The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F. Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.
In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realizing the “American Dream.” Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment checks had run out. Headlines announcing new hiring – still not enough to keep pace with the number of those who would normally have entered the labor force – meant little to the 50 year olds with little hope of ever holding a job again.
This article goes on to spell out the dangers and horrors to be expected in 2012.
Here is his vision of the future:
Even before the crisis, there was a rebalancing of economic power – in fact, a correction of a 200-year historical anomaly, in which Asia’s share of global GDP fell from nearly 50% to, at one point, below 10%. The pragmatic commitment to growth that one sees in Asia and other emerging markets today stands in contrast to the West’s misguided policies, which, driven by a combination of ideology and vested interests, almost seem to reflect a commitment not to grow.
I am writing to profess my utter disbelief at how little you seem to understand the current mood of the nation. In a story at Bloomberg today, you and a handful of fellow banker and billionaire "job creators" were quoted as believing that the horrific sentiment directed toward you from virtually all corners of America had something to do with how much money you had. I'd like to take a moment to disabuse you of this foolishness.
America is different than almost every other place on earth in that its citizenry reveres the wealthy and we are raised to believe that we can all one day join the ranks of the rich. The lack of a caste system or visible rungs of society's ladder is what separates our empire from so many fallen empires throughout history. In a nation bereft of royalty by virtue of its republican birth, the American people have done what any other resourceful people would do - we've created our own royalty and our royalty is the 1%. Not only do we not "hate the rich" as you and other em-bubbled plutocrats have postulated, in point of fact, we love them. We worship our rich to the point of obsession. The highest-rated television shows uniformly feature the unimaginably fabulous families of celebrities not to mention the housewives (real or otherwise) of the rich. We don't care what color they are or what religion they practice or where in the country they live or what channel their show is on - if they're rich, we are watching.
When Derek Jeter was toyed with by the New York Yankees when it came time for him to renew his next hundred million dollar contract, the people empathized with Derek Jeter. Sure, this disagreement essentially took place between one of the wealthiest organizations in the country and one of the wealthiest private citizens - but we rooted for Jeter to get his money. Nobody begrudged him a penny of it or wanted a piece of it or decried the fact that he was luckier than the rest of us. In the American psyche, Jeter was one of the good guys who was deservedly successful. He was one of us and an example of hard work paying off.
Likewise, when Steve Jobs died, he did so with more money than you or any of your "job alliance" buddies - ten times more than most of you, in fact. And upon his death the entire nation went into mourning. We set up makeshift shrines to his brilliance in front of Apple stores from coast to coast. His biography flew off the shelves and people bought Apple products and stock shares in his honor and in his memory. Does that strike you as the action of a populace that hates success?
No, Jamie, it is not that Americans hate successful people or the wealthy. In fact, it is just the opposite. We love the success stories in our midst and it is a distinctly American trait to believe that we can all follow in the footsteps of the elite, even though so few of us ever actually do.
So, no, we don't hate the rich. What we hate are the predators.
What we hate are the people who we view as having found their success as a consequence of the damage their activities have done to our country. What we hate are those who take and give nothing back in the form of innovation, convenience, entertainment or scientific progress. We hate those who've exploited political relationships and stupidity to rake in even more of the nation's wealth while simultaneously driving the potential for success further away from the grasp of everyone else.
Here in New York, we hated watching real estate and financial services elitists drive up the prices of everything from affordable apartments to martinis in midtown with the reckless speculation that would eventually lead to mass layoffs, rampant joblessness and the wreckage of so many retirement dreams. No one ever asked the rest of us if we minded, it just happened. I'm sure people across the country can tell similar stories.
So please, do us all a favor and come to the realization that the loathing you feel from your fellow Americans has nothing to do with your "success" or your "wealth" and it has everything to do with the fact that your wealth and success have come at a cost to the rest of us. No one wants your money or opportunities, what they want is the same chance that their parents had to attain these things for themselves. You are viewed, and rightfully so, as part of the machine that has removed this chance for many - and that is what they hate.
America hates unjustified privilege, it hates an unfair playing field and crony capitalism without the threat of bankruptcy, it hates privatized gains and socialized losses, it hates rule changes that benefit the few at the expense of the many and it hates people who have been bailed out and don't display even the slightest bit of remorse or humbleness in the presence of so much suffering in the aftermath.
Nobody hates your right to make money, Jamie. They hate how you and certain others have made it.
Don't be confused on this score for a moment longer.
If only the American people really took the sentiments of this post to heart. They could break the chains of financial and political abuse they have been under for 30+ years of the "Reagan Revolution".
Inequality is in the news a lot right now. How should we be thinking about it and trying to get our heads around it?
Inequality is one of the things that has changed quite a lot in the United States and other economies over the last three decades or so. A lot of things don’t change radically, but inequality has. Understanding why that has happened and what it implies for our society is important. So it’s a good thing that it’s in the news, it’s an important topic and there is no reason for it to be taboo. Having said that, there is no broad consensus among social scientists about how to talk about inequality, and the average economist probably thinks about it very differently than the average layman. I’m not saying one is right and one is wrong, but the conversation needs to be expanded to bring these different viewpoints to the table.
What’s the economist’s view?
The default position of economists is that inequality reflects the unequal human capital or productive capabilities of different workers. If you start with that premise – that what people earn is commensurate with their contribution to their employer, and also perhaps to society – then greater inequality tells you something about how people’s productivities have evolved over time. This is by no means what every economist believes, but it’s a common view. Economists have cut their teeth on inequality by looking at things like the increase in the college premium over the last 30 years in the US and other economies, as well as the increase in the gap between relatively high earners – the 90th percentile of income distribution – versus the bottom 10th percentile. We’ve seen a big increase in inequality, measured in various ways, and this reflects the fact that the top people, the more educated, high earners have become more skilled. Technology has favoured them, globalisation has favoured them, and inequality has increased for that reason.
