I Blame The Liberal Media

I’m not a big fan of polls, but I thought this new one from Pew Research was interesting:

• About half of Americans think the debate over spending and deficits has been "generally rude and disrespectful," including 48% of Republicans and Democrats as well as 57% of independents.
• The percentage of Americans who feel that the Republicans are better at handing the deficit dropped from 35% after the election to 21% currently.
• The percentage of Americans who feel President Barack Obama is better at handing the deficit has also dropped from 24% to 20%.
• About 75% of Tea Party supporters back the GOP budget plans after the election, that figure has dropped to 52%.

Hmm... maybe, just maybe, anti-Muslim hysteria and a focus on abortion might not have been the deficit reduction plan folks had in mind. Just maybe people are thinking that tax cuts to millionaires and corporations while cutting funds to schools and fire departments isn’t the solution they wanted.

What’s interesting to me is that Republicans and Tea Party leaders blame voter impatience. I’m thinking ... no, at least, not as far as budget deficits are concerned. I think people understand that you don’t vote in November, have your representatives sworn into office in January, and see results by March.

I’m thinking that people are pissed off that jobs and the economy still suck after so many years. It's really that simple.

It’s the same thing that pissed people off in 2004, 2006, 2008 and November 2010. And it will continue to piss people off in 2012 and 2014 and 2016 unless somebody, somewhere, goes after the real problem, which is outsourcing of jobs and wage stagnation and widening inequality between the haves and have nots. These are systemic problems that have no easy answers and they won't be fixed in three months, let alone two years. Tackling healthcare reform was a huge step in that direction but the institutional powers that be pushed back so hard against it, we ended up with very modest changes that really didn't reform much at all. This is a sign of what's to come, people: I'm afraid we're in a situation where we have to fight tooth and nail for tiny, incremental changes like this in everything, which means we're going to be in this situation for a long, long time.

It's kind of sad that the media doesn’t get it. We’ve been in a recession for a really, really long time -- since long before the market crash of 2007. I remember blogging about all the people left behind from the supposed “Bush boom,” and Republicans calling me “angry” and “negative” and a “blame American first” kind of person who suffered from “Bush derangement syndrome.” I mean seriously, am I the only one who remembers these conversations from 2004? Am I the only one who remembers arguing with Bill Hobbs every time he blogged about how terrific the economy was? Am I the only one who remembers George W. Bush telling a divorced mother that it's "fantastic" and "uniquely American" that she works three jobs? As if she wanted to?

America has been in a downward spiral for a long time, folks. This isn’t some new phenomenon that just popped up when the real estate bubble burst. And I think what surveys like this one from Pew show us is that Americans understand this yet don’t know what to do about it, because we have so little control over anything. We’re basically offered a choice between dumb and dumber every two years and people are getting frustrated and maybe a little frightened.

I know I am.

Stupid? Corrupt? Or Immoral?

That’s really the only thing I have to say in regards to this story. Yes, John Boehner took time away from perfecting his golf game this weekend to come to Nashville and lecture the National Religious Broadcasters on the morality of the national debt.

I really don’t think I need to be lectured on financial management by someone who put this nation into debt in the first place. And I really don’t want to be lectured on morality by someone who has voted for poverty, war, death, torture, fear, and destruction of the earth, air and seas at every opportunity.

Nor do I need to be lectured on morality by someone who seems to think the national budget should be balanced on the backs of middle class and low-income working people, while maintaining the wealthiest people in this country should be allowed to feast at the nation’s banquet table without paying a dime. Just three months ago he was shedding tears about the need to extend Bush-era tax cuts for America's millionaires; now he's telling us the nation is broke? Gee, I wonder how that happened.

No, my question is why the National Religious Broadcasters wants to be lectured on morality by someone like John Boehner? What does this say about you folks? It says quite a lot, really. These are folks who sorely need to have their false gospel challenged by someone like Jim Wallis, the evangelical leader and social justice crusader who had this to say about the GOPs budget priorities:

U.S. military spending is now 56 percent of the world's military expenditures and is more than the military budgets of the next 20 countries in the world combined. To believe all that money is necessary for genuine American security is simply no longer credible. To say it is more important than bed nets that prevent malaria, vaccines that prevent deadly diseases, or child health and family nutrition for low-income families is simply immoral. Again, these are ideological choices, not smart fiscal ones. To prioritize endless military spending over critical, life-saving programs for the poor is to reverse the biblical instruction to beat our swords into plowshares. The proposed budget cuts would beat plowshares into more swords. These priorities are not only immoral, they are unbiblical.

This is a message that the membership of the National Religious Broadcasters needs to hear -- these people who operate Christian radio and television stations all around the country, the people pretending to serve families across the public airwaves (here’s a fun exercise: Google “safe for the whole family” and see what you get.)

But they don't want to hear that message. Why should they? It's so much easier to stay in their happy place. Theirs is a smug, self-satisfied faith which sees worldly prosperity not as evil but as a reward from heaven. This allows them to give a "Faith And Freedom Award" to Rep. Mike Pence, who just denied poor women access to pap smears, breast exams, STD testing, cancer treatment and the like. How’s that for today’s Christians, eh? No, National Religious Broadcasters, you need to stay in your comfort zone, where Jesus showers his love upon the righteous -- you know, the wealthy white people driving around in fancy cars. Let’s not worry our pretty little heads about the folks who have been struggling thanks to the policies of political leaders you support. That might be icky.

Carry on, NRB.

Jealousy

In 1979, a movie about a union organizer in a North Carolina textile mill won nine Academy Awards and was a huge box office hit. Some 30 years later, unions have been so demonized I wonder if "Norma Rae" would even sell 10 tickets if it were released today?

It’s a question I’ve asked myself a lot in the past few years: when did unions become the bad guys? We’ve all heard the stereotypes about “union thugs” and corruption, a narrative so firmly embedded in the American consciousness that conservative activists like Phil Parlock have capitalized on the shifting attitudes for political gain. I’ve always wondered how unions went from American hero to zero in one generation.

Andrew Leonard’s interview with author/labor historian/Georgetown University professor Joseph McCartin touches on this very topic. Leonard asks the “what changed” question. McCartin responds:

A lot of this was really produced by the events of the last few years. There was a tremendous loss in the stock market that left a lot of pension funds looking underfunded, and that set off a lot of alarms in people. Now I'm not going to say that there aren't some workers in some places that have gotten some pensions that aren't really fully justifiable but that is different than saying that the whole principle of collective bargaining is wrong.

But an even more important factor is basically a 20- or 30-year period of failure in the private sector. What we are really looking at here is a private sector that for quite a long time now has not generated a lot of rising income for the great majority. It has not generated stable benefits for its workers, it has not generated increasing retirement security -- in fact we've had income stagnation or decline, we've had rising indebtedness, we've had growing insecurity for retirement. The private sector has failed on a massive level. And the tenuous position that so many American workers find themselves in as a result of that now makes it suddenly appear that public sector workers are just living off the fatted calf. I think some of it has to do quite simply with the way in which so many nongovernment workers have been suffering, and legitimately so. You can go to those folks and say: Why are you paying for the pension of the guy down the street? You don't have one!

That seems to be a real political liability for public sector unions.

It is a real liability, but it is liability that is not the result of union munificence, or that came from squeezing the taxpayers; it is a liability that basically flows from the fact that the private sector has done so poorly at creating a really broad growing thriving middle class in the past 20 years. And without a broad growing, thriving middle class, government workers are increasingly isolated and increasingly under threat and it is easy to play the dynamic this way, unfortunately for them.

In short, capitalism has failed a large segment of the American population, and conservatives have successfully laid the blame on unions. How they did that is a neat trick, but I think corporate interests in the guise of the GOP have been selling anti-union Kool Aid for decades, so it's no surprise some of it started to stick. These days we've got “right to work” states and anti-minimum wage movements and the current spate of anti-collective bargaining initiatives in places like Wisconsin and Tennessee, and yet the glorious free hand of the market still hasn't righted things. Indeed, it's made things worse.

The result is resentment and jealousy directed at those people who have what I don’t have. Instead of directing their anger where it belongs -- the wealthy and powerful who enjoy the lowest taxes in the Western world who have pulled the ladders up to keep out the riff-raff -- conservatives are resentful of the people with the crappy jobs who were able to secure some very modest concessions over years of negotiating -- and renegotiating, and renegotiating. The history of unions is nothing if not a history of reneged deals.

