I thought I’d put the “morning reads” up a little later to give you time to check out JJ’s cartoon posts. So . . . let’s see what’s happening out there today.
Well . . . Paul Volker was in Boston on Thursday night, and he talked to some richie-rich guys about income inequality. From The Boston Globe:
Speaking to a room filled with hundreds of Boston investment executives, former Federal Reserve chairman Paul Volcker asked some tough questions about income inequality in America. He called the earnings gap one of the economy’s greatest challenges.
“What accounts for this? What justifies it?’’ an animated Volcker asked. He argued that the trend started in the 1980s and accelerated in the 1990s, with the spread of stock option compensation creating vast wealth and risk-taking.
During that period, he said, the link between pay and performance got “entirely out of whack.’’
The elder statesman of Fed watchers and author of the Volcker Rule — part of the Dodd-Frank reform package after the financial crisis — was speaking before the Boston Security Analysts Society’s annual market dinner…
Good for him. Whether it will do any good is questionable, but these people need to hear about what they are doing to 99% of Americans.
Just for the hell of it, I looked around for some more recent news articles about income inequality. There wasn’t a lot out there, but I did find a few interesting reads.
At the LA Times, Michael Hiltzik writes: Income inequality begins to hit business in the pocketbook. He argues that business is noticing that middle-class customers are disappearing.
The consumer market is beginning to look like a sandwich without meat in the middle–there are enough wealthy customers to keep the luxury market humming along, and a growing demand for cheap no-name and other bargain products.
The phenomenon has been reported by Matthew Yglesias of Slate.com and more recently by Nelson Schwartz of the New York Times. As we reported here and here, it’s been building for years. But it really picked up steam after the last recession, when the imbalance in income between the top 1% and everyone else has really taken off.
Most economists view the stranglehold of the wealthy on U.S. income and wealth as a problem–it leads to slower overall growth and more volatility. As economist Jared Bernstein has observed, it also promotes the creation of asset and credit bubbles, which have a tendency to burst, taking the rest of the economy with them.
The most important analysis of the economic impact of inequality has come from Barry Z. Cynamon and Steven M. Fazzari of Washington University in St. Louis. In a paper published last month, they ask two questions: “First, did rising inequality contribute in an important way to the unsustainable increase in household leverage that triggered the collapse in consumer demand and the Great Recession? Second, has the rise in inequality become a drag on demand growth…that has held back recovery?”
Their answer to both questions is yes. In simpler terms, rising inequality before the recession prompted U.S. households to borrow more to keep up their spending; when the debt frenzy ended (because of the bursting of the housing bubble) the economy crashed. Since then, the demand drag caused by the effect of inequality on the bottom 95% has held back recovery. The impact of inequality on the recovery, compared with previous recoveries, is shown in this stunning graph from their paper.
But Hiltzik notes that many oblivious pundits continue to deny the effects of the top 1% controlling most of the wealth.
At The News Virginian, Jason Stanford finds some “good news” in the fact that most Republicans now agree that income inequality is a problem.
Believe it or not, there is good news when it comes to income inequality. It turns out Republicans finally believe that the gap between rich and poor has become a problem. The bad news is, according to a new poll, is that Republicans think the best solution is cutting the taxes for the wealthy and big corporations so money and opportunity can rain down on the poor. Addressing poverty by ensuring that cash does not become lonely in the wallets of the wealthy is what passes for a Republican governing philosophy these days, and it is exactly why Barack Obama has decided to go it alone on income inequality.
The issue isn’t that income inequality exists but that the wealthiest 1 percent has achieved the financial equivalent of escape velocity, leaving us poor folk back here on Planet Broke. In 1982, the top 1 percent highest-earning families took home one out of every $10. Now they get more than twice that, leaving the other 99 percent of us to make do on less. The last time it was this bad was the Gilded Age, and majorities of Republicans, Democrats and Independents agree it’s time to do something about it.
OK, so Republicans see the problem, but they want to address it with the same old tired trickle-down non-solutions. I’m not really sure that qualifies as good news. Better than nothing, I guess.
At the Akron Beacon Journal, Rick Armon writes about “an American success story.” Thanks to government programs like Social Security and Medicare, not as many seniors are living in poverty as they did in the past.
