WikiLeaks and The Huffington Post have raised all kinds of unshirted hell this morning by publishing a trove of documents relating to the Trans-Pacific Partnership, the gigantic new trade agreement which was negotiated largely in secret — unless, of course, you were a CEO or a lobbyist who worked for one — and which the administration is seeking to "fast-track" through Congress so as to avoid the kind of public scrutiny to which deals like this rarely stand up. OK, that last part's me, but you get the point.
One of the most controversial provisions in the talks includes new corporate empowerment language insisted upon by the U.S. government, which would allow foreign companies to challenge laws or regulations in a privately run international court. Under World Trade Organization treaties, this political power to contest government law is reserved for sovereign nations. The U.S. has endorsed some corporate political powers in prior trade agreements, including the North American Free Trade Agreement, but the scope of what laws can be challenged appears to be much broader in TPP negotiations.
The documents say pretty much what you'd expect them to say — that the provisions of the TPP grant multinational corporations vast new powers and that, among these, are virtual veto-powers over local environmental and labor laws, and that the agreement is a virtual Christmas tree on which corporations have hung all of their fondest individual wishes regarding future profiteering. (The drug companies seem particularly hopeful, which is to say incredibly greedy.) Large financial institutions seem happy, too.
The U.S. is also facing major resistance on bank regulation standards. The Obama administration is seeking to curtail the use of "capital controls" by foreign governments. These can include an extremely broad variety of financial tools, from restricting lending in overheated markets to denying mass international outflows of currency during a financial panic. The loss of these tools would dramatically limit the ability of governments to prevent and stem banking crises...
It's all wonderfully bipartisan. Recently it was announced that Carlos Gutierrez, commerce secretary under George W. Bush, had been named to a high position at Citigroup. For President Obama, there's no cause for worry about the loss of indispensable talent from his administration. Orszag's replacement as head of the Office of Management and Budget, Jacob J. Lew, was both a member of Rubin's Hamilton Project and a former Citigroup executive — thus insuring that government of the banks, by the banks, for the banks shall not perish from the earth.
Five years after the housing market crumbled, government officials are still trying to assign blame for the problems that fueled the mortgage boom and bust.
On Wednesday, federal prosecutors in New York took aim at Bank of America. They accused it of carrying out a scheme, started by its Countrywide Financial unit, that defrauded government-backed mortgage agencies by churning out loans at a rapid pace without proper controls. In a civil suit, prosecutors seek to collect at least $1 billion in penalties from the bank as compensation for the behavior that they say forced taxpayers to guarantee billions in bad loans.
Financial firms have been battling chaotic — and at times redundant — litigation related to the mortgage mess. The cases have come from a patchwork of federal agencies, state officials and shareholder suits, some of which have been resolved in multibillion-dollar settlements.
“They never know who’s going to be coming after them next,” said Dan Hurson, a former federal prosecutor who now defends securities cases. “There’s no central traffic cop.”
Still, the public has been frustrated with the limited number of criminal actions that have been filed since the financial crisis. Few cases have taken aim at top executives. Even in the latest case against Bank of America, no company officials were sued as part of the complaint. Angelo R. Mozilo, the former chief executive of Countrywide Financial, never faced criminal charges but did agree in 2010 to pay $67.5 million to settle a civil fraud case brought by the Securities and Exchange Commission.
Mr. Hurson said that the government had yet to overcome the notion that federal authorities were reluctant to pursue the top rungs of Wall Street. The criminal actions to come from the crisis, he noted, have focused on “small-time operators.”
The government, however, has contended that it has aggressively pursued mortgage fraud. As the legal deadline approaches for filing crisis-related cases, President Obama formed a mortgage task force to investigate wrongdoing. The unit recently announced its first case, taking action against JPMorgan Chase over mortgage deals created by Bear Stearns, the firm that JPMorgan bought during the crisis...
There are no excuses left. Either you join the revolt taking place on Wall Street and in the financial districts of other cities across the country or you stand on the wrong side of history. Either you obstruct, in the only form left to us, which is civil disobedience, the plundering by the criminal class on Wall Street and accelerated destruction of the ecosystem that sustains the human species, or become the passive enabler of a monstrous evil. Either you taste, feel and smell the intoxication of freedom and revolt or sink into the miasma of despair and apathy. Either you are a rebel or a slave.
To be declared innocent in a country where the rule of law means nothing, where we have undergone a corporate coup, where the poor and working men and women are reduced to joblessness and hunger, where war, financial speculation and internal surveillance are the only real business of the state, where even habeas corpus no longer exists, where you, as a citizen, are nothing more than a commodity to corporate systems of power, one to be used and discarded, is to be complicit in this radical evil. To stand on the sidelines and say "I am innocent" is to bear the mark of Cain; it is to do nothing to reach out and help the weak, the oppressed and the suffering, to save the planet. To be innocent in times like these is to be a criminal. Ask Tim DeChristopher.
Choose. But choose fast. The state and corporate forces are determined to crush this. They are not going to wait for you. They are terrified this will spread. They have their long phalanxes of police on motorcycles, their rows of white paddy wagons, their foot soldiers hunting for you on the streets with pepper spray and orange plastic nets. They have their metal barricades set up on every single street leading into the New York financial district, where the mandarins in Brooks Brothers suits use your money, money they stole from you, to gamble and speculate and gorge themselves while one in four children outside those barricades depend on food stamps to eat. Speculation in the 17th century was a crime. Speculators were hanged. Today they run the state and the financial markets. They disseminate the lies that pollute our airwaves. They know, even better than you, how pervasive the corruption and theft have become, how gamed the system is against you, how corporations have cemented into place a thin oligarchic class and an obsequious cadre of politicians, judges and journalists who live in their little gated Versailles while 6 million Americans are thrown out of their homes, a number soon to rise to 10 million, where a million people a year go bankrupt because they cannot pay their medical bills and 45,000 die from lack of proper care, where real joblessness is spiraling to over 20 percent, where the citizens, including students, spend lives toiling in debt peonage, working dead-end jobs, when they have jobs, a world devoid of hope, a world of masters and serfs...
The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didn't really recover—output is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect. First, it was wrong to think that the bankers would mend their ways—that they would start to lend, if only they were treated nicely enough. We were told, in effect: "Don't put conditions on the banks to require them to restructure the mortgages or to behave more honestly in their foreclosures. Don't force them to use the money to lend. Such conditions will upset our delicate markets." In the end, bank managers looked out for themselves and did what they are accustomed to doing.
Even when we fully repair the banking system, we'll still be in deep trouble—because we were already in deep trouble. That seeming golden age of 2007 was far from a paradise. Yes, America had many things about which it could be proud. Companies in the information-technology field were at the leading edge of a revolution. But incomes for most working Americans still hadn't returned to their levels prior to the previous recession. The American standard of living was sustained only by rising debt—debt so large that the U.S. savings rate had dropped to near zero. And "zero" doesn't really tell the story. Because the rich have always been able to save a significant percentage of their income, putting them in the positive column, an average rate of close to zero means that everyone else must be in negative numbers. (Here's the reality: in the years leading up to the recession, according to research done by my Columbia University colleague Bruce Greenwald, the bottom 80 percent of the American population had been spending around 110 percent of its income.) What made this level of indebtedness possible was the housing bubble, which Alan Greenspan and then Ben Bernanke, chairmen of the Federal Reserve Board, helped to engineer through low interest rates and nonregulation—not even using the regulatory tools they had. As we now know, this enabled banks to lend and households to borrow on the basis of assets whose value was determined in part by mass delusion.
The fact is the economy in the years before the current crisis was fundamentally weak, with the bubble, and the unsustainable consumption to which it gave rise, acting as life support. Without these, unemployment would have been high. It was absurd to think that fixing the banking system could by itself restore the economy to health. Bringing the economy back to "where it was" does nothing to address the underlying problems...
Monetary policy is not going to help us out of this mess. Ben Bernanke has, belatedly, admitted as much. The Fed played an important role in creating the current conditions—by encouraging the bubble that led to unsustainable consumption—but there is now little it can do to mitigate the consequences. I can understand that its members may feel some degree of guilt. But anyone who believes that monetary policy is going to resuscitate the economy will be sorely disappointed. That idea is a distraction, and a dangerous one.
What we need to do instead is embark on a massive investment program—as we did, virtually by accident, 80 years ago—that will increase our productivity for years to come, and will also increase employment now. This public investment, and the resultant restoration in G.D.P., increases the returns to private investment. Public investments could be directed at improving the quality of life and real productivity—unlike the private-sector investments in financial innovations, which turned out to be more akin to financial weapons of mass destruction...
The second conclusion is this: If we expect to maintain any semblance of "normality," we must fix the financial system. As noted, the implosion of the financial sector may not have been the underlying cause of our current crisis—but it has made it worse, and it's an obstacle to long-term recovery. Small and medium-size companies, especially new ones, are disproportionately the source of job creation in any economy, and they have been especially hard-hit. What's needed is to get banks out of the dangerous business of speculating and back into the boring business of lending. But we have not fixed the financial system. Rather, we have poured money into the banks, without restrictions, without conditions, and without a vision of the kind of banking system we want and need. We have, in a phrase, confused ends with means. A banking system is supposed to serve society, not the other way around.
That we should tolerate such a confusion of ends and means says something deeply disturbing about where our economy and our society have been heading. Americans in general are coming to understand what has happened. Protesters around the country, galvanized by the Occupy Wall Street movement, already know.
There is a fascinating new study coming out of the Levy Economics Institute of Bard College. It's titled "$29,000,000,000,000: A Detailed Look at the Fed's Bail-out by Funding Facility and Recipient" by James Felkerson. The study looks at the lending, guarantees, facilities and spending of the Federal Reserve.
The researchers took all of the individual transactions across all facilities created to deal with the crisis, to figure out how much the Fed committed as a response to the crisis. This includes direct lending, asset purchases and all other assistance. (It does not include indirect costs such as rising price of goods due to inflation, weak dollar, etc.)
The net total? As of November 10, 2011, it was $29,616.4 billion dollars — (or 29 and a half trillion, if you prefer that nomenclature). Three facilities — CBLS, PDCF, and TAF — are responsible for the lion's share — 71.1% of all Federal Reserve assistance ($22,826.8 billion).
One comment about some of the folks pushing back against this massive total: Yes, there is a big difference between a $100 lent for 3 days, and a $100 lent overnight rolled over 2 more times. And there is an enormous difference when temporary overnight lending lasts for three years.
Overnight lending, by its definition, is temporary, short term, lower risk, modest impact. It exists to allow slightly over-extended banks to meet their reserve requirements. But rolling overnight lending repeatedly for 3 years is none of those things. And it makes a mockery of these same reserve requirements, and the protective purposes they are supposed to serve.
The amount of overnight lending reflects how broken our financial system really is. A well capitalized, moderately leverage system does not require this massive liquidity from a central bank — interbank lending should be sufficient. What the data reveals is that the financial sector remains dangerously under-capitalized and overleveraged.
To pretend these were merely minor overnight loans, rolled over once or twice, is foolish, dangerous nonsense.
The law applies to everyone. Wall Street protesters should be held accountable if they engage in illegal activity — and so should Wall Street banks. There is no excuse for protesters to violate public safety laws — and no excuse for powerful financial institutions to defraud their customers or investors.
Yet for all the talk about accountability, there has been little action when it comes to holding large financial institutions accountable for breaking the law.
Look at the latest foreclosure fraud scandals. For more than a year, one story after another has come to light exposing how some of America's largest financial institutions broke the law. In some cases, their blatantly illegal behavior in the foreclosure process pushed families out of their homes. In some others, families gave up and moved away under the threat of foreclosure.
