economic crisis

Progressive Breakfast: The Net Domestic Product

Isaiah J. Poole — Fri, 30 Oct 2009 06:30:34 -0700

The daily Progressive Breakfast serves up what progressive movement members need to know to start their day. Bill Scher is traveling; he will return Monday.

Thursday's news that the nation's gross domestic product grew at an annual rate of 3.5 percent in the third quarter comes with a lot of asterisks. A few of them:

*The Wall Street Journal reports that the White House recovery plan will claim responsibility today for creating or saving 650,000 jobs with a bit less than half of the $339 billion in recovery funds spent through September 30. "The White House sees the data as proof that its $787 billion American Reinvestment and Recovery Act of 2009 will meet its goal of creating or saving at least 1 million jobs," the WSJ writes.

*John Authers of the Financial Times critiques what helped drive the GDP increase:

Household disposable incomes actually fell during the quarter, by 3.4 per cent, but consumer spending rose, also by 3.4 per cent. This is not a pattern that can be sustained for long, and it is inconsistent with the need for US families to pay down their debts.

Consumption rose largely because of a huge increase in expenditure on durable items, led by motor cars. Government subsidies through the “cash for clunkers” programme, removed before the quarter had ended, largely explain this.

Meanwhile, tax credits for homebuyers, which helped revive activity in the housing market, are due to be withdrawn later this year. The question now is whether higher consumption can be sustained without government support.

... Thursday’s new data on initial claims for unemployment insurance confirmed that the rate of the rise in joblessness has slowed significantly – but the jobless rolls are still rising faster than at any time this decade, before the financial crisis took hold.

*At BusinessWeek, Michael Mandel sees in the numbers evidence "that companies are robbing the future to pay for short-term profits," and if we measured economic growth to take into account the impact of these business decisions, we'd find GDP growth to be significantly lower:

...[T]he official statistics are not designed to pick up cutbacks in "intangible investments" such as business spending on research and development, product design, and worker training. There's ample evidence to suggest that companies, to reduce costs and boost short-term profits, are slashing this kind of spending, which is essential for innovation. Without investment in intangibles, the U.S. can't compete in a knowledge-based global economy. Yet you won't see that plunge reflected in the GDP and productivity statistics, which are still too focused on more traditional sectors, such as motor vehicles and construction.

... Over the past year, U.S. employment of scientists and engineers—the people who create the next generation of products and make the U.S. more competitive over the long term—has fallen by 6.3%, according to a BusinessWeek tabulation of unpublished data. Yet overall employment has fallen only 4.1%. "There are really bright people who are struggling to find a job," says Josh Albert, managing director at Klein Hersh International, an executive search firm for life scientists.

*Bloomberg News reminds us that the future prognosis is for anemic growth:

The economy will likely grow at a 2.4 percent annual rate from October through December, the median forecast in a survey

earlier this month showed. GDP will also grow 2.4 percent next year and 2.8 percent in 2011, the survey showed, compared with an average of 3.4 percent growth over the past six decades.

*In Olathe, Kansas, a suburb of Kansas City, a side effect of the economic downturn is playing out that is happening around the country. From The Olathe News:

The Olathe Salvation Army Food Pantry continues to see an increase in people needing help during these difficult times. The need, however, has changed in recent months.

“We’re seeing people we normally don’t serve,” said Mindia McManness, volunteer coordinator for the Olathe Salvation Army. “They call us not knowing even how to get help because they’ve never needed it before. They don’t know where to begin.”

They’ve lost their jobs or are experiencing other difficulties because of the floundering financial markets.

“They’ve run out savings or maxed out credit cards, something that usually helped them through short-term difficulties in the past,” McManness said.

This recession has gone on much longer than expected, and the impending recovery will take even longer, leading to a new pool of people needing assistance.

Shelves once filled with canned corn, spaghetti noodles, chili, pork and beans or peanut butter and jelly are empty more frequently, and tight food supplies have become the rule, not the exception, all around the metro area.

