Category: Economy

1.2 million Americans lose unemployment benefits today

  Because of the Republicans new found concern for budget deficits, 1.2 million American families will be cut adrift today.

 Nearly 1.2 million unemployed Americans – including 27,000 in Wisconsin – face an imminent cutoff of government unemployment checks if Congress cannot pass emergency legislation to extend federal benefits before funding expires Sunday.

  Senate Majority Leader Harry Reid (D-Nevada) pushed this week for Senate passage of a stopgap 30-day extension of jobless benefits, which also includes a 30-day extension of a federal COBRA health insurance subsidy for the jobless. But as of late Thursday, Sen. Jim Bunning (R-Ky.) objected to each attempt to bring the issue to a Senate floor vote, balking that the measure would further inflate the nation’s debt.

 Remember, this is the same Congress that took less than a week to bail out Wall Street banks for $700 Billion. There were no questions at that time about where to get the money for their criminal friends in banking.

  The Unemployment extension bill is $10 Billion.

Junk Economics and the middle class: Where we went wrong

   When I wrote this essay a lot of people asked me, “What should we do about it?”

 It’s a good question, but its also a trap. I’m not so arrogant as to believe that I know the perfect solution to our economic problems. Anyone that tells you they know is either a fool or a liar.

 However, that doesn’t mean we can’t discover where we went wrong once you apply a little logic and data to the situation.

 For instance, if you realize you have taken a wrong turn, it makes more sense to turn around and go back to the corner where the mistake was made, than it does to drive in a general direction and hope you can find your way home.

 When it comes to the economy, its pretty easy to discover when the wrong turn was made – 1972.

CBO: Stimulus DID create Millions of Jobs

There was some good news from the CBO today:

CBO: Stimulus bill created up to 2.1 million jobs

By ANDREW TAYLOR, The Associated Press – Feb 23, 2010

WASHINGTON — The economic stimulus law added between 1 million to 2.1 million workers to employment rolls by the end of last year, a new report released Tuesday by congressional economists said.

The nonpartisan Congressional Budget Office study also said the $862 billion stimulus added between 1.5 to 3.5 percentage points to the growth of the economy in 2009.

[…]

CBO projects that the stimulus measure to have a greater impact this year, boosting gross domestic product [GDP] by 1.4 to 4 percentage points and lowering the unemployment rate by 0.7 to 1.8 percentage points.

http://www.washingtonpost.com/…

And CBO is projecting even more good news this year, due to the Stimulus Jobs Bill …

The Week in Editorial Cartoons – Al Gore vs the Denialists

Crossposted at Daily Kos.  If you choose to recommend it there, the Rec Button may have been pushed to the bottom after the last diary comment made.

THE WEEK IN EDITORIAL CARTOONS

This weekly diary takes a look at the past week’s important news stories from the perspective of our leading editorial cartoonists (including a few foreign ones) with analysis and commentary added in by me.

When evaluating a cartoon, ask yourself these questions:

1. Does a cartoon add to my existing knowledge base and help crystallize my thinking about the issue depicted?

2. Does the cartoonist have any obvious biases that distort reality?

3. Is the cartoonist reflecting prevailing public opinion or trying to shape it?

The answers will help determine the effectiveness of the cartoonist’s message.

:: ::



Chris Britt, see reader comments in the State Journal-Register (Springfield, IL)

Junk economics and the rape of the middle class

“Behind every great fortune lies a great crime.”

    –  Balzac

  Capitalism hasn’t failed. What has failed is the economic system in place today.

No amount of government taxes, trade barriers, or regulation caused it to fail.

  No investigative reporter, or congressional oversight committee, or regulatory watchdog, exposed the massive fraud and corruption in the financial system today. All of the safeguards put in place to protect the public, and the current system from itself, failed.

  The global financial crisis came to light because what amounts to a falling out amongst thieves. They simply stopped trusting the ability of each other to pay their debts. Once lending stopped, credit creation froze, and the Ponzi-scheme that parallels our financial system broke down.

 This so-called “Great Recession” isn’t cyclical, it’s secular and the problems are systemic. We didn’t get here by accident. Choices were made by very wealthy and powerful people, thus those choices can be reversed.