The revelations about robosigning — in which mortgage servicers falsified legal documents to foreclose on homes faster and more cheaply — were followed by stories about illegal home foreclosures against military personnel serving in Iraq and Afghanistan, cases of mistaken-identity foreclosures, cases of foreclosures caused by bad record keeping and on and on.
Credit unions and most small banks followed the law. But the biggest mortgage lenders and servicers swamped the system with bad practices...
The bankers slept well. Their homes in Beverly Hills were not spotlighted by a noisy swarm of police helicopters, searchlights burning through the sanctity of the night, harassing the forlorn City Hall encampment of those who dared protest the banks' seizure of our government. I live within sight of the iconic Los Angeles City Hall, and at first I thought it was being used once again as a movie location, given the massive police presence, as if an alien invasion was being thwarted.
Not eager to test the resilience of my new heart valve, I hesitated until the first crack of dawn to visit the place where former Labor Secretary Robert Reich and I had spoken weeks before at a teach-in on the origins of the economic crisis. I described the scene back then as a Jeffersonian moment, exactly the kind of peaceful assembly to redress grievances that the Founders of our nation enshrined in the Bill of Rights. But at 5 a.m. Wednesday there was only a graveyard of democratic hope. The protesters were gone, 200 arrested for exercising their constitutional rights, and only the television crews stayed to pick over the carcass of tents, books and posters, including one I pulled from the debris that read "99% you can't arrest an idea." Actually, you can, and the bankers have, as a result, been able to reoccupy Los Angeles' City Hall and every other contested outpost of power throughout the nation.
The liberal Democratic mayor, a past president of the Southern California ACLU, was pleased with the efficiency of the "community policing" approach of his police department. "I said that here in L.A. we'd chart a different path, and we did," Antonio Villaraigosa boasted. However, the result was the same as elsewhere; the bankers were protected from the scorn they so richly deserve and there will no longer be a visible monument to the pain that they have caused. To ensure a pristine, amoral town square, huge concrete-anchored fences were quickly installed to prevent further access to the public space surrounding City Hall...
Without prosecutions, there's nothing keeping fraud from becoming a standard business practice.
Crime invaded the center of our banking system. Wall Street CEOs were signing on to SEC documents knowing they contained material misstatements. The New York Fed, riddled with conflicts of interest, shoveled money to large banks and tried to hide it under the veil of central bank independence. Even Tim Geithner noted that Lehman had "air in the marks" in its valuations of asset-backed securities, as the bankruptcy examiner's report showed that accounting manipulation to disguise the condition of the balance sheet was a routine management tool at the bank...
And what happens when this kind of fraud goes unprosecuted? It continues, even today. The same banks that ran the corrupt home mortgage securitization chain are now committing rampant fraud in the foreclosure crisis...
The bad behavior is so rampant that banks think nothing of a contractor programming fraud into the software. This is shocking behavior and has led to untold numbers of foreclosures, as well as the theft of huge sums of money from mortgage-backed securities investors.
Here's how the fraud works: Mortgage loan notes are very clear on the schedule of how payments are to be applied. First, the money goes to interest, then principal, then all other fees. That means that investors get paid first and servicers, who collect late fees for themselves, get paid either when they collect the late fee from the debtor or from the liquidation of the foreclosure. And fees are supposed to be capitalized into the overall mortgage amount. If you are late one month, it isn't supposed to push you into being late on all subsequent months.
The software, however, prioritizes servicer fees above the contractually required interest and principal to investors. This isn't a one-off; it's programmed. It's the very definition of a conspiracy! Who knows how many people paid late and then were pushed into a spiral of fees that led into a foreclosure? It's the perfect crime, and many of the victims had paid every single mortgage payment.
A lack of criminal prosecutions means that unethical business practices like this one drive out ethical business practices. After all, why should a bank hire an ethical default servicer that charges a high price for its product when it can pay nothing to one that simply extracts from investors and homeowners?
The joke that is the U.S. Attorney network has become very old and very stale. And unfortunately, because of Attorney General Eric Holder, that joke is on us.
Remember the $700 billion Troubled Asset Relief Program with which the federal government came to the rescue of faltering banks in 2008? Well, according to a Bloomberg report, that was just a fraction of the financial help the Federal Reserve Bank wound up doling out to troubled lenders. The real total was reportedly closer to $8 trillion, after you add up benefits outside TARP, including emergency loans given at below-market rates:
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he "wasn't aware of the magnitude." It dwarfed the Treasury Department's better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
Bloomberg came up with that number after reviewing "29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions." Bloomberg adds, "The Fed didn't tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day." That's nearly twice the amount made public in TARP.
For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.
That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.
Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day — three times what the typical factory employee earned at the time. The Wall Street Journal termed his action "an economic crime."
But Ford knew it was a cunning business move. The higher wage turned Ford's auto workers into customers who could afford to buy Model T's. In two years Ford's profits more than doubled.
That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.
The basic bargain is over — not only at Ford but all over the American economy.
New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.
Meanwhile, corporate profits now constitute the largest share of the economy since 1929...
Can we all agree that a $1 billion swindle represents a lot of money, and the fact that Citigroup agreed last week to pay a $285 million fine to settle SEC charges for "misleading investors" demonstrates a damning admission of culpability?
So why has Robert Rubin, the onetime treasury secretary who went on to become Citigroup chairman during the time of the corporation's financial shenanigans, never been held accountable for this and other deep damage done to the U.S. economy on his watch?
Rubin's tenure atop the world of high finance began when he was co-chairman of Goldman Sachs, before he became Bill Clinton's treasury secretary and pushed through the reversal of the Glass-Steagall Act, an action that legalized the formation of Citigroup and other "too big to fail" banking conglomerates.
Rubin's destructive impact on the economy in enabling these giant corporate banks to run amok was far greater than that of swindler Bernard Madoff, who sits in prison under a 150-year sentence while Rubin sits on the Harvard Board of Overseers, as chairman of the Council on Foreign Relations and as a leader of the Brookings Institution's Hamilton Project...
WASHINGTON - The top 1 percent of earners more than doubled their share of the nation's income over the last three decades, the Congressional Budget Office said Tuesday, in a new report likely to figure prominently in the escalating political fight over how to revive the economy, create jobs and lower the federal debt.
In addition, the report said, government policy has become less redistributive since the late 1970s, doing less to reduce the concentration of income.
"The equalizing effect of federal taxes was smaller" in 2007 than in 1979, as "the composition of federal revenues shifted away from progressive income taxes to less-progressive payroll taxes," the budget office said.
The study's assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.
The idea that a few bankers control a large chunk of the global economy might not seem like news to New York's Occupy Wall Streetmovement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs).
"Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," saysJames Glattfelder. "Our analysis is reality-based."
It remains to be seen whether the Occupy Wall Street protests will change America's direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent...
No one can accuse the candidates on stage at Monday's Republican debate of not discussing a broad range of topics. They talked about big issues like social security, the wars in Iraq and Afghanistan, energy independence, repealing healthcare reform and the need for job creation. And they talked about small issues for political point-scoring: like HPV vaccines for girls.
But missing from the debate — and, in fact, much current discussion of America's politics — is the single biggest issue facing the country: the destruction of the American middle class. For stories on how America is bifurcating into haves and have-nots, with precious little in between, you have to dive behind the headlines of the latest Washington political bun-fight and find the devil in the details...
Standard & Poor's is giving a higher rating to securities backed by subprime home loans, the same type of investments that led to the worst financial crisis since the Great Depression, than it assigns the U.S. government.
S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties. New York-based S&P stripped the U.S. of its top rank on Aug. 5, saying Washington politics were making the country less creditworthy.
Treasuries gained about 1.95 percent and U.S. borrowing costs have fallen to record lows as investors repudiated the downgrade, according to Bank of America Merrill Lynch indexes. S&P has awarded AAAs to more than $36 billion of securities in the U.S. this year that were created by bankers who continue to gather thousands of loans, bundle them into bonds of varying risk and pay ratings firms a fee to assign credit rankings.
"Everybody has been led to believe over the years that AAA means AAA means AAA across the board," Gregory W. Smith, the general counsel for the $41 billion Public Employees' Retirement Association of Colorado, said in a telephone interview on Aug. 24. "Anybody that didn't learn in the 2008 crisis that doesn't apply should find another line of work."
Governors Cuomo in New York and Malloy in Connecticut had very similar Plan Bs. They threatened the public employee unions and the people of their states in nearly identical ways. Either the unions accept new contracts with wage freezes and raised contributions to their health insurance plans (and other declines in their basic remuneration) - or the governors would fire tens of thousands of unionised state workers. In Connecticut, the state workers first voted to reject and then re-voted to accept that contract. In New York, the state workers accepted on the first vote.
Let's be really clear on what the two governors were doing. They were forcing a very painful "either/or" onto the mass of people who elected them. Each governor said: I will either fire many thousands of state workers and thereby impose drastic cuts in public services on the entire citizenry, or I will subject tens of thousands of state employees to significant cuts in their wages and benefits.
Each governor spoke and acted as if those were the only two choices - even though that is blatantly untrue. Each governor refused to even consider an obvious alternative Plan C: increasing taxes on corporations and the rich enough to avoid either public service cuts or wage cuts. Instead, each governor snubbed his nose at the public by forcing unions to choose between two awful options.
Not even discussed is the fact that the deficit would be eliminated if the dysfunctional privatized health care system in the US were replaced by one similar to other industrial societies, which have half the per person costs and at least comparable health outcomes. The financial institutions and pharmaceutical industry are far too powerful for such options even to be considered, though the thought seems hardly Utopian. Off the agenda for similar reasons are other economically sensible options, such as a small financial transactions tax.
Meanwhile, new gifts are regularly lavished on Wall Street. The House Appropriations Committee cut the budget request for the Securities and Exchange Commission, the prime barrier against financial fraud. The Consumer Protection Agency is unlikely to survive intact. And Congress wields other weapons in its battle against future generations. In the face of Republican opposition to environmental protection, "A major American utility is shelving the nation's most prominent effort to capture carbon dioxide from an existing coal-burning power plant, dealing a severe blow to efforts to rein in emissions responsible for global warming," the New York Times reports.
Repeat after me: Workers are consumers. Consumers are workers...
Every CEO of every company that continues to squeeze payrolls (Verizon, are you listening? Ford?) needs to understand they're shooting themselves in the feet. Where do they expect demand for their products and services to come from?
Several times recently Paul Krugman, the New York Times columnist and Nobel Prize winning professor at Princeton, has placed a large part of the blame for the appalling level of the budget debate on the media. (Hereis one example.) The problem, he asserts, comes because there is no political cost to being outrageously wrong, irresponsible, stupid or even dishonest. In the eyes of the major media all opinion is equal. The content of political rhetoric does not matter. The truth or falsity of claims does not matter. All that matters is who is on what side. As a result we have had a crucial public debate in which perfectly absurd notions were reported as if they had serious merit. Rationality, civility, not to mention sanity have been major casualties.
This is a very serious accusation, one that responsible journalists should deal with. If it has merit, the profession needs some major self-examination. Granted that, in Professor Krugman's view, the most outrageous rhetoric came from the Tea Party and its allies, but his accusation cannot be dismissed as mere partisanship. There is nothing new in the charge that the major media are indifferent to factual issues, but the budget debate has conspicuously raised to a new level the media's inability or unwillingness to discuss factual issues.
In an 1864 letter to Col. William F. Elkins, Abraham Lincoln warned, "... corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
In the buildup to the bloodiest war of the 20th century, Benito Mussolini said, "Fascism should rightly be called corporatism, as it is the merger of corporate and government power." He is one of history's most reviled characters for good reason.
Now, corporations like Koch Industries are funneling money into the American Legislative Exchange Council (ALEC), a shadowy partnership between Republican legislators and corporate lobbyists. Essentially, ALEC's purpose is to pass laws that enrich corporate profits and investor returns by starving the government of revenue, rigging elections and union-busting.
