Part Two- The Architecture of Our Economy

This forum is for friendly discussion among DesignCommunity members on weather, sports, politics, fishing, and those other parts of life that don't fit into the topic-specific DesCom discussions.

Part Two- The Architecture of Our Economy

Postby WalkerARCHITECTS » Wed Apr 24, 2013 7:21 pm


The White House apparently believed the best way to strengthen its hand in the "sequester" showdown with Republicans was to tell Americans how awful the spending cuts will be, and blamed Republicans for them. This has now quite apparently failed as a strategy.

It didn’t work, it has never worked and it is rigged to fail and predictably it did fail. These tactical messages are getting in the way of the larger truth, which the President must hammer home: The Republicans' austerity economics and trickle-down economics are dangerous, bald-faced lies. Greed has no morality. The larger truth is that conservatives would not behave this way. Americans are not being represented in the congress by conservatives, what is happening now is a new movement. The wealthy have more influence on the members of congress than the entire working class. See part one. Conservatives, the real ones, are disparately needed. As a people we feel the pressure and the expansion of the problem of sustaining our standard of living. We need solutions to the everyday problems of the people. Clearly the wealthy have control at our expense and loss of lifestyle.

Doing more of the same is not going to work. Yes, the pending spending cuts will hurt, we are already feeling the impacts. Let’s quantify the magnitude of the cuts. Examining the cuts on an annual basis for simplicity sake, the cuts equal $270 billion a year. That’s equivalent to 20% of what we export annually. It is equivalent to three times what we export annually to China. It is an annual reduction in economic activity that is larger than the revenue of every U.S. corporation except Wal-Mart and Chevron. Doing more of the same will not work and the cut’s spawned of the same philosophy will not work either.

The magnitude is clearly material. Every Architect needs to understand it. The impact on GDP will also be substantial. Already where those who have money are engaged, the AEC industry sees some small measure of recovery. It is a mixture of hope and disappointments. Even as some Americans begin to feel the pain when the cuts go into effect, most won't feel it for weeks or months, if ever. It probably does not trigger political damage. But it should. It will.

“If corporate America hasn’t increased investment levels to levels reflecting their profit levels because of anemic demand, it is unlikely they will increase hiring as a result of Congress reducing federal spending because as we saw, reducing G reduces G’s contribution to GDP .” (Forbes 8/03/2011)

Half are cuts in the military, which will have a huge impact on jobs (the military is America's only major jobs program), but the cuts will be felt mainly in States with large numbers of military contractors, and then only as those contractors shed employees. Cutting jobs creates more unemployment and fewer paychecks. This affects everything in America that is made and sold here, from coffee to software.

Is this a smart move? Yes, it is a minor cut following a huge build up, to fight a foreign war. The following video from the Cato Institute presents a conservative view of the military cuts forced by the sequester.

The other half, are those cuts in domestic discretionary spending, which will largely affect lower-income Americans. Some programs are protected. This is not a subject where any debate is likely to reach a cogent agreement. There will be sharp reductions in federal aid to poor schools, nutrition assistance, housing assistance, and the like. But here again, most Americans won't see these cuts or feel them. A select portion of the population however will feel the impacts. ... at-doesnt/

Moreover, the blame game can be played both ways, and Republicans are adept at slinging mud. When it comes to high-visibility consequences of the spending cuts -- such as a sudden dearth of air-traffic controllers -- Republicans will dodge blame by happily giving Obama authority to shift spending and find the cuts himself, thereby making the White House appear even more culpable. There may be flexibility in that event. Lawmaker paychecks for example, should be cut, for congress to save face. Social Security however if cut will signal an attack on the elderly and an entire generation now approaching retirement.

Democrats failed to act aggressively. Democrats have allowed policy and politics to shape decisions in place of design intelligence. To govern America requires more than political doctrine. What is required is the actual delivery by government of solutions to address the nations problems. Confrontation by the democrats in congress in the context of the video below this article has been missing in action for thirty years. Where have they been?

On Friday, September 28, 2012, President Barack Obama signed into law a six-month continuing resolution that funds government operations through March 27, 2013. After the sequester comes the showdown over continuing funding of the government beyond March 27. The House of Representatives took the first step March 6th , 2013, toward keeping the federal government open after March 27, passing a bill to extend spending levels through Sept. 30 and preserving the automatic spending cuts.
The Senate went along with that and the House has approved.
Now while the sequester takes effect, another fight over the debt ceiling is emergent. Ordinary working class people will be taken to the cleaners again and again. The problem is that the working class, simply has too few voices in the congress of the United States, Those congressmen who are there simply do not have enough comprehension of the expanding desperation of the American worker in the context of Corporate America’s globalization movement. Unemployment is the problem that requires immediate solutions.

