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By Dave Lindorff
Barack Obama’s first address to Congress provided Americans with yet another example of competent speechmaking, and I suppose, given that we’ve just endured eight painful years of oratorical farce, being able to listen to your president without wincing is something.
The problem is that the way forward proposed by the president as laid out in this address was almost always half-hearted, wrong-headed or doomed.
Obama declared at the outset of his address that the economic crisis was the major issue confronting the country, and while one could argue that this crisis is merely a symptom of much bigger issues, like the nearly completed deindustrialization of the nation, the death grip of militarism, and the growing political power of corporations, one could also concede that there is an urgent need to deal with the deepening recession.
By Steve Cobble, MilitaryBudgetCutsNow
Congressman Barney Frank yesterday called a meeting on Capitol Hill to discuss his proposal to cut 25% from the military budget. He specifically invited grassroots activists and organizations interested in a less expensive, saner, less warlike military budget to come meet with him, to get the ball rolling towards reform.
Frank pushed the need for organizations and coalitions interested in domestic social needs to join the military budget cuts fight--otherwise, he said, they would not have the money for their own needed projects. He also handed out his excellent Nation essay.
By Dave Lindorff
Free market aficionados, particularly in the media, have long been wont to tell us that the "market knows best." That was always the line when progressives (remember when there used to be progressives in government?) would come up with some do-good scheme like a public jobs program during the Johnson War on Poverty, or Medicare, or bigger subsidies for urban mass transit. If the stock market sank, they'd pronounce whatever program or bill it was as a bad idea, because "the market" (meaning investors), had nixed it by selling shares.
The same kind of analytical brilliance has been routinely ascribed by economic pundits to investors when it comes to business decisions--particularly mergers and acquisitions, or divestments and breakups. If Bank of America announces that it is going to buy the foundering Merrill Lynch and shares of B of A fall, then the merger is a bad idea. If the shares rise, it's a good idea. And so it goes.
Earlier this month, the Fed increased by fivefold the size of its Term Asset-Backed Securities Loan Facility, or TALF, to as much as $1 trillion. The program is designed to improve credit in markets backed by consumer-linked assets including credit cards, automobile and student loans, and small business loans. (Bolding mine.)
U.S. Federal Reserve Chairman Ben Bernanke said Tuesday that the recession should end this year and 2010 "will be a year of recovery," if actions taken by the government lead to some stabilization in financial markets.
But that's a mighty "if" given recent severe declines in equity markets to levels not seen in more than a decade despite repeated announcements of government bank and housing rescue plans.
By Steven Thomma, McClatchy Newspapers
WASHINGTON — President Obama will convene a White House meeting next week to address runaway health-care costs. On Monday he called it key to reining in federal spending as he tries to balance plans to spend the country out of a recession with shoring up its long-term fiscal health.
Obama announced his plans for the health-care meeting as he met at the White House with lawmakers, economists and union officials to discuss his promise to cut the federal budget deficit in half by the end of his first term while simultaneously addressing longer-term problems. The event was billed as a "fiscal responsibility summit."
As Obama tries to cut the nation's $1.4 trillion budget deficit, rising health-care costs and the government's rising stake in health coverage will prove a difficult obstacle to work around.
Economist Dean Baker on Book TV: "Plunder and Blunder"
Dean Baker gives a great 1-hr. dissection of our economic plight.
Mr. Baker discusses the growth and "predictable" collapse of the housing and stock market bubbles and is critical of both the Reagan and Clinton administrations. He details the mistakes of Alan Greenspan and Robert Rubin. He offers suggestions for preventing additional financial crises and advocates massive government spending to combat the recession.
to watch Dean Baker on Book TV, click here.
Dispatches from the Front Lines of Economic Crisis
by Stephen Lendman
The more they do, the worse it gets, and world headlines confirm it. Recent ones include:
- The New York Times, February 17: "After Manhattan's Office Boom, a Hard Fall;"
- Washington Post, February 17: "Obama signs $787 billion stimulus bill; Dow Jones industrial average drops nearly 300 points;"
Dow theorist, Richard Russell, called it "one of the damnedest closes I've ever seen," within one point of the November 20 low, and added: "I thought President Obama outlawed torture in the US. Wall Street is not listening."
The next day both the Dow and Transportation averages hit new bear market lows. For Dow theorists like Russell and others, it's confirmation of lower ones to come.
Obama's Fiscal Sideshow | By John Perry
Zbigniew Brzezinski, a former national security advisor, has warned that the US could witness riots if economy continues its downward spiral.
"There's going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!" said Brzezinski, President Jimmy Carter's national security advisor, in a recent interview with NBC.
"In 1907, when we had a massive banking crisis, when banks were beginning to collapse, there were going to be riots in the streets," he added.
