The headline number from the Unemployment Report this morning showed 243,000 jobs were created, more than the highest estimated increase by any of the economists surveyed before the report was released (the average expected increase from the economist survey was 120,00 jobs). The unemployment rate fell to 8.3%, again lower than predicted, and certainly good news for President Obama. Job growth was nearly across the board – in retail, construction, manufacturing, business services, and the hotel and restaurant industry. You can believe all this if you want, or you can go into the details in the report for some interesting context.

Marianne Gingrich, the 2nd wife of Republican presidential aspirant Newt Gingrich, has claimed in an interview with ABC News that her former husband undertook a six year clandestine affair with a Congressional aide 23 years his junior, at the same time he was conducting impeachment hearings against President William Clinton for lying regarding a sexual affair with White House aide Monica Lewinsky. Gingrich later married the Congressional aide – Callista Bisek – only after his wife rejected his proposal that they enjoy an open marriage, with Ms. Bisek playing the role of mistress.

Marianne Gingrich should not have been surprised that Gingrich proposed to Callista Bisek before he even announced to his wife he was seeking a divorce. This is exactly how he dumped his first wife in favor of Marianne, saying to an aide at the time that his first wife was too ugly to be a First Lady, and that her future was uncertain anyway because she had cancer. Marianne Gingrich had previously described the former House Speaker as a man whose hypocrisy is such that he does not think he is bound by the rules he provides the voters for living a moral life. "He believes that what he says in public and how he lives don't have to be connected”, said Marianne Gingrich.

Newt Gingrich provided a brief statement to the press in response to the upcoming interview by his 2nd wife. “While Marianne and I no longer have a relationship, it is gratifying to see that she has put aside her bitterness and endorsed my competence to lead the Republican Party in the 2012 general election. Ever since Ronald Reagan ran on a family values platform, while in private being barely able to speak to his children from his first marriage, I have done my utmost to live up to his standards of hypocrisy and disgraceful personal behavior. I believe no other candidate for the Republican presidential nomination comes close to my cynical attempts at deflecting criticism of my actions by blaming the media, blaming my political enemies, and blaming my misguided, if not outright dishonest, former wife.”

re-upping this, originally posted January 13. ~eds

I was telling someone earlier this week about my good friend Newt Gingrich. You didn’t know he was one of my friends? Neither did I, until I saw his television commercial attacking Mitt Romney for being a vulture capitalist. For at least five years, a lot of us in Leftist Blogoland have been decrying the equity extraction and asset stripping practices of people like Mitt Romney, the former CEO of Bain Capital. We’ve been joined in this crusade by writers with libertarian beliefs, and some of them, like Karl Denninger, are far more direct than we have ever been in calling a crime a crime, and demanding prison terms for the people who helped destroy America’s productive manufacturing base.

The world is running out of money. If money is credit, and credit relies on confidence, there is not enough confidence in the financial system to supply the world with the money it needs. Since the initial credit crisis struck in 2008, credit and money have been withdrawn from the system in such staggering amounts that international trade can no longer grow. The world’s central banks are playing a rear guard action by acting as lender of last resort to banks that no longer trust each other and have stopped lending in the interbank market. As liquidity flows out from the system, the rottenness that has corrupted the foundations of global finance is now exposed for all to see.

I was nine years old at the time. We were in school one morning when our teacher was called away. This was a very unusual occurrence. We sat quietly waiting, and when teacher returned, she was crying and shaking uncontrollably. All of us were worried and confused – teacher had never acted this way before. In fact we had never seen any emotion from her at all. “What has happened, teacher?”, someone called out. Sobbing, she replied – “Children, Great Teacher has died!”

It was as if you pushed a button in the room. Instantaneously all of us burst into tears, with many of us wailing “What is going to happen to us? Who is going to take care of us? How will we live?” It never occurred to any of us that our parents or some responsible adult would take care of us. From the moment we were aware of the outer world, we understood that all that was good, beautiful and intelligent in the world came from Great Teacher.

