Friday Reads
Posted: December 30, 2011 Filed under: morning reads | Tags: Dennis Kucinich, Marcy Kaptur, Racism, Ron Paul, Stormfront, TCE, Toxic Bronx school 14 CommentsSo, we’re getting close to yet another election year. Our challenges are fairly clear but our choices are limited. I only wish the opposite were true.
This Bronx factory turned school has evidently been in the news for a few months. It’s just one horrifying story after another. What would possess a school district to use a factory to house kids without testing it for toxic chemicals? A teacher is now suing the district after she had to terminate a pregnancy due to a horrible brain defect.
A TEACHER WHO worked at a toxic Bronx school lost her baby to birth defects linked to the contamination, she charged Wednesday in legal papers.
In October, five months into her pregnancy, Nancy Tomassi, a fifthgrade teacher at the shuttered Public School 51, learned her baby had a malformed brain, a condition called anencephaly, and would not survive.
The tests done in January showed that the sick school was laden with the carcinogen trichloroethylene, a toxin linked to defects, but failed to warn students or teachers until July.
“The whole tragic nature of the situation was made worse by the fact it could have been avoided if the Department of Education had acted properly,” said Tomassi’s lawyer Jeff Schietzelt, with the firm Silverson, Pareres & Lombardi. He notified the city of her intent to sue on Wednesday.
“How could they have known since January and not have told us?” said Mike Tomassi, Nancy’s husband. “You’re heartbroken and at some point you’re angry.”
For Tomassi, the diagnosis meant she had to end the pregnancy.
When researching possible causes, she found information to suggest the toxic chemical found at the sick school was responsible for her tragedy.
“If wed known about this, things could have been different,” said Tomassi, who worked at the school for five years.
A diligent nurse has evidently been documenting and reporting student illnesses since 2005. She even took the steps to write a superior about possible immune deficiencies in students which she thought might be due to a faulty heating/ac system. The reports of sick children number in the hundreds.
Students at a Bronx elementary school that relocated in September due to toxic contamination had for years complained of headaches, dizziness and other illnesses.
Records obtained by the Daily News under the Freedom of Information Law show that since 2005 nurses at the Bronx New School logged cases of kids suffering headaches, vomiting, abnormal gaits or even seizures nearly every month.
In May 2007, 16 students vomited at the Jerome Ave. school, records show. During one spell in November 2010, nurses listed five cases of students with heart “palpitations.” And in the late 1990s, one student suddenly died of kidney failure.
Toxic levels of TCE–in industrial degreaser–were found in the building. The school was closed in the fall but the report came in around January. This is just one of those stories you think would’ve gone away after all of the work done in the 1970s to make buildings and the environment safer. What do you want to bet that the PLUBS are more upset about the abortion of a nonviable fetus than the rest of the living sick children?
I’ve been calling Ron Paul a neoconfederate for years now. It looks like White supremicist group Stormfront–with whom Paul has taken pictures with the leaders–thought he was one of them too. Paul’s been distancing himself from the newsletters since he developed presidential aspirations.
Ron Paul was a hot topic this week on the talk radio show hosted by prominent white supremacist Don Black and his son Derek. Mr. Black said he received Mr. Paul’s controversial newsletters when they were first published about two decades ago and described how the publications were perceived by members of the white supremacist movement. Former KKK Grand Wizard and Louisiana Congressman David Duke also phoned in to explain why he’s voting for Mr. Paul.
“Everybody, all of us back in the 80′s and 90′s, felt Ron Paul was, you know, unusual in that he had actually been a Congressman, that he was one of us and now, of course, that he has this broad demographic–broad base of support,” Mr. Black said on his broadcast yesterday.
Mr. Black is a former Klansman and member of the American Nazi Party who founded the “white nationalist” website Stormfront in 1995. He donated to Mr. Paul in 2007 and has been photographed with the candidate. Mr. Paul has vocal supporters in Stormfront’s online forum. Mr. Black has repeatedly said he doesn’t currently think Mr. Paul is a “white nationalist.”
Mr. Paul’s newsletters contained threats of a “coming race war,” worries about America’s “disappearing white majority and warning against “the federal-homosexual cover-up on AIDS.” He has since denied writing the newsletters, which appeared under his own name.
“I didn’t write them, I disavow them, that’s it,” Mr. Paul said in a tense CNN interview.
On Monday, Mr. Black said he originally believed the newsletters were written by Mr. Paul.
“They went out under his name in the first person and most people receiving these newsletters, including me, thought he really did write them,” Mr. Black said.
Ron Paul on Thursday downplayed the fringe aspects of his old newsletters, saying on an Iowa radio program that the most offensive passages were probably only a small portion of the overall content.
