Air Goes Of Out Stock Market

Evidently, investors do not think much of the "debt ceiling compromise," or its affects on global markets. So we have a the NY Times talking about fears of a "double dip recession," and even more joblessness. Gloom and helplessness prevail. A 500+ point drop in DJIA. The worst drop since fabled 2008. And just wait till tomorrow. Nice job, Brownie Congress.

The answer, the step that might turn around the economy might be found in stimulus. In spending money. But as I said before, how can you stimulate anything when you won't spend any new money AND when you insist on cutting spending that is already inadequate to fuel the recovery. Does anybody here understand macroeconomics at all? Doubtful.

Hey, Congress, how are all those jobs created by tax cuts working out for you? Calling what Congress has done "voodoo economics" understates the stupidity. How about "economic suicide?

Congress is on vacation. At least they won't be able to enact other measures to plunge the economy further into darkness until they get back. Thank heavens for small favors.

What idiots. I hope they enjoy their summer vacations.

Buddy Can You Spare A Dime?

I thought I had sworn off writing fulminating about politics and economics, and, in particular, what I see as Republican ploys to transfer even more wealth to America’s richest people from those who can least afford to give it up. Instead, I find myself again pointing out that we’re being fleeced. Yet again. We’re being plundered. We need to be creating jobs. Instead, we’re talking about balancing budgets and redistributing wealth to rich people who are doing very, very well, thank you, from people who can ill afford cuts. This is disgraceful. And maddening.

The Republican insistence that taxes cannot be increased on the richest people and/or on corporations means that only spending will be decreased. Not on wars. Not on corporate welfare. Not on the many other boondoggles Washington so loves (Ethanol anyone? Petroleum subsidies?). That, they say, would be unthinkable. They’re talking instead about cutting the already miserable, frayed, inadequate social net. The one that doesn’t have Universal Health Care. The one that doesn’t have long term unemployment benefits. The one that provides for Social Security, Medicare, Medicaid. The one that provides food support for families. And funds for children. Where does this end up? It ends up eventually in death: if you cannot pay for your own necessities, health care, food, heating, or housing, you die.

The context for this plundering of the poorest people is vital. Income inequality is now where it was in 1910. All of the gains of the past century have been wiped out. America’s income distribution looks like Paraguay’s. And now the Republicans want to distribute the remaining 10% of wealth (held by 90% of the population) to the 10% who already have 90% of the wealth. And the principled, stated reasons for this? All eyewash. The wealthy have the best government their money can buy, and their Astroturf T-party minions in Washington are going to keep their promises.

As if that weren’t enough, the Republicans continue to insist and the media repeat as if it were credible, that tax cuts will lead to a resurgence of employment, and that increases in taxes will lead to more unemployment.

Hah. What a joke. All the Bush tax cuts have brought the US are hoarding by the richest and interminable structural unemployment. AP reports that corporations are hoarding almost two trillion dollars and they have no intention of using those funds to hire:

Strong second-quarter earnings from McDonald's, General Electric and Caterpillar on Friday are just the latest proof that booming profits have allowed Corporate America to leave the Great Recession far behind.

But millions of ordinary Americans are stranded in a labor market that looks like it's still in recession. Unemployment is stuck at 9.2 percent, two years into what economists call a recovery. Job growth has been slow and wages stagnant.

"I've never seen labor markets this weak in 35 years of research," says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.

Right. Forgive, if you can, that “looks like” about the labor market still being in depression recession. The unemployed know quite well that their misery continues and that their benefits are gone or shortly expiring. They know too well that there has been no jobs recovery. The unemployed are still living the employment recession and suffering.

And why is there a disconnect between the reported, strong corporate profits and employment? It’s eye popping:

U.S. corporations are expanding overseas, not so much at home. … U.S.-based multinational companies have been focused overseas for years: In the 2000s, they added 2.4 million jobs in foreign countries and cut 2.9 million jobs in the United States, according to the Commerce Department.

Back in the U.S., companies are squeezing more productivity out of staffs thinned out by layoffs during Great Recession. They don't need to hire. And they don't need to be generous with pay raises; they know their employees have nowhere else to go.

Companies remain reluctant to spend the $1.9 trillion in cash they've accumulated, especially in the United States….

It’s not a secret. Corporations aren’t hiring. And won’t. And giving them more tax cuts to spur them to hire is actually just giving them more funds to hoard. Or to build plants overseas. Or distribute as profits to their shareholders.

