Open Left - economy

Weekly Audit: Crashing the Koch's Billionaire Caucus

The Media Consortium — Tue, 01 Feb 2011 16:44:48 GMT

By Lindsay Beyerstein, Media Consortium blogger

Oil barons Charles and David Koch held their annual billionaires' summit in Palm Springs on Sunday, Nancy Goldstein reports in The Nation. Every year, the Kochs gather with fellow plutocrats, prominent pundits, and Republican legislators to plan their assault on government regulation and the welfare state. This is the first year that the low-profile gathering has attracted protesters.

The Kochs are best known for pumping millions into the ostensibly grassroots Tea Party movement. At TAPPED, Monica Potts points to Jane Mayer's famous 2010 profile of the Koch brothers that made their name synonymous with vast right wing conspiracy. Her colleague Jamelle Bouie questions whether the Koch brothers really deserve their bogeyman status--no single cabal of funders can single-handedly sway public opinion, he argues.

That's true, but $30 million can go a long way. That's the amount the event's organizers expect to raise for the GOP, according to Steve Benen of the Washington Monthly, who also notes the event was off-limits to the mainstream media.

David Dayen reports at AlterNet that about 800 to 1,000 protesters rallied outside Sunday's summit at the Rancho Las Palmas resort. Twenty-five protesters were arrested for trespassing. Police in full riot gear carted the protesters away. To add a surreal note to the proceedings, conservative provocateur Andrew Brietbart emerged from the summit on roller skates to argue with the protesters.

Several progressive organizations collaborated to draw the crowd including Common Cause, the California Courage Campaign, CREDO, MoveOn.org, 350.org, the California Nurses Association, and the United Domestic Workers of America. The Media Consortium's own Jim Hightower was a featured speaker at the rally.

Plastic vs. the poor

YES! Magazine highlights a video lecture by racial and environmental justice advocate Van Jones on the hidden economic toll that plastic takes on the world's poor. When we discard our plastic bottles in the recycle bin, we assume they are destined to be reused or recycled. In fact, Jones says, they are often shipped to developing countries and simply burned. Needless to say, these toxic plastic bonfires aren't held in the tonier parts of town. It's the poorest people who bear the brunt of living next door to heaps of flaming pop bottles. Jones' central point is that treating objects as disposable inevitably leads to treating people the same way, because the most vulnerable are forced to live with the worst consequences of pollution.

Wall Street winfall doesn't help Main Street

The Dow Jones Industrial Average briefly hovered above 12,000, prompting the New York Times to proclaim the booming stock market as a sign of an economic recovery. But as George Warner notes in Campus Progress, surging stocks aren't bringing jobs back:

The seasonally adjusted unemployment rate, 9.4 percent, underestimates the true extent of our employment problems by leaving out the many workers said to have "dropped out of the workforce." By the Economic Policy Institute's estimates, we are 11.5 million jobs short. 27 million Americans are unemployed or underemployed. (To see how little our labor market has bounced back, check out this Youtube visualization of the last 3 years...the only thing you can't see is recovery.)

Warner adds that an analysis released last week by the Congressional Budget Office predicts that unemployment will remain high until 2016. What few jobs have been created are overwhelmingly low-wage positions without benefits. This is hardly a foundation on which to build lasting prosperity. A surging stock market without job creation means that the investor class is getting richer while ordinary people continue to struggle.

Hawkeyes Eying Wage Hike?

State Rep. Bruce Hunter (D-Des Moines) has introduced a bill that would raise the Iowa state minimum wage, Tyler Kingkade reports for the Iowa Independent. The bill would increase the minimum hourly wage to $7.50 on January, 1, 2012 and to $8.00 on July 1, 2012. The last time Iowa raised the minimum wage was in 2007 when the rate jumped from $5.15 per hour to the current $7.25.

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

Weekly Diaspora: Why Arizona's Birthright Bill is Bad for the Economy

The Media Consortium — Thu, 27 Jan 2011 16:55:04 GMT

by Catherine A. Traywick, Media Consortium blogger

Arizona lawmakers are expected to introduce an "anchor baby" bill today that would deny birthright citizenship to the U.S.-born children of undocumented immigrants. Modeled after birthright citizenship legislation unveiled by the nativist coalition State Legislators for Legal Immigration (SLLI) earlier this month, the measure is, unabashedly, part of a larger effort on the part of SLLI to challenge existing citizenship law in the United States.

Lawmakers from Georgia, Oklahoma, Pennsylvania and South Carolina have likewise committed to introducing citizenship bills at the state level, while legislators from Nebraska, Indiana, Colorado, Texas and others are determined to implement similarly controversial Arizona-style enforcement measures in their states.

In recent years, communities that implemented harsh anti-immigrant laws have experienced a number of economic and social repercussions which lawmakers continue to overlook in their determination to tighten enforcement. But as nativist policies bleed public coffers and anti-immigrant political speech incites new strains of ethnic violence, the stark consequences of such extremism are becoming harder and harder to ignore.

Devastating local economies

The legal costs of defending constitutionally questionable laws like SB 1070 ought to be obvious. Arizona, which has the rare luxury of drawing from a $3.6 million donor-endowed legal defense fund, spent upwards of $500,000 defending 1070 from legal challenges last year, and could, in the long-term, spend as much $10 million, according to New America Media's Valeria Fernández.

Yet the think-tank Federation for American Immigration Reform (FAIR)-a major supporter of anti-immigrant laws like SB 1070 and birthright citizenship bills-obstinately underplays the financial fall-out of such measures. Ira Mehlman, a national spokesperson for FAIR, reportedly told New America Media that "the costs of litigations pale in comparison to the cost of communities providing healthcare, education and welfare for undocumented immigrants and their citizen children."

Considerable evidence suggests otherwise. The Brookings Institution, the Udall Center for Public Policy and former President George W. Bush's Council of Economic Advisors have all concluded that immigrants contribute much more to their local economies (through taxes and spending) than they take out through social services (about $800,000 more).

Now, a new report by Southern Poverty Law Center (which, incidentally, has listed FAIR as a hate group since 2007) argues that anti-immigrant laws-not immigrants-have a greater track record of depressing local economies. Gebe Martinez at Campus Progress sums up what happened to five communities "that threw anti-immigration statutes onto their books without fully considering their impact." He writes:

Hazleton, Pennsylvania, the leader of the court fights for local immigration enforcement, is in the tank for at least $2.8 million with some estimates totaling $5 million as it defends its ordinance all the way to the U.S. Supreme Court.

Riverside, New Jersey suffered a local economic downturn before the city rescinded its anti-immigrant ordinance and welcomed the return of immigrants.

Farmers Branch, Texas, has spent nearly $4 million in legal fees and is expected to spend at least $5 million to defend its anti-immigration statute with no end in sight.

Prince William County, Virginia dramatically scaled back a tough immigration statute after realizing the original version would cost millions to enforce and defend in court.

