Posts Tagged ‘middle class

23
Feb
09

Best Videos From Last Week 2.23.09: Fox’s Right Wing Agenda, Concentration of Wealth, Regulation

There was some good TV happening last week, here’s what I found notable (hint – read the stuff at the bottom. really):

  • With more and more voters edging toward the left or moderate (and, ahem, away from the Radical Religioner Party), Fox is having a harder time hiding their right wing agenda. CNN’s Howard Kurtz catches the latest Oh No, They Didn’t! moment on Fox.
  • MOST WORTH WATCHING: I very much appreciated this 20 minute clip of Dr. Zbigniew Brzezinski on Morning Joe as he discusses the concentration of wealth over the last few years. It is important for the public to understand that Republican policies enable the top few to get richer off the backs of the lower masses and unless we want the government to determine labor costs (we don’t), it is up to the public themselves to deflate the culture of extreme corporate wealth. Watch the video.
  • CLASSIC GO GET ‘EM! CLIP: Lansing Mayor Virg Bernero goes off on Fox over the suggestion that laborers have to shoulder the burden when companies lose competitiveness (many times due to executive decisions). Lots of talking over each other, which is annoying and Bernero obviously had an agenda when he went on the show, but still…it’s a good clip.
  • Repubs are already lining up their big guns against the upcoming attempts at health care reform. Some of the guns are not new and this one in particular, Betsey McCaughey, is having a clear problem locating the truth. Warning: it’s a Keith Olbermann clip, so if you don’t like him…watch the clip anyway.
  • IF YOU HAVE ITUNES: Dan Rather Reports aired an excellent program on the housing crisis with an even more excellent interview with TARP watchdog Elizabeth Warren. She is one of the few honest heroes of the Wall Street bailout. If you don’t have Itunes, you can get the transcript at the bottom of this page – I recommend the PDF version because the online version has formatting issues. Here are some highlights from the interview that are extremely worth a read:
    • RATHER
      Well, you’ve written– a great deal about family economics and the middle class. Are we in danger of– for all intents and purposes– losing the middle class? Or is that too much of a fear?
      WARREN
      No, I think that’s the real fear. So, here’s the– here’s what’s happened over a generation. Somebody out working 40 hours a week is making less than he was making 30 years ago. Household income has gone up a little. How? Because we put the second earner to work– if she could do it. But that has now flattened out. There’s no one else to put to work. We’ve put to work as many moms as we can possibly do. So, where we stand now is income has flattened out again. But core expenses; housing, health insurance, transportation, child care and taxes, because they’ve got these two salaries, have all gone up. And that’s left the basic family with less money than they used to have a generation ago. So, then we hit the skids of this recession. The bottom falls out of the housing market. They can’t tap home equity. These crazy mortgages for many of them are forcing their expenses up. They’re losing jobs. And that means we have not a few people, we have literally tens of millions of Americans, hard-working, play-by-the-rules, middle class people; people who got decent educations, people who got decent jobs, people who got married, moved out, bought houses, the backbone of what we are as America, those people are now hanging on by their fingernails.
    • RATHER
      If we lose the middle economic class do we have an America approaching anything what we’ve known in my lifetime and yours and our father and mother’s lifetime?
      WARREN
      No. It’s a different America. It becomes a two-class America. It may actually have a larger upper class. You know, maybe– maybe that moves to ten percent of the population who really do quite well. You know, the kids; you can send the kids to college with no debt and they graduate with no debt. They do fine. Nobody gets sick. You know, that’s the group that works. And then what we have is a big underclass. It’s folks who just live basically paycheck to paycheck. If– if you can hang on, if you don’t get a layoff or a cutback in hours
      RATHER
      Or you don’t get very ill?
      WARREN
      If– and one of the kids doesn’t get sick, if grandma doesn’t fall and break a hip, if you don’t get divorced or have a death in the family, you might be able to skirt through. But if anything goes wrong, you’re living one pink slip, one bad diagnosis away from complete financial collapse.
    • RATHER
      You did a special report on regulation. Take us back quickly over the last 25 years. What’s happened to regulation or supposed to have happened to regulation.
      WARREN
      So– so, here’s one way to look at it. In 1792 our young republic, George Washington is president, hits its first economic crisis. And credit markets freeze. Does this sound familiar?
      RATHER
      Yes, it does.
      WARREN
      And– it almost brings the country to its knees. And here’s what happens. About every 15 to 20 years we have another crisis. We call them panics. We have different names for them.
      RATHER
      Depression?
      WARREN
      Depression. But they happen about every 15 to 20 years for 140 years. The pattern is just unmistakable. Then we hit the Great Depression. And coming out of the Great Depression we put three new regulations in place; Glass Stiegel, which divides our community banks basically from the Wall Street investment banks, FDIC insurance, put money in the bank and know that it’s safe and some SEC regulations so you can invest on Wall Street and they can’t cheat you too directly. That’s what we put in place. For 50 years we have no bank failures, no major crises. It works. Now, there’s innovation. There’s change. It’s time to change regulations. It gets to be the early 1980s. And what do we do? Instead of saying new products, we need to change regulations to adapt, we take a different path. We say–
      RATHER
      We let banks to go in the insurance business and vice versa?
      WARREN
      Let’s deregulate. That’s exactly right. We begin to break down the old regulations. We say, “Who needs regulations? They’re so pokey. So old.” So, we go with this idea of let’s get rid of regulation and what happens? Late 1980s, savings and loan crisis should’ve been a warning. Late 1990s, remember long term capital management, hedge fund? Should’ve been a warning. But we let it go. Early 2000s, Enron, bad books, not telling the truth. Should’veĀ  been a warning. But we let it go. And where do we end up? In the biggest crisis since the– Great Depression. Markets are wonderful. They produce great wealth for us. But they are by their very nature something we call pro-cyclical. When they’re going up, they chase themselves up. Hey, wow, it’s doin’ great! Up they go. And when the go down, they chase themselves down. And they go lower than actual supply and demand would suggest. Now look, we can live in a world all ups and downs for the rest of our lives. We can say, “Who needs regulation? Let’s just ride that roller coaster wherever it goes.” But, you know, we have to remember when it goes down, it doesn’t just take down the people who gambled. It doesn’t just take down the people who invested on Wall Street. It takes down everybody who’s got a pension. It takes down folks who have jobs in construction industries and– and other industries that get hit by this. It takes down– in this case, it takes down homeowners, people who thought they were doing the right thing to protect themselves for the future. It takes down the prudent along with the gamblers and the wild ones.
      RATHER
      Which is where we are today?
      WARREN
      Which is exactly where we are today. So, we could say, “Hey, no more regulation. That’s fine.” But look what it’s brought us. We are not willing to let these big financial institutions fail. We’ve got this too big to fail notion. So we are going to shovel billions of dollars in their direction and still take the position we shouldn’t regulate them? I– this is a world that may be a lot of fun for
      the high flyers who get theirs and keep theirs. But it’s not a world that works very well for ordinary families.
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15
Sep
08

