Happy Bank Transfer Day!

Lyrics by Tom Paxton. Performed by Arlo Guthrie.



Happy weekend, all!

#OccupyWallStreet

Corruption and criminal activity.



This can't all be framed as a problem with capitalism.  Way, way too many people terrified of what they perceive the alternative might be.

This can't be framed as a problem with the rich getting richer.  Way, way too many people still duped enough by the promise of the American dream to think they soon might be one of those rich getting richer.

Americans are essentially fair-minded people who like to play by the rules.  The only way to get to them on this one is to make it about corruption and criminal activity.

Greek Tragedy

Who’s running the world? From The New York Times.  The emphasis is mine:

In the short term, Greece remains the central problem. Two bailouts have not been enough. Greek public debt continues to mount, and so does the pressure on the government to find more revenue and make more cuts. Europe’s strategy, to the extent it can be discerned, is to put off restructuring Greece’s debt as long as possible and build up enough backing for a bailout fund so that banks with large exposure to the sovereign debt of Greece and other troubled euro-zone countries, like Portugal, Ireland, Italy and Spain, can survive an all-but-inevitable Greek default.

But the austerity-driven recession in Greece has made its budget deficit even worse than experts predicted, and the country has not kept all its promises to the “troika” — the European Union, the International Monetary Fund and the European Central Bank — that is keeping Athens afloat. Experts from the troika left Greece a month ago in unofficial disgust; they returned last week only after getting fresh promises of action.

Athens is again at the brink. Without the next tranche of aid from the troika — 8 billion euros — Greece could immediately default. So the troika is playing hardball, trying to force Athens to make crucial structural changes that lenders think will never happen otherwise.

Austerity-driven recessions? Never heard of such a thing…

Don't Worry, Be Happy!!!

Silly me. Here I was thinking that my family wasn’t spending as much on “stuff” because we weren’t making as much money. But alas, it’s all my bad attitude, I guess.

From Gail Collins, in The New York Times.  The emphasis is mine.

Finally, we’re coming to a consensus about what’s wrong with the economy. It’s us. And our bad attitude.

Ben Bernanke says we’re too depressed. On Thursday, the Fed chairman suggested that consumers have an irrationally negative worldview.

“Even taking into account the many financial pressures that they face, households seem exceptionally cautious,” he told an audience in Minnesota, where the Twins are in last place, attendance at the state fair was way down and the state’s best-known elected official is Michele Bachmann. Also, star hockey player Dustin Byfuglien was arrested on Lake Minnetonka on suspicion of boating while intoxicated.

Ben Bernanke = #clueless.

And there’s more.

On Friday, President Obama told Americans to “shake off all the naysaying and the anxiety and the hand-wringing.” He is on the road, following up on the big jobs speech he gave before Congress. It got a pretty good reaction, which would probably have been even more positive if the television broadcasts had not been interspersed with reports that Homeland Security was searching for a trio of terrorist truckers.

I will just chalk my anger at getting rejected for a health insurance plan based on a bogus precondition to “naysaying.” Not sure what to do about the anxiety related to possibly having no health insurance.

Guess I just don’t have enough of that “can do” mentality to call myself a true American.

On "Labor" Day

A particularly haunting version of the classic union struggle song, by Natalie Merchant, on the occasion of peace activist Daniel Berrigan's 85th birthday.



And if you have not read former Labor Secretary Robert Reich's reaction to yesterday's jobs numbers, take a look at the whole post, here.

Do you hear me, Mr. President? Please — be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That’s what you have it for.

One more thing, Mr. President. You also have to tackle inequality. When so much income and wealth continues to flow to the very top, America’s vast middle class still won’t have enough purchasing power to boost the economy. Priming the pump is necessary but won’t be sufficient without enough water in the well.

As the good professor says, we're in a "zero economy." On Labor Day.

Offering Hope

UPDATE:  And they hire lobbyists, too.  Surprise, surprise.

President Obama needed to spend the entire weekend seriously bashing Standard & Poors. And not just because of Friday’s downgrading of the U.S. Credit Rating. He needed to spend the entire weekend questioning the S & P’s credibility in making such a judgment. He needed to remind the American people that the S & P – and other institutions with unchecked power – are the ones that got us into this mess.

Just like Rep. Barney Frank (D-MA) did here:

Rep. Barney Frank (D-Mass.) angrily denounced the ratings downgrade, saying S&P was “trying to justify their reputation” after failing to spot problems in the nation’s financial system before the economic crisis of 2008.

