Year in Review: The Top 10 News Stories of 2011

From this Blogger's perspective, here are the top 10 news stories of 2011. Each was chosen based on their potential on-going long-term effects on humanity. In no particular order, they are:

1) The Arab Spring: Erupting in Tunisia and spreading across the Arab world, the entire year was characterized by protests and political changes in Northern Africa and the Middle East. Regime changes in Tunisia, Egypt, and Libya, as well as on-going protests in a dozen nations (currently (most serious in Syria and Yemen) represent serious winds of change throughout the geo-political sphere. A timeline of protests throughout the Arab world can be found at The Guardian

2) Weather Extremes and Global Warming: Once a matter of debate, the vast majority of the world’s climatologists agree that global warming is happening at an even faster rate than expected, with significant changes in the ocean temperatures and subsequent weather patterns. According to the National Oceanic and Atmospheric Administration, there were an all-time record of twelve weather disasters costing more than $1 billion each in 2011 (for a total of 45 billion dollars in damage). The previous record was nine such disasters in 2008. Weather events included a blizzard across much of North America on February 2, record wilfires in the US west, a tornado outbreak that levelled Joplin, Missouri, Hurricane Irene (which uncharacteristically inundated and devastated inland communities in Vermont and Upstate New York), and a foot-and-half snowfall at Halloween in the northeast US. Elsewhere, record high temperatures were recorded in Iraq and Kuwait, an all-time record low volume of Arctic sea was recorded, record floods inundated Australia and Asia, and the worst droughts in three decades affected Africa.

3) Osama bin Laden Killed: A decade after he masterminded the 9/11 attacks on New York City’s World Trade Center, Osama bin Laden was killed in a surgical strike on his hideout in Pakistan. This represented the most visible and significant victory in the global fight against terrorism and the al Qaeda organization.

4) New York State Enacts Marriage Equality: Four days after its scheduled adjournment for the season, the New York State Senate gave its approval to Marriage Equality by a larger-than expected margin of 33-29 when four Republicans broke rank and joined the majority of Democrats, making New York the seventh and largest jurisdiction in the US to permit same-sex marriage. Full story at Tully's Page

5) Occupy Wall Street and Police Brutality: Beginning on September 17 in New York City, the “Occupy Wall Street” movement in many ways inaugurated an American version of the Arab Spring. Spreading to other cities across the nation, thousands of Americans from all walks of life took to the streets to protest persistent unemployment, indebtedness, foreclosures and economic injustice in raw juxtaposition to the trillions of bailouts received by Wall Street financial houses and executives. The movement elicited a brutal response by police forces, and the use of pepper spray against peaceful protesters, young women, and veterans became a national outrage. The movement propelled Time magazine to name “The Protester” as it’s Person of the Year.

6) Federal Reserve Bailouts Revealed: For almost 100 years, the Federal Reserve System, which serves as the nations Central Bank, operated without an audit or significant political oversight. In the aftermath of the bank bailouts commencing in 2008, Congress began looking into the Fed’s activities using taxpayer dollars. In all, it was revealed that over 16 trillion in secret unpaid loans were made to both American and foreign banks. Sen. Bernie Sanders

7) Earthquake, Tsunami, and Nuclear Meltdown in Japan: On March 11, an 8.9 Magnitude earthquake rocked Japan, the worst earthquake in modern history. Over 16,000 people died from the quake and the tsunami that followed. When the Fukushima Daiichi power plant site in Fukushima was inundated by a 49-foot high tsunami wave, the nuclear reactors could not be cooled, began to overheat, and meltdowns began at three of the reactors. What followed was a release of radioactive cesium, evacuation of the surrounding area, and subsequent government and industry cover-ups of the extent of radiation. Fukushima Radiation

8) John Wheeler Murdered: On New Year’s Eve, after the death of 100,000 fish and 5,000 blackbirds in Arkansas, John P. Wheeler, a decades-long government expert in toxic chemicals, was found murdered in a dump as he was en route to Washington DC. The kills and murder came in the wake of the US Government’s Pine Bluffs Arsenal "disposal” of mustard and nerve gas in the area, as well as active “fracking” by energy companies. The incidences awakened a national concern for the environmental effects of these activities, and was the single most visited and cited webpage on this site: John Wheeler

9) Milton Hershey Rejects HIV Positive Student: In an almost incomprehensible burst of ignorance, prejudice, and chutzpah, the highly-vaunted Milton Hershey School (a private, tuition-free boarding school), issued a statement coinciding with World AIDs Day explaining their refusal to admit a student due to his HIV positive status, in direct violation of the federal Americans with Disabilities Act (ADA). Outrage was swift, and brought additional publicity to continuing ignorance about HIV transmission. Milton Hershey

10) European Debt Crisis: Beginning in Greece, the ability of some Eurozone member nations to repay their government debts created continental – and global – concern. Ireland, once seen as the “Celtic Tiger” for its explosive, high-tech-driven growth found itself enacting austerity measures and slashing government spending; Italy, Portugal, and Spain found themselves in a similar condition. The downgrading of these nations bonds began a record weakening of the Euro against the US Dollar that continued throughout the year. A weakened Euro makes it more difficult for the Eurozone members to purchase American goods, endangering the US recovery.

