October 2011
Views and Opinions

Tales From the Supercommittee
Posted: October 31, 2011
Source: The New York Times, Editorial
There are only three weeks left for the Congressional supercommittee to come up with a plan to reduce the federal deficit by at least $1.2 trillion, and there is no sign that the panel is anywhere close to reaching an agreement. Only one side, in fact, seems to be trying — the Democrats — and it is being far too accommodating, given the fierce obstructionism of the other side, the Republicans.

Last week, Democrats offered a $3.2 trillion compromise — proposing cuts to domestic spending and social-insurance programs that were so large as to be imprudent. Their proposal was instantly rejected by Republicans on the panel. Why? Because the Democrats included $1.3 trillion in new tax revenues, which is exactly $1.3 trillion more than Republicans are willing to accept.

In contrast, Republicans say they are willing to cut $2.2 trillion from the deficit, but only about $40 billion of that would be from new revenues. None would be from new taxes. (Republicans are actually proposing to lower overall tax rates, paid for by ending some tax loopholes. They say that that would produce $200 billion in new tax revenues, based on the discredited notion that the government can then count on higher revenues from increased growth. No impartial judge, including the Congressional Budget Office, accepts this kind of estimate.)

If the Republicans maintain this intransigence until the Nov. 23 deadline, they will trigger a huge sequester of federal dollars: an across-the-board, $1.2 trillion cut in spending, including $454 billion from defense programs. But it already seems clear that nothing is more important to them than protecting corporations and the wealthy from tax increases: not the Pentagon, not homeland security, not education, and not the country's economic health. President Obama got burned earlier this year when he tried to work out a "grand bargain" with the Republican leadership of the House. The only real compromise it was interested in was one in which it dictated all of the terms.
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Bombs, Bridges and Jobs
Posted: October 30, 2011
Source: Paul Krugman, in The New York Times
A few years back Representative Barney Frank coined an apt phrase for many of his colleagues: weaponized Keynesians, defined as those who believe "that the government does not create jobs when it funds the building of bridges or important research or retrains workers, but when it builds airplanes that are never going to be used in combat, that is of course economic salvation."

Right now the weaponized Keynesians are out in full force — which makes this a good time to see what's really going on in debates over economic policy.

What's bringing out the military big spenders is the approaching deadline for the so-called supercommittee to agree on a plan for deficit reduction. If no agreement is reached, this failure is supposed to trigger cuts in the defense budget.

Faced with this prospect, Republicans — who normally insist that the government can't create jobs, and who have argued that lower, not higher, federal spending is the key to recovery — have rushed to oppose any cuts in military spending. Why? Because, they say, such cuts would destroy jobs.

[...] But there are also darker motives behind weaponized Keynesianism. For one thing, to admit that public spending on useful projects can create jobs is to admit that such spending can in fact do good, that sometimes government is the solution, not the problem. Fear that voters might reach the same conclusion is, I'd argue, the main reason the right has always seen Keynesian economics as a leftist doctrine, when it's actually nothing of the sort. However, spending on useless or, even better, destructive projects doesn't present conservatives with the same problem.

Beyond that, there's a point made long ago by the Polish economist Michael Kalecki: to admit that the government can create jobs is to reduce the perceived importance of business confidence.

Appeals to confidence have always been a key debating point for opponents of taxes and regulation; Wall Street's whining about President Obama is part of a long tradition in which wealthy businessmen and their flacks argue that any hint of populism on the part of politicians will upset people like them, and that this is bad for the economy. Once you concede that the government can act directly to create jobs, however, that whining loses much of its persuasive power — so Keynesian economics must be rejected, except in those cases where it's being used to defend lucrative contracts.

So I welcome the sudden upsurge in weaponized Keynesianism, which is revealing the reality behind our political debates. At a fundamental level, the opponents of any serious job-creation program know perfectly well that such a program would probably work, for the same reason that defense cuts would raise unemployment. But they don't want voters to know what they know, because that would hurt their larger agenda — keeping regulation and taxes on the wealthy at bay.
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America’s Exploding Pipe Dream
Posted: October 29, 2011
Source: Charles M. Blow, in The New York Times
We are slowly — and painfully — being forced to realize that we are no longer the America of our imaginations. Our greatness was not enshrined. Being a world leader is less about destiny than focused determination, and it is there that we have faltered.

We sold ourselves a pipe dream that everyone could get rich and no one would get hurt — a pipe dream that exploded like a pipe bomb when the already-rich grabbed for all the gold; when they used their fortunes to influence government and gain favors and protection; when everyone else was left to scrounge around their ankles in hopes that a few coins would fall.

We have not taken care of the least among us. We have allowed a revolting level of income inequality to develop. We have watched as millions of our fellow countrymen have fallen into poverty. And we have done a poor job of educating our children and now threaten to leave them a country that is a shell of its former self. We should be ashamed.

Poor policies and poor choices have led to exceedingly poor outcomes. Our societal chickens have come home to roost.

This was underscored in a report released on Thursday by the Bertelsmann Stiftung foundation of Germany entitled “Social Justice in the OECD — How Do the Member States Compare?” It analyzed some metrics of basic fairness and equality among Organization for Economic Co-operation and Development countries and ranked America among the ones at the bottom.
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Lessons for #OWS: It’s Illegal to be Homeless in Public
Posted: October 28, 2011
Source: Working America
A look at one of the lessons being learned from the Occupy movement. From Barbara Ehrenreich at Mother Jones:

What the Occupy Wall Streeters are beginning to discover, and homeless people have known all along, is that most ordinary, biologically necessary activities are illegal when performed in American streets—not just peeing, but sitting, lying down, and sleeping.