Through the corporate-funded American Legislative Exchange Council, global corporations and state politicians vote behind closed doors to try to rewrite state laws that govern your rights. These so-called "model bills" reach into almost every area of American life and often directly benefit huge corporations. Through ALEC, corporations have "a VOICE and a VOTE" on specific changes to the law that are then proposed in your state. DO YOU?
Sullivan said the man kept repeating that he wanted to kill himself. "It seemed almost as if he was interested in being admitted."
Across the country, doctors like Sullivan are facing a spike in psychiatric emergencies — attempted suicide, severe depression, psychosis — as states slash mental health services and the country's worst economic crisis since the Great Depression takes its toll.
This trend is taxing emergency rooms already overburdened by uninsured patients who wait until ailments become acute before seeking treatment.
"These are people without a previous psychiatric history who are coming in and telling us they've lost their jobs, they've lost sometimes their homes, they can't provide for their families, and they are becoming severely depressed," said Dr. Felicia Smith, director of the acute psychiatric service at Massachusetts General Hospital in Boston...
As Toni Kelly battled lymphoma, first with a bone marrow transplant and then with brutal rounds of chemotherapy, she worried obsessively that her four-year struggle would destroy her family's finances.
Her husband, Doug, refused to consider her pleas to stop pursuing costly therapies. But she knew that after she died, which she did on Sept. 29, there was one way she could keep from adding to the $200,000 in medical debt she would leave behind. Like a growing proportion of Americans, she said she wanted her body to be cremated.
"We did everything we could to cut down other costs, and one of the things Toni said was, ‘Let's find out how much it costs to be cremated,' " Mr. Kelly said. "If there was a way we could save even $500 or $1,000, it didn't make a difference. Her major thing was not ruining the family."
All but taboo in the United States 50 years ago, cremation is now chosen over burial in 41 percent of American deaths, up from 15 percent in 1985, according to the Cremation Association of North America. Economics is clearly one of the factors driving that change...
Prisoners are now making more than just license plates and road signs. Oregon's prison factories are perhaps best known for the "Prison Blues" line of blue jeans and other clothing sold on the open market. Tennessee prisoners have manufactured clothes for Kmart and JC Penney, as well as wooden rocking ponies for Eddie Bauer and, more recently, hardwood flooring. Prisoners in Ohio produced car parts for Honda until the United Auto Workers intervened. Prisoners have been employed in data entry and computer circuit board assembly programs, and have even worked in a TWA call center. Incarcerated workers in Utah make cold-weather clothing for Northern Outfitters, while Arkansas prisoners produce cable assemblies and wire harnesses used in medical equipment.
Once private sector companies were allowed to partner with PIECP prison industries to manufacture products and make them available to the general public, they began seeking ways around the program's mandatory requirements, which were interfering with the corporate goal of generating more profit...
Yesterday, a Deutsche Bank branch in Atlanta had requested the eviction of Vita Lee, a 103-year-old Atlanta woman, and her 83-year-old daughter. Both were terrified of being removed from their home of 53 years and had no idea where they'd go next.
But when the movers hired by the bank and police were dispatched to evict the two women, they had a change of heart. In a huge victory for the 99 Percent, the movers "took one look at" Lee and decided not to go through with it.
After 9/11 transfixed America, the country's problems were left to rot.
by George Packer The New Yorker September 12, 2011
What were the American people to do in this vast new war? In his address to Congress on September 20, 2001—the speech that gave his most eloquent account of the meaning of September 11th—the President told Americans to live their lives, hug their children, uphold their values, participate in the economy, and pray for the victims. These quiet continuities were supposed to be reassuring, but instead they revealed the unreality that lay beneath his call to arms. Wasn't there anything else? Should Americans enlist in the armed forces, join the foreign service, pay more taxes, do volunteer work, study foreign languages, travel to Muslim countries? No—just go on using their credit cards. Bush's Presidency would emulate Woodrow Wilson's and Warren G. Harding's simultaneously. Never was the mismatch between the idea of the war and the war itself more apparent. Everything had changed, Bush announced, but not to worry—nothing would change...
Mead writes that America's future belongs to the "Jacksonians": lower-middle-class white Americans who are patriotic, religious, insular, self-reliant, ready to take the fight ruthlessly to the enemy abroad, and hostile to élites at home, their passions best articulated by George W. Bush in his "dead or alive" mode. In short, people like the residents of Surry County, North Carolina. Mead, who was educated at Groton and Yale, is confident that he knows and understands such people. Their perpetual rage, amplified on Fox News and on talk radio, pleases him, and since their power, right or wrong, is surely rising, he hails it. Mead's Jacksonians are also devotees of "millennial capitalism." "A Jacksonian revolt against élites is running in harmony with the structural needs of the economy," he writes. By this logic, laid-off textile workers will land in good jobs as long as they continue to despise pointy-headed experts who keep trying to mess with the economy. Mead's argument is a study in élitism that no longer believes in its own right to exist. Soon after the book's publication, the Bush Doctrine lay in ruins, as the Administration's ambition to mold Iraq into a tidy secular democracy came apart. Then, in September, 2008, the bottom fell out of "millennial capitalism." Suddenly, the whole notion of an American Revival looked like an absurd mirage. That a writer of Mead's calibre could fall under its sway underscores the intellectual confusion that followed the tremendous surprise of September 11th. In his eagerness to imagine an "American grand strategy in a world at risk," he didn't bother to notice the problems festering at home...
Critics of President Obama never tire of blaming him for today's high deficits. But if blame belongs with one president, it belongs with Obama's predecessor, George W. Bush. The chart in this article, which the New York Times created based upon figures from the Center on Budget and Policy Priorities, illustrates this point very clearly. But it's worth reviewing the history here, because while it's familiar to most of us who follow politics it doesn't seem to get a lot of attention in the political debate.
The Republicans embraced a philosophy of no new taxes or revenues that had little relation to reality-except for the fact that their long-standing goal has been to shrink the size of the federal government. This began with the major tax cut passed early in George W. Bush's presidency, which purposely put serious pressure on domestic programs and which some saw at the time as folly-folly with grim implications for the future. That tax cut, renewed in December with Obama's assent (he didn't have the votes to stop it, and he got some stimulus money in exchange), began the Republicans' march from the $137 billion surplus Bill Clinton had bequeathed the country to the deficit of $1.2 trillion when Bush left office. It accounts for more than one quarter of the current deficit.
In the past few years, the U.S. economy has been beset by the subprime meltdown, skyrocketing oil prices, the Eurozone debt crisis, and even the Tohoku earthquake. Now it's staring at a new problem-a failure to raise the debt ceiling, which would almost certainly throw the economy back into recession. Unlike those other problems, however, this one would be wholly of our own making. If the economy suffers as a result, it'll be what a soccer fan might call the biggest own goal in history.
The truth is that the United States doesn't need, and shouldn't have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There's no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn't risk economic chaos-namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn't raised, we'll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he'll end up violating the debt ceiling.
As it happens, the debt ceiling, which was adopted in 1917, did have a purpose once-it was a way for Congress to keep the President accountable. Congress used to exercise only loose control over the government budget, and the President was able to borrow money and spend money with little legislative oversight. But this hasn't been the case since 1974; Congress now passes comprehensive budget resolutions that detail exactly how the government will tax and spend, and the Treasury Department borrows only the money that Congress allows it to. (It's why TARP, for instance, required Congress to pass a law authorizing the Treasury to act.) This makes the debt ceiling an anachronism. These days, the debt limit actually makes the President less accountable to Congress, not more: if the ceiling isn't raised, it's President Obama who will be deciding which bills get paid and which don't, with no say from Congress.
On the day the family moved, there were officially 14.1 million unemployed Americans, or 9.2 per cent of the workforce. Hartzell himself probably isn't counted in these statistics. In recent years, he has fallen into the more nebulous categories of the part-time employed, the long-term unemployed, and the "marginally attached"-the no-longer-looking unemployed. Economists report that the broader, and more accurate, unemployment rate is 16.2 per cent. Three years after the economic meltdown, nearly one in six Americans are out of work.
In Washington, President Barack Obama and Congress are engaged in high-drama brinksmanship, like members of an ordnance-disposal unit arguing about how to defuse a huge ticking bomb. Obama, securely in character, called on all sides to rise above petty politics, acknowledged the practical realities of divided government, and proposed a grand compromise that would lower the deficit by four trillion dollars. According to the Times' Nate Silver, Obama's offer, in its roughly four-to-one balance between spending cuts and revenue increases, falls to the right of the average American voter's preference; in fact, it may outflank the views of the average Republican. Among other drastic cuts to domestic spending, the President proposes a ten-year, hundred-billion-dollar reduction in federal contributions to Medicaid, a program that helped provide new sets of teeth for Danny Hartzell and his wife just before their move...
A lot of people are talking about Frank Rich's explosive new article in New York magazine. I think it is a remarkable thing, the latest and maybe the most comprehensive in an increasingly lengthy series of articles and investigations into the Obama administration's failure to properly investigate the causes of the financial crisis.
By now this is not quite a mainstream media drumbeat, but it's coming close: between the reporting of Louise Story and Gretchen Morgenson at the New York Times to the recent not-terribly-laudatory piece on New York Southern District U.S. Attorney Preet Bharara by the New Yorker's George Packer, to Eliot Spitzer's bitter commentary on the subject on CNN, to my own bleatings, and now this Rich broadside, it seems quite clear that the Obama administration's failure to clean up Wall Street is becoming a matter of some fascination with the few investigative journalists who are not covering the Casey Anthony case.
This investigation has the potential to be a Mother of All Nightmares situation for the banks for a couple of reasons. For one thing, the decision to go after the securitization process is a total prosecutorial bullseye. This is the ugly heart of the wide-scale fraud scheme of the bubble era. Again, the business model during this time was a giant bait-and-switch scam. Sleazy lenders like Countrywide and New Century first created huge masses of bad loans, committing every conceivable kind of fraud to get people into loans (from doctoring income statements with white-out to phonying FICO scores to engineering fake appraisals). They then moved the bad loans quickly to the big banks, which pooled them and chopped them up (this is the "securitization" process), sprinkled hocus-pocus math on them, and them sold them to suckers around the world as AAA-rated securities.
A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges.
They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.
Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.
It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.
The money was packed onto pallets inside a heavily guarded New York Federal Reserve compound in East Rutherford, New Jersey, trucked to Andrews Air Force Base outside of Washington, and flown by military aircraft to Baghdad International Airport.
By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. But soon after the money arrived in the chaos of war-torn Baghdad, the paper trail documenting who controlled it all began to go cold...
On this day, December 30th, in 1936 — 75 years ago today — hundreds of workers at the General Motors factories in Flint, Michigan, took over the facilities and occupied them for 44 days. My uncle was one of them.
The workers couldn't take the abuse from the corporation any longer. Their working conditions, the slave wages, no vacation, no health care, no overtime — it was do as you're told or get tossed onto the curb.
So on the day before New Year's Eve, emboldened by the recent re-election of Franklin Roosevelt, they sat down on the job and refused to leave.
They began their Occupation in the dead of winter. GM cut off the heat and water to the buildings. The police tried to raid the factories several times, to no avail. Even the National Guard was called in...
The Big Lie by Michael Thomas Newsweek December 26, 2011
But now, I think, the game is at long last over.
As 2011 slithers to its end, none of the major problems that led to the crisis point three years ago have really been solved. Bank balance sheets still reek. Europe day by day becomes a financial black hole, with matter from the periphery being sucked toward the center until the vortex itself collapses. The Street and its ministries of propaganda have fallen back on a Big Lie as old as capitalism itself: that all that has gone wrong has been government's fault. This time, however, I don't think the argument that "Washington ate my homework" is going to work. This time, a firestorm is going to explode about the Street's head—and about time, too...
