Tuesday, December 27, 2011
"So, if I believed what the neo-liberals are arguing, we [Germany] would have to be bankrupt, but apparently this is not the case. Despite high wages... despite our possibility to influence companies, the economy is working well in Germany."
"Using an original data set of almost two thousand survey questions on proposed [U.S. government] policy changes between 1981 and 2002, I find a moderately strong relationship between what the public wants and what the government does, albeit with a strong bias toward the status quo. But I also find that when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of poor or middle-income Americans. The vast discrepancy I find in government responsiveness to citizens with different incomes stands in stark contrast to the ideal of political equality that Americans hold dear. Although perfect political equality is an unrealistic goal, representational biases of this magnitude call into question the very democratic character of our society."
"There has never been a democratic society in which citizens' influence over government policy was unrelated to their financial resources. In this sense, the difference between democracy and plutocracy is one of degree. But by this same token, a government that is democratic in form but is in practice only responsive to its most affluent citizens is a democracy in name only."Most middle-income Americans think that public officials do not care much about the preferences of 'people like me.' Sadly, the results presented above suggest they may be right. Whether or not elected officials and other decision makers 'care' about middle-class Americans, influence over actual policy outcomes appears to be reserved almost exclusively for those at the top of the income distribution."
Thursday, December 15, 2011
Wednesday, December 14, 2011
Data from the National Assessment of Educational Progress show that more than 40 percent of the variation in average reading scores and 46 percent of the variation in average math scores across states is associated with variation in child poverty rates.
Sunday, December 11, 2011
Cumulative facility totals, in billions
Source: Federal Reserve
|Facility||Total||Percent of total|
|Term Auction Facility||$3,818.41||12.89%|
|Central Bank Liquidity Swaps||10,057.4(1.96)||33.96|
|Single Tranche Open Market Operation||855||2.89|
|Terms Securities Lending Facility and Term Options Program||2,005.7||6.77|
|Bear Stearns Bridge Loan||12.9||0.04|
|Maiden Lane I||28.82(12.98)||0.10|
|Primary Dealer Credit Facility||8,950.99||30.22|
|Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility||217.45||0.73|
|Commercial Paper Funding Facility||737.07||2.49|
|Term Asset-Backed Securities Loan Facility||71.09(.794)||0.24|
|Agency Mortgage-Backed Security Purchase Program||1,850.14(849.26)||6.25|
|AIG Revolving Credit Facility||140.316||0.47|
|AIG Securities Borrowing Facility||802.316||2.71|
|Maiden Lane II||19.5(9.33)||0.07|
|Maiden Lane III||24.3(18.15)||0.08|
BERNANKE'S OBFUSCATION CONTINUES: THE FED'S $29 TRILLION BAIL-OUT OF WALL STREET
By L. Randall Wray
December 9, 2011 | Economonitor
Monday, December 5, 2011
Sunday, December 4, 2011
Friday, December 2, 2011
American Christians are more likely than their Western European counterparts to think of themselves first in terms of their religion rather than their nationality; 46 percent of Christians in the U.S. see themselves primarily as Christians and the same number consider themselves Americans first. In contrast, majorities of Christians in France (90 percent), Germany (70 percent), Britain (63 percent) and Spain (53 percent) identify primarily with their nationality rather than their religion. Among Christians in the U.S., white evangelicals are especially inclined to identify first with their faith; 70 percent in this group see themselves first as Christians rather than as Americans, while 22 percent say they are primarily American.
"'I think to the right-wing, Obama's rise to power was a little too, in a weird way, too traditional,' Robin said. 'He did all the right things. He worked hard, he studied hard, he went to the right schools. And he kind of did the march through the institutions. And I know there are some conservatives who credit that to affirmative action, and all the rest of it. But I think there's actually a deeper suspicion of it, which is that he's actually mimicking too much the ways of power.'"This may help to explain the persistence of exotic paranoid fantasies about Obama on the right—birtherism, claims that he's a secret Muslim, a socialist, a terrorist, some sort of 'sleeper,' etc. The more Obama conforms to traditional prescriptions, the more they suspect him, seeking for the 'real truth', the 'real birth certificate', and so on."'Someone like Cain is actually more appealing to them because he's outside of—he doesn't have a traditional path to power. He's a self-made man.' Robin explained. 'He comes up through the marketplace, which is the only thing—the marketplace and the battlefield—is the only places that they really trust as being the sorting mechanisms of greatness.'"
Thursday, December 1, 2011
Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn't paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don't worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.
Yet this is exactly what the major American banks have done to the public. During the deepest, darkest period of the financial cataclysm, the CEOs of major banks maintained in statements to the public, to the market at large, and to their own shareholders that the banks were in good financial shape, didn't want to take TARP funds, and that the regulatory framework governing our banking system should not be altered. Trust us, they said. Yet, unknown to the public and the Congress, these same banks had been borrowing massive amounts from the government to remain afloat. The total numbers are staggering: $7.7 trillion of credit—one-half of the GDP of the entire nation. $460 billion was lent to J.P. Morgan, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley alone—without anybody other than a few select officials at the Fed and the Treasury knowing. This was perhaps the single most massive allocation of capital from public to private hands in our history, and nobody was told. This was not TARP: This was secret Fed lending. And although it has since been repaid, it is clear why the banks didn't want us to know about it: They didn't want to admit the magnitude of their financial distress.
