the mega-powerful institutions that is actually running the world economy. Anyone who follows the IMF knows that what the IMF wants, the IMF usually gets. So could a global currency known as the “Bancor” be on the horizon? That is now a legitimate question.

So where in the world did the name “Bancor” come from? Well, it turns out that “Bancor” is the name of a hypothetical world currency unit once suggested by John Maynard Keynes. Keynes was a world famous British economist who headed the World Banking Commission that created the IMF during the Breton Woods negotiations.

The Wikipedia entry for “Bancor” puts it this way….

The bancor was a World Currency Unit of clearing that was proposed by John Maynard Keynes, as leader of the British delegation and chairman of the World Bank commission, in the negotiations that established the Bretton Woods system, but has not been implemented.

The IMF report referenced above proposed naming the coming world currency unit the “Bancor” in honor of Keynes.

So what about Special Drawing Rights (SDRs)? Over the past couple of years, SDRs have been touted as the coming global currency. Well, the report does envision making SDRs “the principal reserve asset” as we move towards a global currency unit….

“As a complement to a multi-polar system, or even—more ambitiously—its logical end point, a greater role could be considered for the SDR.”

However, the report also acknowledges that SDRs do have some serious limitations. Since the value of SDRs are closely tied to national currencies, anything affecting those currencies will affect SDRs as well.

Right now, SDRs are made up of a basket of currencies. The following is a breakdown of the components of an SDR….

*U.S. Dollar (44 percent)

*Euro (34 percent)

*Yen (11 percent)

*Pound (11 percent)

The IMF report recognizes that moving to SDRs is only a partial move away from the U.S. dollar as the world reserve currency and urges the adoption of a currency unit that would be truly international. The truth is that SDRs are clumsy and cumbersome. For now, SDRs must still be reconverted back into a national currency before they can be used, and that really limits their usefulness according to the report….

“A limitation of the SDR as discussed previously is that it is not a currency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions. And though an SDR-based system would move away from a dominant national currency, the SDR’s value remains heavily linked to the conditions and performance of the major component countries.”

So what is the answer?

Well, the IMF report believes that the adoption of a true global currency administered by a global central bank is the answer.

The authors of the report believe that it would be ideal if the “Bancor” would immediately be used as currency by many nations throughout the world, but they also acknowledge that a more “realistic” approach would be for the “Bancor” to circulate alongside national currencies at first….

“One option is for bancor to be adopted by fiat as a common currency (like the euro was), an approach that would result immediately in widespread use and eliminate exchange rate volatility among adopters (comparable, for instance, to Cooper 1984, 2006 and the Economist, 1988). A somewhat less ambitious (and more realistic) option would be for bancor to circulate alongside national currencies, though it would need to be adopted by fiat by at least some (not necessarily systemic) countries in order for an exchange market to develop.”

So who would print and administer the “Bancor”?

Well, a global central bank of course. It would be something like the Federal Reserve, only completely outside the control of any particular national government….

“A global currency, bancor, issued by a global central bank (see Supplement 1, section V) would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.”

In fact, at one point the IMF report specifically compares the proposed global central bank to the Federal Reserve….

“The global central bank could serve as a lender of last resort, providing needed systemic liquidity in the event of adverse shocks and more automatically than at present. Such liquidity was provided in the most recent crisis mainly by the U.S. Federal Reserve, which however may not always provide such liquidity.”

So is that what we really need?

A world currency administered by an international central bank modeled after the Federal Reserve?

Not at all.

As I have written about previously, the Federal Reserve has devalued the U.S. dollar by over 95 percent since it was created and the U.S. government has accumulated the largest debt in the history of the world under this system.

So now we want to impose such a system on the entire globe?

The truth is that a global currency (whether it be called the “Bancor” or given a different name entirely) would be a major blow to national sovereignty and would represent a major move towards global government.

Considering how disastrous the Federal Reserve system and other central banking systems around the world have been, why would anyone suggest that we go to a global central banking system modeled after the Federal Reserve?

Let us hope that the “Bancor” never sees the light of day.

However, the truth is that there are some very powerful interests that are absolutely determined to create a global currency and a global central bank for the global economy that we now live in.

It would be a major mistake to think that it can’t happen.