Financial markets rise and fall based on the perceived value of the products being sold. But there are occasions when market value is affected by the condition of the marketplace itself, and whether the infrastructure that supports the market is structurally sound. This is the situation investors are now facing. There is rottenness apparent in even the largest and most trusted markets, like the US Treasury market, and investors are beginning to question how safe their funds are, or whether the protection being bought is worth anything. Private money is nervous, or it is fleeing the markets altogether. When so many different markets are afflicted by the same creeping structural weakness, it is no surprise that the average investor begins to ask whether Financial Armageddon may be upon us.

There is a story that appeared this week in The New York Times that would have been worth reading if it had been published five years ago. In the article, the reporter, Edward Wyatt, analyzes the propensity of the largest financial institutions to violate securities laws despite having previously violated these same laws and made promises to the Securities and Exchange Commission never to violate them again.

The New York Times has a portentous way of writing such stories, as if the information they have uncovered is revelatory if not earthshattering. Case after case is presented, experts are interviewed and asked to provide analysis, and some weighty conclusions are reached. Readers should be left with at least a slight feeling of outrage that such things have been going on in high finance.

Stock markets around the world reacted with horror this week to the news that Greek Prime Minister George Papandreou has ordered that the terms of a proposed EU rescue package worth €130 billion should be voted on by the Greek people in a national referendum. The Nikkei, the German DAX index, the French CAC-40, and the Dow Jones Industrial index all ended the day down 2% or more. The euro took a pummeling on the foreign exchange markets.

Global leaders involved in the Greek rescue talks expressed shock and disappointment that the Greek government would throw into jeopardy the carefully-constructed rescue plans that required approval from all 17 EU governments. The White House press secretary, speaking on behalf of the President, urged Greece to accept the bailout terms as soon as possible. It was US Treasury Secretary Timothy Geithner who first recommended to the EU leadership that it significantly expand its bailout fund from €440 billion to as much as €2 trillion in order to calm global financial markets.

Now let’s step back a minute and consider how ludicrous this all is. The Greek Prime Minister proposes that the Greek people, who have borne the burden of one austerity package after another each time Greece has approached the EU for help, at long last get to have a say in these discussions. Politicians everywhere express dismay and surprise that any politician, especially one on the receiving end of the bailout talks, would even consider allowing the people to at long last have a vote in these decisions. Financial markets plummet on the news. Since when did democracy become the enemy of good governance in democratic countries?

You didn’t have to buy Apple products to be indebted to Steve Jobs. Millions of people resented the man – the figure in a black turtle neck sweater and blue jeans who obsessed over corporate secrecy, who built up a cult following of Apple aficionados, who staged product introductions as if they were a manifestation of the Second Coming. Millions of people resented all this about Steve Jobs, but quietly, day by day, they paid homage to him nonetheless.

Do you use a personal computer? That product owes its existence to Steve Jobs more than anybody else. What about a smart phone? A touch screen computer? A new tablet? All of these products came from his imagination, or better said – from the collective imagination of the teams of people working for him. These people were creative, but it takes a special form of genius to inspire creative people to work towards a common goal.

Members of the Federal Reserve’s Open Market Committee woke up earlier this week to find a dead fish placed on the steps of the Marriner Eccles building in Washington. Everyone knows this is a traditional Mafioso warning to the recipient that they are soon to be “sleeping with the fishes”. But who would have the audacity to so-crudely threaten the distinguished and eminent governors and presidents of the Federal Reserve System? How about those masters of intimidation and economic terrorism, the Republican Leadership in Congress.

Yes, the warning came collectively from Mitch McConnell, Jon Kyl, John Boehner, and Eric Cantor, in the form of a letter to Fed Chairman Ben Bernanke ordering him not to institute any more monetary easing. The timing was exquisitely deliberate: a day before the FOMC was due to meet to discuss monetary policy and – according to many insider reports – vote to approve some new form of Quantitative Easing.

The Pirate Party surprised pollsters as well as the general public by procuring 15 seats in the Berlin parliament, following yesterday’s election. To win any seats, a political party has to obtain at least 5% of the vote in the election; the Pirate Party surpassed this total easily, reaching nearly 9% of the vote. To put this in perspective, Angela Merkel’s coalition partners, the Free Democrats, received only 2% of the vote and will not be allowed representation in the Berlin parliament. Despite its name, the Pirate Party is not simply a protest group. It is a serious political movement focused on individual rights to communication, particularly when it comes to the internet. The party does not identify itself as right or left, liberal or conservative. It is, however, anti-corporatist, and is especially opposed to corporations that seek monopolies in public communication.

