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Money news
The Progressive
Review
JUNE 2009
THE GOOD & THE BAD IN OBAMA'S
FINANCIAL REGULATORY PLAN
THREE ESSENTIALS OF FINANCIAL REFORM
END OF AN AFFAIR WITH CHRYSLER
OBAMA: BAILING OUT BANKERS INSTEAD
OF BANKS
THE FINANCIAL WAR AGAINST US
MORTGAGE RESCUE PLAN NOT WORKING
THE ULTIMATE FORECLOSURE: CITY
BOARDS MAN UP IN HOUSE HE LOST
DEMOCRATS REFUSE TO END USURY
BY BANKS GETTING BAILOUTS
DEMOCRATS EXPRESS CONCERN OVER
DEALERSHIP CLOSINGS
STATE UNEMPLOYMENT FUNDS IN DEEP
TROUBLE
STATE BUDGET WOES TO GET WORSE
THE BANKRUPT APPROACH TO GENERAL
MOTORS
SIX WAYS THE BAILOUT IS A SCAM
OBAMA BACKED AUTO DEALER SLASHING
IS NEW BLOW TO STATES
WHY ARE CHRYSLER & GM DESTROYING
THEIR CUSTOMERS, THE DEALERS?
MAY 2009
BILLIONS FOR BANKERS; NOT ONE
DIME FOR SUNSHINE DODGE
COURT OKAYS FORECLOSURE ON GOTTI
ESTATE . . .
BUT NOT UNTIL DELINQUENCY HIT $650K
HOW OFFSHORE TAX HAVENS HELPED
CREATE THE CRISIS
BAILED OUT BIG BANKS WERE FINANCIAL
FORCE BEHIND SUBPRIME SCAM
SIGNS OF THE TIMES
AIG BONUSES 2.5 TIMES MORE THAN
STATED EARLIER
AS AMERICA SHRINKS, CHINA GROWS
CAN SBA HANDLE SMALL BUSINESS
STIMULUS PACKAGE?
CREDIT CARD COMPANIES ABUSE BUSINESSES
AND CUSTOMERS WITH HIGH TRANSACTION FEES
SMALL BANKS BEING CHARGED FOR
BIG BANKS' PROBLEMS
BANKERS
STILL RUNNING WASHINGTON; KILL BANKRUPTCY REFORM
THE COLLAPSE OF THE MIDDLE CLASS
HOW GOLDMAN SACHS TOOK OVER THE
WORLD
CREDIT CARD COMPANIES ILLEGALLY
BLOCKING SOCIAL SECURITY OF DEBTORS
UP CLOSE AND PERSONAL WITH TIM
GEITHNER
THE WAIL OF THE 1%: WALL STREET
IS MAD AT YOU
PULLING THE TARP ON TARP
TENT CITIES GROWING
WORKERS OF MIXED ETHNICITY PAID
LESS THAN WHITES OR BLACKS
THE LAW THEY JUST WANT TO FORGET
ABOUT, NOT REPEAL
WHERE YOUR BAILOUT MONEY WENT
THE NEW DEAL WORKED; THE GOP'S
DISMANTLING OF IT IS WHAT GOT US INTO THIS TROUBLE
APRIL 2009
WHY IS ONCE CRIMINAL USURY NOW
COMMON PRACTICE?
THE HUGE FRAUD BEHIND THE FISCAL
CRISIS
LARRY SUMMERS: A WALKING, TALKING
CONFLICT OF INTEREST
CREDIT UNIONS ALSO IN DANGER
WHY BANK RAGE IS NOT POPULISM
WHAT WE CAN LEARN FROM ITALY ABOUT
ECONOMIC COOPERATION
HOW THE GEITHNER TOXIC ASSET SCHEME
IS ANOTHER BANK SCAM
HOMELESSNESS UP A THIRD
WHAT'S REALLY BEHIND THE AIG BAILOUT
THE MARKET AS PREDICTOR
MARCH 2009
HIDDEN PENSION FIASCO MAY FOMENT
ANOTHER $1 TRILLION BAILOUT
GROWTH IN PRISON SPENDING TOPS
ALL BUT MEDICAID
INTERVIEW WITH DEAN BAKER, WHO
SAW IT COMING
ELIMINATING EARMARKS, WEAKENS
CONGRESS, STRENGTHENS WHITE HOUSE
HOW WRONG YOU CAN BE IN WASHINGTON
AND STILL NOT SAY YOU'RE SORRY
WHY IS AIG SO IMPORTANT?
GALLERY: SCENES OF A RECESSION
KARL MARX IS BACK
TMZ FINDS $1.6 BILLION FOR THE
GOVERNMENT
THE MEDIA'S ROLE IN THE FISCAL
CRISIS
ABOUT EARMARKS
FBI WARNED OF MORTGAGE FRAUD EPIDEMIC
FIVE YEARS AGO
BANK NATIONALIZATION ATTRACTS
OBAMA, GOP, ECONOMISTS
COMMODITY MARKET PONZI SCHEMES
ON THE RISE
WHY THE STIMULUS MAY LEAVE THE
ECONOMY SOMEWHAT FLAT
LOOK WHO PLANS TO MAKE BIG BUCKS
OUT OF THE BAILOUT. . . WITH TAXPAYERS SUBSIDIZING IT
THINGS THEY DON'T TELL YOU ABOUT
THE BAILOUT
HOW MUCH YOU'LL GET FROM THE BAILOUT
FEBRUARY 2009
THE RECOVERY PLAN FROM HELL
HOW MUCH DID THE BI-PARTY KNOCK
OUT OF YOUR SCHOOL SYSTEM'S CONSTRUCTION BUDGET?
HOW CLOSE THE WORLD ECONOMY CAME
TO COLLAPSING
CALVIN & HOBBES GOT IT DOWN
YEARS AGO
TWO OUT OF FIVE DEMOCRATS BUY
INTO GOP TAX CUT MYTH
NOT ALL PORK IS EQUAL
THE CASE FOR NATIONALIZING BANKS
BUSH'S APPROACH TO SOCIAL SECURITY
PROVED A DISASTER. . .IN ITALY
SAVING THE GLOBE VS. GROWING THE
ECONOMY
PROGRESSIVES & THE BAILOUT
WHO'S ON FIRST? AN EXPLORATORY CALCULATION
UN CRIME WATCHDOG SAYS DRUG MONEY
HELPED IN FISCAL CRISIS
THE GOOD AND THE BAD IN OBAMA'S
ECONOMIC PLAN
BRITS PROVE BAILOUTS DANGEROUS
TO THOSE IN POWER
AUTO BAILOUT INCLUDES WORKER STRIKE
BAN
JANUARY 2009
LEMON SOCIALISM AT ITS WORST
LAUNDERING ILLEGAL FUNDS THROUGH
THE FINANCIAL SYSTEM
NEARLY TWO THIRDS OF AMERICANS
DON'T AGREE WITH OBAMA ON TARP
RECESSION GIVES BOOST TO LIBRARIES
THE BUDGET SWAMP NOBODY MENTIONS
WHAT'S A DEPRESSION?
WHAT SORT OF ECONOMISTS DO WE
GET?
ECONOMY TRASHER GREENSPAN GOT
HIS START WITH AYN RAND
WAL-MART: NATION'S LEADING UNION
BUSTED
RAIL TAKES BACK SEAT IN OBAMA
STIMULUS PLAN
THE PRICE OF FOLLOWING JIM CRAMER'S
ADVICE
TRAPPED UNDER THE TARP
FED TO GIVE HEDGE FUNDS LOANS
STIMULUS IS FOR SUCKERS: WHAT
WE REALLY NEED
WHAT A REAL STIMULUS
MIGHT LOOK LIKE
Sam Smith
- Reduce credit card interest.
As one politician once put it, "I'd frankly like to see
credit cards rates down. I believe that would help stimulate
the consumer and get consumer confidence moving again.'' Another
politician responded by offering a bill in the Senate to cap
credit card interest at 14%. The Senate voted for it 74-19. The
first politician was that radical president, George Bush, in
1991. The other politician was that well known progressive, Alfonze
D'Amato. Why are Obama and the Democrats more conservative than
Daddy Bush and D'Amato?
- Start a movement to
nationalize banks. Progressives led by Robert LaFollette did
this in the 1930s, giving FDR cover for his more moderate solutions.
Today, all the political pressure is coming from Wall Street,
which tilts policies in that direction.
- All measures must put
the interest of the ordinary citizen first. Neither the GOP nor
the Democrats are doing that.
- Deemphasize tax cuts.
They are far less effective than many think.
- Emphasize programs that
will cheer people up and where they can see things changing for
the better. Among the Wall Street bailout scam's many faults
was that no one could tell what was happening as a result. Good
economies need optimism.
- Use revenue sharing.
It's a quick way to get money down to the states and cities and
to the people who live there. Sure, some of it will get corrupted
but far less than is already happening with the phony stimulus
packages. The upside is that citizens have a better idea of what
is being done on their behalf and have some say in how it is
done.
- Fund public works project
that have large spin-off benefits and which will be heavy in
blue collar employment. These would include new mass transit
service and a massive growth of America's rail system. It would
deemphasize fixing up existing systems because the spin off benefits
are far less. Would it include the much discussed new energy
projects? We haven't seen any serious discussion of this. What
is the blue collar employment potential of such projects?
- Institute a shared equity
program for homeowners in distress under which the federal government
buys a portion of the mortgage, renegotiates interest rates with
the lenders and then gets its part of the equity back when the
house is sold. A similar program could be used for building new
homes.
- Decentralize decisions
and negotiations on foreclosures and real estate interest rates,
using local courts and similar bodies as was done in the 1930s.
- Give the government
preferred stock in companies it aids. At one point in the New
Deal, the Reconstruction Finance Corporation owned bank shares
that would be worth at least $20 billion today.
NADER: TIME TO CHALLENGE CORPORATE
PERSONHOOD IN COURT
THE MYTH OF AMERICAN CAPITALISM
DECEMBER 2008
A VISUAL GUIDE TO THE BAILOUT:
HOW IT NORMALLY WOULD HAVE BEEN HANDLED, HOW IT WAS HANDLED,
AND HOW IT COULD HAVE BEEN HANDLED
FED REFUSES TO REVEAL RECIPIENTS
OF BAILOUT
THE CRASH OF AMERICAN IMAGINATION
WHAT'S HAPPENING TO THE MIDDLE
CLASS?
CHINESE BARGAIN HUNTERS CHECKING
OUT U.S. REAL ESTATE
HOW CHINA AND HONG KONG HAVE HANDLED
THE FINANCIAL CRISIS
WHAT BANKS, ACADEMICS, THE MEDIA AND POLITICIANS
DON'T TELL YOU ABOUT MONEY
THE SUB PRIME CASE FOR BLAMING
IT ALL ON SUB PRIMES
FOOD STAMP USE HITS RECORD
THE BANKING SYSTEM IS REALLY BROKEN
SMALL BANKS ANGRY WITH BAILOUT
WHAT'S HAPPENING TO THE MIDDLE
CLASS
Tony Allison, Financial
Sense - While fulfilling its classic role as the backbone of
the American economy, the middle-class also is the unwitting
pawn in the complex chess game of global finance and government
excess. The problem with being a pawn is that one has no control
of the game, or its outcome. Historically, the middle-class is
always the group to feel the greatest pain and reap the fewest
rewards from the machinations of Wall Street and Washington.
The period dead ahead will be no exception. . . The middle-class
has been under growing pressure for over 30 years, as its purchasing
power has been steadily under attack. . .
The early 1970's was clearly
an historic turning point for millions of Americans. With the
1971 severing of the gold-backed dollar by the Nixon Administration,
the fate of the middle class was sealed. Unlimited fiat money
creation led to unlimited debt and a rapidly depreciating dollar.
Middle-class "real" wage growth would never again keep
up with "real" inflation, especially in key areas such
as health care and college tuition, which have greatly exceeded
the stated rate of inflation.
Divided by the CPI (which
has been understated for decades) the "adjusted" Median
Household Income has barely grown at all since 1973. .
Do you think the strapped
middle-class family feels better when hearing that inflation
is "only" 4%, instead of 11.6%, as measured prior to
1983? Not likely. Understated inflation does not help remove
the sting of declining purchasing power. It just adds to the
confusion and desperation. . .
Americans have been slowly
transferring ownership of their homes to the banking system over
the last 50+ years. These figures would look much worse if the
roughly 1/3 of homes owned "free and clear" (mostly
by seniors) were removed from the data, but you can see the trend
is toward less equity and more debt. This is not a sign of a
prospering middle-class.
WHY WASHINGTON CAN'T HANDLE DETROIT'S
PROBLEM
PAULSON THREATENED CONGRESS WITH
MARTIAL LAW IF IT DIDN'T PASS BANK SWEETHEART DEAL
ETHICAL SUBPRIME LENDING
THREE CITIES SEEKING FEDERAL FUNDS
LANGUAGE: THE BAILOUT IS FAR MORE
FASCIST THAN SOCIALIST
BILL CLINTON'S ROLE IN THE FINANCIAL
COLLAPSE
NOVEMBER 2008
TWO WOMEN WHO TOOK ON THE WALL
STREET TOUGH GUYS
THE BAILOUT: WHAT THE HELL IS
GOING ON?
WHAT ECONOMISTS DON'T UNDERSTAND
THE PROFANITY OF CASINO CAPITALISM
BANKERS ALREADY RIPPING OFF A
TENTH OF THE BAILOUT FOR THEMSELVES
THE
ESTABLISHMENT THAT DESTROYED AMERICA'S FIRST REPUBLIC
DEJA VU ALL OVER AGAIN: THE S&L BAILOUT
REVISITED
ETHICAL SUBPRIME LENDING
Daniel Gross, Slate -
In recent months, conservative economists and editorialists have
tried to pin the blame for the international financial mess on
subprime lending and subprime borrowers. If bureaucrats and social
activists hadn't pressured firms to lend to the working poor,
the story goes, we'd still be partying like it was 2005 and Bear
Stearns would be a going concern. The Wall Street Journal's editorial
page has repeatedly heaped blame on the Community Reinvestment
Act, the 1977 law aimed at preventing redlining in minority neighborhoods.
