400,000 Layoffs Expected At State And Local Governments

USA TODAY - Here's another headwind for a sputtering job market: State and local governments plan many more layoffs to close wide budget gaps.

Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding, says Mark Zandi, chief economist for Moody's Economy.com.

The development could slow an already lackluster recovery. Friday, the Labor Department said employers cut 125,000 jobs, mostly because 225,000 temporary U.S. Census workers completed their stints. The private sector added 83,000 jobs, fewer then expected, as the jobless rate fell to 9.5% from 9.7%.

Layoffs by state and local governments moderated in June, with 10,000 jobs trimmed. That was down from 85,000 job losses the first five months of the year and about 190,000 since June 2009.

But the pain is likely to worsen. States face a cumulative $140 billion budget gap in fiscal 2011, which began July 1 for most, says the Center on Budget and Policy Priorities.

While general-fund tax revenue is projected to rise 3.7% as the economy rebounds in the coming year, it still will be 8%, or $53 billion, below fiscal 2008 levels, according to the National Association of State Budget Officers.

Meanwhile, federal aid is shrinking. Money for states from the economic stimulus is expected to fall by $55 billion, says the National Governors Association. And the Senate last week failed to pass a measure to provide states $16 billion for extra Medicaid funding, an initiative that would have extended benefits from last year's stimulus. The House approved $25 billion in enhanced Medicaid funding.

Philippa Dunne, who surveys state financial officials for a newsletter, the Liscio Report, says most plan to intensify layoffs the coming year after relying largely on furloughs.

"The downturn has gone on so long, all the low-hanging fruit has been taken," says Scott Pattison, head of the state budget officers group.

Wells Fargo economist Mark Vitner expects state and local governments to cut about 200,000 workers this year if Medicaid benefits aren't extended. That's largely why Wells Fargo cut forecasts for third-quarter economic growth to 1.5% from 1.9%.

Even if Congress extendsMedicaid subsidies, Zandi expects 325,000 job cuts the next year, though Vitner says losses could be far less.

Among cuts planned and made:

•New York City is planning 4,500 layoffs, and more if the Medicaid subsidies aren't approved, says the Center on Budget and Policy Priorities.

•Washington state would have to chop 6,000 jobs without the Medicaid money.

•The city of Maywood, Calif., laid off all 68 of its employees July 1 and is contracting out police services, partly because of a $450,000 budget deficit.