“There were many times I did not edit the entire letter and other things were put in,” he told a caller on the Jan Mickelson radio show. “I was not aware of the details until many years later. These were sentences that were put in, eight or 10 sentences. It wasn’t a reflection of my views at all. It got in the letter and I thought it was terrible.”
He added that the newsletter content in question was “probably ten sentences out of 10,000 pages,” and that he only focused on producing the “economics” part of the publication.
But the promotional materials advertising the newsletter from the time indicate that the most out-there racist and homophobic lines were far from a rare sideshow.
One 1993 direct mail piece aimed at attracting potential subscribers name-checked “the coming race war,” “the federal-homosexual cover up on AIDS,” “the Israeli lobby that plays Congress like a cheap harmonica,” and described an elaborate conspiracy theory in which US officials would use newly introduced currency to impose martial law. All in just eight pages specifically devoted to summarizing the newsletter’s broader themes for new readers. That’s a pretty high density of fringe.
Jamie Kirchick, who compiled the newsletters four years ago, told TPM that the most incendiary parts were hardly stray cases.
“Ron Paul’s characterization of the newsletters as only containing ‘eight to ten sentences’ that can be characterized as ‘offending’ is preposterous,” he said in an e-mail. “As anyone can see from the scans of the newsletters available on the TNR website or posted elsewhere, the documents contain pages upon pages of bigoted statements and outright paranoia.”
Maybe we should send him some white sheets and see if he wants to make a fashion statement out of them.
U.S. Representatives Dennis Kucinich and Marcy Kaptur, both Democrats, will run against each other for their party’s nomination next year to represent a reconfigured Ohio congressional district.
Kaptur’s current district includes Toledo and extends east toward Cleveland. Kucinich represents parts of Cleveland and its suburbs. Both filed papers today with the Cuyahoga County Board of Elections in Cleveland to run in the March 6 primary to be the Democratic nominee in the redrawn district, the election board said.
Ohio’s number of House seats was reduced to 16 from 18 following the 2010 U.S. Census.
Kucinich, 65, said he would try to avoid attacks on his fellow Democrat.
Economist Jared Bernstein has a great set of wonky graphs up that he’s called “Guideposts on the Road back to Factville”. He has a large number of them that demonstrate that the US is a low
tax country, has extremely high income inequality, and that Dubya’s policies caused the huge federal deficit. Included is this advice as well as some interesting links. My favorite one is this one that shows how good the one percent have it here compared to the other developed nations. Too bad our middle and working class Americans don’t have similar blessings.
Arm yourselves with the knowledge herein, and you’ll be immune to the fact-free hand-waving that too often passes for debate these daze. Think of them not as wonky graphs, but as guideposts on the road back to the land where facts matter.
So, that’s my contributions this morning to get the conversations started off right. What’s on your reading and blogging list today?
Our Future is Calling
Posted: December 29, 2011 Filed under: Economic Develpment, Economy | Tags: aggregate demand problems, infrastructure, Keynesian Economics 9 CommentsThe massive loss of economic value that has occurred so far this century should give us pause when we hear about both austerity agendas and slightly improved conditions. Economist Dean
Baker reminds us that we’re not looking at clear steering ahead even if we slowly mend. Here are some things to consider. The incredible loss of wealth on the kinds of investments made by average Americans and from the collapse of the housing market has severely weakened millions of Americans and decreased their net worth. Statistics like these are likely to keep older workers on the jobs far past their prime. Baker responds to Daily Beast writer Zachary Karabell.
The unemployment rate for the year is likely to average above 9.0 percent. The number of people who are involuntarily underemployed has generally been 8.5 and 9.0 million, close to double the pre-recession level. Millions more have given up looking for work altogether. Real wages have been stagnant or falling for the last 4 years, with little prospect of turning around any time soon as the high rate of unemployment continues to depress wages.
In addition, tens of millions of baby boomers are approaching retirement with almost nothing to support themselves other than their Social Security. According to a recent study by the Pew Research Center, the median older baby boomer (ages 55-64) had just $162,000 in wealth. This is roughly enough to buy the median home. This means that if this household took all of their wealth, they can pay off their mortgage. They would then be completely dependent on their Social Security to support them in retirement. And, half of older baby boomers have less wealth than this.
In short, most of the country is looking at a situation where they are desperate for work or fearful about losing their job. Older workers are looking at a retirement where they are not far above the poverty level, even after spending a life working in middle class jobs. The bad attitudes toward this situation are not the result of “groupthink” as the column asserts, they are the conclusion of people better able to understand the economy than Karabell.
