Yves SmithThursday, February 9, 2012
http://www.nakedcapitalism.com/2012/02/the-top-twelve-reasons-why-you-should-hate-the-mortgage-settlement.html
As readers may know by now, 49 of 50 states have agreed to join the so-called mortgage settlement, with Oklahoma the lone refusenik. Although the fine points are still being hammered out, various news outlets (New York Times, Financial Times, Wall Street Journal) have details, with Dave Dayen’s overview at Firedoglake the best thus far.
The Wall Street Journal is also reporting that the SEC is about to launch some securities litigation against major banks. Since the statue of limitations has already run out on securities filings more than five years old, this means they’ll clip the banks for some of the very last (and dreckiest) deals they shoved out the door before the subprime market gave up the ghost.
The various news services are touting this pact at the biggest multi-state settlement since the tobacco deal in 1998. While narrowly accurate, this deal is bush league by comparison even though the underlying abuses in both cases have had devastating consequences.
The tobacco agreement was pegged as being worth nearly $250 billion over the first 25 years. Adjust that for inflation, and the disparity is even bigger. That shows you the difference in outcomes between a case where the prosecutors have solid evidence backing their charges, versus one where everyone know a lot of bad stuff happened, but no one has come close to marshaling the evidence.
The mortgage settlement terms have not been released, but more of the details have been leaked:
1. The total for the top five servicers is now touted as $26 billion (annoyingly, the FT is calling it “nearly $40 billion”), but of that, roughly $17 billion is credits for principal modifications, which as we pointed out earlier, can and almost assuredly will come largely from mortgages owned by investors. $3 billion is for refis, and only $5 billion will be in the form of hard cash payments, including $1500 to $2000 per borrower foreclosed on between September 2008 and December 2011.
Banks will be required to modify second liens that sit behind firsts “at least” pari passu, which in practice will mean at most pari passu. So this guarantees banks will also focus on borrowers where they do not have second lien exposure, and this also makes the settlement less helpful to struggling homeowners, since borrowers with both second and first liens default at much higher rates than those without second mortgages. Per the Journal:
“It’s not new money. It’s all soft dollars to the banks,” said Paul Miller, a bank analyst at FBR Capital Markets.
The Times is also subdued:
Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.
2. Schneiderman’s MERS suit survives, and he can add more banks as defendants. It isn’t clear what became of the Biden and Coakley MERS suits, but Biden sounded pretty adamant in past media presentations on preserving that.
3. Nevada’s and Arizona’s suits against Countrywide for violating its past consent decree on mortgage servicing has, in a new Orwellianism, been “folded into” the settlement.
4. The five big players in the settlement have already set aside reserves sufficient for this deal.
Here are the top twelve reasons why this deal stinks:
1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.
2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.
3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.
4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.
5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.
6. The past history of servicer consent decrees shows the servicers all fail to comply. Why? Servicer records and systems are terrible in the best of times, and their systems and fee structures aren’t set up to handle much in the way of delinquencies. As Tom Adams has pointed out in earlier posts, servicer behavior is predictable when their portfolios are hit with a high level of delinquencies and defaults: they cheat in all sorts of ways to reduce their losses.
7. The cave-in Nevada and Arizona on the Countrywide settlement suit is a special gift for Bank of America, who is by far the worst offender in the chain of title disaster (since, according to sworn testimony of its own employee in Kemp v. Countrywide, Countrywide failed to comply with trust delivery requirements). This move proves that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced. These cases also alleged HAMP violations as consumer fraud violations and could have gotten costly and emboldened other states to file similar suits not just against Countrywide but other servicers, so it was useful to the other banks as well.
8. If the new Federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating. It’s a bad idea to settle obvious, widespread wrongdoing on the cheap. You use the stuff that is easy to prove to gather information and secure cooperation on the stuff that is harder to prove. In Missouri and Nevada, the robosigning investigation led to criminal charges against agents of the servicers. But even though these companies were acting at the express direction and approval of the services, no individuals or entities higher up the food chain will face any sort of meaningful charges.
9. There is plenty of evidence of widespread abuses that appear not to be on the attorney generals’ or media’s radar, such as servicer driven foreclosures and looting of investors’ funds via impermissible and inflated charges. While no serious probe was undertaken, even the limited or peripheral investigations show massive failures (60% of documents had errors in AGs/Fed’s pathetically small sample). Similarly, the US Trustee’s office found widespread evidence of significant servicer errors in bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges. Yet the services and banks will suffer no real consequences for these abuses.
10. A deal on robosiginging serves to cover up the much deeper chain of title problem. And don’t get too excited about the New York, Massachusetts, and Delaware MERS suits. They put pressure on banks to clean up this monstrous mess only if the AGs go through to trial and get tough penalties. The banks will want to settle their way out of that too. And even if these cases do go to trial and produce significant victories for the AGs, they still do not address the problem of failures to transfer notes correctly.
11. Don’t bet on a deus ex machina in terms of the new Federal foreclosure task force to improve this picture much. If you think Schneiderman, as a co-chairman who already has a full time day job in New York, is going to outfox a bunch of DC insiders who are part of the problem, I have a bridge I’d like to sell to you.
12. We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won’t ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support.
As we’ve said before, this settlement is yet another raw demonstration of who wields power in America, and it isn’t you and me. It’s bad enough to see these negotiations come to their predictable, sorry outcome. It adds insult to injury to see some try to depict it as a win for long suffering, still abused homeowners.
Showing posts with label Wall Street. Show all posts
Showing posts with label Wall Street. Show all posts
Wednesday, February 29, 2012
Monday, January 30, 2012
Occupy Las Vegas protesters target foreclosed homes in valley
Kristi Jourdan
Jan. 7, 2012
http://www.lvrj.com/news/occupy-las-vegas-protesters-target-foreclosed-homes-in-valley-136885893.html
They are the faces of the foreclosure crisis, and Occupy Las Vegas wants to set up camp in their yards.
About 20 protesters spread out across the valley and spent Saturday knocking on the doors of homes facing foreclosure in hopes of contacting homeowners and their neighbors. The majority of the properties are single-family homes in Las Vegas, Henderson and North Las Vegas going to auction in the next week or so.
Some of the dozens of properties were caked in cobwebs and decorated with dirty lawn chairs, evidence the owners were long gone. An old welcome mat sat on the porch of one property, but a look through the blinds showed the home was empty.
Others were cleaner, a sign that real estate agents and banks were caring for them or, as some neighbors reported, the owners don't live there anymore but occasionally return to the property to keep it neat.
Some properties were in gated communities where protesters were unable to make contact with homeowners or neighbors. The occupiers left cards and fliers in screen doors and windows whenever they could.
The group of protesters set up a small camp in front of an empty three-bedroom home in the Autumn Chase neighborhood, which has made headlines for internal squabbling among neighbors and homeowners association leadership.
The 1,200-square-foot home in the 5000 block of Golden Fields Street is scheduled to go to auction Tuesday.
Protesters said they want to collectively bargain with banks through public protests and letter-writing campaigns. They said they want to call attention to predatory lending practices.
They are promoting principal reduction rather than simple modifications as a way to break the cycle that created the foreclosure crisis in the Las Vegas Valley, which is commonly called "ground zero" of the foreclosure crisis.
"We're going to put (banks) in a position where they don't gain anything by negotiating with the homeowner, but they'll lose something if they don't," said Sebring Frehner, event organizer.
Occupy Las Vegas is the local chapter of the Occupy Wall Street movement against corporate greed and influence in politics. Local protesters have a permit through late February to camp on county-owned property on Paradise Road near Swenson Street and Tropicana Avenue.
With a crew of five in tow, protester Angie Sullivan scoured a North Las Vegas neighborhood, contacting nearby neighbors of an abandoned property in hopes of tracking down its owner.
Sullivan said she was concerned that the area was too transient, because neighbors didn't know each other and houses appeared to be empty.
"I don't know about organizing a neighborhood where there is no one left," Sullivan said.
Neighbors Jamie and Gina Basham live across from the property in the 2100 block of Mountain Sunset Avenue which is scheduled to be auctioned off Monday. The couple has lived in the neighborhood for almost three years and said they didn't mind occupiers camping on the property across the street to draw attention to the foreclosure issue.
"I don't have a problem with it if it helps everybody else," Jamie Basham said.
Banks "have taken advantage of people, and there are strength in numbers."
