Tag: Chris Hayes

Austerity Is Economic Suicide

Cross posted from The Stars Hollow Gazette

The economic crisis in Europe and the austerity response to it which has spread from Greece to other countries in Europe has dominated the news now for weeks. This past weekend the leaders of the G-8 met at Camp David where it was the main topic for discussion. While President Obama’s statement that encourages stimulus and growth as solutions to the EU problem, he did not discount austerity as one of the driving policies that has extended the downturn and caused social upheaval in Greece and now Spain. The reporting in the traditional mainstream media has been particularly lacking ion balanced analysis and, in some cases, some pretty sloppy and biased reporting.

William K. Black, an associate professor of economics and law at the University of Missouri-Kansas City, former litigation director for the Federal Home Loan Bank Board and a white-collar criminologist, takes reporters at the New York Times task for their profound ignorance on covering Europe’s financial, social, and political crises. He explains why they are so wrong:

Economists have known for roughly 75 years that adopting austerity in response to recession or depression will make the economic crisis grow and last far longer.  Austerity is to economics as bleeding was to medicine. [..]

The NYT article focuses on Alexis Tsipras, the Greek political leader whose party rose to prominence by promising to reject the loan-for-austerity program that the disgraced former Greek government agreed to at Berlin’s diktat. The article’s theme is that Tsipras is endangering all of Europe by demanding an end to austerity being imposed on Greece.  The reporters write, as if it were undisputed fact, that Tsipras has started “a high-stakes game of chicken with Europe’s leaders.”  But that reverses the facts.

The game that Berlin designed required the Greek to agree (1) to drive their economy off a cliff into a deepening Great Depression through increased austerity, (2) to force an enormous reduction in working class wages, (3) to sell Greek islands to private parties, and (4) to give up other aspects of sovereignty so that hostile, foreign, and private entities such as the IMF and the ECB could monitor its governmental actions.  The Greeks are now refusing to commit economic, political, and social suicide.  The Germans are demanding that they drive off the cliff because “a deal is a deal.”

If Greece were to drive off the cliff by adopting greater austerity it would likely destroy the EU.  Austerity would force Greece into a deepening depression, eventually lead to a default on Greek sovereign debt, and tear Greece apart.  Austerity has already generated a substantial neo-Nazi party in Greece.  Few Americans recall the Greek civil war between the right and the left that began in World War II and continued for several years after the war or the post-war coup.  Greeks recall the civil war and the coup and fear their resumption.  Proponents of the Berlin Consensus already have blood on their hands because of the suicides engendered by mass unemployment, small business failures, and hopelessness.  If the Berlin Consensus sparks a civil war or coup it could be fatal to the EU.

The EU crisis was also the topic of a heady discussion on this Sunday’s Up with Chris Hayes. Prof. Black was joined on the “Uppers” panel by Betsey Stevenson, former chief economist for the Obama Labor Department, Karl Smith, assistant professor of economics and government at the University of North Carolina at Chapel Hill; and MSNBC policy analyst Ezra Klein.

Eurozone in fragile balance

Mr Hayes’ assessment of the political situation in Greece was challenged by a commenter at his blog. Carol P Christ wrote with regards to the political and social responses to the crisis:

Since you are a member of the Progressive Left, you might reconsider calling Syriza the ‘far” Left in comparison to ‘far’ right Golden Dawn. There is no comparison between the 2. Syriza is a coaliton of parties to the left of centrist PASOk and to the “right” of KKE the Communist Party. You might be voting for them if you were in Greece, but you surely would NOT be voting for Golden Dawn. There is NO “comparison” between the 2. Continuing to compare the 2 parties makes it seem that all Greeks are irrational. There is nothing irrational about voting for Syriza. [..]

The “austerity” programs of the EU and banking systems have already destroyed our economy. To blame immigrants as Golden Dawn does is illogical. To ask voters to reject the terms of the second austerity package which is leading to massive unemployment and daily failures of small businesses is by no means irrational.

The Green Party is also against the austerity packages. And we are not “irrational” either.

The dualistic thinking of the west (ironically a legacy of Plato) leads to the demonization of the “other” as irrational. Unfortunately Greece has been portrayed as the “irrational” other within Europe for some time now.

Greece does need to change, but punishing the poor and middle classes is not a “rational” policy. [..]

Let me add that the European union and the Euro should not be confused. The Euro has only been in existence for 11 years. England with one of the largest economies in Europe is not a member of the Euro, nor is Sweden. They are still part of Europe and the European Union.

In Greece the Euro led to a massive rise in prices (a cup of coffee from $1 to $3-5, etc.) without a concomitant rise in wages. For example a tour bus driver makes E700 a month and a radiologist E1400, wages that are near poverty level in the US. depending on family size. Yet the cost of living is as high or higher than in the US, thanks to the price rises that the Euro brought. Gasoline is over $10 a gallon. Sales tax is 23%.