Fremont, Nebraska, increased the city's property tax to help pay the legal fees for its anti-immigration ordinance which it intends to defend.A

A spate of state-level birthright citizenship bills stands to be similarly costly, as the admitted goal of their sponsors is to force numerous court cases that challenge the conventional applications of the 14th amendment-legislation through litigation. But there are other expenses as well. If such legislation were to pass, government agencies would bear the incredibly costly burden of making citizenship determinations for every child born in the United States-a logistical nightmare that neither federal nor state governments are prepared to undertake.

Fueling ethnic violence

As economically devastating as these divisive measures can be, their social impact on communities is often even greater. Politicians bent on enacting anti-immigrant legislation frequently rely on hateful speech and pejorative language to foment public discontent and, in so doing, build citizen support for their measures-with tragic consequences.

Colorlines.com has repeatedly reported on the correlation between bigoted political speech, anti-immigrant legislation, and ethnic violence. Now, Mónica Novoa reports that a new study from the University of Maryland corroborates the connection. Charting the use of anti-immigrant slurs in newspapers and wire services over the last three decades, the study revealed that "a spike in usage of the dehumanizing slurs usually coincided with contentious immigration policy proposals."

The correlation persists despite the fact that more than 15 years ago, four professional journalism associations-National Association of Hispanic Journalists, Asian American Journalists Association, Native American Journalists Association and National Association of Black Journalists-advised their members to stop using the phrase "illegal alien" on the grounds that is is "pejorative," "grammatically incorrect and crosses the line by criminalizing the person, not the action they are purported to have committed."

While incendiary rhetoric may be an effective way of garnering political support for controversial measures, it all too often fuels violence. Going back to New America Media, Fernández notes that this destructive cycle frequently makes for tragic consequences, as in the case of a 9-year-old girl who was allegedly murdered by members the Minuteman Project, an armed, volunteer border patrol organization. The Latino advocacy organization Cuentame, in partnership with Brave New Films, similarly emphasizes the link between hate speech and increasing incidents of hate crimes against Latinos:

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Anti-birthright citizenship bills would effectively create an underclass of mostly Hispanic non-citizens. It's an almost certain catalyst for rampant and systemic anti-immigrant discrimination and ethnic violence. As the anti-immigrant lawmakers from Arizona and elsewhere make good on their promises to push a new, more fervent, onslaught of anti-immigrant legislation in 2011, expect the financial and social costs of such extremism to rise further still.

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

Weekly Audit: Wall Street Destroyed $8 for Every $1 Earned

The Media Consortium — Tue, 25 Jan 2011 16:29:52 GMT

by Lindsay Beyerstein, Media Consortium blogger

Tonight, President Barack Obama will deliver his State of the Union address. A major theme of the speech will be jobs and the economy. Let's hope the president spares a few minutes for Wall Street reforms that might prevent a repeat of the economic collapse that we're slowly starting to recover from.

As Kai Wright points out in ColorLines, the State of the Union is the unofficial kickoff of the 2012 election season:

The still churning foreclosures and mounding debt in black and brown neighborhoods don't suggest a stabilized economy anywhere except Wall Street, but let's set that familiar fight to the side for now. The point is that whether we're talking about creating jobs or seating district court judges, the time for making policy is gone. Starting tomorrow night, it's all talk until we vote next.

Amy Dean of Working In These Times shares Wright's skepticism. With the Republicans in control of the House and the Democrats hanging on to the Senate, we're looking at a legislative stalemate until the next election. Dean argues that activists should use this lull in the action to refocus their organizing at the grassroots level.

Wall Street destroyed $8 for every $1 it earned

In AlterNet, Les Leopold asks why bankers are earning such huge bonuses while the financial system is in disarray. According to standard economic theory, your compensation reflects the value of your work. Yet, according to Leopold's back-of-the-envelope calculations, the financial sector has destroyed $8 worth of wealth for every dollar it earned over the last 5 years. His estimate includes the wealth-destroying impact of the subprime mortgage crisis and other epic Wall Street blunders.

The free market might not be as generous with bankers as the current system of government bailouts. If financial firms were allowed to fail, Leopold notes, bankers who drove their own firms out of business wouldn't get paid. However, under the current "too big to fail" rules bad decisions lead to taxpayer rescues, not unemployment. So, the bonus checks keep rolling in.

Social Security switcheroo

James Ridgeway of Mother Jones predicts that Obama is gearing up to cut Social Security:

Having "retooled'' his Presidency for a more open accommodation of the center right, Obama will soon be overseeing the battle to launch a dismantling of the Social Security system. [...] Without entirely destroying the popular program, he will support cuts that go beyond anything that should rightly happen during a Democratic administration.

Ironically, Ridgeway notes, our current Democratic president is to the right of many of yesterdays conservative Republicans. The legendary arch conservative Sen. Robert A. Taft (R-OH) was a staunch defender of Social Security. Republican President Dwight Eisenhower spearheaded the largest expansion of Social Security in the largest expansion of benefits in the history of the program.

Michelle Obama and Wal-Mart

Michelle Obama has enlisted the world's largest corporation (and largest grocer) in her Let's Move! campaign against childhood obesity. George Warner of Campus Progress takes a closer look at the skewed economics behind the "Nutrition Charter" signed by Wal-Mart last week. Amongst other things, Wal-Mart pledged to cut added sugar in its products by 10% by 2015; make healthy food more affordable; and develop a "nutrition seal" to alert shoppers to ostensibly healthier foods.

Yet, Warner notes that Wal-Mart is contributing to ill-health by employing a massive workforce at less than a living wage. Even if Wal-Mart follows through on its relatively modest pledges to promote healthy eating, it continues to put its own workforce at risk of ill health simply by paying them poverty-level wages. Studies show that for every job a new Wal-Mart store creates, it destroys three existing jobs, which paid an average of 18% more.

Poverty is one of the strongest predictors of obesity and poor diet.

Beck vs. Piven, Round 2

Last week, the Audit covered a bizarre right wing trend of demonizing 78-year-old CUNY political science prof Frances Fox Piven for an article she wrote in 1966. Glenn Beck and other leading lights of the right claim that Piven's 45-year-old article is being used right now by liberal elites in their sinister plot to violently overthrow capitalism.

Piven is receiving death threats by email; and death threats are popping up on Glenn Beck's website, including: "Snap her little chicken neck. This pinko filth needs a long dirt nap."; "Somebody tell Frances I have 5,000 rounds ready.", and "We should blow up Piven's office and home."

In actuality, Piven's article argued that everyone who was eligible for welfare should sign up for benefits in order to expose the structural flaws in the system. Say what you will about the plan, it was non-violent. It involved a lot of paperwork. Far from overthrowing the federal government, Piven sought to usher in a federal guaranteed federal income as an alternative to the patchwork of state and local welfare agencies doling out benefits.

Matthew Rothschild reports in the Progressive that the Center for Constitutional Rights has sent a letter to Roger Ailes of Fox News asking him to reign in the anti-Piven demagoguery.

Weekly Mulch: The Sticky Truth about Oil Spills and Tar Sands

The Media Consortium — Sun, 16 Jan 2011 06:53:41 GMT

by Sarah Laskow, Media Consortium Blogger

The National Oil Spill Commission released its report on last year's BP oil spill this week. The report laid out the blame for the spill, tagging each of the three companies working on the Deepwater Horizon at the time, Halliburton, Transocean and BP, and also offered prescriptions for avoiding similar disasters in the future.