Contact reporter Kristi Jourdan at kjourdan@reviewjournal.com or 702-455-4519.
Jan. 7, 2012
http://www.lvrj.com/news/occupy-las-vegas-protesters-target-foreclosed-homes-in-valley-136885893.html
They are the faces of the foreclosure crisis, and Occupy Las Vegas wants to set up camp in their yards.
About 20 protesters spread out across the valley and spent Saturday knocking on the doors of homes facing foreclosure in hopes of contacting homeowners and their neighbors. The majority of the properties are single-family homes in Las Vegas, Henderson and North Las Vegas going to auction in the next week or so.
Some of the dozens of properties were caked in cobwebs and decorated with dirty lawn chairs, evidence the owners were long gone. An old welcome mat sat on the porch of one property, but a look through the blinds showed the home was empty.
Others were cleaner, a sign that real estate agents and banks were caring for them or, as some neighbors reported, the owners don't live there anymore but occasionally return to the property to keep it neat.
Some properties were in gated communities where protesters were unable to make contact with homeowners or neighbors. The occupiers left cards and fliers in screen doors and windows whenever they could.
The group of protesters set up a small camp in front of an empty three-bedroom home in the Autumn Chase neighborhood, which has made headlines for internal squabbling among neighbors and homeowners association leadership.
The 1,200-square-foot home in the 5000 block of Golden Fields Street is scheduled to go to auction Tuesday.
Protesters said they want to collectively bargain with banks through public protests and letter-writing campaigns. They said they want to call attention to predatory lending practices.
They are promoting principal reduction rather than simple modifications as a way to break the cycle that created the foreclosure crisis in the Las Vegas Valley, which is commonly called "ground zero" of the foreclosure crisis.
"We're going to put (banks) in a position where they don't gain anything by negotiating with the homeowner, but they'll lose something if they don't," said Sebring Frehner, event organizer.
Occupy Las Vegas is the local chapter of the Occupy Wall Street movement against corporate greed and influence in politics. Local protesters have a permit through late February to camp on county-owned property on Paradise Road near Swenson Street and Tropicana Avenue.
With a crew of five in tow, protester Angie Sullivan scoured a North Las Vegas neighborhood, contacting nearby neighbors of an abandoned property in hopes of tracking down its owner.
Sullivan said she was concerned that the area was too transient, because neighbors didn't know each other and houses appeared to be empty.
"I don't know about organizing a neighborhood where there is no one left," Sullivan said.
Neighbors Jamie and Gina Basham live across from the property in the 2100 block of Mountain Sunset Avenue which is scheduled to be auctioned off Monday. The couple has lived in the neighborhood for almost three years and said they didn't mind occupiers camping on the property across the street to draw attention to the foreclosure issue.
"I don't have a problem with it if it helps everybody else," Jamie Basham said.
Banks "have taken advantage of people, and there are strength in numbers."
Contact reporter Kristi Jourdan at kjourdan@reviewjournal.com or 702-455-4519.
Friday, January 6, 2012
Occupy the P.U.-litzers!
12/27/11
http://www.fair.org/index.php?page=4451
This year has given us simply too many worthy contenders for FAIR's annual P.U.-litzers--recognizing the stinkiest journalism of the year. A big part of the problem was that so many outlets were striving to distinguish themselves with especially awful coverage of the Occupy Wall Street movement. So to note those lowlights, we bring you a special installment of P.U.-litzers: The OWS edition.
--Early Warning System Award: CNN's Wolf Blitzer
On September 19: "Protests here in New York on Wall Street entering a third day. Should New Yorkers be worried at all about what's going on?"
--We Could Do It Better Award: New York Times' Ginia Bellafante
Under the headline "Gunning for Wall Street, With Faulty Aim" (9/23/11), Bellafante turned in the quintessential corporate media dismissal of progressive protests. The reporter discovered "a default ambassador in a half-naked woman...with a marked likeness to Joni Mitchell and a seemingly even stronger wish to burrow through the space-time continuum and hunker down in 1968."
The movement's cause "was virtually impossible to decipher," Bellafante complained, slamming [it] for "lack of cohesion and its apparent wish to pantomime progressivism rather than practice it knowledgeably." And who has more knowledge about grassroots progressive activism than the New York Times.
--What's News Award: NPR's Dick Meyer; Washington Post
Asked to explain NPR's non-coverage of OWS, executive editor Meyer said (NPR.org, 9/26/11): "The recent protests on Wall Street did not involve large numbers of people, prominent people, a great disruption or an especially clear objective."
And the massive demonstrations around the world October 15th made it onto the front page of the next day's Washington Post--in the form of a lower right-hand corner blurb approximately one column inch long, directing people to page A20 to find news about protests in "more than 900 cities in Europe, Africa and Asia."
--Channeling Glenn Beck Award: Reuters
Under the headline (10/13/11) "Who's Behind the Wall Street Protests," the news agency provided an answer straight from one of Glenn Beck's conspiratorial chalk boards:
One name that keeps coming up is investor George Soros, who in September debuted in the top 10 list of wealthiest Americans. Conservative critics contend the movement is a Trojan horse for a secret Soros agenda.
Who exactly is bringing up Soros' name? Reuters names one slightly less than credible source: right-wing talker Rush Limbaugh. But Reuters did its own digging, going on to suggest "indirect financial links" between Soros and the group Adbusters, which issued the original call for the Occupy protest. The links were mostly figments of the right-wing imagination, as even some Reuters reporters pointed out. Reuters eventually changed the headline to "Soros: Not a Funder of Wall Street Protests."
--The Suites to the Streets Award: New York Times' Andrew Ross Sorkin
The Times star business writer (10/4/11) did little to dispel critics who say he's too close to his Wall Street sources by admitting that he checked out the protests--after a banker told him to:
I had gone down to Zuccotti Park to see the activist movement firsthand after getting a call from the chief executive of a major bank last week, before nearly 700 people were arrested over the weekend during a demonstration on the Brooklyn Bridge.
"Is this Occupy Wall Street thing a big deal?" the CEO asked me. I didn't have an answer. "We're trying to figure out how much we should be worried about all of this," he continued, clearly concerned. "Is this going to turn into a personal safety problem?"
As I wandered around the park, it was clear to me that most bankers probably don't have to worry about being in imminent personal danger. This didn’t seem like a brutal group--at least not yet.
--Those Facts Are Biased Award: WNYC's Takeaway
Web producer Caitlin Curran was photographed at an OWS protest holding a sign that said this:
It's wrong to create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn't aware that you sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon.
Curran was promptly fired by the New York public radio station for her flagrant violation of journalistic objectivity. Who could trust a journalist who took a far-out radical position like that?
--Timeless Cliches Award: Washington Post's Charles Krauthammer
"Starbucks-sipping, Levi's-clad, iPhone-clutching protesters denounce corporate America even as they weep for Steve Jobs," wrote Post columnist Krauthammer (10/14/11), maligning the protesters as "indigant indolents saddled with their $50,000 student loans and English degrees" whose policy proposal boils down to "eat the rich."
--We Smell a Rat Award: Washington Post
November 16: "Is this an occupation or an infestation?"
--Fact Check Failure Award: CNN's Erin Burnett
New CNN host Burnett decided on her debut program (10/3/11) to fact check the Occupy Wall Street protests. Declaring that that the protesters "did not know" why they were there, adding that "it seems like people want a messiah leader, just like they did when they anointed Barack Obama." Burnett quizzed one protester: "So do you know that taxpayers actually made money on the Wall Street bailout?" Burnett assured viewers this was true--"right now to the tune of $10 billion.... This was the big issue, so we solved it."
A few problems: The TARP bailout is not "the big issue" for OWS, and it's odd to think that people should feel good that big banks were about to turn low-interest government loans into profits. And the total cost of the various bank rescue policies run into the trillions of dollars (Bloomberg News, 8/22/11). But, yes, those protesters sure don't know what they're talking about.
--Tabloid-Style Dignity Award: New York Post
The front page of Rupert Murdoch's New York Post (11/4/11), urging a crackdown on Occupy Wall Street, proclaimed: "Enough! Mr. Mayor, It Is Time to Reclaim Zuccotti Park--and New York's Dignity." This on the same front page that recently declared (8/10/11), "Crazy Stox Like a Hooker’s Drawers--Up, Down, Up." Another cover (10/27/09) photoshopped a skirt onto a Phillies baseball player with a line about the "Frillies" coming to town. And who could forget the Iraq War classic (2/14/03), "UN Meets: Weasels to Hear New Iraq Evidence," with animal heads superimposed onto the representatives from France and Germany? That's the New York Post for you: Always dignified.
