Friday, October 17, 2008

NY Mother Faces Loss of Foreclosed Home

Earlier this year, Jocelyn Voltaire of Queens, New York lost her oldest son in Iraq. An auction is scheduled for today to sell her foreclosed home. Since news of her story broke, a grassroots effort has sprung up to help.

Original Transcript

Monday, October 13, 2008

Re: Taxes

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

Saturday, October 11, 2008

Who Owns The Federal Reserve?

The Fed is privately owned. Its shareholders are private banks

by Ellen Brown

"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders."

– The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s

The Federal Reserve (or Fed) has assumed sweeping new powers in the last year. In an unprecedented move in March 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations.1 In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company. The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer. The Associated Press called it a "government takeover," but this was no ordinary nationalization. Unlike the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:

"The Treasury Department, for the first time in its history, said it would begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs."2

This is extraordinary. Why is the Treasury issuing U.S. government bonds (or debt) to fund the Fed, which is itself supposedly "the lender of last resort" created to fund the banks and the federal government? Yahoo Finance reported on September 17:

"The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters."

Normally, the Fed swaps green pieces of paper called Federal Reserve Notes for pink pieces of paper called U.S. bonds (the federal government’s I.O.U.s), in order to provide Congress with the dollars it cannot raise through taxes. Now, it seems, the government is issuing bonds, not for its own use, but for the use of the Fed! Perhaps the plan is to swap them with the banks’ dodgy derivatives collateral directly, without actually putting them up for sale to outside buyers. According to Wikipedia (which translates Fedspeak into somewhat clearer terms than the Fed’s own website):

"The Term Securities Lending Facility is a 28-day facility that will offer Treasury general collateral to the Federal Reserve Bank of New York’s primary dealers in exchange for other program-eligible collateral. It is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. . . . The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable."

"To switch debt that is less liquid for U.S. government securities that are easily tradable" means that the government gets the banks’ toxic derivative debt, and the banks get the government’s triple-A securities. Unlike the risky derivative debt, federal securities are considered "risk-free" for purposes of determining capital requirements, allowing the banks to improve their capital position so they can make new loans. (See E. Brown, "Bailout Bedlam,", October 2, 2008.)

In its latest power play, on October 3, 2008, the Fed acquired the ability to pay interest to its member banks on the reserves the banks maintain at the Fed. Reuters reported on October 3:

"The U.S. Federal Reserve gained a key tactical tool from the $700 billion financial rescue package signed into law on Friday that will help it channel funds into parched credit markets. Tucked into the 451-page bill is a provision that lets the Fed pay interest on the reserves banks are required to hold at the central bank."3

If the Fed’s money comes ultimately from the taxpayers, that means we the taxpayers are paying interest to the banks on the banks’ own reserves – reserves maintained for their own private profit. These increasingly controversial encroachments on the public purse warrant a closer look at the central banking scheme itself. Who owns the Federal Reserve, who actually controls it, where does it get its money, and whose interests is it serving?

Not Private and Not for Profit?

The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a "lender of last resort" to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:

* "The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."

* "[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms."

* "The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury."5

So let’s review:

1. The Fed is privately owned.

Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.

2. The fact that the Fed does not get "appropriations" from Congress basically means that it gets its money from Congress without congressional approval, by engaging in "open market operations."

Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to "expand the money supply" (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called "open market operations" because the Fed buys the bonds on the "open market" from the bond dealers. The bonds then become the "reserves" that the banking establishment uses to back its loans. In another bit of sleight of hand known as "fractional reserve" lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve "a total money-making machine." He wrote:

"When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check."

3. The Fed generates profits for its shareholders.

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered "for profit" corporations.

In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their "reserves." The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in "reserve" can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total "loans and leases in bank credit" as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.

The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ -- for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.

Time to Change the Statute?

According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:

"[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute."

As we know from watching the business news, "oversight" basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The only real leverage Congress has over the Fed is that it "can alter its responsibilities by statute." It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.

If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly "federal" Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine. Her websites are and .

Wednesday, October 08, 2008

I Hate Beauty (sort of...)

Why I Hate Beauty

Men are barraged with images of extraordinarily beautiful and unobtainable women in the media, making it difficult for them to desire the ordinarily beautiful.

By: Michael Levine, Hara Estroff Marano

Poets rave about beauty. Brave men have started wars over beauty. Women the world over strive for it. Scholars devote their lives to deconstructing our impulse to obtain it. Ordinary mortals erect temples to beauty. In just about every way imaginable, the world honors physical beauty. But I hate beauty.