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Hindenburg Omen Tripped Again

By Steven Russolillo

The Hindenburg Omen reared its ugly head late last week, signaling more doom and gloom as stocks plod along amid the dog days of summer.

The Omen, a technical indicator which uses a plethora of data to foreshadow a stock-market crash, was tripped again on Friday, marking the second time since Aug. 12 it has occurred. (It also came close on Thursday, but one of its criteria fell short.)

The latest trigger has prompted the Omen’s creator, Jim Miekka, to exit the market. “I’m taking it seriously and I’m fully out of the market now,” Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. “I would’ve probably stayed in until the beginning of September,” depending on how the indicators varied. “That was my basic plan, until the Hindenburg came along.”

The Omen has been behind every market crash since 1987, but significant stock-market declines have followed only 25% of the time. So there’s a high likelihood that the Omen could be nothing more than a false signal.

But that isn’t stopping Miekka from taking any chances, especially as September, typically the market’s worst-performing month, sits only one week away.

“It’s sort of like a funnel cloud,” he said. “It doesn’t mean it’s going to crash, but it’s a high probability. You don’t get a tornado without a funnel cloud.” He added he’s not currently shorting anything, although he may look to short Nasdaq stock index futures in the next few weeks, “depending on how the technicals go.”

Despite the ominous forecast, there are some glimmers of hope. Miekka doesn’t expect to sit on the sidelines for very long. In fact, Miekka, who is an avid target shooter despite being blind, is looking at put volumes and various moving averages that will offer clues of when he will start buying again.

“With what we have now, I think it’s possible we could get a 20% decline going into the fall,” Miekka said. “But I would expect some type of selloff and be buying at a lower price.”

Obama now blames poor job numbers on congressional inaction. Wait! His party runs Congress

NEWS FLASH! “democRATS” HAVE HAD CONTROL OF CONGRESS SINCE 2006

Just a few minor things to catch up on for the weekend now that the Fundraiser-in-Chief has gone on another vacation (Don’t worry though. White House chef Sam Kass went along, so the first family need not eat ordinary human food.)

– The Congressional Budget Office says the 2010 federal deficit will be in excess of $1.3 trillion, as in $1,000,000,000,000+. (BTW, the next level we’ll be talking about out of Washington is quadrillion, which has fifteen 0′s.)

– Despite Vice President Joe Biden’s April boast that administration stimulus spending would spur the economy to add a half-million jobs a month by now, initial unemployment claims jumped a half-million last week, the worst since last November, as national unemployment remains at 9.5% and the economy sheds 131,000 more jobs.

– But the economy’s going great at the Democratic National Committee, which reports collecting $11.5 million from donors in July on top of the $53.8 million already taken in from various sources this year. The president just devoted three workdays across five states to rake in several more millions for his party.

– But before leaving for his ninth presidential vacation, 10 days at a….

…secluded estate on Martha’s Vineyard, Obama devoted four minutes in the White House driveway to a special statement on the latest disappointing jobs numbers. (Full text, as usual, can be read on the jump, along with a brief reaction from the Republican National Committee chairman.)

No questions allowed because the president didn’t want to explain why despite the administration’s announced Recovery Summer Program, the jobs numbers have started going backward again after 19 months of promises and $787 billion in alleged stimulation spending. Because, faced with the uncertainty of the economy and the certainty of new taxes after Nov. 2, employers are holding back on hiring.

According to the president, he’s been “adamant” with Congress for months now about a new jobs bill to help small businesses. Obama says this really good bill is stalled in the Senate, where so much administration legislation has been crammed through so effectively by Majority Leader Harry Reid.

Reid’s been so good at it, in fact, that he’s now running for his political life in a reelection campaign back in Nevada where unemployment is 14.3% and Obama’s legislation is not so popular.

Reid’s up against a conservative Republican. So, that means Harry Reid must be a Democrat, just like Obama, and just like 59% of the Senate’s votes.

The very same party that has controlled both houses of Congress since the 2006 election and really controlled them both since the 2008 hopey-changey balloting.

So, facing the growing grim possibility of a GOP surge on Nov. 2, is this maybe the start of buddy-bickering within the Democratic huddle? Vulnerable people pointing the proverbial political finger of blame at someone else? That’s ridiculous, of course.