At least 3.6 million jobs have been wiped out throughout the US since the recession began in December 2007. The jobless rate officially reached a 16-year high of 7.6% (11.6 million people) last month.
U.S. Secretary of State Hillary Clinton is back in Washington from her first official overseas trip - a four nation tour of Asia.
Before leaving Beijing, her final stop, Clinton urged China Sunday to keep buying U.S. debt and work with Washington to fix the global economic crisis.
She said Washington must incur more debt to China to boost the ailing U.S. economy and stimulate demand for Chinese products. She says it would not be in China's interest if the U.S. is unable to get its economy out of a recession.
China is the largest holder of U.S. Treasury bonds. Clinton says China's continued investment in U.S. Treasuries is a recognition that the two economies are tied together.
Chinese Foreign Minister Yang Jiechi told Clinton that both countries should boost economic policy coordination and reject protectionism in trade.
The world needs a "global New Deal" to haul it out of the economic crisis it faces, Prime Minister Gordon Brown of the United Kingdom said Sunday.
"We need a global New Deal -- a grand bargain between the countries and continents of this world -- so that the world economy can not only recover but... so the banking system can be based on... best principles," he said, referring to the 1930s American plan to fight the Great Depression.
Brown was speaking as the leaders of Europe's biggest economies met to try to forge a common position on the global financial crisis ahead of a major summit in London in April.
French President Nicolas Sarkozy said the world's response to the global financial meltdown had to be profound and long-lasting, not just tinkering around the edges.
Up to 120,000 protesters brought Dublin city centre to a standstill on Saturday over government austerity measures aimed at stabilising the once high-flying economy now wracked by recession.
The demonstration came a day after the global economic crisis led to another political casualty elsewhere in Europe, with Latvia's prime minister quitting as his country grapples with deepening recession.
Organised by the Irish Congress of Trade Unions (ICTU) and featuring teachers, police, civil servants and others, the Irish protest was the "first step in a rolling campaign of action," ICTU general secretary David Begg said.
Police put the number of protesters at up to 120,000.
Marchers are particularly opposed to a pension levy on some 350,000 public servants which is designed to save about 1.4 billion euros (1.8 billion dollars) this year.
According to IMPACT, Ireland's biggest public sector trade union, the levy will cost low to middle-income earners between 1,500 euros and 2,800 euros a year.
President Obama will hold a "fiscal responsibility summit" in Washington next Monday with the goal of reining in government spending. Watch out.
With our federal budget deficit heading toward $1.4 trillion this year, or nearly 10% of our overall economy, something must be done. Look out.
Obama adviser John Podesta says the summit is the first step in a process to help the public "understand how the financial balance sheet of the federal government comes back into order."
Translation: Middle class and poor folks are going to really get nailed.
According to the Washington Post Obama's team has invited big business, economists and a range of other "special interests" to the event which will feature five breakout sessions. Larry Summers (refer to Naomi Klein interview here) will lead the discussion on Social Security. Hold onto your hat.
Report: Nearly 75% of ex-Bush officials looking for jobs are unemployed
Stephen C. Webster | Raw Story
While the market for job-seekers in the United States might be sour, for most it isn't as impenetrable as it is for the nearly 3,000 former members of the Bush administration.
Between 70-75 percent who are looking for full-time work still haven't found new jobs, according to a Saturday report by the Wall St. Journal.
"That 'is much, much worse' than when Ronald Reagan, George H.W. Bush and Bill Clinton left the White House," Carlos M. Gutierrez, who served as Bush's commerce secretary, told the paper.
By Danny Schechter, AlterNet
At a time when we need hard-hitting investigations into our financial catastrophe, we are getting superficial reporting -- even on PBS.
A recent column on the legacy of disaster left by the Bush Administration brings to mind some of the history behind that legacy, for the truth is, Bush didn’t sink the country on his own. His stealth attacks on both the economy and the bill of rights were prepared by previous administrations, in particular the two terms of the Reagan Administration. This is made clear by several things I’ve read recently, in particular, Thom Hartmann’s 2006 book, Screwed: The Undeclared War Against the Middle Class, and Katherine Austin Fitts’ stunning account of her time as a mortgage banker and later a high official in HUD, “Dillon Read and the Aristocracy of Profits.” Both shed important light on the staggering economic crisis the United States now faces.
The Assn. of Community Organizations for Reform Now has launched a campaign encouraging people facing eviction to summon volunteers to their homes to resist orders to leave.
By Jessica Garrison, Los Angeles Times
A national community organizing group Thursday announced a campaign of civil disobedience designed to help families resist eviction and remain in their homes after foreclosure.
Activists with ACORN, the Assn. of Community Organizations for Reform Now, said they would encourage people facing eviction to use text messaging and cellphones to quickly summon volunteers to their homes. The entire group would resist orders to leave, forcing sheriff's deputies to arrest large numbers of people to complete the eviction -- and drawing attention to the evictees' plight in the process.