--Clueless and Repugnant Award: Washington Post's Richard Cohen
After the Post columnist visited the New York protests, he wrote a column (10/24/11) defending the group against bogus charges of anti-Semitism. But he had plenty of other things to say about OWS. To Cohen, "their slogans suggest a tired socialism that is as repugnant to me as the felonious capitalism that produced the mortgage bubble and the impoverishment of millions of Americans." Cohen was just getting warmed up. The protests are "a destination for the aimless...a tourist attraction with the usual vendors, the usual zaftig young women doing the usual arrhythmic dance, somehow missing the beat of many drums."
Occupy Wall Street is "an incoherent articulation of anger...above all, a conspiracy to have left-leaning writers make jackasses of themselves by imparting grave and grand meaning to what is little more than a vast sleepover." But no anti-Semitism.
http://www.fair.org/index.php?page=4451
This year has given us simply too many worthy contenders for FAIR's annual P.U.-litzers--recognizing the stinkiest journalism of the year. A big part of the problem was that so many outlets were striving to distinguish themselves with especially awful coverage of the Occupy Wall Street movement. So to note those lowlights, we bring you a special installment of P.U.-litzers: The OWS edition.
--Early Warning System Award: CNN's Wolf Blitzer
On September 19: "Protests here in New York on Wall Street entering a third day. Should New Yorkers be worried at all about what's going on?"
--We Could Do It Better Award: New York Times' Ginia Bellafante
Under the headline "Gunning for Wall Street, With Faulty Aim" (9/23/11), Bellafante turned in the quintessential corporate media dismissal of progressive protests. The reporter discovered "a default ambassador in a half-naked woman...with a marked likeness to Joni Mitchell and a seemingly even stronger wish to burrow through the space-time continuum and hunker down in 1968."
The movement's cause "was virtually impossible to decipher," Bellafante complained, slamming [it] for "lack of cohesion and its apparent wish to pantomime progressivism rather than practice it knowledgeably." And who has more knowledge about grassroots progressive activism than the New York Times.
--What's News Award: NPR's Dick Meyer; Washington Post
Asked to explain NPR's non-coverage of OWS, executive editor Meyer said (NPR.org, 9/26/11): "The recent protests on Wall Street did not involve large numbers of people, prominent people, a great disruption or an especially clear objective."
And the massive demonstrations around the world October 15th made it onto the front page of the next day's Washington Post--in the form of a lower right-hand corner blurb approximately one column inch long, directing people to page A20 to find news about protests in "more than 900 cities in Europe, Africa and Asia."
--Channeling Glenn Beck Award: Reuters
Under the headline (10/13/11) "Who's Behind the Wall Street Protests," the news agency provided an answer straight from one of Glenn Beck's conspiratorial chalk boards:
One name that keeps coming up is investor George Soros, who in September debuted in the top 10 list of wealthiest Americans. Conservative critics contend the movement is a Trojan horse for a secret Soros agenda.
Who exactly is bringing up Soros' name? Reuters names one slightly less than credible source: right-wing talker Rush Limbaugh. But Reuters did its own digging, going on to suggest "indirect financial links" between Soros and the group Adbusters, which issued the original call for the Occupy protest. The links were mostly figments of the right-wing imagination, as even some Reuters reporters pointed out. Reuters eventually changed the headline to "Soros: Not a Funder of Wall Street Protests."
--The Suites to the Streets Award: New York Times' Andrew Ross Sorkin
The Times star business writer (10/4/11) did little to dispel critics who say he's too close to his Wall Street sources by admitting that he checked out the protests--after a banker told him to:
I had gone down to Zuccotti Park to see the activist movement firsthand after getting a call from the chief executive of a major bank last week, before nearly 700 people were arrested over the weekend during a demonstration on the Brooklyn Bridge.
"Is this Occupy Wall Street thing a big deal?" the CEO asked me. I didn't have an answer. "We're trying to figure out how much we should be worried about all of this," he continued, clearly concerned. "Is this going to turn into a personal safety problem?"
As I wandered around the park, it was clear to me that most bankers probably don't have to worry about being in imminent personal danger. This didn’t seem like a brutal group--at least not yet.
--Those Facts Are Biased Award: WNYC's Takeaway
Web producer Caitlin Curran was photographed at an OWS protest holding a sign that said this:
It's wrong to create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn't aware that you sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon.
Curran was promptly fired by the New York public radio station for her flagrant violation of journalistic objectivity. Who could trust a journalist who took a far-out radical position like that?
--Timeless Cliches Award: Washington Post's Charles Krauthammer
"Starbucks-sipping, Levi's-clad, iPhone-clutching protesters denounce corporate America even as they weep for Steve Jobs," wrote Post columnist Krauthammer (10/14/11), maligning the protesters as "indigant indolents saddled with their $50,000 student loans and English degrees" whose policy proposal boils down to "eat the rich."
--We Smell a Rat Award: Washington Post
November 16: "Is this an occupation or an infestation?"
--Fact Check Failure Award: CNN's Erin Burnett
New CNN host Burnett decided on her debut program (10/3/11) to fact check the Occupy Wall Street protests. Declaring that that the protesters "did not know" why they were there, adding that "it seems like people want a messiah leader, just like they did when they anointed Barack Obama." Burnett quizzed one protester: "So do you know that taxpayers actually made money on the Wall Street bailout?" Burnett assured viewers this was true--"right now to the tune of $10 billion.... This was the big issue, so we solved it."
A few problems: The TARP bailout is not "the big issue" for OWS, and it's odd to think that people should feel good that big banks were about to turn low-interest government loans into profits. And the total cost of the various bank rescue policies run into the trillions of dollars (Bloomberg News, 8/22/11). But, yes, those protesters sure don't know what they're talking about.
--Tabloid-Style Dignity Award: New York Post
The front page of Rupert Murdoch's New York Post (11/4/11), urging a crackdown on Occupy Wall Street, proclaimed: "Enough! Mr. Mayor, It Is Time to Reclaim Zuccotti Park--and New York's Dignity." This on the same front page that recently declared (8/10/11), "Crazy Stox Like a Hooker’s Drawers--Up, Down, Up." Another cover (10/27/09) photoshopped a skirt onto a Phillies baseball player with a line about the "Frillies" coming to town. And who could forget the Iraq War classic (2/14/03), "UN Meets: Weasels to Hear New Iraq Evidence," with animal heads superimposed onto the representatives from France and Germany? That's the New York Post for you: Always dignified.
--Clueless and Repugnant Award: Washington Post's Richard Cohen
After the Post columnist visited the New York protests, he wrote a column (10/24/11) defending the group against bogus charges of anti-Semitism. But he had plenty of other things to say about OWS. To Cohen, "their slogans suggest a tired socialism that is as repugnant to me as the felonious capitalism that produced the mortgage bubble and the impoverishment of millions of Americans." Cohen was just getting warmed up. The protests are "a destination for the aimless...a tourist attraction with the usual vendors, the usual zaftig young women doing the usual arrhythmic dance, somehow missing the beat of many drums."
Occupy Wall Street is "an incoherent articulation of anger...above all, a conspiracy to have left-leaning writers make jackasses of themselves by imparting grave and grand meaning to what is little more than a vast sleepover." But no anti-Semitism.
75 Years Ago Today, the First Occupy
Michael Moore December 30th, 2011
http://www.michaelmoore.com/words/mike-friends-blog/75-years-ago-today-first-occupy
On this day, December 30th, in 1936 -- 75 years ago today -- hundreds of workers at the General Motors factories in Flint, Michigan, took over the facilities and occupied them for 44 days. My uncle was one of them.
The workers couldn't take the abuse from the corporation any longer. Their working conditions, the slave wages, no vacation, no health care, no overtime -- it was do as you're told or get tossed onto the curb.
So on the day before New Year's Eve, emboldened by the recent re-election of Franklin Roosevelt, they sat down on the job and refused to leave.
They began their Occupation in the dead of winter. GM cut off the heat and water to the buildings. The police tried to raid the factories several times, to no avail. Even the National Guard was called in.
