So, we learned today that our economy lost 35,000 in February and the Unemployment Rate was 9.7%. Markets loved it and so did the Obama Administration - what the heck things are getting worse much less slowly - hurray.

Quite frankly this unacceptable. And what kind of response do we get from Washington: a token response of $18 billion "Jobs Bill". This "Jobs Bill" is a joke. We need "overwhelming force" to address this Jobs Crisis.

This is war, this is a major Jobs Crisis. Here are a few more numbers to chew on (ht Calculated Risk):

Enough of the bastardization of Keynesian economics. True Keynesian economics is NOT about bailing out Wall Street and providing a tax cut to wealthiest Top 1-2% of population. Keynesian economics is NOT about providing government spending for a war machine. Keynesian economics is NOT about creating deficits WITHOUT a material return on investment in the form of FULL EMPLOYMENT.

What is Keynesian economics? In a nutshell, Keynesian economics is a political economic philosophy that believes that government fiscal and monetary policy can help close any output (GDP) gap in the economy - meaning recession/depression. The focus of Keynesian economics is on FULL EMPLOYMENT and SHARED PROSPERITY.

It was neo-liberal policies that created this mess and it will take progressive policies to fix it. There are several reasons why we have not seen progressive policies from Democrats: 1) They are owned by Wall Street and 2) Such policies require a shared sacrifice (which has been absent for quite some time) or the financial oligarchy to experience some pain. We have seen nothing but policies that support the financial sector. That will have to change if we are to move forward.

The mortgage crisis that triggered our economic crisis or Great Recession was created by a lack of regulation and increased financialization. But we have failed to address the underlying problems of the mortgage crisis. In fact, most programs intended to address the mortgage crisis have failed miserably.

Last week, Ben Bernanke blamed lax regulation for the financial crisis.  He was responding to those who claim low interest rate environment caused the crisis. Conservatives blame Fannie Mae and Freddie Mac.  These all were contributing factors and not the real cause of the crisis.  The depth of this crisis is too severe to blame one or several contributing factor. 

Recently there has been several stories about 2000s being the Lost Decade of Jobs. No kidding. But what the stories fail to discuss is what are the reasons for the lack of job growth. Could it be because of economic policy? Heck, yeah - our current economic policy relies on wage suppression, cheap imports, more debt, abandonment of manufacturing sector (part of wage suppression strategy) and asset price inflation. But why don't we hear about this in the traditional media?

First, a Business Week article:

Second, from a New York Times Article:

The race to the bottom. But this time the supporters of the ideology that is leading the race to the bottom are not hiding behind slogans such as "small government", "government is the problem" or "trickle down economics". No, no, they are coming right out in the open. For example this New York Times article: here.

The authors of this article don't waste any time. Check out the first paragraph:

American workers are overpaid, relative to equally productive employees elsewhere doing the same work. If the global economy is to get into balance, that gap must close.

But it gets better:

The big trade deficit is another sign of excessive pay for Americans. One explanation for the attractive prices of imported goods is that American workers are paid too much relative to their foreign peers.

This proposal is nothing new "new" but borrowed from Denmark.

Our mortgage finance system is broken.  It needs some serious restructuring or a complete overhaul.  We can learn a lot about a new structure from the Danes.  The Danish mortgage system is one of the oldest and most sophisticated housing finance markets in the world. 

This is from a quote from Mervyn King, Governor of the Bank of England. Here is the full quote:

It's the level, stupid -- it's not the growth rates, it's the levels that matter here

I got this quote from reading Mohamed El-Erian's article in the Financial Times.  Dr. El-Erian coined the phrase the "New Normal" for economic growth.  While I agree with his conclusion, I don't entirely agree with his analysis for the "New Normal". 

CFPA stands for the Consumer Financial Protection Agency. The Obama Administration, as part of its proposal for comprehensive financial regulatory reform (much needed), proposes the creation of the Consumer Financial Protection Agency. The Consumer Financial Protection Act, the legislation that creates this new agency, strips away and consolidates the consumer protection duties and responsibilities of various existing federal regulators into one agency - the Consumer Financial Protection Agency. "The agency will be dedicated to looking out for American families when they take out loans or use other financial products or services – with a mission to promote access and protect consumers from unscrupulous practices across the market."

Needless, to say the financial conglomerates hate this idea and their friends in congress are out to kill it:

We are stupid! We've been punked! Punked by the financial oligarchy. Punked by financial conglomerates. And yes, punked by the Obama Administration.

Currently, there is a story on EP about private equity firms feeding at the trough. It talks about FDIC's loss share agreements. These are very generous sweetheart agreements whereby the FDIC, and more directly taxpayers, assume losses of assets sold to private equity firms and other acquirers of failed bank assets. Here is a little taste of these loss share agreements:

Income Inequality + Financialization + Globalization = Destruction of the Middle Class

This equation is a work in progress for me.  I have tried an econometric model but it crashed my computer.  Seriously, we are losing sight of the much bigger picture that is playing out across the country.  Our policy makers are distracted by this financial crisis or intentionally ignore the plight of the Middle Class in the U.S.

Naked Capitalism through Guest Posts by Leo Kolivakis, publisher of Pension Pulse, has done an excellent job of chronicling the problems with pension funds. I certainly encourage people to read his posts.

The headline is from a Bloomberg "exclusive" story. This is the lead in paragraph:

U.S. pension funds contributed to the record $1.2 trillion that private-equity firms raised this decade. Three of the biggest investors, state pensions in California, Oregon and Washington, plunked down at least $53.8 billion. So far, they only have dwindling paper profits and a lot less cash to show the millions of policemen, teachers and other civil servants in their retirement plans.

This is a modest proposal and actually may not be very original. But this is a very important topic that is not getting enough attention. This proposal could be implemented easily and quickly if it had the right partners.

Our financial system offers many options for people to save, invest and obtain credit. But having all these options is not necessarily a good thing. These increased options have also added more complexity to a financial system that was already pretty intimidating for many people. Many of us do not have a basic understanding or knowledge about finance to make good financial decisions for ourselves. Studies have shown that this financial "illiteracy" is widespread across the U.S.

Are financial conglomerates in a position to increase lending? Do they still have too many "toxic assets" on the books plus a lot of their own debt on the books which in turn is causing them to not be able to provide any no loans? Are we (households) in a position to incur more debt? If the trillions of dollars that Federal Reserve and Treasury pumped into the financial system to keep interest rates low is not jump starting new lending, did we just waste trillions of dollars? These are the questions that came to mind after reading this Bloomberg article and the Federal Reserve Bank's April 2009 Senior Loan Officer Opinion Survey.

Congress still has a long way to go in representing their constituents and not their special interest benefactors (eg. cram down bill) but we should give credit when credit is due. Yesterday, two potentially significant pieces of legislation were signed by the President: Helping Families Save Their Homes Act of 2009 and the Fraud Enforcement and Recovery Act of 2009. These pieces of legislation are potentially significant not so much because of their main objectives (which are significant in their own way) but for two potentially powerful amendments included in each.

Helping Families Save Their Homes Act of 2009