Sen. Grassley says greed isn't the problem. Yet, in 1980 on average CEOs earned 42 times the salary of the average workes and now they earn about 476 times that salary.
Later in the video Grassley says that the problem is that banks didn't have enough money. He probably has a point. The banks were giving all of their money to their greedy CEOs.
Ezra Klein makes a great point in a story at the Washington Post.
...most workers think stagnant wages mean their employer is paying them less. They don't know that the main reason for stagnant wages is that their wage increases are going to pay for their health insurance premiums. If they did -- if they realized that compensation is pretty much a zero-sum endeavor and their employers don't so much buy them health insurance as garnish their wages to pay for their health insurance -- you'd probably see a lot more general anger at rising health care costs.
It's time to start getting angrier and demand real health care reform. Our ineffiecient health care system means businesses have to pay more and workers make less.
Real health care reform must take the costs off businesses and let business do what they do best. I don't really want Wal Mart or John Deere or a small business to be providing health care or John Deere. I want Wal Mart to sell things and John Deere to build tractors and small businesses to make local economies stronger.
Ken Meter, President of Crossroads Resource Center based in Minnesota completed a study of food production in Marshall County. He discussed the potential economic benefits for the county of buying more food locally.
He noted that, according to numbers from the U.S. Census, which may not be totally accurate, only 46 farms sell directly to consumers in the county. Further, there are only 13 fruit orchards covering 25 total acres, and 13 vegetable farms covering only 43 acres.
Meter said there were some encouraging signs, such as the number of farms now selling directly to consumers increasing 35 percent in the past few years. Sales have increased 16 percent to approximately $228,000.
"It's a rising force and because it's a rising force, some efforts to cultivate that and let it occur seem appropriate," he said.
Still, Meter's research indicated Marshall County residents spend approximately $104 million each year on food. Nearly 90 percent of that is spent on things produced outside the area.
Finding ways to encourage direct interaction between producers and consumers will not only help locally by keeping more dollars in the community and creating jobs locally, it will help in other ways as well.
Stop by your local farmer's market over the weekend and enjoy some fresh food and help your local economy.
Marc Ambinder poses the question should Obama install Mitt Romney as GM's chairman. Obama has said
The government can't hope to fix G.M. and sell it off without getting under the hood. Over decades now of restructuring plans at the company, two things have demonstrably not helped get much done: Money and time. The government can't simply give more of each to the automaker. What's needed is forceful, even ruthless, leadership to insist on the changes that everyone--the managers, the union leadership, the dealers, everyone--has known were necessary for about 20 years now.[...]
Here's a modest proposal to drive things along: Obama should install Mitt Romney as GM's chairman. Romney grew up outside Detroit and around cars; his father, George W. Romney, saved American Motors from collapse in the 1950s--by killing failing brands and focusing on compact cars! George Romney successfully took on the Big Three with a "dinosaur fighter" strategy. The son would bring to GM that legacy, the turnaround expertise and credentials he developed at Bain & Company, and the outsider's eye that GM desperately needs. He would also usefully jack up even further the stakes and the drama of the undertaking.
And he would create a political firewall for the turnaround. An alliance with Romney to save GM would give Obama and Henderson the protection they need to move briskly to shrink the company. Why would Romney do it? Maybe because the chance to renew an American icon, preserve America's manufacturing capacity, and save tens of thousands of jobs would mean something to him. Maybe because it would give him a platform to demonstrate what an effective leader he can be. Maybe because, along the way, it would allow him to save the Republican Party by proving that it stands for something besides...whatever it is that it stands for right now.
It would be a win for Romney because if he leads GM back he would be a top candidate in 2016. It would be a win for Obama cause it shows his bipartisan approach and would patch over a possible issue in 2012.
With all that said, it probably would never happen because it makes sense.
The Cedar Rapids Gazette applauded the action by the state legislature on flood recovery efforts.
At the bottom line, more than $400 million was pledged in various ways toward flood recovery, mitigation and future preparation. Clearly, even that large sum pales in comparison to the needs that still exist. But during a year when the state faced serious budget difficulties, we agree with Rep. Tyler Olson, D-Cedar Rapids, who calls it a "significant victory."
