By proposing financial reforms that won't curb Wall Street excess, U.S. policymakers have offered an unacceptably weak response to our enormous financial crisis. If voters don't demand that their elected representatives help workers and consumers instead of simply boosting corporate profits, the economic downturn will last for several more years and leave the economy vulnerable to another bank-induced meltdown.
The banks have unbelievable lobbying clout. In an interview with Cenk Uyger of The Young Turks, Heather Booth, executive director of Americans for Financial Reform, describes how one-sided the Wall Street reform fight has been. Despite broad public support for a fundamental financial overhaul, going up against the bank lobby is, as Booth describes, "a David and Goliath fight." It's basically Americans for Financial Reform against every major corporation in the U.S.
Booth notes that the Chamber of Commerce has vowed to spend $100 million on a campaign to defend the "so-called free enterprise system"-you know, the "free market"-in which corporate lobbyists spend millions of dollars to write the rules of the economic game. Just seven financial lobby groups have spent a massive $147 million peddling influence over the past two years.
In fact, as Janine Wedel observes for Salon, the U.S. economic system is starting to look an awful lot like the clannish systems of government that looted Eastern European countries in the early 1990s. Today, the public good takes a backseat to the narrow interests of powerful corporations.
With the Obama administration working with advisers from Citigroup and Goldman Sachs, we're not just watching Wall Street write its own regulations. We're watching the financial sector re-write the official role of the government in the economy. In this new role, the government's top priority is securing profits for corporate America.
"The intertwined coterie of financial and policy deciders in the United States is creating not only the financial architecture of the future, backed by the power and billions of the state, but, more generally, new relationships between the bureaucracy and the market," Wedel writes.
GRITtv's Laura Flanders echoes this theme in an interview with John Perkins, author of Confessions of an Economic Hit Man, and journalist Russ Baker. Lobbyists have so thoroughly hijacked the U.S. economy, Perkins argues, that the nation's government now resembles those of Latin American nations he worked with in the 1980s and 1990s.
"I don't think the U.S. president has much power these days, to be honest with you. . . . It's the big corporate executives who call the shots today, and let's face it, they financed Obama's campaign," Perkins says.
The very efforts the government deployed to save the financial system are being perverted to create another disaster. In a five-part interview with Paul Jay of The Real News, Jane D'Arista, an influential economist and author of The Evolution of U.S. Finance, explains how Wall Street destroyed itself over the past decade. By borrowing massive amounts of money, Wall Street was able to place bigger bets in the capital markets casino, resulting in huge profits when those bets paid off. But when the bets backfired, the losses were just as massive. Companies couldn't pay them off, so the government stepped in to support them.
One of those support mechanisms came from the Federal Reserve, which began making incredibly cheap loans to firms that engaged predominantly in speculative trading. The Fed used to lend exclusively to commercial banks, which used the money to make loans that helped grow the real economy. But now those loans are being used to support risky securities trading, so we're seeing big profits in the financial sector, without much help for workers and consumers. This is a major long-term problem-if the economy can't keep pace with the Wall Street casino, those speculative trades are going to backfire and we'll be right back to the chaos of September 2008, only with an even weaker economy.
All hope is not lost. As Perkins and Baker emphasize in their interview with Flanders, citizens have to demand corporate accountability and a government that actually serves the public good. For much of the past decade in Latin America, governments have been elected that stood up to major corporations and demanded that they stop pillaging their nation's resources at the people's expense.
In addition to demanding much stronger reforms for the financial sector, we have to demand that the government respond seriously to problems facing workers. With the unemployment rate at 10.2% and expected to go still higher, we need jobs. As Steve Benen notes for The Washington Monthly, Obama's economic stimulus package helped stave off total economic devastation. What we need now is another stimulus to get people back to work, not just slow the pace of job losses.
"A bold, ambitious jobs bill can make a huge difference-the stimulus got us out of the ditch, a new effort can get us going in the right direction again," Benen writes.
And the only argument against this plan is that we "can't afford it." That is-the government's fiscal deficit is too high, and we just can't spend money to help people in real economic trouble.
