Category: Economy

Cross posted from The Stars Hollow Gazette

Where the hell is the outrage? That is the question that senior fellow at Campaign for America’s Future and former executive at AIG, Richard (RJ) Eskow asks about the current state of the US econoomy:

From the first breath of life to the last, our lives are being stolen out from under us. From infant care and early education to Social Security and Medicare, the dominant economic ideology is demanding more lifelong sacrifices from the vulnerable to appease the gods of wealth.

Middle-class wages are stagnant. Unemployment is stalled at record levels. College education is leading to debt servitude and job insecurity. Millions of unemployed Americans have essentially been abandoned by their government.  Poverty is soaring. Bankers break the law with impunity, are bailed out, and go on breaking the law, richer than they were before.

And yet, bizarrely, the only Americans who seem to be seething with anger are the beneficiaries of this economic injustice — the wealthiest and most privileged among us.  But those who are suffering seem strangely passive.

As long as they stay that way, there will be no movement to repair these injustices. And the more these injustices are allowed to persist, the harder it will be to end them.

Where the hell is the outrage? And how can we start some?

He notes that Paul Krugman, too, is feeling grim about the possibility that high unemployment has become acceptable and that the “political and policy elite” see no need to find a solution, one that is staring them right in the face:

First of all, I think many of us used to believe that sustained high unemployment would lead to substantial, perhaps accelerating deflation – and that this would push policymakers into doing something forceful. It’s now clear, however, that the relationship between inflation and unemployment flattens out at low inflation rates. We can probably have high unemployment and stable prices in Europe and America for a very long time – and all the wise heads will insist that it’s all structural, and nothing can be done until the public accepts drastic cuts in the safety net.

But won’t there be an ever-growing demand from the public for action? Actually, that’s not at all clear. While there is growing “austerity fatigue” in Europe, and this might provoke a crisis, the overwhelming result from U.S. political studies is that the level of unemployment matters hardly at all for elections; all that matters is the rate of change in the months leading up to the election. In other words, high unemployment could become accepted as the new normal, politically as well as in economic analysis.

Eskow points to the factors why Americans have learned to live in a “quiet state of desperation” and offers a Action Plan for the solution:

1. Expand our avenues of political expression: First, we need to remind ourselves that electoral politics is not the only productive avenue for political activism -that we need strong and independent voices and movements.

2. Refuse to let politicians use social issues to exploit us economically: We also need to reject the exploitation and manipulation of progressive values by corporatist politicians who use social issues like gay marriage and reproductive rights exactly the way Republicans do — to manipulate their own base into ignoring their own economic interests. Politicians who don’t take a stand on economic issues should be rejected, up and down the ticket.

3. Explain what is changing — and contrast what is with what should be:We need to do a better job of explaining what’s happening, so that we can make people aware of the harmful changes taking place all around them.And it’s not just about “change”: It’s also about contrast – between economic conditions as they are, and conditions as they should be and could be, if we can find the political will.

4. Expand the vocabulary of the possible: The “learned helplessness” outlook says “the rich and powerful always win; we don’t stand a chance.” History tells us otherwise. From the American Revolution to the breaking up of the railroads, from Teddy Roosevelt’s trust-busting to FDR’s New Deal, from Ike’s Social Security and labor union expansion to LBJ’s Great Society victories, we need to remind ourselves of what we’ve accomplished under similar conditions.

5. Tell stories: And we need to tell stories — human stories.

Some of those human stories started 22 years ago when Bill Moyers began documenting the stories of two families ordinary families in Milwaukee, Wisconsin who had lost good paying factory jobs and how they have managed over the years. In a 90 minute special on PBS’ Frontline, Moyers revisits the the Stanleys and Neumanns anf their struggles to finding other jobs, getting retrained yet still finding themselves on a “downward slope, working harder and longer for less pay and fewer benefits, facing devastating challenges and difficult choices.”

Over at AMERICAblog, our friend Gaius Publius has posted his interview with RJ Eskow that was taped at this year’s Netroots NAtion in San Jose, CA. It’s an excellent conversation.

