Is U.S. Stuck in Internet's Slow Lane? | Oct 30, 4:41 PM (ET) | By PETER SVENSSON
NEW YORK (AP) - The United States is starting to look like a slowpoke on the Internet. Examples abound of countries that have faster and cheaper broadband connections, and more of their population connected to them.
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The Organization for Economic Co-operation and Development - a 30-member club of nations - compiles the most often cited international comparison. It puts the U.S. at 15th place for broadband lines per person in 2006, down from No. 4 in 2001.
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But the OECD numbers are in line with other international measures. Figures from the British research firm Point-Topic Ltd. put the U.S., with 55 percent of its households connected, in 17th place for adoption rates at the end of June (excluding some very small countries and territories like Macau and Hong Kong).
"We're now in the middle of the pack of developed countries," said Dave Burstein, telecom gadfly and the editor of the DSL Prime newsletter, during a sometimes tense debate at the Columbia Business School's Institute for Tele-Information.
Burstein says the U.S. is lagging because of low levels of investment by the big telecom companies and regulatory failure.
Several of the European countries that are doing well have forced telephone companies to rent their lines to Internet service providers for low fees. The ISPs use them to run broadband Digital Subscriber Lines, or DSL, often at speeds much higher than those available in the U.S.
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Part of the problem may be that people don't see fast Internet access as an essential part of modern life, and may need more of a push to get on. The U.S. does have wider income disparities than many of the countries that are outdoing it in broadband, and people in poverty may have other priorities for their money.
Dan Correa, research analyst at the Information Technology and Innovation Foundation, believes the U.S. needs a more "proactive" broadband policy, and compares the lack of government involvement in the field with the situation in other utilities, which are mostly heavily regulated.
"In the 1930s, we recognized that electricity was essential. We're not quite at that level in broadband," Correa said. ...
The U.S. Federal Communications Commission went down this regulatory road a few years ago, but legal challenges from the phone companies forced it to back away. ...
Wednesday, October 31, 2007
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax
I should pay more tax, says US billionaire Warren Buffett | Andrew Clark in New York | Wednesday October 31, 2007 | The Guardian
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax.
Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."
During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.
"There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said.
Mr Buffett also took a pot shot at hedge fund managers. He said: "Hedge fund operators have spent a record amount lobbying in the last few months - they give money to the political campaigns. Who represents the cleaning lady?" ...
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax.
Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."
During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.
"There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said.
Mr Buffett also took a pot shot at hedge fund managers. He said: "Hedge fund operators have spent a record amount lobbying in the last few months - they give money to the political campaigns. Who represents the cleaning lady?" ...
Tuesday, October 30, 2007
the burgeoning poultry industry ... motels have been converted into permanent living quarters for Mexican and Central American workers
The New Face of Unionbusting | by David Bacon | Part 5 | Designing a "Union-Proof" Workforce
... trying to design a "union-proof" workforce. ...
This tactic has again become widespread. In Los Angeles, the cleaning contractors in office buildings in the late 1980s dumped their union workforce, which had a high percentage of African-American workers, and hired immigrants. They shed their union contracts at the same time.
Today in the midwest and southeast, the burgeoning poultry industry is using the same strategy. In tiny towns in Missouri and Arkansas, motels have been converted into permanent living quarters for Mexican and Central American workers, recruited by labor contractors to take jobs in local chicken plants. ...
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"When you flood the labor market with workfare recipients," explains Fran Bernstein, from the national office of the American Federation of State, County and Municipal Employees, "you see enormous wage depression for the bottom third of the workforce. That's intentional." ...
... trying to design a "union-proof" workforce. ...
This tactic has again become widespread. In Los Angeles, the cleaning contractors in office buildings in the late 1980s dumped their union workforce, which had a high percentage of African-American workers, and hired immigrants. They shed their union contracts at the same time.
Today in the midwest and southeast, the burgeoning poultry industry is using the same strategy. In tiny towns in Missouri and Arkansas, motels have been converted into permanent living quarters for Mexican and Central American workers, recruited by labor contractors to take jobs in local chicken plants. ...
...
"When you flood the labor market with workfare recipients," explains Fran Bernstein, from the national office of the American Federation of State, County and Municipal Employees, "you see enormous wage depression for the bottom third of the workforce. That's intentional." ...
Occupations that were formerly all Black, such as construction, dry-wall and the hotel services are now exclusively Mexican.
Mexican War, Part II | By Paul Streitz | Mar 21, 2006 - 8:07:00 PM | Effect on African-Americans
African-Americans, or as the patriot Terry Anderson has said, “Americans who are Black” have been the group that has been most damaged by the Mexican invasion.
Terry Anderson’s south-central Los Angeles has turned from 90% Black to 90% Mexican. ...
Occupations that were formerly all Black, such as construction, dry-wall and the hotel services are now exclusively Mexican. Occupations that were formerly unionized have been replaced by low-wage, non-unionized Mexicans.
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The New York Times reports on March 20, 2006, “Plight Deepens for Black Men, Studies Warn.” It says, “By 2004, the share (of young black men without jobs) had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts.” Even when high school graduates were included, half of black men in their 20’s were jobless, in 2004.”
Of course, The New York Times does not mention the impact of legal and illegal immigration on African-Americans. ...
African-Americans, or as the patriot Terry Anderson has said, “Americans who are Black” have been the group that has been most damaged by the Mexican invasion.
Terry Anderson’s south-central Los Angeles has turned from 90% Black to 90% Mexican. ...
Occupations that were formerly all Black, such as construction, dry-wall and the hotel services are now exclusively Mexican. Occupations that were formerly unionized have been replaced by low-wage, non-unionized Mexicans.
...
The New York Times reports on March 20, 2006, “Plight Deepens for Black Men, Studies Warn.” It says, “By 2004, the share (of young black men without jobs) had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts.” Even when high school graduates were included, half of black men in their 20’s were jobless, in 2004.”
Of course, The New York Times does not mention the impact of legal and illegal immigration on African-Americans. ...
US is by far the world's biggest debtor nation. ... A quarter century ago, the US was the world's largest creditor nation.
The mystery of the missing $2.9 trillion | By David R. Francis | columnist | from the October 29, 2007 edition
Economists scour the US to find out why we're more in debt than the Department of Commerce says we are.
Like most people, economists love a mystery – especially if it involves not a missing person but a missing $2.9 trillion in United States debt.
That's $2.9 with 11 zeros after it.
Some words of explanation: Every quarter the Department of Commerce comes up with the US "International Investment Position." At the end of 2006, for instance, the US had a net negative position – by this measurement of international assets and liabilities – of $2.6 trillion. In other words, the country is by far the world's biggest debtor nation.
A quarter century ago, the US was the world's largest creditor nation. ...
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So when the dollar loses value, foreign holders of dollar assets lose on their dollar investments. Almost all US foreign liabilities are in dollars and about 70 percent of US foreign assets are in foreign currencies.In what Gourinchas calls an "eye-catching, back-of-the-envelope calculation," a 10 percent depreciation of the dollar represents a transfer of 5.3 percent of US GDP from the rest of the world to the US. America's GDP is currently $13.7 trillion, and the dollar is down 20.6 percent since 2002. So foreigners have – in effect – given the US about $1.3 trillion. ...
Economists scour the US to find out why we're more in debt than the Department of Commerce says we are.
Like most people, economists love a mystery – especially if it involves not a missing person but a missing $2.9 trillion in United States debt.
That's $2.9 with 11 zeros after it.
Some words of explanation: Every quarter the Department of Commerce comes up with the US "International Investment Position." At the end of 2006, for instance, the US had a net negative position – by this measurement of international assets and liabilities – of $2.6 trillion. In other words, the country is by far the world's biggest debtor nation.
A quarter century ago, the US was the world's largest creditor nation. ...
...
So when the dollar loses value, foreign holders of dollar assets lose on their dollar investments. Almost all US foreign liabilities are in dollars and about 70 percent of US foreign assets are in foreign currencies.In what Gourinchas calls an "eye-catching, back-of-the-envelope calculation," a 10 percent depreciation of the dollar represents a transfer of 5.3 percent of US GDP from the rest of the world to the US. America's GDP is currently $13.7 trillion, and the dollar is down 20.6 percent since 2002. So foreigners have – in effect – given the US about $1.3 trillion. ...