So if a CEO is earning $5 million a year, that’s because he deserves that $5 million?
That’s why I put emphasis on the 90th versus the 10th percentile, because once you get to that very high level, the story becomes a little harder to swallow. Economists have, for the most part, not focused on the CEOs for two reasons. This is changing, but one reason is that most of the publicly available data sources don’t have information on CEOs. That’s because there are not that many CEOs, or multimillionaires. So when you take a sample – for example, a 1% sample of all the US households – you’re not going to get many of them. Secondly, data are top coded. You don’t actually see people’s exact earnings. You see that they are at the very top, which might be $250,000, but you don’t see if they’re making $25 million. For that reason, a lot of the labour economics literature has focused on things like, do people with college degrees earn more than high school graduates? Do postgraduates earn more? What has happened to earnings inequality among lawyers or doctors or among production workers?
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In terms of the actual figures, how bad is inequality in the US and, say, the UK?
Based on the work of Thomas Piketty and Emmanuel Saez, if you look from the 1950s up to the end of the 1970s, the share of total national income in the US earned by the richest 1% was about 10%. If you look at the 2000s, it’s well over 20%. It rose up to nearly 25% and then came down. In the UK it’s at about 15%, up from 7% or so. The trend towards inequality over the last 50 years has been very similar in the Anglo-Saxon economies, though it’s important to say that it’s not just an Anglo-Saxon phenomenon. There are similar trends in many economies, though there are a few that haven’t experienced it to any notable extent.
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That’s what’s interesting about Occupy Wall Street. Its supporters aren’t just crazy lefties who don’t believe in free markets, but respected economists.
I’m definitely in that camp. I do believe in markets. I passionately believe in the importance of property rights and private property. I think they are absolute sine qua nons for prosperity. But I also believe that these things are very political and the politics shouldn’t be one-sided. Gore Vidal said, “The United States has only one party – the property party. It’s the party of big corporations, the party of money. It has two right wings; one is Democrat and the other is Republican.” If that is true, that’s a real threat to a free market and a fair society. For that reason I think Occupy Wall Street is very important. It’s a grassroots movement that tries to stand up to this tendency of our political system.
Here is an excellent post by Robert Reich on his blog. I love the way he carefully lays out the logic so that when you arrive at the last sentence you realize that he has cornered the Republicans by their own screwy logic:
Every time I try to make sense of Republican tax doctrine I get lost.
For example, rank-and-file House Republicans are willing to increase taxes on the middle class starting in a few weeks in order to avoid a tax increase the very rich.
Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.
Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal. The surtax would be 3.25 percent.
This means someone who earns $1,000,001 would pay 3 and a quarter cents extra next year.
Relatively few Americans earn more than a million dollars, to begin with. An exquisitely tiny number earn so much that a 3.25 percent surtax on their earnings in excess of a million would amount to much. Most of these people are on Wall Street. It’s hard to find a small business “job creator” among them.
Nonetheless, Republicans say no to the surtax.
This puts Republicans in the awkward position of allowing taxes to increase on most Americans in order to avoid a small, temporary tax only on earnings in excess of a million dollars — mostly hitting a tiny group of financiers.
Not even a resolute, doctrinaire follower of GOP president Grover Norquist has any basis for preferring millionaires over the rest of us.
To say the least, this position is also difficult to explain to average Americans flattened by an economy that’s taken away their jobs, wages, and homes but continues to confer record profits to corporations and unprecedented pay to CEOs and Wall Street’s top executives.
So Republican leaders are trying to get rank-and-file Republicans to go along with an extended payroll tax holiday — but by paying for it without raising taxes on the very rich.
According to their latest proposal, they want to pay for it mainly by extending the pay freeze on federal workers for another four years — in effect, cutting federal employees’ pay even more deeply — and increasing Medicare premiums on wealthy beneficiaries over time.
But even this proposal seems odd, given what Republicans say they believe about taxes.
For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. That was their argument in favor of the Bush tax cuts, remember?
So if they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday? Surely it will pay for itself.
That last bit should make Republicans squirm. But it won't. They are shameless hypocrites and liars. Being caught in their big lie causes them no shame.
The reality in America today is that wages fail to keep up with inflation and all the benefits of productivity improvements go to the top 0.01% and not to the workers. This is an economic crime.
For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.
That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.
Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”
But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.
That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.
The basic bargain is over – not only at Ford but all over the American economy.
New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.
Meanwhile, corporate profits now constitute the largest share of the economy since 1929.
1929, by the way, was the year of the Great Crash that ushered in the Great Depression.
In the years leading up to the Great Crash, most employers forgot Henry Ford’s example. The wages of most American workers remained stagnant. The gains of economic growth went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt. In 1929 the debt bubble popped.
Sound familiar? It should. The same thing happened in the years leading up to the crash of 2008.
The cause of the current Great Recession is obvious. The American worker has been marginalized. They play a smaller and smaller role in the economy. As the big shots keep taking ever bigger shares of the economic pie, there is less and less money left to circulate in the economy. People can't afford to participate, so the real economy stall or shrinks. Greed has killed the goose that laid the golden eggs. How can the electorate not see this simple fact? How can they keep voting in right wing politicians who have put the country on this treadmill?
The secret actions of the US government to keep the US banking system from complete collapse are now available. You can now read the gory details of how the US government "on behalf of the taxpayers gave away $1.2 trillion on Dec. 5, 2008 and, when you add up all the "free money" the banks got, it totals $7.77 trillion.
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.
“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”
The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.
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The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”
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The Fed says it typically makes emergency loans more expensive than those available in the marketplace to discourage banks from abusing the privilege. During the crisis, Fed loans were among the cheapest around, with funding available for as low as 0.01 percent in December 2008, according to data from the central bank and money-market rates tracked by Bloomberg.