For extra credit in the acting up department Karabell throws in a few broad assertions that are simply wrong. For example he tells us that:
“Overall growth for the next year is shaping up to be 2 percent, give or take. That is pretty lame compared to the heady days of the 1990s or even the mid-2000s. But those seemingly halcyon periods benefited from bubbles, whether the stock market and telecom spending in the 1990s or the housing and debt-inflated growth of the mid-2000s. So while activity now doesn’t look so good by those comparisons, it is actual economic activity undistorted by bubbles. It’s as if the economy of the past 20 years was wearing platform shoes (“Wow, she’s like 6 feet tall”); it looked a lot bigger than it was.”
Actually 2.0 percent annual growth would look bad compared to the 80s, the 70s, the 60s, and the 50s. It is simply a very bad growth rate. Trend productivity growth in the U.S. is between 2.0 and 2.5 percent. Labor force growth is averaging around 0.7 percent. This means that we need growth of around 2.5 -3.0 percent just to keep even with the growth of the labor force. At a 2.0 percent growth rate unemployment will be rising, not falling. This has nothing to with platform shoes, it’s arithmetic.
Furthermore, given the severity of the downturn we should be seeing growth in a 5-8 percent range to get the economy back to its potential level of output. People should be outraged at the thought that the economy might only grow at a 2.0 percent rate.
Lengthened work lives and growth too small to replace jobs lost over the last five years is likely to keep pressure on younger workers. Even younger workers that are well educated and should have decent job skills are not able to find decent, well-paying jobs in this economy. They also have made huge investments in their educations and are carrying high levels of student loan debt. The Atlantic Wire says that we may have a ‘lost generation’ in the making.
During the last decade, the unemployment rate for young people spiked to the highest levels since World War II–only 55 percent of Americans aged 16 to 29 have jobs, a 12 percent drop from the employment rate in 2000. Faced with a grim outlook, many young people aren’t leaving home until their 30s–the number of Americans aged 25 to 34 living with their parents jumped 25 percent during the recession. Last month, The New York Timescalled the collective youth “Generation Limbo,” but after seeing the new census data, Harvard economist Richard Freeman takes it a stage further. “These people will be scarred, and they will be called the ‘lost generation’–in that their careers would not be the same way if we had avoided this economic disaster,” Freeman told The Associated Press. The world has seen a number of lost generations in the past century. Gertrude Stein first coined the term in 1920s in reference to the Europeans who grew up during World War I, but it’s most recently referred to Japanese youth who grew up during that country’s recession in the 1990s. In Japan, the lost youth are referred to as the hikikomori, and the decade of widespread unemployment meant that many of them never had the chance to start careers. In the 10 years of recession in Japan the number of young people working temporary or contract jobs doubled, and the collective hopelessness lead to a sky-rocketing suicide rate.
A country with an economy that relies heavily on household spending cannot thrive and grow under these scenarios. It is well known in macroeconomic research that high, sustained levels of unemployment have a multiplying impact on the rate of economic growth. An economic forecast prepared by Goldman Sachs considers government policy an “impediment to growth”. Fiscal tightening on both the state and national level will make things much worse.
Given the fiscal outlook remains difficult, we believe we’re unlikely to get further stimulus, and that government will continue to be a modest drag on growth. We believe we will see an increase in the rate of fiscal tightening at the federal level over the next couple of years. Fiscal policy was a boost in 2009, roughly neutral in 2010, and in 2011, roughly a 1 percentage point drag. In 2012, the impact depends on upcoming policy decisions. At best from a short-term perspective, if the Obama administration’s package passed, which seems quite unlikely, fiscal drag would be neutralized; at worst, if all temporary stimulus expires, we’d expect a fiscal drag of more than 1 1/2 percentage points of growth in early 2012. The more likely, middle ground outcome: the administration and Congress agree on tax-related proposals and probably extend the one-year payroll tax cut for one more year. There will be a bigger problem in 2013 with the expiration of the Bush tax cuts, as well as any fiscal stimulus measures.
I think it’s rather telling to characterize our government as a drag on economic growth. It’s clear that partisan politics have put elections and ideology ahead of any concern for the future of our country. Nothing we’re talking about here is something that shouldn’t be known by folks who had an introductory university economics courses. We’re unfortunately captured by a group of people in power that have no concern for the good of the country as a whole. 