Monday, October 29, 2007
Mr. Gramlich, Federal Reserve official, tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere
A Catastrophe Foretold | By Paul Krugman | The New York Times | Friday 26 October 2007
“Increased subprime lending has been associated with higher levels of delinquency, foreclosure and, in some cases, abusive lending practices.” So declared Edward M. Gramlich, a Federal Reserve official.
These days a lot of people are saying things like that about subprime loans — mortgages issued to buyers who don’t meet the normal financial criteria for a home loan. But here’s the thing: Mr. Gramlich said those words in May 2004.
And it wasn’t his first warning. In his last book, Mr. Gramlich, who recently died of cancer, revealed that he tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere.
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Second, much if not most of the subprime lending that is now going so catastrophically bad took place after it was clear to many of us that there was a serious housing bubble, and after people like Mr. Gramlich had issued public warnings about the subprime situation. As late as 2003, subprime loans accounted for only 8.5 percent of the value of mortgages issued in this country. In 2005 and 2006, the peak years of the housing bubble, subprime was 20 percent of the total — and the delinquency rates on recent subprime loans are much higher than those on older loans.
So, once again, why was nothing done to head off this disaster? The answer is ideology.
In a paper presented just before his death, Mr. Gramlich wrote that “the subprime market was the Wild West. Over half the mortgage loans were made by independent lenders without any federal supervision.” What he didn’t mention was that this was the way the laissez-faire ideologues ruling Washington — a group that very much included Mr. Greenspan — wanted it. They were and are men who believe that government is always the problem, never the solution, that regulation is always a bad thing. ...
“Increased subprime lending has been associated with higher levels of delinquency, foreclosure and, in some cases, abusive lending practices.” So declared Edward M. Gramlich, a Federal Reserve official.
These days a lot of people are saying things like that about subprime loans — mortgages issued to buyers who don’t meet the normal financial criteria for a home loan. But here’s the thing: Mr. Gramlich said those words in May 2004.
And it wasn’t his first warning. In his last book, Mr. Gramlich, who recently died of cancer, revealed that he tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere.
...
Second, much if not most of the subprime lending that is now going so catastrophically bad took place after it was clear to many of us that there was a serious housing bubble, and after people like Mr. Gramlich had issued public warnings about the subprime situation. As late as 2003, subprime loans accounted for only 8.5 percent of the value of mortgages issued in this country. In 2005 and 2006, the peak years of the housing bubble, subprime was 20 percent of the total — and the delinquency rates on recent subprime loans are much higher than those on older loans.
So, once again, why was nothing done to head off this disaster? The answer is ideology.
In a paper presented just before his death, Mr. Gramlich wrote that “the subprime market was the Wild West. Over half the mortgage loans were made by independent lenders without any federal supervision.” What he didn’t mention was that this was the way the laissez-faire ideologues ruling Washington — a group that very much included Mr. Greenspan — wanted it. They were and are men who believe that government is always the problem, never the solution, that regulation is always a bad thing. ...
Wednesday, October 24, 2007
If you really want to reduce spending, you must dismantle the overseas empire.
Time To Choose | By Charley Reese
10/23/07 "KFS" - -- - Most politicians, when they talk about reducing spending, chatter on about cutting waste and fraud. That's OK, but it's a mere nick on the federal budget. If you really want to reduce spending, you must dismantle the overseas empire.
Excluding Iraq, Afghanistan and the other facilities in the Gulf states that have been built since the Republican war, the Pentagon lists 702 overseas bases in 130 foreign countries on which are stationed more than 250,000 uniformed troops. There are also dependents and civilian employees on many of those bases.
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Americans need to realize that we are not the police force of the world. It is not our responsibility to overthrow dictators or effect regime change in other people's countries. It is not our responsibility to stop slaughters such as seem to be a permanent feature of Africa.
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You can't have a free republic and an empire. It is time to choose.
10/23/07 "KFS" - -- - Most politicians, when they talk about reducing spending, chatter on about cutting waste and fraud. That's OK, but it's a mere nick on the federal budget. If you really want to reduce spending, you must dismantle the overseas empire.
Excluding Iraq, Afghanistan and the other facilities in the Gulf states that have been built since the Republican war, the Pentagon lists 702 overseas bases in 130 foreign countries on which are stationed more than 250,000 uniformed troops. There are also dependents and civilian employees on many of those bases.
...
Americans need to realize that we are not the police force of the world. It is not our responsibility to overthrow dictators or effect regime change in other people's countries. It is not our responsibility to stop slaughters such as seem to be a permanent feature of Africa.
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You can't have a free republic and an empire. It is time to choose.
“Societies should not rely on market forces to protect the environment or provide quality health care for all citizens …”
Sunday, October 21, 2007 by the Sunday Gazette-Mail (Charleston, West Virginia) | Nobel Prize Sees What Market-Fundamentalists Don’t | by Rick Wilson
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Three Americans, Eric Maskin, Roger Myerson and Leonid Hurwicz, shared the honor for their work in mechanism design theory, which studies under what conditions markets work well or don’t. Sneak preview: They do better with private than with public goods.
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According to this cult, the market is like an all-wise and all-good but jealous god which becomes exceedingly wrathful when interfered with by things like coal mine or workplace safety laws, minimum wage protections, or taxes that pay for health, education or other services. Its ways are not our ways, nor are its thoughts our thoughts. And if it demands an occasional human sacrifice, we just have to deal with it.
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... Here’s the short version of a key finding: Markets work well with what economists call private goods, like refrigerators or cars, but not for public goods, such as a clean environment or public health.
According to Maskin in an article in Bloomberg.com, “There are some things we want that are never going to be attainable by markets,” he said in a telephone interview. “If we are going to get them at all we have to find alternative ways of delivering them. That’s where mechanism design comes in.”
A Reuters report on the prize noted, “Societies should not rely on market forces to protect the environment or provide quality health care for all citizens …”
In such cases, public investments and policies should promote and protect public goods.
None of this would have come as a surprise to Adam Smith, who wrote in 1776 that there was a need of government support for “public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.” ...
...
Three Americans, Eric Maskin, Roger Myerson and Leonid Hurwicz, shared the honor for their work in mechanism design theory, which studies under what conditions markets work well or don’t. Sneak preview: They do better with private than with public goods.
...
According to this cult, the market is like an all-wise and all-good but jealous god which becomes exceedingly wrathful when interfered with by things like coal mine or workplace safety laws, minimum wage protections, or taxes that pay for health, education or other services. Its ways are not our ways, nor are its thoughts our thoughts. And if it demands an occasional human sacrifice, we just have to deal with it.
...
... Here’s the short version of a key finding: Markets work well with what economists call private goods, like refrigerators or cars, but not for public goods, such as a clean environment or public health.
According to Maskin in an article in Bloomberg.com, “There are some things we want that are never going to be attainable by markets,” he said in a telephone interview. “If we are going to get them at all we have to find alternative ways of delivering them. That’s where mechanism design comes in.”
A Reuters report on the prize noted, “Societies should not rely on market forces to protect the environment or provide quality health care for all citizens …”
In such cases, public investments and policies should promote and protect public goods.
None of this would have come as a surprise to Adam Smith, who wrote in 1776 that there was a need of government support for “public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.” ...
1983 - 2004: wealth of the top 1 percent of households grew by 78 percent ... bottom 40 percent lost 59 percent
Monday, October 22, 2007 by CommonDreams.org | Billionaires Up, America Down | by Holly Sklar
When it comes to producing billionaires, America is doing great.
Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only.
This year, you’d need a Forbes 482 to fit all the billionaires.
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We have a record 482 billionaires — and record foreclosures.
We have a record 482 billionaires — and a record 47 million people without any health insurance.
Since 2000, we have added 184 billionaires — and 5 million more people living below the poverty line.
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Wealth is being redistributed from poorer to richer.