The Fed funds also benefited firms by allowing them to avoid selling assets to pay investors and depositors who pulled their money. So the assets stayed on the banks’ books, earning interest.
Banks report the difference between what they earn on loans and investments and their borrowing expenses. The figure, known as net interest margin, provides a clue to how much profit the firms turned on their Fed loans, the costs of which were included in those expenses. To calculate how much banks stood to make, Bloomberg multiplied their tax-adjusted net interest margins by their average Fed debt during reporting periods in which they took emergency loans.
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The U.S. jobless rate hasn’t dipped below 8.8 percent since March 2009, 3.6 million homes have been foreclosed since August 2007, according to data provider RealtyTrac Inc., and police have clashed with Occupy Wall Street protesters, who say government policies favor the wealthiest citizens, in New York, Boston, Seattle and Oakland, California.
The Tea Party, which supports a more limited role for government, has its roots in anger over the Wall Street bailouts, says Neil M. Barofsky, former TARP special inspector general and a Bloomberg Television contributing editor.
“The lack of transparency is not just frustrating; it really blocked accountability,” Barofsky says. “When people don’t know the details, they fill in the blanks. They believe in conspiracies.”
In the end, Geithner had his way. The Brown-Kaufman proposal to limit the size of banks was defeated, 60 to 31. Bank supervisors meeting in Switzerland did mandate minimum reserves that institutions will have to hold, with higher levels for the world’s largest banks, including the six biggest in the U.S. Those rules can be changed by individual countries.
They take full effect in 2019.
Meanwhile, Kaufman says, “we’re absolutely, totally, 100 percent not prepared for another financial crisis.”
Freedom of the press is essential to a democracy. The fact that Bush and Obama administrations fought bitterly to prevent the electorate from knowing what sweetheart deals they gave the banks should be fully understood by American citizens. The US government is deeply corrupted by the banking system.
The fact that nobody has gone to jail for the multiple trillion dollar fraud committed by banks, mortgage brokers, assessors, ratings companies, and the big Wall Street banks that "financialized" junk debt into AAA bonds that quickly went bankrupt cries out for justice. The US government is fighting this tooth-and-nail. Heads must roll. The corruption must be rooted out.
The Occupy Wall Street and the Tea Party movements both agree on this one fact: the US political system has been corrupted by the banks.
Worst of all, the ultra-rich show complete contempt for the bottom 99%, the ordinary taxpayers and working stiffs, who don't get tax cuts and "special deals" from the government:
Here is a talk by former Clinton Secretary of Labor, Robert Reich, to spell out the ugly details of the current crisis:
The tragedy is that Reagan and the Republicans laid the foundations for this crisis 30 years ago. Bush took a federal surplus and turned it into a multi-trillion dollar deficit. And now Obama has been in office for 3 years and frittered those years away without providing a big enough stimulus or working hard to get the unemployed back into jobs. America has suffered 3 decades of abuse by the 1%.
The tragedy is that Obama had the chance to take office and clean up the corruption. But he didn't. He allowed the Bush admin to walk away scott free. He has allowed fraudulent corporations to avoid justice. These crimes are behind the growing inequality in the US.
Woman Gets Jail For Food-Stamp Fraud; Wall Street Fraudsters Get Bailouts
Had a quick piece of news I wanted to call attention to, in light of the recent developments at Zuccotti Park. For all of those who say the protesters have it wrong, and don’t really have a cause worth causing public unrest over, consider this story, sent to me by a friend on the Hill.
Last week, a federal judge in Mississippi sentenced a mother of two named Anita McLemore to three years in federal prison for lying on a government application in order to obtain food stamps.
Apparently in this country you become ineligible to eat if you have a record of criminal drug offenses. States have the option of opting out of that federal ban, but Mississippi is not one of those states. Since McLemore had four drug convictions in her past, she was ineligible to receive food stamps, so she lied about her past in order to feed her two children.
The total "cost" of her fraud was $4,367. She has paid the money back. But paying the money back was not enough for federal Judge Henry Wingate.
Wingate had the option of sentencing McLemore according to federal guidelines, which would have left her with a term of two months to eight months, followed by probation. Not good enough! Wingate was so outraged by McLemore’s fraud that he decided to serve her up the deluxe vacation, using another federal statute that permitted him to give her up to five years.
He ultimately gave her three years, saying, "The defendant's criminal record is simply abominable …. She has been the beneficiary of government generosity in state court."
Compare this court decision to the fraud settlements on Wall Street. Like McLemore, fraud defendants like Citigroup, Goldman Sachs, and Deutsche Bank have "been the beneficiary of government generosity." Goldman got $12.9 billion just through the AIG bailout. Citigroup got $45 billion, plus hundreds of billions in government guarantees.
All of these companies have been repeatedly dragged into court for fraud, and not one individual defendant has ever been forced to give back anything like a significant portion of his ill-gotten gains. The closest we've come is in a fraud case involving Citi, in which a pair of executives, Gary Crittenden and Arthur Tildesley, were fined the token amounts of $100,000 and $80,000, respectively, for lying to shareholders about the extent of Citi’s debt.
Neither man was forced to admit to intentional fraud. Both got to keep their jobs.
Anita McLemore, meanwhile, lied to feed her children, gave back every penny of her "fraud" when she got caught, and is now going to do three years in prison. Explain that, Eric Holder!
Here’s another thing that boggles my mind: You get busted for drugs in this country, and it turns out you can make yourself ineligible to receive food stamps.
But you can be a serial fraud offender like Citigroup, which has repeatedly been dragged into court for the same offenses and has repeatedly ignored court injunctions to abstain from fraud, and this does not make you ineligible to receive $45 billion in bailouts and other forms of federal assistance.
This is the reason why all of these settlements allowing banks to walk away without "admissions of wrongdoing" are particularly insidious. A normal person, once he gets a felony conviction, immediately begins to lose his rights as a citizen.