Fox Business Network anchor Neil Cavuto in September proclaimed
that "loaning to minorities and risky folks is a disaster."
This line of reasoning
is absurd for several reasons. Many of the biggest subprime lenders
weren't banks and thus weren't covered by the CRA. Nobody forced
Bear Stearns to borrow $33 for every $1 of assets it had, and
Fannie Mae and Freddie Mac didn't coerce highly compensated CEOs
into rolling out no-money-down, exploding adjustable-rate mortgages.
Banks will lose just as much money lending to really rich white
guys like former Lehman Bros. CEO Richard Fuld as they will lending
to poor people of color in the South Bronx. . .
But the best refutation
may come from Douglas Bystry, president and CEO of Clearinghouse
CDFI (community-development financial institution). Since 2003,
this for-profit firm based in Orange County-home to busted subprime
behemoths such as Ameriquest-has issued $220 million worth of
mortgages in the Golden State's subprime killing fields. More
than 90 percent of its home loans have gone to first-time buyers,
about half of whom are minorities. Out of 770 single-family loans
it has made, how many foreclosures have there been? "As
far as we know," says Bystry, "seven." Last year
Clearinghouse reported a $1.4 million pretax profit.
Community-development
banks, credit unions, and other CDFIs-a mixture of faith-based
and secular, for-profit and not-for-profit organizations-constitute
what might be called the "ethical subprime lending"
industry. Even amid the worst housing crisis since the 1930s,
many of these institutions sport healthy payback rates. They
haven't bankrupted their customers or their shareholders. Nor
have they rushed to Washington begging for bailouts. Their numbers
include tiny startups and veterans such as Chicago's Shore Bank,
founded in 1973, which now has $2.3 billion in assets, 418 employees,
and branches in Detroit and Cleveland. Cliff Rosenthal, CEO of
the National Federation of Community Development Credit Unions,
notes that for his organization's 200 members, which serve predominantly
low-income communities, "delinquent loans are about 3.1
percent of assets." In the second quarter, by contrast,
the national delinquency rate on subprime loans was 18.7 percent.
BANKS PRINT MONEY; WHY CAN'T THE
GOVERNMENT?
TAKING IT FROM THE TOP AGAIN
THE FALLACY OF THE 401(K)
HANK PAULSON'S BACKGROUND
HARVARD BUSINESS SCHOOL IS FAR
WORSE THAN YOU THOUGHT
OCTOBER 2008
SHIPPING COSTS CUTTING GLOBALIZATION
CORPORATE EXECS ABUSING PENSION
PLANS FOR OWN BENEFIT
LAS VEGAS ON THE HUDSON. . . AND
WHAT WE PAID FOR IT
HOW THE MELTDOWN WORKED
THE MYTH OF AMERICAN CAPITALISM
WHY YOU CAN'T BLAME THE HOUSING CRISIS ON
POOR HOMEOWNERS
WHERE WILL ALL THE MONEY GO?
OBAMA FINALLY COMES UP WITH SOME
IDEAS FOR THE CRISIS
NINE WAYS A DEPRESSION WILL HELP
NEW YORKERS
TOYOTA WORKPLACE UNDER FIRE
AN ECONOMIC HITMAN EXPLAINS HOW
THE NSA & US POLICY TOWARDS POOR COUNTRIES REALLY WORKS
LATIN LEFT HAVING FUN WITH 'COMRADE
BUSH'
CUSTOMERS FLOCK TO NATIONALIZED
BANK; FREE MARKETEERS CRY THAT'S NOT FAIR
FANNIE MAE FORGIVES LOAN AFTER
90 YEAR OLD WOMAN SHOOTS HERSELF
REPRESENTATIVE SAYS MEMBERS WERE
THREATENED WITH MARTIAL LAW IF THEY DIDN'T PASS BILL
PAULSON PRIVATIZING BAILOUT OPERATION
TRASHING OUT ON FORECLOSURE ALLEY
SICKEST BAILOUT STORY OF THE DAY.
STATES ACT TO CUSHION WALL STREET
MELTDOWN
$700 BILLION FIGURE PULLED OUT
OF THIN AIR
HOUSE TOSSES $25 BILLION TO CAR
MAKERS; STILL NOTHING FOR HOMEOWNERS
UNDER PLAN, PAULSON COULD PAY
OFFENDERS TO SOLVE THE CRISIS
THE GREEN VIEW OF THE FISCAL CRISIS
LIVE ON IMAGINARY MONEY; DIE BY
IMAGINARY MONEY
YOU GOT SOME BAD ASSETS? ADD THEM TO THE
FEDERAL SHITPILE
ONLY 28% SUPPORT BAILOUT PLAN
|
Dear American:
I need to ask you to support
an urgent secret business relationship with a transfer of funds
of great magnitude. I am Ministry of the Treasury of the Republic
of America. My country has had crisis that has caused the need
for large transfer of funds of 800 billion dollars US. If you
would assist me in this transfer, it would be most profitable
to you. . . MORE |
SEPTEMBER 2008
STORIES THE MEDIA DIDN'T TELL
YOU: HANK PAULSON'S BACKGROUND
Tom Ely, World Socialist
- In 1970, fresh from the Masters program of the Harvard Business
School, Paulson entered the Nixon administration, working first
as staff assistant to the assistant secretary of defense. In
1972-73, Paulson worked as office assistant to John Erlichman,
assistant to the president for domestic affairs. Erlichman was
one of the key figures involved in organizing President Richard
Nixon's notorious "plumbers" unit that carried out
illegal covert operations against the president's political opponents,
including espionage, blackmail, and revenge. Ehlichman resigned
in 1973, and in 1975 he was convicted of obstruction of justice,
perjury, and conspiracy, and was imprisoned for 18 months.
Utilizing his connections,
Paulson went to work for Goldman Sachs in 1974. In a 2007 feature,
the British newspaper the Guardian wrote, "Not only was
he well connected enough to get the job [in the Nixon White House],
but well connected enough to resign in the thick of the Watergate
scandal without ever getting caught up in the fallout. He went
straight to Goldman back home in Illinois."
Paulson rose through the
ranks of Goldman Sachs, becoming a partner in 1982, co-head of
investment banking in 1990, chief operating officer in 1994.
In 1998 he forced out his co-chairman Jon Corzine "in what
amounted to a coup," according to New York Times economics
correspondent Floyd Norris, and took over the post of CEO.
Goldman Sachs is perhaps
the single best-connected Wall Street firm. Its executives routinely
go in and out of top government posts. Corzine went on to become
US senator from New Jersey and is now the state's governor. Corzine's
predecessor, Stephen Friedman, served in the Bush administration
as assistant to the president for economic policy and as chairman
of the National Economic Council. Friedman's predecessor as Goldman
Sachs CEO, Robert Rubin, served as chairman of the NEC and later
treasury secretary under Bill Clinton.
Agence France Press, in
a 2006 article on Paulson's appointment, "Has Goldman Sachs
Taken Over the Bush Administration?" noted that, in addition
to Paulson, "the president's chief of staff, Josh Bolten,
and the chairman of the Commodity Futures Trading Commission,
Jeffery Reuben, are Goldman alumni."
"But the flow goes
both ways," the article continued, "Goldman recently
hired Robert Zoellick, who stepped down as the US deputy secretary
of state, and Faryar Shirzad, who worked as one of Bush's national
security advisors.". . .
Paulson, according to
a celebratory 2006 Business Week article entitled "Mr. Risk
Goes to Washington," was "one of the key architects
of a more daring Wall Street, where securities firms are taking
greater and greater chances in their pursuit of profits."
Under Paulson's watch, that meant "taking on more debt:
$100 billion in long-term debt in 2005, compared with about $20
billion in 1999. It means placing big bets on all sorts of exotic
derivatives and other securities."
According to the International
Herald Tribune, Paulson "was one of the first Wall Street
leaders to recognize how drastically investment banks could enhance
their profitability by betting with their own capital instead
of acting as mere intermediaries." Paulson "stubbornly
[asserted] Goldman's right to invest in, advise on and finance
deals, regardless of potential conflicts.". . .
PAULSON UNDERSTATED THE PROBLEM
EVERY STEP OF THE WAY
THE LIST: WHAT A TRILLION DOLLARS
WILL BUY
BUSH PROPOSES COUP BY EMERGENCY
LEGISLATION
BUSH WANTS TO BAIL OUT FOREIGN
BANKS, TOO
CLINTON-BUSH HOUSING BUBBLE BIGGEST
IN A CENTURY
COMPARE BAILOUTS BY SIZE
HUGE BONUSES PROMISED TO SOME
LEHMAN STAFF, OTHERS LEFT WITHOUT PAY
BUSH OFFERS GAMBLING INSURANCE
TO THE RICH
INSTEAD OF HEALTH INSURANCE TO EVERYONE
THE INVISIBLE & UNAIDED VICTIMS
OF THE FISCAL CRISIS
DEJA VU: NO FAULT CAPITALISM MEETS
LEMON SOCIALISM AL CRISIS
WHY THE DEMOCRATS HAVEN'T BEEN
MORE HELPFUL
WHAT THE BRITISH LEFT THINKS ABOUT
THE FISCAL CRISIS
AIG STORY ISN'T OVER
REAGAN GAVE BIRTH TO TODAY'S FISCAL CRISES
47% OF WORKERS UNABLE TO SAVE
ANYTHING
ELDER BANKRUPTCIES SOAR
NEARLY ONE THIRD OF HOME OWNERS
OWE MORE THAN HOUSE IS WORTH
DEALING WITH THE ECONOMIC FREE
FALL
THE LIST: RECENT STORE CLOSINGS
ECONOMY HITTING STATES HARD
VOLUNTARY FORECLOSURES RAISES
NEW BANKING THREAT
LIVE ON IMAGINARY MONEY;
DIE BY IMAGINARY MONEY
One of the important
things not being discussed about the financial crisis is that
the money that is gone was not real in the first place, something
we have mentioned from time to time. . .
Sam Smith's Great American
Political Repair Manual, 1994 - The total federal state, local
and private debt in this country in 1996 was around $14 trillion.
The actual money supply was just under $6 trillion. So what happened
to the rest of the money? Most of it doesn't exist and never
did. We call this imaginary money debt. This debt is money that
we (as individuals, companies and government) have borrowed,
primarily from private sources. As Bob Blain, a professor at
Southern Illinois University, put it:
"Most debt is not
the result of people borrowing money; it is the result of people
not being able to repay what they owed [to banks or individuals]
at some earlier time. Instead of declaring them bankrupt, creditors
just add more to their debt."
This new debt is called
interest. Many people think the idea of the government printing
money is shameful, yet our laws permit private financial institutions
to create money all the time. Every time you fail to pay off
your credit card, you're letting a banker print some more money.
You're not the first,
of course. For example, when the Congress met in February 1790
to figure out how to pay off the Revolutionary War debt of $75
million, Alexander Hamilton strongly advocated issuing debt certificates
and using them as money. Congressman James Jackson of Georgia
warned that this would "settle upon our posterity a burden
which [citizens] can neither bear nor relieve themselves from.
. . Though our present debt be but a few millions, in the course
of a single century it may be multiplied to an extent we dare
not think of."
An alternative to Congress
borrowing money to pay off its debt would have been to have created
the $75 million, using Congress's constitutional power to "coin
money and regulate the value thereof." Instead Congress
began a long tradition of borrowing the money that -- five trillion
dollars of debt later -- many believe we can neither bear nor
relieve ourselves from.
In the early 19th century,
the little British Channel island of Guernsey faced a smaller
but similar problem. Its sea walls were crumbling. its roads
were too narrow, and it was already heavily in debt. There was
little employment and people were leaving for elsewhere.
Instead of going still
further into debt, the island government simply issued 4,000
pounds in state notes to start repairs on the sea walls as well
as for other needed public works. More issues followed and twenty
years later the island had, in effect, printed nearly 50,000
pounds. Guernsey had more than doubled its money supply without
inflation.
A report of the island's
States Office in June 1946 notes that island leaders frequently
commented that these public works could not have been carried
out without the issues, that they had been accomplished without
interest costs, and that as a result "the influx of visitors
was increased, commerce was stimulated, and the prosperity of
the Island vastly improved." By 1943, nearly a half million
pounds worth of notes belonged to the public and was so valued
that much of it was being hoarded in people's homes, awaiting
the island's liberation from the Germans.
About the same time that
Guernsey started to fix its sea walls, the town of Glasgow, Scotland,
borrowed 60,000 pounds to build a fruit market. The Guernsey
sea walls were repaid in ten years, the fruit market loan took
139. In the first part of the 20th century, Glasgow paid over
a quarter million pounds in interest alone on this ancient project.
How did Guernsey avoid
the fiscal disaster that conventional economics prescribed for
it? First and foremost by understanding that when you build roads
or sea walls or colleges or houses, you are not reducing your
society's wealth. In fact, if you do it right, you are creating
something that will add to its wealth. The money that was created
was simply backed by public works rather than gold or "full
faith and credit." It was, in fact, based on something more
solid than the dollar bills in our wallets today. In contrast,
tacking on an interest charge to public works -- as we do in
the US -- creates no new wealth, but merely transfers claims
on existing wealth from debtors to creditors.
The privilege of creating and issuing money is not only the
supreme prerogative of government, but is the government's greatest
creative opportunity. By the adoption of these principles, the
taxpayers will be saved immense sums of interest. -- Abraham
Lincoln
CLINTON-BUSH HOUSING
BUBBLE BIGGEST IN A CENTURY
Sam Smith, Progressive
Review - According to a study by Yale economist Robert J Shiller
cited in his book, "Irrational Exuberance," between
1890 and 1990 the sale of the average existing house (not new
construction) rose no more that 25% over the inflation corrected
value for 1890. In the 1990s, beginning in the Clinton years,
that changed dramatically. Between 1997 and 2006 the typical
house doubled in value of over the 1890 average. In other words,
the Clinton-Bush housing bubble was greatest in over a hundred
years. The bright side is that if the average house drops by
50% we'll be right back where we were in 1997.