This piece is a summary of a paper that I presented at the Left Forum in a panel organised by Geminijen. If you want to see a copy of the longer paper (which is being edited for English and clarity), send me a personal message here with your email and I will send it to you. Fran Luck who is the producer of the radio series “Joy of Resistance: Largest Minority” on WBAI was in the audience and asked us to appear on her show. If you would like to listen to Geminijen, Diana Zevala (who has written for the ACM on education), Barbara Garson and me, please click here: http://archive.wbai.org/files/mp3/wbai_130703_210001wed9pm10pm.mp3).

While in no way denying the impact of the introduction of austerity upon the working class, the disabled and the poor as a whole, there is no question that the impact of austerity on women is far greater. This is due to the job losses in the state sector where women’s labour is predominant, our historically lower wages due to the undervaluation of traditional women’s labour in a capitalist labour market leading to greater dependence upon the social welfare state, and our overwhelming responsibility for reproduction of the working class and how that impacts on our working lives.  The failure of the state to provide completely for social reproduction especially in childcare and care for the infirm and disabled has resulted in women having: 1) discontinuous working lives; 2) and the predominance of our labour in part-time employment.

With incomes falling in the advanced capitalist world as part of general economic policy, women face greater threats than men due to our responsibility as primary caretakers of children, the disabled and the elderly. Women are facing lower incomes, lower pensions, and an increasing reluctance for the state to support women in the workplace through provision of child-care and after-school programmes and shouldering carer responsibilities for the elderly and infirm. Given the transformations in general employment possibilities towards increasingly underemployed and part-time labour, we will begin to face competition from men for the jobs we have normally held while benefits are increasingly run down.



We face increasing economic insecurity without sufficient state assistance to ensure that our children and families can have a decent standard of living provided through employment. Women can no longer depend upon the fact that our labour is of sufficient value to capitalists as men also face increasing precariousness in their employment, and in the absence of a strong labour movement or left-wing movements, can serve the same role of an easily intimidated low-paid work force.

The destruction of the public sector enabling the weakening of the last bastion of trade union organisation to force through even lower wages and a reduction in social subsistence levels of wages along with a further deterioration in working conditions on the basis of non-competition with emerging and peripheral economies is nothing less than a race to the bottom and women will be the first, but not the last, victims of neoliberal economics in the advanced capitalist world.

This piece will be divided into 3 parts. The first is composed of some general statements on austerity. The second part will discuss the women’s labour market in Britain and the impact of austerity. The third part addresses the attack on the universal social welfare state in Britain and its impact upon women.

Cross posted from The Stars Hollow Gazette

The June employment report from the Bureau of Labor Statistics reported that the US added 195,000 jobs but the unemployment rate remained at 7.6%. This better than expected number, along with upward revisions of the April and May jobs numbers led to some speculation by Wall Street analysts to speculate that the Federal Reserve would start to back away from part of its stimulus program.

But hold your horses on the optimism. The reality is that this an anaemic recovery with flat growth and low productivity, as Dean Baker points out in his article:

First, it is important to remember the size of the hole the economy is in. We are down roughly 8.5 million jobs from our trend growth path. We also need close to 100,000 jobs a month to keep pace with the underlying growth rate of the labor market. This means that even with the relatively good growth of the last few months, we were only closing the gap at the rate of 96,000 a month. At this pace, it will take up more than seven years to fill the jobs gap.

It is easy to miss the size of the jobs gap since the current 7.6% unemployment rate doesn’t seem that high. However, the main reason that the unemployment rate has fallen from its peak of 10% in the fall of 2009 is that millions of people have dropped out of the labor force and stopped looking for jobs. These people are no longer counted as being unemployed. [..]

This gets to the type of jobs that have been created in the upturn. Over the last three months, three sectors – restaurants, retail trade, and temporary help – have accounted for more than half of the jobs created. These sectors offer the lowest-paying jobs, with few benefits and little job security. [..]

Workers take these jobs when there are no better alternatives available.

