Of the top 10 states for poverty, 6 are “Right-to-Work” (union busting) states.

Of the top 10 states for hunger, 7 are “Right-to-Work” states.

That should say it all, but the fact that Jeff Sessions and Richard Shelby (Alabama - ranked 6th for poverty) are arguing against good union jobs that raise wages across the industry also tells you all you need to know about the divide between the the haves and have-nots in these “Right-to-Work” states: only it’s who has representation in Congress, and who only gets lip service (or worse).

While slavery might be dead in the South, employers below the Mason-Dixon still hanker for the lost riches that abundant free labor used to provide. They drive down wages by threatening - or actually - shipping jobs overseas, and by pitting whites against minorities to insure that labor solidarity is all but impossible.

Case in point:

Sen. Jeff Sessions, R- Ala., told reporters Wednesday, “I can not imagine a real justification for a worker in Alabama who does not have any health insurance at his company to be taxed to maintain a Cadillac health care plan for somebody in Detroit.”

Sen. Sessions, when is the last time you supported a bill for universal healthcare that would help out your constituents?

And when is the last time you addressed poverty in your state?

Yes, the Big 3 have been top-heavy and unresponsive to actual market conditions for ages. But we have a chance now not only to save about 3,000,000 jobs (at a time when unemployment is at its highest in 16 years) but to demand concessions from the executives - instead of the workers - that could re-make these critical manufacturers at a time when nothing matters more than creating jobs and improving wages.

Oh, and Sen. Sessions: any bailout to the auto industry would be a loan, not a grant, so chances are your poor and hungry constituents, if they even make enough to pay taxes, won’t be out a dime. And neither will the rich, white employers who bought you that seat.

My job in Portland, Oregon depends on exported raw materials coming back into the U.S. as auto glass. The bottom line is that none of us, from the UAW members in Detriot to me to even those Honda workers in Alabama, cannot afford for the country to lose 3 million manufacturing jobs. Demand in this country for everything from hibachis to Hondas would fall so low as to drive us to the edge of a Depression that could last a decade or more (unless we decided another war was the way out).

Peace and prosperity is what Americans want now, Sen. Sessions. Instead of being part of the problem, why don’t you shut up and get to work on some solutions?

Post from: Democracy for Vancouver

1936 Chrysler Airflow Series C-9

These days I sometimes feel like I am living in a psychosis.  I have been absolutely opposed to the financial sector bailout from the beginning.  Our government freaked out and reacted poorly.  Too much money was approved with too little oversight for an industry that has become too big and monopolized for its britches.  I favor using government to restructure mortgage obligations and setting up a RTC (remember that) type of entity that will hold and resell foreclosed properties.

Now comes the automaker bailout.  While I do not favor handing the big three a blank check, it seems the ramifications of letting these industries file bankruptcy and stiff everyone are too serious to ignore.

Once again it seems the our government is reacting poorly to the crisis.  Making a loan to Chrysler during the Iacocca days worked out OK didn’t it?  Why can’t we do the same thing again for all three of them?  All of the car companies including Toyota and Honda have had hefty declines in their revenues.

While the domestic automakers have been hit hardest, all manufacturers have seen sharp drops in sales. Toyota’s sales were down 23.0 percent compared with its year ago levels. Honda’s sales were down 25.2 percent, and Nissan’s sales fell 33.0 percent.

Since this is an industry wide problem and not just an American automaker problem, where is our government when you need them to help strengthen our economy and our domestic industries?  Is the fallout from failure of a few financial giants so much more important than ensuring the survival of millions of American jobs in the auto related industries?

Or perhaps this is a disguised union busting tactic? If the automakers go under, Toyota, Honda and other car makers will be able to cannibalize their revenues while using non-union labor to produce their cars.

In any event, it seems to me that the old adage, As goes GM, so goes the country, is more true today than ever.  Do we really want to cede another industry to foreign manufacturers?  Unless we help out our automakers, we may soon find that the only thing America makes anymore is payday loans.

