Income Disparity, Inequality and Collapse

We worship money instead of honor. A billionaire, in our estimation, is much greater in these days in the eyes of the people than the public servant who works for public interest. It makes no difference if the billionaire rode to wealth on the sweat of little children and the blood of underpaid labor. No one ever considered Carnegie libraries steeped in the blood of the Homestead steelworkers, but they are. We do not remember that the Rockefeller Foundation is founded on the dead miners of the Colorado Fuel & Iron Company and a dozen other similar performances. We worship Mammon; and until we go back to ancient fundamentals and return to the Giver of the Tables of Law and His teachings, these conditions are going to remain with us. It is a pity that Wall Street, with its ability to control all the wealth of the nation and to hire the best law brains in the country, has not produced some statesmen, some men who could see the dangers of bigness and of the concentration of the control of wealth. Instead of working to meet the situation, they are still employing the best law brains to serve greed and self interest. People can stand only so much, and one of these days there will be a settlement.

Harry Truman

The settlement he is referring to is revolution and chaos. Thomas Paine and Alexander Hamilton talked about how revolution and chaos were the final end of every great nation from the past and about how to avoid that in America, that is how to impede the concentration of wealth.

Great White Hope

I've had my ear to the ground (maybe "mud" is a better description for the Republican debates), and my confidential sources inform me that Obama is instituting a plan to kill all newborn white males because he has heard a rumor that the Lord God Almighty plans to send his only begotten son, The Great White Hope, into the world as a babe to become King of the Whites.

Ice Cold Debunk of Economic Austerity Policy

Krugman's Mighty Excerpt (NYT, 2/20/12)

In early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did. Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.Furthermore, bond markets keep refusing to cooperate. Even austerity’s star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.

Meanwhile, countries that didn’t jump on the austerity train — most notably, Japan and the United States — continue to have very low borrowing costs, defying the dire predictions of fiscal hawks. Now, not everything has gone wrong. Late last year Spanish and Italian borrowing costs shot up, threatening a general financial meltdown. Those costs have now subsided, amid general sighs of relief. But this good news was actually a triumph of anti-austerity: Mario Draghi, the new president of the European Central Bank, brushed aside the inflation-worriers and engineered a large expansion of credit, which was just what the doctor ordered.

So what will it take to convince the Pain Caucus, the people on both sides of the Atlantic who insist that we can cut our way to prosperity, that they are wrong?After all, the usual suspects were quick to pronounce the idea of fiscal stimulus dead for all time after President Obama’s efforts failed to produce a quick fall in unemployment — even though many economists warned in advance that the stimulus was too small. Yet as far as I can tell, austerity is still considered responsible and necessary despite its catastrophic failure in practice.

The point is that we could actually do a lot to help our economies simply by reversing the destructive austerity of the last two years. That’s true even in America, which has avoided full-fledged austerity at the federal level but has seen big spending and employment cuts at the state and local level. Remember all the fuss about whether there were enough “shovel ready” projects to make large-scale stimulus feasible? Well, never mind: all the federal government needs to do to give the economy a big boost is provide aid to lower-level governments, allowing these governments to rehire the hundreds of thousands of schoolteachers they have laid off and restart the building and maintenance projects they have canceled.

Look, I understand why influential people are reluctant to admit that policy ideas they thought reflected deep wisdom actually amounted to utter, destructive folly. But it’s time to put delusional beliefs about the virtues of austerity in a depressed economy behind us.

Mormons on Catholicism

I wonder how the Catholics would like Romney if they knew that the following passages from the Mormon "Bible" refer to their church as the "whore of all the earth," the "church of the devil," and the "mother of abominations?"

10 And he said unto me: Behold there are save ^atwo churches only; the one is the church of the Lamb of God, and the ^bother is the church of the ^cdevil; wherefore, ^dwhoso belongeth not to the church of the Lamb of God belongeth to that great church, which is the mother of abominations; and she is the ^ewhore of all the earth.

11 And it came to pass that I looked and beheld the whore of all the earth, and she sat upon many ^awaters; and she had dominion over ^ball the earth, among all nations, kindreds, tongues, and people.

12 And it came to pass that I beheld the church of the Lamb of God, and its numbers were ^afew, because of the wickedness and abominations of the whore who sat upon many waters; nevertheless, I beheld that the church of the Lamb, who were the saints of God, were also upon ^ball the face of the earth; and their dominions upon the face of the earth were small, because of the wickedness of the great whore whom I saw.

