HOW WELL IS YOUR COUNTY DOING IN STIMULUS SPENDING? HOW THE FISCAL CRISIS CAME ABOUT SOME FACTS ABOUT ASSISTED HOUSING A FEW FACTS ABOUT AUTO WORKERS GOVERNMENT CONTRACTORS WITH THE WORST RECORD OF MISCONDUCT, 1995 TO PRESENT EVEN CORRECTING FOR INFLATION, BAILOUT BIGGER THAN MARSHALL PLAN, LOUISIANA PURCHASE, RACE TO THE MOON, S&L CRISIS, KOREAN WAR, NEW DEAL, INVASION OF IRAQ, VIETNAM WAR & NASA COMBINED EVERY SOUTHERN STATE EXCEPT FLORIDA & VIRGINIA ARE AMONG THE 15 POOREST STATES FOOD STAMP USE APPROACHING RECORD HIGH U.S. INCOME GAP SETS POSTWAR RECORD INDICATORS: ROBBER BARONS STILL DOING WELL AMERICAN INCOMES DECLINED DURING BUSH REGIME PERCENTAGE OF POOR AMERICANS IN SEVERE POVERTY REACHES 32 YEAR HIGH THE REAGAN-BUSH-CLINTON-BUSH YEARS: BRINGING INEQUALITY TO PRE-DEPRESSION LEVELS A SHORT HISTORY OF THE ECONOMIC AMERICAN BND - Average full-time workers made $41,198 in 1973 and $37,606 in 2008, adjusted for inflation. CEOs made 45 times as much as workers in 1973 and more than 300 times as much as workers now. By 2006, the richest 1 percent had increased their share of the nation's income to the second-highest level on record. The only year higher was 1928 - on the eve of the Great Depression. A 2008 report from the Center for Economic and Policy Research shows that due to the collapse of the housing bubble, the vast majority of near retirees have accumulated little or no wealth. This means that they will be almost completely reliant on Social Security and Medicare to support them in their retirement years. The report projects that in 2009, the median household in the 45 to 54 age cohort saw its net worth drop by more than 45 percent since 2004, to just over $80,000 (including home equity). For early baby boomers, those between the ages of 55 and 64, the losses were not quite as steep but still came to 38 percent of net wealth, with the median wealth falling to $140,000, approximately 80 percent of the price of the median home. Center on Budget and Policy Priorities - More than 8 million renter households paid more than half of their income for rent and basic utilities in 2007, the most recent year for which data are available. Under federal standards, housing costs are considered unaffordable if they exceed 30 percent of household income. Nearly all of these households had low incomes (i.e., at or below 80 percent of their state's median income). Two out of three of them had extremely low incomes (i.e., below 30 percent of the state median income, a level that is roughly equivalent to the federal poverty line). The number of low-income renter households that paid more than half of their income for housing increased by 2 million, or 32 percent, between 2000 and 2007. - 165,000 units of public housing have been lost since 1995 and not replaced; these losses are likely to continue.
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 MARCH 2010 SOCIAL SECURITY SCARE SQUAD MISSTATES FUTURE COLLEGE-HIGH SCHOOL GRAD PAY GAP NOT AS GREAT AS CLAIMED BRITISH CIVIL RIGHTS COMMISSION SAYS WORKERS SHOULD NOT BE FORCED TO RETIRE MORE UNION MEMBERS IN PUBLIC THAN PRIVATE SECTOR FEBRUARY 2010 INCOME INEQUALITY SOARED OVER PAST 30 YEARS ANOTHER OBAMA CAMPAIGN PROMISE DOWN THE DRAIN  BILL AIMS TO CUT TECH FIRMS' BIAS AGAINST AMERICAN WORKERS OBAMA AND LABOR CHIEFS AGREE ON HUGE TAX FOR HAVING DECENT HEALTH INSURANCE WHAT OBAMA, THE REPUBLICANS AND THE NY TIMES WON'T TELL YOU ABOUT THE DEFICIT HOW TO DEAL WITH THE FORECLOSURE DISASTER  EVEN IF THE ECONOMY IMPROVES, MANY JOBS WON'T COME BACK TOUGH TIMES FOR ENGINEERS: OVER-REPRESENTED IN AL QAEDA; UNDERREPRESENTED IN SEX LONG TERM UNEMPLOYMENT HIGHEST SINCE 1948 JANUARY 2010 BRITISH AIRLINES TO CHARGE YOU TO SIT NEXT TO YOUR CHILDREN PAST DECADE HAD WORST ECONOMY IN MODERN TIMES BANK WHISTLEBLOWER GETS JAIL, BANK PRESIDENT GETS GOLF WITH OBAMA GEITHNER'S NY FEDERAL RESERVE BANK FIDDLED WITH AIG'S GOVERNMENT REPORT TO MAKE IT LOOK BETTER BANKERS DUCK RENEGOTIATING MORTGAGES