Just when the Democrats need to be tougher than ever on financial reform, Senate Banking Committee Chair Sen. Chris Dodd (D-CT), seems to have given up completely and put the proposed Consumer Financial Protection Agency (CFPA) at risk.

Last fall, Dodd called the Federal Reserve’s regulatory efforts an “abysmal failure.” And yet, on March 1, he proposed housing a consumer protection agency within the Fed instead of establishing the CFPA as its own independent entity. This drastic change in strategy has left many Democrats shaking their heads. WTF, Senator Dodd?

A change in focus

As Andy Kroll reports for Mother Jones:

“Dodd appears to have switched his focus from out-reforming the White House to out-compromising just about everyone. As the Senate banking committee prepares to release a draft of a comprehensive reform bill as early as this week, Dodd has repeatedly conceded to his Republican counterparts on key issues, almost guaranteeing that the Senate’s measure will be far more lenient on the banking industry than the legislation the House passed in December… Dodd’s willingness to appease Republicans like Sen. Bob Corker (R-Tenn.), the main GOP negotiating partner, and Sen. Richard Shelby (R-Ala.), the banking committee’s ranking member, has disappointed Dodd’s fellow Democrats and reform advocates who urge a tougher crackdown.”

Whither the CFPA?

Dodd’s latest GOP compromise is part of a bigger problem: The Democrats have mishandled financial reform. As Nomi Prins writes for AlterNet, “Dodd’s latest effort at creating a new Consumer Financial Protection Agency would render the regulator utterly powerless, but it’s not the only issue Democrats appear willing to sacrifice to Wall Street campaign contributions. Right now, just about every other major element of the so-called Wall Street overhaul seems headed for disaster.”

Although the establishment of the CFPA has been fiercely opposed by the banks and Republicans, it has widespread approval among progressives and the general public. So why has Dodd apparently abandoned it through compromise? Maybe because he’s following the lead of his fellow Democrats. Prins notes: “Since June, we’ve been waiting to see whether Democrats had the spine to make sure the final agency would actually do something, or quietly gut reform with a barrage of loopholes.”

There’s still time for Dodd to push real reform before he retires. Or, like Prin says, he could “continue to wimp out for Wall Street, pull a Robert Rubin and secure a cushy job in banking come 2011. The next few months will indicate whether Dodd cares more about his legacy than his wallet.”

Solis a ‘bright spot’

But maybe there is hope. Department of Labor Secretary Hilda Solis has made considerable progress, as Mark Engler emphasizes for Yes! magazine. Engler calls Obama’s Labor appointment a “bright spot” in the administration’s first year—a move “that illustrate[s] the difference that a progressive-minded administration can make when it stands up to corporate interests and is unafraid to act in the public good.”

Engler writes:

“Under the Bush administration’s Department of Labor, the crisis of wage theft was summarily ignored. In March 2009, the Government Accountability Office issued a report saying that the department’s Wage and Hour Division had for years ‘left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn.’ Secretary Solis made reversing this trend a defining initiative of her department. Even before the report had been released, she had commenced the hiring of 150 new field investigators to enforce wage and child labor laws, as well as 100 more to police government contractors working on stimulus programs.”

As Engler argues, officials would do well to follow the lead of Secretary Solis and demonstrate “what can be accomplished when regulators are encouraged to actually do their jobs—to fight for the interests of workers, for example—vigorously and creatively.”

Buffet on banking

Finally, GRITtv’s Laura Flanders reviews Warren Buffet’s annual letter to shareholders, in which Buffet warns his clients that their financial advisers’ advice is skewed by the financial system. As Flanders notes:

“Ironically, just as Buffett’s letter was being published, the man it’ll take to make any agency happen — Christopher Dodd — is agreeing to defang the agency, strip it of independence and most prosecution power.” Watch the video below.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Through inaction and timid legislative negotiations, Congress just keeps letting the U.S. sink deeper and deeper into the economic abyss. Last week, Congress denied relief to the jobless and is currently poised to undercut a proposal that would rein in predatory lending. With unemployment out of control and banks pillaging citizens’ pocketbooks at every turn, the economy is in dire need of serious financial reform and a major jobs package.

More than one million have lost unemployment benefits

As James Ridgeway emphasizes for Mother Jones, over a million people receiving unemployment benefits ran out of financial rope on March 1 thanks to Sen. Jim Bunning’s (R-KY) self-righteousness. As a result of bizarre Senate procedural rules, Bunning’s sole “no” vote was enough to stop a bill that would have extended unemployment benefits for those who are out of work. Of course, Bunning had plenty of moral support from his fellow Republicans. Ridgeway highlights a Think Progress post on Rep. Dean Heller’s (R-NV) preposterous argument that it is time for the government to cut off unemployment benefits, since there are so many bums.

“What makes Heller’s statement really stupid, of course, is that people could become hobos if Congress doesn’t extend unemployment benefits, rather than if they do,” Ridgeway writes. “Modest as they are, these weekly benefits are what’s keeping thousands—and perhaps millions—of families out of poverty.”

As Brian Beutler notes for Talking Points Memo, Bunning’s economic insanity also triggered a 21% cut in the fees doctors receive for treating Medicare patients. That’s a big “Screw you!” to seniors.

What happens when unemployment benefits dry up?

The degree of personal crisis attached to unemployment is also important. We’re talking about access to basic necessities. As Roger Bybee notes for Working In These Times, when a family runs out of unemployment benefits, the result is an absolute personal catastrophe in which there is simply no money left to buy food, pay rent, or meet electricity bills.

Yet when a major financial institution finds itself on the verge of collapse, the government is quick to come to the rescue. In addition to the one million people ran out of benefits on March 1, four million more are slated to run out by June—that’s roughly the combined populations of Los Angeles and Dallas. This is a tremendous national crisis. Here’s Bybee:

“There is plenty of bipartisan compassion in Congress when it comes to bailing out the wealthy and their banks. But when it comes to spending federal money to bail out folks … with unemployment compensation and a major jobs program, a bi-partisan consensus forms among conservatives in both parties eager to show ‘fiscal discipline.’”

