Showing all posts tagged: enough

If Americans had been consulted about the 2008-2009 Wall Street bailout, I doubt it would have happened the way it did. At the very least, strict conditions would have been placed on the banks in return for the money. The banks would have had to eat the losses of the predatory mortgages they sold, and help homeowners reduce those mortgages. They’d be required to improve the capitalization of small banks in communities across the country. They’d be forced to accept stringent new regulations, including resurrection of Glass-Steagall.

But Americans weren’t really consulted. It was an inside job.

As a result, Wall Street has prospered but the rest of the nation hasn’t. One out of four homeowners is underwater, owing more on their homes than the homes are worth.

And with the worst economy since the Great Depression, we’re now embarking on fiscal austerity. Either Congress’s super-committee comes up with $1.2 trillion of federal budget cuts that Congress agrees to—going into effect a little over thirteen months from now—or $1.5 trillion of cuts are made across the board. Meanwhile, states and cities have been slashing public services for the past three years.

So which is it? Rule by democracy or by financial markets? Based on what’s happened in America, I’d choose the former.

- Robert Reich, Greece’s Choice—and Ours: Democracy or Finance?

Reich thinks the Greeks should default, and we should let the banks go hang, which is what we might have done back in 2008-2009 if anyone had asked us.

(via markcoatney)

With No New Jobs in August, Calls for Urgent Action - Sheila Dewan

As I said a month ago (see Enough) we will look back on July 2011 as the start of the New Depression, when we slid over the edge from recession.

Obama has one chance left, but with the GOP calling him ‘President Zero’ I don’t know if he can convince enough Americans that we need a huge infrastructure investment.

It’s sad to think that a second hurrricane hitting the US and causing huge damage might be the only thing that could get the population behind a jobs program.

The real value in Mr. Bernanke’s speech is that he explained what really ails the economy — and made the case for a better fiscal response to address those ills. “Good, proactive housing policies” would speed recovery, he said, as would “putting people back to work.”

If Mr. Bernanke advocated specific policies to achieve those aims, he would be violating the etiquette that requires Fed chairmen to leave fiscal details to Congress.

So allow us. The best, proactive way to revive the housing market is to help bankrupt and delinquent borrowers rework their mortgages through principal reductions. It is also important to ease refinancing rules so underwater borrowers who are current in their payments can trade in their high-rate mortgages for lower-rate loans. The Obama administration is considering new refinancing rules, but mortgage investors are sure to resist.

One of the best ways to put people back to work is to fully reauthorize the highway trust fund, a big job creator and vital source of money for improving the nation’s infrastructure. Job creation also requires that federal funds are made available to repair and renovate schools, and to rehire teachers, police officers and firefighters who have lost their jobs in budget cutbacks.

Mr. Bernanke’s Warning - NYTimes.com

The editorial board of the NY Times pick up where Bernake left off. Why didn’t Obama?

A bold jobs plan is also good politics. With more than 25 million Americans looking for full-time jobs, the wages of people with jobs falling, and an economy on the verge of a double dip, the President has to come out fighting on the side of average people.

Besides, Republicans won’t go along with any jobs initiative he proposes – even a tiny one. Better they reject one that could make a real difference than one that’s pitifully small and symbolic.

If Republicans reject it, Obama can build his 2012 campaign around that fight. Maybe he’ll even call Republicans on their big lie that smaller government leads to more jobs.

What would a bold jobs bill look like? Here are the ten components I’d recommend (apologies to those of you who have read some of these before):

1. Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.

2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.

3. Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation’s roads, bridges, ports, airports, school buildings, and water and sewer systems.

4. Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.

5. Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.

6. Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).

7. Make low-interest loans to cash-starved states and cities, so they don’t have to lay off teachers, fire fighters, police officers, and reduce other critical public services.

8. Provide partial unemployment benefits to people who have lost part-time jobs.

9. Enlarge and expand the Earned Income Tax Credit – a wage subsidy for low-wage work.

10. Impose a “severance fee” on any large business that lays off an American worker and outsources the job abroad.

- Robert Reich, The President’s Bold Jobs Bill (Maybe)

Let’s hope. Jobs, jobs, jobs!

 

Stocks Close Down Sharply Over Anxiety on Economy - NYTimes.com

Graham Bowley and Christine Hauser via NY Times

The big stock plunge, though, came around 10 a.m., when the Federal Reserve Bank of Philadelphia reported a sharp drop in regional manufacturing activity in its monthly survey, deepening worries that the economy may dip back into recession.

