'Economy' Archive
Weekly Audit: A Recall Fight Brewing in Wisconsin?
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By Lindsay Beyerstein, Media Consortium blogger
Tens of thousands of people continue their peaceful occupation of the Wisconsin state capital to protest a bill that would abolish most collective bargaining rights for public employees. As the protests entered their eighth day, GRITtv with Laura Flanders was broadcasting from Madison, Wisconsin in collaboration with The Uptake.
Flanders interviewed Nation journalist and seventh-generation Wisconsinite John Nichols. Nichols and fellow guest Matthew Rothschild of The Progressive noted that the bill isn’t just an attack on collective bargaining rights. The bill would force public sector unions to hold recertification votes every year, which would put their very existence on the line annually. “The unions realize that this is a threat to their very existence,” Rothschild explained. (more…)
Weekly Audit: HBGary Federal and The Chamber of Secrets
By Lindsay Beyerstein, Media Consortium blogger
The most influential business lobby group in the United States has been linked to a scheme to deploy dirty tricks against its political opponents. Josh Harkinson reports for Mother Jones that prospective vendors for the Chamber of Commerce hatched a plan to frame and entrap critics of the Chamber.
The plan came to light last week after hackers released thousands of emails obtained from the servers of HBGary Federal, a private security company. The emails reveal Chamber law firm Hunton & Williams was looking for firms to help it execute a plot to entrap bloggers, union officials and other Chamber critics. The goal, according to Harkinson, was to manufacture evidence that all the Chamber’s critics were working together to discredit the business group:
According to the emails, Chamber law firm Hunton & Williams wanted to hire digital sleuths that could demonstrate that the business group’s opponents had been working as a “single entity instead of a true ‘grasroots’ campaign.” That phrase and others suggest that the Chamber’s ultimate goal was to openly accuse its foes of a left-wing form of astroturfing.
HBGary Federal was apparently planning to pitch its services as a “Corporate Information Renaissance Cell” to the Chamber yesterday. The emails show that HBGary Federal and two other firms, Berico Technologies and Palantir, proposed to use the social networking pages of the Chamber’s enemies to manufacture evidence of supposed “relationships” between various players.
Labor of love
Robert Kuttner suggests in The American Prospect that organized labor may be the last best hope for reviving the middle class and restoring shared prosperity:
Though no longer centered in auto and steel factories, unions continue to offer lower-income Americans a path into the middle class–just ask a newly organized janitor, hotel worker, security guard, hospital paraprofessional, home-care worker, or warehouse, call-center, or food-service employee.
Kuttner notes that the average union employee earns about 20% more than a non-unionized worker doing the same job. He also cites evidence that unionized workers are more likely to vote for Democrats than their non-unionized counterparts and that the power of unions to deliver votes for Democrats had been growing steadily up until the Republican blowout in the midterm elections of 2010.
Budget bingo
Ari Berman of The Nation takes a closer look at President Obama’s proposed federal budget for 2012. The budget calls for investments in high speed rail and a national infrastructure bank. It does not tinker with Medicare or Social Security. The cuts proposed in the budget barely offset the cost of continuing the Bush tax cuts for the wealthy, Berman notes.
Meanwhile, David Corn of Mother Jones examines the president’s budget and feels deja vu from the Clinton administration. At a recent press conference, White House budget director Jared Lew outlined a budget that attempts to save money while”winning the future.” Obama’s budget promises $1.1 trillion in savings over the next decade, while maintaining investments in future-oriented research and development projects.
Corn notes that the administration is calling for $2.5 billion in cuts to a home heating program (LIHEAP) for the poor and elderly while simultaneously planning a national broadband network. But the administration has more or less given up on immediate job-creation in favor of long-term investment, Corn argues:
It seems the administration has concluded that after that tax-cut deal—which did amount to something of a second stimulus—there is not much else the White House can do via government spending (or tax cuts) to create jobs, especially with Republicans controlling the House.
That sounds good on paper, but how much are these ambitious big ticket projects going to do for Americans who are struggling in the current recession? He thinks it all sounds a lot like former president Bill Clinton’s centrist approach to the budget.
