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.”

2-3 Year Supply of Foreclosed Homes Means Economic Recovery Will Remain Weak

28% of all home sales in the first quarter of 2011 were foreclosures.  In a healthy economy, that number doesn’t rise above 5%.

158,434 homes in some stage of foreclosure sold in the first quarter.  With around1.9 million homes remaining in foreclosure, the supply of just these types of homes will last between 2 and 3 years.  If no other major economic disruptions occur in the meantime, it will only be after that time that any economic recovery from 2007 can truly occur.

I’m not an economist, but I don’t see that as likely, quite frankly.  Seven years after the last recession started will be a prime time for another to start.  And the Federal Reserve and Treasury Department has done more to prop up billionaires than lower and middle class Americans, despite the fact that the latter sets are what actually drive the U.S. economy toward growth.  Moreover, those two institutions have run out of actions they can take.  Interest rates continue to hover near zero for banks (not that you and I see any tangible benefits) while trillions of dollars (literally) have been loaned to banks at those near-zero interest rates.  And that’s only a couple of examples of how close to the end of the string they are.

What left?  Well, the government abdicated its responsibility to ensure that a large enough economic stimulus was provided in 2009.  Politicians of both major parties refused to listen to economists who were experts on how we exited the Great Depression.  As a result, we’re left with a tepid economy and even worse disparate wealth differences between the top and bottom than prior to 2007.  I don’t see the situation improving appreciably any time soon.

Financial Crisis: Bush Defends “Free-Market”

Worshippers of the free-market religion have found themselves racing to defend their beliefs in the face of overwhelming evidence that their “free-market” doesn’t work.

First, the latest economic numbers.  Jobless claims jumped to the highest level since just after the events of 9/11/01.  516,000 claims were made last week.  As corporations try to keep their profits and executives try to keep their obscene compensation flowing, millions of Americans are going unemployed.

Which leads to Americans being unable to afford their homes.  Foreclosures continue to set records.  A couple of statistics bear watching: there were 25% more foreclosures this October compared to last October, which was higher than the October before.  279,500 homes received at least one foreclosure notice last month, 5% higher than those issued in September.  More than 84,000 properties were reposessed last month.  That’s 84,000 families that just lost their homes before the holiday season.  How many of those folks lost their jobs earlier this year because executives wanted their multi-million dollar incomes?  That’s what the “free-market” generates.  Programs are being enacted to help homeowners stay in their homes.  Not surprisingly, it’s been the banks that have initiated those programs.  Bush’s government continues to drag its feet – the “compassionate conservatives” don’t care if thousands of Americans lose their homes.  Their motto: “You’re on your own.”

Companies Making Economy Worse

I wrote about this late last month – companies are going to make the recession deeper and longer.  It’s not hard to figure out why.  Two-thirds of the U.S. economy is made up of consumer spending.  In order for people to spend money, they need access to money.  Instead of increasing wages, Cons decided to make credit more available via credit cards since the 1980s and mortgages in the past decade.  Households owe more than they make on a yearly basis: credit card debt is massive, which led to people borrowing against their equity in order to keep buying stuff.  Now, housing values are less than what people owe on them.  They only thing left is wages, which haven’t increased for a super-majority of Americans in 30-some years.

In order to continue making profit so shareholders and executives can be paid enormous sums of money, corporations are laying people off.  That means … people won’t make money.  That means they can’t pay their bills or buy stuff.  Let’s see.  If people aren’t employed, one of the things they can’t pay every month is … their mortgages.  When people don’t pay their mortgages … they get foreclosed on.  Sure enough, the trend is being picked up and is being reported.  Job losses are now fueling more foreclosures.

In order to minimize the recession we’re already in, companies need to be hiring people.  Americans making an income can pay their bills and buy things, keeping the economy afloat.  Companies have initiated a negative-feedback system.  As more people have less money, they’ll buy fewer things.  Companies looking only at their quarterly numbers will fire more workers so they can continue to pay stockholders and executives.  And so on.  Companies will have to wait until their actions are countered by other economic forces.  But how many Americans will lose their jobs in the interim?

President-elect Obama is inheriting an incredibly challenging economy.  It will take visionary work, of the style he has, to lead the country to a better economic future.

News & Discussion Items 10/8/08

Paul Rosenberg nails the past 8 years in a very short post.

The second Presidential debate was last night.  Sen. Obama said the words “middle class” four times.  Sen. McCain didn’t say them at all.  That’s why McCain is losing.  He doesn’t care that the middle class is struggling.