Throughout the preceding
century, houses varied from 85-125 percent of the 1890 average
value with the exception of the depression, which for housing
actually began during World War I. By 1920,housing prices were
down to about 65% of 1890 levels and then began to slowly rise.
By 1940 they were back to the 1890 figure. In other words, housing
devaluation can be a harbinger of worse to come
AUGUST 2008
WEST COAST FOOD BANK SEES DEMAND
RISE 80% THIS SPRING
JULY 2008
HOW SUBPRIME POLITICIANS, LOBBYISTS
AND BANKERS CAUSED CRISIS
FACING THE HOUSING CRISIS
AIRLINES THINKING ABOUT PASSENGERS
AS FREIGHT NOT CUSTOMERS
TEN WAYS AMERICANS ARE HURTING,
NOT WHINING
CORPORADOS PACKING LESS IN SAME
SIZE BOXES
HOUSING CRASH DISASTROUS FOR RETIREMENT
SAVINGS
SHOPPING CENTER CONSTRUCTION BOOMS
AS STORES CLOSE
EXPANDING FREE TRADE MAY BE NEARING
END
JUNE 2008
HOME ELECTRICITY PRICES SOARING
NUMBER OF MARRIED MOTHERS IN WORK FORCE
DROPS
MAY 2008
THE ROLE OF SPECULATION IN CURRENT PRICE
INCREASES
TIP DEPENDANT WORKERS FEELING THE SLUMP
CALIFORNIA FORECLOSURES UP 327%
WASHINGTON & BANKS USING FISCAL CRISIS
TO LIMIT STATE REGULATORY ROLE
FEARS MOUNTING OVER BANKS' USE OF FED'S
LOANS
APRIL 2008
THE NEW AMERICA
IMF SAYS MORTGAGE CRISIS IS LARGEST FINANCIAL
SHOCK SINCE THE GREAT DEPRESSION
OREGONIAN FINDS JPMORGAN CHASE MEMO ON HOW
TO SNEAK IN SUBPRIME LOANS
HOME EQUITY LOANS NEXT CRISIS?
HUD WARNS LANDLORDS IT MAY RUN OUT OF HOUSING
ASSISTANCE FUNDS BY FALL
SOARING FOOD PRICES CAUSING CROP THEFTS,
FOOD TRUCK HIJACKINGS
FED'S RESCUE HALTED A DERIVATIVES CHERNOBYL
THE FED'S VERSION OF LEMON SOCIALISM
THE FISCAL CRISIS: AMERICANS HAVE BEEN CONNED
ILLEGAL DISCRIMINATION HELPED FUEL SUBPRIME
CRISIS
AMERICA'S DISINTEREST IN POVERTY
WHEAT MARKET GOES WILD
SO DOES CORN
BEN BERNANKE THREE YEARS AGO: HOUSING MARKET
NO PROBLEM
HEDGE FUNDS GOOD FOR LAUNDERING DRUG MONEY
WHAT A REAL ECONOMIC RECOVERY PROGRAM WOULD
LOOK LIKE
SUBPRIME SCANDAL AN OLD STORY IN STOCKTON,
CA
SUBPRIME LENDERS TARGETED BLACKS & LATINOS
SUBPRIME CRISIS HELPED BY SUBPRIME POLITICS.
. . AND WHAT TO DO ABOUT IT
HOW TO STIMULATE THE ECONOMY
SOROS CALLS IT'S THE WORST FINANCIAL CRISIS
SINCE WORLD WAR II
BUSH'S WAR ON TERROR HAS COST AMERICA $94
BILLION IN TOURIST DOLLARS
MORTGAGE LENDERS PREFER FORECLOSURE TO HELPING
HOME BUYERS PAY OFF LOAN
WHAT'S REALLY HAPPENING IN MANUFACTURING
MARCH 2008
JOB MARKET 2009
THE FISCAL CRISIS TOTALLY EXPLAINED
TENT CITIES SPRINGING UP
COMPARING FINANCIAL CRISES: WE'VE
BEEN THROUGH THIS BEFORE
In 1990, the Progressive Review
ran an article, "No-Fault Capitalism Meets Lemon Socialism"
in which we examined the second great savings & loan scandal:
the bailout of the S&L industry. The article won an Utne
Reader award for one of the ten most undercovered stories of
the decade. In it, we compared the government's reaction to the
S&L crisis to its reaction to the banking crisis that culminated
in the banking holiday and emergency legislation of 1933. Although
the causes of the two crises were quite different, so were other
factors. Some may ring a bell in today's financial crisis.
1933
Underlying financial problem involved
shortage of deposits.
Fraud was not a major factor
Single bi-partisan goal: to save
the banking system
Protection of average citizens'
interest central to decisions.
Long-range implications of actions
thought through
Majority party not beholden to major
financial interests
Pressure for nationalization of
banking industry by progressives such as Sen. Robert LaFollette,
creating a political middle for FDR to work within.
Administration and Congress moved
decisively. Within five days of FDR's inauguration, emergency
banking legislation was passed with only 40 minutes of House
debate. From introduction to president's signature it took only
eight hours.
Problem affected 18,390 banks Administration
handled specific cases quickly. About two thirds of all banks
were opened under government license four days after bank holiday
was declared. Another 1300 banks were reopened a month later
and within nine months another 1200 banks were reopened and the
remaining 2000 would be reopened as soon as financing from the
Reconstruction Finance Corporation could be arranged.
Specific situations handled by small
bureaucracy in decentralized fashion with banks placed under
conservatorships. Emphasis on recapitalization and low interest
loans.
Government allowed to participate
in recovery by holding preferred stock in commercial bank. At
one point, the RFC held $1.3 billion in commercial bank stock.
Heavy White House pressure on banking
industry to cooperate. Appeal to patriotism, implicit threat
of nationalization.
1990
Underlying financial problem involved
failure of loan repayments
Fraud is a major factor
Multiple and conflicting bi-partisan
goals including changing the financial system (even to extent
of eliminating S&L industry), avoiding blame, escaping political
and criminal liability.
Protection of major financial institution's
interest central to decisions.
Decisions driven by fire-sale mentality
Both parties beholden to major financial
interests.
No significant progressive pressure
for radical solutions, hence politics of situation skewed heavily
toward rightwing assumptions.
Administration and Congress moved
indecisively. Early actions were driven by attempt to conceal
from public the true extent of the problem. When situation got
out of hand, legislation was passed hastily with inadequate forethought.
Problem affected 2600 savings &
loans
Administration handles specific
situations at snail's pace. The Resolution Trust Corporation
dealt with only 200 out of 450 failed thrifts in its first eleven
months, with another 260 S&Ls expected to go under in the
next year.
Specific situations handled by large
centralized bureaucracy in Washington, adding the inefficiency
of scale to other problems.
Emphasis on government subsidies
and lemon socialism. Rightwing paradigm prevents government from
engaging in self-supporting solutions.
No political or financial burden
placed on S&L industry as a whole. Political leverage of
White House lies fallow.
FEBRUARY 2008
RECOVERED HISTORY: THE 50TH ANNIVERSARY
OF 'THE AFFLUENT SOCIETY'
DANIEL BEN-AMI, SPIKED-ONLINE -
When John Kenneth Galbraith's The Affluent Society was first
published 50 years ago, it was meant as a polemic against the
spirit of the times. Back in 1958, with America in the middle
of the boom that followed the Second World War, the orthodox
view was that economic growth was good. That was why Galbraith,
then an economics professor at Harvard, coined the term 'conventional
wisdom' to describe the mainstream view that he intended to attack.
. .
To understand the impact the book
made it is first necessary to appreciate the intellectual context
in which it was written. Immediately after the war ended in 1945,
there was intense anxiety in America about what would happen
to the economy. Memories of the Great Depression of the 1930s,
with its economic slump and severe social dislocation, were still
fresh. But soon the economy started to boom. In the period from
the late 1940s to 1973 the American economy enjoyed its greatest
ever growth spurt. It was in this context that the overriding
emphasis on growth in economic policy, rather than simply an
attachment to stability, emerged. . .
At this point it is important to
recognize that the most ardent advocates of economic growth were
often liberals. Truman was a Democrat president and his key economic
advisers were inclined towards liberalism. This is in contrast
to today where the relatively few advocates of outright economic
growth tend to be associated with the right. Back in the late
1940s and 1950s what could be called 'growth liberalism' held
sway.
It was in this environment that
two leading liberal thinkers with close ties to the Democrats,
Arthur Schlesinger Jr (1917-2007) and Galbraith, started raising
questions about growth in the mid-1950s. Schlesinger, then a
Harvard historian, wrote in 1957 that liberals should shift their
focus to 'enlarging the individual's opportunity for moral growth
and self-fulfillment'. Meanwhile, Galbraith, who was of Canadian
origin, testified in 1956 to the Royal Commission on Canada's
Economic Prospects, arguing: 'Sooner rather than later our concern
with the quantity of goods produced - the rate of increase in
Gross National Product - would have to give way to the larger
question of the quality of life that it provided.' It was this
idea that Galbraith developed in The Affluent Society.
The emphasis on production - and
therefore on raising the level of affluence in society - was
one of the main targets for criticism in Galbraith's 1958 book.
He argued that his book's concern was with 'the thraldom of a
myth - the myth that the production of goods, by its overpowering
importance and its ineluctable difficulty, is the central problem
of our lives'
Galbraith does not argue that production
was always so unimportant. On the contrary, in earlier times
he concedes it was a worthy goal. But since the 1930s he said
that there had been 'a mountainous rise in wellbeing'. Under
such circumstances, in America and Western Europe at least, he
argued that promoting prosperity should no longer be a priority.
. .
For Galbraith, another consequence
of this argument was that conventional economics was living in
the past. Economic theory, developed in an era of scarcity, emphasized
the need to raise productivity and output (8). Much of the early
part of the book is a critique of economic thought as an expression
of the conventional wisdom. . .
By far the most quoted passage of
the book contrasts private affluence with public squalor. It
argues that the pursuit of growth can make individuals wealthy
but it has damaging consequences for the rest of society: 'The
family which takes its mauve and cerise, air conditioned power-steered
and power-braked automobile out for a tour passes through cities
that are badly paved, made hideous by litter, blighted buildings,
billboards and posts for wires that should long since have been
put underground. They pass on into a country that has long been
rendered largely invisible by commercial art. . . They picnic
on exquisitely packaged food from a portable icebox by a polluted
stream and go on to spend the night at a park which is a menace
to public health and morals. Just before dozing off on an air
mattress, beneath a nylon tent, amid the stench of decaying refuse,
they may reflect on the curious unevenness of their blessings.
Is this, indeed, the American genius?'
STIMULUS
PACKAGE A SURPRISE BUST FOR 36 STATES
KANSAS CITY STAR - The
federal economic stimulus package may please taxpayers who get
$600 checks, but it isn't going over well in many state capitols,
including Kansas and Missouri. The legislation could cost Missouri
$100 million and Kansas $87 million.
The Center on Budget and
Policy Priorities, a Washington think tank, estimates that two
business tax cuts in the package will cost 36 states a total
of $2.9 billion in lost tax revenue. While some of that loss
will occur this year, most will occur during the fiscal year
beginning July 1 for most states.
Missouri House Budget
Chairman Allen Icet, a St. Louis County Republican, said a $100
million hit would wipe out nearly 30 percent of the annual growth
in state revenue.
Officials with the Center
on Budget and Policy Priorities said the reduction in states'
spending would partly offset any economic boost from the additional
business tax breaks. . .
Two provisions in the
stimulus package cause the problem:
- Companies will be able
to depreciate 50 percent of the cost of new equipment and machinery
in the first year rather than over several years.
- Companies can reduce
their federal income tax liability by $250,000 if they expand,
compared to $125,000 now.
The accelerated write-offs
also will apply in the 36 states that link their tax codes to
the federal government's tax structure, among them Missouri and
Kansas. The center's report stated that 28 states already were
projecting budget deficits as a result of the nation's economic
downturn.
JANUARY 2008
BUSINESS AS MORE THAN PROFITS
IRVING WLADAWSKY-BERGER -[Dr. Muhammad]
Yunus is a Bangladeshi economist and the founder of the Grameen
Bank, which he created in 1974 to help impoverished borrowers
start small businesses and obtain an education. He first loaned
$27 to a small group of very poor Bangladeshi women, and gradually
increased the number of loans. He pioneered the revolutionary
concept of micro-loans to help the poor in developing countries.
With these micro-loans, the poor are able to start very small
businesses, and they can gradually improve their economic situations
and start moving out of poverty. Grameen Bank now has more than
7.5 million borrowers, and about 2/3 of the families receiving
loans have risen above the poverty line.
The banking system pioneered by
Muhammad Yunus is now being used in more than 100 countries.
. .
He does not view the Grameen bank
and related activities as charity. He truly views them as businesses,
albeit a somewhat different kind of business from the classic
ones based on maximizing profits. . .
He writes, "Many of the problems
in the world remain unresolved because we continue to interpret
capitalism too narrowly. In this narrow interpretation we create
a one-dimensional human being to play the role of entrepreneur.
We insulate him from other dimensions of life, such as religious,
emotional, political dimensions. He is dedicated to one mission
in his business life - to maximize profit. He is supported by
masses of one-dimensional human beings who back him up with their
investment money to achieve the same mission."
But, he later adds, "everyday
human beings are not one-dimensional entities, they are excitingly
multi-dimensional and indeed very colourful. Their emotions,
beliefs, priorities, behavior patterns can be more aptly described
by drawing analogy with the basic colors and millions of colors
and shades they produce." He wants to create a new type
of entrepreneur, who is not just interested in profit-maximization
but who is also totally committed to make a difference in the
world and give a better chance in life to other people, not just
through charity, but by creating social businesses. These businesses
may or may not earn a profit, but like other businesses, they
must not incur a loss. They must become self-sustaining. Grameen
Bank is such a social business.
http://irvingwb.typepad.com/
PRIMING THE SUBPRIME CRISIS
JAMES MCCUSKER, EVERETT HERALD,
WA - In the wake of the 1929 stock market crash and the subsequent
global economic depression, Congress, among other actions, passed
the Glass-Steagall Act which prohibited banks from engaging in
securities underwriting. There was money to be made in securities,
though, and after a suitable period of penance for their contributions
to the crash and depression banks began to agitate for relief
from this restrictive law.