As Nobel laureate economist Joseph Stiglitz emphasizes in an interview at AlterNet, the jobs crisis is so severe that the government needs to go much further than simply extending existing unemployment benefits. At minimum, it also needs to send a major package of fiscal aid to states on the order of $200 billion to allow states to hire teachers and cops, as well as prevent further layoffs.

Making the jobs bill accessible to all

While a new jobs bill is critical, it’s important to make sure everyone has access to its efforts, as Aaron Glantz explains for The Progressive. The economic stimulus bill that President Barack Obama signed into law last year has helped keep the economy from falling off a cliff, but it’s overwhelmingly neglected communities of color. The unemployment rate for blacks is 16.5%, nearly the double the 8.7% rate for whites, while Latinos face an unemployment rate 50% higher than whites. Not all of that disparity can be blamed on the stimulus, but the federal contracts awarded for new jobs projects overwhelmingly went to white-owned firms. We have to make sure that the funds Congress dedicates to unemployment relief are distributed fairly.

Save the Consumer Financial Protection Agency

After watching the government hurl trillions of dollars at faltering banks, it’s obvious that major financial reform is urgently needed. And one of the most important aspects of that reform is a new regulatory agency that defends consumers, not just bank balance sheets. As Tim Fernholz argues for The American Prospect:

“Shoring up our financial system to avoid new disasters remains popular with the public but only if it represents real reform. …That means closing loopholes and making clear that this bill has what it takes to protect average citizens as well as restricting banks’ bad behavior.”

And yet astoundingly, Sen. Chris Dodd (D-CT), the current Democratic leader of financial reform negotiations in the Senate, appears ready to drop Obama’s proposal to create an independent Consumer Financial Protection Agency (CFPA).

Instead, Dodd would house the regulator under the Treasury Department, and give the existing, failed bank regulators effective veto power over the CFPA’s moves. It’s a head-fake: We create a new regulator, but are instead giving that power to the same failed agencies who allowed the banks to pillage our pocketbooks, our retirement savings and our home values.

Failed negotiations with the GOP

This is supposedly all part of a set of negotiations with Republicans, but they aren’t really negotiating in any clear sense. Negotiating means going through some process of give-and-take. Right now, Republicans are just seeing how far Democrats will bend, and so far, there has been no limit. Ferhnolz is right. Voting for the banks and against taxpayers and consumers will be a very bitter pill for Republicans to swallow. Dodd and the Democrats need to make them do it instead of caving to pressure and allowing Republicans to vote for a weak bill that doesn’t protect the public from banker excess. Make the Republicans vote for real reform, or face the consequences at the polls for voting against it.

The public shame that is currently being heaped upon Bunning should prove that point. The American public wants jobs and financial reform. They want to go back to work and make sure that the bankers who tanked the economy can’t keep getting rich by hijacking their savings. Woe unto the politician who opposes that.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Over the past thirty years, Wall Street has waged a steady war against governments around the globe, convincing policymakers of various ideological stripes that whatever raises profits for bankers and traders will be good for the rest of society. It’s a very simple and appealing portrait of how the world works. Unfortunately, it’s completely wrong.

Profiting from hunger

In an interview with AlterNet’s Terrence McNally, economic luminary Raj Patel explains the connection between widespread global poverty and wild Wall Street profits. Markets are defined by a set of rules—if those rules completely disregard social welfare, then the participants in those markets will ignore them as well. When traders can make a quick buck speculating on the price of rice, they will, even if that speculation drives up the price of a basic necessity and makes people go hungry.

We’ve known this for a long time, but as Patel illustrates, governments have allowed financial bigwigs to rewrite the basic rules of the road so that Wall Street can extract profits from anything—even hunger. That process created several crises in the developing world over the past few decades, and has now ravaged the economies of the United States and Europe. As Patel notes:

By basically gaming the system with regulations — that they authored — which encouraged a certain kind of playing fast and loose with the numbers, it was possible through some creative accounting for huge amounts of systematic risk to be kicked off into the future and ignored. And of course when the catastrophic risk was realized, everyone ran for the hills and started demanding public support.

Financial turmoil in Greece

This political sleight-of-hand is demonstrated by the looming fiscal crisis in Greece. As Richard Parker explains for The Nation, Goldman Sachs colluded with prior Greek administrations to hide the nation’s fiscal situation from both its own citizens and investors (Parker is an adviser to current Greek Prime Minister George Papandreou). Goldman was not interested in fair play—it was interested in making money off of the Greek government in any way it could. If that meant actively sabotaging the market by hiding important information, well, Goldman didn’t care.

First Greece, then …

Now that this budget façade has been stripped away, Goldman and other investors are now profiting from making things very difficult for Greece.  As Matthew Yglesias explains for The American Prospect, the rational, profit-maximizing choices of investors are now actively helping to drive Greece into a default that hurts everyone:

When Greece starts looking shaky, the interest rate it needs to pay on its deficit goes up, which makes the country look even shakier. This cycle can push a vulnerable country into a default situation.

Various Greek administrations clearly bear significant responsibility for the situation. Nobody forced them to get in bed with Goldman Sachs, just as nobody forced U.S. administrations to gut our financial regulatory system. But the problem in Greece is not just a problem for a single Mediterranean nation—there is very real risk that the investor “unease” could spread to Portugal, Ireland, Spain, Italy, and by extension the European Union and the global economy. The bonuses at Goldman Sachs and J.P. Morgan Chase this year were not a sign of renewed strength in the global economy.

Community Security Clubs to the rescue

So if Wall Street can’t save us, what can? Our communities could play a significant role, as Andrée Collier Zaleska explains for Yes! Magazine. Zaleska profiles Common Security Clubs in Portland, Boston and Fort Lauderdale to show how people hit hard by the economic downturn are banding together to make ends meet, and organizing for political action.

“[Jared] Gardner, a busy organizer in Portland, launched four CSCs in his church, two of which were comprised almost entirely of unemployed people. By the time his own group had met five times, they were planning tours of local co-housing projects, organizing to fight locally for progressive taxation, and wondering how to bring the rest of their church into the time bank they had created.”

Markets are supposed to serve human needs, not the other way around. But Wall Street isn’t going to give up its stranglehold on the U.S. political process for nothing. While community-driven efforts are a good start, we need much larger actions and reform to restore balance to the global economy.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

One year after President Barack Obama secured passage of his critical economic stimulus package, the U.S. Senate is finally taking anther look at how to create jobs and repair the economy. These issues are more important than ever, but absurd Republican obstructionism and timid Democratic negotiation are once again threatening good public policy.

