all money in existence is owned by the rich - the rich rent it to poor - the cost to pay the rent is hidden in the price of everything

guardian |  With its shuttered banks, furious public protests and iconoclastic politicians, the plight of Greece, brought to its knees by a crippling debt burden, has been gripping and heartbreaking in equal measure: a full-blown sovereign debt crisis on the doorstep of some of the wealthiest countries in the world.

Yet new analysis by the Jubilee Debt Campaign reveals that Greece’s plight is far from unique: more than 20 other countries are also wrestling with their own debt crises. Many more, from Senegal to Laos, lie in a debt danger zone, where an economic downturn or a sudden jump in interest rates on world debt markets could lead to disaster.

One of the lessons from the 2008 crash was that hefty debt levels can leave countries vulnerable to sudden shifts in market mood. But Jubilee reports that the rock-bottom interest rates across major economies, which have been a key response to the crisis, have in many cases prompted governments, firms and consumers to go on a fresh borrowing binge, storing up potential problems for the future.

Judith Tyson of the Overseas Development Institute thinktank says the flipside of the latest round of borrowing has been investors and lenders in the west looking for bigger returns than they could get at home, a process known in the markets as a “search for yield”.

“Since 2012, there’s been a huge increase in sovereign debt, in Africa in particular,” she says. Some of the countries involved were beneficiaries of the debt relief programme that G8 leaders signed up to at the Gleneagles summit in 2005. “They were given debt relief with the idea that it would give a clean slate to go forward,” Tyson says.

She warns that a number of countries have since “loaded up” on debt – and while some governments had invested the money wisely, diversifying their economies and improving infrastructure, others have not. She points to Ghana, in west Africa, where a sharp increase in borrowing has been spent on what she calls “pork-barrel politics. They’ve spent it in a frivolous way.”

Jubilee’s analysis defines countries as at high risk of a government debt crisis if they have net debt higher than 30% of GDP, a current-account deficit of over 5% of GDP and future debt repayments worth more than 10% of government revenue. “We estimate that 14 countries are rapidly heading towards new government debt crises, based on their large external debts, large and persistent current account deficits, and high projected future government debt payments,” it says.

the eu's historically perplexing miscalculations about greece

stratfor |  In a result that should surprise no one, the Greeks voted to reject European demands for additional austerity measures as the price for providing funds to allow Greek banks to operate. There are three reasons this should have been no surprise. First, the ruling Coalition of the Radical Left, or Syriza party, is ruling because it has an understanding of the Greek mood. Second, the constant scorn and contempt that the European leadership heaped on the prime minister and finance minister convinced the Greeks not only that the scorn was meant for them as well but also that anyone so despised by the European leadership wasn't all bad. Finally, and most important, the European leadership put the Greek voters in a position in which they had nothing to lose. The Greeks were left to choose between two forms of devastation — one that was immediate but possible to recover from, and one that was a longer-term strangulation with no exit.

The Europeans' Mistaken Reasoning

As the International Monetary Fund noted (while maintaining a very hard line on Greece), the Greeks cannot repay their loans or escape from their economic nightmare without a substantial restructuring of the Greek debt, including significant debt forgiveness and a willingness to create a multidecade solution. The IMF also made clear that increased austerity, apart from posing an impossible burden for the Greeks, will actually retard either a Greek recovery or debt repayment.

The Greeks knew this as well. What was obvious is that austerity without radical restructuring would inevitably lead to default, if not now, then somewhere not too far down the line. Focusing on pensions made the Europeans appear tough but was actually quite foolish. All of the austerity measures demanded would not have provided nearly enough money to repay debts without restructuring. In due course, Greece would default, or the debt would be restructured.

Since Europe's leaders are not stupid, it is important to understand the game they were playing. They knew perfectly well the austerity measures were between irrelevant and damaging to debt repayment. They insisted on this battle at this time because they thought they would win it, and it was important for them to get Greece to capitulate for broader reasons.

time to repo puerto rico....,

NYTimes |  Puerto Rico’s governor, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.

The governor, Alejandro García Padilla, and senior members of his staff said in an interview last week that they would probably seek significant concessions from as many as all of the island’s creditors, which could include deferring some debt payments for as long as five years or extending the timetable for repayment.

“The debt is not payable,” Mr. García Padilla said. “There is no other option. I would love to have an easier option. This is not politics, this is math.”

It is a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state.

A broad restructuring by Puerto Rico sets the stage for an unprecedented test of the United States municipal bond market, which cities and states rely on to pay for their most basic needs, like road construction and public hospitals.