The US mortgage crisis has crept upon the judicial and political scene in bits and pieces. One lawsuit will concentrate on robo-signing by the big banks. Another will look at errors in the securitization process. A third will probe the way mortgages were originated. None of these lawsuits really puts the whole picture together – until now. Catherine Cortez Masto, the Attorney General for the state of Nevada, has filed a complaint against Bank of America that takes you from the origination of mortgages to their foreclosure, showing you exactly how Nevada thinks Bank of America defrauded consumers in that state. It is a well-written legal complaint, but it is not easy reading. It will be hard for you to believe that one bank could be so deceitful and so reckless with the law. It will be even harder for you to understand how Bank of America is still allowed to call itself a bank.

If you are a Republican running for president, what should be your opening line of attack – the one thing the voters should remember as your biggest concern? The lousy economy? The lack of jobs? The federal deficit? The war in Afghanistan?

If you’re Rick Perry, Governor of Texas, how about leading off with the Federal Reserve and Quantitative Easing? In fact, why not go right after Ben Bernanke, and accuse him of treason, suggesting he might want to avoid large crowds milling around lampposts. Either Rick Perry is naïve and hopelessly out of his league in the big game of national politics, or he’s on to something. His gambit did work in one respect: it got him a lot of publicity, and it wasn’t entirely bad because so far he has refused to back down on his statement.

From World War I until Gulf War II – these are the bookmarks that define the American Century. All through this period the United States enjoyed economic, military, and political ascendance, and by the time Germany surrendered in 1945, the United States was the preeminent global power in so many dimensions that it truly “owned” the 20th century. In the realm of finance, American supremacy was symbolized by the AAA rating accorded its government securities, a rating the United States has enjoyed since 1917.

Now the United States has lost its AAA rating, and deservedly so. It has shown itself incapable of dealing with many serious financial and economic problems, One of its two major political parties has deliberately – yes deliberately – attempted to force a default on US Treasury securities, so that it can engineer its vision of a fiscally prudent America, one in which it is forbidden ever to raise taxes on wealthy people. This despite the fact that, other than corporations, wealthy people are the only source of incremental tax revenue for a government desperately in need of cash flow.

Hey, John! John Bull! How you doing? It’s been a while – I don’t get many visitors these days you know. You’re looking great! I gotta say – I loved that wedding. Loved it! I saw all of it from the very beginning to that balcony scene at the end. I saw it live too – at 3:00 a.m. – right here in the hospital room. I was up anyway; I don’t sleep too well these days. I have to say, you guys really do that pageantry stuff better than anybody. The Pope could take some lessons from you, and those guys at the Vatican have a few millennia of practice at that sort of thing. And that Kate and William! What a lovely couple. Do you know they came to visit me right after the honeymoon? Very thoughtful, they were.

Hey, you wouldn’t mind putting on one of those white face masks, would you? These hospitals are just full of germs and you shouldn’t take any chances.

You heard about my illness, didn’t you? Something to do with my debt ceiling. My blood count was too high – reaching the limit – I couldn’t follow it all. They had all these specialists in Washington running around shouting at each other. It was all over the television channels. A real embarrassment, I tell you! Half of them were saying I needed even more blood transfusions, and the other half were saying maybe I should slow down a bit or even reduce my intake. I’m all in favor of that; I’d like to get back to where I was ten years ago, when I wasn’t stuck in a hospital bed.

Was it just a week ago that President Obama was hanging tough, insisting he would never accept a debt ceiling package that excluded tax increases? In rejecting a six month extension of the debt ceiling, Obama said last week:

But there’s an even greater danger to this approach. Based on what we’ve seen these past few weeks, we know what to expect six months from now. The House of Representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way.

It’s hard to say if the Tea Party has an acknowledged leader, but someone who professes to be just that has chosen a very opportune moment to trash Speaker John Boehner’s attempts to craft legislation that would allow an increase in the debt ceiling. Judson Phillips, the CEO of Tea Party Nation, is the self-acknowledged head of the Tea Party, and in an editorial this morning in The Washington Post, he attacks Boehner’s legislation for providing “almost non-existent budget cuts.”