Not really bipartisan, is it?

As Steve Benen notes for The Washington Monthly, the Senate Finance Committee reached a “bipartisan” agreement to supposedly spur job creation last week. Republicans demanded billions in tax cuts for wealthy people, but kept on caterwauling about the federal budget deficit. In exchange for $80 billion to dedicate to jobs—an extremely modest figure given the state of the labor market—Republicans asked for hundreds of billions in giveaways for the rich. And that’s just to get the bill through the Finance Committee, much less the full Senate.

In a piece for Working In These Times, Michelle Chen notes that Senate Majority Leader Harry Reid pulled the plug on the Finance Committee “compromise,” but stripped out a critical extension of unemployment benefits for laid-off workers in the process.

The Republican uproar over such modest job figures is an economically preposterous political ploy, and Democratic cave-ins to their demands are both bad politics and bad economics. Chen notes that 70% of Americans support a $100 billion jobs bill. And we know what kinds of programs help spur employment—many of them were passed in the stimulus bill last year and have saved millions of jobs.

Stopping the Bleeding

In an interview with Christopher Hayes of The Nation, Economic Policy Institute Fellow Josh Bivens explains that Obama’s economic stimulus package has worked well, effectively stopping the job hemorrhaging that the economy was experiencing immediately before Obama took office. Here’s Bivens:

“We haven’t returned to growth on employment … but the rate of contraction has slowed radically. Immediately before the Recovery Act is passed, we’re losing on the order of 700,000 jobs per month … In the past three months, we’re now down to something like between 50 and 75,000 jobs lost per month, on average … it really is a stark before and after.”

Racial inequality and the recession

The trouble is, the stimulus was only big enough to prevent the economy from getting much worse. It was not large enough to return the economy to serious job growth. And the brutal effects of the recession are not being shouldered equally. As LinkTV’s collaboration with ColorLines illustrates (video below), the Great Recession is hitting people of color much harder, but the story of racial inequality is being lost in stories about statistical economic recovery in the financial sector. The special profiles several families of color struggling to make ends meet in the worst recession since the Great Depression, which features Depression-era unemployment rates for African Americans.

“What we don’t see on TV are the [people] who never had a home or a good job to lose in the first place. These are the millions of poor people whose chance to cross the line into middle class has always been cut short by another kind of line, the color line,” says host Chris Rabb, founder of Afro-Netizen.

Rabb, ColorLines and LinkTV describe a social safety net that has been shredded by opportunistic politicians. Instead of focusing on ways to guarantee good jobs, politicians since the Reagan era have demonized black single mothers by exploiting racist stereotypes in an effort to justify slashing federal supports for the poor and unemployed. The result is a fundamentally unstable economy. Our society has weak demand for goods and services in good times, and that demand completely falls apart when economic conditions deteriorate. And while these socially destructive initiatives have been described as “pro-business,” the truth is, businesses don’t like societies where millions of people are impoverished. They don’t have any customers.

Predatory lending strikes again

The recession hasn’t exactly been a picnic for the middle class, either. In an article for Mother Jones, Andy Kroll profiles the mortgage mess that Ocwen Loan Servicing created for borrower Deanna Walters. Unlike millions of other borrowers dealing with mortgage headaches, Walters wasn’t actually behind on her payments. She was making payments regularly, but Ocwen was misplacing them, and charging her thousands of dollars in improper fees. Walters even paid the fees, but Ocwen eventually foreclosed on her home and sold it in an auction without even informing Walters.

As Kroll emphasizes, Ocwen’s antics aren’t unique. There is an entire class of companies known as mortgage servicers that specialize in deceiving and bullying borrowers out of their money. They often use illegal tactics, and as I note for AlterNet, have been systematically exploiting a badly designed foreclosure relief program from the U.S. Treasury Department.

Funding projects that will put people to work

As prominent economist Dean Baker argues for The American Prospect, there are dozens of productive programs that would put millions of people back to work—if they could just get the funding. The government could quickly and easily provide money to improve public transportation, develop open-source software, fund objective clinical drug trials and (my favorite) support writers and artists, whose work would subsequently be available for the public to enjoy for free.

Taxing financial speculation

The federal government can afford these programs right now, especially without any additional tax revenue. But if we’re really worried about the budget deficit, we can always turn to reasonable new sources for taxes. As Sarah Anderson details for Yes!, an obvious place to look is financial speculation. Since excessive and risky trading helped bring down the economy in 2008, a tax discouraging this behavior could make the economy stronger and reap as much as $175 billion a year for the public.

Our economy wouldn’t face troubles of the same order as those it must overcome today if so-called conservatives had not spend decades pursuing a radical agenda to shred the social safety net. The stimulus package has not spurred job growth to date because of cuts demanded by Congressional Republicans, nearly all of whom refused to vote for the bill anyway. Our economy needs a jobs bill now. It’d be nice if Republicans would show some interest in governing, but if they continue to refuse, Democrats must act on their own.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

On Feb. 1, President Barack Obama unveiled his 2011 budget proposal. While conservative pundits reacted with predictable, yet preposterous, wailing about the federal budget deficit, the short-term U.S. budget outlook is just fine. If anything, Obama’s budget doesn’t dedicate nearly enough funding to create jobs.

As John Nichols notes for The Nation, Obama budgets just $100 billion for jobs in fiscal 2011. The amount is nowhere near enough to make a significant dent in the epic unemployment rate. The government’s fiscal 2011 calendar begins in October of this year, and by that time, the stimulus package Obama pushed through in February of 2009 will have been exhausted, leaving the labor market without serious support from the federal government.

The free market isn’t going to take care of the jobs shortage on its own. While the unemployment rate fell from 10.0% to 9.7% during January, the “improvement” is really just a statistical mirage—the economy actually lost 20,000 jobs during the month.

If we had pushed through a bigger, or as Nichols notes, a better stimulus package in the first place, we might not be facing the same situation today. Part of the problem is that Obama redirected about $326 billion of the $787 billion bill away from direct job-creation efforts toward a set of tax cuts intended to appease Republican senators.