That market has already been shaken by municipal bankruptcies in Detroit; Stockton, Calif.; and elsewhere, which undercut assumptions that local governments in the United States would always pay back their debt.

Puerto Rico’s bonds have a face value roughly eight times that of Detroit’s bonds. Its call for debt relief on such a vast scale could raise borrowing costs for other local governments as investors become more wary of lending.

Perhaps more important, much of Puerto Rico’s debt is widely held by individual investors on the United States mainland, in mutual funds or other investment accounts, and they may not be aware of it.

Puerto Rico, as a commonwealth, does not have the option of bankruptcy. A default on its debts would most likely leave the island, its creditors and its residents in a legal and financial limbo that, like the debt crisis in Greece, could take years to sort out.

...while germans laugh at the vampire squid

BBC | In a kitchen in rural South Carolina one night, Hunter Bliss told his mother he wanted to apply to university in Germany. Amy Hall chuckled, dismissed it, and told him he could go if he got in.

"When he got accepted I burst into tears," says Amy, a single mother. "I was happy but also scared to let him go that far away from home."

Across the US parents are preparing for their children to leave the nest this summer, but not many send them 4,800 miles (7,700km) away - or to a continent that no family member has ever set foot in.

Yet the appeal of a good education, and one that doesn't cost anything, was hard for Hunter and Amy to ignore.

"For him to stay here in the US was going to be very costly," says Amy. "We would have had to get federal loans and student loans because he has a very fit mind and great goals."

More than 4,600 US students are fully enrolled at Germany universities, an increase of 20% over three years. At the same time, the total student debt in the US has reached $1.3 trillion (£850 billion).

Each semester, Hunter pays a fee of €111 ($120) to the Technical University of Munich (TUM), one of the most highly regarded universities in Europe, to get his degree in physics.

Included in that fee is a public transportation ticket that enables Hunter to travel freely around Munich.

Health insurance for students in Germany is €80 ($87) a month, much less than what Amy would have had to pay in the US to add him to her plan.

"The healthcare gives her peace of mind," says Hunter. "Saving money of course is fantastic for her because she can actually afford this without any loans."

To cover rent, mandatory health insurance and other expenses, Hunter's mother sends him between $6,000-7,000 each year.

At his nearest school back home, the University of South Carolina, that amount would not have covered the tuition fees. Even with scholarships, that would have totalled about $10,000 a year. Housing, books and living expenses would make that number much higher.

The simple maths made Hunter's job of convincing his mother easy.

"You have to pay for my college, mom - do you want to pay this much or this much?"

vampire squid sucking the blood out of it's most productive...

Slashdot | 
There are some valid points raised in Lee Siegel's 1,100 word rant against college loans (if not so much against college education). There are also some bad ones. But two things are clear: the words "personal" and/or "responsibility" were used precisely zero times. Siegel, who described himself as "the author of five books who is writing a memoir about money," is hardly a glowing advertisement for the return on nearly a decade in university just to achieve a Master of Philosophy degree. (ed: emphasis mine)

New York Times | ONE  late summer afternoon when I was 17, I went with my mother to the local bank, a long-defunct institution whose name I cannot remember, to apply for my first student loan My mother co-signed. When we finished, the banker, a balding man in his late 50s, congratulated us, as if I had just won some kind of award rather than signed away my young life.

By the end of my sophomore year at a small private liberal arts college, my mother and I had taken out a second loan, my father had declared bankruptcy and my parents had divorced. My mother could no longer afford the tuition that the student loans weren’t covering. I transferred to a state college in New Jersey, closer to home.

Years later, I found myself confronted with a choice that too many people have had to and will have to face. I could give up what had become my vocation (in my case, being a writer) and take a job that I didn’t want in order to repay the huge debt I had accumulated in college and graduate school. Or I could take what I had been led to believe was both the morally and legally reprehensible step of defaulting on my student loans, which was the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society.

I chose life. That is to say, I defaulted on my student loans.

As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example.

It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. Having opened a new life to me beyond my modest origins, the education system was now going to call in its chits and prevent me from pursuing that new life, simply because I had the misfortune of coming from modest origins.


Am I a deadbeat? In the eyes of the law I am. Indifferent to the claim that repaying student loans is the road to character? Yes. Blind to the reality of countless numbers of people struggling to repay their debts, no matter their circumstances, many worse than mine? My heart goes out to them. To my mind, they have learned to live with a social arrangement that is legal, but not moral.

