Oldie but goodie

The woes of the banks' CEOs, HERE.

OWS has changed the national conversation

 POLITICO:

Occupy Wall Street is winning


Whatever the objectives of protesters involved in Occupy Wall Street, they have succeeded in engaging the country in a conversation about income inequality.

A quick search of the news--including print articles, web stories and broadcast transcripts--via Nexis reveals a significant rise in the use of the term “income inequality,” from less than 91 instances in the week before the occupation started to almost 500 instances last week

What do teachers make?

A Corporate Plege of Allegiance?

From Robert Reich:

(I)f the Supreme Court and regressive Republicans insist big corporations are people and want to treat them as American citizens, then why not demand big corporations take a pledge of allegiance to the United States?

And if they don’t take the pledge, we should boycott them. (Occupiers — are you listening?)

Here’s what a Corporate Pledge of Allegiance might look like:

The Corporate Pledge of Allegiance to the United States

The [fill in blank] company pledges allegiance to the United States of America. To that end:

We pledge to create more jobs in the United States than we create outside the United States, either directly or in our foreign subsidiaries and subcontractors.

If we have to lay off American workers, we will give them severance payments equal to their weekly wage times the number of months they’ve worked for us.

We further pledge that no more than 20 percent of our total labor costs will be outsourced abroad.

We pledge to keep a lid on executive pay so no executive is paid more than 50 times the median pay of American workers. We define “pay” to include salary, bonuses, health benefits, pension benefits, deferred salary, stock options, and every other form of compensation.  

We pledge to pay at least 30 percent of money earned in the United States in taxes to the United States. We won’t shift our money to offshore tax havens and won’t use accounting gimmicks to fake how much we earn.

We pledge not to use our money to influence elections.

Companies that make the pledge are free to use it in their ads over the Christmas shopping season.

The impact of "Occupy Wall Street" on the labor movement

Steven Greenhouse at NYT:

Organized labor’s early flirtation with Occupy Wall Street is starting to get serious.

Union leaders, who were initially cautious in embracing the Occupy movement, have in recent weeks showered the protesters with help — tents, air mattresses, propane heaters and tons of food. The protesters, for their part, have joined in union marches and picket lines across the nation. About 100 protesters from Occupy Wall Street are expected to join a Teamsters picket line at the Sotheby’s auction house in Manhattan on Wednesday night to back the union in a bitter contract fight.

Labor unions, marveling at how the protesters have fired up the public on traditional labor issues like income inequality, are also starting to embrace some of the bold tactics and social media skills of the Occupy movement.

PBS Newshour on Income Inequality

Another Oldie but Goodie - HERE.

Oldies but goodies

I'll be doing ten days of of oldies but goodies while on vacation...

For starters there's Joe Stiglitz' "Of the 1%, by the 1%, for the 1%" that helped get the OWS ball rolling.

The Age of Growth

Paul Krugman on the years before and after deregulation and "trickle down" became the mantras of conservative (and "neo-liberal") economics:

There’s only one way in which the post-deregulation boom was exceptional, and that’s in terms of the growth in incomes at the top of the scale. 

The true age of spectacular growth in the United States and other advanced economies was the generation after World War II, with post-Reagan growth nowhere near comparable. So why do these people imagine otherwise?

If you’re looking at the average, the last generation is a poor shadow of the postwar boom. But if you’re talking about the 1 percent, wonderful things have happened.

No wonder then, that Very Serious People — who, after all, get to be considered Very Serious because the elite likes them — have retained faith in deregulation despite repeated disasters.

"The Financial System Is Rigged in Favor of the Rich"

Economist Mark Thoma at Fiscal Times:

If the Federal Reserve had thought more about Main Street when it was bailing out the financial system, there might not be an Occupy Wall Street movement throughout the country today.

The belief that the economic system is rigged in favor of the rich and powerful is an important factor driving OWS. This belief is based, in part, on the way in which the financial bailoutwas handled by monetary authorities. Policymakers insulated banks from losses using the argument that protecting Wall Street would also prevent large losses on Main Street. But the bailout alone wasn’t enough to prevent big problems on Main Street, and it came to be viewed as largely a giveaway to the wealthy interests controlling financial institutions.

It didn’t have to be that way. Instead of bailing out banks directly, we could have given money to homeowners to help them pay their mortgages. The money could have been earmarked for mortgage payments so that it still ended up in the hands of banks, but by allowing the help to pass through households first, the distribution of the benefits from the bailout would be much different: Both households and banks would have realized gains, and this would have been much more politically acceptable.

Read the rest HERE.

Monopoly

Amherst economics professor Nancy Folbre at "NYT's Economix":

(T)he percentage of manufacturing industries in which the largest four companies account for at least 50 percent of shipping value has increased to almost 40 percent, up from about 25 percent in 1987.

Even more striking is the increase in retail consolidation, largely reflecting a “Wal-Mart effect.” In 1992, the top four companies accounted for about 47 percent of all general merchandise sales. By 2007, their share had reached 73.2 percent.