Tax cuts do not equal job growth

But as Art Levine emphasizes for Working In These Times, the $100 billion that Obama sets aside for job creation in 2011 appears once again to take the form of relatively inefficient tax cuts. Giving money to businesses, even small businesses, isn’t really going to make them start hiring unless there’s a real demand for what those businesses produce. When everybody is broke and out of work, that demand doesn’t exist, since people don’t have money to spend.

If the government wants to create jobs, it has to do it directly by hiring people to help rebuild the nation’s infrastructure through institutions such as schools, transportation and green energy. Just as important, the federal government can provide funding to state and local governments to make sure that jobs that serve our communities—teachers, cops, etc.—don’t disappear.

Sure, these things cost money. But the short-term budget deficit is nowhere near the current deficits of many European nations, or the deficits the U.S. ran during World War II. The budget deficit only matters to economics insofar as it raises concerns that the government will not be able to pay back its debt. But despite caterwauling from the right, investors just aren’t worried about a U.S. debt default. If they were, they would demand very high interest rates on Treasury bonds, and Treasury rates are at their lowest levels in decades.

If policymakers want to keep the jobs bill from running the deficit higher, they could always raise taxes on somebody. Financial speculation on Wall Street seems like a good place to start, but just about any tax on the wealthy would work fine. Rich people don’t get hammered by recessions. After all, they’re rich.

Overzealous tax cuts hurt communities

In a piece for AlterNet, David Sirota details the budgetary disaster that has already befallen the city of Colorado Springs, CO., a conservative enclave where anti-tax extremists have managed to slash just about every basic government service imaginable. Rather than impose some modest taxes on the wealthy, Colorado Springs is going to lay off cops and firefighters, let its parks go to waste, shut-down rec centers and museums and even allow its streetlights to go out. This is the Republican plan for fiscal responsibility.

But several state governments recognize that shredding the social fabric just isn’t a good idea. In Oregon, Sirota notes, voters just approved two ballot initiatives to raise taxes on corporations and wealthy individuals rather than allow their state to slide into social decay.

How to deal with a deficit

There are two ways to increase a budget deficit: You can either increase spending, or cut taxes. If you want to decrease the budget deficit, you can either cut spending, or raise taxes. As Kevin Drum notes for Mother Jones, Republicans both increased spending and cut taxes during the George W. Bush presidency. Now those same so-called fiscal conservatives are feigning outrage over the prospect of the government actually spending some money to put people back to work. These are not serious economic arguments—conservative politicians are just hoping to gut progressive policy priorities.

But while the attacks don’t hold any water, conservative media outlets are latching on to them, and Obama isn’t pushing back.

What caused the current crisis

Writing for The American Prospect, Robert Kuttner notes Obama’s recent support for a proposal from right-wing deficit hawks to create a commission to evaluate the causes of our so-called fiscal crisis. But we already know what put us in the current fiscal situation: Rising health care costs, a brutal recession, and the Bush era. The commission is being pushed by radical conservatives for a reason—it’s part of an effort to gut Social Security. It’s bad economics, bad public policy and it badly misreads the real source of public discontent. Kuttner explains:

“Public concern about deficits is really a proxy for broader unease that government is not delivering enough practical help . . . . The president should be helping citizens sort this out, not caving in to the fear-mongers.”

Fortunately, as Steve Benen notes for The Washington Monthly, Senate leaders appear committed to passing at least some kind of legislation to help put people back to work.

Whatever right-wing pundits say, the U.S. fiscal crisis remains a totally theoretical problem. Someday, if the U.S. budget does not come down, it is conceivable that investors would be reluctant to purchase U.S. debt. For now, that is simply not the case. But the crisis in the job market is very real and requires direct action. Put simply, the deficit is no excuse for inaction.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

In a landmark decision last week, the Supreme Court ruled that corporations could spend unlimited funds to influence American elections, overturning a century of legal precedent. The Court’s ruling in Citizens United v. FEC undermines the integrity of the U.S. government, as President Barack Obama emphasized at his State of the Union address. But the decision also deals a damaging blow to the U.S. economy by encouraging lawmakers to write economic rules that benefit specific companies at the expense of everyone else.

The editors of The Nation lay out the High Court’s hubris in no uncertain terms:

The Citizens United campaign finance decision by Chief Justice John Roberts and a Supreme Court majority of conservative judicial activists is a dramatic assault on American democracy, overturning more than a century of precedent in order to give corporations the ultimate authority over elections and governing. This decision tips the balance against active citizenship and the rule of law by making it possible for the nation’s most powerful economic interests to manipulate not just individual politicians and electoral contests but political discourse itself.

Citizens United and the financial crisis

How does this ruling have any bearing on the economy? Markets are not simply the product of random interactions between consumers and producers. Even under the most radical, laissez-faire economic theories, markets are defined, coordinated and policed by the government. For the economy to function at all, we need the government to define what constitutes fair play.

But over the past few decades, we’ve watched Congress and the executive branch rewrite those rules of the game under heavy corporate influence, creating artificial profits for a set of favored companies with very bad consequences for the broader economy.

The U.S. banking industry serves as a prime example. Since the 1980s, banks have been spending like crazy in all kinds of elections, and getting just about anything they want in return. I interviewed Harvard University Law Professor and TARP Oversight Panel Chair Elizabeth Warren for AlterNet, and she presented a concise but unsettling economic history of consumer protection law:

Thirty years ago we had laws that put some basic fairness into the consumer credit market. Over time, the large financial institutions captured the regulators who were supposed to be the cops on the beat to enforce those laws. They also pumped hundreds of millions of dollars into Washington to make sure that no new cops were put on the beat. Without good laws, the industry started selling ever-more-deceptive products, and their friendly regulators looked the other way.

The bank lobby and the AIG bailout

In Mother Jones, Corbin Hiar reveals how even a bank that engineered a massive tax fraud scheme was able to benefit from the AIG bailout. Major financial institutions convinced Congress to block any regulation of credit default swaps (CDS) all the way back in 2000. CDS contracts were essentially insurance on the value of financial assets—if the assets lost value, banks would still get paid as if they were highly profitable.