It is essentially illegal to be homeless, especially in public.

What occupiers from all walks of life are discovering, at least every time they contemplate taking a leak, is that to be homeless in America is to live like a fugitive. The destitute are our own native-born “illegals,” facing prohibitions on the most basic activities of survival. They are not supposed to soil public space with their urine, their feces, or their exhausted bodies. Nor are they supposed to spoil the landscape with their unusual wardrobe choices or body odors. They are, in fact, supposed to die, and preferably to do so without leaving a corpse for the dwindling public sector to transport, process, and burn.

Society acknowledges a “homeless problem,” but fails to recognize that the problem is growing, and that more and more folks who were once middle class are joining the “problem.” Homeless people are supposed to stay out of sight, and stop reminding the lucky ones that they could be next. The lack of awareness is also attributable to a level of shame that prevents those formerly middle class folks from admitting to their homelessness.
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Wall Street isn’t winning — it’s cheating
Posted: October 27, 2011
Source: Rolling Stone
I was at an event on the Upper East Side last Friday night when I got to talking with a salesman in the media business. The subject turned to Zucotti Park and Occupy Wall Street, and he was chuckling about something he'd heard on the news.

"I hear [Occupy Wall Street] has a CFO," he said. "I think that's funny."

"Okay, I'll bite," I said. "Why is that funny?"

"Well, I heard they're trying to decide what bank to put their money in," he said, munching on hors d'oeuvres. "It's just kind of ironic."

Oh, Christ, I thought. He’s saying the protesters are hypocrites because they’re using banks. I sighed.

"Listen," I said, "where else are you going to put three hundred thousand dollars? A shopping bag?"

"Well," he said, "it's just, they're protests are all about... You know..."

"Dude," I said. "These people aren't protesting money. They're not protesting banking. They're protesting corruption on Wall Street."

"Whatever," he said, shrugging.

These nutty criticisms of the protests are spreading like cancer. Earlier that same day, I'd taped a TV segment on CNN with Will Cain from the National Review, and we got into an argument on the air. Cain and I agreed about a lot of the problems on Wall Street, but when it came to the protesters, we disagreed on one big thing.

Cain said he believed that the protesters are driven by envy of the rich.

"I find the one thing [the protesters] have in common revolves around the human emotions of envy and entitlement," he said. "What you have is more than what I have, and I'm not happy with my situation."

Cain seems like a nice enough guy, but I nearly blew my stack when I heard this. When you take into consideration all the theft and fraud and market manipulation and other evil shit Wall Street bankers have been guilty of in the last ten-fifteen years, you have to have balls like church bells to trot out a propaganda line that says the protesters are just jealous of their hard-earned money.

Think about it: there have always been rich and poor people in America, so if this is about jealousy, why the protests now? The idea that masses of people suddenly discovered a deep-seated animus/envy toward the rich – after keeping it strategically hidden for decades – is crazy.
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Americans Support 99 Percent Movement Causes, View GOP As Defenders Of Rich
Empty Posted: October 26, 2011
Source: Think Progress.org
A new report from the Congressional Budget Office released Tuesday added to the evidence that the income gap between the top American income earners and the middle- and lower-classes continues to grow, as the top one percent saw its average after-tax income grow by 275 percent between 1979 and 2007. During the same time period, it grew just 18 percent for the bottom 20 percent, resulting in a “substantially more unequal” distribution of wealth than there was three decades ago.

That feeds the core message of inequality that has driven the 99 Percent Movement protests, now in their second month in New York City and gaining steam in cities across the country. And while Republicans continue to either dismiss or pay lip service to the protests and the changes they seek, a new poll from the New York Times and CBS has found that Americans not only view the protests positively but also support a more equal distribution of wealth and higher taxes on top earners while opposing corporate tax breaks that have been protected by the GOP:

Almost half of the public thinks the sentiment at the root of the Occupy movement generally reflects the views of most Americans.

With nearly all Americans remaining fearful that the economy is stagnating or deteriorating further, two-thirds of the public said that wealth should be distributed more evenly in the country. Seven in 10 Americans think the policies of Congressional Republicans favor the rich. Two-thirds object to tax cuts for corporations and a similar number prefer increasing income taxes on millionaires.

It’s no wonder 70 percent of Americans think Congressional Republicans favor the rich, as the GOP continues to either ignore the problems of the middle- and lower-classes or directly assault the programs that help them most. Even though the top income earners have seen their tax rates halved over the last decade, Republicans continue to oppose efforts to raise their taxes. Meanwhile, they have taken an axe to the federal budget, proposing to cut programs like Pell Grants, assistance for women and children, and foreclosure prevention, while preserving the very corporate tax breaks the NYT/CBS poll shows two-thirds of Americans oppose.
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Jobs aplenty Americans don't want
Posted: October 26, 2011
Source: The Seattle Times
A headline in The Wenatchee World newspaper this past week may have seemed vague to outsiders. But to the "apple capital of the world," in the middle of a hectic harvest, the meaning was clear enough.

"The high cost of scaring them away," it read.

Who is this "them"? It's the people who used to pick the apples, but aren't anymore.