Banking, however, takes the cake...in 1995, the six largest bank-holding companies (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) had assets equal to 17 percent of gross domestic product in the United States. By the third quarter of 2010, this had risen to 64 percent...

"Root canal" governance

Thomas Edsall at the NYTs on the politics of austerity:

The economic collapse of 2008 transformed American politics. In place of shared abundance, battles at every level of government now focus on picking the losers who will bear the costs of deficit reduction and austerity.

Fights in Washington are over inflicting pain on antagonists either through spending cuts or tax increases, a struggle over who will get a smaller piece of a shrinking pie. This hostile climate stands in sharp contrast to the post-World-War II history of economic growth. Worse, current income and employment trends suggest that this is not a temporary shift.

The year 2008 marked the emergence of a Democratic Party driven by surging constituencies of minorities, single women and voters under 30. The flowering of this coalition, manifested in the election of President Obama and in continued Democratic control of Congress, was quickly followed by developments affirming the activist, redistributive state: the enactment of a $787 billion economic stimulus bill, passage of the $900 billion health care reform act and rising demand for food stamps, unemployment compensation and Medicaid...

As the national debt grew from $10.6 trillion when Obama took office to $13.7 trillion on Election Day 2010, the stage was set for a conservative revival. Conservatives successfully shifted the focus of American politics to the twin themes of debt and austerity — with a specific attack on means-tested entitlement programs.

The Republican Party, after winning back control of the House in 2010, has reverted to the penny-pinching of an earlier era, the green eyeshade Grand Old Party of Herbert Hoover and Robert Taft, advocating a “root canal” approach to governance…

"Studies show flat taxes are harmful to your health"

Economist Robert Frank explains at NYT's how the flat tax "would greatly exacerbate longstanding growth in income inequality" and diminish quality of life, health and well-being:

Republican candidate, Herman Cain, enjoyed widespread attention when he unveiled his “9-9-9” plan last month...

Mr. Cain touted his plan’s simplicity, and many voters were apparently impressed... Rick Perry, the Texas governor, responded with a flat-tax proposal of his own. At this point, Mr. Romney is the only top-tier Republican candidate without some variant of a flat-tax proposal. But give him time.

The contention that a flat tax would be simpler because it involves only a single rate is flatly wrong. The complexity of the current system has nothing to do with its multiple income brackets.

The hard step in figuring your tax bill is to compute your adjusted gross income — roughly, the amount you earn, less the myriad exemptions, deductions and various other offsets described in the 3.4-million-word code of the Internal Revenue Service...

The much more serious concern is that a flat tax would reinforce the trends toward greater income inequality that have been seen over the last several decades.

“Government should be embarked on a multiyear, substantial investment program in infrastructure.”

I can't say I'm a fan of Larry Summers, but at a talk at his alma mater he appears to be speaking common sense:

The United States needs additional government spending to create significant economic growth, and in so doing would face little risk of serious inflation, said Lawrence H. Summers ’75, the economist and former Obama administration adviser, in public remarks at MIT on Wednesday.

“No thoughtful person can look at the U.S. economy today and believe that the principal constraint on expansion of output and employment is anything other than the lack of demand experienced by firms,” Summers said. That is, not enough consumers in the country have sufficient spending power; government programs employing more people would change that, he asserted at the event, hosted by MIT’s Undergraduate Economics Association.

“If the private sector is either unable or unwilling to borrow and spend on a sufficient scale, then there is a substantial role for government in doing that,” added Summers, who also served as Treasury secretary in the Clinton administration. “That’s the right macroeconomics. It’s also common sense.”

Mayor Bloomberg tries to re-write the origins of the financial crisis

Matt Taibbi at Rolling Stone:

Mayor Michael Bloomberg said this morning that if there is anyone to blame for the mortgage crisis that led the collapse of the financial industry, it's not the "big banks," but congress.

Speaking at a business breakfast in midtown featuring Bloomberg and two former New York City mayors, Bloomberg was asked what he thought of the Occupy Wall Street protesters.

"I hear your complaints," Bloomberg said. "Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I'm not saying I'm sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn't have gotten them without that."

To me, this is Michael Bloomberg’s Marie Antoinette moment, his own personal "Let Them Eat Cake" line...Bloomberg, with this preposterous schlock about congress forcing banks to lend to poor people, may yet make himself the face of the 1%’s rank intellectual corruption.

"Inequality trends in one picture"

More Paul Krugman:

Here, from the CBO report, are the changes, in percentage points, of the shares of income going to three groups. The top quintile excluding the top 1 percent – which is basically the abode of the well-educated who aren’t among the very lucky few – has only kept pace with the overall growth in incomes. Just about all of the redistribution has taken place from the bottom 80 to the top 1 (and we know that most of that has actually gone to the top 0.1).