Britain has put together a rescue package for its banks.  Which is quite different than the Bailout Bush prushed.  See, Britain is buying shares in the banks until such time that their financial affairs are back in order.  British banks are not just getting money handed out to them, as they are in America.  Spain is following in America’s footsteps.  The framing of each case is critical moving forward.

A number of swing states have seen voter rolls purged – likely illegally.  A New York Times look into the matter hasn’t picked up any patterns of responsibility by either major party.  Regardless, a lot of people could be turned away come Election Day or told to vote on provisional ballots, which are rarely counted.  My own state of Colorado is on the list.  Despite an increase in population all decade and very successful voter registration drives, there are currently 100,000 fewer voters left on the rolls than in 2004.  That’s going to be a big problem come November 5th.  This situation provides strong evidence of the need for same-day registration.  Americans should be able to wait longer than 4-5 hours for an official count for something as important as President.

NASA’s Phoenix lander is currently expected to keep operating until about the middle of November 2008.  At its high latitude, the amount of sunlight it can receive is currently decreasing as Mars moves into its fall and winter.  Soil sampling will continue until no power is left on the craft.

Some 76 million Americans own their homes.  Housing values have fallen about 30% since their peak two years ago.  Which means approximately 12 million Americans owe more on their homes than they’re worth – about 16%!  That percentage is up from only 4% in 2006 and 6% in 2007.  9% of homeowners are between one month overdue or in foreclosure.  Here is why that’s really bad news.  More upside-down houses results in more foreclosures which drags other home values down, which puts more owners upside-down and so forth.  That’s what initiated the mortgage crisis and then the financial crisis.  With the credit markets frozen, fewer mortgages will be approved, keeping housing values and sales down for some time to come.

Economic News: Bad and Worse

Wall St. continues its free fall, with the Dow falling over 500 points today after falling 370 points yesterday.  Indices are at the same level as they were in the fall of 2003.  Retirement accounts have lost $2 Trillion in value.  The problem?  Despite the approval of the Bush Bailout by Congress last Friday, no one has any confidence in anyone else.  Banks still refuse to lend to one another or to credit-worthy customers.  As I and others stated last week, the Bush Bailout didn’t address the fundamental problems in the economy.  More and more people recognize that and are reacting to it.

They’re also reacting to the realization that the Bush administration’s refusal to do anything about the housing bubble for over two years spread tons of bad debt and risk around to world banks.  So the world is staring a deep recession in the face because the Bushies decided they’d rather wait until America was in debt past its eyeballs before proposing something.

The Federal Reserve is offering to buy up another $300 billion of loans from banks, without collateral of course, to unfreeze credit markets.  How are they going to pay for that?  By borrowing money from the banks.  By printing more money.  Printing more money, by the way, increases inflation, which was at 5.4% last I checked (and that’s a b.s. low-ball calculation by economists who want to pretend the economy is doing better than it really is).  In an era of stagnant incomes and rising unemployment, higher inflation will simply wreck the middle class’ ability to stay afloat.

The economy has been running on credit, as everyone should be well aware of by now.  First in the 1980s and 1990s with credit cards.  Then in the 2000s with home equity.  Now that credit is being taken away in a flash.  What’s left has two distinct faces: consumer borrowing is down for the first time since 1998.  While it’s good that people are borrowing less, it also means they’re going to spend less.  After all, incomes after inflation haven’t increased in years.  Consumers without credit will have no money to spend unless one of two things happen: incomes increase (the better solution) or credit flows again (the worse option).  Raising incomes will put our economy back onto the path of health again in a meaningful way.

Oh, here’s the worse economic news.  Foreclosures were running at record rates for the past 12 months or so.  Well, it turns out that the government uses numbers from RealtyTrac.  So good, so far?  Well, RealtyTrac hasn’t kept track of foreclosures in 900 rural counties across the United States.  Here’s a choice piece of the article:

But in West Virginia last year, it [RealtyTrac] counted fewer than 500 foreclosure notices. New federal statistics counted 12,000 notices in the state, since the start of 2007.

Heck, that’s only 24 times as bad.  Who’s counting?  Thankfully, a Democratic Senator in July co-sponsored the Foreclosure Prevention Act, which Congress passed in July. The bill required the Department of Housing and Urban Development to measure foreclosure rates in each state.

