In Wake of JP Morgan Chase Debacle, Where is the Tea Party Again?

The fine folks at JP Morgan Chase continued to make unchecked bets (the same kind that A.I.G. made and got burned) and lost big: $2 Billion in the last 6 weeks.  A few of those folks have since lost their jobs.  But not the man who lobbied the hardest against regulations that would prevent Chase from making those bets – no, he still has his job.  The shareholders are doing what they’re supposed to be doing: asking tough questions.  Will Dimon keep his job?  Sure – crony capitalism rewards failures at the top.

What I want to know is where are the massive rallies by the Tea Party calling for Dimon to be fired and regulations to be imposed on gamblers masquerading as bankers?

The answer is easy: there aren’t any and there won’t be any.  The Tea Party was co-opted by the same folks who perpetrated the worst activities that led up to the Great Recession and our continued economic malaise.  No substantive changes were made in the way Chase or other banks do business – save the tens of Trillions of dollars they got for free from the Federal Reserve.

The co-opting included distracting the populists in the Tea Party with the supposedly scarier threat of a Black Man in the White House.

Meanwhile, speculators were allowed to run up the cost of oil and gasoline, which acts as a choke collar on the American economy, and other right-wing economic theories were imposed across Europe, which has led to what is likely to be another recession:

[h/t Bonddad]

The combination of high oil/gas prices, US corporations sitting on Trillions of dollars in cash (not hiring), and European economic weakness will not help the US economy.  Will our “recovery” be over soon; will we follow Europe into weaker and weaker economic conditions?  Don’t ask the Tea Party, they don’t truly care.

Gasoline Usage Still Way Down YoY; Oil Prices Rising

According to NDD at the Bonddad Blog, Year-over-Year gasoline usage in the U.S. remains significantly negative: 8167 M gallons this year vs. 8810 M gallons last year this week.  That’s -7.3%.

Yet oil prices increased this week by over $4 to $103.24 per barrel and gas prices at the pump rose $0.04 to $3.52 (national average).

Let ‘s state this clearly: it’s not American demand driving those prices up.  We can attribute part of the increase to other growing economies.  But as more people are figuring out all the time, a not inconsequential part of it is commodity speculators.  Then there’s tension over Iran that the Republican Teabaggers are trying to inflame – they just love them all the war and conflict they can gin up (as long as their family members aren’t required to actually serve, dont’cha know).  Finally, don’t discount the role of the giant fossil fuel industry here – do you think they’re taking the Keystone pipeline decision in peace?

As the folks at Bonddad Blog state, oil and gas prices this high helped act like a choke collar on the U.S. economy last year.  Given the relative growing health of the economy since, and the similarly growing prospects for Obama’s reelection largely as a result, that collar might be forcefully reapplied (or no action taken by some to remove it) in order to dim his electoral chances.

Employment & Economic Disparity Graphs

I saw a diary at DailyKos the other day that I wanted to spread to just a little wider audience.  Some are from the Economic Policy Institute and some are from other sources.  I will reprint one of the graphs – it’s one that I’ve seen monthly for the past 3 years and think it speaks volumes as to why the Occupy Movement remains viable and is growing.

Calculated Risk

As you can see, horrific job losses continue 4 years after the month of peak employment.  This is the longest such occurrence in modern history in the U.S.  If we extrapolate that trend, employment numbers last seen in 2007 will finally be achieved in 2015.  Meanwhile, population will increase and replacement jobs will continue to pay less than the originally held jobs.

At this point, it is worth pointing out that President Obama needs to start owning the economic conditions his policies have created.  He can’t keep pointing to Congress as if they’re exclusively the problem while he tries to play Mr. Nice Guy in Washington.  Americans don’t want Mr. Nice Guy and barely functional economic policies.  They want fully functional policies and politicians that can get them enacted.  Everything else is secondary.

In the larger scheme of things however, this graph shows one of the effects of Teabagger economic policy: longer and longer employment recoveries.  Make no mistake, this is exactly the type of situation that the 1% want to occur.  Will there be recoveries after the next couple of recessions?  I still think we’re witnessing a new normal condition of our economy.  How soon that theory is validated or refuted remains to be seen.

Oil Back Near $100/Barrel: Where Is The Demand?

The price per barrel of oil is back up near $100 as of the end of last week and through today’s trading.  According to the free-marketeers, that must mean gasoline demand has been through the roof.  Oops, not so much: demand is down -4.3% YoY, at 8671 M gallons vs. 9056 M a year ago, as noted at The Bonddad Blog.

Clearly, something other than just demand is and has been at work.  Oil trading is as much gambling as the stock market is.  All the volatility that consumers are affected by arises primarily from large amounts of bets placed on anticipated prices.

Why is this important?  As NDD notes, “This [oil's price] is back above the recession-trigger level calculated by analyst Steve Kopits. Gas at the pump declined $.03 to $3.42 a gallon. Measured this way, we probably are still about $.15 above the 2008 recession trigger level.”  Those bets have real-world implications.  Recessions are easier to trigger when oil and gas prices remain high.