OBAMA'S FORECLOSURE MODIFICATION PROGRAM A BIG BUST STOP BANKING WITH THE BAD GUYS FOR SIX MILLION AMERICANS, FOOD STAMPS ARE ONLY INCOME  SMALL BUSINESS STIMULUS SHORT CHANGES MINORITY FIRMS OBAMITES' SWEETHEART TAX DEAL WILL NET CITIGROUP BILLIONS THE CAUSES OF RISING INEQUALITY IN AMERICA  HOW TO MAKE AN EASY ONE BILLION DOLLARS FACING OUR HIDDEN WELFARE PROBLEM STUDY: NEARLY HALF OF ALL U.S. CHILDREN WILL USE FOOD STAMPS DECEMBER 2009 TOO BIG TO FAIL VS. TOO SMALL TO KNOW WHAT'S GOING ON BERNANKE SAYS SOCIAL SECURITY AND MEDICARE NOT MANDATORY ABOUT A QUARTER OF MODIFIED HOME LOANS STILL FALLING BEHIND NORTH AMERICA'S LARGEST INDUSTRIAL UNION AND WORLD'S LARGEST COOPERATIVE JOIN FORCES THE FIRST LABOR UNION IN PROFESSIONAL SPORTS HISTORY PENSIONS: THE NEXT CASUALTY OF WALL STREET BILLIONS FOR BANKS, BUT SMALL FUND FOR SMALL BUSINESSES RUNS OUT FOUR THINGS THAT WOULD TRULY HELP THE ECONOMY ONE IN FOUR HOME MORTGAGE HOLDERS UNDER WATER WHY HELPING LOWER INCOME PEOPLE HELPS REVIVE THE ECONOMY NOVEMBER 2009 RECOVERY ACT INTERFERES WITH STATE BUDGETING WHAT WOULD A ROUT OF THE DOLLAR LOOK LIKE? HUNGER IN AMERICA HITS NEW LEVELS ADMINISTRATION REPORTS STIMULUS BENEFITS IN NON-EXISTENT PLACES CELEBRITY MEDIA BUBBLE JOINS THE RECESSION TORN TARP: TAXPAYERS ABOUT TO LOSE $2.3 BILLION FROM FAILED BAILOUT BOSTON GLOBE FINDS MAJOR MISTAKES, MISSTEPS & MANIPULATION IN STIMULUS JOB COUNT GLEANINGS FROM THE STIMULUS PACKAGE: $9 MILLION FOR A BOSTON FOOTBRIDGE TEN YEARS AGO: CLINTON, SUMMERS, SCHUMER BLOW IT SEVEN QUESTIONS ABOUT THE FINANCIAL INDUSTRY THAT AREN'T BEING ASKED OBAMA'S PROGRAMS FOR WORKERS: ANOTHER STUDY IN NOTHINGNESS THE ECONOMIC MODEL MENTIONED BY NEITHER FOX NOR MSNBC BEN BERNANKE GOES TO COSTLY RESORTS TO PREACH LOWER FEDERAL DEFICITS JAMES GALBRAITH ON THE VIRTUES OF DEFICITS STUDY: YOU CAN'T TELL IF DERIVATIVES HAVE BEEN TAMPERED WITH CONGRESSIONAL WATCHDOG CRITICAL OF FORECLOSURE EFFORTS OCTOBER 2009 LOOKING UNDER THE TARP ISN'T PRETTY JOSEPH STIGLITZ: WE ARE NOT OUR GDP YOU'RE NOT UNEMPLOYED, YOU'RE JUST A LAGGING INDICATOR ANOTHER HUD SCANDAL: DEPARTMENT TURNED FORECLOSURE WORKOUTS OVER TO WALL STREET PREDATORS REPORT: BERNANKE & PAULSEN MISLED PUBLIC ON STATE OF BANKS LAGGING INDICATORS: 67 BODIES IN DETROIT MORGUE REMAIN UNCLAIMED SOTOMAYOR CHALLENGES MYTH THAT CORPORATIONS ARE PERSONS CREDIT CARD USURERS COME UP WITH NEW WAYS TO HIS CLIENTS SEPTEMBER 2009 INCOMES OF YOUNG IN 8-YEAR NOSE DIVE 27 PERCENT OF NEW YORK BLACKS UNEMPLOYED OR UNDEREMPLOYED BANKS CUTTING LENDING TO DANGEROUS LEVEL SAY SOME EXPERTS TOP EXECS CASH IN ON HUGE STOCK OPTIONS HOMEOWNERS FORCED INTO BEING LANDLORDS BARTERING SOARS IN BAD ECONOMY MIDDLE CLASS JOINING THE POOR ON FOOD STAMPS MADOFF AIDE EXPLAINS HOW IT WAS DONE WHY IS THE MEDIA DOWNPLAYING THE JOB CRISIS? AFL-CIO PUSHING STOCK TRANSFER TAX LOCAL HEROES: SOMEONE IN GOVERNMENT WHO ACTUALLY CARES ABOUT FORECLOSURES WHAT UNDERWEAR TELLS YOU ABOUT THE ECONOMY AUGUST 2009 FOUR BANKS NOW ISSUE ONE HALF OF ALL MORTGAGES & TWO-THIRDS OF ALL CREDIT CARDS SCIENTIFIC STUDY FIND JUST A FEW FUNDS, BANKS AND CORPORATIONS CONTROL FINANCIAL MARKETS OBAMA'S FORECLOSURE PROGRAM SUBSIDIZING SUBPRIME LENDERS OBAMA'S PLAN TO HELP HOMEOWNERS IS A BUST UNDERSTANDING THE UNEMPLOYMENT FIGURES BY 20011 NEARLY HALF OF U.S. HOMEOWNERS WILL OWE MORE THAN HOUSE IS WORTH UNEMPLOYMENT CHECKS RUNNING OUT FOR 1.5 MILLION AMERICANS HOW JOB LOSS AFFECTS YOUR LIFE EXPECTANCY BOOKSELF: INEQUALITY IS BAD EVEN FOR THOSE AT THE TOP AVOID SOCIALISM OR YOU COULD END UP LIKE NORWAY HIGH FREQUENCY TRADING: A NEW WALL STREET FRAUD REAL UNEMPLOYMENT HIGHEST SINCE DEPRESSION COMMERCIAL LOAN DELINQUENCIES UP 585% JULY 2009 7-11 GROWING DESPITE RECESSION BAILOUT WATCHDOG SAYS TREASURY REJECTS 'COMMON SENSE' 80% SAY WALL STREET - NOT TAXPAYERS - BENEFITED MOST FROM BAILOUT  WHAT CALIFORNIA COULD HAVE DONE WITH ITS IOUs OBAMITES FINALLY DISCOVER SMALL BUSINESS AN INSTRUCTIVE - IF DEPRESSING - COLLECTION OF CHARTS ON THE ECONOMY