There is also the impact of sequestration that has yet to have its full impact on the economy and Congress seems content to leave in place with one side blaming the other. There is little chance that a budget or any significant legislation will get through this Congress:

Do you see the problem here? The president’s adversaries lament his lack of warmth and his remote intellectualism; his supporters see the same quality as an analytical and cool-headed virtue. This could be a cute “the president is from Mars, Republicans are from Venus” thing – if it weren’t for the fact that several important issues this summer, including the budget and food-stamp funding, hinge on whether these two crazy kids will ever figure it out. At the base of their problem is an absence of mutual respect and a lack of legislative sportsmanship.

Until the players figure this out – and there’s no sign they ever will – we’re going to be stuck in an endless loop of revisiting these unhelpful battles that drag on for years. This summer is the last chance for any legislation to get through. Starting in the fall, the campaigns for the 2014 midterm elections are going to start, and the window for serious legislative action will have closed – at which point you can kiss any progress on major bills goodbye. [..]

the sequestration cuts are not a question of “one side” winning or losing. They’re a question of the nation, the economy and the American people losing. They’re a question of poor people losing: Meals on Wheels will suffer, as will those living in federal housing.

No one, so far, is winning at all. Even more concerning, it’s not abundantly clear that anyone in Washington knows how to play the game anymore.

Voters need to start making greater demands on their congress critters and start threatening to throw them out for ones who will represent the people and not Wall Street and their own self-interests.

If one can claim that a virtual economy offers increased possibility for revolutionary political change, that change should be measured against more material forms of analysis rather than treating information commodities as epiphenomenal. The tenuous connection between correlation and causation much like the meme of “Voodoo Economics” was treated more lightly and less seriously in a 2010 Bruce Watson piece on zombies and vampires as seasonally or cyclically symptomatic of a national economy:

there appears to be a loose connection between recession cycles and monster movies: zombie films tend to be more popular during boom times, while vampire flicks are ascendant when the economy is bad. As I wrote at the time, this makes a certain sort of symbolic sense: after all, as unthinking consumers, zombies reflect the tone of high-consumption boom times. The more melancholic vampires, on the other hand, suggest buyer’s remorse. While the zombie/vampire recession cycle didn’t always hold true, I found that it had a few interesting connections to the economy. For example, for most of the Reagan spend-till-you-drop 1980’s, zombie films dominated movie theaters. In fact, vampire movies’ only brief moment of ascendence in the decade was in 1987-1988, when a stock market tumble sent the economy into recession. Similarly, in 1991 and 2001, vampire films spiked and zombie films fell behind as recessions struck.

Aside from the doomsday preppers and faux survivalists in Dollywood and Hollywood invoking the fear of a zombie apocalypse as signs of an impending breakdown of urban society double-coded as racism, vampires and zombies can be differentiated by information while serving as cultural commodities in mass media. Vampires are asymmetric information commodities since in media narratives their representations appear conventional at first, whereas zombies are symmetric in that we know them instantly by their appearance. In either case they represent a pathological tipping point where fear trumps rationality and wooden stakes, garlic, holy water and shotguns make their appearance in contemporary film.

In a material context, such contemporary monsters represent the same class fears represented by European revolution in the Nineteenth Century not unlike the colonizers’ fears of the colonized or the contemporary anti-immigrant discourse where Americans ignore the labor history of the bracero and the coolie as invisible, informal Gastarbeiter.

A spectre is haunting Europe – the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre

Marx’s invocation becomes more or less ironic in the post-Soviet period

Spectres de Marx: l’état de la dette, le travail du deuil et la nouvelle Internationale is a 1993 book by French philosopher Jacques Derrida The title Spectres of Marx is an allusion to Karl Marx and Friedrich Engels’ statement at the beginning of The Communist Manifesto that a “spectre [is] haunting Europe.” For Derrida, the spirit of Marx is even more relevant now since the fall of the Berlin Wall in 1989 and the demise of communism. With its death the spectre of communism begins to make visits on the earth. Derrida seeks to do the work of inheriting from Marx, that is, not communism, but of the philosophy of responsibility, and of Marx’s spirit of radical critique.

The philosophy of responsibility may be best represented in the problematic role of information and national security in a virtual surveillance state where Ed Snowden may be a vampire presently in the undead transit lounge of a Russian airport, avoiding the cleansing hot light of sunshine law. The disclosure of information asymmetrically held by a democratic state committed to a public sphere operates in contradiction to its multinational, geopolitical obligations.

Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him. [4] If the labourer consumes his disposable time for himself, he robs the capitalist Link

Virtuality has conditioned all forms of labour to some degree, creating different classes of worker, set against each other, not conscious of the web of virtuality that links them all into a single multitude. That unity is virtual in one sense – a potential that could be activated by virtuality in another sense, the resources of the net.

Come below the squiggle for more “mysterious forces or powers that govern the world and the lives of those who reside within it, but also a range of artistic forms that function in conjunction with these vodun (sic) energies.”

Accordingly to an article entitled, “More Women Are bringing Home the Bacon…, ”  heralding women’s gains in pay equity, a recent Pew study revealed that an  impressive number of married breadwinner moms reflects society’s increasing opportunities for women, while the median income for the growing population of  single mother households  is $23,000 — just 28 percent of the income of one in which the female breadwinner is married, and less than half the median household income in America.

So What Else Is New?

The wage gap between women’s and men’s individual wages is the most standard indicator used to define women’s march toward equality. In recent studies of the gender wage gap, women make between 76 to 78 cents for every dollar made by men and most literature is optimistic that the gap will disappear or even reverse in  the near future. The gender wealth gap, however, another measure of gender inequality which measures the total wealth or net worth a woman has accumulated over time,  shows that women have, on average, only 6% to 36% of the wealth owned by men and that the gap is growing.



source:http://www.cunapfi.org/download/198_Women_of_Color_Wealth_Future_Spring_2010.pdf

The stark difference between these two measures suggests two things about statistics:1) statistics on the same subject can fluctuation wildly depending on what is being measured and the methodology used and 2) One of the main functions of statistics is not to measure the reality, but as a propaganda tool to reinforce the ideology of the dominant culture.

The problem with using the wage gap . As a measure of inequality, the gender wage gap only measures an individual’s income growth in the market place and does not take into account either the worth of women’s unpaid social labor in the home(outside the marketplace) or how this unpaid labor structurally effects women’s position in the market place over time.

Because of its narrow parameter, much of the analysis of what the wage gap means in terms of the overall inequality of men versus women is merely a guess that allows for a lot of unverifiable  interpretations. For example, the recent Pew study echoes a demographic study that hit the New York Times a couple of years ago that showed  a narrowing of the wage gap, suggesting women’s wages were even surpassing men’s in some cases, especially in major cities.

The cause of women’s increased equality, the researcher suggested, was due to  increases in women’s higher educational status and increased  “feminist  consciousness.” In fact,  a closer analysis showed that the close in the wage gap was due to the outsourcing of  well paying union manufacturing jobs which had been held by men due to a sex segregated workforce. By focusing on city populations where people of color form a larger part of the database, the lower gap also reflected the fact that the wage gap is generally lower between women and men of color since men of color generally make significantly less than white men due to racism.  

Cross posted from The Stars Hollow Gazette

Earlier this year, the Justice Department brought a $5 billion fraud law suit against the ratings agency Standard and Poors for knowingly giving triple “A” ratings to financial products the agency’s analysts understood to be unworthy. The financial crisis that began in 2007 was mostly caused by those fraudulent ratings. Senators Al Franken (D-MN) and Roger Wicker (R-MI) worked together on an amendment that was included in  Dodd-Frank (pdf) to bring accountability and transparency to the ratings process. The amendment also required that the Securities and Exchange Commission conduct a study, that study has been completed (pdf). It found that there were “inherent” conflicts of interest in the system contributed to the 2008 crisis.

Contributing editor and investigative journalist for Rolling Stone Matt Taibbi published an in depth look at the ratings agencies and how ratings agencies like Moody’s and Standard & Poor’s helped trigger the meltdown with new documents. The documents surfaced from two lawsuits that files against S&P by  a diverse group of institutional plaintiffs with King County, Washington, and the Abu Dhabi Commercial Bank. The plaintiffs claimed that S&P, along with Morgan Stanley, fraudulently induced them to heavily invest in a pair of doomed-to-implode subprime-laden deals. Matt calls these new revelations the “Last Mystery of the Financial Crisis:

What about the ratings agencies?