Welcome To Maywood, Mexico

Boasting a population that is 97% Hispanic, more than half foreign born, and 40% illegal, the Los Angeles County, Calif., incorporated city of Maywood has achieved the Reconquista goal. It is now as lawless and chaotic as any place in Mexico. Maywood is a warning to every city and town in America.
The Maywood City Council announced this week that after years of radical policies, corruption and scandal, the city was broke and all city employees would be laid off and essential city services contracted out to neighboring cities or to L.A. County government.
How did this happen? Until recently, Maywood was the model for “brown power” politics.
Maywood was the first California city with an elected Hispanic City Council, one of the first “sanctuary” cities for illegal aliens, the first city to pass a resolution calling for a boycott of Arizona after that state passed a law to enforce federal immigration laws, the first California city to order its police department not to enforce state laws requiring drivers to have licenses to drive, the first American city to call on Congress to grant amnesty to all illegals.
Council meetings were conducted in Spanish. Maywood was the leader in the peaceful, democratic achievement of the La Raza goal to take power in the U.S.
The City of Maywood started out quite differently. Back after World War II, Maywood was a booming blue-collar town with good jobs, a multi-ethnic suburb of Los Angeles.
On the 25th anniversary in 1949 of Maywood’s incorporation as a city, the town celebrated with a beard-growing contest, a rodeo, and wrestling matches in City Park. Chrysler operated an assembly plant there until 1971.
But the early 1970s saw these industrial jobs in aerospace, auto and furniture manufacturing, and food processing evaporate under the pressure of higher taxes, increased local and state regulation, and the attraction of cheaper land and cheaper labor elsewhere.
The multi-ethnic Maywood of the post-war years was transformed in the ’80s and ’90s by wave after wave of Hispanic immigrants, many of them illegal.
In August 2006, a “Save Our State” anti-illegal immigration rally in Maywood drew hundreds of protesters—but a larger number of defenders of illegal immigration. The pro-illegal protesters carried signs which read “We are Indigenous ! The ONLY owners of this Continent!” and “Racist Pilgrims Go Home” and “All Europeans are Illegal Here.”
According to newspaper reports at the time, objectors to illegal aliens were subject to physical attacks. A 70-year-old man was “slashed,” a woman attacked, and cars vandalized. Pro-illegal demonstrators raised the Mexican flag at the U.S. Post Office.
The illegal population and their sympathizers became increasingly radicalized. Elections to the City Council saw “assimilationist” incumbent Hispanic council members ousted by La Raza supporting radical challengers.
For years, the Maywood City Council authorized police checkpoints to stop drunk driving. Drivers without licenses had their cars impounded. Illegals in California cannot get drivers licenses. By 2005, the number of such impounds were in the hundreds. A community campaign was launched forcing the City Council to suspend the checkpoints.
Cars were still being impounded whenever a police traffic-violation stop resulted in a driver without a license. Felipe Aguirre, a community activist with Comite Pro-Uno, an “immigration service center,” coordinated a new campaign against any impounds. He was elected in 2005 to the City Council. He is the mayor of Maywood today.
Aguirre and a new majority of the council dismantled the Traffic Department. Illegals were given overnight-parking permits and impounds stopped. You didn’t need a license to drive in Maywood. The Los Angeles Times wrote glowingly of this “progress” in a story entitled “Welcome to Maywood, Where Roads Open Up For Immigrants”.
The Maywood Police Department was restructured by the new council. A new chief and new officers were hired. Later it turned out that many of the new officers had previously been fired from other law enforcement agencies for a variety of infractions. The Maywood P.D. was known as the “Department of Second Chances.”
Among those hired was a former L.A. Sheriff’s deputy terminated for abusing jail inmates; a former LAPD officer fired for intimidating a witness; and an ex-Huntington Park officer charged with negligently discharging a handgun and driving drunk.
Even the L.A. Times called the Maywood Police Department a “haven for misfit cops.” Their story alleged that a veteran officer was extorting sex from relatives of a criminal fugitive; that another officer tried to run over the president of the Maywood Police Commission; and that another officer has impregnated a teenage police-explorer scout.
Charges of corruption and favoritism led to one recall of city council members and threats of more recalls are heard to this day.
Maywood is represented in the state Senate by Democrat “One Bill” Gil Cedillo. He earned the nickname by introducing every year in the state legislature a bill to grant drivers licenses to illegals. Maywood is represented in Congress by Democrat Lucille Roybal-Allard, a staunch advocate of amnesty for illegals.

Today, Maywood is broke. Its police department dismantled along with all other city departments and personnel. Only the city council remains and a city manager to manage the contracts with other agencies for city services in Maywood.
Maywood is the warning of what happens when illegal immigrants, resisting assimilation as Americans, bring with their growing numbers the corruption and the radical politics of their home countries. Add the radical home-grown anti-Americanism of Hispanic “leaders” and groups like La Raza and you get schools where learning is replaced with indoctrination, business and jobs replaced by welfare and gangs, and a poisonous stew of entitlement politics.
In too many American communities, this sad tale is all too familiar.

BP, Homeland Security and Police Work Together To Deny First Admendment Rights

Kurt Nimmo - The father of fascism, Benito Mussolini, defined fascism as corporatism. “Fascism should more properly be called corporatism because it is the merger of state and corporate power,” said Mussolini.

ProPublica and PBS learned this lesson recently in Texas City. “A photographer taking pictures for ProPublica was detained Friday while shooting pictures in Texas City, Texas,” reports Raw Story. “The photographer, Lance Rosenfield, said that shortly after arriving in town, he was confronted by a BP security officer, local police and a man who identified himself as an agent of the Department of Homeland Security. He was released after the police reviewed the pictures he had taken on Friday and recorded his date of birth, Social Security number and other personal information.”

Rosenfield’s information was also turned over to BP. It was described as standard procedure.

Michael Marr, a BP spokesman, released a statement explaining the company’s actions. “BP Security followed the industry practice that is required by federal law. The photographer was released with his photographs after those photos were viewed by a representative of the Joint Terrorism Task Force who determined that the photographer’s actions did not pose a threat to public safety.”