The previous week, the governor declared that a farmworker shortage had become a crisis. The state jobs agency put out a call, with radio ads, for the able-bodied to head east to help pick the world's largest apple crop.

Some orchards were said to be paying $100 to $150 a day.

But barely anybody has answered the call.

The state job centers and farm-labor contractors in Central and Eastern Washington say that despite the push, the number of job openings has scarcely budged.
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It’s Consumer Spending, Stupid
Posted October 25, 2011
Source: The New York Times
As an economic historian who has been studying American capitalism for 35 years, I’m going to let you in on the best-kept secret of the last century: private investment — that is, using business profits to increase productivity and output — doesn’t actually drive economic growth. Consumer debt and government spending do. Private investment isn’t even necessary to promote growth.

This is, to put it mildly, a controversial claim. Economists will tell you that private business investment causes growth because it pays for the new plant or equipment that creates jobs, improves labor productivity and increases workers’ incomes. As a result, you’ll hear politicians insisting that more incentives for private investors — lower taxes on corporate profits — will lead to faster and better-balanced growth.

The general public seems to agree. According to a New York Times/CBS News poll in May, a majority of Americans believe that increased corporate taxes “would discourage American companies from creating jobs.”

But history shows that this is wrong.

Between 1900 and 2000, real gross domestic product per capita (the output of goods and services per person) grew more than 600 percent. Meanwhile, net business investment declined 70 percent as a share of G.D.P. What’s more, in 1900 almost all investment came from the private sector — from companies, not from government — whereas in 2000, most investment was either from government spending (out of tax revenues) or “residential investment,” which means consumer spending on housing, rather than business expenditure on plants, equipment and labor.

In other words, over the course of the last century, net business investment atrophied while G.D.P. per capita increased spectacularly. And the source of that growth? Increased consumer spending, coupled with and amplified by government outlays.
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Screw the Big Banks and the Corporate Welfare Pony They Rode in on
Posted October 24, 2011
Source: Wauwatosa Patch
We spent $5 BILLION tax-payer dollars bailing-out Citigroup and Bank of America and what have we gotten in return:

Thank God I belong to a credit union. There are no milion dollar bonuses paid out to CEO's and investors. There were no bailouts for the credit unions. The interest rates on car and small business loans are lower and the branch mangers are in the same tax bracket as most of the state employees that entrust them with their life savings.

I empathize with the "Occupy Wall Street" movement. While the big banks made risky, disingenuous investments with our money they continued to payout seven figure bonuses to CEO's that are taxed at half the rate of their $9 per hour bank teller. They then spent millions of dollars and man hours hiring "robo-signers" to sign forclosure letters on hundreds of thousands of Americans who could not keep up with their mortgages due to no fault of their own.

Why is it okay for the CEO of a financially-troubled bank to receive a $5 million bonus while teachers, nurses, cops and firemen take 10% pay cuts and lose the right organize?
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Even Worse Than Citizens United
Posted: October 24, 2011
Source: The New York Times, Editorial
The Justice Department is right to defend as essential the century-old ban on direct corporate contributions to political candidates for federal office. In a brief to the United States Court of Appeals for the Fourth Circuit, the lawyers challenge a wrongheaded ruling by Judge James Cacheris of Virginia, arguing that the ban serves the government's strong interest in preventing political corruption.

In the Citizens United case, the Supreme Court said corporations and other organizations could make unlimited independent expenditures in political campaigns. But the court said it was not overturning the ban on direct corporate contributions to candidates' campaigns.

Flouting that precedent, Judge Cacheris ruled that the "logic" of "Citizens United requires that corporations and individuals be afforded equal rights to political speech, unqualified." He also flouted a 2003 Supreme Court case upholding the ban on direct corporate donations. Judge Cacheris has no basis for rejecting those two decisions, which bind the lower courts until the Supreme Court overturns them.
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Occupy the Classroom
Posted: October 23, 2011
Source: Nicholas Kristof, in The New York Times
Occupy Wall Street is shining a useful spotlight on one of America's central challenges, the inequality that leaves the richest 1 percent of Americans with a greater net worth than the entire bottom 90 percent.

Most of the proposed remedies involve changes in taxes and regulations, and they would help. But the single step that would do the most to reduce inequality has nothing to do with finance at all. It's an expansion of early childhood education.

Huh? That will seem naïve and bizarre to many who chafe at inequities and who think the first step is to throw a few bankers into prison. But although part of the problem is billionaires being taxed at lower rates than those with more modest incomes, a bigger source of structural inequity is that many young people never get the skills to compete. They're just left behind.

"This is where inequality starts," said Kathleen McCartney, the dean of the Harvard Graduate School of Education, as she showed me a chart demonstrating that even before kindergarten there are significant performance gaps between rich and poor students. Those gaps then widen further in school.

"The reason early education is important is that you build a foundation for school success," she added. "And success breeds success."

One common thread, whether I'm reporting on poverty in New York City or in Sierra Leone, is that a good education tends to be the most reliable escalator out of poverty. Another common thread: whether in America or Africa, disadvantaged kids often don't get a chance to board that escalator.

Maybe it seems absurd to propose expansion of early childhood education at a time when budgets are being slashed. Yet James Heckman, a Nobel Prize-winning economist at the University of Chicago, has shown that investments in early childhood education pay for themselves. Indeed, he argues that they pay a return of 7 percent or more — better than many investments on Wall Street.
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99% will pay the price for I-1183 liquor privatization
Posted: October 19, 2011
Source: Brendan Williams, writing in The Stand
Passage of Initiative 1183 would represent another smashing victory by the 1% over the 99%.

