The Unraveling of America - Part III - Immigration

Under Construction

News flash 

Pres. Obama has rewritten constitutional law by executive order, without the will of Congress, and in defiance of public consensus.  The "Dream Act" (amnesty for illegal aliens) has been signed into law.  2012/06/15.


Everyone warns me not to discuss immigration. Xenophobia and racism threats will occur. We are too "politically correct" to objectively study this issue. Unfortunately, immigration (legal and illegal) is a huge problem in the Unraveling of America and must be repaired. Both legal and illegal immigration statistics are notoriously hard to find - mostly bad guesses from various sources. Estimates disagree between US government departments.

First, I am going to tell my personal observations. Then I will present the abuse of the work visa programs, penetration of various industries by illegal aliens, deportation vs. sanctions on employers, the effects of "Free Trade Agreements" on them and us, Constitutional and Congressional rhetoric, and the ties to Globalization that has decimated the economies of the world.

How immigration has affected me

My first brushes with immigration occurred in the mid-1980's in Houston, TX. My 36 year career has been Information Technology. IT has become the main battleground of the importation of cheap foreign labor having received from 45% to 72% of the total visa quota. More of that later.

I worked primarily as an IT consultant (contractor) to oil, gas and pipeline companies. The Savings and Loan Disaster, corporate mergers, acquisitions, downsizings, and layoffs were daily occurrences. Houston was falling from its heydays in the 70's. Salaries were stagnant and you felt lucky to have a job.

On many of my contracts I heard stories of failed "offshoring" projects - as high as 300 million dollars - moving IT development and administration functions to foreign locations. As a matter of fact, I have worked at dozens of top 500 corporations with offshore projects and not one has succeeded. At each of these companies I noticed pockets of foreign workers. Most were in isolated annexes of office buildings - I suppose, to keep the build-up of these foreign workers invisible to the citizen employees who were being laid off at the same time. "The plan", lauded by CEO's and the US Department of Commerce and financed by the US government, was to train these "non-immigrant" (temporary) foreign workers on local systems, then move the whole function to India, Philippines, etc., to take advantage of that cost savings in labor. After all, this was Free Market Capitalism at its zenith. We used to call it slave trade. Now it is Globalization.

http://www.rttsweb.com/outsourcing/statistics/

"More than 1.3 million additional Western jobs will vanish by 2014 due to "the accelerated movement of work to India and other offshore locations," says the study released Nov. 15. Hackett doesn't talk of this as good or bad, but as something that will be a reality and a challenge for more Western businesses. Hackett says the pace of job erosion has nearly doubled this decade." Investors.com Dec 2010

"There is research that proves that many companies that outsource either domestically or internationally don’t perform as well as before the outsourcing. In a study, the average user satisfaction deficit was 13 percent. Other criteria, like value for money and company perception by customers, showed similar drops. One has to ask oneself if it’s really worth it." The Outsource Blog Jul 2010

"According to a mid-2009 report by AMR Research Inc. on the state of IT outsourcing, roughly 80% of enterprises plan to increase their amount of IT outsourcing or keep it the same." SearchCIO.com Feb 2010

"Compass Management Consulting services director Nigel Hughes argued that companies could see productivity losses of up to 60 percent when the full cycle of application development is outsourced, leading to longer development times." VNUNet April 2009

"The number of H-1B visas that can be issued annually is capped by Congress at 65,000...but while the total of available visas remains constant, the number issued to the major offshoring vendors is rising. The four largest H-1B recipients last year are all based in India: Infosys Technologies Ltd., with 4,559 visas; Wipro Ltd., with 2,678; Satyam Computer Services Ltd., with 1,917; and Tata. The number of visas issued to Infosys was identical to what it received in fiscal 2007, but Wipro, Satyam and Tata all saw increases." Computerworld February 2009

"When compared to their beliefs two years ago, 58% of companies said they were less of a believer in the idea that working with Indian IT outsourcers delivers value for their company and its shareholders." InformationWeek January 2009

"The $50 billion-a-year offshore outsourcing business was growing at a 29 percent annual rate until the credit crisis hit last fall, said Rod Bourgeois, a technology services specialist at Sanford C. Bernstein & Company. But he now forecasts growth in 2009 to be about 10 percent." New York Times January 2009

"Numerous surveys indicate that anywhere from 17 percent to 53 percent of customers have not realized business value/return on investment from offshore outsourcing." CIO November 2008

As work became rare in Houston, I took contracts all over eastern US. By the late 1990's, nearly all the employment agents nationwide were Indian. This was in stark contrast to employment agents in the 80's who operated out of local agencies that had been in business for decades. Most of these local companies were run out of business by increased competition from the international firms who were the biggest employers of H-1B foreign workers and from a deluge of new Indian employment (contracting) agencies. Rates were going lower and lower and pushed all experienced and capable engineers out of the market and into more lucrative jobs like stock trading and mortgage brokering.

