Posts Tagged ‘The Economy Stupid’

Frontline: Money, Power and Wall Street

Monday, May 14th, 2012

Watch Money, Power and Wall Street: Part One on PBS. See more from FRONTLINE.

Can’t recommend this 4 Part Series on the Financial Crisis and the aftermath enough.

It’s amazing, chilling and sickening.

As frustrating as it is to watch the crisis unfold, it’s even more frustrating to know that the Too Big To Fail conditions that necessitated the bailout still exist.

Ed’s on Fire

Sunday, November 6th, 2011

Ed Schultz is all fired up.

I love this stat:

49% of Florida voters believe that Congressional Republicans are sabotaging the economy in order to make Obama look bad. This number includes 25% of Republicans.

Friday night’s clip on the jobs report was pretty good as well.

The Promise of Occupy Wall Street

Tuesday, October 18th, 2011

A protester holds a sign at the Occupy Wall Street protest last weekend

In 2009 when the Republicans looked like they were about to vanish from the political scene in the United States I was debating online with one of my regular Republican sparring partners and I said something about how the Republicans didn’t stand a chance in the next elections.

He said simply: “we’ll see. There is a great stirring out there.”

He turned out to be right, and 2010 followed 2008.

It’s hard to tell what the ultimate effect of the Occupy Wall Street movement will be on American politics, but it’s clear that the protestors are tapping into something significant and that this could have huge implications for our politics. A month into the movement, protests broke out yesterday in 951 cities across 82 countries.

Most of the criticisms of the movement center on a lack of clarity on their agenda, but a few things seem clear: they’re protesting a system where entrenched special interests call the shots and everyone else pays the price.

No matter what side of the political fence you’re on, it should be clear that the U.S. political system has still not dealt with the problems that led to the Great Recession and the underlying economic and political institutions that enabled those problems. Three years after the economic collapse, we have a real unemployment rate that is close to 15%, a huge deficit problem, the highest spending in years, the lowest taxes in a few generations and a Congress that would rather spend their time casting symbolic votes for a Balanced Budget Amendment than actually coming up with a plan that asks for sacrifice on the part of anyone except the most vulnerable in our society. Their solution to deal with the unprecedented deficits is to give even more tax breaks to the wealthy and dismantle the already frayed American social safety net that so many people fought so hard to create.

The ultimate result of the Tea Party elections in 2010 is that the Congress has been taken over by a small minority of zealots who have done nothing to deal with the problem that most Americans are concerned about: the persistently high unemployment rate. Since the March 2009 lows, the stock market has been on a tear as corporate profits have steadily increased, but the unemployment rate has stayed stubbornly high and now close to 1/3 of Americans are underwater on their mortgages. Meanwhile, the banks that hold these mortgages get money at zero interest from the government which they then turn around and gamble in rigged capital markets that almost guarantee profits.

Moderate legislation to control those banks is opposed by that same small band of ideological zealots who protect these powerful interests and their cowardly Democratic friends who live in fear of being called Socialists for breaking up a cartel that lets four institutions control almost 40%  and ten institutions control 60% of the assets in this country.

Three years after the Republicans were defeated soundly in the 2008 elections, the Bush tax cuts still remain in effect even though the numbers of people who would rather see tax increases on the top 2% before they see cuts in government spending ranges from two-thirds to three quarters of American’s. Once again, even attempts to increase those taxes to the levels they were during the greatest economic boom in twenty years is decried as Socialism.

Meanwhile, the trends on income disparity are even more dramatic. From 1952 to 1982, the percentage of wealth made by the top 10% remained fairly steady at around 35%. Beginning in 1982 the percentage of income made by the top 10% began to increase dramatically. By 2007, at the height of the Bush economy, the top 10% earned more than 50% of the wages in America.  During the same years, middle class incomes remained stagnant and poverty actually increased.

Republicans continue to say that the country is “broke,” but they oppose any attempts to cut back on our military presence around the world while our internal infrastructure continues to crumble and (does anyone see a pattern emerging?) any attempts to make investments in America are decried as Socialism.

Enough already.

Anyone but the Fox addled (and that is apparently a significant segment of America) can see that the Tea Party missed the mark: that the problems of this country don’t end with cutting taxes and starving government; that it’s a galling contradiction to vehemently oppose the bailout and then completely punt when given a chance to support regulations that would prevent the need for the next bailout; that the real problem  is a system that is so controlled by special interests that it makes real change almost impossible, no matter who is in control of Congress.

Many of these problems are intractable and systemic, but others can be remedied with some common sense measures. Occupy Wall Street and their supporters should push for a constitutional amendment rolling back the Citizens United case. I’ll leave the drafting to the lawyers, but an amendment should give the government the power to regulate campaign contributions, should stipulate that corporations are not entitled to the same rights as citizens and that giving money to political contributors shall not be considered speech. Constitutional Amendments are extraordinarily difficult to pass, but the prolonged effort needed will help to create a movement and politicians who believe that giving money is the same thing as speech and corporations are people,” will have to answer for that.

Unfortunately, it may be a long time before conditions are right for Congress to revisit financial reform, but that shouldn’t stop Occupy Wall Street and their allies from pushing for it. 

There are a few premises that should be self evident to anyone who thinks about it for a moment or two:

  1. If a bank is too big to fail, it is too big to exist
  2. Allowing four companies control 40% of the assets in the country isn’t healthy
  3. Banks should not be able to run what are effectively hedge funds out of the back door of their banks.  Make a choice: you are either a hedge fund or a bank. Not both.

