All Entries in the "Economy – Labor" Category

Big Banks’ Small Business Lending: Do The Numbers Really Add Up?

Big banks’ reputations have taken a hit over the last few years, starting with the financial crisis and culminating with the Occupy Wall Street protests. Meanwhile, small businesses have been cast as the economy’s earnest underdogs, generating rhetorical support from Congress to the campaign trail to Wall Street. So it’s no surprise that Bank of America, Chase, Citibank and Wells Fargo were eager to release seemingly impressive small-business lending figures for 2011. Problem is, many of those loans may be going to businesses that aren’t that small.

For lending purposes, the nation’s four biggest banks define small businesses as those with annual revenues up to $20 million — an amount far higher than many businesses on Main Street will ever reach. This could explain the ongoing disconnect between big banks’ upbeat lending reports and the 61 percent of small-business owners who say it’s harder to get loans now than four years ago, according to a study released Thursday by the American Sustainable Business Council, Small Business Majority and Main Street Alliance.

Sarwan “Rimpy” Singh, owner of seven Taco Time restaurants in the Portland, Ore., area, experienced the disconnect when two big banks rejected his application for a $300,000 loan to buy property he is leasing. One bank told Singh it doesn’t give loans to restaurants because they’re high-risk, though Singh has been in business for 16 years, has excellent credit, a sizable down payment and has been a longtime bank customer. Earning $2.5 million to $3 million in 2011 revenue, Singh said he wonders whether he’s at the wrong end of the revenue spectrum when it comes to borrowing. “There are a lot of mixed messages from the big banks,” he said. “That definition is completely wrong. They have no clue what a small business is.”

Full Story Here: Big Banks’ Small Business Lending: Do The Numbers Really Add Up?.

The siren call of austerity

David Cay Johnston :-:

The World Economic Forum opened in Davos amid choruses of central bankers and economists calling for governments to cut spending.

This message of austerity is like the call of the ancient Sirens, whose music lured sailors to shipwreck.

We should take a lesson from Odysseus, who poured wax into the ears of his crew and had himself lashed to the mast of his ship to resist the Siren call.

Austerity supporters are selling the idea that governments, like families, must cut back when income shrinks. But economically, governments are not like families.

Firing teachers, cops and government clerks will, for sure, reduce public spending. But budgets, like the song of the Sirens, are only part of the story. Listen only to the alluring lyrics and, like the many voyagers before Odysseus, we will suffer disastrous consequences – in our case falling incomes and worsening economies.

Full Story Here: David Cay Johnston.

Moyers : How power and influence helped big banks rewrite the rules of our economy

Big banks are rewriting the rules of our economy to the exclusive benefit of their own bottom line. But how did our political and financial class shift the benefits of the economy to the very top, while saddling us with greater debt and tearing new holes in the safety net? This weekend on Moyers & Company (check your local listings), Bill Moyers talks with former Citigroup Chairman John Reed and former Senator Byron Dorgan to explore a momentous instance: how the mid-90�s merger of Citicorp and Travelers Group � and a friendly Presidential pen — brought down the Glass-Steagall Act, a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. In effect, says Moyers, they put the watchdog to sleep.

Full Story Here: Moyers & Company Show 103: How power and influence helped big banks rewrite the rules of our economy. on Vimeo.

Ben Bernanke: Unemployment High, Interest Rates Unchanged For Many Months To Come

Memo to those who are out of work: Don’t get your hopes up this year. Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank did not expect the U.S. unemployment rate to go below 8.2 percent in 2012 or below 7.4 percent in 2013.

That’s one reason the Fed left short-term interest rates unchanged at 0 to 0.25 percent, where they are expected to remain through 2014. “Unless there is a substantial strengthening of the economy in the near term, I would think that it’s a pretty good guess that we will be keeping rates low for some time from now,” Bernanke said.

Bernanke’s muted outlook reinforced many economists’ view that, despite some small glimmers of hope, the economy and jobs won’t be picking up in the near term. His prediction for continued high unemployment comes on the heels of President Barack Obama’s State of the Union speech Tuesday night, which offered a few ideas for improving the employment picture — none of which curried much favor with economists.

Full Story Here: Ben Bernanke: Unemployment High, Interest Rates Unchanged For Many Months To Come.

In State Of The Union, Obama Calls For Minimum 30 Percent Tax On Millionaires

During tonight’s State of the Union, President Obama — noting that one quarter of millionaires are able to pay less in taxes than millions of middle class families — called for a minimum 30 percent income tax rate for millionaires. Obama also took on the favorite Republican talking point that calling for millionaires to pay their fair share in taxes is “class warfare”:

Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes…Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.

Full Story Here: In State Of The Union, Obama Calls For Minimum 30 Percent Tax On Millionaires | ThinkProgress.

What we’ve learned from Romney’s returns

Romney would be in the top 1% based solely on the income he makes in one week.

Mitt Romney’s campaign, as promised, released the former governor’s 2010 tax returns, as well as an estimate for his 2011 returns, and we’re starting to get a sense of why the Republican candidate wasn’t eager to share these details.

Mitt Romney offered a partial snapshot of his vast personal fortune late Monday, disclosing income of $21.7 million in 2010 and $20.9 million last year — virtually all of it profits, dividends or interest from investments.

None came from wages, the primary source of income for most Americans. Instead, Romney and his wife, Ann, collected millions in capital gains from a profusion of investments, as well as stock dividends and interest payments.

By any fair estimate, over $42 million in income over two years isn’t bad for a guy who jokes about being “unemployed.” Indeed, Romney would be in the top 1% based solely on the income he makes in one week.

Full Story Here: Political Animal – What we’ve learned from Romney’s returns.

Conservative Fantasies About the Miracles of the Market

A central doctrine of evangelicals for the “free market” is its capacity for innovation: New ideas, new technologies, new gadgets — all flow not from governments but from individuals and businesses allowed to flourish in the market, we are told.

That’s the claim made in a recent op/ed in our local paper by policy analyst Josiah Neeley of the Texas Public Policy Foundation, a conservative think-tank in Austin. His conclusion: “Throughout history, technological advances have been driven by private investment, not by government fiat. There is no reason to expect that to change anytime soon.” http://www.statesman.com/opinion/cheap-energy-comes-when-market-rules-2105711.html

As is often the case in faith-based systems, reconciling doctrine to the facts of history can be tricky. When I read Neeley’s piece, I immediately thought of the long list of modern technological innovations that came directly from government-directed and -financed projects, most notably containerization, satellites, computers, and the Internet. The initial research-and-development for all these projects so central to the modern economy came from the government, often through the military, long before they were commercially viable. It’s true that individuals and businesses often used those innovations to create products and services for the market, but without the foundational research funded by government, none of those products and services could exist.

Full Story Here: Conservative Fantasies About the Miracles of the Market | Common Dreams.

Boehner Threatens To Hold Payroll Tax Holiday Hostage To Approval Of Keystone XL

On Fox News Sunday this morning, House Speaker John Boehner (R-OH) told Chris Wallace that “We’re going to do everything we can to make sure the Keystone Pipeline is approved.” When Wallace pressed him whether Republican leadership would make the pipeline a condition for extending the payroll tax holiday, Boehner admitted, “We may,” adding (several times) that “All options are on the table.” Watch it:

Full Story Here: Boehner Threatens To Hold Payroll Tax Holiday Hostage To Approval Of Keystone XL | ThinkProgress.

Free Enterprise on Trial

Robert Reich :-:

Mitt Romney is casting the 2012 campaign as “free enterprise on trial” – defining free enterprise as achieving success through “hard work and risking-taking.” Tea-Party favorite Senator Jim DeMint of South Carolina says he’s supporting Romney because “we really need someone who understands how risk, taking risk … is the way we create jobs, create choices, expand freedom.” Chamber of Commerce President Tom Donahue, defending Romney, explains “this economy is about risk. If you don’t take risk, you can’t have success.”

Wait a minute. Who do they think are bearing the risks? Their blather about free enterprise risk-taking has it upside down. The higher you go in the economy, the easier it is to make money without taking any personal financial risk at all. The lower you go, the bigger the risks.

Wall Street has become the center of riskless free enterprise. Bankers risk other peoples’ money. If deals turn bad, they collect their fees in any event. The entire hedge-fund industry is designed to hedge bets so big investors can make money whether the price of assets they bet on rises or falls. And if the worst happens, the biggest bankers and investors now know they’ll be bailed out by taxpayers because they’re too big to fail.

Full Story Here: Robert Reich (Free Enterprise on Trial).

Romney’s Bain made millions as S.C. steelmaker went bankrupt

Boston-based Bain Capital LLC more than doubled its money on GS Industries Inc. — the former parent company of Georgetown Steel — under Mitt Romney’s leadership in the 1990s, even as the steel manufacturer went on to cut more than 1,750 jobs, shuttered a division that had been around for 100 years and eventually sank into bankruptcy.

Bain Capital spent $24.5 million to acquire GS Industries in 1993, according to an investment prospectus for the company that was obtained by the Los Angeles Times and reviewed by McClatchy Newspapers. By the end of that decade, Bain Capital estimated its partners had made $58.4 million off its investment in GS Industries, according to the prospectus.

Bain Capital’s partners also earned multimillion-dollar dividends from GS Industries and annual management fees of about $900,000. But by the time GS Industries filed for bankruptcy protection in 2001, it owed $553.9 million in debts against assets valued at $395.2 million.

Full Story Here: Romney’s Bain made millions as S.C. steelmaker went bankrupt | McClatchy.

The Middle Class: The Engine of Economic Growth

The Center for American Progress has launched a 2012 series of events and publications on the importance of the middle class to our economy. Our series is based on the bedrock progressive principle that a strong middle class is essential for both economic growth and economic stability.

The middle class is our nation’s indispensable workforce. The middle-class consumer creates the incentive to conceive, manufacture, and sell what our economy produces. That demand drives business opportunities and spurs investment. Entrepreneurship and invention also are rooted in the middle class, and the rise in middle-class worker productivity generates much of our nation’s wealth.

The conservative position is less concerned about the middle class. Their counternarrative is that rising inequality is just fine for America since the gains for those in the top 1 percent will eventually “trickle down” to the 99 percent. But that’s not what’s happened over the past few decades. In fact, just the reverse occurred. The economic recovery of 2000 to 2007 didn’t benefit middle-class America. Over that time period gross domestic product grew by nearly 18 percent, yet median household income fell by 0.6 percent.

Full Story Here: Middle Class, Inequality, and Growth Series.

The Rise and Consequences of Inequality

On December 6 President Barack Obama said that the kind of inequality that we have in America today, higher than at any time since the Great Depression, “hurts us all.” He went on to outline how growing inequality and a shrinking middle class are at the root of our economic problems. These trends mean less stable consumption, unsustainable debt, a concentration of power in the hands of the few, and the unraveling of the American Dream that portrays the United States as a land of opportunity for anyone who works hard and plays by the rules. In short, an economy that doesn’t work for all of us, isn’t working.

Join us for a conversation with Dr. Alan Krueger, chairman of the President’s Council of Economic Advisers, about how inequality threatens both the middle class and the economy at large.

full text speech, Video and downloadable Powerpoint [at link below]  

Full Story Here: The Rise and Consequences of Inequality.

Few Keystone XL Jobs Would Go to Residents on Pipeline Route

The proposed Keystone XL pipeline has been publicized as a major jobs creator, but recent unemployment figures indicate that few of those jobs will go to people who live along the project’s route.

According to the latest data from the U.S. Bureau of Labor Statistics, the 57 counties in the pipeline’s path have some of the nation’s lowest unemployment rates. And since most of the construction jobs will go to skilled union laborers, only a fraction of the local people who are looking for work would likely qualify for those positions.