But as Christopher Hayes writes for The Nation, the deficit excuse is pretty pathetic. Economic stimulus bolsters economic growth, thus improving tax returns for the government in the future. And any spending on any project can be taken out of the budget from other measures. Hayes notes that our massive military spending is almost never included in discussions about "fiscal responsibility." If we were really worried about how much it would cost to fix the economy, we could stop spending so much money killing people.
"Fiscal conservatism and deficit concern is nearly always code speak in Washington for something else," Hayes writes. "Most often, when someone in Washington says they're concerned about the deficit, what they're really saying is, 'I would like to make sure we have a government that focuses maximally on blowing people up.'"
The government has to start saying 'no' to corporate America. Corporate profits are not the same thing as a strong economy. We need to demand an economic policy that answers to workers, not just bank balance sheets.
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.
Today, the public will get a look at how funds distributed through the American Recovery and Reinvestment Act of 2009 are being spent when the reports from agencies receiving these stimulus funds are released.
While many questions will surround the release of this information, it's likely that a critical part of this story will be lost unless we ask the right questions about this spending. Namely, is this stimulus really creating a recovery for everyone?
This is an important consideration given that many groups of Americans have consistently been left behind in ways that hard work and personal achievement alone cannot address. This was true even before the economic downturn began to affect everyone else, and it's likely that the crisis has further worsened gaps in income and assets that existed already.
To get an idea of what some Americans faced before the crisis, just look at 2007, the year before the crisis began affecting everyone:
Bailout pay czar Ken Feinberg raised a ruckus last week when he announced plans to slash cash payouts to executives at seven companies that have received massive levels of taxpayer support. While better oversight of the bailout barons is helpful, the best way to change Wall Street pay practices is to adopt a set of tough, comprehensive regulations that cover everything from the executive suite to the loan department. As is, many of the executives Feinberg cracked down on will still make millions this year from stocks and other perks, while the very banks that depend the most on bailout money are spending like mad to lobby against reform.
Feinberg's new salary limits only apply to executives at Citigroup, Bank of America, AIG, GM, Chrysler, GMAC and Chrysler Financial. But while these new rules are an effort to reduce the incentive for executives to take big risks for short-term gains, the rules of the game for non-bailout barons haven't changed at all. Risky securities trading and unenforced consumer protection regulations still allow financiers to make a killing by gambling on mortgages and credit cards.
As Greg Kaufmann explains for The Nation, Feinberg has been barred from altering some of the most egregious bonus arrangements at even the biggest fund recipients, as the employment contracts were signed prior to the government's bailout. AIG plans to pay out $198 million in bonuses in March 2010, and none of Feinberg's recent rulings will change that. As Kaufmann also notes, back in March, AIG agreed to pay pack $45 million of the bonuses it shelled out early this year. After over seven months, just $19 million has been repaid.
The government's hands-off approach to AIG employment contracts is a rather flagrant display of deference to executives. Nothing stopped the government from renegotiating contracts for union laborers when it bailed out Chrysler and GM, as Dean Baker notes for The American Prospect.
Lest we forget, the government literally owns AIG, and would own both Citigroup and Bank of America had it demanded a market rate of return for its investment. Taxpayers injected several times the stock market values of both Citi and BofA into the troubled banks, but settled for a 36% stake in Citi and preferred stock in BofA. As Mike Madden emphasizes for Salon, Feinberg is still letting executives make several times the median household income in cash alone-nevermind stock-and it's unlikely that his move will spark changes among bankers outside the handful of companies ordered to make changes.
"Executives are still taking home paychecks that dwarf what the average American earns. And it's not clear whether any other companies will get on board with the Treasury plan unless they're forced to," Madden writes.
Congress hasn't taken any significant steps to curb Wall Street paydays since the crisis broke, but lawmakers did take two other important steps toward banking reform this week. Two different House committees passed bills to rein in the wild world of derivatives trading and establish a new Consumer Financial Protection Agency (CFPA). In a video piece for the Huffington Post Investigative Fund, Amanda Zamora and Lagan Sebert detail the legislative battle to create a CFPA, which has faced an enormous lobbying push from both banks and the top lobby group for the corporate executive class, the U.S. Chamber of Commerce.