Between 1983 and 2004, the average wealth of the top 1 percent of households grew by 78 percent, reports Edward Wolff, professor of economics at New York University. The bottom 40 percent lost 59 percent.
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The Forbes 400 is even more of a rich men’s club than when it began. The number of women has dropped from 75 in 1982 to 39 today.
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The 400 richest Americans have a conservatively estimated $1.54 trillion in combined wealth. That amount is more than 11 percent of our $13.8 trillion Gross Domestic Product (GDP) — the total annual value of goods and services produced by our nation of 303 million people. In 1982, Forbes 400 wealth measured less than 3 percent of U.S. GDP.
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Tax cuts will save the top 1 percent a projected $715 billion between 2001 and 2010. And cost us $715 billion in mounting national debt plus interest.
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Inequality has roared back to 1920s levels. It was bad for our nation then. It’s bad for our nation now.
When it comes to producing billionaires, America is doing great.
Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only.
This year, you’d need a Forbes 482 to fit all the billionaires.
...
We have a record 482 billionaires — and record foreclosures.
We have a record 482 billionaires — and a record 47 million people without any health insurance.
Since 2000, we have added 184 billionaires — and 5 million more people living below the poverty line.
...
Wealth is being redistributed from poorer to richer.
Between 1983 and 2004, the average wealth of the top 1 percent of households grew by 78 percent, reports Edward Wolff, professor of economics at New York University. The bottom 40 percent lost 59 percent.
...
The Forbes 400 is even more of a rich men’s club than when it began. The number of women has dropped from 75 in 1982 to 39 today.
...
The 400 richest Americans have a conservatively estimated $1.54 trillion in combined wealth. That amount is more than 11 percent of our $13.8 trillion Gross Domestic Product (GDP) — the total annual value of goods and services produced by our nation of 303 million people. In 1982, Forbes 400 wealth measured less than 3 percent of U.S. GDP.
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Tax cuts will save the top 1 percent a projected $715 billion between 2001 and 2010. And cost us $715 billion in mounting national debt plus interest.
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Inequality has roared back to 1920s levels. It was bad for our nation then. It’s bad for our nation now.
Bush discretionary spend; “He has presided over massive increases in almost every category … a dramatic change of pace from most previous presidents,”
Bush is the biggest spender since LBJ | By David Lightman | McClatchy Newspapers | Wednesday, October 24, 2007
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The numbers are clear, credible and conclusive, added David Keating, the executive director of the Club for Growth, a budget-watchdog group.
“He’s a big spender,” Keating said. “No question about it.”
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Discretionary spending went up in Bush's first term by 48.5 percent, not adjusted for inflation, more than twice as much as Bill Clinton did (21.6 percent) in two full terms, Slivinski reports.
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“He has presided over massive increases in almost every category … a dramatic change of pace from most previous presidents,” said Slivinski.
War Costs May Total $2.4 Trillion ... nearly $8,000 per man, woman and child in the country ... "it boggles the mind,"
War Costs May Total $2.4 Trillion | By Ken Dilanian, USA Today. Posted October 24, 2007.
The cost of the wars in Iraq and Afghanistan could total $2.4 trillion through the next decade, or nearly $8,000 per man, woman and child in the country, according to a Congressional Budget Office estimate scheduled for release Wednesday.
A previous CBO estimate put the wars' costs at more than $1.6 trillion. This one adds $705 billion in interest, taking into account that the conflicts are being funded with borrowed money.
The new estimate also includes President Bush's request Monday for another $46 billion in war funding, said Rep. John Spratt, D-S.C., budget committee chairman, who provided the CBO's new numbers to USA TODAY.
Assuming that Iraq accounts for about 80% of that total, the Iraq war would cost $1.9 trillion, including $564 million in interest, said Thomas Kahn, Spratt's staff director. The committee holds a hearing on war costs this morning.
"The number is so big, it boggles the mind," said Rep. Rahm Emanuel, D-Ill. ...
The cost of the wars in Iraq and Afghanistan could total $2.4 trillion through the next decade, or nearly $8,000 per man, woman and child in the country, according to a Congressional Budget Office estimate scheduled for release Wednesday.
A previous CBO estimate put the wars' costs at more than $1.6 trillion. This one adds $705 billion in interest, taking into account that the conflicts are being funded with borrowed money.
The new estimate also includes President Bush's request Monday for another $46 billion in war funding, said Rep. John Spratt, D-S.C., budget committee chairman, who provided the CBO's new numbers to USA TODAY.
Assuming that Iraq accounts for about 80% of that total, the Iraq war would cost $1.9 trillion, including $564 million in interest, said Thomas Kahn, Spratt's staff director. The committee holds a hearing on war costs this morning.
"The number is so big, it boggles the mind," said Rep. Rahm Emanuel, D-Ill. ...
Monday, October 22, 2007
Home Energy Assistance ... LIHEAP, only has enough funding to cover 16 percent of the 38 million poor households eligible ... Bush proposes budget cut
Government money short to help poor pay heating bills | By Tom Doggett Fri Oct 19, 5:44 PM ET
WASHINGTON (Reuters) - About 30 million low-income American households who will need help paying heating bills this winter from a U.S. government program will be left in the cold because of a lack of funding for the program.
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Consumer groups and state energy officials have sounded the alarm, saying a federal program to help poor families pay heating bills will have nowhere near the money needed to cover those expected to seek assistance.
The government's Low Income Home Energy Assistance Program, known as LIHEAP, only has enough funding to cover 16 percent of the 38 million poor households eligible for the program.
The current $2.16 billion LIHEAP budget in only $300 million more than what the program had when it was created by Congress in 1981. Despite higher energy costs, the Bush administration has proposed cutting the program's budget.
WASHINGTON (Reuters) - About 30 million low-income American households who will need help paying heating bills this winter from a U.S. government program will be left in the cold because of a lack of funding for the program.
...
Consumer groups and state energy officials have sounded the alarm, saying a federal program to help poor families pay heating bills will have nowhere near the money needed to cover those expected to seek assistance.
The government's Low Income Home Energy Assistance Program, known as LIHEAP, only has enough funding to cover 16 percent of the 38 million poor households eligible for the program.
The current $2.16 billion LIHEAP budget in only $300 million more than what the program had when it was created by Congress in 1981. Despite higher energy costs, the Bush administration has proposed cutting the program's budget.
Sunday, October 21, 2007
“These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation a go,” ...
Wednesday, October 17, 2007 by CommonDreams.org | What Do Brazil, Mexico, Russia and the USA Have in Common? | by Russell Mokhiber
What do Brazil, Mexico, Russia and the USA have in common?
A rapidly expanding billionaire class.
Rampant poverty.
And a distressed middle class.
That’s the take of Pulitzer prize-winning New York Times reporter David Cay Johnston in a soon to be released book - Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill) (Portfolio, December 2007).
In it, Johnston seeks to afflict the comfortable top one tenth of one percent of Americans — the 300,000 men, women and children who last year made more money than the bottom 150 million Americans.
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Much of the wealth transfer upstairs has come at the hands of corporate welfare artists who have shifted billions from the middle class to the billionaire class.
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Johnston points out that we used to prosecute loan sharks. But then we got rid of usury laws and passed new laws that allow “Goldman Sachs and Lehman Brothers, MBNA and Citibank to exploit the poor, the unsophisticated and the foolish.”
“These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation a go,” he says. “The result? In the last 25 years or so, one American family in seven has sought refuge in federal bankruptcy court. ”
...
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, http://www.corporatecrimereporter.com.
What do Brazil, Mexico, Russia and the USA have in common?
A rapidly expanding billionaire class.
Rampant poverty.
And a distressed middle class.
That’s the take of Pulitzer prize-winning New York Times reporter David Cay Johnston in a soon to be released book - Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill) (Portfolio, December 2007).
In it, Johnston seeks to afflict the comfortable top one tenth of one percent of Americans — the 300,000 men, women and children who last year made more money than the bottom 150 million Americans.
...
Much of the wealth transfer upstairs has come at the hands of corporate welfare artists who have shifted billions from the middle class to the billionaire class.
...
