Our # 1 story relates how the OWS was targeting Black Friday. Apparently it didn’t work out for them. #2 tells about how the bad economy is looking to hit China. #3 wonders why we are still in receivership with Fannie and Freddie. #4 takes a look at the Solyndra scandal and tells you what is important and what isn’t. #5 lays out who and what the movement actually is at the Occupy Movement. It’s a long article but well worth your time to read it.
1. OWS Targets Black Friday
OCCUPY WALL STREET-INSPIRED PROTESTERS ARE EYEING A NEW TARGET -- TARGET. AND DOZENS OF OTHER COMPANIES.
A campaign under the name "Occupy Black Friday" is trying to enlist supporters to boycott just about every major retailer, and quite a few mid-sized ones, the day after Thanksgiving. The protesters are casting a wide net, urging people to demonstrate against the top retail stores -- a list that includes everything from Wal-Mart to Target to Dick's Sporting Goods to Dollar Tree.
"THE IDEA IS SIMPLE, HIT THE CORPORATIONS THAT CORRUPT AND CONTROL AMERICAN POLITICS WHERE IT HURTS, THEIR PROFITS," the group's Facebook page reads, describing Black Friday as the "one day where the mega-corporations blatantly dictate our actions."
But retailers, who are monitoring the mini-movement, warn that a blanket boycott could end up hurting local communities.
"Retailers, regardless of their size, are an important part of the community, and they employ friends and neighbors of that community across the country," said Joseph LaRocca, a senior adviser to the National Retail Federation specializing in loss prevention….
Stupidity is on full display here. The Occupy movement is now like a small child demanding attention and throwing tantrum after tantrum trying to get it.
2.Global slowdown triggers China factory strikes
Thousands of workers have downed tools from the factory hotspot in the east of Guangdong province, to sports and electronics plants to the south and west.
The social tension comes as MANUFACTURING ORDERS ARE SLOWING IN CHINA in the wake of slowing external demand from trade partners hit by the eurozone debt crisis.
"WE ARE WILLING TO WORK BUT YOU MUST ALSO PAY US ENOUGH TO SURVIVE, even during the financial crisis we didn't see pressure like this," factory workers told Reuters.
Although factory strikes are relatively frequent in China, the current raft of action comes amid growing tension about the deteriorating global economic backdrop and tighter domestic credit conditions.
The Federation of Hong Kong Industries RECENTLY WARNED THAT UP TO A THIRD OF SOME 50,000 HONG KONG-OWNED FACTORIES IN GUANGDONG AND ELSEWHERE IN CHINA COULD DOWNSIZE OR CLOSE BY THE END OF THE YEAR, potentially putting at risk hundreds of thousands of jobs.
The real problem here for China is that less than 9% growth rate will threaten the regime. All is not well in the middle kingdom.
3. Moving beyond Freddie and Fannie
The term “permanent conservatorship” is an oxymoron. By its very construct, the conservatorship of a corporation is meant to be temporary. And yet THREE YEARS AFTER THE BAILOUT OF FANNIE MAE AND FREDDIE MAC, WE ARE NO CLOSER TO TRANSITIONING THEM OFF GOVERNMENT LIFE SUPPORT THAN WE WERE THE DAY IN 2008 WHEN THEY CAME UNDER DIRECT GOVERNMENT CONTROL.
This is unacceptable.
A delay in dealing with Fannie and Freddie was partly inevitable, as policymakers worried that any misstep could negatively affect a fragile housing market. But WE HAVE COME TO A POINT WHERE CONTINUED INACTION IMPEDES THE ABILITY OF THE PRIVATE MARKET TO TAKE OVER A FUNCTION THE GOVERNMENT HAS COMPLETELY MISMANAGED. We must move beyond Fannie and Freddie, immediately.
This task will not be politically easy. Many of the institutions that have come to rely on the corporate welfare Fannie and Freddie provide have argued that we cannot have a housing finance system without the support of government-sponsored enterprises (GSEs). This argument not only ignores the risks taxpayers are forced to bear but also fundamentally misrepresents the structure of the housing finance system.