 It’s important to understand that we aren’t fighting Adam Smith’s Invisible Hand. We are fighting against the Money Trust.

Food Stamp Profiling Contributes to the Stigma

The Food Stamp program has always been a contentious, heavily partisan issue.  A recent New York Times article highlights the back-and-forth that has characterized the highs and lows of the program, and where it seems to be headed.  Today I’ve chosen to write about this controversial subject to, in part, document of my own direct personal experience.  Though food stamp usage might have been more stigmatized in an earlier year, there is unfortunately still much bias and prejudice directed towards those who take advantage of its existence.  Until this is eliminated, others will refuse to apply and find their poverty and need considerably worsened.  If this be Welfare, it is one of the most essential safety nets ever devised and my fear is that a resurgent GOP presence will eliminate it altogether, or prune it back considerably.  

Bank lending collapses; money supply shrinks

   Today the Federal Reserve began raising interest rates. Quantitative easing efforts (read: monetization) are also coming to an end.

  The central banks are worried about inflation due to the massive money printing of the past two years. Should they be worried? Probably not.

 David Rosenberg from Gluskin Sheff said lending has fallen by over $100bn (£63.8bn) since January, plummeting at an annual rate of 16pc. “Since the credit crisis began, $740bn of bank credit has evaporated. This is a record 10pc decline,” he said.

  Mr Rosenberg said it is tempting fate for the Fed to turn off the monetary spigot in such circumstances. “The shrinking in banking sector balance sheets renders any talk of an exit strategy premature,” he said.

 Bank lending is the money multiplier in a fractional-reserve banking system, and banks aren’t lending.

  All those trillions of dollars bailing out Wall Street was meant to fix the credit markets, which means to get the banks lending again. This effort was a complete and total failure…unless you count banker bonuses.

Hill: Reid Lacks Jobs Bill Cloture Vote

Yesterday, I reported on the incredulous national reaction fellow Democrats had to Senator Dianne Feinstein’s (D, CA) proposed amendment to the upcoming Jobs Bill, the one where she wanted to suspend the Endangered Species Act protections to migrating baby salmon and Delta smelt in the Sacramento & San Joaquin River Delta, with the excuse that increased water pumping out of the Delta to her billionaire water broker donors would “increase jobs.”

This ignored the fact that the salmon fishing season has been suspended the past 2 years on the CA coast and may be heading for a 3rd year of cancelation because of the collapse and crash of the salmon population.

Story here:

DiFi Does a Pombo on Salmon, Jobs Bill Amend Guts EndSpecAct

I found a letter from CA Assemblyperson, Chair of the “Water, Parks, & Wildlife Committee,” Jared Huffman, to Mark Corwin, Director of the CA Dept of Water Resources (DWR) from 1 week ago, Feb 10th.  In it, Chairman Huffman asks why the CA Dept of Water Resources (DWR)  is flouting the CA Endangered Species Act (CESA) with regards to Judge Oliver Wanger’s opinion Feb 5, 2010, that Delta water pumping extraction must decrease to protect Delta Smelt and migrating salmon.  In 2008 and 2009, the US Fish and Wildlife Service and the National Marine Fisheries Service said that if water agencies such as CVP + SWP pumped high amounts of water out of the Delta at certain times, it was going to drive Federally listed endangered fish in the Delta to extinction. (state rules need to comply with Federal listings)  In the summer of 2009 the Dept of Water Resources requested rules clarification, then turned around and started attacking the new rules in court.  

 

Huffman  to DWR:

{{{   On August 3, 2009, (the CA)  Dept Water Resources (DWR) filed legal papers in support of a motion

by its water contractors seeking to invalidate the biological opinion – even though the effect would

be to invalidate DWR’s own CA Endangered Species Act coverage for the SWP pumps.

Then DWR took aim at the salmon biological opinion.  Last week, detection of salmon triggered an

obligation under the salmon biological opinion for the SWP/CVP pumps to reduce reverse flows in Middle

and Old Rivers.  State and federal water contractors went to court seeking to overturn the heavily peer

reviewed salmon biological opinion and replace it with a previously invalidated Bush-era opinion.  