Health Care: House Moves Ahead

House Democrats unveiled the long-awaited health care reform legislation Thursday that will be up for debate on the House floor, and the best that can be said about it, at least according to a headline this morning on Politico, is that "liberals don't bolt" from it:

...[T]he bill [House Speaker Nancy Pelosi unveiled Thursday includes big pieces of what the most liberal members of her party wanted — most likely setting up a serious battle when negotiators try to merge it with the far more moderate Senate legislation.

The public option stays, even if it’s not the same one the House speaker preferred. So, too, does the so-called millionaire’s tax to help offset the $894 billion price tag. Individuals will be required to own insurance. Most employers will be legally mandated to offer it.

And in return, the House speaker won assent — if not complete agreement — from the liberals in her caucus, as well as a surprising amount of support from Democratic moderates who have long railed against some of these provisions.

Liberals expressed frustration that the speaker bowed to political reality by allowing doctors and hospitals participating in the public option to negotiate payments directly with the Department of Health and Human Services, and some promised to request an amendment that would allow them to scrap the current plan for one tied to Medicare. But few pledged to vote against the bill.

Adele Stan at AlterNet says that at least the House bill is "almost (dare we say it?) progressive" when compared to what's pending in the Senate:

So, okay, it isn't the "robust" public option promised to AlterNet readers by Ways and Means Committee Chairman Charles Rangel, D-N.Y., this summer, but it doesn't include that silly opt-out plan. Unlike the lonely Harry Reid, who stood alone to face reporters on Monday, Pelosi was surrounded by members of her caucus, all smiles. Implicit in her timing was a message to the Senate: Keep noodling all you want, but here's a bill, a decent bill -- the bill we're gonna pit against yours in a conference committee if you ever get around to passing one. So, you might want to hop to it. And the more yours looks like ours, the easier it's gonna be for all of us.

As for the compromises in the House bill...

The deficit neutrality of the House bill presumably wins the support of the White House, while the less-than-robust public option seems to have passed muster with the big labor unions, who are surely influenced by another important distinction between the House and Senate bills: the House bill helps pay for itself through a new tax on the nation's most well-off citizens, while the yet-to-be-finalized Senate bill will likely pay for part of its cost by taxing high-priced, fully-loaded health-care plans -- like the plans many unions have negotiated in lieu of salary increases (and even as trade-offs for give-backs) by their members. Within hours of Pelosi's unveiling, both the AFL-CIO and the Service Employees International Union (SEIU) released statements praising the House bill.

Some ConservaDems are still refusing to get behind the House bill, reports McClatchy's David Lightman, claiming they need to hear from constituents:

"The plan on the table has some good points and some bad points. I want to look at it," said Rep. Lincoln Davis, D-Tenn.

Blue Dogs wanted to hear from constituents, many of whom are more conservative than those represented by most Democrats. "I have both sides of the health care debate well-represented in my district," said Rep. Allen Boyd, D-Fla.

... Blue Dogs and some party moderates have been concerned about the plan's cost, as well as its impact on small business and expansion of government. Those concerns remain.

But Pelosi thinks that there's already been so much debate on the merits and impact of all aspects of the legislation that she wants the nearly 2,000-page bill to face an up-or-down House vote without a lengthy amendment process. Ryan Grim at The Huffington Post:

House Speaker Nancy Pelosi said Thursday that there's been plenty of time for amendments already, so neither her caucus nor members of the minority party should expect a chance to amend the health care bill when it gets to the House floor.

"I've considered all of that input as our amendment process," Pelosi said on a conference call with bloggers, citing "probably 78 caucuses on this subject where we've listened to members [and] 2,000 town meeting on this subject."

A stinging rebuke of one feature of the House health-care bill comes from FireDogLake's Jane Hamsher, who says as a breast-cancer survivor she felt "tremendous disappointment" that the bill places higher hurdles the marketing of generic versions of biologic anti-cancer drugs:

Nancy Pelosi made a choice with regard to the lifesaving biologic drugs I took when I was in chemotherapy that will cost many of my fellow breast cancer survivors everything they own, and quite possibly their lives. ... Thanks to Representatives Anna Eshoo and Joe Barton, there will be no generic versions of these drugs. At least not for 12 years, if the House health care bill announced today passes. And because of an “evergreening” clause that grants drug companies a continued monopoly if they make slight changes to the drug (like creating a once-a-day dose where the original product was three times per day), they will never become generics. Instead of the Waxman-Deal amendment that granted much more reasonable terms to biologic patent holders, Speaker Pelosi chose the Eshoo-Barton amendment. And we could all be paying for that choice for the rest of our lives.