Somehow folks think if they work hard enough they’ll be bazillionaires like the Koch Brothers, not realizing the Koch Brothers have stacked the deck against them. I mean Jesus, it's not like people aren't working hard now. I know people with four jobs. They're barely treading water. There's no getting ahead when you are saddled with healthcare debt, or can't get a job because your credit score isn't high enough or because you're unemployed, which takes the cake for stupid reasons not to hire someone. We are fast headed to a country with a permanent underclass and a permanent ruling class, and no movement betwixt the two.

Yes, somehow jealousy and resentment has convinced some people that their solution is to hand their power over to those who will never give them a place at the table. It's quite baffling, really, how the wealthiest and most powerful interests managed to convince those lower down on the ladder that they should accept a less equitable arrangement. I really don't get it, but then women tend to understand these things more easily anyway. We're always being asked by society to give up our power to someone else. We're always being told our priorities and issues are less important and we're somehow deserving of less. So naturally we're suspicious when some rich asshole drives up in his limousine and tells us that we should accept lower wages and pay higher taxes than he does, just 'cuz. Being asked to accept inequality is something most of us women find a little reprehensible. And we know when we're being sold a shit sandwich.

I've linked to this Financial Times article from last summer before, but I'm going to do it again. Here we go:

Alexis de Tocqueville, the great French chronicler of early America, was once misquoted as having said: “America is the best country in the world to be poor.” That is no longer the case. Nowadays in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Britain on some measures. To invert the classic Horatio Alger stories, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe.

Combine those two deep-seated trends with a third – steeply rising inequality – and you get the slow-burning ­crisis of American capitalism. It is one thing to suffer grinding income stagnation. It is another to realise that you have a diminishing likelihood of escaping it – particularly when the fortunate few living across the proverbial tracks seem more pampered each time you catch a glimpse. “Who killed the American Dream?” say the banners at leftwing protest marches. “Take America back,” shout the rightwing Tea Party demonstrators.

Statistics only capture one slice of the problem. But it is the renowned Harvard economist, Larry Katz, who offers the most compelling analogy. “Think of the American economy as a large apartment block,” says the softly spoken professor. “A century ago – even 30 years ago – it was the object of envy. But in the last generation its character has changed. The penthouses at the top keep getting larger and larger. The apartments in the middle are feeling more and more squeezed and the basement has flooded. To round it off, the elevator is no longer working. That broken elevator is what gets people down the most.”

CNN recently covered this issue in its "Rise Of The Super Rich" piece, and included a neat little chart:


Admit it, folks. This is why you are angry. Not at some public school teacher who earns $50,000 a year but if you include their union-negotiated benefits and pension it sounds like a whole lot more, while the guy selling this resentment tea has a personal net worth of $27 $21.5 billion.

You're pissed because capitalism has failed. For the past 25 years 90 percent of us have been working harder to stay in the same place, while a very small group of people have surged ahead thanks to policies which keep everyone else down. Everyone else has seen the American Dream slip away.

False Advertising, Cultural Narrative Edition

Adding to my earlier post today .... Have you seen this Simpson’s Coca-Cola ad? I think it ran during last year’s Super Bowl. I missed it then, but they’re playing it at the movie theater now, so I’ve seen it a gazillion times:



What’s interesting to me is that during this current recession, billionaires didn’t go broke. The “C. Montgomery Burnses” of the country got giant bailouts from the taxpayers and are safely ensconced in their mansions surrounded by their family heirlooms. The people getting yanked out of their homes and selling mementos at the flea market are the middle class and lower class folks -- the people the ad shows enjoying the simple, carefree joys of a day in the park and a Coke.

So why does a corporate multinational like Coca Cola choose to present our current dilemma in this way? Was this rewriting of history deliberate? This misrepresentation of facts to put the wealthy in the same boat as everyone else: intentional? A blatant attempt to change the cultural narrative before our very eyes? I mean, unless you’re really paying attention, you might not even notice.

It’s all very fascinating.

Recession? WHAT Recession?

It’s always a sunny day for some people!

Hedge-fund manager John Paulson personally netted more than $5 billion in profits in 2010—likely the largest one-year haul in investing history, trumping the nearly $4 billion he made with his "short" bets against subprime mortgages in 2007.

Mr. Paulson's take, described by investors and people close to investment firm Paulson & Co., shows how profits continue to pile up for elite hedge-fund managers. Appaloosa Management founder David Tepper and Bridgewater Associates chief Ray Dalio each personally made between $2 billion and $3 billion last year, according to investors and people familiar with the situation. James Simons, founder of Renaissance Technologies LLC, also produced profits in that range, say investors in his firm.

By comparison, Goldman Sachs Group Inc., Wall Street's most profitable investment bank, paid all of its 36,000 employees a total of $8.35 billion last year. James Gorman, chief executive of 76-year-old investment bank Morgan Stanley, is expected to receive compensation of less than $15 million for 2010.

But don’t hate on them, the WSJ reminds us: it’s mostly just paper gains! And heaven forbid we should tax these people at a rate that, say, Ronald Reagan found acceptable. Why should these people pay for our resource wars that make their life of luxury possible? That's crazy talk!

Ah yes, putting the “gross” in gross profits. There is injustice and inequality in this country, children. And anyone who dares point this out is swiftly put in their place by these self-satisfied, spoiled, amoral assholes.

They are rioting in Egypt and Yemen and Tunisia. Some asshole on Wall Street is probably making a few hundred million off of it, too. That’s just the way it is.

I am reminded that this is our eternal human story, played out a thousand different ways throughout history. It has been ever thus. Read the Bible and you will see our past, present and future laid out before you. The cast of characters has changed but the play remains the same.

Sometimes the oppressed rise up and throw off the yoke that has been placed upon them, sometimes the rich shake a few coins from their coats and the oppressed improve their lot modestly, sometimes human greed surges to the forefront and the oppressed take a step back. And this is how humanity makes its slow, inexorable creep toward enlightenment.

Yes, it’s all for the best.

Another Wingnut Myth Debunked: Entrepreneurship Thrives Under Socialism

I’ve had a love affair with Norway forever, since I first visited there back in the ‘80s, which has prompted more than a few mash notes on this blog.

And now I get to write another one, thanks to Inc.'s story on entrepreneurship in Norway. It appears that, right-wing talking points notwithstanding, entrepreneurship and innovation aren’t stagnant in places like Norway, where taxes are brutally high and socialism is embraced whole-heartedly:

Norway is also full of entrepreneurs like Wiggo Dalmo. Rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States, according to the latest report by the Global Entrepreneurship Monitor, a Boston-based research consortium. A 2010 study released by the U.S. Small Business Administration reported a similar result: Although America remains near the top of the world in terms of entrepreneurial aspirations -- that is, the percentage of people who want to start new things—in terms of actual start-up activity, our country has fallen behind not just Norway but also Canada, Denmark, and Switzerland.

That’s gotta hurt. This flies in the face of every Republican talking point we’ve been given since, well, forever. I’m sure we won’t be hearing about the “Norwegian miracle” in the Wall Street Journal.

In fact, I actually know people who live and work in Norway. One American friend recently told me about how his Norwegian partners laughed in his face when he asked about liability insurance for the hotel they were opening. Not necessary, he was told. What about lawsuits? “Silly Americans, always with the lawsuits!” they laughed. “Why would anyone sue? If you’re hurt you go to the hospital!” Apparently Norway’s strong social safety net and socialized medicine is a better defense against frivolous lawsuits than the “tort reform” conservatives are always pushing.

Imagine that. Indeed, that appears to be what Inc.'s reporter found. It's a fascinating read, I hope you will hop over there and give the article your time. (And that goes for my wingnut friends--*cough*cough*JIM*cough*cough*--who I'm sure are dying to post Cato Institute and Heritage Foundation links here. Read the damn article first, please. Thanks.)

I found really interesting the article's discussion of taxes. Tax rates in the U.S. have basically been slashed in half over the past 30 years but what did we get for it? Zip:

But there is precious little evidence to suggest that our low taxes have done much for entrepreneurs—or even for the economy as a whole. "It's actually quite hard to say how tax policy affects the economy," says Joel Slemrod, a University of Michigan professor who served on the Council of Economic Advisers under Ronald Reagan. Slemrod says there is no statistical evidence to prove that low taxes result in economic prosperity. Some of the most prosperous countries—for instance, Denmark, Sweden, Belgium, and, yes, Norway—also have some of the highest taxes. Norway, which in 2009 had the world's highest per-capita income, avoided the brunt of the financial crisis: From 2006 to 2009, its economy grew nearly 3 percent. The American economy grew less than one-tenth of a percent during the same period. Meanwhile, countries with some of the lowest taxes in Europe, like Ireland, Iceland, and Estonia, have suffered profoundly. The first two nearly went bankrupt; Estonia, the darling of antitax groups like the Cato Institute, currently has an unemployment rate of 16 percent. Its economy shrank 14 percent in 2009.

