“There are pockets of our society that are not just broken, but are frankly sick.
“It is a complete lack of responsibility in parts of our society, people allowed to feel the world owes them something, that their rights outweigh their responsibilities and their actions do not have consequences. Well, they do have consequences.”
You’re darn right! The global elites have gone too far! The banksters have stolen trillions from ordinary taxpayers, and then demanded and received massive government bailouts. Politicians have lost any sense of responsibility toward their constituents, only listening to their corporate masters and their lobbyists. Yes there are consequences and these wealthy elites will discover there are consequences for their corrupt and immoral actions.
The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government’s first-ever audit of the central bank.
Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.
Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office’s (GAO) analysis shows.
Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012.
Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.
This scepticism toward the potency of democratic politicians – and therefore democratic politics itself – is oddly echoed by the looters themselves. Certainly no one outside the Iranian state media is calling them “protesters”, but even “rioters” seems the wrong word, carrying with it a hint of political purpose. For some, especially at the start in Tottenham, there was clearly a political dimension – with the police the prime focus of their anger. But many of the copycat actions across London and elsewhere have no apparent drive beyond the opportunistic desire to steal and get away with it. It’s striking that the targets have not been town halls or, say, Tory HQ – stormed by students last November – but branches of Dixons, Boots and Carphone Warehouse. If they are making a political statement, it is that politics does not matter.
Lambert notes that at least these looters didn’t steal $16 trillion from the U.S. Treasury.
And while the revulsion at the looting has been widespread and bipartisan – with plenty of liberals admitting to “coming over all Daily Mail” at the ugliness of the vandalism – that sense of the impotence of politics is widespread, too. One aspect of the phone-hacking scandal that went deep was its revelation that those we might think exert authority – police and politicians – were in fact supine before an unelected media corporation. The sheer power of News Corp contrasted with the craven behaviour of those we elect or entrust to look out for us.
But elected officials are supposed to protect all citizens–even the poor, the unemployed, and the elderly–aren’t they? Yet in the U.S. and Europe, the burden of the economic crisis is falling on those with the least ability to pay, while the wealthy continue to receive their government handouts. When people are pushed to the point that they feel they have nothing to lose, this is what happens. Why it is coming as such a surprise to the comfortable elites is the real mystery.
Let’s take a look at what some of the rioters themselves have said about the meaning of their actions. From Yahoo News:
The Conservative-Liberal Democrat coalition government, making deep cuts to public services to tackle a record budget deficit, has been quick to deny that the unrest was linked to austerity measures, calling the disorder “pure criminality.” [….]
Public anger over the widespread looting of shops appears to have strengthened the government’s argument, with stolen goods ranging from the expensive — televisions and jewelry — to the absurd — sweets and bottles of alcohol.
However, community leaders and rioters themselves said the violence was an expression of the frustration felt by the poorest inhabitants of a country that ranks among the most unequal in the developed world.
“They’ve raised rates, cut child benefit. Everyone just used it as a chance to vent,” one man who took part in unrest in the east London district of Hackney told Reuters.
Surprise, surprise. Cutting social services to pay for the bankers’ failures has real life consequences. Austerity measures create more unemployment, and people who don’t have jobs get hungry and scared. When you take everything from people who can least afford it, they get angry. What on earth do these people expect? What planet are they living on anyway? And no, I’m not condoning violence. I’m just saying that it’s going to happen when you push people too far.
Here are some quotes from two young women who participated in the British riots:
Two girls who took part in Monday night’s riots in Croydon have boasted that they were showing police and “the rich” that “we can do what we want”.
“I came here to get my penny’s worth,” said a man who gave his name as Louis James, 19, a slightly built participant in the widening riots that have shaken London to its core. With a touch of guilt on Tuesday, Mr. James showed off what he described as a $195 designer sweater that he said he took during looting in Camden Town, a gentrified area of north London.