The White House must directly rebut the two big lies that fuel the Republican assault -- and that have fueled it since the showdown over the debt ceiling in the summer of 2011.

The first big lie is austerity economics -- the claim that the budget deficit is the nation's biggest economic problem now, responsible for the anemic recovery. This lie is obvious and the stock market demonstrates it clearly. Markets are moving in response to change but the market presence that is driving this change represents less than 5% of Americans. See the video at the top of the Article.

You can’t repair the problem without treating the wound inflicted on the working class. The problem is too few jobs, lousy wages, and slow growth. Cutting the budget deficit anytime soon makes the problem worse because it reduces overall demand. As a result, the economy will slow or fall into recession -- which enlarges the deficit in proportion. You want proof? Look at what austerity economics has done to Europe. Failure to engage reason and design intelligence IS failed government!

The second big lie is trickle-down economics -- the claim that we get more jobs and growth if corporations and the rich have more money because they're the job creators, and job growth would be hurt if their taxes were hiked. What we get is revealed above in the video.

The idea that the rising water lifts all boats, is a false prophecy. The real job creators are the broad middle class and everyone who aspires to join it. Their purchases keep the economy going. Buying is more important to the economy than tax breaks for a few and buying requires people with jobs and good family supporting wages.

As inequality continues to widen, and income and wealth become ever more concentrated at the top, the rest don't have the purchasing power they need to boost the economy. That's the underlying reason why the recovery continues to be so anemic. The existing design at the top is creating that outcome. It is not accidental, it deliberate, contrived, and sustained by the greed of a few and their influence on our government. All of this damage has been shaped by the interests of a few with wealth and power and the bulk of the population and what is best for them and their families has been ignored. Both parties are responsible for the damage inflicted on the American people.

These two lies -- austerity economics and trickle-down economics -- are being told over and over by Republicans and their mouthpieces on Fox News, yell radio, and the editorial pages of the Wall Street Journal. They are wrong and they are dangerous. But the lack of design intelligence is more dangerous than any lies could ever inflict.

Yet unless they are rebutted clearly and forcefully, the nation will continue to careen from crisis to crisis, showdown to showdown. We will have almost no chance of reversing the larger challenge of widening inequality. Could it be the intent of those in congress that Americans should now settle for less? Is the lack of design intelligence we perceive so clearly deliberate? The sad answer is simply yes, we are in fact betrayed, in the congress and at the paycheck, betrayed by the bank which we built with our labor and betrayed by the Supreme Court in whom we invested not only our trust but our lives on the battle field.

President Obama has the bully pulpit. We urge that the president work to drive consensus that best serves the common working class American. Americans trust him more than they do congressional Republicans. But he is letting micro-tactics get in the way of the larger truth. And he's blurring his message with other messages -- about gun control, immigration, and the environment. All are important, to be sure. But none has half a chance unless Americans understand how they're being duped on the really big story. There is no picture to print without the exposure.

The president's "sequester" offered, was designed to slash non-defense spending by $830 billion over the next ten years. That happens to be the precise amount we're implicitly giving Wall Street's biggest banks over the same time period. Why not simply not give Wall Street’s big bankers the money and give it to the working class instead?

We're collecting nothing from the big banks in return for our generosity. Corporate America has a better deal if we give the money to the people. Instead we're demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class - pretty much everybody, in fact, who isn't "too big to fail." The outrage of failed design intelligence is that it is deliberate!

That's injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoint, rather than with scrolls and trumpets and kingly proclamations. Yet the evil embodied will be acted out in the suffering of Americans as it was acted out in the kingdoms of medieval tyrants.

And remember: The White House represents the liberal side of these negotiations. Where is the design intelligence that every American deserves from it’s elected government?


The Big Shots
The $83 billion 'subsidy' for America's ten biggest banks first appeared in an editorial from Bloomberg News - which, as the creation of New York's billionaire mayor Michael Bloomberg, is hardly a lefty outfit. That editorial drew upon sound economic analyses to estimate the value of the US government's implicit promise to bail these banks out. Certainly good stable banks are necessary. See this video and remember where this started!

Then it showed that, without that advantage, these banks would not be making a profit at all. So as every American knows they are constantly taking our money in every way they can contrive!

The problem is that Jamie Dimon insults the American people he big banks are guaranteed arbitrage, and that is not a good deal for the American people. That means that all of those banks' CEOs, men (they're all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence - they would probably lose their jobs again today.

We propose that we actualize that solution immediately. Why not measure risk and uncertainty where it lives and and where it’s influence is felt?