This time, I fear, the public anger will not be deflected. Confessions, not false, will be exacted. Occupy Wall Street has set the snowball rolling; you may not think much of OWS—I have my own reservations, although none are philosophical or moral—but it has made America aware of a sinister, usurious process by which wealth has systematically been funneled into fewer and fewer hands. A process in which Washington played a useful supporting role, but no more than that.
Over the next year, I expect the "what" will give way to the "how" in the broad electorate's comprehension of the financial situation. The 99 percent must learn to differentiate the bloodsuckers and rent-extractors from those in the 1 percent who make the world a better, more just place to live. Once people realize how Wall Street made its pile, understand how financiers get rich, what it is that they actually do, the time will become ripe for someone to gather the spreading ripples of anger and perplexity into a focused tsunami of retribution. To make the bastards pay, properly, for the grief and woe they have caused. Perhaps not to the extent proposed by H. L. Mencken, who wrote that when a bank fails, the first order of business should be to hang its board of directors, but in a manner in which the pain is proportionate to the collateral damage. Possibly an excess-profits tax retroactive to 2007, or some form of "Tobin tax" on transactions, or a wealth tax. The era of money for nothing will be over...
There will be violence, mark my words. Houses burnt, property defaced. I just hope that this time the mob targets the right people in Wall Street and in Washington. (How does a right-thinking Christian go about asking Santa for Mitch McConnell's head under the Christmas tree?)...
At the end of the day, the convulsion to come won't really be about Wall Street's derivatives malefactions, or its subprime fun and games, or rogue trading, or the folly of banks. It will be about this society's final opportunity to rip away the paralyzing shackles of corruption or else dwell forever in a neofeudal social order. You might say that 1384 has replaced 1984 as our worst-case scenario. I have lived what now, at 75, is starting to feel like a long life. If anyone asks me what has been the great American story of my lifetime, I have a ready answer. It is the corruption, money-based, that has settled like some all-enveloping excremental mist on the landscape of our hopes, that has permeated every nook of any institution or being that has real influence on the way we live now. Sixty years ago, if you had asked me, on the basis of all that I had been taught, whether I thought this condition of general rot was possible in this country, I would have told you that you were nuts. And I would have been very wrong. What has happened in this country has made a lie of my boyhood.
There should be more to America, Gore Vidal has written, than who pays tax to whom. It has been in Wall Street's interest to shrivel our sensibilities as a nation, to shove aside the verities of which General MacArthur spoke at West Point—duty, honor, country—in favor of grubby schemes and scams and "carried interest" calculations. Time, I think, to take the country back.
The anciens régimes in various guises keep trying to play by the old rules, expecting the people to fold, yet the people—tens and hundreds of thousands of them—keep pushing back. To state this fact is not to romanticize the revolutionary moment, but rather to begin appreciating it as something different in scope and kind from anything that has come before. Never has such a vast region had such young populations. Half the people of Egypt are not yet 25; half those of Syria are younger than 22. In Yemen the median age is 18.
The level of contact and communication these Arabs enjoy was inconceivable to their parents. And yet the young people take it for granted, as part of the natural order in which they're growing up. Twenty years ago, there was no 24-hour satellite news station in Arabic. Now there are many. By 2009, according to a University of Maryland survey of the Arab world, some 80 percent of the respondents were getting their international news from television, and most (58 percent) were getting their headlines from Qatar-based Al Jazeera. Follow-up polls find that the Arab public has widened its range of news sources: about 27 percent of those connected to the Internet have signed on to the Web for the first time in just the past year. Perhaps most important, in a region where telephone landlines were difficult to obtain and tightly monitored until the late 1990s, roughly a third of Egypt's people now have mobile phones. In Saudi Arabia, most people have more than one.
Anybody paying the least attention to the Middle East knew those two basic trends in Arab fecundity and connectivity. But no one really foresaw what would happen when you stirred them together on the streets of Tunis or in Tahrir Square. And anyone who claims to have figured out exactly where that volatile and creative mix will take the region is still just guessing. The only certainty is that the Arabs will keep surprising the West, and very often themselves: pushing back when historically they would have been expected to submit, developing new strategies for thwarting demagogues, and over time—it's impossible to say how much time—shaping their own sorts of democracies.
There are grave misgivings about this new dynamic in the West. There's the sudden and unsettling realization that the old deals cut with Arab despots may not sit so well with the despots' former subjects. And yes, those despots' peace treaties and tacit understandings with Israel could be examples. But the hoary enmity toward the Zionists is, like most other history, not especially relevant at the moment to the Arab kids who are taking over the Arab world (unless the Israelis give them reason to care anew—and as of this writing, that has not happened)...
The impoverished peasants who subsisted in this information-starved world resembled the rural society Karl Marx described in France in the 1850s: a conglomeration rather than a class. Its members had no interconnectivity outside their families and villages. They were like "potatoes in a sack," Marx wrote: "They cannot represent themselves, they must be represented."...
The rich, conservative monarchies are viewed with deep suspicion by young democrats, who are sure the Saudis and Qataris are underwriting retrograde Salafism at the expense of secular liberalism. But the royals also seem to be supporting democratic freedoms elsewhere as a way of coopting dissenters at home. (They once did the same with jihadists.) Is that a risky proposition? Sure. But they're no better at reading the entrails of sacrificed dictators than anyone else has been...
And even if it were, the era when such takeovers were feasible has passed. There are too many men and women who have too many ways of making their voices heard, whether on the streets or in cyberspace. There's no looking back. These once-closed societies are now open or opening, and that process cannot be reversed. The history of the modern Arab world has only just begun.
Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."
Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider — someone so close to the development of the Reaganomics ideology — says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish...
Do we need more proof Washington's not working for middle class families? We got it once again this week.The big banks and their army of lobbyists couldn't stop the creation of a new Consumer Financial Protection Bureau, so now they are trying to undermine its work, enlisting their Republican friends on the Senate Banking Committee to stop the nomination of Richard Cordray to lead the agency — just to try to slow up the agency from doing its work.It's outrageous — and we've got to hold them accountable.
A Senate panel report made public Wednesday says Goldman Sachs Chief Executive Lloyd Blankfein, shown above, and other executives at the investment banking giant misled the Senate's Permanent Subcommittee on Investigations. They did so, the report says, when they appeared before the subcommittee last April and testified that the investment bank had not consistently tilted its own investments heavily against the housing market - a position known as being "net short."
Ben Bernanke was on the CBS 60 Minutes episode today, and it was interesting to hear what he has to say about the U.S. economy...
it was amazing to hear a man who graduated from Harvard University with a B.A. in economics summa cum laude, and got a doctorate in economics from the Massachusetts Institute of Technology, say such stupid stuff...
then again, he served as Chairman of President George W. Bush's Council of Economic Advisers, and it was the Republican policies of deregulation and lack of enforcement when the Republicans controlled the White House, the Senate, and the House of Representatives that led the American economy off the cliff... Bush did not veto a single federal spending bill his first five years in office, when the Republicans controlled the House and the Senate... the federal deficit rose more during the Bush years than all previous 42 presidents combined...
Bernanke did mention how unfortunate and unwise it was that AIG was unregulated, but that is not even the tip of the iceburg that wrecked the American economic Titanic... he did not say anything about unregulated NINJA loans...
Scott Pelley acted all stunned and surprised when Bernanke said it would take another five years for the American economy to recover, but that is actually a wildly optimistic prediction... in reality, it will probably take at least 20 years, if the economy ever does recover, which is iffy...
first, the reason it will take so long is all based on what was the cause of the economic disaster— American real estate... with reality-based steady economic growth, rather than bubbles doomed to burst, real estate goes up in value in America an average of a hundred bucks a month... so for houses to rise in value to what they possessed when they were sold when the subprime bubble had risen, with the growth of about 1200 bucks a year, it will take at least 20 years for the houses to be worth what they were in 2006... and we are by no means even in the beginning of recovery yet, because home foreclosures are still setting new records every month, so it will be some time before the real estate even begins to increase in modest value...
second, in the interview with Pelley, Bernanke himself described how 8.5 million jobs were lost in the crash, and only a million jobs have been recovered... so if it takes over two years to recover a million jobs, then again, we are looking at about 20 years before full employment again...
but there are other factors that make me even more pessimistic... China, with a billion consumers, has a lot more spending power now, so the global demand for oil and food is increasing, and the supply is not increasing, which means the prices are going up... gas will easily be three bucks a gallon for American drivers a year from now, and I am being optimistic with the price still that low... energy prices for home and business utilities are going up... food prices are going up, too...
so Americans face higher prices and lower wages for years to come...
2011 is going to be vewy vewy intewesting... 2 million people who no longer receive unemployment checks could be desperate people, unless those essential benefits are extended by Congress... job increase for the holidays was anemic, and did not even keep up with the increase in the labor force from new young people looking for their first jobs... Delta Airlines announced it was hiring 1,000 new employees, and Delta received 100,000 applications...
Mr. Ed said a couple days ago that he thinks Wall Street has it in for Obama to prevent his reelection because of the Dodd-Frank Wall Street Reform and Consumer Protection Act that Obama signed into law July 21, 2010... an attachment that Bernie Sanders added to the bill has revealedA Real Jaw Dropper at the Federal Reserve—
At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed, and the American people now have this information...
What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.
We also learned that the Fed's multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald's, Caterpillar, Harley Davidson, Toyota and Verizon.
Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse — which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.
Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.
Has the Federal Reserve of the United States become the central bank of the world?
The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college. Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis they started never happened...
I intend to investigate whether these secret Fed loans, in some cases, turned out to be direct corporate welfare to big banks that used these loans not to reinvest in the economy but rather to lend back to the federal government at a higher rate of interest by purchasing Treasury Securities. Instead of using this money to reinvest in the productive economy, I suspect a large portion of these near-zero interest loans were used to buy Treasury Securities at a higher interest rate providing free money to some of the largest financial institutions in this country. That is something that we have got to closely examine...
We have begun to lift the veil of secrecy at one of most important agencies in our government. What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people.
"In order to overcome commodity fetishism, it is necessary to effect a revolutionary overthrow of capitalist society, which is based on private ownership of the means of production. Under socialism, amid conditions where there is a predominance of public ownership of the means of production, relations between people are not veiled by relations between things; instead, they have a planned nature, and so commodity fetishism disappears."
—A. A. KHANDRUEV The Great Soviet Encyclopedia, 3rd Edition (1970-1979)
In capitalist society, providing it develops under the most favourable conditions, we have a more or less complete democracy in the democratic republic. But this democracy is always hemmed in by the narrow limits set by capitalist exploitation, and consequently always remains, in effect, a democracy for the minority, only for the propertied classes, only for the rich. Freedom in capitalist society always remains about the same as it was in the ancient Greek republics: freedom for the slave-owners. Owing to the conditions of capitalist exploitation, the modern wage slaves are so crushed by want and poverty that "they cannot be bothered with democracy", "cannot be bothered with politics"; in the ordinary, peaceful course of events, the majority of the population is debarred from participation in public and political life.
Democracy for an insignificant minority, democracy for the rich — that is the democracy of capitalist society. If we look more closely into the machinery of capitalist democracy, we see everywhere, in the "petty" — supposedly petty — details of the suffrage (residential qualifications, exclusion of women, etc.), in the technique of the representative institutions, in the actual obstacles to the right of assembly (public buildings are not for "paupers"!), in the purely capitalist organization of the daily press, etc., etc., — we see restriction after restriction upon democracy. These restrictions, exceptions, exclusions, obstacles for the poor seem slight, especially in the eyes of one who has never known want himself and has never been inclose contact with the oppressed classes in their mass life (and nine out of 10, if not 99 out of 100, bourgeois publicists and politicians come under this category); but in their sum total these restrictions exclude and squeeze out the poor from politics, from active participation in democracy.
