Sunday, September 21, 2014

Age Demographics of the Scottish Secessionist Referendum - Old Folks and Fear Killed Liberty

An astounding 73% of Scots 65 years of age and older voted NO and 57% of the 55-64 age group voted NO on Scotland's secessionist referendum.

All other age group hit YES at 51% to 59%, with the lions share of YES votes (59%) coming from the 25-34 age group.

What does this tell us?  It tells us that old folks don't give a shit about their children and progeny, and are so tethered to Britain's welfare state, its empire and its tyranny that they gladly would sacrifice anything for the privilege of compliant subservience.

In many ways, the Scottish vote demographics reminds me of America's Republican Party that is dominated by old, white folks who control Republican primaries; they consistently vote for establishment statist candidates.  Like their Scottish counterparts, these folks tend to worship the welfare state, empire, wars, fascism, the military and the wholesale slaughter of civil liberties.  Turns out the Greatest Generation isn't so great after all.

Michael Krieger who blogs at offered some astute observations on the Scottish vote including why the vote can accurately be interpreted as HOPE.

Fear and Loathing in Scotland – Why the NO’s Won and Lessons Learned from the Vote
In the wake of the results, I have witnessed a great deal of bitterness and anger about the vote. While I can relate to such sentiments, I try to take a much more constructive and optimistic approach to the future. First and foremost, we should all be proud that the vote happened at all. So many people within the so-called “liberty movement” are discouragingly extreme pessimists. While proclaiming to fight for liberty, many of them seem to think we are powerless in the face of the powerful. To them, the independence referendum is proof that nothing can ever be changed. I completely disagree with this perspective.

Yes, I believe there are many important takeaways, several of which are instructive going forward.

First, there’s the fact that fear was a driving force behind the NO voters.

Recall that the older lady yesterday (I would guess she was in her 70s) stated that her friends were all voting NO because they were “afraid.”

The NO vote was entirely secured by overwhelming support from those aged above 55. In fact, the “better together” camp failed to win any of the age groups below 55 years of age. For the 65+ crowd it was simply a blowout. 73% of them voted NO. So in a nutshell, old people filled with fear blocked independence. Similarly, fearful old people bailed out the banks in the U.S. several years ago, putting a nail in the coffin of the middle class and the youth generally. See what I am getting at here?

What we now know for certain is that old people in positions of wealth and power, and the ability to frighten others of their generation, is proving to be the most significant obstacle to global change. For those of us who wish to see paradigm shifting changes, this is a very positive realization. For starters, the older generation will gradually fade away, and the promises made to them via pensions will not be on the table for younger generations. Pensions were a huge issue for the 65+ crowd when it came down to their voting decisions....

As a result of the horrific and self-interested choices of older generations, the youth will be left with a much more difficult and uncertain future. This is already happening, but it will worsen considerably following the next severe economic decline, likely to start in late 2015. 
Of course, any rational and informed individual who follows monetary and fiscal issues fully comprehends that western style central banking and its accompanying 'cradle to the grave' entitlement state are on the cusp of imploding and that there is no money to fund these programs (there never was).

In the US, the Social Security Trust Fund is empty and has always been empty simply because Congress immediately stole the money and spent it on wars and other slop while leaving a worthless pile of IOU (US Treasuries) that can never be repaid.  When SS was created, there were 41 workers supporting every beneficiary but that ratio has plunged to 2.9 workers supporting every beneficiary.

Western nations have piled on mountains of debt and taxes in various vote buying schemes over the decades.  The day of reckoning is starting to arrive.  Interest on debt service will continue to rise and eat up larger and larger percentages of government revenues and there will be far less entitlement money to dole out.  Printing 'magical money' out of thin air will only result in massive inflation and currency depredation.

The game is up.  What is left is hope and fear and right now fear is winning.

The young understand that there is nothing for them in a once prosperous western economic system that was totally destroyed by the ravages western elites, statism, corporatism and unfunded entitlement promises, and they seek a glimmer of hope for an otherwise desolate future.  The old cling to fear and a prayer that the bankrupt system will somehow last at least until they exit this earthly paradise.

It's an economic lose-lose for everybody as well as a blueprint for future generational warfare in a statist society where nobody will have much of a future, young or old.

Monday, September 8, 2014

The Whys Behind the Ukraine Crisis by Robert Parry

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Investigative journalist Robert Parry at Consortium News has an excellent article on the situation in Ukraine, America's motivations, huge natural gas reserves ripe for fracking, oligarchs, Joe Biden's son and John Kerry engineering war for Rosemont Capital (a private equity company founded by his son-in-law Christopher Heinz).  Hunter Biden and Christopher Heinz are business partners.

The Whys Behind the Ukraine Crisis

Exclusive: Given the very high stakes of a nuclear confrontation with Russia, some analysts wonder what’s the real motive for taking this extraordinary risk over Ukraine. Is it about natural gas, protection of the U.S. dollar’s dominance, or an outgrowth of neocon extremism, asks Robert Parry.

By Robert Parry

A senior U.S. diplomat told me recently that if Russia were to occupy all of Ukraine and even neighboring Belarus that there would be zero impact on U.S. national interests. The diplomat wasn’t advocating that, of course, but was noting the curious reality that Official Washington’s current war hysteria over Ukraine doesn’t connect to genuine security concerns.

So why has so much of the Washington Establishment – from prominent government officials to all the major media pundits – devoted so much time this past year to pounding their chests over the need to confront Russia regarding Ukraine? Who is benefiting from this eminently avoidable – yet extremely dangerous – crisis? What’s driving the madness?

