Saturday, February 27, 2010

The Great American Bank Robbery

By Joseph Stiglitz, W. W. Norton & Company
Posted on February 27, 2010, Printed on February 27, 2010

The following is Part I of a two-part excerpt from Freefall: America, Free Markets, and the Sinking of the World Economy by Joseph Stiglitz ( W.W. Norton & Co., 2010). Read AlterNet's recent interview with Stiglitz by Zach Carter.

Bankruptcy is a key feature of capitalism. Firms sometimes are unable to repay what they owe creditors. Financial reorganization has become a fact of life in many industries. The United States is lucky in having a particularly effective way of giving firms a fresh start—Chapter 11 of the bankruptcy code, which has been used repeatedly, for example, by the airlines. Airplanes keep flying; jobs and assets are preserved. Shareholders typically lose everything, and bondholders become the new shareholders. Under new management, and without the burden of debt, the airline can go on. The government plays a limited role in these restructurings: bankruptcy courts make sure that all creditors are treated fairly and that management doesn't steal the assets of the firm for its own benefits.

'Death of American Capitalism:' The 10 final scenes

Commentary: Munger warns 2012 is our tipping point on 'road to ruin'

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- Good news, Americans are "downbeat about today. Upbeat about tomorrow," says the latest USA Today/Gallup Poll. "Americans feel battered by hard times, record home foreclosures, stubbornly high unemployment rates and war."

And yes, we are "fed up with Washington and convinced more than 3 to 1 that the nation is heading in the wrong direction," yet there's "confidence that there will be better times ahead, that the classic American dream endures and hasn't been extinguished. It's not even at its low ebb." Why? Because we're in denial!

Joseph Stiglitz: Bankers Made Reckless Bets on the Economy, Knowing Taxpayers Were Going to Pick up the Tab

By Zach Carter, AlterNet
Posted on February 25, 2010, Printed on February 27, 2010

Nobel Prize-winning economist Joseph Stiglitz has served as the Chairman of President Bill Clinton's Council of Economic Advisers and Chief Economist for the World Bank. He has been a persistent critic of free-market economics, whose recent book Freefall: America, Free Markets, and the Sinking of the World Economy (W. W. Norton & Co., 2010) traces the roots of the financial crisis and details the government's flawed response. Dr. Stiglitz discussed the crash of '08 in an interview with AlterNet economics editor Zach Carter.

Zach Carter: How did we get here?

Joseph Stiglitz: Well, there are so many pieces that contributed to our getting here that it's hard to distill into something simple, but the bottom line is that the banks acted recklessly in their lending, in their gambling, in their management of risk. They made bad judgments about credit worthiness. In a sense, they failed their core societal function of allocating capital and managing risk. They misallocated capital and they mismanaged the risk. What I tried to do with the book is peel back the onion and ask – this is not the way capitalism supposed to work – why did things happen so badly? And here there are a number of factors. One of them was that the bankers had the incentive to engage in short-sighted behavior and excessive risk-taking. You have to ask, "Why is that?" And the answer has to do with problems of corporate governance and a host of other problems that I try to delineate in the book.

Friday, February 26, 2010

Tax Fraud

Debunking the claim that higher income-tax rates reduce GDP.

By Eliot Spitzer

The American debate over taxes is ferocious and highly partisan. Some, mostly Republicans, reflexively oppose all taxes. Others, mostly Democrats, decry the lack of progressivity and fairness in the tax system and favor higher tax rates for the wealthy.

This debate isn't new. The same arguments have been repeated, with the same passion, since our income tax system was created—first during the Civil War and then—after its initial rejection by the Supreme Court—following the ratification of the 16th Amendment in 1913. A wonderful book by Steven Weisman, The Great Tax Wars, brings this history to life.

But as Weisman makes clear, one thing has changed in a spectacular manner, and that is the American public's—and American politicians'—willingness to defend high marginal income-tax rates as an essential and proper way to pay for the cost of government. Until a generation ago, many Americans and their representatives argued vehemently that the wealthy ought to pay more in taxes, but that position has drastically declined in popularity. Weisman sets the debate in the context of the battle between those who invoke justice—progressive taxes create equity and hence justice—and those who invoke virtue—the belief that hard work should be rewarded and taxing higher income at an elevated level creates a disincentive to the hard work we should promote.

The Rising Toll Of Wall Street's Global War

Deflating The Middle Class Dream

The dream of the middle class is that the majority of people will be able to comfortably cover their basic needs by working a reasonable number of hours at a probably unspectacular, but useful and therefore, respectable, job. A middle class life means a secure place to live, good food to eat, adequate medical care, the ability to purchase clothing and transportation services suitable to maintaining employment, and a stable environment for your children to grow up in so they can do as well or better [1].

Today, the entire concept of the middle class is being effectively scrapped in an environment where that level of economic security may often require desperate measures [2], or a six-figure income [3]. Why? Because no new jobs were created between 1999 and 2009 [4], completely deflating the wage economy.

In Avedon Carol's words, "Our owners are telegraphing that some magic formula dictates [5] that we have to be made miserable. Of course, what's making us miserable isn't magic - it's them." Productivity will likely continue to rise [6], but its benefits won't be shared [7] down the economic ladder [8], they'll be used as collateral to cash out productive enterprises [9] and fire their workers.

The Unemployed Now Have Their Own Union, and It's Catching on Quickly

By Harry Kelber, Labor Educator
Posted on February 24, 2010, Printed on February 26, 2010

It's been only a month that a union for the unemployed has come into existence through an ingenious grassroots organizing campaign. In case you haven't heard about it, the union's name is "UR Union of the Unemployed" or its nickname, "UCubed," because of its unique method of organizing.

UCubed is the brain-child of the International Association of Machinists and Aerospace Workers (IAM), whose leaders feel that the millions of unemployed workers need a union of their own to join in the struggle for massive jobs programs.

Exposing the Great American Bubble Barons: Join Us in the Investigation

Join AlterNet's collective investigative project into the bubble barons who got obscenely rich as they destroyed our economy. Help hold them accountable with Citizen Journalism.

February 24, 2010 | A century ago, the robber barons at the helm of the U.S. economy were easily identifiable titans of industry: Andrew Carnegie of Carnegie Steel, John D. Rockefeller of Standard Oil, financier and steel magnate J.P. Morgan. It was easy to draw the link between the robber barons' brutal business practices and their immense wealth; it was clear that these businessmen were, quite literally, robbing the American people in the course of amassing their fortunes.

Saturday, February 20, 2010

Roots key to second Green Revolution

Root systems are the basis of the second Green Revolution, and the focus on beans and corn that thrive in poor growing conditions will help some of the world's poorest farmers, according to a Penn State plant scientist.

Republicans Consistently Turn To Lobbyists For Strategies To Block And Kill Legislation

Yesterday, The Hill reported that Senate Majority Leader Harry Reid (D-NV) may not have the votes to begin debate on a $15 billion jobs package. Reid, for his part, is reaching out to Sen. Scott Brown (R-MA), in the hopes that he will provide support to overcome a GOP filibuster. A Reid spokesman said simply that “the vote is in the hands of Republicans.”

However, as Roll Call reported, the Senate Republican leadership is trying to persuade members to simply block the legislation. And this push comes after the GOP spent an afternoon huddled with more than 100 lobbyists, trying to figure out how to react to Reid’s bill:

Senate Republican leadership staff are huddling with K Streeters this afternoon over Senate Majority Leader Harry Reid’s (D-Nev.) decision to forgo a bipartisan jobs package in favor of a smaller, targeted plan…The business community has been up in arms since Reid decided to ditch a bipartisan job-creation bill last week.

