Can you imagine what would happen to the economy if top wage earners were taxed at 70 to 90 percent?
Former Clinton Labor Secretary Robert Reich can, and he thinks it's a great idea.
To be sure, many Americans were concerned that giving Democrats control of the executive and legislative branches of our government during an economic crisis could usher back in socialist tendencies first seen in this nation during the Depression.
Fears of such a leftward shift sparked a new powerful movement called the Tea Party.
With this in mind, Reich's op-ed "How to End the Great Recession" published in Friday's New York Times validates these concerns:
It seems “banks are doing nearly twice as many modifications under their own foreclosure prevention initiatives than under the Obama administration's signature Home Affordable Modification Program, known as HAMP,” Luhbi wrote in her Aug. 30 article. Banks made 644,000 “proprietary permanent modifications” in the first half of 2010, almost twice the 332,000 under HAMP.
Loan modifications are an alternative to foreclosures, in which the debtors usually receive “interest rate and principal reductions.” The HAMP program, according to Luhby, “lowers monthly payments to 31% of pre-tax income.”
Fed Chairman Ben Bernanke's first full day as the only person in the whole wide world with any kind of influence over what happens in the economy didn't go too badly.
That's the impression one might get from consuming two Friday Associated dispatches and a related AP Video.
Bernanke apparently took full charge of anything and everything having to do with the economy on Thursday evening. As noted early Friday morning (at NewsBusters; at BizzyBlog), two Thursday afternoon dispatches from the wire service in advance of the government's Friday morning GDP report widely predicted to contain news of a significant downward revision to second-quarter economic growth placed surreal importance on the content of a speech he was to give Friday morning shortly after that report's release. The names of President Barack Obama, Harry Reid, Nancy Pelosi, Tim Geithner, and Larry Summers were totally absent from both reports.
Friday, in the wake of the downward revision of second-quarter GDP from an annualized 2.4% to 1.6%, AP's primary economic report about Bernanke's apparent first day as Emperor-in-Chief again failed to name the five folks just mentioned, as did a one-minute video from Mark Hamrick found here (after a 30-second commercial).
Here is some of what Christopher Rugaber, with assists from Jeannine Aversa and Alan Zibel, wrote about Ben's big day:
Sometimes you just have to chuckle at the transparent motivations of business writers in the establishment press.
Two Associated Press reports from this afternoon, one from Stephen Bernard and another much lengthier piece from Jeannine Aversa, attempt to set the template for Friday morning's reportage: Despite all the bad news, including a serious downward revision to second-quarter economic growth, it's up to Big Ben Bernanke to calm everyone down, and magically return the economy to some kind of even keel.
It is a curious phenomenon - the way the media have handled the economy since President Barack Obama has taken office. Generally the coverage has been on the optimistic side over the last 18 months. But could this blind optimism come back to haunt people that trade on economic metrics?
According to CNBC "Mad Money" host Jim Cramer, it will and in a big way on Aug. 27, when the new gross domestic product numbers are released. On CNBC's Aug. 26 broadcast of "Street Signs," Cramer predicted dismal numbers during his "Stop Trading" segment, which has been contrary to the way the market reacted.
"Look, I'm going to give you my forecast right now - I think we're going to get 0.5 percent GDP, OK?" Cramer said. "But, let's say we get 0.5 percent GDP. Everyone's going to say it's horrible. We're going to go track down economists, Nobel winners who think it's a double dip. And it'll be like shocker - 0.5 percent. And I'm telling you it's going to be 0.5 percent. It's like the housing number. On my show I said it's going to be declined 50 percent. We get 30 percent. It was like shocker. Whoever is making these estimates is just so wrong because you know, you piece these pieces together on a daily basis like I do and come up with something between zero and 1 percent growth."
Here's how the Associated Press's Martin Crutsinger and Daniel Wagner reported the housing portion of their Tuesday report on the day's economic news ("Factories aid bumpy recovery, housing still weak"):
Single-family home construction, which represented nearly 80 percent of the market, fell 4.2 percent. And requests for building permits, considered a good sign of future activity, slid 3.1 percent.
