Ugly and Getting Uglier

The following chart speaks volumes about what has been going on in the U.S. for the last 20 or so years. The fat cats are getting fatter and the rest of us are getting screwed. This is what money in politics translates into when all is said and done. If we don't get the GOP out of government as well as all those Democrats beholding to big money then we have no one to blame but ourselves.
Get out and vote in 48 days and vote Democratic. It won't solve all the problems but it might let us begin to focus on them.  h/t to Digby

Populist and Refreshing

It is nice to see Democrats taking the lead for a change. Barbara Lee has introduced HR199 to address the "backward incentives" corporations have that allow them to deduct the costs of executive compensation. You can read the details at the Orange Satan.

Under the current rules, the more a firm pays its CEO, the more the firm can deduct from its taxes.
To be clear, corporations can compensate their executives as much as they’d like. The idea is to prevent corporations from passing the buck to the American taxpayers.
My bill would eliminate a “backward” incentive for excessive compensation, which the bill defines as more than 25 times that of the lowest paid workers at the company.

This is a good thing and there is a petition at the above link if you think so too.

Wall Street Has Found Another Way To Screw Us

Just read this in the AJC this morning. Have to go to work so I don't have time for a long post but this just really pisses me off. Goldman Sachs and aluminum warehouses.

But We're the Richest Nation Right?

Not so much. We've got a lot of billionaires but that comes at the expense of the rest of us. As the 1% get richer the rest of us get poorer. In fact, when compared to other developed countries, when it comes to per-adult median wealth, we rank #27:

Country Median Wealth per Adult
1. Australia $193,653
2. Luxembourg $153,967
3. Japan $141,410
4. Italy $123,710
5. Belgium $119,937
6. United Kingdom $115,245
7. Iceland $ 95,685
8. Singapore $ 95,542 (non-OECD)
9. Switzerland $ 87,137
10. Denmark $ 87,121
11. Austria $ 81,649
12. Canada $ 81,610
13. France $ 81,274
14. Norway $ 79,376
15. Finland $ 73,487
16. New Zealand $ 63,000
17. Netherlands $ 61,880
18. Ireland $ 60,953
19. Qatar $ 57,027 (non-OECD)
20. Spain $ 53,292
21. United Arab Emir. $ 47,998 (non-OECD)
22. Taiwan $ 45,451 (non-OECD)
23. Germany $ 42,222
24. Sweden $ 41,367
25. Cyprus $ 40,535 (non-OECD)
26. Kuwait $ 40,346 (non-OECD)
27. United States $ 38,786

If you take a close look at the list you will see that all the "socialist" countries...you know...the ones that provide everyone with healthcare and all that crap are, in many cases, well ahead of us. Even poor old Cyprus, who got "gang banged" by Germany and the rest of the EU and even struggling Spain are better off than the average American.The secret is that this is all a result of the great American idea that making more money from money is more important than making anything real.

You can read more about this over at Firedoglake.

The Need For Some Balance

If you, unlike me, shop at Wal-Mart because of the low prices and you have to make each dollar go as far as it can, that's cool and understandable but please so so with the knowledge that, while necessary, it is a dance with the devil. Know that each one of your hard earned dollars is feeding a beast that is successful, in large part, because taxpayers are subsidizing there operations since most employees can't survive on Wal-Mart wages without public assistance in various forms.

Also keep in mind the following:

The six human beings who are heir to the Wal-Mmart fortune have as much wealth as the bottom 40% of all Americans combined. That’s six people on one side of the scale and approximately 125,600,000 on the other. Read the second number carefully and say it aloud. "One Hundred Twenty Five Million Six Hundred Thousand".

Never forget that each dollar you spend is a vote for the kind of world you want to live in.

So, if you have to buy stuff at Wal-Mart for whatever reason just do so with an open mind and don't let the resident evil that you can sense when you walk through the doors overwhelm you while you are there.