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Post from: Democracy for Vancouver

3 Comments

• At November 20, 2008, First You Were Against the Bailout Before You Were For It wrote:

  [...] the rest of this great post here Share and Enjoy: These icons link to social bookmarking sites where readers can share and [...]

• At November 21, 2008, Allen wrote:

  What I find amazing is that nobody is mentioning Ford's 65+MPG, 5 passenger car that they WON'T sell in the USA. Why should the taxpayers bail out the auto companies when they keep shafting the consumers?

  I do realize that many jobs are dependent on the big 3, but when management, such as Ford's, are opposing selling economic sound vehicles, with such good MPG, it does make a person wonder. I also remember the VW diesel car back in the 70's that was getting over 50 MPG. They also disappeared.

  The big 3 have had the knowledge to manufacture autos that would have excellent MPG for many years, and yet they have not put them on the market. Now they want my tax money to help them with their golden parachutes? NO WAY.

  And yes, it's probably a union busting idea they are trying to use. Labor cost is not the problem, as they want you to believe it is, management, gov't red tape, and the oil companies are the problem, but like everything else, the unionized labor force gets the blame.

• At November 21, 2008, John wrote:

  Here are some afterthoughts to my post.

  Why is it OK to require the car companies to come up for a plan to turn themselves around before giving them government assistance but nothing similar is being required of the banks, insurance companies, investment houses, etc?

  Why was it urgent to get immediate funds to the financial oligopolies but Congress is taking their time with the potential failure of the car companies?

  It seems to me we continue to have a bunch of ineptitude haunting us in D.C. and unfortunately we have no one to blame but ourselves because we put them there.

  I just wish somehow we could eliminate Congress or at least 99% of the people that work there and start over with some people that know what they are doing. After all isn't that what happens in failing corporations? Management is fired and new management is put in to straighten things out.

  We need new management in Congress not just a new party in control.

Some 691,000 children went hungry in America sometime in 2007, while close to one in eight Americans struggled to feed themselves adequately even before this year’s sharp economic downturn, the Agriculture Department reported Monday.

The department’s annual report on food security showed that during 2007 the number of children who suffered a substantial disruption in the amount of food they typically eat was more than double the 430,000 in 2006 and the largest figure since 716,000 in 1998.

Overall, the 36.2 million adults and children who struggled with hunger during the year was up slightly from 35.5 million in 2006. That was 12.2 percent of Americans who didn’t have the money or assistance to get enough food to maintain active, healthy lives.
…
“There’s every reason to think the increases in the number of hungry people will be very, very large based on the increased demand we’re seeing this year at food stamp agencies, emergency kitchens, Women, Infants and Children clinics, really across the entire social service support structure,” said James Weill, president of the Food Research and Action Center, an anti-hunger group.

Weill said the figures show that economic growth during the first seven years of the Bush administration didn’t reach the poorest and hungriest people. “The people in the deepest poverty are suffering the most,” Weill said.

This is disgraceful, to say the least. We’re spending trillions between Iraq and Afghanistan and the bank robbery-cum-bailout, but we can’t manage to keep our populace from hunger - one of the hallmarks of a “first-world” country.

As Rachel Maddow has so often said, we are Birkina Fasso with cable.

When the Walk & Knock bag comes in your Columbian in the next few weeks, please fill it up with canned & boxed goods (if you can - these are tough times, I know), and remember to leave it outside by 8am on December 6th. If you don’t subscribe to the Columbian, please mark the date on your calendar and use any old bag. (Almost all neighborhoods in Clark County will be covered by Walk & Knock teams.)

You can find more information and volunteer for the Walk & Knock and prep activities before December 6th here.

Post from: Democracy for Vancouver

From CNBC, here is the Treasury’s financial crisis balance sheet, as of last Wednesday:

That’s 4,284.5 BILLION dollars, or $4.2845 TRILLION.

And not a single dollar for infrastructure repair or job creation.

Time for shrillness, anyone?