... The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units. Building activity in June was weaker than first reported. It fell 8.7 percent to an annual rate of 537,000 units, the slowest pace since October of last year.
"The bad news is that activity is likely to remain depressed for several years," said Paul Ashworth, senior U.S. economist at Capital Economics. "The good news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level."
Well, okay, but the situation is already closer to a zero-out than it is to the levels we were seeing just a few years ago--or any time in the 50-plus years such records have been kept. Looking at the raw data on a historical basis, one finds that July 2010 was the worst July on record for the both stats the AP pair cited:
Paul Krugman and Larry Kudlow - not exactly two guys you would associate with one another. However, they are two media figures Washington Post columnist Frank Ahrens thinks should be candidates for the same job.
In his case for Krugman, Ahrens wondered that since Krugman can talk the talk, can he walk the walk as well.
"Outside the academic world, Nobel Prize-winning economist Paul Krugman is best known for his New York Times columns arguing that the $787 billion, debt-busting stimulus bill was not enough, so even moderate Democrats -- not to mention conservatives -- might lose their minds with this pick. But maybe it's time for Krugman to put his money where his mouth is," Ahrens wrote. "You think government needs to spend more to get us out of this funk? Okay, Paul. Here's the key to the car."
Ed Schultz on Thursday blamed Republicans for all the unemployed people living in America today.
As he began the most recent installment of the "Ed Show" on MSNBC, the host said, "The Republican Party has been on a crusade against the middle class and the poor for the last 30 years. We're now seeing the wreckage of that race to the bottom line culture."
He disgracefully continued, "Today a government report showed weekly jobless claims at a five-month high. 484,000 new unemployment claims were filed in the week ending August 7th. And you know what folks, you can lay this right at the feet, right at the altar of the Republican Party."
Sadly, he wasn't close to done, claiming, "The people you see flooding the streets begging for help, begging for an opportunity are victims of the Republican agenda just to make sure that President Obama fails" (video follows with transcript and commentary):
During Morning Joe on Thursday, MSNBC's Chuck Todd appeared baffled by a discussion of negative feelings directed towards Barack Obama from Wall Street. The confused journalist wondered, "Look, at the end of the day, he has not done that much when it comes to business stuff."
Mad Money host Jim Cramer relayed to Todd that Wall Street is upset because, "Most of the people on Wall Street are behind the scenes guys" and the President is demagoging the issue and demonizing them. Todd argued that, regardless of what the President does, "He is getting trapped and hit from both sides, but it isn't just that, this is how sour the American public is."
To understand why Wall Street and the American public might be "sour," one needs to look no further than the cap and trade energy proposal, health care, the financial reform bill, the stimulus, or the nationalization of the automobile and student loan sectors.
Earlier today, NB's Lachlan Markey covered Bill O'Reilly's interview with the Fox Business Channel's Charles Gasparino.
In that interview, Gasparino confirmed what the New York Post reported in April of last year, namely that "GE Execs Encouraged CNBC Staff to Go Easy on Obama."
The suits at GE, including Chairman Jeff Inmelt, had a clear motivation for encouraging their reporters to lighten up, namely that "General Electric at the time was hoping to profit handsomely from policies that would benefit a few companies, including GE, at the expense of the majority of the economy"-- specifically cap and trade.
But speaking of motivation: What about former CNBCer Gasparino's?
The easy answer would be that sometime in the past two years he has seen the light and realizes his past reporting at CNBC was lacking in fairness and balance. Despite his move to Fox, there's reason to doubt that.
There are quite a few shaky assertions in Alan Zibel's Associated Press report yesterday about Freddie Mac's latest quarterly loss ($6 billion), its latest bailout installment request to the U.S. Treasury ($1.8 billion), and the cumulative taxpayer bailout amounts that have been paid out to Freddie Mac and big sister Fannie Mae thus far ($148.2 billion) -- too many to cover in a blog post.