Rachel Maddow fact checks conservative conference

By David Edwards and Muriel Kane
Friday, February 19th, 2010 -- 11:42 am

MSNBC's Rachel Maddow is attending the Conservative Political Action Conference this week and reporting back to the rest of the country on what she described Thursday as "the biggest single event on the conservative calendar that is not Ronald Reagan's birthday."

Maddow focused in particular on the numerous Republican politicians who showed up to woo conservative activists, noting wryly that "their courting of the CPAC audience today did not apparently extend to making sure that what they told that audience was true."

Paul Krugman: California Death Spiral

Published: February 18, 2010

Health insurance premiums are surging — and conservatives fear that the spectacle will reinvigorate the push for reform. On the Fox Business Network, a host chided a vice president of WellPoint, which has told California customers to expect huge rate increases: “You handed the politicians red meat at a time when health care is being discussed. You gave it to them!”

Indeed. Sky-high rate increases make a powerful case for action. And they show, in particular, that we need comprehensive, guaranteed coverage — which is exactly what Democrats are trying to accomplish.

Breitbart Lied About ACORN 'Pimp' Videos When Selling Story in His Own Washington Times Column

Falsely asserted O'Keefe 'dressed as pimp' while 'asking for, getting help for illegal activities'; Still stands behind fabricated claim

Media Matters details mainstream outlets that took bait, fell for Breitbart/O'Keefe's sensationalized fiction...

Posted By Brad Friedman On 17th February 2010 @ 17:46

As mentioned yesterday [1], on Monday night, wingnut propagandist Andrew Breitbart tweeted [2]
to me...
andrewbreitbart [3] | @TheBradBlog [4] U can lie that i lied until youre blue in face. ive told truth every step of way. U are propagandist. keep repeating the lies. reply to The BRAD BLOG's [5] recent series of articles highlighting, among other things, how he lied, along with his accused federal felon [6] employee [7] James O'Keefe, in order to sell their phony ACORN hit videos to gullible media --- and how the New York Times, and so many others, fell for it hook, line, and not-yet-retracted sinker [8]

Wall Street's Bailout Hustle

Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash


Posted Feb 17, 2010 5:57 AM

On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America's pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman's role in precipitating the global financial crisis.

The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a "bailout tax" on banks. Maybe this wasn't the right time for Goldman to be throwing its annual Roman bonus orgy.

Totally Corrupt TV: Corporate Lobbyists Pose as Disinterested Experts on Cable News

Covert corporate influence-peddling is taking over cable news.

February 18, 2010 | President Obama spent most of December 4 touring Allentown, Pennsylvania, meeting with local workers and discussing the economic crisis. A few hours later, the state's former governor, Tom Ridge, was on MSNBC's Hardball With Chris Matthews, offering up his own recovery plan. There were "modest things" the White House might try, like cutting taxes or opening up credit for small businesses, but the real answer was for the president to "take his green agenda and blow it out of the box." The first step, Ridge explained, was to "create nuclear power plants." Combined with some waste coal and natural gas extraction, you would have an "innovation setter" that would "create jobs, create exports."

Conservatives' Real Agenda Revealed at CPAC Conference: Love of Torture and Hatred of Obama

Day One of this year's conservafest included a surprise visit by torture advocate #1 Dick Cheney, and the crowd went wild for him.

February 19, 2010 | At first, the opening roster of speakers at this year's Conservative Political Action Conference sounded a common theme: How many ways can conservatives -- a term re-purposed to describe the Tea Party movement -- threaten the establishment of the Republican Party? Given the exuberant response of the CPAC crowd to those who expressed it, you'd be forgiven for thinking you had walked into a gathering of a coherent movement.

Orange peels, newspapers may lead to cheaper, cleaner ethanol fuel

Scientists may have just made the breakthrough of a lifetime, turning discarded fruit peels and other throwaways into cheap, clean fuel to power the world's vehicles.

University of Central Florida professor Henry Daniell has developed a groundbreaking way to produce ethanol from waste products such as orange peels and newspapers. His approach is greener and less expensive than the current methods available to run vehicles on cleaner fuel – and his goal is to relegate gasoline to a secondary fuel.

Daniell's breakthrough can be applied to several non-food products throughout the United States, including sugarcane, switchgrass and straw.

Team finds subtropical waters flushing through Greenland fjord

February 16, 2010

Source: Media Relations

Waters from warmer latitudes — or subtropical waters — are reaching Greenland's glaciers, driving melting and likely triggering an acceleration of ice loss, reports a team of researchers led by Fiamma Straneo, a physical oceanographer from the Woods Hole Oceanographic Institution (WHOI).

"This is the first time we’ve seen waters this warm in any of the fjords in Greenland," says Straneo. "The subtropical waters are flowing through the fjord very quickly, so they can transport heat and drive melting at the end of the glacier."

Paying For Tax Cuts At The Top By Cutting Pensions For The Rest

Today's new York Times has a front-page story (really an editorial) [1] that promotes cutting the Social Security pensions of Americans and other things that we as citizens are entitled to.

Many analysts say the president and Congress could send a strong signal to global markets by agreeing this year to a package of both long-term tax increases and spending reductions, especially in the popular entitlement programs, that would not take effect until 2012.

Let's remember how we got here.

For decades following the depression and WWII the country had operated with a budget that was in or nearly in balance while maintaining our infrastructure and investing in our future. Past concentrations of wealth were decreasing, the middle class was expanding, and we led the world in growing prosperity.

The trouble all started when we dramatically cut taxes on the rich. For decades the top tax rate was 90%. Then we cut it to 70% and then 50% dramatically from there all the way to around 30%. The budget immediately went completely out of balance. The tax cuts created a "structural deficit."

Study: States must fill $1 trillion pension gap

HARRISBURG, Pa. – States may be forced to reduce benefits, raise taxes or slash government services to address a $1 trillion funding shortfall in public sector retirement benefits, according to a new study that warns of even more debilitating costs if immediate action isn't taken.

The Pew Center on the States released a survey Thursday of state-administered pension plans, retiree health care and other post-employment benefits in all 50 states that blamed a decade's worth of policy decisions for leaving them shortchanged.

Does 'tea party' populism verge into extremism?

Atlanta – Evidence of growing ties between the quasi-libertarian “tea party” movement and supremacist “patriot” groups has the blogosphere all-a-Twitter after The New York Times ran a long story on the topic Tuesday, datelined rural Idaho. Judging by scorn heaped on the article from both the right and the left, NYT investigative reporter David Barstow may well have hit the issue pretty squarely on the head. “The Tea Party movement has become a platform for conservative populist discontent, a force in Republican politics for revival … [b]ut it is also about the profound private transformation of … people who not long ago were not especially interested in politics, yet now say they are bracing for tyranny,” Mr. Barstow wrote.

Wednesday, February 17, 2010

France shows it can deal with death

Britain would do well to follow the French example and pay people who take time off to look after a dying relative or partner

Andrew Brown, Wednesday 17 February 2010 10.00 GMT

The French state is not famous for sensitivity and tact, but this morning the parliament voted unanimously for a remarkably imaginative measure to make dying easier there. People who take time off to look after a relative or partner close to death will be entitled to an payment of €50 (£44) a day for 21 days. At a time when English politicians argue about a death tax, the French have got on and established a subsidy for the dying.

It's not a huge sum of money. I don't think that's the point. There are incidental expenses and inconveniences when someone is dying but they are seldom immense. They matter far less than the grief and exhaustion which attend almost every deathbed. What the payment does is to register the state's belief that to tend a dying friend or relative is a worthwhile activity, which should be honoured and not needlessly impeded.

