Nice recovery, if you can afford it

According to economists and the media, in June 2009 we came out of the deepest recession since the Great Depression and we’ve been on the upswing since. Unemployment’s down, with corporate profits recouping their losses from the recession and hitting new highs along with the stock market.

But it really continues to be a tale of two economies: one that works for the 1 percent and another, in which the 99 percent are increasingly falling behind.

For some striking evidence, look at the recent study by a prominent economist reported in the New York Times.

As the recovery took hold in 2010, UC Berkeley economist Emmanuel Saenz reported, the top 1 percent captured 93 percent of the income gains.

Top incomes grew 11.6 percent in 2010, while the incomes of the 99 percent increased only 0.2 percent. That tiny gain followed a drop of nearly 12 percent over the previous two years – the largest two-year drop since the Depression.

Other signs on the economic landscape also show the wreckage for those not protected by wealth.

Despite a dip in unemployment and the most the most recent more optimistic job creation numbers, the economy isn’t producing enough jobs on a sustained basis to permanently reduce unemployment. And many of the jobs that have been created pay severely reduced wages. Under the two-tiered wage systems increasingly favored by U.S. corporations, new blue-collar jobs pay start at a steeply lower hourly wage than they did in the past – $12 to $19 an hour as opposed to $21 to $32.

One in seven Americans are on food stamps, while high gas prices put the squeeze on low-income and working people alike. Meanwhile, foreclosures are on the rise in the wake of the state attorneys general announcement of a settlement over foreclosure fraud charges with the biggest banks, though the details of the settlement still haven’t been released.

The Occupy movement has put the great divide between the 1 percent and the 99 percent on the political map, forcing President Obama to acknowledge income inequality in his state of the union speech as the “defining issue” of our time, while the Republican’s front-running presidential candidate, Mitt Romney has dismissed such concerns as “envy.”

Obama’s concern about inequality has yet to translate itself into effective action, and it’s unclear, given the strong ties he’s had to the big banks and corporate titans, whether he’s capable of delivering.

Occupy, after delivering a much-needed jolt to the public discourse, likewise, has also yet to show that it can go beyond influencing the debate to actually winning gains for the 99 percent and reducing the widening inequality gap.

It’s no coincidence that income inequality has accelerated as large corporations have grown more influential in our political system through the clout of their cash, encouraging deregulation, tax cuts, trade deals and a host of other policies that benefit the 1 percent and disadvantage the rest of us. The fight against income inequality and for a more fair economy inevitably leads to the fight to rid our government of toxic corporate donations. Find out about WheresOurMoney’s constitutional amendment to undo Citizens United, the U.S. Supreme Court’s terrible decision that unleashes unlimited, anonymous corporate political donations, here.

 

 

 

Income inequality / Jobs crisis / Martin Column / Occupy - 03/09/2012

Where’s Our Bailout? (Redux)

Between August 2007 and April 2010, the U.S. Federal Reserve handed out up to $1.2 trillion in public money to banks and other companies in the form of short-term loans to help them cope with cash flow problems, according to a recent report by the Bloomberg news service. In addition to U.S. banks and speculators, big bucks went to financial institutions owned by foreign governments; domestic firms like Ford and G.E. as well as Toyota and Mitsui and a German real estate investment firm.

While American taxpayers kept big businesses all over the planet alive, no such loans are available to taxpayers to cover their own personal cash-flow problems, including not being able to pay their mortgages, monthly bills, put food on their tables or a few holiday presents under the tree.

New figures, ironically also issued by the Federal Reserve, show how much help $1.2 trillion could be – if put in the hands of Americans. According to the Fed, the total amount of all money Americans owed on their credit cards as of last September was $693 billion. All of that could be paid off – in full – leaving another $500 billion, say, to help people avoid foreclosures or give every consumer in the United States a hefty tax cut.

Imagine the “stimulus effect” on our economy of paying off every credit card in the nation.

Although the Fed has portrayed the bailouts as the only way to keep money flowing in the economy, the Money Industry has yet to open its spigot and expand lending. Instead, they’ve used our dollars mostly to inflate CEOs’ executive salaries and pay themselves even more ridiculous bonuses.

Zeroing out America’s credit cards would solve that problem instantly. The credit card companies would get the money, of course, but Americans could start fresh and begin investing in their families, their businesses and their local economies.

Unfortunately, our country’s leadership owes its allegiance to the multi-national mega-corporations that grease the system with billions of dollars in campaign contributions. Wall Street’s “investment” in Washington caused the financial depression we are in today, and its no wonder that Washington’s attention is focused so narrowly on the welfare of the wealthy and large corporations. In fact, with its infamous decision equating corporations to human beings, the United States Supreme Court has turned the corruption of our democracy by money into a principle of our Constitution. Until we change that, Americans will be second class citizens in a country controlled by wealth and power.