The banking industry's whining about
Glass-Steagall eventually paid off. . . Few people spoke out
against the idea, which was endorsed by America's top banking
regulator, Federal Reserve Chairman Alan Greenspan. It is tempting
to say that his enthusiasm for the idea, and Congress' action,
made sense at the time, but that was not so. In fact, it made
no sense then, and makes none now. . .
Banks eagerly bought up low-quality
mortgage loans, packaged them up and sold them as securities
-- all the while using "three-card Monte" accounting
constructs to keep the transactions off their balance sheets.
. .
The Federal Reserve, the president
and Congress have their hands full at this time. Their first
priority is damage control, and that is as it should be. Eventually,
though, the economy will right itself, with or without Washington's
help, and the president, the Federal Reserve and Congress will
have time to consider what got us into this fix in the first
place.
If we had to pick a single event
that set off this economic stink bomb, it would have to be Alan
Greenspan's decision to support the expansion of bank activities
into securities underwriting. While the Congress has a mind of
its own, it is extremely doubtful that they would have approved
this expansion in the face of his objections. He was at the height
of his powers then, and his support for the idea made it bullet-proof,
politically.
As soon as possible, Congress should
extend its damage control operations to put banking back on solid
ground, and reconstruct the wall between banking and stock-market
gaming.
WALL STREET REWARDED ITSELF WITH
$39 BILLION IN BONUSES AS MARKET WAS TANKING
WORLD SOCIALIST - The five largest
Wall Street banks doled out a record $39 billion in bonuses last
year, according to data collected by the Bloomberg news service.
After driving hundreds of thousands of families into foreclosure,
causing a financial crisis affecting hundreds of millions, and
pushing the US and world economies closer to recession, it appears
Wall Street is rewarding itself for a job well done.
The banks announced record losses
in the fourth quarter, wrapping up the financial industry's worst
year since 2002. All in all, Wall Street wrote off more than
$90 billion in bad debt for the year, and the five largest banks
saw their profits drop more than 60 percent. Three of the five
firms posted losses in the fourth quarter.
While the $39 billion was divided
among 186,000 workers at the five firms -averaging $211,849 -
the lion's share was reserved for a few thousand high-level managers,
traders, and senior executives, who took in multimillion-dollar
bonuses in addition to their salaries. Rank-and-file clerical
workers took home a few hundred dollars. Bonuses for traders
in subprime-related securities are reported to be about 30 percent
lower this year in comparison to other sectors.
http://www.wsws.org/articles/2008/jan2008/bonu-j21.shtml
HOW TO SIMULATE AN ECONOMY
ECONOMIC POLICY INSTITUTE - An effective,
appropriate stimulus package should meet the following five criteria:
1. A stimulus package should generate
growth and jobs to offset rising unemployment. . . The two feasible
ways to boost demand are to increase consumer spending (for example
through tax or monetary policy) or to increase government spending
(at the federal, state, or local level). Any stimulus aimed at
spurring more business investment will not be effective at this
point, because business investment will remain sluggish until
consumer and government demand picks up. For example, a recent
study estimated that business investment write-offs and the dividend-capital
gain tax reductions included in Bush's tax packages had a small
"bang-for-the-buck. . .
Government spending is more effective
than tax cuts in stimulating domestic demand for two reasons:
a portion of the tax cut will be saved rather than spent immediately,
and consumers are more likely than the government to spend on
imports (rather than domestically produced goods). Approximately
10 cents per dollar of consumer expenditures will be spent abroad,
while virtually every penny of investments in public infrastructure
will be spent domestically. Especially problematic would be more
tax cuts directed at the wealthy, which would not be as effective
as tax cuts directed at the low- and middle-income households
who would spend (rather than save) a larger share of any extra
income.
2. A stimulus package should take
effect quickly. . . Ideally, an effective package would have
some components that have immediate effect and others that might
have impact in six months to a year, thus ensuring a solid foundation
for the recovery. . .
3. A stimulus package should raise
current deficits but not affect the long-term budget outlook.
The purpose of any good stimulus package is to boost immediate
job growth. For this purpose we need one-time measures that,
if the recession deepens, can be extended as necessary. Permanent,
ongoing measures that will affect the budget two or three years
from now are, in most cases, inappropriate. . .
4. A stimulus package should target
unmet needs. Another goal of any good stimulus plan should be
to meet, where possible, unmet social needs. For instance, it
is widely acknowledged that there is a huge backlog of necessary
school and bridge repairs and new construction projects. A temporary
spending increase for such infrastructure would be doubly beneficial
in that it would meet the other criteria listed above but also
address an acknowledged, pre-existing need. Other examples could
include funding needed sewage-treatment plant construction or
making public facilities energy efficient.
5. A stimulus package should be
fair. The distribution of wages, income, and wealth in the United
States has become vastly more unequal over the last 30 years.
In fact, this country has a more unequal distribution of income
than any other advanced country. Therefore, a criterion for favoring
one stimulus plan over another should be that the plan avoids
exacerbating income inequality and, wherever possible, acts to
lessen current inequalities. A temporary increase in federal
revenue-sharing with the states, for example, would fulfill this
criterion well by helping preserve public school spending, Medicaid
for low-income families and low-income elderly in nursing homes,
and other state programs that could face cutbacks due to state
fiscal crises.
http://www.epi.org/content.cfm/bp210
THE SELFISH CAPITALISM OF REAGAN,
BUSH AND CLINTON MAY BE WHAT HAS MADE US UNHAPPY
THINGS THE MEDIA DOESN'T TELL
YOU: THE PUBLIC HOLDS BIG BUSINESS IN LOW REGARD
STUDY: WAL MART REDUCES NATIONAL
WAGES $4.5 BILLION A YEAR
Retail workers in the U.S. are making
$4.5 billion less each year due to Wal-Mart's presence, according
to a new study by the University of California's Center for Labor
Research and Education.
The study focuses on stores that
opened between 1992 and 2000 and concludes, "Opening a single
Wal-Mart store lowers the average retail wage in the surrounding
county between 0.5 and 0.9 percent."
Wal-Mart's presence pushes down
wages in two ways. "First is the substitution effect: a
new Wal-Mart store replaces better paying jobs with lower-paying
ones," the authors explain. "A second factor is competition:
Wal-Mart pushes down wages in competing businesses."
Not only did Wal-Mart lower average
wage rates, but "every new Wal-Mart in a county reduced
the combined or aggregate earnings of retail workers by around
1.5 percent." Because this number is higher than the reduction
in average wages, it indicates that Wal-Mart not only lowered
pay rates, but also reduced the total number of retail jobs.
That finding is consistent with a major study published earlier
this year that found that the opening of a Wal-Mart store causes
a net loss of about 150 retail jobs.
"At the national level, our
study concludes that in 2000, total earnings of retail workers
nationwide were reduced by $4.5 billion due to Wal-Mart's presence,"
they find.
Most of these losses were concentrated
in metropolitan areas. Although Wal-Mart is often associated
with rural areas, three-quarters of the stores it built in the
1990s were in metropolitan counties.
Another new study from the UC Center
for Labor Research and Education indicates that Wal-Mart could
substantially raise its workers' earnings, particularly those
living at or near poverty, with little impact on most shoppers.
"Living Wage Policies and Wal-Mart" analyzes the effects
of instituting a $10 minimum wage at Wal-Mart. More than half
of the retailer's employees (56%) currently earn less than $10
an hour.
"We find that 46.3 percent
of the pay increase would go to workers in families with total
incomes below 200 percent of the federal poverty level,"
the study finds. "These poor and low-income workers could
expect to earn an additional $1,020 to $4,640 a year."
http://www.newrules.org/retail/news_slug.php?slugid=365
DECEMBER 2007
STEADY STATE ECONOMICS
BRIAN CZECH AND HERMAN
E. DALY, WILDLIFE SOCIETY BULLETIN 2004 - A steady state economy
with long human life spans entails low birth and death rates.
In our opinion this is preferable, within reason, to a steady
state economy with short life spans, high birth rates, and high
death rates. The same concept applies to capital and durable
goods such as automobiles. We opine that a relatively slow flow
of high-quality, long-lasting goods is preferable to a fast flow
of low-quality, short-lived goods.
Nothing about a steady
state economy precludes economic development, where development
is defined as a qualitative process. Various sectors may come
and go in a steady state economy. For example, organic farms
may supplant factory farms, the proportion of bicycles to Humvees
may increase, and professional soccer may attract more fans while
NASCAR attracts fewer. As long as the physical size of the economy
remains constant in the long run, a developing economy is a steady
state economy.
Nor would any type of cultural
stagnation result from a steady state economy.
John Stuart Mill, one of
the greatest economists and political philosophers in history,
emphasized that an economy in which physical growth was no longer
the goal would be more conducive to political, ethical, and spiritual
improvements
A steady state economy
means a constant rate of employment. . . Economic development
continues in a steady state economy so that in the extractive
sector, oilfield roughnecks may decrease in number while wind-power
facility attendants may increase. In the arts, guitar playing
may wax while flute playing wanes. In the sciences, industrial
chemists may be replaced by wildlife ecologists. . .
In a steady state economy,
the average amount of money in real dollars earned by workers
from the current generation to the next remains constant.
"Real dollars"
means that inflation has been accounted for. Because income reflects
the use of natural resources, stabilized income reflects a stabilized
"ecological footprint," which is the area of land required
to support a human being . . .
If the steady state economy
is established at a relatively low population level, the potential
exists for each worker, and his replacement in the next generation,
to earn a high income. This scenario is similar to that of a
low-density deer population with plenty of forage per deer. If,
on the other hand, the steady state economy is established at
a high population level, less income is available for the average
worker, as in a high-density deer population with little forage
per deer.
We think it important that
a steady state economy be established at a relatively low population
level. This scenario is conducive to incomes high enough to allow
retirement savings and social secu rity (in the generic sense),
making the economy more politically acceptable and therefore
more stable. If the steady state economy is established with-in
ecological carrying capacity, each new generation may expect
its workers to accumulate retire- ment savings of the same magnitude
as the previous generation. So we think it important to establish
a steady state economy as soon as possible. As the population
grows, it becomes less likely the steady state economy may be
established whereby incomes are high enough to support reasonable
periods of retirement.
Won't the stock market
crash if a steady state economy is established? . . . Many people
view the stock market as predicated on economic growth, so they
wonder if a stock market could even exist in a steady state economy.
It certainly could and probably would. In a steady state economy,
firms still need to invest in capital--namely, at the same rate
at which capital depreciates.
Publicly traded stocks
provide the social benefit of liquidity to investors and offer
an efficient mechanism for the acquisition of investment capital.
Stock markets tend to expand
and contract in concert (though often with lags) with gross domestic
product, the dollar value of newly produced, final goods and
services. There are winners and losers in bullish and bearish
markets, though the winners tend to be more prominent in the
for- mer. The stock market in a steady state economy of stable
GDP would be neither bullish nor bearish for extended periods.
It, too, would have winners and losers, with perennial losers
becoming insolvent and being replaced by more competent firms.
But in a steady state economy the stock market would be less
of a casino than in the growth economy.
Economic growth, on the
other hand, is bound to cause an extensive and extended stock
market crash because demands for capital eventually will exceed
the productive capacity of the earth.
Therefore, advocating a
steady state economy is appropriate not only for purposes of
wildlife conservation but also because it would reduce the volatility
of the stock market.
There are, of course, alternatives
to the stock market for purposes of financing capital investment.
For example, capital may be financed by private banks, cooperatives,
and governments. In fact, all of these institutions are active
financiers throughout the world. The relative prominence of each
in a given nation helps to describe that nation's history, ideology,
and "political economy," which brings us to our next
question--a very big one.
Doesn't a steady state
economy require a socialist government? More generally put, what
kind of government is most conducive to a steady state economy?
Might it be, for example, a capitalist democracy, a communist
state or a dictatorship? In theory, each is capable of producing
or coexisting with a steady state economy, but we do not think
any of these is particularly conducive. Each has exhibited far
more concern with GDP growth than with other important endeavors,
such as poverty alleviation and, of course, wildlife conservation.
We think the form of government
most conducive to a steady state economy, in the context of twenty-first-century
nation states, is a constitutional democracy somewhat more socialized
than the current American version. "Socialist democracies,"
as the term is used in political science, already exist in many
nations, most notably such European nations as Sweden, Switzerland
and England.
Economists more frequently
call them "mixed economies." These are democratically
operated governments in which the state plays a more prominent
role in the economy than the American government plays in its
economy
http://www.steadystate.org/CASSEFAQs.html#anchor_151
EDWARDS TAKES ON CREDIT
CARD USURY, TRICKS
ONE AMERICA - Senator John
Edwards has outlined a plan to take on abusive lenders and help
American families save. "Debt has become the central fact
of middle-class existence," said Edwards. "For most
families, wages have not kept up with rising costs for middle-class
essentials like health care, housing and child care. Consumer
debt has skyrocketed in recent years and today, half of Americans
say they live paycheck to paycheck.
"At the same time,
abusive credit card companies deliberately build in tricks and
traps for families. Consumers often fail to understand the basic
terms of their cards due to complicated and confusing disclosures.
Most big credit card companies advertise low rates but reserve
the right to change rates at any time for any reason - a single
late payment can trigger penalties that raise interest rates
to an average of almost 25 percent.
To take on the credit card
industry - that has spent $250 million on lobbying and campaign
contributions since 1998 - Edwards promises to:
- enact national legislation
to protect families from the most abusive practices in the credit
card industries.