BP, Homeland Security, the FBI’s Joint Terrorism Task Force, and local cops will now decide if it is acceptable for journalists to take photographs.

“We certainly appreciate the need to secure the nation’s refineries,” said ProPublica after the incident. “But we’re deeply troubled by BP’s conduct here, especially when they knew we were working on deadline on critical stories about this very facility. And we see no reason why, if law enforcement needed to review the unpublished photographs, that should have included sharing them with a representative of a private company.”

It looks like BP and its goon force (including federal agencies) knew ProPublica and PBS were working on a story. The incident had nothing to do with the security of refineries or public safety. It was about blocking a story a transnational corporation did not want published. This sort of thing happens in a corporatist-fascist state. It is not supposed to happen in a constitutional republic where the First Amendment and the Bill of Rights are respected.

First it was bloggers and citizen journalists who were harassed by the state and denied their First Amendment right. Now the foundation and non-profit media are falling victim to the heavy hand of the corporate-fascist state.

Late last week “National Incident” commander Thad Allen announced all media — print, television, radio and internet bloggers — will be subject to arrest and federal class D felony charges if they cover operation and clean up sites. In short, the government and BP have effectively shut down the First Amendment.Join Treasure Trooper and make some easy money doing surveys and cash offers. Sign-Up right now at Treasure Trooper 

Obama America: Illinois Stops Paying Its Bills

Michael Powell (CHICAGO) — Even by the standards of this deficit-ridden state, Illinois’s comptroller, Daniel W. Hynes, faces an ugly balance sheet. Precisely how ugly becomes clear when he beckons you into his office to examine his daily briefing memo.

He picks the papers off his desk and points to a figure in red: $5.01 billion.

“This is what the state owes right now to schools, rehabilitation centers, child care, the state university — and it’s getting worse every single day,” he says in his downtown office.

Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

For the last few years, California stood more or less unchallenged as a symbol of the fiscal collapse of states during the recession. Now Illinois has shouldered to the fore, as its dysfunctional political class refuses to pay the state’s bills and refuses to take the painful steps — cuts and tax increases — to close a deficit of at least $12 billion, equal to nearly half the state’s budget.

Then there is the spectacularly mismanaged pension system, which is at least 50 percent underfunded and, analysts warn, could push Illinois into insolvency if the economy fails to pick up.

States cannot go bankrupt, technically, but signs of fiscal crackup are easy to see. Legislators left the capital this month without deciding how to pay 26 percent of the state budget. The governor proposes to borrow $3.5 billion to cover a year’s worth of pension payments, a step that would cost about $1 billion in interest. And every major rating agency has downgraded the state; Illinois now pays millions of dollars more to insure its debt than any other state in the nation.

“Their pension is the most underfunded in the nation,” said Karen S. Krop, a senior director at Fitch Ratings. “They have not made significant cuts or raised revenues. There’s no state out there like this. They can’t grow their way out of this.”

As the recession has swept over states and cities, it has laid bare economic weakness and shoddy fiscal practices. Only an infusion of federal stimulus money allowed many states to avert deep layoffs last year.

Cuts in Work Forces

The federal dollars are nearly spent. Last month, local governments nationwide shed more than 20,000 jobs. Should the largest struggling states — like California, New York or Illinois — lay off tens of thousands more in coming months, or default on payments, the reverberations could badly damage a weakened economy and push housing prices down still further.

“You’re not seeing these states bounce back, and that could be a big drag on the national economy,” said Susan K. Urahn of the Pew Center on the States. “It could be a very tough decade.”

In Illinois, the fiscal pain is radiating downward.

From suburban Elgin to Chicago to Rockford to Peoria, school districts have fired thousands of teachers, curtailed kindergarten and electives, drained pools and cut after-school clubs. Drug, family and mental health counseling centers have slashed their work forces and borrowed money to stave off insolvency.

In Beardstown, a small city deep in the western marshes, Ann Johnson plans to shut her century-old pharmacy. Because of late state payments, she could not afford to keep a 10-day supply of drugs. In Chicago, a funeral home owner wonders whether he can afford to bury the impoverished, as the state has fallen six months behind on its charity payments, $1,103 a funeral.