Politicians from both the right and the left, the police and most residents of the areas hit by violence nearly unanimously describe the most recent riots as criminal and anarchic, lacking even a hint of the anti-government, anti-austerity message that has driven many of the violent protests in other European countries.
But the riots also reflect the alienation and resentment of many young people in Britain, where one million people from the ages of 16 to 24 are officially unemployed, the most since the deep recession of the mid-1980s.
Don’t these politicians, police, and other observers understand that poverty and jobless *are* sociopolitical issues? Just because people are acting out of desperation or even opportunism doesn’t mean that their actions are not political. Just because someone is young and poor does not mean he or she isn’t aware that government and corporate corruption have caused much of their distress. Back to the NYT article:
In many ways, Mr. James’s circumstances are typical. He lives in a government-subsidized apartment in northern London and receives $125 in jobless benefits every two weeks, even though he says he has largely given up looking for work. He says he has never had a proper job and learned to read only three years ago. His mother can barely support herself and his stepbrothers and sisters. His father, who was a heroin addict, is dead.
He says he has been in and out of too many schools to count and left the educational system for good when he was 15.
“No one has ever given me a chance; I am just angry at how the whole system works,” Mr. James said. He would like to get a job at a retail store, but admits that he spends most days watching television and just trying to get by. “That is the way they want it,” he said, without specifying exactly who “they” were. “They give me just enough money so that I can eat and watch TV all day. I don’t even pay my bills anymore.”
Jonathan Portes, the director of the National Institute of Economic and Social Research in London, says that Mr. James’s plight reflects a broader trend here. More challenging students, Mr. Portes says, have not been receiving the attention they should as teachers, under pressure to meet educational goals, focus on children from more stable homes and those with greater abilities and social skills. Disillusioned, those who cannot keep up just drop out.
The Tottenham riots that blindsided Britain were sparked by the fatal police shooting of Mark Duggan, a 29-year-old black man. Over the past few days, they’ve continued and spread, turning into what has largely become youths’ looting and destroying parts of London. But no one is exactly sure why they’re doing it. Prime Minister David Cameron called it “criminality, pure and simple.”
But why have the riots continued day after day?
The riots are neither politically or racially fueled, wrote Doug Sanders of the Globe and Mail. They’re the result of a “lost generation” of youth under 20 who have little to lose and a bleak future. Here’s an excerpt:
Whether the thousands of rioters actually did express disillusionment — some did say they were angry at police or the world, but many appeared gleeful or greedy — it is clear that most had nothing else to do with themselves, and no reason to fear or feel responsible for the consequences of their actions.
This is a chronic problem in Britain, which has a “lost generation” of young high school dropouts far larger than most other Western countries’.
It’s so simple-minded to expect that youthful rioters are going to calmly explain their behavior in a reasoned, intellectual manner or that they are not going to act euphoric once they let go of restraint and begin acting out as part of a mob. None of that means that the reasons for their behavior are not political.
It seems to me that masses of young people who have “little to lose and bleak future” is in fact a powerful political issue for any society. And when people are powerless, there are few ways for them express their anger. Violence is one way to get attention from the powerful.
Can it happen here? You bet it can. As long as the President and Congress continue enacting austerity measures and ignoring unemployment and general misery among ordinary Americans, it’s guaranteed the U.S. will see riots in the streets–as we have in the past. When it happens here, will our elites be as dumbfounded and out-of-touch with reality as those in Great Britain? Probably.
I posted this in a comment yesterday, but I’m going to put it up again here. It’s an interview of writer and broadcaster Darcus Howe by a clueless BBC “journalist.”
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That’s my suggested reading for today. What do you recommend?
UPDATE: I found a piece in the Guardian that reflects my thinking.
It is essential for those in power in Britain that the riots now sweeping the country can have no cause beyond feral wickedness. This is nothing but “criminality, pure and simple”, David Cameron declared after cutting short his holiday in Tuscany. The London mayor and fellow former Bullingdon Club member Boris Johnson, heckled by hostile Londoners in Clapham Junction, warned that rioters must stop hearing “economic and sociological justifications” (though who was offering them he never explained) for what they were doing.