Moreover, the typical arguments peddled by business groups and in the editorial pages of The Wall Street Journal— the idea, for instance, that George W. Bush's tax cuts in 2001 and 2003 created economic growth—are problematic. The unemployment rate rose following the passage of both tax-cut packages, and economic growth during Bush's eight years in office badly lagged growth during the Clinton presidency, before the tax cuts were passed.

And so the case of Norway—one of the most entrepreneurial, most heavily taxed countries in the world—should give us pause. What if we have been wrong about taxes? What if tax cuts are nothing like weapons or textbooks? What if they don't matter as much as we think they do?

Ah yes, what if? What if “we” have been wrong, lo these many years?

It’s almost laughable. Of course “we” haven’t been wrong, but conventional Villager wisdom has been. Folks like Paul Krugman have been writing about this for years. Nobody but a bunch of Dirty Fucking Hippies have bothered to notice what a bunch of voodoo nonsense “trickle down economics” and “the Laffer Curve” are. But, ya know, don’t listen to us!

Conservative economics doesn’t work, never has, we all know it yet people keep repeating the same tired old canards about high taxes crushing entrepreneurship and killing jobs because they’re fucking children, little itty bitty babies who want their cake and candy and not their nutrition. We’re children who prefer to believe fairy tales because they feel oh so good even though they aren’t real.

No wonder the empire crumbled.

But don’t worry, America. You will never, ever have to suffer the slings and arrows of affordable healthcare, a clean environment, low unemployment, and a high standard of living like our Norwegian friends. That’s because we in America have been brainwashed for an entire generation into thinking certain things like taxes are a soul-crushing evil. Who needs taxes when we have our beloved Puritan work ethic, and “rags to riches” mythology, ammiright? The idea that America is the land of opportunity is as central to our national identity as the Stars and Stripes and National Anthem. Continually these national talismans prove to be worthless fairy tales, yet we cling to them because the idea that America is not the land of opportunity is just too painful to bear.

Norwegians have a completely different attitude toward taxes which I just can’t imagine flourishing in the United States. They don’t see it as a “punishment” the way some people, especially conservatives, do. Norwegians see taxes as an investment in their families and their country. Because they receive such high level of tangible services -- healthcare, pensions, free education (from preschool to college), robust family leave, etc. -- there’s an actual value. America never invested in itself in such a fashion; instead, what we get for our tax dollar is war. Buyers’ remorse, anyone?

This may help explain why entrepreneurship in Norway has thrived, even as it stagnates in the U.S. "The three things we as Americans worry about—education, retirement, and medical expenses—are things that Norwegians don't worry about," says Zoltan J. Acs, a professor at George Mason University and the chief economist for the Small Business Administration's Office of Advocacy. Acs thinks the recession in the U.S. has intensified this disparity and is part of the reason America has slipped in the past few years. When the U.S. economy is booming, the absence of guaranteed health care isn't a big concern for aspiring founders, but with unemployment near double digits, would-be entrepreneurs are more cautious. "When the middle class is shrinking, the pool of entrepreneurs is shrinking," says Acs.

I guess one could say Norway has never had to worry about being overrun by Russian tanks in the past 60 years -- I mean, since the end of World War II America has basically decided to be the world’s police force. I’m not smart enough on foreign affairs to ascertain how credible such a threat has been, anyway. But when comparing our two countries, it does seem like we got a raw deal.

Ultimately, the problem America faces is psychological. We're just completely unable to have a serious conversation about anything right now, and I don't see that changing:

Holte was fascinated by this last topic, particularly the angry opposition to President Obama's health care reform package. "It makes me laugh," he says. "Americans don't understand that you can't have a functioning economy if people aren't healthy."

Holte's American subsidiary pays annual health care premiums that make his head spin—more than $23,000 per employee for a family plan—and that make the cost of employing a software developer in the United States substantially higher than it is in Norway, even after taxes. (For a full breakdown, see "Making Payroll.") Holte is no pinko—he finds many aspects of Norwegian socialism problematic, particularly regulations about hiring and firing—but when he looks at the costs and benefits of taxes in each country, he sees no contest. Norway is worth the cost.

This makes so much sense -- in fact, it is the logic behind such things as liberals' desire for single-payer healthcare -- yet we just can't seem to have a rational conversation about these things anymore (if we ever did). Because as soon as someone tries to point out the economic impact of our lack of any reasonable social policy, America's Vuvuzela Chorus strikes up and it's all "job killing healthcare reform" and "death panels" and "Socialsim-Fascism-Nazi-baby-killer" bullshit. We never get to have a grown-up conversation! Everything immediately disintegrates into lies and bullshit.

It's killing this country and it's leaving us in the dust behind more progressive countries like Norway.

The Culprits

Via the Economic Populist blog I discovered this handy-dandy tool where you can punch in your zip code and find out exactly who is exporting jobs from your community.

It appears Nashville’s top five employment villains are AFL Dixiewire, Bridgestone Americas Tire, Cummins Business Services, Dollar General Corp., and Ford Motor Credit Corp.

So thank you very fucking much.

Today in the car I caught the last part of Ed Schultz’s interview with Virg Bernero, Democratic candidate for governor of Michigan. Bernero is a pants-on-fire economic populist if I ever heard one and I wish I could share clips of his interview with you, it was amazing. He talked about how there is an economic war going on, which you can see in all the shuttered businesses and foreclosures all across the country, and America is losing big-time because we aren’t even fighting it. Hell we don’t even talk about it. And he's right!

My question is, is this by design? I have to wonder if so much of our crazy discourse in this country -- Christine O’Donnell is a witch! Sharron Angle says Sharia law has taken hold in Texas! -- isn’t designed to distract from this important discussion. And I think it’s why the U.S. Chamber of Commerce has been so threatened by attacks from the left about its support of Republican candidates because it puts the focus exactly where the corporatists don't want it. "Please," I can hear them all saying, "let's talk about the crazy people some more!"

The Chamber’s tagline is “Fighting For Your Business.” Once upon a time that implied “fighting for your jobs, your communities, your country.” Those days are long gone. Today the U.S. Chamber of Commerce is fighting for your business’ right to ship manufacturing jobs to Mexico and China, make those workplaces that remain in the U.S. unsafe, pollute our air and water, all to benefit a few overpaid CEOs at the top of the heap.

Again: thank you very fucking much.

Pay attention, people. You’re being played.

Hungarian authorities arrested Zoltan Bakonyi for unleashing an ecological hell on the Danube. The CEOs of Massey Energy, British Petroleum and the Tennessee Valley Authority all walk free. The U.S. Chamber philosophy is: mistakes were made! Bygones!

So yes, it’s an economic war, and there are turncoats in our midst who are aiding and abetting the enemy. Strong words? Yes of course. But I don’t know how else to wake folks up.

The Fighter Pilots Of Capitalism

Apparently the “fighter pilots of capitalism” feel they should be rewarded with fat bonuses for crashing billion dollar jets. And they think it’s totally unfair that the rest of us rubes in flyover country don’t agree with them.

That’s the general viewpoint of the bankers and Wall Street casino jockeys who vent a little spleen at Middle America in this piece (and a big tip of the hat to John Cole at Balloon Juice.) While the Teanut brigade likes to accuse Liberal Hollywood Elites of mocking them and treating them and all they value with disrespect, it’s their capitalist brothers in arms who seem to be looking down their noses at Real America® these days. For example:

“No offense to Middle America, but if someone went to Columbia or Wharton, [even if] their company is a fumbling, mismanaged bank, why should they all of a sudden be paid the same as the guy down the block who delivers restaurant supplies for Sysco out of a huge, shiny truck?” e-mails an irate Citigroup executive to a colleague.

Welcome to the meritocracy! Isn’t class warfare fun?

Here’s another one:

“We’re in a hypercapitalistic society. No one complains when Julia Roberts pulls down $25 million per movie or A-Rod has a $300 million guarantee. We have ex-presidents who cash in on their presidencies. Our whole moral compass has shifted about what’s acceptable or not acceptable. Honestly, you can pick on Wall Street all you want, I don’t think it’s fair. It’s fair to say you ran your companies into the ground, your risk management is flawed—that is perfectly legitimate. You can lay criticism on GM or others. But I don’t think it’s fair to say Wall Street is paid too much.”