Johnston points out that we used to prosecute loan sharks. But then we got rid of usury laws and passed new laws that allow “Goldman Sachs and Lehman Brothers, MBNA and Citibank to exploit the poor, the unsophisticated and the foolish.”
“These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation a go,” he says. “The result? In the last 25 years or so, one American family in seven has sought refuge in federal bankruptcy court. ”
...
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, http://www.corporatecrimereporter.com.
[Tight money] affecting day-to-day calculations of merchants like Wal-Mart ... "customers running out of food products, paper towels sooner in month"
Living Paycheck to Paycheck Gets Harder | Oct 19, 4:16 PM (ET) | By ANNE D'INNOCENZIO
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Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc. (WMT) (WMT), 7-Eleven Inc. and Family Dollar Stores Inc. (FDO) (FDO)
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From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
"It's pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. "It seems like to us, customers are running out of food products, paper towels sooner in the month."
Wal-Mart, the world's largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
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Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they're further skimping on basic medical care and other critical services. ...
...
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc. (WMT) (WMT), 7-Eleven Inc. and Family Dollar Stores Inc. (FDO) (FDO)
...
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
"It's pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. "It seems like to us, customers are running out of food products, paper towels sooner in the month."
Wal-Mart, the world's largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
...
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they're further skimping on basic medical care and other critical services. ...
Tuesday, October 16, 2007
only 34% of Americans expected today’s children to be better off - down from 55% shortly before President Bush came to power
October 15, 2007 by The Guardian/UK | The Land of Optimism Is in the Dumps, But Refuses to Accept How It Got There | by Gary Younge
Not since Watergate has such pessimism afflicted Americans. They want politicians to lift them without facing the cause
...
This sense of optimism has been in retreat in almost every sense over the past few years. According to Rasmussen polls, just 21% of Americans believe the country is on the right track, a figure that has fallen by more than a half since the presidential election of 2004. Meanwhile only a third think the country’s best days are yet to come, as opposed to 43% who believe they have come and gone - again a steep decline on three years ago. These are not one-offs. In the past 18 months almost every poll that has asked Americans about their country’s direction has produced among the most pessimistic responses on record - a more extended period than anyone can remember since Watergate.
...
There are three main reasons. Closest to home is the economy. Wages are stagnant, house prices in most areas have stalled or are falling, the dollar is plunging, and the deficit is rising. A Pew survey last week showed that 72% believe the economy is either “only fair” or poor and 76% believe it will be the same or worse a year from now. Globalisation is a major worry. Of 46 countries polled recently, the US had the least positive view on foreign trade and one of the least positive on foreign companies.
The sense that things will improve for the next generation has all but evaporated. Another Pew poll from last year found that only 34% of Americans expected today’s children to be better off than people are now - down from 55% shortly before President Bush came to power.
...
Second is the Iraq war and the steep decline in America’s international standing it has prompted. A global-attitudes Pew poll from last year showed that 65% of Americans believe the country is less respected by the rest of the world than it was - double the figure of 20 years ago. The fact that only half those polled thought this was a problem is telling.
...
Which brings us, finally, to the political class. Once again the American public have lost faith. The rot starts at the top. Almost as soon as they elected Bush in 2004 they seemed to regret it. Since Katrina, his favourability ratings have been stuck in the 30s and show no signs of moving - or at least not upwards. Bush’s only comfort is that public approval of the Democratically controlled Congress is even worse, hovering just below where it was shortly before the 2006 elections. In other words, however Americans believe their country will return to the right track, they no longer trust politicians to get them there. ...
Not since Watergate has such pessimism afflicted Americans. They want politicians to lift them without facing the cause
...
This sense of optimism has been in retreat in almost every sense over the past few years. According to Rasmussen polls, just 21% of Americans believe the country is on the right track, a figure that has fallen by more than a half since the presidential election of 2004. Meanwhile only a third think the country’s best days are yet to come, as opposed to 43% who believe they have come and gone - again a steep decline on three years ago. These are not one-offs. In the past 18 months almost every poll that has asked Americans about their country’s direction has produced among the most pessimistic responses on record - a more extended period than anyone can remember since Watergate.
...
There are three main reasons. Closest to home is the economy. Wages are stagnant, house prices in most areas have stalled or are falling, the dollar is plunging, and the deficit is rising. A Pew survey last week showed that 72% believe the economy is either “only fair” or poor and 76% believe it will be the same or worse a year from now. Globalisation is a major worry. Of 46 countries polled recently, the US had the least positive view on foreign trade and one of the least positive on foreign companies.
The sense that things will improve for the next generation has all but evaporated. Another Pew poll from last year found that only 34% of Americans expected today’s children to be better off than people are now - down from 55% shortly before President Bush came to power.
...
Second is the Iraq war and the steep decline in America’s international standing it has prompted. A global-attitudes Pew poll from last year showed that 65% of Americans believe the country is less respected by the rest of the world than it was - double the figure of 20 years ago. The fact that only half those polled thought this was a problem is telling.
...
Which brings us, finally, to the political class. Once again the American public have lost faith. The rot starts at the top. Almost as soon as they elected Bush in 2004 they seemed to regret it. Since Katrina, his favourability ratings have been stuck in the 30s and show no signs of moving - or at least not upwards. Bush’s only comfort is that public approval of the Democratically controlled Congress is even worse, hovering just below where it was shortly before the 2006 elections. In other words, however Americans believe their country will return to the right track, they no longer trust politicians to get them there. ...
Sunday, October 14, 2007
66% of execs said the compensation of top executives was high relative to their performance.... 33% just right ... 2% too low
We are overpaid, say US executives | By Francesco Guerrera in New York | Published: October 14 2007 22:03 | Last updated: October 14 2007 22:03
Most US corporate leaders believe chief executives are overpaid and do not provide value for money for their companies, according to a study that will embolden critics of excessive compensation.
The findings – to be published today by the National Association of Corporate Directors – are likely to strengthen calls by investors and politicians, including George W. Bush, US president, for restraint on executive pay at a time of growing income inequality in the US.
...
Four out of six chief executives or company presidents polled by the NACD in July and August said the compensation of top executives was high relative to their performance.
Only 2.2 per cent of the nearly 70 chief executives and presidents involved in the survey said compensation was too low, while a third deemed it “just right”.
Their views were backed up by outside directors, with more than 80 per cent of them saying chief executives were overpaid. ...
Most US corporate leaders believe chief executives are overpaid and do not provide value for money for their companies, according to a study that will embolden critics of excessive compensation.
The findings – to be published today by the National Association of Corporate Directors – are likely to strengthen calls by investors and politicians, including George W. Bush, US president, for restraint on executive pay at a time of growing income inequality in the US.
...
Four out of six chief executives or company presidents polled by the NACD in July and August said the compensation of top executives was high relative to their performance.
Only 2.2 per cent of the nearly 70 chief executives and presidents involved in the survey said compensation was too low, while a third deemed it “just right”.
Their views were backed up by outside directors, with more than 80 per cent of them saying chief executives were overpaid. ...
Friday, October 12, 2007
The wealthiest 1% of Americans earned 21.2% of all income in 2005 ... up from 19% in 2004 ... highest since 1920's ... financiers and lawyers ...
Income-Inequality Gap Widens | Boom in Financial Markets Parallels Rise in Share For Wealthiest Americans | By GREG IP | October 12, 2007; Page A2
The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.
The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
...
The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.
...
One study by University of Chicago academics Steven Kaplan and Joshua Rauh concludes that in 2004 there were more than twice as many such Wall Street professionals in the top 0.5% of all earners as there are executives from nonfinancial companies.
Mr. Rauh said "it's hard to escape the notion" that the rising share of income going to the very richest is, in part, "a Wall Street, financial industry-based story." The study shows that the highest-earning hedge-fund manager earned double in 2005 what the top earner made in 2003, and top 25 hedge-fund managers earned more in 2004 than the chief executives of all the companies in the Standard & Poor's 500-stock index, combined. It also shows profits per equity partner at the top 100 law firms doubling between 1994 and 2004, to over $1 million in 2004 dollars. ...
The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.
The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
...
The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.
...
