One of the Many Things Pundits Don't Get About Occupy Wall Street

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By Ian Murphy

Wednesday night, broadcasting from Liberty Square in lower Manhattan, MSNBC's Ed Schultz rhetorically asked his guests if the Democrats were the biggest winners of the Occupy Wall Street movement. The crowd laughed a little at the myopic spin.

Thursday, Rush Limbaugh – citing an unnamed, likely imaginary “friend” – said that Obama's actually behind Occupy Wall Street, and, laughably, that the President's been planning “riots” for months. Riots. Planning. For months.

Although I can easily imagine both of these guys ending up in the same ICU for similar gasket-blowing ailments, I'm not playing the false equivalence card. These individual acts of stupidity are not equal, but they are both incredibly wrong.

El Rushbo's lying. No one told him this. And if they did, that person (Herman Cain?) was lying. He's a leaky bucket of bile; these are known knowns.

Schultz isn't lying. But he is off by a mile. This movement is rooted deeper than America's shallow, money-infested political dichotomy, but, indeed, it's been fertilized by this Democratic Administration's bullshit.

Rush is right: a good number of these kids turned out for Obama. Some of the protesters I talked to last weekend will hold their noses and vote Obama in 2012. Some will not. And all of them are painfully aware that despite Limbaugh's – and other insane right-wing – charges of “socialism,” Obama is Jeb Bush with a better jump shot. They know Dodd-Frank is a watered down bowl of nothing. They know that both parties are bought and sold by the same moneyed interests. They know recessions are worsened by so-called “austerity” measures. They know this pay-to-play political paradigm must crumble, for democracy to function properly.

If the Democrats gain from this movement it will be by embracing the populist sentiment of the now nationwide occupation, and making good on it if elected. No doubt Dems will co-opt the message. But will they deliver? Will we see this real populist movement translated into policy, as we saw the fringe tea party set affect the national dialogue?

Speaking of false dichotomies, it's important to remember that only 11 percent of the adult population identifies with the tea party; 64 percent of Americans think we should institute a more progressive tax code; and a remarkable 77 percent of Republicans agree with Occupy Wall Street.

President Obama has expressed empathy for the protesters' frustrations. But saying it and doing it are two different things. If the Democratic party wants to remain viable in the long-term, it's time for them to walk the walk. They must give this dissatisfied generation a clear alternative to corporate governance, instead of ruling from the triangulating, big business “center.” The occupiers are not happy with Republican Lite. They don't like Jeb Bush.

Something new, albeit long-in-the-making, is here. And, just as money's influence on our politics, it transcends party affiliation. While Democrats may capitalize in the short-term by co-opting the populist #OWS message, these protesters are Legion. They do not forgive. They do not forget.

Why Ma and Pa America Can Get Behind Occupy Wall Street

By Brad Reed

 

Take that pitchfork down to Wall Street, man!

Good news, my fellow Americans: You don't have enjoy drum circles or want to free Mumia to support Occupy Wall Street! And there's a simple reason for this: Our political and economic elites have screwed all of us, not just out-of-work twenty-somethings. How have they done this, you ask? Let us count the ways:

• First, our political and business leaders have cheered on the decimation of America's manufacturing industries through trade pacts that open up American workers to competition from countries where workers have no rights and are paid something like negative-five billion cents per year. This has not only led to the destruction of millions of middle-class jobs but has given America an absurd current-account deficit where we basically import cheap crap from China and don't make much of anything ourselves anymore. See this graph:
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• At the same time our politicians and business leaders pursued policies that benefited the super rich at the expense of everyone else. Think income tax cuts, capital gains tax cuts, the repeal of Glass-Stegall, the deregulation of derivatives and the creation of a billion-zillion-katrillion loopholes in the tax code that let the super rich get away with paying fewer and fewer taxes. The result has, quite predictably, been a rise in income inequality See this graph:
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• To cover up the stink of good jobs disappearing and real wages stagnating, our politicians and business leaders assured us not to worry since we had access to all kinds of cheap crap and, even better, we could exponentially expand our credit through the miracles of modern finance! So even if you go deeper and deeper into debt to maintain your lifestyles and to pay for college and medical expenses, don't sweat it! You can always take out a home equity line of credit to pay the bills since home prices always, always, always go upupup and you can just sell your house for a higher price if all else fails! See this graph:
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• Except... ooops. Housing prices are plummeting...
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  ...and now you're stuck with a paying a mortgage on a house that is worth far, far less than it was just last year.
  (Note to my conservative friends: This isn't just a subprime problem for shifty inner-city layabouts. One-third of all prime mortgage loan borrowers are underwater as well.)