The liquor privatization campaign is cloaked in deception snake oil salesmen of the past could only admire.

Consider just one ad running on the Internet: Showing a grinning police officer and a happy teacher, it promises I-1183, “Provides more funding for Schools, Health Care and Public Safety.”

In public forums, I-1183 spokespeople reinforce that claim – even bringing revenue projections for the cities they’re in.  I-1183, we are told, is the solution to all that ails government budgets.  Close your eyes and vote yes!

Really?

The state’s shortfall for the current budget may be as high as $2 billion, on top of over $10 billion in cuts since 2008.  How much would I-1183 bring in to address this crisis? Between $5.4 million and $8.8 million in 2012.  To put that in perspective, Costco has already spent much more just to pass I-1183 (Costco members recently received notice of a fee increase).

Furthermore, new revenue projections are based upon liquor becoming more expensive – with the state’s current 51.9% markup being replaced by a private one of 52-72%.  The corporate Washington Research Council assumes it will be 62.5%.  It’s all the more jarring considering the state’s markup is scheduled to fall to 39.2% in 2013.

In other words, only if customers – “the 99%” – pay more to inflate Costco’s profits will the state realize a return. Even then, it would be less than 1% of the size of the latest revenue shortfall.  And remember, the state’s lower markup not only sustains the state budget but also pays living wages to those working in state-run stores.

Ignoring these facts, the I-1183 campaign both promises new revenue and claims liquor will be cheaper.  That’s impossible.
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Why won't media report aggressively on GOP jobs plan?
Posted: October 18, 2011
Source: Greg Sargent, in The Washinton Post
I’m glad to see that my post below on the press’s failure to subject the GOP jobs plan to more serious scrutiny has led to some very smart commentary around the Web from bloggers who are trying to explain why this is the case. Here’s Kevin Drum:

I suspect that reporters are simply so used to Republicans embracing nonsense that they evaluate it on a whole different plane than they do “serious” proposals. [But] there’s no reason to give these guys a pass on their laughable jobs plans that virtually no one thinks will create any actual jobs.

Here’s Steve Benen:

If I had to guess, I’d say the root cause is a familiar one: a reporter could tell news consumers that empirical data shows the Democratic plan would work and the Republican plan wouldn’t, but to say this out loud would be to invite accusations of “bias.” Forced neutrality reigns, facts be damned.

But for those who care about reality, the truth is unambiguous: the GOP “jobs plan” wouldn’t make things better, and the American Jobs Act would.

And here’s Jason Linkins:

Beltway reporters, as a rule, do not care about the unemployment crisis except for the impact it has on the reelection of various politicians. So, both plans are “equal” in that both represent a “point of view.” It would never occur to them that the effects either plan would have on ordinary people is worth covering.
These explanations all strike me as pretty persuasive. The problem, though, is that when you offer this sort of critique, media figures tend to immediately tune out the criticism by reflexively dismissing it as mere partisan ref-gaming.


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The Rise of the Regressive Right and the Reawakening of America
Posted: October 17, 2011
Rise of oppulenceSource: Robert Reich, in The Huffington Post
A fundamental war has been waged in this nation since its founding, between progressive forces pushing us forward and regressive forces pulling us backward.

We are going to battle once again.

Progressives believe in openness, equal opportunity, and tolerance. Progressives assume we're all in it together: We all benefit from public investments in schools and health care and infrastructure. And we all do better with strong safety nets, reasonable constraints on Wall Street and big business, and a truly progressive tax system. Progressives worry when the rich and privileged become powerful enough to undermine democracy.

Regressives take the opposite positions.

Eric Cantor, Paul Ryan, Rick Perry, Michele Bachmann and the other tribunes of today's Republican right aren't really conservatives. Their goal isn't to conserve what we have. It's to take us backwards.

They'd like to return to the 1920s -- before Social Security, unemployment insurance, labor laws, the minimum wage, Medicare and Medicaid, worker safety laws, the Environmental Protection Act, the Glass-Steagall Act, the Securities and Exchange Act, and the Voting Rights Act.

In the 1920s Wall Street was unfettered, the rich grew far richer and everyone else went deep into debt, and the nation closed its doors to immigrants.

Rather than conserve the economy, these regressives want to resurrect the classical economics of the 1920s -- the view that economic downturns are best addressed by doing nothing until the "rot" is purged out of the system (as Andrew Mellon, Herbert Hoover's Treasury Secretary, so decorously put it).

In truth, if they had their way we'd be back in the late nineteenth century -- before the federal income tax, antitrust laws, the Pure Food and Drug Act, and the Federal Reserve. A time when robber barons -- railroad, financial, and oil titans -- ran the country. A time of wrenching squalor for the many and mind-numbing wealth for the few.

Listen carefully to today's Republican right and you hear the same Social Darwinism Americans were fed more than a century ago to justify the brazen inequality of the Gilded Age: Survival of the fittest. Don't help the poor or unemployed or anyone who's fallen on bad times, they say, because this only encourages laziness. America will be strong only if we reward the rich and punish the needy.