In Peoria — where the city faced a $14.5 million gap this year and could face an additional $10 million budget hole next year — Virginia Holwell, a trainer of child welfare caseworkers, lost her job when the state cut payments to her agency. She sits in her living room high above the Illinois River and calculates the months of savings left before the bank forecloses on her house. Public colleges and universities occupy a fiscal sickbed all their own. This year they muddled through without $668 million expected from the state; the University of Illinois has yet to receive 45 percent of its state appropriation. Legislators made no pretense of promising to pay this bill soon. Instead they authorized colleges to borrow against the expected state payments.

“The big fear is that next year we’ll be down twice as much,” said Randy Kangas, an associate vice president of the university. “No one knows how to make the cash flow work.”

Illinois legislators tend to plead victim to economic circumstance, and the state’s maladies are considerable. In 2006, the Illinois unemployment rate stood below 5 percent; now it is near 11 percent, and the percentage of long-term unemployed exceeds the national average. Major manufacturers have eliminated thousands of jobs, and the state ranks in the top 10 nationally in foreclosures.

Five years ago, the Chicago suburb of Tinley Park issued about 650 home building permits; last year it processed one. The city of Rockford plans to close fire stations and lay off firefighters, and in Decatur, 180 impoverished seniors have lost their delivered meals. The lakeshore condo towers in Chicago bespeak affluence, but there are so many foreclosures on the bungalow blocks of southern and western Chicago that “for sale” signs sprout like sunflowers.

Few budget analysts are surprised to see Illinois, with a limping economy and broken political culture, edge close to the abyss. Two of the last six governors have served jail terms, and a third is on trial.

“We are a fiscal poster child for what not to do,” said Ralph Martire of the Center for Tax and Budget Accountability, a liberal-leaning policy group in Illinois. “We make California look as if it’s run by penurious accountants who sit in rooms trying to put together an honest budget all day.”

Stopgap Solutions

The Community Counseling Centers of Chicago is another of those workaday groups that are like the stitches on a baseball, holding together poor and working-class neighborhoods. With an annual budget of $16 million, the agency tends to families torn by crime and violence as well as people who are psychologically stressed and abusing drugs.

On any given Monday morning, the agency’s chief administrative officer, John J. Troy, 61, has no idea how he is going to keep its doors open until Friday. He said the state had not come through with an expected $2.2 million, which is about six months of arrears. He has laid off and recalled employees three times in the last two years.

“Two weeks ago, I had days to meet my $420,000 payroll and all I was looking at was a $200,000 line of credit from a bank,” recalled Mr. Troy. “I drove down to Springfield and said, ‘Hey, you owe us $3 million.’ They said: ‘Oh, that’s nothing. We owe another agency $10 million.’ ”

“The fact of the matter is,” he added, “I don’t sleep much these days.”

Illinois’s fiscal practices are thoroughly fractured. Large agencies survive from one payday to the next. Small agencies seek high-interest loans from out-of-state finance companies.

The state pension system is a money sinkhole and the most immediate threat. The governor and legislature have shortchanged the pensions since the mid-1990s, taking payment “holidays” with alarming regularity.

The state’s last elected governor, Rod R. Blagojevich, is on trial for racketeering and extortion. But in 2003, he persuaded the legislature to let him float $10 billion in 30-year bonds and use the proceeds for two years of pension payments.

That gamble backfired and wound up costing the state many billions of dollars. Illinois reports that it has $62.4 billion in unfunded pension liabilities, although many experts place that liability tens of billions of dollars higher.

Legislators this year raised the retirement age and slashed benefits. Though changes apply only to future employees, the legislature claimed immediate savings.

“Savings upfront and reforms down the road,” said Mr. Hynes, the state comptroller. “It’s just bad habits and bad practices.”

“I’ve got enough to last until the end of August,” she says, matter-of-factly. “I’m 58 and I’m pretty good at what I do, and I got to tell you, I’m pretty devastated.” More broadly, Illinois is caught between blue state convictions about social safety nets and a red state aversion to taxes. For years, the Democratic-controlled legislature has passed budgets that are, in effect, in deficit. Lawmakers routinely skip around the state’s balanced-budget law, with few consequences. (Republicans are near monolithic in voting against any tax increases and borrowings. When one broke ranks to try to keep the pension solvent, he was stripped of a committee position, reducing his pay and pension.)
Payback Time

Articles in this series are examining the consequences of, and efforts to deal with, growing public and private debts.