Post from: Democracy for Vancouver

2 Comments

• At November 18, 2008, David Carrier wrote:

  I never thought I would see the day when the Secretary of the Treasury in a right wing Republican Administration would heed the advice of someone like Barney Frank, the only Socialist member of Congress (who has been saying this very thing for a year now):

  Fighting the Financial Crisis, One Challenge at a Time

  By HENRY M. PAULSON Jr., NYT, November 17, 2008

  The answer to the second question is that more access to lower-cost mortgage lending is the No. 1 thing we can do to slow the decline in the housing market and reduce the number of foreclosures. Together with our bank capital program, the moves we have made to stabilize and strengthen Fannie Mae and Freddie Mac, and through them to increase the flow of mortgage credit, will promote mortgage lending. We are also working with the Department of Housing and Urban Development, the F.D.I.C. and others to reduce preventable foreclosures.

• At November 19, 2008, missy wrote:

  Actually Barney Frank is a Democrat. Bernie Sanders (Senator from VT) is a Socialist.

See, Ed, I was right:

The real problem is on the demand side of the economy.

Consumers won’t or can’t borrow because they’re at the end of their ropes. Their incomes are dropping (one of the most sobering statistics in Friday’s jobs report was the continued erosion of real median earnings), they’re deeply in debt, and they’re afraid of losing their jobs.

Introductory economic courses explain that aggregate demand is made up of four things, expressed as C+I+G+exports. C is consumers. Consumers are cutting back on everything other than necessities. Because their spending accounts for 70 percent of the nation’s economic activity and is the flywheel for the rest of the economy, the precipitous drop in consumer spending is causing the rest of the economy to shut down.

I is investment. Absent consumer spending, businesses are not going to invest.

Exports won’t help much because the of the rest of the world is sliding into deep recession, too. (And as foreigners — as well as Americans — put their savings in dollars for safe keeping, the value of the dollar will likely continue to rise relative to other currencies. That, in turn, makes everything we might sell to the rest of the world more expensive.)

That leaves G, which, of course, is government. Government is the spender of last resort. Government spending lifted America out of the Great Depression. It may be the only instrument we have for lifting America out of the Mini Depression. Even Fed Chair Ben Bernanke is now calling for a sizable government stimulus. He knows that monetary policy won’t work if there’s inadequate demand.

Post from: Democracy for Vancouver

Ed Schultz said today that governors and state legislatures should do what they can to prop up the auto makers to give consumers an incentive to buy cars. He was suggested a tax credit for buying a car made in the U.S.

In the first place, Ed, most states are looking at budget deficits right now - the last thing they need is a revenue killer. A tax credit that would be sufficient to tempt a consumer today would have to be so large that it would overwhelm any ability of sales tax, tag and title fees to make up for it.

And in the second place, who has the money - or credit - available to buy a car today? Adult Americans are holding an average of about $50,000 of debt a piece, and with unemployment at a generational high and more added to the rolls every week, who are going to buy these cars, Ed?

We have to start smaller, truly with Main Street, as annoying as that term has become. Maybe in a year or two or three we’ll work our way up to $25,000 durable goods, but right now we just have to give consumers enough breathing room to buy groceries and clothes for their kids again.

UPDATE:

Retail Sales Collapse in October

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $363.7 billion, a decrease of 2.8 percent from the previous month and 4.1 percent below October 2007. Total sales for the August through October 2008 period were down 1.3 percent from the same period a year ago.

Retail trade sales were down 3.1 percent from September 2008 and were 5.0 percent below last year.

Post from: Democracy for Vancouver

5 Comments

• At November 13, 2008, John wrote:

  Yea, I turned Ed Schultz off today which I do every so often because I can only take so much of his BS.

  The way I see it, the car companies are in trouble mostly because:

  1. Poor trade policies, ie NAFTA causing outsourcing and erosion of competitiveness.

  2. Lack of single payer, universal health care making the cost to hire US employees non-competitive as compared to other countries.

  Once again, our government's failure to regulate and enact good regulatory policies is coming back to bite us.

  We may have to bail out the automakers but the root causes must be addressed or they will just keep bleeding us dry due to not having a sound business model.

  All the money in the world will not fix an unprofitable business model.

  A bean counter once told me when I asked why a certain company was losing money, "They are selling dollars for 80 cents." That is quite simply what the automakers are doing. And if they keep selling dollars for 80 cents, one bailout is just going to lead to another and another.