Zamora and Sebert note that top bank lobbyist Ed Yingling is arguing that if regulators simply enforced the existing consumer protection laws, all of the major abuses in mortgage lending and credit cards would have been prevented. Even for a corporate lobbyist, Yingling's disingenuousness is absolutely breathtaking. He acknowledges that existing regulators are not enforcing consumer protection laws, says he wants the laws enforced, and then says it would be a bad idea to create a new agency to enforce those laws.
The CFPA won't have any mysterious new powers. It will have the same authorities on credit cards and mortgages that existing federal regulators have. But the current regulators are focused primarily on bank profits, which often run directly contrary to fair play with consumers. Yingling and Wall Street are really afraid of a serious regulator who will stand up for consumers. They're terrified that the CFPA will actually enforce consumer protection rules against powerful banks-but are talking as if all they want is effective enforcement. It's a lie, pure and simple.
On Monday and Tuesday, thousands took to the streets in Chicago to protest a meeting of Yingling's lobby group, the American Bankers Association (ABA). Esther Kaplan details the protests in a piece for The Nation, complete with video footage. The ABA retaliated against Kaplan's reporting by revoking her press credentials, but it appears to have been worth it, as her piece describes everything from citizen outrage to police intimidation and awkward banker solidarity. As Democracy Now! explains, the ABA has spent decades lobbying against rules to strengthen the economy and prevent banker abuses, and is now at the heart of an effort to use taxpayer bailout money to lobby Congress against financial reforms.
So far, their efforts seem to be paying off. Last week, one of the CFPA's chief advocates, Rep. Brad Miller (D-NC), co-authored an amendment significantly restricting the agency's enforcement powers. As Sebert and Zamora note, Miller agreed to exempt banks with $10 billion or less in assets from regulatory examinations by the CFPA-roughly 98% of all banks. The existing, corrupted regulators who didn't lift a finger to prevent the subprime mortgage crisis will be the people actually going to the banks and reviewing their books. While the CFPA could send along one of its own regulators to participate in the exam, the new agency can't tax the bank to pay for it, which would make it very difficult for the CFPA to keep an eye on smaller banks.
Even worse, there is nothing to prevent a giant bank like Bank of America from moving all of its most egregiously predatory activities into a series of small corporate subsidiaries. By exploiting this loophole, 100% of U.S. banks could be exempt from CFPA enforcement, including the giant banks most heavily involved in subprime mortgage abuses.
The other big piece of Obama-backed financial legislation to make its way through Committee last week had to do with derivatives, also known as the wild Wall Street securities that brought down AIG. The best way to fix the derivatives mess is to require that derivatives be traded on an exchange the same way stocks are, so that companies can't make crazy bets without regulatory and market scrutiny. But Obama only wants "standardized" derivatives to be processed through a central clearinghouse-like an exchange, except without any public pricing information. And so long as a derivative contract can be deemed "customized," it would be totally exempt from even this limited reform.
But as Art Levine notes for AlterNet, the derivatives bill actually got worse in committee. Plenty of non-financial businesses use derivatives to legitimately hedge real risks: Airlines try to insure themselves against swings in oil prices, for instance. Lawmakers agreed to exempt any contract with these companies, termed "end-users" in the financial jargon, from central clearing requirements. The trouble is, big Wall Street hedge funds and private equity firms can be classified as "end-users," opening a fatal loophole in the legislation. The five banks who control 95% of the derivatives market will just conduct all of their most reckless trades with hedge funds and avoid oversight entirely.