Of course, Washington’s conventional wisdom is that America only wants “democracy” for the people of Ukraine and that Russian President Vladimir Putin provoked this confrontation as part of an imperialist design to reclaim Russian territory lost during the breakup of the Soviet Union in 1991. But that “group think” doesn’t withstand examination. [See’s “Who’s Telling the Big Lie on Ukraine?”]

The Ukraine crisis was provoked not by Putin but by a combination of the European Union’s reckless move to expand its influence eastward and the machinations of U.S. neoconservatives who were angered by Putin’s collaboration with President Barack Obama to tamp down confrontations in Syria and Iran, two neocon targets for “regime change.”

Plus, if “democracy promotion” were the real motive, there were obviously better ways to achieve it. Democratically elected President Viktor Yanukovych pledged on Feb. 21 – in an agreement guaranteed by three European nations – to surrender much of his power and hold early elections so he could be voted out of office if the people wanted.

However, on Feb. 22, the agreement was brushed aside as neo-Nazi militias stormed presidential buildings and forced Yanukovych and other officials to flee for their lives. Rather than stand behind the Feb. 21 arrangement, the U.S. State Department quickly endorsed the coup regime that emerged as “legitimate” and the mainstream U.S. press dutifully demonized Yanukovych by noting, for instance, that a house being built for him had a pricy sauna.

The key role of the neo-Nazis, who were given several ministries in recognition of their importance to the putsch, was studiously ignored or immediately forgotten by all the big U.S. news outlets. [See’s “Ukraine’s ‘Dr. Strangelove’ Reality.”]

So, it’s hard for any rational person to swallow the official line that the U.S. interest in the spiraling catastrophe of Ukraine, now including thousands of ethnic Russians killed by the coup regime’s brutal “anti-terrorist operation,” was either to stop Putin’s imperial designs or to bring “democracy” to the Ukrainians.

That skepticism – combined with the extraordinary danger of stoking a hot war on the border of nuclear-armed Russia – has caused many observers to search for more strategic explanations behind the crisis, such as the West’s desires to “frack” eastern Ukraine for shale gas or the American determination to protect the dollar as the world’s currency.

Thermo-Nuclear War Anyone?

The thinking is that when the potential cost of such an adventure, i.e. thermo-nuclear warfare that could end all life on the planet, is so high, the motivation must be commensurate. And there is logic behind that thinking although it’s hard to conceive what financial payoff is big enough to risk wiping out all humanity including the people on Wall Street.

But sometimes gambles are made with the assumption that lots of money can be pocketed before cooler heads intervene to prevent total devastation — or even the more immediate risk that the Ukraine crisis will pitch Europe into a triple-dip recession that could destabilize the fragile U.S. economy, too.

In the Ukraine case, the temptation has been to think that Moscow – hit with escalating economic sanctions – will back down even as the EU and U.S. energy interests seize control of eastern Ukraine’s energy reserves. The fracking could mean both a financial bonanza to investors and an end to Russia’s dominance of the natural gas supplies feeding central and eastern Europe. So the economic and geopolitical payoff could be substantial.

According to the U.S. Energy Information Administration, Ukraine has Europe’s third-largest shale gas reserves at 42 trillion cubic feet, an inviting target especially since other European nations, such as Britain, Poland, France and Bulgaria, have resisted fracking technology because of environmental concerns. An economically supine Ukraine would presumably be less able to say no. [See’s “Beneath the Ukraine Crisis: Shale Gas.”]

Further supporting the “natural gas motive” is the fact that it was Vice President Joe Biden who demanded that President Yanukovych pull back his police on Feb. 21, a move that opened the way for the neo-Nazi militias and the U.S.-backed coup. Then, just three months later, Ukraine’s largest private gas firm, Burisma Holdings, appointed Biden’s son, Hunter Biden, to its board of directors.

While that might strike some of you as a serious conflict of interest, even vocal advocates for ethics in government lost their voices amid Washington’s near-universal applause for the ouster of Yanukovych and warm affection for the coup regime in Kiev.

For instance, Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, dismissed the idea that Hunter Biden’s new job should raise eyebrows, telling Reuters: “It can’t be that because your dad is the vice president, you can’t do anything,”

Who Is Behind Burisma?

Soon, Burisma – a shadowy Cyprus-based company – was lining up well-connected lobbyists, some with ties to Secretary of State John Kerry, including Kerry’s former Senate chief of staff David Leiter, according to lobbying disclosures.

As Time magazine reported, “Leiter’s involvement in the firm rounds out a power-packed team of politically-connected Americans that also includes a second new board member, Devon Archer, a Democratic bundler and former adviser to John Kerry’s 2004 presidential campaign. Both Archer and Hunter Biden have worked as business partners with Kerry’s son-in-law, Christopher Heinz, the founding partner of Rosemont Capital, a private-equity company.”

According to investigative journalism in Ukraine, the ownership of Burisma has been traced to Privat Bank, which is controlled by the thuggish billionaire oligarch Ihor Kolomoysky, who was appointed by the coup regime to be governor of Dnipropetrovsk Oblast, a south-central province of Ukraine. Kolomoysky also has been associated with the financing of brutal paramilitary forces killing ethnic Russians in eastern Ukraine.