When his predecessor Ken Livingstone linked the riots to the impact of public spending cuts, it was almost as if he’d torched a building himself. The Daily Mail thundered that blaming cuts was “immoral and cynical”, echoed by a string of armchair riot control enthusiasts. There was nothing to explain, they’ve insisted, and the only response should be plastic bullets, water cannon and troops on the streets.
We’ll hear a lot more of that when parliament meets – and it’s not hard to see why. If these riots have no social or political causes, then clearly no one in authority can be held responsible….If this week’s eruption is an expression of pure criminality and has nothing to do with police harassment or youth unemployment or rampant inequality or deepening economic crisis, why is it happening now and not a decade ago? The criminal classes, as the Victorians branded those at the margins of society, are always with us, after all. And if it has no connection with Britain’s savage social divide and ghettoes of deprivation, why did it kick off in Haringey and not Henley?
…To refuse to recognise the causes of the unrest is to make it more likely to recur – and ministers themselves certainly won’t be making that mistake behind closed doors if they care about their own political futures.
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Good Morning!! Let me get a sip of my breakfast tea, and then I’ll share what I found in the news today.
After doing his level best to wreck the U.S. economy, President Obama headed to Chicago to celebrate his birthday and rake in some campaign donations.
Taking a brief hometown respite Wednesday night, President Barack Obama used a 50th birthday bash in Uptown to raise re-election money from a friendly crowd as he sought to recharge a presidency showing signs of scars from Washington’s partisan battles.
The president told supporters at the Aragon Entertainment Center that the nation doesn’t have time to “play these partisan games.”
“I hope we can avoid another self-inflicted wound like we saw over the last couple weeks,” Obama said of the recent debt-ceiling gridlock.
Although Obama doesn’t turn 50 until Thursday, his visit symbolized presidentially and politically a need to turn the corner following weeks of bruising debate over raising the nation’s debt ceiling and cutting the country’s deficit.
Awww, poor guy. Screwing the poor, the elderly, baby boomers, and the working- and middle-classes must be really exhausting.
to highlight what they see as deficiencies in the Obama’s administration and to force the president and Congress to pay more attention to poor people who have been hit hardest by the recession.
Smiley called the legislation, signed by the president, “a declaration of war on the poor.”
“I don’t understand how the president could agree to a deal that does not extend unemployment benefits, does not close a single corporate loophole and doesn’t raise the taxes on the rich,” said Smiley. “The poor are being rendered more and more invisible in this country. Nobody, not the president, not the Republicans in Congress, is speaking to the truth of the suffering of everyday people.”
Paul Krugman was on Keith Olbermann’s show last night. I keep forgetting to watch that! Krugman discussed a number of things related to the debt ceiling bill, including Newt Gingrich’s remark that the Obama’s is “the Krugman Presidency.” It is to laugh!
He blamed the earthquake and tsunami in Japan, higher energy prices, default worries in Europe and recently resolved uncertainty over raising America’s borrowing limit. Carney said, “We believe the economy will continue to grow.”
Al-righty then! I guess we have nothing to worry about.
Of course there’s a threat. Larry Summers puts the odds at one in three; I might be slightly more optimistic, but the risk is very real. Who, exactly, is at the White House who knows better?
And think about the politics here. For two years the White House has been determinedly cheerful, always declaring that the recovery was on track, that its policies were working fine. And all it did was squander its credibility. Maybe admitting the truth, saying that in fact we hadn’t done nearly enough, would not have helped get useful legislation through Congress. But at least it would have conveyed the message that the WH was living in the same reality as ordinary workers.
Now they’re doing it again. To what purpose? Do they think the markets will be reassured? Do they think consumers will be reassured? At this point, after the “summer of recovery” came and went a whole year ago?
