Haunting the Web Since 1999
A brand-spankin’ new CBO report concludes what we all already know: Income inequality has surged since 1981, and government, post-Reagan, has consistently failed to address the problem. “‘The equalizing effect of federal taxes was smaller’ in 2007 than in 1979, as ‘the composition of federal revenues shifted away from progressive income taxes to less-progressive payroll taxes,’ the budget office said.” But, hey, let’s sweat that deficit.
Along the same lines, Naked Capitalism‘s Yves Smith responds to the disclosure that repeat offender Bank of America is trying — with the Fed’s help — to foist their more toxic assets into FDIC-backed accounts (meaning that taxpayers will eat the losses.) “[T]his move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral.“
Continues Smith: “The FDIC is understandably ripshit…Bill Black said that the Bloomberg editors toned down his remarks considerably. He said, ‘Any competent regulator would respond: ‘No, Hell NO!’ It’s time that the public also say no, and loudly, to yet another route for running a drip feed from taxpayers to banksters.‘” (Cartoon via here.)
James K. Galbraith, who warned of the deficit witchhunt a year ago, weighs in on the debt ceiling endgame currently playing out in Washington, as well as Obama’s role in it:
“[W]hat do we have, from a President who claims to be a member of the Democratic Party? First, there is the claim that we face a fiscal crisis, which is a big untruth. Second, a concession in principle that we should deal with that crisis by enacting massive cuts in public services on one hand and in vital social insurance programs on the other. This is an arbitrary cruelty. Third, a refusal to stand on the strong ground of the Constitution, against those whose open and declared purpose is tear that document and the public credit to shreds.“
Yep, that’s about it. When it became clear that Obama had fully inhaled voodoo economics and was once again going to give away the store in these needless negotiations, I said on Twitter: ““I’ll take [Boehner/Cantor/Lannisters/Littlefinger] at his word!” I just realized: Obama negotiates like Ned Stark. Now, winter is coming.“
But, really, that gives this president too much credit. He’s not a nobly deluded sap. He’s getting exactly what he wants: a Third Way-approved Grand Bargain that takes money out of a sputtering economy and needlessly slashes our social insurance system, all in response to a problem that is basically imaginary.
But, of course, the chatterers and the Serious People™ will applaud this bargain as being wise, centrist, and independent no matter what damage it causes — hey, only Nixon can go to China! And all the while the economy and labor market will continue to tank. What a fucking fiasco. [Rorschcat via here.]
“The contrast in fortunes between those on top of the economic heap and those buried in the rubble couldn’t be starker. The 10 biggest banks now control more than three-quarters of the country’s banking assets. Profits have bounced back, while compensation at publicly traded Wall Street firms hit a record $135 billion in 2010. Meanwhile, more than 24 million Americans are out of work or can’t find full-time work, and nearly $9 trillion in household wealth has vanished. There seems to be no correlation between who drove the crisis and who is paying the price.“
As Bank of America pays a pittance to other banks for its malfeasance, former chair of the Financial Crisis Inquiry Commission Phil Angelides looks into how the winners are now rewriting the history of the 2008 financial collapse. “So, how do you revise the historical narrative when the evidence of what led to economic catastrophe is so overwhelming and the events at issue so recent? You and your political allies just do it. And you bet on the old axiom that a lie is halfway around the world before the truth can tie its shoes.” Attorney General Schneiderman, our nation turns its lowly eyes to you.
It used to be a central tenet of progressivism was working to shorten the work week. Now, even unemployment-soothing innovations like workshare go nowhere, and, as Mother Jones‘s Monika Bauerlein and Claira Jeffrey explain (with handy graphs), we are all victims of the Great Speedup…but not the beneficiaries. “For 90 percent of American workers, incomes have stagnated or fallen for the past three decades, while they’ve ballooned at the top, and exploded at the very tippy-top…In other words, all that extra work you’ve taken on — the late nights, the skipped lunch hours, the missed soccer games — paid off. For them.”
I saw this a few weeks ago, and Follow me Here reminded me of it: As we pass the fortieth anniversary of the failed war on drugs, Wire creator David Simon makes a deal with Attorney General Eric Holder: End the drug war for a Wire season six. As if there weren’t already enough good reasons to do so, S6 would be the cherry on top.
Ex-Grayson staffer (and friend) Matt Stoller dissects the lack of political will for infrastructure reinvestment in today’s political climate. “Ultimately, of course, we will have no choice but to rebuild our infrastructure or risk social collapse…Meanwhile, the ideological fight is not over whether to spend more on infrastructure. It’s whether we should privatize what’s left.“
Proving Matt’s point is this thoroughly sad column by ex-Biden Chief of Staff Ron Klain, a man who until very recently was a senior advisor to the president. (Now, he works for a “private investment firm,” natch.). Says Klain: “Hoover Dam nostalgia is misguided…[I]t’s time to let go of the idea that a handful of marquee construction projects, even majestic and lasting ones, can solve our employment problem. Such endeavors alone didn’t bring us out of the Depression in the 1930s, and they won’t end our current predicament.“
Uh, is anyone actually saying that we should only do “a handful of marquee construction projects“? No, no, they’re not. They’re saying we should build big things, build small things, rebuild and repair things big and small, and otherwise put people back to work in any way possible. Where’s the vision? It’s going to take something a mite bigger and more audacious to get the economy moving again than an employer-side payroll tax cut.