In the 2000's the only jobs I got paired me with H-1B visa foreign workers. I was not told or paid to be a trainer, but that was my obvious job. Rates and salaries continued to plummet as the IT industry became saturated with foreign workers. My highest career earning period was 1998. It has been down hill ever since.

The US President's Council on Jobs and Competitiveness has recommended easing immigration for skilled migrants among other economic reforms.

What about the millions of unemployed citizens?

Remember the lies about "only 65,000" H-1B visas available for jobs that corporations cannot fill?

H-1B is broken down as follows, according to information on the USCIS web site:
1,400 nationals of Chile; Free Trade Agreements
5,400 nationals of Singapore;
20,000 with master's and doctor's degrees from US colleges and universities;
58,200 with "bachelor's degrees or equivalent experience" from any hole-in-the-wall in the world;
unlimited visas for those employed by non-profit research outfits;
unlimited visas for those employed for local, state and federal research;
unlimited visas for those employed by US colleges & universities.

http://www.epi.org/publication/bp257/

the data

The H-1B and L-1 are very large guest worker programs,
admitting 214,261 new foreign workers in fiscal year
2008 alone, a year in which the U.S. economy lost a net
of 920,000 jobs (U.S. Department of State 2008) While
no one knows the exact number of H-1B or L-1 holders
in the United States at any one time, because the govern-
ment does not track those numbers, estimates are in the
range of 600,000 H-1Bs and 350,000 L-1s.

Does this sound familiar?

The same scenario above has been described to me by career truckers and construction contractors. The complaint is illegal Mexicans taking over large portions of the trucking and construction industries. I faced this when I was out of work for 18 months and tried to go back into building construction. If you didn't speak fluent Spanish and accept $10/hr, you didn't work. The same issue is raised in the restaurant, hospitality, and building maintenance trades. Citizen companies in these trades cannot compete with illegal aliens who are largely paid under the table without taxation. When you go illegal, nothing that proceeds can be legal. Criminal employers are given the upper hand. The Citizenship and Immigration Services and Immigration and Customs Enforcement are practically unfunded and cannot (will not?) enforce the immigration laws of the country. ICE rounds them up, USCIS turns them loose.

Attempts to pass "Immigration Reform" legislation are appended to nearly every major appropriations bill in Congress. "Immigration Reform" means amnesty for all illegal aliens. Amnesty was passed in the mid-1980's and failed to stop the flood over the border. America needs orderly enforcement of the existing immigration laws. Border control needs to be taken as seriously as the wars in Iraq and Afghanistan. Mexico is being overtaken by drug cartel armies. The US is being overrun by refugees.

Deportation vs. Employer Sanctions

The media immigration debate usually centers around deportation of individuals, mothers and fathers torn from their families, abandoned children, mistreatment in detention centers, etc. I don't see the rationale in these media circus raids. The courts can't handle the load, so they are released.

The employers say that illegals do jobs that Americans won't do. That is a big lie. Only 17% of farm workers are illegals. 83% are Americans at below subsistence pay.

There is not much said about the employers of illegal aliens. There is very little, if any, punishment for knowingly employing illegals. The recent economic recession has proved that illegals will self-deport if there is no work. The employer of illegal aliens is committing a felony. There are far less employers than there are illegal alien employees, so the cost of enforcing the law against employers is much less than the cost of rounding up millions of illegal aliens. The bus lines that bring illegal aliens from Brownsville, TX and distribute them east and west about the country can, and do, make the reverse trip. http://elexpreso.net/terminal.php

How did we get here?

The flood of Central and South Americans into the US has been caused by failed US trade policies. The North American Free Trade Authority (NAFTA) caused the loss of 3 million manufacturing jobs in the US and turned Mexico into a slave state. The Mexican economy collapsed, farmers were forced out of their farms by huge American corporations, and the Exodus grows.

January 1, 2004 marks the tenth anniversary of the North American Free Trade Agreement’s implementation. NAFTA promoters — including many of the world’s largest corporations — promised it would create hundreds of thousands of new high-wage U.S. jobs, raise living standards in the U.S., Mexico and Canada, improve environmental conditions and transform Mexico from a poor developing country into a booming new market for U.S. exports. NAFTA opponents — including labor, environmental, consumer and religious groups — argued that NAFTA would launch a race-to-the-bottom in wages, destroy hundreds of thousands of good
U.S. jobs, undermine democratic control of domestic policy-making and threaten health, environmental and food safety standards.

http://www.citizen.org/publications/publicationredirect.cfm?ID=7295

Nafta produced results that were exactly the opposite of what was promised. For instance, domestic industries were dismantled as multinationals imported parts from their own suppliers.
Local farmers were priced out of the market by food imported tariff-free. Many Mexican farmers simply abandoned their land and headed north.

http://www.nytimes.com/2009/03/24/business/worldbusiness/24peso.html?pagewanted=all

Free trade aggrements (FTAs) continue to be signed. Our jobs are exported and foreign workers are imported in each of these agreements. Three FTAs were passed last week - South Korea, Colombia, and Panama. Expect those economies to collapse within 5 years. Our economy will continue to be drained for decades.

