Re- the Stalled Recovery,

From Nation of Change:

While the [National Federation of Independent Businesses (NFIB), an organization that often acts as a front for larger corporate interests] warns that minimum wage increases would create serious cost problems for small businesses, few of their members list "labor costs" as their "most important problem." Instead, what we see from the NFIB survey results is that the percentage of small businesses listing labor costs as their most important problem has hovered consistently between 3% and 5% since the beginning of the recession in December 2007. In the most recent data, the percentage fell to 2%, its lowest level since the start of the recession.

* * * * *
Instead of wages, the NFIB survey results suggest that “poor sales” have been — far and away — the biggest concern of small businesses. At the onset of the recession in December 2007 about 9% of firms said that poor sales were their most serious problem. By 2009 and 2010, the share citing poor sales was as high as 34%. In the most recent data, about 21% of all firms still list poor sales as their biggest challenge. The real problem facing firms is not that their low-wage workers earn too much, it is apparently that their customers earn too little [see chart at right.]

Lots more useful info at DU.

The Results of Austerity

How states that have expanded spending have done as compared to states that have cut back. More at The Atlantic.

The Results of "Trickle Down"

"1) Corporate profit margins just hit an all-time high. Companies are making more per dollar of sales than they ever have before. . . .

"2) Fewer Americans are working than at any time in the past three decades. . . .

"3) Wages as a percent of the economy are at an all-time low. This is both cause and effect. One reason companies are so profitable is that they're paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: those "wages" are other companies' revenue."

More great charts and other info at Business Insider. And if you like this, you might like this video of Huey Long in 1934.

Retirement, Ha Ha!

I have a 401(k) with a major investment company whose name starts with F, which I'll call "F Co." I just got an email from them advising me of five "relatively easy steps that [their] research shows" can help make sure I have a comfy retirement. Here they are:

1. Rebalance your investments, i.e., every once in a while, you should shift some of your funds from stocks into bonds or vice versa, to keep from accumulating too much of either. This is investments 101 and I don't think most of us needed F Co.'s "research" to reveal it to us. It also kind of assumes we're actually accumulating too much of either stocks or bonds, which hasn't been a problem for most of us 99%-er's lately.

2. Contribute more to your savings. Duh!

3. Put off retiring. Here's where I guffawed.

4. Work during retirement. Seriously, they counted that as a separate "step" toward a comfy retirement. Well, maybe the job market will have picked up in another ten or fifteen years.

5. (Drumroll . . . ) Sell your home.

Since 1/4 of my retirement funds were melted in 2008, I'm really glad for F Co.'s "research."

News You Can Use

Per the WSJ's Market Watch,

After adjusting for inflation, spending under Obama is falling at a 1.4% annual pace — the first decline in real spending since the early 1970s, when Richard Nixon was retreating from the quagmire in Vietnam.

In per capita terms, real spending will drop by nearly 5% from $11,450 per person in 2009 to $10,900 in 2013 (measured in 2009 dollars).

By the way, real government spending rose 12.3% a year in Hoover’s four years. Now there was a guy who knew how to attack a depression by spending government money!

UPDATE: Great article in the NYT by Bruce Bartlett, who held senior policy roles in the Reagan and George H.W. Bush administrations:

Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.

Much more at the link.

The Eurozone Crisis

. . . is not about market "discipline," according to Dean Baker:

The people who gave us the eurozone crisis are working around the clock to redefine it in order to profit politically. Their editorials – run as news stories in media outlets everywhere – claim that the euro crisis is a story of profligate governments being reined in by the bond market. This is what is known in economics as a "lie". The eurozone crisis is most definitely not a story of countries with out of control spending getting their comeuppance in the bond market. Prior to the economic collapse in 2008, the only country that had a serious deficit problem was Greece. In the other countries now having trouble financing their debt, the debt to GDP ratio was stable or falling prior; Spain and Ireland were actually running budget surpluses and had debt to GDP ratios that were among the lowest in the OECD. . . . The crisis changed everything. It threw the whole continent into severe recession. This had the effect of causing deficits to explode, since tax revenues plummet when the economy contracts and payments for unemployment benefits and other transfer programmes soar. . . .