“The pension move was Enron-esque,” said Mike Lawrence, a press secretary to the former Republican governor Jim Edgar, who was the last governor to sign an income tax increase. “Blagojevich was not a tax-and-spend governor; he was a spend-and-borrow governor.”

The state’s income tax burden is not terribly high — Illinois ranks in the bottom half of states — and its government is not terribly large. (The budgets in New York and California, per capita, are much larger). Even if the state cut out all family and human services spending, more than half of the budget deficit would remain.

As comptroller, Mr. Hynes has trained his attention on the public and nonprofit agencies that rely on state money; he tends to roll his eyes at the notion that slashing alone is a solution.

“Only the most delusional people think you can solve this without raising taxes,” he said.

The legislature has a different instinct: to borrow. In good times, that leads to unsightly imbalances. In bad times, it becomes catastrophic. This year, leaders gave the governor authority to move money around and left town to campaign.

“Each budget has gotten historically worse during this recession,” said Laurence Msall, president of the Civic Federation, a policy research organization. “We’ve borrowed more and pushed larger unpaid bills into the future.”

‘Everything Is Triage’

So where is the exit door from this crisis? In Illinois, it depends on whom you ask. The state representative Barbara Flynn Currie, one of the Democratic leaders in the statehouse, sees salvation in the economic cycle. “In the long run, we’ll muddle our way through,” she said.

Perhaps, but many analysts, liberal and conservative, warn of a potentially far grimmer reckoning — Greece by Lake Michigan. Borrowing costs are rising, nonprofits that depend on taxpayer money are dropping contracts, and the state’s pension costs and unpaid bills balloon each month.

Newspaper reports offer stories of hundreds of young teachers moving out of state. Sounding as if she had been punched in the stomach, Ms. Johnson, 53, the pharmacist in Beardstown, said she was going to work at Wal-Mart. Mr. Troy keeps logging on to the comptroller’s Web site to see whether money might soon flow to his counseling centers.

And Ms. Holwell has joined Illinois People’s Action, which challenges banks and foreclosures. With a raspy voice, she talks of her irritation with “the people who just yammer.”

“We’ve helped save four houses,” she said. “Now I wonder: can I save my own?”

For now, Illinois spends a minor fortune papering over its budget holes. Last year, the comptroller’s office paid $55.3 million just in interest on two short-term borrowings to pay the state’s bills.

Mr. Hynes walked into his child’s elementary school recently and learned that kindergarten hours were being cut because of the state budget.

“Everything is triage now,” he said. “We work to avoid outright disaster.”

In past years, when nonprofits needed credit lines to see themselves through tough budget times, the comptroller issued letters assuring banks that vendors would be paid. Not anymore.Repairpal is a terrific idea that is likely to become even more valuable as it grows in popularity. The concept is simple a one stop website.

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Mexican Drug Gang Enforcer Admits Ordering U.S. Consulate Workers Killing

MEXICO CITY (AP) -- A drug-cartel enforcer told Mexican police that a rival gang infiltrated the biggest U.S. consulate along the border through a worker who helped get them U.S. visas, and that he ordered her killed for it. An American official rejected the claim Friday and said the motive for the slaying remains unknown.

The employee, Lesley Enriquez, was among three people connected to the U.S. consulate in Ciudad Juarez who were killed March 13 in attacks that raised concerns that Americans were being caught up in the drug-related violence raging in that border city and across Mexico.

Jesus Ernesto Chavez, whose arrest was announced Friday, confessed to ordering the killings, said Ramon Pequeno, the head of anti-narcotics for the Federal Police. Pequeno said Chavez leads a band of hit men for a street gang tied to the Juarez cartel.

Enriquez and her husband were killed in Ciudad Juarez, across the border from El Paso, Texas, as they drove toward a border crossing. Chavez also is accused in a nearly simultaneous attack that killed the husband of a Mexican employee of the consulate.

Pequeno said Chavez told police that Enriquez was targeted because she helped provide visas to a rival gang.

A U.S. federal official familiar with the investigation said Friday that after the killings, U.S. officials investigated possible corruption involving Enriquez and found none. The official was not authorized to speak about the case and spoke on condition of anonymity.

The official said the motive behind the killing remains unclear.

