As Trillions of Tax Dollars Are Wasted, Long-Term Economic Pain for American Families – Hot List 7/27

July 27th, 2010 · · Hotlist

Pentagon can’t account for $8.7 billion in Iraqi funds

The U.S. Defense Department is unable to properly account for over 95 percent of $9.1 billion in Iraqi oil money tapped by the U.S. for rebuilding the war ravaged nation, according to an audit released Tuesday. The report by the U.S. Special Investigator for Iraq Reconstruction offers a compelling look at continued laxness in how such funds are being spent in a country where people complain basic services like electricity and clean water are sharply lacking seven years after the U.S.-led invasion that toppled Saddam Hussein. The audit found that shoddy record keeping by the Defense Department left the Pentagon unable to fully account for $8.7 billion it withdrew between 2004 and 2007 from a special fund set up by the U.N. Security Council. Of that amount, Pentagon “could not provide documentation to substantiate how it spent $2.6 billion.”

Billions Wasted in Mexico Pushing Failed U.S. Drug War Tactics

A new report by the Government Accountability Office (GAO) makes painfully clear that the U.S. is wasting hundreds of millions of taxpayer dollars on the drug war in Mexico, with little oversight, instead of investing in proven strategies to reduce drug demand and weaken Mexico’s powerful drug cartels. The GAO report, released on Wednesday, says that, after two full years, the U.S. has no clear measures in place to determine if its $1.6 billion aid package to Mexico-known as the Merida Initiative -is having any impact whatsoever on the strength of the cartels.”

Long-Term Economic Pain for American Families

A rigorous new analysis for the Rockefeller Foundation shows that Americans are more economically insecure now than they have been in a quarter of a century, and the trend lines suggest that things will only get worse. Rampant joblessness and skyrocketing medical costs are among the biggest factors tearing at the very fabric of American economic life so painstakingly put together in the early post-World War II decades. The analysis was done by a team of researchers led by Professor Jacob Hacker of Yale University. They created an economic security index, which measures the percentage of Americans who experience a decrease in their household income of 25 percent or more in one year without having the financial resources to offset that loss. (Major medical expenses were counted as a decrease in available income.) The team’s findings were grim. Simply stated, more and more families are facing utter economic devastation: completely out of money, with their jobs, savings and retirement funds gone, and nowhere to turn for the next dollar.
U.S. Cities, Counties Poised to Cut 500,000 Jobs, Report Finds

U.S. local governments may cut almost 500,000 jobs through next year to cope with sliding property taxes, a decline in state and federal aid and added need for social services, according to a report released today. The report, a result of a survey by the National League of Cities, the U.S. Conference of Mayors and the National Association of Counties, showed local governments are moving to cut the equivalent of 8.6 percent of their workforces from 2009 to 2011. That suggests 481,000 employees will lose their jobs, according to the report, which said the tally may yet rise.
The Market Is a Hologram Masking Deflation | Max Keiser

Getting back to what happened in 2008, when the markets hit the skids, the government reacted by increasing the money supply; just as they did after the 1987 crash, the Long Term Capital Management crisis, the dot-com crash, 9/11, and the sub-prime crash. But unlike any of those instances, the money supply kept shrinking and prices kept deflating (notwithstanding the price of a few items). At first it looked like the liquidity stimulus was going to revive the economy and there was an anemic bounce in 2009, but that death rattle has now expired and the primary trend of falling real estate prices, falling wages, and deteriorating bank balance sheets has reasserted itself and threatens to take the economy down again dramatically (read: depression). The question of a ‘double dip’ is misleading. The economy started down a depressionary slide in 2008 and hasn’t looked back.”

Keiser Report: Collapse of Social Security [video]

We look at the latest scandals of fetishes for black swans; American youth unconcerned by the coming collapse of their Social Security they bought and paid for; Tony Blair’s 2007 photo op with Colonel Gaddafi. In the second half of the show, Max talks to Ned Naylor-Leyland of Cheviot Asset Management about the silver market.

