Ed Schultz

Ed had a great segment on tonight's show, all about how the stimulus really did work despite the lies the Republicans have been saying. He lays it out nice an clearly about who has done what and who you should trust with the economy. And he's got a chart! I love charts!

Visit msnbc.com for breaking news, world news, and news about the economy

Vote Democratic Part 2

I found out about that chart in the first post from Rachel Maddow, who got it from Ezra Klein's blog. One of her fans sent her a new chart. This shows the same thing, that when the dems are in charge our incomes rise a lot more than when pubs are in charge. But in this chart he lays it out when the dems are in charge of the House, or the Senate, or the Presidency, or have it all. Ezra's chart dealt only with the Presidency.

You see, the Republicans are lying to you, when they say the Democrats are tax and spend they mean the dems tax rich people and spend it on the other 95% of us. The taxes for us 95% don't change a whole lot, not a lot of room for change, but the top tax rate can change dramatically. All through the 40's and 50's the top tax rate was around 90% for all income over $400,000 - and what happened in the 50's? We had a strong growth that created a strong middle class for the first time, in fact, most of the country moved up from poverty to the middle class.

In 1980 Reagan dropped the rate down to around 25%, which made the rich very, very happy. Of course, the deficit and our debt grew faster than ever before in American history and he had to raise taxes. He's known for lowering taxes but a lot of people are surprised when they hear he then raised taxes 4 times during his 2 terms. His voodoo economics simply didn't work.

The big lie from the Republicans is that they got the middle class to think the raising or lowering of taxes was about them and not the rich. There are 2 ways a modern economy can function, the rich can be taxed at a high rate in order to supply the 95% of us with a variety of services, like roads, schools, police, military, welfare, medical care, etc. Or all the tax breaks can be for the rich which funnels all our money from us 95% upward to the rich, so they can get richer and richer. Since Reagan took office until today the top 1% saw their incomes increase by 250%, while the bottom 95% of us saw our income drop by 6%. Productivity increased quite a bit as well but the workers who are working harder and better don't get to reap the rewards, it all gets funneled up to the rich.

The end results of Republican economic policy is a total collapse. It happened once back in the 1930's and we had the Great Depression as a result, and happened again at the end of Bush's watch but we were saved from another depression by Obama's economic policies. So that instead of the Second Great Depression we got the first Great Recession. Semantics? No, it really does make a difference. When Bush left office and Obama took over we were losing 700,000 jobs per month - yes, PER MONTH!! Now, we have a net gain of jobs being added by about 40,000 per month.

Unfortunately people are still feeling it because we need to be adding 300,000 jobs every month just to keep pace with the population growth. In other words, 300,000 new workers enter the job market every month. Still, moving from a falling economy to one that is gaining is quite a grand feat and worth giving Obama much credit for.

Vote Democratic!!!

Why, you ask? Look at this chart below, this alone is more than enough reason:

The blue lines show how much more we will all make under Democrat rule. Unless you are in the top 5% - those making over $200,000 a year - you WANT the democrats in and should dread the idea of Republicans gaining power again. Look at how bad it’s been lately, that all came from Republican policies going back 30 years but topped off by 8 years of George Bush

And make no mistake, Obama’s stimulus worked, it kept the economy from going over the cliff. It’s hard to make the argument that it would have been much worse without the stimulus, but I’d like to think most human beings are capable of at least that much abstract thought. We would all be in the second great depression right now if it wasn't for Obama.

What will the Republicans do if back in power? Tax cuts for the wealthy and subpoenas for everyone, shutting the government down. If tax cuts created jobs we wouldn’t be in this mess now because the tax cuts have ALREADY been there for 10 years and fewer jobs were created under George Bush's watch than any other president.

If you look at the chart you will notice that even the top 95% make more under Democrats, so why do the rich support Republicans? Because Republicans will lower tax rates. The majority of the money made by millionaires and billionaires comes from investments, which are taxed at a straight 15% rate. It used to be 20% under Clinton, so they have been making out like bandits over the past ten years. And instead of saying “OK, we’ve done really well for the past ten years, we should turn it around and help the lower 95% get a bigger cut of the pie, that’s only fair, after all.” What they really say is “KEEP YOUR HANDS OFF MY MONEY AAAARRRGGGGHHHH!!!!”

So vote Democratic if you want your income to go up, vote Republican if you want it to do down. And remember that while the tax breaks for everyone are over at the end of this year Obama wants to lock them in place permanently for everyone making under $200,000, but letting the tax breaks end for the top 95%. The Republicans want to continue with the tax breaks for the wealthy and are threatening to not vote for middle-class tax relief by itself. Those tax breaks for the wealthy mean an extra $100,000 per each million of income in the pocket of millionaires.