The European Union is a good thing, but the Euro was driven more by market forces and the desire to sell goods freely in Europe, than by a concern for world peace, the environmental protection, or any of the other good things the European Union is working on.

The Euro has not been a good thing for Greece, in my opinion.

(I have taken the liberty of posting most of Ms. Christ’s comments because I think they go straight to the heart of the misrepresentation that is taking place in the traditional news media.)

In another article at the New Economic Perspective, Prof. Black reports that the former head of the European Central Bank (ECB), Jean-Claude Trichet, thinks that by giving European politicians the power to declare a sovereign state bankrupt and take over its fiscal policy it would salvage the euro. To quote Prof. Black, “austerians have decided that since democracy is the problem, imperialism is the answer.”

Nor are fixing the problems of the euro a solution for the austerians:

Trichet, however, says that answer is impossible:  “For the European Union, a fully fledged United States of Europe where nation states cede a large chunk of fiscal authority to the federal government appears politically unpalatable, Trichet said.”  Democracy remains the stumbling block, but Trichet has an answer to that problem – crush democracy.  He proposes that the EU:

   “[T]ake a country into receivership when its political leaders or its parliament cannot implement sound budgetary policies approved by the EU. The action would have democratic accountability if it were approved by the European Council of EU heads of states and the elected European Parliament, he said.”

Of course, the “sound budgetary policies” he means are the suicidal, and failed policies of trying to balance the budget during a Great Recession.  He does not understand even now that a nation in a severe recession cannot simply decide to run a budget surplus.  It can try to do so, by cutting spending or raising taxes, but those policies are likely to reduce already sharply inadequate public and private sector demand, which increases unemployment, increases demand for public services, and reduces government revenue – all factors likely to increase the budget deficit.  I am sure that the Greeks will consider the loss of their sovereignty at the hands of hostile foreign powers who openly sneer at the Greek people to represent the epitome of “democratic accountability.”

And what was the reaction of Berlin to Trichet’s policy to force suicidal austerity on the Greeks and bleed their economy while removing their sovereignty and right to democratic rule?  You know the answer.

As Prof Black so aptly noted that that austerity is “a policy where you’re handed a gun and told to shoot yourself. Eventually people say, ‘Now exactly why should I do that?’. [..]

Whether Greece is the good or the bad, the policy is stupid.”

The United States is not Greece. It has its own sovereign currency and a bond market which it controls. We do not need to follow the EU and shoot ourselves with austerity.

What We Now Know

Now We Know: ‘In politics, money cannot buy excitement’

Up host Chris Hayes outlines the prominent news stories of the week after Americans Elect’s third-party presidential candidate nomination process fell through despite the group’s $35 million budget.

Chris and his guests discussed a proposal created by Republican strategists, and commissioned by TD Ameritrade founder Joe Ricketts, which calls for revived attacks on President Obama’s relationship with Rev. Jeremiah Wright.

Also, Steve Coll, author of Private Empire: Exxon Mobil and American Power talked about corporate power, and Wisconsin State Senator Lena Taylor (@sentaylor) discussed the Wisconsin recall vote of Gov. Scott Walker. Plus, Chris’s Story of the Week focused on JP Morgan Chase’s reported $3 billion loss this quarter and the single “London Whale” trade that caused it.

Chris was also joined by Chrystia Freeland (@cafreeland), editor of Thomson Reuters Digital; Alexis Goldstein (@alexisgoldstein), Occupy Wall Street activist and former Wall Street information technologist; and Bhaskar Sunkara (@el_bhask), editor of Jacobin Magazine (@jacobinmag)

This is an Open Thread. Let us know what you now know.

Open Thread: What We Now Know

Now We Know: Sen. Brown’s daughter benefits from insurance extension

Up host Chris Hayes summarizes the week of news after Massachusetts Sen. Scott Brown was called out for including his 23-year-old daughter on his health insurance – a provision made possible through the “Affordable Care Act” that Brown nearly derailed.

Tell us what you have learned this week.