CDS insurance encouraged banks to engage in risky mortgage lending, and allowed them to book huge profits on those risky mortgages during the housing boom, even though many of those mortgages were doomed from the get-go. AIG binged so heavily on CDS that the company was on the brink of bankruptcy in the fall of 2008. But an AIG bankruptcy would have hammered the major banks who served as AIG’s betting partners, most notably Goldman Sachs. Those banks would have received just pennies on the dollar from a bankrupt AIG. But under the bailout, the New York Federal Reserve paid the banks off at full value, without demanding any concessions whatsoever.

“The credit crunch was an existential threat to every over-leveraged big bank. What’s most shocking about the AIG bailout … is that these endangered banks were able to extract such a sweet deal from the government,” Hiar writes. “The banks were paid the full value of all the CDS contracts they had made with AIG—including those mortgage-backed securities they had bought when it was clear the subprime market was collapsing.”

The only AIG counterparty to even consider taking CDS losses was Swiss banking giant UBS, which was negotiating a separate settlement with the U.S. government over a massive tax evasion scheme. But even the tax fraudsters at UBS ultimately received full payment on their CDS exposure, and it now appears that the Swiss bank will be able to protect its wealthy tax-evading clients.

With the AIG bailout, the corporate takeover came full-circle. The banks purchased radical deregulation in Congress, and when the deregulated banks destroyed themselves, the government paid out billions to save them. The rest of the economy was ravaged by predatory lending, and taxpayers, not bankers, footed the bill for bank losses.

Redefining corruption

So the Citizens United decision will not introduce corporate influence in elections. Instead, it takes an uneven playing field and tilts it further in the favor of corporate executives. The Roberts court didn’t just open the floodgates for corporate cash in U.S. elections and call it a day. It also explicitly redefined “corruption” to give corporations—and anyone else—greater leeway to financially curry favor with politicians. Heather K. Gerken details the new definition for The American Prospect:

The most important line in the decision … was this one: “ingratiation and access … are not corruption.” For many years, the Court had gradually expanded the corruption rationale to extend beyond quid pro quo corruption (donor dollars for legislative votes). It had licensed Congress to regulate even when the threat was simply that large donors had better access to politicians or that politicians had become “too compliant with the[ir] wishes.” Indeed, at times the Court went so far as to say that even the mere appearance of “undue influence” or the public’s “cynical assumption that large donors call the tune” was enough to justify regulation. “Ingratiation and access,” in other words, were corruption as far as the Court was concerned.

Most of us would consider the key lawmakers ensnared in the Jack Abramoff scandal as fundamentally corrupt—Abramoff flew former Republican Whip Tom DeLay of Texas to Scotland for golfing vacations in an effort to win greater leverage over DeLay’s legislative agenda. The court’s ruling claims that this kind of activity is not corrupt, and bars Congress from passing any laws to counteract it. As filmmaker Alex Gibney emphasizes in an interview with Amy Goodman of Democracy Now!, the court has essentially taken Tom DeLay’s corporatist philosophy and made it a piece of constitutional law.

“Tom DeLay’s view is, we spend more money on potato chips than we do on political campaigns. His view would be, let the money rush down like great waters,,” Gibney says. “I think the court was channeling Tom DeLay when they issued their recent decision.”

Why citizens need to speak out now

So what can we do about this? As GRITtv’s Laura Flanders discusses in a roundtable discussion with several progressive leaders, there will be a long fight for a Constitutional Amendment to ban corporate influence in politics. Until then, as progressive strategist Mike Lux explains, citizens will have to take an aggressive stance against Corporate America as shareholders. Corporate power is exercised by a handful of executives, but the resources that support that power come from ordinary Americans who own stock in those companies, primarily through retirement plans. By demanding that the giant firms we own do not highjack our democracy with lobbying, we can limit some of the damage from the court’s recent decision.

If you liked the bank bailouts, then there’s plenty for you to love about the Citizens United decision. If you didn’t, then it’s time to speak up.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Progressives have waited a year for President Barack Obama to roll up his sleeves and fight for serious financial reform. Last week, he finally jumped in the ring, telling weak-kneed Senators to stand up to Wall Street and endorsing a critical ban on risky securities trading.

But while it was good to see Obama start throwing financial punches against the banks, this week he also started throwing them at workers. His recent rhetoric on implementing a spending freeze to reduce the deficit is an economic catastrophe in the making. It indicates that Obama is willing to sacrifice jobs to try and win over Republicans.

A spending freeze would kill jobs

A three-year spending freeze is crazy talk. It’s a right-wing ideologue’s dream that accomplishes nothing and drives millions of people out of work. John McCain campaigned on it during his 2008 presidential run. Our long-term deficit problems are tied to the rising cost of health care. If you want to fix the deficit, fix health care. In the short-term, there is no deficit problem. In fact, the U.S. fiscal position looks very good compared to many European nations.

As Matthew Rothschild notes for The Progressive, a spending freeze would kill any legislation to create jobs. With unemployment at 10%, the economy desperately needs another round of government spending to put people back to work. While the abrupt policy reversal is clearly a political ploy, voters care much more about results than they care about ideology. If Obama actively sabotages the job market to win over conservative deficit-hawks, he’ll be putting his political future in serious jeopardy.

And yet, as Steve Benen notes for The Washington Monthly, Obama’s recent, ramped-up rhetoric against banks still marks a significant change in tone. For most of the year, Obama hasn’t been involved in the financial reform debate at all, letting Treasury Secretary Timothy Geithner capitulate to Wall Street and the politicians it owns. Benen highlights the end of Obama’s speech announcing his new banking rules on Jan. 21. Obama says:

So if these folks want a fight, it’s a fight I’m ready to have. And my resolve is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see soaring profits and obscene bonuses at some of the very firms claiming that they can’t lend more to small business, they can’t keep credit card rates low, they can’t pay a fee to refund taxpayers for the bailout without passing on the cost to shareholders or customers — that’s the claims they’re making. It’s exactly this kind of irresponsibility that makes clear reform is necessary.

Saving the CFPA

Katrina vanden Huevel lays out Obama’s new financial reform agenda in a column for The Nation, praising a new $117 billion tax on the nation’s largest banks, a plan to cap overall bank size, and a proposal to ban high-risk trading by economically essential commercial banks (more on that later).