That’s what “they” always say about the financial crisis and the teeming rat’s nest of corruption it left behind. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters like spray-tanned Countrywide ex-CEO Angelo Mozilo.

But what about the ratings agencies? Isn’t it true that almost none of the fraud that’s swallowed Wall Street in the past decade could have taken place without companies like Moody’s and Standard & Poor’s rubber-stamping it? Aren’t they guilty, too?

Man, are they ever. And a lot more than even the least generous of us suspected.

Thanks to a mountain of evidence gathered for a pair of major lawsuits, documents that for the most part have never been seen by the general public, we now know that the nation’s two top ratings companies, Moody’s and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

Matt joined MSNBC’s All In host Chris Hayes to discuss how these newly-revealed documents are “the smoking gun of the financial crisis” revealing the corruption and dishonesty at the core the industry.

I have to admit, I was surprised to be notified that Historian Rick Perlstein of Nixonland fame, devoted an entire column in the Nation to two tweets replying to him; one from myself and one from another commentator on twitter. It’s also surprising, because I have been a fan of some of what Perlstein has written in the past, and I have cited him before. However, after this, I and certainly a lot of other people surprised at this lack of professionalism from an established writer, won’t do it again.

After all, one doesn’t normally read columns by established historians devoting entire pieces to complaints about tweets they received or people on twitter. Especially, one tweet that was merely a question about a widely cited article at CNET. I certainly don’t know why Rick Perlstein was so offended by that to devote an entire piece in the Nation to mine and one other tweet he received. I have to wonder if he realizes how unprofessional he looks by doing so. The excellent responses to Perlstein’s shoddy piece in the comments section certainly speak to that.

On Glenn Greenwald and His Fans

Read another tweet:

“NSA admits listening to U.S. phone calls without warrants cnet.co/1agOFCy via @CNET What say you, @RickPerlstein ?”

I think we can detect here an accusatory tone, especially given the way the tweeter, “therealpriceman,” fawns over Glenn Greenwald generally. (Though you can never be sure on the Internet, and besides, why do people pursue political arguments on Twitter anyway? I’ll never understand how, for instance, “When u talk gun violence lk in mirror PA here we cling to guns-apologz to PRES O”-another tweet directed my way, apparently somehow meant to respond to this-could possibly contribute anything useful to our common political life.) I detect in this message: even the NSA says you’re wrong about Glenn Greenwald, so when are you going to apologize? And if I’m reading right, that’s some really smelly stupidity. Because the whole point of my original post was that there was plenty Greenwald had “nailed dead to rights” in his reporting. What I had in mind when I wrote that (I should have specified this, I think) was the stuff on Verizon turning over metadata to the NSA. And yet what therealpriceman links to is an article suggesting something that Greenwald has not (yet?) claimed, and which still remains controversial and undetermined: that the NSA has acknowledged that it does not need court authorization to listen to domestic phone calls, a claim sourced to Representative Jerrold Nadler, which Nadler based on a classified briefing he and other Congressmen received, but which it has since been established Nadler probably just misunderstood.

{…..}

And given that perspective, I would love to know why Glenn Greenwald thinks the establishment cannot do to him, a relative flyspeck in the grand scheme of things, what they did to Dan Rather, a towering giant of Washington reporting going back to Watergate. Which is: consign him to the outer darkness, where the only people who care about what he has to say are the likes of my good friends @therealpriceman and @runtodaylight.

He starts out by assuring the audience that he has thick skin, but then goes on to prove just how thin it really is.  By whining for 13 paragraphs or so about criticism, criticism from a couple of tweets he received days ago, it really doesn’t show the maturity he was initially hoping to espouse. So since I apparently hurt his fee fees so bad, in 140 characters or less, I’ll go ahead and put his suppositions to the test.

From This in Michigan…

To This in Honduras….

In Michigan, Republican Governor Rick Snyder has appointed an “emergency manager” to  take over the city of Detroit,  with the powers to over-ride the votes of local citizens and the decisions and contracts made by their locally elected mayor and city council. The manager has the power to abrogate previously signed union contracts with city workers and sell city assets to pay off the city’s creditors.  The new emergency manager has ordered the appraisal of the Detroit Art Institute’s world class art collection with a view to its sale.  