- create a new Family Savings
and Credit Commission to review all financial services products
marketed to families to determine that terms are reasonable and
fairly disclosed.
- subsidize bank accounts
for low-income workers - nearly 28 million Americans lack them
- and create work bonds to match their savings.
http://johnedwards.com/news/headlines/20071202-abusive-lenders/
SEPTEMBER
2007
NOVEL IDEA FOR THE HOMELESS: GIVE THEM A HOME
DAVID HENCH, PORTLAND PRESS HERALD A recently
released survey of Portland's homeless population shows a decline
for the third straight year in the number of chronically homeless
people, those who often absorb a disproportionate share of resources
from the city and social- service agencies. Advocates for the
homeless say the improvement is directly related to the availability
of Logan Place, which provides 30 apartments to men who had been
homeless repeatedly or for long periods, and to greater access
to housing in a softening rental market.
Beyond the reduction in shelter use, getting
people into stable homes provides dramatic benefits to people's
quality of life, and that pays dividends for society, said Mark
Swann, executive director of the Preble Street Resource Center,
which helped conduct the survey. . .
The Point-in-Time Survey of Homelessness,
which gathers information from the people staying in city shelters,
makeshift camps and in their cars, found that just 19 percent
of those people were considered chronically homeless, down from
37 percent in 2004.
City statistics show a decline in the use
of Portland shelters overall for the past two years -- Logan
Place opened in 2005 -- after increasing steadily between 1997
and 2005. . .
"There are only 30 people" at
Logan Place, he said, "but they were responsible for over
6,000 bed nights in shelters the previous year.". . .
An analysis done with the University of
New England showed that residents of Logan Place used ambulances
71 percent less than the year before they moved in; showed a
74 percent decrease in emergency room visits; had a 70 percent
decrease in police contacts; and had an 88 percent decrease in
jail time, Swann said.
THE REAGAN-BUSH-CLINTON-BUSH YEARS:
BRINGING INEQUALITY TO PRE-DEPRESSION LEVELS
FROM THE
ECONOMIST
JULY 2007
HOW TO CONTACT A LIVE PERSON IN
CORPORATE AMERICA
FEBRUARY 2007
BRINGING FAIR TRADE HOME
ERBIN CROWELL, EQUAL EXCHANGE, IN COOPERATIVE
GROCER - Today, just 10 corporations account for over 50 percent
of the revenue generated globally by food retailing. Not surprisingly,
as agribusiness profits have gone up, the share of the consumer
dollar received by farming families has declined dramatically.
By 2003, there were just 1.9 million working farmers in the U.S.
- less than the prison population.
For African American farmers, the challenge
is even more severe. For example, in 1920, one in seven farmers
were African American; by 1998, just one in 100, a loss rate
more than three times that of white farmers. Like many of the
small farmers that Equal Exchange works with across Latin America,
Africa and Asia, black farmers in the U.S. have been shut out
of markets, denied access to capital, and given racist treatment
at an institutional level. . .
Recently Equal Exchange and the Federation
began exploring a new idea: Domestic Fair Trade. The goal of
the partnership is to bring the Federations nearly 40 years of
organizing for civil rights and community development together
with Equal Exchanges 20 years of international Fair Trade experience
and commitment to cooperation. The result will be healthy snacks
grown, processed, marketed, and sold by cooperatives.
Our first project is with Southern Alternatives,
a pecan processing cooperative in southern Georgia. Through collective
action and persistence, this group has managed to accomplish
something inspiring: a black-owned, cooperatively organized pecan
processing facility that includes farmers and workers. With the
support of the Federation, workers in the facility kept the business
alive as a strategy for preserving jobs in a rural area devastated
by the modern agricultural economy and abandoned by the textile
mills that have moved overseas. .
http://cooperativegrocer.coop/articles/index.php?id=697
NON-PROFIT TESTS BANK CARD FOR WORKERS
NORTH JERSEY - A
New Jersey nonprofit is at the forefront of a nationwide effort
to grant special bank cards to low-wage workers, including immigrants,
regardless of their legal status. The New Labor Center in New
Brunswick, a workers center with a largely immigrant clientele,
is piloting a device called the Sigo card, developed by the Newark-based
company I.T.D.
Sigo acts as a kind of pre-paid debit card
that workers can use to deposit money directly into an account
and cash checks, or send duplicate cards to family members so
they can withdraw remittances directly from an ATM in their country,
at a better rate than money transfer agencies.
"The idea was, could we save workers
money, provide a secure place to put their money and get them
on an asset-building path," said Janice Fine, a Rutgers
labor relations professor who helped developed the program with
The Center for Community Change in Washington, D.C.
Sigo cards cost $4.95, and have a $2.50
monthly maintenance fee, a portion of which is paid in dues to
the nonprofit agency that issues the cards, in order to fund
the programs that assist the workers.
NEW BUSINESS TREND: CO-WORKING
KERRY MILLER, BUSINESS WEEK -
Over the past few years, co-working facilities - both grassroots,
co-op-like versions and for-profit models - have started popping
up across the country and the world, from Seattle to Copenhagen.
A co-working wiki hosts pages for dozens of other cities with
co-working initiatives in progress. And while the concept of
shared office space is nothing new to entrepreneurs, an increasing
number of them are signing on and finding that the community-building
and networking benefits outweigh even the virtues of a shared
fax machine.
In a recent report on the future of small
business, the Silicon-Valley based Institute for the Future pegged
co-working as a trend to watch over the next decade. After co-working
first took off with clusters of free-agent programmers and writers,
its flexibility and low cost have also proven a good match for
startups unwilling to sign a long-term lease. Because many of
these facilities operate on a gym-membership model that doesn't
assign workers to specific desks, co-working is cheaper than
most subleasing arrangements. And unlike traditional business
incubators, co-working isn't just for startups with high-growth
potential. . .
One of the newest co-working facilities,
for-profit Indoor Playground, opened in Toronto on Feb. 1 with
a mission statement focused solely on supporting local entrepreneurial
activity. The space's hanging dividers and movable desks allow
for reconfigurable work areas that can accommodate growing businesses
as well as community events. Those events are planned by members
themselves, both in person and through wikis.
Indoor Playground co-founder Mark Dowds
calls it a hands-off approach to business incubation: "We
created an environment-an open space where people can find each
other, collaborate, and create great ideas. Then we'll see what
happens."
HOW THE MARKET REALLY WORKS
[A beautiful example of the privatization
myth at work]
PAUL DUGGAN, WASHINGTON POST
- A D.C. government report issued yesterday describes the private
management of parking meters in the city as a financial waste,
saying the outsourcing not only failed to save money but drove
up costs by nearly $9 million from 1999 to 2005.
The system is riddled with other problems as well, the report
says. Among the findings: The city improperly issued almost 7,000
tickets to vehicles parked at broken meters in that seven-year
span, while residents' complaints about meters jumped from 3,652
in 1997, shortly before privatization, to 89,840 in 2005. . .
ACS, which is paid based on parking meter
revenue, sometimes got more than it was entitled to, according
to the auditor's findings, first reported yesterday by the Washington
Examiner. When meters along streets are "bagged" with
hoods because of construction, parades, funerals or other events,
the people or companies involved pay the city a fee. ACS is not
supposed to share in that money. However, from 1999 to 2005,
the report says, "ACS billed, and the District inexplicably
paid ACS, $644,952 in fees for bagged meter revenue.". .
.
When the auditors examined paperwork related
to meters along seven sample traffic routes, ACS records showed
that there were 1,906 meters on those routes. But the auditors
found only 1,236, of which 197 were "completely inoperative."
As for the 670 missing meters, "DDOT management had no clue
. . . how many had been removed from service, the revenue implications
of these removals, the reason for the removals or how long the
meters had been removed."
The report states that in 1993, the most
profitable parking-meter year of the decade before privatization,
the city took in $13.2 million in revenue against $1.1 million
in expenses, for a net gain of $12.1 million -- a return of about
$11 for each dollar spent. In the best year under privatization,
2003, the return was $2.63 per dollar spent.
LEFT BUSINESS OBSERVER HITS
20
DOUG HENWOOD, one of the most useful and
remarkable voices on the left for the past two decades has just
published his 20th edition issue of the Left Business Observer.
One of the things we've always liked about Henwood is his ability
to make one think differently about money and its effect on us.
His anniversary issue is no different. For example he notes that
Tom Frank in the 'What's the Matter with Kansas' had argued that
"the white working class has been hoodwinked by Republican
culture warriors into voting against their economic interests."
This has been a case we have long made as well and is one of
the reasons we support a strong populist approach to politics.
But Henwood shoots two well-aimed holes
in the argument:
- "[Richard Hofstadter] made the now
largely forgotten point that American Protestants have long had
a deep sympathy for The Market. Since they see humans as fallen,
corrupt creatures always in need of a good kick in the ass, they
revere it as a wonderful mechanism of social discipline, punishing
the lazy and rewarding the hard-working. If people are poor,
it's because they're immoral, impatient, or wasteful.".
. .Henwood notes the acceptance of this fantasy explains "why
there's been so little political price paid for the economic
march back to the 19th century."
- "I'll confess that for a moment
or two after the dot com bubble burst, and Enron and the other
corporate scandals were revealed, I'd hoped there might be some
moment of magical awakening. But it didn't happen that way. And
the reason it didn't happen was well anticipated by C. Wright
Mills in the Power Elite. Writing of of the routinization of
crisis and scandal, Mills declared there was really no energy
for sustained or productive outrage: 'Among the mass distractions
this feeling soon passes harmlessly away. For the American distrust
of the high and mighty is a distrust without doctrine and without
political focus; it is a distrust felt by the mass public as
a series of more or less cynically expected disclosures.'"
Henwood hopes to have a more upbeat tone
for the 30th anniversary of LBO, but in the meantime it's an
excellent place to find why things work the way they don't. .
. and why they don't know matter how hard we try.
LEFT BUSINESS OBSERVER
http://leftbusinessobserver.com/
JANUARY 2007
WHERE WOULD JESUS BANK?
Do you know who
is your banker is? Do you know what your banker is doing with
your money right now? The corruption and violence we are witnessing
today could only be happening with the complicity and leadership
of the major banks. When we do business with these banks, we
are "voting with our money" to finance the Wall Street-driven
government and financial policies we say we despise.
We have the power
to transform events by making some simple choices about who we
bank with on Main Street. According to Catherine Austin Fitts,
former Assistant Secretary of Housing during Bush I and successful
Wall Street investment banker, this is the single most effective
action that consumers can take to clean up government and dirty
money.
In an audio seminar, Fitts illuminates the relationship between
our banks and growing corruption; identifies the "Tapeworm
Banking 20" -- our vote for the 20 worst offenders; walks
you through how to affirm your existing bank or choose a new
local bank or credit union; describes why a small number of people
shifting their deposits locally can have a dramatic impact in
a highly leveraged financial system; explains why the first step
to decentralized energy solutions and new job creation is decentralizing
our bank deposits.
http://www.solari.com/store/free_offer/
DECEMBER 2006
MASSACHUSETTS COMMUNITY PRINTS ITS OWN
MONEY
Just ten weeks after Berk Shares
made their debut on the streets and in the cash registers of
southern Berkshire County, Massachusetts, trade in this model
local currency has been brisk. Berk Shares Inc., the organization
sponsoring the project, estimates that 333,000 Berk Shares have
already been purchased from the four participating banks. Much
of that has already gone into the hands of the 188 participating
local merchants and service providers, who, in turn, have spent
the currency at other participating local businesses.
Berk Shares are attractive bills
that celebrate local heroes, landscapes, and the work of local
artists. Their use helps keep community assets from leaving the
Berkshires for far-off places. Every Berk Share spent means more
money in the hands of Berkshire businesses. And as the Berk Shares
keep circulating, the effect is cumulative.
An estimated 3,000 people have
been using Berk Shares on a regular basis for food, movie tickets,
clothing, books, music, and a variety of services from legal
advice to landscaping, from car repair to carpentry. . . .
Berk Shares Inc. is cosponsored
by the E. F. Schumacher Society and the Southern Berkshire Chamber
of Commerce.
Participating businesses accept
Berk Shares at full dollar equivalent in payment for goods and
services. Some restrictions may apply to accommodate the individual
nature of each business. As long as the Berk Shares stay in circulation
- for change, partial payment of salaries, and purchase of goods
- they will keep full dollar value; however, when merchants accumulate
too many in their cash registers, they can redeem the notes at
participating banks for 90 cents on the Berk Share, thereby offering
regular customers a ten percent discount.
www.berkshares.org
LOCAL CURRENCY
[Several readers expressed skepticism
about Berk Shares, the new local currency in a Massachusetts
community, Here are some things we have previously written on
this topic]
SAM SMITH, SHADOWS OF HOPE, 1994
- During the last recession, the lease for a certain restaurant
in Great Barrington, Mass., expired. The local bank wouldn't
lend restaurateur Frank Tortrello money to move across the street.
So Frank decided to print his own. He called them Deli Dollars.
Each sold for $9 and could be redeemed for $10 worth of food
after six months. Not only did the idea provide Frank with enough
money to make his move, but it spread throughout the community.
A local farm issued notes with the slogan "In Farms We Trust,"
featuring the head of a cabbage instead of the head of a president.
New restaurants followed with their own currency and the local
bills started showing up everywhere, including in church collection
plates.
Others are also reinventing money.
Alternative currency has cropped up in Ithaca NY and is being
used by 700 individuals and business. In Seattle, some have devised
cardboard money. In another town, wooden coins.
Then there's Daisy Alexander,
a retiree from Montclair, New Jersey, and Pepe, a recent immigrant
from Havana, Cuba. They both live in a low-income senior housing
development section of Miami, Florida. At first glance, Daisy
and Pepe seem to have little in common. But they are bound to
each other -- in friendship and through the common bonds of a
new economic system called time dollars or service credits.
Time dollars, described in the book Time Dollars: A Currency
for the 90's by Edgar Cahn and Jonathan Rowe, operate like a
blood bank. People help others in their community and get credits
in a computer data base that they can draw upon in times of need.