Open Thread

The Buffett Rule

Cross posted from The Stars Hollow Gazette

Income equality in the United States continues to widen between the 99% and the 1%. It was one of the main issues that Occupy Wall St. brought to the forefront of the conversation on the economy and the phony concern over the deficit. One of the big issues is tax inequality, the poor and middle class pay a greater percentage of their income to the government than do the top earners. President Obama and the Congressional Democrats have proposed a minimum tax of 30 percent to individuals making more than a million dollars a year, called the Buffet Rule, after billionaire Warren Buffet who thinks that it is unfair that he pays less in taxes than his secretary. Although it has been pointed out that revenue generated from the increase would only minimally help reduce the deficit, it is wildly popular with 67% of Americans in support of its passage. Unfortunately, it didn’t have the votes in the Senate to even get to the floor for a vote. Even if it did it would never see the light of day in the intransigent House. We mustn’t tax the job creators who haven’t created jobs in the US for over a decade. We must continue to allow millionaires, like Romney, to give their children millions as a gift tax free, thanks to a tax loophole on “carried interest,” presumably one of the loopholes that would have been closed:

When the Romney campaign disclosed in December that the couple’s five sons had a $100 million trust fund, I suspected that, in setting up the fund, the Romneys used a tax strategy that allows some very rich people to avoid paying gift taxes. But it was impossible to know if this was the case without seeing their tax returns going back years. [..]

Reuters emailed the Romney campaign spokeswoman to ask how much the Romneys paid in gift taxes on assets put into the sons’ trust over the last 17 years. The spokeswoman, citing Brad Malt, the Romney family tax lawyer, answered: none.

The idea that someone could pay zero gift taxes on contributions to a $100 million trust fund may surprise people who have heard arguments that the wealthy are overburdened by gift and estate taxes. But the Romneys’ gift-tax avoidance strategy is perfectly legal.

A good discussion on whether Obama’s ‘Buffett Rule’ would bridge tax divide was had on MSNBC’s Up with Chis Hayes with University of Pennsylvania Wharton professor Betsey Stevenson, Reuters columnist David Cay Johnston, former Rep. Tom Perriello, D-Va., and Demos Vice President Heather McGhee.

This bill had very little chance of passing and was in all reality merely a political gambit to make the Republicans look like they are out of touch with the average American voter. How well that will work this early in the campaign remains to be seen.

Carolyn Maloney Gets an Education on Financial Fraud

Cross Posted from The Stars Hollow Gazette

Anytime that Congress passes a bill with a cute acronym, you should be very suspicious. ~ Chris Hayes

Last week Congress passed the Jump Start Our Business Startups Act (pdf), the JOBS Act, which is set to be signed into law with much fanfare by President Obama despite the fact that it will in all probability create an explosion of financial fraud. The act rolls back many of the regulations that were passed under Sarbanes-Oxley in 2002. Professor of economics and law at the University of Missouri-Kansas City, Bill Black wrote an outstanding article for the New Economic Perspectives that was cross posted at naked capitalism, explaining with clarity how the jumpstart Obama’s Bucket Shops Act is just another in a long series of fraud-promoting legislation. He closed with this analysis:

We have trashed a regulatory system that was the envy of the world. It helped bring us prosperity, far greater economic stability, fewer and less severe recessions, and reduced income inequality. It made freer enterprise possible because the regulatory cops on the beat helped limit the Gresham’s dynamic in which bad ethics drives good ethics out of the marketplace. When frauds prosper honest businesses are among the victims. The three de’s have brought us recurrent, intensifying financial crises, the end of any material gains by the middle class, losses for the working class, the expansion of poverty and extreme inequality, and the domination of our political system by crony capitalism. Elite fraud and corruption are now common in America.

The entire article is a must read.

During a panel discussion on Up with Chris Hayes, Prof. Black and Alexis Goldstein of Occupy the SEC “educated” Democratic Representative Carolyn Maloney, who represents the the Upper East Side constituency of top Wall Street earners, on just how bad this bill is. As Yves Smith observes, “it is pretty hard to imagine that Carolyn Maloney would do anything that would seriously inconvenience her constituency”:

You need to watch the full segment to get the effect, but Maloney starts out by saying that the JOBS Act probably won’t create many jobs, but she was nevertheless getting complaints about how costly it was for “small” businesses to hire auditors (earth to base, if they are public, they would not qualify as “small” in most people’s book). Goldsmith devastates Maloney with her command of the bill, pointing out that it covers companies of up to $1 billion in revenues, that the tech companies its backers keep invoking have VC firms ready and willing to invest, and the new format well be used by PE firms flipping companies they had taken private back to public investors. By the end, Maloney is telling Goldsmith to send her suggestions for improved legislation and she’ll put it forward (I’ll believe her sincerity when I see action).

Yves is right, Alexis shreds Carolyn. Watch this segment, it is a thing of beauty.

Prof. Black also explains “stump & dump” scams and “cloud financing” that can cause devastating losses and won’t create any jobs.

Open Thread: What You Should Know

MSNBC’s Chris Hayes hosts Up with Chris on Saturday and Sunday mornings. Chris focuses on “politics including the day’s top headlines, newsmaker interviews, and panels of pundits, politicos and voices from outside the mainstream.” At the end of each show Chris and the panel guests share what they have learned and what we should know. Below is the segment from April 1.

