Bank protesters arrested after trying to cash $673-billion check: It was an over-sized check made out to the “people of California,” LAPD Lt. Paul Vernon said. The demonstrators sat down and refused to leave the bank and six men and four women were arrested as part of the protest organized by the Refund California campaign. Occupy L.A. protesters also joined in.
Photo: Police arrest protesters in the Bank of America branch at 7th Street and Figueroa in downtown Los Angles on Thursday afternoon. Credit: Genaro Molina/Los Angeles Times
Posts tagged economy.
It’s not much of a surprise, I guess. The American Jobs Act never had a particularly good chance of passing the House. But as of yesterday, it’s officially dead. Majority Leader Eric Cantor isn’t even pretending the two sides will work something out. “The $447 billion jobs package as a package: dead?” A reporter asked him. “Yes,” Cantor replied.
It’s not the arrests that convinced me that “Occupy Wall Street” was worth covering seriously. Nor was it their press strategy, which largely consisted of tweeting journalists to cover a small protest that couldn’t say what, exactly, it hoped to achieve. It was a Tumblr called, “We Are The 99 Percent,” and all it’s doing is posting grainy pictures of people holding handwritten signs telling their stories, one after the other…These are not rants against the system. They’re not anarchist manifestos. They’re not calls for a revolution. They’re small stories of people who played by the rules, did what they were told, and now have nothing to show for it. Or, worse, they have tens of thousands in debt to show for it.
The Reverend Al Sharpton and various labor unions have announced a March for Jobs. But I’m afraid we’ll need more than marches to get jobs back.
Since the start of the Great Recession at the end of 2007, America’s potential labor force – that is, working-age people who want jobs - has grown by over 7 million. But since then, the number of Americans who actually have jobs has shrunk by more than 300,000.
In other words, we’re in a deep hole and the hole is deepening. In August, the United States created no jobs at all. Zero.
America’s ongoing jobs depression - which is what it deserves to be called - is the worst economic calamity to hit this nation since the Great Depression. It’s also terrible news for President Obama, whose chances for re-election now depend almost entirely on the Republican party putting up someone so vacuous and extremist that the nation rallies to Obama regardless.
The problem is on the demand side. Consumers (whose spending is 70% of the economy) can’t boost the American economy on their own. They’re still too burdened by debt, especially on homes that are worth less than their mortgages. In addition, their jobs are disappearing, their pay is dropping, their medical bills are soaring.
Consumer spending slowed again in August as incomes dropped.
Businesses, for their part, won’t hire without more sales. So we’re in a vicious cycle. The question is what to do about it.
When consumers and businesses can’t boost the economy on their own, the responsibility must fall to the purchaser of last resort. As John Maynard Keynes informed us 75 years ago, that purchaser is the government.
Government can hire people directly to maintain the nation’s parks and playgrounds and to help in schools and hospitals. It can funnel money to help cash-starved states and local government so they don’t have to continue to slash payrolls and public services. And it can hire indirectly - contracting with companies to build schools, revamp public transportation and rebuild the nation’s crumbling highways, bridges and ports.
Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need - generating more jobs. Not exactly rocket science.
But congressional Republicans are firmly opposed. Why don’t Republicans get it? Either they’re knaves - they want the economy to stay awful through next election day so Obama gets the boot. Or they’re fools - they’ve bought the lie that reducing the deficit now creates more jobs.
Republicans claim businesses aren’t hiring because they’re uncertain about regulatory costs, or their taxes are too high, or they can’t find the skilled workers they need. But if these were the reasons businesses weren’t hiring - and consumer demand were growing - we’d expect companies to make more use of their current employees. The average number of hours worked per week by the typical employee would be increasing.
In fact, the length of the average workweek has been dropping. In August, it declined for the third month in a row, to 34.2 hours. That’s back to where it was at the start of the year - barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).
Republicans say America can’t afford to spend more. In truth, we’ll be in worse shape if we don’t. If the economy remains dead in the water, the ratio of public debt to the total economy balloons.