• At November 14, 2008, Pat Campbell wrote:

  Yes, first start with ourselves (Work on a debt reduction/elimination program. Dave Ramsey's book Total Money Makeover is great.).

  Work also on mainstreet (no speculation with tax money on Vancouver's waterfront is a good start). Elect officials who try to inact economically sound policies or urge those who don't to do so.

• At November 14, 2008, missy wrote:

  Re: the car companies and their unprofitability... Does anyone know why they could make the EV-1 go 40 miles on a charge 15 years ago, and now they're bragging about the Volt coming out in 2010 and how they're still working on the 40-mile batteries to make it possible? I understand it's a sedan (not a compact), but haven't they had 15 years to upgrade their battery technology?

  I guess shit happens when you spend 15 years selling gas hog SUVs to the exclusion of everything else.

• At November 15, 2008, Chad Lupkes wrote:

  What I think we need our states to do is to focus their resources on infrastructure, specifically energy production, distribution and conservation. Especially here in Washington State, we need Olympia to contract for the construction of Wind, Solar, Geothermal and Tidal power stations, giving people jobs. The Sound Transit Proposition passing in the Puget Sound also helps, but that's pretty localized. The new state Treasurer should review the buyout of Puget Sound Energy, and force some infrastructure development projects as part of the deal.

• At November 15, 2008, admin wrote:

  I think I fixed the commenting not posting issue. Thanks for letting me know it was messed up.

  John

The $700 Billion Dollar Man gave a report on the progress of the “TARP” program this morning, and unsurprisingly the benefits are all going to the banks, while the individuals who are in debt to those same banks get bupkis. If you’ve ever seen the movie House of Games (or even The Sting), you’ll have a good roadmap to Paulson’s signature moves.

Start with that time-honored con, the Bait and Switch:

We asked for $700 billion to purchase troubled assets from financial institutions. At the time, we believed that would be the most effective means of getting credit flowing again.

During the two weeks that Congress considered the legislation, market conditions worsened considerably. It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets - our initial focus - would take time to implement and would not be sufficient given the severity of the problem… I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.

Next, make the beneficiaries (in truth, your partners-in-crime) seem like a tough sell; this is a variant on the con-man’s trust-aversion gambit:

As we planned a capital purchase plan to support the overall financial system by strengthening balance sheets of a broad array of healthy banks, the terms had to be designed to encourage broad participation, balanced to ensure appropriate taxpayer protection and not impede the flow of private capital.

Then, hype your success at getting these hard-sells to participate in the program, without letting the mark ever sense that it was easy:

By October 26th we had $115 billion out the door to eight large institutions. In Washington that is a land-speed record from announcing a program to getting funds out the door. We now have approved dozens of additional applications, …[but] it will take time to complete legal contracts and execute investments in the significant number of institutions who meet the eligibility requirements and are approved…

Keep the pressure on to make sure no one gets the troublesome idea of clapping eyes on what you’re doing:

During times like these with a slowing economy and some deterioration in credit conditions, even the healthiest banks tend to become more risk-averse and restrain lending, and regulators’ actions have reinforced this lending restraint in the past. With a stronger capital base, our banks will be more confident and better positioned to play their necessary role to support economic activity.

Mix up news of your successes with mentions of probable failures to make your mark think throwing good money after bad is all part of the program, and that we’re on the right track:

First and foremost, because the system remains fragile, we must continue to stand ready to prevent systemic failures. That is the basis for Monday’s action to purchase preferred shares in AIG. The stability of our system remains the highest priority.

…The injection of up to $250 billion of capital into individual banks, the FDIC’s temporary guarantee of bank debt and the Federal Reserve’s multiple liquidity facilities for banks, money funds and commercial paper issuers have all significantly enhanced liquidity and helped improve market conditions.