As Mother Jones' Kate Sheppard notes, it's unlikely the recommendations will impact policy going forward.

"I think the recommendations are pretty tepid given the severity of the crisis," Jackie Savitz, director of pollution campaigns at the advocacy group Oceana, told Sheppard. "Even the small things they're suggesting, I think it's going to be hard to convince Congress to make those changes."

No transparency for you!

Last summer, after the spill, the Obama administration tried hard to look like it was pushing back against the oil industry, even though just weeks before the spill, the president had promised to open new areas of the East Coast to offshore drilling.

This week brought new evidence that, despite some posturing to the contrary, the administration is not exactly unfriendly to the energy industry. One of the key decisions the administration faces about the country's energy future is whether to support the Keystone XL, a pipeline that would pump oil from tar sands in Canada down to Texas refineries. And one of the key lobbyists for TransCanada, the company intending to build the pipeline, is a former staffer for Secretary of State Hillary Clinton.

Friends of the Earth, an environmental group, filed a Freedom of Information requesting correspondence between the lobbyist, Paul Elliott, and his former boss, but the State Department denied the request.

"We do not believe that the State Department has legitimate legal grounds to deny our FOIA request, and assert that the agency is ignoring its own written guidance regarding FOIA requests and the release of public information," said Marcie Keever, the group's legal director, The Michigan Messenger's Ed Brayton reports. "This is the type of delay tactic we would have expected from the Bush administration, not the Obama administration, which has touted its efforts to usher in a new era of transparency in government, including elevated standards in dealing with lobbyists."

Tar sands' black mark

What are the consequences if the government approves the pipeline? As Care2's Beth Buczynski writes, "Communities along the Keystone XL pipeline's proposed path would face increased risk of spills, and, at the pipeline's end, the health of those living near Texas refineries would suffer, as tar sands oil spews higher levels of dangerous pollutants into the air when processed."

What's more, the tar sands extraction process has already brought environmental devastation to the areas like Alberta, Canada, where tar sands mining occurs. Earth Island Journal's Jason Mark recently visited the Oil Sands Discovery Centre in Ft. McMurray, Alberta, which he calls "impressively forthright" in its discussion of the environmental issues brought on by oil sands. (The museum is run by Alberta's provincial government.) Mark reports:

The section on habitat fragmentation was especially good. As one panel put it, "Increasingly, Alberta's remaining forested areas resemble islands of trees in a larger network of cut lines, well sites, mine, pipeline corridors, plant sites, and human settlements. ... Forest disturbances can also encourage increased predation and put some plants and animals at risk."

Not renewable, just new

The museum that Mark visited also made clear that extracting and refining oil from tar sands is a labor-intensive practice. He writes:

Mining, we learn, is just the start. Then the tar has to be "upgraded" into synthetic petroleum via a process that involves "conditioning," "separation" into a bitumen froth, then "deaeration" to take out gases, and finally injection into a dual-system centrifuge that removes the last of the solids. Next comes distillation, thermal conversion, catalytic conversion, and hydrotreating. At that point the recombined petroleum is ready to be refined into gasoline, diesel, and jet fuel. It all felt like a flashback to high school chemistry.

Why bother with this at all? In short, because with easily accessible sources of oil largely tapped out, techniques like tar sands mining and deepwater drilling are the only fonts of oil available. This problem is going to get worse, as The Nation is explaining over the next few weeks in its video series on peak oil.

Energy and the economy

Traditional ideas about energy dictate that even as the world uses up limited resources like oil, technology will create access to new sources, find ways to use limited resources more efficiently, or find ways to consume new sources of energy. These advances will head off any problems with consumption rates. The peak oil theory, on the contrary, argues that it is possible to use up a resource like oil, that there's a peak in supply.

Once the peak has been passed, the consequences, particularly the economic consequences, become dire, as Richard Heinberg, senior fellow with the Post Carbon Institute explains. "If the amount of energy we can use is declining, we may be seeing the end of economic growth as we define it right now," he told The Nation. Watch more below:

Light green

Part of the problem is that the energy resources that could replace fossil fuels like oil-wind and solar energy, for instance-likely won't be in place before the oil wells run dry. And as Monica Potts reports at The American Prospect, our new green economy is getting off to a slow start.

Although the administration has talked incessantly about supporting green jobs, Potts writes that the federal government hasn't even finalized what count as a "green job" yet. The working definition, which is currently under review, asserts that green jobs are in industries that "benefit the environment or conserve national resources" or entails work to green a company's "production process." But what does that actually mean?

"That definition was rightly criticized as overly broad," Potts writes. She continues:

While nearly everyone would include installing solar panels as a green job, what about an architect who designs a green house? (Under the proposed definition, both would count.) ... Another problem comes in weighing green purposes against green execution: We could count, for example, public-transit train operators as green workers. But how do we break down transportation as an industry more broadly? Most would probably agree that truckers who drive tractor-trailers running on diesel fuel wouldn't count as green workers even if they're transporting wind-turbine parts. And many of the jobs we would count as green already exist.

It doesn't exactly inspire confidence that the country is moving swiftly toward a bright green future.

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

The Politics of the Foreclosure Mess: Another Big Bank Bailout?

Mike Lux — Fri, 14 Jan 2011 00:00:00 GMT

Everything I am reading these days on financial issues points to some serious reckoning soon to come, especially because of - as the folks at Third Way are calling it - foreclosure-gate. The Massachusetts Supreme Court ruling in the Ibanez case, along with a growing body of cases where the banks and/or their servicers have been ruled against in foreclosure cases, and even the banks' lawyers are being castigated in court by judges for bringing in made-up paperwork, is causing a growing sense of panic among the biggest banks that hold the most mortgages. Spokespeople for the banks are talking bravely, trying to dismiss the situation as some minor paperwork errors, but everyone who has been paying attention to the situation fears that there are really big consequences afoot. The plain fact is that over the last decade, in their overwhelming rush to make bigger and bigger profits from trading in the bubble-driven real estate securities market, the banks ran roughshod over the home mortgage and title system that had served this country (and England and many others) quite well for hundreds of years - and they made a serious mess of it. Because of the way these mortgages have been sliced and diced and sold into complicated securities, homeowners, judges, and the banks themselves are having quite a bit of trouble figuring out who actually owns the note in more cases than is easy to believe. The "paperwork" - figuring out who owns the note - is not just a little messed up, it is a disaster area.