Apparently, that is what they think. Via Digby, Tim Geithner, who seems to be the person Obama listens to most on economic issues, strongly believes in the “confidence fairy.” He must also be the source of Jay Carney’s belief that we won’t have another recession, because that’s what Geithner told George Stepanopoulos a couple of days ago.
GEORGE STEPHANOPOULOS: But don’t you think that any deficit reduction now will — will hurt the attempts of the economy to recover?
TIM GEITHNER: You know, I think the — basic reality we live with and, you know, part of governing is recognize we live with — we don’t have unlimited resources, and we inherited and are left with unsustainable deficits long term. And the president understands that for the sake of the economy long-term it’s very important we demonstrate to the American people, to people around the world that we can get our arms around this and start go back to living’ within our means.
Now, we want to do that very carefully so we create room for the economy to grow and we have the resources necessary to invest in things that are going to be very important to the future like education, like infrastructure, like incentives for private investment. And to do that, it is absolutely essential to lock in these long term savings. Now — the president was very strong on this and made sure that we were not going to accept spending cuts that would damage the prospects for near term recovery. Now, with this behind us, and we get this —
GEORGE STEPHANOPOULOS: So this won’t cost us jobs?
TIM GEITHNER: No, it will not. Now … if we put this behind us then we can turn back to the important challenge of trying to find ways to make sure that we do everything we can to get more people back to work, strengthen our growth. And we’ll have more ability to do that now with people more confident and we can start to get our arms around the long-term problems.
WTF?! Is this guy for real? As Krugman said, “hope is not a plan,” but they don’t seem to have anything else.
…by almost all accounts inside the beltway, a downgrade in the federal government’s credit rating would be catastrophic. But a closer look at who issues these ratings, how they do it, and the real-world impact of these ratings tells a different story.
The first clue that these ratings might not be highly calibrated, serious indicators of creditworthiness can be found in the 2008 economic collapse. The financial products created by Wall Street that were full of toxic mortgage securities were all blessed with gold-star ratings as safe investments from the country’s three main credit ratings agencies, Moody’s, Fitch and Standard and Poor’s.
These products were so awful as to destroy Lehman Brothers, threaten many other trading firms, and plunge the economy into recession, but the ratings agencies consistently told investors they were safe. As William Greider has noted here, this essentially made the rating agencies “unindicted co-conspirators” in the collapse.
Were these agencies just bad at their jobs? Maybe, but Greider offers another more sinister theory: since the banks pay the rating agencies to examine their financial products, a harmful rating would persuade the banks to just shop elsewhere for a more favorable outcome. “This is an outrageous conflict of interest at the very heart of the financial system,” Greider writes.
Overpaid New York Yankee Alex Rodriguez is in trouble again, this time for illegal gambling. Baseball officials opened an investigation after
Star Magazine reported that Rodriguez “played in an underground, illegal poker game where cocaine was openly used, and even organized his own high-stakes game, which ended with thugs threatening players.”
Under the rules that govern baseball players, Rodriguez will have to truthfully answer baseball’s questions. If he acknowledges that he played in underground games or if officials uncover evidence that he did so, he could face a suspension.
The report Wednesday came a month after Major League Baseball opened its own investigation into Rodriguez’s ties to gambling. The investigation was prompted by a Star Magazine report in June that said Rodriguez had participated in a high-stakes illegal poker game with the actors Tobey Maguire, Leonardo DiCaprio, Ben Affleck and Matt Damon.
Hmmm…he was playing with Red Sox fans Affleck and Damon. I wonder who talked to Star Mag? I also learned on Google that A-Rod is dating actress Cameron Diaz. Boy is she making a big mistake.
To Marla Cooper of Oklahoma, her uncle was D.B. Cooper — except she knew him as Uncle L.D. She believes he died in 1999.
“I saw my uncle plotting a scheme,” Cooper told CNN’s Brooke Baldwin of what she said she remembers witnessing as an eight-year-old girl four decades ago.
Cooper said she was with two uncles at her grandma’s house around Thanksgiving time.