A modest reform on paychecks for bailout recipients is nowhere near sufficient to protect our economy from banker excess. If Wall Street is going to serve any productive economic function, it has to be subject to serious consumer protection rules, and its derivatives casino has to be dismantled.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
One thing that every major policy initiative the Obama administration has taken/has been forced to take on (most of them are in the latter category given the stakes) early in their term have in common is their overwhelming complexity. I am glad we have a President with real brains and a mind that can understand complexity, because when I think about the problems we have, and what it will take to solve them, the idea of George W. Bush, John McCain, or Sarah Palin being in charge gives me a bad case of the shivers. Think about what is on this President's plate: solving the worst economic crisis since the Great Depression, dealing with the mess in Afghanistan, finding a long term international solution to climate change, finally reforming health care in a comprehensive way, dealing with an utterly out of control and corrupt financial sector, finally finding a fair and comprehensive solution to immigration reform. I know I'm missing some big things, but you get my point. There's not a single issue on this list that is simple to resolve, either substantively or politically. This level of major issues and crises to handle really does rival only a few other Presidents- Washington, Adams, and Jefferson in our nation's earliest days, Lincoln in the Civil War years, FDR. So thank goodness he's smart, and thank goodness he has surrounded himself with a lot of really bright advisers, because to make progress- let alone resolve- these issues is going to take a huge amount of brain power.
Two new economic studies just came out that, especially taken in combination, are truly stunning and profoundly troubling. The first, by the Center for Economic and Policy Research (a DC-based think tank), reported that the federal government is essentially subsidizing the Too Big to Fail (TBTF) banks in terms of the interest rates banks must pay to borrow funds. The second, coming out of Rutgers University, tells us that- if all goes quite well- that we don't get back to our pre-recession level of employment until the last half of 2017.
These two things are each worthy of huge concern. In combination, they spell very, very big economic trouble for America.
Arianna Huffington's spot-on post yesterday about our country's broken financial system led with the sentence "The window for reform is closing." Which is word for word what Elizabeth Warren said to me in a conversation we had a few days ago. For all of the incredible power Goldman Sachs and JP Morgan Chase have, their Achilles heel is momentarily exposed because of the incredibly anger the American public justifiably has at them right now, and there is a window for at least some progress on this.
There is, ironically, another reason for urgency as well: as Arianna and I and others have noted in multiple articles in recent weeks, the big Wall St. traders are back to their old tricks, business as usual pure and simple. And those tricks are exactly what brought down our financial system over the last couple of years. With our economy in such fragile shape, their recklessness endangers us greatly. I've heard people say that if we don't fix the problem, we could be in danger of another financial meltdown 10 or 20 years from now, but that way understates the problem. With our economy as weak as it is, we could see another financial crisis next year, not 10 or 20 years from now.
The remarkable thing about all this is that the reforms the White House has proposed are so modest. The Consumer Financial Protection Agency is a commonsense, reasonable proposal that even the Republicans I know from the financial industry think makes perfect sense. For an old lefty populist like myself, I don't think it goes nearly far enough. But even this moderate policy is running into a violent assault by Goldman Sachs, JP Morgan Chase, and the American Bankers Association. If something this reasonable is opposed by these guys, it's a sign of how far out on the ledge these companies have gone in pursuit of making billions by unregulated gambling and chicanery.
The window is closing on financial reform, and the window is closing on health care reform. These are easily the biggest political tests of Obama's Presidency, those that will determine whether his Presidency is going to be a success. A President can come back politically from early failures on big issues, as Bill Clinton did, but if they lose the big early battles, they generally don't try to do anything big or ambitious again.
I wrote in my book The Progressive Revolution about how the pattern of American history is that every so often, the window to create big change comes open for a while, that the combination of crisis, leadership, and political movement make it possible to really make big positive changes in our country. That window is open right now, and President Obama, to his credit, is trying to keep it open by doing some big and important things. But if he gives up the fight and caves in to special interest lobbyists, or if Democrats in Congress don't back his play, or if the reform movements on these big issues can't deliver grassroots strength, then the window will slam shut. That would be an immense tragedy, because this country desperately needs some big changes, and because the Republican opposition to Obama is going down such a dark path.
This country has been very lucky for much of its history. But if we can't fight through the special interest muck and deliver big change soon, I fear that our luck could run out. The economic and political storm are gathering in the sky, and we can't afford to do nothing to change the dynamics.
