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2009 Is When The Fat Cats Got Fatter …

… And The Rest Of Us Got Scraps

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

By Robert Reich

Reprinted from his blog at robertreich.blogspot.com

In September 2008, as the worst of the financial crisis engulfed Wall Street, George W. Bush issued a warning: “This sucker could go down.” Around the same time, as Congress hashed out a bailout bill, New Hampshire Sen. Judd Gregg, the leading Republican negotiator of the bill, warned that “if we do not do this, the trauma, the chaos and the disruption to everyday Americans’ lives will be overwhelming, and that’s a price we can’t afford to risk paying.”

In less than a year, Wall Street was back. The five largest remaining banks are today larger, their executives and traders richer, their strategies of placing large bets with other people’s money no less bold than before the meltdown. The possibility of new regulations emanating from Congress has barely inhibited the Street’s exuberance.

But if Wall Street is back on top, the everyday lives of large numbers of Americans continue to be subject to overwhelming trauma, chaos and disruption.

It is commonplace among policymakers to fervently and sincerely believe that Wall Street’s financial health is not only a precondition for a prosperous real economy but that when the former thrives, the latter will necessarily follow. Few fictions of modern economic life are more assiduously defended than the central importance of the Street to the well-being of the rest of us, as has been proved in 2009.

Inhabitants of the real economy are dependent on the financial economy to borrow money. But their overwhelming reliance on Wall Street is a relatively recent phenomenon. Back when middle-class Americans earned enough to be able to save more of their incomes, they borrowed from one another, largely through local and regional banks. Small businesses also did.

It’s easy to understand economic policymakers being seduced by the great flows of wealth created among Wall Streeters, from whom they invariably seek advice. One of the basic assumptions of capitalism is that anyone paid huge sums of money must be very smart.

But if 2009 has proved anything, it’s that the bailout of Wall Street didn’t trickle down to Main Street. Mortgage delinquencies continue to rise. Small businesses can’t get credit. And people everywhere, it seems, are worried about losing their jobs. Wall Street is the only place where money is flowing and pay is escalating. Top executives and traders on the Street will soon be splitting about $25 billion in bonuses (despite Goldman Sachs’ decision, made with an eye toward public relations, to defer bonuses for its 30 top players).

The real locus of the problem was never the financial economy to begin with, and the bailout of Wall Street was a sideshow. The real problem was on Main Street, in the real economy. Before the crash, much of America had fallen deeply into unsustainable debt because it had no other way to maintain its standard of living. That’s because for so many years almost all the gains of economic growth had been going to a relatively small number of people at the top.

President Obama and his economic team have been telling Americans we’ll have to save more in future years, spend less and borrow less from the rest of the world, especially from China. This is necessary and inevitable, they say, in order to “rebalance” global financial flows. China has saved too much and consumed too little, while we have done the reverse.

In truth, most Americans did not spend too much in recent years, relative to the increasing size of the overall American economy. They spent too much only in relation to their declining portion of its gains. Had their portion kept up — had the people at the top of corporate America, Wall Street banks and hedge funds not taken a disproportionate share — most Americans would not have felt the necessity to borrow so much.

The year 2009 will be remembered as the year when Main Street got hit hard. Don’t expect 2010 to be much better — that is, if you live in the real economy. The administration is telling Americans that jobs will return next year, and we’ll be in a recovery. I hope they’re right. But I doubt it. Too many Americans have lost their jobs, incomes, homes and savings. That means most of us won’t have the purchasing power to buy nearly all the goods and services the economy is capable of producing. And without enough demand, the economy can’t get out of the doldrums.

As long as income and wealth keep concentrating at the top, and the great divide between America’s have-mores and have-lesses continues to widen, the Great Recession won’t end — at least not in the real economy.

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Queen Of England’s Speech

[History]

Following The Links

An Image of the Present, Illustrating the Past

by Reviewer Rob

An interesting pic from the official website for Number 10 Downing Street is posted below. It just amazes me when I see it because in it there’s so many images of tradition that has been existing there, in London, in an unbroken line for so many hundreds of years. There’s the signs of pagan Celtic and Anglo-Saxon tribal rulers, and there’s the Church of England, which we know morphed from the remnants of ancient Roman rule in the form of the Catholic Church.

The foot-messenger for this image was originally Twitter, for which they’ve got a verified account.


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Garrido’s Aggressive Stalking on Google Maps?

Jaycee Lee Dugard: did Phillip Garrido trail a Google Street View camera van?