And this, then, is more or less the face of America in 2011: We're basically a nation of former factory workers who now work as Walmart greeters. As if that weren't bad enough, we are getting tossed out of our homes and are living in fear of coming down with any sort of illness because our crappy part-time job doesn't provide us with health insurance. And the reason we got ourselves into this mess in the first place is because we followed the advice of our best and brightest business and political leaders.

I mean, if you can't get pissed off about that you can't get pissed off about anything.

The Occupy Wall Street Protesters are True Patriots, Not Astro-turf Chumps Like The "Tea Party"

Top 5 Reasons Why The Occupy Wall Street Protests Embody Values Of The Real Boston Tea Party

By Lee Fang on Oct 3, 2011 at 7:30 pm

2011: Demonstrators stage civil disobedience protests against corporate control of America. 1773: Protester boards an East India Trading Company ship, dumps tea.

In recent years, the Boston Tea Party has been associated with a right-wing movement that supports policies favoring powerful corporations and the wealthy. As ThinkProgress has reported, lobbyists and Republican front groups have driven the current manifestation of the Tea Party to push for giveaways to oil companies and big businesses.

However, the Occupy Wall Street demonstrations picking up momentum across the country better embody the values of the original Boston Tea Party. In the late 18th century, the British government became deeply entwined with the interests of the East India Trading Company, a massive conglomerate that counted British aristocracy as shareholders. Americans, upset with a government that used the colonies to enrich the East India Trading Company, donned Native American costumes and boarded the ships belonging to the company and destroyed the company’s tea. In the last two weeks, as protesters have gathered from New York to Los Angeles to protest corporate domination over American politics, a true Tea Party movement may be brewing:

1.) The Original Boston Tea Party Was A Civil Disobedience Action Against A Private Corporation. In 1773, agitators blocked the importation of tea by East India Trading Company ships across the country. In Boston harbor, a band of protesters led by Samuel Adams boarded the corporation’s ships and dumped the tea into the harbor. No East India Trading Company employees were harmed, but the destruction of the company’s tea is estimated to be worth up to $2 million in today’s money. The Occupy Wall Street protests have targeted big banks like Goldman Sachs, Bank of America, as well as multinational corporations like GE with sit-ins and peaceful rallies.

2.) The Original Boston Tea Party Feared That Corporate Greed Would Destroy America. As Professor Benjamin Carp has argued, colonists perceived the East India Trading Company as a “fearsome monopolistic company that was going to rob them blind and pave the way maybe for their enslavement.” A popular pamphlet called The Alarm agitated for a revolt against the East India Trading Company by warning that the British corporation would devastate America just as it had devastated South Asian colonies: “Their Conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men. [...] And these not being sufficient to glut their Avarice, they have, by the most unparalleled Barbarities, Extortions, and Monopolies, stripped the miserable Inhabitants of their Property, and reduced whole Provinces to Indigence and Ruin.”

3.) The Original Boston Tea Party Believed Government Necessary To Protect Against Corporate Excess. Smithsonian historian Barbara Smith has noted that Samuel Adams believed that oppression could occur when governments are too weak. As Adams explained in a Boston newspaper, government should exist “to protect the people and promote their prosperity.” Patriots behind the Tea Party revolt believed “rough economic equality was necessary to maintaining liberty,” says Smith. Occupy Wall Street protesters demand a country that invests in education, infrastructure, and jobs.

4.) The Original Boston Tea Party Was Sparked By A Corporate Tax Cut For A British Corporation. The Tea Act, a law by the British Parliament exempting tea imported by the East India Trading Company from taxes and allowing the corporation to directly ship its tea to the colonies for sale, is credited with setting off the Boston Tea Party. The law was perceived as an effort by the British to bailout the East India Trading Company by shutting off competition from American shippers. George R.T. Hewes, one of the patriots who boarded the East India Trading Company ships and dumped the tea, told a biographer that the East India Trading Company had twisted the laws so “it was no longer the small vessels of private merchants, who went to vend tea for their own account in the ports of the colonies, but, on the contrary, ships of an enormous burthen, that transported immense quantities of this commodity.” Occupy Wall Street demands the end of corporate tax loopholes as well as the enactment of higher taxes on billionaires and millionaires.