Also, regarding this energy motive, it shouldn’t be forgotten that on Dec. 13, 2013, when neocon Assistant Secretary of State for European Affairs Victoria Nuland reminded Ukrainian business leaders that the United States had invested $5 billion in their “European aspirations,” she was at a conference sponsored by Chevron. She even stood next to the company’s logo.

So, clearly energy resources and the billions of dollars that go with them should be factored in when trying to solve the mystery of why Official Washington has gone so berserk about a confrontation with Russia that boils down to whether ethnic Russians in eastern Ukraine should be allowed some measure of autonomy or be put firmly under the thumb of U.S.-friendly authorities in Kiev.

There’s also the issue of Russia’s interest in exploring with China and other emerging economies the possibility of escaping the financial hegemony of the U.S. dollar, a move that could seriously threaten American economic dominance. According to this line of thinking, the U.S. and its close allies need to bring Moscow to its geopolitical knees – where it was under the late Boris Yeltsin – to stop any experimentation with other currencies for global trade.

Again, the advocates for this theory have a point. Protecting the Mighty Dollar is of utmost importance to Wall Street. The financial cataclysm of a potential ouster of the U.S. dollar as the world’s benchmark currency might understandably prompt some powerful people to play a dangerous game of chicken with nuclear-armed Russia.

Of course, there’s also the budgetary interest of NATO and the U.S. “military-industrial complex” (which helps fund many of Washington’s “think tanks”) to hype every propaganda opportunity to scare the American people about the “Russian threat.”

And, it’s a truism that every major international confrontation has multiple drivers. Think back on the motives behind the U.S. invasion of Iraq in 2003. Among a variety of factors were Vice President Dick Cheney’s lust for oil, President George W. Bush’s psychological rivalry with his father, and the neocons’ interest in orchestrating “regime change” in countries considered hostile to Israel. [See’s “The Mysterious Why of the Iraq War.”]

There are also other reasons to disdain Putin, from his bare-chested horseback riding to his retrograde policies on gay rights. But he is no Stalin and surely no Hitler.

The Neocons’ ‘Samson Option’

So, while it’s reasonable to see multiple motives behind the brinksmanship with Russia over Ukraine, the sheer recklessness of the confrontation has, to me, the feel of an ideology or an “ism,” where people are ready to risk it all for some larger vision that is central to their being.

That is why I have long considered the Ukraine crisis to be an outgrowth of the neoconservative obsession with Israel’s interests in the Middle East.

Not only did key neocons – the likes of Assistant Secretary Nuland and Sen. John McCain – put themselves at the center of the coup plotting last winter but the neocons had an overriding motive: they wanted to destroy the behind-the-scenes collaboration between President Obama and President Putin who had worked together to avert a U.S. bombing campaign against the Syrian government a year ago and then advanced negotiations with Iran over limiting but not eliminating its nuclear program.

Those Obama-Putin diplomatic initiatives frustrated the desires of Israeli officials and the neocons to engineer “regime change” in those two countries. Israeli Prime Minister Benjamin Netanyahu even believed that bombing Iran’s nuclear plants was an “existential” necessity.

Further, there was the possibility that an expansion of the Obama-Putin cooperation could have supplanted Israel’s powerful position as a key arbiter of U.S. foreign policy in the Middle East. Thus, the Obama-Putin relationship had to be blown up – and the Ukraine crisis was the perfect explosive for the destruction. [See’s “Why Neocons Seek to Destabilize Russia.”]

Though I’m told that Obama now understands how the neocons and other hardliners outmaneuvered him over Ukraine, he has felt compelled to join in Official Washington’s endless Putin-bashing, causing a furious Putin to make clear that he cannot be counted on to assist Obama on tricky foreign policy predicaments like Syria and Iran.

As I wrote last April, “There is a ‘little-old-lady-who-swallowed-the-fly’ quality to neocon thinking. When one of their schemes goes bad, they simply move to a bigger, more dangerous scheme. If the Palestinians and Lebanon’s Hezbollah persist in annoying you and troubling Israel, you target their sponsors with ‘regime change’ – in Iraq, Syria and Iran. If your ‘regime change’ in Iraq goes badly, you escalate the subversion of Syria and the bankrupting of Iran. “Just when you think you’ve cornered President Barack Obama into a massive bombing campaign against Syria – with a possible follow-on war against Iran – Putin steps in to give Obama a peaceful path out, getting Syria to surrender its chemical weapons and Iran to agree to constraints on its nuclear program. So, this Obama-Putin collaboration has become your new threat. That means you take aim at Ukraine, knowing its sensitivity to Russia.

“You support an uprising against elected President Viktor Yanukovych, even though neo-Nazi militias are needed to accomplish the actual coup. You get the U.S. State Department to immediately recognize the coup regime although it disenfranchises many people of eastern and southern Ukraine, where Yanukovych had his political base.

“When Putin steps in to protect the interests of those ethnic Russian populations and supports the secession of Crimea (endorsed by 96 percent of voters in a hastily called referendum), your target shifts again. Though you’ve succeeded in your plan to drive a wedge between Obama and Putin, Putin’s resistance to your Ukraine plans makes him the next focus of ‘regime change.’

Your many friends in the mainstream U.S. news media begin to relentlessly demonize Putin with a propaganda barrage that would do a totalitarian state proud. The anti-Putin ‘group think’ is near total and any accusation – regardless of the absence of facts – is fine.”

Yet, by risking a potential nuclear confrontation with Russia — the equivalent of the old lady swallowing a horse – the neocons have moved beyond what can be described in a children’s ditty. It has become more like a global version of Israel’s “Samson Option,” the readiness to use nuclear weapons in a self-destructive commitment to eliminate your enemies whatever the cost to yourself.