This wouldn't be as big a deal except that the combination of the housing bubble itself plus the worst recession since the Great Depression (caused in great part by that bubble) has created a foreclosure crisis of gargantuan proportions. Millions of homeowners are in foreclosure proceedings, millions more underwater because of the collapse of housing prices. And because the banks have cooked their books, not wanting all these toxic assets to wreak havoc with their official valuation and their stock prices, they have no interest in helping homeowners stay in their homes by writing down these mortgages to current market levels. So banks are moving to foreclose these millions of homes, but they can't prove to judges that they even own the notes that would allow them to foreclose. Thus you have robo-signers, falsified affidavits, and all kinds of strange things being presented to judges in courts. The judges who are not bought and paid for by the banks are raising big red flags about all this, and thus you have cases like Ibanez going against the banks.
This is a mess not just for the housing market but for the entire economy, as the numbers on all this are staggering, and the housing market really does have the potential to just completely freeze up, which would be an economic nightmare. Our economy has no chance of getting dramatically better until the housing market starts moving again. So the banks are now going to their political allies, just like they did in 2008, and telling them: unless you save us from the mess that we've created (oh, wait, they don't use those last four words, instead it's the unforeseeable "perfect storm", "black swan" thing), we will go under and take the entire economy down with us. The good news for the banks is they are not necessarily looking for a cash handout this time - although it may come to that - but just some legal "tweaking" of this "minor paperwork problem."

If you have the stomach for it and want to learn more about the gory details about the policy side of all this, there are a bunch of good writers you can turn to, including Yves Smith, David Dayen, and Marcy Wheeler, all of whom have put up great pieces worth looking at in the last couple of days. Numerian has a great post I have already linked to a couple times in past pieces this week on the truly scary implications of what is going down. But my focus, as usual, is on the politics of all this, because the drumbeat is beginning in a big way to bail out the bankers from their own mess once again. Third Way's piece, which Yves, David, and Marcy do a good job deconstructing, is the opening shot in what will be a very focused legislative push to once again bail out the bankers from their own mess. The banks and their allies will try to do this as quickly and quietly as they can, portraying it as a simple legal fix for minor paperwork problems. However, the consequences of this kind of legal bailout are actually far greater in some ways than the TARP bailout, as costly as that was. The TARP bailout was just dollars though. This one, as Yves writes, undermines fundamental property law that our entire economic system is based on:

This proposal guts state control of their own real estate law when the Supreme Court has repeatedly found that "dirt law" is not a Federal matter. It strips homeowners of their right to their day in court to preserve their contractual rights, namely, that only the proven mortgagee, and not a gangster, or in this case, bankster, can take possession of their home.
This sort of protection is fundamental to the operation of capitalism, so it's astonishing to see neoliberals so willing to throw it under the bus to preserve the balance sheets of the TBTF banks. Readers may recall how we came to have this sort of legal protection in the first place. England learned the hard way in the 17th century what happens with low documentation requirements: abuse of court procedures, perjury and corruption become the norm. Parliament enacted the 1677 Statute of Frauds to establish higher standards for contracts, such as witnessing by a third party, to stop the widespread theft of property that was underway.
The memo completely ignores the harm to investors from the bank mistakes and lacks any provisions for damage to investors to be remedied. Moreover, denying borrower rights removes their leverage to obtain deep principal mortgage modifications, which for viable borrowers produces lower losses than costly foreclosures and sales of distressed property. Thus this shredding of contractual protections in mortgages not only hurts borrowers but also harms investors.
So to save the banks from their own, colossal abuses of contracts that they devised, the Third Way document advocates Congressional intervention into well established, well functioning state law. This is a case where these matters can and should be left to the courts and ultimately state AGs to coordinate the template of a more broadbased solution.

To once again bail out the bankers, this time by changing real estate law in a way that hasn't been done since the 1670s, would be a far bigger deal than even the trillions in bailout dollars the TARP and Fed gave these banks in 2008/9. But the bankers and their allies like Third Way will try to present this as a simple fix to some minor paperwork problems. Look, if these paperwork problems were so minor, we wouldn't need the fix they are proposing: the banks would get nicked a little in a few cases where they screwed up a little bit of paperwork, and everyone would go on their way. But they have made a Texas-sized mess of the entire mortgage title system in their haste to make money, and it is time to pay the piper.

What's the solution? We should start with a foreclosure freeze while the government sorts through the mess and the state attorney generals finish their negotiations with the big banks. Clearly, a massive amount of mortgage write-downs to underwater homeowners to reflect current housing prices makes a ton of sense, and would dramatically cut the need for foreclosures, taking some of the pressure off the system. Once those two steps are taken, hopefully the AGs can cut a good deal for the American people to make things work better going forward.

The problem with sensible pro-middle class solutions like this is the incredible political power of these big banks. Here's the deal, though: politicians hate the idea of having to bail these guys out again. If progressives can make clear that any legal changes the bankers are trying to push through on mortgage and title law are just one more big bailout of the big banks, we can win this fight. Let's hope we do, because the stakes are pretty damn high.

Strategy Number One: Shift Money from the Big Banks

Mike Lux — Mon, 20 Dec 2010 21:30:00 GMT

One of the most discouraging things about the last two years was seeing swing voters in focus groups, when asked what President Obama's economic strategy was, repeat different versions of "Well, I know he said we needed to save the banks. Beyond that, I'm not sure." When Obama in his first State of the Union gave a vigorous defense of bailing out the banks, saying he knew it about as popular as a root canal, and saying "I get it", it was very memorable to voters. But when his predictions about what would happen when the banks were stabilized- they would start making loans to businesses, and businesses would start hiring- didn't happen, and instead the banks gave themselves record breaking bonuses, voters turned on Obama fast. In exit polls on Nov. 2nd, when asked who was most to blame for the bad economy, voters by a wide margin said Wall St was most to blame, and the voters who said that went Republican by a 14 point margin.

Obviously, saving the banks hasn't been the President's only economic strategy. The stimulus bill, while too small, was an important job creator/saver. Saving the American auto industry was an incredibly important thing to do. Health care reform was in part a long term economic strategy. The infrastructure bank idea is a great potential job creator. Extending unemployment insurance helps keep money in the economy. And all the tax cutting going on is clearly meant to have some stimulative effect, although how much is highly debatable.

However, there have certainly been times where Secretary Geithner, who has been the main driver of the economic strategy, seems to think and act as if helping the big banks and helping the economy amount to the same thing. The tepid reaction to the foreclosure crisis has sure felt that way- apparently we can't freeze foreclosures or do much to help homeowners because it might "endanger" the banks. In fact, I would argue the exact opposite: that our number one economic strategy right now should be to shift money from the big banks to the real economy, to Main Street businesses and workers and consumers. The big banks are hoarding extraordinary amounts of money, and they are clearly not investing it in job creating businesses. They are speculating with it, they are trading with it, they are investing in complicated financial instruments that do nothing to create jobs- in fact, they are sucking capital out of the real economy that might actually create jobs. These massive financial conglomerates have way too much concentrated wealth and market power, and that is weakening the rest of the economy.

This is one reason why, as I wrote a couple of times last week, it is so important to write down the mortgages of homeowners who are underwater. Taking that money out of the bankers' hands and putting it in the hands of the hard pressed middle class would do more to stimulate the economy than any other thing the President could do right now. This is also why the Federal Reserve's new proposed rule, out last week, on swipe fees is so good. It would generally limit swipe fees to 12 cents per transaction. Right now the average is 44 cents, and with most small businesses it's quite a bit higher. If this rule is upheld, this is money that will go straight from the big banks' profit margins into the main street economy- all told probably a $15 billion boost going back to retailers, restaurant owners, taxi cab drivers, and hopefully consumers. $15 billion going from Wall Street, speculative economy into the real economy is a nice lift right now. This is why I have been working with retail business leaders and consumer groups to support this new regulation.

