Yesterday afternoon, I stopped by Mr Pierce's joint and saw he had a post up and the video of Senator Elizabeth Warren's appearance on CNBC's Squawk Box this past Friday (July 12), talking about her proposed legislation to reinstate the Glass-Steagall Act from the 1930s. I made it almost to the end of the video snippet Mr Pierce had posted when I heard a preposterous question (Columbia Journalism Review identifies the questioner as one Joe Kernen - and accurately identifies the question as a straw-man):
Sullivan’s dumb question is followed by a straw man question from Joe Kernan about how Glass-Steagall—all by itself—wouldn’t have prevented the financial crisis. Warren has amiably knocked that one down before (not coincidentally, it came from CNBCer and NYTer Andrew Ross Sorkin), and she does here as well.
As I was writing this diary, I came across an article from Fortune Magazine on Monday where the author first claims:
Last week, the unlikely political pair introduced a bill aimed at recreating the 1933 law. The effort is welcomed, but the protections of Glass-Steagall aren't a cure-all for bank risk today -- its repeal didn't cause the financial crisis. And reinstating the law likely won't protect Americans from another one.
Then immediately follows this first paragraph with this:
This isn't to say a law like Glass-Steagall isn't needed. Warren and McCain's proposal would separate traditional banks that offer your standard checking and savings accounts insured by The Federal Deposit Insurance Corp. from riskier institutions, such as those involved in investment banking, the sale of insurance products, hedge funds, private equity, and the like.
When did we reach the point where proposed legislation like Glass-Steagall is being presented as a miracle cure/magic wand that will cure all the ills? We do not live in a binary world where the options are all-or-nothing. Senator Warren maintained her composure and pointed out to the Wall St ShillsSquawk Box hosts this exact point.
Yet this is no where near the first time we hear Beltway Village Idiots Pundits, Politicians, and Courtiers use the argument that X legislation won't totally solve a problem in-and-of itself so we should not do anything at all. I'm thinking right now specifically of the opposition to even the most basic expansion of background checks at gun shows. Background checks alone will not solve the problems with the proliferation of guns but they just might keep them out of the hands of some folks who should not be allowed to carry (criminals for example.) Will someone who is intent on obtaining a weapon going to be stopped? Probably not. But what is wrong in making it a tad more difficult for them?
We do not live in a binary world, so let's stop trying to pretend that the solutions are only binary. Oh, and Jim Cramer? When you have to protest that Senator Warren did not make an impact on the issue of Glass-Steagall with her appearance? You pretty much confirm that she DID make an impact.
I sometimes think that there has to be a crest to the levels of stoopid coming out of Washington, DC but obviously, I am wrong. Just the past two days, Dean Baker at his blog Beat the Press refuted three different pieces of so-called "conventional wisdom" by different members of the Beltway Village Idiots Pundits, Press, and Politicians in good standing.
Europe is a different story. The bubble years allowed much of Europe to avoid making the kind of structural changes necessary to put its social welfare system on a sustainable fiscal path and reform its labor and product markets. The euro crisis — which is both a banking crisis and a sovereign debt crisis — has forced Europeans to begin addressing those issues.
Of course this is completely wrong. The countries with the well developed welfare states, Germany, Denmark, Sweden, the Netherlands are doing fine. The countries that are in crisis, Spain, Greece, Portugal, Ireland, have the least developed welfare states among the older EU countries.
The pensions are underfunded in part because policymakers would not take seriously those of us who warned that pensions were making overly optimistic assumptions about stock returns before the market crashed. Returns have been well below expectations in the dozen years since the peak of the stock bubble in 2000.
The other reason is that some politicians, like New Jersey Governor Chris Christie, think it is really cute to not make the state's required contribution to the pension fund. Not surprisingly, if states get into the habit of not contributing to their pension fund, as has been the case in some states, then pension funds will be underfunded.