Paul Krugman put up this graph showing the level of Gross Investment by State and Local Governments. This would be the kinds of infrastructure that support modern life as we know it and include things like roads, bridges, new school buildings, sewers, airports, and other things that also drive local business growth. As you can see, there is a serious lack of infrastructure investments by state and local governments this century. Since interest rates are cheap, now is a good time to do these kinds of long term projects that would provide jobs and incentives for local businesses to expand. The majority of our states have balanced budget amendments which disallow deficit spending and in some cases, borrowing. Long term investment is nearly impossible in many states. Krugman argues that the timing is right to invest in roads, bridges, airports, and other important public projects. It’s a perfect time to look at an Infrastructure Bank which had broad bipartisan support during the Bush/Cheney years. President Obama has proposed such an institution.
The proposal, modeled after a bipartisan bill in the Senate, would take $10 billion in start-up money and identify transportation, water or energy projects that lack funding. Eligible projects would need to be worth at least $100 million and provide “a clear public benefit.” The bank would then work with private investors to finance the project through cheap long-term loans or loan guarantees, with the government picking up no more than half the tab — ideally, much less — for any given project.
There is still this insane argument out there that the US is going broke and can’t afford to spend any money. This confuses the institution of government with households and businesses. A government has the ability tax and the national government has the ability to print money and borrow in perpetuity. This country spent far more of its future output during the Great Depression and World War 2 and the results speak for themselves. We’ve had most of this decade’s fiscal policy using taxes to encourage gambling for paper profits, not actual production of goods and services. Europe’s policy makers are stuck in the same mindset. You would think that the experiences between the two world wars would’ve made an impression on them. We’ve spent trillions of dollars propping up the world’s gambling houses without telling them they must lend for productive purposes as a condition of those bailouts. I have no idea how many more years that economists will have to scream that it’s the aggregate demand stupid at policy makers, but I have a feeling we won’t be stopping any time soon.
The New Reality vs. an American Calvinist Meme
Posted: December 28, 2011 Filed under: religious extremists | Tags: C street, Calvinist, Domininism, the family, unemployment 13 Comments
Lost between the “blessed be” in the Beatitudes and the “damned is” in modern American fundamentalist group think is economic reality. The outcast rabble that used to listen to a radical rabbi from the iron ages were taught that its harder for a rich man to get to heaven than a camel to fit into an eye of a need (Mathew 19:24) and “Blessed be ye poor: for yours is the kingdom of God” (Luke 6:20) The downtrodden up there on the mount would probably not recognize today’s pious pharisees as the legacy of their community. It’s probably still a way of justifying Armani suits and Mercedes for the leaders of the flock and their beneficiaries, but it’s impacting our policy in a detrimental way.
Many of these folks preach the perversion hat there is something inherently wrong with poor and jobless people. They really believe that the poor and jobless just haven’t deserved god’s blessings like the uber rich. It really shouldn’t take a little ol’ atheist like me to point out that it’s a stellar example of hypocrisy. I should mention that I am a member of Buddhist clergy. We’re really not supposed to point out the short comings of others’ spiritual paths but contemplate the notion that its just not their kalpa for enlightenment and apply bodhicitta. However, this meme flies not only in the face of teachings out there in their own Gospels, it flies in the face of today’s reality. Again, it’s shaping our policy. We’re in this mess because of that type of thinking.
We already talked some about an Esquire article called ‘We Are Not All Created Equal; The truth about the American class system. It’s got a pretty good example of what I’m talking about. Herman Cain is not only a right wing pundit among all the other things, he is an associate minister of a Baptist Church.
Herman Cain’s [fig. 6] comment in a recent interview on the Occupy Wall Street movement, which is by no means an uncommon opinion, was this: “If you’re not rich, blame yourself.” The old Calvinist strain that connects prosperity to divine election runs deep. Work hard and stay late and you get to be a banker or doctor; drop out of high school or start using drugs and you’ll end up at McDonald’s. Even among liberals, the new trend toward behavioral economics demonstrates how poor people fare worse on tests requiring self-control, how their personal weaknesses create cycles of poverty. You don’t have to be on talk radio to believe that the poor must be doing something wrong.
The Great Outcry that has filled the country with inchoate rage is the bloody mess of this fundamental belief in the justice of American outcomes crashing headfirst into the new reality. The majority of new college grads in the United States today are either unemployed or working jobs that don’t require a degree. Roughly 85 percent of them moved back home in 2011, where they sit on an average debt of $27,200. The youth unemployment rate in general is 18.1 percent. Are these all bad people? None of us — not Generation Y, not Generation X, and certainly not the Boomers — have ever faced anything like it. The Tea Partiers blame the government. The Occupiers blame the financial industry. Both are really mourning the arrival of a new social order, one not defined by opportunity but by preexisting structures of wealth. At least the ranters are mourning. Those who are not screaming or in drum circles mostly pretend that the change isn’t happening.
Reconcile Cain’s repeat of the meme with this reality.