It has become accepted economic wisdom, uttered with deadpan certainty by policy pundits and budget scolds on both sides of the aisle, that the only way to get control over America’s looming deficits is to “reform entitlements.”

The statistics Republicans trot out at the slightest provocation — federal budget data showing a huge spike in direct payments to individuals since the start of 2009, shooting up by almost $600 billion, a 32 percent increase.

And Census data showing 49 percent of Americans living in homes where at least one person is collecting a federal benefit –food stamps, unemployment insurance, worker’s compensation, or subsidized housing — up from 44 percent in 2008.

But these expenditures aren’t driving the federal budget deficit in future years. They’re temporary. The reason for the spike is Americans got clobbered in 2008 with the worst economic catastrophe since the Great Depression. They and their families have needed whatever helping hands they could get.

Deceit is at the root of these claims by those who rule the nation with their money.

If anything, America’s safety nets have been too small and shot through with holes. That’s why the number and percentage of Americans in poverty has increased dramatically, including 22 percent of our children.

Wall Street banking is at the source. The data shows that, without these advantages, these banks would not be making a profit at all. So as every American knows they are constantly taking our money in every way they can contrive!

The problem is that Jamie Dimon insults the American people he big banks are guaranteed arbitrage, and that is not a good deal for the American people. That means that all of those banks' CEOs, men (they're all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence - they would probably lose their jobs again today.

We propose that we actualize that solution immediately. Why not measure risk and uncertainty where it lives and and where it’s influence is felt?

Certainly Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of Goldman Sachs, both of whom have told us it's imperative that we cut social programs for the elderly and disabled to "save our economy, are blatantly self- serving liars. The elderly and disabled have paid for those programs - just as they paid to rescue Jamie Dimon and Lloyd Blankfein, and just as they implicitly continue to pay for that rescue today. Design Intelligence requires that risk and uncertainty be reduced or eliminated where ever it damages the banking industry. Working class people certainly have no reason to trust them and every reason not to. Liars are the source code of lost Profits and failed design intelligence is the source code of government that can’t govern by providing solutions to the nations problems.

Dimon, Blankfein and their peers are like the corrupt “Trading Families” of imperial Spain and Portugal. They've been given great wealth and great power over others, not through native ability but by the largesse of the Throne. It is now time to vacate these men and their henchmen from the seats of power that they abuse. What have they done for us lately?

Disorder and Anti-fragility
Earlier this year, in a rare burst of candor, Dimon said this to investors on a quarterly earnings call: "This bank is anti-fragile, we actually benefit from downturns." Liars are of course egotistical as a general rule within limits, demigods have higher standards and more tolerance for their own outrageous conduct.

It's true, of course. Other corporations - in fact, everybody else - has to survive or fail in real-world conditions. But Dimon and his peers are wrapped in a protective force field which was created by the people, of the people, and for ... well, for Dimon and his peers. They should be removed from power and retired from both prominence and respect. This would be good for America. These banks enjoy Arbitrage, a guaranteed profit, and in addition, the working class has been used as their insurance policy. These banks no longer have to compete for a profit, they make money by manipulating the financial markets, they have failsafe revenues from credit cards to bank service charges, they milk the working class relentlessly.

The term "antifragile" was coined by maverick financier and analyst Nassim Taleb, whose book of the same name is subtitled "Things That Gain From Disorder." That's a good description of JPMorgan Chase and the nation's other megabanks. Certainly the American worker has not profited from the disorder.

From Corruption to Arbitrage

Design Intelligence requires integrity in every decision. Dimon's comment was another way of saying that his bank, and everything it represents, is The Shock Doctrine made manifest. The nation's megabanks are arbitraging their own failures, and the economic crises that flow from those failures. We have observed buzzards doing the same.

These institutions are designed to prey off economic misery. They work diligently to sustain the misery. They suppress genuine market forces in order to thrive, and they couldn't do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen. The truth is that design intelligence is not applied by our government to create moral outcomes for the working class but rather to strip the working class of both cash and dignity in addition to every other working class person in the free world.

Design Intelligence is ignored. Greed, lies, manipulation and corruption currently rule Wall Street because it is more profitable than competition.

Those who have made these banks "antifragile" have crowned their leaders the Lords of Disorder. Necromancy has it’s place once reason has lost purchase on the market place. Rather than make money from achievement they choose to make money from constructed disorder. They literally extract profits from the dead and failed transactions that they themselves drove the life out of.

How to sell nothing at a profit

Bloomberg's use of the word 'subsidy' can be slightly misleading. Public institutions don't issue $83 billion in checks to Wall Street's biggest banks every year. But they didn't let them fail as they should have - through an orderly liquidation - after they created the crisis of 2008 through fraud and chicanery. Instead it allowed them to prosper from it, creating that $83 billion implicit guarantee. This money they will receive is your money and mine. It is not made from nothing. It was taken from you!