Well, actually, people do complain about movie star and athletes' salaries, all the time. And there are also salary caps in pro sports, and yada yada. But the big answer, as author Gabriel Sherman points out, is if Julia Roberts makes a dud movie, the entire economy doesn’t come crashing down. And let me add: Julia Roberts does not make $25 million a picture, not even close, in fact after after “Duplicity” failed, she was reportedly forced to accept $10 million to make “Eat Pray Love,” also a dud, and one can imagine her asking price will continue to fall until she hits box office gold again. And let's remember all of the endorsement deals Tiger Woods lost when he turned out to have a little problem with his zipper. Yet this is the very “free hand of the market” salary deal the banksters think they are too good to accept. Think about it, Tea People: even free market capitalists don't believe in the free hand of the market! How hilarious is that?

Here's another one:

To Wall Street people who have grown up in the bubble, the meaning of the crisis is only slowly sinking in. They can’t yet grasp the idea of a life lived on less. “Without exception, Wall Street guys have gotten accustomed to not being stuck in the city in August. So it becomes a right to have a summer home within an hour or two commute from Manhattan,” says the Goldman vet. “There’s a cost structure of going with your family on summer vacation that’s not optional. There’s a cost structure of spending $40,000 to send your kids to private school that is not optional. There’s a sense of entitlement, that you need that amount of money just to live, that’s not optional.”

So, these are the people the GOP wants to hand your Social Security over to. Talk about needing a reality check! The problem is one which Brad DeLong explained so beautifully over the weekend. We live in a world of haves and a growing number of have-nots. The have-nots do not have summer homes in the Hamptons and cannot afford to send their kids to private school and do not have housekeepers and personal trainers and aestheticians and country club dues and spring break trips to the Caribbean and a highly-paid accountant to do their taxes and a lawyer to handle their legal troubles. These may feel like the necessities of life for the family of a Wall Street banker but they are not, in fact, the necessities of life in general. You can do your own taxes and clean your own house and send your kids to public school.

And let me add: No one wants to begrudge anyone these things. If you can afford them, great! But when your entire industry only survived because of taxpayer assistance, don’t be surprised to learn your sense of entitlement about such things rubs taxpayers the wrong way. If the rest of the country must tighten its belt, then you can do your part too, buddy. You know. For the duration, and all.

I'm reminded that once upon a time Americans pulled together to do the hard things. Those days, sadly, are gone.

Despite what the National Bureau of Economic Research may say, our economy is not out of the woods yet. And while the banksters are stunned anyone would want to make their casino abide by some rather modest house rules, the rest of the nation is dealing with some much more sobering issues. There are people who have been out of work for over a year now, thanks to you. They aren’t worried about where they’ll “summer,” they are worried about where they’ll live. And a lot of those people went to college, too, Mr. Citibank Executive.

So yeah, people are still pissed, and they don't want to hear you whining about how hard you have it because I guarantee you that far more people have it far worse and they are just as worthy as you. So if you can't "suck it in and cope," then here's another idea:

About That Privatizing Social Security Thing ...

[UPDATE]:

Ooops. Stay out of the bond market, too. Jars buried in the back yard are looking better already.

------------------------------

Yesterday’s New York Times had a front page story about “small investors” fleeing the stock market to the tune of $33.12 billion through July. The article quotes analysts as saying the average American investor has “lost their appetite for risk” and also suggests this:

And the flight from stocks may also be driven by households that are no longer able to tap into home equity for cash and may simply need the money to pay for ordinary expenses.

I’m sure that’s a big factor, as are the wild up and down swings we’ve seen in the past few years which have in fact soured people on the whole risk thing.

Apparently Joe and Jane Investor is rethinking how their IRA and 401(k) contributions are invested. Equities are too risky, too unstable, too prone to losing their value in a matter of seconds due to some stock traders’ “fat fingers” or a fart in Greece that reverberates around the global exchanges. These facts alone should give anyone advocating privatizing Social Security (AHEM, Republicans) pause. Similarly, insofar as the risk and instability of the market have been caused by things beyond anyone’s control let alone ability to predict, it should give anyone advocating repealing Wall Street reform (AHEM, Republicans) pause as well.

Democrats: don’t listen to the spin, listen to the facts. Small investors have pulled $33.12 billion out of the stock market this year alone (and in fact the “average investor” began fleeing the market way back in 2007). There is a reason.

Personally I’m more and more convinced that all of this automated electronic trading has turned the stock market into a rigged game with loaded dice and the casino always wins.

Remember the May 6 ”flash crash”, originally blamed on a trader’s “fat fingers”? Yeah, right:

Recently we posted a required reading analysis by Nanex in which the market trading analytics firm presented irrefutable evidence of quote stuffing by HFT algorithms in tens of stocks, in which thousands of cancelled quotes would reappear each second with a definitive periodicity and regularity, around the time of the May 6 flash crash. Aside from the fact that it is illegal to indicate a quote without a trade intent, this form of quote stuffing is in fact manipulative when conducted by HFT repeaters in specific "shapes" as it actually moves the NBBO actively higher or lower, in cases pushing the bid/offer range up to 10% higher without even one trade ever having occurred, simply by masking a big block order which other algos interpret as bid interest and pull all offers progressively or step function higher (or vice versa, although we have rarely if ever seen the walking down of a stock over the past 18 months).

[...]

Today, courtesy of Nanex we demonstrate that this type of illegal stock manipulation continues rampant to this very day, and the SEC still fails to acknowledge that it is precisely the HFT market participants that persist in destabilizing stock prices, which have given up responding to fundamentals and merely move up or down based on quote stuffing interventions by those who plead innocence and claim to only be providing liquidity. Well take a look at the millions in fake, and thus illegal, bids demonstrated below and tell us just how any of this manipulation is "providing liquidity" - the second the patterns break, the algos responsible for the churn pattern disappear, thus eliminating numerous levels of so called bid liquidity below the NBBO: break enough patterns and you have another flash crash as the market once again goes bidless.

Whew. And if that sounds like a bunch of gobbledy-gook to you, here’s the concept repated in plain English:

They say high-speed traders could have been trying to outwit one another’s computers with blizzards of buy and sell orders that were never meant to be filled. These superfast traders might even have been trying to clog exchanges to outflank other investors.

It’s the same casino mentality that allowed oil futures broker Steven Noel Perkins to single-handedly spike the global price of oil in a weekend binge of booze and bets on Brent crude futures. It’s the short sales and algo trading and all of the rest of the unregulated hedge fund BS over which Joe and Jane Investor has no understanding let alone control.

So when yesterday’s New York Times mildly posits this:

The notion that stocks tend to be safe and profitable investments over time seems to have been dented...

I’m thinking, Um, yeah. Understatement, much? Maybe what’s killed the notion of stocks as “safe and profitable investments” is the way the markets are now completely manipulated by computerized trading and other mumbo jumbo I can’t even wrap my head around.

A favorite bromide of the investment world is that “over time, the stock market outperforms other investments.” Maybe that was once true but this isn’t your father’s stock market. Back in the good ol’ days we didn’t have high-frequency traders and flash trades and computer algorithms running the show. Volatile is the new normal and it looks like a bunch of Wall Street assholes have turned the marketplace into a freewheeling ride on the roulette wheel.

So no wonder the average investor says no thanks to a rigged game. And when it comes to putting our safety net in that volatile casino? Not just no but HELL no. Those of you who want to put your economic future in the hands of a few untrustworthy, unregulated market manipulators whose best interest is not yours can still do so. But to gamble away the security we all share that way? Irresponsible.

Please Pardon Our Mess

And America puts up a "closed for the duration" sign:

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

It’s a disastrous choice in both the short run and the long run.

In the short run, those state and local cutbacks are a major drag on the economy, perpetuating devastatingly high unemployment.

It’s crucial to keep state and local government in mind when you hear people ranting about runaway government spending under President Obama. Yes, the federal government is spending more, although not as much as you might think. But state and local governments are cutting back. And if you add them together, it turns out that the only big spending increases have been in safety-net programs like unemployment insurance, which have soared in cost thanks to the severity of the slump.

That is, for all the talk of a failed stimulus, if you look at government spending as a whole you see hardly any stimulus at all. And with federal spending now trailing off, while big state and local cutbacks continue, we’re going into reverse.