But the workers held their ground, and after 44 days, the corporation gave in and recognized the UAW as the representative of the workers. It was a monumental historical moment as no other major company had ever been brought to its knees by their employees. Workers were given a raise to a dollar an hour -- and successful strikes and occupations spread like wildfire across the country. Finally, the working class would be able to do things like own their own homes, send their children to college, have time off and see a doctor without having to worry about paying. In Flint, Michigan, on this day in 1936, the middle class was born.
But 75 years later, the owners and elites have regained all power and control. I can think of no better way for us to honor the original Occupiers than by all of us participating in the Occupy Wall Street movement in whatever form that takes in each of our towns. We need direct action all winter long if we are to prevail. You can start your own Occupy group in your neighborhood or school or with just your friends. Speak out against economic injustice at every chance you get. Stop the bank from evicting the family down the block. Move your checking and credit card to a community bank or credit union. Place a sign in your yard -- and get your neighbors to do it also -- that says, "WE ARE THE 99%." (You can download signs here and here.)
Do something, anything, but don't remain silent. Not now. This is the moment. It won't come again.
75 years ago today, in Flint, Michigan, the people said they'd had enough and occupied the factories until they won. What is stopping us now? The rich have one plan: bleed everyone dry. Can anyone, in good conscience, be a bystander to this?
My uncle wasn't, and because of what he and others did, I got to grow up without having to worry about a roof over my head or medical bills or a decent life. And all that was provided by my dad who built spark plugs on a GM assembly line.
Let's each of us double our efforts to raise a ruckus, Occupy Everywhere, and get creative as we throw a major nonviolent wrench into this system of Greed. Let's make the politicians running for office in 2012 quake in their boots if they refuse to tax the rich, regulate Wall Street and do whatever we the people tell them to do.
Happy 75th!
http://www.michaelmoore.com/words/mike-friends-blog/75-years-ago-today-first-occupy
On this day, December 30th, in 1936 -- 75 years ago today -- hundreds of workers at the General Motors factories in Flint, Michigan, took over the facilities and occupied them for 44 days. My uncle was one of them.
The workers couldn't take the abuse from the corporation any longer. Their working conditions, the slave wages, no vacation, no health care, no overtime -- it was do as you're told or get tossed onto the curb.
So on the day before New Year's Eve, emboldened by the recent re-election of Franklin Roosevelt, they sat down on the job and refused to leave.
They began their Occupation in the dead of winter. GM cut off the heat and water to the buildings. The police tried to raid the factories several times, to no avail. Even the National Guard was called in.
But the workers held their ground, and after 44 days, the corporation gave in and recognized the UAW as the representative of the workers. It was a monumental historical moment as no other major company had ever been brought to its knees by their employees. Workers were given a raise to a dollar an hour -- and successful strikes and occupations spread like wildfire across the country. Finally, the working class would be able to do things like own their own homes, send their children to college, have time off and see a doctor without having to worry about paying. In Flint, Michigan, on this day in 1936, the middle class was born.
But 75 years later, the owners and elites have regained all power and control. I can think of no better way for us to honor the original Occupiers than by all of us participating in the Occupy Wall Street movement in whatever form that takes in each of our towns. We need direct action all winter long if we are to prevail. You can start your own Occupy group in your neighborhood or school or with just your friends. Speak out against economic injustice at every chance you get. Stop the bank from evicting the family down the block. Move your checking and credit card to a community bank or credit union. Place a sign in your yard -- and get your neighbors to do it also -- that says, "WE ARE THE 99%." (You can download signs here and here.)
Do something, anything, but don't remain silent. Not now. This is the moment. It won't come again.
75 years ago today, in Flint, Michigan, the people said they'd had enough and occupied the factories until they won. What is stopping us now? The rich have one plan: bleed everyone dry. Can anyone, in good conscience, be a bystander to this?
My uncle wasn't, and because of what he and others did, I got to grow up without having to worry about a roof over my head or medical bills or a decent life. And all that was provided by my dad who built spark plugs on a GM assembly line.
Let's each of us double our efforts to raise a ruckus, Occupy Everywhere, and get creative as we throw a major nonviolent wrench into this system of Greed. Let's make the politicians running for office in 2012 quake in their boots if they refuse to tax the rich, regulate Wall Street and do whatever we the people tell them to do.
Happy 75th!
Thursday, January 5, 2012
The Book of Jobs
Forget monetary policy. Re-examining the cause of the Great Depression — the revolution in agriculture that threw millions out of work—the author argues that the U.S. is now facing and must manage a similar shift in the “real” economy, from industry to service, or risk a tragic replay of 80 years ago. Joseph E. Stiglitz
The Economic Crisis
January 2012
Domino Theory: The financial meltdown is the Depression parallel everyone notices. The more frightening parallel is everything else.
http://www.vanityfair.com/politics/2012/01/stiglitz-depression-201201
It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are falling—the real income of a typical American household is now below the level it was in 1997.
We knew the crisis was serious back in 2008. And we thought we knew who the “bad guys” were—the nation’s big banks, which through cynical lending and reckless gambling had brought the U.S. to the brink of ruin. The Bush and Obama administrations justified a bailout on the grounds that only if the banks were handed money without limit—and without conditions—could the economy recover. We did this not because we loved the banks but because (we were told) we couldn’t do without the lending that they made possible. Many, especially in the financial sector, argued that strong, resolute, and generous action to save not just the banks but the bankers, their shareholders, and their creditors would return the economy to where it had been before the crisis. In the meantime, a short-term stimulus, moderate in size, would suffice to tide the economy over until the banks could be restored to health.
The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didn’t really recover—output is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect. First, it was wrong to think that the bankers would mend their ways—that they would start to lend, if only they were treated nicely enough. We were told, in effect: “Don’t put conditions on the banks to require them to restructure the mortgages or to behave more honestly in their foreclosures. Don’t force them to use the money to lend. Such conditions will upset our delicate markets.” In the end, bank managers looked out for themselves and did what they are accustomed to doing.
Even when we fully repair the banking system, we’ll still be in deep trouble—because we were already in deep trouble. That seeming golden age of 2007 was far from a paradise. Yes, America had many things about which it could be proud. Companies in the information-technology field were at the leading edge of a revolution. But incomes for most working Americans still hadn’t returned to their levels prior to the previous recession. The American standard of living was sustained only by rising debt—debt so large that the U.S. savings rate had dropped to near zero. And “zero” doesn’t really tell the story. Because the rich have always been able to save a significant percentage of their income, putting them in the positive column, an average rate of close to zero means that everyone else must be in negative numbers. (Here’s the reality: in the years leading up to the recession, according to research done by my Columbia University colleague Bruce Greenwald, the bottom 80 percent of the American population had been spending around 110 percent of its income.) What made this level of indebtedness possible was the housing bubble, which Alan Greenspan and then Ben Bernanke, chairmen of the Federal Reserve Board, helped to engineer through low interest rates and nonregulation—not even using the regulatory tools they had. As we now know, this enabled banks to lend and households to borrow on the basis of assets whose value was determined in part by mass delusion.
The fact is the economy in the years before the current crisis was fundamentally weak, with the bubble, and the unsustainable consumption to which it gave rise, acting as life support. Without these, unemployment would have been high. It was absurd to think that fixing the banking system could by itself restore the economy to health. Bringing the economy back to “where it was” does nothing to address the underlying problems.
The trauma we’re experiencing right now resembles the trauma we experienced 80 years ago, during the Great Depression, and it has been brought on by an analogous set of circumstances. Then, as now, we faced a breakdown of the banking system. But then, as now, the breakdown of the banking system was in part a consequence of deeper problems. Even if we correctly respond to the trauma—the failures of the financial sector—it will take a decade or more to achieve full recovery. Under the best of conditions, we will endure a Long Slump. If we respond incorrectly, as we have been, the Long Slump will last even longer, and the parallel with the Depression will take on a tragic new dimension.
Until now, the Depression was the last time in American history that unemployment exceeded 8 percent four years after the onset of recession. And never in the last 60 years has economic output been barely greater, four years after a recession, than it was before the recession started. The percentage of the civilian population at work has fallen by twice as much as in any post-World War II downturn. Not surprisingly, economists have begun to reflect on the similarities and differences between our Long Slump and the Great Depression. Extracting the right lessons is not easy.