One study by University of Chicago academics Steven Kaplan and Joshua Rauh concludes that in 2004 there were more than twice as many such Wall Street professionals in the top 0.5% of all earners as there are executives from nonfinancial companies.
Mr. Rauh said "it's hard to escape the notion" that the rising share of income going to the very richest is, in part, "a Wall Street, financial industry-based story." The study shows that the highest-earning hedge-fund manager earned double in 2005 what the top earner made in 2003, and top 25 hedge-fund managers earned more in 2004 than the chief executives of all the companies in the Standard & Poor's 500-stock index, combined. It also shows profits per equity partner at the top 100 law firms doubling between 1994 and 2004, to over $1 million in 2004 dollars. ...
Thursday, October 11, 2007
Since 2001 the dollar has lost more than half its value against the euro.
Almighty US dollar turns into ‘American peso’ | DEMAND AND SUPPLY | By BOO CHANCO | The Philippine Star
There is this joke circulating in financial circles that the once “almighty US dollar,” is fast turning into the “new American peso.” Since 2001 the dollar has lost more than half its value against the euro. It now costs nearly $1.40 to buy one euro. And it isn’t just the euro that seems to be growing stronger against the US dollar. It has declined against many other major world currencies, and even including minor ones like our peso, reflecting the dollar’s loss of purchasing power.
As the Los Angeles Times reported, “in much of the world — from Brazil to Poland to Thailand — one dollar buys less than it did a year ago, and far less than it did four years ago. On Friday, the US currency hit a 30-year low against its Canadian peer.”
...
... Mr. Greenspan says Mr. Bush ignored his advice to veto “out-of-control” bills that sent the US deeper into deficit.
There is this joke circulating in financial circles that the once “almighty US dollar,” is fast turning into the “new American peso.” Since 2001 the dollar has lost more than half its value against the euro. It now costs nearly $1.40 to buy one euro. And it isn’t just the euro that seems to be growing stronger against the US dollar. It has declined against many other major world currencies, and even including minor ones like our peso, reflecting the dollar’s loss of purchasing power.
As the Los Angeles Times reported, “in much of the world — from Brazil to Poland to Thailand — one dollar buys less than it did a year ago, and far less than it did four years ago. On Friday, the US currency hit a 30-year low against its Canadian peer.”
...
... Mr. Greenspan says Mr. Bush ignored his advice to veto “out-of-control” bills that sent the US deeper into deficit.
ecoming more difficult for economists to clutch to their bosoms the delusion that offshoring is free trade... US is on a path to economic Armageddon
America’s Hegemonic Status Slipping Away | By Paul Craig Roberts
09/19/07 "ICH" -- -- Former Fed Chairman Alan Greenspan’s memoir has put him in the news these last few days. He has upset Republicans with his comments on various presidents, with George W. Bush getting the brickbats and Clinton the praise, and by saying that Bush’s invasion of Iraq was about oil, not weapons of mass destruction.
Opponents of Bush’s wars welcomed Greenspan’s statement, as it strips the moral pretext away from Bush’s aggression, leaving naked greed unmasked.
The most notable aspect of Greenspan’s memoir is his unconcern with America’s loss of manufacturing. Instead of a problem, Greenspan simply sees a beneficial shift in jobs from “old” manufacturing (steel, cars, and textiles) to “new” manufacturing such as computers and telecommunications. This shows a remarkable ignorance of statistical data on the part of a Federal Reserve Chairman renowned for his command over numbers and a complete lack of grasp of offshoring.
The incentive to offshore US jobs has nothing to do with “old” and “new” economy. Corporations offshore their production, because they can more cheaply produce abroad what they sell to Americans. When corporations bring their offshored production to the US to sell, the goods count as imports.
Had Greenspan bothered to look at US balance of trade data, he would have discovered that in 2006, the last full year of data, the US exported $47,580,000,000 in computers and imported $101,347,000,000 in computers for a trade deficit in computers of $53,767,000,000. In telecommunications equipment the US exported $28,322,000,000 and imported $40,250,000,000 for a trade deficit in telecommunications equipment of $11,883,000,000.
...
For most of the 21st century I have been pointing out that offshoring is not trade, free or otherwise. It is labor arbitrage. By replacing US labor with foreign labor in the production of goods and services for US markets, US firms are destroying the ladders of upward mobility in the US. So far economists have preferred their delusions to the facts.
It is becoming more difficult for economists to clutch to their bosoms the delusion that offshoring is free trade. Ralph Gomory, the distinguished mathematician and co-author with William Baumol, past president of the American Economics Association, of Global Trade and Conflicting National Interests, the most important work in trade theory in 200 years, has entered the public debate.
In an interview with Manufacturing & Technology News (September 17), Gomory confirms that there is no basis in economic theory for claiming that it is good to tear down our own productive capability and to rebuild it in a foreign country. It is not free trade when a company relocates its manufacturing abroad.
Gomory says that economists and policymakers “still are treating companies as if they represent the country, and they do not.” Companies are no longer bound to the interests of their home countries, because the link has been decoupled between the profit motive and a country’s welfare. Economists, Gomory points out, are not acknowledging the implications of this decoupling for economic theory.
A country that offshores its own production is unable to balance its trade. Americans are able to consume more than they produce only because the dollar is the world reserve currency. However, the dollar’s reserve currency status is eroded by the debts associated with continual trade and budget deficits.
The US is on a path to economic Armageddon. Shorn of industry, dependent on offshored manufactured goods and services, and deprived of the dollar as reserve currency, the US will become a third world country. Gomery notes that it would be very difficult—perhaps impossible—for the US to re-acquire the manufacturing capability that it gave away to other countries.
It is a mystery how a people, whose economic policy is turning them into a third world country with its university graduates working as waitresses, bartenders, and driving cabs, can regard themselves as a hegemonic power even as they build up war debts that are further undermining their ability to pay their import bills.
09/19/07 "ICH" -- -- Former Fed Chairman Alan Greenspan’s memoir has put him in the news these last few days. He has upset Republicans with his comments on various presidents, with George W. Bush getting the brickbats and Clinton the praise, and by saying that Bush’s invasion of Iraq was about oil, not weapons of mass destruction.
Opponents of Bush’s wars welcomed Greenspan’s statement, as it strips the moral pretext away from Bush’s aggression, leaving naked greed unmasked.
The most notable aspect of Greenspan’s memoir is his unconcern with America’s loss of manufacturing. Instead of a problem, Greenspan simply sees a beneficial shift in jobs from “old” manufacturing (steel, cars, and textiles) to “new” manufacturing such as computers and telecommunications. This shows a remarkable ignorance of statistical data on the part of a Federal Reserve Chairman renowned for his command over numbers and a complete lack of grasp of offshoring.
The incentive to offshore US jobs has nothing to do with “old” and “new” economy. Corporations offshore their production, because they can more cheaply produce abroad what they sell to Americans. When corporations bring their offshored production to the US to sell, the goods count as imports.
Had Greenspan bothered to look at US balance of trade data, he would have discovered that in 2006, the last full year of data, the US exported $47,580,000,000 in computers and imported $101,347,000,000 in computers for a trade deficit in computers of $53,767,000,000. In telecommunications equipment the US exported $28,322,000,000 and imported $40,250,000,000 for a trade deficit in telecommunications equipment of $11,883,000,000.
...
For most of the 21st century I have been pointing out that offshoring is not trade, free or otherwise. It is labor arbitrage. By replacing US labor with foreign labor in the production of goods and services for US markets, US firms are destroying the ladders of upward mobility in the US. So far economists have preferred their delusions to the facts.
It is becoming more difficult for economists to clutch to their bosoms the delusion that offshoring is free trade. Ralph Gomory, the distinguished mathematician and co-author with William Baumol, past president of the American Economics Association, of Global Trade and Conflicting National Interests, the most important work in trade theory in 200 years, has entered the public debate.
In an interview with Manufacturing & Technology News (September 17), Gomory confirms that there is no basis in economic theory for claiming that it is good to tear down our own productive capability and to rebuild it in a foreign country. It is not free trade when a company relocates its manufacturing abroad.