The banks' claims of financial stability and solvency appear at a minimum to have been misleading—and may have been worse. Misleading statements and deception of this sort would ordinarily put a small-market player or borrower on the wrong end of a criminal investigation.
So where are the inquiries into the false statements made by the bank CEOs? And where are the inquiries about the Fed and Treasury officials who stood by silently as bank representatives made claims that were false, misleading, or worse?
Only now, because of superb analysis done by Bloomberg reporters—who litigated against the Fed and the banks for years to get the information—are we getting a full picture of the Fed and Treasury lending. The reporters also calculated that recipient banks and other borrowers benefited by approximately $13 billion simply by taking advantage of the "spread" between their cost of capital in these almost interest-free loans and their ability to lend the capital.
In addition to the secrecy, what is appalling is that these loans were made with no strings attached, no conditions, and no negotiation to achieve any broader public purpose. Even if one accepts the notion that the stability of the financial system could not be sacrificed, those who dispensed trillions of dollars to private parties made no apparent effort to impose even minimal obligations to condition the loans on the structural reforms needed to prevent another crisis, made no effort to require that those responsible for creating the crisis be relieved of their jobs, took zero steps towards the genuine mortgage-reform that is so necessary to begin a process of economic renewal. The dollars lent were simply a free bridge loan so the banks could push onto others the responsibility for the banks' own risk-taking.
If ever there was an event to justify the darkest, most conspiratorial view held by many that the alliance of big money on Wall Street and big government produces nothing but secret deals that profit insiders—this is it.
So what to do? The revelations of the secret loan program may provide the opportunity for Occupy Wall Street to suggest a few concrete steps that would be difficult to oppose.
First: Demand a hearing where the bank executives have to answer questions—under oath—about the actual negotiations, or lack thereof, that led to these loans; about the actual condition of each of the borrowing banks and whether that condition differed from the public statements made by the banks at the time.
Second: Require the recipient banks to use this previously undisclosed gift—the profit they made by investing this almost interest-free money—to write down the value of mortgages of those who are underwater. The loans to the banks were meant to solve a short-term liquidity problem, not be a source of profits to fund bonuses. Take back the profits and put them to a public use.
Third: Require the government officials responsible for authorizing these loans to explain why there was no effort made to condition these loans on changes in policy that would protect the public going forward.
Fourth: Ask congress to examine every filing and statement made to Congress by the banks about their financial condition and their indebtedness to see if any misrepresentations were made in an effort to hide these trillions of dollars of loans. Misleading Congress can be a felony, and willful deception of the Congress to hide the magnitude of the public bailouts should not go unprosecuted.
Finally: Demand that politicians return all contributions made by the institutions that got hidden loans. Pressure the politicians who continue to feed from the trough of Wall Street, even as they know all too well how the banks and others have gamed the system and the public.
"Any sort of self-sustaining [housing sector] recovery, at this point, appears unfathomable."
The U.S. economy won't recover until housing recovers; and housing won't recover until the U.S. economy recovers. It's a perfect Catch-22!
So when's the last time you heard a single national-level politician offer an idea how to address this, the #1 problem our economy is facing right now? If they were waiting for the Fed's low interest rates to save us, they should have given up a year ago.
You know, I could almost respect a mean but frank right-winger who said, "Screw homeowners, banks and markets, let this foreclosure backlog work itself out," who would then be honest that this process could take years, maybe a decade, and in the meantime the U.S. economy would drag and unemployment would be high, no matter what else happened. But where is such an honest ideologue these days? No, instead the free-marketers and tea-party types want to blame our poor economy on excess federal regulation, Obamacare (which has yet to really take effect), and not enough oil drilling and coal mining. And nobody -- not the MSM or the Democrats -- are calling them on it.
The ones who haven't gone mute have gone insane!
By Agustino Fontevecchia
November 29, 2011 | Forbes
I'm not sure you old tea-party types sitting at home in the 'burbs watching FOX and listening to ClearChannel really understand the sentiments driving the OWS protests. If you think this is about getting out the vote for Dems in 2012, re-living the hippy '60s, union funding, or George Soros's diabolical organizing, you're just not getting it. So here you go:
Of course, the sense of possibility that progressives might win was what fueled the election of Obama. And their frustration is what has created the context for OWS—and raises the specter that it might alter the landscape the president must traverse next year in dramatic and unpredictable ways.
"Obama didn't build a movement, he built an electoral machine," says Marom. "If he had built a movement, he would not be where he is right now. But the fact that he was elected, that so many people came out in the streets for him, that people cried when he won, was an expression of the fact that they wanted what they thought he was, which is an alternative. He wasn't it. He can't deliver it. This political system can't deliver it. This economy can't deliver it. But there are millions of people who genuinely want it. That's amazing and inspiring to people like us, who are just, like, 'Okay. This is for real.' "
As an avowed liberal-progressive, I'm still not sure I like OWS, because I'm not sure all their energy will come to anything; and meanwhile there are real winnable battles being fought, and the stakes are high. There are big elections coming up, and Republicans and faux Democrats are vulnerable. But votes and elections just aren't what OWS is about. That's their prerogative. I just hope they know what they're doing.
In 2008, Barack Obama lit a fire among young activists. Next year, Occupy Wall Street could consume him.
By John Heilemann
November 27, 2011 | New York Magazine