July 26, 2010
The fifth annual conclave of the Netroots Nation (a group of liberal bloggers) took place in Las Vegas last week. Among the stories emerging from that event was the plea that progressive bloggers “quit beating up on Obama”. I found this very amusing. After Obama betrayed his supporters by pushing through a faux healthcare “reform” bill, which lacked the promised “public option” and turned out to be a giveaway to big pharma and the health insurance industry – the new President turned the long-overdue, financial “reform” bill into yet another hoax.
As I pointed out on July 12, Mike Konczal of the Roosevelt Institute documented the extent to which Obama’s Treasury Department undermined the financial reform bill at every step. On the following day, Rich Miller of Bloomberg News examined the results of a Bloomberg National Poll, which measured the public’s reaction to the financial reform bill. Almost eighty percent of those who responded were of the opinion that the new bill would do little or nothing to prevent or mitigate another financial crisis. Beyond that, 47 percent shared the view that the bill would do more to protect the financial industry than consumers. Both healthcare and financial “reform” legislation turned out to be “bait and switch” scams used by the Obama administration against its own supporters. After that double-double-cross, the liberal blogosphere was being told to “pay no attention to that man behind the curtain”.
Despite the partisan efforts by Democrats to blame our nation’s economic decline exclusively on the Bush administration, reading between the lines of a recent essay by Senator Bernie Sanders provides some insight on how the problem he discusses has festered during the Obama administration:
The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families! During the last fifteen years, while these enormously rich people became much richer their effective tax rates were slashed almost in half. While the highest-paid 400 Americans had an average income of $345 million in 2007, as a result of Bush tax policy they now pay an effective tax rate of 16.6 percent, the lowest on record.
Let me get this straight . . . Is Senator Sanders telling us that it took the 400 families the entire eight Bush years just to pick up $400 billion and that once Obama came to the White House, those families were able to pick up another $827 billion in less than two years? In fairness, Senator Sanders made a great argument to reinstate what I call, “the tax on dead millionaires”. He began by discussing the harsh reality experienced by mere mortals:
And while the Great Wall Street Recession has devastated the middle class, the truth is that working families have been experiencing a decline for decades.
Nevertheless, to understand how the middle class has been destroyed by those 400 families, their corporate alter egos and the lobbyists they employ, one need not rely on the words of a Senator, who is an “avowed socialist” (a real one – not just someone called a socialist by partisan blowhards). Consider, for example, a great essay by Phil Davis, avowed capitalist and self-described “serial entrepreneur”. The title of the piece might sound familiar: “It’s the End of the World As We Know It”. Mr. Davis discussed the latest battle in the war against Social Security and the current efforts to raise the retirement age to 70:
So, what is this all about? It’s about forcing 5M people a year who reach the age 65 to remain in the work-force. The top 0.01% have already taken your money, they have already put you in debt, they have already bankrupted the government as well so it has no choice but to do their bidding. Now the top 0.01% want to make even MORE profits by paying American workers even LESS money. If they raise the retirement age to 70 to “balance” Social Security – that will guarantee that another 25M people remain in the workforce (less the ones that drop dead on the job – saving the bother of paying them severance).
Those who believe that President Obama would never let this happen need look no further than a recent posting by Glenn Greenwald (a liberal Constitutional lawyer – just like our President) at Salon.com:
It is absolutely beyond the Republicans’ power to cut Social Security, even if they retake the House and Senate in November, since Obama will continue to wield veto power. The real impetus for Social Security cuts is from the “Deficit Commission” which Obama created in January by Executive Order, then stacked with people (including its bipartisan co-Chairs) who have long favored slashing the program, and whose recommendations now enjoy the right of an up-or-down vote in Congress after the November election, thanks to the recent maneuvering by Nancy Pelosi. The desire to cut Social Security is fully bipartisan (otherwise it couldn’t happen) and pushed by the billionaire class that controls the Government.
Despite the efforts to characterize Social Security as an “entitlement program” – it’s not. It’s something you have already paid for – as documented by your income tax returns and W-2 forms. Pay close attention and watch how our one-party system, controlled by the Republi-cratic Corporatist Party steals that money away from you. Both Phil Davis and Glenn Greenwald have each just given you a big “heads-up”. What are you going to do about it?
The End
July 29, 2010
The long-awaited economic recovery seems to be coming to a premature end. For over a year, many pundits have been anticipating a “jobless recovery”. In other words: don’t be concerned about the fact that so many people can’t find jobs – the economy will recover anyway. These hopes have been buoyed by the widespread corporate tactic of cost-cutting (usually by mass layoffs) to gin-up the bottom line in time for earnings reports. This helps inflate stock prices and produce the illusion that the broader economy is experiencing a sustained recovery. The “jobless recovery” advocates ignore the extent to which the American economy is consumer-driven. If those consumers don’t have jobs, they aren’t going to be spending money.
Although many observers seem to take comfort in the assumption that the jobless rate is below ten percent, many are beginning to question the validity of the statistics to that effect provided by the Department of Labor. AOL’s Daily Finance website provided this commentary on the June, 2010 unemployment survey conducted by Raghavan Mayur, president of TechnoMetrica Market Intelligence:
Frank Aquila of Sullivan & Cromwell recently wrote an article for Bloomberg BusinessWeek, discussing the possibility that we could be headed into the second leg of a “double-dip” recession:
The same government that found it necessary to provide corporate welfare to those “too big to fail” financial institutions has now become infested with creatures described by Barry Ritholtz as “deficit chicken hawks”. The deficit chicken hawks are now preaching the gospel of “austerity” as an excuse for roadblocking any further efforts to use any form of stimulus to end the economic crisis. One of the gurus of the deficit chicken hawks is economic historian Niall Ferguson. Because Ferguson is just an economic historian, a real economist – Brad DeLong — had no trouble exposing the hypocrisy exhibited by the Iraq war cheerleader, while revisiting an article Ferguson had written for The New York Times, back in 2003. Matthew Yglesias had even more fun compiling and publishing a Ferguson (2003) vs. Ferguson (2010) debate.
At The Daily Beast, Sir Harry Evans emphasized how the sudden emphasis on “austerity” is worse than hypocrisy:
Gerald Celente, publisher of The Trends Journal, wrote a great essay for The Daily Reckoning website entitled, “Let Them Eat Losses”. He pointed out how the kleptocracy violated and destroyed the “very essence of functioning capitalism”. Worse yet, our government betrayed us by forcing the taxpayers “to finance the failed financiers”:
As I discussed on July 8, because President Obama lacked the political courage to advance an effective economic stimulus package last year, the effects of his “semi-stimulus” have now abated and we are headed into another recession. Reuters reported on July 27 that Robert Shiller, professor of economics at Yale University and co-developer of Standard and Poor’s S&P/Case-Shiller Index, gave us this unsettling macroeconomic prognostication:
During the last few months of 2009, did you ever think that someday you would be looking back at that time as “the good old days”?
href=”http://statcounter.com/wordpress.org/”
target=”_blank”>