Hamsher is helping to organize with Public Option Please "treat, not trick" Halloween-themed protests at 3 p.m. at the Russell Senate Office Building, the Baltimore office of Maryland Sen. Barbara Mikulski and the offices of Rep. Sen. Kay Hagan and Rep. Anna Eshoo.

'Too Big To Fail' Reform Too Bad To Work?

The Obama administration's plan to change the rules for so-called too-big-to-fail financial institutions so that taxpayers will not be compelled again to prop them up when they engage in reckless gambles is receiving significant criticism on Capitol Hill. The Washington Post:

Under legislation unveiled this week by the committee chairman, Rep. Barney Frank (D-Mass.), in close coordination with the Obama administration, an oversight council of regulators would act as a monitor of systemic risk throughout the financial system and impose tougher regulatory standards on the largest companies. Compared to an earlier draft put forward by President Obama's team, the current bill expands the role of the council, entrusting it to identify risks to the system. The Fed would be the enforcer of the council's recommendations.

But that structure came under fire from Sheila C. Bair, chairman of the Federal Deposit Insurance Corp., who argued the new council should be headed by an independent chairman rather than by the Treasury secretary, and that the council should have greater authority.

Bair also joined both Republican and Democratic lawmakers in questioning the government's plan to pay for the cost of winding down large, failing financial firms. The plan calls for companies with more than $10 billion in assets to be assessed fees only after a large collapse, rather than contributing ahead of time into an insurance-like fund. [Treasury Secretary Timothy F.] Geithner and Frank have said the intent is to shift the burden of such failures from taxpayers to the financial industry itself, but Bair argued for the insurance approach.

The Washington Independent also details the objections that Treasury Secretary Timothy Geithner faced when he testified before the House Financial Services Committee:

“Mr. Secretary, I’m not a man that fears this administration or you,” Rep. Paul Kanjorski (D-Penn.) told Geithner. “But I do fear the accumulation of power exercised by someone in the future that can be extraordinary.”

Rep. Brad Sherman (D-Calif.) echoed those concerns, arguing that the bill represents “the most unprecedented transfer of power to the executive branch to make decisions about both spending and taxes in history — all without congressional approval.”

... [S]ome lawmakers are attacking the proposed bailout tax on large institutions, arguing that it should be collected beforehand as a type of insurance fund, rather than imposed after a competitor went under.

“No more TARP. No more bailouts,” said Rep. Luis Gutierrez (D-Ill.). “Let them [the companies] create the fund, the systemic risk fund, that will guarantee that the American taxpayer will no longer have to be involved should they cause such a crisis ever again.”

The Measure of Our Progress

Terrance Heath — Wed, 16 Sep 2009 13:14:37 -0700

In the previous post, I included a quote from Franklin Roosevelt's Second Inaugural Address.

We are determined to make every American citizen the subject of his country's interest and concern; and we will never regard any faithful law-abiding group within our borders as superfluous. The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.

It was a short quote, only because I couldn't very well quote the entire speech. I wanted to, because so much in it speaks directly to where we stand today, the kind of country we want to be, and the choices that will lead us closer to that goal — or farther from it.

Delivered on January 20, 1937, the speech came after Roosevelt's landslide victory in the 1936 election, and two years after he stared down businessmen and bankers who sought to halt an economic recovery that had not yet trickled down to — as Roosevelt said — one-third of the population.

He was elected President in November 1932, to the first of four terms. By March there were 13,000,000 unemployed, and almost every bank was closed. In his first "hundred days," he proposed, and Congress enacted, a sweeping program to bring recovery to business and agriculture, relief to the unemployed and to those in danger of losing farms and homes, and reform, especially through the establishment of the Tennessee Valley Authority.