However it is more than a bit bizarre that we should therefore ripoff the workers who are counting on these pensions. Suppose state and local governments contract with construction companies for road work or hospitals to treat poor people. If the governments don't put aside the money to pay these contracts would we then think it makes sense to tell the contractors and hospitals to get lost?
Finally, today Baker goes after NPR and Nariman Behravesh, the chief economist of the forecasting firm IHS Global Insight, who thinks that the biggest problem we face is "the deficit":
Wow, isn't that impressive. So Europe, China and the rest of the world will be really impressed if the United States throws even more people out of work as long as it reduces its budget deficit! That's interesting, had it not been for NPR I never would have known people in the rest of the world thought this way.
As one of the 25 Million plus long term un and underemployed Baker mentions in his post, I would like to quote the inimitable Mr Pierce, "Fck the deficit. People got no jobs. People got no money.
David Dayen at FDL News today (Monday, October 22) covered a survey on the wage gap between federal workers and their private industry counterparts. Not so surprisingly, the public sector workers are paid far less than private sector jobs requiring comparable levels of skills and education:
If you compare organized federal employees, many of whom have college degrees, to unorganized service-sector and retail workers, then yes, you will find higher wages in the public sector. But if you do an apples-to-apples comparison between public employees and their private-sector counterparts in related fields, you will find that the public sector is significantly undervalued.
...snip...
You cannot lump together those who clean up the National Mall and those who work on scientific breakthroughs at the National Institute of Health, compare them to the “average worker,” and come up with a legitimate pay scale for federal employees. You have to go sector by sector and find the appropriate comparison in the private sector. And when you do that work, you see that federal employees are underpaid. This has an impact on millions of hard-working Americans, who are forced to take less than their skills would bring them back in the open market, because of a foolish tendency toward austerity and the demonizing of public workers.
Over these past few years, we've all seen many articles decrying the "generous pensions and salaries" of public sector workers, whether teachers, fire fighters, EMTs, or police at local levels or scientists at the NIH, NASA, JPL, EPA, or any other federal agency you wish to name.
My question is why?
One of the themes to emerge from this year's presidential race has been Mitt Romeny's "infamous" speech at a private fund raiser last May, calling 47% of the US basically moochers and freeloaders because they don't pay federal income taxes or they receive some level of federal benefits be it Social Security, VA or the Earned Income Tax Credit (EITC) among others.
But why is it so fashionable to trash people who have earned pensions, earned veterans benefits or Social Security or have used the EITC because of low wages? Shouldn't we be asking why there are so many people earning such low wages that they don't even pay a minimum federal income tax? I know for myself, I would dearly love to be earning a salary that would have me paying federal income taxes. Reuters offered this analysis on Friday (October 19):
The number of Americans not owing federal income taxes has been growing since the mid-1980s, and the increase largely stems from expansion of these two tax credits - championed by Republicans from conservative economist Milton Friedman to former President Ronald Reagan.
I want to work in my chosen field, earn a decent wage with benefits and pay my fair share of taxes. Instead, we see the "champions of industry" threatening employees with lay offs should President Obama be re-elected.
Right now, I'm a bit surprised we don't see more news articles like this one from the AP last Sunday (October 14) about a man attempting to rob a bank of $1 so he could be sent to a Federal Prison. How bad must it be to want to rob a bank so that you can get sent to prison. My guess is the three hots and a cot and health care sounded mighty appealing if the option was starving on the street.
Unless you have been stuck under a rock, you probably know that Neil Armstrong died yesterday. In July 1969, I, like so many millions of others, watched as he made "One small step for (a) man; one giant leap for mankind." (I am using the words as he said he spoke them rather than how we heard them as I can fully appreciate how there could be a comm drop - as should anyone who has had a phone drop the occasional word.)
That summer, I was 17 years old and about to start my senior year in high school. Vietnam was still raging; Richard Nixon had been president for only a few months, and I had all my life and the world in front of me. The USSR had launched Sputnik just 12 years earlier. Newspapers were soon providing the nightly times when Sputnik and then the follow-on US satellites would be visible in the night sky so that we could go out and watch them move rapidly across the sky.