Gomory says that economists and policymakers “still are treating companies as if they represent the country, and they do not.” Companies are no longer bound to the interests of their home countries, because the link has been decoupled between the profit motive and a country’s welfare. Economists, Gomory points out, are not acknowledging the implications of this decoupling for economic theory.
A country that offshores its own production is unable to balance its trade. Americans are able to consume more than they produce only because the dollar is the world reserve currency. However, the dollar’s reserve currency status is eroded by the debts associated with continual trade and budget deficits.
The US is on a path to economic Armageddon. Shorn of industry, dependent on offshored manufactured goods and services, and deprived of the dollar as reserve currency, the US will become a third world country. Gomery notes that it would be very difficult—perhaps impossible—for the US to re-acquire the manufacturing capability that it gave away to other countries.
It is a mystery how a people, whose economic policy is turning them into a third world country with its university graduates working as waitresses, bartenders, and driving cabs, can regard themselves as a hegemonic power even as they build up war debts that are further undermining their ability to pay their import bills.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan Administration. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice.
Tuesday, October 9, 2007
For the first time since Carter, homeownership is set to decline over [Bush,s] tenure
The American Dream in Reverse | Published: October 8, 2007
For the first time since the Carter administration, homeownership in the United States is set to decline over a president’s tenure. When President Bush took office in 2001, homeownership stood at 67.6 percent. It rose as the mortgage bubble inflated but is projected to fall to 67 percent by early 2009, which would come to 700,000 fewer homeowners than when Mr. Bush started. The decline, calculated by Moody’s Economy.com, is inexorable unless the government launches a heroic effort to help hundreds of thousands of defaulting borrowers stay in their homes.
...
The foreclosure crisis is rooted in reckless — and shamefully underregulated — mortgage lending. Many homeowners — mainly subprime borrowers with low incomes and poor credit — are now stuck in adjustable-rate loans that have become unaffordable as monthly payments have spiked upward. Their predicament is not entirely of their own making, and even if it were they would need to be bailed out because mass foreclosures would wreak unacceptable damage on the economic and social life of the nation.
...
Democratic Congressional leaders have called on the Bush administration to appoint one senior official to lead a foreclosure relief effort. The White House dismissed the idea, saying, in effect, that it’s doing enough. ...
For the first time since the Carter administration, homeownership in the United States is set to decline over a president’s tenure. When President Bush took office in 2001, homeownership stood at 67.6 percent. It rose as the mortgage bubble inflated but is projected to fall to 67 percent by early 2009, which would come to 700,000 fewer homeowners than when Mr. Bush started. The decline, calculated by Moody’s Economy.com, is inexorable unless the government launches a heroic effort to help hundreds of thousands of defaulting borrowers stay in their homes.
...
The foreclosure crisis is rooted in reckless — and shamefully underregulated — mortgage lending. Many homeowners — mainly subprime borrowers with low incomes and poor credit — are now stuck in adjustable-rate loans that have become unaffordable as monthly payments have spiked upward. Their predicament is not entirely of their own making, and even if it were they would need to be bailed out because mass foreclosures would wreak unacceptable damage on the economic and social life of the nation.
...
Democratic Congressional leaders have called on the Bush administration to appoint one senior official to lead a foreclosure relief effort. The White House dismissed the idea, saying, in effect, that it’s doing enough. ...
Sunday, October 7, 2007
Bush's record on jobs: 72,000 per month .. Clinton: 237,000 per month
A closer look at Bush's record on jobs | 10.06.07 -- 6:09PM | By Steve Benen
In response to the latest monthly employment report, the White House released a "fact sheet" yesterday bragging about the president's record on job creation. It led Paul Krugman to take a closer look at Bush's numbers as compared to his predecessor's.
Over the whole of the Clinton administration, the economy added 22.7 million jobs -- 237,000 per month.
Over the whole of the Bush administration to date, the economy added only 5.8 million jobs -- 72,000 per month.
But, the White House says, the first two years of Bush's presidency shouldn't count because there was a recession and 9/11 affected the economy. It's only fair, the president's supporters say, to start counting since August 2003, and forget about his first 32 months in office.
Fine, Krugman said. Bush's monthly average, using the cherry-picked timeline, still trails Clinton, 172,000 per month to 237,000 per month.
Krugman concludes, "Did I mention that the Clinton job boom followed an, um, increase in taxes?"
In response to the latest monthly employment report, the White House released a "fact sheet" yesterday bragging about the president's record on job creation. It led Paul Krugman to take a closer look at Bush's numbers as compared to his predecessor's.
Over the whole of the Clinton administration, the economy added 22.7 million jobs -- 237,000 per month.
Over the whole of the Bush administration to date, the economy added only 5.8 million jobs -- 72,000 per month.
But, the White House says, the first two years of Bush's presidency shouldn't count because there was a recession and 9/11 affected the economy. It's only fair, the president's supporters say, to start counting since August 2003, and forget about his first 32 months in office.
Fine, Krugman said. Bush's monthly average, using the cherry-picked timeline, still trails Clinton, 172,000 per month to 237,000 per month.
Krugman concludes, "Did I mention that the Clinton job boom followed an, um, increase in taxes?"
Saturday, October 6, 2007
By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, ...
Republicans Grow Skeptical On Free Trade | By JOHN HARWOOD | October 4, 2007; Page A1
WASHINGTON -- By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.
The sign of broadening resistance to globalization came in a new Wall Street Journal-NBC News Poll that showed a fraying of Republican Party orthodoxy on the economy. While 60% of respondents said they want the next president and Congress to continue cutting taxes, 32% said it's time for some tax increases on the wealthiest Americans to reduce the budget deficit and pay for health care. ...
WASHINGTON -- By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.
The sign of broadening resistance to globalization came in a new Wall Street Journal-NBC News Poll that showed a fraying of Republican Party orthodoxy on the economy. While 60% of respondents said they want the next president and Congress to continue cutting taxes, 32% said it's time for some tax increases on the wealthiest Americans to reduce the budget deficit and pay for health care. ...
Thursday, October 4, 2007
Clinton raised the national debt 4.3% per year. The Republican presidents (Reagan, Bush, and Bush II) raised the debt at 10.8% per year
United States National Debt | (1938 to Present) | An Analysis of the Presidents Who Are Responsible for the Borrowing | By Steve McGourty | Update History | 6 May 2007, Third Revision
The chart below, Figure 1, shows the United States national debt (per Microsoft’s Encarta Encyclopedia[1] and US Government data[2]) with the various Presidents’ terms marked by vertical lines. Under President Clinton the growth in debt ceased, but note the radical change in direction since George W. Bush entered office. There is no question and a lot of mathematical proof that the steepest upward rises in debt since the end of World War II, started with President Reagan and continued with other so called Neo-Conservatives. (See red in Figure 1 below. For larger views of any graph in this paper just put your mouse pointer over the graph and click on it).
...
For the mathematically inclined, if you take the first derivative of the data presented to find the slope of each President’s debt increase, you will find that the Republican slopes are consistently more positive than the Democratic slopes. For everyone else, this just means that unbiased mathematical proof exists to support the claim that since 1945, Republican presidents have borrowed more than Democratic presidents regardless of the inflation rate[4].
...
Comparing the borrowing habits of the two parties since 1981, when the Neo-Conservative movement really took hold and government spending raced out of control, it is extremely obvious that the big spenders in Washington are Republicans and their party’s presidents. The only Democratic president since then, Mr. Clinton raised the national debt an average of 4.3% per year. The Republican presidents (Reagan, Bush, and Bush II) raised the debt an average of 10.8% per year. That is, for every dollar a Democratic President has raised the national debt in the past 25 years, Republican presidents have raised the debt by $2.53[6]. Any way you look at it Neo-Conservative Republican presidents cannot or will not control government spending. ...
The chart below, Figure 1, shows the United States national debt (per Microsoft’s Encarta Encyclopedia[1] and US Government data[2]) with the various Presidents’ terms marked by vertical lines. Under President Clinton the growth in debt ceased, but note the radical change in direction since George W. Bush entered office. There is no question and a lot of mathematical proof that the steepest upward rises in debt since the end of World War II, started with President Reagan and continued with other so called Neo-Conservatives. (See red in Figure 1 below. For larger views of any graph in this paper just put your mouse pointer over the graph and click on it).