But what is particularly shocking in this case is how virtually everyone in U.S. officialdom – and across the mainstream media spectrum – has bought into this madness.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s.

Sunday, August 10, 2014

Social Security from 2% to 15.3% - Robbing the Poor and Middle Class since 1937

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There is no Social Security Trust Fund and every tax dollar collected was immediately spent on wars and other slop.  The SS Trust Fund was left with a worthless pile of IOU's totaling nearly $3 trillion, courtesy of thieving Congress Critters.

For decades, the Social System was nothing but a cash cow for the government because receipts far exceeded disbursements but that changed a few years ago.  The cash cow croaked and SS is running a deficit - meaning disbursements exceed receipts.  This requires the federal government to up the rate of interest it pays on the debt (treasuries) or dip into the general fund to finance SS payment obligations.

If SS was running a consistent surplus for many decades, then why did the government keep raising the tax?  It's a valid question, especially given that nearly $3 trillion vanished into the spending hole. The answer to the question is that both Republicans and Democrats plundered the SS Trust fund to finance wars.  The largest increase in the SS tax included LBJ and Reagan years; not only was the SS tax increased, the Medicare tax introduced in 1966 by LBJ at .7% but was quickly raised to 2.9%. Medicare is also bankrupt, even more bankrupt than SS because Medicare is basically an unfunded entitlement while SS is a plundered and looted entitlement that still generates significant cash.

It's interesting to note how the 2% SS tax grew from 2% to 15.3% and what presidents were responsible for the largest increases in SS-Medicare taxes. LBJ and Reagan were both ferociously loyal to the military industrial complex and both used SS-Medicare taxes to fun the MIC.

[hide]Historical Social Security Tax Rates
Maximum Salary FICA and/or SECA taxes paid on[9]

Tax rate
Tax Rate
Tax rate
Tax Rate
Tax rate is the sum of the OASDI and Medicare rate for employers and workers.
In 2011 and 2012, the OASDI tax rate on workers was set temporarily to 4.2%
while the employers OASDI rate remained at 6.2% giving 10.4% total rate.
Medicare taxes of 2.9% now (2013) have no taxable income ceiling.
Sources: Social Security Administration, [40] and [41], accessed 7 Nov 2013
Source of chart:

Social Security and Medicare taxes are like property taxes - you have the tax rates plus the base or assessment on which they were assessed. 

Medicare did not exist until LBJ created it in 1966 with a tax rate of .6 that was quickly raised to 1.2% by LBJ.  This was on top of LBJ's 16% increase in the SS tax from 7.25% to 8.4%.  Even worse, LBJ raised the base a whopping 63% from $4,800 to $7,800.   It's how LBJ funded the Vietnam War.

But the prize for the biggest SS tax hikes in history go to Reagan who raised the SS tax from 10.16% to 12.12%, in addition to raising the Medicare tax from 2.1% to 2.9%.  But Reagan also raised the base from $25,700 to $48,000, nearly doubling the taxable base by a whopping 86%.

These taxes fell squarely on the poor and middle class who obviously pay the brunt of SS and Medicare taxes. 

Reagan's SS-Medicare tax hikes combined with the increase in the wage base on which these taxes were paid constituted the biggest tax hike on the poor and middle class in US history, AFTER the Federal Reserves' wholesale robbery of the purchasing power of the dollar.

After Nixon de-tethered the dollar from gold in 1971, the purchasing power of the dollar rapidly declined and was permanently decimated.  During the Reagan years, the poor and middle class were hit with monster SS and Medicare tax on wage dollars that were buying less and less.  Still, every president and congress since SS was enacted has plundered the SS Trust Fund and left a worthless pile of IOU's.  Reagan, with bipartisan support, managed to royally screw the poor and middle class on a level unheard of in US history.

To put SS tax rates into perspective especially as it pertains to both the rate and the ever increasing  base, the best example is Teresa Heinz Kerry who disclosed her tax returns when hubby John Kerry ran for president.  Teresa Heinz Kerry, who is worth $200 million according to, paid a paltry federal tax rate of 12% on unearned income (dividends and interest) in excess of $5 million, here and here, in 2003.

When the richest folks in America pays much lower tax rates than the poor and middle class, something is radically wrong. 

In America, the minimum tax rate for the poor and middle class starts with a floor of 15.3%, a rate that doesn't include federal taxes, state taxes, sales taxes and various other taxes designed to gouge ordinary working stiffs and the poor.

And if the ordinary folks think that the government is saving their money for them and their future retirement, they are brain dead and delusional.  Yeah, it's an absolute tragedy that damn few Americans even know what the government did with their so-called retirement savings.  Spending SS and Medicare taxes on wars and other slop is just another pathetic example of the thieving powers of government whose only goal is to plunder the people. And plundering the people is the only thing that government is good at.

Wednesday, July 23, 2014

The Incredible Stupidity of the Western Statist - Let's CRUSH Russia!

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Western statists in government and the media view the entire world as one big chess board wherein they only have to make a few brilliant moves to economically crush annihilate their perceived enemies to control the planet and its resources.

Matthew Yglesias at exhibits such a mentality and arrogantly believes his own delusion that the US and Europe can so economically impair Russia that Russia can be blasted back to the Stone Age. Aside from the genocidal insanity that deliberately hurting and harming folks is indeed a desirable foreign policy goal, the stone cold reality of actual facts dismisses such dangerously juvenile aspirations, despite the best efforts of Yglesias to believe his own warped rant and he isn't focused on merely punishing Russia (who did nothing to earn punishment) but he's thoroughly focused on CRUSHING Russia.