Hunger Is Growing

While you're (maybe) contemplating your big Memorial Day cookout whether it be burgers or whatever don't think about this article in The Atlantic which discusses the current state of hunger in most of the developed countries of the world. We know, even though we rarely dwell upon it, that people are starving by the thousands in such places as Africa and the Middle East or India but we don't think of the U.S. as a place for hunger....wrong!

Nearly a Quarter of People in Greece and the U.S. Can't Afford Food

Hunger has grown dramatically in Europe since 2007

Olga Khazan May 23 2013, 1:09 PM ET

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A Greek man eats food distributed by the Athens Municipality on January 30, 2012. (Yannis Behrakis/Reuters)

No matter where you're from, not having enough to eat is the ultimate signifier of economic distress. Food is the base of Maslow's hierarchy. It's the first concern in disaster zones. It's usually the last thing to go -- after the car and the nice apartment -- when you lose your job.
If you can't afford food, there's really nowhere to go but up. That's why it's so shocking just how many more hungry people there are now in what were formerly known as the world's well-off nations. According to a new Pew report released today, almost a quarter of people (24 percent) in the United States and Greece answered "yes" to the question, "Have there been times during the last year when you did not have enough money to buy food your family needed?"
The levels in other Western countries weren't quite that high, but the rate at which hunger has swept the eurozone since 2007 is still really dramatic:

Good News Not

If you have any money in stock market maybe via a 401K or something I'm sure you are pleased that it has returned to 2000 levels with its run up yesterday...Congratulations you are where you were 13 years ago.

Seriously, it is really difficult to get all giddy about the about the Dow going over 14,000.  Robert Reich doesn't feel to giddy either, and explains why.

The key thing to note is that only the wealthiest 1% in this country make any profit off the stock market and are better off than they were 13 years ago. They also pay very low, if any, taxes on said profits. The rest of us (you know the other 99%) are actually worse off than we were in 2000 and we pay the full boat in taxes even on our minimum wage job.

Wally World Is A Bad, Bad Place

Those of you that have been visiting here for anytime know how I feel about Wal-Mart. I don't shop there and discourage anyone I know from shopping there. They are a bad, bad company. There is a post up at Crooks and Liars that gives a glimpse of how bad they actually are.

For those of you who say that you have to shop at Wally World to take advantage of the low prices you should really take a hard look at how much the "low prices" and accompanying low wages actually cost you in increased taxes. Just sayin'.

Yeah, yeah I work part time for Home Depot which in a lot of ways isn't much different from Wal-Mart in their personnel practices. I'm in the same boat as the 1.4 million Wal-Mart workers in that I need the job for health insurance what I don't have in common is that I don't need the job to eat or keep a roof over my head.

Robotic Versus Gaian

Eric Liu and Nick Hanauer have an interesting article in the NYT "The Machine and the Garden" that brings up an interesting and, I think, a valuable notion. Our use of mechanistic metaphors when talking about government, economics and society in general drive our thinking in the wrong direction. They use the neologisms "Machinebrain and Gardenbrain" to separate the two ways of thinking about how things work and it really does make sense and it has been something I have thought about a lot over the years. The economy and society more resembles a garden than a machine, and it needs to be fertilized and cultivated more than it needs to be lubricated and tuned.

What we require now is a new framework for thinking and talking about the economy, grounded in modern understandings of how things actually work. Economies, as social scientists now understand, aren’t simple, linear and predictable, but complex, nonlinear and ecosystemic. An economy isn’t a machine; it’s a garden. It can be fruitful if well tended, but will be overrun by noxious weeds if not.

In this new framework, which we call Gardenbrain, markets are not perfectly efficient but can be effective if well managed. Where Machinebrain posits that it’s every man for himself, Gardenbrain recognizes that we’re all better off when we’re all better off. Where Machinebrain treats radical inequality as purely the predictable result of unequally distributed talent and work ethic, Gardenbrain reveals it as equally the self-reinforcing and compounding result of unequally distributed opportunity. 