– One more thing: Arianna Huffington has word-processed another one of her thoughtful essays over at Huffington Post. This one sounds kind of critical of the president himself. The headline: “Memo to America’s Middle Class: Obama Is Just Not That Into You.”

LA unveils $578M “Taj Mahal” school, costliest in the nation

By CHRISTINA HOAG, Associated Press Writer
– Sun Aug 22,

LOS ANGELES – Next month’s opening of the Robert F. Kennedy Community Schools will be auspicious for a reason other than its both storied and infamous history as the former Ambassador Hotel, where the Democratic presidential contender was assassinated in 1968. With an eye-popping price tag of $578 million, it will mark the inauguration of the nation’s most expensive public school ever.

The K-12 complex to house 4,200 students has raised eyebrows across the country as the creme de la creme of “Taj Mahal” schools, $100 million-plus campuses boasting both architectural panache and deluxe amenities.

“There’s no more of the old, windowless cinderblock schools of the ’70s where kids felt, ‘Oh, back to jail,’” said Joe Agron, editor-in-chief of American School & University, a school construction journal. “Districts want a showpiece for the community, a really impressive environment for learning.”

Not everyone is similarly enthusiastic.

“New buildings are nice, but when they’re run by the same people who’ve given us a 50 percent dropout rate, they’re a big waste of taxpayer money,” said Ben Austin, executive director of Parent Revolution who sits on the California Board of Education. “Parents aren’t fooled.”

At RFK, the features include fine art murals and a marble memorial depicting the complex’s namesake, a manicured public park, a state-of-the-art swimming pool and preservation of pieces of the original hotel.

Partly by circumstance and partly by design, the Los Angeles Unified School District has emerged as the mogul of Taj Mahals.

The RFK complex follows on the heels of two other LA schools among the nation’s costliest — the $377 million Edward R. Roybal Learning Center, which opened in 2008, and the $232 million Visual and Performing Arts High School that debuted in 2009.

The pricey schools have come during a sensitive period for the nation’s second-largest school system: Nearly 3,000 teachers have been laid off over the past two years, the academic year and programs have been slashed. The district also faces a $640 million shortfall and some schools persistently rank among the nation’s lowest performing.

Los Angeles is not alone, however, in building big. Some of the most expensive schools are found in low-performing districts — New York City has a $235 million campus; New Brunswick, N.J., opened a $185 million high school in January.

Nationwide, dozens of schools have surpassed $100 million with amenities including atriums, orchestra-pit auditoriums, food courts, even bamboo nooks. The extravagance has led some to wonder where the line should be drawn and whether more money should be spent on teachers.

“Architects and builders love this stuff, but there’s a little bit of a lack of discipline here,” said Mary Filardo, executive director of 21st Century School Fund in Washington, D.C., which promotes urban school construction.

Some experts say it’s not all flourish and that children learn better in more pleasant surroundings.

Many schools incorporate large windows to let in natural light and install energy-saving equipment, spending more upfront for reduced bills later. Cafeterias are getting fancier, seeking to retain students who venture off campus. Wireless Internet and other high-tech installations have become standard.

Some pricey projects have had political fallout.

After a firestorm over the $197.5 million Newton North High School in Massachusetts, Mayor David Cohen chose not to seek re-election and state Treasurer Timothy Cahill reined in school construction spending.

Now to get state funds for a new school, districts must choose among three designs costing $49 million to $64 million. “We had to bring some sense to this process,” Cahill said.

In Los Angeles, officials say the new schools were planned long before the economic pinch and are funded by $20 billion in voter-approved bonds that do not affect the educational budget.

Still, even LA Unified Superintendent Ramon Cortines derided some of the extravagance, noting that donations should have been sought to fund the RFK project’s talking benches commemorating the site’s history.

Connie Rice, member of the district’s School Bond Oversight Committee, noted the megaschools are only three of 131 that the district is building to alleviate overcrowding. RFK “is an amazing facility,” she said. “Is it a lot of money? Yes. We didn’t like it, but they got it done.”

Construction costs at LA Unified are the second-highest in the nation — something the district blames on skyrocketing material and land prices, rigorous seismic codes and unionized labor.