Legislative action includes $56 million swiftly approved in the session's opening days for recovery needs. In the session's final hours, a series of massive bonding initiatives were approved that include $45 million expressly for Cedar Rapids infrastructure projects, including dollars focused on repairs to several government and cultural facilities. Local projects also may receive finds from other portions of the bonding program in the coming months.
Another $100 million in bonds were approved for flood-related projects at the University of Iowa.
Additional housing funds were approved, and tens of millions of dollars in tax credits were authorized to encourage investments in new housing and in the preservation of historic structures damaged by flooding.
The Legislature also poured resources into efforts to prevent future flooding, including millions of dollars to repair flood-damaged soil conservation practices and to expand multiple programs within the Iowa Department of Natural Resources aimed at better managing floodplains and runoff in watersheds across the state.
Are you fired up? Sen. Majority Leader Mike Gronstal was fired up yesterday when he was discussing Iowa's economic future and helping Iowans recover from last summer's historic floods.
So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."
Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its "pneumonia" was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.
Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.
People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.
The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
This diary at MyDD talks about the growing income equality in the United States.
Unequal societies have throughout history been prone not just to social upheaval but also to economic turmoil. Beginning in the 1970s and accelerating after 1980, the US began undoing a series of policies that dated to FDR led to what historians call the "Great Compression" a flattening of income so that by 1964 the ratio of CEO pay to average worker pay was 24:1, the narrowest in the nation's history. Before the financial meltdown the ratio was around 400:1, or back to levels last seen in the late 1920s. And this is actually down from a high of 525:1 in 2000 (the reason is that executive compensation is largely paid in stock). In 1970, the top 1% of Americans controlled 8% of the nation's wealth, by 2000 they controlled 15%. In 1973, the income of the top 20 percent of American families was 7.5 times that of the bottom 20 percent. By 1996, it was 13 times. By 2006, it was 18 times.[...]
On almost every measure, Americans grew apart over the past 30 years. The chasm between rich and poor is not just wider but also deeper. As Paul Krugman noted at height of the market turbulence this past month "we are a banana republic with nukes." These results aren't by accident. In 2009, the US is far poorer as a collective society than we were in 1964 despite our many technological comforts. The Reagan economic model gave us cheap imported electronics but at a cost of being able to send our kids to college. The harsh reality is that the United States is a cleft nation as a result of the Friedmanistic economic policies pursued by Republican and Democrat alike since 1968 and cleft nations have a propensity to fail. It is not, I think, a coincidence that 2008 saw an economic meltdown when income inequality in the United States reached the same levels in 2008 that we last saw in 1928.
Richard Florida wrote a new column yesterday stressing the need for using the Stimulus money to build a new economy and instead of pouring money into the economy of the past.
However, the facts are that the locus of economic growth has shifted dramatically and a stimulus that focuses on traditional infrastructure cannot succeed. What drives the economy today is not the old mix of highways and single-family homes but new, idea-driven industries. They range from software, communication devices and biotechnologies to culture and entertainment - and importantly the convergence of the two.
The familiar kind of stimulus - the “shovel-ready” kind that built highways and roads, and worked so well during the Great Depression and its aftermath - worked precisely because it didn’t stimulate that period’s aging agriculture economy. Instead, it accelerated the transition to a new economy based on housing, autos and all the products of the industrial assembly line, from refrigerators and washing machines to air conditioners and television sets.
The Keynes-derived notion of pouring money into public works built the roads and infrastructure that spurred postwar demand and primed North America for postwar global economic dominance, because the consumption embedded in our suburban way of life stimulated just the right kind of industrial production.
But eventually the system got out of whack. The housing and credit bubbles of the past decade ultimately biased and distorted our economy, channelling money and investment toward older industries, real estate and construction and away from more productive, innovative and creative ones.
For a stimulus to work today it has to stimulate the emerging creative economy, the engines of regional economic growth and higher incomes across Canada and the U.S.
David Sirota posted 2 videos from Friday's cable news shows that shows the disconnect in what Sirota calls market populists and grassroots populists.