This is good way to think and while I am not to keen on the ugly  "machinebrain/gardenbrain" terms and would prefer something a little less barren on the order of "Robotic/Gaian" it does provide what I consider a  much more positive and constructive alternative for economic reality. What is even more important is that it happens to fit the facts far better than the right-wing/libertarian machine models which are leading us rapidly down the path to a major catastrophe. I would venture to say that if we and our leaders started thinking more about the "ecosystem" that is the reality of our society and economies we would begin to see a lot more constructive things begin to happen. If the mechanistic thinking and insistence that the whole thing is a "zero sum game" where if one wins another loses were to turn into a recognition that we all can win in a healthy, ecologically balanced system we could do nothing but generate a positive change. It also doesn't hurt that this whole way of thinking fits pretty closely with my overall Buddhist, Gaian, and Pagan belief system.

Happy Fourth of July

Independence Day so a lot of people get the day off including yours truly. Around here we are going to fall off the diet regimen for the day as I scored some pork spare ribs at the ridiculously low price of $2 a pound. Low and slow ribs over a hardwood fire are on the menu for today as well as some fresh veges from the garden including heirloom tomatoes, of course. We had a nice little rain last night and more thunderstorms are predicted for this afternoon so I'll the get ribs on in a bit so that they will have the requisite 6 hours or so. Everybody have a safe and fun holiday.

Oh, and as Bryan at Why Now? reminds us...yes we declared our independence way back in 1776 but it wasn't until 1964 and the Civil Rights Act that a lot of Americans were actually approaching "independence" and the reality is that we still aren't fully there. A lot of folks are suffering from the economy, ongoing discrimination and other injustices and while the shackles aren't iron they bind the souls just as firmly. Life, Liberty and the pursuit of Happiness taken in its full measure means the freedom from want for the basic necessities, freedom from the fear that one illness can destroy your family economically forever. The founding principles of our country, while drowned in the insanity of  today's political chicken dance, were that all citizens are vested with inalienable rights and that with those rights comes a responsibility to contribute to ones best ability in the governance and success of our society. Working for the common good, helping our fellow countrymen realize the best that our system can offer is what this is all about. The escalating economic disparity and insanity in the country is making the dreams of our fathers and grandfathers a more distant goal each day but they are not out of site yet. Maybe today would be a good day to remember the dreams and think about what we might do to bring them a little closer.

Surprise

The latest news that our elected representatives are richer and that we are poorer is one of those "duh" pieces of news. Why else do they vote to protect the 1% over the 99%? They are part of the 1%...duh!

They're Laughing At Us

Now that  Bloomberg LP, the parent of Bloomberg News won their court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC we now know just how much the our overlords got from the Fed while the rest of us saw our jobs and savings go away and the economy tanked..

Remember that Fed Chairman Ben S. Bernanke argued that revealing borrower details would create a stigma as investors and counter parties would avoid firms that used the central bank as lender of last resort.

The amount of money the central bank parceled was staggering.  Including  guarantees and lending limits the Fed committed $7.77 trillion as of March 2009 to rescuing the financial system. Do the math and you will see that that is more than half the value of everything produced in the U.S. that year. It dwarfs the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP.

All the while these SOB's were taking the equivalent of half of the U.S. GDP the were loudly whining and screaming about socialism and government involvement in the markets.

This revelation should make the average Joe insanely mad and disgusted, especially if they also reveal that nothing has changed at the "too big to fail" banks. They are still sucking billions out of the economy with shady, high risk deals and exotic debt instruments and not adding any real value. What happens during the next crisis? You know there will be one since nothing has changed.

You can also bet that they are laughing at us rubes because they know that we are going to re-elect their enablers next year and the party will continue.

What The 1% Do with Their Pocket Change

Via Greg Sargent, Vanity Fair has a long, very positive piece on Elizabeth Warren, “The Woman Who Knew Too Much“:

... At a time of record corporate profits, a time when 14 million Americans are out of work, when millions have lost their homes and, according to the Census Bureau, the ranks of those living in poverty has grown to one in six—that Elizabeth Warren could be publicly kneecapped and an agency devoted to protecting American consumers could come under such intense attack is, ultimately, the story about who holds power in America today.