Permafrost line recedes 130 km in 50 years

Quebec City, February 17, 2010–The southern limit of permanently frozen ground, or permafrost, is now 130 kilometers further north than it was 50 years ago in the James Bay region, according to two researchers from the Department of Biology at Université Laval. In a recent issue of the scientific journal Permafrost and Periglacial Processes, Serge Payette and Simon Thibault suggest that, if the trend continues, permafrost in the region will completely disappear in the near future.

Despite His Stimulus Bashing, Almost A Third Of Pawlenty’s Budget Relies On Stimulus Money

In December, Fox News’ Eric Bolling presented Minnesota Gov. Tim Pawlenty as an example of a conservative politician making tough choices to balance his state’s budget. “A big hole and a simple plan to dig out of it, stop spending,” said Bolling while introducing Pawlenty. “Sounds simple enough. Hold the line on taxes, live within your means. That is how my next guest aims to close his state`s billion-dollar-plus projected budget gap.”

Regulator waffles on bisphenol A

EPA's tough talk goes silent after lobbyist meeting

Eight days after chemical industry lobbyists met with Obama administration officials, federal regulators delayed action on including bisphenol A in a new effort to better regulate dangerous chemicals.

The move is drawing suspicion, considering how the head of the Environmental Protection Agency had been talking tough in one speech after another last fall about the need to protect the public from such chemicals, particularly BPA.

Perdue seeks a shake-up of state government

AJC Exclusive: Proposal would make 4 offices appointed, rather than elected

The Atlanta Journal-Constitution

4:50 a.m. Friday, February 5, 2010

Gov. Sonny Perdue will announce plans today for a major restructuring of state government that would make four constitutional offices appointed, rather than elected, The Atlanta Journal-Constitution has learned.

Perdue’s plan, which would require approval of voters in November, would allow future governors to appoint the state’s insurance, labor and agriculture commissioners, as well as the state school superintendent.

Did Bill Gates Just Give the Most Important Climate Speech of the Year?

By Alex Steffen, Worldchanging
Posted on February 16, 2010, Printed on February 17, 2010

When we talk about zero climate emissions, we sound crazy. When Bill Gates does it, bankers pick up the phone.

On Friday, the world's most successful businessperson and most powerful philanthropist did something outstandingly bold, that went almost unremarked: Bill Gates announced that his top priority is getting the world to zero climate emissions.

Now, I'm not a member of the Cult of Bill myself (I'm typing this on a MacBook), but you don't have to believe that Gates has superhuman powers of prediction to know that his predictions have enormous power. People who will never listen to Al Gore, much to less someone like me, hang on Gates' every utterance.

Tuesday, February 16, 2010

Congress Warned Not to Forget Long-Term Unemployed

Senate Struggles to Craft Jobs Bill

By Mike Lillis, 2/12/10 6:00 AM

There is unemployment, and then there is long-term unemployment. As Congress grapples this month with ways to tackle the nation’s jobless crisis, many economists are hoping lawmakers recognize the distinction.

Not only is there often a stigma associated with being out of work for long stretches, but the long-term unemployed are also more likely to have lost a competitive step in their field, requiring focused retraining programs more nuanced than simply throwing federal dollars to existing industries. Many other workers will discover that the task they’ve spent a lifetime doing is no longer relevant on the other side of the recession.

The Folks Who Missed the Bubble Want Your Social Security

by: Dean Baker, t r u t h o u t | Op-Ed

If you fail disastrously at most jobs, you get sent packing. But, there are different rules for Washington policy wonks. The same crew who could not see the $8 trillion housing bubble that wrecked the economy are convening in Washington this week to hatch new schemes to take away people's Social Security and Medicare in the name of "fiscal responsibility."

You might think there would be a little bit of humility here. After all, it was the job of these policy wonks to prevent the sort of economic collapse that the country is now experiencing. The basic story really was very simple. Nationwide house prices diverged from a 100-year trend; eventually rising by more than 70 percent above their trend levels.

'Star Wars' is a mere phantom menace to missiles

15:13 16 February 2010 by Debora MacKenzie

The US Missile Defense Agency (MDA) has finally shot down a moving missile with an airborne laser – but military experts say the system is not good enough for combat.

A liquid-fuelled rocket – thought to be a Scud-B, similar to those being developed by Iran and North Korea – was fired from a ship off the coast California on 11 February.

Within the next 20 seconds, the "airborne laser testbed" onboard a modified Boeing 747 locked-on to it with two low-powered tracking lasers, then a laser beam of several megawatts, to heat-damage the missile's skin. If such damage is done while booster rockets are still firing, the stresses caused by the acceleration can destroy the missile, as this clip of the test shows.

Obama and the 'savvy' bankers

In an interview, the US president described the Goldman Sachs CEO as 'savvy'. So how did he and his crew use their wisdom?

Dean Baker
Monday 15 February 2010 21.30 GMT

Last week, when President Obama was asked about the $9m dollar bonus for Goldman Sachsdescribed Blankfein as a savvy businessman, adding that Americans don't begrudge people being rewarded for success. While the White House later qualified Obama's comment about Blankfein and his fellow bank executives, it's worth examining more closely some of the ways in which Blankfein and the Goldman gang were "savvy". CEO Lloyd Blankfein, he

Perhaps the Goldman gang's best claim to savvy was in buying up hundreds of billions of dollars of mortgages and packaging them into mortgage backed securities, and more complex derivative instruments, and selling them all over the world. Blankfein and Goldman earned tens of billions of dollars on these deals. The great trick was that many of the loans put into these securities were issued by banks filling in phony information so that borrowers could get loans that they would not be able to repay. But this was not Goldman's concern. They made money on the packaging and the selling of the securities.

In hard times, Americans blame the poor

Last month, Lt. Gov. Andre Bauer of South Carolina said that when the government helps the poor, it's like people feeding stray animals that continually "breed."

And just last week, Colorado state legislator Spencer Swalm said poor people in single-family homes are "dysfunctional."

Both statements riled some Americans from the Piedmont to the Rockies and underscored a widely held belief: In tough times, people are tough on the poor.

Are Corporations Using the Internet to Accelerate Our Cultural, Political and Economic Decline?

Maybe the Internet isn't the panacea it's made out to be -- Hedges argues it has been hijacked by corporate interests and it's destroying our society.

The Internet has become one more tool hijacked by corporate interests to accelerate our cultural, political and economic decline. The great promise of the Internet, to open up dialogue, break down cultural barriers, promote democracy and unleash innovation and creativity, has been exposed as a scam. The Internet is dividing us into antagonistic clans, in which we chant the same slogans and hate the same enemies, while our creative work is handed for free to Web providers who use it as bait for advertising.

Ask journalists, photographers, musicians, cartoonists or artists what they think of the Web. Ask movie and film producers. Ask architects or engineers. The Web efficiently disseminates content, but it does not protect intellectual property rights. Writers and artists are increasingly unable to make a living. And technical professions are under heavy assault. Anything that can be digitized can and is being outsourced to countries such as India and China where wages are miserable and benefits nonexistent. Welcome to the new global serfdom where the only professions that pay a living wage are propaganda and corporate management.

Monday, February 15, 2010

Goldman Goes Rogue – Special European Audit To Follow

At 9:30pm on Sunday, September 21, 2008, Goldman Sachs was saved from imminent collapse by the announcement that the Federal Reserve would allow it to become a bank holding company – implying unfettered access to borrowing from the Fed and other forms of implicit government support, all of which subsequently proved most beneficial. Officials allowed Goldman to make such an unprecedented conversion in the name of global financial stability. (The blow-by-blow account is in Andrew Ross Sorkin’s Too Big To Fail; this is confirmed in all substantial detail by Hank Paulson’s memoir.)