More Funds for AIG...

The U. S. Treasury Department announced today that another 30 billion dollars would be headed for troubled Insurance giant AIG. This is on top of the 150 billion already sunk into this Insurance Titanic, including 26 billion in loans from the Federal Reserve Bank.

This would put the US Government ownership of AIG at 80%.

It also would convert the stock that the US Government (Read: U S Taxpayers) has in the company from Preferred to Common Stock: and that means that if the company loses money, the U. S. Taxpayer gets socked first.

Now, with all this cash, could AIG actually lose money? Well, friends, they just reported quarterly losses of 61 billion.

The appropriate action is to allow AIG to fail, and distribute their clients to well-run companies. There are plenty of healthy, responsible Insurance companies who could and would benefit from taking on AIG's clients: companies like Guardian Life, New York Life, and the American Financial Group, all of whom have refused taxpayer bailout funds because they have operated their companies responsibly and profitably.

Which are the companies that are taking taxpayer funds?

- Banks that sold and traded in irresponsible sub-prime mortgages (required by Democratic President Carter, to 'help' low-income areas, and strenuously enforced by Democratic President Bill Clinton).

- Insurance Companies that invested in subprime mortgages and irresponsible banks after Banking Deregulation (signed by Democratic President Bill Clinton in 1999) permitted it. (See a pattern here?)

Meanwhile, healthy insurers that should be the focus of the public's purchases are put at competitive disadvantage by having the Irresponsible Government Favorites kept afloat with tax dollars. We are rewarding the inept, and hurting the wise.

Why? Why would Obama want 80% government control of an insurance Company?

Ah, lets just wait for his new Health Plan Initiative Wouldn't it be amazing if AIG suddenly became the US Government-funded Universal Health Insurer?

Hmmmm....

GM, Chrysler, Homeowners: they all want MY money.

Frederic Bastiat, writing two centuries ago, said it best:

"The law has come to be an instrument of injustice....the law defends plunder and participates in it...The present day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it."

Today's News item #1: "General Motors Corp. and Chrysler LLC summoned the prospect Tuesday of their collapse unless they get $7 billion in federal aid within six weeks -- part of a dramatic plea for a total of up to $39 billion to survive the worst economic crisis in the history of Detroit's signature industry."

(This, of course, is 14 billion more than they ASSURED us all that they needed a few months ago)

Today's News item #2 (With breaking details from ABC news, who, apparently, claims an 'in' with Democratic policy makers): "...Government subsidies for lenders to modify loans to homeowners who are struggling to make payments. The government would subsidize the difference.... A program through Fannie Mae and Freddie Mac for homeowners to refinance their mortgages if they owe more than their homes are worth..."

So, in a nutshell:

1) *I,* (like the majority of Amertican consumers) chose NOT to buy GM or Chrysler cars, but to purchase cars that met my needs as a consumer. Because I chose better cars by better manufactureres that offered me what I needed and wanted at a price I could afford...my government will now force me, via taxation, to keep afloat poor competitors whom I specifically did NOT choose on my own to support.

2) *I* chose to purchase a tiny house that i could afford, and refinanced when appropriate, to make sure that I was a responsible homeowner. Eight of us lived in an affordable two-bedroom house. I subdivided the living room to create a third bedroom. When my teens needed more room, i moved to sleeping on an unheated porch - because it was the responsible thing to do.

However, for all those who bought houses beyond their means, who threw caution to the wind in terms of adjustable rates, who lied on their applications...and for all the banks who make money on these loans...these people will keep their houses and their banks will continue to make money...because my government will now force ME to subsidize THEM through taxation.

Yes, I'm disgusted.

"Big 3" Auto Bailout? How many mistakes can one Congress make?

A step back in History:

It's 1979, and Lee Iacocca, Chairman of Chrysler, has successfully convinced Congress to guarantee 1.5 billion in loans to the corporation, with taxpayer dollars, because this would help revive the all-American Corporation. There was even a specific plan - Chrysler's "K-Car" would catapult the company into profitability forever, and an american icon would be saved.

Wrong.

Today, the so-called "Big Three" - GM, Ford, and yes, Chrysler...are seeking billions more in assistance, using the same tired arguements and promsiing the same eventual victories if they could just get "a little help."

It is one of those cases where if you say things often enough, people believe it. "Big Three?" You can find this phrase repeated over and over in the media.