Deportation of illegal immigrants increases under Obama administration

In a bid to remake the enforcement of federal immigration laws, the Obama administration is deporting record numbers of illegal immigrants and auditing hundreds of businesses that blithely hire undocumented workers. The Immigration and Customs Enforcement agency expects to deport about 400,000 people this fiscal year, nearly 10 percent above the Bush administration’s 2008 total and 25 percent more than were deported in 2007. The pace of company audits has roughly quadrupled since President George W. Bush’s final year in office.
The Great Decoupling of Corporate Profits from Jobs | Robert Reich

Second-quarter earnings reports are coming in, and they’re making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter. Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost. So with all this money and profit, they’ll start hiring again, right? Wrong – for three reasons. First, lots of their profits are coming from their overseas operations. So that’s where they’re investing and expanding production.
Greenpeace activists close down BP stations in London

BP filling stations across London have been shut down by activists. Environmental group Greenpeace said it had cut fuel supplies to all 50 BP stations in the city. The oil firm said 35 to 40 had been shut but many of them have now reopened. The protesters stopped the fuel by removing safety switches on forecourts. The action comes as BP reported an £11bn loss after the oil spill in the Gulf of Mexico and confirmed chief executive Tony Hayward is to step down.
Why Wikileaks’ Doc-Dump Is Such a Big Deal (Even if There’s Nothing New Within)

There is a tendency among People Who Pay Close Attention To Things to think other Americans are also paying attention — to decent information — and are therefore somewhat in the know. That leads to people trying to get away with ridiculous claims, such as this: ANYONE who has spent the past two days reading through the 92,000 military field reports and other documents made public by the whistle-blower site WikiLeaks may be forgiven for wondering what all the fuss is about. I’m a researcher who studies Afghanistan and have no regular access to classified information, yet I have seen nothing in the documents that has either surprised me or told me anything of significance. I suspect that’s the case even for someone who reads only a third of the articles on Afghanistan in his local newspaper. That paragraph was from an op-ed piece by Andrew Exum, a fellow with the Center for a New American Security (CNAS) — a pro-Afghanistan war think-tank — in The New York Times. Exum’s message seems to be, ‘move along, folks, there’s nothing to see here.’ Understandable — CNAS, according to a WaPo report last year, “may emerge as Washington’s go-to think tank on military affairs” in the Obama era. CNAS staff have “filled key posts in the new administration (such as former CNAS president Michele Flournoy, who is now undersecretary of defense for policy), and its top people include John Nagl, who helped draft the Army’s counterinsurgency manual, and David Kilcullen, a former adviser to Gen. David H. Petraeus. And his suspicion that everyone already knows this stuff is bullshit.
Is Wall Street Making Life or Death Decisions?

Is your health insurance company traded on Wall Street? If so, is Wall Street deciding your medical care? It’s hard to recall that for-profit corporations were once kept out of health care — in fact, for most of the 20th century. During this time, the nation’s medical system was built largely by non-profit and charitable organizations, which is why so many hospitals are named for saints. Courts across the country ruled that for corporations to profit from medical care was simply “against sound public policy.” In the early 1980’s, however, when the financial and airline industries were deregulated, a similar process occurred for American medicine. For-profit corporations became newly encouraged to take leadership of health care. Deregulating health care into the free market was intended to drive down costs and to improve care. After all, medical care in 1980 consumed a whopping 9.1 percent of the nation’s GDP.

GE to pay 23 million dollars after Iraq bribery charges

US industrial titan General Electric has agreed to pay over 23 million dollars to settle allegations that it bribed Iraqi officials, a US financial watchdog said. GE had been accused by the Securities and Exchange Commission of being part of “a 3.6 million dollar kickback scheme with Iraqi government agencies to win contracts to supply medical equipment and water purification equipment.” Four subsidiaries of the Connecticut-based company were accused of bribing officials at the Iraqi ministries of health and oil, trading cash, computer equipment and medical supplies to win lucrative contracts.