So I'll concentrate on the howlers present in just a single paragraph near the end, wherein the AP reporter attempts to explain why the two formerly government-sponsored mortgage giants that are now government-bailout enterprises ran into the ditch. The verbiage pretty much states the meme that the establishment press seems to want the public to swallow about what went down, and who's to blame:
During the housing boom, Fannie and Freddie faced political pressure to expand homeownership and competitive pressure from Wall Street to back ever-riskier loans. When the market went bust, defaults and foreclosures piled up, and the government had to take them over.
When the credits are the most intriguing part of the movie, there's a problem.
In the new film "The Other Guys," starring Mark Wahlberg and Will Ferrell, two mismatched cops try to make a name for themselves by investigating a potential Ponzi scheme run by a corrupt investor. The villain is a pseudo-Bernie Madoff but rather than vilifying a single fraud, director Adam McKay ("Anchorman," "Step Brothers") lumped all investors together and attacked Wall Street as a whole.
"The Other Guys" is a funny but not hilarious movie for 1 hour and 47 minutes but instead of simply rolling the credits and letting viewers leave smiling, McKay followed with graphics criticizing Wall Street and corporate executives. It was almost as if Michael Moore filmed the closing credits, as graphics included the anatomy of a Ponzi scheme, the ratio of CEO to employee salaries, a comparison of the New York Police Department's pension fund to an average CEO's pension fund, an average worker's 401(k) account compared to a CEO's, and the amount of taxes Goldman Sachs paid after the bailout.
While the credits provided the most egregious anti-business attacks, there were other subtle pokes at business and Republicans within the film. For example, the villain, named David Ershon (whose last name rhymes eerily with ‘Enron'), is seen in a photograph with former President George W. Bush and is said to be friends with conservative Supreme Court Justice Antonin Scalia. Other chides included Ershon stealing from both the lottery and the NYPD pension fund -- essentially stealing money from the state and a labor union -- and the villains' drive SUV's while the heroes drive a Toyota Prius.
Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers.
The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.
It seems that not even the truth can possibly overturn the narrative that President Obama and the Democrats in Congress have brought transparency to Washington.
Last Wednesday I wrote about how the Dodd-Frank financial regulatory bill Obama signed into law last month contains a provision exempting the Securities and Exchange Commission from Freedom of Information Act requests. Such an exemption would surely have been grounds for a media outcry during the Bush administration, yet apart from The Wall Street Journal and CNN, only blogs have been following the developments. The latter opted simply to parrot the administration's claims without challenge.
Other media ouetlets, such as National Public Radio and MSNBC, completely ignored the controversy, in stark contrast to their extensive coverage of the Bush administration's attempts to curtail the scope of the Freedom of Information Act. NPR's Don Gonyea said "When conflicts arise over what should or should not be open, the administration does not hesitate to invoke the memory of 9/11. And while it's true that 9/11 changed the security landscape, it's also true that the administration was tightening the control of information much earlier . . ."
What a fine group of happy warriors! Right Online 2010 turned out over 1,000 like-minded activists from over 30 states. These passionate folks walked the over-100 degree streets of Las Vegas to educate voters that November Is Coming.
Should the Democrats be worried? No. They should be resigned. The real worry-warts should be Republicans consistently intent on selling out their principles. Be worried. People are mission-focused.
A couple highlights from the conference: Here's my favorite speaker from the group, Emery McClendon:
PBS recently responded to accusations of a liberal slant to its July 23 Need to Know program which featured satirist Andy Borowitz making fun of Sarah Palin’s intelligence as the show's executive director Shelley Lewis claimed that, because the previous week's episode had featured a segment that was critical of President Obama, the program in reality has been balanced in going after political figures. According to TVNewser, quoting from Michael Getler's July 28 "The Ombudsman Column" on the PBS Web site, Lewis argued: "Is a little joking about Ms. Palin's penchant for malaprops really such a big deal? Last week, editorial cartoonist Steve Brodner was pretty tough on President Obama, and we heard plenty from Obama fans about how unfair we were, how right-wing we were, etc. We do try to have some fun at both sides' expense..."