So amid stagnant wages, rising unemployment, rising inflation and worse foreclosure numbers than have been reported in two years, the Republicans have done a pretty good job of wrecking America’s economy.  Their pursuit of making the richest Americans uber-rich has affected millions of good, hard-working Americans negatively.  That’s the reason Barack Obama is leading John McCain by double digits in polls and is nearing a blowout in the electoral college numbers.  That’s the reason why John McCain and Sarah Palin are inciting their supporters with hate speech.

Economy Is Bad; Elitist McCains & Palins Don’t Care

We’ve seen nothing but bad economic news for the better part of a year or more now. The housing market is collapsing, foreclosures continue to set records, inflation is at 20-year highs, wages haven’t gone up for the majority of Americans in 8 years, now unemployment is once again more than 6% and I’m probably forgetting some measures. Who brought us this horrible economy? Republicans! This is what deregulation and tax cuts for the rich produce. It happened in the late 1980′s, early 1990′s after Reagan and Bush I wrecked it and it’s happening now that Bush II has screwed things up for 7 years.

What issue did McCain not substantively address during his acceptance speech last night? The economy. Do you know why? Because he and his rich, elitist pals are doing just fine. They can absorb 9% inflation because their incomes have increased at a higher rate in the past seven years, unlike 99% of the rest of Americans. They’re not losing their jobs or their houses. Cindy McCain wore $300,000 outfits to the RNC. Sarah Palin has her choice of $500 designer glasses to wear every day. The economy that they live in every day is obviously doing just fine. They can’t fix a problem if they don’t see it.

Unemployment is now at 6.1%, the highest reading in 5 years. 84,000 jobs were lost during August alone, bringing this year’s total to 605,000. 605,000 is 10% of the jobs gained in the past 6 years. The “recovery” from the 2001 recession has produced the fewest number of jobs since any recovery since the end of WWII. And that’s considered a success by Republicans. Here’s why: the only mention of the economy during McCain’s speech revolved around globalization. Sure, the fewest jobs on record were put on the rolls during the Bush-II era. But thanks to economy wreckers like NAFTA, GATT and CAFTA, many more jobs were created overseas. Corporations have continued to make profit and more and more of it has been directed at people who are already rich. The rest of us are on our own.

I’ve written before that the reported unemployment rate doesn’t include everybody who really are unemployed. It’s a false measurement of the state of workers in this country. So conditions are actually worse than what the Labor Department is reporting today.

The economy is the number one concern cited by Americans and has been for months now. What solutions to the malaise did McCain describe last night? None. McCain and Palin want to continue and strengthen the failed Bush economic policies. Instead, McCain (and every other speaker this week) kept trying to scare Americans into voting for them again. Terrorism, Iran and Iraq were major talking points. Isn’t it interesting that the economy, health care and Afghanistan weren’t? Fear, fear, fear. Fight, fight, fight. Those were the themes of the RNC.

More of the same for the next four years? America can’t take it. Our middle class is being devastated. We need elected officials who have a better understanding of the economy the majority of us are facing and who possess the empathy to do something to change things that obviously aren’t working. Barack Obama and Joe Biden have that understanding and that empathy. More than that, instead of being bought off by corporate interests like McCain and Palin, Obama is more beholden to the millions of campaign donors and workers. If he doesn’t enact policies that benefit those millions, do you really think they’ll let him get away with it? If McCain doesn’t enact policies that benefit those millions, what recourse do they have? All he has to please are his corporate benefactors.

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[Update]: With the economy in tatters and getting worse, plenty is being written about it.  I found this while perusing the tubes.  The total U6 (defined as total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers) is higher today than it was during any point of the 2001-2003 recession.  The U6 value has actually been increasing since January of last year and it hasn’t peaked yet.  That’s why the economy is the #1 issue on voters’ minds.  And that’s why McCain, Palin and the rest of the Republicans responsible for the economy’s bad shape don’t want to talk about it on the campaign trail.  Since they don’t want to discuss middle class economic issues (they brought up the estate tax during the RNC!), McCain and Palin aren’t likely to do anything about it once they get in office either.  Pay attention to who these candidates are now.  They won’t change if elected.

Quick Hits 6/5/08

One million homes are now in foreclosure. How’s that Republican-led economy doing?

United’s Ted will stop flying next spring. Fuel prices have doubled in the past year. Fuel-guzzling aircraft are being retired from numerous fleets. How’s that Republican-led economy doing?