When the C.F.P.B. was first proposed to Congress, in early 2009, the Chamber of Commerce, the leading business lobbying group in the country, announced that it would “spend whatever it takes” to defeat the agency. According to the Center for Public Integrity, from 2009 through the beginning of 2010, it would be one of the biggest spenders among the more than 850 businesses and trade groups that together paid lobbyists $1.3 billion to fight financial reform…

According to the Center for Responsive Politics, in 2010 the financial industry flooded Congress with 2,565 lobbyists. They were financed by the likes of the Financial Services Roundtable, which, according to the Center, paid lobbyists $7.5 million, and is on its way to spending as much or more this year. The Chamber of Commerce spent $132 million on lobbying Washington in 2010. The American Bankers Association spent $7.8 million. As for individual banks: JPMorgan Chase, which received $25 billion in TARP funds from taxpayers, spent nearly $14 million on lobbying during the 2009–10 election cycle; Goldman Sachs, which received more than $10 billion from taxpayers, spent $7.4 million; Citigroup, which was teetering on the brink of insolvency and received a $45 billion infusion, has paid more than $14 million to lobbyists since 2009. And none of this money includes the direct campaign donations these organizations, and their surrogates, made to members of Congress.

The banks “do not like to lose,” says Ed Mierzwinski, of the National Association of State Public Interest Research Groups, which was part of the grossly outmatched consumer coalition that managed to scrape together a paltry $2 million to lobby in favor of reform…

You know they are spending a lot to keep their shell game going but when you see the hard numbers it kind of leaves you breathless. We are so owned by the oligarchy. Oh, and this is part of what Occupy Wall Street is about.

Getting There

I must say I am encouraged by the latest tack taken by the White House. Is the hope for a happy honeymoon with the insane GOP over finally? All indications are that the President has finally realized that no matter how much he bends it won't be enough for the Republicans whose only goal in life is to insure he is a one term president. Of course, regardless of how defiant the President is and how firm he is on standing his ground with respect to progressive issues the GOP ain't going to budge.

You do have to love the President's line from yesterday..."It's not class warfare. It's math."

GOP Fantasy

This is not a surprise. If you can add 2+2 and come up with 4 this is not magic.  Lo and behold austerity, it turns out, is contractionary. What the Hell!

In a new paper for the International Monetary Fund, Laurence Ball, Daniel Leigh and Prakash Loungani look at 173 episodes of fiscal austerity over the past 30 years—with the average deficit cut amounting to 1 percent of GDP. Their verdict? Austerity “lowers incomes in the short term, with wage-earners taking more of a hit than others; it also raises unemployment, particularly long-term unemployment.”

More specifically, an austerity program that curbs the deficit by 1 percent of GDP reduces real incomes by about 0.6 percent and raises unemployment by almost 0.5 percentage points. What’s more, the IMF notes, the losses are twice as big when the central bank can’t cut rates (a good description of the present.) Typically, income and employment don’t fully recover even five years after the austerity program is put in place.

There’s also a class dimension here: A deficit cut of that size tends to cause real wage income, where lower-income folks get their money, to shrink by 0.9 percent, whereas rents and profits, which higher-income folks depend on, decline by just 0.3 percent. And, as the chart on the right shows, profits tend to bounce back faster than wages.

Some austerity programs can be harsher than others. The IMF study notes that plans to reduce the deficit can be particularly brutal if central banks “do not or cannot blunt some of the pain through a monetary policy stimulus.” (In 1992, Italy and Finland took steps to rein in their deficits but mitigated the discomfort by depreciating their currencies and boosting exports.) Meanwhile, if multiple countries are all carrying out austerity at the same time, the overall pain is likely to be greater. This sums up the current debt crisis in the euro zone: Individual euro member states can’t depreciate their own currencies because they’re all on the euro; the European Central Bank isn’t providing much monetary stimulus; and the economically ailing countries are all dragging one another other down.

