Archive for the ‘Financial Meltdown’ Category

In a perfect world the Sunday morning talk shows would provide some measure of clarity in an otherwise confusing and conflicted world. Clearly, it isn’t a perfect world, and just how imperfect it is was on display this morning on Meet the Press. The subject was the fiscal cliff and deficit reduction.

For example, Tom Brokaw said it is ridiculous that he should get the same Medicare benefit as his less-wealthy brother. Sounds reasonable, doesn’t it? Maybe there should be a means test where only those who need Medicare should get it. That way Medicare would be turned into a welfare program that the Right could whittle away at by adjusting the means threshold. Good idea, Tom. How about controlling run-away medical costs, instead? That might work.

Mr. Brokaw also suggested that the maybe Social Security retirement age could be increased to 67 now, and maybe even 70 in a few years. Uh-oh, this is a back breaker…literally.  Some workers, particularly those at the lowest end of the wage scale such as laborers and farm workers, spend their lives doing work that takes a terrible toll on their bodies. Are we going to ask them to work even longer before they can retire? Riding a desk is one thing, as the people in Washington do. Day-after-day physical wear and tear is something else, again. Or, how about this? There are fewer and fewer jobs to go around, now. The effect of asking people to work additional years before retirement would actually increase the labor pool, which would increase unemployment, while driving wages down even more.  Sorry to be picking on you, Mr. Brokaw, but your ideas suck.

David Brooks offered that the Republicans were going to take most of the blame if we go over the cliff, but he was critical of the president for not getting more involved in the negotiations. So, let’s see. Brooks wants the president, who ran on a clearly defined platform of how he wanted to cut the deficit, to bring the Republican caucus around to agreeing to a more conciliatory plan than he actually campaigned on, which the Republican Majority Leader John Boehner was unable to sell to his own party. Really, Mr. Brooks? You want the president to bloody himself on a fool’s errand? As a Republican flack I can understand why that would work for you, but it doesn’t work for the president or the Democats. And let’s not forget that a sizable percentage of Mr. Boehner’s caucus believes that the president stole the election in the first place (Birtherism 2.0), which would tend to harden the positions of the right-wing nut jobs who control the Republican Party.

Finally, there’s the constant banter about how important it is to get control over entitlements. This makes my blood boil. The people need Social Security, Medicare/Obamacare and Medicaid and Obama’s win makes it clear that the people don’t what Washington messing around with these programs. Moreover, the people did not create the economic mess we are in; the banks and Wall Street created it and, in the process of doing so, the inequality gap got larger, unemployment and poverty increased, more families need food stamps, wages declined and the rich got richer. And now the people’s social safety net needs to be reined in to reduce the deficit? Really? What about corporate entitlements? Defense Department entitlements. Tax dodges for the wealthy? Endless colonial wars?

WTF! It least it’s Sunday and there’s football to watch.

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English: The Seal of the United States Federal...

Today I read in the Huffington Post that the “FBI Investigated ‘Occupy’ As Possible ‘Terrorism’ Threat.” I guess the reason was that the FBI figured that economic inequality, the rallying cry of the Occupy movement, had the potential to disrupt the social order, and that the constitutionally protected right of the people to assemble and demonstrate peaceably has limits.

Now, suppose for a moment that the Occupy Movement did to the economy and to families what the banks and Wall Street firms pulled off when they knowingly sold toxic assets all over the world.  What do you think would have happened to the leaders of the Occupy Movement? Guantanamo comes to mind. Then why the hell aren’t those who actually sold those toxic assets and actually brought the world’s financial system to its damned knees treated like the terrorists they are? Of course I know the answer to that question: Over-the-top greed isn’t bad, but demonstrating against it is.

There is an overarching message in this; the people’s interests don’t matter nearly as much as the interests of those who make money off the peoples’ blood, sweat and tears. Merry Christmas and Happy Holidays.

The continuing unrest in Europe demands answers to fundamental questions.

  • Why must the people shoulder the immense pain of austerity when they neither caused the financial collapse nor did they profit from it?
  • What difference is there between Europe’s austerity measures and Paul Ryan’s draconian budget?
  • Isn’t it time that the fat cats who run the world’s financial system heard a very loud and clear message from the people that goes something like this: NO MORE!

Instead of the people eating trickle-down cake it’s time for fat cats and banksters to feel the people’s’ trickle-up pain.

While subbing at a local high school recently I found myself engaged with students in a discussion of free-trade agreements. Given my position as a teacher proxy I had an academic responsibility to be a facilitator rather than an advocate.

The students, all of them quite bright and surprisingly well informed, were pretty evenly split between  free-trade opposition and advocacy with the advocates arguing that globalism is a realty and to get used to it, and the opponents taking up the cause of American workers whose jobs got off-shored. The debate went back and forth until I suggested that instead of focusing on the offshoring of jobs (the effect of free trade agreements) they should consider the cause.  What role, I asked, does capitalism play in the loss of jobs and the decline in wages? I then had the pleasure of watching and listening to these young people wrestle with fundamental questions about the structure of our economy, the class stratification of our society and even the survival of our country.

My belief, which I did not share with the students, is that we are teetering on the edge of a political and economic abyss. We need to take a dispassionate look the basic nature of capitalism, which posits that labor is a cost to be minimized, while profit is to be maximized…often at the expense of labor. Through that lens there is absolutely nothing wrong with offshoring jobs despite what it means to workers, families, and the middle class. Through that lens corporations and big money rule; the rich get insanely rich, and everyone else eats their trickled-down cake. If anyone says this isn’t happening right now they just aren’t paying attention. And these economic problems didn’t just happen in the wake of the financial meltdown; they would have happened anyway, just not as fast nor as dramatically as they did.