Regarding income inequality, when the top 1% control 35% of the wealth in a country and the top 20% control over 85% of the wealth in a country, that is a real problem and it needs to be dealt with. Not only should the rich be paying higher taxes in this country, but the upper middle class should be as well. 

As I said initially, it’s far to early to predict the effect of Occupy Wall Street on American politics. The demonstrator’s demands may not fit within the range of possibilities of our sclerotic political system, un which case they will become an interesting footnote in American history. Still, this movement has potential and I’m cheered by the fact that the Left is finally waking up in this country and that there may finally be a counterweight to the corrosive efforts of the Tea Party.

I’m With Krauthammer

Tuesday, January 4th, 2011

Just catching up from the holidays and posting a few things I missed while gone.

This is from the aftermath of the tax deal.

While the Democrats were damning the president for giving up core principles and Republicans were crowing about the fact that they got their number one priority (tax cuts for the top 2%) by threatening to stop all legislative activity, (including benefits for 9-11 first responders and tax cuts for 98% of Americans) Fox News Commentator Charles Krauthammer wrote this piece, in which he called the tax cut deal a “really big win for the president.”

He cited some of the same reasons that I had given for arguing that it wasn’t such a bad deal for Obama, namely that Obama, in effect, tricked the Republicans into running short term deficits to stimulate the economy after they spent two years arguing that deficits were no good and very bad, even during a recession.

In a somewhat discordant note, Krauthammer noted that the deal “will add as much as 1 percent to gross domestic product and lower the unemployment rate by about 1.5 percentage points.”… Sounds good to me so far… but, he quickly added, ”that easily could be the difference between victory and defeat in 2012.”

For someone who spends their time writing and thinking about politics, that is a stunning statement to make. We’re in the greatest recession since the Great Depression, hiring has stagnated and we are debating a policy that you believe will add 1% to the GDP and lower unemployment by 1.5%… But you consider that a bad thing because Obama might get re-elected when more people have jobs? That’s positively Limbaugh-esque.

But I digress…Krauthammer followed this one up with another article in which he said that, if Obama is reelected, “historians will mark his comeback as beginning on Dec. 6, the day of the Great Tax Cut Deal of 2010.” There’s a lot of water that needs to pass under that bridge, but this may ultimately be true. If the economy comes back, Obama’s going to get the lionshare of the credit. The stimulus effectively built a floor under the economy and (we can hope) the new package will prime the pump for more private sector hiring to get this economy going.

All in all, Obama ends his 2nd year with a ton of challenges, but also a ton of accomplishments.

As I joked recently, Obama’s first two years have been a total failure:

  • preventing a Great Depression
  • stabilizing the US banking system
  • rescuing the American Auto Industry
  • equal pay for women
  • a children’s health care expansion
  • ending subsidies to corporate banks for college loans
  • a major national service program expansion
  • the largest federal investments in energy and education in the country’s history
  • the largest federal investments in infrastructure in the country’s history
  • health care for 30 million more Americans (which eluded progressive presidents for 70 years)
  • significant increases in assistance for veterans
  • repeal of Don’t Ask Don’t Tell
  • a new START Treaty with Russia

And even though the Democrats had historic losses in the House, his approval is still better than Reagan and Clinton at the same time in their presidencies.

and now comes the pivot to the center.

All this against the backdrop of a Republican Congress that ended the year explaining how some $17 billion in unemployment extensions during the worst recession since 1932 “need to be paid for” but $140 billion in tax cuts for the top 2% can just be added to the deficit.

As Krauthammer notes, soon after they voted for the tax deal,

Republicans began righteously protesting $8.3 billion of earmarks in Harry Reid’s omnibus spending bill. They seem not to understand how ridiculous this looks after having agreed to a Stimulus II that even by their own generous reckoning has 38 times as much spending as all these earmarks combined.

Hey, I’m all for ending earmarks. They’re symbolic of a broken process in which even the so called “fiscally conservative” bring home the goodies for their constituents. But let’s get real: they account for one half of one percent of the federal budget; and defeating a proposal that has $8.3 billion in earmarks with one hand while you increase the federal deficit by $900 billion with the other does not show “fiscal responsibility.”

As I noted before, the biggest short term benefit to this deal for Obama is to show how hypocritical the Republicans are when it comes to running deficits that benefit their core constituency (those in the upper income brackets).

At least on that point, I’m with Krauthammer.

The Rich Get Richer, The Poor Get Poorer

Thursday, December 2nd, 2010

There’s some astounding stats here.

If you want to skip the whole “Republicans want to give permanent tax cuts to the rich without paying for them, but cry poor about extending unemployment to people out of work” argument, just skip to minute 6.

So much for trickle down economics.

Amazing that Democrats don’t talk about this more.

Cartoon Characters Explain Quantitative Easing

Tuesday, November 30th, 2010

A Republican sparring partner sent me this recently.

It’s riddled with incorrect info, but pretty damn funny.

Just to correct some things, let’s remember that the country would be in the midst of a Great Depression without the intervention of Ben Bernake and the Fed. Also, the rampant inflation that the Republicans predicted two years ago hasn’t manifested. Whether it will as a result of this latest Fed injection of capital into the economy is an open question, but anyone who reads the latest economic projections from the Fed and sees how permanently gridlocked the Congress is, can understand why they feel this is necessary.

Thet being said, the take on the crony capitalism that runs this country is spot on. As I told my friend, the only thing that would have made this more spot on is if the cartoon character ended by saying  

“and the American people just voted in the people that spent the last 2 years filibustering to keep this status quo?”

 Allright, enough of my BS.

Watch the cartoon, laugh, cry, or make your own.