But white-collar criminals of the type we’ve seen in recent years on Wall Street – both the individuals and the corporate "citizens" – do not suffer these ramifications. They commit crimes without real consequence, allowing them to retain access to the full smorgasbord of subsidies and financial welfare programs that, let’s face it, are the source of most of their profits.
Why, I wonder, does a bank that has committed fraud multiple times get to retain access to the Federal Reserve discount window? Why should Citigroup and Goldman Sachs get to keep their status as Primary Dealers of U.S. government debt? Are there not enough banks without extensive histories of fraud and malfeasance that can be awarded these de facto subsidies?
Go read the original post to get all the embedded links. These are worth following up. You need to really appreciate the "tilt" of justice in America. The makes all too obvious that there is one "justice" for the 99% and a very different "justice" for the 1%.
What surprises me is that most people don't join the protests. They simply put up with the vast and ugly injustice in American life. They continue to hope for a better day, a fairer deal. But it is a fruitless hope. Only if there is profound change in America will the bottom 99% get a chance to improve their lot. They need to fight so that they can get a fair piece of the economic pie. For 30+ years under Republican rule, the rich have gotten fabulously wealthy while the middle class has treaded water and the poor have actually become poorer. Tragic.
“... It sounds like an attempt to distract from the fact that the rich aren’t paying their fair share of tax.”
“Aha, the 1 per cent, you mean?”
“Exactly, the 1 per cent.”
“How much tax do you think they should pay?”
“Um – well, more.”
“More than what?”
“More than they are doing now!”
“How much do you think they are paying now?”
“Well, not enough.”
“We’re going in circles here. We’ve established that you’d like the rich to pay more than a quantity of tax which you admit is entirely unknown to you. It’s 27.7 per cent, by the way.”
“What is?”
“The percentage of income tax paid by the top 1 per cent of earners in the UK. It’s 27.7 per cent. I looked it up. It’s on the revenue and customs website. It’s a little fact you might find useful next time you get into a discussion about whether it should be more than that.”
“Let’s go back to this something nicer business.”
“I’ve got a five point plan. Number one is more meaningful equality of opportunity. Left-wingers have been too interested in making sure people who make very different choices end up with similar amounts of money. Right-wingers have been too glib about levelling the playing field and accepting whatever outcome the market produces. We need much more attention to the quality of nurseries and schools.”
“More easily said than done.”
“Isn’t everything? Number two, raise more taxes from environmentally damaging activities. For some reason we seem to have decided that jet fuel and domestic heating deserve a tax break, yet simply being rich is regarded as the most profound of pollutants.”
“What about the banks? They’ve been doing toxic things.”
“They have, but the idea that the cause of the crisis was simply fat cat bankers is juvenile. The financial system – its regulations, risk management and ethics – is profoundly flawed. Fixing those flaws is a hugely technical problem as well as a political one. Fighting the banking lobby is going to be necessary but not sufficient. And that’s point three.”
“Point four?”
“We need to pay serious attention to our innovation system. Patents are useful in some circumstances but seem to be distorting the computing industry. There is far too little attention being paid to ideas that really matter, such as low-carbon technology or antibiotics.”
“And point five?”
“Point five is the most ambitious of all. We need a cultural shift in parts of business. Capitalism can’t just be about trying to make money – that’s the ethics of a used car salesman or a drug dealer. Capitalism has to involve a sense of creativity, boldness and pride in a job well done. The most successful companies have usually had this and many still do – from Apple to Brompton to Zipcar – but many financial companies seem to have long ago abandoned them.”
“None of this quite amounts to the overthrow of capitalism, does it?”
“No. I think it’s going to be rather more difficult than that – and a lot more useful.”
The real and lasting success of the Occupy Wall Street movement isn't the tents cluttering up city centres. It is the fact that it has got jobs, inequality, poverty, and the shortcomings of capitalism onto the political agenda. It is helping to slowly turned the supertanker called "the state" to chart a new course for a better future than the complete freeze-up of society as the 0.01% end up with 90% of the income and 99.999% of the wealth of society. That kind of social pyramid with a handful owning everything ends democracy and destroys the economy. The rich can hire only so many servants to pad around after them braying out praises to keep their egos afloat. A real economy needs a real middle class to keep industry and innovation going.
Over the last few decades, income growth for most Americans has slowed to a crawl, while income for the very rich has exploded. That’s a reversal of the three decades following World War II, when all income groups got richer, with the poor and middle class rising at a faster rate than the rich. Crucially, the Congressional Budget Office’s new analysis shows that changes in government policy over this period have made inequality worse. (In CBO-speak: “The equalizing effect of transfers and taxes on household income was smaller in 2007 than it had been in 1979.”)
We’re not having a debate about how to reverse or even stop the growth of inequality. Nobody has a real plan to do that. The Democratic plan is to slightly arrest the growth of inequality by hiking taxes on the rich a few percentage points, so as to minimize the need to cut the social safety net. The Republican plan is to slash taxes for the rich and programs for the poor, thereby massively increasing inequality.
That is a hard position to defend in the context of exploding inequality, and conservatives would rather not defend it. Instead the right’s response has been to persistently deny or ignore the facts. Rick Perry, pressed by a reporter to explain why he was proposing a tax plan that would widen income inequality further, replied, "I don’t care about that." The Wall Street Journal editorial page today dismissed the Tax Policy Center, whose calculations persistently show the ways in which various Republican tax proposals would widen inequality, as “liberal.” It didn’t even pretend to dispute the substance of the calculations. Eric Cantor gave a speech about income inequality centering on stories about how his grandmother worked hard and pulled herself up by the bootstraps in the old days. It was a nice speech if you like stories about plucky grandmothers. It failed to grasp the central dilemma, which is that it was a lot easier for poor people to move up sixty years ago, when tax rates on the rich happened to be far higher, than it is today.