Consumers Anonymous
Carrie Barker of Ms. Magazine interviews CNN host Jane Velez-Mitchell about her new book Addict Nation, a book about American consumerism as a form of mass addiction. As a recovering alcoholic with 16 years of sobriety, Velez-Mitchell says she began to see connections between her personal struggles and the larger cultural script that “more is better.” She argues that our society needs a “consumer revolution” that will prompt people to rethink their buying patterns as conscious social and moral choices, as opposed to reflexive self-gratification.
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.
Weekly Audit: The Real Legacy of Reaganomics
By Lindsay Beyerstein, Media Consortium blogger
Sunday marked the 100th anniversary of the birth of B-movie actor-turned-conservative president, Ronald Wilson Reagan. On the eve of the centennial, economist Yves Smith talked Reaganomics on the Real News Network. Smith argues that Reagan’s real legacy is the deregulation of the U.S. economy that set the stage for the economic meltdown of the late 2000s:
But [with] financial services, you have companies that have state guarantees. That’s the bottom line with the banking system. Ever since the 1930s, we in advanced economies have made the decision we’re not going to let the banking system fail. So if you don’t regulate banks, you have set up the situation that we have now, which is that you have socialized losses and privatized gains. And what have we seen come out of that? Financial crises. When we had a heavily regulated financial system, we had nearly 40 years of hardly any financial crises. When we started deregulating the banks, you saw increasing in frequency and increasing in significance financial crises directly resulting from that.
Spot of Tea?
Ordinary Britons are rallying to the defense of the welfare state. Faced with the deepest public spending cuts in living memory, citizens are taking to the streets to force deadbeat companies to pay their taxes, Johann Hari reports in The Nation. Their federal government has pledged to slash £7 billion in public spending. Cuts to subsidized housing alone will force 200,000 people out of their homes.
A group of friends in a local pub were galvanized by the news that Vodafone, one of the UK’s leading mobile phone companies, owed an astonishing £6 billion in back taxes. Calling themselves UK Uncut, the friends staged a protest outside Vodafone headquarters in London. The meme went viral. In the following days, several Vodafone stores were temporarily paralyzed by peaceful sit-ins.
Hari argues that the success of UK Uncut can teach American progressives a lot about how to build a grassroots counterpart to the Tea Party.
Persistent vegetative states
Big or small, liberal or conservative, state governments are screwed. That’s the upshot of Paul Starr’s latest essay in The American Prospect. Unemployment remains at recession levels and there is little political will to raise taxes. States can’t deficit spend like the feds do. So, the only option is public service cuts, which means firing teachers, doctors, firefighters, and other public workers.
Starr argues that the economic stimulus was a good start, but one that didn’t go far enough. As part of the stimulus, the federal government picked up a larger share of the states’ Medicaid costs. This was a good thing, in Starr’s view, because the extra federal dollars saved jobs while providing health care for the poor. Starr argues that state budget woes during recessions are so predictable, and the consequences so dire, that the Medicaid subsidy should kick in automatically whenever unemployment rises past a predetermined threshold.
Anti-union bill dead in CO
A bill to end collective bargaining for public employees in Colorado died in committee this week, according to Joseph Boven of the Colorado Independent. The bill would have abolished an executive order signed by former Gov. Bill Ritter, which gave state employees the right to organize. If the bill had been enacted, this kind of organizing would become illegal. This bill, sponsored by Sen. Shawn Mitchell (R-Broomfield), was just one of many attempts by Republicans to scapegoat public sector unions for what Mitchell calls the “financial Armageddon” facing state governments.
Smurfs rob Moms
“Smurfing” is money laundering slang for recruiting a lot of low-level accomplices to move money in untraceably small increments. But the word may soon have a new derogatory connotation.
Kevin Drum of Mother Jones reports that a kids’ video game, Smurfs’ Village, is depleting parents’ bank accounts, one wagon of Smurfberries at a time. Capcom’s game offers kids the chance to build the village from scratch. Along the way, they can pay real money for in-game resources. One mother was shocked to receive a $1,400 bill from Apple because her daughter bought innumerable imaginary props, such as $19 “buckets of snowflakes,” and a $100 “wagon of Smufberries.” The purchases require a password, but critics say it’s too easy for clever kids to circumvent the security. As Drum says, if adults want to waste their real dollars on virtual Farmville paraphernalia, that’s fine, but such a racket has no place in kids’ games.