You want jobs? You need a stimulus program. A big one. You need more deficit spending. And you need to build infrastructure. Nothing else is going to work. And none of this has anything to do with balancing the budget. The state governments’ attempts to balance their budgets by cutting has only increased unemployment. And stagnation. Cutting jobs is antithetical to job creation. Tax decreases to people who will not hire are antithetical to job creation. Only Government spending will spur growth and hiring. Are Democrats talking about a new stimulus program and the need for new jobs? Crickets.

What’s the debt ceiling got to do with this? Everything and nothing. It’s just the latest hostage in the Republicans’ relentless redistribution of income (and wealth) from me and you to the richest, who hired elected them to carry out this piracy. And amazingly, yet again, the Republicans’ threat to destroy things, this time the Full Faith and Credit of the United States, seems to be working. There won’t be a default. No. That would hurt the wealthy’s investments. It would mess up the stock markets. Hurting them would be unthinkable. What there will be instead, as usual, is an even further rending of the already threadbare safety net. And it will be yet another Victory for those who least need one. The victory might even be gift wrapped as Bipartisanship.

I am pessimistic. If there is anything good happening in Washington at the moment, I have no idea what it might be. I’m afraid that we’re getting ready to witness yet another Republican rip off. And I’m afraid that there is no proposal that addresses the US’s urgent need for job creation.

Out Of Touch

This is really funny.

A Letter To The Secretary Of The Treasury

Dear Sir:
This evening while I was reading the proposed "bailout bill," I realized that there was a terrible omission in the document. Specifically, you forgot to try to collect any funds for the bail out from the very people responsible for the mess. I'm not talking about the firms they've looted. I'm talking about the people who have taken money from the firms and made those funds their personal property. And, I see, you are going to require me and my family, who didn't participate at all in the financial feeding frenzy that led to the crash depression problem, to pick up the tab. And that the tab is a whopper.

If you look at my 1040's for the past decade, you'll see that I haven't participated at all in "investment banking" or derivatives or bundled mortgages or other shaky but previously, highly profitable, unregulated transactions. Unfortunately for me, it's obvious that the people you are bailing out did very, very well for themselves with their "investments" before the "crash", making huge, personal profits, buying themselves beach houses, and Rolexes, and Escalades, and having champagne and caviar dinners and traveling around the world and staying in 5-star hotels. Not to mention their off shore slush funds. But you don't even try to get these people to chip in and buy these worthless assets with their own money, with their own money from the profits they made selling and manipulating these very assets.

The legislation you've proposed allows these "investors" to keep all their ill gotten assets, the Grand Cayman bank accounts, the jewelry, the private airplanes. All of it. I don't see anything in the legislation that requires those who benefited to disgorge any of their assets or to pay any portion of their income, income it should be pointed out that was generated from manipulation of these worthless investments. I don't see anything in the legislation that requires them in the first instance personally to do anything to set matters right. No. What I see in the legislation is that instead of these rapacious looters, I and my family are supposed to pay for these paper assets while the Wall Street Masters of the Universe keep their houses, their cars, their second homes, and their wine cellars. You've got a lot of nerve to think that's acceptable to me and my family.

That's your plan. Really, I'm honored to be one of the philanthropists suckers you've selected to pick up the tab for such a lavish, such an extravagant party, one to which I was not invited, by the way, really I am. But I have to decline. No thanks. I don't think I or my family should have to contribute a single cent until you've re-couped as much as you can from the personal assets and income of those who are responsible for the current situation. I'm sure with your background, you know exactly who I'm talking about.

In a fair world (there's a laugh) the first thing that should happen is that the assets and income of those who screwed up would be seized so that they could make good on their debts. What was left after that might be a "bad debt" and would have to be carried by whoever was owed the money (which is not me). It's only in crazy world, the one we're in now, where they get to keep the Rolex and the Escalade and the beach house, and I have to pay the tab as if it were mine, as if they bounced a rubber check to me that they don't have to have funds to cover, so I get stuck with the loss.

I really must to decline your request that I pay for this party. I heard it was a lovely party while it lasted. I think those who partied should be first to pay the tab. It would be best if they did it with the funds they looted from the "banks" as their bonuses, pay, commissions, stock options, and salaries, if they had to sell their toys to pay back. After you try to collect that money, you can try me again about taking up the slack. I don't think I'll be any more interested then than I am now, but you never know.

Your most humble servant,