If approved, the crude oil pipeline would cross six states—Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas—on its way from the tar sands mines of Alberta, Canada to refineries on the U.S. Gulf Coast. According to November data from the Bureau of Labor Statistics, unemployment rates in the majority of the counties along the route were between 2.0 and 5.7 percent, much lower than the national rate of 8.7 percent. (The lowest national unemployment rate in the past 20 years was 4.0 percent in 2000.)

Only six of the Keystone XL counties had unemployment rates at or above the national rate of 8.7 percent.

Full Story Here: Few Keystone XL Jobs Would Go to Residents on Pipeline Route | Truthout.

The Perils of 2012

 Joseph E. Stiglitz  :-:

The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F. Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.

In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realizing the “American Dream.” Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment checks had run out. Headlines announcing new hiring – still not enough to keep pace with the number of those who would normally have entered the labor force – meant little to the 50 year olds with little hope of ever holding a job again.

Indeed, middle-aged people who thought that they would be unemployed for a few months have now realized that they were, in fact, forcibly retired. Young people who graduated from college with tens of thousands of dollars of education debt cannot find any jobs at all. People who moved in with friends and relatives have become homeless. Houses bought during the property boom are still on the market or have been sold at a loss. More than seven million American families have lost their homes.

Full Story Here: The Perils of 2012 – Joseph E. Stiglitz – Project Syndicate.

Co-operative business is not business as usual

Co-operative business models offer more to the communities they operate in, and they’re scalable says Pauline Green

video at link

Full Story Here: Co-operative business is not business as usual | Guardian Sustainable Business | guardian.co.uk.

Fraud and folly: The untold story of General Electric’s subprime debacle

Ex-employees say GE ignored warnings from whistleblowers

For General Electric Co., hawking subprime mortgages was a long way from making light bulbs and jet engines.

That didn’t stop the industrial giant from jumping into the subprime business in 2004, lending blue-chip respectability to the market for risky home loans by paying roughly half a billion dollars to buy California-based WMC Mortgage Corp.

What GE got in the bargain, former WMC employees say, was a place where erstwhile shoe salesmen, ex-strippers and even a former porn actress could sign on as sales reps and make big money pushing home loans. WMC’s top salespeople earned a million dollars a year or more and lived fast, swigging $1,000 bottles of Cristal and wheeling around in $100,000 Ferraris and Bentleys.

Full Story Here: Fraud and folly: The untold story of General Electric’s subprime debacle | iWatch News.

Keynes’ Predictions Proven Spectacularly Accurate

Paul Krugman :-:

The economist Dean Baker is once again justifiably mad at Robert Samuelson at The Washington Post who, in a column titled “Bye-Bye Keynes?” published on Dec. 18, writes: “Were [John Maynard] Keynes alive now, he would almost certainly acknowledge the limits of Keynesian policies. High debt complicates the analysis and subverts the solutions. What might have worked in the 1930s offers no panacea today.”

Mr. Baker, in a blog post for the Center for Economic Policy and Research, pointed out the next day that “Samuelson actually wants to say goodbye to Keynes, but he would have had a better case if he was talking about Darwin and the theory of evolution. After all, when we have seen nothing but confirming evidence for years, why should we still accept the theory?”

It is indeed frustrating that after three years in which Keynesian predictions have been spectacularly correct, pundits insist on reading the evidence as a rejection of his work.

What do I mean by saying that predictions were correct? Three things:

Full Story Here: Keynes’ Predictions Proven Spectacularly Accurate | Truthout.

NFL Players Call On Indiana Republicans To Drop Their Anti-Labor Bill Before Indianapolis Super Bowl

For the last two days, Democrats in the Indiana legislature have prevented the consideration of a “right to work” bill, which would make Indiana the first state in the U.S. industrial belt to allow non-union workers to free-ride on union contracts, which obviously undermines the ability of the union to do its job. Today, the National Football League Players Association called on the Indiana GOP to drop its bill in advance of the 2012 Super Bowl, which is being played in Indianapolis, saying that the NFL’s biggest game “should be about celebrating the best of what Indianapolis has to offer, not about legislation that hurts the people of Indiana“:

To win, we have to work together and look out for one another. Today, even as the city of Indianapolis is exemplifying that teamwork in preparing to host the Super Bowl, politicians are looking to destroy it trying to ram through so-called “right-to-work” legislation.

“Right-to-work” is a political ploy designed to destroy basic workers’ rights. It’s not about jobs or rights, and it’s the wrong priority for Indiana. [...]

As Indianapolis proudly prepares to host the Super Bowl it should be a time to shine in the national spotlight and highlight the hard working families that make Indiana run instead of launching political attacks on their basic rights. It is important to keep in mind the plight of the average Indiana worker and not let them get lost in the ceremony and spectacle of such a special event. This Super Bowl should be about celebrating the best of what Indianapolis has to offer, not about legislation that hurts the people of Indiana.

Full Story Here: NFL Players Call On Indiana Republicans To Drop Their Anti-Labor Bill Before Indianapolis Super Bowl | ThinkProgress.

Teachers Decide To Work For Free After Budget Cuts Leave Pennsylvania School District Without Funds For Salaries

The Chester Upland School District in Delaware County, Pennsylvania suffered a serious setback when Gov. Tom Corbett (R) slashed $900 million in education funds from the state budget. The cuts landed hardest on poorer districts, and Chester Upland, which predominantly serves African-American children and relies on state aid for nearly 70 percent of its funding, expects to fall short this school year by $19 million.

Faced with such a shortage of funds, the school district informed its staff that it will not be able to pay their salaries come Wednesday. So the teachers decided to work for free. As one teacher put it, students “need to be educated, so we intend to be on the job”:

At a union meeting at Chester High School on Tuesday night, the employees passed a resolution saying they would stay on “as long as we are individually able.”

Columbus Elementary School math and literacy teacher Sara Ferguson, who has taught in Chester Upland for 21 years, said after the meeting, “It’s alarming. It’s disturbing. But we are adults; we will make a way. The students don’t have any contingency plan. They need to be educated, so we intend to be on the job.”

Full Story Here: Teachers Decide To Work For Free After Budget Cuts Leave Pennsylvania School District Without Funds For Salaries | ThinkProgress.

Romney’s Tax Plan Would Increase Taxes On Half Of Middle Class Families With Children

The Tax Policy Center yesterday released an analysis showing that 2012 GOP presidential frontrunner Mitt Romney’s tax plan is heavily weighted towards the richest Americans, giving 50 percent of its benefit to those making $1 million or more. While millionaires would receive an annual tax cut of nearly $150,000, many middle class and low income families would see their taxes go up.

And because Romney would phase out tax breaks that the Obama administration put in place in 2009 specifically for families with children and families paying for a child’s college education, it’s those families that would be hardest hit. According to an analysis of the Tax Policy Center’s data done by the Center for American Progress’ Seth Hanlon and Michael Linden, half of families with incomes of less than $50,000 who have children would see a tax increase under Romney’s plan (compared to current policy):

Full Story Here: Romney’s Tax Plan Would Increase Taxes On Half Of Middle Class Families With Children | ThinkProgress.

‘Job Creators’ Aren’t Doing Their Job

If you put in long hours and hard work into a job, would you be upset with a boss who paid you with a handful of nickels, especially if hundred-dollar bills spilled out of your boss’s pockets while he dug around for the coins?

As taxpayers, Americans expect to get what they pay for—safe infrastructure, prompt emergency response, good schools, and a strong social safety net. As shareholders in profitable companies, investors expect to get what they pay for—dividends. And as job seekers in a troubled economy, America’s unemployed are trying to find work wherever they can; but corporate greed is depriving taxpayers, shareholders and job seekers of what they need and deserve.

With $2 trillion at home and $1.4 trillion abroad, corporations are sitting on record-high piles of cash. For example, Apple holds $76 billion by itself, more than the U.S. Treasury. Yet, these hoards of cash remain untaxed. A 35% tax on corporate America’s cash reserves in the United States alone would generate $700 billion in revenue. That amount would reverse every budget cut in every state, rejuvenating America’s schools and infrastructure by re-creating almost a half-million public sector jobs lost since the recession.

Full Story Here: ‘Job Creators’ Aren’t Doing Their Job | Common Dreams.

Bain, Barack and Jobs

Paul Krugman :-:

America’s recovery from recession has been so slow that it mostly doesn’t seem like a recovery at all, especially on the jobs front. So, in a better world, President Obama would face a challenger offering a serious critique of his job-creation policies, and proposing a serious alternative.

Instead, he’ll almost surely face Mitt Romney.

Mr. Romney claims that Mr. Obama has been a job destroyer, while he was a job-creating businessman. For example, he told Fox News: “This is a president who lost more jobs during his tenure than any president since Hoover. This is two million jobs that he lost as president.” He went on to declare, of his time at the private equity firm Bain Capital, “I’m very happy in my former life; we helped create over 100,000 new jobs.”

But his claims about the Obama record border on dishonesty, and his claims about his own record are well across that border.

Full Story Here: Bain, Barack and Jobs – NYTimes.com.

The Cheery Jobs Report That Isn’t: Outlook Still Dismal

The Center on Budget and Policy Priorities: Almost 24 million people are unemployed or underemployed.

Agencies are cheering a Labor Department report that showed a growth of 200,00 jobs in December.

AP reports:

The nation added 200,000 jobs in December in a burst of hiring that drove the unemployment rate to its lowest in almost three years. The figures raised hopes that the economy might finally be healthy enough to power an even stronger job market.

Alan B. Krueger, Chairman of the Council of Economic Advisers, stated:

Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression.

This statement may be of little comfort to the long-term unemployed. The report from the Bureau of Labor Statistics shows:

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.6 million and accounted for 42.5 percent of the unemployed.

The Center on Budget and Policy Priorities gave a sobering look at the jobs report:

Full Story Here: The Cheery Jobs Report That Isn’t: Outlook Still Dismal | Common Dreams.

IRS Audits Of Millionaires Jump By Roughly A Third In Fiscal 2011

What do the Occupy movement and IRS have in common? They’re both taking an interest in the one percent.

Tax audits for millionaires jumped in fiscal 2011 by roughly a third, with the Internal Revenue Service examining income tax returns for 12.48 percent of people who earn $1 million or more, according to Bloomberg. In other words, about one in every eight millionaires got an audit this year. By comparison, in fiscal 2010 the IRS only audited 8.36 percent of millionaires.

A comparison of the audit rates for millionaires and less wealthy taxpayers suggests the IRS is giving special care to the upper tax brackets. While the IRS audited one in eight millionaires in 2011, the same thing happened to just one in 100 people earning less than $200,000, according to the Associated Press.

Full Story Here: IRS Audits Of Millionaires Jump By Roughly A Third In Fiscal 2011.

The German Model For Prosperity

Many economists in the United States have turned their attention to the economies of East Asia for models of success – and with good reason. However, Germany is currently providing another paradigm for excellence, and the U.S. should take notice.

Germany’s current unemployment rate is 6.6 percent, which is 2.5 percent lower than that of the U.S. Germany’s income is more evenly distributed than the vast disparity that exists in the U.S., and in 2010, Germany’s economy grew by 3.6 percent versus America’s 2.8 percent. Manufacturing in Germany also makes up approximately twice the percentage of total economic activity than it does in the United States, while at the same time the average compensation for a manufacturing worker is 50 percent higher than it is here. Let’s not forget that Germany also has a trade surplus. So how has Germany achieved this while other capitalist countries continue to struggle?

The German model of capitalism looks very different from that of the United States. In Germany, many companies continue to be privately owned, eliminating the need to appease shareholders. While financing in the U.S. comes from capital markets, local banks finance the smaller facility operations that comprise most manufacturing in Germany.

Full Story Here: The German Model For Prosperity | Economy In Crisis.

Vampire Squid Watch: 4 Scary Economic Trends for 2012

Top economic thinkers explain why 2012 will be a year of continued – and escalating – predation by financiers.