I'd add, also, that we wasted stimulus money on crap like $237 billion in individual tax cuts and $51 billion in tax cuts for businesses. Tax cuts haven't wowed me as a job creator or an economic stimulator, but we apparently needed to appease the free market fairies to overcome a Republican fillibuster. Whatever.

The Starve The Beast Agenda

Today’s New York Times carries a front page story about the sacred cows state and local governments are slaughtering in the face of record budget shortfalls. Hawaii closed its public schools on 17 Fridays, Colorado Springs (which I wrote about here) turned off street lights and cut its police force, and an Atlanta suburb axed its public transit system. The Times piece looks at how these cuts have drastically impacted peoples’ lives, and it’s well worth a read.

And it’s with a heavy, heavy heart that I report Camden, N.J.’s awful decision to permanently shutter its libraries. Just another tough decision in a tough economic climate.

None of this is news to me; I wrote about this exact issue last fall when Michigan stopped safety inspections of it school buses and Tennessee dropped another 84,000 people from TennCare. Drastically cutting or even eliminating vital services is the new black, a hand governments are forced to play as the sluggish economy reduces tax revenues and citizens recite their “taxed enough already” mantra and say no to new taxes. Shit needs to be paid for, and this is the end result.

It occurs to me that this is conservatives’ “mission accomplished” moment. Grover Norquist, Newt Gingrich and the rest of the “small government” crowd must be high-fiving each other. They’ve achieved their fondest dream, with government shrinking so small it can’t even operate a public library, a public school, or public police force. I suppose they imagine private enterprise sailing in on a white horse to take care of these things for those who can afford it. I’m not sure what their plan is for everyone else; as we’ve seen from the past few years, they don’t seem to have one. Next stop New Deal, suckaz!

Here’s what I don’t get. While I understand why the “taxed enough already” message resonates--who likes paying taxes, right?--instead of demanding lower taxes, how come no one ever demands higher wages?

On Monday I linked to this Financial Times article on the American economy, which contained this telling information:

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The Economics Policy Institute looked at this “median wage stagnation” way back in 2007 and came up with this neat little chart:

Looking at our current economic woes I have just one question: whatever happened to “trickle down”?

I don’t understand why people are rallying in the streets to protest taxes, which are some of the lowest in recent history (at least income taxes are), but they aren’t saying a peep about the fact that they haven’t seen a raise in 13 years -- well before our current economic woes began.

In fact, wages went down during the Bush “boom”, and few pundits or policymakers seemed to notice:

For working people, wages remain stagnant. In fact, median weekly wages, when adjusted for inflation, fell slightly for both high school and college graduates from 2000 to 2009, according to a recent analysis by the Economic Policy Institute, a Washington think tank. For high school graduates, median inflation-adjusted wages were $626 per week in 2009, compared with $629 in 2000, according to the EPI analysis. That comes to $32,552 in 2009, down from $32,708 in 2000.

For college graduates, weekly wages were $1,025 in 2009, compared with $1,030 in 2000, according to the study. Over the course of a year, that's $53,300 in 2009, down from $53,560 in 2000.

The long period of wage stagnation predated the recession.

I remember us lefty bloggers mentioning before the 2004 election that a whole bunch of people weren’t seeing squat from the Glorious Bush Economy. We were all told to be patriotic and clap louder. Anyone who dared point out that things weren’t so great for everyone was called “part of the Blame America First crowd.”

I think it's obvious that a main reason wages have stagnated is because organized labor has lost significant influence. When workers lose their voice in the debate, the results are predictable. What I don’t understand is why no one is really talking about this wage stagnation. We're always told that we need to be "pro-business" but if that never trickles down to the worker bees, what's the point?

Furthermore, last week we had another Fauxtroversy about President Obama being "anti-business" yet even that isn't true:

[...] according to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter—an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike. Maybe the president could be anti-me for a while. I could use the money.

Heh. You and me both, buddy.

I now completely understand why the Republicans have held fast in obstructing every effort to save the economy. Under Bush they wrecked the economy, and now they aim to prolong the misery. This scores a political win by preventing Democrats from being effective, and achieves the ultimate goal of starving state and local governments of revenue, forcing deep cuts to vital services--cuts they hope will be permanent. It's small government all the way and they won’t stop until they completely unravel the New Deal. "Mission accomplished," indeed.

Making taxes the economic bogeyman of the American people has been wonderfully effective, and it's a shame liberals and organized labor haven't seized this opportunity to raise the wage issue. I guess they tried, especially during the minimum wage debate, but it never seemed to hit the national radar. I wonder why that is?

I wonder if people will ever wake up and ask the other question: "I don't want to pay more, but why can't I have more? Why do my wages never go up, even though my company's profits always do?" How come that's not part of the national debate?

Some people may agree with the Starve The Beast Agenda but they will soon learn that it was never imagined with the "small people" in mind. It was imagined for the Big Boys, the plutocrats, the "elites" they always accuse liberals of being every election. No one should be surprised when they are being told thank you for playing, now go away; for 20 years we've been sold this Libertarian bullshit line about letting business have its way and everything will be capitalist lollipops and free market unicorns. But it hasn't worked out that way. We're earning the same or even less than our parents did.

This isn't how you get ahead in the world, it's how you wreck a nation.

Woefully Deficient In Leadership & Ingenuity

[UPDATE]:

What I've been saying, courtesy of Krugman.

----------------------------

I have been meaning to do a post on our incredibly stupid U.S. Senate which failed to do anything on climate and energy legislation, and then Robert Redford went ahead and did it for me. Man, that is one awesome rant. Go read it now.

Here’s the part that got me:

In the middle of the biggest oil disaster in American history, the hottest summer on record, and a war with an oil-rich nation, this group of cynics blocked efforts to pass comprehensive energy and climate legislation. This was the moment brimming with potential for new jobs, a more robust economy and cleaner environment -- this bill would have guided America down a profoundly safer and more productive path.



So therefore, the Senate is left to vote on an anemic energy bill of such remarkably limited scope that it could have been passed during the Bush era.

Compare this to the 1969 Santa Barbara oil spill, and the “societal punch” it packed. The contrast is striking. Our cowardly U.S. Senate caved to Big Oil, even as oil gushed out of the sea floor and coastal regions reeled from the loss of their tourism and fishing industries.

How far we’ve fallen in 40 years. I’m angry, and so is Redford. He writes:

The elected officials who steered this turnaround have abdicated their responsibility to uphold our nation's best interests, and have shown us, and the world, an America woefully deficient in both leadership and ingenuity.

Tough medicine, but true. And the truth is, we've been woefully deficient in these areas for years. It is, in fact, a reference to a larger, far more nefarious decline in American public life: our inability to solve our national problems.

For this discussion I direct readers to this heartbreaking Financial Times article, which I found courtesy of John Cole at Balloon Juice. It’s a depressing read, and I hate to start the week off on such a downer note, but it’s also terribly enlightening. For starters:

Nowadays in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Britain on some measures. To invert the classic Horatio Alger stories, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe.

[...]

The barometer is economic. But the anger is human and increasingly political. “I have this gnawing feeling about the future of America,” says Spence. “When people lose the sense of optimism, things tend to get more volatile. The future I most fear for America is Latin American: a grossly unequal society that is prone to wild swings from populism to orthodoxy, which makes sensible government increasingly hard to imagine. Look at the Tea Party. People think it came from nowhere. While I don’t agree with their remedies, most Tea Party members are middle-class Americans who have been suffering silently for years.”

As for how we got here, the article presents several ideas: globalization, outsourcing, automation.

Or:

Then there are those, such as Paul Krugman, The New York Times columnist and Nobel prize winner, who blame it on politics, notably the conservative backlash which began when Ronald Reagan came to power in 1980, and which sped up the decline of unions and reversed the most progressive features of the US tax system.

Fewer than a tenth of American private sector workers now belong to a union. People in Europe and Canada are subjected to the same forces of globalisation and technology. But they belong to unions in larger numbers and their healthcare is publicly funded. More than half of household bankruptcies in the US are caused by a serious ­illness or accident.

I can buy that 20+ years of conservatism has caused our economic problems, but has it made us unable to solve them? Well, it’s certainly responsible for today's political paralysis in Washington, where Republicans operate in lockstep to block everything and anything in an effort to sink a Democratic President.

But the Democrats don’t get off scott-free. They were handed clear majorities in the last two elections -- the mandate Bush pretended he’d had. The fact is, they’ve failed to lead. They’ve failed to engage the American public. That we can’t pass climate and clean energy legislation in the midst of the worst oil spill in American history isn’t the fault of Republicans, it’s the fault of Democrats, including the President, for failing to make this a priority.