Hey, a group of people are doing something about energy consumption: House Democrats led the 21st Century Green High-Performing Public Schools Facilities Act to passage. The White House threatened a veto, saying it was wrong for the feds to launch a costly new school-building program. Especially when we’re still mired in a non-working country-building program. Republicans have lost any claim on fiscal responsibility. Spending under Regan and the two Bushes have wrecked our balance sheets.

Oh, the occupation of Iraq is doing wonders keeping us safe back home.  Or not, as another story shows.  Helicopter EMS pilots are on year-long waiting lists for night-vision goggles.  Military contracts specify they get first pick.  So if you need to be flown by medical helicopters, make sure it’s during the day in clear conditions.

If you haven’t heard, Gov. Schwarzenegger declared CA is in a drought.  He is calling for increased conservation and transfer of water to areas facing shortages.  Rationing might be the next step.

Those At The Top Desperately Out of Touch

Three pieces of news from the business world are a clear indication that there are people in the U.S. that are out of touch, but it certainly isn’t someone like Barack Obama.

First, foreclosure filings hit a record last month. 243,353 households received a foreclosure filing in April 2008. That’s up 65% over the previous year and up 4% from March. Municipalities’ will be the second group to suffer from this as their tax base plummets.

Second, the Consumer Price Index (CPI), a measure of inflation, rose 0.2% in April, versus forecasts for a rise of 0.3%. Well that sounds alright, doesn’t it? Here is where economists go cukoo: they always take part of the calculations out to present a rosier picture and try to convince people the economy is just fine. Stripping out food and auto sales, the CPI rose 0.1%, versus expectations for a rise of 0.2%. I’ve said this before and I’ll continue to say it: stripping out food from any measure of economic analysis makes absolutely no sense. Can you strip out food from your budget, just because prices are higher? Of course not. At this point in our economic cycle, here is why it is harmful to throw them from consideration: food prices played a big role in the rise in prices, posting the biggest jump in 18 years. Not surprisingly, who was “running” the country 18 years ago? That’s correct: Republicans. Running the country into the ground is something they excel at.

The above isn’t too terribly bad, in and of itself. It’s when we get to the next piece of news that you know most of us are getting the shaft. As of 10:15MDT, the Dow was up 116.59 points, mostly because of the inflation news. You read that right. Food prices jumped by the largest margin in 18 years and the markets respond by moving upwards, because that’s good news. The top earners of our country are making money today on news that the rest of us are less able to afford the food we have to put on our tables. By the way, they’re not paying their fair share of taxes on that extra money. A big portion of the Bush tax cuts included a reduction of the amount of tax paid on capital gains, the gains the Wall Streeters are “earning” today. That’s pretty twisted.

Spate of Bad Economic News & McSame

A barrel of oil hit an all-time high yesterday. The price continues to climb today, currently at $111.76. Airlines are failing, farmers and truckers are having trouble paying for diesel (>$4.00 per gallon) and Americans are having to choose between paying for gas and spending money in other sectors of the economy. Meanwhile, energy corporations continue to enjoy record profits, totaling billions of dollars per quarter. I’m sure glad folks voted for the regular guy they wanted to have a beer with.

Some serious inflationary pressure is being applied to the economy. Prices jumped 1.1% last month. It represented the second largest increase in prices in the past 33 years, with the largest coming last November when prices jumped 2.6%. This won’t shock anybody: economic forecasts were way off: economists were expecting a 0.4% rise. Oops. If a weather forecaster missed a high temperature by 1/3, they’d be tarred and feathered in the streets. But economists are part of the serious classes.

Inflation over the past year stands at 6.9%. I’ve asked before and I’ll continue to ask the following: did your wages increase by 6.9% last year? Unless you’re a corporate executive, and if you’re lucky enough to still have a job, they probably didn’t. With the decline the dollar has suffered, Americans can buy less and less every month. Economists talk about the core inflation rate, which doesn’t take energy and food costs into account. That makes sense: people don’t have to transport themselves or eat, after all. I’m not going to talk about the core inflation because it’s a joke measure of the economy. It’s set up to allow fat cats to convince themselves the economy is performing well.

The Republican economy is doing so well, 52,000 homes were lost to foreclosures last month. But Bear Stearns received $30 billion last month in corporate welfare. Taxpayers of course will be responsible for that money if Stearns’ investments fail. Almost 250,000 houses are entering foreclosure filings every month now. Republican economic policies prevent people from achieving the American dream. And it’s because of their worship at the false altar of the “free market”, where the only freedom is freedom from regulation. Well, we’re seeing the direct results of that lack of regulation.