“I was with them while they were plotting it. I didn’t really know what was going on,” Cooper said. “Afterwards on Thanksgiving Day, I saw them return and I heard them discussing what they had done with my father. I have very vivid memories of it.”
Her claim might be cause for healthy speculation, especially 40 years after the fact, but two sources close to the investigation have told CNN that Marla Cooper’s tip led to the FBI reviving the case and for the past year the agency has been actively working the lead.
She says her uncle returned home badly injured and was treated at a VA hospital. Then he disappeared and she never saw him again. Her family made her swear she would never talk about what had happened.
On Monday at the Republic, MO school board meeting, four Republic School Board members reviewed a year-old complaint that three books are inappropriate reading material for high school children. In a 4-0 vote, the members decided to ax two of the three books from the high school curriculum and the library shelves: Twenty Boy Summer by Sarah Ockler and Slaughterhouse-Five by Kurt Vonnegut. Speak by Laurie Halse Anderson was spared. The resident who filed the original complaint targeted these three books because “they teach principles contrary to the Bible”
Wesley Scroggins, a Republic resident, challenged the use of the books and lesson plans in Republic schools, arguing they teach principles contrary to the Bible.
“I congratulate them for doing what’s right and removing the two books,” said Scroggins, who didn’t attend the board meeting. “It’s unfortunate they chose to keep the other book.”
Horrors! Contrary to the Bible? We can’t have that! You know, sometimes I’m very grateful to live in a relatively civilized place like Boston. This is one of those times.
On that note, I’m going to get another cup of tea and then check out what you all are reading and blogging about. Please post your links in the comments.
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signaled on Friday that he is ready to take over the debt-limit negotiations, summoning Senate leaders to the White House next week as the continuing impasse pushes the country closer to a potential default.
Obama will meet separately with Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) on Monday. The meetings follow the collapse Thursday of talks between Vice President Joe Biden and congressional leaders.
This isn’t good news for us liberals. Once Obama gets involved, I think we can assume he will give away the store to the Republicans. He’ll probably give them much more than they’re asking for. We’re going to need some stiffened Democratic spines in the Senate if we want to rescue Medicare and Medicaid. Are there and Democratic Senators left who have spines to stiffen?
“The president is willing to make tough choices, but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and to sacrifice while millionaires and billionaires and special interests get off the hook,” White House press secretary Jay Carney said Friday. That’s not “a fair and balanced approach.”
Oh fine. Just what we needed–a Fox News reference.
Meanwhile, House Speaker John Boehner (R-Ohio) said the “realities of the situation” are that the House won’t pass any deal that involves raising new revenues, and the package must include budget reforms and spending cuts that exceed the amount of the debt limit increase, which is expected to top $2 trillion.
Boehner’s demands are insane, but that probably won’t stop Obama from allowing Republicans to put the final nails in the coffin of the U.S. economy.
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The disconnect between reality and beltway rhetoric has never been more obvious when it comes to the economy. The NYT editorial page has an op-ed up today– ‘The Numbers are Grim’–in which they call for more attention to the unemployment crisis. As I mentioned when these numbers came out, a decrease in domestic household consumption is a troublesome signal in an economy where nearly 68% of production usually goes to domestic consumption.
When consumers are constrained, so is hiring, because without customers, employers are hard pressed to retain workers or make new hires. A recent Labor Department report showed a greater-than-expected rise in the number of people claiming jobless benefits even as private-sector economic forecasts are being revised downward — both very bad omens for continued job growth.
Republican lawmakers have responded to renewed signs of weakness with a jobs plan that prescribes more of the same “fixes” that Republicans always recommend no matter the problem: mainly high-end tax cuts, deregulation, more domestic oil drilling and federal spending cuts.
The White House has offered sounder ideas, including job retraining, plans to boost educational achievement and tax increases to help cover needed spending. But its economic team is mainly focused on negotiations to raise the debt limit, presumably parrying Republican demands for deep spending cuts that could weaken the economy further while still reaching an agreement on the necessary increase.
