The middle class is getting whacked by the Great Recession. Fifteen million people are out of work, another 9 million workers can only find part-time jobs, and millions more have given up looking for work altogether. Those lucky enough to be employed are unlikely to see any substantial wage gains for years to come.
Millions of homeowners are facing the loss of their home and more than ten million are underwater in their mortgage. Most of the huge baby boom cohort is approaching retirement with little other than Social Security to support them, now that the collapse of the housing bubble has destroyed their home equity and much of the rest of their savings.
This pain is infuriating for two reasons. First, this was an entirely preventable disaster. The housing bubble was easy to see. Competent economists had long warned of its dangers.
The second reason why the current situation is infuriating is that we know how to get the economy out of this mess. We just need to boost demand. This can be done either with much more government stimulus, more aggressive monetary policy from the Fed, or pushing the dollar down to boost exports.
If this disaster was preventable and we know how to get out of it, why didn't our leaders try to stop it before it happened? Why don't they take the steps necessary now to get the economy moving again?
The answer to both these questions is simple; the politicians work for someone else. On Election Day, the politicians might need our votes, but they won't get to be serious contenders unless they've gotten the campaign contributions of the big money crew. And the moneyed elite has been using its control of the political process to ensure that an ever larger share of the economy's output is redistributed upward in their direction.
The reason that there was little interest in cracking down on the housing bubble is that Goldman Sachs, Citigroup and the rest were making a fortune from the financial shenanigans that fueled the bubble. Former Treasury Secretary Robert Rubin personally pocketed over $100 million from this fun. Why would they want the government to rein it in?
Of course, when the bubble did finally blow and threaten their banks with bankruptcy, the Wall Street crew just ran to the government for help. And they got trillions of dollars in loans and loan guarantees to ensure that they would not be victims of the crisis they had created. Now that they are back on their feet, with Wall Street profits and bonuses both again at near record levels, they see little reason to concern themselves with the measures that might set the economy right for the rest of us.
After all, the steps necessary to revitalize the economy could mean some inflation. This would reduce the value of the debt owned by the wealthy. And the wealthy don't see any reason that they should risk any of their wealth just for the good of the economy.
We have enormous ground to cover to restore an economy that works for the vast majority, but the first step is to know where we are. The upward redistribution of the last three decades has nothing to do with the market and a belief in "market fundamentalism." This is about a process where the rich and powerful have rewritten the rules to make themselves richer and more powerful.
For example, they wrote trade rules that were designed to put downward pressure on the wages of the bulk of the U.S. workforce by placing manufacturing workers in direct competition with low-paid workers in China and other developing countries. This had nothing to do with a belief in "free trade." They did not try to subject lawyers, doctors or other highly paid workers to the same sort of international competition. They only wanted international competition to put downward pressure on the wages of workers in the middle and bottom, not those at the top.
This elite has instituted a system of corporate governance that allows top executives to pilfer companies at the expense of their shareholders and its workers. Top executives are overseen only by a board of directors who owe their hugely overpaid sinecures to the executives they supervise. And of course the Wall Street barons themselves are given a license to gamble with the implicit promise that government picks up their tab when they lose.
No progressive movement will make any progress until we understand the battle we are fighting. Our income is a cost to the rich. They will look to cut it wherever they can, whether this is wages for private sector workers, pensions for public employees, or Social Security for retirees. That is their target.
We have to fight back using the same logic. Their income is our cost -- the multimillion dollar bonuses for the Wall Street wizards is a direct drain on the economy. So are the bloated paychecks of top executives and their lackey boards. Progressives must be prepared to use all the same tactics to bring down the income of the rich and powerful that they have used to reduce the income of everyone else.
This means restructuring the rules of corporate governance to put serious downward pressure on the pay of top executives. The highest paid workers (doctors, lawyers, and economists) must be subjected to international competition in the same way as manufacturing workers have been subjected to international competition. And, we should sharply limit the extent of the patent or copyright protections that are exploited by the drug industry and the entertainment and software industries.
We have to put the focus on the ways the rich have rigged the rules and place this at the center of political debate. The three decade-long battle over tax cuts for the rich is important, but at the end of the day it is a side show. If we let them steal all the money at the onset, it really doesn't make much difference if they end up letting us tax a little of it back.
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Dean's argument is a crystal clear call for massive change and there's a lot of supportive comment.
So what are you all going to do about it?
And one other little thing, they own Congress as well. Campaign finance reform needed.
It's time to stop letting the rich call the plays. It's time to stop drinking the Kool-Aid offered by those who care nothing for our interests. It's time to stop listening to the rich cry "socialism" when we try to level the playing field. Regular people don't want welfare, don't want a handout. We want equal opportunity to earn an honest dollar and to be paid fairly for the services we provide.
I defy anyone to show me a person who got rich without 1) taking advantage of laws favoring, protecting, or subsidizing his/her business interests and tax liability, 2) taking advantage of underlings by undervaluing the employees' contribution to the success of the company, or 3) lying, cheating, or stealing.
The answer to both these questions is simple; the politicians work for someone else."
Duh, yeah, Dean.