V.I. Lenin The State and Revolution Chapter 5: The Economic Basis of the Withering Away of the State
George Soros on the Coming U.S. Class War by John Arlidge Newsweek January 23, 2012 You know George Soros. He's the investor's investor-the man who still holds the record for making more money in a single day's trading than anyone. He pocketed $1 billion betting against the British pound on "Black Wednesday" in 1992, when sterling lost 20 percent of its value in less than 24 hours and crashed out of the European exchange-rate mechanism. No wonder Brits call him, with a mix of awe and annoyance, "the man who broke the Bank of England."
Soros doesn't make small bets on anything. Beyond the markets, he has plowed billions of dollars of his own money into promoting political freedom in Eastern Europe and other causes. He bet against the Bush White House, becoming a hate magnet for the right that persists to this day. So, as Soros and the world's movers once again converge on Davos, Switzerland, for the World Economic Forum this week, what is one of the world's highest-stakes economic gamblers betting on now?
He's not. For the first time in his 60-year career, Soros, now 81, admits he is not sure what to do. "It's very hard to know how you can be right, given the damage that was done during the boom years," Soros says. He won't discuss his portfolio, lest anyone think he's talking things down to make a buck. But people who know him well say he advocates making long-term stock picks with solid companies, avoiding gold—"the ultimate bubble"—and, mainly, holding cash.
He's not even doing the one thing that you would expect from a man who knows a crippled currency when he sees one: shorting the euro, and perhaps even the U.S. dollar, to hell. Quite the reverse. He backs the beleaguered euro, publicly urging European leaders to do whatever it takes to ensure its survival. "The euro must survive because the alternative—a breakup—would cause a meltdown that Europe, the world, can't afford." He has bought about $2 billion in European bonds, mainly Italian, from MF Global Holdings Ltd., the securities firm run by former Goldman Sachs head Jon Corzine that filed for bankruptcy protection last October...
"At times like these, survival is the most important thing," he says, peering through his owlish glasses and brushing wisps of gray hair off his forehead. He doesn't just mean it's time to protect your assets. He means it's time to stave off disaster. As he sees it, the world faces one of the most dangerous periods of modern history-a period of "evil." Europe is confronting a descent into chaos and conflict. In America he predicts riots on the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties. The global economic system could even collapse altogether...
More than any other political figure, it was Ronald Reagan who put America on its present course toward stunning income inequality and into a brave new world of deregulated industries, which were then able to exploit lax government controls to devastate the economy.
It was Reagan who experimented with "supply side economics" which held that slashing the top marginal tax rates for the rich by half or more would eliminate the federal deficit and supposedly help everyone by letting the extra money at the top trickle down.
It was Reagan who declared that "government is the problem" and convinced many middle-class Americans - especially white men - that they should despise "big government" as a threat to their liberty and trust their financial security to the kindness, wisdom and generosity of corporate chieftains.
It was Reagan who demanded a massive reinvestment in the U.S. military, even as America's principal adversary, the Soviet Union, was in rapid decline. Reagan also allied the United States with some of the world's most brutal regimes and insurgent movements, as long as they identified themselves as "anti-communist."
It also was Reagan who transformed the Republican Party into a political organization disdainful of science and empiricism - and devoted to retaining its power at almost any price. For Reagan and his P.R. team, the goal was always "perception management," controlling how average Americans saw the world, not how it actually was.
Though it may be true that the current crop of Republicans is even more extreme than Reagan, that is mostly because today's GOPers have dropped the few nuances that Reagan retained because of the political constraints that he faced. Three decades into Reagan's transformation of America, the Right's accumulated power has allowed the embrace of even more radical positions...
The corporate barbarians are through the gate of American democracy. Not satisfied with their all-pervasive influence on our culture, economy and legislative processes, they want more. They want it all...
The year 2011 has been a tough one for Vermont and our country. The recession caused by the greed, recklessness and illegal behavior of Wall Street continues. While Vermont is doing better economically than much of the country, too many of our friends and neighbors are unemployed or underemployed or are earning less than they need to adequately support their families...
It is no secret that the people of our country are angry and frustrated with Washington and their government. They correctly perceive that we face enormous problems: a collapsing middle class, increased poverty and a growing gap between the very rich and everyone else; sky-high unemployment; 50 million Americans without health insurance; a deteriorating infrastructure; the continued loss of our manufacturing capabilities; the ongoing mortgage and student loan crises, and the planetary challenge of global warming. And on top of all of that, we have a $15 trillion dollar national debt.
The American people want action. They want their government to start representing the 99 percent, not just the top 1 percent. With that goal in mind, let me say a few words about some of the issues that I will be working on when Congress reconvenes in January...
A majority of Americans believe that former President George W. Bush is more responsible than President Obama for the current economic problems in the country, according to a new Washington Post-ABC News poll.
Fifty-four percent of respondents said that Bush was more to blame while 29 percent put the blame on Obama; 9 percent said both men deserved blame while 6 percent said neither did. Among registered voters, the numbers are almost identical; 54 percent blame Bush, while 30 percent blame Obama.
Independents, widely considered the most critical voting bloc this fall, continue to blame Bush far more than Obama for the economic troubles. Fifty-seven percent of unaffiliated voters put the blame on the former Republican president, while 25 percent believe the blame rests more with Obama...
WASHINGTON, DC — Santa Claus came early this year for four former executives of Washington Mutual (WaMu), a large US bank that failed in fall 2008. The Federal Deposit Insurance Corporation (FDIC) had brought a lawsuit against the four, actions that included taking huge financial risks while "knowing that the real estate market was in a ‘bubble.'"...
To be sure, the executives lost their jobs and now must drop claims for additional compensation. But, according to the FDIC, the four still earned more than $95 million from January 2005 through September 2008. So they are walking away with a great deal of cash...
At the same time, their actions — and similar actions by other bankers — are directly responsible for both the run-up in housing prices and the damaging collapse that followed. That collapse has impacted non-bankers in many negative ways, including through the loss of more than eight million jobs...
But what about government support for the big banks? Is this contracting in the light of our current fiscal pressures? Unfortunately, it is not; much government support remains, implicitly through allowing banks to be "too big to fail," and explicitly through various kinds of backing provided by the Federal Reserve...
The protesters of "Occupy Albany" issued a powerful consensus statement recently, which reads in part:
"The interests of those who purchase influence are rewarded at the expense of the People, from whom the government's just power is derived. We believe that this failure in our system is at the core of many interconnected issues we face as a society, and its resolution is key to a just future. We therefore demand true democracy, decoupled from the corrosive influence of concentrated economic power, and we call all who share in this common goal to stand with us and take action toward this end."
Big banks represent the ultimate in concentrated economic power in today's economies. They are able to resist all meaningful reform that could really change their compensation schemes. Their executives want to get all the upside while facing none of the true downside.
But capitalism without the prospect of failure is not any kind of market economy. We are running a large-scale, nontransparent, and dangerous government subsidy scheme for the benefit primarily of a very few, extremely wealthy people...
We should learn from both the WaMu and the Occupy movement. In both cases, the lesson is the same: concentrated financial power is a gift that keeps on giving — but not to you.
This year has witnessed a global wave of social and political turmoil and instability, with masses of people pouring into the real and virtual streets: the Arab Spring; riots in London; Israel's middle-class protests against high housing prices and an inflationary squeeze on living standards; protesting Chilean students; the destruction in Germany of the expensive cars of "fat cats"; India's movement against corruption; mounting unhappiness with corruption and inequality in China; and now the "Occupy Wall Street" movement in New York and across the United States.
While these protests have no unified theme, they express in different ways the serious concerns of the world's working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. The causes of their concern are clear enough: high unemployment and underemployment in advanced and emerging economies; inadequate skills and education for young people and workers to compete in a globalized world; resentment against corruption, including legalized forms like lobbying; and a sharp rise in income and wealth inequality in advanced and fast-growing emerging-market economies.
Of course, the malaise that so many people feel cannot be reduced to one factor. For example, the rise in inequality has many causes: the addition of 2.3 billion Chinese and Indians to the global labor force, which is reducing the jobs and wages of unskilled blue-collar and off-shorable white-collar workers in advanced economies; skill-biased technological change; winner-take-all effects; early emergence of income and wealth disparities in rapidly growing, previously low-income economies; and less progressive taxation...
The problem is not new. Karl Marx oversold socialism, but he was right in claiming that globalization, unfettered financial capitalism, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct. As he argued, unregulated capitalism can lead to regular bouts of over-capacity, under-consumption, and the recurrence of destructive financial crises, fueled by credit bubbles and asset-price booms and busts...
Thirty large and profitable U.S. corporations paid no income taxes in 2008 through 2010, said a study on Thursday that arrives as Congress faces rising demands for tax reform but seems unable or unwilling to act.
Pepco Holdings Inc , a Washington, D.C.-area power company, had the lowest effective tax rate, at negative 57.6 percent, among the 280 Fortune 500 companies studied.
The statutory U.S. corporate income tax rate is 35 percent, one of the highest in the world; but over the 2008-2010 period, very few of the companies studied paid it, said the report.
The average effective tax rate for the companies over the period was 18.5 percent, said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, both think tanks.
Their report also listed General Electric Co , Paccar Inc , PG&E Corp , Computer Sciences Corp , Boeing Co and NiSource Inc as among the 30 that paid no taxes.
Corporations will say rightly that the loopholes that let them slash their taxes were perfectly legal, the report said.
"But that does not mean that low-tax corporations bear no responsibility ... The laws were not enacted in a vacuum; they were adopted in response to relentless corporate lobbying, threats and campaign support," the report said...
WASHINGTON — Despite a pledge not to take money from lobbyists, President Obama has relied on prominent supporters who are active in the lobbying industry to raise millions of dollars for his re-election bid.
At least 15 of Mr. Obama's "bundlers" — supporters who contribute their own money to his campaign and solicit it from others — are involved in lobbying for Washington consulting shops or private companies. They have raised more than $5 million so far for the campaign.
Because the bundlers are not registered as lobbyists with the Senate, the Obama campaign has managed to avoid running afoul of its self-imposed ban on taking money from lobbyists.
But registered or not, the bundlers are in many ways indistinguishable from people who fit the technical definition of a lobbyist. They glide easily through the corridors of power in Washington, with a number of them hosting Mr. Obama at fund-raisers while also visiting the White House on policy matters and official business.
As both a candidate and as president, Mr. Obama has vowed to curb what he calls the corrupting influence of lobbyists, barring them not only from contributing to his campaign but also from holding jobs in his administration. While lobbyists grouse about the rules, ethics watchdogs credit the changes with raising ethical standards in Washington.
But the prevalence of major Obama fund-raisers who also work in the lobbying arena threatens to undercut the president's ethics push, raising questions about whether the campaign's policies square with its on-the-ground practices, some of those same watchdogs say...
But I remember following Obama on the campaign trail and hearing all sorts of promises before union-heavy crowds. He said he would raise the minimum wage every year; he said he would fight free-trade agreements. He also talked about repealing the Bush tax cuts and ending tax breaks for companies that move jobs overseas.
It's not just that he hasn't done those things. The more important thing is that the people he's surrounded himself with are not labor people, but stooges from Wall Street. Barack Obama has as his chief of staff a former top-ranking executive from one of the most grossly corrupt mega-companies on earth, JP Morgan Chase. He sees Bill Daley in his own office every day, yet when it comes time to talk abut labor issues, he has to go out and make selected visits twice a year or whatever to the Richard Trumkas of the world.
Listening to Obama talk about jobs and shared prosperity yesterday reminded me that we are back in campaign mode and Barack Obama has started doing again what he does best - play the part of a progressive. He's good at it. It sounds like he has a natural affinity for union workers and ordinary people when he makes these speeches. But his policies are crafted by representatives of corporate/financial America, who happen to entirely make up his inner circle.