For years, the food pantry in Crystal Lake, Ill., a bedroom community 50 miles west of Chicago, has catered to the suburban area’s poor, homeless and unemployed.
But Cate Williams, the head of the pantry, has noticed a striking change in the makeup of the needy in the past year or two.
Some families that once pulled down six-figure incomes and drove flashy cars are now turning to the pantry for help.
A few of them donated food and money to the pantry before their luck soured, according to Williams.
“People will shyly say to me, ‘You know, I used to give money and food to you guys. Now I need your help,’” Williams told The Fiscal Times last week. “Most of the folks we see now are people who never took a handout before. They were comfortable, able to feed themselves, to keep gas in the car, and keep a nice roof over their head.”
Suburbia always had its share of low-income families and the poor, but the sharp surge in suburban poverty is beginning to grab the attention of demographers, government officials and social service advocates.
The past decade has marked the most significant rise in poverty in modern times. One in six people in the U.S. are poor, according to the latest census data, compared to one-in-ten Americans in 2004. This surge in the percentage of the poor is fueling concerns about a growing disparity between the rich and poor — the 99 percent versus the 1 percent in the parlance of the Occupy Wall Street movement.
But contrary to stereotypes that the worst of poverty is centered in urban areas or isolated rural areas and Appalachia, the suburbs have been hit hardest in recent years, an analysis of census data reveals. “If you take a drive through the suburbs and look at the strip mall vacancies, the ‘For Sale’ signs, and the growing lines at unemployment offices and social services providers, you’d have to be blind not to see the economic crisis is hitting home in a way these areas have never experienced,” said Donna Cooper, a senior fellow at the Center for American Progress, a progressive think tank.
The economic data show some distinct changes that have occurred some where between the end of the 20th century and the onset of the 21st. Income inequality has worsened. Upward mobility has reversed. Unemployment has become pervasive and long term. This isn’t just the reality for a sliver of the population. The downward spiral is pulling more and more Americans from all walks of life. It’s not a lack of skill, work ethic, or education. It’s a lack of opportunity and economic policy that is hell bent on destroying the US middle class.
I have to say that much of this has to do with the herd of Republicans and some DINOS that have bought into the ‘prosperity’ theology. It is part and parcel of the “dominion” movement which is characterized by the creepy C Street cult and wealthy religious preachers like C Wagner, Rick Joyner, and John Eckhard. Bostonboomer has written extensively about these guys based on the research of Jeff Sharlet. She also wrote in the Tuesday morning post about some of the even creepier conspiracy theories these folks harbor surrounding any action to promote women’s self autonomy or environmental protection. Michelle Bachmann and Rick Perry have ties to this cult. They are major Republican political figures and have input to all kinds of US policy.
If you want to understand Michele Bachmann and Rick Perry, understanding Dominionism isn’t optional.
Put simply, Dominionism means that Christians have a God-given right to rule all earthly institutions. Originating among some of America’s most radical theocrats, it’s long had an influence on religious-right education and political organizing. But because it seems so outré, getting ordinary people to take it seriously can be difficult. Most writers, myself included, who explore it have been called paranoid. In a contemptuous 2006 First Things review of several books, including Kevin Phillips’ American Theocracy, and my own Kingdom Coming: The Rise of Christian Nationalism, conservative columnist Ross Douthat wrote, “the fear of theocracy has become a defining panic of the Bush era.”
Now, however, we have the most theocratic Republican field in American history, and suddenly, the concept of Dominionism is reaching mainstream audiences. Writing about Bachmann in The New Yorker this month, Ryan Lizza spent several paragraphs explaining how the premise fit into the Minnesota congresswoman’s intellectual and theological development. And a recent Texas Observer cover story on Rick Perry examined his relationship with the New Apostolic Reformation, a Dominionist variant of Pentecostalism that coalesced about a decade ago. “[W]hat makes the New Apostolic Reformation movement so potent is its growing fascination with infiltrating politics and government,” wrote Forrest Wilder. Its members “believe Christians—certain Christians—are destined to not just take ‘dominion’ over government, but stealthily climb to the commanding heights of what they term the ‘Seven Mountains’ of society, including the media and the arts and entertainment world.”
In many ways, Dominionism is more a political phenomenon than a theological one. It cuts across Christian denominations, from stern, austere sects to the signs-and-wonders culture of modern megachurches. Think of it like political Islamism, which shapes the activism of a number of antagonistic fundamentalist movements, from Sunni Wahabis in the Arab world to Shiite fundamentalists in Iran.