As we detailed in 2011, the TARP program didn't "make money," either. Banks received a free and easy trillion-plus dollars from our public institution, on terms that amounted to a gift worth tens of billions, and possibly hundreds of billions. This is wrong, because it was taken from you in a swindle.

That gift prevented them from failing. In private enterprise, this kind of rescue is only given in return for part ownership or other financial concessions. But our government asked for nothing of the kind. This was George W. Bush’s solution and the deal was done under a cloud of fear and collusion.

Debts Never Paid
Breaking up the big banks would have protected the public from more harm at their hands. That didn't happen. In place of that we accepted a swindle and that swindle was created with lies and silence, what we were never told was huge and what we are told now is that the deal is done.

Government institutions could have imposed a financial transaction tax, whose revenue could be used to repair the harm the banks caused while at the same time discouraging runaway gambling. They still could. They certainly should. They could have imposed fees on the largest banks to offset the $83 billion per year advantage we've given them. They still could. They certainly should.

They have not and this one-sided giveaway is the equivalent of an $83 billion gift for Wall Street each and every year. It is now time for that to end. When we speak about failed design intelligence in government we are talking about what can only be described by a complete failure to protect and serve the working class. We are the ones whose money has been taken! It was the Governments job to make certain this was done fairly. We have the right to be paid back!

Revealing the Stealing

$83 billion per year: Our current budget debate is framed in ten-year cycles, which means that's $830 billion in Sequester Speak. You'd think our deficit-obsessed capital would be trying to collect that very reasonable amount from Wall Street. Instead the White House is proposing $130 billion in Social Security cuts, $400 in Medicare reductions, $200 billion in "non-health mandatory savings," and $100 billion in non-defense discretionary cuts.
That adds up to exactly $830 billion.

There it is. We have the right to be paid back! We want that equity back in our homes we need that money. The government of George W. Bush betrayed us.

No doubt there is genuine waste that could be cut. But $830 billion, or some portion of it, could be used to grow our economy and brings tens of millions of Americans out of the ongoing recession that is their daily reality, even as the Lords of Disorder continue to prosper. It could be used for educating our young people and helping them find work, for reducing the escalating number of people in poverty, for addressing our crumbling infrastructure, for giving people decent jobs.

It's going to Wall Street instead. This is wrong. They took that money from us.

Trillion-Dollar Tribute

The right word for that is tribute. As in, "a payment by one ruler or nation to another in acknowledgment of submission ..." or "an excessive tax, rental, or tariff imposed by a government, sovereign, lord, or landlord ... an exorbitant charge levied by a person or group having the power of coercion." (Courtesy Merriam-Webster)

In this case the tribute is made possible, not by military occupation, but by the hijacking of our political process by the corrupting force of corporate contributions. That is the truth and it stings.

The fruits of that victory are rich: Bank profits are at near-record highs. Most of the country is still struggling to dig out from the wreckage they created but, as Demos' Policy Shop puts it, "for the banks it's 2006 all over again."

On Bended Knee

"Millions for defense," they said in John Adams' day, "but not one cent for tribute."

Today we're paying for both. That doesn't leave much for the elderly, the disabled, the impoverished, the children, or anybody else who doesn't "benefit from disorder." Nobody's fighting for them in this budget battle.
That leaves the public with a clear choice: Demand solutions that are more just and democratic - or submit willingly to the Lords of Disorder.

Are you worthy? Will you take action? Will you stand up and say NO, "I am angry as hell and I won't take it anymore?"

Well it is time to do something. The big news about President Obama's fifth State of the Union speech is that it's going to focus on "job creation" and "economic growth." But what's really newsworthy is less that Obama is going to focus on jobs, or that the White House is telegraphing the same, but that, with nearly 8 percent unemployment (is that an accurate number?) and the economy was contracting in the last quarter of 2012, it's actually a news story that the president is going to focus on jobs and the economy.

Why is that news worthy? It's a symptom of how far both Washington's responsiveness to the economy and our expectations have fallen. But it's what comes after the speech that's important. Or, I should say, between this speech and the next one, since jobs and the economy have made regular appearances in his four previous State of the Union speeches, as well. Here is what he said in 2009, 2010, 2011 and 2012.

"Reviving his populist reelection message," says the Washington Post about the State of the Union speech, "President Barack Obama will press a politically-divided Congress to approve more tax increases and fewer spending cuts."