By 1935 the Nation had achieved some measure of recovery, but businessmen and bankers were turning more and more against Roosevelt's New Deal program. They feared his experiments, were appalled because he had taken the Nation off the gold standard and allowed deficits in the budget, and disliked the concessions to labor. Roosevelt responded with a new program of reform: Social Security, heavier taxes on the wealthy, new controls over banks and public utilities, and an enormous work relief program for the unemployed.

In 1936 he was re-elected by a top-heavy margin. Feeling he was armed with a popular mandate, he sought legislation to enlarge the Supreme Court, which had been invalidating key New Deal measures. Roosevelt lost the Supreme Court battle, but a revolution in constitutional law took place. Thereafter the Government could legally regulate the economy.

The words of Roosevelt's 1937 inaugural address are particularly relevant, as America and the rest of the world still reels from the worst economic downturn since the Great Depression — a downturn made possible by a 30-year project of rolling back many of the reforms Roosevelt put into place.

Roosevelt's words are relevant today, as bankers and economists declare "Recovery!" — and advise that a second stimulus unnecessary — before lacing up their wingtips for a victory lap. Meanwhile, for many Americans it's a jobless recovery that hasn't held much benefit for them.

Jumbo shrimp. Buy and save. Jobless recovery. Americans are on full oxymoron alert these days, as we read and hear about this "jobless recovery." Recovery for whom?

The unemployment rate is high and growing higher, nearing an official 10 percent - an estimate which is always lower than the reality of impoverished, underemployed and "discouraged workers" who have stopped bothering to officially register. Since this recession began, 7 million Americans have lost their jobs.

Why aren't 7 million of us "too big enough to fail"?

If stimulus packages for corporate sinkholes are good enough for the American taxpayer, why can't we find $5.4 billion to create minimum wage jobs with full health care benefits for the 216,000 Americans who lost their jobs in August?

It is, at best a weak recovery, due to the lack of what economist Joseph Stiglitz called "a recovery of sustained consumption" — which basically means American consumers can't spend the economy back into recovery, because they haven't experienced a recovery yet.

They are reeling from double-digit unemployment, and some 15 million are "locked into a nightmare of unemployment." Thousands of them are living in hotels, as more families are joining the ranks of the homeless and mortgage defaults soar to record heights. One in five of their children are sinking into poverty, with them. Seventeen percent of their children under five face hunger, with them.

Roosevelt's words have undeniable resonance when the poverty rate hits an 11-year high, and the the suffering of American families increases in kind.

The government's first broad look at the recession's effect on the nation's households in 2008 showed the poverty rate jumped to an 11-year high, incomes sank across the board and the number of people without health insurance rose to 46.3 million.

As bleak as these statistics were from the Census Bureau on Thursday, they captured only part of the devastating effects of the economic downturn that worsened last fall and into this year.

Experts said they expected the official poverty rate, which rose to 13.2% of the nation from 12.5% in 2007, to keep climbing this year and next, reversing the progress made in the 1990s.

With the U.S. unemployment rate averaging 8.9% this year and increasing almost every month, compared with 5.8% in 2008, incomes are likely to deteriorate further as well.

In 1937, with the country only partially out of the woods, Roosevelt rejected those who said recovery had gone far enough.

Shall we pause now and turn our back upon the road that lies ahead? Shall we call this the promised land? Or, shall we continue on our way? For "each age is a dream that is dying, or one that is coming to birth." 16

Many voices are heard as we face a great decision. Comfort says, "Tarry a while." Opportunism says, "This is a good spot." Timidity asks, "How difficult is the road ahead?"

True, we have come far from the days of stagnation and despair. Vitality has been preserved. Courage and confidence have been restored. Mental and moral horizons have been extended.

But our present gains were won under the pressure of more than ordinary circumstances. Advance became imperative under the goad of fear and suffering. The times were on the side of progress.