James Sohn, the district’s chief facilities executive, said the megaschools were built when global raw material shortages caused costs to skyrocket to an average of $600 per square foot in 2006 and 2007 — triple the price from 2002. Costs have since eased to $350 per square foot.

On top of that, each project had its own cost drivers.

After buildings were demolished at the site of the 2,400-student Roybal school, contaminated soil, a methane gas field and an earthquake fault were discovered. A gas mitigation system cost $17 million.

Over 20 years, the project grew to encompass a dance studio with cushioned maple floors, a modern kitchen with a restaurant-quality pizza oven, a 10-acre park and teacher planning rooms between classrooms.

The 1,700-student arts school was designed as a landmark, with a stainless steel, postmodernistic tower encircled by a rollercoaster-like swirl, while the RFK site involved 15 years of litigation with historic preservationists and Donald Trump, who wanted to build the world’s tallest building there. The wrangling cost $9 million.

Methane mitigation cost $33 million and the district paid another $15 million preserving historic features, including a wall of the famed Cocoanut Grove nightclub and turning the Paul Williams-designed coffee shop into a faculty lounge.

Sohn said LA Unified has reached the end of its Taj Mahal building spree. “These are definitely the exceptions,” he said. “We don’t anticipate schools costing hundreds of millions of dollars in the future.”

The Mendacity of Carbon Offsets, will the UN be forced to Act?

UN Board Could Rein in $2.7 Billion Carbon Market
UN board to investigate complaints, could rein in $2.7 billion carbon market

By JOHN HEILPRIN Associated Press Writer
UNITED NATIONS August 21, 2010 (AP)

An obscure U.N. board that oversees a $2.7 billion market intended to cut heat-trapping gases has agreed to take steps that could lead to it eventually reining in what European and U.S. environmentalists are calling a huge scam.

At a meeting this week that ended Friday, the executive board of the U.N.’s Clean Development Mechanism said that five chemical plants in China would no longer qualify for funding as so-called carbon offset credits until the environmentalists’ claims can be further investigated.

The “CDM” credits have been widely used in the carbon trading markets of the European Union, Japan and other nations that signed onto the 1997 Kyoto Protocol requiring mandatory cuts in greenhouse gases.

Rather than cut their own carbon emissions, industrialized nations can buy the credits which then pay developing countries to cut their greenhouse gases instead.

But environmentalists say rich nations could be wasting billions of dollars on what some are calling “perverse financial incentives,” because some of the largest projects funded by the U.N.-managed CDM are a golden goose for chemical makers without making meaningful cuts in emissions.

The CDM executive board, based in Bonn, Germany, has asked for a decades’ worth of data on the gases from those five plants in China to study whether the system was manipulated.

The controversy revolves around the apparent conflict between the Kyoto climate treaty and another U.N. treaty, the 1987 Montreal Protocol for repairing the Earth’s fragile ozone layer.

The money from the CDM-authorized fund goes to pay the carbon offset credits claimed by more than 20 chemical makers mostly in China and India, but also in nations such as South Korea, Argentina and Mexico.

The chemical makers are paid as much as $100,000 or more for every ton they destroy of a potent greenhouse gas, HFC-23. The price for destroying it is based on its being 11,700 times more powerful as a climate-warming gas than carbon dioxide.

But that gas is a byproduct of an ozone-friendly refrigerant, HCFC-22, which those chemical makers also are paid to produce under the U.N.’s ozone treaty. Environmentalists say there is so much money in getting rid of HFC-23 that the chemical makers are overproducing HCFC-22 to have more of the byproduct to destroy.

“The evidence is overwhelming that manufacturers are creating excess HFC-23 simply to destroy it and earn carbon credits,” said Mark Roberts of the Environmental Investigation Agency, a research and advocacy group. “This is the biggest environmental scandal in history and makes an absolute mockery of international efforts to combat climate change.

HCFC-22 is widely used in hair sprays, air conditioners and some refrigerators because it less damaging to the seasonal ozone hole over Antarctica than previous coolants. It has been promoted under the ozone treaty, often considered one of the world’s most successful environmental treaties, as a replacement for chloroflourocarbons, or CFCs.

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