Having been seen to twitch – ever so slightly – in 2011 as global protests erupted, the vampire squid is stirring in its evil lair. Reports of sucking noises and new tentacles sprouting in every direction tell us that the global financial monster is poised to steal yet more wealth and resources from the public in the coming year. Top economic thinkers have shared their forecasts with AlterNet, and the focus is clear: 2012 will be a year of continued – and escalating – predation by financiers. Their influence over political, financial, and economic activity is likely to grow – along with potential for harm.

1. Back-door Bailout of the Eurozone

Full Story Here: Vampire Squid Watch: 4 Scary Economic Trends for 2012 | | AlterNet.

Keiser Report: Breastfeeding the Bankers

This week Max Keiser and co-host, Stacy Herbert, present London brokers shrinking, boycotting JP Morgan, boycotting the financial system and command and control credit derivatives. In the second half of the show, Max talks to JS Kim of SmartknowledgeU about the MF Global fraud and gold and silver.

Full Story Here: Keiser Report: Breastfeeding the Bankers (E229) – YouTube.

Seven Economic Policy Goals For Progressives In 2012

At best, 2011 can be described as a middling year for progressives when it comes to the economy. Though the economy continued its modest recovery, and despite recent positive signs of improvement, many progressive goals went unfulfilled.

Thanks to GOP obstruction, no widespread jobs package passed, the Consumer Financial Protection Bureau is still without a director, and important areas of investment faced unnecessary budget cuts on both the state and federal level. Progressives were, however, able to block much of the House GOP’s radical agenda — preventing Republicans from gutting Medicare and thwarting repeated efforts to repeal the Affordable Care Act and Wall Street reform laws.

In a perfect world, Congress would make job creation its highest priority when it returns in 2012. But that is unlikely given Republican control of the House, where the GOP continues to push an agenda that would actually kill jobs. With that in mind, ThinkProgress compiled a list of seven goals for progressives that could boost the economic recovery over the next year:

Full Story Here: Seven Economic Policy Goals For Progressives In 2012 | ThinkProgress.

Wall Street Has Destroyed the Wonder That Was America

Imagine a vast field on which a terrible battle has recently been fought, the bare ground cratered by fusillade after fusillade of heavy artillery, trees reduced to blackened stumps, wisps of toxic gas hanging in the gray, and corpses everywhere.

A terrible scene, made worse by the sound of distant laughter, because somehow, on the heights commanding the dead zone, the officers’ club has made it through intact. From its balconies flutter bunting, and across the blasted landscape there comes a chorus of hearty male voices in counterpoint to the wheedling of cadres of wheel-greasers, the click of betting chips, the orotund declamations of a visiting congressional delegation: in sum, the celebratory hullabaloo of a class of people that has sent entire nations off to perish but whose only concern right now is whether the ’11 is ready to drink and who’ll see to tipping the servants. The notion that there might be someone or some force out there getting ready to slouch toward the buttonwood tree to exact retribution scarcely ruffles the celebrants’ joy.

Full Story Here: The Big Lie: Wall Street has Destroyed the Wonder That Was America | Common Dreams.

Half of America In Poverty? The Facts Say It’s True

Recent reports suggest that almost 50% of Americans are in poverty or at a “low income” level. The claim is based on a new supplemental measure by the Census Bureau that includes health care, transportation, and other essential living expenses in the poverty calculation.

The concept of “low income” is controversial. It has been defined as earnings between 100 and 199 percent of the poverty level, a claim which, if true, would place every American family making $50,000 or less at a near-poverty level.

Conservative organizations believe the whole ‘poverty’ issue is overblown. The Cato Institute blames LBJ and Obama for reversing a declining poverty rate. Forbes blames the calculations. The Heritage Foundation argues, “The average poor person, as defined by the government, has a living standard far higher than the public imagines…In the kitchen, the household had a refrigerator, an oven and stove, and a microwave.” The case for a growing “consumption equality” is alternately defended and denied.

Full Story Here: Half of America In Poverty? The Facts Say It’s True | Common Dreams.

Christine Lagarde: World Economy In ‘A Dangerous Situation’

The head of the International Monetary Fund said the world economy was in danger and urged Europeans to speak with one voice on a debt crisis that has rattled the global financial system.

In Nigeria last week, IMF Christine Lagarde said the IMF’s 4 percent growth forecast for the world economy in 2012 could be revised downward, but gave no new figure.

“The world economy is in a dangerous situation,” she told France’s Journal du Dimanche in an interview published on Sunday.

Full Story Here: Christine Lagarde: World Economy In ‘A Dangerous Situation’.

State jobs data calls for ‘super shift’ to job creation

Employment and unemployment data released today by the Bureau of Labor Statistics remind us once again that the so-called “recovery” continues to leave millions of Americans behind. While national policymakers have focused their attention on the “supercommittee,” the very real jobs crisis persists in nearly every state. (See interactive maps below.)

This month’s data show that 10 states and the District of Columbia continue to struggle with unemployment rates at or above 10.0 percent (led by Nevada at 13.4 percent, California at 11.7 percent, and the District of Columbia at 11.0 percent), while 19 states plus the District of Columbia have unemployment rates of 9.0 percent or higher.

The geographic impact of the weak recovery is noteworthy. Over the past three months, states in the Northeast lost more than 29,000 jobs, led by New York, which has lost 22,400 jobs since July. Unemployment rates remain persistently very high in the West and the Southeast.

Full Story Here: State jobs data calls for ‘super shift’ to job creation | Economic Policy Institute.

Payroll tax cut helps, but it’s a limited tool

As the showdown between President Obama and House Republicans continues, it is worth asking just how maintaining a cut in payroll taxes came to dominate the progressive agenda. To be clear, the economy (some recent good news aside) remains in serious need of fiscal support to alleviate the obvious crisis of joblessness. I don’t want to dampen enthusiasm for a measure that does indeed provide this support. But political realism should not completely overshadow the economic realism indicating that the payroll tax cut is a limited tool.

The simple history of how we got the payroll tax cut is pretty straightforward. In December 2010 the Bush tax cuts were set to expire, while the unemployment rate stood at 9.8 percent. The GOP Congress wanted an extension of the Bush tax cuts while the Obama administration wanted fiscal support to help lower unemployment. The primary outcomes of their negotiation were a two-year extension of the Bush tax cuts, a one-year extension of emergency unemployment insurance (UI) benefits, and a one-year payroll tax cut. This payroll tax cut in a sense supplanted the Making Work Pay (MWP) tax credit – a policy that President Obama campaigned on and which was part of the Recovery Act.

Full Story Here: Payroll tax cut helps, but it’s a limited tool | Economic Policy Institute.

11 telling charts from 2011

There are currently more than four unemployed persons for every job opening. While this ratio of job seekers to openings has improved since the depth of the recession, there is still a long way to go to reach a healthy job market.

Full Story Here: 11 telling charts from 2011 | Economic Policy Institute.

Court Rules Against U.S. Anti-Dumping Duties

A federal appellate court has ruled that the United States cannot place anti-dumping and countervailing duties on Chinese goods that benefit from export subsidies. The ruling is based on the fact that the United States has considered China a “nonmarket” economy in some cases, and it is considered impossible to determine the damage from export subsidies in a nonmarket economy because subsidies are so rampant. This ruling will hurt U.S. businesses, and has resulted in renewed calls for Congress to pass legislation to counter illegal Chinese practices.

The case was brought in U.S. courts over the use of the U.S. anti-subsidy law against Chinese-made off-road and agricultural tires. In some cases, the United States chooses to recognize China as a market economy, under which it would be legal to apply anti-dumping and countervailing duties, because market economies cannot legally subsidize their industries under international trade law. But because the United States sometimes treats China as a nonmarket economy, the court ruled that using the anti-subsidy law against Chinese imports is illegal in all cases.

Full Story Here: Court Rules Against U.S. Anti-Dumping Duties | Economy In Crisis.

The 1 Percenters Who Act Like Scrooge…and the Ones Who Don’t

Some say that the 99 percent should shut up and thank the fatcats for their crust of bread. But a few 1 percenters think that’s humbug

Meanwhile, JPMorgan Chase honcho Jamie Dimon, the highest paid executive among the six biggest and most dangerous banks, whines that he doesn’t deserve our ire: “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” said Dimon, whose 2010 take totaled $23 million

Full Story Here: The 1 Percenters Who Act Like Scrooge…and the Ones Who Don’t | Economy | AlterNet.

Goodbye ‘Shop Til You Drop’ Mentality: Renegade Band of Economists Call for ‘Degrowth’ Economy

The road to prosperity and happiness doesn’t lead to the shopping mall, as most economists would have you believe.

In this country, shopping is not just a national pastime. Consumer spending, which makes up about 70 percent of the economy, is a sort of patriotic duty — never more so than in the last four years of economic malaise.

So news from the National Retail Federation that the country is on track for a record-breaking holiday shopping season — $469.1 billion in sales, up 3.8 percent from last year — could only be a good thing, right?

But what if all roads to prosperity don’t lead to the shopping mall, as most economists would have us believe? What if, in fact, all that shopping — and the imperative to grow corporate profits quarter after quarter and continuously expand the economy — was actually the root of many of the problems we face today?

Full Story Here: Goodbye ‘Shop Til You Drop’ Mentality: Renegade Band of Economists Call for ‘Degrowth’ Economy | Economy | AlterNet.

Why Are We Forced to Worship at the Feet of ‘Mythical’ Financial Markets Controlled by the Elite?

We are told to appease the market gods or face eternal financial damnation.

These are just a few of the many ways financial markets are described each and every day by the media, financial players and public officials. At first it seems as if these markets are humanoids onto which we project our feelings. Yet, on closer inspection, it’s more like we have ascribed to them god-like powers. We are told to appease the market gods or face eternal financial damnation. As President Obama warned Europe recently, they must “muster the political will” to “settle markets down.”

Why do we worship these angry market gods?

Full Story Here: Why Are We Forced to Worship at the Feet of ‘Mythical’ Financial Markets Controlled by the Elite? | Economy | AlterNet.

MF Global Collapse Spotlights Practice That Heightens Systemic Financial Risk

No one’s money is Safe

The swift implosion of MF Global highlights a common practice used by aggressive speculators, one that experts say makes the broader financial system vulnerable to another crisis. It’s called rehypothecation, and it allows a firm to essentially pledge the same limited collateral to arrange fresh loans.

MF Global is believed to have used client funds as collateral to borrow money to make bets on the risky sovereign debt of Portugal, Spain and Italy, leading to a daisy chain of securitization, Thomson Reuters Business Law Currents reported. It’s akin to using a single home as collateral for several loans and then investing that money to earn dividends before payments are due on the loans.

In recent weeks amid the turmoil of the debt crisis, European banks appear to be taking measures to restrict their exposure via these collateralized loans made through rehypothecation and have shortened the daisy chains of loaned securities. Clamping down on lending, they have instead deposited assets at the European Central Bank where the assets cannot be recommitted, Bloomberg reported on Thursday. They kept an average of $356 billion at the central bank over the last 20 days, nearing the record high from July 2010.

Full Story Here: MF Global Collapse Spotlights Practice That Heightens Systemic Financial Risk.

Keystone XL: The Persistent Illusion Of Jobs, Jobs And More Jobs

Although the Senate and the House are facing off over legislation that would extend the payroll tax cut, it now seems certain that any compromise will contain a provision — one staunchly insisted upon by Republicans in both chambers — that President Obama make a decision on the long-disputed Keystone XL oil pipeline within 60 days.

The nominal reason offered by supporters of the provision is that the project would create jobs — roughly 20,000 of them, according to the number most often used these days.

But that number, like so much else attending the Keystone XL project, has been a matter of intense debate, and it’s difficult to imagine that the real motive behind the 60-day provision is anything but partisan gamesmanship. It is at least as pure as the Obama administration’s own decision early last month to postpone any ruling on the proposed pipeline until early 2013 — which just so happened to be after next year’s presidential contest.

Full Story Here: Tom Zeller Jr.: Keystone XL: The Persistent Illusion Of Jobs, Jobs And More Jobs.