The Stimulus

Image via Wikipedia

Despite what everyone says Obama's stimulus WAS successful, it kept us (and possibly the world) from going over the cliff. The problem was that it was too small, which Paul Krugman tried to warn them about.

The Obama team made 2 major miscalculations; the first was that they underated the severity of the recession, they didn't think they need something huge, that the economy would bounce back like it always does, boy, were they wrong. The second was that they thought they would be able to come back and do a second stimulus, not realizing that there was no rationality left in the Republican party, they were perfectly willing to let the economy collapse in order for them to get elected and win back majorities in both houses.

Ezra Klein goes into more detail, here's an excerpt:

Ten percent unemployment and a terrible recession ended up discrediting the people trying to do more for the economy, as their previous intervention was deemed a failure. That, in turn, empowered the people attempting to do less for the economy. So rather than a modestly sized stimulus leaving the door open for more stimulus if needed, its modest size was used to discredit the idea of more stimulus when it became needed.

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• How Did We Know The Stimulus Was Too Small? (krugman.blogs.nytimes.com)

Free Money Only for Wall Street

Image via Wikipedia

The administration has unveiled new plans to help the auto industry. It will entail a complete re-organization of Gm and Chrysler - “shared sacrifice” is what Obama called for, which means the re-negotiations of union contracts. And he also wants the head of GM to step down.

Excuse me???!!!! Is Obama serious? Now I’m having very serious doubts about his ability to get us out of this economic mess - he doesn’t seem to understand what caused it and what has to change.

I don’t mean that any of those things he wants the car companies to do are wrong - what I’m mad about is why didn’t he and Geithner make these same demands of the bankers and Wall Street guys and AIG??!!

When it came to the AIG bonuses they said “Oh, we can’t do anything about it, they have contracts.” Yeah? Tell that to the auto workers union members who also have contracts. They will tell you contracts aren’t sacred, in fact, they might even tell you that contracts are worthless. Except - they only seem to be worthless for a working man, if you are rich then your contracts will not even be questioned.

And why is the head of AIG still there? Actually the guy in there now is new and can’t be blamed for all the stuff that went on before he got there. But what about all those guys who got those bonuses? You know, the guys so indispensable they not only can’t be fired but we have to give them millions of dollars just to keep them around - who are the same guys who engineered a huge part of the problems. Or the people at all those over corporations?

Where the HELL is the “shared sacrifice” over at Wall Street? Can we even have any kind of “shared sacrifice” as long as the rich guys aren’t part of it?

On top of that he gave the 2 auto companies 60 days to turn things around or the hammer will fall. But Wall Street is given 5 times as much money with no demands on them at all. They don’t even have to account for where the money went.

All the people who have caused this financial meltdown are still there making far more than any auto worker ever did and are being handed billions of dollars with absolutely no strings attached.

UPDATE: Turns out that although the head of GM was fired by Obama he will be walking away with a $25 million golden parachute. Think the union people renegotiating their contracts will see the “shared sacrifice”? Think about it, working people making the HUGE fortune of $50,000 per year are asked to take a pay cut while the head of GM walks away with more money that any of them will ever see in their lifetime? GM stock went from around $30 per share to around $2 per share during his tenure. That's worth $25 million?

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Tax The Rich

I get a weekly newsletter that I always find interesting even though it makes my blood boil. It's called Too Much and it talks about the many abuses of the rich and how much they are really walking away with and how everything they say is a lie.

This week they talk about the claim by Republicans and the rich that raising taxes on the rich doesn't mean anything because the rich just hire accountants to get them out of paying more:

Does this case against upping tax rates on high incomes have any merit? Do higher tax rates on high incomes merely roll off the super rich, as opponents of these higher rates charge, like water off a duck's back?

We don't have to guess at the answer here. We need only examine the historical record. Higher tax rates on income in the nation's top tax brackets, that record shows, do make a clearly discernible difference. The higher the tax rate on high incomes, the more in taxes the super rich pay.

Tax loopholes, of course, do exist, and the super rich have, down through the years, spent large fortunes on tax lawyers who know how to max out on the opportunities these loopholes offer. But they spend these fortunes whether tax rates on high incomes are rising or falling. The lower the tax rate, consequently, the less the rich will pay in taxes.

The current top federal tax rate, 35 percent, has been in place since 2001. On 2008 tax returns, this top rate will apply to ordinary income — that's wages, salaries, and bonuses, but not capital gains — over $357,700.

In other words, they are lying. If it was true why would the rich care if their tax rate was raised if they wouldn't have to pay any more? The fact is the rich ALREADY have armies of accountants getting them the best tax payment they can get, they won't suddenly start hiring them if their tax rate is raised. The Too Much web site has charts for how much they rich paid in the past when there were higher rates.