The regressive right has slowly consolidated power over the last three decades as income and wealth have concentrated at the top. In the late 1970s the richest 1 percent of Americans received 9 percent of total income and held 18 percent of the nation's wealth; by 2007, they had more than 23 percent of total income and 35 percent of America's wealth. CEOs of the 1970s were paid 40 times the average worker's wage; now CEOs receive 300 times the typical workers' wage.
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Rabbit-Hole Economics
Posted: October 14, 2011
Source: Paul Krugman, in The New York Times
Reading the transcript of Tuesday's Republican debate on the economy is, for anyone who has actually been following economic events these past few years, like falling down a rabbit hole. Suddenly, you find yourself in a fantasy world where nothing looks or behaves the way it does in real life.

And since economic policy has to deal with the world we live in, not the fantasy world of the G.O.P.'s imagination, the prospect that one of these people may well be our next president is, frankly, terrifying. In the real world, recent events were a devastating refutation of the free-market orthodoxy that has ruled American politics these past three decades. Above all, the long crusade against financial regulation, the successful effort to unravel the prudential rules established after the Great Depression on the grounds that they were unnecessary, ended up demonstrating — at immense cost to the nation — that those rules were necessary, after all.

But down the rabbit hole, none of that happened. We didn't find ourselves in a crisis because of runaway private lenders like Countrywide Financial. We didn't find ourselves in a crisis because Wall Street pretended that slicing, dicing and rearranging bad loans could somehow create AAA assets — and private rating agencies played along. We didn't find ourselves in a crisis because "shadow banks" like Lehman Brothers exploited gaps in financial regulation to create bank-type threats to the financial system without being subject to bank-type limits on risk-taking.

No, in the universe of the Republican Party we found ourselves in a crisis because Representative Barney Frank forced helpless bankers to lend money to the undeserving poor.

[...] It’s a terrible thing when an individual loses his or her grip on reality. But it’s much worse when the same thing happens to a whole political party, one that already has the power to block anything the president proposes — and which may soon control the whole government.
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What they're fighting for
Posted: October 14, 2011
Source: The Hill
People are angry, and they see a government willing to bail out rich investors on Wall Street while ignoring the plight of regular Americans — the other 99 percent. They see Republicans on Capitol Hill demanding that the nation's meager social net get torn to shreds, while protecting their wealthiest friends from feeling any of the "shared sacrifice" the rest of us are supposed to endure. They see Democrats unable or unwilling to stand up to GOP bullying, refusing time and time again to pursue a populist agenda despite strong public support. They see the Obama administration infested with Goldman Sachs alumni from top to bottom.

People are angry at an economic system that has seen average annual household income flat-line for the last 20 years while the income of the top 1 percent has quadrupled to nearly $2 million a year.

So what are those protesters fighting for? The same thing Elizabeth Warren will fight for when elected to the Senate.

If you still don't understand, then you're probably part of the problem.
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Finally Making Sense on Wall Street
Posted: October 12, 2011
Source: The New York Times
[A]t first the occupiers appeared to be building a counterculture. But on Sept. 29 they accused Wall Street of supporting foreclosures, encouraging inequality, undermining the agricultural system and poisoning the food supply, stripping employees of healthcare, pay and negotiating rights, determining “catastrophic” economic policy, blocking alternate energy sources, and more. (I didn’t see “sabotaging efforts to deal with climate change” in their declaration, but it noted — not without humor — that “these grievances are not all-inclusive.”) Who among us, except those who benefit from these practices, is not in agreement with at least some of this?

“We Are the 99 Percent” encourages us to demand of those in power, “Are you with the 99 percent or not? And what are you doing about it?” And the “99 percent” slogan is not only all-embracing but nearly correct: the system is working for far more than one percent of us, of course, but how much more? We are the most class-divided of all the world’s “developed” nations, though in my current travels through five European countries I’ve seen and heard about life-altering cuts everywhere.

Protest is such a no-brainer that support for the occupiers now comes even from labor union leadership, along with every progressive in the country. Happily, the right is unhappy. Herman “Get a Job” Cain calls Occupy Wall Street “un-American,” which is just stupid. Mitt “Put the Dog on the Roof” Romney calls it “class warfare,” but that’s as American as the struggle for justice; it’s just that the wrong class is winning. In fact there’s no more American action than this one; its roots are in the populist, suffragist, labor, civil rights, women’s, anti-war, environmental and even food movements. Unlike the Tea Party, funded as it is by wealthy reactionaries like the Koch brothers, “Occupy” is sustained by energy, frustration, anger, perception, pizza and apples paid for by supporters or donated by farmers and, ultimately, by its daily growth.

{...] But if ever there were a time for outrage, this is it. And in stark contrast to those of us who came of age in the ‘60s and ‘70s — before the decline of American economic hegemony — today’s youth have a frighteningly more difficult future. But it’s not just young people, as the We Are the 99 Percent tumblr reveals. These are the stories, writes Washington Post columnist Ezra Klein, of “people who played by the rules, did what they were told, and now have nothing to show for it.” How many Americans fall into that category, and how many more are on the precipice?
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This Time, It Really Is Different
Posted: October 10, 2011
Source: Joe Nocera, The New York Times
The title of the white paper is, admittedly, a mouthful: “The Way Forward: Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness.” It was commissioned by the New America Foundation, which hoped that it might “re-center the political debate to better reflect the country’s deep economic problems,” according to Sherle Schwenninger, the director of the foundation’s Economic Growth Program. Its authors are Daniel Alpert, a managing partner of Westwood Capital; Robert Hockett, a professor of financial law at Cornell and a consultant to the New York Federal Reserve; and Nouriel Roubini, who is, well, Nouriel Roubini, whose consistently bearish views have been consistently right. It is scheduled to be released on Wednesday.