Unfortunately, not all Democrats see it this way. Tom Carper and Mark Warner tried to head off the amendment that made this regulation happen in the Senate, and have been lobbying the Federal Reserve against a strong regulation on the subject ever since they lost the legislative fight. And Barney Frank, who is a great liberal on social issues but spends way too much time with bank lobbyists, was whining on Friday how unfair the proposed rule was to the poor bankers.

Barney, you got this one wrong. Democrats should not be looking out for the bankers, we should be looking for every single opportunity we can to drain the Wall St swamp. The big banks are hoarding money. They have way too much market power, and when their profits expand, they put that money into the speculative economy rather than the real economy that manufactures goods, sells products and services, and creates jobs. When we take a dollar away from them, and put it into the real economy, there is actually a multiplier effect as people on Main Street spend or invest the money in real products. When mortgages get written down, it helps the real economy. When swipe fees on credit or debit card transactions get lessened, it helps the real economy. If we instituted a transactions tax on every trade made on Wall St, and put that money into a jobs program, that would help the real economy.

The big banks are hoarding our money. Our best economic program right now is to shift money from the banks, and put it into the hands of consumers who might actually buy products and businesses who might actually hire more workers.

An Unmentioned Cause Behind America's Economic Woes

Inoljt — Sun, 19 Dec 2010 22:18:38 GMT

By: Inoljt, http://mypolitikal.com/

America's economy is in a bad way. The economic recovery has turned out to be disturbingly weak, and joblessness rates are still actually rising. Investment is down, Americans are depressed and angry, and there are even worries about a double-dip recession.

There has not been much analysis of the causes behind today's economic stagnation. Most experts talk about how weak recoveries generally follow financial crises. Politically, Republicans blame Democrats, and Democrats are generally too busy trying to fix the problem than to think about what caused it.

Yet there is indeed something that did badly damage the recovery - an event very few nowadays link to America's economic woes.

More below.
This event was much like the 2008 financial crisis (indeed, it actually was another financial crisis). It dominated newspaper headlines, threatened to severely weaken several economically mighty countries, and in the end required international intervention to the tune of one trillion dollars.

On the surface, the European sovereign debt crisis - and more specifically, the bankruptcy of Greece - might have little to do with the United States. Greece, after all, is quite far away from America. Yet, as 2008 showed, the fall-out from a financial crisis goes wide and far; if Europe was hurt by America's financial crisis, it stands to reason that America was hurt by Europe's financial crisis.

Moreover, both crises had much in common. Panic hit the market and risk spread wildly, from the original contagion to even the safest strongholds. In the United States, banks went bankrupt; in Europe, countries went bankrupt. For both crises, the "fix" cost hundreds of billions of dollars.

There is another, more ominous analogy. The Great Depression, it is commonly held, started with the collapse of the American stock market. What really made it "Great," however, was a series of bank failures that followed. These started in Austria. If the 2008 financial crisis was Black Tuesday, then the Greek crisis holds a disturbing parallel with the chain of bank failures that started in Europe.

Fortunately, the European Union was able to put a halt to the Greek crisis - unlike what happened during the Great Depression. Due to the lessons learned from that era, unemployment is less than half what it was during the Great Depression's peak (which is, unfortunately, still quite high).

Nevertheless, the fact that the European debt crisis was halted probably did not it from inflicting the harm it had already done. Much as the 2008 financial crisis raised unemployment to jump to 10%, fall-out from the European financial crisis seems to be keeping it at that number. It is interesting that almost nobody, whether in politics or economics, seems to be publicizing this fact.

Weekly Audit: Tax Cuts for the Rich Extended

The Media Consortium — Tue, 07 Dec 2010 18:12:12 GMT

Weekly Audit: Tax Cuts for the Rich Extended

By Lindsay Beyerstein, Media Consortium Blogger

Congressional Republicans and the White House struck an agreement in principle on Monday night to extend all the Bush tax cuts for 2 more years in exchange for extending unemployment benefits. The GOP agreed to the so-called "Lincoln-Kyl compromise" a partial 2-year extension of the Bush estate tax cuts on estates worth over $5 million. If the deal had not been struck, estate taxes on estates over $5 million would have gone back up from 0% to the pre-cut rate of 55%. Instead, the rate will be 35% for the next 2 years.

The GOP also agreed to a short-term "stimulative" 2 percentage-point cut off the 6.2% payroll tax we all pay on income up to $106,800. The good news is that a payroll tax holiday will provide the most noticeable tax relief to low- and middle-income Americans. The bad news is that payroll taxes fund Social Security, so cutting the tax means starving a program that most directly benefits average people. Social Security is not in crisis yet, but steps like these could push the program into worse financial straights where significant benefit cuts become inevitable. It's almost as if the GOP, having failed to spark panic about an as-yet non-existent Social Security crisis, is determined to engineer one.

All these gimmes for the rich were the price of a partial extension of unemployment benefits. The stakes couldn't have been higher. If Congress had failed to act, 2 million people stood to lose their benefits this month and another 7 million would have run out before the end of next year, reports Andy Kroll of Mother Jones.

Meanwhile, unemployment continues to rise. The economy only added 39,000 jobs in November when analysts were expecting about 150,000. "At the beginning, some people just thought it was a printing error," said reporter Motoko Rich on the New York Times' weekly business podcast. The overall unemployment rate climbed to 9.8%.

At ColorLines, Kai Wright argues that the time has come for President Obama to seize the opportunity to debunk conservatives' bad faith arguments for tax cuts above all else:

At the same time, the anti-government crowd's political hand-if forced-has never been weaker. A depressingly large number of middle-class and working-class Americans now know all too well what economists have long understood: You get a great deal more economic bang out of keeping lots of people from becoming destitute than you do by helping a few people horde wealth. People remain enraged about the no-strings-attached bank bailout, for instance, because they intuitively understand its ramifications. Wall Street is now enjoying a narrow, taxpayer-financed recovery while unemployment, hunger and poverty all continue climbing through the former middle class.

Extending UI makes sense

Tim Fernholtz of TAPPED tackles some of the bad arguments against extending unemployment insurance. Economist Greg Mankiw claims that extending unemployment insurance is just a surreptitious ploy to redistribute income to the poor from the wealthy. Actually, as Fernholtz points out, the point of a UI safety net is to prevent people, 3 million of them in 2009, from becoming poor in the first place. Poverty is very expensive for society at large. If we can keep the unemployed in their homes, spending their benefits in their communities, we can keep the socially corrosive effects of poverty at bay until the economy improves. The social costs of child poverty alone have been estimated at $500 billion a year, Fernholtz notes. The deeper we allow people to sink into poverty, the more difficult it will be for the economy to rebound. On this view, UI is a shared investment in a well-ordered society, not just a lifeline for jobless families.