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.
Weekly Audit: Crashing the Koch’s Billionaire Caucus
By Lindsay Beyerstein, Media Consortium blogger
Oil barons Charles and David Koch held their annual billionaires’ summit in Palm Springs on Sunday, Nancy Goldstein reports in The Nation. Every year, the Kochs gather with fellow plutocrats, prominent pundits, and Republican legislators to plan their assault on government regulation and the welfare state. This is the first year that the low-profile gathering has attracted protesters.
The Kochs are best known for pumping millions into the ostensibly grassroots Tea Party movement. At TAPPED, Monica Potts points to Jane Mayer’s famous 2010 profile of the Koch brothers that made their name synonymous with vast right wing conspiracy. Her colleague Jamelle Bouie questions whether the Koch brothers really deserve their bogeyman status–no single cabal of funders can single-handedly sway public opinion, he argues.
That’s true, but $30 million can go a long way. That’s the amount the event’s organizers expect to raise for the GOP, according to Steve Benen of the Washington Monthly, who also notes the event was off-limits to the mainstream media.
David Dayen reports for Firedoglake that about 800 to 1,000 protesters rallied outside Sunday’s summit at the Rancho Las Palmas resort. Twenty-five protesters were arrested for trespassing. Police in full riot gear carted the protesters away. To add a surreal note to the proceedings, conservative provocateur Andrew Brietbart emerged from the summit on roller skates to argue with the protesters.
Several progressive organizations collaborated to draw the crowd including Common Cause, the California Courage Campaign, CREDO, MoveOn.org, 350.org, the California Nurses Association, and the United Domestic Workers of America. The Media Consortium’s own Jim Hightower was a featured speaker at the rally. (more…)
Weekly Audit: Wall Street Destroyed $8 for Every $1 Earned
by Lindsay Beyerstein, Media Consortium blogger
Tonight, President Barack Obama will deliver his State of the Union address. A major theme of the speech will be jobs and the economy. Let’s hope the president spares a few minutes for Wall Street reforms that might prevent a repeat of the economic collapse that we’re slowly starting to recover from.
As Kai Wright points out in ColorLines, the State of the Union is the unofficial kickoff of the 2012 election season:
The still churning foreclosures and mounding debt in black and brown neighborhoods don’t suggest a stabilized economy anywhere except Wall Street, but let’s set that familiar fight to the side for now. The point is that whether we’re talking about creating jobs or seating district court judges, the time for making policy is gone. Starting tomorrow night, it’s all talk until we vote next.
Amy Dean of Working In These Times shares Wright’s skepticism. With the Republicans in control of the House and the Democrats hanging on to the Senate, we’re looking at a legislative stalemate until the next election. Dean argues that activists should use this lull in the action to refocus their organizing at the grassroots level.
Wall Street destroyed $8 for every $1 it earned
In AlterNet, Les Leopold asks why bankers are earning such huge bonuses while the financial system is in disarray. According to standard economic theory, your compensation reflects the value of your work. Yet, according to Leopold’s back-of-the-envelope calculations, the financial sector has destroyed $8 worth of wealth for every dollar it earned over the last 5 years. His estimate includes the wealth-destroying impact of the subprime mortgage crisis and other epic Wall Street blunders. (more…)
Weekly Audit: We Welcome Our New Plutocratic Overlords
By Lindsay Beyerstein, Media Consortium blogger
Meet the new global elite. They’re pretty much the same as the old global elite, only richer and more smug.
Laura Flanders of GritTV interviews business reporter Chrystia Freeland about her cover story in the latest issue of the Atlantic Monthly on the new ruling class. She says that today’s ultra-rich are more likely to have earned their fortunes in Silicon Valley or on Wall Street than previous generations of plutocrats, who were more likely to have inherited money or established companies.
As a result, she argues, today’s global aristocracy believes itself to be the product of a meritocracy. The old sense of noblesse oblige among the ultra-rich is giving way to the attitude that if the ultra-rich could do it, everyone else should pull themselves up by their bootstraps.