I live in what is likely the beauty capital of the world and have the enviable fortune to work with some of the most beautiful women in it. With their smooth bodies and supple waists, these women are the very picture of youth and attractiveness. Not only are they exemplars of nature's design for detonating desire in men, but they stir yearnings for companionship that date back to ancestral mating dances. Still, beauty is driving me nuts, and although I'm a successful red-blooded American male, divorced and available, it is beauty alone that is keeping me single and lonely.

It is scant solace that science is on my side. I seem to have a confirmed case of the contrast effect. It doesn't make me any happier knowing it's afflicting lots of others too.

As an author of books on marketing, I have long known about the contrast effect. It is a principle of perception whereby the differences between two things are exaggerated depending on the order in which those things are presented. If you lift a light object and then a heavy object, you will judge the second object heavier than if you had lifted it first or solo.

Psychologists Sara Gutierres, Ph.D., and Douglas Kenrick, Ph.D., both of Arizona State University, demonstrated that the contrast effect operates powerfully in the sphere of person-to-person attraction as well. In a series of studies over the past two decades, they have shown that, more than any of us might suspect, judgments of attractiveness (of ourselves and of others) depend on the situation in which we find ourselves. For example, a woman of average attractiveness seems a lot less attractive than she actually is if a viewer has first seen a highly attractive woman. If a man is talking to a beautiful female at a cocktail party and is then joined by a less attractive one, the second woman will seem relatively unattractive.

The contrast principle also works in reverse. A woman of average attractiveness will seem more attractive than she is if she enters a room of unattractive women. In other words, context counts.

In their very first set of studies, which have been expanded and refined over the years to determine the exact circumstances under which the findings apply and their effects on both men and women, Gutierres and Kenrick asked male college dormitory residents to rate the photo of a potential blind date. (The photos had been previously rated by other males to be of average attractiveness.) If the men were watching an episode of Charlie's Angels when shown the photo, the blind date was rated less desirable than she was by males watching a different show. The initial impressions of romantic partners—women who were actually available to them and likely to be interested in them—were so adversely affected that the men didn't even want to bother.

Since these studies, the researchers have found that the contrast effect influences not only our evaluations of strangers but also our views of our own mates. And it sways self-assessments of attractiveness too.


Tuesday, October 07, 2008

Meditation changes temperatures:

Harvard Gazette report on Tibetan monks who can heat up their bodies at will
September 25, 2008 — Stefan Fobes

Buddhist monk meditating
A Buddhist monk has his vital signs measured as he prepares to enter an advanced state of meditation in Normandy, France. During meditation, the monk’s body produces enough heat to dry cold, wet sheets put over his shoulders in a frigid room (Photo courtesy of Herbert Benson).

Mind controls body in extreme experiments
By William J. Cromie
Gazette Staff

In a monastery in northern India, thinly clad Tibetan monks sat quietly in a room where the temperature was a chilly 40 degrees Fahrenheit. Using a yoga technique known as g Tum-mo, they entered a state of deep meditation. Other monks soaked 3-by-6-foot sheets in cold water (49 degrees) and placed them over the meditators’ shoulders. For untrained people, such frigid wrappings would produce uncontrolled shivering.

If body temperatures continue to drop under these conditions, death can result. But it was not long before steam began rising from the sheets. As a result of body heat produced by the monks during meditation, the sheets dried in about an hour.

Attendants removed the sheets, then covered the meditators with a second chilled, wet wrapping. Each monk was required to dry three sheets over a period of several hours.


Sunday, October 05, 2008

US Banking Collapse a 'Controlled Demolition'

What does the rest of the world know that we don't? The United States Dollar is dead.

While we are being jerked around by the mainstream media here at home, the rest of the world has already drawn the final conclusion for us, and what they are saying about us isn't pretty.

We are in the middle of a crisis much larger than most Americans could imagine, a portion of America can't even handle it, for that matter. The Bailout was an awful idea, and the majority of Americans realized that. There is even a provision that would grant Treasury Secretary Henry Paulson dictatorial powers, and that is obviously insane, but here we are debating it. It's like asking a dead man whether he wants to be buried or cremated; it's a non issue and Congress is just playing a game to distract the American people. We need to move ahead, and we should begin with taking our country back from the tyrants.

Hank Paulson has already taken control of the US banking system; journalist and expert economist Max Keiser compares Paulson to the 9/11 hijackers, calling him a financial terrorist. Keiser has been making his rounds on international broadcasts, including France 24 and Press TV where he compares the collapse of the US banking system to WTC 7 - "a controlled demolition."