Officials with the U.S. Embassy in Mexico City declined to comment. At the U.S. Justice Department in Washington, spokeswoman Tracy Schmaler law enforcement "continues to work closely with our Mexican counterparts to bring to justice individuals involved in these murders."

U.S. Embassy officials previously said that Enriquez was never in a position to provide visas and worked in a section that provides basic services to U.S. citizens in Mexico.

Mexican police provided no further details from Chavez's confession on how Enriquez might have helped provide visas to a drug gang.

Enriquez was four months pregnant when she and her husband, Arthur H. Redelfs, were killed by gunmen who opened fire on their vehicle after the couple left a children's birthday party. Their 7-month-old daughter was found wailing in the back seat.

Jorge Alberto Salcido, the husband of a Mexican employee of the consulate, also was killed by gunmen after leaving the same event in a separate vehicle.

Chavez told police that gunmen opened fire on Salcido because the two cars were the same color and the hit men did not know which one Enriquez was in, Pequeno said.

Investigators also have looked at whether Redelfs may have been targeted because of his work at an El Paso County jail that holds several members of the Barrio Azteca, the gang believed to be responsible for the attacks. Pequeno said Chavez belongs to Barrio Azteca, which works for the Juarez cartel on both sides of the border.

In March, U.S. federal, state and local law enforcement officers swept through El Paso, picking up suspected members of the gang in an effort to find new leads in the killings. A suspect detained in Mexico shortly after the shooting confessed to acting as a lookout as the Azteca gang supposedly hunted down Redelfs, but he was never charged and was released without explanation.

Officials also have speculated that both attacks could have been a case of mistaken identity.

More than 23,000 people have been killed in Mexico's drug-related violence since President Felipe Calderon launched an all-out offensive against drug gangs in 2006.

Much of the violence stems from rival drug- and migrant-smuggling gangs vying for power, including a firefight Thursday that left 21 people dead and at least six others wounded about 12 miles (20 kilometers) from the Arizona border.

The shootings took place in a sparsely populated area near the border city of Nogales that is considered a prime corridor for migrant and drug smuggling. Sonora state prosecutors said all those killed were gang members.

Gangs often fight for control of the routes they use to smuggle drugs and people across the border, and also abduct migrants from each other. The violence near the Arizona border is one reason given for a controversial law passed in April requiring police there to ask people about their immigration status in certain situations.

The turf war between the Juarez and Sinaloa cartels, meanwhile, has made Ciudad Juarez one of the deadliest cities in the world. More than 2,600 people were killed last year in the city of 1.3 million people.

Chavez, 41, served five years in a Louisiana prison on drug distribution charges, according to Mexico's central intelligence database. He was detained in Mexico in 2008 by the Mexican army on drug trafficking allegations and released, only to be promoted within the Azteca gang, Federal Police said.

Chavez was arrested along with five suspected gang associates who are accused of carrying out killings or providing support. Six assault rifles, a sub-machine gun and ammunition were seized.

Aside from the killings related to the U.S. consulate, Mexican police say Chavez also confessed to participating in the Jan. 31 killing of 15 youths at a party that was mistaken as a gathering of drug-gang rivals. That massacre fueled outrage over innocents killed.

The State Department, meanwhile, announced new travel restrictions Friday for U.S. government employees working away from the border in Mexico and Central America. As of July 15, they and their families are barred from crossing anywhere along Texas' border, north or south, because of safety concerns. The U.S. government continues to urge Americans to exercise extreme caution or defer unnecessary travel to certain parts of Mexico. Repairpal is a terrific idea that is likely to become even more valuable as it grows in popularity. The concept is simple a one stop website.

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Middle Class Families Around The World Face A Triple Whammy

Edmund Conway - You don't usually expect radical neo-Marxism from the International Monetary Fund – the last great bastion of capitalism, spreading the gospel about the free market to the furthest reaches of the world. And yet, hidden away in an obscure IMF report a few years back is a short sentence that explains precisely the problems that Britain, and the rest of the Western world, have been sleepwalking towards for years.

The claim made by the IMF's Financial Stability Report in 2005, in a seemingly throwaway remark, was that households had become the financial system's "shock absorber of last resort". In other words, whereas in previous eras, much of the pain of recession and financial crisis was borne by businesses or governments, with families afforded some degree of protection by the pensions system or welfare state, it was now households who were far more likely to face the music.