That report came a day after Morgan Stanley lowered its forecasts for both worldwide and domestic economic growth, partly because it expected cuts in government spending in Europe and the United States to damp recoveries. It described the United States and the euro area as “hovering dangerously close to a recession” and said it would not take much in the form of additional shocks to tip the balance.

The yield on 10-year Treasury bonds dropped to 1.97 percent on the Philadelphia Fed news before recovering to close at 2.07. According to data from Bloomberg, that low during the day was the lowest yield since at least 1962. Global Financial Data, a supplier of historical financial and economic statistics, said it was the lowest since 1950.

“What freaked me out today was that Philly Fed number,” said James W. Paulsen, chief investment strategist for Wells Capital Management. “That was the first number that says recession.”

That sentiment was echoed by Eric Green, an economist at TD Securities. “When you have an economy operating at stall speed facing these headwinds, it does not take much to tip it over the edge,” he said. “You read a report like this and you think we are going over the edge.”

Credit Suisse said in a note that if the Philadelphia numbers proved a national barometer, and that was unknown, “then a recession likely began in August.”

As I predicted, this downturn will not only be a second recession, but in the near future analysts will look back and consider it the conclusive edge of the New Depression.

There is hardly any reason to imagine how it can be turned. The US could — and desperately needs to — ramp up a massive jobs program, but Mr Obama will not have the spine to block all legislation until he gets one.

That sort of obstructionism — which is exactly how the GOP is playing the game these days — will prove necessary.

The Republicans won’t agree to anything from Obama, except massive austerity. They will sacrifice the country for their ideé fixe: to get Obama out of office at all costs.

Playing it safe is not going to cut it. Not proposing anything bold and not trying to do something to definitively deal with our problems would mean that we’re going to have another year and a half like the last year and a half — and then it’s awfully hard to get re-elected.

Christina Romer, professor of economics at the University of California, Berkeley, and former chairwoman of the president’s Council of Economic Advisers, offers some campaign advice to Mr Obama, cited by Binyamin Appelbaum and Helene Cooper, White House Debates Fight On Economy

It is not a ‘stunt’ — as some of his advisors are saying — to get angry and push for an aggressive jobs agenda that at the present time seems impossible to get through the House. Bang the table every day. Call them names. Make it the single most important issue and talk about it every day. Jobs.

The future of generations is hanging in the balance. These are not abstractions. Imagine it as a crazy person holding a gun to a child’s head, and you have no immediate way to get the madman to put the gun down. Would you walk away, and worry about other things, because you haven’t yet figured out how to get that gun?

These are crazy people holding our country hostage. The fact that they think they are justified to do so, or that God told them to do it, just doesn’t matter.

We have to make jobs the only issue to be discussed. Tie up the work of Congress until they send you a jobs bill you can sign. Accept nothing else. Veto all other legislation until you get a jobs bill. Go nuclear, Mr President.

There is an interesting artifact of the NY Times content management system, one that occasionally sheds additional light on the thinking of the editors.

This morning, for example, there were two editorials about President Obama’s current bus trip and political activities. The first is entitled ‘His Anger Is A Start’ and the second, ‘Fight For A Jobs Agenda’. However, the underlying titles of the HTML pages are somewhat different, reflecting the fact that the pages are often created before a final title is settled. But it is these initial tiles that are displayed in browser tabs, and the URLs associated with the pages. So in today’s two editorials the HTML titles are ‘Waiting For Mr Obama - His Anger Is A Start - NY Times’ and ‘Waiting For Mr Obama - We Need A Jobs Agenda - NY Times’. The URLs match.

So the editors of the NY Times are sending their hidden message, one we can all agree with: we are waiting for Mr Obama. We are waiting for him to get angry and stay angry, and we are waiting for him to create a jobs program. And if he doesn’t do that, or use every power of the presidency to try to do so, he won’t be reelected.

Boycott Campaign Donations! - NYTimes.com

Joe Nocera writes about Howard Schultz, the CEO of Starbucks, who is advancing the idea that we should withhold campaign contributions until our elected officials start working on creating jobs. I’m down with that:

Joe Nocera via NY Times

The contribution boycott, as Schultz envisions it, would be completely bipartisan; indeed, it would have to be for it to work. Schultz isn’t calling on Washington to come up with solutions that are aligned with his political leanings (which are Democratic). Rather, he wants solutions, agreed to by both parties, that will help get the country back on its feet.