...
For the mathematically inclined, if you take the first derivative of the data presented to find the slope of each President’s debt increase, you will find that the Republican slopes are consistently more positive than the Democratic slopes. For everyone else, this just means that unbiased mathematical proof exists to support the claim that since 1945, Republican presidents have borrowed more than Democratic presidents regardless of the inflation rate[4].
...
Comparing the borrowing habits of the two parties since 1981, when the Neo-Conservative movement really took hold and government spending raced out of control, it is extremely obvious that the big spenders in Washington are Republicans and their party’s presidents. The only Democratic president since then, Mr. Clinton raised the national debt an average of 4.3% per year. The Republican presidents (Reagan, Bush, and Bush II) raised the debt an average of 10.8% per year. That is, for every dollar a Democratic President has raised the national debt in the past 25 years, Republican presidents have raised the debt by $2.53[6]. Any way you look at it Neo-Conservative Republican presidents cannot or will not control government spending. ...
Wednesday, October 3, 2007
ideological conviction that markets are so perfectly self-regulating that government's main job is to protect property rights,... and get out of way
The Alarming Parallels Between 1929 and 2007 | Robert Kuttner | October 2, 2007 | web only
Has deregulation left the economy at risk of another 1929-scale crash? Should the Fed keep bailing out speculators? Robert Kuttner testified yesterday before the House Financial Services Committee.
Mr. Chairman and members of the Committee:
...
In researching the book, I devoted a lot of effort to reviewing the abuses of the 1920s, the effort in the 1930s to create a financial system that would prevent repetition of those abuses, and the steady dismantling of the safeguards over the last three decades in the name of free markets and financial innovation.
... I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.
...
The most basic and alarming parallel is the creation of asset bubbles, in which the purveyors of securities use very high leverage; the securities are sold to the public or to specialized funds with underlying collateral of uncertain value; and financial middlemen extract exorbitant returns at the expense of the real economy. This was the essence of the abuse of public utilities stock pyramids in the 1920s, where multi-layered holding companies allowed securities to be watered down, to the point where the real collateral was worth just a few cents on the dollar, and returns were diverted from operating companies and ratepayers. ...
...
A second parallel is what today we would call securitization of credit. Some people think this is a recent innovation, but in fact it was the core technique that made possible the dangerous practices of the 1920. Banks would originate and repackage highly speculative loans, market them as securities through their retail networks, using the prestigious brand name of the bank -- e.g. Morgan or Chase -- as a proxy for the soundness of the security. It was this practice, and the ensuing collapse when so much of the paper went bad, that led Congress to enact the Glass-Steagall Act, requiring bankers to decide either to be commercial banks - ....
...
A third parallel is the excessive use of leverage. In the 1920s, not only were there pervasive stock-watering schemes, but there was no limit on margin. If you thought the market was just going up forever, you could borrow most of the cost of your investment, via loans conveniently provided by your stockbroker. It worked well on the upside. When it didn't work so well on the downside, Congress subsequently imposed margin limits. ...
...
The fourth parallel is the corruption of the gatekeepers. In the 1920s, the corrupted insiders were brokers running stock pools and bankers as purveyors of watered stock. 1990s, it was accountants, auditors and stock analysts, who were supposedly agents of investors, but who turned out to be confederates of corporate executives. ...
...
Yet another parallel is the failure of regulation to keep up with financial innovation that is either far too risky to justify the benefit to the real economy, or just plain corrupt, or both. In the 1920s, many of these securities were utterly opaque. ...
...
A last parallel is ideological -- the nearly universal conviction, 80 years ago and today, that markets are so perfectly self-regulating that government's main job is to protect property rights, and otherwise just get out of the way. ...
Has deregulation left the economy at risk of another 1929-scale crash? Should the Fed keep bailing out speculators? Robert Kuttner testified yesterday before the House Financial Services Committee.
Mr. Chairman and members of the Committee:
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In researching the book, I devoted a lot of effort to reviewing the abuses of the 1920s, the effort in the 1930s to create a financial system that would prevent repetition of those abuses, and the steady dismantling of the safeguards over the last three decades in the name of free markets and financial innovation.
... I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.
...
The most basic and alarming parallel is the creation of asset bubbles, in which the purveyors of securities use very high leverage; the securities are sold to the public or to specialized funds with underlying collateral of uncertain value; and financial middlemen extract exorbitant returns at the expense of the real economy. This was the essence of the abuse of public utilities stock pyramids in the 1920s, where multi-layered holding companies allowed securities to be watered down, to the point where the real collateral was worth just a few cents on the dollar, and returns were diverted from operating companies and ratepayers. ...
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A second parallel is what today we would call securitization of credit. Some people think this is a recent innovation, but in fact it was the core technique that made possible the dangerous practices of the 1920. Banks would originate and repackage highly speculative loans, market them as securities through their retail networks, using the prestigious brand name of the bank -- e.g. Morgan or Chase -- as a proxy for the soundness of the security. It was this practice, and the ensuing collapse when so much of the paper went bad, that led Congress to enact the Glass-Steagall Act, requiring bankers to decide either to be commercial banks - ....
...
A third parallel is the excessive use of leverage. In the 1920s, not only were there pervasive stock-watering schemes, but there was no limit on margin. If you thought the market was just going up forever, you could borrow most of the cost of your investment, via loans conveniently provided by your stockbroker. It worked well on the upside. When it didn't work so well on the downside, Congress subsequently imposed margin limits. ...
...
The fourth parallel is the corruption of the gatekeepers. In the 1920s, the corrupted insiders were brokers running stock pools and bankers as purveyors of watered stock. 1990s, it was accountants, auditors and stock analysts, who were supposedly agents of investors, but who turned out to be confederates of corporate executives. ...
...
Yet another parallel is the failure of regulation to keep up with financial innovation that is either far too risky to justify the benefit to the real economy, or just plain corrupt, or both. In the 1920s, many of these securities were utterly opaque. ...
...
A last parallel is ideological -- the nearly universal conviction, 80 years ago and today, that markets are so perfectly self-regulating that government's main job is to protect property rights, and otherwise just get out of the way. ...
U.S. hiring weak again in September ... goods-producing sector fell by 39,000 jobs, manufacturing by 22,000
U.S. hiring weak again in September | Private-sector employment grew by 58,000, ADP says | By Rex Nutting, MarketWatch Last Update: 9:09 AM ET Oct 3, 2007
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Private-sector job growth has averaged just 42,000 per month over the past three months, down sharply from 95,000 in the first three months of the year.
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Private payrolls grew by 58,000 in September, following a revised 27,000 gain in August, ADP said. It marks the third straight month of modest job growth. Read the full report.
Private-sector job growth has averaged just 42,000 per month over the past three months, down sharply from 95,000 in the first three months of the year.
The report suggests nonfarm payrolls may have grown less in September than the 113,000 anticipated by economists surveyed by MarketWatch. See Economic Calendar.
Adding in some 20,000 government jobs not covered by the ADP report, the report suggests the government's figures on nonfarm payrolls probably grew by about 80,000.
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Construction jobs fell by 20,000 in September and 157,000 in the past year.
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According to ADP, the goods-producing sector fell by 39,000 jobs in September, including 22,000 in manufacturing.
Construction jobs fell by 20,000 in September and 157,000 in the past year.
Manufacturing and housing have been the sectors with the largest job losses in the past year, in both the ADP and government data. ...
The services sector added 97,000 jobs in September. Employment in financial services fell by 7,000, the second consecutive decline after six years of strong growth.
Sadly, the hard data tells us that we cannot school our way out of national trade policy ... skilled jobs shipped overseas ...
David Sirota | Flattening the Great Education Myth
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"We need to increase educational opportunity," said Tyler Trevor, an aide to Montana's commissioner of higher education. "We have to create our own educational capital here."
"We don't invest in good teaching practices," said Bruce Messinger, Helena's superintendent of schools. "We have to make sure our teachers are using the best methods."
All said exactly what Friedman said at the end of his videotape: "Kids need to learn how to learn" in order to compete in the "flat world."