At the time, the idea received little attention. But it has truly radical implications for economics and politics around the world. This is not merely about the financial crisis, but something more deep-seated: the way in which wealth is distributed around society. It is about the middle classes, and why they have become the biggest victims of all.

The problem is that families face a threefold threat to their prosperity. The first issue – the one that the IMF was originally focusing on – is pensions. Not so long ago, households were lucky enough to receive gold-plated pensions that would guarantee a certain pay-out upon retirement. Most companies have closed their schemes after realising they are simply unaffordable. The public sector at last looks like following suit, if the BBC's decision this week to reduce the generosity of its pension plan is anything to go by.

This is, in the IMF's words, a "quantum leap". Suddenly households have gone from being able to rely on a constant stream of legally protected income from their employer to having to manage their own investments (as they technically do under the new breed of pensions).

This would be fine if one could be assured that most people would have either the time or the inclination to understand these new responsibilities. But every piece of evidence – academic and anecdotal – suggests that they do not. The result is that the majority of households are heading blindly towards a future of relative poverty.

The second issue is that the welfare state has become unaffordable, and yet many of Britain's poorest families have become overly reliant on it. Here, too, there is to be a reckoning. Whereas Gordon Brown used his first Budget to save money by grabbing an annual £6 billion from pension funds (and the middle class), George Osborne used last month's emergency Budget for a similar-sized grab on the welfare class. Re-indexing tax credits against a lower measure of inflation will cost Britain's poorest families billions by the end of this parliament.

And it is not merely that the middle class and the poorest have found themselves squeezed so hard: it is that so much of the extra cash generated during the boom years (and even after them) has been actively funnelled towards the most wealthy. The median wage in the US, adjusted for inflation, has been stagnant for pretty much three decades. But the figures at the high end of the scale have soared; whereas in 1970 the average US chief executive made $25 for every dollar of their typical employee's salary, today the figure is more like $90.

Much of this disparity is down to globalisation. When the world is changing fast, those qualified to deal with the technology du jour (be it the steam engine or the internet) will earn more than their peers. But the fact remains that not only is inequality at the highest level since the Thirties, the pension and welfare systems set up then for the express purpose of levelling this divide are in an exponential decline, threatening to widen the gulf further.

Moreover, there is good reason to suspect, as Raghuram Rajan points out in his new book, Fault Lines, that policy-makers have only been able to persuade people to live with this manifestly unfair situation by pumping up ever bigger booms in the property and stock markets to give them the impression that they are actually making money. Now that the bubble has burst and debt is harder to procure, that illusion has evaporated.

All this before one even takes into account the third problem for households – that they are having to bear the costs of the clean-up for the financial crisis. The austerity budgets being imposed across Europe will mean that families are taxed more and receive less in the way of welfare and public services. Police numbers will be cut; university fees are likely to rise further. In other words, the cost of trying to live a stable, contented middle-class life will balloon.

So I have one simple question: when do the politicians intend to let the public know about the fate that awaits them? The longer they put it off, the nastier the reaction, the bigger the strikes and the greater the chance that governments will fall. Don't say you weren't warned. Repairpal is a terrific idea that is likely to become even more valuable as it grows in popularity. The concept is simple a one stop website.

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21 Killed In Shootout between Drug Gangs Near Arizona Border

HERMOSILLO, MEXICO (AP) -A massive gun battle between rival drug and migrant trafficking gangs near the U.S. border Thursday left 21 people dead and at least six others wounded, prosecutors said.

The fire fight occurred in a sparsely populated area about 12 miles (20 kilometers) from the Arizona border, near the city of Nogales, that is considered a prime corridor for immigrant and drug smuggling.

The Sonora state Attorney General's Office said in a statement that nine people were captured by police at the scene of the shootings, six of whom had been wounded in the confrontation. Eight vehicles and seven weapons were also seized.

All of the victims were believed to be members of the gangs.

The shootings occurred near a dirt road between the hamlets of Tubutama and Saric, in an area often used by traffickers.

Gangs often fight for control of trafficking routes and sometimes steal "shipments" of undocumented migrants from each other, but seldom have they staged such mass gun battles.

Gang violence near the Arizona border has led to calls from officials in the U.S. state for greater control of the border and is one reason given for a controversial law passed in April requiring Arizona police to ask people about their immigration status in certain situations.