Bro.Feed: What Happened to the Rt. Hon.Michael Manley's Organic Competency Development Agenda?

systemicdisorder |  A small country immiserates itself under orders of international lenders; unemployment and poverty rise, the debt burden increases and investment is starved in favor of paying interest on loans. If this sounds familiar, it is, but the country here is Jamaica.

So disastrous has austerity been for Jamaica that its per capita gross domestic product is lower than it was 20 years ago, the worst performance of any country in the Western Hemisphere. In just three years, from the end of 2011 to the end of 2014, real wages have fallen 17 percent and are expected to fall further in 2015, according to the country’s central bank, the Bank of Jamaica.

Such is the magic of austerity, or “structural adjustment programs,” to use the official euphemism of the International Monetary Fund and World Bank.

A new paper from the Center for Economic and Policy Research, “Partners in Austerity: Jamaica, the United States and the International Monetary Fund,” reports that the amount of money Jamaica will use to pay interest (not even the principal) on its debt will be more than four times what it will spend on capital expenditures in 2015 and 2016. And despite a new loan, the country actually paid more to the IMF than it received in disbursements from the IMF during 2014!

As a further sign of the times, the current pro-austerity government of Jamaica is led by the National People’s Party, the party of former democratic socialist President Michael Manley. President Manley took office in 1972 on promises to combat social inequality and injustice, and he is credited with enacting legislation intended to establish a national minimum wage, pay equality for women, maternity leave with pay, the right of workers to join trade unions, free education to the university level, and education reforms that enabled students and teachers to be represented on school boards.

He also became an international figure advocating for progressive programs to be implemented elsewhere. Naturally, this did not sit well with the United States government. When President Manley stood with Angola against the invasion by the apartheid South African régime and supported Cuban assistance to Angola, he defied a warning from U.S. Secretary of State Henry Kissinger. The CIA presence in the Jamaican capital, Kingston, was doubled.

A Jamaica Observer commentary noted parallels between the overthrow of Salvador Allende in Chile and unrest in Jamaica later in the 1970s:

“The imperialists applied the same ‘successful’ Chile model of destabilisation in Jamaica. They applied the same strategy of ‘making the economy scream,’ creating artificial shortages of basic items, promoting violence, including the savage murder of 150 people in a home for the elderly. Violence erupted in Jamaica as was never seen before in the ‘shock and awe’ tactics mastered by the imperialists whenever they want to create fundamental change in someone else’s country. Manley and Jamaica yielded under the pressure and eventually took the IMF route.”

Replacing human development with austerity

The conservative who took office in 1980 reversed President Manley’s programs. By the time that President Manley returned to office in 1989, he had moved well to the right under the impact of changing world geopolitical circumstances and the dominance of neoliberal ideology. As an obituary in The Economist dryly put it, “He did as the IMF told him, liberalised foreign exchange and speeded up the privatisation of state enterprises.”

The one-size-fits-all program, a condition of IMF and World Bank loans, includes currency devaluation (making imports more expensive), mass privatization of state assets (usually done at fire-sale prices), cuts to wages and the prioritization of the profits of foreign capital over a country’s own welfare. The 2001 film Life and Debt, produced and directed by Stephanie Black, depicted a country on its knees thanks to “structural adjustment.” The film’s Web site sets up the picture then this way:

“The port of Kingston is lined with high-security factories, made available to foreign garment companies at low rent. These factories are offered with the additional incentive of the foreign companies being allowed to bring in shiploads of material there tax-free, to have them sewn and assembled and then immediately transported out to foreign markets. Over 10,000 women currently work for foreign companies under sub-standard work conditions. The Jamaican government, in order to ensure the employment offered, has agreed to the stipulation that no unionization is permitted in the Free Trade Zones. Previously, when the women have spoken out and attempted to organize to improve their wages and working conditions, they have been fired and their names included on a blacklist ensuring that they never work again.”

why WaPo call this a dangerous revolt?

WaPo |  By the time Heiney graduated in August 2014, she said she had racked up $18,810 in debt, with nearly 80 percent coming from federal loans. This month marks the end of the six-month grace period on her student loans, which means the government will starting asking Heiney for its money. But she won’t pay.

Heiney has landed a job as a home-health care attendant, but still feels trapped. “Don’t get me wrong. I’m happy to have my job, but my dream is to go back to Africa and start a medical clinic. Because I’m now a slave to these loans I can’t pursue my dreams,” she said.

Heiney and the other 14 protesters have been working with an offshoot of the Occupy Wall Street movement known as the Debt Collective. The group organized a campaign last year, called Rolling Jubilee, to buy student loans from debt buyers for cents on the dollar and wipe out the debt. To date, the campaign has erased over $30 million in medical and education debt, including $13 million in private student loans for Everest students.