To hold to progress today, however, is more difficult. Dulled conscience, irresponsibility, and ruthless self-interest already reappear. Such symptoms of prosperity may become portents of disaster! Prosperity already tests the persistence of our progressive purpose.

Let us ask again: Have we reached the goal of our vision of that fourth day of March 1933? Have we found our happy valley?

And he challenged the country to live up to its promise for all Americans.

I see a great nation, upon a great continent, blessed with a great wealth of natural resources. Its hundred and thirty million people are at peace among themselves; they are making their country a good neighbor among the nations. I see a United States which can demonstrate that, under democratic methods of government, national wealth can be translated into a spreading volume of human comforts hitherto unknown, and the lowest standard of living can be raised far above the level of mere subsistence.

But here is the challenge to our democracy: In this nation I see tens of millions of its citizens—a substantial part of its whole population—who at this very moment are denied the greater part of what the very lowest standards of today call the necessities of life.

I see millions of families trying to live on incomes so meager that the pall of family disaster hangs over them day by day.

I see millions whose daily lives in city and on farm continue under conditions labeled indecent by a so-called polite society half a century ago.

I see millions denied education, recreation, and the opportunity to better their lot and the lot of their children.

I see millions lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions.

I see one-third of a nation ill-housed, ill-clad, ill-nourished.

It is not in despair that I paint you that picture. I paint it for you in hope—because the Nation, seeing and understanding the injustice in it, proposes to paint it out. We are determined to make every American citizen the subject of his country's interest and concern; and we will never regard any faithful law-abiding group within our borders as superfluous. The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.

Last year saw a record decline in American families' wealth, as households saw a 9% drop in wealth. Meanwhile the wealthiest one percent saw an increase in their incomes, the wealthiest 10 percent of Americans now have a larger-than-ever share of total income, and American has one of the highest rates of income inequality, surpassed only by Mexico and Turkey.

Much of what was true for those Americans Roosevelt mentioned in his speech is true for far, far too many American families today, as the result of decades spent "adding to the abundance of those who have much." Now, we face the same text of our progress — of our commitment to progress— that Roosevelt recognized in 1937.

Will Americans rise to the challenge? It remains to be seen. In the absence an FRD-like leadership, we will make our leaders rise to the challenge? Will we pass this test of our progress? It remains to be seen.

Econocide: A Silent, Violent Epidemic

OurFuture.org Staff — Thu, 04 Jun 2009 07:15:03 -0700

The Weekly Audit: Why Accountability Matters

Zach Carter — Tue, 26 May 2009 09:05:04 -0700

With workers all over the globe trudging through a catastrophic recession, it's almost a given that governments will be battling the economic slide for a long time. Part of the effort to rebuild must involve new rules and regulations, but meaningful systems for economic accountability will be just as essential. If we do not hold the reckless executives who caused this crisis accountable for their actions, we risk regressing into similar turmoil in the near future.

We all know that times are tough, and almost all of us agree on the cause: A massive Wall Street risk-binge combined with an almost total failure of regulatory oversight. It's surprising that few meaningful criminal charges have been filed amid what may very well be the worst financial crisis in history. Bernie Madoff will likely spend the rest of his life behind bars, but the subprime mortgage brokers who specialized in predatory loans–and the Wall Street banks that bought them–have yet to face consequences in court.

In The American Prospect, Tim Fernholz details the efforts of some state-level officials to investigate and punish white-collar crime at the nation's largest financial firms. Much of the problem, Fernholz explains, results from an insane legal landscape at the federal level. Active deregulation of the financial sector, which began in the 1980s, is shielding the irresponsible risk-taking that caused the current crisis from legal penalties.

Despite these obstacles, Massachusetts Attorney General Martha Coakley and other key officials are going after some of the worst offenders, and have successfully taken action against some of the predatory profiteers, including subprime mortgage lender Fremont Investment & Loan and Wall Street icon Goldman Sachs. Coakley secured an injunction against Fremont to prevent the company from foreclosing on its borrowers, and Goldman agreed to modify $50 million in predatory mortgages.