From telegraph.co.uk/news/newstopics/jaycee-lee-dugard/6120878/Jaycee-Lee-Dugard-did-Phillip-Garrido-trail-a-Google-Street-View-camera-van.html

Phillip Garrido, the man charged with the abduction of Jaycee Lee Dugard, may have followed a Google Street View van after noticing it photographing his street, it has been claimed.


[Editor’s Note: It’s true and pretty damn creeeee-peeeeeeee. I went to Google Maps last night and checked it out. Go there yourself right now at google.com/maps and type in Phillip Garrido’s address of 1554 Walnut Ave, Antioch, CA 94509. Then track down the street to the west of the address and watch the van follow you… ~Reviewer Rob]


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modern blackface

Devine’s Jug Band

Review by J. Darren Lee

Serving up a nice piece of Southern Americana pie, Devine’s Jug Band brings the listener back to the heyday of Southern jug/blues music that was prevalent in the 1920s, and 30s when bands such as The Memphis Jug Band played wherever they could find a place to sit down and play. Hailing from San Francisco, California, Devine’s Jug Band plays tribute to this African-American band, as well as many others that were popular among both black and white fans in a place and time not known for its racial harmony. Devine’s Jug Band’s cover of “4th Street Mess Around” by Memphis Jug Band is beautifully, and artistically done giving homage to a time and place mostly forgotten in American history.

Featuring the talents of Pete Divine on jugs/washboard, Bill Foss on banjo/mandolin, Mayumi Urgino on fiddle, Jacob Groopman on banjo/mandolin, and Meredith Axelrod on guitar, Devine’s Jug Band began in 2007 with founding members Pete Divine, and Bill Foss. The band has gotten quite a name for themselves with appearances from the 2007 San Francisco Jug Band Festival to more lucrative spots on NPR’s “West Coast Live” and even NBC News.

Classics such as ‘Terrible Operation Blues” originally by Thomas A. Dorsey also known as Georgia Tom, and “Ted’s Stomp” by Howard Armstrong and Ted Bogan are given new, fun and energetic life by the incredibly talented and gifted musicians of Devine’s Jug Band.

Even if you are not necessarily into American Blues, and Folk music, or even jugs, you will love Devine’s Jug Band. They are fun to listen to, and delightfully uplifting. If you have the blues, this jug band definitely has the cure.

Devine’s Jug Band has many upcoming shows Davis, Felton, and San Francisco, California-area and even one at the National Jug Band Festival in Louisville, Kentucky on September 19, 2009. For more information on dates and times of where this extremely talented troupe of musicians will be playing next, please go to Devine’s Jug Band Myspace site at myspace.com/devinesjugband.


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Detroit’s New “Artist” District

Got $100? Welcome to your new Detroit home

from CNN.com

Story Highlights:
* Detroit artists buy a trashed, abandoned house for $100, fix it up
* Other artists have bought cheap houses in the same neighborhood
* The Power House was the first home, meant to power the other houses nearby

By Ashley Fantz

(CNN) — If an e-mail popped up in your inbox promising a house for $100, you’d expect to see it sent from a guy in Nigeria asking you to wire him several thousand dollars first.

But this depressed housing market dream is real. And Detroit, Michigan, artist Jon Brumit and his wife Sarah are living it.

The couple never counted on owning a home.

“It’s not that we have a little money,” Jon Brumit said, laughing. “I’m saying we have no money.”

But the couple began entertaining the idea of a permanent nest when their friends Mitch Cope and Gina Reichert, also artists, started taking advantage of foreclosures in the city, where the average home price dipped to $11,533 in April, according to the Detroit Association of Realtors.

Dragging down the average are homes are long abandoned or foreclosed on that are selling for pennies on the dollar. Detroit already had the lowest market value houses in Michigan before the latest rounds of job losses at GM and other huge employers, market analysts say.

“Those artists are doing a good thing; they are at least helping to stabilize neighborhoods that would be all but lost,” said Mike Shedlock, an investment adviser who blogs frequently about Detroit’s economy.

For less than a few thousand dollars, Cope and Reichert snapped up a dilapidated bungalow in a north Detroit neighborhood called “BanglaTown,” for its unexpected mix of Bangladeshis, African-Americans, Polish and Ukrainians and the occasional shady character.

Scrappers had cleaned the house to the bone. The copper had been stolen; the electrical wiring was stripped.