While your mark is absorbing this avalanche of information, throw out another “must do” project that the mark would have never approved at the beginning, and push him over the brink and into the mindset that he’s put too much up already to stop now:

Second, the important markets for securitizing credit outside of the banking system also need support. Approximately 40 percent of U.S. consumer credit is provided through securitization of credit card receivables, auto loans and student loans and similar products. This market, which is vital for lending and growth, has for all practical purposes ground to a halt. Addressing these two priorities will have powerful impacts on the overall financial system, the strength of our financial institutions and the availability of consumer credit.

(Here you also neglect to tell the mark the obvious, that the U.S. consumers’ capacity to service all of the nation’s consumer debt has long since exceeded its limit.)

Finally, explain why it’s strictly necessary to help all of your associates, but never the mark’s associates or friends:

Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets. Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role, relative to other potential uses of TARP resources, in helping to strengthen our financial system and support lending.

Our only hope is that Obama, being from Chicago, has seen this con game run before, and will shut it down - that is, if Congress manages to get through its lame duck session without approving the release of the final $350 billion. (Bush’s release of the second $100 billion is a given at this point; he’s got nothing to lose, and his and Cheney’s buddies in the banking sector have everything to gain.)

Post from: Democracy for Vancouver

Percent Negative Equity in Homes (click to enlarge)

source

Automaker average wage comparisons (click image for source article)

Post from: Democracy for Vancouver

Larry Summers is the 180° wrong choice for Treasury Secretary:

It would be a really bad start to his administration if President Obama picked a Treasury Secretary who shares a substantial part of the blame for the bubble economy and the financial crisis. It will not be easy to pick up the pieces and get the economy back on its feet, but we would be going in the wrong direction to put one of the people responsible for getting us in this mess in the top economic position in the Obama administration.
…
President Obama has a chance to make a fresh start. He would handicap his administration by relying on those whose mistakes helped to bring about about this economic crisis.

Open Left has set up this anti-Summers petition that will be forwarded to Obama transition team members John Podesta and Michael Strautmanis; I’m having trouble getting through the link right now, but I hope that’s just because so many people know that Larry Summers is a DLC wanker, and the wrong man at the wrong time:

DATE: December 12, 1991
TO: Distribution
FR: Lawrence H. Summers
Subject: GEP

‘Dirty’ Industries: Just between you and me, shouldn’t the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I’ve always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization.

What.A.Dick.

UPDATE from Open Left - More charming Summers correspondence, this time to Ken Lay:

No doubt that energy market deregulation was more than a little on Kenny-Boy’s mind when he penned his congratulatory billet-doux to Larry.

Post from: Democracy for Vancouver

I just heard on the radio that that DLC quisling Rahm Emanuel is Obama’s likely choice for Chief of Staff. Crap.

While my opinion doesn’t mean squat, here’s my dream cabinet, which includes promoting FEMA back to cabinet level (and taking it out of Dept. of Homeland Security):

Department of Agriculture: Senator Tom Harkin
Department of Commerce: Rep. Peter DeFazio, D-Oregon
Department of Defense: General Wesley Clark
Department of Education: Geoffrey Canada
Department of Energy: Angelina Galiteva
Federal Emergency Management Agency: Jane A. Bullock
Department of Health and Human Services: Former Oregon Governor - and author of the Oregon Health Plan - Dr. John Kitzhaber
Department of Homeland Security: Domestic Terrorism expert Morris Dees
Department of Housing and Urban Development: National Urban League president Marc Morial
Department of the Interior: former Alaska Governor Tony Knowles
Department of Justice: Andrew Cuomo
Department of Labor: SEIU president Andy Stern
Department of State: New Mexico Governor Bill Richardson
Department of Transportation: Outgoing Chair of the American Public Transportation Association Michael S. Townes
Department of Treasury: anyone but Larry Summers
Department of Veterans Affairs: Tammy Duckworth

Who would be in your dream cabinet?

What are your priorities for an Obama administration? Mine are, in no particular order because they are all of critical importance:

(1) Get out of Iraq.

(2) Use undispersed portion of the $700 billion bailout for transportation and renewable energy infrastructure projects as economic stimulus.

(3) Repeal FISA law changes.

(4) Repeal the Military Commissions Act.

(5) Repeal new FBI guidelines for “intelligence gathering.”