Cahn and Rowe describe how time dollars have transformed over
100 communities and how grass-roots groups built the new currency.
Here's how it works for Daisy
and Pepe: Daisy volunteers three days a week tutoring first graders
at the elementary school across the street from her home. Every
week Pepe comes to her house and takes her grocery shopping.
An amputee with a cane, Daisy is dependent on Pepe to provide
this service for her. But no money changes hands. Daisy simply
"cashes in" the time dollars she earns tutoring to
"pay" for Pepe's shopping help. In turn Pepe earns
time dollars to buy services he needs. But Daisy and Pepe gain
in other ways as well. Both are renewed and enthused about the
opportunity for helping, and inspired by the social activities
that the sense of community has produced.
"The potential benefits
of the time dollars concept are limitless. It can touch every
life in every community, ranging from an apartment complex to
an entire nation, every facility, from a nursing home to a university
campus," says author Cahn. "It fosters a sense of financial
independence, camaraderie, community spirit, harmony among age
groups, races, religions, income levels, and even political adversaries."
In each of these cases, citizens
have come to understand that money is just a way that we translate
the value of products and services. Just because one may not
have money does not mean there is no value to be exchanged. It
is simply a matter of coming up with a way to keep track of it
without the services of the Federal Reserve.
SAM SMITH'S GREAT AMERICAN POLITICAL
REPAIR MANUAL, 1997 - It's legal to print your own money provided
that it can't be mistaken for the government kind -- the Secret
Service frowns on that. In fact, says Barbara Brandt in Whole
Life Economics, in the 1860s there were more than ten thousand
different kinds of locally issued bank notes in use in the US
simultaneously, including that issued by state banks. After the
creation of federal banking during the Civil War and a federal
reserve system in the early 1900s, the variety of money in this
country contracted. But in the 1930s, when communities found
themselves with products, needs, skills and labor but little
money, local currencies made a comeback. Writes Brandt: "In
numerous communities, local governments, business associations,
or charitable groups began to create their own money systems
for local use. Local depression money came in many variations:
vouchers that could only be traded in specific stores, or for
specific items, and printed currencies (often called 'scrip')
on paper, cardboard, or even wood, which had to be spent within
the community a certain number of times or before a certain date.
. . By 1933, the New York Times reported that one million Americans
in three hundred communities were using barter or scrip system
to keep their economies going. Today there is a revival of community
money -- or green dollars as it is sometimes called. In 1983,
Michael Linton developed a local exchange trading system on Vancouver
Island that created $350,000 worth of trading in its first four
years."
In Ithaca NY, some half million
dollars worth of local trade has been added to the economy through
Ithaca Hour notes. An Ithaca Hour is based on the average local
wage, about $10 an hour. Ithica Hours have been used to buy plumbing,
child care, car repair, and eyeglasses. They are accepted at
restaurants, movie theatres, bowling alleys, and health clubs.
As Paul Glover explained, "We printed our own money because
we watched federal dollars come to town, shake a few hands, then
leave to buy rain forest lumber and to fight wars. The local
money, on the other hand, stays in our region to help us hire
each other."
NOVEMBR 2006
CREDIT CARD FIRMS HEAVY INTO USURY
MARCY GORDON, AP - Late fees
for credit card payments have jumped, but card issuers have done
a poor job of explaining their policies on fees and penalties
to consumers, a new study by congressional investigators has
found. The report by the Government Accountability Office, Congress'
investigative arm, describes the fees, interest rates and disclosure
practices of 28 popular credit cards. It found that late fees
averaged $34, up from $13 in 1995, while some credit card issuers
impose penalty interest rates of more than 30 percent on consumers
who pay late or exceed the credit limit.
"Millions of Americans depend
on credit cards to pay their bills and buy essentials like groceries
or gas. Unfair or confusing credit card practices take advantage
of working families," said Sen. Carl Levin of Michigan,
the senior Democrat on the Senate's investigative subcommittee,
who had asked the GAO to conduct the study. . .
SEPTEMBER
2006
THE PHONY 'END'
OF WELFARE
CAT SULLIVAN,
SEATTLE POST-INTELIGENCER - Welfare reform has reached its tenth
anniversary. Many crow about its success and how wonderful it
is that low-income moms are now working for a wage; they are
now productive members of society. As if raising children to
run this country, fight in the wars we create and teach children
to become productive parents themselves is not being productive.
Some things we do know about the impact of what welfare reform
has or hasn't done:
- The U.S. has
increased its poverty levels.
- Many welfare
families are now part of the working poor and children see their
single parent less and less.
- We have the
highest infant mortality of all the world's developed nations.
- Underemployment
is growing by leaps and bounds.
- We have exponentially
raised the presence of whole families becoming homeless.
- More Americans
now live without health care.
ROBERT SCHEER
- To hear Bill Clinton tell it, his presidency won the war on
poverty three decades after President Lyndon B. Johnson launched
it, having changed only the name. Unfortunately, however, for
the mothers and their children pushed off the rolls but still
struggling mightily to make ends meet even when employed, the
war on welfare was not the same battle at all.
Clinton masterfully
blurred the two in a recent New York Times opinion column, as
did most others on the tenth anniversary of the passage of the
Personal Responsibility and Work Opportunity Reconciliation Act,
writing as if getting mothers and their children off the welfare
rolls is the same as getting them out of poverty. . .
The truth is
we know very little about the fate of those moved off welfare,
70% of whom are children, because there is no systematic monitoring
program, thanks to "welfare reform" severing the federal
government's responsibility to help the nation's poor.
The best estimates
from Census and other data, however, indicate that at least a
million welfare recipients have neither jobs nor benefits and
have sunk deeper into poverty. For those who found jobs, a great
many became mired in minimum-wage jobs --- sometimes more than
one --- that barely cover the child-care and other costs they
incurred by working outside the home. . .
What we do know
unequivocally is that real wages have been declining for workers,
both lower- and middle-class, despite increases in productivity.
As the New York Times reported on Monday, "wages and salaries
now make up the lowest share of the nation's gross domestic product
since the government began recording the data in 1947, while
corporate profits have climbed to their highest share since the
1960s.". . .
The sad reality
is that "ending welfare as we know it" was championed
by Clinton because it made him appear to be a "new Democrat"
and not because it would improve the lives of poor kids. Otherwise,
he would not dare boast in his column that "as a governor,
I oversaw a workfare experiment in Arkansas in 1980," because
that program was a failure.
In Arkansas today,
fully half the children are described in Census department data
as "low income," while one out of ten live in a situation
that researchers call "extreme child poverty," meaning
that a family of four survives on less than $9,675 per year.
http://www.alternet.org/columnists/story/41074/
AUGUST 2006
THE TRUTH
ABOUT WAGES AND THE RICH
PAUL KRUGMAN,
NY TIMES - Since the 1920's there have been four eras of American
inequality:
- The Great Compression,
1929-1947: The birth off middle-class America. The real wages
of production workers in manufacturing rose 67 percent, while
the real income of the richest 1 percent of Americans actually
fell 17 percent.
- The Postwar
Boom, 1947-1973: An era of widely shared growth. Real wages rose
81 percent, and the income of the richest 1 percent rose 38 percent.
- Stagflation,
1973-1980: Everyone lost ground. Real wages fell 3 percent, and
the income of the richest 1 percent fell 4 percent.
- The New Gilded
Age, 1980-?: Big gains at the very top, stagnation below. Between
1980 and 2004, real wages in manufacturing fell 1 percent, while
the real income of the richest 1 percent - people with incomes
of more than $277,000 in 2004 - rose 135 percent.
What's noticeable
is that except during stagflation, when virtually all Americans
were hurt by a tenfold increase in oil prices, what happened
in each era was what the dominant political tendency of that
era wanted to happen.
Franklin Roosevelt
favored the interests of workers while declaring of plutocrats
who considered him a class traitor, "I welcome their hatred."
Sure enough, under the New Deal wages surged while the rich lost
ground.
What followed
was an era of bipartisanship and political moderation; Dwight
Eisenhower said of those who wanted to roll back the New Deal,
"Their number is negligible, and they are stupid."
Sure enough, it was also an era of equable growth.
Finally, since
1980 the U.S. political scene has been dominated by a conservative
movement firmly committed to the view that what's good for the
rich is good for America. Sure enough, the rich have seen their
incomes soar, while working Americans have seen few if any gains.
SUPER RICH EVADE AS
MUCH AS $70 BILLION A YEAR IN TAXES
DAVID CAY JOHNSTON, NY TIMES - So many superrich
Americans evade taxes using offshore accounts that law enforcement
cannot control the growing misconduct, according to a Senate
report that provides the most detailed look ever at high-level
tax schemes. Among the billionaires cited in the report are the
owner of the New York Jets football team, Robert Wood Johnson
IV; the producer of the "Mighty Morphin Power Rangers"
children's show, Haim Saban; and two Texas businessmen, Charles
and Sam Wyly, who the Center for Public Integrity found in 2000
were the ninth-largest contributors to President Bush. . . Cheating
now equals about 7 cents out of each dollar paid by honest taxpayers,
as much as $70 billion a year, the report estimated. . .
JULY 2006
THE COST OF BEING POOR
ERIK ECKHOLM, NY TIMES - Drivers from low-income
neighborhoods of New York, Hartford and Baltimore, insuring identical
cars and with the same driving records as those from middle-class
neighborhoods, paid $400 more on average for a year's insurance.
The poor are also the main customers for appliances and furniture
at "rent to own" stores, where payments are stretched
out at very high interest rates; in Wisconsin, a $200 television
can end up costing $700.
Those were just
two examples among several cited in a report Tuesday showing
that poor urban residents frequently pay hundreds if not thousands
of dollars a year in extra costs for everyday necessities. The
study said some of the disparities were due to real differences
in the cost of doing business in poor areas, some to predatory
financial practices and some to consumer ignorance.
RISE OF THE SUPER-RICH
TERESA TRITCH,
NY TIMES - Income inequality used to be about rich versus poor,
but now it's increasingly a matter of the ultra rich and everyone
else. The curious effect of the new divide is an economy that
appears to be charging ahead, until you realize that the most
of the people in it are being left in the dust. . . Figures show
that from 2003 to 2004, the latest year for which there is data,
the richest Americans pulled far ahead of everyone else. In the
space of that one year, real average income for the top 1 percent
of households - those making more than $315,000 in 2004 - grew
by nearly 17 percent. For the remaining 99 percent, the average
gain was less than 3 percent. . .
Rich people are
also being made richer, recent government data shows, by strong
returns on investment income. In 2003, the latest year for which
figures are available, the top 1 percent of households owned
57.5 percent of corporate wealth, generally dividends and capital
gains, up from 53.4 percent a year earlier.
GRAND UNIFIED THEORY
OF THE DAY
How many economists
does it take to change a light bulb?
The answer is
indeterminate. Choose one of the following:
TWO: one to change
the bulb and one to assume the existence of a ladder.
EIGHT: one to
screw in the bulb and seven to hold everything else constant.
NONE: They are
all waiting for an invisible hand.
[Alcom, S. and
Solarz, B, Yale Economic Review]
MAY 2006
STUDY: WAL-MARTS INCREASE
POVERTY
PLANETIZEN -
A new study claims that Wal-Mart raises poverty rates in the
counties where its stores are located. A study published in the
latest issue of Social Science Quarterly is the first to examine
the effect of Wal-Mart stores on poverty rates. The study found
that nationwide an estimated 20,000 families have fallen below
the official poverty line as a result of the chain's expansion.
During the last decade, dependence on the food stamp program
nationwide increased by 8 percent, while in counties with Wal-Mart
stores the increase was almost twice as large at 15.3 percent.
"After controlling for other factors determining changes
in the poverty rate over time, we find that both counties with
more initial Wal-Mart stores and with more additions of stores
between 1987 and 1998 experienced greater increases (or smaller
decreases) in family poverty rates during the 1990's economic
boom period," Stephan Goetz a Professor of Agricultural
and Regional Economics at The Pennsylvania State University states.
Although Wal-Mart employs many people living in its communities,
for most, the hours worked and the wages paid do not help these
families transition out of poverty.
Another effect
is that the closing of "mom and pop" stores following
the appearance of a store leads to the closing of local businesses
that previously supplied those stores including: wholesalers,
transporters, logistics providers, accountants, lawyers and others.
The authors state that "by displacing the local class of
entrepreneurs, the Wal-Mart chain also destroys local leadership
capacity." They encourage community leaders to think about
programs and policies in anticipation of helping those displaced
by the arrival of the chain.
http://www.planetizen.com/node/19820
OTHER IDEAS FOR THE
PALESTINIANS
[From Sam
Smith's Great American Political Repair Manual]
[] Issue local
currency
SAYS BARBARA
BRANDT in Whole Life Economics, in the 1860s there were more
than ten thousand different kinds of locally issued bank notes
in use in the US simultaneously, including that issued by state
banks. After the creation of federal banking during the Civil
War and a federal reserve system in the early 1900s, the variety
of money in this country contracted. But in the 1930s, when communities
found themselves with products, needs, skills and labor but little
money, local currencies made a comeback. Writes Brandt: "In
numerous communities, local governments, business associations,
or charitable groups began to create their own money systems
for local use. Local depression money came in many variations:
vouchers that could only be traded in specific stores, or for
specific items, and printed currencies (often called 'scrip')
on paper, cardboard, or even wood, which had to be spent within
the community a certain number of times or before a certain date.
. . By 1933, the New York Times reported that one million Americans
in three hundred communities were using barter or scrip system
to keep their economies going. Today there is a revival of community
money - or green dollars as it is sometimes called. In 1983,
Michael Linton developed a local exchange trading system on Vancouver
Island that created $350,000 worth of trading in its first four
years. David Burman put it this way: "LETS is as close to
a biological organism as an economic system can be. . . . Low
administration fees pay for daily operations entirely in green
dollars. Federal dollar expenses like telephone and postage come
from nominal annual fees. . . In Ithaca NY. . . Ithica Hours
have been used to buy plumbing, child care, car repair, and eyeglasses.