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The way to understand Ryan is that he’s deeply influenced by the theories of Ayn Rand, who believed that the root of all evil lay in attempts to alter the wealth distribution created by the free marketplace. Rand may have been a deranged cult leader, but she did live at a time when the fear of the poor devouring the rich had an actual real-world basis. She escaped communist Russia for the United States, Franklin Roosevelt — while not a reprise of the communists, as she mistakenly believed — really did denounce the rich and impose confiscatory tax rates. The world of Rand’s imagination bore a slight resemblance to the world she inhabited, but it bears no resemblance to the contemporary United States.
Ryan cannot process the realities of this world because they are so at odds with the imagined world of his ideology. After his speech, he was asked about the CBO’s report on inequality, and he brushed it off, falling back on Rand-esque lingo the virtuous rich (“takers”) and parasitic poor (“makers”):
“Let’s not focus on redistribution, let’s focus on upward mobility,” he said. “If these studies are used as justification for erecting new and more barriers for making it harder for people to rise, all that will do is reduce our prosperity in this country.”
“We’re coming close to a tipping point in America where we might have a net majority of takers versus makers in society and that could become very dangerous if it sets in as a permanent condition.
Don’t confuse Paul Ryan with the facts. If studies run up against Ryan’s ideology, then the studies must give way.
Sadly, the politics in America a deeply dysfunctional. No major party is addressing the concerns of the 99% so clearly visible in the Occupy Wall Street movement.
Here is a video that gives more "context" to the Occupy Oakland incident. It is fairly clear that the police were not threatened. Instead, you hear them reading the riot act to citizens peacefully assembled seeking a redress of grievances. Then all hell breaks loose...
Here is the specific event:
It is obvious that a government has the right to control crowds, but the legal and police authorities have to be lenient with crowds with a political grievance. Otherwise you turn a democracy into a police state where the only "right" you have is to ask "how high?" when the state tells you to "jump". That isn't freedom. That is tyranny.
The police have no right to use force in a situation where the crowd is peaceful. Even suiting up in full riot gear is provocative. It shouldn't be done. And you certainly shouldn't be carrying out "street clearing" actions under the cover of dark and a fusilade of grenades and tear gas. That is war, not policing.
Update 2011nov12: Here is an update from Veterans for Peace on the condition of Scott Olsen, the injured ex-Marine who served in Iraq and was shot by trigger-happy cops at the Occupy Oakland protests:
Adele Carpenter Updates VFP on Scott Olsen
Hi, all.
I had a chance to visit Scott this evening. He is very present, alert, and has a lot of energy. He is still struggling with speech, but is attempting conversations without having the writing instrument out. He also is doing an amazing job of staying patient with himself and didn't seem to get frustrated with himself or need to rush when trying to work out thoughts in speech. Personally, it was a huge relief to see him after last having seen him while he was sedated and in critical condition.
We did talk some business and I wanted to give an update on that.
Housing: His parents are coming tomorrow and they will be looking for a place in the South Bay near where he will be accessing outpatient treatment. He said he doesn't know if they need help looking and I agreed to call his mom tomorrow to check about how their settling here might go. He said that he and Keith will look for a place in Berkeley after his parents leave in November.
Visiting and Support: He said he doesn't want or need any formal plans for visitation, like making a schedule of folks to keep him company when he is out, and that informally scheduling visits has been fine and he will let people know if he needs something else. He doesn't have any big wishes or desires for when he gets out of the hospital. He already got to go out for Thai food, but other than that, he is just focused on getting better.
Legal: Scott is aware that allies have offered legal contacts trained in police accountability and veteran issues. I also told him that several lawyers have expressed urgency around his case and investigation being taken up. He said he is already taking care of this and that if he wants bios or contacts for those lawyers, he will let me know.
Media: Scott would like to shoot to put out a statement for Vet's day, but doesn't want to rush himself because he doesn't know how much energy its going to take when his parents arrive and also with transitioning out of inpatient over this week. If he does write something, he would like someone to look it over. I also assume he'd rely on us to disseminate any statement to press contacts. I really wanted to respect that he not push himself since there will be a lot going on the next few days. If he does write something or want help composing something, he knows that we are more than willing to line up support.
Hope that covers the business end. My overall impression was that he is both trying to take it easy, but is also able to start taking care of his affairs and knows that he can ask for support if he needs it. I'm really happy he's doing so well and seems both accepting and determined. All good news for today.
You can't believe what you read. Even the "newspaper of record" in the US, the NY Times, manipulates "the news" to present something other than the facts.
Curious Omissions from a New York Times Story on a Foreclosure Auction Protest
As readers may know, we’ve reported from time to time on efforts by community members to block specific foreclosure auctions, since this is a sign of how citizens place much less stock in the credibility of banks and legal procedures than they once did.
So we took interest in a report in the New York Times on an effort to block a foreclosure auction in Brooklyn that resulted in 9 arrests. The article made much of the fact that the protestors sang to disrupt the auction. Key extracts:
It was just after 3 p.m. Thursday in a second-floor courtroom in Brooklyn when an auctioneer announced to a crowd of about 60 people that she would begin selling foreclosed properties…..
The interruption in business as usual at the State Supreme Court building on Adams Street was staged by Organizing for Occupation, a coalition of housing advocacy groups that recently helped halt the eviction of an 82-year-old woman in Bedford-Stuyvesant in a foreclosure proceeding that the woman and her supporters said resulted unjustly from a subprime loan…
Just before 3:30, court officers announced that anyone who did not clear the courtroom would be arrested. Most of the crowd got up and departed, but about 10 singers remained. A moment later, they emerged from the courtroom into a corridor, cuffed, escorted by court officers and still singing…
Inside, spectators and would-be bidders sat on wooden benches in a hallway as they waited for the auction to resume. Among them was Michael Nicholas, 50, from Ridgewood, Queens, who said that he had been attending foreclosure auctions in Brooklyn for a decade but had never before witnessed a choir take over the courtroom.