Fifty years after President Lyndon Johnson declared the War on Poverty, at least one group of Americans is much better off today: senior citizens.
The percentage of seniors nationwide living below the poverty line has plummeted from 27 percent to 9 percent today, according to a Beacon Journal analysis of census data….
Today, there are 3.7 million seniors living in poverty, compared with 5.2 million in 1969, when the 1970 census was conducted.
The reasons are pretty simple, experts say: It’s a combination of Social Security, pensions, 401(k) programs and Medicare that has kept more elderly people from slipping into poverty.
Armon says those figures may be a little too optimistic (read the details at the link); but still, it’s progress.
Yesterday everyone was talking about Asst. Sec. of State Victoria Nuland’s bugged phone call with the US ambassador to Ukraine in which she uttered the words “fuck the EU,” apparently using an unencrypted cell phone. Someone posted portions of the call to Youtube, and the U.S. has accused Russia of tapping Nuland’s phone. Read all the gossipy details at BBC News.
Of course Russia is accusing the U.S. of “meddling” in the Ukraine crisis. From The New York Times:
KIEV, Ukraine — The tense Russian-American jockeying over the fate of Ukraine escalated on Thursday as a Kremlin official accused Washington of “crudely interfering” in the former Soviet republic, while the Obama administration blamed Moscow for spreading an intercepted private conversation between two American diplomats.
An audiotape of the conversation appeared on the Internet and opened a window into American handling of the political crisis here, as the two diplomats candidly discussed the composition of a possible new government to replace the pro-Russian cabinet of Ukraine’s president, Viktor F. Yanukovych. It also turned the tables on the Obama administration, which has been under fire lately for spying on foreign leaders.
The developments on the eve of the Winter Olympics opening in Sochi, Russia, underscored the increasingly Cold War-style contest for influence here as East and West vie for the favor of a nation of 45 million with historic ties to Moscow but a deep yearning to join the rest of Europe. The tit for tat has been going on since November, when Mr. Yanukovych spurned a trade deal with Europe and accepted a $15 billion loan from Moscow. Months of street protests have threatened his government, and American officials are now trying to broker a settlement — an effort the Kremlin seems determined to block.
There’s a lot more background on the Ukraine situation in the NYT article.
If the problems in Ukraine weren’t enough, anti-government protests have now broken out in Bosnia-Hertzegovina. The Guardian reports:
Thousands of Bosnian protesters took to the streets in the centre of Sarajevo on Friday, setting fire to the presidency building and hurling rocks and stones at police as fury at the country’s political and economic stagnation spread rapidly around the country.
As many as 200 people were injured in protests that took place in about 20 towns and cities. Government buildings were set on fire in three of the largest centres – Sarajevo, Tuzla and Zenica.
At one point in the central Bosnian city of Tuzla, some of the 5,000-strong crowd stormed into a local government building and hurled furniture from the upper stories….
The scenes in Sarajevo were similarly fraught on Friday night, as fire raged through the presidency building and hundreds of people hurled stones, sticks and whatever else they could lay their hands on to feed the blaze. Police used rubber bullets, tear gas and water cannon trying to disperse the crowd. Buildings and cars were also burning in downtown Sarajevo and riot police chased protesters….
The protests have bubbled up out of long-simmering discontent at a sluggish economy, mismanagement, corruption and unemployment, which is rising irresistibly towards 30%. Bosnia has been hamstrung by political infighting and deadlock between its three main ethnic groups – Bosniaks, Croats and Serbs – in the near 20 years since its three-year civil war ended in 1995. The economy has suffered as a result, and the population remains deeply sceptical of a political class widely believed to be ruling in the interests of the elite, not the people.
There continues to be plenty of surveillance news–both about NSA, and more recently about Russia’s intelligence agencies and their security measures activities around the Sochi Winter Olympic Games. This article from The Moscow Times by Andrei Soldatov provides a good overview: FSB Makes Eavesdropping an Olympic Event. In NSA news, Glenn Greenwald and friends have stepped up their publishing activities in the run-up to the unveiling of their First Look news site, planned for Monday. I’ll just share a couple of items with you.
