Must Read Posts for June 6, 2010

On The Economic Populist you might have noticed the right column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.

Sometimes though, one cannot say it better but miss those who did.

Must Read Post #1

Gretchen Morgenson notes Banks are dumping their worthless residential loans, including home equity loans, on taxpayers via Fannie Mac and Freddie Mae.

Taxpayers are the ones holding the bag when institutions try to avoid losses by refusing to buy back problem loans they have sold to Fannie Mae and Freddie Mac, the mortgage finance giants that are wards of the state.

Must Read Post #2

Angry Bear wryly comments on the G20 new momentum to reduce deficits is all about Market Concerns:

Finance ministers from the world’s leading economies ripped up their support for fiscal stimulus on Saturday, recognising that financial market concerns over sovereign debt had forced a much greater focus on deficit reduction.

Must Read Post #3

Paul Krugman bemoans the obviously coming Lost Decade, due to G20's focus on debt. Maybe the lost decade has more to do with bailing out mega banks and ignoring the U.S. middle class and real economy.

Must Read Post #4

Naked Capitalism has a good overview post on the games BP plays to avoid liability and how the Obama administration is complicit. Realize placing gag orders on workers, and worse, through contract law is par for the course for all corporations. So is double speak and trying to deny the real damage in order to reduce their liability costs. BP is simply bad guy du jour, but this double speak is standard fare, and why you see large sociopathic public relations divisions, a plastering of ads which have no connect to actual reality as well as hordes of blood sucking corporate lawyers.

Must Read Post #5

Robert Reich has jumped onto the double dip recession prediction bus and this site notes the total government spending was negated by the massive spending cuts at the state and local levels. Regardless, policy makers did not focus on the middle class, direct jobs and the real economy so none of these latest dire predictions are new to readers of this site.




In 1936, reacting to stinging criticism of the Keynsian Pump, FDR cut back the New Deal to the bone. Corporate Tax rate went to 12.5 percent, Capital gains rates were set to 50 percent of ordinary income.

The tax thing always got the rap for the double dip of the Great Depression but it was less than half the picture. Deficit spending had reached 35 percent of GDP, Keynes wanted a full 50 percent.There was a 1 percent FICA tax added, so what? FDR commented on Keynes, "I don't understand a word that man says."

We are seeing a repeat of 1936 on the Fiscal side, without the federal taxes. The drop in M3, and dump of GSE losses is alarming. If Reich is right about the loss of state spending, then we get at least another 1 percent loss of GDP (times multiplier), before the next Credit Crunch.

As the opponents of the New Deal love to say, "It was only WWII that got us out of the Depression." So how many years have we got left till WWIII to "get us out" of this Depression? The WWIII Planning is going better than many realize.

Burton Leed

How many years till WW III

How many years till WW III ? Zero, it just started with Turkey now being in a technical state of war with Israel.