The grim numbers tell an unavoidable truth: The economy is not growing nearly fast enough to dent unemployment. Unfortunately, no one in Washington is pushing policies to promote stronger growth now.
Even the Wall Street Journal recognizes the challenges our economy faces. Many corporate economists see similar indications of a permanent growth problem. This should not be happening. We know how to correct this. We have nearly 70 years of economy theory and empirical data that have provided a guide to every administration except the last two.
Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.
“It’s very hard to generate a rapid recovery when rapid recoveries are historically driven by housing and the consumer,” said Nigel Gault, an economist at IHS Global Insight. He expects an annualized, inflation-adjusted growth rate of less than 3% in coming quarters—better than the first-quarter’s 1.8% rate, but too slow to make a meaningful dent in unemployment.
A growing number of forecasters are downgrading their second-quarter growth predictions. JPMorgan Chase & Co. economists revised down their estimate to a 2.5% rate from 3%, while Bank of America Merrill Lynch economists cut theirs to 2% from 2.8%. Deutsche Bank cut its forecast to 3.2% from 3.7%.
Companies are similarly cautious. Applied Materials Inc., the largest maker of machines used in producing computer chips, said it expected growth in its semiconductor and solar markets to slow following one of its best quarters ever. Hewlett-Packard Co. cut its fiscal-year outlook amid weak computer sales and negative effects from the disaster in Japan. Clorox Co. offered a more guarded outlook for its household goods business as executives noted that higher prices may hurt sales.
As stated by the NYT, most Republicans put a plan forward that calls for “high-end tax cuts, deregulation, more domestic oil drilling and federal spending cuts”. This is exactly the opposite of what needs to be done. The mantra of ‘too high’ taxes strangling business which dampens unemployment is simply not true. It’s never been true. It’s a fallacy! Bruce Bartlett has done an excellent job–see the nifty graph above–in using facts to put down that meme. Not only are effective tax rates on corporations already exceedingly low, but tax revenues from wealthy individuals are so low that most of us probably have higher effective marginal tax rates. This has been the case now for nearly 7 years and for about that same time we’ve experienced some of the worst job creation and economic growth ever.
The economic importance of statutory tax rates is blown far out of proportion by Republicans looking for ways to make taxes look high when they are quite low. And they almost never note that the statutory tax rate applies only to the last dollar earned or that the effective tax rate is substantially lower even for the richest taxpayers and largest corporations because of tax exclusions, deductions, credits and the 15 percent top rate on dividends and capital gains.
The many adjustments to income permitted by the tax code, plus alternative tax rates on the largest sources of income of the wealthy, explain why the average federal income tax rate on the 400 richest people in America was 18.11 percent in 2008, according to the Internal Revenue Service, down from 26.38 percent when these data were first calculated in 1992. Among the top 400, 7.5 percent had an average tax rate of less than 10 percent, 25 percent paid between 10 and 15 percent, and 28 percent paid between 15 and 20 percent.
The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.
Meanwhile, the complete disconnect between spending and cutting priorities in Congress and the White House and the American people grows. As mentioned by BostonBoomer this morning in a reference to a Paul Rosenberg peice at Alternet, Americans want none of what is being dished up in the beltway. It is true that the current spending path for the general budget, social security, and medicare are not sustainable at current levels. What is not true is that we need to accept the current path and Republican policy priorities as the solution. There is no evidence that anything they’ve suggested will remotely help our jobs and growth problem which would take care of much of the deficit problems. The rest could be solved by simply returning tax policy back to the Reagan or Clinton levels.
It’s obvious from the last set of economic numbers that the current problem stems from lack of consumer demand which is rooted in a lack of income, confidence, and wealth in the majority of US Households. People simply do not have the wherewithal to purchase homes or sustain household budgets. This is because we have an unacceptably high level of unemployment, we have let the pathway to home ownership completely collapse, and we’re allowing basic government services to collapse to fund unrealistically low tax rates for corporations and wealthy individuals. Don’t even get me started on funding never-ending wars. There is mounting evidence that these funds aren’t even staying in the country any more but are being used to fund jobs, investment, and growth in other places. This is unacceptable policy under our current economic situation. American treasury should not be used to chase profits abroad.
