Economy

By David Bacon, New America Media

OAKLAND, Calif. -- Twelve unions met in Washington, D.C., last week, and announced they're considering rejoining the two labor federations, the American Federation of Labor/Congress of Industrial Organizations (AFL-CIO) and Change to Win (CTW). The two had split apart five years ago.

The initiative came from the incoming Obama administration, which told union leaders it didn't relish the idea of dealing with competing union agendas.

Many progressive labor activists greeted the idea with a sigh of relief. "Dividing the labor movement was never a good idea to begin with," says Bill Fletcher, former education director for the AFL-CIO and now director of field services for the American Federation of Government Employees.

House Democrats Introduce Legislation To Expand Health Care Coverage to Millions of Children

WASHINGTON, DC —Today House Democratic leaders introduced legislation to expand the State Children’s Health Insurance Program, which provides health insurance currently for more than 7 million children. This legislation will protect coverage for those children and expand it to include an additional 4 million children who would otherwise be uninsured.

“As our nation moves deeper into a recession, millions of American families are joining the ranks of the uninsured,” said Energy and Commerce Health Subcommittee Chairman Pallone. “For the last two years, President Bush blocked our efforts to strengthen SCHIP, but change is coming to Washington. This week, the House should once again show its commitment to ensuring more Americans have access to affordable and quality health care by passing legislation that will reach 11 million American children.”

REASON 1: Treasury Says It Doesn't Need the Money

REASON 2: "New" Conditions Are Filled With Loopholes & Omissions

REASON 3: Congress Still Abdicating Its Oversight Responsibilities

REASON 4: Nobody Has Explained Why This Is the Best Way to Spend $350 Billion

By David Sirota

By CBS News

WASHINGTON, Jan. 12, 2009(CBS) When Congress passed the $700 billion dollar bailout, the whole idea was to buy failed mortgage assets.

But once the bill became law on October 3, Henry Paulson's Treasury Department moved quickly on an entirely different front: Give bailout money to select banks to help them buy competitors. It was largely under the public radar, with only anonymous government officials acknowledging the strategy, CBS News investigative correspondent Sharyl Attkisson reports.

During the hearing on Nov. 13, Sen. Chris Dodd, D-Conn., called it "confounding to me."

Rep. Dennis Kucinich, D-Ohio, said it "breaks with congressional intent."

But CBS News has learned the banking industry was clued-in from the start.

Economy made few gains in Bush years
Eight-year period is weakest in decades
By Neil Irwin and Dan Eggen | Washington Post

President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data, and economists across the ideological spectrum increasingly view his two terms as a time of little progress on the nation's thorniest fiscal challenges.

The number of jobs in the nation increased by about 2 percent during Bush's tenure, the most tepid growth over any eight-year span since data collection began seven decades ago. Gross domestic product, a broad measure of economic output, grew at the slowest pace for a period of that length since the Truman administration. And Americans' incomes grew more slowly than in any presidency since the 1960s, other than that of Bush's father.

The $10 trillion hangover:
Paying the price for eight years of Bush
By Joseph E. Stiglitz and Linda J. Bilmes | Harper's Magazine

In a new article in Harper’s Magazine, Linda Bilmes and Joseph Stiglitz estimate that the cost of undoing the Bush administration’s economic choices, from the wars in Iraq and Afghanistan to the collapse of the financial system, soaring debt, and new commitments to interest payments and Medicare, all add up to over $10 trillion.

Senate Allies Fault Obama on Stimulus
By PETER BAKER and DAVID M. HERSZENHORN, NY Times

WASHINGTON — President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.

Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.

Just hours earlier, Mr. Obama called for speedy passage of the stimulus measure, warning that the recession “could linger for years” if Congress did not pass his plan within weeks.

U.S. jobless rate hits 7.2%, a 16-year high
By Louis Uchitelle | IHT.com

With the recession in full swing, U.S. employers shed 524,000 jobs in December, the government reported Friday, and a rapidly deteriorating economy promised more significant losses in the months ahead. December's job losses brought the total for 2008 to 2.6 million, spanning a recession that started 12 months ago.