Besides, the United States can now borrow money from the rest of the world at fire-sale rates. Interest on the ten-year Treasury bill is now under 2%. That’s an almost unprecedented deal. With so many Americans unemployed and so much of our infrastructure in disrepair, this is the ideal time to get on with the work of rebuilding the nation.
But it won’t be enough for government to become the buyer of last resort – in Keynes’s words, to prime the pump. If the economy is to continue to grow and create jobs after the government has stopped the priming, there must be enough water in the well. Yet, now and in the foreseeable future, America’s vast middle class doesn’t have the purchasing power to keep the mechanism going.
For more than 30 years, the median wage in America has barely increased, adjusted for inflation – even though the economy is twice as large as it was three decades ago. Almost all the gains have gone to the top - especially the top 1%, who now receive over 20% of total income (it was just 10% in 1980).
As long as America’s vast middle class could continue to borrow on the rising value of their homes, they continued to spend - thereby keeping the economy going. But going deeper into debt is not a sustainable strategy. Now, after the bubble burst, America’s middle class doesn’t have enough money to maintain the economy at or near full employment.
Any long-term strategy for rescuing the American economy must therefore seek to reverse the widening gap in income and wealth. One place to start is tax reform. The earned income tax credit - a wage subsidy for lower-income workers - should be enlarged and expanded. Taxes on the middle class should be reduced - including social security payroll taxes (80% of Americans pay more in payroll taxes than they do in income taxes).
Taxes on the wealthy, on the other hand, should be increased. The president has proposed closing some tax loopholes that allow the super-rich to reduce their tax liability, and to end the tax cut on the rich put in place by George W Bush in 2001 (thereby increasing the top marginal tax rate to what it was under Bill Clinton - 39%).
But the nation should go much further, particularly in light of the large budget deficit projected several years from now. We need more tax brackets at the top, with higher marginal rates. The capital-gains tax (now at 15%) should be raised to match the income tax rate. And a wealth surtax of 2% should be applied to all wealth in excess of $7 million.
Needless to say, Republicans won’t go along with anything like this. They balk even at the president’s modest plan.
It would be better for President Obama to assume that he will get no Republican support this year and next, and build his 2012 election campaign around a bold plan to revive jobs and the American middle class — and end the American Jobs Depression.
More than 700 people were arrested on the Brooklyn Bridge on Saturday evening during a march by anti-Wall Street protesters who have been occupying a downtown Manhattan square for two weeks.
During the afternoon a long line of protesters numbering several thousand snaked through the streets towards the landmark bridge across the East River with the aim of ending at a Brooklyn park.
However, during the march across the bridge groups of protesters sat down or strayed into the road from the pedestrian pathway. They were then arrested in large numbers by officers who were part of a heavy police presence shepherding the march along its path.
At one stage 500 protesters were blocked off by police on the bridge. At least one journalist, freelancer Natasha Lennard for the New York Times, was among those arrested.
Is anyone shocked by this? It will be interesting to see what happens as more people show up.
New York Times(!) has great coverage here. It appears police may have inadvertently (at best) or purposefully (at worst) led some of the marchers from the walk bridge to where they were arrested. Several reports have Tony Bologna as one of the officers who was walking ahead of marchers. Here’s one photo that appears to show him talking with officers watching over several handcuffed protesters on the bridge.
Up until this announcement, the Occupy Wall Street movement has been unwieldy and somewhat lacking in a coherent voice, but that’s all about the change. New York City labor unions have decided to descend upon the streets of Lower Manhattan on Friday.
The leadership of the Transit Workers Union Local 100—comprised of subway and bus workers—voted unanimously to support the protestors. With a membership of 38,000, 5 Oct. will easily be the largest day yet in the protest. On 12 Oct., SEIU 32BJ, representing doormen, security guards, and maintenance workers around the city, is also staging a rally in support of the cause.
It’s unclear for now whether the transit system will be completely shut down while the 38,000 workers are participating in the protest. If it is, the Occupy Wall Street movement will definitely make its mark in history. And either way, it now has a substantial footing to make a real statement about American economy policy.