I don’t know that anything at this point could re-center the political debate, so unyielding are the two parties. But as Congress prepares to take steps, through the deliberations of the already deadlocked supercommittee, that will likely further wound our ailing economy, “The Way Forward” ought to at least give our politicians pause.

Its analysis of our problems is sobering. Its proposed solutions are far more ambitious than anything being talked about in Washington. And its prognosis, if we continue on the current path, is grim. “Unless we take dramatic steps, it will be Japan all over again,” says Alpert. “Continuous deflation, no economic growth, in and out of recessions. And high unemployment.” Adds Hockett: “It will be like the economic version of chronic fatigue syndrome. A low-grade fever all the time.”

The paper’s central premise is something I’ve been hearing from Alpert for more than a year now: this time, it really is different. What he and his co-authors mean by that is that the bursting of the debt bubble three years ago was not just a severe example of the ups and downs that are an inevitable part of American capitalism. Rather, it was the ultimate consequence of the modern global economy. Chief among the changes that have taken place is the integration of China, Russia, India and other countries into the global economic mainstream. The developed world once had maybe 500 million workers. Today, say the authors, we’ve added another two billion people to the global work force.

That change alone has had a great deal to do with the stagnant wages, income inequality and the oversupply of labor in America that was masked by rising home prices and access to credit. The bursting of the bubble exposed how much the American economy depended on cheap credit. Now that the curtain has been pulled back, cheap credit alone can’t fix our problems. The country is in a deflationary cycle that is very difficult to get out of: as wages decrease (or more workers become unemployed), people become afraid to spend. Assets like homes drop in value. Businesses react by lowering prices and laying off yet more workers — which only triggers a new round of deflation. The only thing that doesn’t change is the unsustainably high debt that was accrued during the bubble.

How can we break this cycle? Like most mainstream economists, Alpert, Hockett and Roubini roll their eyes at the calls for immediate government deficit reduction, which led to the creation of the supercommittee. Reducing government spending in the short term will only make things worse.

Instead, they believe that this is perhaps the best time in recent history for the government to take on a sustained infrastructure program, lasting from five to seven years, to create jobs and demand. “Labor costs will never be lower,” says Hockett. “Equipment costs will never be lower. The cost of capital will never be lower. Why wait?” Their plan calls for $1.2 trillion in spending — not all by the government, but all overseen by government — that would add 5.2 million jobs each year of the program. Alpert says that current ideas, like tax cuts, meant to stimulate the economy indirectly, just won’t work for a problem as big the one we are facing. Indeed, so far, they haven’t.
Read the complete source story here.

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The Myth of Voter Fraud
Posted: October 9, 2011
Source: The New York Times, editorial
It has been a record year for new legislation designed to make it harder for Democrats to vote — 19 laws and two executive actions in 14 states dominated by Republicans, according to a new study by the Brennan Center for Justice. As a result, more than five million eligible voters will have a harder time participating in the 2012 election.

Of course the Republicans passing these laws never acknowledge their real purpose, which is to turn away from the polls people who are more likely to vote Democratic, particularly the young, the poor, the elderly and minorities. They insist that laws requiring government identification cards to vote are only to protect the sanctity of the ballot from unscrupulous voters. Cutting back on early voting, which has been popular among working people who often cannot afford to take off from their jobs on Election Day, will save money, they claim.

None of these explanations are true. There is almost no voting fraud in America. And none of the lawmakers who claim there is have ever been able to document any but the most isolated cases. The only reason Republicans are passing these laws is to give themselves a political edge by suppressing Democratic votes.

[snip]

Some of the desperate Republican attempts to keep college students from voting are almost comical in their transparent partisanship. No college ID card in Wisconsin meets the state’s new stringent requirements (as lawmakers knew full well), so the elections board proposed that colleges add stickers to the cards with expiration dates and signatures. Republican lawmakers protested that the stickers would lead to — yes, voter fraud. Other states are beginning to require documentary proof of citizenship to vote, or are finding other ways to make it harder to register. Some are cutting back on programs allowing early voting, or imposing new restrictions on absentee ballots, alarmed that early voting was popular among black voters supporting Barack Obama in 2008. In all cases, they are abusing the trust placed in them by twisting democracy’s machinery to partisan ends.
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Confronting the Malefactors
Posted: October 7, 2011
Source: Paul Krugman (The New York Times)
There's something happening here. What it is ain't exactly clear, but we may, at long last, be seeing the rise of a popular movement that, unlike the Tea Party, is angry at the right people.

When the Occupy Wall Street protests began three weeks ago, most news organizations were derisive if they deigned to mention the events at all. For example, nine days into the protests, National Public Radio had provided no coverage whatsoever.

It is, therefore, a testament to the passion of those involved that the protests not only continued but grew, eventually becoming too big to ignore. With unions and a growing number of Democrats now expressing at least qualified support for the protesters, Occupy Wall Street is starting to look like an important event that might even eventually be seen as a turning point.

What can we say about the protests? First things first: The protesters' indictment of Wall Street as a destructive force, economically and politically, is completely right.