(6) Remove ban on gays and lesbians from serving openly in the military.

(7) Close Guantanamo and release all prisoners not charged with any crime.

(8) Get started on universal health care.

(9) Undertake prosecution for fraud, where appropriate, in the banking, mortgage brokerage and insurance industries and bond rating agencies; direct any civil fines levied into a program to help homeowners at risk of foreclosure.

(10) Remove the gag order from all family planning funding, both domestic and international, and allow family planning funding for groups that also provide contraception and abortion services; fully de-fund abstinence-only education and re-direct these funds into complete family planning and human sexuality education.

(11) Repeal Bush tax cuts.

Post from: Democracy for Vancouver

1 Comments

• At November 5, 2008, John wrote:

  My laundry list is more what some would call "unrealistic" but I think you have to start at the source of the problems.

  I'd take a platform from Kucinich and establish a Department of Peace.

  Disband Homeland Security.

  I would push legislation that requires all elections officials to be elected in nonpartisan races rather than appointed, require all elections to have paper ballots and outlaw voter purging.

  Push legislation for public financing of campaigns and instant run-off voting in all national, state and local elections.

  Appoint new FCC commissioners who support re-instituting the previous bans on too much concentration of media ownership and the equal time rule.

  Repeal the Patriot Act.

  Re-institute the Glass-Steagall act and tighten up bank leverage ratios. Force banks to divest into smaller entities to reduce the "too big to fail problem".

  Make it explicitly illegal for a President to execute signing statements and disobey any existing or future legislation passed by Congress. Take steps (not sure what they would be) to ensure the Department of Justice is never again used as a political tool of the White House.

  Remove tax deductibility for compensation paid to an individual (with no exceptions like we presently have in the tax law) in excess of $1 million annually (indexed for inflation) and add a 5% corporate tax surcharge to wages paid in excess of this amount. Use the funds to help pay for lower college tuitions.

  I would appoint at least one Republican cabinet member, Chuck Hagel would be a good pick.

  Do something creative to punish corporations who outsource employees.

  Limit Supreme Court judges terms to 15 or 20 years.

  Once the above is done, I would turn to energy, global warming, healthcare, tax reform, redirect military spending into programs that help foreign countries reduce their propensity to breed terrorists (let's kill them with our kindness instead of killing them) and the many other issues that must be addressed.

Obama Pumpkin

So says our Representative Brian Baird and I quote him from a link to a story in my earlier article:

Baird said the legislation also will prevent executives who presided over the financial crisis from reaping huge salaries and bonuses.

“Any company that chooses to participate in the program will not be able to offer their departing executives exorbitant severance packages,” he said. “In companies where the government is making a direct purchase, it will also place strict limits on executive salaries and will end the tax deduction for executive salaries over $500,000. For the first time in a long while, adult supervision is returning to Wall Street.”

And as any 6th grader could have anticipated back then, Seeking Alpha has an article entitled, For Shame: $50 Billion of Bailout Funds Already Designated for Year-End Bonuses, which states:

As if the economic bailout by U.S. taxpayers isn’t enough to make you sick to your stomach, new information has come to light that several banks are planning to pay billions of dollars in year-end bonuses from the bailout funds they received.  Investigations are beginning into the nine banks that took in the first $125 billion – the same $125 billion that was supposed to be used to unclog the credit system which was preventing banks from providing much needed funds for individuals and businesses.

There are many feathers in a ruffle over this and New York Attorney General Andrew Cuomo and several congressmen are furious that over $20 billion has already been earmarked as bonus funds for management and employees. Unbelievably, that is just the estimates from Goldman Sachs (GS), Morgan Stanley (MS) and Merrill Lynch (MER). There are six more banks that are also working on similar heists.

Here is their rationale for using that money: It is reported that the financial industry pays base salaries in the range of $80,000 to $600,000 and apparently that is simply not enough to keep some of the best and brightest working to keep their companies profitable. It seems that if they were paid only this meager amount, the company would risk mass defections. That would be a real problem…or would it?