After reading Mike's diary, "A Simple Test", I found myself agreeing with the broad thrust of it, that Obama needs to move left-as FDR did, after his initial '100 Days'-guided most simply by the test, "does it benefit poor and middle class people, or does it benefit Goldman and Morgan?". Yet, at the same time, I found myself disagreeing that this simple test is necessarily enough. It's certainly a good starting point, and given that no legislation is ever perfect, and that time and energy spent on one thing is taken away from another, that test may well be enough for most legislation in most circumstances. But we should be clear that ideally more is required, and we should be clear just what that is, so that even when we don't pursue it, we know precisely what it is that we are foregoing. And so I present my three-part test:
(1) Mike's Simple Test:
who does it benefit the most, and who does it benefit first? If the main or biggest beneficiary is the big majority of poor and middle income people, I rate it a success. If the first and biggest beneficiaries are the wealthy and powerful, then I rate it a failure
(2) The Marine Test: Who did it leave behind on the battlefield? Who could have been helped who was not helped? Particularly when more was clearly achievable. If it failed to help a substantial number of poor and middle income people, then it was failure, even if it passed Mike's Simple Test-unless there is a clear and credible plan and a path forward to do more to help those people, and there is the political will to pass legislation that achieves the unmet goal.
(3) The Gramsci Test: Did it help change the direction of basic operating assumptions for future political struggles in a more progressive direction? If so, rate it a success. If it missed a rare opening, created new obstacles, or needlessly reinforced conservative assumptions, it is a failure.
Now, let me emphasize again, I am not suggesting that all three tests should apply to every piece of legislation, just because they could be applied. First of all, as already noted, there are practical trade-offs to be considered. Second, there are significant differences in the opportunities presented at different times. But when we're talking about major pieces of legislation, such as the stimulus, or the health care reform, then it seems entirely proper to employ all three tests. We might, in the end, decide to support legislation that failed one or more of the tests, but at least we would support it having a much more realistic sense of the cost involved.
On the flip, I consider what difference this might make in evaluating the stimulus and health care reform-with particular attention to the former, in light of new statistics out about the state of state finances. By sharpening critical awareness of what happened with the stimulus, perhaps we can do better with health care and global warming.
I have always had a simple test for any public policy: who does it benefit the most, and who does it benefit first? If the main or biggest beneficiary is the big majority of poor and middle income people, I rate it a success. If the first and biggest beneficiaries are the wealthy and powerful, then I rate it a failure- after all, they generally do just fine without special benefits from the government. And the who-it-benefits-first thing is a critical part of the equation, because as John Maynard Keynes famously said, in the long run we are all dead. The reality is that policy, politics, other unexpected circumstances change too rapidly in this country that if poor and middle income folks are not benefiting early from some policy change, they probably aren't going to benefit at all (See trickle down economics in general as an example of what I mean.)
By this simple test, even though it is now clear that the stimulus package passed earlier this year was clearly too small, I still rate it a success in some important ways. It has saved the jobs of a lot of teachers, firefighters, police officers, social workers, and others doing important work, and it has created new jobs in the environment, health care, science, technology, the arts, construction, and road building.
Goldman Sachs has openly, blatantly gone back to business as usual, knowing they will be bailed out by taxpayers if their high rolling gambles don't work, and they don't care who knows about it.
The reason they can be so breathtakingly arrogant, so stunningly cavalier about not giving a damn about things that any other company's PR and government relations department would advise them against, is that they know they have the power to do anything they want to do. The Obama White House needs to take Goldman Sachs to the woodshed rhetorically, and they should have the Justice Department investigating them for anti-trust violations and all manner of stock manipulation. It is time to start squeezing the management at Goldman, and making them nervous about being broken up into pieces that are not too big to fail.
Here's (with brief intro) Matt Taibbi, Rob Johnson, and myself taking about Goldman Sachs on what is rapidly becoming my favorite media program for discussing economic issues, GRITtv:
If you've seen the news today, you know Goldman Sachs exceeded its second quarter expectations for earnings, making $3.44 billion after dividends. As I wrote yesterday, this gigantic, much better than expected profit is largely from engaging in the same risks that got Goldman and other companies into trouble in the first place- taking massive risks on things like volatile currencies. The same risks that has helped lead the country to economic collapse. Apparently the only thing Goldman learned from the financial collapse was that the government would bail it out if it kept taking big gambles, which isn't the lesson I was hoping it would learn.