On one side, you have what Thomas Frank has called "Market Populism" - the portrayal of Wall Street's agenda as an impassioned mass-based populist movement. Check out this clip from CNBC, where the network's correspondent, Rick Santelli, is literally on the floor of the Chicago Mercantile Exchange surrounded by multimillionaire traders railing on the Obama administration for trying to help struggling homeowners, and berating people who are getting foreclosed on as "losers." Santelli is praised as a supposed "revolutionary" and the mob of financial elites around him is whooping and hollering, pretending to be a populist mob of regular Joes:
Now watch Virg Bernero, the mayor of Lansing, Michigan, presenting the antithesis of Market Populism - let's call it Grassroots Populism. Bernero demands to know how anyone can be calling for wage/benefit cuts for workers at a time the government is taking workers' tax money and handing it to the very speculators that Santelli is whooping it up with:
After watching these two clips, the question is the same question that's always been at the heart of economic politics: Which side are you on? And the answer, if you look at the hard data, is that most Americans are Grassroots Populists: those who think Wall Street and the government are colluding to rip off taxpayers, and who think the crumbs of aid for so-called "losers" that Santelli is ragging on is way too small - not way too much.
In both the House and the Senate, the vast majority of Republicans rallied behind the idea that the appropriate response to the abject failure of the Bush administration’s tax cuts is more Bush-style tax cuts.
And the rhetorical response of conservatives to the stimulus plan — which will, it’s worth bearing in mind, cost substantially less than either the Bush administration’s $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq — has bordered on the deranged.
If Republicans had made this much fuss over the $2 trillion Bush tax cuts or the $1 trillion spent in Iraq then they actually might have won an election in 2006 and in 2008. But they didn't and they lost a lot of seats in those elections.
It seems quite hypocritical for Republicans to now be complaining about spending.
From the outset, the Republicans in Washington pored over the bill to find trivial issues to make hay with. They found some small funding for HIV and sexually transmitted diseases prevention; they jumped up and down about renovating the national mall; they went nuts over a proposal - wait for it - to make some government buildings more energy-efficient; they acted as if green research and federal funds for new school building were the equivalent of funding terrorism. And this after eight years in which they managed to turn a surplus into a trillion-dollar deficit and added a cool $32 trillion to the debt the next generation will have to pay for. Every now and again their chutzpah and narcissism take one’s breath away. But it’s all they seem to know.
The Obama administration keeps having to learn that bland centrism is not pragmatic, that it's not helpful in resolving a big crisis and that it certainly doesn't buy you any love.[...]
This is the cost of bland centrism: The plan seemed to be defined more by what it didn't want to be than by what it actually was, inspired more by a concern with how things look than what actually works. [...]
The Senate's compromise bill was the essence of preferring the illusion of moderation over substance. By stripping out of the House bill significant amounts of fiscal help to the states, school construction money and other forms of spending, those so-called moderate senators who provided the key votes made the proposal far less stimulative. [...]
There is nothing wrong with a sensible centrism that tries to balance competing goods. But Washington has become too concerned with appearances and with calculating the distance from some arbitrary midpoint in any given debate. The sensible center should be defined by what works, even if that means discovering that the true middle ground isn't where we thought it was.
Follow the link for more specifics on the stimulus bill.
Best Moment(s): When Obama repeatedly reminded the braindead Washington press corps and the lobotomized Republican Party that it was the GOP that created the national debt with its irresponsible tax cuts and wars, and that therefore, their fake outrage at the stimulus's deficit spending is absurd.
Worst Moment: When Obama repeated right-wing - and silly - talking points that "some in my party [are] too resistant to reform" and think "only money makes a difference." This is the old conservative meme that all progressives want to do is throw money at problems. Except, last I checked, one of the people who's been most "resistant to reform" and who has effectively insisted that "only money makes a difference" is President Obama when it comes to the $8 trillion no-strings-attached Wall Street bailout - a bailout that hasn't included any financial regulatory reform whatsoever.
Movement Moment: When Sam Stein of the Huffington Post - a progressive media outlet - was given the opportunity to ask a question.
Most Predictable Moment: When CNN's John King later called the Huffington Post "not a mainstream news organization" as a subtle dig at his new media competitors.
Silliest Moment: When Obama was asked about A-Rod - as if the president's opinion on that matter means anything.