Share with us what you think we should know. This is an Open Thread.

What You Need to Know

Cross posted from The Stars Hollow Gazette

The tragic murder of a 17 year old black walking home in the rain by a so-called neighborhood watchman who apparently chased him down and shot him because this young black man “looked suspicious” has dominated the news this past week. It has the media and the country enraged about the law in Florida that allowed the perpetrator to not just walk away, but walk away never having been questioned by the police about what occurred and walk away with the gun that killed an unarmed child. This man is still free, still unquestioned by authorities and still armed.

MSNBC’s Up with Chris dedicated its entire two hours to a discussion about the public call for justice, how these “Stand Your Ground” laws that allowed his assailant to walk were passed by state legislatures and the ramifications. The Up w/ Chris Hayes panel, The Atlantic‘s Ta-Nehisi Coates, The Nation‘s Liliana Segura, the Bernard Center’s Michelle Bernard, and former police officer Peter Moskos, discuss the case in detail and the national cause it has become.

The tragedy of Trayvon Martin

Gun lobby influence on ‘Stand Your Ground’

Lisa Graves, the executive director of the Center for Media and Democracy, joins the Up w/ Chris Hayes panelists to discuss “Stand Your Ground” and the nationwide gun lobby.

Now We Know: Increase of justified homicides in Florida

MSNBC host Chris Hayes and his panel share what they know from the week’s news, including reports that the number of justified homicides in Florida has increased since the state’s “Stand Your Ground” bill was signed into law.



     

Open Thread: What You Should Know

You Should Know: Lawmakers Who Can’t Say ‘Transvaginal’

In a rundown of the news stories “You Should Know”, Chris Hayes argues that the lawmakers who can’t bring themselves to say the word “transvaginal” out loud “shouldn’t be legislating vaginas at all.”

Story of the Year: Protests

Adapted from The Stars Hollow Gazette

The Emperor has no clothes and must be exposed.

Protests, uprisings, and massive mobilizations of international dissent.

Olbermann Removes the SMALL {Attention Spans} from “Small Business”

The main GOTP argument for keeping the Bush Tax Cuts in place for the Top 2% — pivots on how it will “hurt Small Businesses” if we don’t.

This simple slogan, fails to take into account one VERY SMALL stat.

[Mitch McConnell] says President Barack Obama’s plan to limit future tax breaks to couples earning less than $250,000 would subject 50 percent of small business income to a tax increase, stalling the job creation engine.

[…]

McConnell’s 50-%-of-income figure is based on a July 12 finding by the Joint Committee on Taxation, … that 1/2 of about $1 trillion of business income in 2011 will be reported on some 750,000 personal tax returns filed by people who pay the top marginal rates.

He calls those small businesses. Yet the report says the data “do not imply that all of the income is from entities that might be considered ‘small.’ ” Almost 20,000 of those businesses, for example, had receipts of more than $50 million, it says.

Would Ending Bush’s Tax Cuts Hurt Small Business?

Ryan J Donmoyer, BusinessWeek – 09/23/10

Behold the GOTP — Defenders of the $50 Million-aires!

Chris Hayes to Olbermann: ‘Our’ Gulf Oil gets sold on World Markets

This was a stunner.  

With all the hoopla about how America desperately needs to become “Energy Independent” — and SO the “urgent need” to Drill off OUR Shorelines — well it turns out, all that Drilling and Spilling, is just for Barrels of Oil, destined for resale on the World Markets!

Turns out — “Our” Gulf Oil is just another “fungible global commodity“!

Huh, what?  Fungy-what?   Does that mean it’s “more fun”?

No.  Fungible simply means something is “interchangeable”.  That One unit of something (like a barrel of Oil) is worth just as much as any other Unit of that same something.  One Ounce of Gold, is exchangeable with any other Ounce of Gold.

Or as Chris Hayes succinctly put it:

There’s NO barrels marked somewhere, “Foreign.”

Say What?  I thought we were risking our precious Ecosystems, to “free ourselves” from the need of Foreign Oil — to increase our “Domestic Reserves”?

If British Petroleum, can pump it and dump it, on the Global Marketplace, where one Barrel of Oil is identical to every other Barrel (assuming no disastrous spills of course) —

Then what the Hell is the Point?

Chris Hayes’ Speech At Sum of Change/Grow the Hope House Meeting

Yesterday, we were humbled when folks from the DC/MD/VA area packed into the living room of David Hart, founder of Grow the Hope, for a fundraiser to help us cover the annual Netroots Nation conference. We could not have been more thrilled with the level of energy in the room.

Our featured speaker, Chris Hayes, the DC Editor of The Nation, gave a rather fantastic speech that we wanted to share with you all right away:

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