Jackie DiSalvo, an #OccupyWallStreet organizer, summarized the movement’s policy as such: “Occupy Wall Street will not negotiate watering down its own message.”
You have no idea how excited I am to see this.
09-29-11 Sen. Bernie Sanders became the first US Senator to voice his support for Occupy Wall Street on Countdown With Keith Olbermann.
He still an asshole
It’s class warfare!
Yeah right. Three decades of laissez-faire economic polices have allowed the rich to double their share of the national income while paying tax rates a fifth lower than before. The result,notes Kevin Drum, was “wage stagnation for everyone else, a massive financial collapse that ravaged the middle class, an enormous deficits that they’ll be asked to pay off eventually.” If the millionaires tax is the only blowback, the wealthy should count their blessings.
It’s a tax on small business
“Don’t forget that most small businesses file taxes as individuals,” House Budget Committee Chairman Paul Ryan (R-Wis.) said on Fox News Sunday. “So when you are raising top tax rates, you are raising taxes on these job creators.” Except when you aren’t. ThinkProgress’s Pat Garofalo points out that fewer than 2 percent of the nation’s small businesses fall into either of the top two tax brackets. Plus, many of the small business filers in the upper brackets are merely investors who have nothing to do with running the business. And if small businesses don’t want to pay taxes as individuals, they can file always as corporations.
It reduces incentives to work and invest
Experience shows otherwise. As Nancy Folbre points out over at Economix, “average annual rates of growth in gross domestic product in the high tax era between 1950 and 1980 exceeded those of the last 30 years. Increases in the top tax rate under President Bill Clinton were followed by robust economic expansion.”
It’s an unstable source of revenue
A recent essay in the Wall Street Journal argued that the high volatility of upper-level income makes it impractical to rely on taxing it. But this concern is vastly overblown and can be easily dealt with by establishing rainy day funds.
In the libertarian view, the rich are entitled to their gains because they worked for them. But this ignores how structural changes in the economy such as globalization, financial deregulation, and the rise of the knowledge-based economy has disproportionately rewarded the wealthy. At the same time, we’ve failed to reinvest in government programs that once leveled the playing field, such as financing for community colleges and public universities.
The rich will leave the country
Good riddance, writes Don Peck in a recent Atlantic essay on how to save the middle class: “America remains a magnet for talent, for reasons that go beyond the tax code; and by international standards, none of the tax changes recommended here would create an excessive tax burden on high earners. If a few financiers choose to decamp for some small island-state in search of the smallest possible tax bill, we should wish them good luck.”
As usual, President Obama is the only one making sense.
“As demonstrators converged on Wall Street — with police blocking them from reaching the New York Stock Exchange — much of the news media paid little attention to the protests. Meanwhile, much of the conservative punditry has taken to mocking the demonstrations, with conservative Twitter users lambasting the “hippies” in New York City. CNN contributor and RedState blogger Erick Erickson labeled the protesters as “profoundly dumb.”
Certainly, debates about the tactics and strategy behind an anti-Wall Street campaign are warranted. But in a country where much of the populist energy has been absorbed by a movement that compared expanding access to private insurance to “death panels,” it’s worth reviewing why Americans and others should be protesting against Wall Street.
While many of the conservative defenders of Wall Street may be quick to portray protests against the American financial establishment as driven by envy of its wealth or far-left ideologies, the truth is that people have a very simple reason to be angry — because Wall Street’s actions made tens of millions of people dramatically poorer through no fault of their own. In 2010, the International Monetary Fund and World Bank conducted studies of the effects of the global recession — caused largely by Wall Street financial instruments that were poorly regulated by government policies — and found that the recession threw 64 million people into extreme poverty:
The International Monetary Fund estimates that the global economy contracted by 0.6 per cent in 2009 and the implications of this have been severe for many. Economic growth in developing countries was only 1.7 per cent in 2009 compared with 8.1 per cent in 2007. However, if China and India are excluded, the economies of developing countries actually contracted by 1.8 per cent. The World Bank has estimated that an additional 64 million people will be living in extreme poverty on less than US$1.25 a day by the end of 2010 as a result of the global recession.