One fact that explains how Europe could crush Russia's economy by Matt Yglesias 

Yglesias is convinced that if Europe sanctions Russia that Russia will surely end up burning in the sanctions toaster. He validates his position by asserting that the trade relationship between Europe and Russia is far more valuable to Russia and even implies that Europe doesn't even need to trade with Russia. Yglesias then proceeds to defend EU statism as if it's a force so powerful that no nation state can escape it dictates.

The fly in the ointment is that while Russia is a nation-state, the European Union is a confederation of separate countries. The EU has incredible clout when it speaks with one voice....

The European economy presently sucks, especially southern Europe, so cutting off trade doesn't just hurt Russia, it also hurts Europe because trade is always a 2 way streak. Just how much is EU-Russia trade worth? It's worth a whopping $412 billion according to a CNN infographic, yet Yglesias dismisses $400 billion in trade as if it's really nothing, a most bizarre assumption considering that Europe is Russia's largest trading partner and Russia is Europe's 3rd largest trading partner.

The price of 'crushing' Russia economically would be quite steep for Europe but there is much more to the Russia-EU economic alliance and mutual dependency.  Europe is also dependent upon Russia for gas.

Map: Europe's thirst for Russian gas

30% of the EU's gas comes from Russia - in Germany it's 40% and Germany is the Europe's powerhouse economy.

Europe gets very cold in the winter, especially its frigid northern nations like Germany.  Does anybody really think that Europeans and the Germans are about to risk freezing in the winter and risk losing over $400 billion a year in trade to appease the US Empire?   Well, some believe that it's no problem and that the US can supply Europe with all the gas it needs. (formerly reports, here:

Europe's reliance on Russia is temporary. By 2020, the U.S. could become a major energy exporter, supplying Europe with about half of the gas that Russia supplies now, according to the Obama administration. If the EU and the U.S. can agree upon an "energy policy," then Europe could rely on the U.S. as one of their main energy suppliers. That endangers Russia's grip over the EU, but it also means that Europe would only have to manage the next few years under Russian dominance.
The bold assumption that the US can supply Europe with all its gas needs begs the question: Who controls the largest natural gas reserves on the planet and who has the infrastructure to deliver it?  It's not the US.

Top Natural Gas Reserves by Country 2014

Russia has 1,688.00 trillion cubic feet
Iran has 1,193.00 trillion cubic feet
Qatar has 885.29 trillion cubic feet
Turkmenistan has 265.00 trillion cubic feet
US has 308.44 trillion cubic feet


Gas as a resource is worthless without a delivery system and pipelines are indeed the main delivery source. While Russia and Europe are linked by a complex network of pipelines, the US can't deliver gas to Europe because there is no infrastructure in place to accomplish such deliveries, forgetting momentarily that Russia has more than 5 times the natural gas reserves of the US.

Any efforts by the US to deliver gas to Europe will be expensive, require a huge infrastructure investment (probably one that isn't even close to being economically viable) and will also drive up energy costs across Europe, all of which will negatively impact Europe's already ailing economy.

The bottom line is that nobody can meet Europe's natural gas needs more efficiently and cost effectively than Russia, despite the grand delusions of US media foreign policy wonks preaching the hallucinations of USG policy wonks.

If you were a citizen of Europe, would you risk freezing in the winter and suffering more economic hardship just to appease the US Empire?

While the USG and its media hacks may be suffering from an acute case of inhaling way too many summer vapors, at the end of the day Europe will tell the US to take a hike with a polite "Thank you very much but we rather like our $400 billion plus trade with Russia, we very much like Russian gas and we aren't about to commit economic suicide or freeze or genuflect before DC, and by the way we still remember the NSA, YES, America can go straight to hell and we are totally fed up with the damn Yanks."

Tuesday, July 22, 2014

Obamacare Taxes, Subsidies and Mandates: Why Obamacare is getting legally interesting.

Obamacare is probably headed back to SCOTUS.  Today, 2 different federal courts made conflicting rulings on the issue of subsidies. Politico reports:
First, the U.S. Court of Appeals for the D.C. Circuit in a 2-1 decision said the insurance subsidies can’t be awarded through the 36 federal-run exchanges, that they can only flow through the state-run markets. Hours later, the Fourth Circuit court ruled 3-0 that people can draw on the subsidies in both kinds of exchanges. The divergent opinions set up a clash that could eventually end up at the Supreme Court — and reverberate through the fall campaign.

The ruling against the subsidies is the second Obamacare strike against the White House in less than a month, after it lost in the Supreme Court’s Hobby Lobby ruling on birth control coverage. But unlike the contraception rule, which is a small piece of the health law, the subsidies go to the heart of coverage expansion in the Affordable Care Act.....

Unlike other major Obamacare challenges, this controversy hinges on just a few words in a lengthy law. The D.C. Circuit concluded — “frankly, with reluctance,” as one judge wrote — that the statute narrowly but explicitly authorizes only state-run exchange subsidies, no matter what Congress may have intended. The Richmond court saw ambiguity in the text, but said the IRS had the power to interpret the statute broadly as it set the rules.