In fact, this is an economic horror story that has been playing out since the 1970s when the trend lines of productivity and personal employment income crossed; workers produced more while earning less. The trend was exacerbated by women entering the labor force in greater numbers, increased migration from the south and, most recently, by the offshoring of good jobs in huge numbers. The result has been the gutting of the middle class, the dashing of dreams, high unemployment and destructive underemployment.

So, as the classroom debate unfolded and the bell about to ring, I asked one final question: If the problem that we were examining is structural rather than cyclical do you believe that the American people will be best served by an active and engaged government or should the government disengage and allow capitalism, as it is currently expressing itself in the United States dictate the fate of the people?

I haven’t seen the students in the class since that day. I can only hope that they challenge those who are far too content to accept the status quo, a condition that, all too often, serves the pocketbooks of those who advocate it.

I am a REALTOR. As part of the licensing procedure in New Jersey, licensees are required to participate in an ongoing education program. That’s a good thing. What isn’t so good is that sometimes instructors feel obliged to spread their political views to their captive audiences. Fortunately, it doesn’t happen often…at least in my experience…but it did recently which prompted the following response. Unfortunately, when these things do happen leverage is on their side since one voice can reach many. That is why those of us who are serious about change must remain vigilant and spread the truth as often we can to as many people as we can.

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Alan Greenspan, former chairman of the Board o...

Alan Greenspan, former chairman of the Board of Governors, The Federal Reserve Board, USA. (Photo credit: Wikipedia)

I want to respond to a couple of points you made during your presentation that had more to do with politics than with housing or with the state of the housing market. The first point was your allegation that the mortgage/financial meltdown was the result of social engineering. Since “social engineering” is often linked to Democratic or left-wing politics, the political implications of the linkage are clear. What is less clear is any factual support for the allegation.

Since the 1970s individual employment income dropped in the United States while, over the same period, worker productivity increased. In addition, vast numbers of women entered the work force, a large worker migration arrived from the south, and the offshoring of jobs all conspired to exert powerful downward pressures on wages.

In order for middle-class lifestyles to be maintained in this environment, which was essential in order to sustain America’s consumer-driven economy, easy-money policies of the Fed fostered a dependence on credit and encouraged home equity cash outs.

Then, along came Alan Greenspan, the arguably libertarian Fed Chairman who set the stage for economic disaster. He knew that as housing went so went the economy so, he reasoned, why not make home ownership possible for a far broader population? All it took was low interest rates, the repeal of Glass-Steagall, and the easing of mortgage credit requirements.

The housing industry boomed, business boomed, Wall Street and the banks swam in money and strutted their bullet-proof, too-big-to-fail power for all to see. It was crony capitalism at its worst. But the only connection to social engineering was how it was sold to potential home buyers…the people who did not yet own a home. We know who they are; those evil people who should have known better than to take loans that they couldn’t pay for despite the fact that from America’s top banker all the way down to the Wall Street scum bags who securitized the toxic paper and then took the government’s bailout money all said it was the right thing to do.

No, it wasn’t social engineering that caused the problem. It was economic mischief of the highest order, the results of which are the financially engineered destruction of the middle class, and a staggering and unsustainable level of income inequality.

And the second point…

You gushed over Governor Chris Christie’s private sector job creation numbers. That, too, is not supported by the facts. In terms of the percentage increases in total jobs and private-sector jobs as of April 2012, New Jersey’s growth since the beginning of Christie’s tenure has been less than the growth in New York, Connecticut and the nation as a whole, according to seasonally-adjusted data from the U.S. Bureau of Labor Statistics. (more)

Michael Bloomberg was affiliated with Salomon ...

Image via Wikipedia

November 20, 2011.

I’m sitting on a park bench near the corner of 79th and 5th in New York City. It’s not far from Mayor Bloomberg’s home. A few hundred drum-pounding Occupy Wall Street (OWS) demonstrators, assembled behind police barricades, line the west side of 5th Ave. Noisy, passionate and well-behaved, they run the gamut from seniors (like this writer) to teens. They appear to be evenly split between males and females. What they all share is a belief that the system is broken, and that the Mayor supports the system and not the people. I’m here because I believe that, too.

Unfortunately, explaining why the system is broken doesn’t yield to a few sound bites or easily voiced talking points except, maybe, for this one: OWS is the opposite of the I’ve-got-mine-and-to-hell-with-everyone-else, top-down, trickle-down belief set that aids and comforts the 1%, while wage earners, what’s left of the middle class, and the poor eat cake. Not exactly a sound bite, but it works.

The passion that drives the OWS movement is something you feel, whether for yourself, your children and grandchildren or for those who have lost hope that tomorrow will be any better than today. OWS owes no allegiance to any political party; money drives political parties and moneyed interests fear the people. For the first time since the ’60s and ’70s, people have seen the power of democratic and collective voices raised to protesteconomic and political injustice. OWS demands an end to this injustice. We all should demand it, becauseAmerica, as it now exists, is unsustainable.

November 22, 2011.

Despite what OWS has been able to accomplish after only 2-plus months, Mayor Bloomberg says that OWS doesn’t know what it wants but wants it now. Great line, isn’t it? I’m tempted to say that he just doesn’t get it, but that would be unfair to the mayor who, most assuredly, gets it. He knows that fixingAmerica’s political and economic system requires the restoration of our democracy…a frightening prospect for the greed-is-good set, as well as the corporate and special interests that pullAmerica’s strings. No, Mayor Bloomberg knows quite well what OWS wants, and it scares the hell out of him.

My objective in offering these thoughts for consideration is to urge people to reject the contentious, sound-bite rhetoric that seeks to demonize and trivialize a long-overdue, democratic, peaceful, passionate, diverse, and patriotic movement that seeks to reawaken the American Dream for all people. After all, don’t our children and their children deserve what we had?