Income Inequality Denialism

From "The Bad Reporter," SFGate

Jonathan Chait has a terrific piece at New York magazine on "income inequality denialism":

Rising income inequality, like climate change, is an ideologically inconvenient issue for conservatives. They would prefer not to discuss it altogether. If forced to discuss it, they will generally either deny its existence or simply carry on as if it doesn’t exist.

The underlying facts, like the facts of climate change, are stark. Over the last few decades, income growth for most Americans has slowed to a crawl, while income for the very rich has exploded. That’s a reversal of the three decades following World War II, when all income groups got richer, with the poor and middle class rising at a faster rate than the rich. Crucially, the Congressional Budget Office’s new analysis shows that changes in government policy over this period have made inequality worse. (In CBO-speak: “The equalizing effect of transfers and taxes on household income was smaller in 2007 than it had been in 1979.”)

We’re not having a debate about how to reverse or even stop the growth of inequality. Nobody has a real plan to do that. The Democratic plan is to slightly arrest the growth of inequality by hiking taxes on the rich a few percentage points, so as to minimize the need to cut the social safety net. The Republican plan is to slash taxes for the rich and programs for the poor, thereby massively increasing inequality.

That is a hard position to defend in the context of exploding inequality, and conservatives would rather not defend it. Instead the right’s response has been to persistently deny or ignore the facts.

The stark truth of growing income inequality

Paul Krugman on the implications of income inequality and "inequality denialism" among the right-wing punditry and policy class:

Whenever growing income disparities threaten to come into focus, a reliable set of defenders tries to bring back the blur. Think tanks put out reports claiming that inequality isn’t really rising, or that it doesn’t matter. Pundits try to put a more benign face on the phenomenon, claiming that it’s not really the wealthy few versus the rest, it’s the educated versus the less educated.

So what you need to know is that all of these claims are basically attempts to obscure the stark reality: We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only.

Why we need to sustain the "Occupy" movements - things only start to change when the pressure is on and protest is visible & persistent

Dave Weigel at Slate:

In four days, Bank of America was all set to face protests against its proposed $5 per month debit card fees -- a so-called "Bank Transfer Day." Today, the bank told the protesters they could find something else to do.

We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee. Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.

Is this the first popular victory for Occupy Wall Street?

This narrative - that OWS is starting to gain traction in protecting average citizens against monstrosities like the Bank of America - even if only in small ways - is critical.  People can make jokes about drum circles or other bits of fun or trivia that had been associated with OWS, but if Bank of America's customers see their interests served by the movements inspired by OWS, the last laugh is on the bank and the movement's approval among the general public - which is already high - will grow. 

And, of course, despite this significant victory, protestors will find plenty more to do that keeps the financial elite in their sights.

How crazy is this? (Not so much Rick Perry's notably odd speech...but the massive tax cuts for the "1%" and above?)

Based on his weird presentation here, it's unlikely Rick Perry will become the GOP nominee. He appears to be well-lubricated.



But for what it's worth, the "flat tax" plan Perry whips out of his pocket cuts the taxes of 97% of the infamous economic elite - the "one-percent" - by close to $300,000 on average. Worse, for the top .1% - the super-rich upper tenth of the top one-percent - taxes are cut by over a million and a half dollars per annum.

(Tax Policy Center via Economix)

The "Flat Tax" Fraud

Today's New York Times:

A Bad Movie - "Plan 999 From Outer Space"

According to the latest New York Times/CBS News poll, nearly 70 percent of Americans say that Congressional Republicans’ policies favor the rich and that they oppose lowering taxes for large corporations. Two-thirds polled say that wealth should be distributed more evenly; a similar share wants to increase taxes on millionaires, not cut them. In a previous Times/CBS poll from August, a majority of Americans also wanted to use tax increases to close the deficit, rather than rely only on spending cuts.

Flying in the face of public opinion,  most of the  GOP's Clown Car of Presidential aspirants are currently pushing - in some or another variation  - so-called "flat tax" proposals that cut taxes on the rich and raise taxes on the middle-class and working poor. 

The most notable is Herman Cain's catchy "999" plan, not to be confused with the price of a pizza.  Rick Perry is also floating a flat tax proposal.  Even Mitt Romney - once a critic of flat tax proposals - is backing off and will probably do a double-Mitt 180' turn on the issue, as he's done on every other policy of consequence.  (Apparently for Romney's supporters, his floppiness has become a feature, not a flaw - holding out the hope to any "moderate" Republican voters that he doesn't really believe all of the crazy stuff he's saying to pander to the GOP's increasingly crackpot base.)

As an antidote to this flurry of GOP tax proposals, Robert Reich explains exactly why the Flat Tax falls flat.  And why we  need more progressive rates at the elite levels of upper income, not less:

The details of flat-tax proposals vary, of course. But all of them end up benefiting the rich more than the poor for one simple reason: Today’s tax code is still at least moderately progressive. The rich usually pay a higher percent of their incomes in income taxes than do the poor. A flat tax would eliminate that slight progressivity.