Read the rest here.
Obamacare is an expensive and complicated maze of subsidies, taxes, mandates and Medicaid expansion but the subsidies are indeed the mother's milk of Obamacare because without the subsidies health insurance costs will soar for tens of millions of Americans who depend on them.  Right now, the only endangered subsidies are the subsidies for health insurance policies bought on federal exchanges.  Subsidies for state run Obamacare exchanges remain in tact. 

Thus far, the only major Obamacare SCOTUS case, besides the Hobby Lobby case, was the 6/13 SCOTUS decision upholding Obamacare.  While conservatives went ballistic and would have preferred that SCOTUS strike down the entire legislation as unconstitutional, that SCOTUS decision was embraced as constitutional by many Libertarian jurists who claimed that Justice Roberts got it constitutionally right. 
Yes, there was conservative mass hysteria over the SCOTUS 6/13 Obamacare decision but does Chief Justice Roberts deserve the thrashing he got from conservatives? While conservatives were moaning the decision with fear and loathing, liberals were probably uncorking the Champagne. As sane observers took another look at the decision from the jurisprudence perspective, it's believed by some who embrace conservative-Libertarian politics that the Roberts decision was indeed the right decision and for the reasons outlined in an interesting article from the Testosterone Pit.
Conservatives should be ecstatic that Chief Justice of the Supreme Court John Roberts sided with the four liberal Justices in ruling the Affordable Care Act (Obamacare) is constitutional as a tax, while siding with the four conservative Justices that the law is un-constitutional under the Commerce Clause. Roberts just humiliated President Obama, gutted the social welfare and regulatory state, and appears to have set-up the entire Obamacare law to be constitutionally invalidated.

Chief Justice Roberts Gutted Congressional Power And May Still Have Invalidated Obamacare

Those are very powerful words:  "Roberts just humiliated President Obama, gutted the social welfare and regulatory state, and appears to have set-up the entire Obamacare law to be constitutionally invalidated."

The Obamacare decision is not a simple cut and dry decision.  It's got several critically important moving parts.  Justice Roberts did uphold the power of the Federal government to tax even though he also opposed the mandate.   Yes, the federal government does have the constitutional authority to tax.  More importantly, he did not uphold Obamacare under the Commerce ClauseAnother very important aspect of the decision involved the constitutional authority of the federal government to force the states to tax its citizens to fund increased Medicaid enrollments.  While the federal government does have the power to tax, Justice Roberts indicated that the federal governments' powers of taxation do not extend to the states.  In other words, the federal government does not have the constitutional authority to force the state to tax its citizens to fund Obamacare.

Medicaid expansion is the heart and soul of Obamacare because it not only forces folks into Medicaid, it forces taxpayers at the state level to fund it.

I wondered how long it would take liberals to recover from the fog of their celebratory hangovers and realize what really happened.  Not long!
Of all the ways President Obama’s health care law is poised to alter the U.S. medical system, the extension of new health insurance coverage to some 32 million people has been billed as its most important.....
But thanks to the Supreme Court's decision on the Affordable Care Act (ACA) last week, which upheld the law's basic architecture and the controversial individual mandate, fixing the problem of the uninsured could be a lot more difficult that Democrats were hoping. In a move that surprised court watchers and progressive advocates, the Supreme Court, by a 7-2 vote, ruled that states don’t have to participate in a huge expansion of Medicaid, the state-federal insurance program for the poor, called for in the ACA. (The ACA was written so that states that decided not to expand their Medicaid programs would lose their existing Medicaid funding, but the court said funding already in place should not be affected by states' decisions on the ACA changes.)
Whether states want to participate in the Medicaid expansion isn't just a matter of dollars. Republicans governors across the country, who have been vocal critics of the Affordable Care Act since it passed, are now signaling they may not opt into the Medicaid expansion. (Similarly, many of them turned down federal stimulus dollars.) Gov. Rick Scott of Florida has said he won't support a Medicaid expansion, although the state legislature might feel otherwise. New Jersey Gov. Chris Christie said after last week's ruling that he was glad the Medicaid expansion was ruled optional, but didn't say whether his state would participate. Other Republican governors, like Nikki Haley of South Caroline and Bobby Jindal of Louisiana, have said they will not make moves to implement the ACA in their states, although it's not yet clear if this means they intend to reject billions in Medicaid funding.
Medicaid Ruling Endangers Universal Coverage

While liberals perceived Obamacare as a backdoor to universal healthcare coverage, Chief Justice Roberts stuck a stake straight through the heart of that dream and yes Medicaid was the superhighway for forced universal government controlled healthcare. The Roberts roadblock has infuriated the left.

In fact, the issue of Medicaid expansion has so upset the Obama Administration that the the website of the White House ( is moaning that 24 states have refused to expand Medicaid.

24 States Are Refusing to Expand Medicaid.

Here's What That Means for Their Residents: Nearly half of states are so locked into the politics of Obamacare that they're willing to leave nearly 5.7 million of their own people uninsured. Take a look at our map -- and make sure you share it.

Clearly, the Roberts ruling opened up whole new cans of worms in the continuing saga of America's healthcare nightmare.  How it will ultimately shakeout is an issue of pure conjecture.  Moreover, the courts have not seen the last of Obamacare.  The only issue that was settled in the 6/13 SCOTUS decision was that the federal government has the power to tax and we already knew that.  The fact that the federal government does not have the power to force the state to tax folks to fund Obamacare is incredible relevant.  What is even more relevant is that while Roberts did uphold federal powers of taxation, he did stun America when he refused to uphold Obamacare under the Commerce Clause.  Exactly how that will play out in future decisions remains to be seen.