But while Coakley's investigations may bring some much-needed relief to troubled homeowners, they're only part of the solution. If executives that approved their companies' subprime policies go through this crisis unscathed, it will be difficult to deter similar behavior in the future.

Fremont had to be sold off last year at fire-sale prices to avoid bankruptcy, but Goldman has weathered the economic downturn better than many of its Wall Street brethren. Much of the company's resiliency, however, stems from its ability to secure billions upon billions of dollars of bailout financing from the U.S. government. Over at AlterNet, Jim Hightower blasts Goldman for its multiple avenues of taxpayer support and emphasizes that only the notorious Troubled Asset Relief Program (TARP) comes with any strings attached whatsoever. While Congress attached some very modest restrictions on executive compensation to the TARP bailout, the FDIC and the Federal Reserve have provided big banks with trillions in loans and guarantees completely free of restrictions on how these perks are deployed.

Goldman received $10 billion under TARP, which the company hopes to repay soon to shrug off those CEO pay limits. When the government bailed out AIG, $12 billion of the funds were directed Goldman's way. But perhaps the greatest and lowest-profile outrage comes in the form of the FDIC's Temporary Liquidity Guarantee Program. Hightower notes that the FDIC has guaranteed $28 billion of Goldman's recently issued corporate debt without imposing any restrictions on the Wall Street giant. In short, if Goldman were to default, the government would pay off its investors. This taxpayer guarantee has allowed Goldman and many of its banking peers to secure capital at exceptionally low rates, helping the firms survive during a time when any financing is hard to come by.

Even if Goldman is able to repay its TARP money, the company remains thoroughly dependent on taxpayer assistance. Once the TARP funds are paid off, Goldman will be free to pay its executives whatever it wants—even when that salary is subsidized by American tax dollars. That's a pretty perverse definition of accountability.

Of course, botched bailouts are not unique to the financial sector. As John Nichols explains in The Nation, the terms of automaker Chrysler's bankruptcy proceeding include plans to close down manufacturing plants across the Midwest, a strategy that undermines the entire economic justification for bailout: Sparing investors pain in order to save jobs.

"Tens of billions of taxpayer dollars are being poured into Chrysler and General Motors, ostensibly to 'save' the U.S. auto industry," Nichols writes. "Yet, the companies have acknowledged that they plan to use the money to shutter factories, lay-off tens of thousands of factory workers and dramatically downsize dealership networks–at the cost of as many as 100,000 additional jobs."

Still worse, it appears that both Chrysler executives and officials from the Obama administration mislead Congress on the implications of the bankruptcy. Nichols cites a letter from Rep. Dennis Kucinich, D-Ohio, in which the lawmaker says Congress was told there would be no permanent job losses a result of the Chrysler bankruptcy filing. The very next day, plant closings were announced in Michigan, Missouri, Wisconsin, and Ohio.

Even the economic stimulus package rewarded companies with a history of recklessness. In a piece for Salon, ProPublica journalists Michael Grabell and David Epstein reveal how contractors that have paid substantial fines for violating environmental regulations, federal safety rules and laws against racism have been able to score new business with the federal government. The worst offender? A contractor known as CACI International, which has been awarded three contracts worth $1.5 million under the stimulus package, despite ties to abuses at Abu Ghraib prison in Iraq.

CACI helped hire interrogators at Abu Ghraib, but an Army investigation found that the contractor ended up employing people with "little or no interrogator experience." Abuses committed by CACI employees included dragging a handcuffed prisoner on the ground, placing a prisoner in an "unauthorized stress position," dressing a prisoner in women's underwear and lying to investigators about using dogs in interrogations, according to Grabell and Epstein.

If the government relies on criminals to build the recovery, the public is not going to get the results it needs. But the recovery is only part of the solution to the current economic crisis. If we fail to prosecute executives whose active scheming and criminal negligence brought down the global economy, we are inviting more of the same behavior in the future.

Zach Carter writes The Weekly Audit for The Media Consortium.