This is a good start as speeches go. Imagine that you're sitting in the well of the House when a president gives a State of the Union speech. You're required to stand and applaud at every applause line, which means, if you're in the cabinet or an elected official of the president's party, it is a ceremonial requirement and results in an extraordinary amount of standing and sitting.

As Robert Reich explained, Congress is good at standing and sitting. This they can do well.

But for the president, the State of the Union provides a unique opportunity to focus the entire nation's attention on the central issue you want the nation to help you take action on. We wish we could shape the presidents speech towards more design intelligence as a critical component of the nations management. The problem is that speeches do not change anything.

President Obama has been focusing his (and therefore America's) attention on immigration, guns, and the environment. These are very important matters. Design Intelligence should be the central theme of his address however. Because all the issues are important and solutions to the nation’s problems are the task of the government, it is most important to engage in the work effort of creating solutions to our problems.

Design Intelligence is not political forcing. It is logic, and reason coupled with creativity, aimed at creating a better, leaner and more effective and affordable government.

We do believe that it is appropriate to focus on joblessness, falling real life wages, economic insecurity, and widening inequality that continue to plague our nation. All of which are caused by failed design intelligence. These problems arise because of intellectual error and all are problems we can solve and most were preventable in the first place.

Error as well as the failure to seize opportunity are failed design intelligence. Nobody in Corporate America can afford to tolerate failed design intelligence. It is simply too costly in human lives and too costly to the markets.

According to Robert Reich; "These three issues (immigration, guns, and the environment) are the overriding concerns of most Americans." We disagree we believe design intelligence to be the greater concern. "It will get worse whenever the deficit hawks, austerity mavens, trickle-down charlatans, and government-haters engage under the false ideology of the Tea Party or the John Birch Society."

Political solutions based upon dogma do not create jobs or drive the wages upward or empower American workers to achieve economic security and financial stability. Both the failed ideology, and successful ones have commanded center stage for far too long, the philosophy has not solved any of our problems, beliefs shape our legislation too frequently where pragmatic solutions would have served us better. Failed Design Intelligence occurs when the dogma takes over and the thinking stops. Problem do not solve themselves. Governance requires the diligent work of problem solving by every member of the House and the Senate. We need to get back to work as a nation and the House needs to get it’s house in order. The Senate needs to compensate for deficiency and eliminate waste and surplus. Managing dollars does not accomplish anything without the corresponding delivery of value to the American people.

We need something better than philosophy.

The central message of the right wing is not aimed at solutions to the problems of the working class. Messages that are not aimed at America’s problems are not good design intelligence nor good government. The problems of the American people are largely created by those who are too out of touch to see the problems, That includes most of the congress. But messages only go so far in an economy where more than 35 million people still live in underwater homes and millions of people are unemployed.

There is a crisis out here and the congress is not acting like they need to be responding to that crisis. Solutions will go much further and will rebuild the America we all feel slipping away from us. Solutions to the nation’s problems require a government willing to actually do the work of finding solutions for the American people. The wealthy do not need the attention of the government nearly so much as the working class. Not knowing where the problems in America are located is simply not an indication that working solutions are on the way to the working class.

Progress is too slow, it always has been.

We enjoy the speeches. In coming weeks the GOP will be using another fiscal cliff, a funding crisis, and another debt ceiling showdown to convince Americans of an outright lie: that the federal budget deficit is our most important problem, that it is responsible for the continuing anemic recovery, and that we must move now to reduce it.

We are tired of trickle up economics. That must end. Actually we have a different sort of crisis, our elected officials actually do not understand that the problems in America are not accidental, the current state was created deliberately. Congress had a great deal to do with that delivery of economic damage on the working class and very little to do with the meager recovery now engaged. The lack of effort to help the average American is unacceptable. Stop accepting the unacceptable failure of government to pull it's act together.

The President should make it clear that any Republican effort to hold the nation hostage to the GOP's ideological fixation on the budget deficit and a smaller government will slow the economy, likely pushing us into another recession. And that those most imperiled are the middle class and the poor.

The congress needs to care about the middle class and the poor. One good step for every congressman would be to meet with the middle class and poor everyday, so they could learn about the problems they are tasked to solve.

Apparently they are not doing that although they have plenty of meetings. Who do they meet with? The American people think that who the congress meets with is and should be public information and it should be possible to get a report from any member of congress that conveys the nature of the business they have engaged in and who they met with. After all they work for us.

The congress should be meeting with the working class everyday and not Corporate America. They represent us, the average citizen. We are important and our families are important. We create the profits of those corporations with our labor. We need a congress who understands who is important before we have a chance at design intelligence in government.