Companies such as Ace Ltd., Citigroup Inc. and Pfizer Inc. have led the effort to get the South Korea deal passed, while Caterpillar Inc., General Electric Co. and Whirlpool Corp. were among the biggest backers of the accord with Colombia.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/14/bloomberg_articlesLSZD6X6S9728.DTL#ixzz1b0FsGNK7

So, what do we get? Pink slips.

More than 1,700 union members were killed in Colombia in the past decade, the most in the world and 63 percent of the global total, based on union school figures.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/14/bloomberg_articlesLSZD6X6S9728.DTL&ao=2#ixzz1b0HNnT1m

United States Coast Guard officials say they have recovered 7.5 tons of cocaine from a drug submarine in the Caribbean Sea.Niles said the five sub crew members, who were allegedly transporting the cocaine from Colombia to Mexico, were stopped by the Coast Guard as they tried to escape in a yellow life raft. http://jamaica-gleaner.com/gleaner/20110803/carib/carib1.html

"Colombia" as in Colombian Free Trade Agreement.


http://www.fairus.org/site/DocServer/USCostStudy_2010.pdf?docID=4921;security=1601&news_iv_ctrl=1761

the annual costs of illegal immigration at the federal, state and local level to be about $113 billion; nearly $29 billion at the federal level and $84 billion at the state and local level

http://cis.org/node/759

A 1997 study by the American Academy of Sciences found that the cheap labor of illegal aliens and poor immigrants caused a 44 percent decrease in wages among the poorest Americans from 1980 to 1994.

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Source: U.S. Census Bureau, Population Division
Questions? / 1-866-758-1060

Blast From The Past

This 2001 warning from PublicCitizen.org went unheeded, leading to worldwide economic collapse.

http://www.citizen.org/cmep/article_redirect.cfm?ID=7104

Blind Faith: How Deregulation and Enron's Influence Over Government Looted Billions from Americans

Sen. Gramm, White House Must Be Investigated for Role in Enron's Fraud of Consumers and Shareholders

December 2001

Public Citizen's

Critical Mass Energy & Environment Program

---

Summary of Findings

• The combination of unregulated state wholesale electricity markets and federal deregulation of commodity exchanges has removed accountability and transparency from the energy sector, allowing corporations to manipulate price and supply of electricity and natural gas through the exercise of significant market power. California's recent energy crisis and Enron's bankruptcy would have been impossible under a regulated system. [This refers to the repeal of Glass-Steagall Act.  See The Unravelling of America - Part I.  Unfortunately, this deregulation was not limited to energy trading.]
  
  
• Enron developed mutually beneficial relationships with federal regulators and lawmakers to support policies that significantly curtailed government oversight of their operations.
  
  
• Enron's business model was built entirely on the premise that it could make more money speculating on electricity contracts than it could by actually producing electricity at a power plant. Central to Enron's strategy of turning electricity into a speculative commodity was removing government oversight of its trading practices and exploiting market deficiencies to allow it to manipulate prices and supply.  [Wall Street can do this, too.]
  
  
• Dr. Wendy Gramm, in her capacity as chairwoman of the Commodity Futures Trading Commission (CFTC), exempted Enron's trading of futures contracts in response to a request for such an action by Enron in 1992. At the time, Enron was a significant source of campaign financing for Wendy Gramm's husband, U.S. Senator Phil Gramm.
  
  
• Six days after she provided Enron the exemption it wanted, Wendy Gramm resigned her position at the CFTC. Five weeks after her resignation, Enron appointed her to its Board of Directors, where she served on the Board's Audit Committee. Her service on the Audit Committee made her responsible for verifying Enron's accounting procedures and other detailed financial information not available to outside analysts or shareholders.
  
  
• Following Wendy Gramm's appointment to Enron's board, the company became a significant source of personal income for the Gramms. Enron paid her between $915,000 and $1.85 million in salary, attendance fees, stock option sales and dividends from 1993 to 2001. The value of Wendy Gramm's Enron stock options swelled from no more than $15,000 in 1995 to as much as $500,000 by 2000.
  