The unemployment rate jumped to 7.2 percent in December from 6.8 percent in November and 5 percent last April, when the recession was four months old and just beginning to bite. More than 11 million Americans are now unemployed, and their growing ranks seem likely to put pressure on President-elect Barack Obama and Congress to act quickly on a stimulus package that mixes tax cuts and public spending.

Cheney: CIA Did Nothing Illegal in Interrogations
Cheney says he has no reason to believe CIA did anything illegal in harsh interrogations
By Deb Riechmann | ABCNews.com

Vice President Dick Cheney said Thursday that he sees no reason for President George W. Bush to pre-emptively pardon anyone at the CIA involved in harsh interrogations of suspected terrorists. "I don't have any reason to believe that anybody in the agency did anything illegal," he said.

In an interview with The Associated Press, Cheney also said that Bush has no need to apologize for not foreseeing the economic crisis.

"I don't think he needs to apologize. I think what he needed to do is take bold, aggressive action and he has," Cheney said. "I don't think anybody saw it coming."

By Dave Lindorff

The real cost of the Bush Administration’s trillion-dollar bailout of Wall Street is becoming painfully apparent as the incoming Obama administration attempts desperately to make a case for its own $800-billion economic stimulus package, while warning about “trillion dollar deficits as far as the eye can see.”

On its own merits, all other considerations aside, with the economy slipping into a sinkhole, President-elect Barack Obama’s call for $800 million in stimulus spending should be a slam dunk for Congress. The problem is, Congress already caved in a hurry and approved nearly that same amount--$700 billion—in a matter of days when Bush’s Treasury Secretary Hank Paulson and his Federal Reserve Board Chair Ben Bernanke said they needed the money to prevent a collapse of the financial industry, as the nation’s biggest banks, investment banks and insurance companies teetered on the brink of insolvency last fall.

Linda Bilmes Interview: The $10 Trillion Hangover - Paying the Price for Eight Years of Bush
Amy Goodman | Democracy NOW! | Transcript from Veterans for Common Sense

Prof. Linda Bilmes: "So, in another words, we have amassed more debt over the past eight years than we have under all the previous forty-two presidents combined."

~Chip's Quip: "Hell of a job, Bush! How did our 'first MBA President' work out for us?" Remember when the Republicans were touting that as a presidential credential?

In a new article in Harper’s Magazine, Linda Bilmes and Joseph Stiglitz estimate that the cost of undoing the Bush administration’s economic choices, from the wars in Iraq and Afghanistan to the collapse of the financial system, soaring debt, and new commitments to interest payments and Medicare, all add up to over $10 trillion. Interview Transcript:

By Katrina vanden Heuvel, The Nation

Poverty is on the rise, record numbers of people are relying on food stamps and we've seen no relief for the foreclosure crisis. There are increasing rates of child abuse and domestic violence linked to this recession. State governments don't have financial resources to cope at the exact moment when those resources are most needed. Nineteen states and the District of Columbia have lowered Medicaid payments or eliminated people from eligibility. The senior economist of the International Monetary Fund recently warned of another Great Depression

We don't need a stimulus, we need a recovery. And that means investing $1 trillion over the next two years.

From NY Times

The first and biggest test of Mr. Obama’s commitment to labor, and to Ms. Solis, will be his decision on whether or not to push the Employee Free Choice Act in 2009. Corporate America is determined to derail the bill, which would make it easier than it has been for workers to form unions by requiring that employers recognize a union if a majority of employees at a workplace sign cards indicating they wish to organize.

Ms. Solis voted for the bill when it passed the House in 2007. Senate Republicans prevented the bill from coming to a vote that same year. Mr. Obama voted in favor of bringing the bill to the Senate floor and supported it during the campaign.

The measure is vital legislation and should not be postponed.

The Global Economic Crisis: Bad and Worsening
by Stephen Lendman

In a new article, economics professor Richard Wolff explains the current crisis in Marxian terms. It "emerged from the workings of the capitalist class structure. Capitalism's history displays repeated boom-bust cycles punctuated by bubbles. They range unpredictably from local, shallow and short to global, deep and long." Clearly we're now in one of the latter and potentially the worst ever.