5.) The Original Boston Tea Party Wanted A Stronger Democracy. There is a common misconception that the Boston Tea Party was simply a revolt against taxation. The truth is much more nuanced, and there were many factors behind the opposition to the East India Company and the British government. Although the colonists resented taxes levied by a distant British Parliament, in the years preceding the Tea Party, the Massachusetts colony had levied taxes several times to pay for local services. The issue at hand was representation and government accountable to the needs of the American people. Patrick Henry and other patriots organized the revolutionary effort by claiming that legitimate laws and taxes could only be passed by legislatures elected by Americans. According to historian Benjamin Carp, the protesters in Boston perceived that the British government’s actions were set by the East India Trading Company. “As Americans learned more about the provisions of the new East India Company laws, they realized that Parliament would sooner lend a hand to the Company than the colonies,” wrote Carp.

Progressive political movements, from Martin Luther King to Mahatma Gandhi, have drawn on the original American Boston Tea Party for inspiring civil disobedience against oppression. Indeed, the very first Boston Tea Party was truly radical and faced scorn from elites and conservatives of the era.

Gee, Who Knew That Removing Money And Jobs From an Economy Would Depress That Economy!

Greece Acknowledges Austerity Failing, Dumping Country Into Depression
By: David Dayen Monday October 3, 2011 6:59 am

The Greek Finance Ministry released its estimated economic statistics this morning, and they were brutal.  But the AP report can’t understand why.

On Sunday, Greece’s finance ministry said the deficit this year will likely be 8.5 percent of its gross domestic product, higher than the 7.8 percent previously anticipated, and blamed a deeper-than-expected recession for the failure. The Greek economy is projected to shrink 5.5 percent this year.
The revelation that Greece is finding it increasingly difficult to reduce its borrowings in spite of all its austerity measures has raised fears that international creditors will effectively pull the plug.

Let me fix this AP story. It’s not that Greece’s budget deficit is growing despite austerity measures, it’s because of them, exactly as prominent economists understood and predicted.

Greece is in a depression.  Unemployment is at over 15%. Among young people aged 15-24 it’s 25%. The estimate of a 2.5% contraction in GDP for 2012 (after a 5.5% reduction in 2011) is laughable. It will be much higher. To meet creditors’ demands, the Greeks plan to cut 30,000 public sector jobs. That’s on a population of 11 million; it’s the equivalent of 900,000 job cutbacks in the US.
About 30% of the GDP that remains in Greece is in the underground economy, and even in the real economy, tax avoidance has become an art form. To alleviate these symptoms, Greece does not promise better tax collection or hiring of more collectors.  Instead it proposes more taxes that won’t be collected!

This is fated for total disaster. The Greek economy is dead and the Eurozone along with the IMF  and Eurpean Central Bank have a solution of shooting the dead patient rather than re-animating it. To make sure the banks that lent money to Greece are made whole (because Lord knows they shouldn’t feel any pain for their bad lending decisions), they’re going to turn the Euro bailout fund into a leveraged CDO.

This elicited a fitting metaphor from Wolfgang Munchau:

We are now in the stage of the crisis where people get truly desperate. The latest crazy idea, which is being pursued by officials, is to turn the eurozone’s rescue fund into an insurance company, or worse, a collateralised debt obligation, the financial instrument of choice during the credit bubble. This is the equivalent of putting explosives into a can, before kicking it down the road.

So why use such a toxic instrument to construct a product to save the eurozone? The current lending size of the European financial stability facility (EFSF) is €440bn, which is equal to the guarantees given by the 17 eurozone member states. If you want to leverage the CDO without increasing the liabilities of governments, then this €440bn would become the equity tranche of the new CDO. The equity holders in the CDO are supposed to be the ultimate risk-bearers. You can leverage the structure by creating more senior tranches of bonds that would be open to outside investors. You could expand the structure further through a mezzanine layer – which carries less risk than that of the equity tranche but more than that of the senior bonds. You could look at those senior tranches as eurozone bonds.