  
• Phil Gramm is the second largest recipient in Congress of Enron campaign contributions, receiving $97,350 since 1989.
  
  
• Days before her attorneys informed Enron in December 1998 that Wendy Gramm's control of Enron stock might pose a conflict of interest with her husband's work, she sold $276,912 worth of Enron stock.
  
  
• Enron spent $3.45 million in lobbying expenses in 1999 and 2000 to deregulate the trading of energy futures, among other issues.
  
  
• In December 2000, Phil Gramm helped muscle a bill through Congress without a committee hearing that deregulated energy commodity trading. This act allowed Enron to operate an unregulated power auction -- EnronOnline -- that quickly gained control over a significant share of California's electricity and natural gas market.  [Gramm's bill was Gramm-Leach-Bliley Act: allowing commercial banks, investment banks, and insurers to merge (which would have violated antitrust laws under Glass-Steagall).]
  
  
• Phil Gramm's legislation was in conflict with the explicit recommendations of the President's Working Group on Financial Markets, which is composed of representatives from the Department of Treasury, the Board of Governors of the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The Working group expressly recommended against deregulating energy commodity trading because the traders would be in strong positions to manipulate prices and supply.
  
  
• From June 2000 through December 2000 -- prior to the bill's passage -- California experienced significant price spikes but only one Stage 3 emergency (requiring "rolling blackouts"). After passage of Gramm's energy commodity deregulation bill in December 2000, Stage 3 emergencies increased from one to 38 until federal regulators helped end the crisis by imposing price controls in June 2001. Phil Gramm's legislation, for which Enron was the primary lobbyist, allowed Enron's unregulated energy trading subsidiary to manipulate supply in such a way as to threaten millions of California households and businesses with power outages for the sole purpose of increasing the company's profits.
  
  
• Because of Enron's new, unregulated power auction, the company's "Wholesale Services" revenues quadrupled -- from $12 billion in the first quarter of 2000 to $48.4 billion in the first quarter of 2001. This remarkable revenue increase came on top of the record revenue gain that Enron posted from 1999 to 2000, when full-year "Wholesale Services" revenues increased from $35.5 billion to $93.3 billion -- a 163 percent increase.
  
  
• Investigations by state and federal officials concluded that power generators and power marketers intentionally withheld electricity, creating artificial shortages in order to increase the cost of power.
  
  
• Enron took advantage of lax oversight following deregulation and formed a complicated web of more than 2,800 subsidiaries -- more than 30 percent (874) of which were located in officially designated offshore tax and bank havens.
  
  
• President Bush's presidential campaign received significant financial support from Enron ($1.14 million).
  
  
• Upon assuming office in 2001, Bush promptly scrapped plans put into place by former President Bill Clinton to significantly limit the effectiveness of these countries as tax and bank regulation havens. This action came at the height of high West Coast energy prices, probably allowing Enron to siphon billions to its offshore accounts.
  
  
• At the same time, the Bush administration and certain members of Congress waged a legislative and public relations campaign against the imposition of federal price controls in the Western electricity market. Such price controls remove the ability of companies exercising significant market share to price-gouge by effectively re-regulating the market. Bush's opposition to price controls unnecessarily extended the California energy crisis and cost the state billions of dollars.
  
  
• When federal regulators finally imposed strict, round-the-clock price controls over the entire Western electricity market on June 19, 2001, companies operating power auctions (like Enron) no longer had the ability to charge excessive prices and no longer had incentive to manipulate supply.
  
  
• While price controls clearly saved California, Enron suffered because it could no longer manipulate the market and price-gouge consumers. With no significant asset ownership to offset its losses, Enron's unregulated power auction quickly accumulated massive debts. At the same time, the curtailed revenue flow made it more difficult for executives and members of the Board to conceal the firm's accounting gimmicks. Amid the turmoil, CEO Jeff Skilling resigned in August. But shareholders and federal regulators did not learn of the severity of Enron's financial trouble until November 2001. At this time, Enron's top executives continued to receive significant bonuses.
  
  
• Due to Wendy Gramm's position on Enron's Audit Committee, she had intimate knowledge of Enron's financial structure and had access to sensitive financial information not available to Wall Street analysts or average shareholders. It is therefore probable that she knew of Enron's possibly fraudulent practices for some time and that her husband would have known as well. Enron's 874 tax haven subsidiaries allowed Enron to funnel billions of dollars to offshore accounts.
  
  
• The Gramms' close involvement with Enron's corporate and legislative activities, the Gramms' possible knowledge and/or connection to criminal misconduct relating to Enron's collapse, and the effects of Enron's layoffs and other economic impacts on Senator Gramm's constituents may have been the leading factor in Gramm's decision on September 4 not to seek re-election to the Senate in 2002.