But look at the real numbers, they are now paying 35%, but only on income OVER $357,700, not on all their income. And the new tax rate will only take them back to the Clinton tax rate of 39%, again only for income OVER $357,700. This means $40,000 per every million they make. This is pocket change for them, they spend more than that on their daughter's birthday parties. And they were still pretty rich and getting richer during the Clinton years.

It's unbelievable how greedy and petty these people are - and unpatriotic. This is to help the country and they fight it tooth and nail.

New Rules

Bill Maher thinks if we kill just 2 bankers it will scare the rest of them into acting better.

The Big Con

Image via WikipediaThom Hartmann has a good article on the Air America web site on what has been going on for the past 30 years in America, how the Republicans seized power and drove us in to disaster. If you aren't familiar with Thomm I suggest you give him a listen on Air America radio weekdays from 9 am to Noon. Thomm is very knowledgeable on politics and the economy and has several books out on the subject.

How The Republican Party Has Conned America for Thirty Years
By Thom Hartmann

This weekend, House Republican leader John Boehner played out the role of Jude Wanniski on NBC's "Meet The Press." Odds are you've never heard of Jude, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.

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It's Official

We ARE in a recession and have been since LAST December. Boy, what a relief, now I know I'm not just a whiner.

The Big 3 auto makers are heading back to Washington to beg for money. This time they are going to drive there in hybrid cars. Each taking a private jet to go to Congress, hats in hand to beg for taxpayer money, was such a bad idea you have to wonder why it never occurred to even one of them that they shouldn't do it. It's because the rich live in a bubble and don't have a clue what it is like down in the trenches. I did hear that for one of them part of the plan is for him to take one dollar in annual salary until they are solvent again, guess he got the message.

And the auto workers are not to blame for the dismal state of companies. The idea that the average salary is $75 an hour is a blatant lie spread by Republicans. What they did is take all salaries, all medical benefits, all retirees and THEIR medical benefits, and add them together then divide it by the number of actually worked hours. One guy announced this in the news and everybody took it up and spouted it like it was true without ever checking. The truth is the average auto worker hourly wage is $26. This is only $54,080 a year, not exactly a huge salary. And if they were making $75 per hour that would still be peanuts compared to the millions the top execs take when they are the ones making the decisions that got them into trouble.

The New New Deal

Here is a good article by Paul Krugman on what Obama should do about the economy:

But it would be fair for the new administration to point out how conservative ideology, the belief that greed is always good, helped create this crisis. What F.D.R. said in his second inaugural address — “We have always known that heedless self-interest was bad morals; we know now that it is bad economics” — has never rung truer.

And right now happens to be one of those times when the converse is also true, and good morals are good economics. Helping the neediest in a time of crisis, through expanded health and unemployment benefits, is the morally right thing to do; it’s also a far more effective form of economic stimulus than cutting the capital gains tax. Providing aid to beleaguered state and local governments, so that they can sustain essential public services, is important for those who depend on those services; it’s also a way to avoid job losses and limit the depth of the economy’s slump.

So a serious progressive agenda — call it a new New Deal — isn’t just economically possible, it’s exactly what the economy needs.

The bottom line, then, is that Barack Obama shouldn’t listen to the people trying to scare him into being a do-nothing president. He has the political mandate; he has good economics on his side. You might say that the only thing he has to fear is fear itself.

That last line is a good one. Maybe next time Krugman will win the Nobel Prize for literature to go alongside the one for economics.

But it's a very true statement. Nancy Pelosi said they would govern down the middle. Screw that! Obama was elected for change and that is what people want. We certainly don't want cowardice and timidity, this is the time for bold action along the lines of what FDR did in the 30's.

The polls just before the election showed that McCain's cry of "redistribution of the wealth" actually raised Obama's numbers. People want that. Even those who don't know all the details know the rich have been ripping us off for years and we have a collapsing economy to show for it. Obama does have a mandate, let's hope he uses it.

McCain's Big Backfire

Just came across this article on Alternet that says all the same things I said in yesterday's post. Just in case anyone thinks I'm making any of this up or have my facts wrong check it out:

Obama has not only maintained a stable lead under the Republican barrage, he has increased his positives in the traditionally Republican territory of taxes. The final national polls before Tuesday all show a national hunger for national wealth redistribution downward. An Ipsos/McClatchy poll finds that likely voters prefer Obama's tax plan to McCain's by 8 points. Pew says Obama added to his edge on taxes and the economy between mid-September and mid-October by 6 points, jumping from 44 to 39 earlier to 50 to 35. On Oct. 30, Gallup released results showing Americans favor Obama's style of wealth spreading by a whopping 58-to-37 margin.