Why corporate tax cuts won't create jobs

Jack Rasmus of Working In These Times explains why tax cuts will not create jobs. Simply put, banks and big companies are sitting on over a trillion dollars. Among the nation's biggest banks, lending to small and medium size businesses, the engines of job creation, has dwindled over 2009 and 2010. America's biggest companies are sitting on a hoard of $1.84 trillion dollars, which they are not investing in job-creating projects. The Deficit Commission recommended slashing corporate taxes, ostensibly to spur investment and job creation, which would ultimately generate taxable income to help balance the budget. As Rasmus points out, this wishful thinking is predicated upon the assumption that if only corporations had more money, they would invest it to create jobs. The fact that companies are already sitting on huge piles of cash suggests that shoveling more moolah on the pile won't change the basic dynamic. Perhaps companies are waiting to invest because they know that consumers aren't keen to buy goods and services when they are unemployed or fearing job loss.

Economic disobedience

At In These Times, Andrew Oxford interviews sociologist Lisa Dodson about her new book on getting by in the low-wage economy. Her research shows that as economic instability mounts, many Americans are quietly taking matters into their own hands:

To understand how fair-minded people survive in an unfair economy, Dodson interviewed hundreds of low-wage workers and their employers across the country, examining what she terms the "economic disobedience" now pervasive in the low-wage sector. From a supervisor padding paychecks to a grocer sending food home with his employees, these acts of disobedience form the subject of her latest book, The Moral Underground: How Ordinary Americans Subvert an Unfair Economy.

Winner-take all economy

In an interview with Democracy Now!, Yale political science profesor and Jacob Hacker explains why the Deficit Commission has it all wrong when it comes to tax cuts vs. unemployment benefits.

Hacker studies inequality. He has written a book on how the richest Americans cornered an unprecedented share of the country's wealth for themselves over the past three decades. The richest Americans have never been in a better position to help the country grapple with the deficit. Yet, as Hacker points out, the Deficit Commission wants to balance the budget on the backs of middle- and lower-income Americans by cutting spending on programs that disproportionately benefit working people and readjusting the tax code to make it even more favorable to the rich.

Weekly Diaspora: The Final Fight for the DREAM Act

The Media Consortium — Thu, 02 Dec 2010 17:25:58 GMT

by Catherine A. Traywick, Media Consortium blogger

It's a now-or-never moment for the DREAM Act, a bill that would provide a conditional path to citizenship for certain immigrant youth. The bill's prospects won't improve with next Congress' influx of Republican legislators, and thousands of undocumented students and their bipartisan supporters are urging the Senate to pass the DREAM Act. But as the Senate appears ready to finally vote on the landmark bill, state lawmakers are moving in the exact opposite direction.

In California, Colorado and Minnesota, state legislators have recently filed enforcement bills modeled after Arizona's draconian SB 1070, and a cadre of conservative citizens are already mobilizing in support of the measures. But whether those measures will hold up in light of mounting evidence that such bills are fiscally irresponsible remains to be seen.

Some lawmakers never learn...

New America Media reports that a Tea Party-backed immigration enforcement bill was filed in California last week, bolstered by a signature drive to raise support for the measure's inclusion on the 2012 ballot. Reading like a roll call of Arizona's most controversial immigration measures to date, the bill would require law enforcement to perform immigration status checks, require businesses to use the notoriously ineffective E-Verify program, ban undocumented persons from driving or soliciting work on the street and prohibit sanctuary cities.

Meanwhile in Colorado, State Senator-elect Kent Lambert (R) announced his plans to introduce "a carbon copy of SB 1070" early in the next session, according to Scot Kersgaard at the Colorado Independent. Eschewing concerns about the bill's constitutionality, Lambert added that if the bill is not passed and signed by Governor-elect John Hickenlooper, a Democrat, he would move to put the measure on the ballot.

And in Minnesota, Andy Birkey of the Minnesota Independent reports that a group called Minnesotans Seeking Immigration Reform (MINNSIR) is launching a petition to build support for an SB 1070 copy-cat bill expected to reach the House floor in the upcoming session. The group, derived from the Minnesota Minutemen (whom the Southern Poverty Law Center classifies as "Nativist Extremist"), is known for spreading misinformation about immigrants, including the erroneous claim that Mexican immigrants spread leprosy.

SB 1070 vs. the Dream Act: A Cost Benefit Analysis

But while obstinate lawmakers doggedly push for SB 1070-styled legislation, evidence is mounting that such draconian measures are fiscally irresponsible.

As Marcos Restrepo reports at the American Independent, a new study commissioned by the Center for American Progress reveals that Arizona has lost $400 million in economic output and $130 million in earnings as a result of SB 1070-provoked conference cancellations alone. Defending the measure, moreover, has already cost the state more than $1 million-a bill other states can anticipate footing should they move forward with similar legislation.

Restrepo notes that the high costs of imposing and defending such measures is economically impractical-especially when compared to the potential economic benefits of passing the DREAM Act. That bill could increase the nation's pool of higher-income workers by up to 2 million college graduates, according to the Migration Policy Institute, which could ultimately generate $3.6 trillion for the economy over the next 40 years.

The DREAM Act builds momentum

The DREAM Act has the potential to be so beneficial that, as the clock ticks towards the 11thhour vote, the bill is garnering significant new bipartisan support. Department of Homeland Security Secretary Janet Napolitano has voiced her support for the measure, according to William Fisher at of the Inter Press Service News Agency, as have the editorial staffs of both the Wall Street Journal and the Economist. Moreover, former Secretary of State Colin Powell is a long-time vocal advocate of the act on the grounds that "immigrants strengthen America." (Campus Progress has more on that).

And the Obama administration has come fully on board, finally assuming a "high profile, public role" in passing the DREAM Act, according to Julianne Hing at ColorLines. Hing notes that the move is a stark, if welcome, departure from the administration's usual approach to immigration reform, which has favored punitive, enforcement heavy bills over comprehensive reform.

The Heart of Darkness

Mike Lux — Tue, 23 Nov 2010 18:30:00 GMT

I came across these stunning statistics in a Matt Taibbi piece the other day: the top 1% in our country has had its percentage of the nation's wealth leap from 34.6% in 2007 to 37.1% in 2009, while the median net worth for an American household has gone from $102,500 in 2007 to $65,400 in 2009. Changes in numbers that dramatic in a two year period are astonishing, almost unfathomable. In the massive economic crisis we have just experienced, the home prices, savings, pensions/401(k) funds for the middle class took a beating like nothing most of us have seen in our lifetimes, while the top 1% have actually done okay after the initial hit on stock prices: corporate profits and stock prices are back up, corporate bonuses and dividends and executive compensation is in good shape, and the top 1% has more of the country's wealth in its back pocket than it did before. We still have high unemployment and stagnant wages and a terrible housing market, but the guys at the top are floating along pretty well right now.

As I was writing that last paragraph, my eye was caught by this headline and story from today's NYTimes:

Corporate Profits Were the Highest on Record Last Quarter
The nation's workers may be struggling, but American companies just had their best quarter ever.
American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.
Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.