But no matter. Here was a chance for Cope and Reichert, who run a popular Detroit art store, to rehabilitate the 1920s brick house into a bastion of energy savings, with solar panels, LED lights, recycled wood and high-end insulated windows.

They’re installing a security system that exemplifies elegant efficiency with hurricane-proof windows and steel doors replacing burglar bars. They are also experimenting with running their air-conditioning on a car battery.

The project became known as the Power House. Cope and Reichert wanted to create a central place to power homes nearby and, in turn, revive a neighborhood’s sense of community.

The trick was getting their friends not only to cheer the concept but invest in it by moving next door.

“It was much easier than we thought it might be,” Cope said. “We told everyone that Detroit is an interesting city to work in as an artist, and the neighborhood is diverse. But, really, it came down to money.”

“I kept telling Mitch, ‘Wow those are an awesome, ridiculously good deals but if you find anything that’s less, let me know,” Brumit said. “Like, if something comes along for next to nothing, cool.”

A few weeks later, Cope e-mailed Brumit a photo of an abandoned home on his block. Its windows were boarded up and plywood was nailed across the front door. The huge hole in the roof was courtesy of the fire department. A neighbor said the house had been set on fire — twice.

Pricetag: $100. Brumit called a real estate agent with the Department of Housing and Urban Development, who confirmed that bids on the foreclosed property started at $95 for the property, $5 for the house. There were no back taxes — no one seemed to be sure who once owned the house, it had been empty for so long, Brumit said.

Cope, also a designer and builder, and an inspector did a walk-through.

“Inspection was fine and Mitch told me the foundation was good,” Brumit said. “He just said, ‘If you didn’t mind scraping some peeling paint, doing some surface treatments, putting in new utilities, windows and repairing the roof … this could be pretty interesting.'”

Now, when he’s not hauling loads of rubble away or knocking out walls to create a single, open studio space, Brumit’s searching Craigslist for a furnace. In exchange for designing the business Web site of a local barn recycler, he’s getting materials to turn that hole in his roof into a skylight.

“I saw it as a project,” the artist said. “I’m a builder. I’ve been building skateboards since I was 12.”

Skateboards are one thing. Rebuilding homes where the plumbing has been ripped out or the cabinets destroyed in a fit by an upset foreclosed homeowner is another. Michigan housing authorities acknowledge that there’s little incentive for people who aren’t quite as handy as Brumit.

In two weeks, the state will begin offering $25,000 to anyone who buys a home, as long as they pay 1 percent of the total cost and live in it. Landlords or speculators aren’t eligible.

Part of a $263 million grant given to Michigan and other states under 2008’s Housing and Economic Recovery Act, the funds are intended to help buyers bring trashed properties up to code, according to Mary Townley, a director with the Michigan State Housing Development Authority.

She and other housing officials CNN spoke with said Michigan’s economy has some extremely frustrating woes. A report from the nonprofit think tank Brookings Institution said Detroit had the lowest performing economy out of 100 U.S. cities it analyzed — scoring the worst in unemployment and average wages, the highest foreclosure rates and the lowest market value homes.

The artists in BanglaTown are careful to say they are not looking to change a city. Their goal is simply to improve a neighborhood, one house at a time.

New neighbors, freelance photographer Corine Vermeulen-Smith and her husband Zeb Smith, a designer, are always checking out www.freecycle.com, where a stainless steel kitchen sink can be bought for $65.

The Smiths bought their 660-square-foot home for $549.99 from Cope and Reichert, who originally purchased the foreclosed home for $500. “We knew the property, we knew it had been sitting there empty for at least a year, and it had been trashed,” Vermeulen-Smith said. “But we wanted to own a home.”

All the copper in their “micro-home” had been ripped out, as well as every electrical outlet, Vermeulen-Smith said. Trash had to be hauled out in several loads.

“You have to get over that fear that the house had that history, that you’re going to be a victim of a crime or something,” she said. “Crime is everywhere. My husband and I have lived in the city for a long time; we know that people look out for each other year. We don’t have that kind of fear.”

Careful not to entice thieves again, the Smiths replaced the copper with plastic. They are considering taking the home completely off the grid with by installing a mini-wind turbine, but for now they are happy to put in the basics.

A bathtub from Habitat for Humanity cost them $100. And Zeb Smith, who works at the Museum of Contemporary Art Detroit, brings home wood the museum would otherwise toss when installations close.

“This is, for us, very exciting to believe that we could totally reinvent a space,” she said, “and prove that having a home isn’t about having money.”