In a city on another part of the U.S. border, gunmen killed an assistant attorney general for Chihuahua state and one of her bodyguards.

After being chased by armed assailants through the darkened streets of Ciudad Juarez, the vehicle carrying Sandra Salas Garcia and two bodyguards was riddled with bullets Wednesday night.

Arturo Sandoval, a spokesman for the Attorney General's Office, said the second bodyguard was seriously wounded.

Salas was responsible for evaluating the work of prosecutors and special investigations units in Chihuahua.

Drug violence has killed more than 4,300 people in recent years in Ciudad Juarez, which borders El Paso, Texas.

More than 23,000 people have been killed by drug violence since late 2006, when President Felipe Calderon began deploying thousands of troops and federal police to drug hot spots.

Justice Dept Lied: Black Panthergate

Don Suber - I remember that when the New Black Panther Party opened a page on Candidate Barack Obama’s Web site, lefties assured me that there was no connection between the two. “Anybody” could start a page on the Web site — which if true was a bone-headed decision indicative of someone with all the management skills of a 3-year-old.

Now, there just may be a connection between Obama and the New Black Panther Party.

From Fox News: “A former Justice Department attorney who quit his job to protest the Obama administration’s handling of the New Black Panther Party voter intimidation case is accusing Attorney General Eric Holder of dropping the charges for political reasons. J. Christian Adams, now an attorney in Virginia and a conservative blogger, also accuses Deputy Attorney General Thomas Perez of lying under oath to Congress about the circumstances surrounding the decision to drop the probe.”

A press that decried George Walker Bush for firing a few U.S. attorneys he had appointed now ignores what looks to be a real scandal of cover-up for a failure to investigate a politically-connected group.

Indeed, Fox News noted: “In the final days of the Bush administration, three Black Panthers — Minister King Samir Shabazz, Malik Zulu Shabazz and Jerry Jackson — were charged in a civil complaint with violating the Voter Rights Act in November 2008 by using coercion, threats and intimidation at a Philadelphia polling station — with Shabazz brandishing what prosecutors called a deadly weapon. The Obama administration won the civil case in federal court in April 2009 but moved to dismiss the charges in May 2009. Justice attorneys said a criminal complaint, which resulted in the injunction, proceeded successfully.”

Add Black Panthergate to the ever-growing list of scandals emanating from 1600 Pennsylvania Avenue sinec January 20, 2009. The difference between Bush’s scandals and this administration’s is that teh press reported on Bush’s.

Rep. Pete Stark Mocks Constituents At Town Hall Meeting

Looking like a burnt-out teacher with three years left to retirement presiding over an after school detention session, Congressman Pete Stark (D-CA) took great pleasure recently in alienating his constituents at a town hall meeting by marginalizing the Mexican border issue and issuing sarcastic, belittling answers to reasonable questions that were asked of him.
When a Minuteman– part of a group that voluntarily patrols the Mexican border and reports crossings by illegal immigrants–stood to ask a question, Stark first asked him, “Who are you going to kill today?”  Then in response to the question itself, which was why the federal government wasn’t doing more to seal the borders, Stark mockingly responded, “We’d like to get all the Minutemen armed so they can stop shooting people here.”
Stark then went on to make other amazingly detached and dismissive retorts which sparked outrage from various members of the audience, including a round of applause when the Minuteman asked his question again.  Stark then insisted that the border was secure, which invited more jeers.
Politicians have always been accused of pandering to their constituents and offering transparently phony promises to address their concerns, feeling that a false front of sincerity was enough to placate their critics.  In recent history however, politicians have reacted to voters with arrogant ridicule and outright hostility as a mass awakening has caused Americans to increasingly exercise their duties as citizens to become more politically active, challenging the dominance of the establishment that keeps career politicians in office.
Pete Stark’s performance at the town hall is the most brazen display of disdain from a politician towards ordinary Americans since Bob Etheridge assaulted a student who asked him a question on the street a few weeks ago.  Such displays show that the masks are  falling off the controlled authorities of the nation as the metaphorical lizards underneath them are revealed.  Now, instead of rushing to put the masks back on, some political reptiles are deciding to show their true faces, baring their teeth and lashing their tongues out at their stunned constituents, whom they once at least pretended to represent.