And hey look, even more thrilling, it's been reported in late June that the company plans to pay its employee record bonuses. Congrats, guys.
Okay, Goldman. So as long as you're paying record bonuses to many of the same employees that engaged in these wildly speculative trading ventures, how about paying back the $13 billion you got from AIG by way of the U.S.Treasury? Or the unrevealed billions (likely many tens of billions) from the Federal Reserve?
Now I wouldn't be so irritable about all this if unemployment wasn't still going up, and most economists weren't saying it will continue to go up through 2010. I wouldn't be so irate if unemployed folks were getting jobs, home prices were starting to up again, and as a result bankers also made money. I wouldn't be so completely pissed out of my mind if we didn't already know, based on the last eight years, that the trickle-down economics of making sure the biggest banks recovered first just didn't work for everyone else in this economy.
It is time for a movement to take on the big bankers and change the economy so that it produces jobs for the rest of us.
This seems like Framing and Political Strategy 101 to me, but since few other people are talking in this way, let me just lay out a basic idea: all this talk about doing a stimulus package versus not doing a stimulus package is fundamentally besides the point. What we need is a comprehensive policy package that is very simply focused on one thing and one thing only: jobs.
I know the policy wonks on Capitol Hill may be confused by that paragraph because, they would say, well, a stimulus program would create jobs. Well, yeah, that is the idea of stimulus. But my point is this: the politics of a second stimulus package are a dead end. The politics of having a debate about a policy package that will create jobs is a helpful thing. Announcing a second stimulus package gets Democrats into a defensive crouch about why the first one failed, and gets us into that same "can we get to 60" dance with Ben Nelson, Arlen Specter, Olympia Snowe, and Susan Collins that caused the first stimulus bill to be pared back and rendered less effective.
Voters don't know what it means to say you are going to stimulate the economy, but they do know what a job is. And right now, what we need is jobs sooner rather than later. My point here is not to just rename the stimulus bill the jobs bill. In fact, there are quite a few things the White House and Congress can do to focus on jobs that don't involve just spending more, although more money will certainly need to be spent. Here is what I would include in a comprehensive package:
So the United States lost to Brazil in the final of the FIFA Confederations cup, in that thrilling but painful tale of two halves, with the U.S. up 2-0 only to see Brazil roar back (or rather dance and prance and glide with balletic ferocity) and win 3-2. All I can say is, thank god.
For the past sixty years, the powerhouses of international soccer (a.k.a. football) either have been empires past their prime and on the decline or countries that dream fruitlessly of empire - England, France, Italy, Germany, Argentina, Brazil, and Spain. To bestride the world as a soccer power is to not bestride it as an economic or military power. In its period of global hegemony, the United States was manifestly not a global powerhouse in soccer. It was mighty in everything but the sport that is played by more people in every corner of the world than any other. And so if the United States had magically defied the odds and the gods and beaten Brazil, it would have been the final sign that American is indeed in decline.
by Zach Carter, Media Consortium MediaWire Blogger
Now that Treasury Secretary Timothy Geithner isn't going to impose pay restrictions on bailed out Wall Street executives, it's critical to remember that severe economic inequality was a major factor in the financial meltdown. Our tax code funnels money into the hands of our wealthiest citizens, which means that our financial system protects the interests of the affluent—not the the average citizen. The broad divergence between our core democratic values and the existing U.S. economic structure must become part of the public debate over financial reform.
(Speaking of populist backlash, apparently Wall Streeters think there is too. - promoted by Mike Lux)
I hate the phrase "jobless recovery". If people are not getting decent employment, there is no such thing as a recovery. It doesn't matter if corporate profits go up, if the Dow Jones rebounds, if Goldman Sachs honchos got record bonuses, if the Gross National Product rises. What matters is whether regular folks are feeling any difference in their lives. And when you hear the phrase "but jobs are a lagging indicator", let's be clear: that's just another way of saying trickle-down economics.