Many have argued that the Depression was caused primarily by excessive tightening of the money supply on the part of the Federal Reserve Board. Ben Bernanke, a scholar of the Depression, has stated publicly that this was the lesson he took away, and the reason he opened the monetary spigots. He opened them very wide. Beginning in 2008, the balance sheet of the Fed doubled and then rose to three times its earlier level. Today it is $2.8 trillion. While the Fed, by doing this, may have succeeded in saving the banks, it didn’t succeed in saving the economy.
Reality has not only discredited the Fed but also raised questions about one of the conventional interpretations of the origins of the Depression. The argument has been made that the Fed caused the Depression by tightening money, and if only the Fed back then had increased the money supply—in other words, had done what the Fed has done today—a full-blown Depression would likely have been averted. In economics, it’s difficult to test hypotheses with controlled experiments of the kind the hard sciences can conduct. But the inability of the monetary expansion to counteract this current recession should forever lay to rest the idea that monetary policy was the prime culprit in the 1930s. The problem today, as it was then, is something else. The problem today is the so-called real economy. It’s a problem rooted in the kinds of jobs we have, the kind we need, and the kind we’re losing, and rooted as well in the kind of workers we want and the kind we don’t know what to do with. The real economy has been in a state of wrenching transition for decades, and its dislocations have never been squarely faced. A crisis of the real economy lies behind the Long Slump, just as it lay behind the Great Depression.
For the past several years, Bruce Greenwald and I have been engaged in research on an alternative theory of the Depression—and an alternative analysis of what is ailing the economy today. This explanation sees the financial crisis of the 1930s as a consequence not so much of a financial implosion but of the economy’s underlying weakness. The breakdown of the banking system didn’t culminate until 1933, long after the Depression began and long after unemployment had started to soar. By 1931 unemployment was already around 16 percent, and it reached 23 percent in 1932. Shantytown “Hoovervilles” were springing up everywhere. The underlying cause was a structural change in the real economy: the widespread decline in agricultural prices and incomes, caused by what is ordinarily a “good thing”—greater productivity.
At the beginning of the Depression, more than a fifth of all Americans worked on farms. Between 1929 and 1932, these people saw their incomes cut by somewhere between one-third and two-thirds, compounding problems that farmers had faced for years. Agriculture had been a victim of its own success. In 1900, it took a large portion of the U.S. population to produce enough food for the country as a whole. Then came a revolution in agriculture that would gain pace throughout the century—better seeds, better fertilizer, better farming practices, along with widespread mechanization. Today, 2 percent of Americans produce more food than we can consume.
What this transition meant, however, is that jobs and livelihoods on the farm were being destroyed. Because of accelerating productivity, output was increasing faster than demand, and prices fell sharply. It was this, more than anything else, that led to rapidly declining incomes. Farmers then (like workers now) borrowed heavily to sustain living standards and production. Because neither the farmers nor their bankers anticipated the steepness of the price declines, a credit crunch quickly ensued. Farmers simply couldn’t pay back what they owed. The financial sector was swept into the vortex of declining farm incomes.
The cities weren’t spared—far from it. As rural incomes fell, farmers had less and less money to buy goods produced in factories. Manufacturers had to lay off workers, which further diminished demand for agricultural produce, driving down prices even more. Before long, this vicious circle affected the entire national economy.
The value of assets (such as homes) often declines when incomes do. Farmers got trapped in their declining sector and in their depressed locales. Diminished income and wealth made migration to the cities more difficult; high urban unemployment made migration less attractive. Throughout the 1930s, in spite of the massive drop in farm income, there was little overall out-migration. Meanwhile, the farmers continued to produce, sometimes working even harder to make up for lower prices. Individually, that made sense; collectively, it didn’t, as any increased output kept forcing prices down.
Given the magnitude of the decline in farm income, it’s no wonder that the New Deal itself could not bring the country out of crisis. The programs were too small, and many were soon abandoned. By 1937, F.D.R., giving way to the deficit hawks, had cut back on stimulus efforts—a disastrous error. Meanwhile, hard-pressed states and localities were being forced to let employees go, just as they are now. The banking crisis undoubtedly compounded all these problems, and extended and deepened the downturn. But any analysis of financial disruption has to begin with what started off the chain reaction.
The Agriculture Adjustment Act, F.D.R.’s farm program, which was designed to raise prices by cutting back on production, may have eased the situation somewhat, at the margins. But it was not until government spending soared in preparation for global war that America started to emerge from the Depression. It is important to grasp this simple truth: it was government spending—a Keynesian stimulus, not any correction of monetary policy or any revival of the banking system—that brought about recovery. The long-run prospects for the economy would, of course, have been even better if more of the money had been spent on investments in education, technology, and infrastructure rather than munitions, but even so, the strong public spending more than offset the weaknesses in private spending.
Government spending unintentionally solved the economy’s underlying problem: it completed a necessary structural transformation, moving America, and especially the South, decisively from agriculture to manufacturing. Americans tend to be allergic to terms like “industrial policy,” but that’s what war spending was—a policy that permanently changed the nature of the economy. Massive job creation in the urban sector—in manufacturing—succeeded in moving people out of farming. The supply of food and the demand for it came into balance again: farm prices started to rise. The new migrants to the cities got training in urban life and factory skills, and after the war the G.I. Bill ensured that returning veterans would be equipped to thrive in a modern industrial society. Meanwhile, the vast pool of labor trapped on farms had all but disappeared. The process had been long and very painful, but the source of economic distress was gone.
The parallels between the story of the origin of the Great Depression and that of our Long Slump are strong. Back then we were moving from agriculture to manufacturing. Today we are moving from manufacturing to a service economy. The decline in manufacturing jobs has been dramatic—from about a third of the workforce 60 years ago to less than a tenth of it today. The pace has quickened markedly during the past decade. There are two reasons for the decline. One is greater productivity—the same dynamic that revolutionized agriculture and forced a majority of American farmers to look for work elsewhere. The other is globalization, which has sent millions of jobs overseas, to low-wage countries or those that have been investing more in infrastructure or technology. (As Greenwald has pointed out, most of the job loss in the 1990s was related to productivity increases, not to globalization.) Whatever the specific cause, the inevitable result is precisely the same as it was 80 years ago: a decline in income and jobs. The millions of jobless former factory workers once employed in cities such as Youngstown and Birmingham and Gary and Detroit are the modern-day equivalent of the Depression’s doomed farmers.
The consequences for consumer spending, and for the fundamental health of the economy—not to mention the appalling human cost—are obvious, though we were able to ignore them for a while. For a time, the bubbles in the housing and lending markets concealed the problem by creating artificial demand, which in turn created jobs in the financial sector and in construction and elsewhere. The bubble even made workers forget that their incomes were declining. They savored the possibility of wealth beyond their dreams, as the value of their houses soared and the value of their pensions, invested in the stock market, seemed to be doing likewise. But the jobs were temporary, fueled on vapor.
Mainstream macro-economists argue that the true bogeyman in a downturn is not falling wages but rigid wages—if only wages were more flexible (that is, lower), downturns would correct themselves! But this wasn’t true during the Depression, and it isn’t true now. On the contrary, lower wages and incomes would simply reduce demand, weakening the economy further.
Of four major service sectors—finance, real estate, health, and education—the first two were bloated before the current crisis set in. The other two, health and education, have traditionally received heavy government support. But government austerity at every level—that is, the slashing of budgets in the face of recession—has hit education especially hard, just as it has decimated the government sector as a whole. Nearly 700,000 state- and local-government jobs have disappeared during the past four years, mirroring what happened in the Depression. As in 1937, deficit hawks today call for balanced budgets and more and more cutbacks. Instead of pushing forward a structural transition that is inevitable—instead of investing in the right kinds of human capital, technology, and infrastructure, which will eventually pull us where we need to be—the government is holding back. Current strategies can have only one outcome: they will ensure that the Long Slump will be longer and deeper than it ever needed to be.
Two conclusions can be drawn from this brief history. The first is that the economy will not bounce back on its own, at least not in a time frame that matters to ordinary people. Yes, all those foreclosed homes will eventually find someone to live in them, or be torn down. Prices will at some point stabilize and even start to rise. Americans will also adjust to a lower standard of living—not just living within their means but living beneath their means as they struggle to pay off a mountain of debt. But the damage will be enormous. America’s conception of itself as a land of opportunity is already badly eroded. Unemployed young people are alienated. It will be harder and harder to get some large proportion of them onto a productive track. They will be scarred for life by what is happening today. Drive through the industrial river valleys of the Midwest or the small towns of the Plains or the factory hubs of the South, and you will see a picture of irreversible decay.