Break Up Bank of America Before it Breaks Us

On Monday, Bank of America (BofA) stocks briefly traded for under $5. Yes, you could buy a share of BofA for less than the noxious debit card fee they tried to force down your throat.

BofA is massive, with assets equivalent to 15 percent of U.S. GDP. So why is it trading for the price of a latte?

Because Wall Street’s dirty little secret is that BofA is a zombie bank. Now the reek is getting too strong to ignore.

The Most Dangerous Bank In America?

Full Story Here: Break Up Bank of America Before it Breaks Us | Common Dreams.

For Youngest Veterans, the Bleakest of Job Prospect

Now he lives with his parents, sells his blood plasma for $80 a week and works what extra duty he can get for his Marine Corps Reserve unit.  Corporal Rhoden, who is 25, gawky and polite with a passion for soldiering, is one of the legions of veterans who served in combat yet have a harder time finding work than other people their age, a situation that officials say will grow worse as the United States completes its pullout of Iraq and as, by a White House estimate, a million new veterans join the work force over the next five years.

In Afghanistan, Cpl. Clayton Rhoden earned about $2,500 a month jumping into helicopters to chase down improvised explosive devices or check out suspected bomb factories.

Now he lives with his parents, sells his blood plasma for $80 a week and works what extra duty he can get for his Marine Corps Reserve unit.

Corporal Rhoden, who is 25, gawky and polite with a passion for soldiering, is one of the legions of veterans who served in combat yet have a harder time finding work than other people their age, a situation that officials say will grow worse as the United States completes its pullout of Iraq and as, by a White House estimate, a million new veterans join the work force over the next five years.

Full Story Here: For Youngest Veterans, the Bleakest of Job Prospects – NYTimes.com.

Unemployment Benefits Extension: Some Would Lose Aid Under Senate’s Payroll Tax Deal

A breakthrough deal between the White House and party leaders in the U.S. Senate would preserve federal unemployment insurance programs through February. The agreement would prevent more than 1 million jobless from missing out on federal unemployment compensation in the first two months of 2012, but people in 11 states would nevertheless lose benefits during that time.

The deal would reauthorize two federal programs that provide benefits for people who use up the standard 26 weeks of benefits provided by most states. The first program, called Emergency Unemployment Compensation, lasts for 53 weeks. Then the Extended Benefits program adds in up to 20 additional weeks, but only in states where the unemployment rate has risen significantly over the past three years.

Even though the jobs situation is almost as dire as ever, it hasn’t worsened much from three years ago, so Extended Benefits, even if it is reauthorized, would begin to phase out unless Congress changes the way the program is triggered. In November, Democrats in both chambers of Congress introduced bills that would have allowed states to change their “look back” periods to encompass four years instead of three. But as Republicans have pointed out, the White House supports letting the program shrivel up next year.

Full Story Here: Unemployment Benefits Extension: Some Would Lose Aid Under Senate’s Payroll Tax Deal.

Boehner: House Republicans Oppose Senate Payroll Tax Cut Bill

U.S. House Speaker John Boehner on Sunday threw into doubt an extension of a popular tax break for wage earners, saying he and his fellow House Republicans opposed the two-month extension passed by the Senate.

Boehner said on NBC’s “Meet the Press” he wants a longer-term extension of the reduced rate for U.S. payroll tax paid by workers to fund Social Security.

The Senate on Saturday passed a two-month extension but Boehner said he wanted to work out differences with the Senate before the end of the year, when the tax cut expires. (Reporting By David Lawder)

via Boehner: House Republicans Oppose Senate Payroll Tax Cut Bill.

Max Keiser: MF Global bankruptcy

In this edition of the show Max interviews Gerald Celente from trendsjournal.com.

Gerald Celente is a trends forecaster who was recently defrauded by MF Global run by former New Jersey governor, Jon Corzine, who was also former head of Goldman Sachs.

When MF Global collapsed, client cash was taken and apparently transferred to creditors, like JP Morgan.

This commingling of funds has violated the very foundation of the futures market and we talk to Celente about whether he will ever invest money with a brokerage again?

Full Story Here: MF Global bankruptcy-On the Edge with Max Keiser-12-16-2011 – YouTube.

Why Free-Market Economics is a Fraud

Ian Fletcher :-:

If there’s one thing everyone in America knows, it’s that free-market economics is true and free markets are best.

After all, we’re not communists, are we? They starved and lost the Cold War because they believed otherwise. And their watered-down European cousins the socialists? More of the same, only less so. Even liberals get this nowadays. All hail the free market!

Trouble is, things “everyone” knows are often wrong. And this is no exception.

It’s time to start getting honest about a very simple fact: Nobody, but nobody, really believes in free markets. That’s right. Not the Republican Party, not the libertarians, not the Wall Street Journal, nobody.

Here’s why: a truly free market is a perfectly competitive market. Which means that whatever you have to sell in that market, so does your competition. Which means price war. Which means your price gets driven down. Which means little or no profit for you.

Oops!

Naturally, businesses flee perfectly competitive markets like the plague. In fact, the fine art of doing so is a big part of what they teach in business schools.

That’s why businesses use strategies like product differentiation, so their competition is no longer selling the exact same product they are. That’s why they use strategies like branding, so their buyers don’t think the products are the same.

Businesses will, in fact, do almost anything to get out of the hell of pure head-to-head competition.

They don’t do it because they’re crooked; they do it because they have an intrinsic economic incentive to. Always.

This is part of the innate essence of capitalism. It is not a flaw or a defect.  It is part of what makes the whole system go. It is part of what makes capitalism capitalism.

People are the same way. Consider your own career. Why do you get paid more than the minimum wage? (I’m hoping you do.) Probably because you have some skill that everybody else doesn’t have. So you don’t have to bid against every unemployed person in your area to hold your job. Just a few of them. Which pushes your wage above the legal minimum.

That skill of yours is what economists call a “barrier to entry”—entry into the market for your job, that is. And if you’re anything other than a damn fool, you’ll cherish it like your very life.

I sure do.

Now let’s consider the other side of the equation. We’ve looked at free markets in things you sell. Now let’s consider free markets in things you buy.

Here everything gets turned around. If I’m buying something, I want the freest possible market in that product.

I don’t, to take an example recently on my mind, want there to be only one market for live Christmas trees in my town. I want there to be two (or more), and right next to each other so I can easily comparison shop. And I want to shop for more-easily shippable goods on the Internet, if possible, where I can potentially find the lowest price in the entire world.

I want, in other words, every seller’s nightmare. Which every smart seller will use every legal trick in the book to avoid.

As a result, nobody with any wits about them really believes in free markets. People believe in them when it’s in their interest, but not when it’s the other way around.

This is a systemic, structural condition, so anyone who tells you they believe in “free markets” is either lying, stupid, or hasn’t thought the whole concept through properly.

The latter category is quite common. Many people do their thinking about political ideology in an entirely different—and dreamily disconnected—mental space than they use for managing real life.

Frankly, everyone I’ve ever met gets the truth well enough in practice, in their own personal life or in how they run their business, so I just don’t believe anymore that anyone does believe in free markets.

Like any rational person, I’m open to counter-examples if anyone can show me any. But I’ve been asking around for a while on this, and haven’t come up with much.

This is not just an esoteric point, still less yet one more example of the familiar fact that people are hypocrites in politics.

Here’s why it matters. The political players in America today who claim to support free markets don’t. They support free markets in the things their backers buy, but maximum barriers to entry in the things their backers sell.

For example, one of the great unnoticed achievements of the Republicans (and their Democrat collaborators) from Reagan onward has been to gut U.S. antitrust law. Having a monopoly, or a cozy oligopoly with friendly rivals, is one of the best barriers to entry around.

As recently documented in Barry Lynn’s fine book Cornered: the New Monopoly Capitalism and the Economics of Destruction, American industry is now concentrated as it hasn’t been since before the era of Teddy Roosevelt and his trustbusters. (There’s a different kind of Republican for you, by the way. These truths are not liberal or conservative.)

Most Americans don’t realize this has happened because, unlike in the old days of Standard Oil, oligopolies today are cunning about masking their existence.

To take just one example, America’s eyeglass frame industry is now dominated by the conglomerate Luxottica. That’s why frames are so expensive. And any company, like Oakley the sunglass maker, that tries to break into the market? They find themselves shut out of a Luxottica-controlled distribution system. And retailers are now afraid to receive distribution from anyone else, lest they be cut off.

It’s a remarkably well-oiled scheme, and it has its parallels in many other industries. But the average consumer has no idea about this, because the range of brands, if not suppliers, in optical shops remains diverse.

We’re fat, dumb and happy.  We’ve been fooled.  But behind the smiling mask of a hundred labels smirks a single monopolist.

But aren’t there laws against this sort of thing?

Well, there sure used to be, enforced by unsung lawyers and bureaucrats (horrors!) at the Justice and Commerce Departments. Whom nobody considered very glamorous, but who were doing the rest of us a big favor. Talk about forgotten wisdom!

Consider some other examples:

• Tyson in chicken
• Smithfield in ham
• Menu Foods in pet food
• Frito-Lay in chips
• InBev and MillerCoors in beer
• PepsiCo, Coca-Cola, and Nestlé in bottled water
• Dickinson in medical devices
• Microsoft in operating systems
• Iron ore (three companies)
• Aluminum
• Cement
• Railroads
• Banking

The number of problems caused by letting monopoly power—whose key consequence is known as “pricing power”—is astonishing.

For one thing, this is a huge part of what ails American farmers. Family farmers are caught between the agribusiness monopolies who push up the price of their inputs (feed, seed, fertilizer etc.) and the agribusiness monopolies who push down the price of their outputs. (The economists’ term for the latter is “monopsony,” with an “s,” but it works the same way as monopoly.)

It’s the perfect racket.

And it’s no surprise that on the other side of the equation, “free” market politicians are very diligent in imposing genuinely free markets where this suits the interests of the multinational “American” corporations that fatten their campaign coffers.

This is done, of course, as a matter of high principle and sophisticated economic rationality.  It’s remarkably easy to make wonderful after-dinner speeches about free markets.

Let’s start with labor. Post-Nixon Republicans have genuinely supported just about every policy designed to weaken the pricing power of labor. This starts with weakening unions and letting the inflation-adjusted minimum wage fall, but it doesn’t end there.

You think Ronald Reagan got in 1986, and George W. Bush wanted in 2007, amnesties for illegal immigrants because they were nice, compassionate people? To ask the question is to answer it. Whatever the ultimate merits of amnesty as policy, for them it was about cheap labor, plain and simple.

The reality is that the past prosperity of America has never been based on pure free markets—starting with the fact that we had the highest average income in the world in 1776 because the colonies had structurally tight labor markets due to the open frontier. (Europeans and other Old World peoples were trapped by the iron law of wages because they had nowhere to go.)

Free, or nearly free, markets do have their rightful place in many parts of the economy, and it would be foolish to sabotage them. But in other areas—above all, in labor markets—our prosperity was based on pricing power.

A number of areas other than labor also worked better thanks to a healthy dose of pricing power. Try advanced technology, for a start. The patent system, which is not natural, is a fairly recent invention, and does not de facto exist even today in much of the world, is one. Innovation doesn’t come cheap, and without pricing power for innovators, few companies could afford it.

Even the existence of scale economies, which are intrinsic to modern, large-scale, capital-intensive industry, implies markets that are less than free. Why? Because scale economies intrinsically imply a small  number of large producers and thus give rise to oligopoly, with the consequences mentioned earlier.

This is why most other industrialized nations aren’t romantics about free markets, are honest about their frequent nonexistence, and focus their policies on taming the negative effects of oligopoly while capturing the positive ones. They understand, for one thing, that big corporations are necessary but often pirates, and focus on making them share their loot with their crews.

We, on the other hand, live in a state of denial about the piracy

So the next time someone tells you to believe in “free” markets, just tell them you’ll believe as soon as they do.