This story, those statistics from my opening paragraph, paint an incredible picture of an economy and country in bizarre juxtaposition: corporate profits at record levels, big banks quarterly bonuses and profits at record levels over the least couple of years, while the rest of the country in economic meltdown.

Democrats are still reeling from our political losses, and the DC political class is still obsessed with the re-positioning dance, but at the heart of everything else, at the center of everything that matters, are these bleak economic facts driving our politics. The sooner Democrats stop worrying about being center or left, and start focusing on how to get the middle class out of its economic black hole, the sooner our politics start getting fixed. Period. End of story. The heart of our political darkness is the heart of the middle class' economic darkness.

Weekly Audit: Millions of Americans Could Lose Unemployment Benefits

The Media Consortium — Tue, 23 Nov 2010 16:21:01 GMT

Weekly Audit: Millions of Americans Could Lose Unemployment Benefits

Editor's Note: Happy Thanksgiving from the Media Consortium! This week, we aren't stopping The Audit, The Pulse, The Diaspora, or The Mulch, but we are taking a bit of a break. Expect shorter blog posts, and The Diaspora and The Mulch will be posted on Wednesday afternoon, instead of their usual Thursday and Friday postings. We'll return to our normal schedule next week.

by Lindsay Beyerstein, Media Consortium blogger

According to official statistics, nearly 15 million Americans are unemployed. Between 2 and 4 million of them are expected to exhaust their state unemployment insurance benefits between now and May. Historically, during times of high unemployment, Congress provides extra cash to extend the benefits. Congress has never failed to do so when unemployment is above 7.2%. Today's unemployment rate is above 9% and the lame duck session of Congress has so far failed to extend the benefits.

Congress has until November 30 to renew two federal programs to extend unemployment benefits, as David Moberg reports for Working In These Times. Last week, a bill to extend benefits for an additional three months failed to garner the two-thirds majority it needed to pass in the House. The House will probably take up the issue again this session, possibly for a one-year extension, but as Moberg notes, it's unclear how the bill will fare in the Senate. The implications are dire, as Moberg notes:

The result? Not just huge personal and familial hardships that scars the lives of young and old both economically and psychologically for years to come. But failure to renew extended benefits would also slow the recovery, raise unemployment, and deepen the fiscal crises of state and federal governments.

But wait! There's more:

The Paycheck Fairness Act died in the Senate last week, as Denise DiStephan reports in The Nation. The bill would have updated the 1963 Equal Pay Act to close loopholes and protect employees against employer retaliation for discussing wages. All Republican senators and Nebraska Democrat Ben Nelson voted not to bring the bill to the floor, killing the legislation for this session of Congress. The House already passed its version of the bill in 2009 and President Barack Obama had pledged to sign it.

Economist Dean Baker talks with Laura Flanders of GritTV about quantitative easing (a.k.a. the Fed printing more money) and the draft proposal from the co-chairs of the deficit commission. Baker argues that we're facing an unemployment crisis, not a deficit crisis.

Charles Ferguson's documentary "Inside Job" is a must-see, according to Matthew Rothschild of The Progressive. An examination of how Wall Street devastated the U.S. economy, the film details the reckless speculation in housing derivatives, enabled by crooked credit rating schemes, that brought the entire financial system to the brink of collapse. The film is narrated by Brad Pitt and features appearances by former Governor and anti-Wall Street corruption crusader Eliot Spitzer, financier George Soros, and Prof. Nouriel Roubini, the New York University economist who predicted the collapse of the housing bubble.

Confronting Obama on Jobs and Economy

SpitBall — Wed, 17 Nov 2010 22:17:22 GMT

The 2010 elections can be described in many ways, but one way to view them is as a repudiation of the congressional factions with which the Obama Administration has negotiated with (and/or capitulated to) over the last two years.

Blue Dogs and "moderate/centrist" GOPpers were overwhelmingly defeated in primaries and in the general election.

The progressive wing of the Democratic party did not suffer such defeat. It is time that the President join the winning wing of his chosen political party.

At a minimum President Obama owes the progressives a nod of thanks and respect for their demonstrated ability to stave off the recent Republican Wave.

On that note:

More Warren, Less Bowles

Mike Lux — Thu, 11 Nov 2010 14:00:00 GMT

The Democratic Party internal debate about what to do in order to come back in 2012 rages on and will for a while. The issues and strategic implications are complicated. There are a lot of big and small tactical considerations. The potential paths that could be followed go a lot of different directions. But here's one thing I feel extremely confident in saying: the path for Obama's political comeback does not lie in walking over the backs of senior citizens and the working class.

Voters over 65 years old were the one age group that went clearly against Obama in the 2008 victory, but it got a lot worse in 2010: the margin against Democrats ballooned to 22 points in this election, after being -8 in 2008. And working class voters in their 40s, 50s, and 60s- the folks getting ready to go on Social Security and Medicare- turned strongly against the Democrats as well. The economy was a big part of that, of course, but so was a few hundred million dollars worth of false ads about Democrats cutting Medicare.
Fresh off that delightful experience, Erskine Bowles wants President Obama to embrace raising the retirement age for Social Security and Medicare to 69, and cutting benefits to boot. I'm trying to think of what the best way to describe this as a political strategy. Let's see- thinking, thinking, begins with S...Oh yes, I remember now: the word would be Suicide. And yes, that would be with a capital S.

Senior citizens are not the cause of our deficit problems. Neither is hard working Americans in their 40s and 50s paying into the system every month so they can look forward to having some way to stay out of poverty when they get older. We have the deficit problems we have because of tax cuts to millionaires and billionaires passed in 2001, because of agribusiness and other corporate subsidies, because of defense and other government contractors gaming and the system and ripping off taxpayers, and because of Wall St speculators who crashed our economy and then came begging for a bailout. That's who the deficit commission should be going after, not Grandma and Grandpa.

President Obama should distance himself quickly and decisively from this "Chairmen's Mark". The distance he should put between it and him would be about the distance between earth and Jupiter, and that may not be enough. Obama needs a lot less Erskine and a lot more Elizabeth (as in Warren): in other words, Obama needs people around him who argue passionately on behalf of middle class interests, and can explain policy in ways middle class folks can get. His new chief of the National Economic Council should be someone who has argued strongly against Social Security cuts, and argued strongly for an economic strategy that aggressively promotes new manufacturing and infrastructure jobs for the middle class. The new White House staffers brought in should be the same: people known for their passion in fighting on behalf of working people and seniors living on Social Security.

This issue is actually a lot like the foreclosure crisis- a mushy response is a big political problem, but a strong, decisive, pro-middle class response would be great for Obama. The Deficit Commission Chairmen's Mark could be either a curse or an opportunity. It all depends on how the President handles it. If he is mushy in his approach, this awful report becomes his to own. If he makes it clear that he is strongly rejecting these bad ideas, and is moving to champion the interests of the middle class, he becomes a hero- to senior citizens, to working class voters, and to his base.