And if we can’t do this, right now, I fear we won’t be able to do anything at all.

Death Of Another Right Wing Myth

[UPDATE] 2:

At least some Democrats are paying attention:

Tomorrow the newest Blue America endorsed candidate, Fred Johnson (D-MI) will be joining us for a live chat at Crooks and Liars. This morning he told me that the Times report is "typical of the mindset. When it was working class folks who were underwater on their mortgages it was all about 'duty' and 'keeping your word' and everyone was supposed to just suck it up and keep paying their mortgages for the good of society. Now it hits the wealthy and suddenly a house is just a bad investment that they can simply walk away from. How about they start pulling on their own bootstraps for a change, instead of preaching to the rest of us? Of course, many of these folks got where they are through the very types of financial gimmickry that put the economy in the mess it's in now, so I guess it just shows that you reap what you sow."

Yes that sounds about right.
----------------------

[UPDATE]:

Haven't had time to really delve into this one but it looks like we have another one:

CHARLOTTE, North Carolina (Reuters) – A government program to bail out banks at the height of the financial crisis has so far turned a profit, according to a report by investment bank Keefe, Bruyette & Woods Inc.

The Capital Purchase Program, part of the $700 billion Troubled Asset Relief Program, has generated an average return of 10 percent on the initial investment in 61 banks that have fully repaid the aid, said the report, issued on Wednesday.

"Its pretty clear that unless the economy just craters, the bank portion of TARP will be profitable," said Fred Cannon, bank analyst with Keefe, Bruyette and Woods.

About $137 billion, or two-thirds of the initial government investment, has been paid back, with $65 billion still to be repaid, the report said.

Death of yet another right wing meme?

----------------------

Today’s New York Times front page brings us the death of yet another cherished right-wing meme:

Biggest Defaulters on Mortgages Are the Rich

Whaaa...? You mean .... not those shiftless, irresponsible brown people in the projects which the big, bad Community Reinvestment Act forced banks to throw money at?

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Well, that’s certainly nothing new.

I’ve been spending a lot of time debunking cherished right wing myths these days. There’s the “Obama has halted all offshore oil drilling” myth, which I’ve devoted several posts to debunking. Fat lot of good it’s done, as the oil industry’s false claims about lost jobs has worked on some bought and paid for judges. Still, let me repeat:

The administration’s order halted 33 exploratory drilling projects and suspended new permits, but did not affect more than 3,000 platforms already in production.

Thirty-three risky, ultra-deep wells operating in dangerous conditions. Such is the power of Big Oil that they've been able to spin this as a sad over lost jobs.

One of my favorites is the “Obama took more money from Big Oil than McCain did” myth, sometimes presented as “Democrats are now the party of Big Oil.” Sorry, FOX News fans, it’s not true:

Without getting into whether the administration’s response has been adequate, we can say that the oil and gas industry leans heavily Republican in its campaign contributions, and the 2008 presidential race was no exception. Republican candidate John McCain and his ticketmate Palin took in nearly three times the amount of money from the industry’s political action committees and employees as did Obama and running mate Joe Biden from industry employees: about $2.4 million compared with $890,000, according to the Center for Responsive Politics. (The Obama presidential campaign did not accept any PAC money.) Obama, however, received about twice as much from British Petroleum’s executives as McCain did: $71,051 compared with $36,649. Neither received money from BP’s PAC.

So, personal donations from BP employees to the tune of $71,051 somehow trumps the millions the Republican tickets received from oil and gas industry PACs. Okie dokie.

Paul Krugman regularly debunks right wing economic memes. Here’s a good one, about fear of government hampering investment:

Truly, we live in a time of mass delusion — or maybe make that elite delusion — where there are lots of things that everyone believes, without a shred of evidence to back that belief. Here’s one more: everywhere you go, you encounter the claim that businesses aren’t investing, they’re just sitting on piles of cash, because they’re worried about future government policies.

There is, of course, a much more prosaic alternative: businesses aren’t investing because they have lots of excess capacity. Why build new structures and buy new machines when you’re not using the ones you already have?

There’s a neat little chart-y thingie with red and blue lines and it shows basically this “fear of socialism” meme is bunk.

Finally, we’re seeing serious fearmongering about the deficit, which most right wingers seem to have swallowed whole. This despite the fact that just a few years ago, Republicans were the ones telling us that “deficits don’t matter,” something which “Reagan proved.”

So what happened? Krugman has an idea, and it’s not what you think. It’s not a sudden stab of conscience or realization that they were wrong for Bush’s two terms. No, it’s far more heinous:

There’s only one way to read this: it’s not about the deficit — it’s about the deficit as an excuse to dismantle social programs.

So you people yammering about wanting the government’s hands off your Medicare and Social Security just may get your wish.

Declaration Of Interdependence

Steve McCallion has a great little read up at Fast Company, and has issued a challenge. He writes:

America has mortgaged its future to maintain the symbols of personal freedom (the house, the car, the big screen TV) at the expense of real freedom. We owe China almost one trillion dollars; our public education system is approaching collapse; and, we rank number one globally for our obesity rate, with more than a third of our adult population being technically obese. America’s current understanding of freedom is unsustainable and raises the question, “Are we really free?”

McCallion says what's needed is a new vision to move America forward, one that can be summarzied in a "Declaration of Interdependence." And he challenges us to articulate this vision and develop a movement to promote it, one which he writes will “awaken a new collective spirit.”

I agree with McCallion completely, and have written many times about our need not just for "reform" but a complete and total reinvention of how we do things and how we look at things. With this in mind I stumbled upon Gus Speth’s excellent piece from the May issue of Solutions, "Towards a New Economy and a New Politics.” It’s long and maybe a little wonky but it picks up where McCallion leaves off. There are some great ideas here, articulated clearly. In particular I like this:

Before it is too late, America should begin to move to a post-growth society where working life, the natural environment, our communities, and the public sector are no longer sacrificed for the sake of mere GDP growth; where the illusory promises of continuous growth no longer provide an excuse for neglecting to deal generously with compelling social needs; and where citizen democracy is no longer held hostage to the growth imperative.

That’s a great Declaration of Interdependence if I’ve ever heard one. I’ve written about this before (notably here and here) but it bears repeating: what ails the nation and indeed the entire world is that all of our metrics, institutions and barometers of success no longer serve us. This has become abundantly clear as one institution after another has failed and we stand powerless in the face of enormous challenges. The world is a different place now, bearing 7 billion humans, all of whom are more interdependent than ever. The conventional wisdom, the generally accepted modus operandi, our entire structure must change. We need a complete transformation at our deepest levels.

This is great news, because Americans are really good at reinventing themselves. However, it’s bad news because there are established institutions with a very powerful interest in maintaining the status quo.

Speth outlines some very clear policies that are required to bring about this reinvention, many of them we’ve discussed here: policies like making the things we buy reflect their true cost. He also recognizes a need for political reforms (campaign finance, regulating lobbyists, etc.). It’s a great read and I urge everyone to head over to Solutions to give it a look.

As it relates to the McCallion piece, I think Speth actually articulates a great vision for the future:

Americans now face a great imperative to build a new economy—a sustaining economy. Sustaining people, communities, and nature must henceforth be seen as the core goals of economic activity, not hoped-for byproducts of market success, growth for its own sake, and modest regulation. The watchword of the sustaining economy is caring: caring for each other, for the natural world, and for the future.

I’m sure this will sound like typical liberal unicorns and lollipops to the craven Glenn Beck types but I think it’s important to remember that these voices are simply the amplified protests of the established interests trying to protect their turf. The reality is, the status quo no longer works for the majority of people. Something has to change, and we can either be thoughtful and deliberate about that change now or we can see it take shape inside the maelstrom and chaos that is civil unrest. Because what we have now is unsustainable and change will happen.

Hating On The Poor

Welcome, Crooks & Liars! And hugs to Mike Finnigan for including me in today's round-up.

-------------------

Every time I do a post on taxes someone comes along to complain about the “freeloaders,” “moochers” and irresponsible people who suck up our tax dollars, looking for “someone else to pay their way.” It happens without fail.

Usually these folks are talking about the poor, people who benefit from things like food stamps, the people they see as taking handouts. Which is puzzling to me, because I’m trying to think of who gets a free ride in this country and it’s not usually the poor. Nothing is free. Public housing ain’t free, folks--it’s subsidized, meaning you pay what you can. But no one pays nothing. And if you don’t keep up on your utilities you’re out on the streets faster than you can say “the check is in the mail.”