* * * * *
People should recognize this process for what it is: class war. The wealthy are using their control of the ECB to dismantle welfare state protections that enjoy enormous public support. This applies not only to government programs like public pensions and healthcare, but also to labour market regulations that protect workers against dismissal without cause. And of course, the longstanding foes of Social Security and Medicare in the US are anxious to twist the facts to use the eurozone crisis to help their class war agenda here. The claim that the countries in Europe are just coming to grips with the reality of modern financial markets is covering up for the class war being waged on workers across the globe. The assertion that this crisis is about market discipline should not appear in a serious newspaper, except on the right side of the opinion page.

More at Al Jazeera. (Dean Baker was among the first observers to identify a US housing bubble in 2002. He was a senior economist at the Economic Policy Institute and worked as a consultant for the World Bank and the Joint Economic Committee of the US Congress, and authored weekly commentaries for the NYT and WaPo.)

UPDATE: Other recent headlines of economic interest:

The Four Companies that Control the 147 Companies that Own Everything (re- the 147 cos., see here).

Iceland is Our Modern Utopia (rejecting a bailout for their banks, the citizens of Iceland took control of their now-resurgent economy).

Germany Builds 2X the Cars & Pays Workers 2X the Wages

Evidence of Market Manipulation in the Financial Crisis

Is Bank of America Holding the US Hostage? (referring to the fact that BoA just moved its derivatives business into its FDIC (i.e. taxpayer) -insured depositary).

Too Big to Stop: Why Big Banks Keep Getting Away with Breaking the Law (the industry has captured the regulators, so the fines are too small to deter).

Why the Economy Does Not Have to Be a Zero Sum Game

Who's saying it does? I've heard the claim attributed to Occupiers, but I personally haven't seen or heard any Occupiers make it.

In fact, I'd argue it's the 1% who've acted as if they believe the economy's a zero-sum game – and in so doing, have made it so.

Here are a couple of factors to think about (from my essay, Ten Things You Need to Know About the Infowar, which as far as I can tell no one has read, but they should, 'cuz as far as I can tell, it's still the case that hardly anyone else has put some of this stuff together):

8. Greater transparency maximizes efficiency and profits for a group as a whole, but individuals within the group profit most when they're not transparent while others in the group are.

There's a fascinating piece, "The Transparency Paradox," at colayer, regarding what I've called [Julian] Assange's theory of "the cost of tightened secrecy to organizational I.Q.," or as Volatility puts it more succinctly (more under Thing No. 9 below), his "secrecy tax." The author at colayer says studies show that, while greater transparency maximizes efficiency and profits for a group as a whole, individuals within the group profit most when they're not transparent while others in the group are.

General transparency means that everyone has more useful info to work with, and can work together efficiently to solve problems and create wealth for all; the group benefits from the "wisdom of the crowd," as James Surowiecki would put it, or as Assange might say, the computational power of the system as a whole is maximized.

(Image right from "The Transparency Paradox," at colayer.)

And, colayer points out, the internet and other technologies now available have greatly reduced the cost of transparency.

But when you're negotiating, you have an advantage if you know what cards the other parties are holding but they're ignorant of yours.

I'd like again to emphasize again the importance of the dimension of time, which Assange has also written about, in his 2006 essay for counterpunch, "Of Potholes and Foresight." To put part of his point in other words, a stitch in time often saves nine, and transparency makes that kind of foresight possible, which otherwise tends to give way to political pressures to allocate resources in more near-sighted ways. Recall Wikileaks' logo (an hourglass). Or as someone else said, making a related but somewhat different point, " . . . Napoleon . . . said that it wasn't necessary to completely suppress the news; it was sufficient to delay the news until it no longer mattered." (attributed by PRWatch to Martin A. Lee & Norman Solomon, Unreliable Sources: A Guide to Detecting Bias in News Media (New York: Lyle Stuart, 1991), P. xvii; I hope the internet adopts Assange's "scientific journalism" and becomes better sourced, as well as more complete, soon).

* * * * *

9. So long as a system as a whole remains mostly transparent, it's a more-than-zero-sum game; but where transparency has sufficiently deteriorated, the competition among "players" devolves into a race to see who can loot the most the fastest, even if valuable resources (including personnel) are wasted in the process.

Re- the big, "systems" picture, there's a great article at Volatility on "racketeering":

According to Joseph Tainter’s theory of imperial collapse, as societies become more complex, they must expend an ever greater portion of the energy they have available simply on maintaining their complexity. Although social and technological advances may achieve profitable returns for awhile, once a certain level of complexity is reached, diminishing returns set in. Eventually, at the late imperial stage, the complexity of the power structure, the military infrastructure, the bureaucracies, all the rents involved in maintaining an ever more bloated parasite class, their luxuries, the police state required to extract these rents and keep the productive people down, and the growing losses due to the response of the oppressed producers, everything from poor quality work to strikes to emigration or secession to rebellion, reaches a point where the system can only cannibalize itself and eventually collapse.