Book of Mormon, 1 Nephi, Ch. 14

Lew: Spending Needed to Bolster the Economy

from Newsmax.com 2/13/12
White House Chief of Staff Jack Lew said hundreds of billions of dollars in spending for roads and bridges, education and manufacturing are necessary to keep the U.S. economy growing.
“Most Americans understand that a crumbling infrastructure is not the way to build an economy that can last,” Lew, the former White House budget director, said on CNN’s “State of the Union.” “We need to make sure we have a manufacturing base in this country” and workers with the needed skills. President Barack Obama submits the fourth budget of his presidency on Monday, a multitrillion-dollar package that calls for $350 billion in short-term spending to create jobs and a $476 billion highway bill, while saying it will cut $4 trillion from the deficit over a decade, partly by raising taxes on the wealthy. Much of the budget, which envisions a $1.3 trillion deficit this year, declining to $901 billion next year, represents a repackaging of proposals that Republicans in Congress have largely blocked or rejected as unworkable or unnecessary. Obama faces a re-election campaign, and the budget amounts to a campaign platform reflecting his vision for the country, while Republican rivals question its direction and cost. Lew said “there are a lot of tough cuts” in the budget, including more than $360 billion over a decade in Medicare, Medicaid and other health programs. He urged lawmakers to extend the payroll tax cut to the end of the year as a stimulus to the economy. If Congress fails to take action the tax cut for 160 million Americans expires Feb. 29, resulting in a tax increase. “We still need to pay attention to sustaining economic growth and creating jobs,” Lew said. He declined to predict what the economy would look like in September as the elections draw near but said job growth has been increasing, with employers adding 243,000 jobs in January.

The Liberal Media

From the AP:

There's still no progress on the central issue of finding budget cuts to finance a cut in Social Security payroll taxes. At the hearing earlier this week, Democrats came out against GOP plans to freeze federal workers' pay and require higher income seniors to pay higher Medicare premiums.

But Democrats have yet to come forward, publicly or privately, with an alternative roster of deficit cutting proposals to raise $160 billion or so in savings to pay for extending the payroll tax cut and jobless benefits for the long-term unemployed, as well as preventing a 27 percent cut in Medicare payments to doctors required under an outdated funding formula. [Emphasis added]

There have been not just one but several Democratic proposals to pay for the extension of the payroll tax holiday, not the least of which was the surtax on the upper income taxpayers. This is simply an outright lie, obviously written by a lazy slob of a reporter who simply copied a Republican press release without even attempting to fact check it. It's hard to see how this country can succeed with this level of irresponsibility in the fourth estate

GOP’s Economic Sabotage

From the DC Underground:

When GOP congressman Allen West dismissed falling unemployment as “number games,” he was pointing the way forward for his party—into disinformation and deliberate destruction.

by Michael Tomasky |Wash Post, February 6, 2012 4:45 AM EST

It was somewhere between hilarious and pathetic to watch Republicans respond to the positive jobs report last Friday. Some friends and I were counting the minutes until some Republican started casting aspersions on the Bureau of Labor Statistics (BLS), which compiles and releases the data. Sure enough, by early Friday afternoon, Tea Party Congressman Allen West was saying (on the basis of no evidence of course) that “Americans need truth, not these number games.” West’s comment suggests a desperation that will spread if future reports are as good as last week’s, which raises the question of what the Republicans will do next to try to wreck the economy. I know, one isn’t supposed to talk like this. I know, it’s evil to suggest that politicians would put their electoral fate this fall ahead of the conditions of the people. And, I know, it’s just . . . ooooh, it’s so mean!

But the record shows clearly that all the Republican Party can do is destroy. First, Republicans destroyed the economy. We don’t speak much these days of George W. Bush, which I’ve always felt, from January 2009, was a big tactical error on the Democrats’ part. They should have been doing with Bush all this time what the Republicans did with Jimmy Carter. He was as bad a president. Actually worse. In terms of job creation, far, far worse. Check it out—Carter’s job-creation record was in fact rather enviable. So they spent eight years taking the humming economy they inherited and asphyxiating it. Bush handed Obama three huge messes—the biggest meltdown in 80 years, plus Iraq and Afghanistan.

Then Obama tries to clean up mess number one, and they do everything they can to block every step he’s taken. It’s worked pretty well for them politically because the jobless rate has been high, and as long as that was the case, they could say no, choosing whatever weapon was handy and wagging their collective finger at the president.

But what do they do now? What if the economy keeps creating 200,000-plus jobs a month? Economists, a pessimistic lot by training and nature, are now rethinking their pessimism. Just two weeks before the jobs numbers came out, the Congressional Budget Office released a report (PDF) showing, under one scenario, that unemployment would be 8.9 percent this fall and still higher in the last quarter of 2013, at 9.2 percent. These numbers received a massive amount of attention, as they fed the trouble-for-Obama story line that will yield the close election that political reporters are desperate to have. The report sent every Democrat in Washington into a funk.