A little more than a week ago Greenwald worked with CBC reporters to “break” a story about alleged spying by Canada’s equivalent of NSA on airport passengers that supposedly continued for days after they left the airport. As usual, the report was deeply flawed, as explained by Matthew Aid, author of The Secret Sentry: The Untold History of the National Security Agency: Analysis Indicates Recent CBC Story About Canadian SIGINT Agency Spying on Travellers Incorrect.
On January 30, the Canadian television channel CBC broke a story written by Greg Weston, Glenn Greenwald and Ryan Gallagher, saying that the Communications Security Establishment Canada (CSEC), which is Canada’s equivalent of NSA, used airport WiFi to track Canadian travellers – something which was claimed to be almost certainly illegal. This story was apperently based upon an internal CSEC presentation (pdf) from May 2012 which is titled “IP Profiling Analytics & Mission Impacts.”
However, as is often the case with many of the stories based on the Snowden-documents, it seems that the original CSEC presentation was incorrectly interpreted and presented by Canadian television.
Read all the gory details at the Aid’s blog.
Then yesterday, Greenwald–in collaboration with NBC News–released a truly bizarre article, Snowden Docs: British Spies Used Sex and ‘Dirty Tricks’, that reveals methods and sources for the GCHQ’s efforts to arrest malicious hackers, criminals, and terrorists, and to prevent nuclear proliferation. You have to wonder why NBC news thought those efforts were somehow wrong or illegal. I’m running out of space, so I’ll let Bob Cesca explain the problems with this story.
There’s one sentence in the new Glenn Greenwald revelation for NBC News that renders everything that follows mostly irrelevant. It’s the lede. And not even the entire lede — just the first part of it.
British spies have developed “dirty tricks” for use against nations, hackers, terror groups, suspected criminals and arms dealers…
The only sane reaction to this news should be, “Great!” We don’t really need to know anything else. But that didn’t stop Greenwald and NBC News from spilling the beans on operations that target such poor helpless victims as malicious hackers, the Taliban, Iran and, yes, terrorists dealing in loose nukes.
See more examples at The Daily Banter. Cesca sums up:
Regardless, what we’re looking at here is another leak from Greenwald & Company that tips off some of our most dangerous enemies including and especially the looming threat of nuclear proliferation and loose nukes. These leaks have been published yet again under the banner of the public interest, but it’s difficult to see any public interest in an operation expressly aimed at those who even the article admits are our “enemies.”
Greenwald has been publishing quite a few leaks about British spying lately. I have to assume that this is his threatened revenge for the Brits detaining David Miranda at Heathrow airport last year. Pretty childish, if you ask me.
Now it’s your turn. What have you been reading and blogging about? Please share your links in the comment thread, and have a terrific weekend!
We are not Afghanistan. We are not Haiti or the Democratic Republic of the Congo. We are not any of the 3rd world nations that are sometimes callously referred to as the ‘black holes’ of the world, where national incomes range between $700-900 annually, where human assets in nutrition, education, health and adult literacy are the lowest of the low. Nor do national fluctuations in agriculture production, instability of import/export services or economic smallness define us.
We are decidedly not one of the least developed nations on the planet. Quite the contrary. We are the richest, most powerful and technologically advanced nation the world has ever known.
Yet poverty exists and is rising. American poverty is a fact, a condition defined not by 3rd world standards but by the standards of who and what we are as a premier Nation among all nations.
No sooner had the Census Bureau come out with its findings on poverty–the first report in September, followed by a supplemental report in early November—the naysayers lined up reminding us that the findings were misleading, that many of the so-called poor had cars and TVs, that children of the poor sported Xboxes. And my God, a goodly number actually have air conditioning! I suspect many have heating, too.
The arguments are that unless a family or individual meets a 3rd-world definition of poverty then even the mention of rising American poverty levels falls into the category of gross exaggeration. This in a time when unemployment is the top concern of the American electorate, when unemployment sits ‘officially’ at 9% but, in fact, has reached nearly 20%, when from 2001-2009 42,400 American factories closed their doors to traditional middle-class jobs. This is also in a time of historical corporate profits and obscene CEO salaries in the financial services industry that through casino betting, accounting fraud and governmental bailouts brought this country and the world to its knees. And continues to do so, eg., MF Global headed by former NJ Governor Jon Corzine.