Julian Assange’s theory of the secrecy tax he’s trying to impose through Wikileaks is one example of these diminishing returns on imperial complexity. All the indications are that Wikileaks has been successful in this.

* * * * *
This is a welter of parasites battening on the same host. They’re in a zero sum game, not only against the people, but among themselves. Each has an interest in just exploiting the host, not killing it. But together they are killing it and therefore themselves. It’s clear none is capable of organizing or regulating the others. The federal government isn’t capable of doing it. If one big bank tried to do it, it would be subverted by the others. Each racket, from highest to lowest, is going to maximize its bloodsucking until there’s no blood left.

I would argue that "complexity" is often associated with a lack of transparency. And I would argue that size matters greatly, since it's difficult for a large system to function without some kind of internal division of responsibilities, and that means complexity. One of the main respects in which both size and complexity matter has to do with the fact that they make it more difficult to keep track of what different individuals or agencies within the organization are doing and hold them accountable. In particular, those at the top of the hierarchy become less accountable to those along the bottom.

Again, theoretically, so long as the system as a whole remains mostly transparent, it's not a zero-sum game (or at least, its productivity growth would be subject only to such physical limits as peak oil or climate change), because problem-solving and general efficiency are maximized by pervasive info-sharing, plus everyone's equally incentivized. The system as a whole is greater than any one individual within it or even than the sum of its "parts."

(Still from Falls (2008).)

In contrast, where transparency has sufficiently deteriorated, workers become less productive, both because of reduced info-sharing and because they're disincentivized – i.e., those not sharing info are still incentivized to continue to exploit the others, but once those who are being exploited figure out what's going on, they're discouraged from sharing and working hard just to enrich the exploiters. At this point, the competition devolves from who can produce the most of the best, into who can loot the most the fastest. If anything, non-transparency should tend to result in something even worse than a zero-sum game, since not only are opportunities for growth wasted, but even resources already in existence may be at least partially wasted, since each actor is motivated to grab what it can even at the cost of spoiling portions of the remainder for possible use by others.

(As Julian Assange has observed, corrupt governments (and, I expect, other organizations) are inevitably secretive because their efforts to exploit people and interfere with their liberties tend to inspire resistance – see "State and Terrorist Conspiracies" and "Conspiracy as Governance" (2006) and Assange's post on his site, IQ.org, "Sun 31 Dec 2006 : The non linear effects of leaks on unjust systems of governance".)

Jobs Americans Aren't Willing to Do

(Thanks, Ben!) Don't miss the last segment starting ca. 5:30 min.

What the Fed HA$ Delivered On:

. . . its intent – clear, for those who would see, in Oct., 2008 – that TARP funds would be used to bail out not only Goldman, but foreign investors et al.

Results of the recent Fed audit showing that trillions went to foreign investors discussed here. Oct., 2008 c-Blog post warning that the TARP bill was designed to permit this here.

Opportunity Cost: What the US Gave Up for 10 Years of Tax Cuts

"ThinkProgress, using data on various social spending projects from the National Priorities Project – which does these calculations for the cost of the Iraq and Afghan wars – has estimated ten other possible policies we could’ve paid for at the same $2.5 trillion price of the Bush tax cuts. . . . For the same price as the Bush tax cuts, which did little to help the economy, we could’ve sent tens of millions of students to college, retrofitted every household in America with the capacity to generate alternative energy, hired millions of firefighters and police officers, effectively ended our national shame of having kids who lack health care coverage, or put millions of more teachers into classrooms. . . . " Details here.

Everything is NOT Ok

Photo doc here.

Worried About the Economy?

Vote Dem:





















Sources here.















(Sources for stats: Wall Street Journal; Wikipedia.)

$12.8 Trillion for Banks vs. . . . ?

Bloomberg reporter Bob Ivry has confirmed, U.S. taxpayers didn't just fork out $700 billion for TARP; they're also on the hook for $12.8 trillion for other assistance to the banks (see the PBS interview excerpt here).

Exactly who's gotten the benefit of our largesse? The Federal Reserve refuses to tell, despite being hauled into court. The reporter who led in pursuing this story – to the point of suing the Fed for the info and winning – was Mark Pittman.