I just don't believe this guy anymore, and it's become almost painful to listen to him...
The top six financial institutions in this country own assets equal to more than 60 percent of our gross domestic product and possess enormous economic and political power. One of the great questions of our time is whether the American people, through Congress, will control the greed, recklessness and illegal behavior on Wall Street, or whether Wall Street will continue to wreak havoc on our economy and the lives of working families.
I represent Vermont, where many workers drive long distances to jobs that pay $12 an hour or less. Many seniors living on fixed incomes heat their homes with oil during our cold winters. These people have asked me to do all that I can to lower outrageously high gasoline and heating-oil prices. I intend to do just that.
Why have oil prices spiked wildly? Some argue that the volatility is a result of supply-and-demand fundamentals. More and more observers, however, believe that excessive speculation in the oil futures market by investors is driving oil prices sky high.
A June 2 article in the Wall Street Journal said it all: "Wall Street is tapping a real gusher in 2011, as heightened volatility and higher prices of oil and other raw materials boost banks' profits." ExxonMobil Chairman Rex Tillerson, testifying before a Senate panel this year, said that excessive speculation may have increased oil prices by as much as 40 percent. Delta Air Lines general counsel Richard Hirst wrote to federal regulators in December that "the speculative bubble in oil prices has concrete detrimental consequences for the real economy." An American Trucking Association vice president, Richard Moskowitz, said, "Excessive speculation has caused dramatic increases in the price of crude oil, which harms end-users like America's trucking industry."
I released records last month that documented the role of speculators and put the information on my Web site for three reasons...
Michael Moore posted this on his blog yesterday... this is a brilliant history lesson, and there is much more about it at the link...
From time to time, someone under 30 will ask me, "When did this all begin, America's downward slide?" They say they've heard of a time when working people could raise a family and send the kids to college on just one parent's income (and that college in states like California and New York was almost free). That anyone who wanted a decent paying job could get one. That people only worked five days a week, eight hours a day, got the whole weekend off and had a paid vacation every summer. That many jobs were union jobs, from baggers at the grocery store to the guy painting your house, and this meant that no matter how "lowly" your job was you had guarantees of a pension, occasional raises, health insurance and someone to stick up for you if you were unfairly treated.
Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure — changes in real G.D.P. since the recession began — Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.
Nor is Britain unique. Italy is also doing worse than it did in the 1930s — and with Spain clearly headed for a double-dip recession, that makes three of Europe's big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy.
And it's a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years...
How goes the state of the union? Well, the state of the economy remains terrible. Three years after President Obama's inauguration and two and a half years since the official end of the recession, unemployment remains painfully high.
But there are reasons to think that we're finally on the (slow) road to better times. And we wouldn't be on that road if Mr. Obama had given in to Republican demands that he slash spending, or the Federal Reserve had given in to Republican demands that it tighten money.
Why am I letting a bit of optimism break through the clouds? Recent economic data have been a bit better, but we've already had several false dawns on that front. More important, there's evidence that the two great problems at the root of our slump — the housing bust and excessive private debt — are finally easing...
"And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A."
That's how the fictional Gordon Gekko finished his famous "Greed is good" speech in the 1987 film "Wall Street." In the movie, Gekko got his comeuppance. But in real life, Gekkoism triumphed, and policy based on the notion that greed is good is a major reason why income has grown so much more rapidly for the richest 1 percent than for the middle class.
Today, however, let's focus on the rest of that sentence, which compares America to a corporation. This, too, is an idea that has been widely accepted. And it's the main plank of Mitt Romney's case that he should be president: In effect, he is asserting that what we need to fix our ailing economy is someone who has been successful in business.
In so doing, he has, of course, invited close scrutiny of his business career. And it turns out that there is at least a whiff of Gordon Gekko in his time at Bain Capital, a private equity firm; he was a buyer and seller of businesses, often to the detriment of their employees, rather than someone who ran companies for the long haul. (Also, when will he release his tax returns?) Nor has he helped his credibility by making untenable claims about his role as a "job creator."...
Last month President Obama gave a speech invoking the spirit of Teddy Roosevelt on behalf of progressive ideals — and Republicans were not happy. Mitt Romney, in particular, insisted that where Roosevelt believed that "government should level the playing field to create equal opportunities," Mr. Obama believes that "government should create equal outcomes," that we should have a society where "everyone receives the same or similar rewards, regardless of education, effort and willingness to take risk."
As many people were quick to point out, this portrait of the president as radical redistributionist was pure fiction. What hasn't been as widely noted, however, is that Mr. Romney's picture of himself as a believer in a level playing field is just as fictional. Where is the evidence that he or his party cares at all about equality of opportunity?
Let's talk for a minute about the actual state of the playing field.
Americans are much more likely than citizens of other nations to believe that they live in a meritocracy. But this self-image is a fantasy: as a report in The Times last week pointed out, America actually stands out as the advanced country in which it matters most who your parents were, the country in which those born on one of society's lower rungs have the least chance of climbing to the top or even to the middle...
In 2011, as in 2010, America was in a technical recovery but continued to suffer from disastrously high unemployment. And through most of 2011, as in 2010, almost all the conversation in Washington was about something else: the allegedly urgent issue of reducing the budget deficit.
This misplaced focus said a lot about our political culture, in particular about how disconnected Congress is from the suffering of ordinary Americans. But it also revealed something else: when people in D.C. talk about deficits and debt, by and large they have no idea what they're talking about — and the people who talk the most understand the least.
Perhaps most obviously, the economic "experts" on whom much of Congress relies have been repeatedly, utterly wrong about the short-run effects of budget deficits. People who get their economic analysis from the likes of the Heritage Foundation have been waiting ever since President Obama took office for budget deficits to send interest rates soaring. Any day now!
And while they've been waiting, those rates have dropped to historical lows. You might think that this would make politicians question their choice of experts — that is, you might think that if you didn't know anything about our postmodern, fact-free politics...
"The boom, not the slump, is the right time for austerity at the Treasury." So declared John Maynard Keynes in 1937, even as F.D.R. was about to prove him right by trying to balance the budget too soon, sending the United States economy - which had been steadily recovering up to that point - into a severe recession. Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.
Unfortunately, in late 2010 and early 2011, politicians and policy makers in much of the Western world believed that they knew better, that we should focus on deficits, not jobs, even though our economies had barely begun to recover from the slump that followed the financial crisis. And by acting on that anti-Keynesian belief, they ended up proving Keynes right all over again...
Consider the following picture: Recent growth has relied on a huge construction boom fueled by surging real estate prices, and exhibiting all the classic signs of a bubble. There was rapid growth in credit— with much of that growth taking place not through traditional banking but rather through unregulated "shadow banking" neither subject to government supervision nor backed by government guarantees. Now the bubble is bursting — and there are real reasons to fear financial and economic crisis.
Am I describing Japan at the end of the 1980s? Or am I describing America in 2007? I could be. But right now I'm talking about China, which is emerging as another danger spot in a world economy that really, really doesn't need this right now...
It's time to start calling the current situation what it is: a depression. True, it's not a full replay of the Great Depression, but that's cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.
On that last point, I am not being alarmist. On the political as on the economic front it's important not to fall into the "not as bad as" trap. High unemployment isn't O.K. just because it hasn't hit 1933 levels; ominous political trends shouldn't be dismissed just because there's no Hitler in sight...
Financial markets are cheering the deal that emerged from Brussels early Thursday morning. Indeed, relative to what could have happened — an acrimonious failure to agree on anything — the fact that European leaders agreed on something, however vague the details and however inadequate it may prove, is a positive development.
But it's worth stepping back to look at the larger picture, namely the abject failure of an economic doctrine — a doctrine that has inflicted huge damage both in Europe and in the United States.
The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed.
This doctrine was sold both with claims that there was no alternative — that both bailouts and spending cuts were necessary to satisfy financial markets — and with claims that fiscal austerity would actually create jobs. The idea was that spending cuts would make consumers and businesses more confident. And this confidence would supposedly stimulate private spending, more than offsetting the depressing effects of government cutbacks...
So bailing out the banks while punishing workers is not, in fact, a recipe for prosperity. But was there any alternative? Well, that's why I'm in Iceland, attending a conference about the country that did something different.
If you've been reading accounts of the financial crisis, or watching film treatments like the excellent "Inside Job," you know that Iceland was supposed to be the ultimate economic disaster story: its runaway bankers saddled the country with huge debts and seemed to leave the nation in a hopeless position.
But a funny thing happened on the way to economic Armageddon: Iceland's very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.
So how's it going? Iceland hasn't avoided major economic damage or a significant drop in living standards. But it has managed to limit both the rise in unemployment and the suffering of the most vulnerable; the social safety net has survived intact, as has the basic decency of its society. "Things could have been a lot worse" may not be the most stirring of slogans, but when everyone expected utter disaster, it amounts to a policy triumph.
And there's a lesson here for the rest of us: The suffering that so many of our citizens are facing is unnecessary. If this is a time of incredible pain and a much harsher society, that was a choice. It didn't and doesn't have to be this way.
To understand the furor over the decision by Standard & Poor's, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it's the last place anyone should turn for judgments about our nation's prospects.
Watching the evolution of economic discussion in Washington over the past couple of years has been a disheartening experience. Month by month, the discourse has gotten more primitive; with stunning speed, the lessons of the 2008 financial crisis have been forgotten, and the very ideas that got us into the crisis - regulation is always bad, what's good for the bankers is good for America, tax cuts are the universal elixir - have regained their hold.
And now trickle-down economics - specifically, the idea that anything that increases corporate profits is good for the economy - is making a comeback.
On the face of it, this seems bizarre. Over the last two years profits have soared while unemployment has remained disastrously high. Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation?
Nonetheless, trickle-down is clearly on the ascendant - and even some Democrats are buying into it. What am I talking about? Consider first the arguments Republicans are using to defend outrageous tax loopholes. How can people simultaneously demand savage cuts in Medicare and Medicaid and defend special tax breaks favoring hedge fund managers and owners of corporate jets?
Many commentators remain complacent about the debt ceiling; the very gravity of the consequences if the ceiling isn't raised, they say, ensures that in the end politicians will do what must be done. But this complacency misses two important facts about the situation: the extremism of the modern G.O.P., and the urgent need for President Obama to draw a line in the sand against further extortion.
The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe's single currency is coming apart at the seams. How did it all go so wrong?
Borrowing a page from Goldman Sachs and other Wall Street banks that bet against investments sold to investors, mortgage giant Freddie Mac is banking that Americans won't be able to refinance their homes—even though making refinancing easier is one of the taxpayer-owned operation's primary missions.
An investigation by ProPublica and NPR News found that Freddie Mac has been betting against refinancing opportunities since late 2010, which was around the same time it started to make it harder for homeowners to get out of high-interest mortgages...
In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.
Roy, a truck driver, and Sheila, a former hotel housekeeping supervisor, knew their new loan from Wells Fargo would enable them to save $198.86 a month — a nice chunk to help with gas and groceries.
But what the Bowers never imagined was that their old loan, the one Wells Fargo told them was paid off, would resurrect itself, trashing their credit report, scotching their son's student loans and throwing the whole family into foreclosure. All, they say, even though they didn't miss a single mortgage payment.
The Fed's FOMC is supposed to steer the US economy to prosperity. As we now see, it was completely rudderless in 2006
In keeping with its policy of releasing transcripts with a five-year lag, the Federal Reserve Board recently released the transcripts from its 2006 Open Market Committee (FOMC) meetings. There is much there to cause pain and amusement...
As we start the New Year, the executive branch and Congress continue to pretend the gravest risk to our economy and social stability does not exist: the ongoing foreclosure crisis. The financial crisis began with the housing crisis and it will not end until we resolve housing. Government policymakers who seemingly ignore this basic fact are leading the nation to another potential catastrophe.
