Comment: Recovery money is sitting in hedge funds

Fareed Zakaria on CNN the other day said that outgoing US president's George W. Bush's worse mistake was cutting taxes on the rich.

Bush not only cut higher tier taxes he also restructured the tiers basically lumping together the super rich with the moderately rich and then lowering both of their taxes. It was the last phase in a process that began in the Reagan years.

While Republicans like to criticize "socialist" redistribution of wealth, what has happened over the last few decades is a redistribution of wealth from the middle class and the poor to the rich.

Money that used to be in the savings of ordinary Americans is now sitting in derivative markets, in which average players are locked out. These markets are designed to allow the super rich to win, but to protect them from losing, i.e., they're rigged.

When Japan's real estate market melted down, the Japanese government was able to borrow from its people, who had stockpiles of money, at almost no interest. Actually it would have been better off just taxing the people.

Because by borrowing the money, it just transferred the problem of the Japan's banks to the central government.

Now, corporate types like to criticize the central government, but many in the corporate world are looking to the central government for help. The fact is that a country's economy is closely tied to the performance of the central government and the central bank.

The Japanese people could have easily just given the government the money not obliging them, i.e., the taxpayer, to pay it back. You see how there is a wasteful cycling of money here. The Japanese had sufficient savings to absorb such higher taxes. As it was, they ended up straddling the central government with debt that it's still trying to pay back.

Now, the American people have very little savings to offer the government for bailout money. Much of the needed money again is sitting in the derivative funds of the wealthy.

These wealthy elites want to lend the government the money instead of paying it in taxes. But who pays for the loans?

Yes, the taxpayer will eventually pay for those loans. So again we see a wasteful cycling of money that benefits the wealthy and will leave the central government swimming in red ink.

And again the central government is important to the economy. Just look at all the people in Wall St. and elsewhere looking to the central government at this time of crisis.

So basically, big deficit spending is just transferring the problems of Wall St, the auto industry, etc. to the central government.

Holistically, a deficit spending plan will not work in actually repairing the economy because there actually must be a healthy redistribution of wealth, a reversal of the redistribution of wealth that has occurred over the last 25 years. Debt spending does not get that job done.

Coral Triangle faces massive bleaching event

A hot summer could cause a massive bleaching event in the Coral Triangle, the world's most diverse marine area, environmentalists warn.

The Coral Triangle stretches from the Philippines and Sabah, on the island of Borneo, through Eastern Indonesia to Papua New Guinea.

Coastal marine resources could be impacted by the event, and similar bleaching episodes are predicted to happen more frequently int he future because of global warming.

Indonesia will hold the Coral Triangle Initiative Summit in May on the island of Sulawesi to address the problems facing the rich marine area.



Power Boat - World
Colourless corals spell doom
New Straits Times, Malaysia - Dec 19, 2008
The Coral Triangle, which stretches from the Philippines to Malaysia (Sabah) and Papua New Guinea, is home to 75 per cent of all known coral species, ...
Massive Coral Bleaching Could Decimate SE Asia’s Coral Triangle ... Earthtimes (press release)
Scientists predict coral destruction Sydney Morning Herald
Indigenous insights help save coral reefs ABC Online

Max Keiser: World in deep recession

Economic analyst Max Keiser talks about a deep world recession on al-Jazeera television.

He talks about a "black hole" of American debt created by short-selling and other schemes that is greater than the combined American wealth.

Countries like South Korea and Taiwan have been turning a wary eye on American treasuries making it difficult for the U.S. to finance its recovery plans.

In the latest economic news from the United States, manufacturing fell to a 28-year low in December.

ABC News

Manufacturing falls to 28-year low
Bizjournals.com - 1 hour ago
Manufacturing activity fell to its lowest point in 28 years as factories are slashing capacity in the face of weakening demand, according to an analysis of December factory data released Friday by the Institute for Supply Management.
Manufacturing index drops to 28-year low The Associated Press
US Economy: Manufacturing Shrinks as Orders Hit 60-Year Low Bloomberg