Keystone XL: Obama Plays His “Base” Like A Fiddle

There’s lots of cheerleading going on from the environmental sidelines over this:

There will be a “supplemental” environmental impact statement — presumably one that isn’t rigged. It “could be completed as early as the first quarter of 2013.”

A SEIS completed in 2013.  Hmm, what about that date might be important?  Oh, I know – it’s the quarter after the 2012 general election.  After Obama wins because environmentalists and others vote for him, convinced that he’s playing 11th-dimensional chess after all of his stunning successes in his first term.  Or after he loses because the Teabaggers remain more motivated than the trod-upon Democratic base.

Either way, I fully expect the Keystone XL project to more forward starting in 2013.  Bill McKibben can bluff all he wants: “The president should know that If this pipeline proposal somehow reemerges from the review process we will use every tool at our disposal to keep it from ever being built”.  What leverage will McKibben or any other environmentalist have on Obama or his Republican Teabagger replacement in 2013?

A delay is not a victory, Bill & Joe.  But keep cheering.  I just know that will make all the difference in 2013 since climate change is one of Obama’s highest priorities.

Excellent Financial Crisis Write-Up

Hale Stewart has an excellent post describing the timeline leading up to the 2008 financial collapse.  Unsurprisingly, there is a good amount of Republican hypocrisy thrown into the mix: they were pushing for entities to provide more high-risk loans before they blamed those entities for the entire crash.  Of course, only a small fraction of high-risk loans were made by those entities, but when did a Republican let reality get in the way of their delusion?

The post’s premise is supported by a ton of research done by a wide variety of folks.

If you’re at all interested in knowing exactly what happened, read this post.  There is some economic jargon thrown in, but slog your way through it.  You’ll be better off because you’ll know what to look for in the future.

Citigroup Earnings Rise 74% to $3.8 Billion

I think that headline says enough, don’t you?

If not, there’s this (emphasis mine):

Three years after needing a (taxpayer funded) federal bailout (of billions of dollars) to survive, Citigroup reported its seventh-straight quarterly profit, with a 74 percent rise in the third quarter despite dismal results of its investment bank.

Remember, instead of consumer advocates or labor (you know, people who actually voted for him), Team Obama has people from Citi and other super-banks advising him on economics.  Does anybody seriously think that’s accidental?  No, it’s exactly what Obama wants.  Think that through carefully as you hear his campaign ramp up attacks on Romney for being too connected to Wall Street.  Rolling up his sleeves and giving speeches around the country is meant to obscure that hypocrisy.  Tell me again exactly how Romney would be worse if you’ve lost your home and/or job in the past 5 years while Citi got bailed out with your tax money and is now posting record profits.  Tell me how Romney would be worse when real incomes have fallen for the first time since WWII with a “Democratic” President pushing conservative economic policies as hard as his Con predecessor.  Because on too many issues, I’m not seeing enough of a difference.

Democratic Machine Wants The Occupy Movement

And that includes President Obama and his advisers, by the way.  Obama’s team is planning on challenging Mitt Romney as being too closely associated with those who every day exert more control over the people’s government.  Really?  That’s Rovian in nature: attack your opponent where you’re weakest.  Obama flooded his economic team with former Wall Streeters once he took office.  The people who have PhD’s on topics like the Great Depression (which we’re still flirting with)?  They left the White House because their voices were being kept from the President.  You need only look at our pathetic economic “recovery” and dismal employment opportunities to see how well that has worked out.

While Team Obama and the Democratic Party establishment might be working overtime trying to figure out how best to co-opt the Occupy Wall Street movement for their purposes, this demonstrates how tone deaf the President is:

But Obama also defended his support for bailing out distressed banks after the 2008 financial crisis, saying he “used up a lot of political capital, and I’ve got the dings and bruises to prove it, in order to make sure that we prevented a financial meltdown and that banks stayed afloat.”

Wow.  The President wants us all to feel very very sorry for his trials and tribulations “us[ing] up a lot of political capital”.  Yeah, the banks stayed afloat.  Better than that, they’re bigger today than they were in 2008.  They’re imposing new fees on the 99% and continuing to post record profits.  I’m so glad the President used up so much of his political capital to ensure continued abuses on the lower and middle classes.  I totally remember voting for that kind of change.

Millions of foreclosures in the past 3 years.  Millions more unemployed.  Trillions in taxpayer dollars given away for free to the banks.  Billions in bonuses paid to uncharged criminals who should be doing hard time.

Be careful, Team Obama.  I don’t think the Occupy-ers are stupid enough to fall for the same gimmickry they’ve been abused with in the past again.  Your hypocrisy and lack of principle have been on display.  Talking a harsher game doesn’t employ millions of Americans or put them back in their homes.  We didn’t get real change after 2008.  The ante has been upped.  This isn’t the hand where you bluff in return.

Be careful, Occupy-ers.   Do not let the Democratic establishment get their hands on the controls behind the movement.  They want to defang you and keep their favored elites in place.