Organizers reached out to Corinthian students as the for-profit schools ran into trouble. After months of pleading with the Education Department to forgive the federal loans, the students and the organizers came up with the idea for the strike, said Ann Larson, a Debt Collective organizer.

More than 100 borrowers have contacted the group since the strike started this week. Before any of them can join, they must attend a financial literacy workshop on the consequences of not repaying their debt, Larson said, noting that most people are already in default.

An attorney working with the Collective is helping the Corinthian students file what’s known as a defense to repayment claim, an appeal to the Education Department to discharge the federal loans on the grounds that the for-profit school broke the law.

“Our attorneys say it’s a very untested law and no one has really done it because the process is unclear,” Larson said. “But rather than wait for the Department of Ed to clarify the process, we’re just going to dispute the legitimacy of the debt and see what happens.”

for whom the muzzein calls....,

WaPo |  The poor pay more for everything, from rolls of toilet paper to furniture. It's not because they're spendthrifts, either. If you're denied a checking account, there's no way for you  to  avoid  paying a fee to cash a paycheck. If you need to buy a car to get to work, you'll have to accept whatever higher interest rate you're offered. If you don't have a car, the bus fare might eat up the change you'd save shopping at a larger grocery store as opposed to the local corner store.

It's easy to feel that "when you are poor, the 'system' is set up to keep you that way," in the words of one Reddit user, "rugtoad." That comment is at the top of an extraordinary thread full of devastating stories about what it's like to get by with nothing in the United States of 2015.

"Growing up really poor means realizing in your twenties that Mommy was lying when she said she already ate," wrote "deviant_devices," another commenter.

You can buy only a single pack of paper towels at a time, rather than saving on a bundle of 10, as "Meepshesaid" noted:

When you are broke, you can't plan ahead or shop sales or buy in bulk. Poor people wait to buy something until they absolutely need it, so they have to pay whatever the going price is at that moment. If ten-packs of paper towels are on sale for half price, that's great, but you can only afford one roll anyway. In this way, poor people actually pay more than others for common staple goods.

You can't pay for health insurance, and instead buy medicine from pet stores, as "colorcoma" writes:

I buy "fish" antibiotics online because I can't afford health care. … Amoxicillin and such. Mostly for husband who has Lyme's disease. We can't afford our monthly health care rates. We are 30somethings in the US. Really feel like a "bottom feeder".

You can't also buy shoes that will last for more than a few months, according to "DrStephenFalken":

I'm making $150- $200 a week and I need new shoes. So I can buy $60 shoes that will last or $15 walmart shoes. So I buy the walmart shoes and some groceries instead of just the $60 shoes and no groceries. Three months later I'll need new shoes again. But I'll also have to pay rent and my light bill is due. So I'll pay the light bill and buy some "shoe glue" for $4 to fix my shoes for another few weeks until I can buy the $15 ones again.

Economists have documented the "ghetto tax," as the additional costs of living paid by the poor are often known. A Brookings study from 2006 found that someone who is not able to open a checking account will typically pay between $5 and $50 to cash a $500 check, and that people in poor neighborhoods paid several hundred dollars more for homeowner's insurance, or to buy a car of a given make and model, than someone living in a wealthier neighborhood.

can it be that it was all so simple?

rule of law: harvard and mit both hip deep in payday loan sharking...,

bloomberg |   Alex Slusky was under pressure to put the money in his private-equity fund to work. 

The San Francisco technology financier had raised $1.2 billion in 2007 to buy and turn around struggling software companies. By 2012, investors including Harvard University were upset that about half the money hadn’t been used, according to three people with direct knowledge of the situation. 

Three Americans on the Caribbean island of St. Croix presented a solution. They had built a network of payday-lending websites, using corporations set up in Belize and the Virgin Islands that obscured their involvement and circumvented U.S. usury laws, according to four former employees of their company, Cane Bay Partners VI LLLP. The sites Cane Bay runs make millions of dollars a month in small loans to desperate people, charging more than 600 percent interest a year, said the ex-employees, who asked not to be identified for fear of retaliation. 

Slusky’s fund, Vector Capital IV LP, bought into Cane Bay a year and a half ago, according to three people who used to work at Vector and the former Cane Bay employees. One ex-Vector employee said the private-equity firm didn’t tell investors the company is in the payday-lending business, where borrowers repay loans out of their next paychecks.

rule of law: slave leasing capital misery designs and exports modes of human bondage

pitch |  On the cover of Ingram's last month was a man named Steve Mitchem. The business publication was honoring him with one of its "Local Heroes" awards for philanthropic contributions — Mitchem has given $160,000 to the Down Syndrome Guild of Greater Kansas City over the past three years.