I’m sure there are some poor folks looking for someone to pay their way, just as there are middle class folks and wealthy folks looking for the same deal. This is why Publisher’s Clearinghouse is in business and I’m still getting phone calls offering me a free vacation at a Las Vegas resort if I’d only listen to a two-hour sales pitch.

But when I think of someone living large off the taxpayer teet it’s not usually the single mom with four kids working two jobs who still can’t make ends meet. Or the senior citizen (usually a veteran) living on a fixed income in one of our senior citizen high-rises in the Edgehill neighborhood. I think of people like Dick Cheney, Riley Bechtel, Erik Prince, and Michael McConnell: folks profiting handsomely off the taxpayer-funded war in Iraq which they dragged us into in the first place.

But maybe that’s just me.

We live in an era where things have been devalued to an extraordinary degree, including people. Recently I picked up the book Natural Capitalism: Creating The Next Industrial Revolution; despite it being about 10 years old, I find it transformational. I urge everyone to pick up a copy.

A few brief items culled from Chapter Three, “Waste Not”:

People are often spoken of as being a resource -- every large business has a “human resource” department -- but apparently they are not a valuable one.

[...]

In a world where a billion workers cannot find a decent job or any employment at all, it bears stating the obvious: We cannot by any means -- monetarily, governmentally or charitably -- create a sense of value and dignity in people’s lives when we are simultaneously creating a society that clearly has no need for them.

Wow. That just blew my mind. Of course! That, in a nutshell, is the Western capitalist mind-set. Industrialization and globalization have created a world where people have been devalued, are superfluous, and discarded by the privileged class as “moochers” and “freeloaders.” If only they would just go away, right?

But even Jesus said “the poor you will always have with you.” I have to think that this was as much an indictment of human society as stating a simple, eternal truth. Regardless, our challenge for thousands of years has been to find a way to accommodate the poor, the infirm, the elderly--what one of my commenters, in an effort to be inflammatory, calls “human debris.” And the way we've gone about it in the past is not working any more (if it ever truly did).

The problem is that the fruits of industrialization and globalization are a devaluation of all people, including you and me; the poor are just the most visible victims.

I wrote about how my own work has been devalued here. But all of us find we are working harder yet earning less. Again I quote from Natural Capitalism:

Just as overproduction can exhaust topsoil, so can overproductivity exhaust a workforce. The assumption that greater productivity would lead to greater leisure and well-being, while true for many decades, may no longer be valid. In the United States those who are employed (and presumably becoming more productive) find they are working one hundred to two hundred hours more per year than people did twenty years ago.

[...]

From an economist’s point of view, labor productivity is a Holy Grail, and it is unthinkable that continued pursuit of taking it to ever greater levels might in fact be making the entire economic system less productive. We are working smarter, but carrying a laptop from airport to meeting to a red-eye flight home in an exhausting push for greater performance may now be a problem, not the solution. Between 1979 and 1995, there was no increase in real income for 80 percent of working Americans, yet people are working harder today than at any time since World War II. While income rose 10 percent in the fifteen-year period beginning in 1979, 97 percent of that gain was captured by families in the top 20 percent of income earners. The majority of families, in fact, saw their income decline during that time. They’re working more but getting less ... [...]

Today, companies are firing people, perfectly capable people, to add one more percentage point of profit to the bottom line. [NOTE: I wrote about Macy's and Smurfit-Stone last week.] Some of the restructuring is necessary and overdue. But greater gains can come from firing the wasted kilowatt-hours, barrels of oil, and pulp from old-growth forests and hiring more people to do so.

Western economies are wasteful by nature, none more so than the United States. We value the bottom line, the P&L report, the short-term profit, the immediate rise in share price. But we are looking at just a piece of the picture, not the entire painting. Instead of looking at people who need assistance as “human debris,” “moochers,” and “looters” and dismissing them with an admonishment to get a job, we need leaders who are interested in looking at the systemic problems that have created this situation in the first place. Our profit and growth oriented value system has put our entire society out of balance. Nowhere except in economics is constant, unrestrained growth considered a good thing: in medicine, it's called cancer.

We are losing ground, fast. For an idea of just how much ground we are losing, take a look at the Index of Social Health, which tracks indicators such as infant mortality, teen suicide, crime, food stamp coverage, and income inequality. It makes clear that as a nation we have been on the decline for decades, working more but getting less for our efforts, and creating all sorts of social problems in the process:

In 2007 (the last year for which complete data are available), the Index of Social Health stood at 56 out of a possible 100. The performance in 2007 represented an improvement of one point over 2006, but it marked the seventh consecutive year during which the Index remained in the mid-50s. Overall, between 1970 and 2007, the Index declined from 66 to 56, a drop of 14 percent.

Areas that showed improvement since the 1970s are:

• Infant mortality
• Teenage drug abuse
• High school dropouts
• Unemployment
• Poverty, ages 65 and over
• Homicides
• Alcohol-related traffic fatalities

Indicators which have gotten worse since 1970:

• Child abuse
• Child poverty
• Teenage suicide
• Average weekly wages
• Health insurance coverage
• Out-of-pocket health costs, ages 65 and over
• Food stamp coverage
• Access to affordable housing
• Income inequality

Looking at which indicators have worsened compared to those which have improved, it's clear that we are all working harder and getting less. Telling people to "get a job" when there are no jobs, or calling someone who works two low-paying jobs and still can't make ends meet a "moocher" is not helpful or productive because the problem is not with the people, it is with a system which has reached its limit.

We need a complete overhaul of how we do things. We need to create jobs for people which actually pay a decent wage, not expect people to be able to provide for their families working two or three part-time jobs, neither of which provides benefits. We must work to build a society that has a need for people, which values them. Because we're all headed in that direction, as the indicators reveal.

Godly Economics

[UPDATE]:

Pastor Bob has more to say on the subject here: "Economic Principles: Gleanings from Genesis"

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I know a lot of folks don’t think God belongs in any discussion of economics and that’s fine, but we live in a country where snake-oil salesmen (and women) peddle a bastardized version of Christianity in which we all worship Free Market Jesus, and they think this is appropriate public policy.

You know, people like crackpot Gary North (let’s hope he knows more about economics than he does theology). Or Ralph Reed and his “Faith & Freedom Coalition,” which touts free markets right along side limited government, lower taxes, aid to Israel and oh, yeah, helping the poor among its founding principles. Dude, that don’t ad up.

(And why are these groups always coalitions? Coalitions of what? Idiots?)

Indeed as some astute observers have noted, the GOP’s sole idea for pulling us out of the economic abyss they placed us in seems to be prayer for Divine intervention.

Excuse me for calling these phonies out by name, but it just seems to me that so few of these people have actually read the Bible--and I mean the whole thing, not just the parts that conveniently support their politics. So for this I turn to my friend the reverend, aka Pastor Bob, for a look at what a Biblical economic plan really looks like.

Do read the whole post for an education on what the Bible says about how nations should run their economies. And then look at our supposed "Christian nation," and the policies that right wing Christians have espoused for decades, and see if you don't notice a wee bit of an inconsistency. I do:

First of all, the entire land belonged to God: “The earth is the Lord’s, and the fullness thereof.” Pious, empty-sounding religious words? No, an economic principle: All land, and its produce, belong to God. No property is private. It was God who made sure each family had an inheritance on it. In acknowledgement of this, they were called upon to offer tithes. Not only that, they were forbidden to fence off their lands, and were not allowed to go over their fields a second time after harvesting, and the same was true of the grape vines: “you shall leave them for the poor and the alien: for you were aliens in Egypt.”

Wonder what Sarah Palin or Ralph Reed would say to a Washington economic policy which looked like that? They’d cry “wall of separation” so fast your head would spin.

Pastor Bob goes on:

Next came the matter of debt, and here the rule was very simple: All debts were to be forgiven every seven years. Period.

Many years and much watering down later, we now begrudgingly allow some debts to be released, maybe once in a person’s lifetime, with that event a blot on their economic record that lasts at least seven years. And I am willing to bet that a lot of “Bible-believing” Christians are pretty sure that anyone who takes advantage of this provision is a victim of his or her own moral failure, and ought to be ashamed.

Now, along with requiring all creditors to release the obligations of all debtors once every seven years, without exception, the biblical law also expressly prohibited the accumulation of extreme wealth:

“Woe to those who add house to house, and field to field!”