Phillips says:

As the founder of Tea Party Nation, I feel confident in saying that the Tea Party understands what so many in Washington seem to have forgotten: We do not have a debt crisis. We have a spending crisis. There is only one way you get to a debt crisis — you spend too much money.

Here is what is fundamentally wrong and dangerous with the core assumption of the Tea Party: There are two ways to get to a debt crisis – you either spend too much money or you don’t take in enough revenue. Anyone who has done a family budget or a business budget understands there are two sides to every discussion of cash flow: cash flow in, and cash flow out. In government terms, this equates to taxes received and expenditures made.

By taking one half of this equation out of the discussion, the Tea Party is dragging the nation along on a fantasy ride in which only spending cuts are allowed as a solution to the government’s debt problem. The danger in an approach which demands enormous budget cuts - $4 trillion is the number mentioned by the Tea Party – is that you expose the economy to a depressionary shock, especially since the Tea Party wants the cuts immediately. Immediate cuts of that size would be the equivalent of removing 25% of all cash flow out of the economy, throwing tens of millions of middle class Americans into acute financial stress. For many poor people, it would be an existential crisis, in which starvation becomes a real prospect.

If political functionality were a means test for a country’s credit-worthiness, the US would have lost its AAA rating a long time ago. The country which prides itself as the “World’s Greatest Democracy” has puts its dysfunctional political system on display for months now, in a struggle to get the debt ceiling increased. The resulting spectacle has nauseated even the ever-complacent American public: both Democrats and Republicans are now given losing grades by the voters for their performance in this farce. If the country had a legitimate third party to vote for, the Democrats and Republicans would be in serious trouble. Of course, the political system is geared to prevent third parties from emerging, so the country flounders about, looking for leadership from pusillanimous Democrats or ideological Republicans who consider raising taxes a mortal sin. The voters are probably a few steps away from concluding what is meant to be hidden but by now should be obvious: American democracy doesn’t exist, and the political system in Washington is beyond repair. What is worse: there are people and organizations who like things just the way they are and will fight any attempts at reform.

As we enter another round of quarterly earnings “surprises” on the upside for American corporations, one company continues to stand out from the crowd – Wal-Mart. The distinction is not one that Sam Walton would ever have wanted or expected: Wal-Mart has endured eight straight quarters of declining sales in stores opened for at least one year. This is the most important measure of success in retailing, because it strips out the distortions in revenue that come from adding new stores. Consider in particular how difficult it is for a retailer like Wal-Mart to achieve even one quarter of declining same-store sales; Wal-Mart’s two high-volume products are gasoline and food, both of which have experienced percentage price increases in the double digits. It should be easy for the company to achieve substantial revenue growth just on inflation alone, which means something has gone seriously wrong with the business model of the company that is a poster child for globalization.

Rupert Murdoch has always prided himself on his ability to make or break prime ministers, presidents, and princes, but in the end it was a lowly 13-year-old schoolgirl who has reached out from the grave to bring him down. Milly Dowler, a murdered British teenager, has extracted revenge against Rupert Murdoch for his many crimes, something the wealthy and the powerful have never been able to do.

Rupert Murdoch has been about wealth and power from his earliest days as a newspaper proprietor in Australia, but it is power that he lusts after. The power to shape and move public opinion is intoxicating for ambitious men like Murdoch, and when he first got into the business, merely owning a megaphone like the editorial page of a large national newspaper was enough to provide him the tools to guide the general public into a particular voting direction. Those days are long gone. Murdoch may own respectable newspapers like The Times of London, or The Wall Street Journal, but their editorial pages carry a fraction of the influence they had a quarter century ago. The reading audience – or more particularly the voting public – have long since moved on to television, and more recently cable television and the internet. To maintain his influence over the public, and to continue to intimidate, bribe, and possibly blackmail politicians, Rupert Murdoch has had to step up his game in a very nefarious way.

The mountains look on Marathon - / And Marathon looks on the sea; / And musing there an hour alone, / I dreamed that Greece might yet be free. - Lord Byron

The Greek parliament voted to approve this week what might justly be titled “The Debt Enslavement Act of 2011”. Under this act, everyone in Greece gets to be a helot, and how bad could that be? It’s not like the old days. In ancient Greece the youth of Sparta participated every autumn in the Krypteia, a sort of military training exercise in which Spartans would hunt down and kill helots without fear of legal reprisal. The helots were Greeks too, just the wrong kind of Greeks – lower class, servile, tied to the land. Slaves, in effect.