But the July 16 segment that poked fun at Obama actually criticized him for not being liberal enough in keeping his campaign promises as cartoonist Steve Brodner was shown drawing sketches of Obama while a voiceover of the cartoonist lamented that "the presumed anti-war Obama became the 30,000 more troops Obama," and that "the previous stimulus advocate Obama who faced McConnell finally and a vocal conservative movement, he didn't campaign consistently for the stimulus that he mentioned in the State of the Union, wound up advocating for that along with deficit reduction, making him at least partly like McConnell."
Gold has been a highly valued commodity going at least as far back as the ancient Egyptian culture in 2600 BC. But now, with economic instability and uncertainty over the health of major global currencies, the demand for gold has risen as a store of value and a hedge against inflation.
Over the past 12 months, the price of gold has gone up dramatically - up 25 percent from July 2009 (from $929 per ounce to $1,163 per ounce, after reaching a high of $1,250 per ounce). That has outperformed the Dow Jones Industrial Average (DJIA) on a percentage basis.
Striking a blow for her sex, Mika Brzezinski today claimed that the Wall Street meltdown "simply would not have happened" if more women had been in charge.
The Morning Joe co-host was reacting to news that the Dems managed to slip into the recently enacted financial regulation bill a provision--authored by Rep. Maxine Waters--that would create "at least 20 new Offices of Minority and Women Inclusion" with the power to kill government contracts with financial firms not meeting new "diversity standards."
Tina Brown seconded her sister's sentiment, blaming the financial industry's woes on "all this phallic obsession."
What's good for Wall Street is presumably good for Washington, too. Mika Brzezinski--founder of Feminists For Palin, perhaps?
On Wednesday's CBS Early Show, fill-in co-host Erica Hill cheered the passage of financial reform legislation as "another huge milestone for President Obama." Hill went on to explain: "The first was when he signed the historic health care bill back in March. Today he is set to sign a bill aimed at completely overhauling Wall Street."
White House correspondent Chip Reid began a report on the new bill by proclaiming: "It's being hailed as the biggest shakeup of Wall Street since the Great Depression." Reid enthusiastically touted provisions in the legislation: "The bill's centerpiece is the Bureau of Consumer Financial Protection....charged with regulating financial products, including mortgages, credit cards, and student loans. The legislation also gives broad new powers to the federal government, allowing it to take control of and shut down large financial institutions..."
Reid pointed out criticism of the legislation: "But critics say the bill fails to reform mortgage giants Freddie Mac and Fannie Mae, does not create a fund to help shut down big banks when they fail, and gives too much power to federal regulators to create reams of new rules." After noting GOP concern that bill "will curb growth and kill jobs," Reid turned to an analyst from the left-leaning Brookings Institution for reassurance: "Still, former investment banker Douglas Elliott believes the bill is better than doing nothing." Elliott argued: "The bill addresses most of the problems and makes a good start. It's not perfection, but in the real world, we don't get perfection."
Some investigative reporters still live up to their job descriptions.
On the July 20 edition of "CBS Evening News," reporter Sharyl Attkisson exposed how government-sponsored entity (GSE) Fannie Mae and mortgage lender Countrywide "scratched each other's backs" while their toxic loans fueled America's mortgage crisis.
Attkisson revealed new documents showing that Countrywide gave "very important person" loans to dozens of Fannie Mae executives while American taxpayers forked over $84 billion to bail out the GSE.
Among the VIP loan recipients were Fannie Mae CEO Jim Johnson, who received $10 million, former Vice Chair Jamie Gorelick and former CEO Franklin Raines, whose total amounts received remain unknown. Attkisson reported the loans, but did not mention Raines, Gorelick, and Johnson all have ties to Democrats, from Bill Clinton to John Kerry to President Obama.