The far dicier issues of Obamacare are nowhere near resolved and now the subsidy issue is on the judicial table.

For more information on the absurdity known as the US healthcare system, see:

The Absurdity of US Healthcare and OMG, the Hysteria over SCOTUS upholding the Obamacare Tax! Under What Circumstances Would This Government Hating Libertarian Reluctantly Support a Single Payer Healthcare System?

America Already Has Socialized Medicine - A Trillion for Medicare & Medicaid and Another Trillion for Obamacare Subsidies 

The Bad Boss Tax and Yes Corporations Do Lobby for Entitlements and Yes it's a Form of Corporate Welfare

Image source:,_Philip_Leung,_Chinese,_Marcell_Webb,_Negro,_and_an_unidentified_White_worker_adjust..._-_NARA_-_196335.tif

The liberal leaning  Nation of Change had an interesting article titled The Bad Boss Tax.  Effectively it smacked corporations who pay low wages and then shifts the social cost to the taxpayers who are forced to pay for Medicaid, food stamps and other entitlements for the working poor.  The article even advocates for taxing these low wage paying corporations to reimburse the public for having to pony up with tax dollars to subsidize the working poor.

While I don't endorse increasing corporate taxation and would simply prefer that the corporate tax be totally abolished, the rational response is: what would happen if entitlements for the workers were also abolished?  What if corporations were forced to compete in the labor market as they once did before they figured out that they could bribe politicians to pass entitlement legislation for workers and shift the social costs of labor to the taxpayers?

Anyway, The Bad Boss Tax article does indeed raise some very interesting and valid points.

Vampire businesses

Just how much money are low-wage businesses draining from local, state and federal coffers? A study released in April by Americans for Tax Fairness, a coalition of more than 400 organizations that advocate progressive tax reform, estimated that Wal-Mart alone costs taxpayers $6.2 billion annually in public assistance. That report draws from a 2013 study by the Democratic staff of the US House Committee on Education and the Workforce, which estimated that Wal-Mart cost taxpayers, on average, between $3,015 and $5,815 per worker.

Americans for Tax Fairness used the House Democrats’ study to extrapolate Wal-Mart’s public-assistance burden on each state. In Minnesota, for example, where Wal-Mart has 20,997 employees, the public burden totaled $92.7 million per year. That’s $92.7 million Wal-Mart isn’t paying in wages or benefits, but that instead is being borne by taxpayers — taxpayers who, of course, include Wal-Mart workers.

The study also notes that Wal-Mart profits from food stamps on the consumer end. According to the company’s own estimates, Wal-Mart captures 18 percent of the SNAP market, some $13.5 billion annually...

Wal-Mart isn’t alone; there are thousands of other low-wage employers...

Most of those minimum-wage workers are in the service industry, particularly in food service. And not coincidentally, taxpayers are also shelling out to prop up food industry wages. Studies last year from the National Employment Law Project and the University of California, Berkeley, showed that fast-food companies cost taxpayers an additional $7 billion per year in public assistance, with McDonald’s accounting for $1.2 billion. The Berkeley study notes that fast-food companies pay cashiers and other frontline workers a median wage of $8.69 an hour, and more than half of those workers rely on one or more public programs, compared to 25 percent of the workforce as a whole.

It's a damn poor reflection on our economic system that folks who work full time need public assistance.  Libertarians and free market proponents may scream about increasing the minimum wage as an assault on the poor and businesses but until they can convince Americans that free labor markets can and do deliver a level of non-entitlement dependent workers then all the sympathy will indeed be with statist solutions to mandate wages.

A long time ago I was a minimum wage worker and survived quite nicely - had enough money to fund a modest lifestyle complete with an apartment, a car, food on the table and even enough money left over for booze, clothes and entertainment.  But the dollar bought a whole lot more when I earned the minimum wage.

Saturday, June 14, 2014

Iraqi Oil, US foreign policy disasters and the Iraq Civil War

The lion's share of Iraq's oil is in Shiite controlled central and southern Iraq and Kurd controlled northern Iraq.  Whoever controls Iraqi oil controls the wealth of the nation. When the US deposed and executed Sunni Saddam Hussein, and imposed a democracy, power shifted from Sunni minority control of Iraq and its oil to the 60-70% Shiite majority who won elections.  Iraq's natural ally is Shiite Iran with a 90% plus Shiite population.  In the middle east control of oil is everything.

With Iraq busting into a 3 way Shiite-Sunni-Kurd civil war, some interesting things are happening besides the obvious - Iraq is Barack Obama's problem from hell.

The Sunni uprising is driven by radical and murderous Sunni Salafist Wahhabists (Al Qaeda and other Sunni Islamist groups) with the backing of Wahhabist Saudi Arabia, a longtime US alley despite being the global kingpin of Islamist terror.  The US is faced an epic nightmare - support the same Al Qaeda and radical Sunni Islamists that birthed the idiotic US War on Terror or ally with Iran, a nation the US has vowed to destroy one way or another.

The geopolitical consequences of the situation in Iraq are hugely significant.  Oil prices are already soaring, hundreds of thousands of Iraqis have become displaced and thousands of Iraqis have been beheaded by Sunni murderers.

There is no way that Iran won't step in to defend the Iraqi Shiites and their oil, much of which is very close to the Iranian border (see the above map).