Now, detection of smelt has triggered protections under the delta smelt biological opinion. As you know, a limitation on reverse flow to protect delta smelt would also meet your requirements to protect salmon and longfin smelt.  Monday, Central Valley Project contractors filed for a Temporary Restraining Order on the delta smelt protections.  And Dept of Water Resources, fully informed as to the deference the court gave its last letter, filed another “non-opposition” letter yesterday.

Having actively worked to create these problems, please explain how DWR intends to fix them.  }}}

 

______________

a pdf download of Huffman’s letter to the DWR is here:  

http://www.lloydgcarter.com/fi…

I expanded some of the acronyms above, so it would read more easily

I’m quoting this to to help illustrate the breadth of the problem Senator Feinstein created with so many levels of both state and Federal water and fisheries law, when she decided to play Top Water Distributress of the SacJoaquin Delta. The state of CA was trying to work this out with the Federal government, and she meddled to make a favor to Kerns County water brokers, and Westlake Mutual Water Company and billionaire donor Stewart Resnik, so they could sell a bigger water allotment to the highest bidder in Southern CA.  And this is going to be tacked on to a JOBS Bill.

Congress has had this week off because of President’s day. They had the previous week off because of 2 massive snowstorms.  So they’ve had plenty of time to interact people who are either mad at them or wish to purchase their influence.

Today, The Hill is reporting that Majority Leader Senator Harry Reid doesn’t have the cloture votes to even begin debate on the jobs bill.  

1950-1980 — Was This Our Golden Era?

Great Depression Soup Line Pictures, Images and Photos

Is good news one of those quaint relics, exclusively relegated to our past, fovever doomed to never again be a part of our present or future?  

Breaking Free of the Bubble

If we were to be fair with ourselves, we would admit that, compared to most of the rest of the world, we really do have it good.  As I say this, I recognize that statements such as these have been set forth multiple times to scold those who feel no desire to contribute to some worthy cause or endeavor.  I’m not really out to highlight an issue or to request a donation, nor do I seek to appeal to your latent sense of guilt.  Rather, I do ask for your sober contemplation.  What I say now is designed to encourage discussion and discourage argument.  We have enough back-and-forth as it is and we waste so much of our energies and ourselves in the process, passion better spent focused on different avenues.  

All of us live in one bubble or another.  The wealthier and more privileged we are, the greater and more exclusive the bubble.  Growing up in the South, as I did, my parents and the parents of my peers most often had been born into solidly working class families.  It had only been through their hard work and a resulting favorable economic climate that they’d had the ability to achieve social mobility, and in so doing scale one class up the proverbial ladder.  Now that I live in a city where I encounter on a regular basis people my own age who have come from a long line of relative wealth, their views and mine are often as different as our priorities.  I find it quite difficult to not be jealous and envious of, for example, their multiple trips abroad to Germany or their ability to attend an elite institution (or two) of higher learning.  Still, I recognize that compared to many who live in the state of my birth, I had it very easy.    

When we talk about Haiti, Darfur, or the Middle East, all the usual conduits to direct money and financial assistance fall easily in place.  Yet, it is rather telling that it takes a catastrophe before we give even half a second to contemplate what life must be like for those in the Third World.  Whether we admit it or not, a hierarchy of need exists, and the simultaneous blessing and curse of having our  own basic needs met on an almost constant basis is that we can afford to have trivial, tedious arguments of insidious intent.  And what to what overwhelming question does this lead us?  It’s tough to say, really, but whatever it may be is frequently useless and thoroughly counter-productive.  

As for our friends in dire need, their daily thoughts tend to be whether they have enough food to eat, or whether their lives will be in danger tomorrow, or how they’ll manage to raise their children in a harsh, unforgiving environment.  To them, our arguments would seem not just ludicrous but also completely incomprehensible.  Many have talked about this concept before, too, I recognize.  If I believed we had gotten the message before now I wouldn’t bother reintroducing it.  To be sure, I am aware that some do take this matter to heart.  These are the ones who jump at the chance to volunteer to serve the less fortunate in other countries.  I admire and appreciate their devotion.  I do also take to heart the often-conservative criticism that we spend so much time and energy temporarily boosting the stature of devastated foreign countries while simultaneously neglecting our own poor and downtrodden.  We would certainly go far to document the lives of our own needy beyond the occasional human interest story or anecdote.  It’s not so much where we devote our energy as it is a question of our general mindset, which must not just be a single-minded and highly time-limited desire to cross off the phrase “humanitarian effort” from our Socially Conscious™ checklist.    