The Re-Positioning Tango

Mike Lux — Wed, 10 Nov 2010 18:30:00 GMT

It’s only been a week, and I am already sickened unto death of the re-positioning tango over how to re-position ourselves to win the next election. Of course, maybe one of the reasons I am sick of it is that it happens after every losing election. The biggest reason I am sick of it, though, is that none of it really matters at all to the voters Democrats lost in this election and need to win back. The swing voters we lost in this election, as I wrote about here, are the economically stressed working and middle class- the ones whose mortgages are underwater or in danger of getting there, the ones whose family members are losing jobs or having hours being cut back, the ones who haven’t gotten a raise in 2 or 3 years, the ones whose pensions and savings are worth a lot less than they were 3 years ago. And you know what: they couldn’t care less how Obama or other Democrats are positioned. What they do care about are having good jobs come back to their communities, and having their homes’ value start to edge up again.

That’s why the new memo from Third Way doesn’t do much for me. It doesn’t make me angry, either, although I know it is supposed to: you know, get the debate between liberals and moderates engaged and all that. What it does do is go to my friends at Third way’s favorite stalking horse, the fact that self-identified liberals only make up 20% of the electorate. You know what? Just so Third Way folks don’t feel like they have to keep beating this dead horse, I will be glad to stipulate that point in this and all future arguments: self-described liberals are a small minority of the electorate, and you can’t win elections with only their votes. See, we agree. And who ever said progressives couldn’t get along with moderates?

Now that I’ve agreed to their main point, let me tell me why it doesn’t matter. Because the word liberal has become so poisoned and narrowed as a descriptive phrase, the only people who tend to call themselves that tend to be white urban creative class types, clustered mostly in the northeast and west coast. Liberals are an important part of the Democratic base, but they sure aren’t the only part, or even the biggest part. Most African-Americans, who voted 90% Democratic, do not describe themselves as liberals. Neither do most Hispanics, labor union members, unmarried women, or young people, all of whom gave Democrats strong majorities. To me, those demographic groups, along with self-described liberals, are who I think of as the Democratic base. And there were some issues there Democrats need to deal with if they want to win:

-voters under 30 were 11% of the electorate in 2010 compared to 18% in 2008, and their margin shrunk from +29 D to +17 D.

-Unmarried women had about the same % of the electorate as in 2008, but their margin slid from +40 to +16. White unmarried women actually voted Republican for the first time since I’ve been reading exit poll data.

-Although their loyalty to Democrats only dropped slightly, African-Americans dropped from 13% of the electorate down to 10%

-Union households’ Democratic margin dropped 8 points, but even more importantly their share of the electorate dropped 6 in comparison to 2006.

So before you accept the Third Way/Matt Bai argument that the base doesn’t matter much because they voted for us anyway, be extremely careful. The kind of numbers sited in the 4 bullets above, with both smaller shares of the electorate and a smaller % for Democrats in some of the most loyally Democratic demographic groups, is exactly the kind of shift that will cost you elections. But here’s the most important point: self-described liberals, who tend to be a little higher income creative class professionals- professors and folks with post-grad educations, tech workers, people in the arts and entertainment, etc- have not been as badly hurt by this economy, so of course their turnout and percentage for democrats isn’t dropping, Meanwhile, union households, unmarried women, African-Americans, and young people, while still more Democratic demographic groups, have been hurt badly by this awful economy, so it is no surprise their numbers are going down for Democrats. Meanwhile, the classic swing voters in American politics, the white working class, have been devastated by this economy, so it is no surprise they are turning on Democrats in big numbers.

Which brings me back to my original point: this ain’t about positioning, folks, this is about giving all those folks- base and swing voters alike- some solutions on this economy. With the fiscal stimulus being politically dead as a doorknob, that solution is gone. We are going to have to come up with other approaches to help the middle class and those struggling to get into it and the biggest piece of business out there is this housing market that is in a shambles. The big banks’ solution is to foreclose on everyone as fast as possible so they can clear those properties off their books, but that does nothing for the middle class whose mortgages are underwater, or for housing prices which will sink further with more foreclosures. The Obama administration can help those folks, and stabilize the housing market by taking a few key steps, all of which they can do without having to get Republicans in Wall St’s pocket to pass anything. They have the power in their hands. Check this link out.

These policies have been developed by church leaders and community groups around the country working on the foreclosure crisis. They would go a long way to providing some tangible help to those hard hit voters who are worse off now than they were two years ago, a demographic group that went from 42 points for Obama to 29 points against Democrats in this election. It is precisely these stressed out voters that are the ones we have to get back.

We can also get them back by championing policy that will create good new jobs. Check out this new piece in Huff Po by Leo Hindery on how to create new manufacturing jobs now. And we can get them back by making sure the laws passed in this last session of Congress get administered to actually help middle class people: check out this great interview from last night with Elizabeth Warren on the Maddow show.

Democrats can win the next election, but it won’t be by engaging the same stale debates about positioning ourselves in the middle, whatever that means. The way we do it is pretty straightforward: deliver real economic benefits to the working and middle class voters hardest hit by this economy. By the way, guess what: that helps us with the base voters we didn’t get this time and with those populist swing voters just as much. Let’s not worry so much about positioning: let’s deliver real benefits to the voters who most need them, and we will be rewarded politically.

Illustrating Inequality in the United States

Inoljt — Sat, 06 Nov 2010 23:38:12 GMT

By: Inoljt, http://mypolitikal.com/

Inequality constitutes a rising problem in United States. Ever since the 1970s, it has been steadily increasing; today, income inequality is at its highest since the Great Depression. The fact that America is currently mired in the worst economic crisis since that period may not be a coincidence.

This site has found fifteen striking charts of inequality. Some are better at conveying the problem than others. Nevertheless, overall it does a decent job at presenting the magnitude of American inequality. Pictures like the one below are especially effective:

More below.
The causes of this growing inequality remain complex. Experts attribute numerous causes. Some point to the decline of manufacturing and blue-collar industry since the '70s - which probably plays a part. Liberals blame conservative tax-cuts which helped the rich disproportionately.

Whatever the reason, it remains undeniable that the well-off have benefited most from the economic growth over the past few decades. Another graph illustrates this point:

What is most striking about this chart is the degree to which CEO pay increases, almost without regard to how well the companies under their management do. The stories of massive Wall-Street bonuses to CEOs responsible for bankrupting their banks have become infamous; the practice continues.

At some point something will have to be done to curb this trend. Taxes on the rich will almost certainly be raised, although it would be better to do this after the recession. Even the analysts on Fox News acknowledged this on their Sunday discussion forum. The estate tax - which falls on the inheritances the rich give to their children - is going back to its level before President George W. Bush cut it. The New Yorker and other sources are proposing a "millionaire's tax," something for which broad public support probably exists.

All in all, increasing inequality remains a threat to the overall wellbeing of a country. As a matter of fairness, income inequality goes hand-in-hand with opportunity inequality - leading to rigid social stratification. This sets the ground for social unrest, as the rich increasingly feel disconnected from the poor, and vice versa. In the worst case, things may end in revolutionary violence.

Of course, the United States is nothing near that situation now. Best keep it that way.