Mitchem has led an interesting life. He moved to Kansas City in the early 1980s to pursue graduate studies at Nazarene Theological Seminary. He then worked as a traveling evangelist for two years before settling in locally as a full-time minister at the Church of the Nazarene. In 1990, Mitchem went secular, at least professionally. He retired as a minister and joined Tivol, the luxury jewelry company, as an associate at its retail space on the Country Club Plaza. He rose through the ranks and was named president of Tivol in 2005.

Here in Kansas City, that's a powerful, and surely quite lucrative, gig. Yet Mitchem left Tivol two years after being appointed to the post. A story at the time in JCK, a trade publication covering the jewelry industry, reported that he was resigning to "join his son in his loan business."

About that loan business: Technically it is dozens of separate companies, with many different names, but it adds up to one of the largest online payday-lending operations based in Kansas City, according to several individuals with ties to the industry.

"Steve was working down at Tivol on the Plaza, and these payday guys kept coming in every other month and buying Rolexes," a source tells The Pitch. "He figured out that they were basically printing money doing their online-lending businesses, and he wanted in on it. So first, he set his son up in the business. Then he quit Tivol and joined him."

Filings with the secretary of state's offices in Missouri and Kansas, plus a couple of lawsuits, help back up that account. In December 2006, Mitchem's son, Josh Mitchem, filed articles of incorporation in Missouri for a company called Platinum B Services. In 2012, Dustin McDaniel, the attorney general of Arkansas, brought a lawsuit against that company and PDL Support LLC, another company controlled by Josh Mitchem.

In the suit, McDaniel alleged that Josh Mitchem and his companies controlled a variety of LLCs, purportedly based in the West Indies federation of St. Kitts and Nevis, that were engaged in lending over the Internet to Arkansas citizens at interest rates as high as 644 percent. Arkansas law caps rates on consumer loans at 17 percent.

"The purpose of these LLCs is to make it appear as if the Defendants are not the actual payday lenders and to otherwise shield Defendants from liability from lawsuits such as the one brought by the Attorney General in this case," the lawsuit states. "The Defendants make the decisions concerning all lending operations from their offices in the Kansas City, MO area."

rule of law: misery ground zero for extreme usury - another form of "poor peoples tax"...,

pitch |  On October 25 of this year, a man named Del Kimball was served papers at his home in Mission Hills. The following day, Kimball's business partner, Sam Furseth, was also served in Mission Hills.

Kimball and Furseth head up a variety of online payday-lending operations, many of which are based in downtown Kansas City, Missouri, at 908 Baltimore. True to industry form, the names of these outfits are countless and constantly in flux. There's LTS Management (of which Furseth is listed as president on LinkedIn). There's Glacier Marketing. There also are DMS Marketing and the Loan Shop Online. Each is part of a turnkey business that markets, funds, lends and collects on payday loans.

Not a lot of sunlight finds its way into 908 Baltimore. Workers are prohibited from speaking with the media. No sign hangs outside the building.

"It's because the owners are afraid of shootings and retribution for their collection practices," says a former employee. "They keep everything as private as possible. There's no relationship between upper management and the rest of the staff."

Most people who operate and finance payday-loan businesses — whether brick-and-mortar shops, such as the ones seen on every other street corner on the East Side of Kansas City, or online companies like Kimball and Furseth's — have an elevator pitch prepared about the social utility of their services. The gist is that they're giving people access to credit that they can't get anywhere else.

Say your car breaks down. You need to fix it so you can get to work, but you don't get paid for another 10 days. A bank won't give you a short-term loan to fix your car. Nor will any government agency. So you take out a $500 payday loan against the check coming to you in 10 days. When that check arrives, the payday lender gets $575 from you. It's a high interest rate, but it got you out of a jam — assuming you settle that $575 right away.

But many borrowers can't or don't get out from under their payday debts as soon as the next check comes, and the knock against such loans is that they trap borrowers in a cycle of debt. Defenders of the industry tend to dismiss such instances as aberrations. But according to a July 2012 company overview from online-lending operation Evergreen Capital Partners LLC, repeat customers are one of its "competitive differentiators."

Kimball is the CEO of Evergreen Capital Partners, and Furseth is the president. They split ownership 50-50. The overview indicates that 174 people were employed by the company in July 2012. Its online loans range in size from $100 to $800, the overview states, with fees set between $15 and $60 per $100 borrowed.