“These are some of the people who have the worst records of incompetence and irresponsibility around,” Frank, the top Democrat on the House Financial Services Committee, said on MSNBC’s “Rachel Maddow Show.”

And just like former Clinton-era Labor Secretary Robert Reich, did here. The emphasis is mine:

Pardon me for asking, but who gave Standard & Poor’s the authority to tell America how much debt it has to shed, and how?

If we pay our bills, we’re a good credit risk. If we don’t, or aren’t likely to, we’re a bad credit risk. When, how, and by how much we bring down the long term debt — or, more accurately, the ratio of debt to GDP — is none of S&P’s business.

S&P’s intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P’s failures (along with the failures of the two other major credit-rating agencies — Fitch and Moody’s) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.

Or Paul Krugman did, in The New York Times today:

It’s not the whole story, but something like this threatens to develop:

1. US debt is downgraded, sparking demands for more ill-advised fiscal austerity

2. Fears that this austerity will depress the economy send stocks down

3. Politicians and pundits declare that worries about US solvency are the culprit, even though interest rates have actually plunged

4. This leads to calls for even more ill-advised austerity, which sends us back to #2

Behold the power of a stupid narrative, which seems impervious to evidence.

And then this morning, he needed to outline steps explaining to the American people how he – in his leadership capacity – was going to limit the ability of such institutions, to influence economic policy to the extent necessary. Instead, we got this:



Gridlock. Legitimate source of concern. Need to tackle our deficits. Spending cuts.

Oh yeah, and tax “reform” and “adjustments” to Medicare that we need not fear. Common sense and compromise. Lack of political will. And some stuff about jobs that had little to do with creating decent jobs that won’t cause people ulcers as they try to figure out how to pay exorbitant health insurance bills.

Despite this President's continual efforts to offer hope, the words "depressing" and "bewildering" seem best suited, for today,

The Downgrade

On MSNBC’s Rachel Maddow Show last night, Congressman Barney Frank (D-MA) expressed his outrage at the S & P downgrading of the U.S. credit rating, with a negative outlook. Listen carefully – an excellent analysis all around.

Visit msnbc.com for breaking news, world news, and news about the economy

Not just a mathematical error, but a blatant political move designed to tilt our economic policy in a conservative direction. Despite the error, actually. Deficit reduction did not go far enough, in “our view.” And the American “political process” is not great, either.

Yet another institution that helped get us in the mess we are in, continuing to have the ability to exert power over economic policy, and the lives of the average American. How this is still possible, is beyond comprehension.

And from Paul Krugman, in yesterday’s New York Times. The emphasis is mine:

More than that, everything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs, so a couple of trillion more or less barely signifies in the long term. What matters is the longer-term prospect, which in turn mainly depends on health care costs.

So what was S&P even talking about? Presumably they had some theory that restraint now is an indicator of the future — but there’s no good reason to believe that theory, and for sure S&P has no authority to make that kind of vague political judgment.

In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.

Barney Frank urges us not to pay any attention to these people, but will anyone with power and control listen? Is it even a possibility?

In short, by Atrios:

Apparently we're supposed to care about what some idiots at some corrupt organization think about anything.

The Republicans will use this as an excuse to lobby for more deficit reduction. And I have no faith the Democrats will use what happened yesterday to (begin to) systematically ensure that the institutions that got us where we are, are stripped of their power now, and for good.

Looking forward to the day when something like this happens again, and we can collectively say, “who cares.” And mean it.

The State Of The State, Minnesota Style

No new taxes, so I guess all is right with the world:

After weeks of crippling political deadlock, DFL Gov. Mark Dayton and Republican legislative leaders emerged in the darkened Capitol on Thursday to announce they had brokered a budget deal to end the longest state government shutdown in U.S. history.

The deal raises the revenue Dayton sought -- $1.4 billion -- but without raising taxes, which Republicans opposed. Instead, it reaches back to an earlier GOP offer to rely primarily on more borrowing from schools and from the sale of tobacco bonds. The House and Senate could return in special session to vote on a final budget as early as Monday or Tuesday.

And the Democrats got concessions on a few social issues, including Republican demands on restricting public funding for stem cell research, abortion restrictions, and government worker layoffs.

As Minnesota goes, so goes DC???

Decision Time?

So, what’s it finally going to be on the debt reduction talks?

Before bringing talks to a close Thursday, Obama gave Republicans three options: The far-reaching $4 trillion deal that includes taxes and cuts to entitlement programs; a $2 trillion package that would require each side to give only a little; and a much smaller package that would include no tax increases and no cuts to entitlement programs — and do much less to solve the nation’s financial problems.

