No one can ferret out the economic and tax outrage like David Cay Johnston. His new book, The Fine Print exposes more shafting of the U.S. middle class through fees, contracts and taxes, this time all buried in the details. Johnston tallies up all of the fees, overcharges and gifts to corporations to show small font corruption costs each American family of four about $2,390 per year.
Most of us know we do not have government by and for the people. Johnston documents the never ending collusion between corporate America and government. That's all government, federal, state, local and even the court system working not for the national interest, but for corporate America's interests. The book is front loaded with all sorts of outrage which should get your blood boiling. No political party and their agendas are spared.
Did you know state and local governments give corporations at least $70 billion per year in rebates and tax breaks? Some corporations get over 90% of new facilities paid for by taxpayers. Did you know corporations get massive state and local tax givebacks on the promise of a few jobs? State and local governments pay hundreds of millions of dollars for a few jobs which pay little, if the company bothers to hire any Americans at all. One deal for Verizon amounted to paying $3.1 million dollars per job promised by the company.
Every once in a while we see a piece of data which makes the hair on our heads stand on end. Such is the Census Foreign Trade graph of the month. Below are corn exports and their percent change a year from June 2012.
The more orange a state is, the more their exports declined. Texas corn exports declined a whopping -272.6%, Kansas dropped -160.9%. Arkansas is a real disaster, with a -445.2% drop in corn exports as of June 2012. What's worse is the June data only gives a 10% national drop in corn exports from a year ago. July gave much worse figures.
By July 2012, the United States corn export decline was the lowest in 19 years and had dropped 40% from a year ago according to the latest USDA statistics. The U.S. is the largest exporter of corn and corn is the largest export of course-grains. The below charts are from the USDA grain report.
How much are you paying to fuel Wall Street oil speculators? A new, very timely St. Louis Federal Reserve research paper, Speculation in the Oil Market finds 15% of oil price increases are due to speculation and is the second most powerful mover of prices beyond actual physical demand. Demand itself accounts for 40% of the total oil price increase.
Déjà vu, it's 2008 all over again. Why are gas prices soaring through the roof?
Some are revisiting oil speculation as the culprit. Commodity futures speculation always pops up in the public discourse the minute gas prices go above $3.65, yet nothing ever seems to come of it.
Our usual stupid political tricks, from tapping the strategic oil reserve to the GOP blaming Obama for gas prices, are in full swing. Isn't this all getting rather old? Wouldn't we all just like a stable price fluctuation in a key critical commodity upon which our economy and our empty pockets depend?
We know one thing, $5 gas can literally kill economic recovery. Oil shocks are correlated to recessions, as James Hamilton points out as do others. Below is a quarterly historical graph of real GDP percent change vs. the West Texas Intermediate average Oil Price. Notice the spikes in oil price and the grey recession bars.
I was invited by Manfrommiddletown to stray from my usual Blog home at European Tribune and post on the subject of Credit Default Swaps.
I find it hard to post on CDS without reference to the wider context, and in fact the reference here yesterday to the proposed Gas OPEC gives me the perfect excuse, since I have in recent days had a direct and intimate exposure to that initiative.
I have just returned to Scotland from ten days in Teheran, and was asked - by the head of the Iranian Majlis (Parliament) Energy Commission among others, to propose my ideas as to a possible structure for such a global gas market initiative.
For those who don't know, I was once upon a time a Director of the International Petroleum Exchange (now ICE Futures Europe), and since then have been busy in the area where markets and the Internet converge.
Lost in this past week's dismal news for 401k retirement reports (can we call them 201k's now?) is a silver lining for the consumer: this recession, like every 20th century recession before it, has created enough demand destruction to break the back of inflation. Been to your local gasoline station this past week? Odd are, you are seeing prices you haven't seen in a long time. In fact, the price of Oil per barrel is now lower than it was a year ago. Here's the graph demonstrating that truth:
Canada, Russia, Denmark, Norway and the United States are squaring off over 1.2 million square kilometers (460,000 square miles) of Arctic seabed, thought to hold 25 percent of the world's undiscovered oil and gas. Experts estimate the ridge has ten billion tons of gas and oil deposits and significant sources of diamonds, gold, tin, manganese, nickel, lead and platinum.
You hear a lot of buzz words these days about shady deals and speculation on oil futures. So, what exactly is this Enron Loophole so many refer to which allows all of this trading on energy to go on with no accountability or regulation?
it has been widely understood that, unless properly regulated, futures markets are easily subject to distorting the economic fundamentals of price discovery (i.e., cause the paying of unnecessarily higher or lower prices) through excessive speculation, fraud, or manipulation.
A while ago, in a diary entitled Are Hard Times near? The Great Decline in interest rates is ending I pointed out that the great decline in interest rates that began in 1981 looked like it was coming to an end, and with it American consumers' ability to refinance debt at lower rates. I noted that if consumers could no longer refinance at better terms, and if their wages weren't growing, the engine of the American economy would stall, not just for a short time, but for a very long period -- What I have called "The Slow Motion Bust."
With oil prices at $126 a barrel, and $4 a gallon gasoline, the boa constrictor of higher prices has tightened around the average American's budgetary breathing space some more. A look at how much and how consumers are coping, below.
How much are you paying to fuel Wall Street oil speculators? A new, very timely St. Louis Federal Reserve research paper, 
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
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