Broadly speaking, THE RISKS INHERENT IN MORTGAGE LENDING CAN BE PLACED IN TWO CATEGORIES, INTEREST RATE RISK AND CREDIT RISK. Interest rate risk stems from the fact that homeowners can prepay their mortgages at any time, and they generally choose to do so when interest rates are low. This leaves the lender with the tricky job of managing an asset-liability mismatch. But THE PRIVATE SECTOR HAS PROVED CAPABLE OF THE TASK. IN FACT, THE DEVELOPMENT OF THE RISK MANAGEMENT INFRASTRUCTURE TO DEAL WITH THIS CHALLENGE REMAINS A GREAT ACCOMPLISHMENT OF MODERN FINANCE.
The second risk in mortgage lending is credit risk, or the risk that a borrower will default on his or her mortgage. TODAY, MORTGAGE CREDIT RISK IS ALMOST COMPLETELY PRICED AND MANAGED BY THE GOVERNMENT. HAVING “CROWDED OUT” PRIVATE INVESTORS BY CHARGING AN INSURANCE PREMIUM THAT WAS TOO CHEAP, THE GSES ARE SADDLED WITH $5 TRILLION WORTH OF BAD CREDIT. This is a tragedy of our own making. During the boom years, the GSEs’ affordable housing goals were coupled with a Congress and an administration that saw only the bright side of rapidly increasing homeownership rates. That meant that as housing prices began to spike, it was impossible to make credit slightly more expensive…..
As you can see where the government has taken over, the results have been catastrophic. $5 trillion worth of bad credit is why nothing is going forward on Fannie and Freddie.
4.The Solyndra Scandal
To understand the importance of the Solyndra saga, it’s important to understand what’s not important. Here’s a breakdown of what doesn’t matter—and what does…..
….WHAT DOES MATTER
THE STIMULUS AND THE LOAN-GUARANTEE PROGRAM. THE PRESSURE THE WHITE HOUSE WAS PUTTING ON THE ENERGY DEPARTMENT TO ENSURE SOLYNDRA, ITS FIRST RECIPIENT OF A STIMULUS-BACKED LOAN GUARANTEE, WOULD QUICKLY SUCCEED WAS INTENSE AND UNRELENTING. Obama, Vice President Joe Biden, and Chu made public statements about how Solyndra was the prototype for both stimulus jobs and clean-energy innovation in 2010 when the company’s finances were going south. The stimulus-backed program that awarded Solyndra its loan was given just two years to push out billions of dollars’ worth of renewable-energy loan guarantees. That truncated time frame created a series of implementation problems within the program that an internal West Wing memo sent to Obama in 2010 and several independent government reports highlighted. In response to Solyndra’s demise, the White House is reviewing the program and is expected to issue a report in late December.
Global market conditions in 2010 and 2011. The global price of silicon solar panels dropped by more than 70 percent in two and a half years. “That was totally unexpected, not only by us,” Chu told Congress last week. The Energy Department was increasingly aware of these market conditions and Solyndra’s worsening finances throughout 2010 when OBAMA VISITED THE COMPANY’S CALIFORNIA HEADQUARTERS IN MARCH OF THAT YEAR AND TOUTED IT AS THE “TRUE ENGINE OF ECONOMIC GROWTH.” AN INDEPENDENT AUDIT REPORT ISSUED SHORTLY BEFORE OBAMA’S VISIT RAISED RED FLAGS ABOUT SOLYNDRA’S FINANCES, and one clean-energy investor who supports Obama even urged the president not to visit Solyndra because of these concerns. Chu seemed to indicate last week he didn’t know at the time about the audit report: “I’m aware of it now.”
The Energy Department’s decision to restructure the loan. Chu told lawmakers that his department decided to restructure Solyndra’s loan in early 2011 despite its grim finances because the factory the company received the loan for wasn’t finished, and pulling the plug then meant certain bankruptcy and a useless, half-built factory. E-MAILS SHOW THAT EVEN ARGONAUT’S INVESTORS WERE READY TO THROW IN THE TOWEL, AND DOE HAD TO CONVINCE ARGONAUT TO INVEST MORE. CHU SAID THE ONLY WORKABLE DEAL REQUIRED NEW PRIVATE INVESTMENT, AND ARGONAUT’S INVESTORS WERE WILLING TO GO ALONG WITH RESTRUCTURING ONLY IF THEIR NEW INVESTMENT WAS FIRST IN LINE IF SOLYNDRA DEFAULTED. Many legal experts say subordinating the government’s interest violates the Energy Policy Act of 2005. Chu’s testimony last week didn’t answer many questions about DOE’s legal reasoning for doing this.