5 March 2010
8 out of 10 stimulus dollars go overseas
[Rob Sanchez] @ 12:15 pm [Email author] [Email this article] [Print this article]
The good news is that the Obama stimulus money targeted for green industries is creating jobs. The bad news is that most of the jobs are in China. Two video reports describe what is happening. There are companion articles to the videos that fill in more details of the story. The video and text articles aren’t the same so to get the complete picture check both of them out.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.
So Where Are the Jobs?

“Most of the jobs are going overseas,” said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. “According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S.”

New Wind Farms in the U.S. Do Not Bring Jobs
ABC News Reports, Jonathan Karl, Feb. 9, 2010:
Article and video

The story continued when an ABC News affiliate in San Diego did a follow up story with some very clever investigative reporting. Who would have ever thought of actually going to an office of one of the companies that are receiving billions of taxpayer dollars?

A-Power Energy Generation Systems is one example. The company lists a downtown San Diego office suite as its business and mailing address in filings with the Securities and Exchange Commission. However, that office suite is vacant.

Foreign Firms Benefitting From U.S. Green Energy Funding, KGTV 10, February 8, 2010
video and article on same page

These stories were originated by an organization called the “Investigative Reporting Workshop“, which is affiliated with the School of Communication at American University. They have an article on the website that adds more fuel to the fire: “Renewable energy money still going abroad, despite criticism from Congress, by Russ Choma, February 8th, 2010.

The Workshop was the first to report last October that more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. Since then, the administration has stopped making announcements of new grants to wind, solar and geothermal companies, but has handed out another $1 billion, bringing the total given out to $2.1 billion and the total that went to companies based overseas to more than 79 percent.

In fact, the largest grant made under the program so far, a $178 million payment on Dec. 29, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company.
Of course the Chinese stuck their hooks into Texas also.

The same day the Workshop’s first reported on this story a consortium of American and Chinese companies announced a deal to build a $1.5 billion wind farm in Texas, using imported Chinese turbines. Company officials said they planned to collect $450 million in stimulus grants for the project. The deal would create dozens of jobs in the U.S. and thousands in China. The news provoked outrage among lawmakers, particularly after the Energy Department seemed to take a neutral stance, declining to say whether it would reject such an application.

The tragedy with all of this is that most of the money isn’t going to go to home grown crooks — it’s going to fund scams in other countries. Americans will get a few of the leftover crumbs when and if the foreign companies decide to hire workers to install the equipment, but even then there is no guarantee that they will hire Americans — remember the Texas bridge welders from Italy?

If Obama and Congress insist of throwing billions of dollars around, why aren’t they making sure that the only pigs at the trough are U.S. citizens?

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Green Stimulus Going Offshore

http://www.ourfuture.org/blog-entry/2009114719/hell-if-dc-didnt-offshore-849-million-stimulus-windmills-already

Hell if D.C. Didn't Offshore $849 Million in Stimulus for Windmills Already

By Leo Gerard
November 19, 2009 - 11:52am ET

Of the $1.05 billion in clean energy grants awarded by D.C., $849 million -- 84 percent -- went to foreign wind companies, according to an analysis by Russ Choma of the Investigative Reporting Workshop. He wrote:

"The cash grants were given for the installation of 1,763 megawatts of capacity - 1,566 installed by foreign companies. Using the Renewable Energy Policy Project's own numbers, as many as 4,500 manufacturing jobs may have been created overseas."

http://romanticpoet.wordpress.com/2009/11/09/stimulus-funds-for-green-energy-projects-going-offshore-along-with-other-u-s-manufacturing-ge-and-jeffrey-immelt-profiting/

Stimulus Funds for Green Energy Projects Going Offshore along with Other U.S. Manufacturing
By Institute for Energy Research
Friday, November 6, 2009

The Obama Administration sold its $787 billion stimulus plan on the basis of improving the economy through investing in green energy and by doing so, increasing employment in the United States. But what is actually happening, particularly with wind and solar projects, is that the majority of the manufactured components are being built offshore in either Asia or Europe, resulting in foreign countries capturing a good deal of our stimulus funds and finding a lucrative haven for their products in the United States.