My earliest and most vivid memories of elementary school were when we would gather together in a single classroom and watch a rocket take off with a man aboard. I grew up with the Mercury Seven Astronauts, the Gemini program and eventually the Apollo Missions that culminated on July 20 1969 when Neil Armstrong stepped off a ladder onto the moon.
In 12 short years, we as humans went from the first man-made objects in space to a man on the moon. This was a celebration of humanity at least as much as a celebration of "American Exceptionalism."
So where are we going? Not just as a nation but as a human race? The author Kim Stanley Robinson visited Firedoglake's Book Salon yesterday to talk with folks about his latest novel 2312. One of the things that makes me love "hard" sci-fi is the inherent optimism that we will escape at least out to our solar system if not the whole universe. Let's hope our leaders can show some of the same imagination as shown by President Kennedy when he vowed to put a man on the moon within the decade. Otherwise, we have the situation Mr Pierce describes:
For at least a time, there literally was only one other person in the history of man who knew what Armstrong knew — how that sandy soil feels when you walk on it, the exact places where the shadows fall, the precise geometry of the mountains of the moon. Today, there are only eight of them left, all of them in their 70's. What will happen when the last of them dies? It's very likely that there will not be a living human being who knows what Neil Armstrong knew. It will all be for videotape and digital libraries, for historians and, if we're very lucky, for poets, as well. But there will be nobody alive who actually knows. Not a single one of our fellow humans, anywhere on the Earth.
Now, some folks may have noticed (ha!) that I have not been posting too much these last few months. Those who actually know me understand that I've had a very good reason for this. However, I have still continued to surf the news sites each day and keep up with various blogs as well. I figure Mr Pierce does such a fine job eviscerating the Zombie-eyed-granny-starver and so many other idiots, that there really isn't much I can say and definitely can't improve on. As well, Dean Baker continues to easily refute the gibberish of so many Beltway Village Idiots Pundits and Politicians, so there's not much need for my rants.
So, I laugh when I see where someone has butt shot himself while thinking of all the "butt calls" I have received from family and friends. And I get a little sad when I see legislators in my home state embarrassing themselves with their diatribes against teaching evolution. (Note: Gravity is still considered a theory as well, maybe some of these folks complaining about teaching evolution "cuz it's only a theory" should maybe be invited to test that gravitational theory from the top of the capital building - rhetorically speaking of course.)
But then, I wind up reading something that is so incredibly stupid and disingenuous, that I am moved to take a whack at it on my own. Today, I reached this point when I read this idiocy from Robert Samuelson at the Washington Post:
Judging by the political reaction, you’d think that Paul Ryan’s budget takes a meat ax to Medicare and threatens economic havoc for the elderly. Just the opposite is true: The Ryan budget spares older people from almost any change or sacrifice — and that’s the problem. We have (and, to be fair, this is mainly the doing of Democrats and their intellectual apologists) made those 65 and over into a politically protected class, of which nothing is expected and everything is given.
It is impossible to have an honest debate about the budget — and government’s size and role — unless this changes, because aiding the elderly is now the main thing the federal government does. If you remove that, fearing a backlash from the 50 million or so Social Security and Medicare recipients, you condemn yourself to bad choices: (a) you can’t deal with deficits, which may crowd out productive investment and risk a financial crisis; (b) you must dramatically squeeze the rest of government, including the social safety net, defense and research; or (c) you must raise taxes sharply, which may further slow the economy.
Now, I am admittedly not an economist (thank doG) but by my rough count those two paragraphs contain maybe two semi-factual statements and about ten misstatements, mis-directs, and outright lies.