The president should emphasize that the real job creators are not the rich but the vast majority of ordinary Americans whose purchases give businesses reason to add jobs. And that if most Americans still cannot afford to buy, the government must be the spender of last resort. Higher wages will work very well to grow the economy but if employers fail to see the relationship between wages and a robust economy then they must have spent too much time at Cambridge and they need a quality education in management from me.

"Workers can buy more than wealthy people do because there are more of them. There are lots of workers. Workers without money do not buy as much as workers with money. When we have more and more workers with lower and lower wages then we have less and less buying!" You can quote me.

Supply and demand is an interesting relationship. When money is in short supply demand will decline. The current crop of business managers believe that lean wages results in lower prices and consequently more sales.

All of those impacted by lower wages consequently have less buying power. Trickle down economics obviously is not something that happens in reality.

So when the lower wages are the same people they want to sell to is a profound confusion induced?. Which part of that is too complicated for a Harvard MBA? Judging by the current state of the wages, creating more jobs is held hostage to the failed design intelligence of the nations elite MBA’s.

We are actually blaming them for the economic disaster. All the clues lead us to the same door.

Fortunately there are immediate, concrete steps the president announced in his speeches which will help struggling homeowners while at the same time stimulating the economy and promoting job creation. We have reason to sustain faith.

More than $1 trillion in homeowners' money is underwater, much of it tied up in bank payments for housing value that has disappeared. I am a victim of this. Too many of us are. This was as you recall done to American homeowners deliberately. This was the result of failed design intelligence and it is also, or should be, illegal to lend so much money at such high risk that if the economy slows it will trigger an economic catastrophe.

Too much was leveraged here, the risk was huge, and it would be impossible to not know mathematically that we were in too deep. The certainty that this catastrophe would occur must have been quite clear. Wall street analysts must have done the math and we know the Federal Reserve certainly did do the math and write the white paper.

However at this juncture the right Presidential actions will free up billions of dollars in homeowner obligations, enabling them to spend that money in the equivalent of a new multi-billion-dollar stimulus to boost the economy and create jobs. Unless that money has actually vanished.

Chained CPI in Social Security will be a disaster. The GOP will blame Obama and so will the Social Security recipients who will feel the impacts.

Perhaps it's too much to hope for, but I'd encourage the President to call for boosting the economy: Reversing the recent Social Security tax hike by exempting the first $20,000 of income from payroll taxes and lifting the ceiling on income subject to it, to make up the shortfall. That has not happened yet. Reviving the WPA and CCC, to put the long-term unemployed directly to work. Raising the minimum wage. Imposing a 2 percent annual tax surcharge on wealth in excess of $7 million to fund a world-class system of education, so all our kids can get ahead. That has not happened yet. Cutting corporate welfare and the military but not cutting public investments or safety nets the middle class and poor depend on. Giving tax credits to companies that create more new jobs in America. Helping states and locales rehire the teachers, fire fighters, police officers, and social workers they need.

Still waiting, it has not happened yet. The Congress is estranged from Design Intelligence.

This is the most fragile recovery in modern history, from the deepest downturn since World War II. Most Americans are not experiencing a recovery at all. Few Architects have coasted through this disaster, most of us are financially crippled permanently.

As has been shown in Europe, that austerity economics is a cruel hoax. President Obama must acknowledge this in his State of the Union, and commit to fighting those who would impose it on America. If he spoke to this at all it did not change the outcome. America needs only one central idea, return to the basics, create value by tapping the labor available inside the US. We built this nation and we can rebuild it. All the profit is the consequence of labor well managed.

Large amounts of idle or under utilized labor is not adequate management of our nation state. In short it is bad design intelligence. Smarter use of the labor we have here is best leveraged now not after the crisis deepens. Austerity does not create wealth for the many. It only protects the wealth of a few.

So to answer the question;

"Does anyone really believe (since our politicians/government departments boldly acknowledge that their allegiance and objectives are owned by the banks) that our President and regulators can or will reform, solve or mitigate appreciably this massive theft we call socialized, free-reign usury?"

Yes, I believe this can be fixed with design intelligence.