This past week, a number of important events occurred in Washington, including important recess appointments by President Obama. However, the most noteworthy event did not make front page news: the Federal Reserve's (apparently) unsolicited memo to the committees of Congress that oversee financial services warning of the dangers the current housing market poses for the economy.
This represents an extraordinary action and underscores both the seriousness of the continuing crisis and the absence of meaningful discussion of the problem in Washington. Bernanke's memo reviewed federal actions to date and effectively concluded that they were unlikely to solve this national tragedy...
Federal Reserve chairman Ben Bernanke wants US taxpayers to purchase more of the garbage loans and mortgage-backed securities (MBS) that the big banks still have on their books. (Cash for trash) That's the impetus behind the Fed's 26-page white paper that was delivered to Congress last Wednesday. The document outlines the Fed's plan for ‘stabilizing the housing market', which is a phrase that Bernanke employs when he wants to provide more buy-backs, giveaways, subsidies and other corporate welfare to big finance.
"Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery," Bernanke opined in a letter to the Senate Banking and House Financial Services committees.
Indeed. The housing depression continues into its 5th year with no end in sight, mainly because the people who created the crisis are still in positions of power. And, they're still offering the same remedies, too, like handing the banks another blank check to save them from losses on their bad bets. That's what this new "housing stabilization" boondoggle is really all about, bailing out the bankers...
Remember the $700 billion bailout that prompted rage from right to left? Which inspired millions to join the Tea Party and the Occupy movements? Turns out that that was a mere drop in the bucket, less than a tenth of what the Federal Reserve Bank doled out to the big banks.
Bloomberg Markets Magazine reports a shocking story that emerged from tens of thousands of documents released under the Freedom of Information Act: by March 2009, the Fed shelled out $7.77 trillion "to rescuing the financial system, more than half the value of everything produced in the U.S. that year."
The U.S. national debt is currently a record $14 trillion.
We knew that the Fed and the White House were pawns of Wall Street. What's new is the scale of the conspiracy...
This stinks. It's terrible economics. And it's unbelievably cruel... Every man, woman in child in the United States would have received $24,000.
A family of four would have gotten $96,000.
And that's without an income test.
New data from the U.S. Census Bureau shows that 100 million American citizens—one of out of three—subsists below or just above the official poverty line. Demographers, statisticians and economists were stunned. "These numbers are higher than we anticipated," Trudi J. Renwick, the bureau's chief poverty statistician, told The New York Times. "There are more people struggling than the official numbers show."...
There isn't any money to help you.
We don't have the budget.
You can't get the bank to call you back about refinancing, much less the attention of your Congressman.
But not if you're a banker.
Bankers get their calls returned. They get anything they want.
There is no three-strikes law for crooked bankers, not even a law for a fifth strike, as The New York Times reported in the case of Citigroup, cited last month in a $1 billion fraud case. Unlike the California third-striker I once wrote about whom a district attorney wanted banished forever to state prison for stealing a piece of pizza from the plate of a person dining outdoors, Citigroup executives get off with a fine and by offering a promise not to do it again, and again and again.
As the Times reported when Citigroup agreed to settle SEC charges last month: "Citigroup's main brokerage subsidiary, its predecessors or its parent company agreed to not violate the very same antifraud statue in July 2010. And in May 2006. Also as far back as March 2005 and April 2000."
Not that the bankers face prison time, since the Justice Department has refused to act in these cases, and the Securities and Exchange Commission is bringing only civil charges, which the banks find quite tolerable. This time, the fine against Citigroup was $285 million, which may sound like a lot except that the bank raked off as much as $700 million on this particular toxic securities deal. As the Bloomberg news service editorialized, "... there should be only one answer from Jed S. Rakoff, the federal judge in New York assigned to weigh the merits of the agreement: You've got to be kidding."
Not to pick on Citigroup, the too-big-to-fail bank that Clinton administration Treasury Secretary Robert Rubin helped make legal before he was paid off with a $126 million job on Wall Street; that corporation was not the only serial offender. "Citigroup has a lot of company in this regard on Wall Street," the Times noted, "nearly all of the biggest financial companies-Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America among them-have settled fraud cases by promising that they would never again violate an antifraud law, only to have the SEC conclude they did it again a few years later."
So forget relying on the federal government to hold the Wall Street swindlers accountable. Indeed, the Obama administration has been involved in negotiating a deal with state attorneys general to settle their complaints with the banks for a pittance of compensation for the victims. In return, the states would promise not to institute further legal proceedings against the banks.
The fix was in for what a New York Times editorial on Tuesday headlined "Letting the Banks Off Easy" described as "paltry" mortgage relief, reducing by less than $20 billion the balances of 14.5 million underwater homeowners who are "drowning in some $700 billion of negative equity." The deal has been stalled by the refusal of California Attorney General Kamala Harris to accept this sellout. Among its other disastrous concessions would be ending further investigation by the states into financial skulduggery connected with the housing meltdown.
In September, Harris, elected in a Democratic sweep of the state's top offices in 2010, went against the dictates of the Democrat in the White House, stating that she refused to release the banks from legal liability for the mortgage crisis. That is the nub of the pending White House-brokered deal with the banks. As the Times summarized it: "The proposed settlement reportedly would prevent the states from pursuing claims against banks relating to fraud or abuse in the origination of the bubble. It would also prevent states from pursuing claims for foreclosure abuses, like improper denial of loan modifications."
Traditionally the states provided the essential regulation of mortgage origination, ownership and sales as a transparent process duly recorded and subject to public examination at the county level. But in order to facilitate the gathering of those mortgages into the sort of collateralized debt obligations that the banks could then bet on and trade worldwide, homeownership became a murky matter. Many of the mortgages now in question, including the ones that Citigroup's "synthetic" derivative was based on, are no longer owned by the banks that originated them. They are instead part of the Mortgage Electronic Registration Systems (MERS) database, owned by a consortium of banks and residing in computers in Reston, Va.
The MERS system is described by the Times as "a land registry system implicated in bubble-era violations of tax, trust and property law." The Obama-supported settlement would make it very difficult if not impossible to investigate at long last the workings of MERS and other systemic sources of what is now a full-blown international economic crisis. As the Times editorial put it, "In effect, the legal waivers being contemplated would let the banks pay up to sweep wrongdoing under the rug."
Thankfully, we have a few state attorneys general, most prominently California's Harris, standing up for the American people, but it is outrageous that a president who avowedly committed to defending the public interest would now be subverting that effort rather than leading it.
We know that the Occupy people want to keep their opposition on a general level of informed outrage and not get to the specific policy level. Fine. The 535 people in Congress, who put their shoes on every day like we do, are quite susceptible to a fast rising rumble from the people. They don't need specifics. They know all about the savagely avaricious corporate paymasters and their swarming lobbyists on Capitol Hill wanting ever more varieties of goodies and less corporate law enforcement. What they need to know is that you've got their number and that people are fed up and on the move.
More members of Congress than one might expect, with their finger to the wind, start readjusting their antennas when they sense voter agitation. It is just that for years, there has been nary a breeze from that crucial source, while the corporatists have had their party year after year with their governmental toadies on both ends of Pennsylvania Avenue.
Make no mistake; support for the power shift espoused by the 99 percent movement is now only a breeze but a windstorm is coming. The protesters are feeling their way — demonstrating before big banks and closing out their accounts in favor of smaller community banks. Protests in front of the Manhattan mansions of the superrich from the big media and the big hedge funds also make sense...
This vanguard of larger protests to come is building on the personal stories of desperate but failed attempts to find work; stories of heart-breaking inability to pay for healthcare for themselves or their families'; stories of being defrauded of their pensions, their tax dollars, their savings and their rights. They demand accountability for the culprits who lied, stole and got away with it destroying the economy. And they want Congress to never bailout the Wall Street crooks, swindlers and speculators with taxpayer dollars.Shining the light of the 99 percenters on the operations base of the corporate supremacists and their Congressional minions in one location after another both empowers and further informs those Americans who are seeing that showing up is half of democracy.
The week before the editorial ran, Craig A. Dubow resigned as Gannett's chief executive. His short six-year tenure was, by most accounts, a disaster. Gannett's stock price declined to about $10 a share from a high of $75 the day after he took over; the number of employees at Gannett plummeted to 32,000 from about 52,000, resulting in a remarkable diminution in journalistic boots on the ground at the 82 newspapers the company owns.
Never a standout in journalism performance, the company strip-mined its newspapers in search of earnings, leaving many communities with far less original, serious reporting.
Given that legacy, it was about time Mr. Dubow was shown the door, right? Not in the current world we live in. Not only did Mr. Dubow retire under his own power because of health reasons, he got a mash note from Marjorie Magner, a member of Gannett's board, who said without irony that "Craig championed our consumers and their ever-changing needs for news and information."
But the board gave him far more than undeserved plaudits. Mr. Dubow walked out the door with just under $37.1 million in retirement, health and disability benefits. That comes on top of a combined $16 million in salary and bonuses in the last two years.
And in case you thought they were paying up just to get rid of a certain way of doing business — slicing and dicing their way to quarterly profits — Mr. Dubow was replaced by Gracia C. Martore, the company's president and chief operating officer. She was Mr. Dubow's steady accomplice in working the cost side of the business, without finding much in the way of new revenue. She has already pocketed millions in bonuses and will now be in line for even more.
Forget about occupying Wall Street; maybe it's time to start occupying Main Street, a place Gannett has bled dry by offering less and less news while dumping and furloughing journalists in seemingly every quarter...
For the past several weeks I have watched and read news about the Occupy Wall Street protests with both interest and admiration. I thought The New York Times hit the nail on the head in aneditorial Sunday:
"The message - and the solutions - should be obvious to anyone who has been paying attention since the economy went into a recession that continues to sock the middle class while the rich have recovered and prospered. The problem is that no one in Washington has been listening."
"At this point, protest is the message: income inequality is grinding down that middle class, increasing the ranks of the poor, and threatening to create a permanent underclass of able, willing but jobless people. On one level, the protesters, most of them young, are giving voice to a generation of lost opportunity."
From the economy to the climate crisis our leaders have pursued solutions that are not solving our problems, instead they propose policies that accomplish little. With democracy in crisis a true grassroots movement pointing out the flaws in our system is the first step in the right direction. Count me among those supporting and cheering on the Occupy Wall Street movement.
I've been down to "Occupy Wall Street" twice now, and I love it. The protests building at Liberty Square and spreading over Lower Manhattan are a great thing, the logical answer to the Tea Party and a long-overdue middle finger to the financial elite. The protesters picked the right target and, through their refusal to disband after just one day, the right tactic, showing the public at large that the movement against Wall Street has stamina, resolve and growing popular appeal...
There just isn't going to be an iconic "Running Girl" photo with Goldman Sachs, Citigroup or Bank of America - just 62 million Americans with zero or negative net worth, scratching their heads and wondering where the hell all their money went and why their votes seem to count less and less each and every year.
No matter what, I'll be supporting Occupy Wall Street. And I think the movement's basic strategy - to build numbers and stay in the fight, rather than tying itself to any particular set of principles - makes a lot of sense early on. But the time is rapidly approaching when the movement is going to have to offer concrete solutions to the problems posed by Wall Street. To do that, it will need a short but powerful list of demands. There are thousands one could make, but I'd suggest focusing on five:
1. Break up the monopolies. The so-called "Too Big to Fail" financial companies - now sometimes called by the more accurate term "Systemically Dangerous Institutions" - are a direct threat to national security...
2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts...
3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer's own money to lobby against him.
4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break, which allows hedge-fund titans like Stevie Cohen and John Paulson to pay taxes of only 15 percent on their billions in gambling income, while ordinary Americans pay twice that for teaching kids and putting out fires...