As Krugman says:

In the first half of last year a strange delusion swept much of the policy elite on both sides of the Atlantic — the belief that cutting spending in the face of high unemployment would actually create jobs. I went after this stuff early and hard (I suspect that the confidence fairy will be one of my lasting contributions to economic discourse); still, it’s good to have a steadily mounting weight of evidence about just how wrong that view was.The latest entry is a comprehensive review of past episodes of austerity by economists at the IMF, from which the figure above is taken. Yes, contractionary policy is contractionary. And as the authors point out, it’s probably even more contractionary than usual under current conditions...Unfortunately, austerity programs are now the rule everywhere; even if the new Obama plan became law, which it won’t, it would only slow the pace of fiscal consolidation in America, and there’s nothing like it even on the table elsewhere.

I actually don't know why I am posting this since pretty much everyone who stops by here has a brain but I thought it important.

Day of Reckoning

Since I am taking my Labor Day morning off to catch up on my reading I though I would share another worthwhile article. This one from John Lanchester in the London Review of Books discussing the current state of the Euro and the the global economy. It isn't pretty.

The GOP Is Winning

In their never ending campaign to make the American economy as miserable as possible before the 2012 election, which will give them a shot at the presidency, the GOP won another battle today. This lousy jobs report is going to hurt and the markets have already responded with the DOW down a couple of hundred points at the bell. Bummer! While their efforts are as transparent as glass the electorate will wind up blaming Obama for the lousy economy and while we teeter on the brink of another recession I'm sure the PTB within the GOP are figuring out the best way to push us over the edge.

There Went Any Progress in 2011

The dramatic fall in the market yesterday wiped out all of the gains in recent history. Investors fled to treasuries and gold. Treasuries are in effect a negative investment when you consider inflation but they are a safe haven. It's not like we haven't been here before. Way back in 1936 FDR tried to attack the deficits created by his New Deal and we promptly fell back into recession. We know what works and what doesn't work but that doesn't seem to come into play when you are dealing with the Jesus and  the Triceratops Tea baggers. Never let it be said that facts and experience get in the way of insane beliefs. The market may be over reacting but the investors know that we are teetering on the brink of falling back into a recession and they are bailing.

I think is safe to say that we haven't seen the end of all this. Yeah, they are saying that today's job report is better than expected but adding 117,000 jobs doesn't even keep up with the new folks coming into the labor pool.

One good point is the latest polling shows that the American people are properly blaming the GOP and tea baggers for the sorry state of affairs.

Not Rational

I don't why I keep expecting something rational to happen with respect to the debt ceiling deal. Rational things happen when rational people come together and hammer out reasonable compromise. In the debt ceiling talks we don't have this. What we do have is a politically centrist White House trying to reach a rational compromise with irrational people(meaning the ultra conservative/teahadist bunch). This is no different than the discussions over climate change. One side, the rational one, has the backing of the facts and consensus of  an overwhelming majority of scientists. There is no question that human activity is having a negative effect on global climate and that it is getting more serious. That's the real world. On the other hand you have the climate change deniers who, in spite of all evidence otherwise, are insisting that just the opposite is true. They have a separate reality that is not based on fact and observable phenomena and to try to reach some rational agreement is impossible...they are not in the same universe. The same applies to the debt ceiling talks. The radical right doesn't agree with a majority of the world's economists and insist that the debt ceiling is no big deal...they are living in a separate reality untouched by facts and figures and therefore can't be reasoned with. We should expect the worse but I will say that were I Mr. Obama I would just rule the debt ceiling doesn't exist by virtue of the "full and credit" language in the Constitution and dare anyone to challenge me. The majority of the American people believe this and would back the President.

Speaking of Crunch

Well, another week ends with no real movement on raising the debt ceiling. It sure would be nice to be like the GOP and decide that in spite of running up huge debts on your credit cards you can just decide to not pay them. People just don't seem to be talking about the fact that we are not talking about NEW spending just about paying for spending already committed to by Congress. Two wars, a huge tax cut and a Medicare drug bill all on the old plastic.
It is not looking like there will be any resolution either and if there is I am not taking bets on who will blink but as batshit crazy as the GOP is I doubt it will be them. It is going to get ugly.