The Nine Steps

Proposed By Richard Eskow

Here are nine steps the president can take today to create the "homeowners' stimulus." They're practical, they're "populist" and best of all they can be done right now.
1. Spend the rest of the HAMP money.
The administration has only spent roughly $4 billion of the $29.9 billion Congress allocated for struggling homeowners.
Economists speak of a "fiscal multiplier," which is the added economic benefit the economy receives from government spending. As even the traditionally conservative IMF hasacknowledged, that figure is higher during difficult economic times like these -- especially for programs targeted to cash-strapped populations like underwater homeowners.
The president should declare that these funds will be used by the end of the year as direct aid to struggling homeowners.
2. Clean up the HAMP scandals.
At the same time the president should announce an investigation into the terrible abuses associated with the HAMP program. He should announce that he will direct the Treasury Secretary to put an immediate stop to "dual-tracking," a bank scam in which homeowners are told that they qualify for assistance while the bank secretly continues foreclosure proceedings against them.
That's part of a cruel overall pattern known as "extend and pretend." It's allowed banks to squeeze thousands more from homeowners, take advantage of a government program meant to keep people in their homes -- and then foreclose on them anyway.
Banks have also exploited the program to trap homeowners in loans under unfavorable terms for the borrower -- but which are very favorable for them. They've turned a homeowner assistance program into yet another bank bailout.
As the National Consumer Law Center notes, "HAMP's failure to reach its intended scale has one root cause: massive servicer noncompliance." This underscores the need for national mortgage servicing standards, which the President should announce as a priority during the State of the Union.
If whistleblower reports are correct, banks like Bank of America have also fraudulently abused the program. The president should announce that all such reports will be vigorously investigated.
3. Monitor and enforce the so-called "$26 billion settlement."
From the start, the much-celebrated and misnamed "$26 billion settlement" for massive bank foreclosure fraud has proven to be a disaster -- and worse, another Wall Street hoax.
Banks have falsely claimed to meet the settlement's goals when they agree to a short sale on a home in lieu of foreclosure -- even though they would have done the short sales anyway for financial reasons. Homeowners are still turned out of their homes, which makes a travesty of a policy that's supposedly intended to keep them in those homes.
Banks have also claimed credit for mortgage relief paid for with other people's money, declining to give borrowers relief on bank-owned loans and instead cutting deals on those they've already sold to investors.
They're also allowed to keep defrauding customers, albeit at a slower rate. Attorney Abigail Field has documented the provisions of the settlement which set the standards for acceptable levels of ongoing fraud, which she's summarized in "The Mortgage Settlement Allows Banks to Systematically Overcharge You and Wrongfully Take Your Home."
These facts cast a doubtful light on reporting like this from CNN Money, which claimed last November that, "More than 300,000 homeowners have received $26 billion in relief under the big foreclosure." And with 3.4 million homes foreclosed upon in the last four years, a figure like 300,000 only highlights the trivial nature of the exercise.
The president should announce that, starting immediately, these abuses will be ended and the program will be redirected back to its intended purpose: restitution for the banks' millions of victims.
4. End the state-level hijacking of homeowners' money.
$2.5 billion was given to the states for the purpose of helping distressed homeowners, but as of last report some of those states had diverted nearly a billion dollars of that money into the general fund. (ProPublica)
They're hijacking money that was supposed to help homeowners and using it for their own purposes -- especially to give more tax breaks to the wealthy. That's the net effect when you take money that was provided for a specific purpose and use it to offset the impact of those tax breaks for the already-prosperous.
The president should convene a meeting with governors -- a public meeting -- to discuss this abuse of funds at homeowners' expense. This is also an excellent opportunity to rebut the conservative canard that "states are better than the Federal government at administering these kinds of programs."
5. Enforce and monitor the $8.5 billion settlement.
Then there's the shocking mismanagement of an agreement made between a number of major banks and a regulator called the OCC. In 2011 the banks agreed to do a thorough review of their foreclosure records and help any homeowners who had been wronged. They pledged to that they would hire independent auditors and would not interfere with their work.
It now appears that they defrauded the government instead. Draft versions of a report from the Government Accountability Office reportedly showed that the banks had paid billions to corporate consultants that were already depending on them for their revenue. They included accounting firms like PriceWaterhouseCoopers ,which behaved questionably -- if not worse -- during the worst of the AIG scandal and at other key times in the bank fraud crime wave.
So the banks and the regulators quickly cut a deal in which the banks would pay $8.5 billion to settle the charges. More tellingly, the GAO report was killed and no further investigations were scheduled. (There's more information here. And we highly recommend Yves Smith's exhaustiveseries exploring whistleblower reports covering Bank of America's extensive fraud in conducting the initial reviews).
The president should announce an immediate investigation into wrongdoing at the major banks, as well as errors, mismanagements, and conflicts of interest at the OCC, with a public report to be delivered no later than the end of this quarter (March 31). He should appoint an independent overseer to monitor the OCC's handling of the new deal and direct the GAO to complete its report or provide a detailed explanation of any agreement which prevents it from doing so.
And he should direct the Attorney General to investigate Bank of America, together with any other institutions where there may be compelling evidence of fraud or other criminal behavior regarding this settlement.
6. Direct all of Bank of America's Fannie Mae settlement money to homeowners.
Speaking of Bank of America: Last month it agreed to settle charges of fraud by its subsidiary Countrywide. That settlement requires BofA to pay Fannie Mae $3.6 billion and buy back $6.75 billion in bad loans.
The president should announce that this money -- roughly $10 billion -- will be used to aid wronged homeowners, and for no other purpose.
Of course, to do that the president will have to fire Ed DeMarco, the recalcitrant bureaucrat who has managed to keep control of Fannie Mae and Freddie Mac, along with the regulatory agency called the FHFA, because Republicans in the Senate are filibustering his replacement. While I don't see DeMarco as the key player others make him out to be, it would be nice to see him go.
The president could announce that in his speech too.
7. Reduce interest rates -- and direct the Treasury Secretary to establish guidelines for principal writedowns.
In its State of the Union preview, the Post reports that "Obama is weighing whether to use his executive authority to give more of the country's nearly 11 million struggling homeowners a chance to refinance at today's ultra-low interest rates, according to the Treasury Department and others in talks with the administration on the issue."
On that issue, he can stop weighing and start doing. Removing DeMarco would help here, too. So would some very pointed face-to-face talk with leading bankers.
But even that wouldn't go far enough. The Administration has consistently dragged its feet on the issue of principal writedowns -- reducing that nearly one trillion dollars in loan amounts due for real estate value that has vanished. That needs to be part of the solution. The president should direct the Treasury Secretary to prepare a report on how to implement a principal writedown program, and to have it on his desk within 90 days.
8. Review past bank settlements for fraudulent behavior or other breaches.
The OCC experience shows that banks sought to defraud the government in their handling of the initial agreement. Banks have entered into many agreements with the SEC in which they promised to stop engaging in illegal and fraudulent behavior, only to repeat that behavior again and again. There's evidence they're doing the same thing with the (supposedly) $26 billion settlement.
Isn't an agreement null and void once one of the parties has violated its terms?
The president should announce that he's asked the appropriate attorneys to determine which bank agreements have been violated, and what other options might be open to the government as a result -- up to and including criminal prosecution of the bankers involved.
9. Announce firm deadlines for action -- and meet them.
Lastly, about that "weighing": the Post also reports that the president is "considering a series of new executive actions" (emphasis ours), but that "one White House official said the moves to boost housing, retrofit buildings, offer same-sex protections or issue new environmental rules were not imminent." Granted, the White House's definition of the word "imminent" is not always thecommonly-accepted one, but in this case we assume the anonymous source means "later."
I'm not predicting a presidential change of heart -- or the absence of one. But he can and should take these steps immediately. If he doesn't, the public should demand them.
As for the timing : Respectfully, Mr. President, it's been four years since the banks ruined our economy. If not now, when?