We now learn – from Der Spiegel last week and today’s NYT – that Goldman Sachs has not only helped or encouraged some European governments to hide a large part of their debts, but it also endeavored to do so for Greece as recently as last November. These actions are fundamentally destabilizing to the global financial system, as they undermine: the eurozone area; all attempts to bring greater transparency to government accounting; and the most basic principles that underlie well-functioning markets. When the data are all lies, the outcomes are all bad – see the subprime mortgage crisis for further detail.

Conservative condescension: Projection and conservative victomology on parade-Part 6

by: Paul Rosenberg

Sun Feb 14, 2010 at 18:00

In Part I, I dealt with the introduction and transition of Gerard Alexander's WaPo commissioned editorial, "Why are liberals so condescending". In Part 2, Part 3, Part 4, and Part 5 I dealt with the four liberal narratives Alexander cites as manifestations of so-called "liberal condescension." This final diary deals with the underwhelming conlusion of Alexander's column.

First, Alexander insists:

These four liberal narratives not only justify the dismissal of conservative thinking as biased or irrelevant -- they insist on it.

But, since I've demolished his arguments about each of the four narratives, not so much. Remember, he's never even tried to produce any evidence that any of the narratives he's gone on about are held as widely or inflexibly as he argues--or more importantly that liberals claim they apply to all conservatives.

Conservative condescension: Projection and conservative victomology on parade--Part 5

by: Paul Rosenberg

Sun Feb 14, 2010 at 14:00

In Part I, I dealt with the introduction and transition of Gerard Alexander's WaPo commissioned editorial, "Why are liberals so condescending". In Part 2, Part 3 and Part 4, I dealt with the first three of the four liberal narratives Alexander cites as manifestations of so-called "liberal condescension." This diary deals with the fourth and last such narrative. A final diary will deal with the conlusion of Alexander's column.

Alexander's fourth narrative is perhaps his most baffling:

Finally, liberals condescend to the rest of us when they say conservatives are driven purely by emotion and anxiety -- including fear of change -- whereas liberals have the harder task of appealing to evidence and logic.
What's baffling about it is that conservatives themselves have spent centuries now attacking liberals precisely for their reliance on reason, which conservatives have argued is far too frail an instrument to deal with the complexities of human affairs.

Bayh Calls Lack Of Primary To Replace Him A Good Thing On Call With Dems

On a conference call with county Democratic Party chairs this afternoon, Sen. Evan Bayh and Indiana Democratic Party Chair Dan Parker declared that not having a Democratic primary to find a replacement for the retiring Bayh would have its upsides, according to a source who was on the call.

Bayh opened the call by repeating the reasons for not seeking reelection he mentioned in his press conference today, the source said. But in a message tailored for his audience of local party officials, Bayh said the timing of his announcement could be a positive for Democrats.

Paul Krugman: The Making of a Euromess

Lately, financial news has been dominated by reports from Greece and other nations on the European periphery. And rightly so.

But I’ve been troubled by reporting that focuses almost exclusively on European debts and deficits, conveying the impression that it’s all about government profligacy — and feeding into the narrative of our own deficit hawks, who want to slash spending even in the face of mass unemployment, and hold Greece up as an object lesson of what will happen if we don’t.

For the truth is that lack of fiscal discipline isn’t the whole, or even the main, source of Europe’s troubles — not even in Greece, whose government was indeed irresponsible (and hid its irresponsibility with creative accounting).

No, the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites — specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.

The Economic Elite Have Engineered an Extraordinary Coup, Threatening the Very Existence of the Middle Class

By David DeGraw, Amped Status
Posted on February 15, 2010, Printed on February 15, 2010

"The American oligarchy spares no pains in promoting the belief that it does not exist, but the success of its disappearing act depends on equally strenuous efforts on the part of an American public anxious to believe in egalitarian fictions and unwilling to see what is hidden in plain sight." -- Michael Lind, To Have and to Have Not

We all have very strong differences of opinion on many issues. However, like our founding fathers before us, we must put aside our differences and unite to fight a common enemy.

It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99 percent of the U.S. population no longer has political representation. The U.S. economy, government and tax system is now blatantly rigged against us.

Why This Matters: A Colorado Story

Via the Boulder Daily Camera: Jennifer Latham is a Colorado preschool teacher with four children, who suffered multiple, debilitating injuries when she was hit by a car in 2005. She spent two months in the hospital recovering, running up $185,000 in medical expenses. She was lucky to have health insurance.

Or so Latham thought. Shortly after coming home, the insurer, Time Insurance Co., told her that it was refusing to pay the bill and that it would be canceling her coverage outright. The reason? When applying for her insurance coverage, the insurer said, she'd failed to disclose two past medical incidents--an emergency room visit for shortness of breath and an episode of uterine prolapse. Not only did that leave her on the hook for $185,000; it also left her without insurance, since no private carrier would touch her after the injuries and cancellation.

Rachel Maddow Stuns Rep. Aaron Schock By Calling Out His Spending Hypocrisy

A heated exchange took place during NBC's "Meet the Press" on Sunday when MSNBC host Rachel Maddow accused Rep. Aaron Schock (R-Ill.) of hypocrisy for railing against a spending bill in public while touting its benefits in his home district.

Appearing alongside each other during a panel session, Maddow pivoted from a discussion on job creation to note that Schock had appeared at an event on Friday touting a grant program that he had voted against.

Sunday, February 14, 2010

Digby: Insty Drinks Some Tea

So Instapundit went to the tea party convention and, surprise, came out convinced that they were all just plain folks who share his libertarian values. (It's interesting how many people look at the teabaggers and see what they want to see.)
A year ago, many told me, they were depressed about the future of America. Watching television pundits talk about President Obama's transformative plans for big government, they felt alone, isolated and helpless. That changed when protests, organized by bloggers, met Mr. Obama a year ago in Denver, Colo., Mesa, Ariz., and Seattle, Wash. Then came CNBC talker Rick Santelli's famous on-air rant on Feb. 19, 2009, which gave the tea-party movement its name.

Tea partiers are still angry at federal deficits, at Washington's habit of rewarding failure with handouts and punishing success with taxes and regulation, and the general incompetence that has marked the first year of the Obama presidency. But they're no longer depressed.

Instead, they seem energized. And surprisingly media savvy
Yes they do.

Volcker: Choice is prop trading or bank charter

Reuters US Online Report Business News

Feb 12, 2010 09:03 EST

NEW YORK (Reuters) - President Barack Obama's economic adviser, Paul Volcker, said his proposed banking rules would force Goldman Sachs and other banks to give up their bank charters if they want to continue proprietary trading.

"The implications for Goldman Sachs or any other institution is, do you want to be a bank?" Volcker, a former chairman of the Federal Reserve, told the Financial Times. "If you don't want to follow those (banking) rules, you want to go out and do a lot of proprietary stuff, fine, but don't do it with a banking license."

Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

Poll Reveals Most Americans Don't Know They Got a Tax Cut

Posted by Robert Hendin

Updated 1:50 p.m. ET

Of all the very information that came out of the recent CBS News/New York Times poll, one question stuck out, that of taxes.

Here's the poll question: "In general, do you think the Obama Administration has increased taxes for most Americans, decreased taxes for most Americans or have they kept taxes the same for most Americans?"

Frank Rich: Palin’s Cunning Sleight of Hand

Liberals had a blast mocking Sarah Palin last weekend when she was caught addressing the Tea Party Convention with a cheat sheet scrawled on her hand. Even the president’s press secretary, Robert Gibbs, couldn’t resist getting into the act and treated a White House briefing to a Palin hand gag of his own.