“I was expecting the auction to begin,” he said. “Then instead I got the chorus line.”
So the protest is made to seem entertaining, harmless (if annoying to people who wanted to conduct business), and quixotic. After all, the protestors were arrested and nothing got done, right?
If you read the more colorfully written account of the same incident at the Village Voice, you’ll see the Times made some crucial omissions. The first is that the foreclosure was under dispute and may have been proceeding improperly:
Morales said that, though negotiations are reportedly on-going between Ward, the man who bought her house, the bank who sold it to him, and the state Attorney General’s office, Ms. Ward is still facing eviction. Last Tuesday, the day before a planned meeting of these parties, the current “alleged” landlord served Ms. Ward with another eviction notice, breaking the lock on her front door to get in and post it. Morales called for a renewed effort towards Ms. Ward’s “eviction patrol.”
The Voice also reports that the protest did succeed in preventing the foreclosure on Thursday. It ins’t clear whether it will be rescheduled to tomorrow, delayed further, or whether the court will decide to seek another resolution. But the effort in the courtroom did achieve a measure of success, while the Times account would lead you to believe otherwise. It’s sort of sad to see that the need to watch out for the interests of the Masters of the Universe has reached the New York Times metro desk.
When the news media is more loyal to corporate interests than they are to the truth, then they are useless and it is time for newspapers to disappear. I find it funny that newspapers all across America complain that they are losing readership. They need to look at how they have sold their readership to their advertisers and then went one step further, they sold truth down the river. They have shown themselves willing to report propaganda and pretend that it is "the news". They deserve to go belly up.
Below, you can see video of some of the protesters in the bank trying to close their accounts who are then arrested by police. That includes one woman who argues she is a customer, and allowed to be in the bank—and then she is picked up by a policeman and taken away.
Incredible!
The mouthpieces of capitalism talk about freedoms, but the freedom to close a bank account apparently isn't one of them. I'm puzzled exactly which law the banks have managed to get their bought-and-paid-for politicians to pass which makes it illegal to request that a your own bank account be closed and your money returned.
Obviously the Wall Street banks have gone one step further than simply using their politicians to siphon taxpayer dollars into the corporations. They are now simply seizing people's money directly and arresting you if you think you have some legal right to your own money!
And here they are hauling people away. I guess the banks love your money more than they love you so they will keep your money while using the police to enforce a "separation" between you and your money.
It is interesting how banks can decide some people are "legitimate" customers while others are not allowed because the bank simply refuses to let the customer into the bank building:
The banks love to set you up with mortgages with hidden charges and "gotcha" stuff. The biggest "gotcha" is they won't let you close your account!
Rather than working to allay public fear, our political leaders (with few exceptions) have manipulated it, to the point where it can be difficult to determine whether their expressions of alarm are genuine or merely opportunistic. Is it possible that many members of Congress actually believe that U.S. prisons are not secure enough to hold terrorism suspects? (And is it remotely conceivable that a member of Congress believes his own warning that if Khalid Sheikh Mohamed is brought to the United States for trial, he might be released on a technicality, granted asylum, and be on a path to citizenship?) These are arguments based on cynicism, not strength or resolve.
And that cynicism is emboldened by a political discourse that rewards those who inflate the terrorist threat and marginalizes those who accurately describe it. Thus, those who proclaim that Muslim terrorists represent an unprecedented threat to our way of life; that our existing laws, courts, and institutions—even our prisons—are inadequate in the face of this threat; that we have no choice but to dispense with core principles—including even the prohibition against torturing prisoners—to defeat this ruthless enemy; that, in short, “9/11 changed everything”—are extolled as hard-nosed realists, warriors who are willing to “take the gloves off.” By contrast, those who defend the vitality and viability of our constitutional system, who insist that our existing institutions are equal to the challenges posed by transnational terrorism; who demand that we abide by core principles, including fair trials for and humane treatment of prisoners, even if that means that terrorism suspects must be released and political leaders must be prosecuted; who, in short, do not believe that the threat of terrorism requires us to abandon our core principles—are dismissed as weak and naïve.
...
On May 26, 2011, a majority of the U.S. House of Representatives voted to give President Obama—and all future presidents—more war authority than Congress gave to President Bush two days after the 9/11 attacks: under the House bill, a president would no longer have to show a connection to 9/11, or even any specific threat to America, before using military force anywhere in the world that a terrorism suspect may be found—including within the United States. The House vote was a discordant spectacle because it sought to place the nation on a permanent war footing at a time when responsible policy-making called for the opposite.
This is must reading for Americans as they allow their civil liberties to be frittered away on endless "wars" against something that will never disappear "terrorism".
The actions of the US since 9/11 have been disreputable... except for the new policies of Obama in the Middle East, particularly in Libya, which have allowed these people to democratically fight for their rights against oppressive regimes.
With a notable exception of the enhanced interrogation program, the incoming Obama administration changed virtually nothing with respect to existing CIA programs and operations. Things continued. Authorities were continued that were originally granted by President Bush beginning shortly after 9/11. Those were all picked up, reviewed and endorsed by the Obama administration.
Frontline adds that while candidate Obama "promised a sweeping overhaul of the Bush administration’s war on terror" and "a top to bottom review of the threats we face and our abilities to confront them," Rizzo explains that, in fact, Obama officials during the transition made clear to the CIA that they intended almost complete continuity. And Rizzo was joined in this assessment today by Dick Cheney, who -- as recounted by his long-time faithful stenographer, Politico's Mike Allen -- cites this continuity to (once again) claim "vindication"; said the former Vice President, “[Obama] ultimately had to adopt many of the same policies that we had been pursuing because that was the most effective way to defend the nation.”