They are accepted at restaurants, movie theatres, bowling alleys,
and health clubs. As Paul Glover explained in In Context, "We
printed our own money because we watched federal dollars come
to town, shake a few hands, then leave to buy rain forest lumber
and to fight wars. The local money, on the other hand, stays
in our region to help us hire each other."
The Ithaca money
was inspired by the success of a similar program in western Massachusetts
where in 1989 a local restaranteur, Frank Tortoriello, raised
a badly needed $5000 in 30 days by issuing scrip. His Deli Dollars
drifted into the local economy and even began showing up in church
collection plates. Edgar Cahn came up with some imaginative ways
to rebuild a non-monetized economy without even using scrip.
He called his system time dollars. For example, in one Washington
community, volunteers accumulated credit hours for a local organization
through baby sitting, cleaning alleys, and so forth. These hours
were then traded for the professional legal help the organization
needed.
Remember, money
is just a way of accounting for labor and goods. The wealth is
in the labor and goods; the rest is a form of bookkeeping.
[] Print money
for capital projects
IN THE EARLY
19TH CENTURY, the little British Channel island of Guernsey faced
a problem. Its sea walls were crumbling. its roads were too narrow,
and it was already heavily in debt. There was little employment
and people were leaving for elsewhere. Instead of going still
further into debt, the island government simply issued 4,000
pounds in state notes to start repairs on the sea walls as well
as for other needed public works. More issues followed and twenty
years later the island had, in effect, printed nearly 50,000
pounds. Guernsey had more than doubled its money supply without
inflation.
A report of the
island's States Office in June 1946 notes that island leaders
frequently commented that these public works could not have been
carried out without the issues, that they had been accomplished
without interest costs, and that as a result "the influx
of visitors was increased, commerce was stimulated, and the prosperity
of the Island vastly improved." By 1943, nearly a half million
pounds worth of notes belonged to the public and was so valued
that much of it was being hoarded in people's homes, awaiting
the island's liberation from the Germans.
About the same
time that Guernsey started to fix its sea walls the town of Glasgow,
Scotland, borrowed 60,000 pounds to build a fruit market. The
Guernsey sea walls were repaid in ten years, the fruit market
loan took 139. In the first part of the the 20th century, Glasgow
paid over a quarter million pounds in interest alone on this
ancient project. His Excellency, the Ambassador from Royal Dutch
Shell
How did Guernsey
avoid the fiscal disaster that conventional economics prescribed
for it? First and foremost by understanding that when you build
roads or sea walls or colleges or houses, you are not reducing
your society's wealth. In fact, if you do it right, you are creating
something that will add to its wealth. The money that was created
was simply backed by public works rather than gold or "full
faith and credit." It was, in fact, based on something more
solid than the dollar bills in our wallets today. In contrast,
tacking on an interest charge to public works -- as we do in
the US -- creates no new wealth, but merely transfers claims
on existing wealth from debtors to creditors.
ORDER THE GREAT
AMERICAN POLITICAL REPAIR MANUAL
http://prorev.com/order3.htm
APRIL 2006
PSYCHOLOGISTS FOUND
BETTER THAN ECONOMISTS AT STOCK PICKING
GUARDIAN, UK
- Shareholders seem to be swayed by the buying pattern of other
shareholders much less than has hitherto been assumed. This at
least is the conclusion arrived at by economists of the Bank
of England and the universities of Heidelberg and Bonn. Together
with the corporate consultants McKinsey they scrutinized the
share-buying behavior of about 6,500 persons in an Internet experiment.
They found no signs of 'herd instinct' during the experiment
- on the contrary, some of the test subjects decided against
buying those specific shares which had just been bought by so
many other players. Psychologists, particularly, mistrusted those
shares which they regarded as overvalued. This strategy benefited
them enormously: on average they were markedly more successful
in their speculation than physicists or mathematicians - or even
economists.
On average the
psychologists earned three times as much as economists and physicists
in the stock exchange game. 'They tended to decide against buying
shares precisely when a lot of other players had bought them,'
Dr. Andreas Roider of the University of Bonn's Economics Department
explains.
http://www.medicalnewstoday.com/medicalnews.php?newsid=3595
3
BERNANKE: THE MUSIC VIDEO
BACKGROUND: R. Glenn Hubbard,
a predecessor of Bernanke's at the Council of Economic Advisers,
had long been seen as a candidate for the Fed job, but as Bernanke's
star rose, so did the voices of Hubbard advocates, who saw him
as a stronger conservative. Hubbard's role as architect of Bush's
drive to all but eliminate taxes on dividends won him strong
allies among supply-side economists, who view tax cuts as the
surest path to economic growth. - Washington Post
MARCH 2006
KIDDING OURSELVES ABOUT
POVERTY
CHRISTOPHER MORAFF,
IN THESE TIMES - The current method for measuring poverty in
the United States was developed in 1963 by a young statistician
for the Social Security Administration named Mollie Orshansky.
Using data from a 1955 Department of Agriculture survey, Orshansky
developed a set of thresholds that set a poverty line at three
times the annual cost of feeding a family of three or more under
Agriculture's "low-cost budget." She developed the
thresholds purely for her own research and said at the time that
her data's limitations would yield a "conservative underestimate"
of poverty.
At that, Orshansky's
work might well have passed into history. But on January 8, 1964,
President Lyndon Johnson uttered the famous words: "This
administration today, here and now, declares unconditional war
on poverty in America." It was a war Johnson intended to
win, but missing was an official yardstick for gauging the problem
and its ultimate resolve. . .
Forty years later,
with the War on Poverty no closer to being won, the Census still
relies on the Orshansky Thresholds to calculate each year how
many Americans live in poverty. That number then determines the
nature and distribution of an array of federal policies and programs
aimed at addressing the issue.
As critics have
pointed out for decades, limitations of the Orshansky formula
are manifold. For one, food doesn't account for one-third of
a family's budget today, making it an unrealistic cost-of-living
measure. The model also fails to take into account housing, transportation
or health care-which together can amount to more than triple
the average cost of food. Add in regional variations, childcare
costs and the growth of single-parent families, and it's fair
to say that the Census Bureau is systematically undercounting
the number of poor Americans.
Census data released
this past August suggests that the number of Americans in poverty
grew slightly in 2004 (the most recent year for which data is
available) to 12.7 percent from the 12.5 percent recorded the
previous year, representing about 37 million Americans. Since
2000, the number of people living in official poverty has increased
by 5.4 million. But according to experts, that number vastly
underestimates the real total. Duke University sociology professor
David Brady puts it this way: "Each August we Americans
tell ourselves a lie. The entire episode is profoundly dishonest."
Brady says that
based on his calculations the real number is closer to 18 percent-or
48 million Americans currently unable to afford the most basic
necessities. Less conservative estimates have put the numbers
of poor at 25 percent, or more than 70 million Americans.
http://www.inthesetimes.com/site/main/article/2513/
GUARANTEED INCOME A
TOPIC IN GERMANY
DW, GERMANY -
Germany is in search of recipes to thin the ranks of its over
5 million jobless. It's the country's main problem, Chancellor
Angela Merkel said this week. And entrepreneur Götz W. Werner
thinks he's found the answer. "We are still living under
the impression that full employment can be achieved," said
Götz W. Werner, whose national drugstore chain, dm-drogerie
markt, has made him a millionaire. "The big problem is that
many people don't have a work place, they have an income place."
According to
Werner, who also holds a professorship at an entrepreneurial
institute at the University of Karlsruhe, Berlin should provide
people with a tax-financed basic income that would free people
from the need to earn money, rather than create jobs for the
12.2 percent of Germans who are unemployed. Society can fulfill
its needs without full employment, Werner said, and it would
be better off if it did. . .
Ridding people
of the burden of work would allow them to devote time to things
they actually want to do, whether volunteering at an old folks'
home, pursuing dreams of an artistic career or spending more
time with their families. And it would relieve millions of people
from the stigma of not having a job.
In Werner's scenario,
every man, woman and child would receive a monthly allowance
that would cover the costs of living, plus a little bit more.
The state would finance the new system through a high consumption
tax that would replace all current taxes and could be gradually
introduced over 20 to 30 years. The non-wage labor costs, such
as social welfare and pension contributions, that add to the
high cost of German jobs, would be a thing of the past as would
the bureaucracies that administer them.
Werner is one
of Germany's most vocal proponents of an unconditional basic
income, but he's not alone. Thomas Straubhaar, head of the Hamburg's
HWWA economic think tank, also backs the idea -- from a different
angle. He thinks it's important to move away from a system financed
by labor costs in favor of one financed by taxes.
http://www.dw-world.de/dw/article/0,,1921600,00.html?maca=en-rss-en-all-1124-rdf
FEBRUARY 2006
YOUNGER HOUSEHOLDERS
LOST GROUND UNDER BUSH
MARK TRUMBULL, CHRISTIAN SCIENCE MONITOR - A new survey shows
that median incomes fell for householders under 45, even as they
rose for older ones, between 2001 and 2004. Income fell 8 percent,
adjusted for inflation, for those under 35 and 9 percent for
those aged 35 to 44. . .
- The median
income for men under age 44 was significantly lower in 1997 than
in 1970, after adjusting for inflation, according to a long-term
analysis by the Census Bureau in the late 1990s. For those over
45, incomes barely held their own during that period.
- The entry of
women into the workforce in those decades has helped push median
family incomes up over time. But even when men and women are
included together, younger workers (age 25-34) are earning well
below what they did in 1970. And at all ages, evidence suggests
that families are putting in more hours of work to make their
household incomes rise.
- Even with extra
time at work, median family income has barely budged since 1995
for householders below 45, up about 5 percent after inflation
through 2004.
- Those aged
45 to 54 did better, with family incomes rising 23 percent during
that period, according to the numbers released last week from
the Federal Reserve Board.
BANKS OUT TO GET RID OF CREDIT UNIONS
FIVE SIGNS THAT ECONOMIC
GROWTH DOESN'T MAKE YOU HAPPIER
ANDREW OSWALD,
FINANCIAL TIMES - Politicians mistakenly believe that economic
growth makes a nation happier. Britain is today experiencing
the longest period of sustained economic growth since the year
1701 ­ and we are ­determined to maintain it," began
Gordon Brown, the chancellor of the exchequer, in his 2005 Budget
speech. Western politicians think this way because they were
taught to do so. But today there is much statistical and laboratory
­evidence in favour of a heresy: once a country has filled
its larders there is no point in that nation becoming richer.
The hippies,
the Greens, the road protesters, the downshifters, the slow-food
movement ­ all are having their quiet revenge. Routinely
derided, the ideas of these down-to-earth philosophers are being
confirmed by new statistical work by psychologists and economists.
First, surveys
show that the industrialized nations have not become happier
over time. Random samples of UK citizens today report the same
degree of psychological well-being and satisfaction with their
lives as did their (poorer) parents and grandparents. In the
US, happiness has fallen over time. White American females are
markedly less happy than were their mothers.
Second, using
more formal measures of mental health, rates of depression in
countries such as the UK have increased.
Third, measured
levels of stress at work have gone up.
Fourth, suicide
statistics paint a picture that is often consistent with such
patterns. In the US, even though real income levels have risen
six­fold, the per-capita ­suicide rate is the same as
in the year 1900.
Fifth, global
warming means that growth has long-term consequences few could
have imagined in their undergraduate tutorials. . .
http://www2.warwick.ac.uk/fac/soc/economics/staff/faculty/oswald/
JANUARY 2006
INCOME INEQUALITY GROWING
CBPP - In most
states, the gap between the highest-income families and poor
and middle-income families grew significantly between the early
1980s and the early 2000s, according to a new study by the Center
on Budget and Policy Priorities and the Economic Policy Institute.
The incomes of the country's richest families have climbed substantially
over the past two decades, while middle- and lower-income families
have seen only modest increases. This trend is in marked contrast
to the broadly shared increases in prosperity between World War
II and the 1970s.
In 38 states,
the incomes of the bottom fifth of families grew more slowly
than the incomes of the top fifth of families between the early
1980s and the early 2000s. In these 38 states, the incomes of
the richest grew by an average of $45,800 (62 percent), while
the incomes of the poorest grew by only $3,000 (21 percent) In
only one state - Alaska - did the incomes of the low-income families
grow faster than the incomes of the top fifth.
In 39 states,
the incomes of the middle fifth of families grew more slowly
than the incomes of the top fifth of families between the early
1980s and the early 2000s. In no state did the income gap (degree
of income inequality) between middle- and high-income families
narrow during this period.
Within the top
fifth of families, the wealthiest families enjoyed the highest
income growth over the past two decades. In the 11 states that
are large enough to permit this calculation, the incomes of the
top 5 percent of families rose between 66 percent and 132 percent
during this period. This is faster than the income growth among
the top fifth of families as a whole in these states- and much
faster than the income growth among the bottom fifth of families
in these states, which ranged from 11 percent to 24 percent.
The five states
with the largest income gap between the top and bottom fifths
of families are New York, Texas, Tennessee, Arizona, and Florida.
Generally, income gaps are larger in the Southeast and Southwest
and smaller in the Midwest, Great Plains, and Mountain states.
Income gaps tend to be larger in states where incomes in the
bottom fifth are below the national average, and to be smaller
in states where incomes in the bottom fifth are above the national
average. The five states with the largest income gaps between
the top and middle fifths of families are Texas, Kentucky, Florida,
Arizona, and Tennessee.
http://www.cbpp.org/1-26-06sfp.htm
43% OF FIRST TIME HOMEOWNERS
LAST YEAR PUT NO MONEY DOWN
NOELLE KNOX, USA TODAY - As housing prices
soared last year, an eye-popping 43% of first-time home buyers
purchased their homes with no-money-down loans, according to
a study released Tuesday by the National Association of Realtors.