The FBI investigation. The FBI raided Solyndra’s California headquarters in early September a week after it announced its bankruptcy. The nature of this investigation is not yet public, and it’s not known when it will be—but REPORTS HAVE SAID IT COULD FOCUS ON ACCOUNTING FRAUD AND MISLEADING FEDERAL OFFICIALS ABOUT THE FINANCES OF THE COMPANY. The Energy Department’s inspector general is a partner in that investigation.
This is a sticky situation and not one you want to have with an election coming up. I can see the attack ads now, Solyndra….Crony Capitalism at its worst.
...When the police officers and sanitation workers reclaimed Zuccotti Park, Occupy Wall Street’s supporters cried, “You can’t evict an idea whose time has come.” Whether the sympathizers or the critics really understand the idea and the method of the movement is a good question. The idea is utopian socialism. The method is revolutionary anarchism.
IT WAS FEBRUARY 25, 1825, AND THE U.S. CAPITOL WAS UNDER OCCUPATION—SORT OF. ROBERT OWEN, a successful Welsh businessman and socialist, wasn’t standing in the Rotunda holding up a placard. He was addressing a joint session of Congress from the dais of the House of Representatives. President James Monroe and president-elect John Quincy Adams were present for at least a portion of the speech. AS JOSHUA MURAVCHIK EXPLAINS IN HEAVEN ON EARTH, A HISTORY OF SOCIALISM, THE ELECTED OFFICIALS WERE MESMERIZED BY OWEN’S PLANS.
In the speech, Owen shared HIS DREAM OF COOPERATIVE VILLAGES WHERE WORKERS WOULD SEE THEIR POVERTY ALLEVIATED AND THEIR SPIRITS TRANSFORMED. Inspired by the success of his New Lanark community in Scotland, where employees lived in hospitable conditions and the children of laborers received early childhood and primary education, OWEN HOPED TO BRING TO AMERICA EXQUISITELY PLANNED SPACES WHERE A NEW, IMPROVED MANKIND WOULD COME INTO BEING. Owen thought his scientifically organized village would “lead to that state of virtue, intelligence, enjoyment, and happiness, in practice, which has been foretold by the sages of past times, and would at some distant period become the lot of the human race!” UTOPIA, ACCORDING TO OWEN, WAS NOT CONFINED TO THE PRINTED PAGE. UTOPIA COULD BE REALIZED.
THE SITE OF HIS AMERICAN UTOPIA WOULD BE NEW HARMONY, ON THE WABASH RIVER IN SOUTHWEST INDIANA. Owen welcomed residents to his colony that April. “I am come to this country,” he told them, “to introduce an entire new state of society, to change it from the ignorant, selfish system, to an enlightened social system which shall gradually unite all interests into one, and remove all cause for contests between individuals.” There would be no 1 percent versus the 99 percent in New Harmony.
THINGS DID NOT WORK AS PLANNED, HOWEVER. Structuring a community along rational lines was extremely difficult. THERE WEREN’T ENOUGH SKILLED LABORERS. MANY OF THE RESIDENTS WERE LAZY. SHORTAGES WERE COMMONPLACE. CENTRAL PLANNING HAMPERED THE EFFICIENT ALLOCATION OF MEALS. FACTIONS SPLIT OFF FROM THE MAIN GROUP. The community closely monitored the activities and beliefs of every member. Alcohol was banned. CHILDREN WERE SEPARATED FROM THEIR PARENTS; one later said she saw her “father and mother twice in two years.” OWEN EXPELLED MALCONTENTS. Only his generous subsidies held New Harmony together.
And not for long. OWEN’S “NEW EMPIRE OF PEACE AND GOOD WILL TO MAN” FELL APART WITHIN FOUR YEARS.