Chrystia Freeland, global editor-at-large for Reuters, believes the new financial regulations are still pretty loose.
"It is still a very feudal, very Byzantine regulatory system," Freeland complained on the PBS News Hour with Jim Lehrer, referring to the Senate's approval of a financial regulations bill yesterday.
A radical policy, Freeland maintained, could have done away with the current "fractured" group of regulators and established a much stronger, more unified single regulator.
However, Freeland said the bill succeeds in tempering the rapid movement of capital. She did acknowledge that Main Street folks will have more trouble getting mortgages than they did in the past. "That's the price of having a safer financial system," she said.
Freeland's championing of the new regulations does not diminish some other aspects of the bill, which include no additional regulation of Fannie Mae and Freddie Mac, tougher times ahead for small businesses trying to procure loans from banks, and tough times for small banks themselves, who lack the resources of Wall Street to deal with the new regulations.
On Thursday's CBS Evening News, anchor Katie Couric touted the just-passed financial reform bill as a "big win" for President Obama, "as was the passage of health care reform." She then lamented how despite that: "...there are rumblings he's in big political trouble as the midterm elections approach."
In the report that followed, White House correspondent Chip Reid proclaimed: "...the President was reveling in another victory on a major piece of legislation.... he'll add it to a long list, headlined by health care reform and the stimulus." A graphic then appeared on-screen actually listing half a dozen of the Obama administration's supposed accomplishments for viewers.
Turning to Obama's falling poll numbers, Reid seemed puzzled: "With so many accomplishments in just 18 months, you'd think the President would be flying high. Instead, his approval rating continues to sink and now stands at just 44 percent."
Reid then observed: "So, what's the problem? In a word: jobs." He highlighted the President's recent trip to stimulus-funded projects in Michigan and sympathized with how Obama "seems powerless to do anything about an unemployment rate stuck at an excruciating 9.5 percent."
Reporting Thursday from Capitol Hill, MSNBC congressional correspondent Luke Russert touted a likely win for Senate Democrats on the Financial Reform Bill, saying it would be a "huge victory."
"Obviously, [President Obama] ran on the slogan 'Change you can believe in,' with health care reform and financial regulatory reform," Russert commented, thus tying the passage of the financial reform bill with success of Obama's message of "change."
The financial regulations package recently passed by the House of Representatives would create a new diversity overseer at each of the major federal financial regulatory agencies, including the new ones created by the legislation itself.
This new office, called the Office of Minority and Women Inclusion, would take over from any existing diversity or civil rights office already working at the agencies in question.
It would also be responsible for making sure that each of the major federal financial regulators is hiring enough minorities and women, and contracting with enough minority-owned and women-owned businesses.
However, each individual diversity czar is responsible for defining exactly how many minorities, women, and minority- and women-owned businesses are satisfactory.
While some on the left side of the aisle in Congress are getting all starry-eyed about prospects of more federal stimulus spending, the first round of stimulus under President Barack Obama may have done even less to help the ailing economy than supporters claim.
On MSNBC's July 9 broadcast of "The Daily Rundown," co-hosts Chuck Todd and Savannah Guthrie interviewed CNBC "Closing Bell" anchor Maria Bartiromo from the Aspen Ideas Festival in Aspen, Colo. And Bartiromo offered her views why the economy didn't spiral out of control any more than it did. She said according to some on Wall Street, it wasn't Obama's $787-billion "stimulus" that included a huge bulk of state government bailout spending, but instead action by the Federal Reserve to put more liquidity in the economy.