Yet the laughter rang hollow. You had to wonder if Palin, who is nothing if not cunning, had sprung a trap. She knows all too well that the more the so-called elites lampoon her, the more she cements her cred with the third of the country that is her base. Her hand hieroglyphics may not have been speaking aids but bait.

If so, mission accomplished. Her sleight of hand gave the anti-Palin chorus another prod to deride her as an empty-headed, subliterate clown, and her fans another cue to rally. The only problem is that the serious import of Palin’s overriding political message got lost in this distracting sideshow. That message has the power to upend the Obama presidency — even if Palin, with her record-low approval ratings, never gets anywhere near the White House.

The Disadvantages of an Elite Education

Posted By William Deresiewicz On June 1, 2008 @ 7:00 am

It didn’t dawn on me that there might be a few holes in my education until I was about 35. I’d just bought a house, the pipes needed fixing, and the plumber was standing in my kitchen. There he was, a short, beefy guy with a goatee and a Red Sox cap and a thick Boston accent, and I suddenly learned that I didn’t have the slightest idea what to say to someone like him. So alien was his experience to me, so unguessable his values, so mysterious his very language, that I couldn’t succeed in engaging him in a few minutes of small talk before he got down to work. Fourteen years of higher education and a handful of Ivy League degrees, and there I was, stiff and stupid, struck dumb by my own dumbness. “Ivy retardation,” a friend of mine calls this. I could carry on conversations with people from other countries, in other languages, but I couldn’t talk to the man who was standing in my own house.

It’s not surprising that it took me so long to discover the extent of my miseducation, because the last thing an elite education will teach you is its own inadequacy. As two dozen years at Yale and Columbia have shown me, elite colleges relentlessly encourage their students to flatter themselves for being there, and for what being there can do for them. The advantages of an elite education are indeed undeniable. You learn to think, at least in certain ways, and you make the contacts needed to launch yourself into a life rich in all of society’s most cherished rewards. To consider that while some opportunities are being created, others are being cancelled and that while some abilities are being developed, others are being crippled is, within this context, not only outrageous, but inconceivable.

Conservative condescension: Projection and conservative victomology on parade--Part 4

by: Paul Rosenberg

Sun Feb 14, 2010 at 10:00

In Part I, I dealt with the introduction and transition of Gerard Alexander's WaPo commissioned editorial, "Why are liberals so condescending". In Part 2 and Part 3 I dealt with the first two of the four liberal narratives Alexander cites as manifestations of so-called "liberal condescension." This diary deals with the third such narrative.
If Alexander's second narrative has a germ of truth to it, he more than makes up for that with his third purported liberal narrative of condescension: conservative exploitation of racial prejudice. It should be obvious that overt racism of the kind that was commonplace until the 60s and 70s is no longer socially acceptable in most places, and plays a relatively insignificant role in mainstream politics. But that hardly means that race no longer matters, or that more subtle forms of racial politics are not powerfully at work.

Conservative condescension: Projection and conservative victomology on parade--Part 3

by: Paul Rosenberg

Sat Feb 13, 2010 at 18:00

In Part I, I dealt with the introduction and transition of Gerard Alexander's WaPo commissioned editorial, "Why are liberals so condescending". In Part 2, I dealt with the the first of the four liberal narratives Alexander cites as manifestations of so-called "liberal condescension." This diary deals with the second such narrative.

If Alexander's first narrative is a transparent bunch of hooey, the same cannot be said about his second one. There is some truth in claim that liberals look down at people repeatedly voting against their economic interests, for cultural causes that are repeatedly ignored or outright betrayed between elections. But this is an isolated observation, and the question is one of context, which raises a host of subsidiary questions: Are liberals who do this more or less condescending than the cynical conservative manipulators who run these games? Is there anything particularly liberal about this? Or is it simply a matter of elite attitudes towards the masses? Or--as Jack Balkin's analysis "Populism and Progressivism as Constitutional Categories" suggests, of people who identify with progressivism towards those who identify with populism? And what about those on the left who reject the 'stupid voter' narrative one way or another? Such as George Lakoff, Drew Wesson, Larry Bartells ("What's the Matter with What's the Matter with Kansas?"), or me, for that matter? And, finally, what about all those liberals who are themselves members of the working class who haven't been fooled at all, but sure are pissed at Democratic elites for doing such a lousy job on their behalf the last three decades or so? The welter of questions like these points to where a genuinely honest debate about elitism and condescension, left and right, might take us. But it's not at all a direction in which Alexander has any interest.

Conservative condescension: Projection and conservative victomology on parade-Part 2

by: Paul Rosenberg

Sat Feb 13, 2010 at 14:00

In Part I, I dealt with the introduction and transition of Gerard Alexander's WaPo commissioned editorial, "Why are liberals so condescending" This is the first of four installments dealing with each of the four liberal narratives Alexander cites as manifestations of so-called "liberal condescension."

The first purported liberal narrative indicative of an attitude of condescension is a vaguely articulated awareness that conservatives engage in hegemonic warfare in a way that liberals do not. Neither Alexander, nor most liberals--even the examples he cites--actually sees things so clearly and sweepingly. Thus, the examples he points to generally point to, but understate an ongoing reality that liberals have long sensed, but never really come to grips with.

The Cleveland Model

By Gar Alperovitz, Ted Howard & Thad Williamson

This article appeared in the March 1, 2010 edition of The Nation.

February 11, 2010

Something important is happening in Cleveland: a new model of large-scale worker- and community-benefiting enterprises is beginning to build serious momentum in one of the cities most dramatically impacted by the nation's decaying economy. The Evergreen Cooperative Laundry (ECL)--a worker-owned, industrial-size, thoroughly "green" operation--opened its doors late last fall in Glenville, a neighborhood with a median income hovering around $18,000. It's the first of ten major enterprises in the works in Cleveland, where the poverty rate is more than 30 percent and the population has declined from 900,000 to less than 450,000 since 1950.

The employees, who are drawn largely from Glenville and other nearby impoverished neighborhoods, are enthusiastic. "Because this is an employee-owned business," says maintenance technician and former marine Keith Parkham, "it's all up to us if we want the company to grow and succeed."

Cut working week to 21 hours, urges think tank

Sounds like an idea we can use here in the US--Dictynna

The working week should be cut to 21 hours to help boost the economy and improve quality of life, a left-wing think tank has said.

The New Economics Foundation claimed in a report the reduction in hours would help to ease unemployment and overwork.

Detroit Schools' Offering Classes in How to Work at Walmart Attacked as 'Subservient Worker' Training

The announcement of the program has caused some outrage on behalf of students. "This is not why parents send them to school," says one watchdog.

February 12, 2010 | Walmart has been widely condemned for offering its employees only low-paying, dead end jobs. Even President Obama criticized Hillary Clinton during the 2008 presidential campaign for having served on Walmart's board and stated that the firm ought to pay "a living wage."

In inner-city Detroit, however, where the unemployment rate is estimated at an astonishing 50%, the prospect of a Walmart job may appear far more attractive.

Worker-Owned, Industrial-Size, Environmentally Sound Business Rises Up

The Evergreen Cooperative Laundry (ECL) in Cleveland is thoroughly green and worker-owned, and a blueprint for the future.

February 11, 2010 | Something important is happening in Cleveland: a new model of large-scale worker- and community-benefiting enterprises is beginning to build serious momentum in one of the cities most dramatically impacted by the nation's decaying economy. The Evergreen Cooperative Laundry (ECL)--a worker-owned, industrial-size, thoroughly "green" operation--opened its doors late last fall in Glenville, a neighborhood with a median income hovering around $18,000. It's the first of ten major enterprises in the works in Cleveland, where the poverty rate is more than 30 percent and the population has declined from 900,000 to less than 450,000 since 1950.