 

Citizens United / Foreclosure / Harvey Column / Outrage / Supreme Court / TARP - 01/11/2012

Taking Aim at Wall Street - With Jack Bauer

After a day consumed with the Goldman-Sachs hearings, last night I caught up with the latest installment of  the television show “24.”

Spoiler alert: I’m going to disclose what’s happening in “24, ” which focuses on the life of a mythical high-level super antiterrorism agent, Jack Bauer, who is pitted constantly and single-handedly not only against the wily, relentless terrorists but against the corrupt and inept politicians and government officials who are his bosses, usually at the same time.

I don’t always agree with the politics of “24.” But I find it insanely entertaining and profoundly troubling. It’s also one of the few public entertainments that confronts directly the issues of authority and morality we’ve been grappling with since 9/11.

In the latest episode, Bauer actually goes against his president, to whom he’s previously shown the utmost loyalty, because he finds out she’s covering up evidence of an assassination. She’s doing it for the greater good of course; to promote a fragile Middle East peace agreement.

At some point, Bauer finds that the principle of accountability is stronger than his ingrained loyalty to his president.

Accountability, Bauer says, is so fundamental to democracy that it cannot be compromised.

When one of his former colleagues, now his new boss, hears what he’s scheming, she cautions him not to go against his president. “You’re not thinking clearly,” she says.

“I’m the only one who’s thinking clearly,” Bauer shoots back.

After a day of watching Goldman’s officials studiously avoid answering questions in the Senate, “24” put a grim exclamation point on one of the most infuriating aspects of the financial crisis: the utter lack of accountability the financial industry has borne for how it wrecked our economy, through fraud, ineptitude, greed and recklessness.

The Obama administration has made clear it’s not interested in punishing bankers: for the greater good of repairing  the economy, we’re told,  we don’t want to look backward too closely.  We need to move forward.

Left unspoken are the millions in contributions that Wall Street has lavished on the Democrats, and the web of interconnections between the administration and the financial industry, most notably Goldman-Sachs.

We’re offered the faux accountability in the emotionally gratifying theater of the Senate Goldman hearings, the SEC’s attempt at reviving its abysmal reputation after missing the Madoff and Stanford massive fraud schemes by suing Goldman for fraud, and the limp, clumsy Financial Inquiry Commission led by Phil Angelides.

Which are fine as far  as they go. I hope they provide some impetus to put real muscle into financial reform, and they serve some purpose in reminding people how angry and ripped off they feel.

But let’s not forget they’re mostly theater. For example, the Republican senators took turns with their Democratic colleagues beating up on Goldman for CSPAN, while outside of camera range they get their Wall Street fundraising mojo back.

One of the sharpest critics of the lack of accountability has been Bill Black, a former bank regulator during the S&L crisis, who emphasizes that it was multiple robust criminal investigations that uncovered the widespread wrong-doing at the heart of that financial meltdown.

One official who gets it is Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, aka the bailout, who has raised the possibility of criminal investigations and tangled with the Treasury Department.

Meanwhile the mainstream media  serves up pap about how the mild financial reform proposed by the Obama administration is “the biggest overhaul of the nation’s financial system since the Great Depression.”

That’s just not true. The largest overhaul of the system would be the 1999 repeal of the Depression-era Glass-Steagall Act, which had kept federally guaranteed traditional banking from riskier casino-style gambling activities which banks found fabulously lucrative before they blew up the economy. The current reform proposals contain nothing as earth-shattering as that.

Despite happy talk of an economic recovery  that still looks far off to many on Main Street, the politicians are finding the public’s outrage over their handling of the financial crisis is not abating, fueled in part by the political grandstanding.

Like Jack Bauer, we’ve had it with the corruption and the blundering. Public outrage over Sen. Chris Dodd’s close ties to subprime cronies forced him to retire. Conservative Democratic Senator Blanche Lincoln, facing a tough reelection battle, wrote a tough bill that would regulate toxic derivatives. Then she was forced to give away  her Goldman-Sachs campaign contributions. On Tuesday, 62 members of Congress wrote a letter demanding that the Justice Department, not just the SEC, investigate Goldman-Sachs. And a handful of senators are preparing amendments that would toughen financial reform.

I know “24” is a fantasy but one of the reasons it’s so compelling is the way it embodies and scrambles the desperation of our current moment, and Jack Bauer, armed to the teeth in a stolen helicopter, touched a nerve this week. Accountability is our most important arsenal.

Martin Column - 04/28/2010