To further complicate the already volatile situation, the Kurds have not only seized a major oil city in the north, they are loading the oil into tankers and fully intend to sell it in the open market, thus bypassing Baghdad. follows oil and geopolitics and is an incredibly knowledgeable and astute observer.

What Do Ukrainian Energy and Kurdish Oil Have in Common?
As the second tanker of Iraqi Kurdish oil leaves the Turkish port of Ceyhan bound for sale on international markets, Baghdad is furious and Washington is fearful of the implications for Iraq.....

Washington has dual concerns right now: Russia’s aggressive energy policy in Europe most recently actuated with the annexation of Ukraine’s Crimean peninsula; and Iran’s growing influence in oil-rich central and southern Iraq, which Iraqi Kurdish oil could push over the edge.

This is what’s got Washington in a tither: The Kurdistan region of Iraq is moving towards independence, not so subtly, by exporting oil directly to Turkey, bypassing the Iraqi central authorities in Baghdad. If this leads to a conflict inside Iraq, it could push the Shi’ite-dominated central and southern Iraq—where the real oil is—closer to Iran, which is already wielding a great deal of influence. Losing Iraq to Iran definitively would be a major blow to Washington’s existing Iran policy, and to its hold on Iraqi oil.

Adding to fears is the spillover from Syria, which culminated on 10 June in Sunni insurgents seizing control of Mosul, Iraq’s second-largest city which also sits in the “disputed territories” dividing Iraq from Iraqi Kurdistan.

In the meantime, some 2 million barrels of Kurdish crude are now seaborne.
Meanwhile, Al Jazeera, a Sunni controlled Arab media giant, is attempting to rationalize the situation in Iraq, especially as it pertains to US foreign policy and Obama.  That the entire middle east region is profoundly jittery is an understatement as the Sunni world is demanding that Obama DO SOMETHING while the Shiite Iraqi government in Baghdad is asking Obama to intervene on behalf of the Shiites to stop the Sunni slaughter.  Baghdad of course is not happy with the Kurds but given the extreme violence of the ISIL Sunni insurgency (the ISIL is an radical Sunni Salafist Wahabbist group like Al Qaeda), the Kurds are the least of Baghdad's problems.

Kurds take oil-rich Kirkuk amid advance of ISIL insurgency in Iraq Al Jazeera
Iraqi Kurds seized control of the northern oil city of Kirkuk on Thursday as Sunni insurgents threatened to advance on Baghdad — two developments that further indicate that the central government has now lost large swathsof a country spiraling deeper into chaos and internecine violence.

Kurds have long dreamed of taking Kirkuk, a city with huge oil reserves just outside their autonomous region, which they regard as their historical capital. The swift move by their highly organized security forces demonstrates how this week's sudden advance by the armed group the Islamic State of Iraq and the Levant (ISIL) has redrawn Iraq's map.

An Obama administration official said the government of Iraqi Prime Minister Nouri al-Maliki last month secretly asked Washington to consider carrying out strikes against ISIL positions, but the White House rebuffed the request, The New York Times reported.

"I don’t rule out anything because we do have a stake in making sure that these jihadists are not getting a permanent foothold in either Iraq or Syria," Obama said Thursday at the White House when asked whether he was contemplating air strikes. Officials later stressed that ground troops would not be sent in.

Obama said he was looking at "all options" to help Iraq's leaders. "In our consultations with the Iraqis, there will be some short-term immediate things that need to be done militarily," he said.
Despite the fact that the ISIL appears to have achieved control of significant real estate, including the Kurdish city of Mosel in northern Iraq, the ISIL has yet to takeover any prized oil fields. However, Al Jazeera is reporting that the ISIL, which it considers an Al Qaeda splinter group, absolutely plans to seize the oil city of Kirkuk, here.

And that would be Obama's worst nightmare.  The US foreign policy choice is to ally with the ISIL Sunni Salafist Al Qaeda splinter group or ally with Iran to squash the Sunni insurgency.  While Saddam Hussein gassed the Kurds and Turkey (borders northern Iraq) has a long history of brutalizing its Kurds, Iran also has significant Kurdish populations and has managed to keep the peace with the Kurds. The ISIL is probably targeting Kurkuk to test Iran who really doesn't want to be involved in a war with the Kurds.  The last thing Iran wants is to be goaded into a war that would give the US an excuse to attack Iran.

The situation is dire and there are no easy or painless solutions. The US invasion and occupation of Iraq unleashed a 3 way civil war, destabilized a once very stable nation, destroyed the Iraq economy, intensified the Sunni-Shiite rift and killed hundreds of thousand (millions according to some estimates) of Iraqis.  For what?  Ask the families of the 4,489 US soldiers who died in Iraq and the 32,0000 who were wounded, here.

Meanwhile, Obama is saying that he won't send troops back to Iraq but he is considering other options including air support (bombings).  But who in the hell is Obama going to bomb? The Kurds, the Sunnis, the Shiites?

In Syria, the ISIL continues to murder, butcher and terrorize Syrians, here. The US is so determined to get rid of Assad, who did nothing to the US, that it is supporting, arming and funding Sunni Salafist Wahhabist terror groups in Syria.  In fact, the entire Benghazi fiasco was nothing but a CIA operation that funneled arms to Syrian terror groups.

My Two Cents on Benghazi

Lies, Lies and More Lies: Benghazi is pure political theater as well as a cover-up.

Stone Cold Reality Check:  The US is governed by an elected crime syndicate consisting of banksters and the military industrial complex who OWN congress and the executive branch, and they constitute the biggest terrorist threat on the planet.

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