The big difference between a eurozone CDO and a subprime CDO is the the nature of the backstop. When the eurozone CDO fails, there are no governments that can bail it out because the governments themselves are already the equity holders of the system. This leaves the European Central Bank as the last man standing.

This is a dangerous solution to a political problem, the fact that the Eurozone nations won’t commit more money for the bailout fund.

But then, the Eurozone response to the crisis has been a cascading series of dangerous and wrongheaded solutions, so why break precedent?

UPDATE: Good thoughts on this from John Lanchester. I like this especially:

What’s roiling the markets is the fact that the governments of the richer European nations, especially that of Chancellor Angela Merkel, in Germany, have been putting the domestic unpopularity of bailouts ahead of their evident economic necessity. This might be only a piece of theatre, taking the crisis right to the brink before the need for action becomes so apparent that its political cost is lowered. (Merkel is facing reëlection in 2013.) German politicians seem to have a block about making clear to their electorate just how much the country has benefitted, and continues to benefit, from the euro, mainly through its enormously helpful effect on Germany’s strong export economy. That could turn out to be a historic failure of leadership.

In The Next Twelve Months I Can Already Hear The Pundits Saying, Wait For It......

"Nobody could've predicted that slashing budgets crashes economies"

by kos

Thousands of U.S. jobs created per month in 2011 (data source)
 

 

It's not rocket science, yet people are still shocked when austerity doesn't improve economies.

They kept spraying water on the wood, but they just couldn't get the fireplace started. The Post wrote the equivalent in an article on the Greek crisis:

"The government has raised taxes and cut services and is announcing tougher steps every other week. So far it has been to no avail; the economic outlook keeps getting worse, not better."

When the government pulls money out of the economy by laying off workers, cutting government workers' pay, and raising taxes, the expected result is a weakened economy. This is exactly what has happened in Greece. It is difficult to understand what the Post meant in saying "to no avail."

I've been asking conservatives everywhere I can to cite ONE example of a country that ended recession with austerity measures. I just want one example! But there are none. I should ask the same of traditional journalists, who are seemingly so enamored with their GOP budget-busting, entitlement-ending daddies that they can't be bothered to ask that question themselves.

There is a lack of consumer demand in today's economy. This has nothing to do with businesses being hampered by anything—be it regulations or capital constraints or the Kenyan socialist in the White House. If consumers want to buy shit, businesses will make it and sell it. It's that simple.

So how do you build consumer demand? You pump money into the economy! Yup. Stimuli. But absent that, the worst thing you can do is take money out of the economy, and that's what austerity does.
There is no sound economic theory backed by reality and real-world success that suggests otherwise.

Wall Street Trader Commits Honesty In Televised Business Interview

Big money is betting against the US recovery and the Euro Bank bail out.

Looks like the vultures have started shorting the US and EU economies. A second crash and bailouts can't be far behind. Get ready, because the middle class will be told to pay for this fiasco too.

LGMC

Another State AG Finds A Spine.

Good News! California AG Walks Away From National Mortgage Fraud Probe

 

By Susie Madrak

October 01, 2011 06:30 AM

Looks like the pressure applied by progressive groups like Credo Action, MoveOn and Progressive Change Campaign Committee really helped. But this is only the beginning. We all know the banks are applying all the leverage they can to block any threat of accountability, and they're not going to give up. We'll stay on top of this and what's happening in other states -- like NY AG Eric Schneiderman's investigation into mortgage bank fraud:

California Atty. Gen. Kamala Harris will no longer take part in a national foreclosure probe of some of the nation's biggest banks, which are accused of pervasive misconduct in dealing with troubled homeowners.

Harris removed herself from talks by a coalition of state attorneys general and federal agencies investigating abusive foreclosure practices because the nation's five largest mortgage servicers were not offering California homeowners relief commensurate to what people in the state had suffered, Harris told The Times on Friday.

The big banks were also demanding to be granted overly broad immunity from legal claims that could potentially derail further investigations into Wall Street's role in the mortgage meltdown, Harris said.

Read More: Here