This is beyond disheartening. It is evident that the plutocracy is doing everything it can to silence any one that could run a narrative contrary to these current fallacies. I don’t believe for one moment that Congressman Wiener’s hacker isn’t part of tearing down any one that appears to be stepping away from the abyss of Washington group think. Meanwhile, the media speak is about pushing the economy to the precipice by focusing on the debt ceiling. It’s looking like we’re being prepped for that. This will make the market demand extremely high rates of return for federal borrowing which will only increase our interest payments on the debt which are already a huge portion of the budget. How much sense does that make?
Early proposals for whittling down spending include a plan to drop federal agriculture subsidies and to require larger employee contributions to the pension system for non-military federal workers.
“Those talks, which actually we’ve been meeting for over three weeks now, they have been all positive. Everything is on the table,” House Majority Leader Eric Cantor (R-Va.) said Sunday on CBS’s “Face the Nation.” “We’ve said, as Republicans, we’re not going to go for tax increases. I think the administration gets that. But we’ve also put everything on the table as far as cuts.”
Oh, and if you think the Republicans are all about small businesses and start-ups because they create jobs, check this nifty graph out from MoJo. The Dubya years basically killed that phenomenon too so it wasn’t about lowering tax rates, was it?
As this chart from the BLS shows, the number of jobs created by new businesses peaked in 2000, began declining at the start of the Bush administration, and has been plummeting ever since …
So much for that Republican meme. Facts are stubborn things, aren’t they?
This problem is basically due to the inability to govern and make prudent decisions. They’d much rather pump out lies and continue on the same path to destruction. These people ran up tons of debt to fund wars for which they found no funds. This is all about the irresponsible Bush tax cuts that Congress and the Obama administration returned to law in December. The pain for these horrible decisions are about to be extracted on middle and working class Americans who have done absolutely nothing to bring on the recent economic problems and fiscal problems. There has been no bail out or special tax breaks for us. It should be obvious by now that the policies of the last five years have done nothing but improved the situation for the very rich and the very large corporation. Shame on all of those elected officials that go along with this. It is as if they are purposefully setting out to destroy our economy and our way of life. I have no idea why they hold so many of us in contempt but it is obvious that that they prefer the donor class to voters. They seem to want a repeat of the Great Depression. At this rate, that is exactly what they will have.
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Too bad we can't buy some stock in soup kitchens ...
U.S. Economic Growth did exactly what most economists expected during the first quarter of 2011, it slowed substantially. There is some hope that the low rate was due to temporary factors like bad weather and political unrest in the MENA region that’s contributed to higher gas prices.
Of these various economic menaces, the most enduring is probably higher commodity prices, which reduce the amount of pocket money that households and businesses have available to spend on other purchases and, in the case of companies, hires. Gasoline prices have shown little sign of falling in recent weeks, and have nearly neutralized the 2011 payroll tax cuts that were intended as a stimulus.
“Consumers are spending more, but it’s getting soaked up in higher gas prices and higher food prices,” the chief economist at RDQ Economics, John Ryding, said. “That’s not leaving nearly as much left over for discretionary spending.”
Declines in government spending will continue to drag on the economy throughout the year, as strapped state and local governments cut back and the federal government tries to cut down on nonmilitary spending. Last quarter’s steep drop in military spending, which tends to be volatile, will probably reverse itself later in the year, economists said.
It’s pretty easy to tell who is experiencing the worst end of this lackluster recovery. Hint: It’s not the wealthiest Americans. But, if you had any doubts, Wal-Mart reports their shoppers are “running out of money”. Again, there’s low overall inflation but higher gas and food prices make up a large portion of the family budget for ordinary Americans.
Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.
