Tag: Recession

While You Were Asleep

While you were recovering from the holidays and while you were enthralled with the football play offs and championships….lots has been happening in Washington that you need to be aware of….you are about to be caught with your winkie in the play-doh…..

First, it is Obama’s attempt to halt bank bonuses:

Barack Obama announced his plan to impose a tax on banks that would “recoup every last penny for American taxpayers.” The move was a political gesture—with no real substance—aimed at distancing himself from the banks as they prepare to announce multi-million dollar year-end bonuses.

Obama is seeking to convince the public that by paying back the TARP money, the banks are fully recompensing taxpayers. But TARP is only one among dozens of government handouts to the banks, ranging from free and unlimited access to credit, guarantees against losses, easier regulation, and cash handed out indiscriminately in late 2008 as the financial system collapsed.

The Obama administration is fully implicated in and responsible for the resumption of “obscene” bank bonuses. The administration has refused (and continues to refuse) to set any real limits on executive payment. There are only a handful of firms, including American International Group, that are required to submit their bonus payment proposals to the government, and even among those, it has approved multi-million-dollar payouts.

Then there was the attack on Social Security……

Obama administration officials and Democratic congressional leaders reached agreement Tuesday on the establishment of a bipartisan commission that would put recommendations for drastic budget cuts to a vote in Congress before the end of 2010. The commission would have unprecedented legal authority to propose changes in both the tax code and major entitlement programs like Social Security, Medicare and Medicaid, with Congress required to hold an up-or-down vote on its recommendations.

The exact method for establishing the commission depends on congressional action. The Senate and House could vote to establish the commission, as an amendment for legislation to raise the national debt ceiling to $13 trillion.

The dimensions of the cuts being prepared is suggested by the commission’s mandate to propose a path to reduce the federal deficit from the current level of 10 percent of gross domestic product to 3 percent by 2015. This would amount to a reduction in the annual deficit of about $700 billion—an amount, not coincidentally, roughly equivalent to the bailout of Wall Street—to be subtracted from federal social spending every year. (go figure!)

All this is just crazy but the real story is that nothing is improving on Main Street….the middle class continues its slide down to poverty….

The “Great Recession” of 2008 and 2009 has spread poverty to millions more US children, according to a recent report by the Brookings Institute. The report, “The Effects of the Recession on Child Poverty,” estimates that a large number of states witnessed marked increases in child poverty in 2009.

In 2008, one in five US children under age 18 lived in families below the official poverty level, according to Census Bureau data released in September 2009. The figure now is significantly higher, according to Brookings researcher Julia B. Isaacs. The census poverty statistics for 2008 “lag considerably behind current economic conditions,” Isaacs writes. “Job losses and wage reductions occurring in 2009 were obviously not captured. In addition, many adverse events in 2008 were only partially captured.”

There is even more bad news for Main Street….

The Labor Department announced Thursday that first-time requests for unemployment insurance increased by 36,000, instead of falling by 4,000 as expected. The number of new claims hit 482,000. The four-week moving average of unemployment claims also rose by 7,000 to 448,250.

The scale of the jobs crisis has further strained state budgets. After 20 million US residents collected unemployment benefits last year, 25 states have run out of money for their unemployment insurance funds and have been forced to borrow money from the federal government or raise taxes.

Look for the Prez to try and counter this bad news in his State of the Union address this coming Wednesday….he has got to get the people back in his corner if he is to cxontinue his attacks on the middle class…..he will undoubtedly give some minor concessions to small businesses as a token of his commitment to reviving the economy through the creation of jobs…..thge problem for me is that I am not convinced that that will help create the number of jobs needed to fuel the recovery…..

Maybe we will have better luck next time…..eventually the middle class will wake up and realize that they are being humped like a sex starved dog…..

Make ‘Em Pay!

For months now I have been a bitch about the taxpayers money being used to give bonuses to the fat cats on Wall Street…..at every turn the banks have gotten a special treatment and it looked like the taxpayer was screwed…..

Today Obama will announce a plan to recover upwards of $120 billion of the money originally given the banks….

Obama’s announcement will come as U.S. unemployment is stuck in double digits and public anger is growing over big bonuses that some financial firms are poised to resume paying, barely a year after the height of the global financial crisis that made the bailout necessary.

The Obama administration official said the amount of money raised from the fees would not exceed $120 billion since this was the higher end of conservative estimates of the cost of the Troubled Asset Relief Program, or TARP.