"On average, repeat customers account for 40-50% of the Company's annual loans," the overview reads. "The Company's average customer will borrow ~$1200 (~3 loans) and repay ~$2350 over a 4-year timeframe. Margins on loans to repeat customers average 150% higher than loans to new customers."

To translate: The average person who takes out a loan from Kimball and Furseth ends up paying back double what he or she initially borrowed. Factor in the 500,000 loans that Evergreen Capital Partners says it has issued since its inception, and a picture emerges: Operators and investors can get pretty rich with a business model like this.

missouri residents use payday loans twice as much as the national average...,

pitch |  The new money started announcing itself at St. Ann sometime around 2008.

"It was most obvious at the school auctions," says one member of the Prairie Village Catholic church. (Like many people interviewed for this story, this source did not want to be identified by name.) "You'd see these cliques of people pulling up in limos, acting wild, dropping a lot of money on exotic two-week vacations and the other lavish items up for bidding. Or all of a sudden so-and-so has a brand-new Range Rover. Or so-and-so family is moving into some giant Mission Hills mansion. And you see it enough times and you start to go, 'Where is this money coming from?'

"And on one hand, it's St. Ann — this is a school and a church that serves Mission Hills and Prairie Village," the member continues. "You expect to see nice cars in the parking lot. But there was something so sudden and loud about this. It was this bizarre explosion of really extreme wealth."

Word trickled out: Some members of the church had become mixed up in the online payday-loan industry.

Payday lenders advertise their loans as short-term, emergency solutions. But every credible study of the industry has found that the high interest rates and fees these outfits charge are designed to turn the loans into long-term debt burdens on the borrowers. These parishioners were involved in various business interests that enjoy astronomical profits by lending to borrowers at interest rates that commonly reach unholy heights of 700 percent.

St. Ann's pastor, the Rev. Keith Lunsford, joined the parish in 2009, after replacing Monsignor Vincent Krische, who retired. "I don't have any firsthand knowledge of anybody at St. Ann involved in the payday-loan industry," Lunsford tells The Pitch.

But according to a number of people The Pitch contacted for this story, the presence of families who have amassed tremendous wealth through their involvement in online payday lending was, and continues to be, a taboo topic and a source of tension in the parish.

"It presented a moral conundrum for St. Ann," says a different parishioner. "Because there was all this money coming into the church through donations and through the auctions and, I mean, it was huge money. And gradually everybody realized that it was money that, if you trace it back to its root, came from poor people who were being taken advantage of, who were being charged crazy interest rates. So there were a lot of behind-closed-doors, hushed-tones conversations happening about it. People on the finance committee and the school board were talking about the morality of taking that money. But in the end, I think they just looked the other way." (Last year, the church reached an $8 million capital campaign goal to fund extensive renovations. It does not disclose specific donations.)

the myth of working your way through college...,

theatlantic |  A lot of Internet ink has been spilled over how lazy and entitled Millennials are, but when it comes to paying for a college education, work ethic isn't the limiting factor. The economic cards are stacked such that today’s average college student, without support from financial aid and family resources, would need to complete 48 hours of minimum-wage work a week to pay for his courses—a feat that would require superhuman endurance, or maybe a time machine.

To take a close look at the tuition history of almost any institution of higher education in America is to confront an unfair reality: Each year’s crop of college seniors paid a little bit more than the class that graduated before. The tuition crunch never fails to provide new fodder for ongoing analysis of the myths and realities of The American Dream. Last week, a graduate student named Randy Olson listened to his grandfather extol the virtues of putting oneself through college without family support. But paying for college without family support is a totally different proposition these days, Olson thought. It may have been feasible 30 years ago, or even 15 years ago, but it's much harder now. 

He later found some validation for these sentiments on Reddit, where one user had started a thread about the increasing cost per course at Michigan State University. MSU calculates tuition by the "credit hour," the term for the number of hours spent in a classroom per week. By this metric, which is used at many U.S. colleges and universities, a course that's worth three credit hours is a course that meets for three hours each week during the semester. If the semester is 15 weeks long, that adds up to 45 total hours of a student's time. The Reddit user quantified the rising cost of tuition by cost per credit hour:

This is interesting. A credit hour in 1979 at MSU was 24.50, adjusted for inflation that is 79.23 in today dollars. One credit hour today costs 428.75.

blustering bankster beehotches be wyhlin....,

BI |  On Saturday, U.S. Secretary of State John Kerry told Russian Foreign Minister Sergei Lavrov that the Kremlin annexing Crimea would “close any available space for diplomacy.”

