Friday, October 14, 2011

Welcome to America

The American Jobs Act contained a provision that would have been extremely stimulative in terms of GDP expansion and jobs growth while also providing direct relief to the workers who have been hardest hit by the recession. That provision was an extension of federal unemployment insurance.

The extension is not likely to be included in a smaller, "bipartisan" bill. While this may gain Democrats talking points for the 2012 elections, millions of unemployed Americans are going to be hurt. And letting extended unemployment benefits expire is just bad policy in an anemic economy. But this is symptomatic of the new America.

In the wake of the weakening and final repeal of the depression-era Glass-Steagall Act, banks merged with investment and insurance firms, creating and selling instruments such as mortgage-backed securities, and creating structured investment vehicles which bought those securities. Supposedly, "a very effective" SEC, knowledgeable investors, and "very sophisticated" rating agencies would protect us from corporate misbehavior. But the SEC had deregulation fever, the rating agencies were selling AAA ratings on financial instruments without knowing or caring what those instruments contained, and investors were buying those instruments without the necessary transparency. The subsequent 2007 sub-prime mortgage financial crisis and the ensuing economic meltdown was reminiscent of the start of the Great Depression.

Now the banks have been bailed out, large corporations are sitting on trillions of dollars, and Wall Street is doing just fine. But Main Street has been trashed, and the blame for our economic ills has been laid instead on out-of-control spending on social programs which supposedly drove the national debt up to unsustainable levels.

Forget all of the cuts in taxes on incomes, capital gains, dividend incomes, and estates, along with subsidies and tax give-aways for large corporations. Never mind the stagnant wages of the middle class, and the flow of generated wealth primarily only to the top 1%, with effective tax rates on that 1% the lowest in decades. Don't think about the estimated $8 trillion in military and homeland security spending since 9/11. Ignore the millions of jobs lost along with the loss of consumer spending those jobs represented. Ignore also skyrocketing health care costs and the waves of medical bankruptcies. Don't look at all of the housing foreclosures and evictions of families.

Look only to the people who need assistance for someone to blame. Look only to gays and socialists and the unemployed and the disabled and immigrants and the poor for the cause of our economic woes. Label "Occupy Wall Street" protesters anti-American, and dismiss their grievances as baseless or incoherent.

Don't look for blame among our Senators, Representatives and Presidents who set the rules under which Wall Street and the wealthy played their games. Don't look at the lobbyists and the flood of corporate campaign contributions to our elected representatives for an answer as to why our unemployment is so high. Instead, blame the economy on immoral poor people, and blame the unemployed for being lazy. Blame seniors for getting welfare, and ignore the fact that Social Security is not paid out of general revenues.

So let's watch our elected representatives as they kick millions of unemployed people off of their gravy train, slashing those incomes to zero.

Let us applaud financial austerity. And let us also not forget to celebrate the passage of new Free Trade Agreements. Wave to the jobs going overseas to North Korean factories owned by South Korean companies who now can sell freely in the U.S. Marvel at the increase in U.S. assets hidden in Panamanian banks and the new regulations designed to prevent investigations of tax fraud in Panama. Smile at the Colombians and ignore the violence towards thousands of pro-union workers in their country.

Candidates for next year's elections are vying with each other over how generous they can be to the supposed "job creators", and they are arguing which of their plans will best dismantle Social Security, Medicare and Medicaid, and the Affordable Care Act. Politicians are more concerned with preventing gay marriages than with job creation. Assistance for home-heating, higher education and county and city governments is disappearing. Austerity is ushering in a global recession.

But don't worry. A new vision of America is on the horizon. Welcome to 1896.

Thursday, October 13, 2011

Letter to Franken Regarding Votes on Free Trade Agreements

To Senator Al Franken (D-MN):

Thank you so much for voting no on the Panamanian and Columbian Free Trade Agreements.

I'm not sure why you would vote yes on the South Korean FTA. As I understand it, the deal would allow South Korean firms to sell their goods here tariff-free. However, over 47,000 North Korean laborers are currently performing work for over 120 South Korean firms doing business in North Korea, and this FTA does nothing to curb abuses of those workers.

Basically, we are encouraging the importation of goods into this country that are made by workers being paid 35 cents an hour, with those workers laboring in the Kaesong Industrial Complex in North Korea under conditions which are among the worst in the world, according to the AFL-CIO.

It is bad enough that manufacturing in this country has been decimated by corporations relocating overseas (or closing because of unfair competition). Must we encourage abuses of laborers in other countries, too?

Tuesday, October 11, 2011

Reply to Social Security Doubter

Comment: I've been paying into the Social Security System for over 20 years...I don't expect to see a dime of it when I retire. Leave it to the government to be fiscally irresponsi­ble. No one can even explain how the system is even sustainabl­e with the amount of retirees vs. people still working.

Reply to Comment: The system is sustainable because there's such a big surplus in the Social Security Trust Fund; it was anticipated years ago that there would be an increase in benefits paid out when Baby Boomers retired. Social Security running a deficit does not mean the program is insolvent. It means that it is drawing down from its 2.6 trillion trust fund (a fund which finances part of the national debt through the purchase of special Treasury Bonds).

Social Security can pay out every dime owed for the next 26 years with no changes to payroll taxes, retirement ages or benefits; after that, it can still pay out four-fifths of obligations. The only thing needed to "fix" Social Security is an increase in the salary cap at which payroll taxes cease to be collected. That cap is fixed at $106,800. (That means that people who make a million dollars pay an effective payroll tax almost 10 times less than people making $100,000.) Raising that cap to adjust for inflation would finance Social Security 100% through at least 2084.

So if you want and can afford to invest in a 401(K) or a Roth IRA or some other company pension plan, go right ahead. Social Security will still be there for you, even when the stock market tanks, you or your company goes bankrupt, or your financial adviser runs off with your retirement funds. Just don't screw with the most successful program ever that keeps millions out of poverty (look up poorhouses).

Wednesday, October 5, 2011

Obama's New Trade Deal Negotiations Favoring Profits Over People

I have just read about current trade negotiations with the Office of the U.S. Trade Representative (USTR) seeking more restrictive intellectual property laws in Vietnam and seven other Pacific nations. This, of course, will drive up medicine costs by giving companies long-term monopolies overseas. It will also "de-incentivize" drug companies from developing newer drugs.

The negotiations seek to export the American patent regime, long maligned as fueling the highest drug prices of any nation (along with the no-negotiation law that Medicare Part D suffers under).

This "junk patent" scheme will not only cause many deaths in those third-world countries, but will increase substantially the cost of foreign aid spent on medicines for relief programs for people lucky enough to get assistance.

Why is a Democratic president aiding in this scheme to maximize corporate profits at the expense of poor people and American taxpayers? Isn't 30 years of favoring large corporations and the wealthy over the middle class and the poor enough? Is there no point at which the president will take a stand against regressive and oppressive Republican policies?

I would suggest that Obama take a serious look at his chief-of-staff (former board member of one of the big drug companies), his economic team (an alarming number of whom are former officials of Goldman-Sachs), his negotiators with the Office of U.S. Trade Representative (who previously advocated corporate interests over those of consumers and taxpayers), and any others that he is responsible for hiring.

This is not just another capitulation; this is cronyism and hypocracy. We invested so much getting Obama into office to change things, and betrayals like this are heart-breaking.