It’s Father’s Day. Do you know where your children are? Most American fathers do, but a growing number have little to do with their children. According to a recent Pew Research Center report, nearly a quarter of all white fathers live apart from their children, due to divorce, abandonment, or other reasons. Among African-American fathers, the number is 44%, influenced by the fact that at any one time one in nine African-American males is in prison (the large majority of them on drug charges). The tendency of fathers to live apart from their children is more pronounced among families earning less than $30,000 a year, and it is no surprise therefore that as middle class wages have fallen over the past twenty years, the number of fatherless children has risen.

The Republican presidential candidates are assembling this week in New Hampshire for another debate, to be broadcast on CNN. Now I know what you’re thinking: “You mean there was a first debate? How did I miss that?” It’s understandable if the first debate completely passed you by, and you failed to notice that it was won by Herman Cain. You probably couldn’t tell Herman Cain from Tim Pawlenty if both of them sent you pictures of themselves naked, so I’ll give you a clue: Herman Cain is the black guy. He’s not an African-American; he won’t use that term. He describes himself as an ABC candidate – American, Black, and Conservative, in that order.

Why Roger Ailes lets him get away with confusing the voters about which television network he represents is beyond understanding. Herman Cain is one of several candidates in the race who represents the sovereign state of FOX News, and one of the first things you need to know about Republican presidential campaigns is which candidates represent Roger Ailes and Rupert Murdoch. There are all the candidates who represent FOX News, and then there’s everybody else. That’s a start to handicapping the candidates, which is relatively easy because all the candidates who aren’t on the FOX News payroll have a serious handicap in the first place. The second thing you need to do is think like a Republican, which of course is asking too much of our readers because they haven’t been lobotomized yet, so I’m here to help (I grew up in a family of Goldwater supporters so I was already lobotomized at a very young age). Here, then, is everything you need to know about our next President of the United States, assuming Barack Obama doesn’t fire Tim Geithner and Ben Bernanke before it is too late.

It took a while, but the financial markets are starting to realize that Quantitative Easing will end next month, possibly once and for all. The unprecedented amount of monetary stimulus being pumped into the global economy by the Federal Reserve will come to a sudden halt. Commodity markets have enjoyed a bubbly expansion since the QE2 program was announced, and they were the first to crumble when the Fed began removing the monetary supports. Stock markets are now slowly beginning to follow suit.

One reason the markets took the news sanguinely was because the Fed engineered it that way. After the May meeting of the Fed Open Market Committee, at which it was decided not to renew QE2 when it expires in June, Ben Bernanke gave a first-ever press conference by a Fed Chairman following an FOMC meeting. The media thought it was a masterful performance – which it was, but not for the reasons cited in the press. Bernanke made it sound as if the end of Quantitative Easing was the most natural thing in the world, and that all the voting members of the FOMC agreed with him. The fact is, the FOMC decision was a defeat for Bernanke and his allies, which included the two other officers of the FOMC, Janet Yellen (Vice Chair of the Fed Board) and William Dudley (NY Fed President). Dudley, just a week before the meeting, had gone public with his desire to have a QE3 program standing by, ready to aid a struggling economy.

The non-state actor. That’s what he was called in the 1990s, before he became universally known as a mass murderer. Academics used it as a euphemistic term for an individual who took on state power, before they came up with the phrase ‘asymmetric warfare.” Osama Bin Laden was, if not the inventor of asymmetric warfare, the master of the technique, the man who single-handedly took on the world’s hyperpower.

How much more asymmetric could you get by spending $200,000 to bring down the globe’s colossus? In one terrifying morning Osama Bin Laden killed nearly 3,000 Americans, some of them tortured to death - forced to choose between being burnt alive or jumping to their death from 96 stories. In the process, he sent the United States on a path of self-destruction, as the nation lost its way between two schizophrenic and conflicting impulses: living in perpetual fear of terrorists, or strutting about the world stage with military bravado, killing hundreds of thousands of invisible, innocent men, women, and children because they were Muslims.