“We’re seeing core consumers under a lot of pressure,” Duke said at an event in New York. “There’s no doubt that rising fuel prices are having an impact.”
Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.
Lately, they’re “running out of money” at a faster clip, he said.
“Purchases are really dropping off by the end of the month even more than last year,” Duke said. “This end-of-month [purchases] cycle is growing to be a concern.
This would explain the results of this Gallup Poll where “More than Half Still Say U.S. is in a Recession”. This amount of consumer depression in an economy driven by 70% household spending cannot bode well for future GDP growth. Businesses are expanding overseas and will not create any jobs or businesses here unless they see customers. This, in the Keynesia mold, calls for increased government spending. What we have been getting is decreases in taxes to people whose investments and job creation efforts are going outside of the country. It’s not hard to see why most citizens do not think we’re in any kind of recovery other than a technical one.
More than half of Americans (55%) describe the U.S. economy as being in a recession or depression, even as the Federal Open Market Committee (FOMC) reports that “the economic recovery is proceeding at a moderate pace.” Another 16% of Americans say the economy is “slowing down,” and 27% believe it is growing.
“The people who are threatening not to pass the debt ceiling are our version of al Qaeda terrorists. Really,” O’Neill, Treasury secretary in the Republican administration of George W. Bush, said Wednesday in an interview with Bloomberg Television’s InBusiness with Margaret Brennan.
“They’re really putting our whole society at risk by threatening to round up 50 percent of the members of the Congress, who are loony, who would put our credit at risk,” O’Neill said.
Real exports of goods and services increased 4.9 percent in the first quarter, compared with an increase of 8.6 percent in the fourth. Real imports of goods and services increased 4.4 percent, in contrast to a decrease of 12.6 percent.
Real federal government consumption expenditures and gross investment decreased 7.9 percent in the first quarter, compared with a decrease of 0.3 percent in the fourth. National defense decreased 11.7 percent, compared with a decrease of 2.2 percent. Nondefense increased 0.1 percent, compared with an increase of 3.7 percent. Real state and local government consumption expenditures and gross investment decreased 3.3 percent, compared with a decrease of 2.6 percent.
The change in real private inventories added 0.93 percentage point to the first-quarter change in
real GDP after subtracting 3.42 percentage points from the fourth-quarter change. Private businesses
increased inventories $43.8 billion in the first quarter, following increases of $16.2 billion in the fourth
quarter and $121.4 billion in the third.
None of this is good news when coupled with the still high rates of unemployment. Despite all these tax cuts, the business sector is clearly not going anywhere. Here’s a link to some further analysis and nifty graphs from Econbrowser. This analysis is particularly germane to our conversation.
Inventory rebuilding and a gain in exports made positive contributions, but these were essentially undone by increases in imports and decreases in government spending. Perhaps the most disappointing detail was investment spending by businesses, which had been making solid contributions to growth the previous three quarters, but was essentially flat for Q1. Housing remains stuck at very low levels, but at least it’s no longer a significant factor dragging the level of GDP down.
But until housing and business investment start making a positive contribution, we’re likely to be disappointed by the employment and GDP reports.
It’s pretty obvious that fiscal policy in this country has gone to VooDoo land because we’re still in deep DooDoo. What we have here is fiscal policy malpractice. Too bad we can’t all join in a massive lawsuit and sue the Congress. Thanks a lot SCOTUS!!!
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The Sky Dancing banner headline uses a snippet from a work by artist Tashi Mannox called 'Rainbow Study'. The work is described as a" study of typical Tibetan rainbow clouds, that feature in Thanka painting, temple decoration and silk brocades". dakinikat was immediately drawn to the image when trying to find stylized Tibetan Clouds to represent Sky Dancing. It is probably because Tashi's practice is similar to her own. His updated take on the clouds that fill the collection of traditional thankas is quite special.
You can find his work at his website by clicking on his logo below. He is also a calligraphy artist that uses important vajrayana syllables. We encourage you to visit his on line studio.
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