Representative Baird, did you REALLY think that lowering the deductibility of executive compensation to $500,000 or $5 for that matter would REALLY stop the robber barons from stealing our (the taxpayer’s) money?  If so, given what is now occurring, do you think you continue to be qualified to represent us (the taxpayers) in Congress?

When is adult supervision going to return to Washington’s 3rd Congressional District?

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Post from: Democracy for Vancouver

I just got my Fidelity IRA statement and don’t have the guts to open it.

So far this morning, the Dow has fallen almost 360, with many wondering if it will lose 1,100 before 2pm triggering a suspension of trading.

Something has to be done to quell fears of a national/international recession bordering on depression. Yes, emotion is driving the market, but their are big, bad fundamentals behind those fears.

There are $18 billion in ready-to-go infrastructure projects in this country: projects that have been through design and engineering and land acquisition, but are simply awaiting funding.

Analysts estimate that for every $1 billion invested in transportation projects, approximately 35 thousand jobs are created.

That’s 630,000 jobs. That could begin to put a dent in the 2.2 million jobs lost in the last 12 months, including the 3,300 positions that Hank Paulson’s own Goldman Sachs announced it would be eliminating today.

Every dollar invested in infrastructure turns over in the community an average of 8 times - that’s a lot of people stimulating the economy.

Bernanke, Bush & Paulson: you were so good at spending money to buy off phantasms of lost value. Why don’t you give us something concrete for a change, something that will help this country move forward and get people back to work?

Get off your asses, you selfish sons of bitches.

Post from: Democracy for Vancouver

From the greed and short-sightedness of the banks to the insanity of free trade policies to the shrinking of the middle class and the fundamental financial ignorance of the average U.S. consumer:

That says it all.

h/t hilzoy

Post from: Democracy for Vancouver

As Aziz Huq wrote in his piece published at truthout yesterday, the financial meltdown currently being experienced on Wall Street and in the Federal Treasury may be the start of unwinding another complicated and ill-considered U.S. investment strategy: our military presence in almost every country on earth.

Even before the mid-September unraveling began, international creditor goodwill toward the “sole superpower” and its fiscal overreach seemed to be evaporating fast. Asian investors, for instance, were quick to evince “unprecedented” skepticism about U.S. assets in the opening moments of the crisis…

Since September, however, the same sovereign wealth funds have proved skittish indeed about helping U.S. financial outfits, thus eliminating another possible resource for responding to credit shortfalls.

At some point, tighter global credit conditions are sure to significantly constrain America’s freedom of action internationally. After all, Chinese and East Asian investors, to offer but one example, are now quite capable of reining in, and even undermining, the federal government (if they choose to), rather than vice versa.

The United States has always prized individualism, and in the beginning, this extended to avoiding “foreign entanglements” as well, as George Washington warned against in his farewell address. But the expansion across the North American continent not only provided the impetus for excluding other nations from our land- and resource-rich prize, but also granted the U.S. the wealth necessary to defend this prize and to project our power first in the Western hemisphere with the Monroe Doctrine, and then across the Pacific with Manifest Destiny, and finally, after World War II and with the advent of the Cold War, into the many places abandoned by the imperial powers of Europe and Japan. Our alliance with Israel brought further military “investment” in the Middle East; the fall of the Soviet Union opened up Eastern Europe to U.S. troops; and after September 11 the Bush Administration expanded our presence into almost every other vacant spot on the map. Currently, the U.S. military has bases or troops in more than 150 countries.

Power may be the ultimate aphrodisiac, as Henry Kissinger famously quipped; but the man himself is living proof that power is also a gateway drug to an addiction only satisfied by more, and greater, power.

The U.S. military budget for fiscal 2009 - which does not include the wars in Iraq and Afghanistan, as these continue to be “emergency expenditures” despite the fact that each has now surpassed World War II in duration - is $515 billion dollars, a breathtaking amount considering that it is only for a single year, and that U.S. military expenditures seem to know no direction but “up.” Only Social Security takes more from the U.S. Treasury, and military spending absorbs more tax dollars than Education, Transportation, Veterans, Justice, Natural Resources, Environment, Agriculture, Foreign Affairs, Community Development, Science and Technology, and Government Administration combined.