Sadly, the hard data tells us that, as comforting as this Great Education Myth is, we cannot school our way out of the problems accompanying a national trade policy devoid of wage, environmental and human-rights protections.
As Fortune magazine reported last year, "The skill premium, the extra value of higher education, must have declined after three decades of growing." Citing the U.S.
government's Economic Report of the President, the magazine noted that "real annual earnings of college graduates actually declined" between 2000 and 2004. The magazine also noted that new studies "show companies massively shifting high-skilled work -- research, development, engineering, even corporate finance -- from the United States to low-cost countries like India and China."
It's not that workers in these other countries are smarter, says Sheldon Steinbach of the American Council on Education. "One could be educationally competitive and easily lose out in the global economic marketplace," he told the Los Angeles Times. Why? "Because of significantly lower wages being paid elsewhere." ...
...
"We need to increase educational opportunity," said Tyler Trevor, an aide to Montana's commissioner of higher education. "We have to create our own educational capital here."
"We don't invest in good teaching practices," said Bruce Messinger, Helena's superintendent of schools. "We have to make sure our teachers are using the best methods."
All said exactly what Friedman said at the end of his videotape: "Kids need to learn how to learn" in order to compete in the "flat world."
Sadly, the hard data tells us that, as comforting as this Great Education Myth is, we cannot school our way out of the problems accompanying a national trade policy devoid of wage, environmental and human-rights protections.
As Fortune magazine reported last year, "The skill premium, the extra value of higher education, must have declined after three decades of growing." Citing the U.S.
government's Economic Report of the President, the magazine noted that "real annual earnings of college graduates actually declined" between 2000 and 2004. The magazine also noted that new studies "show companies massively shifting high-skilled work -- research, development, engineering, even corporate finance -- from the United States to low-cost countries like India and China."
It's not that workers in these other countries are smarter, says Sheldon Steinbach of the American Council on Education. "One could be educationally competitive and easily lose out in the global economic marketplace," he told the Los Angeles Times. Why? "Because of significantly lower wages being paid elsewhere." ...
Alan Greenspan: Solution to Inequality is to Lower U.S. Wages: One of the truly great class warriors of his time.
Greenspan Says Solution to Inequality is to Lower U.S. Wages | David Sirota | Posted October 2, 2007 | 11:44 AM (EST)
Former Federal Reserve Chairman Alan Greenspan has been in the news lately trying to pretend he's had nothing to do with the slow-motion economic meltdown America is currently experiencing in the housing, job and labor market. But he is still the same old Alan Greenspan -- the one who opposes the minimum wage, and wants to drive wages in general into the ground. In fact, he admitted as much in a recent interview on Democracy Now!.
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"We ought to be opening up our borders to skilled labor from all parts of the world because if we were to do that we would increase the supply of skilled workers that our schools have been unable to create and as a consequence of that we would lower the average wage of skills and reduce the degree of income inequality in this country."
...
Beyond his dishonest trumpeting of the Great Education Myth, notice that Greenspan's solution to economic inequality in America is to drive down the wages of the dwindling number of good-paying jobs that remain, by importing more foreign workers who have no basic rights to bargain for good wages, and who are thus paid much less than American workers in the same jobs.
Former Federal Reserve Chairman Alan Greenspan has been in the news lately trying to pretend he's had nothing to do with the slow-motion economic meltdown America is currently experiencing in the housing, job and labor market. But he is still the same old Alan Greenspan -- the one who opposes the minimum wage, and wants to drive wages in general into the ground. In fact, he admitted as much in a recent interview on Democracy Now!.
...
"We ought to be opening up our borders to skilled labor from all parts of the world because if we were to do that we would increase the supply of skilled workers that our schools have been unable to create and as a consequence of that we would lower the average wage of skills and reduce the degree of income inequality in this country."
...
Beyond his dishonest trumpeting of the Great Education Myth, notice that Greenspan's solution to economic inequality in America is to drive down the wages of the dwindling number of good-paying jobs that remain, by importing more foreign workers who have no basic rights to bargain for good wages, and who are thus paid much less than American workers in the same jobs.
Alan Greenspan: One of the truly great class warriors of his time.
Tuesday, October 2, 2007
"Democrats are the new conservatives." ... better 25% on cutting deficits, 16% on controlling spending, 15% on economy, 9% on taxes, 3% on trade.
GOP Is Losing Grip On Core Business Vote | Deficit Hawks Defect As Social Issues Prevail; | 'The Party Left Me' | By JACKIE CALMES | October 2, 2007; Page A1
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... The votes of many disgruntled fiscal conservatives and other lapsed Republicans are now up for grabs, which could alter U.S. politics in the 2008 elections and beyond.
Some business leaders are drifting away from the party because of the war in Iraq, the growing federal debt and a conservative social agenda they don't share. In manufacturing sectors such as the auto industry, some Republicans want direct government help with soaring health-care costs, which Republicans in Washington have been reluctant to provide. And some business people want more government action on global warming, arguing that a bolder plan is not only inevitable, but could spur new industries.
Already, economic conservatives who favor balanced federal budgets have become a much smaller part of the party's base. That's partly because other groups, especially social conservatives, have grown more dominant. But it's also the result of defections by other fiscal conservatives angered by the growth of government spending during the six years that Republicans controlled both the White House and Congress.
... In an interview with The Wall Street Journal, he [Alan Greenspan] said: "The Republican Party, which ruled the House, the Senate and the presidency, I no longer recognize."
...
This year, the culturally conservative wing was roughly the same size, but economic conservatives accounted for just one in six Republicans. ...
...
As for fiscal policy, Mr. Cooper contends that "Democrats are the new conservatives." Republicans "are still talking about tax cuts. It was one thing when Ronald Reagan was doing it and the top [income-tax] rate was about 80%. Now tax rates are reasonable. So what if I have to pay 5% more in taxes?"
...
Yet the benefits to Democrats were evident in a Wall Street Journal/NBC News poll last July. When Americans were asked which party could better deal with national problems, they gave Democrats an edge of 25 percentage points over Republicans on cutting deficits, 16 points on controlling federal spending, 15 points on dealing with the economy, 9 points on taxes and 3 points on trade. "We have lost our measurable advantage on fiscal conservatism, and we have quite some ways to go to get that back," says Terry Nelson, Mr. Bush's national political director in 2004. ...
...
... The votes of many disgruntled fiscal conservatives and other lapsed Republicans are now up for grabs, which could alter U.S. politics in the 2008 elections and beyond.
Some business leaders are drifting away from the party because of the war in Iraq, the growing federal debt and a conservative social agenda they don't share. In manufacturing sectors such as the auto industry, some Republicans want direct government help with soaring health-care costs, which Republicans in Washington have been reluctant to provide. And some business people want more government action on global warming, arguing that a bolder plan is not only inevitable, but could spur new industries.
Already, economic conservatives who favor balanced federal budgets have become a much smaller part of the party's base. That's partly because other groups, especially social conservatives, have grown more dominant. But it's also the result of defections by other fiscal conservatives angered by the growth of government spending during the six years that Republicans controlled both the White House and Congress.
... In an interview with The Wall Street Journal, he [Alan Greenspan] said: "The Republican Party, which ruled the House, the Senate and the presidency, I no longer recognize."
...
This year, the culturally conservative wing was roughly the same size, but economic conservatives accounted for just one in six Republicans. ...
...
As for fiscal policy, Mr. Cooper contends that "Democrats are the new conservatives." Republicans "are still talking about tax cuts. It was one thing when Ronald Reagan was doing it and the top [income-tax] rate was about 80%. Now tax rates are reasonable. So what if I have to pay 5% more in taxes?"
...
Yet the benefits to Democrats were evident in a Wall Street Journal/NBC News poll last July. When Americans were asked which party could better deal with national problems, they gave Democrats an edge of 25 percentage points over Republicans on cutting deficits, 16 points on controlling federal spending, 15 points on dealing with the economy, 9 points on taxes and 3 points on trade. "We have lost our measurable advantage on fiscal conservatism, and we have quite some ways to go to get that back," says Terry Nelson, Mr. Bush's national political director in 2004. ...
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