When pigs fly.

Ian Fletcher is Senior Economist of the Coalition for a Prosperous America, a nationwide grass-roots organization dedicated to fixing America’s trade policies and comprising representatives from business, agriculture, and labor. He was previously Research Fellow at the U.S. Business and Industry Council, a Washington think tank, and before that, an economist in private practice serving mainly hedge funds and private equity firms. Educated at Columbia University and the University of Chicago, he lives in San Francisco. He is the author of Free Trade Doesn’t Work: What Should Replace It and Why.

GOP Leaders Still Holding Middle-Class Tax Cut Hostage For Oil Pipeline, After Democrats Make Major Concession

Congress may have come to an agreement on a $1 trillion bill to keep the government funded beyond midnight (when the current round of funding runs out), but there is significantly less common ground on extending the soon-to-expire payroll tax cut. Democrats, in an attempt to prevent a tax increase on working Americans come year end, have dropped their demand that the extension be paid for via a tiny surtax on income in excess of $1 million.

So does that mean Republicans have dropped their demand that an extension be tied to the approval of the Keystone XL oil pipeline? Of course not:

House Speaker John A. Boehner said Friday that his chamber will not sign off on an extension of the payroll tax cut sought by President Obama without including a provision to speed construction of an oil pipeline, which Obama has opposed…“If that bill comes over to us, we will make changes to it, and I will guarantee you that the Keystone pipeline will be in there when it goes back to the United States Senate,” Boehner said.

Full Story Here: GOP Leaders Still Holding Middle-Class Tax Cut Hostage For Oil Pipeline, After Democrats Make Major Concession | ThinkProgress.

ANALYSIS: Gingrich’s Tax Plan Would Cause Perpetual Trillion Dollar Deficits, Triple The Debt By 2024

GOP presidential frontrunner Newt Gingrich is outdoing his Republican rivals in promising enormous tax cuts for the very wealthiest Americans. According to an independent analysis by the Tax Policy Center, Gingrich’s plan would violate basic notions of fairness by requiring middle-class families to pay higher tax rates than millionaires.

But that’s not all that’s wrong with it. Gingrich’s plan is by far the most fiscally reckless plan to be released by a major 2012 contender. The magnitude of the tax cuts he is proposing to the wealthy and corporations would drive the debt to unprecedented and dangerous levels even if federal spending is cut drastically.

Gingrich has not proposed specific levels for federal spending, so to analyze the effect of his plan on the debt, we assumed that he adopts all of the draconian spending cuts in House Budget Committee Paul Ryan’s (R-WI) budget. Gingrich originally dismissed the Ryan budget as “right-wing social engineering,” but later said he would vote for it.

Full Story Here: ANALYSIS: Gingrich’s Tax Plan Would Cause Perpetual Trillion Dollar Deficits, Triple The Debt By 2024 | ThinkProgress.

A Tale of Two Deficit Charts

Dean Baker : – :

Not long after I first came to Washington 20 years ago I was at a conference dealing with Social Security privatization. One of the panelists used a number for the administrative costs of private accounts that was far lower than the numbers I had seen in the literature. After the panel, I asked one of the other panelists about her best estimate of the administrative costs of private accounts. She said that this depended on whether I was interested in advocacy or policy.

I was somewhat taken aback by her response, but after a moment I told her that I was interested in accuracy. I have always felt that this is the best approach to policy questions.

Accuracy has not featured prominently in Washington budget debates in recent decades. There is an enormous amount of misunderstanding about the deficit, much of it deliberately promoted by politicians. We hear endless tales of out-of-control government spending and chronic deficits. This is nonsense as the data clearly show, but unfortunately both parties have an interest in promoting the deceptions.

Full Story Here: A Tale of Two Deficit Charts | CEPR Blog.

U.S. Postal Service Plans Dramatic Service Cuts

The U.S. Postal Service’s plan to close 252 mail processing facilities and cut 28,000 jobs by the end of next year may help the agency curb its mounting financial problems, but it faces big practical obstacles.

Deciding which plants to close will be difficult and face opposition from community leaders. Actually closing all of them could take a few years, and most workers will stay employed under union rules. The bulk of the job cuts will actually come from attrition and retirements, not layoffs, while the remaining work force is shuffled into new locations and positions.

What’s about to unfold in cities from Reno, Nev., to Chicago will illustrate the complexity of cutting a work force protected by strong union contracts and shrinking operations dependent on intricate logistics.

Full Story Here: U.S. Postal Service Plans Dramatic Service Cuts.

Keiser Report: Gold-for-Bonds & Debts-for-What?!

This week Max Keiser and co-host, Stacy Herbert, discuss central banks and governments ‘saving the day’ and hostage taking paper silver markets and gold for bonds in Japan. In the second half of the show, Max talks to Satyajit Das, author of Extreme Money, about the European debt crisi

Full Story Here: Keiser Report: Gold-for-Bonds & Debts-for-What?! (E221) – YouTube.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

Corporate America is sitting right on top of the solution to the nation’s employment crisis, according to a new report from a group of University of Massachusetts economists.

If America’s largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they’re hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

“There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis,” Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report’s release Tuesday.

Full Story Here: Corporate America Is Sitting On The Solution To The Jobs Crisis: Report.

If the ECB won’t act, the Fed must step in

Dean Baker :-:

The European Central Bank has stubbornly refused to act as lender of last resort, but the eurozone economy is too big to fail

The world is eagerly waiting to see if the European Central Bank (ECB) will take the steps needed to save the euro. Specifically, is the ECB prepared to act as a central bank and guarantee the sovereign debt of the countries in the eurozone as the lender of last resort ordinarily does in a crisis?

If not, there is little doubt what the outcome will be. The austerity being imposed on country after country will slow GDP growth and throw workers out of jobs. Higher unemployment will worsen deficits, since it means less tax revenue coming in and more unemployment benefits and other transfers being paid out. Higher deficits will cause investors to worry about the solvency of the government, leading interest rates to rise.

This gives us the famous downward spiral that already sank Greece’s economy and government. It will soon sink Italy and Spain – unless the ECB starts acting like a central bank. The fallout from disorderly defaults from these two countries will cause banks throughout the eurozone to become insolvent, leading to another post Lehman-type freeze-up of the financial system.

Full Story Here: If the ECB won’t act, the Fed must step in | Dean Baker | Comment is free | guardian.co.uk.

Cities With the Highest and Lowest Unemployment

Unemployment rates fell in three-quarters of large U.S. cities in October, a sign that the job market is picking up broadly across the country.

The Labor Department said Tuesday that unemployment rates fell in 281 metro areas. They rose in 57 and were unchanged in 34. That’s slightly better than September’s showing and is the largest number of cities to report a drop since April.

The metro area unemployment data aren’t adjusted for seasonal variations, such as hiring for the winter holidays. So they can be volatile.

Nationwide, the unemployment rate was unchanged in October at 9 percent. Last week, the government said the nationwide rate fell to 8.6 percent in November, the lowest level in 2 ½ years. Employers added about 120,000 net jobs. Still, a big reason the unemployment rate fell was because more people said they have given up on their job searches and dropped out of the work force.

Below are the cities with the highest and lowest rates:

Full Story Here: Cities With the Highest and Lowest Unemployment – NYTimes.com.

Democrats to offer payroll tax cut compromise

Democrats on Monday will propose a compromise plan to extend the payroll tax cut that includes a “serious” way to pay the more than $200 billion price tag, the chairman of the Senate Budget Committee says.

Senate Majority Leader Harry Reid, D-Nevada, will introduce the compromise proposal Monday after the chamber last week voted down competing Democratic and Republican plans, Sen. Kent Conrad told “Fox News Sunday.”

The North Dakota Democrat refused to divulge details, saying it was up to Reid to do so, but added it would be “paid for in a way that’s credible and serious.”

Full Story Here: Democrats to offer payroll tax cut compromise – CNN.com.

OPS: So just what are the cowardly bastards going to give away this time?

Morgan Stanley CFO Ruth Porat: Raise Taxes On The Rich

The movement to raise taxes on the wealthiest Americans has gained an ally at the top of one of the United States’ largest banks. Ruth Porat, executive vice president and chief financial officer at Morgan Stanley, said on Saturday at the Economist’s World in 2012 summit that the government needs to raise taxes on the rich to address its budget deficit.

“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.”

“We cannot cut our way to greatness,” she added.

President Obama has said he would like to raise taxes on millionaires, but many Republicans oppose such a tax. Most millionaires, on the other hand, say that they would like to pay more in taxes.

Full Story Here: Morgan Stanley CFO Ruth Porat: Raise Taxes On The Rich.

Keiser Report: Hang Paulson

This week Max Keiser and co-host Stacy Herbert discuss big bazookas, dead whistleblowers and Hank Paulson. In the second half of the show, Max talks to Jon Thorisson about the new Eva Joly Institute and Iceland’s ongoing fight for justice.

Full Story Here: Keiser Report: Hang Paulson (E218) – YouTube.

300 Economists lend support to Occupy Wall Street

On November 13th 2011, economists from the University of Massachusetts Amherst issued an open statement pledging support to the Occupy Wall Street movement. Since then, more than about 300 economists from around the world have added their names.

Econ4 has now assembled the list of 300 economists who support Occupy Wall Street and the 99 Percent’s struggle for economic justice. Some of these economists are featured in a new video about what’s wrong with the economy and why they support the protesters. thinkprogress.org

The announcement reads:

“We are economists who oppose ideological cleansing in the economics profession. Equally we oppose political cleansing in the vital debate over the causes and consequences of our current economic crisis.”

“We support the efforts of the Occupy Wall Street movement across the country and across the globe to liberate the economy from the short-term greed of the rich and powerful one percent.”

“We oppose cynical and perverse attempts to misuse our police officers and public servants to expel advocates of the public good from our public spaces.”

“We extend our support to the vision of building an economy that works for the people, for the planet, and for the future, and we declare our solidarity with the Occupiers who are exercising our democratic right to demand economic and social justice.”

http://www.presstv.ir/usdetail/213431.html

Full Story Here: [Mirror] 300 Economists lend support to Occupy Wall Street – YouTube.

After Signaling Support, John Boehner Calls Tax Break For Middle Class ‘Chicken-Shit’

Despite their stated opposition to tax increases, Republican lawmakers have been largely cool or even hostile to a proposed extension of the temporary payroll tax cut, pushed by President Obama and Democrats. Finally, this week, Republicans seemed to relent as GOP congressional leaders publicly urged their caucuses to vote for an extension of the plan. “The fact is that Republicans are doing everything we can to allow American families and small businesses to keep more of what they earn,” Speaker John Boehner (R-OH) said this morning of efforts to whip GOP lawmakers to support an extension.

But in private, Boehner seems to hold a different view. Politico reports that in a closed-door GOP meeting this morning, Boehner referred to an extension of the payroll tax holiday as “chicken-shit,” saying he wanted to tack on unrelated legislation favored by Republicans to make it palatable:

Full Story Here: After Signaling Support, John Boehner Calls Tax Break For Middle Class ‘Chicken-Shit’ | ThinkProgress.

Outsourcing Jobs, Offshoring Markets

Conventional economic wisdom teaches that it is not in the interests of employers to drive wages down to desperation levels, since most consumers are wage earners and consumption demand generates from 66 to 72 percent of the Gross Domestic Product. Were employers to drive wages too low they would at the same destroy their customer base, which is good for neither capital nor labor. This line of reasoning assumes that capitalism is organized such that each nation’s labor market is both entirely domestic and the sole source of the demand for its economy’s output. But capitalism is a global system and its sovereign components are not closed economies. The typical large corporations’ labor pool and customer base are now globally dispersed. In fact, the last few decades has seen the creation, for the first time in history, of a global labor market.