Common-Sense Regulation is a Good Policy

Republican philosophies colliding with reality: Fannie Mae, Freddie Mac and, now, Lehman Brothers.

You hear it all the time from fiscal conservatives: limited government, free market, no corporate regulation. It sounds good. Hey, if these policies actually worked, I’d be all for them. Why would anyone want an unnecessarily large government? They wouldn’t. So, it’s time to acknowledge that Republican policies, when put into practice, do not materialize in a healthy economy. Today is Black Monday, but there will be many more black days to follow because of the George W. Bush economic policies (which McDumbass will continue).

The Nation, a leftie publication, offers a brief, but good synopsis of the evolution that lead to our current economic shitstorm. It’s an informative read, even if you hate italics:

The housing bubble was the result of the Ponzi-scheme antics of those other financial entities: commercial banks, stockbrokers and hedge funds, which were allowed in a GOP-deregulated market to get into the “swap” business. Through the rampant reselling of loans, the obligation to collect on a loan was divorced from the act of selling it in the first place, so who cared if the recipient of the loan was not at all qualified or the appraisal of the property value was inflated, as long as the paper was traded away, or insured, before the moment of foreclosure?

As with any Ponzi scheme, the perps, who included the legislators as well as the bankers who exploited the loopholes they provided, expected to bail long before the bubble burst. The role of the legislators, Republican-led but with far too many Democratic running dogs, was critical to the success of the scam.

The mortgage swaps distancing the originator of the loan from the ultimate collector were made legal only as a result of the Commodity Futures Modernization Act, which former Senator Phil Gramm, R-Texas, pushed through Congress just hours before the 2000 Christmas recess. Gramm, until recently co-chair of the McCain campaign, also had co-authored the Gramm-Leach-Bliley Act, which became law in 1999 with President Bill Clinton’s signature. That gem, which Gramm had pushed for years with massive financial industry lobbying, destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies. Those two acts effectively ended significant regulation of the financial community, and no wonder we have witnessed an even more rapid and severe meltdown in housing values than during the Great Depression.

Not surprisingly, Gramm was rewarded for his service upon retirement as a senator and as head of the Senate Banking Committee with a top position at the Swiss-based UBS bank, which is close to drowning in the subprime mortgage nightmare he helped create. These folks have no shame, as was evidenced when the senator’s wife, Wendy, was named a director of Enron, whose roiling of the energy market had been made possible only through yet another provision of Gramm’s Commodity Futures Modernization Act.

Appropriate regulation is key to a healthy business sector that benefits the entire country, not just just the peeps running the show. Even the Democrats won’t tell you that because they are in big-business pockets as well and uninformed Americans have been duped into thinking that regulation inhibits growth. Not so, as proven by the fact that our economy grows more per capita under Democratic presidents.

Republican candidates and fiscal conservatives repeat the myth of trickle-down economics and oppose regulation, increasing the minimum wage and essentially “looking out for the little guy.” What they don’t share is that unregulated corporations collude, allow greed to motivate business decisions, lack transparency and horde wealth at the top, giving CEO’s outragous wages while the same companies’ bottom-level workers cannot even afford health insurance. These policies increase the wealth gap and weaken the middle-class.

Regulation needs to stop being a bad word. Common sense regulation protects the U.S. economy and Americans themselves. It is not bad for a corporation to profit. It is bad for a corporation to profit at the expense of employees and consumers.




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