The trend is potentially ominous. The real estate market is cooling
in some areas, and rates on adjustable-rate loans are creeping
up. As a result, some no-money-down buyers could owe more than
their homes are worth. The median first-time home buyer scraped
together a down payment of only 2% on a $150,000 home in 2005,
the NAR found. Already, home prices in many areas are declining,
and the "For Sale" signs are hanging in front yards
longer. There's now at least a 50% risk that prices will decline
within two years in 11 major metro areas, including San Diego;
Boston; Long Island, N.Y.; Los Angeles; and San Francisco, according
to PMI Mortgage Insurance's latest U.S. Market Risk Index. .
.
Dean Baker of
the Center for Economic and Policy Research says that if housing
prices fall at least 10%, it could be even more damaging than
the collapse of the high-tech stock bubble in 2000. . . Baker
and other economists are concerned that many lenders have pushed
a series of creative but potentially dangerous loans to help
more Americans afford a home.
THE MIDDLE CLASS PRECIPICE
[A deep look
at the problems of the middle class]
ELIZABETH WARREN,
HARVARD MAGAZINE - Middle-class families have been threatened
on every front. Rocked by rising prices for essentials as men's
wages remained flat, both Dad and Mom have entered the workforce-a
strategy that has left them working harder just to try to break
even. Even with two paychecks, family finances are stretched
so tightly that a very small misstep can leave them in crisis.
As tough as life has become for married couples, single-parent
families face even more financial obstacles in trying to carve
out middle-class lives on a single paycheck. And at the same
time that families are facing higher costs and increased risks,
the old financial rules of credit have been rewritten by powerful
corporate interests that see middle-class families as the spoils
of political influence.
In just one generation,
millions of mothers have gone to work, transforming basic family
economics. The typical middle-class household in the United States
is no longer a one-earner family, with one parent in the workforce
and one at home full-time. Instead, the majority of families
with small children now have both parents rising at dawn to commute
to jobs so they can both pull in paychecks. . .
Today the median
income for a fully employed male is $41,670 per year (all numbers
are inflation-adjusted to 2004 dollars) - nearly $800 less than
his counterpart of a generation ago. The only real increase in
wages for a family has come from the second paycheck earned by
a working mother. With both adults in the workforce full-time,
the family's combined income is $73,770-a whopping 75 percent
higher than the median household income in the early 1970s. But
the gain in income has an overlooked side effect: family risk
has risen as well. Today's families have budgeted to the limits
of their new two-paycheck status. As a result, they have lost
the parachute they once had in times of financial setback-a back-up
earner (usually Mom) who could go into the workforce if the primary
earner got laid off or fell sick. This "added-worker effect"
could buttress the safety net offered by unemployment insurance
or disability insurance to help families weather bad times. But
today, a disruption to family fortunes can no longer be made
up with extra income from an otherwise-stay-at-home partner.
http://www.harvard-magazine.com/on-line/010682.html
DECEMBER 2005
MILLIONS OF YOUNG MEN
LOST IN THE SYSTEM AND OUR STEREOTYPES
MICHAEL GURIAN, WASHINGTON POST - Colleges and universities
across the country are grappling with the case of the mysteriously
vanishing male. Where men once dominated, they now make up no
more than 43 percent of students at American institutions of
higher learning, according to 2003 statistics, and this downward
trend shows every sign of continuing unabated. If we don't reverse
it soon, we will gradually diminish the male identity, and thus
the productivity and the mission, of the next generation of young
men, and all the ones that follow. . .
Many times a
week, a reporter or other media person will ask me: "Why
should we care so much about boys when men still run everything?"
It's a fair and logical question, but what it really reflects
is that our culture is still caught up in old industrial images.
We still see thousands of men who succeed quite well in the professional
world and in industry -- men who get elected president, who own
software companies, who make six figures selling cars. We see
the Bill Gateses and John Robertses and George Bushes -- and
so we're not as concerned as we ought to be about the millions
of young men who are floundering or lost.
But they're there:
The young men who are working in the lowest-level (and most dangerous)
jobs instead of going to college. Who are sitting in prison instead
of going to college. Who are staying out of the long-term marriage
pool because they have little to offer to young women. Who are
remaining adolescents, wasting years of their lives playing video
games for hours a day, until they're in their thirties, by which
time the world has passed many of them by. . .
Statistics show
that a young man who doesn't finish school or go to college in
2005 will likely earn less than half what a college graduate
earns. He'll be three times more likely to be unemployed and
more likely to be homeless. He'll be more likely to get divorced,
more likely to engage in violence against women and more likely
to engage in crime. He'll be more likely to develop substance
abuse problems and to be a greater burden on the economy, statistically,
since men who don't attend college pay less in Social Security
and other taxes, depend more on government welfare, are more
likely to father children out of wedlock and are more likely
not to pay child support.
NOVEMBER 2005
TAX CUTS DON'T
HELP EMPLOYMENT
UNITED FOR A
FAIR ECONOMY - Evidence shows that, historically, changes in
tax rates have no discernible effect on employment. Moreover,
during the Bush administration, job creation since 2003 has fallen
millions of jobs short of the administration's promises, and
is significantly below what would normally be expected even without
extraordinary economic stimulus. "President Bush's Jobs
and Growth Tax Relief Reconciliation Act of 2003, far from delivering
on the promises made to create 5.5 million new jobs, has carved
out a new low in job recovery after a recession." said Scott
Klinger, director of UFE's tax policy group. A UFE study found:
- Reviewed over
a six-decade period, changes in tax policy have not resulted
definitively in job creation or job destruction; they have no
predictable effect on jobs.
- From June 2003
to December 2004, the administration promised its tax-cutting
policy would create 5.5 million new jobs-but only 2.6 million
were created, even though 4.1 million would have been expected
without any special economic stimulus.
- The weakness
in job creation during an economic recovery that we are currently
experiencing is unprecedented since World War II.
- The number
of good quality jobs (defined as those paying at least $16 an
hour, providing employer-paid health insurance, and providing
a pension) has remained flat at 25% of all workers.
- Black employment
is at 89.6%, compared to 95.2% for whites.
- Latino workers
average more than $10,000 per year less in earnings than whites,
and the gap is increasing.
- While there
is no evidence that massive tax cuts create jobs, there is considerable
evidence that they contribute to economy-choking deficits.
REPORT
http://www.faireconomy.org/press/2005/ThanksgivingReport_pr.html
JUNE 2005
. . .
THE HIGH PRICE OF STOPPING BY STARBUCKS
BALINE HARDIN,
WASHINGTON POST - Part of the $115,000 debt Kirsten Daniels of
Seattle incurred to finance law school went toward her regular
caffeine fix. The habit costs her nearly $3 a day, and it's one
that her law school says she and legions like her cannot afford.
It borders on
apostasy in this caffeine-driven town (home to more coffee shops
per capita than any major U.S. city, as well as Starbucks corporate
headquarters), but the law school is aggressively challenging
the drinking habits of students such as Daniels.
"A latte
a day on borrowed money? It's crazy," said Erika Lim, director
of career services at the law school.
To quantify the
craziness, Lim distributes coffee-consumption charts. One shows
that a five-day-a-week $3 latte habit on borrowed money can cost
$4,154, when repaid over 10 years. She also directs students
to a Web site she helped create. The "Stop Buying Expensive
Coffee and Save Calculator" shows that if you made your
own coffee and for 30 years refrained from buying a $3 latte,
you could save $55,341 (with interest).
WHAT HIGH PRICE
COFFEE IS COSTING YOU
http://www.hughchou.org/calc/coffee.cgi
APRIL 2005
ROBBER BARONS
WIDEN GAP WITH WORKERS
http://www.commondreams.org/headlines05/0412-10.htm
ABID ASLAM, ONE
WORLD - An analysis of securities filings showed that CEO salaries
rose 12 percent in 2004 compared with average raises of 3.6 percent
for rank-and-file workers, further widening the world's largest
gaps between executive and labor pay. The average CEO of a major
corporation received $9.84 million in total compensation in 2004,
the AFL-CIO said.
WHY IT'S BETTER
TO BE POOR IN NORWAY OR CANADA THAN IN THE U.S.
http://www.csmonitor.com/2005/0414/p17s02-cogn.html
DAVID R. FRANCIS,
CHRISTIAN SCIENCE MONITOR - Except for the citizens of a few
tiny oil kingdoms and Luxembourg, Americans on average live better
than anybody else. Germans? Forget it. Americans' standard of
living is 30 percent higher. The British? The gap's even wider.
But if the United
States is so rich, critics ask, how come its poor are poorer
than almost anywhere else in the developed world? Consider Canada.
Its median per capita gross domestic product is 19 percent below
the median in the US. Nevertheless, the poorest 18 percent of
Canadians remain better off, on average, than the poorest 18
percent of Americans.
The contrast
is even starker in oil-rich Norway, where the poorest 38 percent
of the people fare better, on average, than the poorest 38 percent
of Americans, despite a lower median per capita GDP. The reason?
America's woefully unequal distribution of income. . .
In a list of
30 prosperous nations, including smaller economies such as Taiwan
and Israel, only Russia and Mexico have a greater maldistribution
of income than the US.
HOW MUCH ARE
FINANCIAL MARKETS BEING MANIPULATED?
http://www.financialsense.com/Market/wrapup.htm
[During the
Clinton years we raised the question of how and when the markets
were being manipulated by the government including a practice
rarely mentioned in the media, "plunge protection."
Lately, we've noticed similar concerns among financial analysts,
an example of which follows]
MIKE HARTMAN,
FINANCIAL SENSE - One of the top analysts I sent an email had
this as part of his reply, "To be honest Mike, I am sick
to death with what I see these jokers do day in and day out.
It does appear we have entered some brave new world in which
our financial masters know what is best for us pitiful peasants.
I suppose the stakes are so high they feel justified in playing
their games, but they do so from the shadows like thieves lurking
in the night." He went on with a great deal more and I read
testimony after testimony of many investors that thought there
was some heavy intervention with the dollar. Bill Murphy titled
his piece last night, "Manipulation OF US Financial Markets
Intensifying." I think my buddy said it all when he wrote,
"I suppose the stakes are so high they feel justified in
playing their games." Folks, the stakes are incredibly HIGH!!!
The euro is competing for dual status as a global reserve currency
with the dollar, Iran might be opening a commodities exchange
denominated in euro, China is being pressured to remove its peg
to the U.S. dollar, and on and on. The stakes are very high indeed!
FEBRUARY 2005
BLACK FARMERS
IN U.S. DISAPPEARING
E.G. VALLIANATOS,
SEATTLE POST-INTELLIGENCER - According to the U.S. Bureau of
the Census, there were 740,670 "Negro" farmers in the
United States in 1900. In 1920, black farmers increased to 922,914,
and then started on a catastrophic decline. In 1969, there were
90,141 black farmers and, by 1992, the number had been reduced
to 18,816. In other words, black farmers declined by about 98%
between 1920 and 1992.
The U.S. Department
of Agriculture, which black farmers call the "last plantation,"
speeded up the exodus of black people from the land. Pearlie
Reed, a senior black official at the USDA, admitted in 1997 that
the USDA discriminated against black farmers, cheating them of
their dignity and loans that could keep them in operation. .
.
Corporate agriculture
pushed its animal factories into the neighborhood of blacks.
Pig farmers settled in black rural communities in eastern North
Carolina. The stink and human-life threatening pollution of the
hog factories bring the urban industrial development model into
the countryside, making a factory out of rural society. And because
the black people of rural North Carolina are so few and largely
powerless, they become the targets of large hog operations and
other plantation farmers.
The USDA is the
only government agency distributing Treasury checks to farmers.
But this money goes through the county committee system, which
is under the control of large white farmers who hate family farmers,
especially black farmers. Add this hatred to the complexity of
USDA regulations and the result is discrimination and fear.
JANUARY 2005
FATHER OF
NEO-FREE MARKET THEORIES ATTACKS SOCIAL RESPONSIBILITY
LISA RONER, ETHICALCORP
- Arthur Laffer, an economist commonly known as the 'father'
of supply-side economics, has denounced corporate social responsibility,
calling it detrimental to stockholders' interests and harmful
to corporate profitability. . . At a news conference organized
by the Washington-based Competitive Enterprise Institute last
week, Laffer said corporate responsibility really means "irresponsibility"
and that modern corporations are simply meant to create wealth
for shareholders.
Companies, Laffer
says, are under pressure from "mainly left-of-center lobbies"
to demonstrate attention to social and environmental concerns
as much as to bottom lines. But he says that puts businesses
on the defensive when their chief executives should be realizing
corporations are "legitimate entities whose prime responsibility
is to make profits for those who have invested in them".
A study he conducted
with two other economists, Andrew Coors and Wayne Winegarden,
Laffer says shows "no significant positive correlation"
between corporate responsibility and business profitability.
. .
Lawrence Mitchell,
John Theodore Fey research Professor of Law at George Washington
University, law director of the Sloan Program for the Study of
Business in Society and director of the International Institute
for Corporate Governance and Accountability, says Laffer "misses
the point entirely."
"Social
responsibility is not necessarily to increase profitability ---
it's to increase profitability responsibly," Mitchell says.
"We have this idea --- and Laffer certainly seems to be
buying into it --- that the corporation is somehow some sort
of natural entity with unrestricted property rights to do whatever
the hell it wants."
But Mitchell
says, with a broad range of laws "designed to ensure property
use is responsible", corporations are called upon to increase
profits in a "non-abusive, non-externalising sort of fashion".
FREQUENT FLYER
MILES NOW THE LEADING CURRENCY
http://www.guardian.co.uk/business/story/0,3604,1385847,00.html?=rss
GUARDIAN - The
gold standard of sterling is long forgotten and now the supremacy
of the greenback has been surpassed. The world has a new global
currency - airline frequent flyer miles, which have a greater
total value than dollars, euros, pounds or yen. Doled out by
airlines to seasoned travelers, they are intended to be redeemed
for tickets as a reward for loyalty. But since their invention
in 1981, their popularity has spawned its own economy of trading
schemes, charitable donations, enthusiasts and scams. By the
end of 2004, almost 14 trillion frequent flyer miles had been
accumulated worldwide.
According to
a new analysis by The Economist magazine, the global stock is
worth more than $700bn, more than all the US dollar bills in
circulation. . |