The HomeStaying campaign is being waged in Los Angeles and more than 20 other cities, including Oakland, Houston and New York, said Charles Jackson, an ACORN spokesman.
Same Old Smoke and Mirrors
By John Perry
Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JP Morgan Chase and US Bancorp...With the national unemployment rate now at 7.6 percent, the market for bank-issued unemployment cards is booming. In 2003, states paid only $4 million of unemployment insurance through debit cards. By 2007, it had ballooned to $2.8 billion, and by 2010 it will likely rise to $10.5 billion, according to a study...
First, Arthur Santa-Maria called Bank of America to ask how to check the balance of his new unemployment benefits debit card. The bank charged him 50 cents.
He chose not to complain. That would have cost another 50 cents.
Washington D.C. (February 19, 2009) -- Congressman Dennis Kucinich (D-OH) and two other Members of Congress today sent a letter to the CEO of General Motors, Mr. Richard Wagoner, Jr., to propose a different kind of auto industry rescue plan that eliminates the competitive disadvantage of inflated health care costs.
As health care costs continue to spiral out of control, the brunt is borne in large part by employers that provide health care. General Motors and other U.S. automakers have significantly higher health care costs than their international competitors -- as much as $1400 per car. In the letter, Members of Congress point out that the adoption of H.R. 676, the United States National Health Care Act, would level the playing field and stimulate the economy.
UBS AG, Switzerland’s largest bank, will pay $780 million and disclose the names of some secret account holders to avoid U.S. prosecution on a charge that it helped thousands of wealthy Americans evade taxes.
The Justice Department accused UBS of conspiring to defraud the U.S. by helping 17,000 Americans hide accounts from the Internal Revenue Service. The U.S. will drop the charge in 18 months if the bank reforms its practices, helps prosecutors and makes payments. UBS will immediately turn over names of about 250 clients, according to people familiar with the matter.
By Matthew Cardinale, North American Correspondent, Inter-Press Service; News Editor, Atlanta Progressive News
MIAMI, Florida, Feb 18 (IPS) - With foreclosures skyrocketing and U.S. families sinking deeper into poverty, a number of organisations are turning to a new strategy to end homelessness: moving families into vacant, foreclosed houses that are currently owned by banks or the government.
About 15 percent of the housing units in the United States in the fourth quarter 2008 were vacant, representing 19 million units, according to a report from the U.S. Census Bureau.
One advocacy group in Miami, Florida, Take Back the Land, has already moved seven families into foreclosed properties.
So far, city officials in Miami have declined to get involved, telling local newspapers that it is up to the property's owners - usually, the banks - to initiate any actions.
By President Barack Obama
I'm here today to talk about a crisis unlike any we've ever known - but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house - and one family - at a time.
I Want Some TARP!
In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.
The presentation documented my experience with a Washington-Wall Street partnership that had:
- Engineered a fraudulent housing and debt bubble;
- Illegally shifted vast amounts of capital out of the U.S.;
- Used “privitization” as a form of piracy - a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder.
UBS Said to Pay $780 Million to Settle U.S. Tax Investigation
By Carlyn Kolker and David Scheer | Bloomberg
UBS AG, Switzerland’s largest bank, will pay $780 million to settle U.S. investigations related to whether clients at the Zurich-based bank avoided taxes, two people with knowledge of the matter said.
By Dave Lindorff
Whatever the truth is about where this economy is heading, one thing is clear: employers are taking every opportunity to slash employment and, if they are unionized, to hammer unions for pay cuts, even when there is no justification for these actions.
Take Safeway Inc., a large national supermarket chain. The company, which had $44 billion in sales in 2007, and which, based upon third quarter figures for 2008 was well on the way to show record sales for 2008, appears to be using the economic downturn as a justification for laying off employees and making remaining employees work harder.
'King Size Combo:' New Report Reveals Broad Toll on Taxpayers by Bailed-Out Bank Goldman Sachs and Its Holdings in Burger King
'King Size Combo:' New Report Reveals Broad Toll on Taxpayers by Bailed-Out Bank Goldman Sachs and Its Holdings in Burger King
Goldman paid nearly double the average bonus on Wall St; Burger King costs taxpayers estimated $273 million a year
As Congress and the Obama administration look to hold major banks that have received billions in federal bailout funds better accountable for their corporate practices, a report released today by the Service Employees International Union (SEIU) on Goldman Sachs and its holdings in Burger King finds that the true total of taxpayer subsidies some of the banks are enjoying extends well beyond the monies they've taken through the Troubled Assets Relief Program (TARP).
The report finds that one of Goldman Sachs' major investments, Burger King, costs taxpayers more than a quarter billion dollars a year as Burger King employees are forced to rely on public health and income support programs as a result of the lack of affordable employer health coverage and sub-poverty wage levels at Burger King.