Is this really the best use of our resources, in a world where we spend more on our military than all of the other nations on the planet - again - combined, and when we are falling behind the rest of the industrialized world in areas as critical as education, infant mortality, and the availability of health care?

On the same day that Aziz Huq published his piece about the inevitable contraction of the American empire, Barrons published a bullish article on the near-term prospects for defense-related stocks, even under an Obama administration:

“It doesn’t really matter” who wins the presidency since both candidates are making defense a priority, says Thomas Nyheim, portfolio manager at Christiana Bank & Trust.

He is overweight defense in part because “a lot of the projects that are on the books have three-year, five-year and 10-year life for their contracts.”

Many defense stocks are hovering near decade-low valuations. Yet, the industry’s annual earnings are expected to climb in the double-digits for the next few years.

In post-9/11 America, “it is political suicide” to even cut a dollar from the defense budget” given the threat of terrorism and increasing geopolitical strife, says Scott Sacknoff, manager of the Spade Defense Index.

The U.S. needs to upgrade and replace military equipment that is either decades old or battered from fighting simultaneous wars in Iraq and Afghanistan.

These realities make the overall defense budget fairly bulletproof.

Time will tell.

The last four decades have seen U.S. citizens pulling back, intellectually, from any involvement in the world other than military; our focus has become increasingly parochial, and infamously shallow. This has been nowhere more evident than in our elections, which have been influenced far more by John Kerry’s windsurfing and Bush’s beer-buddy persona than the critical issues now crashing around our ears.

But this latest crisis seems to have woken us from our reverie; we are out of the poppy field and looking critically, if also fearfully, at the issues and the candidates for the first time in decades. September 11 could not keep us sane for more than a few news cycles, but the threat to our livelihoods, our homes, our bank and retirement accounts have proved a stronger antidote to the ether of American Idol and Fox News.

If absolute power corrupts absolutely, perhaps the weakening of the absolute power of Wall Street (and the waning appeal of T-Bills worldwide) will force us to look realistically at our position in the world, and come to terms with our deep national need for global dominance.

Post from: Democracy for Vancouver

Forbes editorial writer William Anderson struggles mightily to wake up from his nightmare of market failures and bank suicides-by-greed, and worst of all, Paul Krugman’s Nobel Prize in Economics, but he just can’t click his heels fast enough:

Today’s announcement that Paul Krugman won the Nobel Prize in economics, although not earth shattering, indicates that outright political partisanship is not a deterrent to winning. This is not as tragic a moment in western civilization as the sacking of Constantinople in 1453 or the Bolshevik Revolution of 1917, but it suffices as one of those sad moments we will regret over time. [WWWWAAAHHHHHHH!]
…
Paul Krugman is an unabashed liberal, and there is no crime in an economist having such persuasions. For that matter, many economists have a bit of that streak, too. Furthermore, many of us are in agreement that some of the economic policies of the Bush administration have been bad, if not downright disastrous.
…
In Krugman’s world, ideological right-wingers took a meat axe to the carefully planned, stable New Deal economic structures of finance, telecommunications, transportation and manufacturing and created an unstable mess in which greed overruled good sense. Going even farther, Krugman has called for a reinstatement of the New Deal or at least another set of legislative initiatives like the New Deal.
…
As for the current economic turmoil in financial markets, Krugman offers outright socialism as the cure but also continues to peddle the snake oil that the Bush administration is beholden to free-market ideology.

…Krugman believes the problem is that the Bush administration is not socialist enough, which makes it ideologically “free market.” If Obama is elected and Krugman receives a high position in his administration, we shall see if Krugman becomes the first commissar who makes socialism work. I’ll be betting against him.

Poor William Anderson. It must be terrible to be among the elite few - like Alan Greenspan - who see the Objectivist truth: that Milton Friedman’s capitalist utopia has only failed to emerge victorious under yet another Republican president because, like all of his predecessors, George W. Bush lacked the courage of his convictions and refused to stand up to the socialist Republican majority in Congress during the first six years of his presidency to free the markets and let them run their genius course.

Post from: Democracy for Vancouver