Dem Sell-out Dianne Feinstein Attempts End-Run to Hand California Water to Billionaire Farmers

Feinstein is trying to ram through a massive transfer of public water into the private pockets of a clique of billionaire corporate farmers.

February 13, 2010 | California's Democratic Senator Dianne Feinstein showed Californians who she really serves this past Thursday, when news emerged that she was trying to ram through a massive transfer of precious water out of the hands of millions of state residents, and into the private pockets of a clique of billionaire corporate farmers.

Here's how the San Francisco Chronicle described the swindle:

Feinstein wants to attach the proposal as an amendment to a fast-tracked Senate jobs bill. She is pitching the plan as a jobs measure to address the economic calamity in the Central Valley. It would increase farm water allocations from 10 percent last year to 40 percent this year and next, an amount that farmers say is the bare minimum they need.

Iceland aims to become haven for investigative journalism

Parliament to vote on Wikileaks-backed law that would protect sources, guarantee freedom of speech and end libel tourism

Iceland is aiming to become a global haven for investigative journalism, with the country's parliament expected to vote through legislation protecting sources, guaranteeing freedom of speech and ending libel tourism.

Supporters liken the initiative to the offshore financial havens that corporations use to avoid government tax regimes – only for free speech.

Paul Krugman: Republicans and Medicare

“Don’t cut Medicare. The reform bills passed by the House and Senate cut Medicare by approximately $500 billion. This is wrong.” So declared Newt Gingrich, the former speaker of the House, in a recent op-ed article written with John Goodman, the president of the National Center for Policy Analysis.

And irony died.

Now, Mr. Gingrich was just repeating the current party line. Furious denunciations of any effort to seek cost savings in Medicare — death panels! — have been central to Republican efforts to demonize health reform. What’s amazing, however, is that they’re getting away with it.

Why is this amazing? It’s not just the fact that Republicans are now posing as staunch defenders of a program they have hated ever since the days when Ronald Reagan warned that Medicare would destroy America’s freedom. Nor is it even the fact that, as House speaker, Mr. Gingrich personally tried to ram through deep cuts in Medicare — and, in 1995, went so far as to shut down the federal government in an attempt to bully Bill Clinton into accepting those cuts.

Strongest evidence to date shows link between exploration well and Lusi mud volcano

Improper removal of drill bit from unstable well led to uncontrolled influx of gas and water

New data provides the strongest evidence to date that the world's biggest mud volcano, which killed 13 people in 2006 and displaced thirty thousand people in East Java, Indonesia, was not caused by an earthquake, according to an international scientific team that includes researchers from Durham University and the University of California, Berkeley.

Drilling firm Lapindo Brantas has denied that a nearby gas exploration well was the trigger for the volcano, instead blaming an earthquake that occurred 280 kilometers (174 miles) away. They backed up their claims in an article accepted this week for publication in the journal Marine and Petroleum Geology, by lead author Nurrochmat Sawolo, senior drilling adviser for Lapindo Brantas, and colleagues.

The New Deal in Reverse

by Steve Fraser

On March 4, 1933, the day he took office, Franklin Roosevelt excoriated the "money changers" who "have fled from their high seats in the temples of our civilization [because...] they know only the rules of a generation of self-seekers. They have no vision and where there is no vision, the people perish."

Rhetoric, however, is only rhetoric. According to one skeptical congressional observer of FDR's first inaugural address, "The President drove the money-changers out of the Capitol on March 4th -- and they were all back on the 9th."

Thursday, February 11, 2010

Bank bailout watchdog warns of commercial real estate crisis

Corbett B. Daly
Reuters US Online Report Politics News

Feb 11, 2010 00:07 EST

WASHINGTON (Reuters) - The commercial real estate market has fallen more than 40 percent from early 2007 and a wave of loan failures in the next few years could threaten the economy just as it struggles back to its feet, a report from the panel overseeing the $700 billion bank bailout said.

"A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American," said the report, released on Thursday.

Can the FBI Secretly Track Your Cell Phone?

Michael Isikoff

The Justice Department is poised this week to publicly defend a little-known law-enforcement practice that critics say may be the "sleeper" privacy issue of the 21st century: the collection of cell-phone "tracking" records that identify the physical locations where the phones have been.

It may come as a surprise to most of the owners of the country's 277 million cell phones, but their cell-phone company retains records of where their device has been at all times—either because the phones have tiny GPS devices embedded inside or because each phone call is routed through towers that can be used to pinpoint the phones' location to within areas as small as a few hundred feet.

One in ten House Republicans calling it quits

By Daniel Tencer
Thursday, February 11th, 2010 -- 1:05 pm

With Thursday's announcement that Rep. Lincoln Diaz-Balart (R-FL) will not seek re-election in his Miami-area district, the number of Republicans not running for re-election to the House now amounts to more than 10 percent of the House Republican caucus, compared to less than five percent for Democrats.

Chris Cillizza at the Washington Post notes that the total number of House Republicans set to retire or seek other office is now 18, or slightly more than 10 percent of the 178 seats the GOP holds in the House.

To Fix America

by: Ian Welsh

Wed Feb 10, 2010 at 23:53

Don Peck at the Atlantic has noticed that employment is unlikely to recover to pre-great recession levels (let alone Clintonian levels) for a long, long time. This was totally predictable, and predicted. He also notes that even people like Paul Krugman really have no idea how to fix it.

Yes. Employment as a percentage of the workforce will not recover for a generation. And my bet is that median real income won’t either.

Andrew Breitbart and the Vince Foster conspiracists

February 04, 2010 5:21 pm ET

If there's anything more bizarre than an Andrew Breitbart conspiracy theory, it's the decision of so many mainstream reporters to handle him with kid gloves. Breitbart is waging war on the establishment media, and they respond with friendly profiles that whitewash his dishonesty and sleaziness -- apparently not realizing that by legitimizing Breitbart, they hasten their own downfall.

If Breitbart has one defining characteristic, it is his flagrant dishonesty -- a dishonesty that is apparent not only in his willingness to traffic in bogus attacks, but in his rejection of basic standards of proof and logic and reason and consistency. And yet the typical profile of Breitbart portrays him simply as an eccentric but brilliant entrepreneur waging a valiant and impressively successful struggle against craven and corrupt elites -- while his dishonesty goes unmentioned and his critics go unquoted.

Right-wing media narrative on Christmas Day plot falling apart

February 09, 2010 7:50 pm ET

The right-wing media narrative that the Obama administration endangered security by giving Miranda rights to alleged attempted Christmas Day bomber Umar Farouk Abdulmutallab is falling apart. Contrary to claims based on unnamed sources in the right-wing media, Obama administration officials agree that Abdulmutallab gave valuable intelligence during his first interrogation and that Abdulmutallab has begun divulging intelligence again.

False framing: Why is the NY Times spreading "half-truths" about global warming?

February 10, 2010 5:11 pm ET by Jeremy Schulman

The New York Times' Elisabeth Rosenthal framed a front-page article around a series of attacks on the Intergovernmental Panel on Climate Change and its chairman, Rajendra K. Pachauri. But after suggesting in its original headline that these attacks somehow undercut the IPCC's "credibility," the Times waited until much later in the article to acknowledge that they are actually based on a series of "half-truths" and that "mainstream scientists" agree that they don't undermine the IPCC's conclusions that humans are warming the planet.

Time to Tax Financial Speculation

For those of us who want the financial industry to serve people and the planet rather than dominate them, this is the most exciting reform under serious consideration on the world stage.

by Sarah Anderson

For decades, international activists have been pushing the idea of a tax on financial transactions. Such a tax would give us a twofer: a drop in short-term speculation that serves no productive purpose and leads to dangerous bubbles, and 2) loads of money that could be used for good things, like health, climate, and jobs programs.