In Honduras, its post-coup president and legislature has signed a law allowing the government to sell or lease vast tracks of lands in habited by Honduran’s indigenous tribes, to private owners to establish “charter cities”, feudal-like city states which are to establish their own laws and form of government, free of pre-existing state laws and regulations.  

As a part of Honduras’s “public-private partnership”, law, capitalist business have been invited to create new business cities in the wilderness, profit paradises to be totally controlled by the businesses which own them. Thus the ese corporate vandals are pillaging the world, its land, art and culture by liquidating previously sovereign states in their favor.

Honduras will now allow consortia of private corporations to set up their own city-states, free of virtually all pre-existing law and regulation by the country’s government.  The “public”  component of this “public-private partnership”, the putatively democratically elected Honduran government (post the 2009 Zelaya-coup) have voted to sell (or long term lease) large tracks of their country to private corporations and their agents.  Hondurans living in these feudal city-states will have no democratic control of their environment.  

The rules will be set by private charters, written by the corporate agents who shall decide who shall live in their states and who shall be excluded and where they  will live and work if they allowed in.  (Never mind that the likely territories involved long have belonged to indigenous tribes, who have not been consulted in this massive give-away of their land, but actively oppose it.)

It’s really not much different in Michigan.  

forrespect

#Ride4Respect

Right now as you read this, Walmart Workers are on buses and they are caravanning from various cities to Bentonville, Arkansas where Walmart will be holding its annual shareholders meeting on June 7th. They plan to make their presence known by urging Walmart to stop its retaliation against associates who dare to speak out about working conditions. The #Ride4Respect uses the Freedom Riders of the Civil Rights Movement for inspiration. Completely appropriate, in my book. The fight for our rights as workers is a struggle for civil and human rights. Workers are American Citizens, and we are human beings. We don’t stop being Human Beings and Citizens when we pass through the doors of our place of employment.

One of the rights guaranteed to working people by U.S. Labor Law, is the right to speak out about the conditions of labor, and to do so without retaliation from our employer. That retaliation is illegal! Walmart’s retaliation has not ceased, in spite of denial that it exists, and in spite of promises to stop this retaliation (which they deny exists!) This is where the Unfair Labor Practice Strike comes into the picture. Striking Walmart Workers are a big part of the #Ride4Respect. This strike is historic as it will be the first prolonged ULP strike made by Walmart Workers. They are taking OUR Walmart’s fight for respect to another level.

Lisa Lopez walks and gives notice of ULP strike.

A Woman of Courage has put on her fighting clothes!

Mother Jones would be proud!

Cross posted from The Stars Hollow Gazette

At a recent hearing before the Senate Permanent Subcommittee on Investigations, Apple CEO Tim Cooke testified how the company managed to evade paying billions in taxes using tax loopholes particularly and overseas subsidiaries, like Apple’s subsidiary in Ireland.

Apple’s massive cash hoard, and the danger of soaring corporate profits

by Steve Gentile, Up with Steve Kornacki

The major flaw of our recovery has not been the pace, although certainly it could have been much faster. Instead, the major flaw is distribution. The economy is growing, but corporations and the richest Americans are capturing the lion’s share of the proceeds from that growth. You’ve likely heard a lot about the one percent-in the first year of the recovery, they captured 93% of the income gains – but the story of America’s corporations is even more troubling.

We’ve seen systemic inequality in our country growing for decades, even before the latest financial crisis. Between 1979 and 2007, income for the top 1% grew by nearly 300%, while it grew by just 18% for the bottom quintile of earners. [..]

Apple argues that its off-shore profits should only be subject to off-shore taxes. As if those off-shore profits had nothing to do with America. Of course, they do. Apple may sell products across the world, but the company is based in America for a reason. Apple enjoys, indeed exploits, countless legal and economic benefits by operating in America, benefits Apple wouldn’t enjoy anywhere else: basic legal protections, a judiciary that safeguards and enforces the rule of law, an intellectual property regime that affords generous-in fact, overly broad-protections for new ideas and innovations, a world-class system of higher education, a (somewhat) open immigration policy, reliable security, an advanced infrastructure for business development, and countless other benefits  from operating in a functional, developed society with a genuine social contract.