But vanden Huevel also rightfully denounces recent indications that Senate Banking Committee Chairman Chris Dodd (D-CT) may cave to lobbyist pressure and drop the measure to create a new Consumer Financial Protection Agency (CFPA) from the Senate’s financial reform bill.

The death of the CFPA would be a devastating blow to reform. Existing bank regulatory agencies see their primary job as protecting bank profits, meaning that any time the interests of the U.S. consumer conflict with those of bank balance sheets, the regulators have shafted consumers. Current federal banking regulators not only failed to enforce consumer protection laws, they went so far as to join the bank lobby in suing state regulators who were trying to protect households from predatory lending.

Fortunately, Obama isn’t taking Dodd’s bank lobby-induced cowardice sitting down. At Talking Points Memo, Rachel Slajda highlights a New York Times report that claims Obama met with Dodd and told him that the CFPA is a “non-negotiable.”

Commercial banks are important

There’s a lot to like in Obama’s plan to bar commercial banks from participating in risky securities trading. As I emphasize in a piece for AlterNet, commercial banks form the backbone of the U.S. economy. They’re the institutions that accept your paychecks as deposits and keep businesses moving with loans. They also form the core of the economy’s payments system. Without commercial banks, nobody can pay anybody else for goods and services—the economy literally shuts down.

Nevertheless, in the late 1990s, regulators and lawmakers tore down the walls between commercial banking and riskier, complex securities trading, allowing these critical economic utilities to gamble in the capital markets like high-flying hedge funds. That kind of behavior puts the entire economy in jeopardy, and Obama’s proposal to end such behavior is very urgently needed.

But, as vanden Huevel and I both note, Obama’s cap on bank size is a little too timid. Obama indicated that he wants to prevent big banks from getting bigger going forward. That misses the point.

Bustin’ up “too big to fail”

Financial giants like Citigroup and Bank of America are already much too big and pose an economic threat. That’s why we refer to them as “too big to fail,” and why the government had to devote over $17 trillion to saving them. Obama must cap bank size and break up our behemoth banks into companies that are small enough to fail without wreaking havoc on the economy. A good rule of thumb: 1% of gross domestic product.

Shouting down the bank lobbyists

In Mother Jones, David Corn emphasizes that Obama’s credentials as a serious reformer depend more on his policy maneuvering than on his rhetoric. While it has been extremely promising see Obama finally demanding something serious from the financial giants that taxpayers saved, he’ll have to shout down the bank lobbyists to secure meaningful economic—or political—gains. Corn writes:

If Obama aims to be widely regarded as a warrior for the middle class, he will have to take some mighty swings that cut through the clutter. Proclaiming ‘I am a fighter’ will not be enough. He will have to name his foes (financial institutions, insurance companies, Republicans, and perhaps recalcitrant Democrats) and truly exchange blows.

Obama’s stance on the CFPA alone should be enough to get the lobbyists into a lather, but he’ll have to keep up the fight on multiple fronts if he wants to protect our economy from the Wall Street recklessness that spurred millions of foreclosures and sent the unemployment rate soaring into double digits.

Last week, Obama finally told us he was willing to fight for economic change. Now it looks like he’s going to attack anyone who is looking for a job. Let’s hope he turns it around before it’s too late.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Rampant poverty can’t be written off as the result of historical accident or a worker’s incompetence. It is actively cultivated by bad public policies that direct economic resources into the hands of a wealthy few. The resulting inequality creates unnecessary suffering all over the world, from the humanitarian crisis in Haiti to the alarmingly high poverty rate in the United States.

Systemic poverty in Haiti

The tragedy in Haiti is not only the result of a massive earthquake. As Richard Kim explains for The Nation, Haiti has long been one of the world’s poorest nations, and that poverty has prevented the country from protecting itself against natural disasters. As Kim explains:

Haiti’s vulnerability to natural disasters, its food shortages, poverty, deforestation and lack of infrastructure, are not accidental. To say that it is the poorest nation in the Western hemisphere is to miss the point; Haiti was made poor—by France, the United States, Great Britain, other Western powers and by the IMF and the World Bank.

Kim details Haiti’s struggles under the weight of colonialist debt that dates back to 1804, the year it won its independence from France. Soon after the revolution, the U.S. and France threatened a trade embargo against Haiti unless the nation of former slaves agreed to pay reparations to its former slave-masters in France. Haiti paid off this extortion with loans from U.S. and European banks. The country was still paying those loans back in the 1940s.

In 2003, Haitian President Jean-Bertrand Aristide demanded that France repay Haiti $21 billion of these unjust payments. He was ousted by a military coup for his efforts. Even today, the emergency IMF loans that are ostensibly helping Haiti cope with the disaster are crippled by insane stipulations, such as raising electricity prices for Haiti’s poorest citizens.

One-eighth of U.S. population receiving food stamps

The U.S. has been waging a quiet war against its own poor for decades as well. In a blog for Working In These Times, Akito Yoshikane highlights today’s record level of poverty: One in four U.S. children are living on food stamps, while one-eighth of the entire nation is receiving them. That’s over 38 million people, or more than four times the population of New York City. A poverty epidemic on this scale is a total affront to any concept of economic justice, liberal or conservative.

MLK and economic justice

Just economic policy was a critical concern for Dr. Martin Luther King, Jr. But today’s 13.2% U.S. poverty rate is actually higher than when King spoke out against it in 1968, as Rich Benjamin notes for AlterNet. The economic oppression of minorities continues to this day. While the overall U.S. unemployment rate is 10%, among black workers, the rate is an astonishing 16.2%, while Latino and Latina workers face 12.9% unemployment.

10% unemployment vs. multi-million dollar bonuses

It’s impossible to tolerate 10% unemployment in any economy. But those high rates are especially cruel considering the multi-million-dollar bonuses being paid to bankers who were bailed out with U.S. citizens’ tax dollars. Nomi Prins‘ fantastic interactive chart at Mother Jones reveals both the obscene executive pay levels and staggering federal bailouts that banks subsequently used to boost profits and banker pay.

Top bank executives scored regal paydays for nearly destroying the economy, and some of them even helped pervert the government into an enabler of banking excess. Need an example? Prins highlights Robert Rubin, who pushed through a host of radical deregulatory laws as Treasury Secretary in the 1990s, then left to take a job at Citigroup, where he reaped over $120 million before his company needed a massive bailout. There’s no reason for policymakers to accept a 13.2% poverty rate while subsidizing paychecks for wealthy bankers.