Today, we’re closer to achieving this two-for-one deal than we’ll probably ever be in our lifetimes. Reeling from the worst financial crisis in 80 years, policymakers are not only desperate for new sources of revenue, they’re more open to rethinking the role of Wall Street and making sure it serves real economic needs.

Book review: 'Bomb Power' by Garry Wills

Gary Wills begins his provocative account of the atomic bomb's impact on the republic with a high-detonation assertion. "The Bomb," he writes, "altered our subsequent history down to its deepest constitutional roots," redefining the presidency in ways that the Constitution does not intend.

Biblical Capitalism - The Sacralizing of Political and Economic Issues

By Rachel Tabachnick Wed Feb 10, 2010 at 10:36:56 PM EST

Welcome to readers from PA Progress 2010! Keystone Progress held their first conference in Harrisburg Pennsylvania on January 29 and 30. I was honored and excited to be able to participate in this successful event which drew over 500 progressive activists from across Pennsylvania. My presentation was titled "The Sacralizing of Political and Economic Issues" and included a PowerPoint presentation in which I tracked the history and activism related to "biblical capitalism." The presentation is not anti-religious, anti-bible, nor anti-capitalist, but addresses the ideology that unregulated capitalism is dictated by biblical law. In other words, biblical capitalism is the belief that government intervention in the marketplace is against God's will.

As progressives, we are well aware of the role of the Religious Right in issues such as gay rights and women's rights. However, the Religious Right's war on progressive economic policy, regulation, progressive tax structures, and labor unions is often overlooked. Radical free market ideology is being taught to students and adults as a biblical mandate and those in opposition are being literally demonized. Revisionist textbooks rewriting science and social sciences to align with literal biblical interpretations, are widely used in homeschooling, some private schools, and also by "family values" organizations and adult seminars.

Rachel Maddow Exposes GOP Welfare Queens Who Attacked Obama's Stimulus, Yet Enjoyed Billions in Benefits

By , AlterNet
Posted on February 11, 2010, Printed on February 11, 2010

Editor's note: The following is a transcript from the Rachel Maddow Show.

At the top of the show today, we talked about the myth of bipartisanship, the futility of Democrats, including the president, wasting time trying to persuade Republicans to go along with them on policies that are good for the country.

It totally makes sense in the abstract if people can agree on what needs to be done to solve the country‘s problems than those policies, even if they‘re big policies, should get votes from everyone who‘s in agreement.

In the abstract that‘s how it works. In Washington, that is not at all how it works. Republicans proposed a deficit commission. President Obama endorsed the idea so then Republicans decided they‘re against it.

Home Underwater? Walk Away from Geithner's Perverse 'Homeowner Relief' Plan

By Zach Carter, AlterNet

Posted on February 10, 2010, Printed on February 11, 2010

The homeowner relief plan adopted by President Obama and Treasury Secretary Timothy Geithner has not been working for a full year now. What's worse, as the program is currently structured, its chief benefits accrue directly to the nation's largest banks, leaving troubled borrowers to twist in the wind. But despite the administration's indifference, underwater borrowers can still take matters into their own hands. If you owe more than your house is worth, just walk away.

"The rational thing for these people to do is to send the keys to the bank and say, 'Good luck,'" says Dean Baker, co-director of the Center for Economic Policy and Research. "Every month that you keep that person in their home paying that mortgage, that's a gift to the bank. So if you could keep a lot of people from sending their keys to the bank, and keep sending their checks instead, that helps the banks directly."

Wednesday, February 10, 2010

Haiti, Forgive Us

By Amy Goodman

The tragedy of the Haitian earthquake continues to unfold, with slow delivery of aid, the horrific number of amputations performed out of desperate medical necessity, more than a million homeless, perhaps 240,000 dead, hunger, dehydration, the emergence of infections and waterborne diseases, and the approach of the rainy season, which will be followed by the hurricane season. Haiti has suffered a massive blow, an earthquake for which its infrastructure was not prepared, after decades—no, centuries—of military and economic manipulation by foreign governments, most notably the United States and France.

Haiti was a slave plantation controlled by France. In 1804, inspired by Toussaint L’Ouverture (after whom the now barely functioning airport in Port-au-Prince is named), the slaves rebelled, founding the world’s first black republic. Under military threat from France in 1825, Haiti agreed to pay reparations to France for lost “property,” including slaves that French owners lost in the rebellion. It was either agree to pay the reparations or have France invade Haiti and reimpose slavery. Many Haitians believe that original debt, which Haiti dutifully paid through World War II, committed Haiti to a future of poverty that it has never been able to escape. (While France, as part of the deal, recognized Haiti’s sovereignty, slave-owning politicians in the United States, like Thomas Jefferson, refused to recognize the black republic, afraid it would inspire a slave revolt here. The U.S. withheld formal recognition until 1862.)

How a New Jobless Era Will Transform America

How should we characterize the economic period we have now entered? After nearly two brutal years, the Great Recession appears to be over, at least technically. Yet a return to normalcy seems far off. By some measures, each recession since the 1980s has retreated more slowly than the one before it. In one sense, we never fully recovered from the last one, in 2001: the share of the civilian population with a job never returned to its previous peak before this downturn began, and incomes were stagnant throughout the decade. Still, the weakness that lingered through much of the 2000s shouldn’t be confused with the trauma of the past two years, a trauma that will remain heavy for quite some time.

The unemployment rate hit 10 percent in October, and there are good reasons to believe that by 2011, 2012, even 2014, it will have declined only a little. Late last year, the average duration of unemployment surpassed six months, the first time that has happened since 1948, when the Bureau of Labor Statistics began tracking that number. As of this writing, for every open job in the U.S., six people are actively looking for work.

Tuesday, February 9, 2010

My Tea-Stained Weekend

February 09, 2010 5:49 pm ET by Melinda Warner

An evangelical conservative turned progressive goes to the Tea Party Convention

The Tea Party movement, with its loud crowds and explicit signage, has been an intriguing force for months. Their rallies, protests, and townhall appearances have created a storm seldom seen in American history.

Those outside the movement have had a difficult time understanding the motivation behind the passion. The ideals of small government and lower taxes are clearly evident - but why are those goals manifesting themselves in this way?

Understanding the people behind the Tea Party is what drove my employer, Media Matters, to send me to the first Tea Party Convention. Instead of attending as a member of the media, I was to experience the convention as a member, a Tea Partier, a conservative.

It was fascinating.

Jingoism and the Budget Deficit: Using Any Tactic to Advance the Budget Cutting Agenda

The deficit hawks apparently believe that their case is so weak that they must resort to crass jingoism to push their agenda. NBC apparently intends to run a piece on the evening news on Tuesday that talks about the portion of the government debt that is owned foreigners, highlighting the role of China.

This is incredibly dishonest. The extent to which foreigners hold U.S. assets is determined by the trade deficit, not the budget deficit. (Actually, the causation largely goes the other way. The decision of foreign governments and/or investors to buy dollar assets raises the value of the dollar, leading to a larger trade deficit.)

Revised Baseline Scenario: February 9, 2010

Caution: this is a long post (about 3,000 words). The main points are in the first few hundred words and the remainder is supportive detail. This material was the basis of testimony to the Senate Budget Committee today by Simon Johnson.

A. Main Points

1) In recent months, the US economy entered a recovery phase following the severe credit crisis-induced recession of 2008-09. While slower than it should have been based on previous experience, growth has surprised on the upside in the past quarter. This will boost headline year-on-year growth above the current consensus for 2010. We estimate the global economy will grow over 4 percent, as measured by the IMF’s year-on-year headline number (their latest published forecast is for 3.9 percent), with US growth in the 3-4 percent range – calculated on the same basis.