The problem with bubbles, of course, is that bubbles isolate.  They are impermeable.  They keep information from getting out and in so doing keep necessary strategies and potential means of assistance in the hands of and for the use of a small, fortunate few.  In discussion with those of other nationalities, I note that they have at times expressed no small frustration with us that we in this country seem to believe that nothing happens of much importance unless it happens here, or has some direct relevance to America and Americans.  If our ultimate goal was complete equality, as we say it is, then we’d make a general effort to take into account the unique stories, news, and issues of other regions and countries of the world.  Put this way, these very pertinent topics wouldn’t have to be consolidated into a tab labeled “World News” on one’s browser, or reduced to a niche interest targeted to a niche interest group.

What we deal with primarily is a discrepancy involving money and means.  Here in Northwest DC, for example, some have spent years bickering about the location of a new library and whether it should be granted zoning rights and the ability to finally break ground.  Common sense alone would have dictated that the existing temporary library space is much too small to accommodate the number of patrons who use its services, meaning that the construction of the building can’t get underway soon enough.  Whereas, if I turn my attention towards the Southeast in the direction of Anacostia, I am faced with the blight and decay of dire poverty—with it a lack of basic services.  Here, where I live, there are many restaurants and grocery stories I encounter on even the most modest of walks up and down the main thoroughfare.  There, one is hard pressed to find more than one restaurant, and grocery stores are either severely limited, or nowhere to be found.  This underscores how finding common means of comparison is difficult enough between people of similar interest, but in this way, both residents speak completely different languages.

I fail to take into account that many of us genuinely try to do the right thing.  I’ve seen it for myself, many times.  I’m not stating that one ought to drop everything, give all one has to the poor, and move to an impoverished country.  But what I am saying is that once we leave the bubble, we don’t need the novelty of a country or region in crisis to recognize that until our efforts here on these shores are a success, we simply won’t have the infrastructure and the methodology in place to give better aid and assistance to foreign countries in need.  If that on-going War on Poverty is ever won and won forever, it will start here, then spread to other places, not the other way around.  Speaking American English in all its varieties and variations is tough enough, with so many regional, ethnic, and economic distinctions.  Speaking the native tongue of another place is a daunting, if not completely impossible task until we’ve found our own means of translation.  

China dumping riskier U.S. securities?

Earlier today, Karl Denninger double-dog-dared China to start dumping US bonds, arguing that the Chinese were at the mercy of U.S. Presidential fiat with respect to (a) the value of China’s reserves and (b) our superior military.  He may be right, but that won’t stop the Chinese from dumping other assets in an escalation of…one thing or another:

Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.

It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past two weeks, or whether there also is a political dimension. With the expected termination of the Federal Reserve’s special facility to purchase mortgage-backed securities next month, some asset-backed spreads already have blown out, and the Chinese institutions may simply be trying to get out of the way of a widening. There is some speculation that China’s action has to do with the recent deterioration of US-Chinese relations over arm sales to Taiwan and other issues. That would be an unusual action for the Chinese to take-Beijing does not mix investment and strategic policy-and would be hard to substantiate in any event.

One zerohedger views this as political retaliation.

Anyway, we’ve always been at war with […].  I’m sure it bodes well for all.  

Yet another bailout for Wall Street banks

  Once again, the Federal Reserve is going to come to the rescue of Wall Street. Once again, it will be in the name of helping out “us”.

 The idea behind giving the banks cheap money was that the banks would lend it to consumers and businesses.  Unfortunately, that hasn’t happened: Since the start of the crisis, bank lending has fallen off a cliff.  The banks are, however, lending to the Federal government, which needs to fund record deficits by borrowing more than $1 trillion a year.  The combination of the Fed’s desire to stimulate lending via cheap money and the government’s desire to stimulate the economy by running a huge deficit has made it a great time to be a bank: Banks can borrow from the government at artificially cheap rates and then lend the money back to the Federal government at higher rates, pocketing the difference.

And now it’s going to get even better to be a bank.

Load more