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The Big Money economy is booming. According to a new Commerce Department report, third-quarter profits of American businesses rose at an annual record-breaking $1.659 trillion - besting even the boom year of 2006 (in nominal dollars). Profits have soared for seven consecutive quarters now, matching or beating their fastest pace in history. Executive pay is linked to profits, so top pay is soaring as well. Higher profits are also translating into the nice gains in the stock market, which is a boon to everyone with lots of financial assets. And Wall Street is back. Bonuses on the Street are expected to rise about 5 percent this year, according to a survey by compensation consultants Johnson Associates Inc. But nothing is trickling down to the Average Worker economy. Job growth is still anemic. At October's rate of only 50,000 new private-sector jobs, unemployment won't get down to pre-recession levels for twenty years. And almost half of October's new jobs were in temporary help.

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file - "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

We provide direct evidence of market manipulation at the beginning of the financial crisis in November 2007. The type of manipulation, a "bear raid," would have been prevented by a regulation that was repealed by the Securities and Exchange Commission in July 2007. The regulation, the uptick rule, was designed to prevent manipulation and promote stability and was in force from 1938 as a key part of the government response to the 1928 market crash and its aftermath. On November 1, 2007, Citigroup experienced an unusual increase in trading volume and decrease in price. Our analysis of financial industry data shows that this decline coincided with an anomalous increase in borrowed shares, the selling of which would be a large fraction of the total trading volume. The selling of borrowed shares cannot be explained by news events as there is no corresponding increase in selling by share owners. A similar number of shares were returned on a single day six days later. The magnitude and coincidence of borrowing and returning of shares is evidence of a concerted effort to drive down Citigroup's stock price and achieve a profit, i.e., a bear raid. Interpretations and analyses of financial markets should consider the possibility that the intentional actions of individual actors or coordinated groups can impact market behavior. Markets are not sufficiently transparent to reveal even major market manipulation events. Our results point to the need for regulations that prevent intentional actions that cause markets to deviate from equilibrium and contribute to crashes. Enforcement actions cannot reverse severe damage to the economic system. The current "alternative" uptick rule which is only in effect for stocks dropping by over 10% in a single day is insufficient. Prevention may be achieved through improved availability of market data and the original uptick rule or other transaction limitations.

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Economics: I'm going to discuss trillions of dollars in a moment. As an economics teacher, I understand numbers this large are extremely difficult to imagine. If you are among the majority with this difficulty, I recommend that you follow the expert testimony that paints the picture, and know that success in this area of public education transformation that unleashes trillions of our dollars for human creative capacity in unimaginable power is sufficient to end the current economic crisis. This is the longest section of my briefing. If you tire in reading, please consider that at trillions of dollars of annual public benefits, you literally have nothing more valuable to do than understand the following facts and ideas. Harvard's Linda Bilmes co-authored a paper with Nobel Prize winner Joseph Stiglitz estimating the long-term costs of current US wars at now $3 to $5 trillion ($30-$50,000 per US household of $50,000/year income), with total debt increase since 2001 of over $10 trillion. Remember, as demonstrated by the evidence disclosed by our own government, all the reasons Americans were told to go to war were known to be lies as they were told and applicable law proves these wars Orwellian unlawful. Just down the Charles River from Harvard, MIT's Simon Johnson (and former Chief Economist of the International Monetary Fund) describes our economy being lead by gambling oligarchs who have captured government as in banana republics (his words), and might plunge the US into an economy worse than the Great Depression. From his article under the telling title, The Quiet Coup: "Elite business interests-financiers, in the case of the U.S.-played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The govern

It feels perversely quaint that the national conversation is momentarily focused on the likelihood of insider trading cases dropping on a hive of nefarious and presumably well-connected individuals -- huge cases, we are told via breathless leaks from the federal cops on the beat, cases worth -- are you sitting down? -- tens of millions of dollars. With numbers like these, one can only imagine what's up next -- a crackdown on employees who brazenly pilfered office supplies from their jobs at publicly bailed-out institutions like Bank of America, perhaps?

Concerns €110bn bailout will not be enough. NYSE 200 points lower; FTSE 100 down 2.5%. Spain's stock market falls 5%; Germany 2%.

Meanwhile, the banks that caused much of this mess are getting all their money back. A more equitable approach would require the banks to pay at least part of the bill - writing down the debts of some European governments or extending their maturities into the future to allow battered European economies time to recover.

First came the real estate crisis. Then the financial system melted down. And now, skyrocketing public debt is threatening entire countries. Star economist Nouriel Roubini tells SPIEGEL that more crises will come and go before world leaders agree on true reform. He says breaking up huge banks would be a good place to start.

Financial markets have become increasingly volatile, largely because of computer trading on a massive scale. A "transaction tax" could slow down the entire operation

Europeans have grown accustomed to seeing government workers shut down their countries when provoked. At this time of huge deficits from Washington to the smallest towns, government workers in the U.S. also face significant cutbacks.