But Obama also defended his support for bailing out distressed banks after the 2008 financial crisis, saying he “used up a lot of political capital, and I’ve got the dings and bruises to prove it, in order to make sure that we prevented a financial meltdown and that banks stayed afloat.”

Analysis of Occupy Groups Plain Wrong

I’ve heard a lot and read a little about the Occupy Wall Street groups that obviously started in New York City but have quickly spread to metropolitan areas across the U.S. since September.  A couple of things I read today warrant a small piece of my attention away from more homework than I know what to do about.

First up: Paul West’s “Is Occupy Wall Street a Tea Party for Democrats?“, which can be marked up as another sad example of crappy journalism in today’s corporate media dominated world.

Distinctions are drawn by liberals between the origins of the anti-Wall Street drive, which they say is more spontaneous and authentic than a Tea Party movement boosted into existence by Fox News, a favored news source for conservatives. Another difference: Tea Party followers were focused on one issue — cutting government spending — while Occupy Wall Street is amorphous in its aims.

Beyond that, there are broad similarities. Both movements are decentralized and nonhierarchical, driven largely by an alienated and outraged citizenry that favors the same two-word phrase: fed up.

It’s painful when these journalists parrots cannot distinguish between corporate astroturf groups (Tebaggers – they haven’t formally formed a party like the Greens) and organic groups (Occupy Wall Street).

It’s even more painful when their messages are purposefully misscharacterized.  Where were the Teabaggers when the Bush Regime was spending Trillions of taxpayer dollars and blowing up the debt and the deficit?  They were cheering the Regime on, saying spending wasn’t fast enough.  Why did they choose 2009 to start wailing about the spending they used to support?  Because there is a Black Man in the White House.  I call shenanigans.

The Teabaggers’ assault on the political scene in 2009 was orchestrated and paid for by the same ultra-wealthy entities that Occupy Wall Street is protesting.  It was anything but decentralized and non-hierarchical.  What happened when reporters tried talking to the Teabaggers at the beginning?  Amorphous and ridiculous commentary was offered.  The organizers quickly picked up on this and ensured their well-trained communications liaisons were the only ones talking to the corporate media.  There is no way that any disparate group of individuals getting together are well organized when they first form.  Occupy Wall Streeters prove that; the Teabaggers also prove that.

The Teabaggers are mostly right-wing extremists who should feel alienated – all extremists should.  The Occupy Wall Streeters are a much more diverse group who have rightful grievances against a government that is increasingly under corporate dominance.

Next up: an extremist extraordinaire, Jon Caldara, who offered up this nonsense that a different parrot dutifully made into “news”: “‘They wish (for) European-style socialism,’ he said.  ‘It’s not corporate welfare they hate.  They hate that it’s not all going to their causes.  When they want to end all corporate welfare, I’ll douse myself with patchouli oil and join them.’”

Always available for jack-assery, aren’t you Jon?  When the wealthiest 1% control over 50% of the wealth; when real take home income hasn’t changed for the bottom 99% since 1979 while it’s 240% higher for the 1%; when U.S. and foreign banks are loaned Trillions of dollars while millions of Americans lose their hard-earned jobs and homes, people in the 99% are eventually going to show how upset they are.  It has nothing to do with Jon’s obsession with European socialism.

When Jon and other “free-marketeers” stop free-loading off of the socialist infrastructure this country and its citizens built and operate for them on a daily basis (roads, water, air, police, fire, radio, on and on and on), then they should be quoted in the media.  The ridiculousness of quoting somebody who willfully refuses to live up to his own ideals is pathetic.

Keep going, Occupy Wall Street!

Update To Obama’s Bad EPA-Ozone Decision

President Obama has become the epitome of a primary negative for Democrats: he’s too concerned with being called nasty names and not concerned enough with enacting good policies.  Policies such as the recently killed ozone regulation, which is painful on many fronts as more people weigh in on the latest capitulation.

Enter Paul Krugman, a person who won the Nobel Prize in economics (perhaps someone Obama might want to listen to…):

Let’s talk about the economics. Because the ozone decision is definitely a mistake on that front.

As some of us keep trying to point out, the United States is in a liquidity trap: private spending is inadequate to achieve full employment, and with short-term interest rates close to zero, conventional monetary policy is exhausted.

What might this have to do with ozone regulations?

And now you can see why tighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money — but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment.

U.S. corporations are sitting on Trillions of dollars they got for basically nothing from sources like the Treasury.  Do you want to know why too many Americans don’t have jobs, and of those Americans that do have jobs don’t make any more in real terms than they did in 1970?  Because of those Trillions of dollars sitting on the economic sideline.  Money that doesn’t move through the economy means the economy falters, then fails.  That’s what today’s Republican Teabaggers want for America: a failed economy so the black President also fails.

It’s too bad President Obama is more worried about being called bad names by those Teabaggers.  There are good jobs that could have been created by implementing and enforcing ozone regulations.  Instead, no Americans will get new jobs, money will stay out of the economy, Americans’ health will continue to be worse than it should, and President Obama will still get called bad names!  Bad politics, all around.  Better Democrats, please.