Top 10 Signs AIG Is Ruining The Economy For Everyone

Sally Kohn — Wed, 18 Mar 2009 05:06:15 -0700

With children going hungry and working families without health coverage, what's a few extra billion dollars to prop up the AIG executives who caused this mess in the first place? The AIG scandal is no laughing matter. But sometimes, laughter is the best medicine.

My colleagues and I scanned the country for uncommon but comical economic indicators of the fallout from the AIG disaster (actually, we sat around in a conference room but you get the idea...).

So, without further ado, here are our TOP TEN SIGNS THAT AIG IS RUINING THE ECONOMY FOR EVERYONE:

10. Monopoly money currently trades for more than most Latin American currencies.

9. Rapper 50 Cent is now going by Nickel.

8. Anti-immigrant crazies have joined with the KKK to offer "two hates for the price of one".

7. Michelle Obama is donating her sleeves to recent business school grads.

6. Wal-Mart is outsourcing its union busting to Sri Lanka.

5. Instead of adopting another child from Africa, President Obama has asked Brad and Angelina to adopt Africa.

4. Louisiana Governor Bobby Jindal's plan for the 2009 hurricane season is a really, really big umbrella.

3. Gay and lesbian activists no longer want marriage rights because weddings are too darn expensive.

2. Desperate Exxon Mobil and others are now digging for oil in your back pocket.

AND, the number one sign that AIG is ruining the economy for everyone...

1. CNBC's Jim Cramer says it's not really that bad.

Add yours to the list by posting a comment. And keep smiling --- things will get less and less funny from here out!

http://www.communitychange.org/AIG

I don't know why, but I'm on twitter. Follow me! http://twitter.com/sallykohn

This Moment Screams For Boldness

Leo Gerard — Thu, 13 Nov 2008 12:03:34 -0800

Within hours of Barack Obama’s election, naysayers chastened caution. Don’t go too far, they inveighed. Build trust slowly with restrained, moderate, and gradual actions, they admonished.

In other words: Start with piddling plans.

Basically, they want to abort hope -- kill it before it has a chance.

That is all wrong after an election in which it’s believed that a higher percentage of Americans voted than at any time in the past 40 years; a win that brought tears to the eyes of even hardened reporters; a result that drew joyful citizens into streets across the country to celebrate, a balloting that swept even larger majorities of Democrats into the U.S. House and Senate.

This moment during which the nation is suffering great economic peril pleads for political valor. This moment screams for boldness.

Troubled times demand greatness. Franklin D. Roosevelt knew that. He’s the reason U.S. presidents are judged by the sum of their accomplishments in their first 100 days in office.

When FDR was inaugurated in 1933, the country was in the midst of the Great Depression. He didn’t waste time tinkering. After 100 days, he’d given the country the Emergency Banking Act, the Securities and Exchange Commission, the Civilian Conservation Corps, the Federal Emergency Relief Act and the Tennessee Valley Authority.

Obama may not inherit a Great Depression, but he’ll take the oath during an intense recession. Look at the news that arrived the same week as his election: Unemployment rose to 6.5 percent after 10 straight months of jobs losses totaling more than 1.2 million; the stock market dropped 1,000 points in 48 hours after the worst October showing in two decades; auto makers traveled to Capitol Hill begging like hobos for handouts to stave off bankruptcy; two dozen major retailers revealed sales declines, most double digit; and The New York Times reported hospitals are strained as they register fewer paying patients and increased charity cases.

These problems won’t be solved with timidity. In his first press conference after the election, Obama said resolving the economic crisis is his top priority. He said, in fact, “I will confront the economic crisis head on.” No weak-heartedness suggested there.

He said a new president can restore confidence and advance an agenda for the middle class. That is exactly what FDR did with the combination of legislation and fireside chats.

During this brief press conference, Obama got it right, emphasizing aid to the middle class. He said it is essential to pass a rescue plan that would create jobs and extend unemployment benefits. He wants aid to state and local governments so they don’t increase taxes or furlough workers.

The federal government should help both small businesses and the huge auto industry, which provides jobs directly and indirectly through its suppliers.