Solar Cells Manufactured Overseas

Not only are wind turbines mostly manufactured in countries overseas, but so are photovoltaic (PV) cells. Florida Power & Light (FPL) started operating its 25 megawatt photovoltaic solar plant in southwest Florida in conjunction with a visit to the plant by President Obama on October 27. [ix] The DeSoto plant in southwest Florida is the first of a total of 110 megawatts of solar capacity that FPL will install at 3 different sites by the end of 2010. Although Obama praised FPL’s work in the solar arena, he did not tell the American public that the components of the DeSoto plant are from foreign countries. While the PV cells were provided by a firm from California, they were made in the Phillipines. The steel PV frame holding the cells was produced in Canada, and the electrical parts and boxes were made in Germany, where solar power has been given heavy subsidies by the German Government. While German manufacturers have been producing PV technology for their country’s solar expansion, they are now concerned that China will take over their market due to costs that are 30% lower.[x]

http://abcnews.go.com/WN/wind-power-equal-job-power/story?id=9759949

New Wind Farms in the U.S. Do Not Bring Jobs

By JONATHAN KARL (@jonkarl)

Feb. 9, 2010

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.

Even with the infusion of so much stimulus money, a recent report by American Wind Energy Association showed a drop in U.S. wind manufacturing jobs last year.

http://www.sfexaminer.com/opinion/editorials/2011/10/stimulus-funding-paying-overseas-workers

Stimulus funding paying for overseas workers

By: Examiner Editorial | 10/21/11 8:00 PM

Two more such scandals appeared this week, but these latest outrages feature a new wrinkle — stimulus funds being used to create jobs for foreign workers. In the first example, the Obama administration handed $7.2 million to four Oregon logging companies to hire loggers in a severely depressed industry. But according to a Department of Labor inspector general’s report, only two jobs thus funded went to U.S. citizens: “Only two Oregonians were listed on the employer recruitment reports, indicating that workers in Oregon were likely unaware these job opportunities were available. In fact, although 146 U.S. workers were contacted by the employers regarding possible employment, none were hired. Instead, 254 foreign workers were brought into the country for these jobs.”

In the second new stimulus program scandal this week, the Obama administration gave electric carmaker Fisker Car Company a $529 million loan guarantee to build vehicles in the U.S. At the time, Vice President Joe Biden claimed “this is seed money that will return back to the American consumer in billions and billions and billions of dollars in good new jobs.” But the rest of the story came out this week when Fisker officials acknowledged that most of the jobs being created are actually in Finland. Allegedly they couldn’t find a suitable assembly facility here in the U.S., despite the fact Detroit is the birthplace of the automotive industry, virtually every major manufacturer from around the world has put factories in this country, and there are thousands of unemployed auto workers here. Administration officials approved the transfer of jobs to Finland.

Read more at the San Francisco Examiner: http://www.sfexaminer.com/opinion/editorials/2011/10/stimulus-funding-paying-overseas-workers#ixzz1eSxrFnVl

The Unraveling of America - Part II - Globalization

We hear about Globalization every day. We are mesmerized into willing submission by the corporate, government and media indoctrination of the wonderful future we will share in the "New World Order", as proposed by George H. W. Bush.

There are practically no voices railing against this tyranny. Whoever speaks up is shouted down by the crowd as a Protectionist.


Globalization in History

Globalization started when the first trader ventured away from his country to seek goods and slaves in foreign lands. Once a market was found, the king and his corporations quickly set up shop, invested the military, and expanded ruthlessly until competition or nature mounted stronger pressures.

A brief synopsis includes Rome, the Silk Road, Marco Polo, the Spanish search for western gold, Columbus, the British East India Company, the Opium Wars, African colonization, colonization of the Americas, and American multi-national corporation imperialism.

Proponents of globalization attribute the growth of civilization to these practices.

Opponents ask "where are these countries now?" Rome, Spain, Portugal, France, Great Britain - they grew quickly with their world-wide pursuits, but were inevitably brought down by an inability to hold onto their acquisitions. The reach is greater than the grasp.

Civilization grows during long periods of self-sustenance. The two-hundred year isolation of America led to the greatest industrialized and strongest empire on Earth. Creativity needs security and nurture.

Investment in imperial fleets and war tend to drain the coffers. American world trade has increased explosively since the 1960's. Free Trade Authorities have been enacted to "level the playing field" for global trade. Immigration law has been intentionally laxed to provide the cheap labor to remain competitive with foreign countries who do not share our human rights, social welfare, and environmental achievements. Each new treaty includes a swap of American industries for more foreign workers. The results of these treaties can now be articulated.


Globalization Now

The trials and tribulations of the World Trade Organization and the World Bank are fairly well known. Less known are a couple offices of the US Treasury that play this world game with your tax dollars by the hundreds of $billions.

The Overseas Private Investment Corporation (how do you like that name for a US Treasury department?) puts up $billions per year for American industries to pack up shop and move to China, India, Mexico, Brazil, Russia, wherever. These incentives are provided by our government because no commercial interest would risk this type of treason and potential loss. ENRON lost $4 billion of your money in these rip-offs. Go to http://www.opic.gov/ and download the latest annual report. Note OPICs balance sheet has been reduced 50% 2007-2008. I expect OPIC to be insolvent now and guess who will bail them out?