Like others – who have said it this morning far better than I ever will – I do not understand the White House strategy on this one.

I do know, however, that it has caused a lot of anxiety to an already-too-depressed American public this summer.

Pundit Round-Up: The Economic Forecast Edition

Paul Krugman, at The New York Times:

Ugh. That was a seriously ugly jobs report (pdf). Almost no job creation, with slow private-sector growth offset by falling public-sector employment; a falling employment-population ratio; and (I don’t know how many people have picked this up), an actual decline in wages, albeit a small one.

Let me emphasize that last point. My bottom line on the inflation-deflation issue has always been to look at wages; you can’t have a wage-price spiral if wages ain’t spiraling. And they aren’t, to say the least.

It’s important to realize, by the way, that stagnant wages are NOT good for recovery; all they do is ensure that the burden of debt relative to income remains high, keeping demand and employment down.

The situation cries out for aggressively expansionary monetary and fiscal policy. Instead, however, all the political push is in the opposite direction.

Adam Serwer, writing today for The Plum Line:

Today’s jobs report is terrible. While the Republican response borders on self-parody, the White House has shown a complete lack of leadership on the issue.

As Jared Bernstein wrote this morning, most economists expected the economy to add about 120 thousand jobs. Instead, only about 18,000 jobs were added, but that doesn’t tell the whole story. While the economy added 57,000 private sector jobs, the public sector lost 39,000, offsetting what were already modest gains. According to the Center on Budget and Policy Priorities, state and local government payrolls have shrunk by over 500,000 since 2008.

Complete lack of leadership.  Sigh.

Jamelle Bouie, at Tapped:

In a sane country, a jobs report like this would send lawmakers into a deep panic as they scrambled to do something for the growing mass of unemployed people. As it stands, Democratic lawmakers aren’t willing to expend energy on new efforts to reduce unemployment, and Republican lawmakers have staked their ground against federally funded job creation. Instead, the entire political class is trapped in a fantasy world where deficits are the greatest threat to the health of our republic, and spending cuts are the necessary cure. Even President Obama has taken leave of reality; in his most recent weekly radio address, the ostensibly Democratic president endorsed the worst of right-wing economic fallacies:

Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.

In a sane country, indeed.

Jonathan Chait, at The New Republic:

Jonathan Bernstein objects:

I disagree with Jonathan Chait, who basically accuses the Republicans of preferring the economic conditions that would help them elect a president in 2012.

I ought to clarify this. I certainly don't think Republicans are consciously taking steps they think will hurt the economy. That isn't how most brains work. Rather, they understand that the state of the economy is the primary variably impacting their chances of regaining power, and then reasoning toward a view of the economy that melds their self-interest with their perception of the public good:

And perhaps best of all, President Obama’s senior political adviser David Plouffe:

“The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers,” Plouffe said. “People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’”

What Mr. Plouffe seems to not understand, is that the situation in this country is SO BAD, that the two points are now indistinguishable from each other.

And if you don’t follow Former Labor Secretary Robert Reich on Twitter @RBReich, please do. He manages to do a fabulously academic job of making really, really, really good suggestions to the administration, in 140 characters or less.

Economic Forecast

A bad morning. This, from The Washington Post:

Job growth came to nearly to a halt in June, the federal government said Friday in surprisingly grim new data — an alarming challenge to predictions that the economy would bounce back later this year.

Employers added 18,000 jobs last month, a trivial number in a country with 150 million workers, and the unemployment rate rose to 9.2 percent from 9.1 percent. It was a far worse result than expected--economists had forecast 105,000 new jobs.

The jobs report was exceptionally weak even beyond those headline numbers. Job growth in April and May was revised downward by a combined 44,000 positions. Temporary employers, which tend to be a leading indicator of future activity in the job market, cut 12,000 jobs. And some 272,000 Americans dropped out of the labor force, perhaps giving up looking for work out of frustration; the unemployment rate would have risen even higher had they stayed in.

A broader measure of unemployment that includes those who have given up looking out of frustration and those with part time work who want a full-time job rose to 16.2 percent, from 15.8 percent.

I hope I am wrong, but I shudder to think what the numbers will look like a month from now, when July 1st State, County and municipal government layoffs are factored in.  July 1st, the start of new fiscal years all around the country, remember? 

I can already hear the Republican blah-blah now, about how government doesn't create jobs....

Let Them Eat Cake!