Monetary policy is not going to help us out of this mess. Ben Bernanke has, belatedly, admitted as much. The Fed played an important role in creating the current conditions—by encouraging the bubble that led to unsustainable consumption—but there is now little it can do to mitigate the consequences. I can understand that its members may feel some degree of guilt. But anyone who believes that monetary policy is going to resuscitate the economy will be sorely disappointed. That idea is a distraction, and a dangerous one.
What we need to do instead is embark on a massive investment program—as we did, virtually by accident, 80 years ago—that will increase our productivity for years to come, and will also increase employment now. This public investment, and the resultant restoration in G.D.P., increases the returns to private investment. Public investments could be directed at improving the quality of life and real productivity—unlike the private-sector investments in financial innovations, which turned out to be more akin to financial weapons of mass destruction.
Can we actually bring ourselves to do this, in the absence of mobilization for global war? Maybe not. The good news (in a sense) is that the United States has under-invested in infrastructure, technology, and education for decades, so the return on additional investment is high, while the cost of capital is at an unprecedented low. If we borrow today to finance high-return investments, our debt-to-G.D.P. ratio—the usual measure of debt sustainability—will be markedly improved. If we simultaneously increased taxes—for instance, on the top 1 percent of all households, measured by income—our debt sustainability would be improved even more.
The private sector by itself won’t, and can’t, undertake structural transformation of the magnitude needed—even if the Fed were to keep interest rates at zero for years to come. The only way it will happen is through a government stimulus designed not to preserve the old economy but to focus instead on creating a new one. We have to transition out of manufacturing and into services that people want—into productive activities that increase living standards, not those that increase risk and inequality. To that end, there are many high-return investments we can make. Education is a crucial one—a highly educated population is a fundamental driver of economic growth. Support is needed for basic research. Government investment in earlier decades—for instance, to develop the Internet and biotechnology—helped fuel economic growth. Without investment in basic research, what will fuel the next spurt of innovation? Meanwhile, the states could certainly use federal help in closing budget shortfalls. Long-term economic growth at our current rates of resource consumption is impossible, so funding research, skilled technicians, and initiatives for cleaner and more efficient energy production will not only help us out of the recession but also build a robust economy for decades. Finally, our decaying infrastructure, from roads and railroads to levees and power plants, is a prime target for profitable investment.
The second conclusion is this: If we expect to maintain any semblance of “normality,” we must fix the financial system. As noted, the implosion of the financial sector may not have been the underlying cause of our current crisis—but it has made it worse, and it’s an obstacle to long-term recovery. Small and medium-size companies, especially new ones, are disproportionately the source of job creation in any economy, and they have been especially hard-hit. What’s needed is to get banks out of the dangerous business of speculating and back into the boring business of lending. But we have not fixed the financial system. Rather, we have poured money into the banks, without restrictions, without conditions, and without a vision of the kind of banking system we want and need. We have, in a phrase, confused ends with means. A banking system is supposed to serve society, not the other way around.
That we should tolerate such a confusion of ends and means says something deeply disturbing about where our economy and our society have been heading. Americans in general are coming to understand what has happened. Protesters around the country, galvanized by the Occupy Wall Street movement, already know.
The Economic Crisis
January 2012
Domino Theory: The financial meltdown is the Depression parallel everyone notices. The more frightening parallel is everything else.
http://www.vanityfair.com/politics/2012/01/stiglitz-depression-201201
It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are falling—the real income of a typical American household is now below the level it was in 1997.
We knew the crisis was serious back in 2008. And we thought we knew who the “bad guys” were—the nation’s big banks, which through cynical lending and reckless gambling had brought the U.S. to the brink of ruin. The Bush and Obama administrations justified a bailout on the grounds that only if the banks were handed money without limit—and without conditions—could the economy recover. We did this not because we loved the banks but because (we were told) we couldn’t do without the lending that they made possible. Many, especially in the financial sector, argued that strong, resolute, and generous action to save not just the banks but the bankers, their shareholders, and their creditors would return the economy to where it had been before the crisis. In the meantime, a short-term stimulus, moderate in size, would suffice to tide the economy over until the banks could be restored to health.
The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didn’t really recover—output is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect. First, it was wrong to think that the bankers would mend their ways—that they would start to lend, if only they were treated nicely enough. We were told, in effect: “Don’t put conditions on the banks to require them to restructure the mortgages or to behave more honestly in their foreclosures. Don’t force them to use the money to lend. Such conditions will upset our delicate markets.” In the end, bank managers looked out for themselves and did what they are accustomed to doing.
Even when we fully repair the banking system, we’ll still be in deep trouble—because we were already in deep trouble. That seeming golden age of 2007 was far from a paradise. Yes, America had many things about which it could be proud. Companies in the information-technology field were at the leading edge of a revolution. But incomes for most working Americans still hadn’t returned to their levels prior to the previous recession. The American standard of living was sustained only by rising debt—debt so large that the U.S. savings rate had dropped to near zero. And “zero” doesn’t really tell the story. Because the rich have always been able to save a significant percentage of their income, putting them in the positive column, an average rate of close to zero means that everyone else must be in negative numbers. (Here’s the reality: in the years leading up to the recession, according to research done by my Columbia University colleague Bruce Greenwald, the bottom 80 percent of the American population had been spending around 110 percent of its income.) What made this level of indebtedness possible was the housing bubble, which Alan Greenspan and then Ben Bernanke, chairmen of the Federal Reserve Board, helped to engineer through low interest rates and nonregulation—not even using the regulatory tools they had. As we now know, this enabled banks to lend and households to borrow on the basis of assets whose value was determined in part by mass delusion.
The fact is the economy in the years before the current crisis was fundamentally weak, with the bubble, and the unsustainable consumption to which it gave rise, acting as life support. Without these, unemployment would have been high. It was absurd to think that fixing the banking system could by itself restore the economy to health. Bringing the economy back to “where it was” does nothing to address the underlying problems.
The trauma we’re experiencing right now resembles the trauma we experienced 80 years ago, during the Great Depression, and it has been brought on by an analogous set of circumstances. Then, as now, we faced a breakdown of the banking system. But then, as now, the breakdown of the banking system was in part a consequence of deeper problems. Even if we correctly respond to the trauma—the failures of the financial sector—it will take a decade or more to achieve full recovery. Under the best of conditions, we will endure a Long Slump. If we respond incorrectly, as we have been, the Long Slump will last even longer, and the parallel with the Depression will take on a tragic new dimension.
Until now, the Depression was the last time in American history that unemployment exceeded 8 percent four years after the onset of recession. And never in the last 60 years has economic output been barely greater, four years after a recession, than it was before the recession started. The percentage of the civilian population at work has fallen by twice as much as in any post-World War II downturn. Not surprisingly, economists have begun to reflect on the similarities and differences between our Long Slump and the Great Depression. Extracting the right lessons is not easy.
Many have argued that the Depression was caused primarily by excessive tightening of the money supply on the part of the Federal Reserve Board. Ben Bernanke, a scholar of the Depression, has stated publicly that this was the lesson he took away, and the reason he opened the monetary spigots. He opened them very wide. Beginning in 2008, the balance sheet of the Fed doubled and then rose to three times its earlier level. Today it is $2.8 trillion. While the Fed, by doing this, may have succeeded in saving the banks, it didn’t succeed in saving the economy.
Reality has not only discredited the Fed but also raised questions about one of the conventional interpretations of the origins of the Depression. The argument has been made that the Fed caused the Depression by tightening money, and if only the Fed back then had increased the money supply—in other words, had done what the Fed has done today—a full-blown Depression would likely have been averted. In economics, it’s difficult to test hypotheses with controlled experiments of the kind the hard sciences can conduct. But the inability of the monetary expansion to counteract this current recession should forever lay to rest the idea that monetary policy was the prime culprit in the 1930s. The problem today, as it was then, is something else. The problem today is the so-called real economy. It’s a problem rooted in the kinds of jobs we have, the kind we need, and the kind we’re losing, and rooted as well in the kind of workers we want and the kind we don’t know what to do with. The real economy has been in a state of wrenching transition for decades, and its dislocations have never been squarely faced. A crisis of the real economy lies behind the Long Slump, just as it lay behind the Great Depression.