The old canards are being taken for a rerun as well: poverty is a symptom of lazy minds and an entitlement generation or an unwillingness to work hard and save money. Many will recall the Welfare Queen stories of the past, imagined always as a black woman with a dozen children, driving idly around town in her brand new Caddie. Living life high on the hog, the hysterical claims insisted, bilking government largesse [ otherwise known as taxpayer money]. But as Ralph B. noted in an earlier thread, there’s nary a word about corporate/millionaire welfare, where companies and even individuals skate on Federal taxes through loopholes and accounting maneuvers and government handouts
Let’s get real. The fallout of 2007-2008 hit many average families between the eyes, this after wages had been stagnating for three decades with a beginning upswing in the 90s, wage advancements quickly lost since 2000. Prices, however, have continued to rise, commodity prices in particular, those base products— gas, foodstuffs—that we all rely on to survive. Medical costs/premiums have gone through the roof. Is it any wonder seniors, who face a disproportionate share of medical problems and costs, have gotten caught in the old trap of choosing food or drugs? Children are caught up in the economic whirlwind, too, as parents lose jobs and homes, scramble for low-paying, part-time positions, work that frequently is not enough to ensure adequate food and/or nutrition on a consistent basis. Should we be surprised then at the increase of American children now classified as ‘food insecure?’
Here’s what we know:
49.1 million Americans have fallen into poverty, 16% of the population or 1 in 7 Americans.
Nearly 20% of that number are children; nearly 16% of the indigent are 65 years and older.
21.5% of American children have been classified as ‘food insecure.’
1 in 15 Americans are classified as the ‘poorest of the poor, which in 2010 translated to $5570 or less for an individual, $11,157 for a family of four.
The Census Bureau’s Supplemental report issued earlier this month takes into account governmental assistance—food stamps, the earned income tax credit, school lunch programs etc—without which the statistics above would be even worse.
From a Center on Budget and Policy Priorities report:
Six temporary federal initiatives enacted in 2009 and 2010 to bolster the economy by lifting consumers’ incomes and purchases kept nearly 7 million Americans out of poverty in 2010, under an alternative measure of poverty that takes into account the impact of government benefit programs and taxes. These initiatives — three new or expanded tax credits, two enhancements of unemployment insurance, and an expansion of benefits through the Supplemental Nutrition Assistance Program (SNAP, formerly called food stamps) — were part of the 2009 Recovery Act. Congress subsequently extended or expanded some of them.
Hence the total number of persons in poverty would have been even higher last year if not for the six government initiatives.
Btw, the link above gives a rather shocking comparison between the poverty rates in the US and Brazil. Not pretty.
Yet, Michelle Bachmann’s prescription as well as many of her Republican colleagues is based on the old saw: self-reliance, an honest day’s work for an honest day’s pay. This in a time of record unemployment and rising poverty in the general population.
How many statistics, comparisons, articles and images are necessary to convince the disbelieving that American poverty is on the rise, that it is not the result of coddling, laziness or lack of self-reliance? Or perhaps we must admit that there is also a poverty of spirit and reason running rampant through country, blinding those who would blame fellow citizens for the dearth of employment and opportunity without offering any workable solutions to an ever growing, bleak reality.
Good Morning!! I have a real grab bag of news items for you this morning.
Via Ezra Klein, a Gallup poll found that nobody, including most Republicans, wants the government fooling around with Medicare. I can’t embed the chart, but you can see it at either of the above links. Klein:
The Republican Party has a bit of a problem: Their coalition is heavily weighted toward seniors. But their agenda is heavily weighted toward cuts to entitlement programs that benefit seniors. In 2010, they handled this by relentlessly attacking Democrats for the Medicare cuts in the Affordable Care Act. In 2011, they’re trying to handle it by saying that Paul Ryan’s Medicare cuts will exempt anyone under 55 — but because he’s keeping all the Medicare cuts from the Affordable Care Act and implementing them on schedule, that isn’t, by the GOP’s own logic, actually true….
The most popular position in the GOP’s coalition isn’t that Medicare needs a complete overhaul, as Ryan thinks. It isn’t that it needs major changes, or even that it needs minor changes. It’s that we shouldn’t try and control costs at all.