And nearly three years after the start of the global economic crisis — where taxpayers in multiple countries were called upon to save the financial industry — most of the banking elite’s top executives remain virtually untouched. There have been almost no high-profile convictions for fraud and related financial crimes, banking profits continue to soar, and unemployment not just in the U.S. but globally remains very high.
Given these facts, the question is not why more than a thousand people demonstrated on Wall Street yesterday. The question is, why aren’t even more people in the streets of the financial district in New York City?” - Zaid Jilani, ThinkProgress
[Photo: Paul Weiskel]
More Americans lived in poverty in 2010 than in any other time that records have been collected, according to US Census data released yesterday. Median household income fell, too, and a growing number of people are without health insurance.
An additional 2.6 million people became officially poor last year, raising the poverty rate from 14.3 percent in 2009 to 15.1 percent. It was the fourth year in a row that the ranks of the poor grew, and Sawhill predicts poverty rates will rise to 16 percent by 2014.
More people live in poverty than ever before, but the Tea Party says we need to protect the wealthy. HMMMMMM.
Solyndra for Dummies.
Since when did Unions get any money from this?
Lofgren, in describing the reasons for his defection from the Republican party, describes a Republican camp that increasingly acts not like a traditional peacetime political organization, but more like an apocalyptic cult or one of the authoritarian movements from early 20th century European history.
In particular, the insane decision to turn the once-routine procedure of raising the debt ceiling (Lofgren notes it was done 87 times since WWII) into a political crisis revealed that the GOP party mainstream had sunk to the level of terrorism – holding our economic system hostage in exchange for political concessions.
This was a form of violence, and a serious escalation even from the days of George W. Bush, when the party was mostly limited in its willingness to use human beings as pawns in homicidal ploys for political power. Bush and Rove were willing to sacrifice Iraqi lives, and the lives of American servicemen, for oil and votes. But this current crew of Republicans shook canisters of kerosene over the entire American population and threatened to light a match if it didn’t get what it wanted.
As Lofgren notes, this was insurrectionary, revolutionary behavior. Only the massive scale of the gambit prevented it from being easily identified as terrorism and criminal blackmail. If in exchange for not defaulting on our debt Boehner, Hensarling, Cantor and the rest of them had asked for a billion dollars worth of gold bullion deposited in Swiss bank accounts, or the release of a dozen Baader-Meinhofs from German prisons, it could hardly have been much different from what they actually did.
I think most Americans can agree that reducing the public debt is a goal we can all share – and in the old days of thirty or forty years ago, when congress operated on a more collegial model that involved members from opposing parties getting together on weekends to achieve reasonable compromises over golf and highballs, the Rs and Ds could have found a way to press forward with reasonable deficit reduction plans without pushing us all to the edge of a cliff.
But for the new GOP, compromise of any kind defeats their central purpose, which is political totale krieg. This party’s entire reason for being is conflict and aggression. There is no underlying patriotic instinct to find middle ground with the rest of us, because the party doesn’t have a vision for society that includes anyone outside the tent.
I’ve always been queasy about piling on against the Republicans because it’s intellectually too easy; I also worry a lot that the habit pundits have of choosing sides and simply beating on the other party contributes to the extremist tone of the culture war.
But the time is coming when we are all going to be forced to literally take sides in a political conflict far more serious and extreme than we’re used to imagining. The situation is such a tinderbox now that all it will take is some prominent politician to openly acknowledge the fact of a cultural/civil war for the real craziness to begin.
Reading Lofgren’s piece, and a piece by John Judis of the New Republic, makes one realize that we came pretty close to real chaos in that debt ceiling debate. Had Obama invoked emergency powers to raise the debt limit unilaterally – and I think he had good reasons to do that – we might have had a revolt on our hands.