Dominionism derives from a small fringe sect called Christian Reconstructionism, founded by a Calvinist theologian named R. J. Rushdoony in the 1960s. Christian Reconstructionism openly advocates replacing American law with the strictures of the Old Testament, replete with the death penalty for homosexuality, abortion, and even apostasy.
While these two presidential wannabes are dragging their knuckles along the bottom of the polls right now, their messages are still being repeated seriously by main stream media. Actual economists and scientist can’t get on TV these days but these perverted messages brought by idiots are all over the place. We need to realize that these people have brought on policy that has created a fundamental, underlying change in our country. There are 13.3 million unemployed people in the United States. Who can seriously argue that these folks are on some kind of long vacation?
Many pundits and some GOP lawmakers excoriate all unemployed for being lazy and enjoying life on the dole. Sen. Jim DeMint (R-SC)recently said, “People are gaming the system and refusing to take jobs because they get unemployment benefits and food stamps.”
Paul Krugman repeated today the very simple reason why the economy is going nowhere. There is a lack of aggregate demand. This is because wages are stagnant, wealth is down, and job security is nonexistent for nearly all Americans. There is also a large amount of household debt. This problem has an easy solution. The government can boost aggregate demand by spending money and creating jobs. This won’t happen, however, until we make a concerted effort to get rid of the people and the meme that considers problems associated with a financial crisis and recession to be based on personal shortcomings of unemployed people instead of problems associated with wealthy gamblers and the pols that protect them.
Most people understand that worshiping wealth and doing anything to attain it is not moral behavior. Well, that doesn’t count the folks at Fox News who have just started a war on the Muppets for indoctrinating children in “class war” and ecology. Again, I may be a Buddhist and atheist, but those quotes up there in the first paragraph seem to make Jesus to be one of the first warriors in the class war. It certainly wasn’t Kermit the Frog.
Bolling’s guest, Dan Gainor of Media Research Center, added: “It’s amazing how far the left will go, manipulating your kids to give the anti-corporate message.”
Bolling followed with: “Is liberal Hollywood using class warfare to brainwash our kids?”
“Absolutely, they’ve been doing it for decades,” said Gainor.
Gainor said Hollywood hates the oil industry and corporate America. In addition to “The Muppets,” he cited “Cars 2” and “There Will be Blood” as examples of anti-oil movies.
He complained that Hollywood does not tell the positive stories about oil, such as its role in fueling ambulances.
He also linked the Occupy Wall Street movement to “indoctrinating” shows like “Captain Planet.”
Andrea Tantaros, a commentator Fox Business, added that liberal media wants to target children at the “youngest age” possible.
She also complained about the Muppet Lily, a “hungry” Muppet, and linked her to entitlement programs like Medicaid and food stamps.
At the heart of Bolling and his guests’ complaint is that liberal Hollywood allegedly paints material success as “evil” and indoctrinates children with the ideology of class warfare.
Spot the Dominist memes in that long list. Then, try to read the Beatitudes. Then, just for kicks, read the first amendment about the wall between state and religion. How on earth could anything have gotten so turned upside down?
They call it Riding the Gravy Train
Posted: December 27, 2011 Filed under: #Occupy and We are the 99 percent!, Politics as Usual, U.S. Politics, We are so F'd | Tags: Cantor corrupt, Congressional corruption, insider trading by congress 13 CommentsIt recently came to every one’s attention that many members of congress are dealing with legislation while owning stocks that will soar depending on the results of that legislation. We’ve even found out that Eric Cantor bet against the country while stalling legislation designed to increase the US debt level.
In academic studies from the Journal of Financial and Qualitative Analysis, statistically significant results demonstrate that both Republican and Democratic politicians are outperforming the market, with the Democrats enjoying a whopping 9 percent annual outperformance. Senators were the biggest winners, displaying Houdini-like magic and beating the S&P by 12 percent annually. These results are not due to luck or financial acumen, but are rather the result of trades based on non-public information that these politicians are privy to in closed-door sessions. For the rest of us hard-working and investing Americans, this type of advantage is called insider trading.
Obviously, behavior that is criminal for everyday Americans should not be okay for lawmakers who have the power to gin up laws that affect companies while simultaneously keeping an eye on their own spreadsheets and brokerage accounts. Sadly, however, this is in fact the case.
Congressional immorality seems to extend beyond this insider debacle. Recent reports have revealed that Countrywide provided special VIP loans with publically unavailable discounted interest rates to representatives. There was even a rumor this past month concerning student loans given to congressional family members that are later forgiven. Further research by Snoops.com and others revealed that these forgiven student loans are just for a limited group of staff members who work for our elected officials. Well, there you go; finally some moral fiber. It leaves those of us struggling to get our retirement portfolios on track to wonder if there is a way to pick up one of these staff member positions, or better yet become a lawmaker to get to the real juice.