It appears the nation's sanity and sense of fairness has reasserted itself to wipe the floor with condescending GOP red-baiting.

As I said, money has been flowing upward for a long time, in the last 8 years 90% of all the wealth in the nation has gone to the upper 10% of wage earners. Does that seem fair or natural? No, it's greedy asholes trying to steal from the government coffers (your taxes) and getting away with it. Also wiping out the credit card so all of our children and grandchildren have to pay for our exceses. Is that family values or what? It's time to turn it around and start sending that money back down to the rest of us.

If anything Obama's plan to raise the taxes on the top 5% (making over $250,000) from 36% to 39% is much too conservative. It should be raised to 50%.

But I think he didn't want to scare the really wealthy too much. Despite the way I talk about the rich I'm sure that most of them are not too upset by this kind of tax increase. It isn't going to affect their own spending in the least and they realize they've been reaping huge benefits from Bush that they don't really deserve. Some, I think, even realize just how desparate it is getting for the people in the middle class, how close to the edge everyone is. Make a large number of people too desparate and we will have violent revolution. I'm hoping Obama will be the non-violent revolution.

It's not like the middle class is greedy and want something they don't deserve. They simply live in a system created and maintained by the wealthy that make life a difficult proposition for the non-wealthy. All most of us want is to make a decent wage - a liveable wage - for our work, and health care and retirement so no one has to face financial disaster. This doesn't seem like too much to ask, in fact it's merely what the basics SHOULD be in a modern, Democratic society.

And it's not like we are asking any sacrifice of the wealthy, either. So someone makes $10 million after taxes instead of $12. Poor guy! Death can't be far behind! But for those in the middle class who can't afford health insurance and are diagnosed with cancer they really ARE going to die! In 2005 three thousand people died in California alone because of a lack of health insurance. This is a silent holocaust. Add in the other 50 states and we are talking about tens of thousands of preventable deaths every single year in America. This happens in third world countries, not in the wealthiest Democracy on Earth, right?

We just have to ask ourselves what kind of America to we want to live in. One where 95% of us or more are prosperous and happy or one where only %5 of us are and the rest are struggling just to survive and often failing? I have trouble thinking even the richest people think that is a good idea.

Of course, there are lots of very wealthy people who think wealth is a sign of the worth of a person. Those on the lower end simply do not deserve to live if they can't afford to pay for medical treatments. It's a kind of brutal Economic Darwinism, which is truly ironic since most of them don't even believe in evolution.

So McCain's claim of socialism doen't hold much weight. Many don't even know what it is and if they did they would realize they are for quite a number of socialist things. Like Social Security and Medicare, universal health insurance and help for people in natural disasters.

Alexander Zaitchik goes on to say:

Over the last eight years, 90 percent of the new income generated has accrued to the top 10 percent, while average family incomes have dropped $2,000. These numbers have engendered bitterness on top of anxiety that has shifted the economic debate. If Democrats get a chance to seek forceful redress in the coming years, Republicans are sure to call Obama a socialist and much else besides. But that's OK. Tuesday's election is going to show that when people are hurting, they don't mind a little "socialism" -- just as long as it's pointed their way.

The wealth will ALWAYS get re-distributed in a modern society, economics is all about moving money around, it’s just a question of whether you want it flowing up or down. And we already have socialism for the rich and how does that make sense?

Redistribute the Wealth

Many of us were blown away by the McCain camp accusing Obama of socialism, what decade are we in, anyway? I wonder how many people under 30 even know what socialism is? Certainly McCain doesn't. Here is a little article by TOM TEEPEN at the SeattlePI entitled If Obama's a socialist, so is McCain:

As it happens, we have already had a revolution that redistributed the wealth. Bush's big tax overhaul redistributed it to the already rich, so they could be richer yet already.

By 2005, households enjoying the top 1 percent of incomes -- those over $348,000 a year -- were receiving the biggest share of national income since 1928. The income gap between the well off and others has stretched beyond shouting distance. Where middle and lower earners had shared in the 1990s boom, they generally lost income in the meager "Bush recovery" from the brief 2001 recession.

In their rush to make Obama out as a socialist readying tumbrels for the rich, conservatives have sometimes explicitly but for the most part implicitly reverted to the old country-club grumble that the graduated income tax is nothing more than a radical scheme to coddle the undeserving poor with the money of the deserving rich.

It's very important to remember that ever since Reagan became President we have been on a course of redistributing the wealth upwards to the rich people of this country, which W put the final period on, that has helped to bring us to our current financial crisis.