Sounds like a pretty good idea to me….but as usual there is a downside to the plan…..The source, speaking anonymously because the fee has not officially been proposed, said government officials are also discussing exempting automakers and insurer American International Group from the fee, even though these companies are expected to represent a large chunk of the bailout losses.

There are other ways of “Making Them Pay”……that would be a Goldman-Sachs shareholder that is suing the company……this was posted in “Before Its News”:

the firm is supposed to spend about 50% of its net revenue on salaries and bonuses.  But in 2008 Goldman dished out $4.82 billion in bonuses despite earnings of only $2.32 billion..In the first quarter of 2009, it spent 259% of its net income on employee and executive compensation and in the second quarter 193%. Brown is now Goldman for exceeding its own rules on salaries and bonuses.

I makes me happy to see that at least someone is mad enough to do something as a payback for the screwing the banks have given the taxpayer….I just wish more people would take these a/holes to task….

What Happened To The Shovel Ready Projects?

I recall at the beginning of the process, the stim plan would create jobs because of the state’s shovel ready projects that need funding….remember?…..almost all governor’s said there were many, many shovel ready projects in their state that could use funding and that the stim plan would get those projects up and working……..and especially putting Americans back to work……that was then….this is now…..

As reported on ABC:

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

So basically, there is NO change in the status quo of the projects and the promised employment has NOT changed in the least.  So if infrastructure projects would be a boom to the economy, why is it not helping?

Basically, because the bulk of the stim money is being spent saving the gamblers on Wall Street….which I have said many times is NOT creating what the economy needs…..DEMAND!

Will The Economy Recover In 2010?

Personal opinion….not a chance!

The Economic Policy Center has a report of the lasting effects of the current recession…..

Educational achievement: Unemployment and income losses can reduce educational achievement by threatening early childhood nutrition; reducing families’ abilities to provide a supportive learning environment (including adequate health care, summer activities, and stable housing); and by forcing a delay or abandonment of college plans.• Opportunity: Recession-induced job and income losses can have lasting consequences on individuals and families. The increase in poverty that will occur as a result of the recession, for example, will have lasting consequences for kids, and will impose long-lasting costs on the economy.

• Private investment: Total non-residential investment is down by 20% from peak levels through the second quarter of 2009. The reduction in investment will lead to reduced production capacity for years to come. Furthermore, since technology is often embedded in new capital equipment, the investment slowdown can also be expected to reduce the adoption of new innovations.

• Entrepreneurial activity and business formation: New and small businesses are often at the forefront of technological advancement. With the credit crunch and the reduction in consumer demand, small businesses are seeing a double squeeze. For example, in 2008, 43,500 businesses filed for bankruptcy, up from 28,300 businesses in 2007 and more than double the 19,700 filings in 2006. Only 21 active firms had an initial public offering in 2008, down from an average of 163 in the four years prior.

Some economists are saying that the US economy will grow at a  pathetic rate of 2% over the years of the decade……all predictions say that the jobs will not return this year and may not return for several years……all in all the outlook for the middle class is dreary for the foreseeable future….the wealthy have a much brighter future than the rest of us…..we could change that….but we Americans are NOT that courageous….sad right?

The Next Economic Tsunami?

We have had our economic crisis…the financial system all but totally collapsed and thanks to the good will of the American tax payer….they survived….unfortunately the taxpayer is not as lucky…they are having an economic crisis of their own….loss of jobs, benefits, housing and retirement……and that is not the only problem….this one the government is trying to avert….but their efforts are a bit late and a bit impotent….

If you believe the hype, especially the hype that is spun by CNBC and WSJ among others, thenb we are slowly finding our way out of the economic nightmare of the past year….by the way…it is a LIE….all spin and HYPE!

allbusiness.com is reporting:

Rising losses on commercial real estate loans will continue to hurt U.S. banks in coming months and pose the biggest challenge for many financial institutions and their overseers, regulators said Wednesday.

Real estate loans will continue to be “the most prominent area of risk”

for banks over the next several quarters, Federal Deposit Insurance Corp. chairman Sheila Bair told lawmakers at a Senate hearing.

With more than 7 million jobs lost in the recession, office space has sat empty and developers have defaulted on their loans. The $6.2 billion in loans backed by commercial properties that banks wrote off as lost in the past two years will likely grow sharply as more loans come due, Bair said.

Nearly $500 billion of the loans are expected to come due annually over the next few years.

