Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
Debt Ceiling Games are Evil
Blogger George Washington nails it on the debt ceiling agenda with the longest article title in history in They’re Going to Cut Back the Bone and They’re Going to Keep the Fat, Basically. They’re Going to Try to Panic the Population into Acquiescing ... While Making Sure that They Pay the Pentagon, They Pay the Foreign Aid, They Pay Wall Street. He linked to the below Michael Hudson interview exposing debt ceiling game truth:
Washington also links to an article by Dennis Kucinich
The rancorous debate over the debt belies a fundamental truth of our economy -- that it is run for the few at the expense of the many, that our entire government has been turned into a machine which takes the wealth of a mass of Americans and accelerates it into the hands of the few.
The History of Raising the Debt Ceiling
The regular debt ceiling limit dance seems to evoke a fairly standard set of behaviors in the two major US political parties: Whichever party is out of power (White House, or Congress or both) threatens not to support raising the debt ceiling. Which ever party is in power talks about how irresponsible and dangerous such a move would be.
The historical statutory debt ceiling increases (sourced from Table 7.3 here; click graph for Spreadsheet) reveal this game has gone on for more than
halfthree quarters of a century.
Elizabeth Warren Ousted from CFPA
Could we expect any less from this administration? Of course a banking executive, who works for a glorified offshore outsourcing group, McKinsey, is probably the nominee. Naked Capitalism:
We have said for some time Warren was not going to get head the new consumer financial protection agency. Obama was not willing to ruffle the banks, and Geithner, who is is most powerful Cabinet member, would not stand for it). Nevertheless, we are disappointed by this outcome. And it seems a bit churlish for this news to be leaked the day after she ran the gauntlet with the House Oversight Panel. From Bloomberg:
President Barack Obama has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.
The president’s choice is a person who already works at the consumer agency, the person said today. Obama may make the nomination as soon as next week, another person briefed on the administration’s plans said.
The choice is presumably Raj Date, a former McKinsey staffer and banking industry executive (Capital One and Deutsche Banka) whose name was floated a month ago.
editor, correction, Richard Cordray, former Ohio Attorney General was chosen to head the CFPA.
Here's Warren testifying that ForeclosureGate has not been properly investigated.
Black People Lose All Economic Gains
This is an incredible statistic. Black people have now lost all economic gains from the Great Recession and the black male jobs rate is at record lows, 1972, when equal opportunity laws were passed.
This time they cannot blame it on skills or education. CBS News describes an experiment by Sociologist Pager:
Pager's white applicant without a criminal record had a 34% callback rate. That promptly sunk to 17% for her white applicant with a criminal record. The figures for black applicants were 14% and 5%. And yes, you read that right: in Pager's experiment, white job applicants with a criminal history got more callbacks than black applicants without one.
Algernon Austin on some incredible black statistics, such as the median black wealth being $2100 in 2009. Wipe Out!
One definition of "middle class" used by social scientists is twice the poverty level. Individuals who live in households that have an income of at least two times the household's federal poverty threshold are middle class. By this definition, in 1999 black America became a majority middle-class population. That year, 52.2% of blacks were middle class. Last year, the percent of middle-class blacks slipped down to 49.7%. There is every reason to expect further declines this year and next year.
College-educated blacks--another definition of "black middle class"--have been particularly hard hit during this recession. My organization, the Economic Policy Institute (EPI), estimates that this year the unemployment rate for black workers with bachelor's or higher degrees is on track to be the highest since 1979, the earliest year for which we have data. In 2007, the unemployment rate for college-educated blacks was 1.6 times the rate for college-educated whites. This year it is 2 times the rate for college-educated whites.
If one restricts the focus to recent black college graduates, those under 25 years of age, the picture is similar but worse. Young, recent African-American college graduates had an unemployment rate of 15.4% in the first half of this year. Among recent college graduates, this group had the highest unemployment rate and the highest student-loan debt level. Jobless and burdened with over $30,000 worth of debt is a terrible way to begin one's adult life, but this is the reality for many young and well-educated African Americans.
Wealth is another indicator that can be used to gauge the health of the black middle class. In 2004, 32.2% of black households had no wealth. EPI estimates that this percentage grew to 39.9% in 2009. In 2004, the median black wealth was a very modest $13,000. By 2009, it had fallen to $2,100. There has been a tremendous decline in wealth in black households likely due to the foreclosure crisis.
Slap on the Wrist
Barry Ritholtz comments on the insulting no penalty abusive mortgage de facto fine payola, $30 billion in all, for trillions in homeowner pain. Worse, this settlement resolves the banks of any wrong doing. There is no justice!
Wikileaks Exposes Panama Corruption
Public Citizen has been trying to get the truth out on the latest round of bad trade deals, including one with Panama. Now Wikileaks exposes why this is a horrific trade agreement:
Wikileaks has released a treasure trove of damning documents about the current Panamanian administration.
But with friends like Panamanian President Martinelli, who needs enemies?
In January 2009, the Embassy expressed concern that Panama's authorities supposedly in charge of providing the U.S. with intelligence "failed to provide" information about drug-related money laundering "to the Attorney General as required by law. Ambassador stressed that the credibility and efficacy of the UAF were crucial in fight against money laundering."
It gets worse. The man behind the money - David Murcia Guzman - has links to former Colombian president Alvaro Uribe, and current Panamanian president Ricardo Martinelli. According to this cable from March 2009, Martinelli's network of Super 99 stores may have been a "service provider" to Guzman, and may have laundered illicit proceeds.
China's major Trade Tax a $100 billion a year Bonus
Trade Reform overviews a new white paper on how China's Value Added Tax massively subsidizes their exports.
$455 billion — almost half a trillion US dollars.
This is the amount the Chinese government spent to subsidize their domestic companies’ exports between 2002 and 2009. It is the cumulative amount China paid in export tax rebates during that time to increase its exports to America and other countries. Indeed, as the global recession of 2008 took hold, the export tax rebate payments in China increased.
The Debt Ceiling in One Graph
Here's some eye candy that says it all. Raising the Debt Ceiling has happened many, many times.