Speaking of arrogant and deluded Republicans, The Smoking Gun obtained FAA documents relating to an incident in which James Inhofe “scared the crap out of” a bunch of Airport employees when the elderly GOP Senator landed his plan on a closed runway.
Newly released Federal Aviation Administration documents and audiotapes shed a scary new light on a bizarre incident late last year during which U.S. Senator James Inhofe landed his Cessna on a closed runway at a south Texas airport, scattering construction workers who ran for their lives as the politician’s plane hopscotched over them and six vehicles.
The FAA material, provided in response to a TSG Freedom of Information Act request, details how Inhofe, 76, chose to land on the main runway at the Cameron County Airport on October 21 despite being aware that it was closed and had a large ‘X’ on its threshold….
Shortly after Inhofe landed, Sidney Boyd, who was supervising construction on the closed runway, called the FAA to report that Inhofe’s plane, a twin-engine six-seater, initially touched down on the runway and then “’sky hopped’ over the six vehicles and personnel working on the runway, and then landed.”
During the call, which was recorded by the FAA, Boyd said Inhofe’s antics “scared the crap out of” workers, adding that the Cessna “damn near hit” a red truck. Referring to the vehicle’s driver, Boyd added, “I think he actually wet his britches, he was scared to death. I mean, hell, he started trying to head for the side of the runway. The pilot could see him, or he should have been able to, he was right on him.”
Inhofe agreed to “complete a program of remedial training” so he wouldn’t lose his pilot’s license.
According to a report by the Senate Permanent Committee on Investigations, released today, Goldman Sachs “Misled Clients, Lawmakers on CDOs.”
Goldman Sachs Group Inc. (GS) designed, marketed and sold collateralized debt obligations that misled investors and created conflicts of interest as the company built short positions before the U.S. housing market collapsed, a Senate panel said in its report on the financial crisis.
In the case of one CDO, Hudson Mezzanine Funding 2006-1, Goldman Sachs told investors its interests were aligned with theirs while the firm held 100 percent of the short side, according to the report released today by the Senate’s Permanent Subcommittee on Investigations. Senator Carl Levin, the Michigan Democrat who leads the panel, urged regulators to review all of the structured finance transactions described in the report.
At a briefing today, Levin said he believed Goldman Sachs executives weren’t truthful about the company’s transactions in testimony before the subcommittee at an April 2010 hearing. He said he would refer the testimony to the Justice Department for possible perjury charges.
Good. I sure would like to see some prosecutions of these lying, cheating frauds.
While speaking about an AIDS awareness program she works with, Judd writes, “Along with other performers, YouthAIDS was supported by rap and hip-hop artists like Snoop Dogg and P. Diddy to spread the message…um, who? Those names were a red flag.”
Judd continued, “As far as I’m concerned, most rap and hip-hop music – with its rape culture and insanely abusive lyrics and depictions of girls and women as ‘ho’s’ – is the contemporary soundtrack of misogyny.”
She concludes, “I believe that the social construction of gender – the cultural beliefs and practices that divide the sexes and institutionalize and normalize the unequal treatment of girls and women, privilege the interests of boys and men, and, most nefariously, incessantly sexualize girls and women – is the root cause of poverty and suffering around the world.”
The backlash was immediate and vicious, and included death threats. Judd apologized for generalizing about all rap and hip hop music, but ended with this:
“Hatred of girls and women, I will oppose with spiritual and non-violent principles every day,” she concludes, adding that the Twitter responses to her remarks included death threats. “Abuse and violence in any form, at any time, in any expression, are never okay. Period. I, and other girls and women, are not afraid of you. You can keep on hating, but I am going to keep on loving.”
More power to Ashley Judd!
In more violence against women news, the search for bodies is continuing on Long Island. After finding ten bodies so far on beaches, searchers are looking underwater for more remains. In addition the FBI is helping out with “high-tech planes.”
“This is not an episode of CSI. This is an intensive long term investigation that includes the use of sophisticated technology as well as good old fashioned detective work,” said Suffolk County Police Commissioner Richard Dormer at a press conference today.