So Obama isn't redistributing the wealth, he's getting back what the Republicans and the rich have stolen from everyone in this country who makes less than $250,000 a year.

We've had a progressive tax rate since Teddy Roosevelt, John McCain's hero, first started it. Progressive means the percentage gets higher the more you make. By the early 60's the very top rate was 90%. The Republicans try to use JFK as an example of a Democrat lowering taxes on the rich as if that would make it OK for us to do. He brought it down to 75%, but also did away with many of the loopholes that allowed those in that bracket to get massive deductions, the end result was that the richest people actually paid MORE when Jack Kennedy's tax bill went into effect.

That's very similar to what is happening today with business taxes. McCain continues to claim we have the second highest tax rate on business in the world, around 34%. This is true BUT (there are always these "buts" in any claim by Republicans) there are so many loopholes that after deductions US businesses end up actually paying the second lowest taxes in the world. Obama doesn't want to increase the tax rate but to decrease the loopholes. Things like a corp getting a tax break to move their production to China. He actually wants such a company to pay MORE taxes if they want to do that. But give them tax breaks if they choose to keep their jobs in this country.

So during the most abundant times in our history, the 50's and 60's, the progressive tax rates for the rich were very, very high. Why, if the Pubs were right that high taxes on the rich depress the economy, were we so prosperous in those decades? I think we've been trickled ON by George Bush and the other Have's and Have More's long enough. Nothing like a collapsing economy to tell us we are on the wrong path. High taxes on the rich are a way of creating prosperity for the entire economy, lowering the rates creates disaster. Current tax rates for the rich are around 36%, and we are all less prosperous than we were 40 and 50 years ago when the rates were at least twice that much.

Obama just wants to bring the taxes of the top 1% of the country back to the levels they were when Clinton was president, and THIS is being a socialist? I'll tell you what being a socialist is; it's Alaska claiming that all of the state's natural resources belong to everyone - collectively - and that everyone should get a share of the profits. So Sarah Palin took money from the rich oil companies and sent every man, woman and child in Alaska a check for around $3200. That's about as socialist as it gets. Are you against that? Is it a terrible thing that the oil companies have to pay the citizens of Alaska for using their resources?

In Washington they do it a little differently; they privatize profits, and when the top people of a corporation have squeezed the company dry then the government steps in and pays for their losses! What could be better than that? Wouldn't you love to be able to spend like crazy, take all kinds of chances and when you go broke have the government give you a couple of billion dollars? Sorry, only the top one percent of the wealthiest Americans can get that kind of socialism.

Bernie Sanders

Now here is the one senator who is TRULY the most liberal in the senate, and he is the guy who knows how to say things right on target. In this video he explains why the rich people should pay for this Wall st. debacle since they are the ones who benefited from it. The burden should not fall on the middle-class who have already borne the burden to make the rich REALLY rich during Bush's Reign of Terror. I had already linked to his petition in this earlier post:

Senator Bernie Sanders

Sign the Petition! Normally I don't sign these things, I think it makes people a target for the FBI and these days, in the land of the once-free, that is a very serious worry. But Bernie is my favorite Senator (I wish we could get him to move out here and replace Feinstein) and this issue is too important and too outrageous. How dare they come back and ask the American public to rescue the greedy wall streeters who have caused this but apparently, are not supposed to pay any price for it. They've already ripped us off in any number of ways as Bush and the rich have looted the national coffers over the past 8 years to make themselves richer. Bernie says this:

While the Administration has quickly rallied to help Wall Street, it has ignored the needs of the declining middle class. Since President Bush has been in office the wealthiest people in this country have made out like bandits and have not had it so good since the 1920s. The top one-tenth of one percent now earn more income than the bottom 50 percent of Americans and the top one percent own more wealth than the bottom 90 percent. Incredibly, the richest 400 people in our country saw their wealth increase by $670 billion during the Bush presidency.

Having mismanaged the economy for 8 years while continually insisting that, “The fundamentals of our economy are strong,” the Bush Administration, six weeks before an election, wants the middle class of this country to bail out Wall Street to the tune of one trillion dollars. Meanwhile the wealthiest people, those who have benefited most from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd.

So sign the petition and let's see if we can put a stop to this insanity and not give Bush his final, and biggest, victory.

John McCain: The New FDR

All McCain can talk about these days is regulation and how great it is and how much he is for it and boy, when he is president he’s going to regulate those greedy Wall Streeters to within an inch of their lives!!

It’s hard to find a concept more absurd when McCain has called himself the DE-regulator for years and said he is always for less regulation. Let the markets find their own balance was his philosophy, echoing the Republican party line. Free markets should be worshipped like an omnipotent and omnibenevolent god. What an embarrassment this latest crisis must be for him - and all Republicans. Now they have all become regulators crying out against those greedy rich people who have brought us to the brink of ruin.