Because after all, the poor pay too much in taxes. From Sen. Orrin Hatch, R-UT:

I get a little tired of hearing about the Obama approach of 'shared sacrifice.' Shared sacrifice is something — sounds good — but I'd prefer the Republican approach to shared prosperity. And that's what I think we're all about.

When you talk about 'shared' — think about this — it's pretty irrefutable that the bottom 51 percent of all wage earners, of all households, do not pay income taxes. The top 1 percent — the so-called 'wealthy' — pay 38 percent of all income taxes. The top 10 percent are paying 70 percent of all income taxes. The top 50 percent pay something like 98 percent of all income taxes. Fifty-one percent don't pay anything.

And the video, along with a bit of commentary from The Young Turks:



While some of this may be about playing Tea Party politics, the sad part is that I think he really believes this stuff.

Cuts to Social Security and Medicare

While I am not completely surprised, this is truly disappointing.  Horrible news, just breaking from The Washington Post.  I truly do not understand what this White House is thinking.

President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.

At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.

As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

The best might be this.  The emphasis is mine:

Meanwhile, another senior Republican on Wednesday signaled a new openness to raising taxes— at least for selected special interests. House Majority Leader Eric Cantor (Va.) told reporters that he is now willing to consider Democratic demands to end tax breaks for corporations, hedge-fund managers and owners of corporate jets, so long as the final deal does not raise tax rates or overall federal tax collections.

Completely selling out, for what might be small tax revenue increases, at best.

The depression and anxiety spreading through the American public is palpable.  I can hardly imagine what this will do for the collective American psyche this summer.  We are suffering so, from the instability this economic crisis has brought to our society.  Adding on another layer of fear about our future, along with the increasing recognition that no one in Washington gives a hoot about the average-Joe, will be very, very bad for this country.

I hope to wake up tomorrow and chalk it all up to a bad dream.  That is, if I sleep.

Two Elections and a Protest

Polar opposite election results this weekend. From Peru:

LIMA, Peru — Ollanta Humala, a nationalist former military officer who vows to expand antipoverty programs, seemed headed to a narrow victory in the presidential election against his rival, Keiko Fujimori, according to incomplete official returns.

Mr. Humala’s victory would be a rebuke of the economic model that has driven robust growth in Peru, even as millions of citizens who are mired in poverty have felt left out.

Mr. Humala, 48, toned down his once-radical views and retooled his image into that of an admirer of the former Brazilian president Luiz Inácio Lula da Silva, a moderate leftist.

Of course, having the last name Fujimori was not a good way to start off in the election. Keiko Fujimori is the daughter of former Peruvian President Alberto Fujimori, who is serving a 25-year prison sentence for human rights abuses. Either way, this election was about the disaffected poor. Despite Peru’s recent economic growth, there is general discontent that policies have not focused on reducing poverty and lifting many out of dire economic circumstances. Mr. Humala campaigned in part, on raising taxes on mining companies and asserting a bigger government role in some sectors of the economy.

And this from Portugal. The emphasis is mine:

Portugal's Social Democrats have unseated the governing Socialists with a resounding parliamentary election victory, giving the next government a strong mandate to enact a tough austerity program in return for a €78 billion ($A106 billion) international bailout.

Pedro Passos Coelho, leader of the Social Democrats, is expected to be the next prime minister, at the helm of a centre-right coalition government with the conservative Popular Party.

With about 80 per cent of votes counted, the Social Democrats had won 39 per cent of votes compared with 28 per cent for the Socialists led by Prime Minister Jose Socrates. The Popular Party had 12 per cent.

Blackmail.

And all this in light of the protests in the streets of Greece. More blackmail. Again, my emphasis.

ATHENS (Dow Jones)--Tens of thousands of Greeks demonstrated outside parliament Sunday in a massive protest that comes just days before the government is due to introduce new austerity measures that Greece has promised its international creditors.

The protesters held banners demanding popular resistance to the new measures and calling on the Greek government to reject a 110-billion-euro ($159 billion) loan memorandum it signed last year to rescue the country from default.

Taking place in a peaceful, almost carnival-like atmosphere, the demonstrators also directed their message at Greece's political leaders, gesticulating at the parliament building and shouting: "Thieves, Thieves, Thieves" in unison.

The demonstration is the largest protest in 12 days since a new, grassroots movement of self-proclaimed "indignant" citizens began staging daily protests in the central square of Athens. Greek media estimates of the crowd size ranged from 40,000 to more than 100,000.

The movement, organized over the Facebook social-networking site, is modeled on a similar grassroots protest in Spain known as Los Indignados, and brings together a wide segment of society, ranging from youth to retirees.