Pathetic. Obama promised "hope" and "change you can believe in" and "transparency" in government but he has delivered the economy over to the Wall Street bankers and the endless wars over to the Pentagon and has taken draconian steps against whistle-blowers.
Is it just me, or are the 9/11 commemorations oddly subdued?
Actually, I don’t think it’s me, and it’s not really that odd.
What happened after 9/11 — and I think even people on the right know this, whether they admit it or not — was deeply shameful. Te atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neocons wanted to fight, for all the wrong reasons.
A lot of other people behaved badly. How many of our professional pundits — people who should have understood very well what was happening — took the easy way out, turning a blind eye to the corruption and lending their support to the hijacking of the atrocity?
The memory of 9/11 has been irrevocably poisoned; it has become an occasion for shame. And in its heart, the nation knows it.
I’m not going to allow comments on this post, for obvious reasons.
Paul Krugman takes a lot of flak for telling things as he sees them. He is courageous and modest, and he has stayed in the fight despite being ignored and hated. To me, he is like an Old Testament prophet: reviled in his own land, but one day he will be recognized for his honest, heroic, and prescient stand. He's been dead right on almost every issue.
Meanwhile, for comic relief, there is Michael Moore who has done much to publicize problems and wrongs, but who can't resist putting his own ego front and centre. If you want to read something that is 180o out from Krugman's quiet stance, read this article by Michael Moore where he turns the focus off the big issue and instead focuses on "me, me, me". I like Michael Moore but I don't like his narcissistic egotism. Krugman stays at his post focused on the issues, while Michael Moore makes sure he is in the shot when he does a documentary or writes up the injustice or tragedy with his own ego front and centre. I prefer the quiet hero.
I’ve already had my say about what happened 10 years ago. I do not feel a compelling need to revisit it again and again and again.
MSNBC is replaying their September 11, 2001 broadcast; the WSJ made their entire 9/12 paper available online. Other outlets are doing similar “tributes” if thats the right word.
I don’t know if anyone else feels this way, but the relentless 9/11 coverage and tributes feels both ghoulish and exploitative. Sorry, but this is simply too much, I’ve had more than I can take of this. I do not care to spend the entire day crying, but if I watch any more of this coverage that is what will happen.
To those people who can find some consolation in this, I wish you well. Its a macabre spectacle to me. I need to find something more joyous and upbeat.
Between narcissistic egoism and bathetic maudlinism and commercial exploitation, I'm finding early September to be the doldrums of the year.
It looks as if I should say a bit more about yesterday’s anniversary. So:
The fact is that the two years or so after 9/11 were a terrible time in America – a time of political exploitation and intimidation, culminating in the deliberate misleading of the nation into the invasion of Iraq. It’s probably worth pointing out that I’m not saying anything now that I wasn’t saying in real time back then, when Bush had a sky-high approval rating and any criticism was denounced as treason. And there’s nothing I’ve done in my life of which I’m more proud.
It was a time when tough talk was confused with real heroism, when people who made speeches, then feathered their own political or financial nests, were exalted along with – and sometimes above – those who put their lives on the line, both on the evil day and after.
So it was a shameful episode in our nation’s history – and it’s one that I can’t help thinking about whenever we talk about 9/11 itself.
Now, I should have said that the American people behaved remarkably well in the weeks and months after 9/11: There was very little panic, and much more tolerance than one might have feared. Muslims weren’t lynched, and neither were dissenters, and that was something of which we can all be proud.
But the memory of how the atrocity was abused is and remains a painful one. And it’s a story that I, at least, can neither forget nor forgive.
It is hard to believe, but US banks continue to create forged documents in order to foreclose on properties. This was exposed well over a year ago, and it is still going on. Worse, the Obama administration is presuring New York to join 49 other states in doing a deal to collect a few billion dollars as a "fine" and then declare that what was done was done and no criminal prosecutions will be launched. That is insane given the news that these crimes continue even as the negotiations with Obama's Justice Department and the Attorney Generals of all 50 states are in progress.
• The practice continues a year after the companies were caught in the robo-signing scandal, even as the industry has been negotiating a settlement with state attorneys general re: loan-servicing abuses.
• Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.
• Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.
• North Carolina consumer bankruptcy lawyer O. Max Gardner III says servicers and trustees often submit promissory notes in court without proper endorsements, which show the chain of title from one lender to another. Then, after the fact, there will be “a magically appearing note with a stamped endorsement,” Gardner said.
• When plaintiff’s lawyers then try to depose the person whose name is stamped on the endorsement, “we’re being told the person is no longer employed by the servicer or by the party for whom they signed,” Gardner says.
• Linda Tirelli, a New York bankruptcy lawyer, calls such mortgage documents “Ta-Da!” assignments because they seem to appear out of nowhere.
This is why a full investigation must be absolutely mandatory prior to any settlements with the lenders or servicers.
It is absolutely disgusting that Obama has refused to go after the banks that caused the $11 trillion collapse in the US economy. Not one single prosecution. And here, in the dust of the financial meltdown, the same banks are now out creating more crimes as they try to collect on mortgages for which they have lost the paperwork. They are simply creating forgeries to seize properties for which they do not have the proper legal paperwork. In polite society that is call "theft" and Obama is not only turning a blind eye, he is putting pressure on NY to going 49 other states to take a payoff to close the books on these crimes and let the banks off the hook. That would be bad enough by itself, but to put this pressure on the "close the books" while the banks continue to commit the same crimes again and again and again is simply unconscionable. I have lost all respect for Obama. He is pushing to hide crimes while the crimes continue!