A weary cynicism, a belief that justice will never get served, has taken over much of our political debate — and, yes, I myself have sometimes succumbed. In the process, it has been easy to forget just how outrageous the story of our economic woes really is. So, in case you've forgotten, it was a play in three acts.

In the first act, bankers took advantage of deregulation to run wild (and pay themselves princely sums), inflating huge bubbles through reckless lending. In the second act, the bubbles burst — but bankers were bailed out by taxpayers, with remarkably few strings attached, even as ordinary workers continued to suffer the consequences of the bankers' sins. And, in the third act, bankers showed their gratitude by turning on the people who had saved them, throwing their support — and the wealth they still possessed thanks to the bailouts — behind politicians who promised to keep their taxes low and dismantle the mild regulations erected in the aftermath of the crisis.

Given this history, how can you not applaud the protesters for finally taking a stand?
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Unsavvy People
Posted: October 6, 2011
Source: Paul Krugman (The New York Times)
Nieman Watchdog has a very good piece by John Hanrahan about press coverage of the Occupy Wall Street demonstrations. Coverage was initially dismissive and minimal — and mea culpa, I wasn’t paying attention myself. But it’s becoming clear that there’s something important happening: finally, after three years in which Very Serious People refused to hold the financial industry accountable, there’s a real grass-roots uprising against the Masters of the Universe.

There will, of course, be the usual attempts to dismiss the whole thing based on trivialities. Look at the oddly dressed people acting out! So? Is it better when exquisitely tailored bankers whose gambles brought the world economy to its knees — and who were bailed out by taxpayers — whine that President Obama is saying slightly mean things about them?

Or, why don’t they try to work within the system? Well, how’s that been going for those who did indeed try? When palace intrigue undermined the likes of Elizabeth Warren even within the Obama administration, and Republicans have thrown their full backing behind the malefactors of great wealth, why shouldn’t protesters go outside the usual channels?

Finally, why not defer to people who know what needs to be done? Regular readers know the answer: the VSPs have been consistently, awesomely wrong, both before the financial crisis and after. Nothing in the recent record of policy suggests that the wise men of finance deserve any credence at all.

So, good for the protesters. And if the Obama people have any sense of self-preservation, they’ll try to mend fences with the people they have disappointed so badly.

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Where's the Jobs Bill?
Posted: October 5, 2011
Source: The New York Times, Editorial
When Eric Cantor, the House Republican leader, predictably said that President Obama’s jobs bill was dead on arrival in his chamber, and would not even be debated, the president — in a break from his usual forbearance — lashed right back at him. “Does he not believe in rebuilding America’s roads and bridges?” Mr. Obama asked on Tuesday. Does Mr. Cantor oppose rehiring teachers or construction workers, he continued, or giving tax breaks to businesses that hire?

It was the kind of strong, personal rejoinder to Republican obstructionism that Mr. Obama needs to make. Unfortunately, he has not been as forceful in pressing the other lawmakers holding up his bill: Senate Democrats.

Nearly a month after the president proposed his jobs bill, it has not yet been taken up in the chamber controlled by his party. “We’ll get to that,” Senator Harry Reid, the majority leader, said last month, after taking up a misguided bill to punish China for currency manipulation. The truth is that Mr. Reid has not had enough Democratic votes to even claim a Senate majority. That is because so many members of his caucus do not have the political courage to stand up for aggressive government action to revive the economy, or to admit that both higher taxes on the wealthy and an end to corporate tax breaks are necessary to pay for it and to start wrestling down the deficit.

The Republicans have used that cowardice to embarrass Mr. Reid, his party and Mr. Obama. On Tuesday, when the Senate Republican leader, Mitch McConnell, prankishly offered to bring up the jobs bill, Mr. Reid was forced to object, leading to all sorts of merry, if hollow, taunts from the Republican side.

The Republicans’ willingness to play political games while millions are out of work is inexcusable, but the eagerness of some Democratic senators to protect big business and big contributors is no less frustrating.
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Longshoreman Struggle Poses Critical Question:
When Is It Worth Breaking the Law?
Posted: October 4, 2011
Source: In These Times
Union (ILWU) $250,000 for vandalism and trespassing that occurred during a spout of confrontational protests against a newly opened, largely non-union port facility in Longview, Wash. Despite the fine, it appears that union activists will continue to protest the opening of the port.

On September 7, 2011, 500 workers blocked the railroad tracks leading into Longview's Export Grain Terminal (EGT) port as a Burlington Northern Santa Fe Railway car attempted to enter the facility. According to ILWU Spokesman Craig Meirelles, police with batons charged protesters and their families in an effort to disperse them from the train tracks. Police ended up arresting 19 people that day.

The next morning, 800 dockworkers from all over the Pacific Northwest entered the dock and dumped out tens of thousands of grain from a 107-car long grain train. On September 21, 12 union workers and family members were arrested for attempting to block another train from entering the port. Since the protest at least 135 pro-union protesters have been arrested on various occasions, including 100 longshoremen who were arrested for invading the port back in July (a story which In These Times was the first national publication to cover).

As a result of the multiple incidents leading to arrests on charges of trespassing and vandalism, a federal judge issued an injunction, claiming the union broke the National Labor Relations Act’s Section 8(b)(4) by attempting to prevent a rail company from delivering grain to the port. Last Friday, the judge fined the union $250,000 for breaking the injunction. The judge also said that he would fine individuals $2,500 each and union officers $5,000 each for future trespassing or illegal activities in protests against the EGT port facility. Union leaders vowed to continue to appeal the ruling by the judge.