For the past several years, Bruce Greenwald and I have been engaged in research on an alternative theory of the Depression—and an alternative analysis of what is ailing the economy today. This explanation sees the financial crisis of the 1930s as a consequence not so much of a financial implosion but of the economy’s underlying weakness. The breakdown of the banking system didn’t culminate until 1933, long after the Depression began and long after unemployment had started to soar. By 1931 unemployment was already around 16 percent, and it reached 23 percent in 1932. Shantytown “Hoovervilles” were springing up everywhere. The underlying cause was a structural change in the real economy: the widespread decline in agricultural prices and incomes, caused by what is ordinarily a “good thing”—greater productivity.
At the beginning of the Depression, more than a fifth of all Americans worked on farms. Between 1929 and 1932, these people saw their incomes cut by somewhere between one-third and two-thirds, compounding problems that farmers had faced for years. Agriculture had been a victim of its own success. In 1900, it took a large portion of the U.S. population to produce enough food for the country as a whole. Then came a revolution in agriculture that would gain pace throughout the century—better seeds, better fertilizer, better farming practices, along with widespread mechanization. Today, 2 percent of Americans produce more food than we can consume.
What this transition meant, however, is that jobs and livelihoods on the farm were being destroyed. Because of accelerating productivity, output was increasing faster than demand, and prices fell sharply. It was this, more than anything else, that led to rapidly declining incomes. Farmers then (like workers now) borrowed heavily to sustain living standards and production. Because neither the farmers nor their bankers anticipated the steepness of the price declines, a credit crunch quickly ensued. Farmers simply couldn’t pay back what they owed. The financial sector was swept into the vortex of declining farm incomes.
The cities weren’t spared—far from it. As rural incomes fell, farmers had less and less money to buy goods produced in factories. Manufacturers had to lay off workers, which further diminished demand for agricultural produce, driving down prices even more. Before long, this vicious circle affected the entire national economy.
The value of assets (such as homes) often declines when incomes do. Farmers got trapped in their declining sector and in their depressed locales. Diminished income and wealth made migration to the cities more difficult; high urban unemployment made migration less attractive. Throughout the 1930s, in spite of the massive drop in farm income, there was little overall out-migration. Meanwhile, the farmers continued to produce, sometimes working even harder to make up for lower prices. Individually, that made sense; collectively, it didn’t, as any increased output kept forcing prices down.
Given the magnitude of the decline in farm income, it’s no wonder that the New Deal itself could not bring the country out of crisis. The programs were too small, and many were soon abandoned. By 1937, F.D.R., giving way to the deficit hawks, had cut back on stimulus efforts—a disastrous error. Meanwhile, hard-pressed states and localities were being forced to let employees go, just as they are now. The banking crisis undoubtedly compounded all these problems, and extended and deepened the downturn. But any analysis of financial disruption has to begin with what started off the chain reaction.
The Agriculture Adjustment Act, F.D.R.’s farm program, which was designed to raise prices by cutting back on production, may have eased the situation somewhat, at the margins. But it was not until government spending soared in preparation for global war that America started to emerge from the Depression. It is important to grasp this simple truth: it was government spending—a Keynesian stimulus, not any correction of monetary policy or any revival of the banking system—that brought about recovery. The long-run prospects for the economy would, of course, have been even better if more of the money had been spent on investments in education, technology, and infrastructure rather than munitions, but even so, the strong public spending more than offset the weaknesses in private spending.
Government spending unintentionally solved the economy’s underlying problem: it completed a necessary structural transformation, moving America, and especially the South, decisively from agriculture to manufacturing. Americans tend to be allergic to terms like “industrial policy,” but that’s what war spending was—a policy that permanently changed the nature of the economy. Massive job creation in the urban sector—in manufacturing—succeeded in moving people out of farming. The supply of food and the demand for it came into balance again: farm prices started to rise. The new migrants to the cities got training in urban life and factory skills, and after the war the G.I. Bill ensured that returning veterans would be equipped to thrive in a modern industrial society. Meanwhile, the vast pool of labor trapped on farms had all but disappeared. The process had been long and very painful, but the source of economic distress was gone.
The parallels between the story of the origin of the Great Depression and that of our Long Slump are strong. Back then we were moving from agriculture to manufacturing. Today we are moving from manufacturing to a service economy. The decline in manufacturing jobs has been dramatic—from about a third of the workforce 60 years ago to less than a tenth of it today. The pace has quickened markedly during the past decade. There are two reasons for the decline. One is greater productivity—the same dynamic that revolutionized agriculture and forced a majority of American farmers to look for work elsewhere. The other is globalization, which has sent millions of jobs overseas, to low-wage countries or those that have been investing more in infrastructure or technology. (As Greenwald has pointed out, most of the job loss in the 1990s was related to productivity increases, not to globalization.) Whatever the specific cause, the inevitable result is precisely the same as it was 80 years ago: a decline in income and jobs. The millions of jobless former factory workers once employed in cities such as Youngstown and Birmingham and Gary and Detroit are the modern-day equivalent of the Depression’s doomed farmers.
The consequences for consumer spending, and for the fundamental health of the economy—not to mention the appalling human cost—are obvious, though we were able to ignore them for a while. For a time, the bubbles in the housing and lending markets concealed the problem by creating artificial demand, which in turn created jobs in the financial sector and in construction and elsewhere. The bubble even made workers forget that their incomes were declining. They savored the possibility of wealth beyond their dreams, as the value of their houses soared and the value of their pensions, invested in the stock market, seemed to be doing likewise. But the jobs were temporary, fueled on vapor.
Mainstream macro-economists argue that the true bogeyman in a downturn is not falling wages but rigid wages—if only wages were more flexible (that is, lower), downturns would correct themselves! But this wasn’t true during the Depression, and it isn’t true now. On the contrary, lower wages and incomes would simply reduce demand, weakening the economy further.
Of four major service sectors—finance, real estate, health, and education—the first two were bloated before the current crisis set in. The other two, health and education, have traditionally received heavy government support. But government austerity at every level—that is, the slashing of budgets in the face of recession—has hit education especially hard, just as it has decimated the government sector as a whole. Nearly 700,000 state- and local-government jobs have disappeared during the past four years, mirroring what happened in the Depression. As in 1937, deficit hawks today call for balanced budgets and more and more cutbacks. Instead of pushing forward a structural transition that is inevitable—instead of investing in the right kinds of human capital, technology, and infrastructure, which will eventually pull us where we need to be—the government is holding back. Current strategies can have only one outcome: they will ensure that the Long Slump will be longer and deeper than it ever needed to be.
Two conclusions can be drawn from this brief history. The first is that the economy will not bounce back on its own, at least not in a time frame that matters to ordinary people. Yes, all those foreclosed homes will eventually find someone to live in them, or be torn down. Prices will at some point stabilize and even start to rise. Americans will also adjust to a lower standard of living—not just living within their means but living beneath their means as they struggle to pay off a mountain of debt. But the damage will be enormous. America’s conception of itself as a land of opportunity is already badly eroded. Unemployed young people are alienated. It will be harder and harder to get some large proportion of them onto a productive track. They will be scarred for life by what is happening today. Drive through the industrial river valleys of the Midwest or the small towns of the Plains or the factory hubs of the South, and you will see a picture of irreversible decay.
Monetary policy is not going to help us out of this mess. Ben Bernanke has, belatedly, admitted as much. The Fed played an important role in creating the current conditions—by encouraging the bubble that led to unsustainable consumption—but there is now little it can do to mitigate the consequences. I can understand that its members may feel some degree of guilt. But anyone who believes that monetary policy is going to resuscitate the economy will be sorely disappointed. That idea is a distraction, and a dangerous one.
What we need to do instead is embark on a massive investment program—as we did, virtually by accident, 80 years ago—that will increase our productivity for years to come, and will also increase employment now. This public investment, and the resultant restoration in G.D.P., increases the returns to private investment. Public investments could be directed at improving the quality of life and real productivity—unlike the private-sector investments in financial innovations, which turned out to be more akin to financial weapons of mass destruction.
Can we actually bring ourselves to do this, in the absence of mobilization for global war? Maybe not. The good news (in a sense) is that the United States has under-invested in infrastructure, technology, and education for decades, so the return on additional investment is high, while the cost of capital is at an unprecedented low. If we borrow today to finance high-return investments, our debt-to-G.D.P. ratio—the usual measure of debt sustainability—will be markedly improved. If we simultaneously increased taxes—for instance, on the top 1 percent of all households, measured by income—our debt sustainability would be improved even more.