"Those who make peaceful evolution impossible make violent revolution inevitable."- John F. KennedyThere's one thing for sure: 2008 isn't anything like politics as usual.The corporate media (with their unerring eye for the obvious point) is fixated on the narrative that, for the first time ever, Americans will likely end this year with either a woman or a black man headed for the White House. Bloggers are telling stories from the front lines of primaries and caucuses that look like something from the early 60s - people lining up before dawn to vote in Manoa, Hawaii yesterday; a thousand black college students in Prairie View, Texas marching 10 miles to cast their early votes in the face of a county that tried to disenfranchise them. In recent months, we've also been gobstopped by the sheer passion of the insurgent campaigns of both Barack Obama and Ron Paul, both of whom brought millions of new voters into the conversation - and with them, a sharp critique of the status quo and a new energy that's agitating toward deep structural change.There's something implacable, earnest, and righteously angry in the air. And it raises all kinds of questions for burned-out Boomers and jaded Gen Xers who've been ground down to the stump by the mostly losing battles of the past 30 years. Can it be - at long last - that Americans have, simply, had enough? Are we, finally, stepping out to take back our government - and with it, control of our own future? Is this simply a shifting political season - the kind we get every 20 to 30 years - or is there something deeper going on here? Do we dare to raise our hopes that this time, we're going to finally win a few? Just how ready is this country for big, serious, forward-looking change?Recently, I came across a pocket of sociological research that suggested a tantalizing answer to these questions - and also that America may be far more ready for far more change than anyone really believes is possible at this moment. In fac

By John B. Taylor This review is from a syndication service of The Washington Post. In "Reckless Endangerment," Gretchen Morgenson and Joshua Rosner argue that cozy connections between government and the financial industry were the primary cause of the financial crisis. While many economists-including this reviewer-have argued that government actions caused the crisis, Morgenson and Rosner use their investigative skills to dig down and explain why those actions were taken. The book focuses on two government agencies, Fannie Mae and the Federal Reserve. The mutual support system is better explained and documented in the case of Fannie, the government-sponsored enterprise that supported the home mortgage market by buying mortgages and packaging them into marketable securities, which it then guaranteed and sold to investors.

Mathew Yglesias: CBPP Analysis of John Boehner's Plan: The Center on Budget and Policy Priorities concludes that if enacted, John Boehner's debt ceiling plan "could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history." That sounds to me like something that would create strong incentives to not be poor and, indeed, to fully incentive richness. Consequently, we'll have massive economic growth. Right? Think of all the old people who will be willing to do odd jobs, whatever, in order to pay for health care. No more free-riding from grandma and grandpa to slow the economy down. The CBPP adds: This may sound hyperbolic, but it is not. The mathematics are inexorable. ... In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations. As for the way the debt ceiling talks are going, what a disaster.

When Perry accuses Ben Bernanke of treachery and treason, his violent rhetoric ("we would treat him pretty ugly down in Texas") is scary in itself. But we shouldn't let that obscure Perry's substantive message - that neither Bernanke nor the Fed really deserve to exist, to control the US money supply, and to work towards a dual mandate of price stability and full employment. For the first time in living memory, someone with a non-negligible chance of winning the US presidency is arguing not over who should head the Fed, but whether the Fed should even exist in the first place. Looked at against this backdrop, the recent volatility in the stock market, not to mention the downgrade of the US from triple-A status, makes perfect sense. Global corporations are actually weirdly absent from the list of institutions in which the public has lost its trust, but the way in which they've quietly grown their earnings back above pre-crisis levels has definitely not been ratified by broad-based economic recovery, and therefore feels rather unsustainable. Meanwhile, the USA itself has undoubtedly been weakened by a shrinking tax base, a soaring national debt, a stretched military, and a legislature which has consistently demonstrated an inability to tackle the great tasks asked of it. It looks increasingly as though we're entering Phase 2 of the global crisis, with 2008-9 merely acting as the appetizer. In Phase 1, national and super-national treasuries and central banks managed to come to the rescue and stave off catastrophe. But in doing so, they weakened themselves to the point at which they're unable to rise to the occasion this time round. Our hearts want government to come through and save the economy. But our heads know that it's not going to happen. And that failure, in turn, is only going to further weaken institutional legitimacy across the US and the world. It's a vicious cycle, and I can't see how we're going to break out of it.

When we study Marx in my graduate social theory course, it never fails that at least one student will say (approximately), "Class struggle didn't escalate in the way Marx expected. In modern capitalist societies class struggle has disappeared. So isn't it clear that Marx was wrong and his ideas are of little value today?" I respond by challenging the premise that class struggle has disappeared. On the contrary, I say that class struggle is going on all the time in every major institution of society. One just has to learn how to recognize it. One needn't embrace the labor theory of value to understand that employers try to increase profits by keeping wages down and getting as much work as possible out of their employees. As the saying goes, every successful capitalist knows what a Marxist knows; they just apply the knowledge differently. Workers' desire for better pay and benefits, safe working conditions, and control over their own time puts them at odds with employers. Class struggle in this sense hasn't gone away. In fact, it's inherent in the relationship between capitalist employer and employee. What varies is how aggressively and overtly each side fights for its interests.

Here are just some of the sobering facts:-- There are 8.5 million people receiving unemployment insurance and over 40 million receiving food stamps.-- At the current pace of job creation, the economy won't return to full employment until 2018.-- Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.-- Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.-- 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor's degree.-- Over the past year, nominal wages grew only 1.7% while all consumer prices, including food and energy, increased by 2.7%.-- Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010. Government transfers have risen from 11.7% of personal income in 1980 to 18.4% in 2010, a post-war high.The bottom line is simple says Schwenninger: The middle class is shrinking, which threatens the social composition and stability of the world's biggest economy. "I worry that we're becoming a barbell society - a lot of money wealth and power at the top, increasing hollowness at the center, which I think provides the stability and the heart and soul of the society... and then too many people in fear of falling down."

BEIJING - The United States is spending too much on its military in light of its recent economic troubles, China's top general said Monday while playing down his country's own military capabilities.