But here are October's auto sales figures:

GM: 168,719 units sold
Toyota: 152,278 units
Ford: 132,278 units
Chrysler: 94,530 units

Some Lessons:

1) They are NOT "the Big 3." Consumers have clearly spoken, and they've been saying "Toyota" for some time. Congressional action to prop up Ford is tantamount to using taxpayers dollars against the taxpayers themselves. We have already spoken: Toyota has given us what we wanted, at a price we want. Don't force us to bailout the companies we did NOT choose.

2) GM is the largest auto manufacturer world-wide. Since when does the Government seek to bail out the largest company in a competitive field? If GM can not make a profit when it has more car sales than any other company, it is time for them to radically change: split up, reorganize, bust the UAW - but dont seek tax dollars for "same old same old."

3) Ford, GM, and Chrysler ceded the small car market to Honda and Toyota. They lost, folks. That's what business is all about. In the 1500s, Spanish Monk-Economist De Albornoz wrote that "when businesses experience profit and loss, and since when they make a profit, they keep it, they must not transfer a loss to the people."

The Market has clearly chosen. Congress, the UAW, and the so-called "Big-3" don't like the results.

Too Bad. Live with it. Capitalism doesnt guarantee success, and neither should Congress.

Why the Bailout is wrong.

Listening to some of our nations top political leaders, one gets an uneasy feeling that The Great Depression II is right around the corner, unless we entrust the federal government to engage in a massive 700 billion bailout plan that will ultimately save ‘main street’ from Wall Street’s mess. But if that’s the case, why have over 200 leading economists from Harvard, MIT, Northwestern, the University of Chicago, and other respected institutions signed a petition opposing rapid passage of this bailout?

In basic English, the argument in favor of the bailout goes something like this: banks and other financial institutions have purchased mortgages which, for many different reasons, are now worth far less than their purchase price. As a result, banks have lost money buy purchasing them, and they can’t convince anyone else to buy them. If they can’t sell their ‘paper securities,’ they can’t raise cash. This, in turn, means they have no money to lend, and credit markets will be so tight that ‘Main Street’ will grind to a halt: businesses will not be able to borrow funds to meet payroll or expand their enterprises, and consumers will be unable to purchase homes and cars or pay their college tuition bills.

This line of reasoning scares many Americans (as its meant to), but is faulty for several reasons.

First of all is the cost. What is not being revealed to the American public is that over the last 5 months, the Federal Reserve Bank has already provided over 1.1 trillion dollars to financial institutions, in exchange for paper securities, in order to inject cash into the banking system. The 700 billion bailout is in addition to that which has already been injected – with an accompanying bill of over $17,000 per American household before this is over.

Second is the risk. I asked a spokesperson for the Federal Reserve Bank of Boston why Washington Mutual didn’t take advantage of the Federal Reserve’s Bank’s cash offer over the last few months. I was told that there were financial criteria that needed to be met in order to obtain that funding: in other words, the less credit-worthy, the less stable institutions were unable to partake. That means that the 700 billion Congress is about to authorize will be used specifically for those institutions whose paper is the most worthless, leaving the US Taxpayer with nothing in return for its “loan’ to these inept banks. Some commentators suggest that in reality, the taxpayer will make a profit on this paper, but if that was a realistic possibility, there wouldn’t need to be a government bailout: some enterprising institution would have purchased that paper already.

Third is the Moral Hazard created by helping the inept. No one is guaranteed success in a market economy. In the rough and tumble of competition, some win and some lose. If the most ineffective, negligent, inattentive and even fraudulent activities are rewarded by a bailout, what message does this send to the banks who were prudent in their decision–making over these years? The well-run banks ought to profit, and ought to be stronger and inept banks close; instead, we, the taxpayer will be helping the most irresponsible institutions stay afloat, and will pay interest for the ‘honor’ of so doing.

Fourth is the unfounded fear that credit will completely dry up. The fact is, banks do not lend their own money; they lend their depositors funds. Institutions may crash and burn, but their depositors funds are insured by the FDIC, and those depositors will simply place their funds elsewhere. Keep in mind that when Merrill Lynch was subsumed by Bank of America, there was no catastrophe: there was simply an efficient movement of resources. The Market worked without a taxpayer bailout. Similarly, when Washington Mutual ‘collapsed,” they opened the next day as part of JP Morgan. Not one depositor lost money, not one customer lost their line of credit – and not one dollar of taxpayer was required.

The Bailout is an unnecessary, expensive return to Feudal Britain, where the “Crown” owned title to all the land and used tax money to keep its favorite business partners afloat. This is precisely the time to allow the Marketplace to weed out poor investment firms and negligent banking facilities – and allow the rest of us to enjoy the prosperity that can be gained by resting secure in the knowledge that the best and brightest firms have been allowed to carry on financing activities