Wolff states that recurring crises and chronic instability come with capitalism, and only "social change to a non-capitalist class structure" will bring relief and stability. He explains how we got here:

Excess Debt and Deflation = Depression
by Stephen Lendman

Irving Fisher (1867 - 1947) was perhaps the most noted economist of his day. The Concise Encyclopedia of Economics calls him "one of America's greatest mathematical economists and one of" its clearest writers. He earned special acclaim for his work on monetary and statistical theory, policy, index numbers, econometrics, and the distinction between real and nominal interest rates.

He's also remembered for having made one of the worst and most ill-timed ever stock market calls that cost him his reputation and millions in the subsequent crash - on October 17, 1929 (a week before Black Thursday) when he said "stock prices had reached what looks like a permanently high plateau."

by Linda Milazzo

For years since the United States invaded Iraq, I've witnessed countless photo and video images of innocent civilians - men, women, teens and children - being rudely and aggressively threatened by hired uniformed militants (mostly men), wielding guns. I've seen these images from Iraq, Afghanistan, Somalia, Haiti, Palestine, and more. Whether they be armed American military threatening Iraqis, armed Israeli soldiers threatening Palestinians, or armed Ethiopian troops threatening Somalis, the images have always disturbed me. There's an inherent injustice to such blatant imbalance of power. An injustice I suffered recently myself.

The oddity here is that unlike those less fortunate innocents in war zones who faced the guns of hired aggressors, I was not in a war zone when I faced mine. I wasn't even in a high crime zone. I was in a gentle middle class suburb, where my aggressor, an armed Brinks, Inc. security guard, was in full combat-mode performing his non war-zone duty. My aggressor more typified the machismo of a Blackwater guard than the demeanor of community-minded Brinks, when he flailed his loaded gun at me, as though he'd done it often before. My armed Brinks aggressor was not merely disrespectful. He was downright hostile and dangerous. He treated me as his enemy and freely showed me his force.

Here's how it happened:

The Federal Reserve Abolition Act
by Stephen Lendman

On June 15, 2007, Ron Paul introduced HR 2755: Federal Reserve Abolition Act. There were no co-sponsors, no further action was taken, and the legislation was referred to the House Committee on Financial Services and effectively pigeonholed and ignored.

It's a bold and needed measure to "abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks, to repeal the Federal Reserve Act, and for other purposes."

The bill provides for management of employees, assets and liabilities of the Board during a dissolution period, and more as follows:

• it designates the Director of the Office of Management and Budget to liquidate Fed assets in an orderly and expeditious manner;
• transfer them to the General Fund of the Treasury after satisfying all claims against the Board and any Federal reserve bank;
  

TARP This: Paulson's Bailout Plan Riddled With Deception
How a Program To Save The Economy Ended Up Enriching Big Banks
by Danny Schechter | CommonDreams.org

Talk about crazy making. How do we believe anything Hank Paulson says?

First, he needed $700 Billion, and fast, to buy up troubled assets or the skies would fall and we would be pressed to impose martial law. He found an appropriate acronym, TARP, to manage the money with a skeletal staff of 28 headed up by one of his former protégés at Goldman Sachs.

So Far, So Good,

But then he had himself a rethink, realizing that no one has a clue about how to price troubled assets considered practically worthless. So he had to a make a shift, "in the light of new facts," even though Congress never authorized the shift.

International Forecaster December 2008
By Bob Chapman | The International Forecaster

Congressional miscreants just turned down a measly $15 billion bailout for the automakers, but apparently had no problem approving $700 billion for the big bankers, albeit that the approval required a second try. Apparently, the automakers lacked the clout to threaten martial law, did not have a Goldman Sachs stand-in like Hanky Panky, our "beloved" Treasury Secretary, to champion their cause, and could not order an orchestrated PPT takedown of the Dow by 777 points. The automakers had to come up with a plan to show that the $15 billion bailout would make their continuance as an ongoing business concern viable, while Hanky Panky was given carte blanche, no questions asked, over the first $350 billion of the TARP (Troubled Asset Relief Program, a/k/a the Paulson Ponzi Plunder Plan) money, after lying to Congress about what the funds would be used for in the first place. Apparently, the gravitational attraction of the super-massive black hole of the banking industry losses was strong enough to attract and suck in taxpayer funds, while the miniature black hole of the auto industry could not apply the necessary "sucking" power for this purpose.