Ever heard of Export-Import Bank (EX-IM)? Click the link and take notice of where your money has been going all these years. In 2008, most of the $8 billion went to Boeing to build aircraft overseas.


Globalization of the US Auto Industry

Now that GM and Chrysler have gone bankrupt, look at where they invest:

Detroit Bailout

Chrysler Bailout

Ford has the same story.


Globalization of Finance

CitiGroup Bailout

CitiGroup was the largest bank receiver of OPIC and EXIM funds, and still is.


The Trade Balance (?)

As of December 2008 (pdf), the US carries a $700 billion trade deficit in goods and services. The Economic Policy Institute estimates that every $1 billion in net trade deficits destroys between 11,000 and 20,000 jobs.

12,000,000 American Jobs Destroyed in 2008 due to trade deficit.


Epilog

China is now the world's largest exporter.

Now that Globalization has brought down the economies of the world, you would think that Congress, the Administration and the media would have learned their lesson.

No, FTAs are still pending, "Free Trade" is still the darling, our industries are being bought up by foreign nationals, Americans are losing jobs by the millions, and Globalization is the hope for a brighter future.


My next story will be on The Unraveling of America - Part III - Immigration.

The Unraveling of America - Part 1

Following the financial system collapse of 1933, the Glass-Steagall Act was enacted to separate investment banks from commercial banks.

The following study was done after the Savings and Loan Crisis of the 1980's.

Congressional Research Service, 1987

In the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable. Then, in the Great Depression after 1929, Congress examined the mixing of the "commercial" and "investment" banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and fraud in some banking institutions' securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass-Steagall Act. It consists of four sections of the Banking Act of 1933. Its language makes it a felony for anyone -- banker, broker, dealer in securities, or savings institution -- to engage in the deposit-taking and securities businesses at the same time. For Federal Reserve member banks, it included reinforcing language designed to separate the two activities directly and through corporate affiliation or interlocking directorates.

In 1999, contrary to the current Clinton mudslinging of right-wing political blogs, Senator Phil Gramm (R,TX) introduced legislation to repeal Glass-Steagall. Now, I know I am ruffling some right-wing feathers out there, but don't fret. This legislative corruption was supported by Democrats, Independents, and Republicans in a firestorm of deregulation which, to this day, still rages.

LosAngeles.InjuryBoard.com

In 1999, former Senator Phil Gramm (who is, incidentally, Senator John McCain's economic adviser and cochairs his presidential campaign) set out to completely gut the Glass-Steagall Act, and did so successfully, replacing most of its components with the new Gramm-Leach-Bliley Act: allowing commercial banks, investment banks, and insurers to merge (which would have violated antitrust laws under Glass-Steagall).

So, regulations that kept the markets safe for 60 years were stripped.

In 2000, shortly after George W. Bush was elected president, Congress and President Clinton were trying to pass a $384 billion omnibus spending bill, and while the debates swirled around the passage of this bill, Senator Phil Gramm clandestinely slipped a 262-page amendment into the omnibus appropriations bill titled: Commodity Futures Modernization Act. It is likely that few senators read this bill, if any. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision -- lobbied for by Enron, a major campaign contributor to Gramm -- that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities.

Mr. Gramm isn't done.

http://www.commondreams.org/view/2008/09/24-1

The legislation's "Legal Certainty for Bank Products Act of 2000," Title IV of the law - a law that Gramm snuck in without hearings hours before the Christmas recess - provided Wall Street with an unbridled license to steal. It made certain that financiers could legally get away with a whole new array of financial rip-off schemes.

One of those provisions, summarized by the heading of Title III, ensured the "Legal Certainty for Swap Agreements," which successfully divorced the granters of subprime mortgage loans from any obligation to ever collect on them. That provision of Gramm's law is at the very heart of the problem. But the law went even further, prohibiting regulation of any of the new financial instruments permitted after the financial industry mergers: "No provision of the Commodity Exchange Act shall apply to, and the Commodity Futures Trading Commission shall not exercise regulatory authority with respect to, an identified banking product which had not been commonly offered, entered into, or provided in the United States by any bank on or before December 5, 2000. ..."

LosAngeles.InjuryBoard.com

In 2003, Gramm left the Senate to join UBS, which had acquired investment house PaineWebber due to his deregulation bill. At UBS, Gramm lobbied Congress, the Fed and the Treasury Department. During Gramm's tenor at UBS and as a lobbyist, Congress passed the Responsible Lending Act, billed as an anti-predatory-lending measure, but was called the "Loan Shark Protection Act" by consumer advocates, as it was designed to preempt stronger state laws against anti-predatory lending.

And, of course, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 pulls the rest of the rug from under the American people.