2) But thinking in terms of these headline numbers masks a much more worrying dynamic. A major sovereign debt crisis is gathering steam in Europe, focused for now on the weaker countries in the eurozone, but with the potential to spillover also to the United Kingdom. These further financial market disruptions will not only slow the European economies – we estimate growth in the euro area will fall to around 0.5 percent Q4 on Q4 (the IMF puts this at 1.1 percent, but the January World Economic Outlook update was prepared before the Greek crisis broke in earnest) – it will also cause the euro to weaken and lower growth around the world.

Goldman link to Greek financial crisis?

Is it really surprising any more? What happens in 10 or 15 years when this "complex financial product" unravels? Where will the highly paid financial consultants be? You have to wonder if Goldman will always remain above the law or if they will continue to call the shots since they make the law.

The Right-Wing, Pro-Business Advocacy Ad That Went Unnoticed During The Super Bowl

While people were focused on the fact that CBS allowed a pro-life advocacy ad by Focus on the Family to play during the Super Bowl, another one by a right-wing group slipped in unnoticed: a “Defeat the Debt” ad showing schoolchildren pledging allegiance “to America’s debt, and to the Chinese government that lends us money.”

White House press secretary writes grocery list on hand, mocks Palin

White House press secretary Robert Gibbs, in a nod to former Alaska Gov. Sarah Palin, wrote a faux shopping list on his hand in dark pen Tuesday in response to reports over the weekend that Palin had written notes to herself during the Tea Party Convention this past weekend.

Battle begins over who'll get lucrative Haiti cleanup contracts

It's unclear at this point who will be awarding the cleanup contracts, but there is big money to be made in the rubble of some 225,000 collapsed homes and at least 25,000 government and office buildings. At least two politically connected U.S. firms have enlisted powerful local allies in Haiti to help compete for the high-stakes business.

Hal Lindsey Implies the Need for Arab Detention Camps

By wilkyjr
Mon Feb 08, 2010 at 09:22:25 AM EST

The Feb. 6, 2010 Hal Lindsey Report had its usual hard right slant to current events. It is quickly noted that Lindsey is not a friend of the current administration in the nation. He has a long history of attacking President Obama and often complains that the President has a secret agenda to harm the Christian faith.

On Saturday Hal Lindsey caught us up on our history lessons. He reminded us that after Pearl Harbor in 1941, the government set up detention camps for American Japanese citizens. Lindsey politely excused imself, then insinuated we ought to consider doing the same things with the followers of Islam in the nation. He reminded us that in the attack on Pearl Harbor, Japan targeted miliitary settlements. In 9/11, the terrorists attacked citizens, thus they were committing an even graver assault on America.

Globalization Is Killing the Globe: Return to Local Economies

by Thom Hartmann

Globalization is killing Europe, just as it's already wiped out much of the American middle class.

Spain and Greece are facing immediate crises that many other European nations see on the near horizon: aging boomer workers are retiring with healthy benefit packages, but the younger workers who are paying for those benefits aren't making anything close to the income (or, therefore, paying the taxes) that their parents did.

Globalists/corporatists/conservative "free market" and "flat earth" advocates say this is a great opportunity to cut benefits for the old folks (and for the young folks in the future), thus bringing the countries budgets back into balance, and this story is the main corporate media storyline.

The Worst of the Pain

There is a great tendency in this country to refuse to see what is right in front of everybody’s eyes.

While there is now, finally, a great deal of talk among the politicians and in the news media about unemployment, there is still almost a willful refusal to focus on just who is suffering the most from joblessness and underemployment.

When it comes to employment, there are roughly three broad categories in the United States. The folks in the upper-income group are not suffering much, if at all, from the profound reversals in employment brought about by the Great Recession. Those in the middle have been hit hard. The job losses there have been severe and long-lasting. But for those in the lower-income groups, the scale of the employment crisis has been mind-boggling.

False Profits: We Will Be Suffering from Greenspan and Bernanke's Ineptitude for a Long Time

By Dean Baker, PoliPoint Press
Posted on February 9, 2010, Printed on February 9, 2010

The following is an excerpt from Dean Baker's new book: False Profits: Recovering from the Bubble Economy (PoliPointPress, 2010).

As the nation struggles to recover from the worst economic downturn since the Great Depression, the people who got us here are desperately working to rewrite history. The basic story of this economic collapse is very simple. The Federal Reserve Board, guided by its revered chairman, Alan Green span, allowed an $8 trillion housing bubble to grow unchecked.

Arguably, the Fed even fostered the bubble's growth, seeing it as the only source of dynamism in an economy that was suffering from the aftershocks of the collapse of a $10 trillion stock bubble. Greenspan repeatedly insisted that the housing market was just fine, even as a small group of economists and analysts raised concerns about the unprecedented run-up in house prices. He also dismissed concerns about the questionable mortgages the banks were issuing on a massive scale during the bubble years. In fact, he even encouraged people to take out adjustable-rate mortgages (ARMs) at a time when fixed-rate mortgages were near a 50-year low.

Our Democracy No Longer Works and the Problem Is Congress

By Lawrence Lessig, The Nation
Posted on February 9, 2010, Printed on February 9, 2010

We should remember what it felt like one year ago, as the ability to recall it emotionally will pass and it is an emotional memory as much as anything else. It was a moment rare in a democracy's history. The feeling was palpable--to supporters and opponents alike--that something important had happened. America had elected, the young candidate promised, a transformational president. And wrapped in a campaign that had produced the biggest influx of new voters and small-dollar contributions in a generation, the claim seemed credible, almost intoxicating, and just in time.

Yet a year into the presidency of Barack Obama, it is already clear that this administration is an opportunity missed. Not because it is too conservative. Not because it is too liberal. But because it is too conventional. Obama has given up the rhetoric of his early campaign--a campaign that promised to "challenge the broken system in Washington" and to "fundamentally change the way Washington works." Indeed, "fundamental change" is no longer even a hint.

Blind spots to the right

By Julian Delasantellis

Can you believe that there are still silly people who deny that in the pages of the great classics of the past can be found invaluable lessons for today? Take this passage from Johann Wolfgang von Goethe's 1806 masterpiece Faust:
This senseless, juggling witchcraft I detest!
Dost promise that in this foul nest
Of madness, I shall be restored?
It should be obvious to all that, today, this is the internal monologue of a respectable journalist wrestling with his conscience over a lucrative job offer from Rupert Murdoch’s Fox News.

Monday, February 8, 2010

Bank Securitization Woes Only Beginning

We remarked last week that the FDIC had put forward a proposal for fixing the securitization market. To be a bit more precise, it was the FDIC’s plan, put forward for public comment, of the rules it wanted to have in place for banks to get “safe harbor”, meaning off balance sheet treatment, for their securitizations.

As anyone who had even slight contact with the business press no doubt knows, a whole raft of credit bubble era securitizations, particularly real estate and credit cards, have suffered losses far in excess of what banks and investors anticipated. The result, with real estate securitizations, is that almost all of the market ex government guaranteed paper is in a deep freeze. Worse, servicers, who were never set up to do loan mods (and by happenstance also make more by not doing mods) are operating to the disadvantage of investors and communities (as we have mentioned on previous posts, vulture investor Wilbur Ross, the antithesis of a bleeding heart, has demonstrated that deep principal reductions work and for viable borrowers produce better results for the investors than foreclosures). For credit card conduits, rather than let them flounder (banks desperately need to keep that pipeline open) banks have intervened to shore them up, raising serious questions about their off balance sheet treatment.