AP Study Finds $1.6B Went to Bailed-out Bank Execs
By Frank Bass and Rita Beamish | Yahoo!News.com

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

Congress Ignored Critical Bailout Oversight | AmericanNewsProject.com

Tomgram: Ira Chernus, What the President-Elect Should Be Reading | TomDispatch.com

Bailout Payout Tops $8 Trillion
By Jeanne Cummings | Yahoo!News.com

According to Bianco Research President James Bianco, who crunched these numbers, that amounts to more government aid and assistance than nine other historic bailouts and big government outlays combined....Asked just how much the taxpayers are on the hook for, Bianco said: “I just say you should use the number infinity, because nobody understands these numbers, and I would include the Treasury secretary and chairman of the Fed in that group.”

As the holiday season commences, it’s worth taking stock of the last gift that President George W. Bush and the 110th Congress have left for U.S. taxpayers.

America Can't Handle the Truth; But it's Coming Anyway
by Leonce Gaiter | OpEdNews.com

Unemployment benefit payouts hit a 26-year high. Foreclosures up 30% from a year ago. Layoffs abound. 43 states face budget deficits, forcing them to cut jobs, programs, and funds for education and social services.

A major story on CNN.com is, "'Mad Men' star's hair is "-bane of my existence.'"- The Fox News front page promises Glenn Beck on the "Washington State Christmas Scandal."-

Economists fear deflation, and depression. Two of the Big Three automakers may not survive through the end of the year.

A BUZZFLASH NEWS ALERT

When BuzzFlash first started in May of 2000, there were very few progressives tearing up the Internet. Among the relatively small group were Michael "Symbolman" Stinson and his wife Julie Sigwart, who founded TakeBacktheMedia.com. They also invested tens of thousands of dollars in taking on the Bush Administration through video projects and the Internet, even though they are of limited means.

Eventually, they decided to move to Hawaii and raise their young son, Conrad, there. They bought a modest home, but personal circumstances and limited work opportunities have just led to their house being auctioned away this past weekend.

BuzzFlash has used the skilled IT services of Julie off and on over the years and we feel that she and Michael are members of our extended BuzzFlash family, as they are on Democratic Underground. Their story is just one of the all too many foreclosures that appear abstract, until it happens to someone you know.

By Dave Lindorff

A brief conversation I had earlier this week with a car dealership executive while standing in a post office line demonstrated simply both why the bank deregulation and consolidation process of the past two decades has been a screw job for ordinary people, and why the Washington bailout has been both a taxpayer rip-off and a failure (if it was even intended to work!).

I was chatting with the guy standing behind me who works at one of the 14 dealerships in a Philadelphia-area regional family-owned chain of GM dealerships called Bergey’s. Noting that a number of big dealers like Knopf (a Chrysler Dealer) and McGarrity’s (Ford) had been closing, I asked this Bergey’s manager if the problem was that the banks had frozen lending, making it hard for people to buy new cars.

By ANN SANNER, AP

CHICAGO (AP) — President-elect Barack Obama said Saturday that he wants to revive the economy and create jobs by upgrading roads, schools and energy efficiency in a public-works program whose scale has been unseen since construction of the interstate highway system in the 1950s.

He offered no price estimate for the grand plan, how the money might be divided or the effect on the country's financial health at a time of burgeoning deficits.

The ideas were outlined in the weekly radio address the day after the government reported that employers cut 533,000 jobs in November, the most in 34 years. They are part of a vision for a massive economy recovery plan Obama wants Congress to pass and have waiting on his desk when he takes office Jan. 20.