What can be done?

The Financial Crisis Inquiry Commission, a panel convened to uncover the causes of the financial crisis, could play a key role in overturning the injustices embedded within the U.S. financial system. As Ruth Coniff notes for The Progressive, it’s not simply that the bailouts saved the banks. It’s that the banks are piggybacking on taxpayer-granted perks to score record profits.

Economic arguments are routinely deployed to excuse outrageous social injustices—the most common argument for the U.S. bank bailout claims that things would have been much worse for everyone if we hadn’t thrown billions at the banks. There are grains of truth in the argument. If all of the banks had actually failed, the result would have been economic mayhem. But that bailout money should have come with major strings attached. There is no reason why bank CEOs, rather than taxpayers, should be reaping the rewards from profits that taxpayer funds generated.

In both global and domestic politics, severe inequality is often accepted as an economic fact, not a problem that must be solved. But the moral outrage prompted by the disaster in Haiti and the U.S. financial bailout is both real and justified. If we want to live in a just society, we cannot continue to subsidize the rich by exploiting the poor.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

The AIG bailout is one of the largest redistributions of wealth from ordinary taxpayers to bigwig bankers in history, one in which current Treasury Secretary Timothy Geithner played a key role. Newly uncovered emails reveal that Treasury Secretary Timothy Geithner’s New York Federal Reserve office urged AIG to conceal key information about the bailout from the Securities and Exchange Commission.

If Geithner was involved in those decisions, he could face charges of securities fraud. As John Nichols explains for The Nation, the quality of Geithner’s judgment is no longer in question—we already knew he committed plenty of errors while negotiating the AIG bailout as president of the New York Federal Reserve. The question now is whether Geithner needs to be prosecuted for misleading federal regulators.

AIG bet on the housing market with credit default swaps, a new form of financial derivative that helped the company score big profits during the housing boom. But when the market tanked, the company couldn’t cover its losses. AIG’s housing market gambles were completed with help from some of the largest banks in the world, including Goldman Sachs, Merrill Lynch, Bank of America, and Citigroup. If AIG had filed for bankruptcy in September of that year, those banks would have been required to accept much lower payouts on those bets—as little as 10% of their face value.

Instead, when the government swooped in to save AIG, the banks ended up with amazing deals. As a chief negotiator in the AIG bailout, Geithner allowed Goldman and others to receive full payout at 100 cents on the dollar. That meant U.S. tax dollars were going to the banks with no strings attached. But Geithner refused to tell the public which banks were benefiting from the bailout for almost six months. He finally relented when the AIG bonus outrage boiled over in March.

Last week, we learned the most damaging development yet: Geithner’s New York Fed urged AIG to keep the SEC in the dark about its sweetheart deals for the banks. Withholding key information from the SEC can be a criminal offense, and if Geithner was involved in the push to mislead the SEC, he must be held accountable.

For now, the Obama administration is standing by Geithner, saying that the decision to pressure AIG against cooperating with the SEC “did not rise to his level at the Fed” last Friday. But as Mike Lillis notes for The Washington Independent, that explanation strains credulity:

The federal government had recently bailed out AIG to the tune of $180 billion; AIG was funneling that cash to other (already bailed out) Wall Street giants; the New York Fed was telling AIG not to disclose those payments; and that decision didn’t rise to the level of the Fed chairman?

Lately, the government hasn’t had a very good record on prosecuting financial crime. Prosecutors wouldn’t have uncovered a massive tax evasion scheme at Swiss banking giant UBS without the help of whistleblower Bradley Birkenfeld. And the tax fraud was indeed massive—the Justice Department believes that UBS illegally helped shield over 19,000 wealthy clients from paying taxes.

But, as Amy Goodman reveals for Democracy Now!, in return for uncovering the biggest tax fraud in history, the Justice Department has successfully pushed to have Birkenfeld jailed for more than three years. By contrast, almost everyone involved in the scam is getting off with fines, probation, or less. What signal do you think this sends to other potential whistleblowers?

The housing boom encouraged banks to pour money into speculative investments outside the traditional mortgage market, especially by making loans to property developers to build high-end condominiums. When the housing bubble burst, it became clear that there were far more fancy condos than anybody wanted. Today, most economists expect the loans that financed these developments to prove nearly worthless.

As Alyssa Katz details for The American Prospect, scores of those buildings are now nearly vacant in New York City alone. In order to create these useless towers, developers cleared the land by forcing out tenants in affordable housing complexes, and shut down productive businesses. If these spaces are to be used productively—say, for affordable rental housing—banks and developers need to acknowledge that their market has tanked, accept their losses and move on.

Instead, Katz notes, federal regulators are letting banks apply very optimistic accounting values to these commercial real estate projects. This accounting creates illusory short-term profits for banks and eliminates incentives to let the land go to socially useful enterprises. If regulators don’t force banks to get serious about their commercial real estate losses, the government will effectively be subsidizing a rash of useless eyesores, allowing neighborhoods to decay in the process.

Subprime shenanigans from AIG, UBS and other banks helped tank the global economy. We’re still feeling the job fallout from a financial crisis that banks triggered over two years ago. Last week, the government reported that the economy lost 85,000 jobs in December, while the unemployment rate held even at 10%. David Moberg explains why we desperately need the Senate to approve a robust jobs bill in a blog for Working In These Times. A $174 billion package passed the House last month, but it’s a pittance compared to what the government has pledged to save Wall Street.

So how did we get here—saving the crooked jerks who created the mess while leaving everyone else out to dry? Kevin Drum’s story in Mother Jones on the bank lobby offers critical insight into the operations of the U.S. democratic process, and also stands up as one of a handful of investigative journalism masterpieces that have stemmed from the financial crisis. In the last dozen years, elite financiers have secured government approval to shoulder greater risks and pay bigger bonuses, despite a series of near-catastrophic financial market failures. Drum details the financial industry’s pervasive influence over lawmakers in Congress, key policymakers at the Federal Reserve and federal regulators in other agencies, influence often purchased outright with campaign contributions and massive lobbying efforts.

