Michael Collins
Previously, Economic Populist brought the internet the startling news - Obama to Change Party. That was satire, at least on November 14. Just three weeks later, satire becomes reality. In the past few days, President Obama has traded away $620 billion in tax revenues in order to get a $56 billion, 13 month extension of unemployment benefits. Of course, the lost $620 billion will make any further unemployment benefits, or for that matter, any other productive social programs pipe dreams as the deficit explodes over the next two years. (Image: Banksy)
The Obama deal is a long way from the original position of ending Bush tax cuts for the highest earners and simply extending unemployment benefits, as called for by economic and social circumstances.
It started when President Obama sent his vice president to negotiate with Republican leaders on Capitol Hill. Since the president still has a majority in both chambers of Congress, you might wonder why he's negotiating. The House Democrats are ready to rock to show that they're not to blame for the past two years of inaction. There are enough Democratic Senators with either the inclination or the compromised background to strong arm a majority.
Congressional Republicans appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy.
How? By denying them Build America bonds.
The most intriguing aspect of President Barack Obama’s tax deal with Republicans is what the compromise fails to include — a provision to continue the Build America Bonds program. BABs now account for more than 20 percent of new debt sold by states and local governments thanks to a federal rebate equal to 35 percent of interest costs on the bonds. The subsidy program ends on Dec. 31. And my Reuters colleagues report that a GOP congressional aide said Republicans “have a very firm line on BABS — we are not going to allow them to be included.”
No surprise since the public pension fund is one of the last hold outs for any sort of retirement, so of course it is a target. On the other hand, California, as well as Illinois refuse to deal with major costs, including their illegal immigration budget busting problems.
With all of the talk of increased lending, it's useful to look at the latest Federal Reserve's consumer credit report.
Consumer credit increased at an annual rate of 1-3/4 percent in October 2010. Revolving credit decreased at an annual rate of 8-1/2 percent, and nonrevolving credit increased at an annual rate of 6-3/4 percent.
Federal Reserve Chair Ben Bernanke gave a 60 Minutes interview and now the world is all abuzz with the possibility of more quantitative easing. He said other stuff ya know, like income inequality is a real problem in the United States and the unemployment rate could tip the scales into another recession. He even came clean with the reality 2.5% annualized GDP growth is barely enough to maintain the status quo. Watch the interview for yourself below:
Following the on-going drama of the Deficit Commission - which just adjourned without even voting on its own proposal, and which never came close to getting the necessary votes to trigger an up-or-down vote in the Senate - has been rather painful. Especially in light of the Republican takeover of the House and the ongoing dispute over extending the Bush tax cuts and raising the debt ceiling, the grip of austerity thinking seems paradoxically strong and weak at the same time, pervasive enough to be omnipresent within the media yet not actually persuasive enough to get anyone to vote for anything they dislike.
However, there is one point that needs to be cleared up - behind the banalities of "living within our means" and other balanced-budget platitudes, there is ideology at work. The budget is not just a technical issue, but a moral document - it is a choice between a high road or a low road to the future.
Brought to you by economic news - Statistical snowflakes dancing on the heads of snow blind politicians while the middle class is buried in a blizzard of bad policy.
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.
On top of 2.8 million jobs lost from 2000 to 2010 in finance, IT, HR and procurement, The Hackett Group projects that another 1.0 million will disappear by 2014 in North America and Europe, representing a total reduction of 46% of jobs in these functions since 2000.
Remember all of those promises during campaign 2008 to finally reform trade and stop NAFTA like trade agreements? Chalk up another one to the win elections rhetoric dust heap. While Obama claims this NAFTA style Bush era trade agreement is the very ole and tired corporate-speak win-win, odds are it's another lose-lose. A loss for the American people and a loss for Obama himself in 2012.
Obama has announced a new trade agreement with South Korea. There is just one new tweak that is better than before, the tariff schedule on autos.
The new agreement calls for South Korea to reduce its tariff on U.S. auto imports from 8% to 4%, and fully eliminate it in five years.
Meanwhile, the 2.5% U.S. tariff on auto imports will remain in place until the fifth year, instead of being immediately eliminated as specified in the 2007 agreement.
Here's what Public Citizen said about the auto tweaks:
Merely tweaking the “cars and cows” market access provisions of Bush’s NAFTA-style Korea trade pact but leaving in place the offshoring-promoting foreign investor protections is a slap in the face to the majority of Americans who, according to repeated polls, oppose the same old trade policy that has cost millions of American jobs.
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!
Remember all of those derivatives, the CDOs, CDSes which brought down the world economy? This documentary is about the people behind those mathematical models, which due to the failure of financial reform, are still operating today.
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!
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