The outsourcing of jobs has become common knowledge, and is perceived by most working people as a significant source of the nation’s unemployment woes. The loss of jobs to cheaper labor markets is nothing new; it has been building since the 1960s. In 1959, manufacturing represented 28 percent of domestic output. In 2008, it represented 11.5 percent. This tendency has accelerated with the deregulation of cross-border capital flows. Since 2000 the United States has lost thousands of factories and a total of about 5.5 million manufacturing jobs, representing a 32 percent decline. By the end of 2009, less than 12 million Americans worked in manufacturing. The last time we saw those numbers was in 1941.

Full Story Here: Outsourcing Jobs, Offshoring Markets » Counterpunch: Tells the Facts, Names the Names.

Norquist Tells GOP That Raising Taxes On The Middle Class Doesn’t Count As A Tax Increase

Anti-tax zealot Grover Norquist, the president of Americans For Tax Reform and author of the radical anti-tax pledge that has played a significant role in hamstringing budget and deficit-reduction negotiations, has said that it is unacceptable for those who have signed his pledge to vote in favor of any tax increase. But now that President Obama and congressional Democrats are backing a tax cut aimed at stimulating economic growth, Norquist has changed his tune.

Norquist met with Republican members today to let them know that opposing the extension of the payroll tax cut — which would provide many families an extra $1,000 a year — would not amount to supporting a tax increase, National Journal’s Billy House reported today:

Full Story Here: Norquist Tells GOP That Raising Taxes On The Middle Class Doesn’t Count As A Tax Increase | ThinkProgress.

A Banker Speaks, With Regret

If you want to understand why the Occupy movement has found such traction, it helps to listen to a former banker like James Theckston. He fully acknowledges that he and other bankers are mostly responsible for the country’s housing mess.

As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were “no documentation” mortgages.

“On the application, you don’t put down a job; you don’t show income; you don’t show assets,” he said. “But you still got a nod.”

“If you had some old bag lady walking down the street and she had a decent credit score, she got a loan,” he added.

Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable — and that all this was driven by pressure from the top.

Full Story Here: A Banker Speaks, With Regret – NYTimes.com.

S&P Cuts Credit Ratings on Several Large Banks

Standard & Poor’s reduced its credit ratings on 15 big banking companies, mostly in the Europe and United States, on Tuesday as the result of a sweeping overhaul of its ratings criteria.

JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs Group, Morgan Stanley, Barclays, HSBC Holdings and UBS, were among the banks that had their ratings reduced by one notch each. A notch is one third of a letter rating.

S&P also left the ratings of 20 banks as they were and raised the ratings of two in announcing results from its new ratings criteria to 37 of the world’s biggest banking companies. The agency also updated ratings for dozens of bank subsidiaries of the companies.

Although S&P began warning the markets more than a year ago that it was revising its ratings, the announcement comes at a time when the markets for bank debts are fragile.

Full Story Here: S&P Cuts Credit Ratings on Several Large Banks – US Business News – CNBC.

Things to Tax

Paul Krugman :-:

The supercommittee was a superdud — and we should be glad. Nonetheless, at some point we’ll have to rein in budget deficits. And when we do, here’s a thought: How about making increased revenue an important part of the deal?

And I don’t just mean a return to Clinton-era tax rates. Why should 1990s taxes be considered the outer limit of revenue collection? Think about it: The long-run budget outlook has darkened, which means that some hard choices must be made. Why should those choices only involve spending cuts? Why not also push some taxes above their levels in the 1990s?

Let me suggest two areas in which it would make a lot of sense to raise taxes in earnest, not just return them to pre-Bush levels: taxes on very high incomes and taxes on financial transactions.

Full Story Here: Things to Tax – NYTimes.com.

Thom Hartmann on Capital Gains

thom hartmann on Nov 28, 2011

Full Story Here: Thom Hartmann on Capital Gains – YouTube.

9 Ideas for Congress to Address the 99 Percent

Simple Steps to Get Our Economic Engine Running Again

The Occupy Wall Street movement presents a growing chorus of millions who are fed up with mounting economic inequality in the United States.

The movement reflects the frustrations of people across the country saddled by debt, working harder for less, and with less chance of getting ahead.

It has captured our national attention by demonstrating that America’s economy is not working for most Americans today. But it is working for the richest 1 percent, who control two-fifths of the country’s wealth and get a quarter of all income.

Some people in Washington think the right response to this economic inequality is to give more to the 1 percent and hope it reaches the rest of the country. They support tax cuts for the well off—and spending cuts to Social Security, Medicare, and Medicaid, and other programs that the middle class relies on. They want to slash education, energy, and technology investments that are the bridge to our future prosperity.

We disagree.

Full Story Here: 9 Ideas for Congress to Address the 99 Percent.

Steve Keen: Another Great Depression is all but inevitable

Sarah Montague talks to Steve Keen, one of the few economists to have predicted the global financial crisis, about the possibility of another Great Depression, and how to avoid it.

‘Another Great Depression is all but inevitable’ – that’s the view of Steve Keen. He’s been called the ‘Merchant of Gloom’, but he’s one of the few economists to have predicted the global financial crisis. While he used to be a lone voice in challenging the economic consensus, more and more people are now listening to him. His way of avoiding depression? Write off the debt, bankrupt the banks, nationalise the financial system, and start all over again. He talks to Sarah Montague.

Full Story Here: Steve Keen on BBC HARDtalk [good sync] – YouTube.

The Average Bush Tax Cut For The 1 Percent This Year Will Be Greater Than The Average Income Of The Other 99 Percent

As Occupy Wall Street protestors continue to demonstrate across the country, congress’ fiscal super committee failed to craft a deficit reduction package due to Republican refusal to consider tax increases on the super wealthy. In fact, the only package that the GOP officially submitted to the committee included lowering the top tax rate from 35 percent to 28 percent, even as new research shows that the optimal top tax rate is closer to 70 percent.

Sen. Patty Murray (D-WA), who co-chaired the super committee, explained that the major sticking point during negotiations with the GOP was what to do with the Bush tax cuts. With that in mind, the National Priorities Project points out that those tax cuts this year will give the richest 1 percent of Americans a bigger tax cut than the other 99 percent will receive in average income:

Full Story Here: The Average Bush Tax Cut For The 1 Percent This Year Will Be Greater Than The Average Income Of The Other 99 Percent | ThinkProgress.

Failure of the Super Committee Might Be the US’s Best Hope for Economic Recovery

“Drawing blood” from the economy by cutting government expenditures at a time of high unemployment and underused resources will only ensure the patient’s death, not recovery.

The bipartisan super committee will probably fail to meet the self-imposed November 23rd deadline to enact $1.2trillion of cuts over the next ten years. That failure, as Paul Krugman notes in the New York Times, is a good thing: “Any deal reached now would almost surely end up worsening the economic slump. Slashing spending while the economy is depressed destroys jobs, and it’s probably even counterproductive in terms of deficit reduction, since it leads to lower revenue both now and in the future.”

If the super committee fails to come up with an alternative plan by Thanksgiving, the cuts will hit defense and domestic programs equally. But those cuts won’t begin to go into effect until January 2013, two months after next fall’s election, which also means that the programmed fiscal restriction planned for next year won’t come into effect. The likelihood of failure is provoking a negative reaction in both the markets and the mainstream press. But in spite of that, failure might be the difference between sluggish, moderate growth in the U.S. and double dip recession.

Full Story Here: Failure of the Super Committee Might Be the US’s Best Hope for Economic Recovery | Economy | AlterNet.

U.S. tax burden at lowest level since ’58

Americans are paying the smallest share of their income for taxes since 1958, a reflection of tax cuts and a weak economy, a USA TODAY analysis finds.

The total tax burden — for all federal, state and local taxes — dropped to 23.6% of income in the first quarter, according to Bureau of Economic Analysis data.

By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s — a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year.

The analysis comes as President Obama and Congress debate whether to cut federal spending, raise taxes or both.

Full Story Here: U.S. tax burden at lowest level since ’58 – USATODAY.com.

OPS: With twice the population. And you wonder why our infrastructure is crumbling and we are in debt…

Will the Euro be Destroyed?

DEAN BAKER :-:

We could be living through the last days of the euro. That is not a happy thought. While there were many negative aspects to the rules governing the European Central Bank and the eurozone economies, no one can want to see the economic chaos that will almost certainly follow the collapse of the euro.

There will likely be a wave of bank collapses as banks are forced to write down much of the debt they hold in Italy, Ireland and other heavily indebted countries. This would bring about another Lehman-type situation where finance freezes up. Banks would stop lending to each other and even healthy businesses would find it difficult to obtain credit.

That is the story of a severe double-dip in the eurozone, with the spillover effect almost certainly pushing the United States and most of the rest of the world into recession. It could easily be over a decade until these economies recover from the damage.

Full Story Here: Will the Euro be Destroyed? » Counterpunch: Tells the Facts, Names the Names.

Billionaires Use Tax Loophole To Lower Their Tax Rates To 1 Percent

In 2009, 1,470 households reported income of more than $1 million but paid no federal income tax on it, through their use of various tax loopholes and shelters. Tax rates for millionaires have fallen by 25 percent since the mid-’90s, while one quarter of millionaires currently pay lower tax rates than the average middle-class household.

Numbers like these are the driving force behind the Buffett rule, the administration’s proposal aimed at ensuring that millionaires can’t pay lower tax rates than middle-class families. To add to the pile of evidence that such a rule is necessary, Bloomberg News ran a segment today on billionaires who manipulate the tax code to lower their tax rate all the way down to one percent:

Full Story Here: Billionaires Use Tax Loophole To Lower Their Tax Rates To 1 Percent | ThinkProgress.

China’s Ghost Citiesc

WORLD ECONOMIC COLLAPSE?

DEBT BASED ECONOMYS DO NOT WORK–

Max Keiser , There is a Bull Market in Dissent !

As Occupy Wall Street saw a massive day of action, people working on Wall Street actually got pink slips. It’s reportedly the second week of major layoffs. Job cuts on Wall Street are supposed to be brutal coming up here with firms expected to shed 75,000 jobs according to CNN. Credit Suisse, Bank of America, JP Morgan, Citigroup, Goldman Sachs, UBS all reportedly making cuts. So are we gonna see bankers start occupying Wall Street? We asked financial journalist and host of Keiser Report Max Keiser about it. We also track his evolution from working on Wall Street as a broker to occupying it today.

Nearly 1 in 3 U.S. children poor, Census says

The number of children in the United States considered poor rose by 1 million in 2010, the U.S. Census said on Thursday, with nearly one in three of the youngest Americans now living in poverty.

“Children who live in poverty, especially young children, are more likely than their peers to have cognitive and behavioral difficulties, to complete fewer years of education, and, as they grow up, to experience more years of unemployment,” the Census said.

In 2010, when the Census survey was conducted, 32.3 percent of children across the country were poor, compared to 30.8 percent in 2009.

Full Story Here: Nearly 1 in 3 U.S. children poor, Census says – US news – Life – msnbc.com.

Corporations Renew Push For Tax Holiday A Day After CBO Says It Would Have Negligible Effect On Job Creation

The coalition of corporations pushing for a temporary repatriation tax holiday on money that companies have stashed offshore renewed its efforts in a letter to Congress and the White House today, a day after the Congressional Budget Office released a study showing that such a holiday would have a minimal impact on job creation. Executives at Microsoft, Oracle, Cisco Systems, and Pfizer are among the 15 executives that signed the letter, which asserts that Congress can’t wait any longer to push the holiday through, the Wall Street Journal reports:

CEOs seeking a tax holiday on their overseas earnings are sending a not-so-subtle message to Congress and the White House: We can spend the money here in the U.S. or we can spend it over there.

In a letter released Wednesday, the CEOs write that “the simple truth is that the longer we wait, the more money will be spent overseas, and these foreign investments are unlikely to return to the U.S. even if our tax policies are changed to encourage domestic investment in the future.”

Full Story Here: Corporations Renew Push For Tax Holiday A Day After CBO Says It Would Have Negligible Effect On Job Creation | ThinkProgress.