This will be the next nervous breakdown for the financial biggies……

look around at your area….check out Malls and office buildings…are they doing well?  Are they filled to maximum?  The jobless rate will fuel this wildfire that is at this time smoldering….but before long will burst into the flames of economic crisis….yet again…..but will this squeaky wheel get government grease?  Will the American taxpayer be on board with another bail-out?  If you think that there is anger in the heartland now….just try to bail out more corporations……

Let Us Look Back At TARP

Lots of anger….lots of shouting….lots of frustration….lots of cash……lots of everything but justice….by justice I mean the justice where the people that paid the bail out tab got something in return….they got NOTHING….the taxpayer got fleeced!

Let us look back for a moment…..a moment provided by Andre Damon and Barry Grey of wsws.org:

It is worth recalling the justifications that were given at the time for the passage of TARP. Then-President George W. Bush went on national television after the collapse of Lehman Brothers in the fall of 2008 and declared that Wall Street had to be bailed out in order to rescue Main Street. The alternative, he said, was mass unemployment and the worst recession since the 1930s. The taxpayers had to bail out the banks, he insisted, in order to allow them to offload their bad assets so they could begin lending again to consumers and businesses.

These claims were lies. The banks have used their government handouts to boost their profits and further enrich their executives, big shareholders and creditors. They have refused to expand their loans to small businesses and consumers, contributing to the worst jobs crisis since the Great Depression. They have refused to sell off or write down their bad assets, confident that, in the end, the government will make sure that they are able to palm them off at top dollar, or, in extremis, bail them out again.

A good portion of the banks’ revived profits have come from the systematic and open gouging of the public. They have jacked up interest rates and fees on credit cards, imposed higher fees on checking account overdrafts, and gamed the foreclosure crisis in order to profit from the tragedy of families driven into homelessness and destitution.

The American taxpayer has gotten the shaft yet again….they voted for change and they got the same screwing they always get…….no lube….no kiss….no cash……nothing has changed….see what corporate cash can buy?  It buys lots of politicians, even though taxpayer’s money pays them to do a job for the whole country…..they disregard that pledge and work for the captains of industry….the same people that caused all the economic problems……

Grumpy White Guys Rejoice!

Or as the rest of the world calls you….the GOP

Recently there was a report that white people would be in the minority by 2042 but circumstances beyond our control, the demographics have changed…….

Thanks to the AP for the following information:

The estimated time when whites will no longer make up the majority of Americans has been pushed back eight years — to 2050 — because the recession and stricter immigration policies have slowed the flow of foreigners into the U.S.Census Bureau figures released Wednesday update last year’s prediction that white children would become a minority in 2023 and the overall white population would follow in 2042. The earlier estimate did not take into account a drop in the number of people moving into the U.S. because of the economic crisis and the immigration policies imposed after the Sept. 11, 2001, terror attacks.

The 2050 estimate is one of four projections released that is based on rates for births and deaths and a scenario in which immigration continues its more recent, slower pace of adding nearly 1 million new foreigners each year. Demographers said that scenario offers the best look for now at the future demographic makeup based on current conditions, rather than other models which assume higher rates of immigration.

But there could be a downside to the “good” news……

The actual shift in demographics will be influenced by a host of factors that can’t be accurately forecast — the pace of the economic recovery, cultural changes, natural or manmade disasters, as well as an overhaul of immigration law, which may be debated in Congress as early as next year.

With that said, the white grumpy guys need to be praying for the economic down turn to last a little longer to help turn the tide that is coming…..

It’s Jobs, Stupid!

Finally, the admin has addressed the need for jobvs on Main Street, they have already made Wall Street more profitable and now they want us normal people to go back to work….a helluva idea…..it is about time……he is in a hurry noiw because the Dems are losing support and will most likely lose one House of Congress in the next election…..but what does he propose…..

Obama is proposing initiatives to help small businesses grow and hire new staff, spend money to modernize roads, railways, bridges and tunnels, airports and seaports and a new program to provide rebates for consumers who retrofit their homes to become more energy efficient, such as weatherization measures, a White House official said. The official didn’t release further details.

How does that sound to you lowly workers?  Time magazine composed a list for the admin to consider:

Target an Industry and Stimulate Demand

Pay Companies to Hire People

Hire More People to Work for the Government

Boost Access to Credit for Growing Businesses

This is a lame attempt, in my opinion…….pay companies to hire people?  What will that accomplish if unemployment is still high there will be NO demand for the product and with an increase in inventories….lay-offs will follow…..I am still working on this one…..what good is a rebate to weatherize one’s home if one has NO job to afford the materials to weatherize?

And then there are the ideas that the Repubs have onb fixing the job market……Cut regulations. Freeze spending. Cut taxes. No new taxes…..gee the same crap that they propose for every situation that needs a fix….don’t you just love the originality?…..