Despite the heavy fines and the threat of further legal action, it appears that protests will continue. The local longshoremen's union has even launched a campaign to recall the sheriff who has been arresting protesters attempting to block grain trains from entering the port.

Unions up and down the West Coast have engaged in illegal, sometimes uncoordinated wildcat strikes in solidarity. In response to police brutality on September 7, workers in Tacoma and Seattle went out on illegal wildcat strikes on September 8. In response to the arrest of ILWU President Robert McEllrath, ILWU members up and down the West Coast went on an illegal 15-minute strike in a sign of solidarity with the union workers at Longview, Washington.

“Everyone came to the tracks of their own free will to stand up for justice and protect good jobs in the community," said McEllrath, who stood with the volunteers during protests on September 7. “It shouldn’t be a crime to fight for good jobs in America.”

The continued protests have made the port difficult to operate, thus hurting the terminal owners’ bottom line. Rarely are unions able to disrupt the operations of a company as the Longview workers have, as labor law strictly prohibits this and imposes heavy fines on unions that engage in such disruptive protests. Most unions therefore choose to take legal, safe route and protect their campaign, rarely engaging in such action and engaging in nondisruptive picketing that does little more than to attract occasional media attention and maintain moral witness.

"The way that labor law is set up, longshore workers had to engage in illegal actions to have any chance of success. To allow an employer to refuse to use ILWU labor and undermine hard-won ILWU standards would threaten unionization on West Coast ports," says union organizer Joe Burns (a Working In These Times contributor and author of Reviving The Strike). "The problem is, labor law allows an employer to refuse to use union labor and then judges protect the employers with injunctions and threats against the union. Here, longshore workers decided to fight by labor's rules, not management's."

Burns argues that in order for unions to revive themselves, they must get tough and be willing to break labor laws and incur fines in order to win. It looks at this point as if the ILWU is going to disregard the fines and continue to break the law in order to hamper the production at a nonunion facility and force the company to settle.

In 1989, Richard Trumka chose to break labor law and launched his rise as labor leader by leading the United Mine Workers of America (UMWA) in a successful nine-month strike against Pittston Coal Group for cutting off medical benefits to pensioners and the disabled. A full 37,000 miners went out on wildcat strikes in solidarity with the Pittston strikers. The long strike led the UMWA to the brink of bankruptcy, and it was fined nearly $64 million during the strike (fines which were later settled out of court). But the workers stood firm, and the Pittston Strike became a rallying cry against the tide of union busting that had swept the nation during the Reagan era.

Now president of the AFL-CIO, the country's largest labor federation, Trumka has recently been talking about how a new Super PAC will help labor act more independently of the Democratic Party, and help organized labor to stay alive as a movement. Perhaps he should revisit the idea of breaking the law as a strategy for victory.

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Teamsters president James Hoffa right to encourage liberals to get mad
Posted: October 3, 2011
Source: NJ.com, Editorial
Since the birth of the tea party a few years ago, politics in America has been distorted by a huge anger gap.

Conservatives have been mad and liberals have been depressed. And in politics, mad beats depressed every time. Because mad people cast votes, donate money, attend rallies and write letters to politicians. And that stuff makes the pols dance, as it should in a democracy
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But the anger gap may be starting to close. Democrats want President Obama to put down his books and pick up his boxing gloves, according to a slew of recent polls. They are tired of seeing him retreat — whether it’s the Bush tax cuts, the environment, the debt debate or even the timing of this week’s speech.

That frustration came bubbling over on Labor Day when Teamsters President James P. Hoffa was warming up a crowd for Obama. After lambasting the tea party, Hoffa concluded with this charming line: “Let’s take these sons of bitches out.”

Okay, Hoffa was wrong to use that language. And since this was an Obama rally, the classy move would be for the president to say just that.

But the discussion over language misses the larger point. Hoffa was trying to wake the middle class from its stupor, and to rally it against the steady erosion of its position in American society.

By now, the markings of this are familiar. Wages used to rise with worker productivity, but that link has somehow been broken. While productivity continues to rise and profits reach record levels, middle-class wages have stagnated for two decades.

In the decades after World War II, the benefits of economic growth were spread widely. From 1950 to 1970, the new wealth our economy generated mostly benefited the middle class. Just 27 percent of the gains went to the richest 10 percent of the population.

But that’s changed. In the past few decades, from 1988 to 2008, the top 10 percent captured all the gain in national income. The bottom 90 percent got nothing, according to government data compiled by the Economic Policy Institute.

With high unemployment in this mix, we are likely to see even further erosion of middle-class wages. Economists call that supply and demand. Most people call it desperation.

This is happening all over the world and there are many reasons for it. Global trade, while increasing our total wealth, has put unskilled workers at a disadvantage. Some economists believe that technology has replaced even more American workers than trade. Our infrastructure and our education system are slipping in every international ranking.

But if Hoffa is mad, we are mad with him. Because in the face of this, Republicans have refused to ask for shared sacrifice from the wealthy.

They drove the nation’s economy to the edge of a cliff during the debt debate, all because Obama wanted a modest increase in taxes on those earning more than $250,000 a year. Instead, they press for deeper cuts in programs the middle class needs, such as college scholarships and unemployment benefits.

So yes, Hoffa should clean up his language. But our hope is that he stays mad and that others hear him. It’s past time to close the anger gap.

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