...Over the course of the nineteenth century the quest for the ideal society took many directions that can be clustered in two broad categories. THERE WERE THE MARXIAN ATTEMPTS AT “SCIENTIFIC SOCIALISM,” in which the proletarian vanguard sought to overthrow the bourgeoisie to bring about the classless society as ordained by the laws of history. And there was THE REVOLUTIONARY ANARCHIST PROJECT OF ACHIEVING UTOPIA BY LEVELING HIERARCHIES AND ABOLISHING AUTHORITIES.
The two overlapped on certain points. But FOR THE MOST PART THE MARXISTS LOOKED AT THE ANARCHISTS AS BOOBS AND THE ANARCHISTS LOOKED AT THE MARXISTS AS TOTALITARIANS—which of course they were. Scientific socialism is more famous than revolutionary anarchism, if only because in the twentieth century it succeeded in taking over much of the world. The incalculable human cost of communism has obscured the destructive activities of the anarchists, but they were considerable.
Anarchism is often dismissed as merely the rationalization of hooligans. But that is a mistake. ANARCHISM HAS A THEORY AND EVEN A CANON: Bakunin, Kropotkin, Goldman, and others. Anarchism’s purpose is to turn the whole world into one big Fourierist phalanx. “AT EVERY STAGE OF HISTORY OUR CONCERN MUST BE TO DISMANTLE THOSE FORMS OF AUTHORITY AND OPPRESSION THAT SURVIVE FROM AN ERA WHEN THEY MIGHT HAVE BEEN JUSTIFIED IN TERMS OF THE NEED FOR SECURITY OR SURVIVAL OR ECONOMIC DEVELOPMENT, BUT THAT NOW CONTRIBUTE TO—RATHER THAN ALLEVIATE—MATERIAL AND CULTURAL DEFICIT,” writes Noam Chomsky in an introduction to Daniel Guérin’s classic, Anarchism. Dismantle “the system.” Then we’ll be free
THE ANARCHIST SEES NO DISTINCTION BETWEEN FREE ENTERPRISE AND STATE SOCIALISM. He cannot be happy as long as anyone has more property or power than someone else. “Any consistent anarchist must oppose private ownership of the means of production and the wage-slavery which is a component of this system,” Chomsky writes, “as incompatible with the principle that labor must be freely undertaken and under the control of the producer.” What Chomsky is saying is that you can justly grow your own tomato, but you can never hire anyone else to pick it….
...Unsurprisingly, the call to occupy Zuccotti Park went out over Twitter, and the masked spokesmen of Anonymous publicized the movement on YouTube. AN INTELLECTUAL, FINANCIAL, TECHNOLOGICAL, AND SOCIAL INFRASTRUCTURE TO UNDERMINE GLOBAL CAPITALISM HAS BEEN DEVELOPING FOR MORE THAN TWO DECADES, AND WE ARE IN THE MIDDLE OF ITS LATEST MANIFESTATION. Occupy Wall Street’s global encampments are exactly the sort of communities David Graeber had in mind when he wrote about the Zapatistas. The occupiers’ tent cities are self-governing, communal, egalitarian, and networked. THEY REJECT EVERYDAY POLITICS. They foster bohemianism and confrontation with the civil authorities. They are the Phalanx and New Harmony, updated for postmodern times and plopped in the middle of our cities.
There may not be that many activists in the camps. They may appear silly, even grotesque. They may resist “agendas” and “policies.” They may not agree on what they want or when they want it. And they may disappear as winter arrives and the liberals whose parks they are occupying lose patience with them. But the utopians and anarchists will reappear—next year’s party conventions will no doubt be a flashpoint—and it is wrong to coddle, appropriate, or dismiss them. They must be confronted, not only by law but by ideas. The occupation will persist as long as individuals believe that inequalities of property are unjust and that the brotherhood of man can be established on the earth.
The lessons here seem to me to be the Democrats hopes that OWS would be their counterpart to the TEA party seems completely at odds with reality. In fact, rather than replicating 2009, it appears they may have nurtured a movement that will bring back 1968.