4 Ways the Poor Get Screwed That Everyone Takes for Granted

Even if we’re not in the 1%, lots of us still benefit every day from policies that burden the less financially fortunate.

I’m not in the 1%. At the lower end of what I think of as the upper middle class, I nevertheless take daily advantage of a raft of systems intended to ensure that people who have less money than I do pay more than I do. Since my economic advantages result from public policy, it’s fair to call them taxes, levied on people least able to afford them and applied upward for the benefit of people like me. Since the glory days of feudalism are long over, and we don’t like to revel in high position, matters are arranged to keep me and people like me from noticing the systemic nature of our economic advantage.

Here, therefore, are four quotidian things we deal with half-consciously every day that move money upward and keep it there:

1. ATM’s. Some readers have reason to think the lowest amount that can be withdrawn from an ATM is a twenty-dollar bill. Others have reason to know that in less privileged parts of town, ATM companies set the machines to dispense ten-dollar bills, with ads calling attention to the fact. The reason is fairly obvious: many people’s balances and obligations don’t permit them to withdraw $20 at one time, and ATM companies and storeowners don’t want to miss out on collecting fees in such a large — and these days, and in those neighborhoods, such a growing — population.

Full Story Here: 4 Ways the Poor Get Screwed That Everyone Takes for Granted | Economy | AlterNet.

Study: GOP’s Balanced Budget Amendment Would Double Unemployment Rate, Put 15 Million Out Of Work

In a week, the GOP will again vote on a Balanced Budget Amendment, the cockamamie economic proposal they have toyed with several times over the last several months, including during the debate over raising the debt ceiling. The vote is part of the final compromise to raise the debt limit, in which President Obama and Senate Democrats promised to hold a vote on such an amendment, despite the fact that such votes have failed numerous times in the past.

Republicans have taken to ignoring the obvious perilous consequences of the amendment even as voices on both sides of the aisle denounce it as the “worst idea in Washington.” The current amendment, former Reagan adviser Bruce Bartlett said, “looks like it was drafted by a couple of interns on the back of a napkin.” Today, the Center on Budget and Policy Priorities (CBPP) added to that criticism, releasing a study highlighting a piece from Macroeconomic Advisers that notes that such an amendment would make future recessions “deeper and longer” and saying that if a BBA had been enacted prior to the 2008 recession, the “effect on the economy” would have been “catastrophic.”

And according to CBPP, passing a Balanced Budget Amendment now, with the country trying to climb out of the hole of joblessness caused by the recession, would have the exact opposite affect one would expect policy makers to try and achieve. In fact, the budget cuts required by such an amendment now would double the unemployment rate and slide the country back into the throes of recession:

Full Story Here: Study: GOP’s Balanced Budget Amendment Would Double Unemployment Rate, Put 15 Million Out Of Work | ThinkProgress.

Not Just Debit Fees: Other Ways U.S. Banks Cost Customers

The era of the debit card fee may have come and gone, but plenty of bank charges remain.

Indeed, with all the talk of debit fees, it’s easy to forget about all the other reasons banks will charge you. And as of October 2010, the median bank account had been issued a staggering 49 separate types of fees, ranging from $1.50 to $175, according to an April report by the Pew Charitable Trust. The report examined fees and policies at 10 of the largest banks in the United States.

Since last year, though, some things have changed. For example, while the Pew report estimated overdraft fees alone would cost Americans around $38 billion this year, Bloomberg Businessweek more recently found that number would fly in around $16 billion.

Other less-known fees, such as returned check fees and stop payment fees, cost customers an average $12 and $29 each, respectively. But with interest rates expected to remain near zero through 2013, according to the Federal Reserve, more fees may be on the horizon as banks struggle to raise revenue.

Full Story Here: Not Just Debit Fees: Other Ways U.S. Banks Cost Customers.

Over Half of All U.S. Tax Subsidies Go to Four Industries. Guess Which Ones?

Citizens for Tax Justice has analyzed corporate tax rates from 2008 to 2010. The report [PDF] examines over half of the Fortune 500 companies

Perhaps it’s no surprise that the richest industries get the biggest subsidies, starting with finance and Big Energy. That’s how the 1% operate.

Notably, 56 percent of the total tax subsidies went to just four industries: financial, utilities, tele-communications, and oil, gas & pipelines.

Full Story Here: Over Half of All U.S. Tax Subsidies Go to Four Industries. Guess Which Ones? | ThinkProgress.

Broke! 10 Facts About The Financial Condition Of American Families That Will Blow Your Mind

The crumbling U.S. economy is putting an extraordinary amount of financial stress on American families. For many Americans, “flat broke” has become a permanent condition. Today, over half of all American families live paycheck to paycheck. Unemployment is rampant and those that do actually have jobs are finding that their wages are rising much more slowly than prices are. The financial condition of average American families continues to decline and this is showing up in all of the recent surveys. For example, according to a new Gallup poll, “lack of money/low wages” is the number one financial concern for American families. To make ends meet, many American families are going into even more debt and more American families than ever are turning to government assistance. Right now, more Americans than at any other point since World War II are flat broke and have lost hope. Until this changes, the frustration level in this country is going to continue to grow.

The following are 10 facts about the financial condition of American families that will blow your mind…..

Full Story Here: Broke! 10 Facts About The Financial Condition Of American Families That Will Blow Your Mind.

VIDEO: Debunking The Right-Wing Meme That The Obama Administration Is Anti-Business

From GOP presidential contender Mitt Romney and Tea Party Sen. Jim DeMint (R-SC) to Sean Hannity and Bill O’Reilly, a general consensus has emerged that the Obama administration is “anti-business.” Yet any actual evidence of an effect from this putative bias has failed to materialize. ThinkProgress has compiled a video report. Watch it:

Full Story Here: VIDEO: Debunking The Right-Wing Meme That The Obama Administration Is Anti-Business | ThinkProgress.

Beyond the Banks: 3 More Ways to Move Your Money Away from Corporations

Can we organize to actively move our money from the corporations that control our political systems, and invest in more just and sustainable economies?

On Saturday, hundreds of thousands of Americans across the country organized to move their money from predatory big banks to smaller local banks and credit unions. After 650,000 Americans joined credit unions during the month of October alone—more than in all of 2010 combined—even more people organized to make November 5 the beginning of a collective blow to the corporate financial institutions that crashed our economy.

Is there a move-your-money equivalent for corporate power? Can we organize to actively—and sustainably—move our money from the corporations that control our political systems to sustain their greed, and invest in more just and sustainable economies?

Yes.

A few Americans have chosen to live full-time at occupations—enjoying the free food, medical care and childcare in the “ideal” society created by the Occupy movement—but most of us are still living and working in a capitalist society, where we need to buy things. What we buy, and more importantly, where we buy it, could be a collective, quiet revolution that begins to fight corporate control and infiltrates our broken economic system with the beginnings of a new, conscientious economy oriented around economic justice.

Full Story Here: Beyond the Banks: 3 More Ways to Move Your Money Away from Corporations | | AlterNet.

Most Americans Support Raising Minimum Wage To Ten Dollars Per Hour, Survey Finds

The majority of Americans say they support raising the minimum wage — by a lot.

More than two-thirds of Americans say lawmakers should raise the national minimum wage to $10 per hour from its current $7.25, a survey from the Public Religion Research Institute finds. While Democrats were more likely to support a minimum wage boost, more than half of Republican respondents said they would like to see the minimum wage go up, according to the survey.

Support for a minimum wage boost has held at stable levels for more than a year. An October 2010 by the National Employment Law Project found that at the time, two-thirds of Americans supported a hike in the minimum wage.

If the current findings hold true come election day, some Republican candidates for president may have to change their tune. Herman Cain’s campaign has floated the idea of scaling back minimum wage laws in impoverished areas and Michele Bachmann has said she would consider lowering it. Ron Paul has said that the minimum wage should be scrapped completely.

Full Story Here: Most Americans Support Raising Minimum Wage To Ten Dollars Per Hour, Survey Finds.

Why Mitt Romney’s Entitlement-Privatization Plan Is Crazy

| Matt Taibbi |

David Brooks, the [gratuitous insult deleted], wrote this this morning entitled “Mitt Romney, the Serious One.” In it, he explained how Romney’s recent decision to unveil a plan for reforming the entitlement system “demonstrates his awareness of the issues that need to define the 2012 presidential election.”

Romney grasped the toughest issue – how to reform entitlements to avoid a fiscal catastrophe – and he sketched out a sophisticated way to address it.

So we had a giant financial crash in 2008 that necessitated a bailout costing a minimum of nearly $5 trillion and perhaps ultimately costing $10 trillion more, we have foreclosure crisis with more than million people a year losing their homes, and we have a burgeoning European debt disaster that threatens to devastate the global financial system – and the chief issue facing the country, according to Brooks and the Times, is reforming the entitlement system?

Full Story Here: Why Mitt Romney’s Entitlement-Privatization Plan Is Crazy | Matt Taibbi | Rolling Stone.

A Small Wall Street Transaction Tax Would Raise $350 Billion

A minuscule tax on financial transactions proposed by congressional Democrats would raise more than $350 billion over the next nine years, according to an analysis by the Joint Tax Committee, a nonpartisan congressional scorekeeping panel.

The analysis was sent Monday to the offices of Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.), the lawmakers who proposed the tax, and provided to The Huffington Post.

The Wall Street Trading and Speculators Tax Act would impose a tax of 0.03 percent on financial transactions, meaning that longterm investors would barely notice it, but traders who move rapidly in and out of positions would feel its sting and, the authors hope, reduce the volume of their speculation in response.

Full Story Here: Wall Street Transaction Tax Would Raise $350 Billion.

The Conservative-Created Jobs Crisis

Latest Employment Numbers Highlight Culpability

The Bureau of Labor Statistics’ new employment numbers for October alongside revised jobs data for August and September show that job creation is not gaining enough traction. Last month 80,000 jobs were added to our economy, and revisions to the data from the two previous months added another 102,000 jobs. But that is not the kind of sustained job creation our economy needs to leave the Great Recession of 2007-2009 behind us. (see chart)

What explains the slow job creation? Well, the L-shaped recovery is due in large part to conservatives in Congress refusing to support President Barack Obama’s American Jobs Act. The connection is explained in my column at MarketWatch.

Full Story Here: The Conservative-Created Jobs Crisis.

More Small Businesses Are Pulling Their Accounts Out Of Big Banks

Even in a tight credit market, David Meinert didn’t think he’d have a problem getting funding from his bank. He was a model entrepreneur, with good credit and a profitable business earning $2 million in revenue. But when he applied for a relatively small $50,000 line of credit from Chase in late 2010, he got denied in 12 hours, with no explanation. “It was insulting and made no sense, even to the banker. And there was no one to even talk to about it,” Meinert says. “It’s frustrating that banks are getting billions of dollars in taxpayers’ money and they’re sitting on that money and not lending it to small businesses. If you’re making less than $10 million, they don’t care about you.”

Meinert decided to turn his frustration into action. After 12 years with Bank of America and a year with Chase, he’s switching all his business accounts to Seattle Bank. Like many small-business owners, he initially joined the big banks for no particular reason other than that they were conveniently located. Bank of America was the closest bank to his office and Chase was the closest bank to his office that wasn’t Bank of America. He spent years enduring all the subsequent irritations — outdated online banking systems, the revolving door of bank employees, increasing fees, a sense that he was more a number than a name — with little more than an eye roll. But the credit line denial was a breaking point.

Full Story Here: More Small Businesses Are Pulling Their Accounts Out Of Big Banks.

Most of the unemployed no longer receive benefits

The jobs crisis has left so many people out of work for so long that most of America’s unemployed are no longer receiving unemployment benefits.

Early last year, 75 percent were receiving checks. The figure is now 48 percent — a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America’s 14 million unemployed have had no job for a year or more.