The Uptick Rule

The Uptick Rule was instated in 1938 by SEC to block the downward spiral of short selling when a stock or financial instrument was taking a nose dive.

Investopedia: Uptick Rule

A former rule established by the SEC that requires that every short sale transaction be entered at a price that is higher than the price of the previous trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1 and was implemented in 1938. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines.

Since 1938, short selling on the down-tic was outlawed until July 2007 when the SEC struck down the measure. The "UpTick Rule" kept the stock market from collapsing by a rush to hedge on the fall of stocks.

TraderMike.net

The SEC has voted to remove the “short sale tick test”, Rule 17 CFR 240.10a-1 for all equity securities. Effective Friday, July 6, traders will be able to short all securities on an up, down, or zero tick.

The Commission first imposed restrictions on the execution prices of short sales almost seventy years ago, when we adopted the "tick test" of Rule 10a-1 in 1938. The tick test permits short sales only at a price above the last sale price, or alternatively, at the last sale price -- if that is higher than the previous price.

Globalization will be the topic of discussion in my next Part II of this series.

***

Where is the TARP Money Going?

The media doesn't mention a word about where that $350 billion went.

Actually, the Congressional Oversight Panel, commissioned to oversee the Wall Street bailout, doesn't know where it went, either.

As a matter of fact, I am predisposed to do this research because the COP Chairwoman, Elizabeth Warren, was a guest on Bill Maher (HBO) 5/15 at which time she stated that COP, and Congress, don't know where the money went.

COP Report 12/08 (Adobe.pdf)

This is the first report of the Congressional Oversight Panel. We
are here to investigate, to analyze and to review the expenditure
of taxpayer funds. But most importantly, we are here to ask the
questions that we believe all Americans have a right to ask: who
got the money, what have they done with it, how has it helped the
country, and how has it helped ordinary people?

In the course of its meetings with Treasury, the Inspector General
of Treasury, and the staff of the Federal Reserve, the Oversight
Panel has confirmed that the Office of Financial Stabilization
has administered the TARP program without seeking to monitor
the use of funds provided to specific financial institutions.49 Interim Assistant Secretary for Financial Stability Neel Kashkari has said that Treasury favors monitoring through ‘‘general metrics’’ that look at the overall economic effects of the disbursed funds.50

Assessing Treasury’s Strategy: Six Months of TARP

The April oversight report for COP is entitled Assessing Treasury’s Strategy: Six Months of TARP. In this report, COP offers a preliminary look at Treasury’s strategy and offers a comparative analysis of previous efforts to combat banking crises in the past.
Over the last six months, Treasury has spent or committed $590.4 billion of the TARP funds. Treasury has also relied heavily on the use of the Federal Reserve’s balance sheet which has expanded by more than $1.5 trillion (not including expected TALF loans) in conjunction with the financial stabilization activities it has undertaken beyond its monetary policy operations. This has allowed Treasury to leverage TARP funds well beyond the funds appropriated by Congress.

The total value of all direct spending, loans and guarantees provided to date in conjunction with the financial stability efforts (including those of the FDIC as well as the Treasury and the Federal Reserve) now exceeds $4 trillion. This report reviews in considerable detail specific criteria for evaluating the impact of these programs on financial markets.

Mortgage Foreclosures / Defaults / Delinquencies.
As measured by foreclosure initiations or completions, either as a rate or absolutely, or by delinquent mortgages, this problem continues to worsen.100

Housing Prices.
Although some of the drop in real estate value reflects a retreat from unsustainable bubble levels, the continued drop in housing prices is a leading contributor to bank asset write downs, recent declines in household net worth, and the weakening broader economy.107

Overall Loan Originations.
In its most recent report, Treasury cited rising consumer lending, especially in mortgages and student loans; however, seasonal changes in student loan demand and increased refinancing demand largely explain this increase.114 Commercial and industrial lending both fell considerably.115 The combination indicates that credit markets remain tight, especially in the business sector.

Mortgage Originations.
A low risk premium coupled with low mortgage volume indicates substantial tightening of lending standards.120 The GAO has indicated a substantial drop in this figure, both as measured by originations and applications, since the first quarter of 2008.

Oh, yes, and what about those "general metrics"?

Indeterminate Metrics (Too Early to Tell)
Some measures of the health of both credit markets and the broader economy are difficult to evaluate as either improving or worsening, either because they are too volatile or because they are contradictory depending on how one examines them.

And, finally, ....

Since October, approximately $280 billion of capital infusions have been made with TARP funds. Nonetheless, losses on impaired assets have continued to weaken the balance sheets of banks and foster uncertainty in the financial markets.

No word about where the money went. (It went OFFSHORE!)
....