Ironically, Freeland points out that many of the new elite got rich from government bailouts of their failed banks. It’s unclear why this counts as earning one’s fortune, or what kind of meritocracy reserves its most lavish rewards for its most spectacular failures. (more…)
Weekly Audit: GOP Plays Chicken with the Debt Ceiling
By Lindsay Beyerstein, Media Consortium blogger
Sen. Jim DeMint (R-SC) is calling for a “big showdown” over the upcoming vote to raise the nation’s debt ceiling to $14.3 trillion from $13.9 trillion. The debt ceiling is simply the maximum amount the government can borrow.
Congress routinely raises the debt ceiling every year. It’s common sense: Since the government has already pledged to increase spending, Congress must authorize additional borrowing. (Remember that the government is now forced to borrow billions of extra dollars to pay for tax cuts for the wealthy, which Republicans insisted on.) If the ceiling isn’t raised, the United States will be forced to default on its debts, with catastrophic consequences.
Why would default be catastrophic? The principle is the same for countries and consumers alike: If you have a good track record of paying your bills, lenders will lend you money at lower interest rates. If you don’t pay your bills on time, or default on your obligations altogether, lenders will demand higher interest rates. (more…)
Weekly Audit: Republicans Poised to Declare War on Welfare State
by Lindsay Beyerstein, Media Consortium blogger
Senate Republicans scuttled a bipartisan $1.2 trillion dollar spending omnibus bill last week. Now, Majority Leader Harry Reid (D-NV) is scrambling to pass a temporary funding bill to keep the federal government’s lights on.
The GOP abruptly pulled the plug on the omnibus, a massive piece of legislation that Republicans and Democrats had collaborated on for months. Why? Because the Republicans want to start over in the next session of Congress when they will control the House and pick up seats in the Senate. They intend to rewrite the spending bill with much less Democratic input. In other words, bipartisanship proves once again to be a racket.
War on the welfare state
At Truthout, economist Dean Baker offers some predictions on what Republicans have in mind for the 112th Congress. The Bush tax cut extensions that passed with great fanfare are supposed to be 2-year extensions. However, Baker asks why we should expect that the GOP will allow the tax cuts to expire? (more…)
Weekly Audit: Sanders Filibusters Tax Cuts, Electrifies the Left
By Lindsay Beyerstein, Media Consortium blogger
Sen. Bernie Sanders (I-VT), a self-described socialist who caucuses with the Democrats, became a folk hero to progressives when he took to the floor of the Senate for nearly nine hours on Friday to speak against the plan to extend tax cuts for the wealthy in exchange for extending unemployment benefits for millions of workers and extending tax breaks for the middle class.
On the Senate floor, Sanders accused his Republican colleagues of wanting to roll back the New Deal:
And that is, they want to move this country back into the 1920s, when essentially we had an economic and political system which was controlled by Big Money interests, where working people in the middle class had no programs to sustain them when things got bad, when they got old, when they got sick, when labor unions were very hard to come by because of anti-worker legislation.
Senate video servers were overwhelmed as over 12,000 people tried to watch online, John Nichols of The Nation reports. (more…)
Weekly Audit: Tax Cuts for the Rich Extended
By Lindsay Beyerstein, Media Consortium Blogger
Congressional Republicans and the White House struck an agreement in principle on Monday night to extend all the Bush tax cuts for 2 more years in exchange for extending unemployment benefits. The GOP agreed to the so-called “Lincoln-Kyl compromise” a partial 2-year extension of the Bush estate tax cuts on estates worth over $5 million. If the deal had not been struck, estate taxes on estates over $5 million would have gone back up from 0% to the pre-cut rate of 55%. Instead, the rate will be 35% for the next 2 years.
The GOP also agreed to a short-term “stimulative” 2 percentage-point cut off the 6.2% payroll tax we all pay on income up to $106,800. The good news is that a payroll tax holiday will provide the most noticeable tax relief to low- and middle-income Americans. The bad news is that payroll taxes fund Social Security, so cutting the tax means starving a program that most directly benefits average people. Social Security is not in crisis yet, but steps like these could push the program into worse financial straights where significant benefit cuts become inevitable. It’s almost as if the GOP, having failed to spark panic about an as-yet non-existent Social Security crisis, is determined to engineer one.