Let’s pause, for a second, to appreciate the brilliant rhetorical framing. A no-cost jobs plan! Without adding a single dime to the deficit, the Republican’s plan will ameliorate the worst unemployment crisis in 30 years. One wonders how a political party capable of such innovative thinking ever lost its hold of power.  (thanx to Andrew Leonard for the observation)

And the Repubs just keep saying that the Obama technique has failed and failed miserably….but the CBO does not agree with that assessment……that it had added 1.2-3.2 points of GDP growth that would otherwise have not occurred and added 600,000 to 1.6 million jobs……So without the stimulus, judging from the CBO report, one can assume that the economy would still be contracting, and unemployment would be higher than it is now.

I will agree that it is jobs, stupid…..but things are not looking like these will be a long term sustaining answer to the problem…..neither party is doing what is needed to put Americans back to work….

Where Has The Middle Class Gone?

Gone to foreclosure……gone to food stamps….gone to unemployment…..every one…..and the sad part of the saga is that it will most likely never return…..nothing being offered up by the government will protect or strengthen the middle class…it is a dying breed….it is dying slowly and most painfully…

I have heard economists and economic journalists say that part of the problem is the rise of China….this I agree with…..then they say that jobs are sent overseas because labor is cheaper and more profit can be made…..I also agree with this….but then they lose me….they say that the answer to our diminishing middle class is education….and education is the only way to save our faultering economy and middle class….sorry, no matter how I say it…….I can only hear the word BULLSH*T!

Still if they all believe that education is the answer……try to find an explanation for me…..how would a more educated people be a way to save jobs from going overseas?  Would that not make more jobs flee?  I mean with the cost of education and the cost of living in the US so high….jobs would still be sent overseas….a more educated middle class would not bring jobs back and would not make for a stronger economy….what business needs is less educated workers….why?….they will work cheap….that would help bring jobs home….

The Middle class is disappearing thanks to the politics of the country….why?……Massive national and personal debt. The US national debt has risen more in the last five years than in the entire history of the country. Even worse than the debt are the unfunded obligations of the US government in future years. Trump and Kiyosaki say that the unfunded obligations for Social Security are roughly $10 trillion, and those of Medicare are roughly $60 trillion. They compare these to the estimated value of the entire New York Stock Exchange at $35 trillion. These massive obligations are the result of unfunded promises to the large generation of baby boomers who are approaching retirement age. There is simply no way out of this morass that is without significant pain. Second, personal debt is also at an all-time high. One of the reasons for so many home mortgage foreclosures was homeowners using their home equity as a “piggy bank” to fund cars, vacations, luxury items, home improvements, etc. When the housing bubble burst, many of them could not keep up with their mortgage and credit card debt.

All the above causes are directly the fault of the politicians and their attitudes toward the people….absolutely NO ONE in Washington is working to sure up the middle class….banks got it….auto makers got it…..workers got diddly.  The Middle Class will be a course taught in grad school for economics……

Goldman-Sachs Spits On The Taxpayer!

We all have an opinion on whether the bank bailout was a good thing…the problem for Wall Street is that more Americans feel betrayed by their government for handing over massive amounts of cash to these thieves while they have to struggle just to keep food and clothing and shelter….and yet there is still NO demand from the people for the heads of these gtamblers that have pissed away America’s economic future…….

The WSJ is reporting that the CEO of Goldman is talking and apologizing:

Blankfein made a startling confession Tuesday. He apologized for Goldman’s role in the financial crisis, saying that the bank “participated in things that were clearly wrong and have reason to regret.”

This is the same egotistical bastard that last month said:

he made an embarrassing comment in an interview with the Financial Times, saying that he was just “doing God’s work.”

YOU should be mad as hell at the audacity of this a/hole….why?

He got paid $400+ million last year…the year that he was a driving force in the demise of an American economy……he is the a/hole that is setting aside billions to give bonuses to the employees……this is the a/hole that got a massive transfusion of taxpayer money and in return he is spitting in the face of every taxpayer in America.

But Professor he apologized…..did he?……what did he apologize for?  Did he apologize for wrecking the economy?  Is he apologizing for stealing from the taxpayer to pay himself?  Just what is he apologizing for?

If this is a PR ploy then it is piss poor….Americans need to stand up and DEMAND that these thieves be held accountable for the destruction of the American economy….We do NOT need to accept their apologies….why?…..these bastards are insincere…if they were truly remorseful then they would be handling all this situation differently….the people need to send the message…….a FAKE apology is NOT accepted!