5. Change the way bankers get paid. We need new laws preventing Wall Street executives from getting bonuses upfront for deals that might blow up in all of our faces later...
If Occupy Wall Street can do that - if it can speak to the millions of people the banks have driven into foreclosure and joblessness - it has a chance to build a massive grassroots movement...
The protest movement called Occupy Wall Street has struck a nerve. The demonstrators' goals may be vague, but their grievances are very real. If our country is to break out of this horrendous recession and create the millions of jobs we desperately need, if we are going to create a financially-stable future, we must take a hard look at Wall Street and demand fundamental reforms. I hope the protesters provide the spark that ignites that process.
The truth is that millions of Americans lost their jobs, their homes and their life savings because of the greed, recklessness and illegal behavior of Wall Street. Even Federal Reserve Chairman Ben Bernanke agreed when I questioned him this week at a Joint Economic Committee hearing that that there was "excessive risk taking" by Wall Street. Bernanke also said the protesters "with some justification" hold the financial sector responsible for "getting us into this mess" and added, "I can't blame them."
The demonstrators and millions of sympathetic Americans understand that odds are stacked in Wall Street's favor because of the extraordinary economic and political clout of the big banks. Believe it or not, the country's six largest financial institutions (Bank of America, CitiGroup, JP Morgan Chase, Wells Fargo, Morgan Stanley and Goldman Sachs) now have amassed assets equal to more than 60 percent of our gross domestic product. The four largest banks issue two-thirds of all credit cards, half of all mortgages, and hold nearly 40 percent of all bank deposits. Incredibly, after we bailed out the behemoth banks that were "too big to fail," three out of the four are now even bigger than before the financial crisis...
Among those part of and concerned with the Occupy Wall Street movement, it's very common to hear complaints about the lack of mainstream media coverage. There's even a sign at the occupation's media center that says, "Welcome to the media blackout." To a large extent, the blackout is real. The New York Times and other local papers didn't give the movement headlines until almost a week in, with the exception of a cover story in Metro that first Wednesday. And, while several local TV stations were at Liberty Plaza during the first week, their reports weren't being picked up by national affiliates. Only recently has this begun to change.
Online, there have been accusations of outright censorship. Yahoo has admitted to "not intentional" blocking of emails with links to occupywallst.org, blaming their spam filter. (This excuse is not widely believed, but plausible-I've seen the site trigger non-Yahoo spam filters as well.) Twitter has similarly blocked #occupywallstreet from being listed as a trending topic. (This may be because it keeps being throttled by Anonymous bots-or, more conspiratorially, because a considerable stake in the company is owned by JPMorgan Chase, which also just donated $4.5 million to the NYPD.)
Really, though, what do you expect? Resistance movements should not count on coverage by establishment news outlets, much less favorable coverage. Mainstream media are usually a part of a movement's opponent, and they certainly are in this case. The movement's job, then, is to make its actions so irresistible that the media have to cover it, despite themselves. In an instructive essay about her experience doing media relations during the fight for civil rights in the 1960s, Mary King writes:
"Attentive news coverage can never be taken for granted or assumed. It must be won. Gaining the attention of the news industry is one of the central functions that must be planned by a nonviolent movement that hopes to succeed."
In this respect, Occupy Wall Street is already succeeding...
"This was unanimously voted on by all members of Occupy Wall Street last night, around 8pm, Sept 29. It is our first official document for release. We have three more underway, that will likely be released in the upcoming days: 1) A declaration of demands. 2) Principles of Solidarity 3) Documentation on how to form your own Direct Democracy Occupation Group. This is a living document. you can receive an official press copy of the latest version by emailing firstname.lastname@example.org.
As we gather together in solidarity to express a feeling of mass injustice, we must not lose sight of what brought us together. We write so that all people who feel wronged by the corporate forces of the world can know that we are your allies.
As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments. We have peaceably assembled here, as is our right, to let these facts be known.
They have taken our houses through an illegal foreclosure process, despite not having the original mortgage.
They have taken bailouts from taxpayers with impunity, and continue to give Executives exorbitant bonuses.
They have perpetuated inequality and discrimination in the workplace based on age, the color of one's skin, sex, gender identity and sexual orientation.
They have poisoned the food supply through negligence, and undermined the farming system through monopolization.
They have profited off of the torture, confinement, and cruel treatment of countless nonhuman animals, and actively hide these practices.
They have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions.
They have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right.
They have consistently outsourced labor and used that outsourcing as leverage to cut workers' healthcare and pay.
They have influenced the courts to achieve the same rights as people, with none of the culpability or responsibility.
They have spent millions of dollars on legal teams that look for ways to get them out of contracts in regards to health insurance.
They have sold our privacy as a commodity.
They have used the military and police force to prevent freedom of the press.
They have deliberately declined to recall faulty products endangering lives in pursuit of profit.
They determine economic policy, despite the catastrophic failures their policies have produced and continue to produce.
They have donated large sums of money to politicians supposed to be regulating them.
They continue to block alternate forms of energy to keep us dependent on oil.
They continue to block generic forms of medicine that could save people's lives in order to protect investments that have already turned a substantive profit.
They have purposely covered up oil spills, accidents, faulty bookkeeping, and inactive ingredients in pursuit of profit.
They purposefully keep people misinformed and fearful through their control of the media.
They have accepted private contracts to murder prisoners even when presented with serious doubts about their guilt.
They have perpetuated colonialism at home and abroad.
They have participated in the torture and murder of innocent civilians overseas.
They continue to create weapons of mass destruction in order to receive government contracts.*
To the people of the world,
We, the New York City General Assembly occupying Wall Street in Liberty Square, urge you to assert your power.
Exercise your right to peaceably assemble; occupy public space; create a process to address the problems we face, and generate solutions accessible to everyone.
To all communities that take action and form groups in the spirit of direct democracy, we offer support, documentation, and all of the resources at our disposal.
In a tense showdown above the East River, the police arrested about 400 demonstrators from the Occupy Wall Street protests who took to the roadway as they tried to cross the Brooklyn Bridge on Saturday afternoon.
The police did not immediately release precise arrest figures, but said it was the choice of those marchers that led to the swift enforcement.
"Protesters who used the Brooklyn Bridge walkway were not arrested," said the head police spokesman, Paul J. Browne. "Those who took over the Brooklyn-bound roadway, and impeded vehicle traffic, were arrested."
But many protesters said that they thought the police had tricked and trapped them, allowing them onto the bridge and even escorting them across, only to surround them in orange netting after hundreds of them had entered.
"The cops watched and did nothing, indeed, seemed to guide us on to the roadway," said Jesse A. Myerson, a media coordinator for Occupy Wall Street who was in the march but was not arrested.
Things came to a head shortly after 4 p.m., as the 1,500 or so marchers reached the foot of the Brooklyn-bound car lanes of the bridge, just east of City Hall. In their march north from an encampment at Zuccotti Park in lower Manhattan, they had stayed on the sidewalks - forming a long column of humanity penned in by officers on scooters...
When the culture-jamming activist group Adbusters put out a call on July 13 for "20,000 people" to "flood into lower Manhattan, set up tents, kitchens, peaceful barricades and occupy Wall Street for a few months," it never said who those people would be. Now, the question on the minds of everyone from the Department of Homeland Security to the Lower East Side anarchist set is just who and how many will actually show up.
The simplest cop-out of an answer is to say that nobody exactly knows. To an extent, it's true. The large, established, membership groups-unions, lobbies, etc.-have kept quiet about it, so their rank-and-file can't be counted on en masse. There's no central planning committee, no permit with the city, and not even an official website, so there's no obvious person to ask for a prediction or a figure. (Adbusters continues to say 20,000, though its role in organizing is, according to Senior Editor Micah White, solely "philosophical.") Saturday, among other things, will be a test of the scattered American grassroots-their ability to mobilize against the outsized power of corporate elites, and their inclination to do so.
Some on the right-wing's most lunatic of fringes have taken advantage of the information vacuum with headlines declaring "Wall Street Targeted for Britain-Style Riots" (along with thoroughly fictitious links to ACORN, SEIU, and even President Obama), a claim which has already turned into a fundraising scheme for Republican political candidates. Imaginative, but false...
And then there's the internet. Ever since the news began circulating that Anonymous hacktivists would take part, there has been a lot of speculation online about what they might actually do. One hint comes in the form of Operation Lighthouse, "a fully legal operation in support of the wall street occupation on the 17th" which, in its promotional video, is branded as an Anonymous project. It has also been billed as a revival of New York's embattled Critical Mass bike ride. According to the website, though, "The @oplighthouse (Twitter) account was suspended shortly after the operation was publicly announced." Fully legal or not, someone is on to it...
Was there a foreign government behind the 9/11 attacks? A decade later, Americans still haven't been given the whole story, while a key 28-page section of Congress's Joint Inquiry report remains censored. Gathering years of leaks and leads, in an adaptation from their new book, Anthony Summers and Robbyn Swan examine the connections between Saudi Arabia and the hijackers (15 of whom were Saudi), the Bush White House's decision to ignore or bury evidence, and the frustration of lead investigators-including 9/11-commission staffers, counterterrorism officials, and senators on both sides of the aisle.
Richard D. Wolff is professor of economics at University of Massachusetts Amherst.
The US budget for Fiscal Year 2011 is scheduled to spend $ 3.5 trillion while taking in $2.0 in taxes. It is borrowing the other $ 1.5 trillion - the deficit - and thereby adding to the US national Debt (already over $ 14 trillion, roughly the same as the annual output - GDP -of the US). Such massive borrowing is what got Greece, Portugal, Spain, Italy, and other countries into their current massive crises. The "great debate" between Republicans and Democrats over the first few months of 2011 haggled over $60 billion in cuts versus $30 billion with the final compromise of $38 billion. That $ 38 billion cannot and will not make any significant difference to a 2011 deficit of $ 1,500 billion (the equivalent of $ 1.5trillion). Obviously both Republicans and Democrats are agreed to do nothing more that quibble over insignificant margins of so huge a deficit. Meanwhile they perform live political theater about their "deep concern about deficits and debts" for a bemused, bored, and ever-more alienated public.
Neither party can shake off its utter dependence now on corporate and rich citizens' monies for all their financial sustenance. Therefore neither party imagines, let alone explores, alternatives to massive deficits and debts. After all, government deficits and debts mean (a) the government is not taxing corporations and the rich, and (b) the government is instead borrowing from them and paying them interest. So the two parties quibble over how much to cut which government jobs and public services...
A changed system - perhaps called "economic democracy" - in which the workers themselves collectively operate their enterprises would immediately redirect enterprise profits in different ways with very different social consequences. For example, according the Bureau of Labor Statistics, during 2010, the pay for average workers rose 2% while the pay for CEOs rose 23% (Time magazine, May 16, 2011). Workers who collectively directed their own enterprises would distribute pay increases very differently and far less unequally. Likewise, to take another example, self-directing workers would allocate their enterprises' profits to the government (i.e. pay taxes) but demand in return the sorts of mass-focused social programs that the current CEOs and Boards of Directors want government to cut. Democratic enterprises would have to work out collaborations and agreements with democratically run residential units (cities, states, etc.) where their decisions impact one another...
Throughout the Cold War decades and even after the USSR dissolved in 1989, we remained, as a nation, afraid openly to discuss and debate a basic economic issue. Does our economic system, capitalism, serve our needs sufficiently; does it need basic changes; or might a change to another economic system be best? Instead of a debate over alternative answers to such questions, we permitted little beyond self-congratulatory cheerleading for capitalism. Seriously questioning capitalism (let alone challenging it) remained taboo, an activity to keep repressed. That repression encouraged an unquestioned and unchecked US capitalism to become ever more unequal, delivering more "bads" than "goods" to ever larger majorities of people. This unsustainable situation is being strained toward the breaking point by the crisis that now enters Year Five.