Christian America, are you listening? To implement this, there was a provision that once every fifty years (seven periods of seven) any family who had sold their own homestead to pay off debts would have that property returned to them, free and clear. This was expressly to prevent the accumulation of wealth by some at the cost of the permanent impoverishment of others.

Wow, we sure don’t hear that economic policy espoused by the so-called Christians in the Republican party.

Gee, I wonder why.

As Pastor Bob says, he’s just reading his Bible. Maybe some other folks who claim to espouse Biblical beliefs should do so as well.

Show Me The Money

Tea Partiers have arrived in Nashville for three days of hollering about government spending, which I find amusing. Just curious, folks: if the government doesn’t spend money at this moment in our economic crisis, who do you think will? Because near as I can figure, everyone else has hit their miser button. People are not spending money on anything, and neither are those institutions which pre-meltdown were the engines of our economy.

Let me explain. Mr. Beale and I have gone a few rounds with the bank recently as we try to complete a re-fi on the house. We started this process, I kid you not, back in August. I’ve owned two houses in my day, refinanced both, so this is my fifth turn around the home mortgage block and I’ve never been asked to jump through so many hoops or had so many bars moved on me before. We are not happy.

Keep in mind: I have excellent credit, no debt, and my house is still worth considerably more than what I’m asking from the bank. In other words, I’m among the least risky customers this major lending institution will see walk through its doors. Yet they are treating me like a low-life criminal. In fact, they are asking so many bizarre questions that I now suspect they are simply fishing for a reason to say no.

In short: if banks won’t give me a loan, they won’t give anyone a loan. They are holding onto their money with both hands, and they won’t cough up one dime.

And it gets worse. I’ve heard from business people in our community that they cannot get loans, either. And if a business can’t get a loan, then what will drive our economic recovery?

Yes, to a certain extent this re-settling has been long overdue. As a nation, we’ve floated on a sea of debt and promises for far too long, and it was bound to catch up with us. But I do think, as President Obama himself pointed out, that the pendulum has swung too far the other way. It’s probably good that people are saving their money, that businesses are being challenged to use more real capital to finance whatever they want to do, that banks aren’t handing out loans to people who declared bankruptcy in the past 90 days. But by refusing to make even reasonable loans, it’s leading to unemployment and prolonging the economic collapse. Unemployed people do not spend money.

So who is at fault here? What the heck is going on? The banks are blaming the government, and the government is blaming the banks. And I have no clue which party is lying here, except to say in my own dealings with my own bank, they've behaved like huge dicks. I'm sure there is plenty of blame to spread around.

A prominent person in our local real estate world has said there is a new government rule limiting how vested a bank can be in one area of the economy when it comes to making business loans. So, for example, there’s a limit to how many real estate development loans a bank can make in one city, and because Nashville was such a real estate boom town, local banks are maxed out in this business sector. As a result, he says, he can’t get a loan for any development projects.

Now, let me say, that sounds like bullshit to me. But what do I know? Has anyone else heard that?

I bring that up because the Administration wants to funnel $30 billion worth of TARP funds to small community banks so they can make loans to small businesses. Problem is, the community banks don’t seem to want the money. They say they don’t need it and even if they did, there are too many “onerous restrictions" on the money to make it attractive. ABC News reported:

To entice community bankers to use TARP funds, says Mr. Merski, Congress would have to change restrictions on dividend payments, a provision that gives the government partial ownership in the recipient banks, and the cap on executive compensation.

"The key is to remove all those onerous restrictions," says Merski, who doubts Congress would agree to do so. "On top of that, the cost of the TARP funding is extremely expensive, so they would have to change all these rules and restrictions to make it viable."

Merski represents the Independent Community Bankers of America. I just want to call bullshit, bullshit, bullshit all over the place. What the hell? Can we get a straight answer here? I don’t think taxpayers want to see TARP funds used for executive bonuses and political contributions. That’s not onerous, it’s common sense. We don’t want to see TARP funds going to Dubai. That’s not an onerous restriction either.

Neither is paying interest, though that depends on how much interest has been charged. How about one percent? I’ll take one percent.

I’m just not getting what the complaints are about.

Our economy needs money, and the banks don’t seem to want to give it out. And let me add, if we hand over TARP funds to a community bank, what makes anyone think they will make the loans? The major institutions sure haven’t.

I’m getting pissed off here. And I’m not the only one. I’m sure we’ve all heard of the Move Your Money campaign. The movement is spreading: in New Mexico, two state legislators have proposed moving the state's $1.8 billion away from Bank of America to community banks. Ouch. Memo to BofA: keep pissing people off and you might find yourself small enough to fail.

But is there reason to think a community bank will behave any less dickish than a big national institution? Sounds like we’re hearing the same whining from the community banks that we heard from BofA.

In Oregon, gubernatorial candidate Bill Bradbury has suggested forming a state bank. His Bank of Oregon idea is very intriguing:

Under the proposal, all state government agencies would be required to deposit their funds in the bank. The lender would then invest the funds within the state, with the investments serving as an economic development tool. It would also attempt to turn a profit, like a typical commercial bank.

I like this idea. If the banks are saying the government is putting too many restrictions on them, then screw it. Let the government start its own bank to make loans.

Sound socialist? Meh. It’s worked for North Dakota for nearly 100 years.

Anyway, this post has rambled on long enough. But I'd really like to hear some ideas on how we move through this. Anyone?

Jim Wallis In Today’s Washington Post

Progressive Christian Jim Wallis has an excellent column in today’s Washington Post about the false idols of Wall Street. He really addresses a lot of the issues I’ve been talking about for the past several years, especially this part:

More and more people are coming to understand that underlying the economic crisis is a values crisis, and that any economic recovery must be accompanied by a moral recovery. We have been asking the wrong question: When will the financial crisis end? The right question is: How will it change us? This could be a moment to reexamine the ways we measure success, do business and live our lives; a time to renew spiritual values and practices such as simplicity, patience, modesty, family, friendship, rest and Sabbath.

Just a reminder: when liberal Christians use the word “values” and “morals” we aren’t talking about gays and abortion and sex ed in schools--all that below the waistline stuff. We’re talking about broader issues like materialism and isolation and caring for those on the margins of society. We’re talking about heart stuff.

You know, the stuff Jesus talked about.

Just yesterday I was saying our economic measuring stick of constant growth is unnatural. Nothing in nature grows and grows and grows, unless it’s a tumor. Constant growth is a sign of disease, not health. Yet our economic barometers are all focused on the need for constant growth. Little wonder American life is so unhealthy, wrapped up in materialistic exercises like buying bigger and bigger houses to hold more and more stuff, then financing it all with ballooning debt.

Too many Americans live their lives on false promises and air; no wonder as a society we are alienated and retreat into our addictions: food, sex, substance abuse, gambling. These are symptoms of a larger disease in our country, one that is mirrored in our policies and the systems which support our institutions.

Is there a way to set an economic barometer focused on balance, instead?

In December 2008 I asked:

Instead of basing our economy on how much stuff people buy which they don’t need, how about basing the economy on creating jobs? On how many people are working? People need jobs, they don’t need new flat-screen TVs made in Taiwan.

Of course, I don’t think it’s likely our current systems and institutions will be replaced any time soon. But if ever we are to rethink how we do things in this country, now is the time.


And here's something else I love. I’m sure by now many people have heard of the “Move Your Money” campaign started by the Huffington Post (Mack linked to it the other day). Wallis takes up the rallying cry in his column:

When I recently told a few friends that my wife, Joy, and I had decided to close our little account at Bank of America and move our money to a local bank that has behaved more responsibly, I was amazed at the response. Religious leaders and pastors from around the country called to say that they, too, were ready to take their money out of the big banks that have shown such shameful morality and instead invest according to their values, by putting money into more local and community-based institutions.

So we've decided not just to remove our own money, but to invite other Christians, Jews and Muslims to do the same. Already we are hearing reports of whole congregations, groups of churches and faith-based organizations, from California to New York City, deciding to transfer their funds to local banks and credit unions.

The banks say they are "too big to fail." So let's make them smaller. We might finally get Wall Street's attention.

Wow. This is amazing. Just yesterday I wrote that boycotts don’t work, politics doesn’t work, and along comes someone with a movement that people just may be embracing. The universe has seen my cynicism and raised me with a boycott of BofA. I love how this instant karma stuff works! Tell the world something can't be done and watch it reply with an "Oh yeah? Watch me!" LOL.

I'm going to withhold judgment on the "Move Your Money" thing to see if BofA changes their evil ways. But I admit to being encouraged that the progressive faith community has embraced the idea.

I can already tell it's going to be an interesting year!