These days, the money still talks in American government. But the true economic coup is not financial. It’s ideological: Bankers have convinced leaders of both political parties that what’s good for Wall Street is always good for America, even if the cost of boosting the bottom line involves dismantling productive firms, ravaging neighborhoods with foreclosures or scamming poor people with massive overdraft fees.

“…There’s more to the finance lobby than just money and political influence,” Drum writes. “Their real power lies in the fact that they’ve so thoroughly changed our collective attitude toward financial regulation that sometimes they barely need to lobby in the traditional sense at all.”

This is precisely how we got stuck with banker apologists like Geithner, a Justice Department that punishes whistleblowers while letting corporate crooks go free, and why we’re allowing neighborhoods to rot away for no reason. We have to demand more from our government, regardless of which party is in power. If we don’t, we’ll get stuck with the same save-Wall-Street-first policies forever, regardless of the consequences for society.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

The new decade offers a great opportunity to not only look back on the policies that led to our current economic malaise, but consider other ways of building stability that won’t wreak economic and ecological destruction.

Here’s a quick round up of some smart articles that address how economic policy changes could shift the way we work and live in the next decade.

The Washington Monthly’s Steve Benen reminds us that while boom-and-bust cycles are nothing new in the realm of economics, the last decade’s boom-and-bust marks the only cycle since the 1940s that resulted in zero total job creation. Usually, even after the bust, the economy has more jobs than it had before the boom. Benen looks at the current cycle and argues that conservative economic policy just doesn’t work. He highlights a Washington Post article that looks back on a lost decade for the labor market as proof. Deregulation and tax cuts for wealthy individuals and corporations were very good for the rich. For the rest of us, not so much. But even after inciting the worst recession since the Great Depression, this destructive ideology isn’t going away. Benen writes:

“Those policies failed spectacularly—but the discredited agenda nevertheless remains the foundation of the Republican economic philosophy in the new decade.”

The conservative assault on the estate tax is perhaps the most egregious of these dysfunctional trickle-down tax policies, as Brian Miller highlights for the American Forum. When wealthy people die, the government taxes the inheritance money their heirs receive. But the Bush tax cuts approved in 2001 dramatically limited how much the government could tax, and scheduled a full repeal of the tax for 2010. When Congress failed to block the repeal last year, this year’s estate tax disappeared—along with revenue that funds important social projects. Fortunately, the estate tax is scheduled to go back into effect next year, but there’s no excuse for letting it lapse in 2010.

Congress has the legal authority to impose retroactive taxes and needs to exercise that power to prevent the loss of this year’s estate tax revenue. Any so-called fiscal conservative wringing his or her hands over the economic stimulus package has no business sending federal windfalls to the children of wealthy parents. And a strong estate tax isn’t just about the budget, it’s also a critical issue of fairness.

“The estate tax is fundamentally about recycling opportunity,” Miller writes. “Like the farmer who tills under leftover crops at the end of the season, the estate tax helps promote fertile fields of opportunity for the next generation to build upon. It’s about giving each generation a fresh start and a chance at achieving the American dream through their own merit.”

Beyond tax policy, it’s time to acknowledge that unsupervised markets don’t result in free market prosperity, but reckless, free-for-all excess. Many have forgotten the great pet food recall of 2007, in which a supplier called Menu Foods was literally stocking its pet foods with poison. But as Barry C. Lynn emphasizes for AlterNet, the most damaging aspect of the problem was that Menu Foods didn’t simply operate its own retail brand. Instead, the company serves as monopolistic middleman, packaging pet food that is sold under dozens of different brands, from higher-end names like Iams and Hill’s Pet Nutrition Science to store brands at Kroger’s, Safeway, and Wal-Mart. This diverse marketing created an illusion of consumer choice that allowed a single company to build an empire insulated from competitive pressures like quality control.

As a result, problems at a single company most consumers had never heard of created a mass-recall. And these same hidden monopolies exist in dozens of other industries, from toothpaste to beer. Refusing to break up these monopolies is economically irresponsible, Lynn argues, because it defangs the market’s power to root out socially destructive behavior:

“Our political economy is filled with hidden monopolies almost everywhere, and these monopolies increasingly control, restrict, and determine what we buy, with little or no regard for any real market forces.”

Sick of busting your butt five days a week for a measly two-day respite? At Working In These Times, Michelle Chen highlights the effects of a four-day work-week on state employees in Utah to show how a shorter work week can lead to more productivity and more satisfying lives for employees. The idea is simple: Instead of working five eight-hour days, workers take on four 10-hour shifts. So far, Utah has seen better results from its employees and the workers have more days to enjoy the activities they love.

As several governments, including the U.S., stall on climate change, some entrepreneurs are looking to new types of financial markets to bolster environmental conservation efforts. In Mother Jones, Hillary Rosner highlights a program being pushed in Malaysia’s Sabah state that rewards private companies for spending money to protect the region’s rainforest. Under the plan, companies that profited from exploiting the rainforest would purchase “biodiversity conservation certificates” that pay for the preservation and policing of existing rainforest. In return, the companies get certified as an environmentally friendly organization and enjoy the resulting marketing benefits, plus a share of profits from ecotourism.

While this is a creative approach to the economics of environmentalism, there is plenty of room for skepticism. What happens if the rainforest becomes a gambling token in a new eco-casino? After all, dividing up the planet into pieces that can be exploited for economic gain is exactly what got us into the current climate conundrum in the first place.

Lots of other economic policy changes are on the horizon. Federal Reserve Chairman Ben Bernanke comes up for his confirmation vote in the Senate this month after facing higher-than-usual opposition in the Senate Banking Committee. Many progressives and conservatives are upset about Bernanke’s failure to crack down on predatory mortgage lending during the housing bubble and several of the Fed’s crisis-management programs have been heavily criticized, particularly the bailout of AIG. Also be on the lookout for movement around the Senate on a jobs bill. A $154 billion package passed the House in December, and with unemployment at 10%, the labor market needs all the help it can get from Capitol Hill.

Finally, Senate Banking Committee Chairman Chris Dodd (D-CT) and ranking Republican Richard Shelby of Alabama said last month that they were close to agreement on a new financial regulation bill, which will likely strip the Federal Reserve of the regulatory authority it refused to wield over the past decade and give it to a new agency. It’s about time.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.