Largely insulated from the country’s economic downturn since 2008, members of Congress — many of them among the “1 percenters” denounced by Occupy Wall Street protesters — have gotten much richer even as most of the country has become much poorer in the last six years, according to an analysis by The New York Times based on data from the Center for Responsive Politics, a nonprofit research group.
Congress has never been a place for paupers. From plantation owners in the pre-Civil War era to industrialists in the early 1900s to ex-Wall Street financiers and Internet executives today, it has long been populated with the rich, including scions of families like the Guggenheims, Hearsts, Kennedys and Rockefellers.
But rarely has the divide appeared so wide, or the public contrast so stark, between lawmakers and those they represent.
The wealth gap may go largely unnoticed in good times. “But with the American public feeling all this economic pain, people just resent it more,” said Alan J. Ziobrowski, a professor at Georgia State who studied lawmakers’ stock investments.
There is broad debate about just why the wealth gap appears to be growing. For starters, the prohibitive costs of political campaigning may discourage the less affluent from even considering a candidacy. Beyond that, loose ethics controls, shrewd stock picks, profitable land deals, favorable tax laws, inheritances and even marriages to wealthy spouses are all cited as possible explanations for the rising fortunes on Capitol Hill.
What is clear is that members of Congress are getting richer compared not only with the average American worker, but also with other very rich Americans.
The founders of this country came very much from the landed gentry and bourgeois merchant class that had a great deal at stake in the revolution. Their businesses were severely restricted by
government monopolies granted to royal favorites. They were forced to pay the costs to garret troops and were taxed on items to support favored businesses. Yes, most of those patriots were exceptionally educated and wealthy by the standards of colonial America. It wasn’t until much later that representatives found that they could use their offices and the legislation to their advantage. We’ve had many scandals involving graft and congress. We have not, however, seen congress become a systematic path to wealth until recently. There is terrible injustice in this.
Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home equity.
Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
The comparisons exclude home equity because it is not included in congressional reporting, and 1984 was chosen because it is the earliest year for which consistent wealth statistics are available.
The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.
There are things that could be done to stop this. The problem, however, is tha the foxes are in charge of the hen house. There is legislation proposed to stop insider trading by congress. Creepy Eric Cantor is blocking this. There is legislation to separate the political class from their corporate donor teats. Bernie Saunders has proposed a constitutional amendment to remove the power of SuperPacs in his “Saving American Democracy Amendment”.
Something really needs to be done about this
Forget Texas, check out North Dakota
Posted: December 26, 2011 Filed under: commercial banking, financial institutions | Tags: Bank of North Dakota, North Dakota, State Bank 12 CommentsThe problem with a market-based system is the variety of ‘frictions’ that exist when a specific good or service doesn’t line up with the conditions that need to exist in a perfect market. The
assumptions for perfect market capitalism are rather daunting. They are nearly as daunting as the conditions for a centrally planned government like that tried by the Soviets. There have to be thousands–if not millions–of buyers and sellers who have no control over the market’s price or quantity produced. This pretty much rules out all our nation’s markets with the exception of a few commodities. These buyers and sellers produce and sell products and services that are all the same so no one cares who they buy from or sell to because it’s all the same. This means no product or service differentiation. Advertising does no good because there’s nothing that separates one good or service from any other. Labels don’t matter. Sizes, shapes, and colors are all uniform. There is no difference between the information available to buyers and sellers. That means there’s no insider information on any one’s part. There is also no way to cheat or beat a market. The only thing you can compete on if you’re a business is productivity and cost curves. That’s the kind of markets that may have existed some 200 years ago when commodities ruled the planet but it in no way reflects any market today.
Because frictions exist, a role for government in markets exists. It can be one of regulator or one of service/good provider. There is a branch of economics that specifically studies which kinds of goods and services must be provided by government because otherwise they would be provided to only the very rich–like education or health services–or they wouldn’t be provided at all because there is no profit in providing the good. There are also goods that once they are provided for one person are used by many others. This is the so-called free rider problem and the provision of military defense is usually the prime example of this type of government good. Another problem deals with the idea of “the commons” which basically led to an old problem in North Dakota like over hunting and near extinction of the American Bison.
The provision of a public payment system–much like a mail system–is one such good that many economists feel has a public good component. This is why many countries supplement private banking systems with government banks. Blended banking systems are pretty common in the Asian countries. Interestingly enough, there is one state with a state bank. It’s the one state in the union that made it through the global recession relatively unscathed. That would be North Dakota.