"The reason that there was little interest in cracking down on the housing bubble is that Goldman Sachs, Citigroup and the rest were making a fortune from the financial shenanigans that fueled the bubble." Dean, don't forget the biggest bank of all, the "Federal Reserve", and the central role they played in easy money and blowing up the bubble. Obama = Geithner = Greenspan = Paulson = Bush Sr. = Bernanke = Bush Jr.
Enemies of the People.
And it's official: It's another Depression.
http://www.cnbc.com/id/38831550
Brought on like the last one, by the same folks at the "Federal Reserve", as Bernanke can tell you, and with the same political backing. And with the same "solutions" that ensure this one will last 10 years or until the next major war.
Another necessity is to assure that the public controls the media. The founders believed an informed electorate was necessary for our democracy. However, between 1830-50 the richest 1% eliminated gov't printing income to news publishers. This made media survival dependent upon the approval of large advertisers, whose favored news providers have been (and are) the ones which produce an angry and disinformed electorate. This because a mob is easier to manipulate than an informed electorate. This simple tactic has worked to get the American electorate to vote against their own interests, and for the interests of the richest 1%, about 3/4 of the time, for the past 175 years. We must change this.
Then World War II happened and he needed people who knew finance. So, he turned back to Wall Street corruption. Their revenge and machinations were warned about in Eisenhower's famous 'military-industrial complex' speech. The newly reacquired wealth of The Oligarchs that made it possible for Eisenhower to be elected.
In the 1960's and 1970's, business leaders decided to set up their own lobby shops and think tanks to propagandize the public. Together, with mass donations to politicians and the infiltration of government with Global Wall Street agents (think Treasury and The Fed), business convinced the American public to vote against themselves and for business.
This topic would take volumes to discuss.
With the election of Reagan, helped by the deal he did with the Iranians (William Casey and Iran-Contra), business coopted the religious right radicals. The Republican base was convinced to vote against their own well-being.
Business has slowly consolidated control over media and other industries. The Internet is under direct assault as the propaganda campaign to acclimatize the public for a controlled Internet has begun. That is why it has come to the fore in recent months. And it has been brought to you be the same bought media you listen to and read everyday.
Look at the math. The increase in taxes is 75% from an average of 20% to 35%. Going up 3% and not changing the way we collect taxes will yield an extra 0.75% of 3% . The IRS can be directed by the executive branch to concentrate it;'s resources , even if they have to freeze wages on a good part of the service, to audit every single retrain for the past three years on anyone in the top 1%.
So enforce what we have on the books, direct the IRS properly, fund it by not consulting congress but buy having the political appointee allocate all required funds from budget to do touch everything audits on every taxpayer above a certain level. If they find anything they go to jail. Give them 30 days amnesty to pay up and people will see more money than anyone could conceive of with a tiny little tax increase, but do it now. If the GOP get back in, it will never happen. They cut rates further, so their average is zero.
I wrote the same thing to Dean's last HUFFPost.
So, here it is again, lefties.
'' The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.''
Can you say monetary sovereignty?
If you can think about monetary sovereignty - it is OUR money system, we OWN it, have leased it to the private bankers at the Fed, who have indebted US to THEM, using fractional-reserve banking and a debt-based money system.;
The difference and the solution are best laid out here --
http://www.economicstability.org/history/a-program-for-monetary-reform-the-1939-document
The Money System Common
Please have a read.
Thanks.
"Liberty, next to religion has been the motive of good deeds and the common pretext of crime…"
The author does not back track far enough to arrive at the true roots of our problems.
Almost without exception, if one will do this in his/her analysis, you will arrive at unintended consquences of laws, regulations and policies enacted by Congress, including the present housing/economic implosion.
The economy (300 million individuals making decisions) is far to complex and dynamic to be micro-managed.
Obvisously we need regs, laws, etc., but we/they are doing something wrong.
Does everyone wants these TBTF's broken up? The establishment thinks everyone is upset just about the economy. Do Obama and our pols think we've forgotten about what just happened? Do they really think we're all idiots and believe whatever they say? As long as the TBTF's exist all our freedoms are at stake & democracy will not exist for much longer. Capitalism will kill
I would argue, regarding where the 200k went.... it vanished, as it always does when bubbles burst.
History is replete with examples. The trick is to recognize it (human nature/greed) and not get caught holding the bag.
The asset has been re-valued through the auction/bid process. 200k did not go to the bankers. But they have yet to come clean, via proper accounting, as to these "assets" on their books.
Believe me, they do not WANT to own these houses.
Our entire business model, financial model, and savings & investment model has been hi-jacked by powerful, corrupt, evil people. The "shadow elite" have undermined America and we are in ruin going down the tubes faster every day.
We must take it all away from them, and re-write the American business and economic model from the ground up. Throw away our old shackles, and build a new life for ourselves - one that we can be proud of, and for our children and our childrens' children.
No holds barred, take no hostages, down and dirty, we must be quick.
Our military brothers and sisters will back the people, they will turn on the old tyrants quick.
There is a mechanism to collect the money over time through the IRS - and typical overwitholdings could be used to pay it down a little faster at the end of each tax year. Loan rate would be same as fed's rate to US - ie, very low and might be extended to 40 and 50 year terms when warranted for example by unemployment .