And make no mistake about it, we are on the brink, which means the whole world is on the brink of financial ruin. We might be back on the barter system soon, better gather up some actual products instead of money, because it will soon be worthless. But John McCain, or any Republican, sounding like a socialist calling for more and more regulation is a world turned upside down and inside out. But it’s important to note how easily and nimbly McCain has given up everything he has held dear all his life and done a complete about face and betrayed himself in order to become president. Either that or he’s lying. Take your pick on which is a worse statement on his character. What we can say now is that he IS a character, but he HAS none.

But what choice does he have? His whole life has just been shown to be a lie, that the great Republican philosophy of a free market is pure fiction and instead leads to economic ruin. Isn’t it interesting how little it means to him that his life has been a lie, he just does an about face and puts another mask on. Clearly he never believed his own philosophy, it was just convenient for getting him elected as a Republican. Now that it is no longer convenient (to say the least) he does an easy pivot and changes his basic view of the world and becomes a completely different person.

Actually, he has not become a different person, he was always an empty suit and has only reacted to the crisis in the only way possible. It’s like the old joke of a guy running behind a crowd as fast as he can and saying he has to get in front of them because he is their leader!

More On The Economy

Paul Krugman is my favorite economist because he is one of the few who doesn't have his head stuck up the rightwing a-hole. And he really is a well known and highly respected economist. Check out his bio at the NY Times from which this is just a small piece:

Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University.

Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

He's a heavyweight in the field. And he said something today on the Rachel Maddow show that scared me and made me realize what I forgot to mention yesterday in my post on the economy; namely, that we could be heading for another Great Depression just as bad, if not worse as in 1932. This is something I've worried about for years because anyone who knows even a little bit about the economy and what the idiot Republicans were doing to it were worried. Another Great Depression is, of course, the worst of all possible outcomes so I always thought it wasn't too likely (I hoped). But Krugman said today that if the Fed hadn't bailed out AIG we might have been only days away for a GD. Days. This from his blog 2 days ago:

And there’s a lesson there for those ready to hear it: government takeovers may be the only way to get the financial system working again.

Some people have been making that argument for some time. Most recently, Paul Volcker, the former Fed chairman, and two other veterans of past financial crises published an op-ed in The Wall Street Journal declaring that the only way to avoid “the mother of all credit contractions” is to create a new government agency to “buy up the troubled paper” — that is, to have taxpayers take over the bad assets created by the bursting of the housing and credit bubbles. Coming from Mr. Volcker, that proposal has serious credibility.

If everyone loses faith in the ability of banks to borrow money then the whole system comes crashing down because all credit will end which will bring most business to a halt and put all of us out of work. In 1932 they had an unemployment rate of 24%, we could see that again.

So what do we have going on here? We can now proudly proclaim ourselves a socialist country in the style of Europe. That's what Republicanism has done for us. But we aren't out of the woods yet. Krugman says he wants to know the details of what the the Fed, SEC and Congress are cooking up to see if it will do what it needs to do, and hopefully without the CEO's and stockholders of failed companies walking away with millions.

The Economy Stupid

I'd like to say the stupid part goes to Bush, and while he's been the biggest enabler of disastrous economic policies, the fault of this goes way back for decades. In fact, it would be hard to pinpoint where it all started, probably the 1920's is the best place. One article that explains it very nicely starting from the 1920's on up, but written well enough it's easy to understand, is Only a Roosevelt-Scale Counterrevolution Can Prevent Great Depression II By Robert Kuttner.

Free-market extremists brought us this needless economic collapse. Here's a rundown of the mistakes we've made and the reforms we need now.

Free-market extremists, otherwise known as Republicans. And one of the people most at fault is Alan Greenspan. His entire philosophy since he became head of the fed is to do what he could to make the economy business friendly. Here's an article by Digsby on how Greenspan created this current crisis, Digsby quotes Newsweek's Michael Hirsh:

This mess is mostly a titanic failure of regulation. And the largest share of blame goes back to one man: Alan Greenspan. People mainly fault the former Fed chief, who once enjoyed a near-saintly reputation because of his reputed "feel" for market conditions, for ushering in an era of easy credit that accelerated the mortgage mania. But the much bigger problem was Greenspan's Ayn Randian passion for regulatory minimalism. Under the Home Ownership and Equity Protection Act enacted by Congress in 1994, the Fed was given the authority to oversee mortgage loans. But Greenspan kept putting off writing any rules. As late as April 2005, when things were seriously beginning to go wrong, he was saying that subprime lending would work out for the common good—without government interference.