Most Shocking Omission: While the D.C. media continued fetishizing "bipartisanship" with its incessant questions about process, unbelievably (and thankfully) nobody wasted time asking about the First Family's choice of canine.
Biggest Missed Question: Not surprisingly, nobody asked Obama any questions about the composition of his economic team, and why the American people should feel confident in him when he's hired many of the same people who had a hand in creating the economic crisis.
Unanswered Questions: Obama didn't give a conclusive answer about whether he had learned anything about the legislative process from the stimulus negotiations. Seems like the lesson is clear: You don't start a proposal by making concessions in the first draft - in this case, Obama began by proposing a stimulus chock full of Republican-style tax cuts, and now has been negotiating from a position of weakness. But it also seems that Obama isn't sure what he's learned from this - and that could bode poorly for even more divisive issues (health care reform, EFCA, etc.) than the stimulus in the future.
* Preparations to combat potential public health disasters -- which could put the final nail in the economy's coffin -- will not be made.
In every sense, the Senate plan moves in the wrong direction.
At a time when smart economists are saying that a bigger, bolder stimulus plan is needed, Senate Democrats and a few moderate Republicans have agreed to a smaller, weaker initiative.
Paul Krugman wrote this morning that the cuts made as part of the compromise will be cutting approximately 600,000 jobs.
Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.
My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.
The cuts made by the Senate include $40 billion in State Fiscal Stabilization, $16 billion for School Construction, $7.5 billion of State Incentive Grants, and $5.8 billion for Health Prevention Activity.
The most troubling cut is the $40 billion in state fiscal stabilization. Iowa is looking at a very tight budget and we are hardly in the worst shape out there compared to other states.
This report by the Center of Budget and Policy Priorities was written BEFORE the cuts were made by the Senate and says the money is the Stimulus will help, but is not enough. Now that a chunk of that money has been cut.
The state fiscal situation is dire. Revenues are declining, and demand and need for services such as Medicaid is rising, as people lose income and jobs. State deficits are projected to equal $350 billion over the next 30 months. Because nearly all states are required to balance their budgets, states have begun to cut expenditures and raise taxes — both of which create a drag on the economy and threaten to counteract part of the intended federal economic stimulus.
The Senate economic recovery package recognizes this fact and includes substantial assistance for states. The amount of funding that would go to states to help them maintain current activities is approximately $160 billion to $165 billion — or roughly 45 percent of projected state deficits. Most of this money is in the form of increased Medicaid funding plus most of a “Fiscal Stabilization Fund.” This funding would likely be sufficient to deter many states from making the most severe spending cuts and to moderate state tax and fee increases. But states would still have very large gaps to close on their own.
On Meet the Press this morning, Rep. Barney Frank (D-MA), the chair of the House Financial Services Committee, said that these cuts will essentially lay off police officers and firefighters because States will have to cut their State budgets.
Give Sen. Grassley a call at 202-224-3744 and tell him to support more money for States and for schools in the Stimulus bill.
**Update** Here's Barney Frank talking on Meet the Press...
A group of centrist Senators led by Susan Collins (R-ME) and Ben Nelson (D-NE) has cut billions from the Economic Stimulus package and now there seems to be enough votes for the bill to pass.
Political Wire is saying the deal reached last night has secured just 3 three republican votes.
The deal reached last night on President Obama's economic stimulus package includes just three Republicans who will vote for it next Tuesday -- Sen. Susan Collins (R-ME), Sen. Arlen Specter (R-PA) and Sen. Olympia Snowe (R-ME).
Sen. Judd Gregg (R-NH), nominated this week to join Obama's Cabinet, has recused himself from the vote.
The 3 Republicans supporting this bill are all from the Northeast and is another example that the current Republican is a regional party.
The group of centrists was made up of 18 to 20 Senators. With just 3 Republicans supporting this bill it makes me think the deal had as much to do with getting Democrats to vote for the bill than it did to win support from Republicans.
**Update** The vote on the stimulus bill won't be until next week, so there is still time to call Sen. Grassley at 202-224-3744 and encourage him to vote for it.
From a July 2002 memo from the military's Joint Personnel Recovery Agency...
The unintended consequence of a U.S. policy that provides for the torture of prisoners is that it could be used by our adversaries as justification for the torture of captured U.S. personnel.
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