Archive for Recession
Joe Nocera reflects on the lack of accountability over the financial crash of 2008. You’d have thought we might have learned from the Savings & Loan scandal of the 1980s, but no.
In some ways, the legislators who deregulated the S.&L. industry felt that they had no choice — if they didn’t act, the S.&L.’s would have been in terrible trouble, just of a different kind. Seventeen years later, when Congress repealed the Glass-Steagall Act — thus deregulating the entire financial services industry — it didn’t have that excuse. The drive to abolish Glass-Steagall was ideologically inspired, the core belief being that the market would keep the industry honest. But the S.&L. crisis had proved that wasn’t true.
About 1,100 were prosecuted in the wake of the S&L scandal. Federal prosecutions in the wake of the 2008 economic collapse have been a joke, writes Nocera, wondering if when it repealed the Glass-Steagall Act, government had failed to learn its lesson from the S&L deregulation.
Or, perhaps, in the intervening years Wall Street learned that capturing government regulators more fully would allow them to commit financial crimes without fear of prosecution?
Compassion for America’s poor and the long-term unemployed is audibly absent among many of the well-to-do, their on-air groupies, and politicians who once upon a news cycle tried to rebrand themselves as compassionate conservatives. A caller to a progressive radio show this week asked when heartlessness became fashionable in America.
A thousand fast food outlets in 60 cities experienced worker walkouts yesterday. The movement that began weeks ago in New York City has spread to the South and West, including Atlanta, Chicago, Detroit, Los Angeles, Memphis, and Raleigh, N.C. The Service Employees International Union (SEIU) and community organizing groups such as New York Communities for Change called it “the largest protest ever to hit the fast-food industry.”
About 30 workers in Raleigh, N.C., picketed outside a Little Caesars. Julio Wilson said he earned $9 an hour at the pizza restaurant, not enough to support himself and his 5-year-old daughter.
“I know I’m risking my job, but it’s my right to fight for what I deserve,” Wilson said. “Nine dollars an hour is not enough to make ends meet nowadays.”
Obama destroys the economy (again): Total nonfarm payroll employment increased by 236,000 in February. Unemployment rate drops to 7.7%. Dow hits all-time high (again). Simpson-Bowles and the Austerians (Hey, great band name!) order their priests to throw poor people into the volcano to appease the Market gods.
It’s been a busy session for the new Republican dominated North Carolina government. Here’s some other folks’ rundowns on what’s been happening:
F to North Carolina’s leaders for pressing ahead with a plan to radically slash unemployment benefits.
The cuts mean the state can’t take advantage of long-term unemployment insurance supplied by the federal government. With a statewide unemployment rate still about 9 percent this is alarming.
“If enacted, the legislation also would cut off all federally funded Emergency Unemployment Compensation — that is, benefits after 26 weeks of unemployment — to 170,000 unemployed North Carolinians.
the state’s economy will lose $780 million in federal funds that are vital to reducing North Carolina’s high unemployment rate.”
Go figure. The federal budget deficit is not “the economic equivalent of a giant meteor hurtling toward America, about to hit any day,” says the Los Angeles Times.
“… the fight over deficits and spending has become a surrogate for battles over basic political and ideological disagreements over the role of government and, behind the scenes, over how the economic pie should be divided.”
Wow. It took how long to figure that out?
“…the economy is running on the fumes of the investments we made in public goods decades ago.” — Prosperity Economics: Building an Economy for All
As the Mongol army swept across the Asian steppes in the 13th century, psychological warfare was one of their most powerful weapons. Looking much like their victims, Mongol spies easily infiltrated towns in the army’s path to foment panic. “The Mongols are coming! The Mongols are coming! They kill the women and rape the men! The Mongols are coming!” Just as the Mongols hoped, many towns surrendered without a fight.
Come to think of it, the relentless psychological messaging from Washington sounds a lot like that. Austerity. Fiscal cliff. Debt crisis. America could go the way of Greece. America is broke. Grand Bargain. Surrender Dorothy.