There were others responsible, Phil Gramm comes to mind - you know, McCain's economic adviser - but the heart of it all goes back to Reagan's election in 1980. That's when the idea that government was evil and regulations come from government and are evil too. McCain himself is one of those free-market extremists who has supported de-regulation every time he could in his 26 year senate career. But now he likes regulation (hahah).

But not to worry, the government bailout should save us all from collapse, now the Fed is running some major companies, like Fannie Mae and AIG, and actually own all or part of these companies. This means that eventually we all might make a profit from these companies.

A guy on the Today show this morning had a good analogy for it. Think of the hurricane that just wiped out Galvaston. All the people there are screwed because they are individual homeowners with limited resources. But suppose some really rich guy owned it all and could afford to sit back and take big loses for several years, eventually all that property would be rebuilt and he'd make a fortune. The key is being rich enough to get through the financial loses. When it comes to AIG and all the others the Fed has bailed out, only the government is rich enough to do that on the scale needed. Wow, the government as a solution to a major problem, what a concept!

And don't worry, the Fed has money even though the country is in debt. They are the people who print money so they can make as much as they want. But in the modern age of computers actually printing money is not necessary, so the Fed magically created billions of dollars that only exist in computer storage. Isn't that cool? Don't you wish you could make Magic Money?

The main point is that we should be OK, eventually, as long as some strong regulations are enacted to prevent this from happening again. How do we do that? By electing Democrats, especially as president, and throwing out alllthe clowns who want deregulation no matter what. And who are they? Republicans. Republicans should not be allowed to rule and they should never be given moeny to handle, and this has now been proven definitively by the current crisis.

The Final Verdict

"Let's be clear," Obama said, "what we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed."

This is the most important thing Obama has said so far in this campaign, and he seems to be the only one involved, including media and economists, that has really seen the full picture and said it out loud.

What he is saying is that our economy crashing down around ours ears is the full result of Republican economic policy. Let's be very, very clear, the end result here is absolutely proof that the Republican economic philosophy is WRONG. It won't even do what the True Believers think it will do. What they do is remove regulations, privatize everything and let all the fat cats sit back and rake in the cash at the expense of the middle class and poor. The top 1% has nearly doubled their income since Reagan took office, while the middle class has lost over 6% in the same time period. And Bush carried this to new extremes by refusing to enforce any regulations that still existed.

And what happens when the restraints are taken off of the business men, the free market worshipers? They get greedy. And I don't mean just greedy, I mean serial murderer crazy greedy, something all out of proportion to what they needed to do to get very rich.

Phil Gramm was leading the charge back in 1999 to strip regulations from the banking industry. After he left congress he became a lobbyist for one of Europe's largest banks, UBS. What a surprise. John McCain made him his finance czar and he wrote up all of McCain's financial policies. He's been in the dog house ever since he said we were all whiners over the economy but he's still part of McCain's campaign and word is he will be Treasury Secretary if McCain wins.

McCain himself has said for years that he is The De-Regulator. That he always wants less regulation every time. But in the last 24 hours he is suddenly all for regulations on those greedy people on Wall Street, despite a 26 year record of voting against such things. Isn't it great how politicians can suddenly become the exact opposite of what they have always been - in a crisis? Especially when all they really want is to be president and will sacrifice every shred of honor they ever had in that pursuit.

This failed Republican economic philosophy lasts a long time for 2 main reasons; 1-The guys at the top make lots of money for a long time before the house of cards comes crashing down and 2-They are all ideologues, to them this will always be true no matter how much evidence there is that says otherwise. This is why Bush has said we are just "in a rough patch" and that the economy is fundamentally strong. He really does believe that if we all just wait a while it will work out like it's supposed to.

In the meantime, while it's all working itself out, we - you and me - are the ones who have to pay the piper while the guys who caused it all walk away with billions of dollars in their pockets. Not much incentive for them to change, is there? They get all the rewards but take no risks, because when the rich are in trouble socialism suddenly becomes a good thing. In the meantime we have reaped no rewards for all this gluttony but we are stuck with the bill.

The last time this happened it was Herbert Hoover putting the final touches in place to cause the Great Depression. Then we had FDR come in and turn things around by injecting socialism into the American system. And by doing so saved the country and saved capitalism, created a strong middle class and made us rich and prosperous, and most of us got a piece of that prosperity. But the conservatives have been steaming ever since. Their greatest desire was to undo the New Deal and with the election of Reagan in 1980 they had their opening. They've been working like crazy to recreate the world of the Robber Barons of the late 19th century, going all the way up to 1929, and have suceeded.