As Elizabeth Warren famously put it, “There is nobody in this country who got rich on his own.” In the same way, there is no company in this country that got rich on its own. Corporations like Apple are hampering the economy and corroding our political system by hoarding hundreds of billions of dollars in cash. They owe the American people back payments.

On her May 25 MSNBC show, Melissa Harris-Perry exams corporate money tactics and tax codes with guests Lawrence J. Korb, Senior Fellow at the Center for American Progress; Stephen Lerner, organizer of the Wall Street Accountability campaign; Pulitzer Prize-winning investigative journalist David Cay Johnston, author of The Fine Print: How Big Companies Use “Plain English” To Rob You Blind; and Yves Smith, the founder and creator of the blog Naked Capitalism.

Cross posted from The Stars Hollow Gazette

Journalist David Cay Johnston, Sen. Sherrod Brown (D-OH) and MSNBC host Ed Schultz all agree that now is the time, and in some cases past time, to invest in the collapsing and crumbling bridges, road, rails and public buildings.

Pay to Fix America’s Crumbling Infrastructure Now, or Pay More Later

by David Cay Johnston

The I-5 disaster in Seattle reflects the dire state of our bridges and highways. But it may never be cheaper to replace these aging arteries than it is now.

“We cannot hope to have an A+ economy with a C-level infrastructure,” said James Chae, president of the (American Society of Civil) engineering society’s Seattle section. [..]

State and local governments spent $156 billion on highways in 2010, roughly a penny out of each dollar of America’s gross domestic product.

Right now, governments can borrow at the lowest interest rates in 700 years. Roughly 25 million people are involuntarily forced into part-time work, are looking for work, or have given up because they cannot find a job.

We must either update our infrastructure or face a future that is both more dangerous and poorer, as more bridges collapse, pipelines leak and explode, and the movement of goods and people becomes less efficient. We could increase our spending and reap big dividends in jobs and the taxes they generate, improved safety, and a more efficient economy.

Why put off until tomorrow what is cheaper to do today?

MSNBC’s Ed Schultz, host of “The Ed Show,” discussed the problem of cutting spending on rebuilding the nation’s infrastructure with Sen. Brown.

In the real world and the reality based community, there is talk about austerity from people who understand the nuances of it and macroeconomic accounting identities. They point out the undeniable fact that there is austerity in the UK, the Eurozone, and yes, the United States. This interactive chart will show this, though I can’t embed it here. So instead, I will add a small snapshot of some of the data.

Net spending in the United States has steadily declined since it rose from 2008 to 2009 when the inadequate stimulus(only $500 billion of direct spending at about 1.5 percent of GDP) was passed. Stimulus packages don’t exist in a vacuum, and you have to count all government spending, which basically shows how exactly the numbers, including the stimulus as this does, didn’t close the output gap. And since the numbers didn’t, that is actually austerity. After all, spending went up in the UK and Eurozone from 2008 to 2009 as well, and since then, their spending has declined. Even though it is on a higher level, it is being cut at an even more alarming rate with its fate set to go below our miserable level by 2017.

I have pointed this out before. Sometimes I get frustrated, and point this out harshly, because some pride themselves on denying this established data to support whatever a politician in their party says or does. I don’t know why. Denying reality is not going to give resources to people who need them. There is a reason my last diary has been cited by the reality based Post Keynesian MMT community, in which I am truly grateful for and humbled by; it is the truth.

The real economy of jobs and wages continues to go nowhere thanks to the lack of deficit spending and an illogical debate in DC about how much austerity we need to appease the invisible bond vigilantes and confidence fairies. It is neoliberal deficit terrorist economic insanity based on lies. And on that note, it is my pleasure to republish a piece by someone in the reality based economic community whom I can now proudly say is a friend of mine, Post Keynesian MMT economist John T. Harvey. He, once again, brings clarity to these matters in a way that only he can.