North Dakota has been called an economic miracle. It has outpaced every other state during the worst of the recession. North Dakotaas the lowest unemployment rate and the fastest job growth rate in the country. This data is provided in a NYT article by Catherine Rampell.
According to new data released by the Bureau of Labor Statistics today, North Dakota had an unemployment rate of just 3.3 percent in July — that’s just over a third of the national rate (9.1 percent), and about a quarter of the rate of the state with the highest joblessness (Nevada, at 12.9 percent).
North Dakota has had the lowest unemployment in the country (or was tied for the lowest unemployment rate in the country) every single month since July 2008.
Its healthy job market is also reflected in its payroll growth numbers. North Dakota had 19,700 more jobs in July than it did during the same month last year.
That probably sounds like small potatoes when you look at Texas, which had 269,500 more jobs last month than it did a year earlier. But Texas is a much bigger, more populous state, and had many more jobs to begin with. In terms of percentage growth, North Dakota has a better record: year over year, its payrolls grew by 5.2 percent. Texas came in second, with an increase of 2.6 percent.
There are some more interesting facts here. Yes, there is oil in North Dakota but that’s not the only thing driving its economy.
Alaska has roughly the same population as North Dakota and produces nearly twice as much oil, yet unemployment in Alaska is running at 7.7 percent. Montana, South Dakota, and Wyoming have all benefited from a boom in energy prices, with Montana and Wyoming extracting much more gas than North Dakota has. The Bakken oil field stretches across Montana as well as North Dakota, with the greatest Bakken oil productioncoming from Elm Coulee Oil Field in Montana. Yet Montana’s unemployment rate, like Alaska’s, is 7.7 percent.
A number of other mineral-rich states were initially not affected by the economic downturn, but they lost revenues with the later decline in oil prices. North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008. Its balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million, and is debating further cuts. It also has the lowest foreclosure rate and lowest credit card default rate in the country, and it has had NO bank failures in at least the last decade.
If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank.
Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state.
Yes, you read that right. North Dakota is the only state in the union that has a mini-Fed. It’s one of the reasons that the credit crunch didn’t impact the state the way it didn’t the rest of the country. North Dakota’s Banker stepped in when other banks didn’t or couldn’t to help the state’s businesses.
Over the last two years officials and advocacy groups in more than 30 states have called the Bank of North Dakota, where he is chief executive officer, to ask: How does the country’s only state-owned bank work? “As the financial crisis deepened and there were liquidity issues around the country,” says Hardmeyer, “our model was looked at a little bit deeper than it ever had been before.”
The Bismarck-based bank was founded in 1919 to lend money to farmers, then the state’s biggest economic contributors, and retains its socially minded ethic by subsidizing loans for those it believes will stimulate growth: startup businesses and beginning farmers and ranchers. The borrowers apply for the loans through one of the state’s 100-plus local banks and credit unions. If they qualify, the community lender issues the loans at the market rate; the borrowers pay a fraction of the interest, with the Bank of North Dakota covering most of the difference. How can the state bank afford the subsidies? Profit isn’t its first priority. “We have a specific mission that we’re trying to achieve,” says Hardmeyer, “that’s not necessarily bottom-line driven.”
Which is not to say the bank, which has assets of $5 billion, isn’t a moneymaker. Much of its income comes from helping local banks extend credit to borrowers. If a bank wants to share the risk of a loan, the Bank of North Dakota will cover part of it. The state bank then collects interest from the commercial bank at the going rate. In 2010 its profit hit $61.85 million, up 44.3 percent from 2006.
That’s nice, but here’s the real reason politicians across the country are contacting Hardmeyer: North Dakota’s legislature has the authority to tap the bank’s profits to fund government programs during tough times. Since 1945 the state has collected $555 million from the bank.
Of course, the bank has many Republicans crying “Socialism” and the usual hubris you get from bank that really don’t like competition and prefer bonuses and bail outs. The problem is that it’s difficult to argue with results. That is why 13 states–including California–are seriously studying setting up their own state banks. What many critics refuse to discuss is that this institution is not meant to supplant the private banking system. Modified market systems work well with varying degrees of government participation. Some markets function extremely well with a limited government role. The financial system is unique. The finance literature argues that if markets were perfect, banks wouldn’t actually exist. There would be no reason for them. Most of the research tries to actually find meaning in the existence of banks because they are essentially a parasite that attaches to a dysfunctional market that’s riddled with poor information and risk. They can improve both situations or they can exacerbate them. That is why there is some government role and arguably, some government functions within financial markets. The challenge is to find which things the market can do well and the circumstances where the markets function and keep the government role active where failures and frictions create the need for a government role.
It’s possible that North Dakota has found the golden mean.






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