Pittman died in 2009 at only 52. The precise cause of death is unknown. The Fed's appeal of the case is still pending.

(Per Bloomberg, at the time of Pittman's death, his outgoing messages bore a link to the photo of Woody Guthrie at left.)

Next time someone tells you we have to cut Social Security (even though it's fully funded through 2037 and could be brought into balance for another fifty years beyond that with an adjustment of less than one percent to contribution amounts – see Social Security Works), or that we can't afford $50 billion for jobs, tell them about the more than $12.8 trillion we've afforded to banks and suggest we take back some of that instead.

Why the "Stimulus" Didn't Work as Well as Hoped

Most experts without a horse in the race agree it did work, but not nearly as well as it might have, because most of the money went to the wrong people – those at the top, who are hoarding it rather than spending it. Now those same hoarders and their muppets claim we must cut public entitlements like Social Security in order to address the deficit. But as Corrente explains:

"Jamie Galbraith is 100% correct . . . ; modern money is a spreadsheet:

[M]oney is a spreadsheet! It works by computer! When government spends or lends, it does so by adding numbers to private bank accounts. When it taxes, it marks those same accounts down. When it borrows, it shifts funds from a demand deposit (called a reserve account) to savings (called a securities account). And that for practical purposes is all there is. The money government spends doesn't come from anywhere, and it doesn't cost anything to produce. The government therefore cannot run out.

"(So much, therefore, for the ideology underlying the Cat Food Commission [the Deficit Commission appointed by Pres. Obama and headed by Alan Simpson, notorious opponent of Social Security], which is, in short form, that 'We're running out of money ZOMG!' and so the [Masters of the Universe, a.k.a. the "MOTU"], in order to continue to live the lifestyle to which they have become accustomed, must -- Must, I tell you! Must! -- strategically default on their obligations to elders under Social Security, and use that money for themselves.)

So, was Julie's program a success? The answer, too, NPR hides in plain sight, right in the lead:

In the face of the financial crisis, the Federal Reserve decided to buy $1.25 trillion of mortgage-backed bonds as part of its effort to prop up the economy . . .

Whenever you read "the economy," ask yourself "Whose economy?" And the answer to that question couldn't be more clear. [See chart at right {and click on it for a larger version}; via The Big Picture; sorry, no link provided to the exact post.]

"The stack on the right is money used for public purpose: The New Deal, for example. The stack on the left is money handed to the banksters in the bailouts. Different, aren't they? Like, the public stack is a lot smaller, and spread over 200 (two hundred) years. And the bankster stack is a lot bigger, and took place all in 1 (one) year. Any questions? [And the stack on the right gets a lot smaller if you consider the wars to have been more for the benefit of the military-industrial-oil complex than for a "public" purpose.]

"So, indeed, the program was a 'success.' The banksters and the MOTU put the rest of us peasants on the hook for $22 trillion dollars, kept their jobs, kept their bonuses, never did the perp walk in orange jumpsuits on the teebee for accounting control fraud, and are still too big to fail. Mission accomplished!"

The Big Picture's also got a great post-with-charts on the Bush tax cuts, showing just how much more massively the rich would benefit from extending the cuts than the rest of us would.

A Few Recent Headlines Re- the Economy

. . . that should have appeared prominently in your local corporate media, but mostly didn't:

Republicans Confirm: $30 Billion for Unemployed Would Bankrupt Us, but We Should Extend $600 Billion in Tax Cuts for the Rich (Paul Krugman, "Redo that VooDoo," NYT).

It's All About the Wages: Economy Would be Fine if Everyone Made Their Fair Share (Robert Reich, Alternet). See also 22 Statistics that Prove the U.S. Middle Class Is Being Systematically Wiped Out (Business Insider).

Corporate Media Abet Banksters' Lie that Corporate Communisim Is Working ("Lies Divide, Truth Unites," Dylan Ratigan, The Big Picture).

Goldman Gets Off with Fine Worth One Week of Its Trading Income and a Small Fraction of the $16 Billion It Paid in Bonuses Last Year ("Wall Street: The Banks Are Still the Boss," The Guardian).

Unequivocal, Real-time Evidence of Illegal Stock Market Manipulation (Karl Denninger, Market Ticker, starting about half-way into the video).

The New Finance Bill: A Mountain of Legislative Paper, a Molehill of Reform (Robert Reich).

(And speaking of market manipulation, I hope you've heard of the gummint's Plunge Protection Team?)