Congress is expected to decide by year’s end whether to continue providing emergency unemployment benefits for up to 99 weeks in the hardest-hit states. If the emergency benefits expire, the proportion of the unemployed receiving aid would fall further.

Full Story Here: Most of the unemployed no longer receive benefits – Business – Stocks & economy – msnbc.com.

The Specious Case Against a Financial Transactions Tax

DEAN BAKER :-:

With the European Commission seriously considering a tax on financial transactions (sometimes referred to as a “speculation tax”), the opponents of such a tax are shifting their campaign into high gear. We are hearing predictions of disaster from the financial industry and friendly economists if the European Union goes this route.

The opponents’ claims go along three lines:

1. The tax will not be enforceable;

2. The tax will just be passed on to consumers and therefore will not be taking
money from the intended targets in the financial industry;

3. It will raise the cost of capital and therefore slow growth.

Each of these objections are either altogether wrong or hugely exaggerated.

The claim that financial transactions taxes are not enforceable is disproven by the fact that many countries — including China, Hong Kong and the United Kingdom — have financial transactions taxes in place and raise substantial revenue through the tax. In the UK, the tax raises an amount that is between 0.2 and 0.3 percent of GDP each year ($30-$40 billion in the United States). This is done by just taxing stock trades. It does not tax bonds, options, futures or the other derivative instruments that would be subject to the tax being considered by the EC.

Full Story Here: The Specious Case Against a Financial Transactions Tax » Counterpunch: Tells the Facts, Names the Names.

Michigan City Removes Streetlights In Desperate Budget Cut

States and cities around the country have desperately slashed spending in the face of record budget deficits, including unpaving roads, shrinking schools, closing libraries, and even a failed attempt to decriminalize domestic violence.

The latest consequence of extreme austerity is in Highland Park, Michigan, which has not only turned off all of its streetlights, but also ripped out the light poles — a telling sign that its darkening of the streets is permanent. With an unemployment rate at 22 percent and a city debt of $58 million, Highland Park could no longer afford to pay the electric bills:

The city is $58 million in debt and has many more people than jobs, plus dozens of burned-out or vacant houses and buildings. With fewer than 12,000 residents, its population has dwindled to half the level from 20 years ago. Faced with a $4 million electric bill that required $60,000 monthly payments, Mayor Hubert Yopp asked the City Council to consider reducing lighting. Council members reluctantly approved it, even in an election year.

In Highland Park, “the median household income is $18,700, compared with $48,700 statewide. And 42 percent of the city’s residents live in poverty.” The city has seen a precipitous drop in population over the last few decades.

Full Story Here: Michigan City Removes Streetlights In Desperate Budget Cut | ThinkProgress.

Six Reasons to Move Your Money for Bank Transfer Day

Kristen Christian didn’t know she was tapping into a wellspring of consumer discontent. She just knew she was fed up with her “too big to fail” bank’s treatment of its customers. So she created a Facebook event called Bank Transfer Day and invited 500 of her contacts to move their money to credit unions. The response went viral.

Within weeks, Bank Transfer Day swelled to nearly 70,000 participants. Credit Union Times reported that several large credit unions were experiencing record account openings and funds transfers. Kristen’s event had given thousands of unhappy bank customers a solution, and a day of action: November 5th, 2011.

Despite all the ruckus, 70,000 is only a fraction of the big banks’ customer base. Many people have been with the same bank for most of their adult lives, and aren’t likely to move their savings without a few good reasons, of which “my bank is evil” may not be the most convincing.

Full Story Here: Shareable: Six Reasons to Move Your Money for Bank Transfer Day.

Credit Union Business Grows as Consumers Sour on Banks

The big banks may have dropped the debit card fees, but the credit unions are the ones picking up the business.

Long touted by consumer groups as a more consumer-friendly option than large commercial banks, the nation’s not-for-profit credit unions saw a significant jump in new members and deposits last month as momentum in the Occupation Wall Street campaign has increased, and many of the big banks rescinded, debit card fees.

The credit unions pulled in some 650,000 new customers since September 29, when Bank of America announced it would add a $5-a-month debit card fee, an industry trade group reported. Deposits from new customers surged to $4.5 billion, according to the survey released Thursday of 5,000 credit unions by the Credit Union National Association.

The deposits from these new customers were about as much as credit unions’ get from their entire base of existing customers in a typical month.

Full Story Here: Credit Union Business Grows as Consumers Sour on Banks | Common Dreams.

Roubini predicts eurozone collapse; world markets will follow

Noted American economist Nouriel Roubini says the eurozone is in the midst of crumbling, and with the rest of the world’s future at stake with a potential collapse, they might want to listen up — Roubini has been right before.

Speaking privately at a get-together this week at his apartment, those in attendance have since leaked that Roubini, who manages the Roubini Global Economics firm, has low-expectations for resurgence in the eurozone. According to the economist, a collapse is imminent as the economy overseas gets more chaotic.

There is a “significant risk of a Eurozone breakup,” sources say Roubini told a handful of select party guests recently, reports the Business Insider. Adds the economist, if the Eurozone goes under, “everything around the world goes sour.”

Roubini has claimed that in the past he correctly predicted both the housing market crash and the worldwide recession, the aftermath of both is still evident in the crises across the globe. For his forecasting, Roubini has earned the title “Dr. Doom” from members of the media, who look to him for economic outlook and have been met with not-so-optimistic — and correct — assumptions from the analyst in the past. As the American economy continues to show slumping statistics and the unemployment rate stays at or above a stagnant 9 percent for months, a collapse across the pond could cause a catastrophe for the world economy.

Full Story Here: Roubini predicts eurozone collapse; world markets will follow — RT.

America’s corporate tax obscenity

A new report about companies’ finances won’t just enrage you — it’ll make you run to the nearest protest

In 2010, Verizon reported an annual profit of nearly $12 billion. The statutory federal corporate income tax rate is 35 percent, so theoretically, Verizon should have owed the IRS around $4.2 billlion. Instead, according to figures compiled by the Center for Tax Justice, the company actually boasted a negative tax liability of $703 million. Verizon ended up making even more money after it calculated its taxes.

Verizon is hardly alone, and isn’t even close to being the worst offender. Perhaps most famously, General Electric raked in $10.5 billion in profit in 2010, yet ended up reporting $4.7 billion worth of negative taxes. The worst offender in 2010, as measured by its overall negative tax rate, was Pepco, the electricity utility that serves Washington, D.C. Pepco reported profits of $882 million in 2010, and negative taxes of $508 million — a negative tax rate of 57.6 percent.

Altogether, according to “Corporate Taxpayers & Corporate Tax Dodgers 2008-10,” a blockbuster new report  put together by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy that will have you reaching for your hypertension medicine before you finish reading the third page, 37 of the United States’ biggest corporations paid zero taxes in 2010. The list is a blue-chip roll-call.

Full Story Here: America’s corporate tax obscenity – Salon.com.

Bill Gates Champions A Financial Transactions Tax: ‘This Money Could Be Well Spent And Make A Difference’

While Republicans resist any attempt to address growing income inequality, more and more of America’s wealthy are asking to pay their fair share. Joining billionaire Warren Buffet, Microsoft founder Bill Gates recently issued his support for “millionaires and billionaires” paying more in taxes.

Now, Gates is taking it a step further and traveling to the G-20 meeting in Cannes, France today to champion the “Robin Hood tax” — a small financial transaction tax on each stock and bond trade — in order to help financially strapped developed nations meet their global aid pledges to the poor. Aware that countries like the U.S. are not currently receptive to this or any taxes, Gates told the Guardian that hopes his “credibility” lends credence to the idea that such taxes work:

Speaking to the Guardian on the eve of the summit, Gates said: “It is very plausible that certain kinds of FTTs could work. I am lending some credibility to that. This money could be well spent and make a difference. An FTT is more possible now than it was a year ago, but it won’t be at rates that magically raise gigantic sums of money.” [...]

Full Story Here: Bill Gates Champions A Financial Transactions Tax: ‘This Money Could Be Well Spent And Make A Difference’ | ThinkProgress.

650,000 Americans Joined Credit Unions Last Month — More Than In All Of 2010 Combined

One of the tactics the 99 Percenters are using to take back the country from the 1 percent is to move their money from big banks to credit unions, community banks, and other smaller financial unions that aren’t gambling with our nation’s future.

Now, the Credit Union National Association (CUNA) reports that a whopping 650,000 Americans have joined credit unions since Sept. 29 — the date that Bank of America announced it would start charging a $5 monthly debit fee, a move it backed down on this week.

To put that in perspective, there were only 600,000 new members for credit unions in all of 2010. “These results indicate that consumers are clearly making a smarter choice by moving to credit unions where, on average, they will save about $70 a year in fewer or no fees, lower rates on loans and higher return on savings,” said CUNA President Bill Cheney.

Full Story Here: 650,000 Americans Joined Credit Unions Last Month — More Than In All Of 2010 Combined | ThinkProgress.

Romney’s Estate Tax Cut Would Save The Koch Brothers Up To $8.7 Billion Each

Tomorrow, 2012 GOP presidential hopeful Mitt Romney is slated to give a “major spending policy speech” at Americans For Prosperity’s Defending the American Dream Summit. Both the conference and AFP itself are funded by money from the billionaire Koch Brothers.

Romney has, of late, been trying to claim the economic plan he put forth is meant to aid the middle-class, not those in the Koch brothers’ tax bracket. “I want to focus on where the people are hurting the most, and that’s the middle class. I’m not worried about rich people. They are doing just fine,” Romney said at a GOP debate last month. Yesterday, he even tried to claim “I’m proposing no tax cuts for the rich.”

Leaving aside that Romney intends to extend the Bush tax cuts for the wealthy, he has proposed a huge giveaway to the very rich by suggesting the complete elimination of the estate tax. Only the very richest households in the country ever have to pay the estate tax, since, right now, an estate must be worth more than $5 million (or $10 million for a couple) to pay any estate tax at all.

Full Story Here: Romney’s Estate Tax Cut Would Save The Koch Brothers Up To $8.7 Billion Each | ThinkProgress.

Bank Customers Flee to Credit Unions

An estimated 650,000 consumers have closed their bank accounts and opted for credit union membership over the past four weeks, according to CUNA, bringing the approach to Saturday’s Bank Transfer Day to a crescendo.

In a survey of 5,000 of its credit union members CUNA estimates that at least 650,000 consumers across the nation have joined credit unions since Sept. 29, the day Bank of America unveiled its now-rescinded $5 monthly debit card fee. Also during that time, CUNA estimates that credit unions have added $4.5 billion in new savings accounts, likely from the new members and existing members shifting their funds.

The survey results also show that more than four in every five credit unions experiencing member growth since Sept. 29 attributed the growth to consumer reaction to new fees imposed by banks, or a combination of consumer reactions to the new bank fees plus the social media-inspired “Bank Transfer Day,” Nov. 5.

Full Story Here: Bank Customers Flee to Credit Unions – American Banker Article.

New Jersey Plans To Give Food Company $80 Million In Tax Incentives To Create Nine Jobs

Last month, Florida’s economic development agency disclosed that Florida taxpayers have coughed up $1.7 billion in tax credits and incentives for businesses since 1995, but have gotten few jobs to show for it. In fact, “the lion’s share of the awards — 971 — have yet to report any jobs.”

But Florida is far from the only state with this problem. As New Jersey Policy Perspective (NJPP) noted, the Garden State offered food company Goya $80 million in tax incentives last month, for which the state will receive precisely nine jobs in return:

Imagine you are a New Jersey job seeker (one of 418,000 unemployed in the state as of September, 2011, according to the state Department of Labor and Workforce Development) and you read in the news that a firm will be getting a state subsidy to hire 175 new workers. You would be thrilled to see those new job opportunities in the state, right?

But, in the case of Goya Foods, Inc., only nine truly new jobs are being created.

Nine.

Full Story Here: New Jersey Plans To Give Food Company $80 Million In Tax Incentives To Create Nine Jobs | ThinkProgress.