Posts: 808
Joined: Tue Sep 25, 2007 3:12 am

Re: Part Two- The Architecture of Our Economy

Postby phansford » Thu Apr 25, 2013 8:04 am

I guess we need to continue to request Kevin to move these non-architecture posts to the Fireside Forum.
millennium club
Posts: 1178
Joined: Sun Apr 18, 2004 1:47 pm
Location: SW Ohio

Re: Part Two- The Architecture of Our Economy

Postby csintexas » Thu Apr 25, 2013 12:12 pm

Looks like it may be a record post length though.
millennium club
Posts: 2808
Joined: Mon Feb 06, 2006 3:12 pm
Location: USA

Re: Part Two- The Architecture of Our Economy

Postby WalkerARCHITECTS » Mon May 06, 2013 12:01 pm

The consequence of ignoring the problem is that the problem expands. The desire to hide the post is a common affliction that some engage in as a routine response to the truth they would rather not deal with. Phansford if you do not like what I am writing don't read it. You know just skip it. You have that option, so what your doing is trying to prevent others from reading it. I am asking that Kevin not move the most relevant posts to the problems of the current market place for services, on the board, to the fireside chat. It belongs here in this forum.
Posts: 808
Joined: Tue Sep 25, 2007 3:12 am

Return to Fireside Forum

Who is online

Users browsing this forum: No registered users and 6 guests

User Control Panel


Who is online

In this forum zone there are 6 users online :: 0 registered, 0 hidden and 6 guests (based on users active over the past 5 minutes)
Most users ever online was 593 on Sat May 26, 2018 5:18 pm

Users browsing this forum: No registered users and 6 guests
DesignCommunity   ·   ArchitectureWeek   ·   Great Buildings   ·   Archiplanet   ·   Books   ·   Blogs   ·   Search
Special thanks to our sustaining subscribers Building Design UK, Building Design News UK, and Building Design Tenders UK.