Forget two Americas. It's two (or three) different worlds.

Jobs Numbers

Not good.

After several months of strong job growth, hiring slowed sharply in May, raising concerns once again about the underlying strength of the economic recovery.

The Labor Department reported on Friday that the United States added 54,000 nonfarm payroll jobs last month, following an increase of 232,000 jobs in April. May’s job gain was about a third of what economists had been forecasting.

The unemployment rate ticked up to 9.1 percent from 9.0 percent in April.

“The economy clearly just hit a brick wall,” said Paul Ashworth, chief United States economist at Capital Economics. “It’s almost as if it came to a complete standstill.”

Or more bluntly, from Robert Reich, former Labor Secretary under President Bill Clinton:

The May jobs report is a disaster — the weakest reading since September. Non-farm payrolls grew only 54,000 last month, according to the Labor Department’s Bureau of Labor Statistics. Private employment rose only 83,000 — the smallest growth since last June. Government payrolls dropped 29,000.

The overall jobless rate rose to 9.1 percent.

Together with plummeting housing prices, falling wages for non-supervisory workers, a paltry 1.8 percent growth in the first quarter, and a precipitous drop in consumer confidence, the picture should be clear to anyone able to see clearly.

The recovery has stalled.

We’re not in a double dip yet, but the odds are increasing.

Will the Obama administration take his advice?

Several steps need to be taken right away. Exempt the first $20,000 of income from payroll taxes for two years. Lend money to cash-starved state and local governments. Initiate a new WPA for the long-term unemployed. Amend bankruptcy laws to allow homeowners to include their prime residencies in personal bankruptcy (giving them more bargaining leverage with their lenders to renegotiate mortgage loans)

Above all: Washington needs to show Americans it’s taking seriously the ferocious problem of jobs and wages, and the trend back toward a double dip.

I am not much for anecdotal evidence, but we know a number of people who lost their jobs this week on June 1.  And given that July-1st-start-of-the-fiscal-year thing and how poorly some states are doing, we also know quite a few people who are expecting to be laid off with the start of the next month.

These numbers could get worse as the summer goes on.

(Youthful) Help Wanted

Sometimes I feel like I am in a time capsule, traveling back to the 19th century.

AUGUSTA — Gov. Paul LePage has signed into law a bill to ease Maine's child labor restrictions so teenagers can work longer hours.

The bill signed today by the governor will allow students to work as many as 24 hours rather than the 20 per week under current law. It also increases from four to six the number of hours students can work on school days. Students can work as late as 10:15 p.m. on nights before school.

Supporters said the new law helps businesses looking for youthful help, and also helps teenagers who need the money.

Wonder if those kids working more than 20 hours/week will get a benefits package.  And what's that about "looking for youthful help?"  Isn't that age discrimination?  Or did the state of Maine manage to get rid of that, too?

Happy (Real) Tax Day!

Or go to jail....



Enjoy!

Happy (Almost) Tax Day!

Now she's in the typing pool at minumm wage.



Everything runs right on time.

The Budget Speech

Paul Krugman rather liked President Obama's speech this morning, in both substance and style.  The UPDATE to his blog post though, says it all.

Update: I should probably say, I could live with this as an end result. If this becomes the left pole, and the center is halfway between this and Ryan, then no — better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire.

I will be spending the rest of the day reading (and listening to) the conventional wisdom through the lens of the good professor's words.

Rising Gas Prices

Just talking this week in my house about the seeming lack of outrage in this country over rising gas prices.  Not at all like in 2008.  And then I wake up to this on my radio this morning.  From NPR's Morning Edition:

Others are much less concerned, including Nariman Behravesh, chief economist at the forecasting firm IHS. "The increase in gasoline prices, even to above $4 a gallon, is not a huge deal," he says. "Clearly it is squeezing some households, especially lower-income households. But it's very different from what happened back in 2008."

Back then, gas prices also hit $4 a gallon. But at the same time, the country was sliding into a historic financial crisis. The Federal Reserve says the economic recovery is "on firmer footing."

Behravesh says most Americans really don't spend that much money on gas. "Average households spend about 5 percent of their after-tax income on gasoline. That has risen a little bit from about 2 percent a couple of years ago, when oil prices and gasoline prices collapsed. So it is higher, but it's not a killer," he says. "This is not something that's going to kill this recovery."

Because of course, things are SO much better in this country now than they were in the summer of 2008. 

Collective depression is setting in on this country at an alarming rate.  Just the way the all-too-powerful-and-mighty want it.