June 2010

Now that the Banksters Got the Money, G-20 Vows to Cut Deficits by 2013

The G-20 has declared to cut their deficits by half by 2013. Guess what that means. Raising taxes and cutting social safety nets. Even worse, it is reported the word double dip, despite the evidence on slowing economies, didn't even come up as a possibility. Forget real global financial reform too, the G-20 cannot even agree to a very minor tax.

The leaders also discussed banking regulations, but could not agree on a proposal for a global bank tax, supported by the United States, Britain and the European Union, but opposed by Canada and Australia.

From the G-20 annoucement:

Reflecting this balance, advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016. Recognizing the circumstances of Japan, we welcome the Japanese government’s fiscal consolidation plan announced recently with their growth strategy.

Look at some of their other goals. To trade people and advance more bad trade deals. What is it about the trade deficit these people do not understand? What is it about destroying middle classes do these people not get?

Sunday Morning Comics - I See Shadow Bankers Edition

Brought to you by Financial Reform - Nothing pulls the country together more than having a bunch of financial conglomerates in cahoots with government destroying the national economy.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

 

Creating Budget-Neutral Jobs Policy in an Era of Irrational Austerity

Note: this is a cross-post from The Realignment Project.

Introduction:

Recently, the Senate attempted for the second time to pass a small jobs bill. The American Jobs and Closing Tax Loopholes Act of 2010 – which would provide for an extension of Unemployment Insurance, COBRA health insurance subsidies, $24 billion in aid to states’ Medicaid programs to prevent deficit-driven layoffs, partially paid for through closing loopholes that benefit the wealthy – already passed the House three months ago, but is stalled in the Senate. The fact that the bill failed with 56 senators voting in the affirmative not only sharpens the ironies of the anti-democratic nature of the Senate, but also shows that we’re stuck in the middle of a full-blown austerity craze.

Hence Senator Hatch’s call for the unemployed to be drugs tested - for Unemployment Insurance that they have paid for through years and years of contributions – and even supposedly liberal Senators like Dianne Feinstein suggesting that “people just don’t go back to work at all” if UI eligibility is extended beyond 99 weeks. On the simplest level, this is insanity – there are about thirty million unemployed (including both official and unofficial) and only three million job openings. Drugs tested or not, the 27 million left over don’t have a choice of whether to go back to work.

Unfortunately, to paraphrase Keynes, politics can stay irrational longer than the unemployed can stay solvent. Austerity is in full political swing, and unlikely to improve, except in the improbable scenario that Congress remains Democratic in the midterm elections and the Senate Democratic Caucus follows through on their threats to reform the filibuster. A public policy that can only work in optimal circumstances isn’t worth much, though, and there are still ways to move forward on jobs despite being lumbered by irrational budget-neutral burdens.

Friday Movie Night - Slavery and the Making of America

hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

While the focus on slavery is usually morality and human suffering, it was also about money, profit and greed. The below documentary Slavery in America hits on some of those economic aspects. It is estimated there are 27 million people globally being enslaved today. No, that's not counting the wage slaves and other horrors.

 

Episode 1 – The Downward Spiral

 

Bank Failure Friday - 3 more closures, tally for 2010 to 86

Ah, what would be a weekend start without a few more bank failures. This week's closures, along with their costs to the FDIC deposit insurance fund are:

  • High Desert State Bank, Albuquerque, New Mexico $20.9 million
  • First National Bank Savannah, Georgia - $68.9 million
  • Peninsula Bank, Englewood, Florida - $194.8 million

Last year's tally was 140. This years total bank failures are expected to top 2009.

Financial Reform D.O.A. Redux

The Financial Reform Bill is now officially a joke. D.O.A. After the worst financial meltdown and still no jobs in the aftermath, we get...lobbyists getting their way in Congress.

The Lincoln derivatives amendment was weakened and watered down. Banks now can keep most of their derivatives. They do not have to spin off 92% of them to affiliate companies.

Under the agreement, reached late Thursday, banks would continue to be allowed to deal interest rate and foreign exchange swaps, "credit derivatives referencing investment-grade entities that are cleared," derivatives referencing gold and silver, and the firms would be allowed to hedge "for the banks' own risk."

Banks would be forced to push out to their affiliates derivatives referencing "cleared and uncleared commodities, energies and metals (with the exception of gold and silver), agriculture, credit derivatives referencing non-investment grade entities and all equities, and any uncleared credit default swaps," Peterson said.

"Frankly, the biggest part of all these derivatives, by far, are the ones that I named that are going to be able to stay in the bank," Peterson added. "Interest rate and foreign exchange are by far the greatest part of the amount of business that's involved here."

From Bloomberg:

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