The warning is disconcerting because there are three general ways that this crisis could play out: Russia keeps advancing into east and south Ukraine, Russia annexes Crimea and then applies further financial and political pressure on the new government in Kiev, or Russia makes limited concessions and the crisis de-escalates.

By Kerry saying that the diplomatic window is closed if Russia annexes Crimea — which is almost a forgone conclusion — then the best path for de-escalation is obstructed.

"We need a de-escalation and that can only happen via talks," German Vice-Chancellor Sigmar Gabriel, who spoke with Putin in Moscow last week, told Der Spiegel. "It's not a question now of whether we react in a 'hard' or 'soft' manner; rather we have to act in a clever manner."

Furthermore, on Sunday U.S. national security official Tony Blinken said that America won't recognize the March 16 referendum and will increase sanctions on Moscow if and when Crimea secedes. 

Meanwhile, experts agree that Vladimir Putin is not going to give up Crimea.

who owns the u.s. public debt?

bnarchives | This dissertation offers the first comprehensive historical examination of the political economy of US public debt ownership. Specifically, the study addresses the following questions: Who owns the US public debt? Is the distribution of federal government bonds concentrated in the hands of a specific group or is it widely held? And what if the identities of those who receive interest payments on government bonds are distinct from those who pay the taxes that finance the interest payments on the public debt? Does this mean that the public debt redistributes income from taxpayers to public creditors? Who ultimately bears the burden of financing the public debt?

Despite centuries of debate, political economists have failed to come to any consensus on even the most basic facts concerning ownership of the US public debt and its potential redistributive effects. Some claim that the public debt is heavily concentrated and that interest payments on government bonds redistribute income regressively from poor to rich. Others insist that the public debt has become very widely held and instead redistributes income progressively. The lack of consensus, I argue, boils down to both the empirical and theoretical problems that plague existing studies.

Empirically, only a handful of studies have attempted to map the ownership pattern of US federal government bonds, and even fewer have made efforts to measure the redistributive effects associated with a given ownership pattern. And to make matters worse, those few studies that do attempt to map the pattern of US public debt ownership make little effort to theorize in any systematic way the distributive and redistributive dimensions of the public debt.

Anchored within a ‘capital as power’ theoretical framework, my purpose in this is to shed some much-needed light on the dynamics of distribution and redistribution that lie at the heart of the public debt. I show for the household and corporate sectors how over the past three decades, and especially in the context of the current crisis, the ownership of federal bonds and federal interest has become rapidly concentrated in the hands of dominant owners, the top 1% of households and the 2,500 largest corporations. Over the same period the federal income tax system has done little to progressively redistribute the federal interest income received by dominant owners. In this way, this dissertation argues that, since the early 1980s, the public debt has come to reinforce and augment the power of those at the very top of the hierarchy of social power.

the global debt-slavery confederacy requires austerity

Bill Black reports from Davos that the Global Competitiveness Report pushes countries towards even more deregulation - policies that helped trigger the crisis

debt slavery 2012: judicially sanctioned extortion racket

NYTimes | Three years ago, Gina Ray, who is now 31 and unemployed, was fined $179 for speeding. She failed to show up at court (she says the ticket bore the wrong date), so her license was revoked.

When she was next pulled over, she was, of course, driving without a license. By then her fees added up to more than $1,500. Unable to pay, she was handed over to a private probation company and jailed — charged an additional fee for each day behind bars.

For that driving offense, Ms. Ray has been locked up three times for a total of 40 days and owes $3,170, much of it to the probation company. Her story, in hardscrabble, rural Alabama, where Krispy Kreme promises that “two can dine for $5.99,” is not about innocence.

It is, rather, about the mushrooming of fines and fees levied by money-starved towns across the country and the for-profit businesses that administer the system. The result is that growing numbers of poor people, like Ms. Ray, are ending up jailed and in debt for minor infractions.

“With so many towns economically strapped, there is growing pressure on the courts to bring in money rather than mete out justice,” said Lisa W. Borden, a partner in Baker, Donelson, Bearman, Caldwell & Berkowitz, a large law firm in Birmingham, Ala., who has spent a great deal of time on the issue. “The companies they hire are aggressive. Those arrested are not told about the right to counsel or asked whether they are indigent or offered an alternative to fines and jail. There are real constitutional issues at stake.”

Half a century ago in a landmark case, the Supreme Court ruled that those accused of crimes had to be provided a lawyer if they could not afford one. But in misdemeanors, the right to counsel is rarely brought up, even though defendants can run the risk of jail. The probation companies promise revenue to the towns, while saying they also help offenders, and the defendants often end up lost in a legal Twilight Zone.

icelandic anger brings debt forgiveness

bloomberg | Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.

Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.

“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”

The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year.

The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.

Crisis Lessons
“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”

Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said. Fist tap Dale.

consent needed for debt repayments

Video - Michael Hudson: Peoples of countries indebted without their consent should refuse to repay odious debts

MichaelHudson | PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. In Europe, people in many countries are saying no to paying for the crisis and bailing out banks. And to a large extent leading the way have been people in Iceland, who have said no at the ballot box and on the streets. Now joining us to talk about that is Michael Hudson. He teaches economics at the University of Missouri-Kansas City. Thanks for joining us again, Michael.

MICHAEL HUDSON, PROF. ECONOMICS, UMKC: Thank you, Paul.

JAY: So you have colleagues you’re in touch with in Iceland a lot. What’s going on there now?

HUDSON: Well, as many people know, there was a bank failure, and Iceland’s currency plunged and then sort of fell off the pages in the paper. What people don’t realize is that what happened in Iceland has been used as a test case for what’s happening in Greece and what’s happening in Europe, and maybe what happens in the United States. When the three big crooked banks failed, they were sold out to vulture banks, basically, at $0.10 on the dollar. The vulture banks came in and are moving to begin evicting huge amounts of Icelanders from their homes. Ninety percent have their own homes. Three hundred thousand Icelanders have moved to Norway to get work. The country’s been plunged into a depression. Earlier this week, the Social Democratic prime minister gave a speech saying, essentially, we want to give away the country and the banks. They’re backing me. I’ve given the country away to the banks. Now, what do the population do [incompr.] the public opinion polls show that the fascist party there–they call themselves Social Democrats, but they call them fascists–have a 10 percent approval rating. That means a 90 percent disapproval. What they did was get together outside of Parliament with about 20 huge oil drums, and at the point where the prime minister began to speak in Parliament, they all begin banging the huge oil drums and any other noise makers they had in order to make it impossible to hear even the speech, so that any recording of the speech would have this huge din of noise going on. And they did that for the same reason that the people in Occupy Wall Street are gathering. They’re there to say, look, whatever deal this right-wing reactionary prime minister lady makes with Europe, we’re not going to obey it. As soon as we can throw these thieves out of power, we’re going to come in and we’re going to have another government, and we’re not going to pay, because if a government gives away to–the country to foreign bankers and foreign creditors and we don’t have a say in it, that’s not democracy. That’s [crosstalk]

JAY: Right. So they had a referendum about whether or not to do this, you know, use public money to pay off and bail out the banks. They voted no. Then what happened? I mean, it sounds like a lot of this is happening anyway.

HUDSON: The referendum was not whether to pay off the banks. The prime minister, again, had wanted to pay off Gordon Brown in England and the Dutch government–nothing to do with banks at all–for Icesave debt that the governments had to pay and did pay to bail out their own banks. The prime minister, Sigurdardottir, wanted to pay the money to finance England and Netherlands, essentially doing their own bank bailout, for which Iceland didn’t owe a penny. And the president, who normally is like a notary public and has to sign off, says, wait a minute, if we’re going to agree to pay debts that are going to plunge the economy into a decade of depression and force most Icelanders to leave the country to find work, they at least get to vote on it. That’s international law. So they voted no. And then the government said, oh, let’s have another vote, and finally a year later put the referendum again. The people voted no again. That referendum was against bailing out Gordon Brown and the British Labour Party and the Dutch government. It had nothing to do with the banks. This is yet another bank giveaway. The Social Democratic Party, not only in Iceland but throughout Europe, is basically the party of the bank lobbyists. And the other people are saying, wait a minute, we want an election to throw these guys out. They’ve been bought out. They’re crooks. And the government says, we’re not going to let you vote. Whatever we say, we’re going to do. There is no democracy here. And that’s why–.

JAY: And is there a party in Iceland that reflects this that isn’t going to be a right-wing alternative that does the same thing, or another form of right-wing alternative, if you want?

HUDSON: In the past, the only alternative to the Social Democrats were the neoliberal party that gave away the store to the banks to begin with. So they’re in the process of founding a new party. But without letting people vote, when you stop, when you just suspend voting and you won’t let people have any voice in government, no party can function, because there’s no vote, no chance to have a ballot. So the government is–essentially, the Social Democrats have imposed the dictatorship in Iceland that they’re trying to impose in Greece under the socialist government there and in other social democratic governments throughout Europe.

JAY: Thanks for joining us, Michael.

HUDSON: Thanks.