All these gimmes for the rich were the price of a partial extension of unemployment benefits. The stakes couldn’t have been higher. If Congress had failed to act, 2 million people stood to lose their benefits this month and another 7 million would have run out before the end of next year, reports Andy Kroll of Mother Jones.
Meanwhile, unemployment continues to rise. The economy only added 39,000 jobs in November when analysts were expecting about 150,000. “At the beginning, some people just thought it was a printing error,” said reporter Motoko Rich on the New York Times‘ weekly business podcast. The overall unemployment rate climbed to 9.8%.
At ColorLines, Kai Wright argues that the time has come for President Obama to seize the opportunity to debunk conservatives’ bad faith arguments for tax cuts above all else:
At the same time, the anti-government crowd’s political hand—if forced—has never been weaker. A depressingly large number of middle-class and working-class Americans now know all too well what economists have long understood: You get a great deal more economic bang out of keeping lots of people from becoming destitute than you do by helping a few people horde wealth. People remain enraged about the no-strings-attached bank bailout, for instance, because they intuitively understand its ramifications. Wall Street is now enjoying a narrow, taxpayer-financed recovery while unemployment, hunger and poverty all continue climbing through the former middle class.
Extending UI makes sense
Tim Fernholtz of TAPPED tackles some of the bad arguments against extending unemployment insurance. Economist Greg Mankiw claims that extending unemployment insurance is just a surreptitious ploy to redistribute income to the poor from the wealthy. Actually, as Fernholtz points out, the point of a UI safety net is to prevent people, 3 million of them in 2009, from becoming poor in the first place. Poverty is very expensive for society at large. If we can keep the unemployed in their homes, spending their benefits in their communities, we can keep the socially corrosive effects of poverty at bay until the economy improves. The social costs of child poverty alone have been estimated at $500 billion a year, Fernholtz notes. The deeper we allow people to sink into poverty, the more difficult it will be for the economy to rebound. On this view, UI is a shared investment in a well-ordered society, not just a lifeline for jobless families.
Why corporate tax cuts won’t create jobs
Jack Rasmus of Working In These Times explains why tax cuts will not create jobs. Simply put, banks and big companies are sitting on over a trillion dollars. Among the nation’s biggest banks, lending to small and medium size businesses, the engines of job creation, has dwindled over 2009 and 2010. America’s biggest companies are sitting on a hoard of $1.84 trillion dollars, which they are not investing in job-creating projects. The Deficit Commission recommended slashing corporate taxes, ostensibly to spur investment and job creation, which would ultimately generate taxable income to help balance the budget. As Rasmus points out, this wishful thinking is predicated upon the assumption that if only corporations had more money, they would invest it to create jobs. The fact that companies are already sitting on huge piles of cash suggests that shoveling more moolah on the pile won’t change the basic dynamic. Perhaps companies are waiting to invest because they know that consumers aren’t keen to buy goods and services when they are unemployed or fearing job loss.
Economic disobedience
At In These Times, Andrew Oxford interviews sociologist Lisa Dodson about her new book on getting by in the low-wage economy. Her research shows that as economic instability mounts, many Americans are quietly taking matters into their own hands:
To understand how fair-minded people survive in an unfair economy, Dodson interviewed hundreds of low-wage workers and their employers across the country, examining what she terms the “economic disobedience” now pervasive in the low-wage sector. From a supervisor padding paychecks to a grocer sending food home with his employees, these acts of disobedience form the subject of her latest book, The Moral Underground: How Ordinary Americans Subvert an Unfair Economy.
Winner-take all economy
In an interview with Democracy Now!, Yale political science profesor and Jacob Hacker explains why the Deficit Commission has it all wrong when it comes to tax cuts vs. unemployment benefits.
Hacker studies inequality. He has written a book on how the richest Americans cornered an unprecedented share of the country’s wealth for themselves over the past three decades. The richest Americans have never been in a better position to help the country grapple with the deficit. Yet, as Hacker points out, the Deficit Commission wants to balance the budget on the backs of middle- and lower-income Americans by cutting spending on programs that disproportionately benefit working people and readjusting the tax code to make it even more favorable to the rich.
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.