Bush has put on the final touches with an economy so bad we just might see the American economy collapse, or even the world economy because this whole thing is reverberating all over the world. I hate to see what kind of policies other countries will create out of this in order to keep themselves safe from the American cancer of Republicanism, but whatever it is it will be very bad for us and for a very long time.

Our only hope right now is another FDR to come in and save the day and create another golden age of the middle class. That means Obama. Is he up to the task? I don't know and have many severe doubts about his abilities and his economic policies, but he's all we've got, four more years of Republicanism and we are finished. So the next time someone says "Free Market" to you, go out and vote for a Democrat.

TOO MUCH!

I love this site because they point out the problem of money accumulating with the top 1% while diminishing for most of us. Many examples plus clear information on why it is bad in so many ways. If this continues democracy is at an end. We have the middle class because of the policies FDR put in place after Republican rule crashed our economy the last time. One of the great ironies is that FDR saved capitalism while saving America. He made it viable, but those great capitalists, the Republicans, hate him for everything he did. Without him we would likely be a communist or fascist society.

Then all those soldiers came home from WWII and the middle class was created in high numbers and we became more of a democracy. It was a strong middle class that made us the dominant world power, now the deliberate destruction of the middle class by the Republicans are destroying our lead in the world as well as destroying our democracy. And make no mistake about it, a large a prosperous middle class is not natural, it has to be artificially created by government regulation. Otherwise, if left alone we will end up with all the money moving back to the top with the rest of us in terrible poverty. Through most of human history there has been a small elite that was rich and ruled, a slightly larger middle class (only about 5% most of the time) and the rest in great poverty. Only in the 20th century did this change.

Our health is suffering too. Here’s a quote from the website:

“The richest 1 percent of U.S. households now owns 34 percent of the nation's private wealth, more than the combined wealth of the bottom 90 percent of the population. All of us who are in that bottom 90 percent share an interest in having an economy that works for everyone. Rather than dividing ourselves by race, we should unite for an America that benefits the vast majority — regardless of the complexion of that majority.”
Sean Thomas-Breitfeld, Center for Community Change, Albany Times-Union, September 2, 2008.

And it’s beyond absurd that the 90% at the bottom are so easily controlled and manipulated by the propaganda of that 1%. In a land where we can all vote they should be following us.

And here is another good site in the same vein, called Extreme Inequality.

Divided We Fail

This is something from AARP where they are trying to end partisanship in the federal government. They want Democrats and Republicans to work together for common goals. Here is what they say their goals are:

We believe that access to health care and long-term financial security are basic needs that all Americans share.

Sounds nice, doesn’t it? All of us united in doing the best for our country and the people in it. There is one basic flaw in that reasoning - the entire reason we don’t have universal health care or financial security right now is because the Republicans have been fighting it tooth and nail for the last 40 years. How do you ally yourself with the very people who have caused this problem in the first place?

The Republicans’ big break came with Ronald Reagan, he launched modern Republicanism and it has culminated in it’s highest form with George Bush. The main principal of this movement? Funnel wealth upwards from the poor and middle class to the top one percent. And they have been doing it, it’s accomplished because all they have to do it yell “The Democrat will raise your taxes” and people get upset. No one don’t even bothers to check out if it’s true or false, it’s like a little panic button the Republicans have been hitting for so long it’s now become automatic.

Bush lowered your taxes (although he lowered them more for the wealthy). Has this made you better off? The price of gas alone negates whatever small tax cuts you might have gotten and that is just one thing, there are many, many more things that have cost you dearly. And it is so much better having your money going to Exxon than the government, right? The dollar is now worth one third less than what it was when Bush came into office, this means everything from overseas now costs more so prices are rising everywhere because we no longer manufacture anything in this country.

Another beauty of a scheme, Reagan lowered regulations that prevented corporations from moving their operations overseas for the very cheap labor and lack of unions, so all the corps did just that, now that the dollar has dropped they are making even more because all overseas holdings have increased in value and they get more money for all imports.

And with everyone scared about losing their jobs and health insurance - or actually losing them, we are too poor and desperate on a daily basis to make a fuss and fight back. So very few marches and protests these days, and when there are the media, all owned by corporations, don’t cover it.

Bottom line is there can’t be any unity - unity just means we will be screwed again because the Republicans are responsible for the way things are right now. They will continue to fight against the very things we want to the bitter end. The only hope we have to bring back a strong middle class in this country is to get rid of the Republicans and put in Democrats. Sure, Democrats are flawed but they are all we have to work with. Even minor changes in the laws can make huge differences in the American way of life, which is rapidly disappearing. Another 4 years of a Republican President will end the American Experiment in Liberty and doom us to being a third world country for decades to come.