What do the Republicans do if the economy keeps creating 200,000-plus jobs a month?, Paul Sancya. But for now anyway, it’s looking as if these CBO numbers, found in a chart on page 30 at the link above if you’re interested, might turn out to be the worst prediction of 2012. After the jobs numbers came out last Friday, James Bullard, head of the St. Louis Fed, said that the Fed’s own unemployment projections—lower than the CBO’s, but still between 8.2 percent and 8.5 percent at the end of this year—now seemed too high to him, and that “sub-8 percent is a reasonable prediction.”

If the February numbers come in resembling the January ones, the whole collective psyche will change for the better, and the story line will be one of definite rebound. What will the Republicans do then? Rhetorically, they’ll feed us more of what Mitt Romney dished out Saturday night in his Nevada victory speech: “This week [Obama is] trying to take a bow for 8.3 percent unemployment. Not so fast, Mr. President. We welcome any good news on the jobs front. But it is thanks to the innovation of the American people in the private sector and not to you, Mr. President.” So Obama gets the blame when the unemployment is north of 9 percent but not the credit when it drops. Sure, guys. Keep using that one. And the Allen West line will gather steam. The talk-radio right will start to lay into the BLS and try to discredit it. They go out and interview 60,000 households every month (plus more—read about the methodology here). They do not cook numbers. But reality never made any difference to these people anyway.

What’s more worrisome is what the Republicans on Capitol Hill will do in policy terms to try to blunt the recovery. They’re doing little things as they can manage them. Last week, the House Budget Committee approved a bill that would inflate the cost of federal programs. But what about the big things? Let’s watch what happens on the payroll tax-decrease extension the White House wants. The current reduction expires February 29. It would not exactly shock me to see Republicans start throwing new poison pills into the final negotiations.

There are decent and honorable individual Republicans. Probably many of them. I even know some. But as a collective entity, they are toxic destroyers. Why? On the same “the sky is green and the grass is blue” logic that dominates today’s GOP on virtually all matters. They say publicly, as Senator Jon Kyl does in this clip, that the reduction has not had a stimulative effect. They must know that that is preposterous. Putting $1,000 back in the pocket of your average $50,000 wage earner is, economists agree, money she is likely to spend, and spent dollars are by definition stimulative dollars. They know full well that the stimulative effect of the reduction creates jobs, too. Will they really be so blatant as to try to kill it?

There are decent and honorable individual Republicans. Probably many of them. I even know some. But as a collective entity—as a party and a movement that includes the media wing and the base that boos a gay soldier at a debate and cheers executions—they are toxic destroyers, their minds infected by the idea that any cooperation with the president for the sake of the country is the moral equivalent of Munich (yes, with all that analogy implies). They will do anything. Nothing could be more just than to see a surprisingly low unemployment rate come November, with Republicans still insisting that black is white and that governance equals capitulation, and the public rewarding them accordingly.

Are there no prisons? Are there no workhouses?

Perhaps that's what Willard will ask next.

Talk is cheap: Democrats need to show us the money

Jared Bernstein, who was the Vice President's economist and the most progressive economist on the White House economic team, has from time to time advocated a "FAST" (Fix America's Schools Today) bill for emergency infrastructure investment. It's a great idea, but, of course, he laments the fact that it will go nowhere in Congress. Here is a comment I made on his blog post:

The right wing will spend tons of money advertising its position on public issues, as with the millions spent trying to build public pressure on the President to approve the pipeline. Our side seems to do nothing whatsoever -- except well-meaning blog posts for a minuscule audience -- to build public pressure for anything. Why not a campaign to put pressure on Congress to pass FAST? Or is it all just a sham for creating campaign talking points? Yes, the President cannot promote such a campaign directly -- the excuses are always at hand, aren't they -- but there must be some organization with money that believes in the importance of infrastructure. Is there any reason why the President can't drop a hint to some of his many wealthy friends that he'd appreciate some vocal support?

The President's big infrastructure speech, weak as it was on building a case for the critical need for massive infrastructure investment on a relatively permanent basis, came more than two years after it should have been given, and unfortunately came only after the press had declared the campaign to be on. I am not convinced myself that it's anything more than campaign positioning. The lack of any genuine effort to break through Republican resistance, with the de rigeur whines that it's probably all for naught, don't do anything to convince me I'm wrong.

The GOP’s Assault Upon Economic Reality

JANUARY 30, 2012 5:31PM From Salon

The evidence continues to mount that the GOP’s insistent demands for still further reductions in federal, state and local spending have exacerbated and prolonged the current recession. In response, advocates for austerity measures have now begin to argue that demands for increased government programs to lift the economy and to reign in abusive business practices are nothing less than an assault upon free enterprise itself.