My first response after reading Samuelson's gibberish was to rush over to Beat The Press and see if Dean Baker had already taken Samuelson to task. Alas, Dean has been otherwise occupied with taking Casey Mulligan of the NY Times Economix blog and the Washington Post to task for their various misstatements and mis-directs. I imagine he can only deal with just so much stoopid and disingenuousness in one day before reaching his fill.
Samuelson proclaims that the Ryan budget "...spares older people from almost any change or sacrifice..." (this seems to be an article of perceived Conventional Wisdom among the Villagers and TradMed if this and this are indicators. But the devil as always is in the details as this from Think Progress explains. I would like to add that the attempt at generational war by proclaiming loudly that "55 and above are exempt from the changes" presupposes that those of us older than 55 have no desire to see these programs available to our younger family and friends. Please note, not everyone has an "I've got mine, fuck you!" attitude, m'kay?)
I am going to close this without attacking the rest of Samuelson's gibberish and try to re-store my blood pressure to a more manageable level. But I would like to say that Samuelson continues to act as if the social safety net spending, Social Security, and Medicare have been stand alone problems these last ten years while ignoring the destruction of the US and world economies by the Banksters and fraudsters on Wall St.
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My remarks today will focus on recent and prospective developments in the labor market. We have seen some positive signs on the jobs front recently, including a pickup in monthly payroll gains and a notable decline in the unemployment rate. That is good news. At the same time, some key questions are unresolved. For example, the better jobs numbers seem somewhat out of sync with the overall pace of economic expansion. What explains this apparent discrepancy and what implications does it have for the future course of the labor market and the economy?
Importantly, despite the recent improvement, the job market remains far from normal; for example, the number of people working and total hours worked are still significantly below pre-crisis peaks, while the unemployment rate remains well above what most economists judge to be its long-run sustainable level. Of particular concern is the large number of people who have been unemployed for more than six months. Long-term unemployment is particularly costly to those directly affected, of course. But in addition, because of its negative effects on workers' skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.
Once again, it seems to be a speech that depends on the individual perspective as to the take-away. David Dayen at FDL News titled it "The “Better But Not Good Enough” Economy Conundrum" and it follows a pattern from earlier speeches. Last June, I wrote a post after a Benbernank speech that appeared to be at least four different speeches, depending on the spin. Getting it down to only two spins is a bit better. The problem I have with Bernanke and his speeches is that while he talks about the problems of the long term un and underemployed, he never really seems to get around to doing anything about it, even while "pursuit of maximum employment" is part of the stated Federal Reserve mission.
While it appears that the folks on Wall Street and the various stock exchanges loved Bernanke's speech, it has been obvious to anyone paying attention that Wall Street and the various stock exchanges don't really have much of a connection to the real world economies. As Dayen notes in his post:
The problem is that many believe that the Fed’s monetary policies have not been accommodative enough to match the deep hole in economic performance. The other reason some became alarmed by Bernanke’s speech is that he accurately but incompletely touted the labor market recovery, with its 250,000 increase in private market jobs on average over the past three months. Bernanke goes through all the positive indicators and only at the end gets to the negatives, like the 5 million payroll jobs below peak, the still-elevated unemployment rate, and most importantly the shrinkage of the employment-population ratio and the labor force participation rate. Brad DeLong thinks that Bernanke is “preparing to declare victory,” and that “To transform cyclical into structural unemployment is not a victory for policy.”
Amazingly enough, just last month, The Benbernank testified before both the House and the Senate where the Republicans in both chambers took him to task for (from the NY Times House article):
WASHINGTON — Congressional Republicans criticized the Federal Reserve on Thursday for working to reduce unemployment and revive the housing market rather than maintaining a single-minded focus on inflation.
And from the Senate article, also via the NY Times:
Senate Republicans on Tuesday, like their colleagues in the House last week, expressed concern that the Fed effectively was declaring that it would prioritize job growth over inflation.
I guess the folks in the House and Senate would just as soon not deal with the problems of 25M to 30M un and underemployed. They must not think we vote. Or matter.