In 1999, the same sort of Very Serious People told Americans that the Glass-Steagall Act was “obsolete” and “outdated”; they passed the Gramm-Leach-Bliley Act that granted leave for banks to become “too big to fail.” In 2001, Very Serious People promised Americans that tax cuts for the rich would provide jobs for middle class families. In 2003 — after those jobs didn’t appear — Very Serious People cut taxes again, and made the same empty promise. In 2005, Very Serious People told Americans that Social Security was broke and they should hand over their retirement savings to Wall Street. In 2008 … well, you know about 2008. In 2013, Very Serious People will be peddling the same austerity cure that is sending England back into recession. But don’t you worry any, Middle-Class America. Even in recession the rich get richer.
Who is that sensible guy?
Chris Hayes’ research team did some digging and came up with Rep. Paul Ryan, under a Republican administration, arguing forcefully in support of just the kind of economic policies he now utterly rejects under a Democratic one. Now the Republicans’ vice-presidential candidate, Ryan argued in 2002 that a third Bush stimulus package was needed to help the unemployed and to kick-start the economy. And deficits be damned.
Ryan has denounced the 2009 Recovery Act signed by President Obama as “a wasteful spending spree” and “failed neo-Keynesian experiment,” and – as The Huffington Post pointed out this morning — dismissed as “sugar-high economics” the idea that government spending, through measures like payroll tax cuts and unemployment benefits, can help shore up a faltering economy.
But in 2002, when then-President Bush was seeking a roughly $120 billion package of tax cuts, tax incentives for business and unemployment benefits to jump-start the economy, Ryan offered a vigorous defense of the plan. “What we’re trying to accomplish today with the passage of this third stimulus package is to create jobs and help the unemployed,” Ryan said in video that aired today on Up w/ Chris Hayes. The remarks came during a House debate on the measure on Feb. 14, 2002.
As they say, IOKIYAR.
“It’s more than just giving someone an unemployment check,” Ryan said of the Bush stimulus bill. “It’s also helping those people with their health insurance while they’ve lost their jobs and more important than just that unemployment check, it’s to do what we can to give people a paycheck.”
Ryan called such measures “time-tested, proven, bipartisan solutions to get businesses to stop laying off people, to hire people back, and to help those people who have lost their jobs,” and urged congressional Democrats to break ranks and join Republicans in supporting the president’s plan.
Who is that guy?
Well, I was sort of looking forward to it coming to a head, because you know, I feel like the financial Lords of the Universe on Wall Street got a pretty darn good deal back when the feces entered the ventilation system in ’08. They got bailed out at the taxpayers’ expense. They got “made whole” without so much as a slap on the wrist. They got to continue making billions, while the average American got to sink or swim on empty promises of “change” and precious little else.
Paul Krugman was on his game in this video from England (via Crooks and Liars). It’s a familiar dance on both sides of the Atlantic, in which conservatives (here, “austerians”) — losing ground with one argument (economic) — shift quickly to another (moral) one they hope might get more traction. This is not the politics of principle, but of expediency and ideology. When called out as disingenuous — for using economics as a false front for an ideological goal — they throw down the victim card (“and you accuse us of lying?”). Krugman handles that gambit deftly. Watch and learn:
David Atkins comments on Krugman’s Friday column at Hullabaloo:
… The political history of the last thirty years is of the revenge of the right wing after finding itself discredited for a generation after the Great Depression and the fall of fascism. We’re living in a grand period of conservative revanchism, one that I fear will not end without entire economies and and civilizations being destroyed in the process.
That is, after all, what happens when rabid ideologues of any stripe come to power. The problem now is recognizing that, for all the surface niceties of our democratic institutions, we’re in the grip of anti-government cultists just as detached from reality and morality as any other ideological authoritarian regime.
Maybe not so much anti-government as anti-communitarian.