"Look, there's no doubt about it - we were close to going off a cliff the weekend at Lehman Brothers declared bankruptcy, Merrill [Lynch] was sold and AIG acquired by government," Bartiromo said. "You know, I mean I think we were very close and the economy needed stimulus in a big way. It's arguable whether that stimulus that helped the economy was really because of the stimulus plan or really because of the Federal Reserve. I think most people on Wall Street will believe and will tell you that it was really the Fed action in terms of giving greater access to the banks to overnight lending that really, really got us out."
Barack Obama is president. Oil is gushing in the gulf. America was eliminated from the World Cup. Looking for a laugh break? Try this: MSNBC has described DEMOS as "non-partisan." OK, I hadn't heard of them, either. But their web site just happens to mention that Barack Obama is "a founding Board member."
But that didn't stop Chris Hayes of the lefty Nation mag, on MSNBC this evening subbing for Ed Schultz, from, yes, describing DEMOS as "non-partisan" in introducing the group's Washington, DC director, Heather McGhee. And who is Heather? From the DEMOS site: "previously, she was the Deputy Policy Director, Domestic and Economic Policy, for the John Edwards for President 2008 campaign."
Can anyone think of an angrier group of writers in political punditry than the ones currently published at Salon.com?
Throughout the Elena Kagan hearings, both Joan Walsh and Joe Conason have written anti-Republican screeds accusing GOP lawmakers of all sorts of unsavory things to score political points despite what's likely be a certain confirmation.
However, this disposition goes beyond just the SCOTUS hearings.
On CNBC's June 29 broadcast "Power Lunch," Rep. Paul Kajorski, D-Pa. made a pretty prediction about the Dow Jones Industrial Average (DJIA) should Congress be unable to pass financial regulation legislation. [Video Available Here]
"You know, I wish every one of them would ask the question and also the industry and media, what happens in this country if this bill fails?" Kanjorski said. "Do you think 236 points down on the Dow is surprising? Check 1,000 or 2,000 points if we fail to change the ways that caused this problem."
That caught the attention of CNBC's Erin Burnett, who played the clip for "Mad Money" host Jim Cramer. Cramer blasted Kanjorski and the entire institution of the federal government for being a drag on the markets for a myriad of reasons on his June 29 "Stop Trading" segment of CNBC's "Street Signs."
Fresh off his Tea Party cover storyin the June 24 Weekly Standard, CNBC's Rick Santelli foresees what could be classified as an economic black hole for the United States of America.
On the network's June 24 broadcast of "Strategy Session," the CME Group reporter explained how the country could be headed down the same path and face the economic calamity the Japanese faced in what is known asthe "lost decade."That period, from 1991-2000, was one which the Asian nation failed to grow economically despite countless efforts by the government to intervene. But as Santelli explained - the U.S. version of Japanese economic policies could result in Greek-style austerity measures.
"The notion that we are turning into Japan has been something talked about on this floor for probably a year and a half," Santelli said. "What changes though, is that it is now a toss up between Japan and Greece and trust me the eventual solutions or recommendations for avoiding the pitfalls of either are completely different strategies. A lot of Japanese say, ‘More Keynesian, more stimulus, spend, spend, spend, spend, spend.' And the other side of the equation says, ‘Well then, you are going turn into Greece.' Where does the truth lie? One thing I can tell you is, is that demographics are a big issue in this story as well. The Japanese have a demographic time bomb similar to the U.S. in terms of underfunded pensions and liabilities."
Don't be surprised if you open up the June 24 USA Today and find pom poms in the ‘Money' section.
Reporters-turned-cheerleaders Paul Wiseman, Jayne O'Donnell and Christine Dugas wrote a glowing 38-paragraph story about the proposed Bureau of Consumer Financial Protection (BCFP). The story even included a section called "keys to a new agency's success" with quotes from "experts" at a wide variety of government agencies from the Environmental Protection Agency to the Food and Drug Administration.
USA Today's story began by praising the creation of the EPA in 1970 and the way it hit the ground running by ordered city mayors to clean up their water. They included 10 "expert" voices in favor of government agencies (proposed or current) many of whom were former regulators, against only three voices of opposition - all politicians.