Former New Hampshire U.S. Senator John Sununu is a case in point. In an opinion column in today’s Boston Globe ( “Apple, not manufacturing, is America’s future,” January 30, 2011), Sununu showed that he is oblivious to the daily economic struggle of a majority of Americans who must grapple with high unemployment, declining wages, mortgage foreclosures, lack of access to affordable medical insurance, loss of retirement savings and diminished prospects for themselves, their children and their grandchildren. In his column, Sununu argued that we should not lament the loss of manufacturing. In order to support the proposition that corporations like Apple represent the future for America, Sununu had to ignore all of the evidence to the contrary. Previously for example, Charles Duhigg and Keith Bradsher reported in the New York Times (“How the U.S. Lost out on iPhone Work,” January 21, 2012) that nearly all of the 70 million iPhones, 30 million iPads and 59 million other assorted products sold by Apple sold last year were manufactured overseas, primarily in China by third-party vendors with whom Apple contracts for services and products.

One facility alone, Foxconn, employed 230,000 workers, who often worked six days a week, in shifts that lasted 12 hours per day. More than a quarter of Foxconn’s work force was reported to live in company barracks; many workers earned less than $17 a day; and the intolerable working conditions within its facilities have led to suicides and explosions from aluminum dust that killed and injured scores of workers. By contrast, Apple employs only 43,000 people in the United States and 20,000 overseas. As a result of its exploitation of these workers, the New York Times article noted that Apple made a profit of $400,000 per each of it’s actual employees, a sum greater than that made by Goldman Sachs, Exxon Mobil and Google. In response to that data, one current Apple executive stated, We sell iPhones in over a hundred countries, We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”Sununu’s enthusiasm for Apple’s business model is expansive: “In just ten years, the market value of Apple has grown from $7 billion to over $400 billion. The return for mutual funds and pension funds owning the stock have been outstanding, and thousands of employees have earned financial security.” That enthusiasm, however, is not tempered by any recognition that, for millions of middle class Americans who do not directly own Apple stocks, the stock market has been an unmitigated disaster.

CNN News reported that, on September 29, 2008, Dow Jones lost nearly 778 points, in the biggest single-day point loss ever, after the GOP House rejected the government's $700 billion bank bailout plan. The day's loss totaled approximately $1.2 trillion in market value, the first post-$1 trillion day ever recorded, according to the Dow Jones Wilshire 5000, the broadest measure of the stock market. As a result, many middle income investors lost their life savings and have never recovered.

Apple’s predatory business practices and the out-sourcing of U.S. manufacturing must be viewed in the context of the American economy as a whole. Numerous studies report that more than 47 million Americans, including 9 million children, do not have health insurance. A study by Harvard University Medical School in 2009 attributed that the lack of medical insurance to about 45,000 deaths per year in the U.S.
Researchers for the U.S. Department of Agriculture in 2010 reported that 17.2 million households - or 14.5 % of all households in the United States - were "food insecure" and that in one-third of those households "normal eating patterns were disrupted." In 3.9 million of those households, children went hungry. As the real unemployment rate climbed to approximately 20 million Americans in 2011, another 2.6 million Americans, according to the Census Bureau, descended into poverty. Almost simultaneously, the World Bank observed that the United States had a higher level of income inequality than Canada, South Korean or any country in Europe with the exception of Turkey. In October of last year, the Internal Revenue Service and the Congressional Budget Office released findings which showed that the top 1% of the American population continued to receive a disproportionate share of the country's wealth. In 2009, the 1.4 million who belong to the top 1% made an average of $1 million dollars in 2009. Further, since 1979, the share of U.S. Income enjoyed by the top 1% has increased from 9.18% to 17.9% as of 2009, or more than the entire bottom half of the U.S. population. Almost simultaneously, Forbes magazine reported that, as of November, 2011, the four hundred richest Americans enjoyed a combined worth of $1.53 trillion, which figure had increased from $1.37 trillion over the previous year. Their combined wealth was thus approximately equivalent to the GDP of Canada.

Sununu does correctly note a shortfall of trained U.S. works, including scientists and engineers. He, however, refuses to recognize that the same austerity measures that he and other GOP leaders have advocated have caused the lay-offs of thousands of public school teachers around the United States and forced state governments to cut back significantly their investments in pubic higher education.
Today’s Republican Party has become an apologist for an economic status-quo that is stacked against ordinary Americans The net effect of the extraordinary concentration of wealth and power has been that the decisions and predilections of fewer and fewer individuals now determine the outcomes in the American economy while the overwhelming majority of Americans have little ability to influence macro-economic trends or economic and political policies. In the alternate economic universe that so many GOP members inhabit, the enormous wealth now enjoyed by a mere 1% of the population should be an object of public celebration rather than the focus of civic opprobrium or class envy. As Erasmus once observed, “In the land of the blind, the one-eyed man is king.