He believes Congress needs to come back from the August recess now, instead of waiting until September. Then, he says, the president and Congress should hammer out a debt deal, which will restore confidence. And finally, and most importantly, they should start focusing “maniacally” on the nation’s most pressing concern: job creation. Once they’ve done that, the boycott would be lifted.

What I particularly like about Schultz’s idea is that it is not just another plea for compromise and civility, which does nothing to affect political behavior. It is hardheaded and practical, the kind of idea you would expect from a good businessman. Although it would require contributors from both the left and right to join arms, it seems to me that there are enough people in both parties who are fed up enough to give this a try. He’s already lined up one organization, Democracy 21, to support the idea; he’s searching for more.

Is Schultz’s idea a long shot? Yes. Is it worth trying? You bet it is.

I wonder if Schultz will be the populist I have predicted, who will rise up and create a new party:

Stowe Boyd, The Fall Of The Unions, The Rise Of Trade Populism

It will take the people to take our future back.

The form this might take? I foresee the emergence of a grassroots movement, based on what I call ‘trade populism’: an ideology that explicitly identifies a globalized business ecology, made up of wall street bankers, multinational corporations and their leaders, and booming foreign countries (China, India, Brazil, etc.) as the enemies of our freedoms, and channeling the anger of Americans of all political stripes. This movement will not be the Tea Party, although it may attract tea partiers.

And this new populism will also revolve a few other premises, including the idea that we are in a crisis, so special rules apply. For one, they will argue that we need to put aside issues on which we cannot agree for the duration of the emergency. So the leaders of this movement will explicitly defer taking a stand on abortion, foreign aid, or climate change.

Trade populists will argue for the creation of trade barriers, as a support for the American worker, and as a start at dismantling the global business economy of interlocking banks, global business, and state capitalism. 

Another bit of ‘trade populism’ will be that foreclosures must stop for the duration of the emergency, pensions must be paid, and elected officials and businesses that don’t meet their obligations to plain folk will face criminal penalties.

Nearly all union members will join this movement, perhaps even some of the police and firefighters. Progressive democrats, tired of being part of the centrist wing of neoliberal capitalism, will break with the national party. Libertarians will join. The Greens will join. Even moderate Republicans, weary of the clamor, might join. The unemployed young and the disheartened old will join. The poor will join. Maybe even some rich people will join.

This new populism will emerge piecemeal, a little here, a little there. But by 2012 it will be the swing force, and with the right charismatic and confident leaders (Elizabeth Warren, Sheila Bair, Will Allen?), it could shake the elections.

And now, maybe Howard Schultz? With Paul Krugman as Secretary of the Treasury, Robert Reich back in Labor, Will Allen as Interior, and Sheila Bair and Elizabeth Warren on the Council of Economic Advisors.

The Democrats are at a crossroads. They can continue to populate the third wing of the Republican Party, fundamentally accepting the premises of Reagan’s narrative about government the way Republicans from Eisenhower through Ford accepted the premises of Roosevelt’s New Deal. If they choose that course, they will continue to marginalize, antagonize, and demoralize not only their base but the vast majority of swing voters, who don’t give one whit about ideology but simply want someone to represent their interests and values — most importantly, the idea that America ought to work again for people who work for a living.

Alternatively, they can return to progressive principles, starting by articulating for themselves as well as the American people what those principles are. (Personally, I have no idea what it means to be a Democrat anymore, other than to “talk about jobs,” as if talking about them will somehow magically create them, while searching for compromises with Republicans at each successive “budget crisis” — this time the debt ceiling — that will endanger even more jobs.)

If they choose to endorse progressive principles again, they will need to hammer home the distinction between the party that cares first and foremost about working and middle class Americans, those who want to join the ranks of the shrinking middle class, and the small businesses that create two-thirds of all new private sector jobs for working Americans; and the party that cares first and foremost about the rich and well-connected, the big corporations that ship American jobs overseas and rake in massive profits without sharing that prosperity with their workers, and CEOs, Wall Street bankers, and their bloated bonuses.

That would be a change we can believe in. But the Democrats would have to mean it this time.

Drew Westen, The Three Wings of the Republican Party

I don’t think the Democrats know what it means to be a Democrat anymore, either.

Time for a third party, one that actually stands for average people, and is opposed to Corporatist Capitalism that is taking over the world, like in Russia and China, and now here.

Enough.

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