Dormer said that the FBI will provide investigators with planes and choppers that use sophisticated aerial imaging technology of the Long Island beach area where the skeletal remains of at least nine bodies have been found so far.
“Weather permitting this operation will commence later this week…We’re hoping the technology will help identify skeletal remains that may still be out there,” Dormer said.
Police believe that there are no links between the bodies found on Long Island in 2010 and 2011 and four bodies that were found in Atlantic City in 2006.
According to the NY Post, some of the bones found in the past couple of days could be victims of another Long Island serial killer Joel Rifkin.
The skull and torso found on a desolate Nassau County beachfront are too old to be connected to the serial killings of four Craigslist call girls — and could belong to long-lost victims of notorious Long Island butcher Joel Rifkin, a source said yesterday.
“These are so old that roots were growing around the vertebrae and the skull,” the source told The Post.
“These could be one or two of Joel Rifkin’s victims who were never found,” or the work of another killer, the source said.
Further complicating the case, the bodies of a man and a young child have been found during the search.
Austria is the latest country waking up to the abuse of its children by Catholic priests.
Over 800 cases of abuse in Catholic institutions in Austria have been reported so far, a commission tasked with investigating abuse cases announced on Wednesday.
A total 837 abuse victims approached the commission, which was set up by the Austrian Catholic Church last year after it was hit by a wave of abuse revelations, commission head Waltraud Klasnic told a press conference.
Three quarters of the victims were male, with the most cases — about 20 percent — reported in northern Upper Austria province, followed by Vienna and western Tyrol, according to a commission report summarising its first-year findings.
Back in the good old USA, Bill Donohue of the Catholic League says the kids were asking for it.
The group bought an expensive full-page ad in The New York Times Monday that places the blames for the church’s scandals on “homosexuality, not pedophilia.”
And perhaps most shockingly, it also claimed that some children were active participants in the abuse.
“The refrain that child rape is a reality in the Church is twice wrong: let’s get it straight — they weren’t children and they weren’t raped,” self-appointed Catholic League president Bill Donohue wrote in the ad.
“We know from the John Jay study that most of the victims have been adolescents, and that the most common abuse has been inappropriate touching (inexcusable though this is, it is not rape),” he added, referencing a 2004 study by the John Jay College of Criminal Justice, which was funded by the U.S. Conference of Catholic Bishops.
“The Boston Globe correctly said of the John Jay report that ‘more than three-quarters of the victims were post pubescent, meaning the abuse did not meet the clinical definition of pedophilia.’ In other words, the issue is homosexuality, not pedophilia,” Donohue wrote.
Another issue is that priests are in a position of power and should not take advantage of that position to gratify their sexual desires. But I’m sure Donohue would disagree. And where I come from adolescents are still children.
In science news, a new study revealed that Climate change affects tectonic plate movement, causing earthquakes
Understanding why plates change direction and speed is key to unlocking huge seismic events such as last month’s Japan earthquake, which shifted the Earth’s axis by several inches, or February’s New Zealand quake.
An Australian-led team of researchers from France and Germany found that the strengthening Indian monsoon had accelerated movement of the Indian plate over the past 10 million years by a factor of about 20 percent.
Lead researcher Giampiero Iaffaldano said Wednesday that although scientists have long known that tectonic movements influence climate by creating new mountains and sea trenches, his study was the first to show the reverse.
Dakninikat sent me this one from the BBC: Yellowstone supervolcano fed by bigger plume
The underground volcanic plume at Yellowstone in the US may be bigger than previously thought, according to a new study by geologists.
The volcanic hotspot below Yellowstone feeds the hot springs, mud pots and geysers that bring millions of visitors to the US national park each year.
There have been three huge eruptions of the Yellowstone supervolcano: 2.1 million years ago, 1.3 million years ago and 640,000 years ago. Two of these eruptions blanketed a large area of North America with volcanic ash.
The most recent full-scale eruption of the Yellowstone supervolcano ejected some 1,000 cubic km (240 cubic miles) of hot ash and rock into the atmosphere. There have been smaller eruptions in between the largest outpourings; the most recent of these occurred 70,000 years ago.
Of course that can’t be true because the earth can’t possibly be that old, right?
That’s all I’ve got for today. What are you reading and blogging about?