About 20% of adult Americans are either officially unemployed, have given up looking for work, or are involuntarily working part-time or at temporary jobs. As long as that stays true, we can be very clear about what the consequences are:
Foreclosure rates will keep going up, and housing prices won't start to recover
State and local government will continue to be broke, and the federal deficit will continue to rise
Our manufacturing base will continue to be in desperate shape
In other words, our economy- the real economy- will not start getting better. I know that the big banks' executives will be getting huge bonuses, and I'm sure they will be spending that money around like manure, making things grow and all that. But the real economy will not be getting any better.
I hope the President understands that, and understands very keenly how much his fate is tied to real people getting real jobs. His political project will be dead in the water unless the real economy- not Wall Street profits, not the stock market, but real jobs for real people- starts to get better reasonably soon.
The American people like President Obama so far. They know he inherited a big mess, and they know he's working hard to fix it. They are willing to be patient for awhile. But they don't want to be the ones who are the lagging indicators.
There are some very specific things our government can do to create jobs: invest a lot more in infrastructure projects and green jobs, for example. Give the same kind of help to emerging industries that virtually every other industrialized country does. Negotiate tougher with China on currency manipulation. This ain't rocket science, and it needs to happen sooner rather than later.
There is a populist backlash brewing in this country. Folks are going to blame somebody for this economy. I would personally rather it be the banks than President Obama, but that will only be the case if President Obama is making real progress on jobs.
On Thursday, lawmakers bowed to pressure from the bank lobby and killed a crucial piece of anti-foreclosure legislation, poisoning the economy in an effort to keep money flowing to Wall Street. Meanwhile, jobs continue to disappear, retirement accounts are evaporating and families are struggling to cope with economic hardship.
Last week, President Obama announced his intention to address immigration reform in the next few months in a meeting with the Congressional Hispanic Caucus. The statement came as a relief to many, especially with recent reports of human rights abuses within the U.S. detention system. But, as most of the President's statements seem crafted to appeal to warring political constituencies, his actual intentions are still elusive.
It is March, again. Just as I have been for years, in this month I am haunted by the hate we, humans, propagate. March 19th is the sixth anniversary of "unnecessary wars". The phrase is not mine alone. Public servants, Ambassadors, and former Presidents have proclaimed as I have. Foreign Secretaries and domestic Diplomats deem the war was a mistake. Then there are the people.
The financial markets are again getting pummeled, both domestically and globally; the nearly $800 billion stimulus package signed with fanfare by President Obama has done little to alter the mood. In fact, if you read through financial websites and assorted blogs on politics, economics, or anything related to those, you will find a nearly endless sea of misery. The level of anger, pessimism, despair, and sheer hopelessness seems to reach new peaks every week, in inverse relation to the movement of global equity prices and the size of individual retirement accounts.
It is good to be back here at OpenLeft. Thanks to the site's editors, I will be posting from time to time on ACORN's major campaigns and the work being done by progressives to push for the kind of policies we need to get America back on its feet and back to work. I'm starting with the work we are doing to address the foreclosure crisis at the heart of the economic meltdown. -- Bertha
Yesterday President Obama signed into law the economic recovery package that is a firm first step forward in getting America back on its feet in the midst of the economic devastation we are experiencing.
Today, President Obama announced his Administration's $75 billion plan for addressing the foreclosure crisis engulfing the country. This is a welcome initiative, especially in the wake of the 2 years of inactivity and neglect from the Bush Administration.
I would argue that in terms of addressing the specific genesis of our present crisis - the toxic assets crippling the financial sector - the announcement today is of greater magnitude. For without a plan to address the predicted 8-9 million foreclosures over the next 4 years, that's in addition to the 2.3 million that occurred in 2008 with a total estimated cost to the economy of over $850 billion, attempts to spur an economic recovery will fail. There can be no long-term solution without addressing the immediate foreclosure crisis.
I talk about the problem and what we can do about it in the extended entry.