RECOVERED HISTORY: WHEN AMERICA TOOK ON THE BANKERS WHY BANKERS AREN'T WORTH WHAT THEY THINK THEY ARE NY STOCK EXCHANGE QUIETLY CHANGES RULES TO ALLOW BIG TRADES TO BE SECRET STATES HURTING BIG TIME: MAYBE THEY SHOULD CALL THEMSELVES BANKS BAD ADVICE AND THE FINANCIAL CRASH OBAMA'S FINANCIAL PLAN ISN'T CLOSE TO WHAT THE NEW DEAL DID HOW MUCH SHOULD THE FED BE FED? RENTERS' PLIGHT IGNORED BY CONGRESS 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 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 . . . HOW OFFSHORE TAX HAVENS HELPED CREATE THE CRISIS BAILED OUT BIG BANKS WERE FINANCIAL FORCE BEHIND SUBPRIME SCAM  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 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 WORKERS OF MIXED ETHNICITY PAID LESS THAN WHITES OR BLACKS THE LAW THEY JUST WANT TO FORGET ABOUT, NOT REPEAL 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 WHAT WE CAN LEARN FROM ITALY ABOUT ECONOMIC COOPERATION HOW THE GEITHNER TOXIC ASSET SCHEME IS ANOTHER BANK SCAM WHAT'S REALLY BEHIND THE AIG BAILOUT 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  TMZ FINDS $1.6 BILLION FOR THE GOVERNMENT THE MEDIA'S ROLE IN THE FISCAL CRISIS 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 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 THE CASE FOR NATIONALIZING BANKS BUSH'S APPROACH TO SOCIAL SECURITY PROVED A DISASTER. . .IN ITALY SAVING THE GLOBE VS. GROWING THE ECONOMY 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 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 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 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 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 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 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 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? 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 THE MYTH OF AMERICAN CAPITALISM WHY YOU CAN'T BLAME THE HOUSING CRISIS ON POOR HOMEOWNERS OBAMA FINALLY COMES UP WITH SOME IDEAS FOR THE CRISIS NINE WAYS A DEPRESSION WILL HELP NEW YORKERS 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
SEPTEMBER 2008 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  HUGE BONUSES PROMISED TO SOME LEHMAN STAFF, OTHERS LEFT WITHOUT PAY BUSH OFFERS GAMBLING INSURANCE
TO THE RICH 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 REAGAN GAVE BIRTH TO TODAY'S FISCAL CRISES 47% OF WORKERS UNABLE TO SAVE ANYTHING NEARLY ONE THIRD OF HOME OWNERS OWE MORE THAN HOUSE IS WORTH DEALING WITH THE ECONOMIC FREE FALL THE LIST: RECENT STORE CLOSINGS 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. 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 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
 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 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 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    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?' 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. BRINGING INEQUALITY TO PRE-DEPRESSION LEVELS  FROM THE ECONOMIST JULY 2007 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. 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 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. 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. 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
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 APRIL 2006 PSYCHOLOGISTS FOUND BETTER THAN ECONOMISTS AT STOCK PICKING 
MARCH 2006 KIDDING OURSELVES ABOUT POVERTY FEBRUARY 2006 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/ 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 JUNE 2005 . . . THE HIGH PRICE OF STOPPING BY STARBUCKS APRIL 2005 HY IT'S BETTER
TO BE POOR IN NORWAY OR CANADA THAN IN THE U.S. 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? [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! 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". |