The $700 billion bailout must be reviewed, he said, to ensure that it is stabilizing markets, that it’s not unduly rewarding the Wall Street risk-takers who caused the crisis, and that it’s helping families avoid foreclosure.
In addition, he said it’s essential to implement policies to grow the middle class such as investing in clean energy technology, resolving the nation’s health insurance dilemma, and providing tax relief for working families.
These are the correct priorities. And his plans are audacious. Which means he needs our help.

He called for bipartisan cooperation in accomplishing these goals. But he’ll need more than that. He will need the kind of support he got in those weeks just before Election Day.

All of those who voted for him, all of those who want to keep hope alive, and all of those who want real change must demand both houses of Congress and both political parties work with Obama to accomplish it. Those who believe in real change must make it clear that they won’t stand by and allow courageous action to be reduced to faint-hearted baby steps.

On election night, Obama told the crowd in Chicago that the victory was theirs: “I know you didn’t do this just to win an election and I know you didn’t do it for me.”

Then he warned of what is ahead:

“You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime–two wars, a planet in peril, the worst financial crisis in a century.”

With more than 10,000 volunteers across the country, the United Steelworkers campaigned hard to help get Obama on that Chicago stage to make that speech. We will back him as he works to fulfill his promises of what is a New Deal for the new century. And we urge every American who wants real change to join us to ensure his success, the nation’s success.

Record Job Cuts Planned

OurFuture.org Staff — Thu, 06 Nov 2008 08:45:31 -0800

October was another awful month for jobs. Two key employment reports showed the largest number of planned job cuts in nearly five years, with private sector jobs falling by the largest amount in nearly seven years. Job cut announcements by U.S. employers soared to 112,884 in October, up 19% from September's 95,094 cuts, according to outplacement firm Challenger, Gray & Christmas Inc. That was the highest number of pink slips handed out since January 2004. Layoffs last month were up 79% from October 2007, when 63,114 job cuts were announced. Separately, payroll manager ADP said Wednesday that the private sector lost a seasonally adjusted 157,000 jobs last month - more than six times September's decrease and the largest drop since December 2001.

Consumer Bankruptcies Up

OurFuture.org Staff — Thu, 06 Nov 2008 08:38:07 -0800

The sagging economy sparked 106,266 consumer bankruptcy filings in October, the first time monthly filings topped 100,000 since the bankruptcy law changed in 2005, the American Bankruptcy Institute said. During the first year after the new law took effect, personal bankruptcy filings plummeted dramatically, and since then, have risen gradually. In October, though, filings jumped 40% over the same month in 2007. For the year, bankruptcy filings are expected to exceed 1 million. "This underscores that the underlying economic problems of consumers who are facing high debts, flat incomes and now declining home values are a very powerful force that pushes people over the edge," says Samuel Gerdano, ABI executive director.

U.S. Manufacturing Hits 26-Year Low

OurFuture.org Staff — Mon, 03 Nov 2008 22:06:07 -0800

U.S. manufacturing activity fell in October to its lowest level for 26 years, according to a new report from the Institute for Supply Management. The report cited "significant demand destruction", for the third consecutive month in which the sector contracted. The figures were far worse than the market had expected and pushed the Dow Jones index briefly into negative territory in early morning trading. However, U.S. construction spending in September fell far less than expected. The institute's index of national factory activity fell to 38.9 from 43.5 in September. Any score of less than 50 represents a contraction in manufacturing.

Auto Sales Plunge

OurFuture.org Staff — Mon, 03 Nov 2008 21:24:36 -0800

Fearful consumers avoided auto dealerships in October, sending U.S. sales to their lowest levels in more than 25 years. Industry sales plummeted 31.9% from a year ago, according to industry tracking firm Autodata. Automakers sold just 838,156 new vehicles in October, the second consecutive month below 1 million. Until then, monthly sales had been more than 1 million since February 1993. General Motors (GM) says that, adjusted for population growth, U.S. sales were as low last month as they were just after World War II. Without government intervention, GM doesn't see a rebound. "Bottom line, there really needs to be action (to loosen credit) to allow our country to pull out of this very, very bleak period," said Mike DiGiovanni, GM's chief forecaster.