More Re- the Decline of the Middle Class

Great article at rationalrevolution.

And if you haven't already seen it, don't miss Elizabeth Warren's presentation, here.

UPDATE: Just came across this at Who Rules America (apparently based on a recent paper {here} by Edward N. Wolff at Bard's Levy Economics Institute):

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%.

and

So far there are only tentative projections -- based on the price of housing and stock in July 2009 -- on the effects of the Great Recession on the wealth distribution. They suggest that average Americans have been hit much harder than wealthy Americans. Edward Wolff, the economist we draw upon the most in this document, concludes that there has been an "astounding" 36.1% drop in the wealth (marketable assets) of the median household since the peak of the housing bubble in 2007. By contrast, the wealth of the top 1% of households dropped by far less: just 11.1%. So as of April 2010, it looks like the wealth distribution is even more unequal than it was in 2007.

B.t.w., happy 4th.

FURTHER UPDATE: Here are 22 statistics from FinanceMyMoney.com that "Prove the Middle Class Is Being Systematically Wiped Out of Existence in America" (via Business Insider).

Legal and Other Factors in the Decline of Labor Unions

Prof. Jack Getman's lecture explains a lot:

What Happened to the Middle Class?

From "Zombie Nation," posted at MUTE, 2006-05-10 by Paul Helliwell :

The term zombie entered the English language as a result of slavery, in Robert Southey’s History of Brazil. William B. Seabrook’s book The Magic Island, a first-person account of Haitian voodoo rituals (like Maya Deren’s much later Divine Horsemen), inspired White Zombie, 1931, the first zombie movie. In this we see a sugar plantation owned by Bela Lugosi and staffed by zombies. One of the shambling beasts falls into the grinding machinery and becomes at one with the product. This images anxiety about stolen labour on the part of both producer and consumer embodied in what at once unites them and keeps them separate – the commodity. By 1968 and George Romero’s Night of the Living Dead, filmed in de-industrialising Pittsburgh, their passivity was the passivity of the mass non-violent resisters campaigning for civil rights. They lumbered because they were inevitable, the mass in human flesh to be sadistically destroyed, interested only in increasing the number of zombies – apocryphally by eating their victim’s brains. By Dawn of the Dead, 1978, their very existence is overproduction: ‘When there's no more room in hell, the dead will walk the Earth’ – zombies were the proletarian dead proletarian shopping. ‘But why have they all come to the Mall?’ asks one of the living, ‘I don't know… I guess it must have meant something to them in their lives.’ For Web 2.0 users, like the human survivors in Dawn, incarcerated by the zombie hordes in a shopping mall where everything is free, this anxiety of stolen labour can only increase (despite the muzak). Beneath the glossy reflective surface of the commodity is putrifying zombie flesh – humanity is not superfluous in the age of globalised production but only its ‘creative’ part is recognised (leading to its haunting by the latest in a long line of unquiet Marxist spectres).

More at the link above. See also Elizabeth Warren.

Re- ART WORK, a Dead-On Letter to MoMA

from Hollis Frampton; see a more legible version of all five pages here.

IMHO, much of DU has been more or less hopelessly compromised by trolls,

but there are still a few worthy threads. E.g.:

44. and if we could have had Medicare for all.....
Look at all the real jobs that could come from THAT trickle down effect.

32. any jobs caulking foreclosed houses?

33. Chains You Can Believe In

36. Funds don't seem limited for war or Wall Street bailouts. Do they?
"You said that we did it for a show."

39. Hilarious. DU is a riot.
Where's all that Obama love that was flowing before the election? People didn't really believe he was on the side of the working men/women, did they?
This is rich. I'll have to start visiting DU more often now.

42. I'll clue you in: Expect some posters to agree with Obama & that unemployment is a handout.

46. Wow.....that almost sounds like someone's channelling Reagan nt

48. When you have been mocked at DU for a peace sign avatar, anything can happen

55. Some people were so caught up in those pretty speechsermons he preached
that nothing on earth would convince them that he wasn't a progressive dream, not his appointment of the likes of Goolsbee to his economic team, not his duplicity on NAFTA, not the blatant catering to haters in the McClurkin Fiasco, nothing.
So here we are.

43. I love how he's the decider when it comes to shipping dollars overseas
but when it comes to jobs, we're supposed to host little meetings in our living rooms and solve those problems ourselves.
Of course the real solution is obvious, but we're not supposed to notice.