The US government loves to lecture other people around the world, but seem constitutionally unable to apply the most basic concepts of "rule of law" to themselves. Here is a bit from a post by Glenn Greenwald in Salon magazine:
Less than three years ago, Dick Cheney was presiding over policies that left hundreds of thousands of innocent people dead from a war of aggression, constructed a worldwide torture regime, and spied on thousands of Americans without the warrants required by law, all of which resulted in his leaving office as one of the most reviled political figures in decades. But thanks to the decision to block all legal investigations into his chronic criminality, those matters have been relegated to mere pedestrian partisan disputes, and Cheney is thus now preparing to be feted -- and further enriched -- as a Wise and Serious Statesman with the release of his memoirs this week: one in which he proudly boasts (yet again) of the very crimes for which he was immunized. As he embarks on his massive publicity-generating media tour of interviews, Cheney faces no indictments or criminal juries, but rather reverent, rehabilitative tributes ...
That's what happens when the Government -- marching under the deceitful Orwellian banner of Look Forward, Not Backward -- demands that its citizens avert their eyes from the crimes of their leaders so that all can be forgotten: the crimes become non-crimes, legitimate acts of political choice, and the criminals become instantly rehabilitated by the message that nothing they did warrants punishment. That's the same reason people like John Yoo and Alberto Gonzales are defending their torture and illegal spying actions not in a courtroom but in a lush conference of elites in Aspen.
The U.S. Government loves to demand that other countries hold their political leaders accountable for serious crimes, dispensing lectures on the imperatives of the rule of law. Numerous states bar ordinary convicts from profiting from their crimes with books. David Hicks, an Australian citizen imprisoned without charges for six years at Cheney's Guantanamo, just had $10,000 seized by the Australian government in revenue from his book about his time in that prison camp on the ground that he is barred from profiting from his uncharged, unproven crimes.
By rather stark contrast, Dick Cheney will prance around the next several weeks in the nation's largest media venues, engaging in civil, Serious debates about whether he was right to invade other countries, torture, and illegally spy on Americans, and will profit greatly by doing so. There are many factors accounting for his good fortune, the most important of which are the protective shield of immunity bestowed upon him by the current administration and the more generalized American principle that criminal accountability is only for ordinary citizens and other nations' (unfriendly) rulers.
Here's an interview with Glenn Greenwald. He comes in at 2:50 into the video:
I get the heebie-jeebies when I watch Dick Cheney. He now takes his place in the depressing line of never-punished US war criminals, e.g. Nixon, Kissinger, Oliver North, Reagan, etc.
It is truly amazing to watch the dysfunctional American political system and at the same time hear Americans pat themselves on the back for their "wonderful democracy" and boast about being a "city on the hill" for the rest of the world. Lordy, lordy... are they ever delusional!
For me the 1980s were a nightmare. America fell in love with the TV show Lifestyles of the Rich and Famous. I found it wretched to think that people "adored" the rich because of their wealth. But the era from 1980 to now has been marked by this deference to the rich and powerful
People need to wake up from their illusions. This story from CNN should help. Here is yet another story of "lifestyles of the rich and famous" where the curtain is peeled back and you can see the corruption and meanness and the evil that lurks behind the glitter:
As we were about to leave, one of the staff told us there was a nanny who worked for Hannibal Gadhafi who might speak to us. He said she'd been burnt by Hannibal's wife, Aline.
I thought he meant perhaps a cigarette stubbed out on her arm. Nothing prepared me for the moment I walked into the room to see Shweyga Mullah.
At first I thought she was wearing a hat and something over her face. Then the awful realization dawned that her entire scalp and face were covered in red wounds and scabs, a mosaic of injuries that rendered her face into a grotesque patchwork.
Even though the burns were inflicted three months ago, she was clearly still in considerable pain. But she told us her story calmly.
She'd been the nanny to Hannibal's little son and daughter.
The 30-year-old came to Libya from her native Ethiopia a year ago. At first things seemed OK, but then six months into her employment she said she was burned by Aline.
Three months later the same thing happened again, this time much more seriously.
In soft tones, she explained how Aline lost her temper when her daughter wouldn't stop crying and Mullah refused to beat the child.
"She took me to a bathroom. She tied my hands behind my back, and tied my feet. She taped my mouth, and she started pouring the boiling water on my head like this," she said, imitating the vessel of scalding hot water being poured over her head.
She peeled back the garment draped carefully over her body. Her chest, torso and legs are all mottled with scars -- some old, some still red, raw and weeping. As she spoke, clear liquid oozed from one nasty open wound on her head.
After one attack, "There were maggots coming out of my head, because she had hidden me, and no one had seen me," Mullah said.
Eventually, a guard found her and took her to a hospital, where she received some treatment.
But when Aline Gadhafi found out about the kind actions of her co-worker, he was threatened with imprisonment, if he dared to help her again.
"When she did all this to me, for three days, she wouldn't let me sleep," Mullah said. "I stood outside in the cold, with no food. She would say to staff, 'If anyone gives her food, I'll do the same to you.' I had no water -- nothing."
Her colleague, a man from Bangladesh who didn't want to give his name, says he was also regularly beaten and slashed with knives. He corroborated Mullah's account and says the family's dogs were treated considerably better than the staff.
Mullah was forced to watch as the dogs ate and she was left to go hungry, he said.
It seems to sum up how the workers at the beachside complex were viewed by the Gadhafi family.
This is definitely beyond the Queen of Mean, Leona Helmsley, who was a darling of Robin Leach and his unctuous program Lifestyles of the Rich and Famous.
The problem with a society where a few are fabulously weathy and many are dirt poor is that the rich become unhinged. They develop delusions of grandeur and think they deserve what they have and turn ugly and mean toward those who are not so "blessed" with the goodies of life. This is a sickness.
Sadly, America has fallen to this illness and is still running a fever. I hoped that with the election of Barack Obama the fever would break, but it hasn't. I know it must and will some day. I wish it were sooner rather than later. But for now, the disease is still running wild in the soul of America.