The private sector by itself won’t, and can’t, undertake structural transformation of the magnitude needed—even if the Fed were to keep interest rates at zero for years to come. The only way it will happen is through a government stimulus designed not to preserve the old economy but to focus instead on creating a new one. We have to transition out of manufacturing and into services that people want—into productive activities that increase living standards, not those that increase risk and inequality. To that end, there are many high-return investments we can make. Education is a crucial one—a highly educated population is a fundamental driver of economic growth. Support is needed for basic research. Government investment in earlier decades—for instance, to develop the Internet and biotechnology—helped fuel economic growth. Without investment in basic research, what will fuel the next spurt of innovation? Meanwhile, the states could certainly use federal help in closing budget shortfalls. Long-term economic growth at our current rates of resource consumption is impossible, so funding research, skilled technicians, and initiatives for cleaner and more efficient energy production will not only help us out of the recession but also build a robust economy for decades. Finally, our decaying infrastructure, from roads and railroads to levees and power plants, is a prime target for profitable investment.
The second conclusion is this: If we expect to maintain any semblance of “normality,” we must fix the financial system. As noted, the implosion of the financial sector may not have been the underlying cause of our current crisis—but it has made it worse, and it’s an obstacle to long-term recovery. Small and medium-size companies, especially new ones, are disproportionately the source of job creation in any economy, and they have been especially hard-hit. What’s needed is to get banks out of the dangerous business of speculating and back into the boring business of lending. But we have not fixed the financial system. Rather, we have poured money into the banks, without restrictions, without conditions, and without a vision of the kind of banking system we want and need. We have, in a phrase, confused ends with means. A banking system is supposed to serve society, not the other way around.
That we should tolerate such a confusion of ends and means says something deeply disturbing about where our economy and our society have been heading. Americans in general are coming to understand what has happened. Protesters around the country, galvanized by the Occupy Wall Street movement, already know.
Friday, December 23, 2011
Occupy Our Homes
J.A. Myerson, Truthout
Wednesday 7 December 2011
http://truth-out.org/occupy-our-homes/1323268606
Yesterday, no one had lived in 702 Vermont Street for three years. Vermont Street sits in East New York, the Brooklyn neighborhood where foreclosures are five times more frequent than in the rest of the state. Today, Alfredo and Tasha and their son and daughter moved in, with the help of a number of friends whom they'd never met. Some were from the advocacy groups Picture the Homeless and Vocal New York, others were clergy or members of the city council. They had been organized and brought together by Occupy Wall Street for a national day of action to promote foreclosure resistance, an event kicking off a project they call Occupy Our Homes.
Alfredo, Tasha and the kids, way back yesterday, were homeless, having been foreclosed upon by a bank and hundreds upon hundreds of people who had never heard of them came to East New York today to get them a home. Occupy Wall Street is itself somewhat homeless these days, having been evicted from Zuccotti Park on the orders of the 12th-richest man in the United States. A few weeks ago, the media tycoon in question deployed what he openly calls his "army" to dispossess the occupation, including, naturally, everyone who called it their home. Much wondering has been going on in the press about what Occupy Wall Street would do now that it was homeless. Today's answer seems to have been: get other people homes.
The few hundred activists marched through the streets of East New York and took a tour of the foreclosed properties in the area, which is very easy to do, since they are everywhere. "On every block, we have one or two homes either for sale or in foreclosure," Lorraine, who lives in the neighborhood, told me. "I think we have three houses for sale on my block alone."
On the Upper West Side, there are always street fairs. There are museums and libraries and there are parks and concert venues. And on the Upper West Side, there are places for kids to go after school and there are places for people who want to get healthier to exercise. On the Upper West Side, there are churches made of stone. In East New York, there is a church called Hope Christian Center, which looks like an abandoned office building, the paint on the façade stripping away to reveal the brick beneath.
"There's nothing to do here," said longtime East New Yorker Corinne Gonzales, who attributes the many people who watched the march from their windows to this. Revealingly, it was at their windows where people found themselves on a chance Tuesday afternoon in this neighborhood and not, perhaps, at work. Many of them joined the march, which, at its peak, swelled to what was widely estimated to include 1,000 participants - on a Tuesday afternoon in the rain.
Corrine had never seen anything like it. News cameras and satellite vans don't come here, except, occasionally, in the case of a shooting. Now, they'd come here to document the difficulty of a life of poverty and the attempt to change that dynamic. If Occupy Wall Street had chosen to do something else today, another day would have gone by in which no one in the media or politics paid any attention to East New York.
"It's not fair to us low income families," Corrine told me. "Everybody's talking about middle class. Middle class? What about us? We got children. It's not fair to us. And I thank God that you guys came out today to represent us low income families. And I appreciate it very much."
Some activists brought housewarming gifts for the new residents of 702 Vermont Street. Yates McKee, 32, marched carrying a large houseplant. "A plant is important because it's something that helps make it a nice environment," he told me. "It's also a metaphor for sustaining life."
Lorraine had brought brownies. She started a "part-time cooking thing" to make extra money before she lost her job. "They're free," she said, offering me one. "It might energize you, with a little sugar. I have a sweet tooth." These brownies were to welcome the activists who had come to help, though the baker herself faces foreclosure. "Any person at this point is one step away from being jobless and homeless," she remarked. "It's a reality. This is the life that we're living right now. It's like this is what we worked for, all those other years. This is the point that we've come to."
If anybody wanted demands, they were clear today. As Brian Gibbs of Picture the Homeless said by way of the people's microphone, "What we need is real, affordable housing now. It has to change." Gibbs was once homeless on the street and spoke of the police harassment routinely visited upon him and others in his situation. "The problem with homelessness is that people get so desperate, they are willing to risk arrest in order to get off the streets," he told the crowd.
At one stop along the tour, a young man named Quincy, who works as a part time plumber, took the people's mike. "I was tricked into signing over my deed," he confessed. "Now I'm getting evicted. I have a loan of $475,000."
Standing beside him, his city council member, one-time Black Panther Charles Barron, announced, "We will not let this young man lose his home. We've stopped other foreclosures and we're going to stop this one." Thereupon, Quincy began to weep, the friends and comrades he never knew he had gathering around him to place their calming hands upon his shoulders and his arms and his head. He didn't know they were out there, but 1,000 people ready to protect his home happened to be around the corner the day upon which he was getting foreclosed.
As Quincy wrapped up his remarks, a cry from the crowd drew everyone's attention to another longtime resident of the neighborhood, who told the story of having bought her house in 1997, putting $80,000 down. She'd been working two jobs all of her life and had paid her mortgage responsibly, putting down months in advance when she went on vacation. Her son did four years in Kuwait and four years in Iraq and now he's dead. The Pentagon, the woman said, doesn't know whether he died by enemy bullets or friendly fire. Since then, she's become sick and the bills for her medical treatment have ruined her hopes for paying off the rest of her mortgage. Crying to the sky, she asked again and again, "How am I going to do it?"
At the march's destination, balloons announced the block party to be thrown for the incoming neighbors. A tent appeared on the roof, on which was scrawled, "You cannot evict an idea whose time has come." Remarks were shared by, among others, Alfredo, a 27-year-old community organizer around stop and frisk, and Tasha, whose shyness in the face of the people's microphone moved her to nervous giggles and a swift conclusion to her brief thanks.
I went into 702 Vermont Street with the Occupy Wall Street Sanitation Working Group, who entered before anyone else to get the house ready to be, so to speak, occupied. This was a formidable charge. It very much seemed to one as though the people who left 702 Vermont Street did so in a big hurry. Crumbled dry wall, copious mold, piles of refuse - the house might as easily have been Sarajevo in 1996 than in the same city as Wall Street in 2011.
The sun set over Vermont Street behind the clouds, steadily drizzling on the block party. Eventually, Bloomberg's army, consisting of quite a smaller number of people when there wasn't rich people's property to protect, asked the block party to stick to the sidewalk, and the event drew to a close, teams of occupiers agreeing to stay with Alfredo and Tasha and with Quincy for the night, vowing to put their bodies between the residents and anyone attempting to turn them into something else.
The police's boss has $19.5 billion. He's got places to stay all over the world, luxury townhouses in the swankiest neighborhoods in the finest cities in the world and sprawling mansions in lush paradises in the tropics. And no one ever threatens to kick him out of any of them. For the time being, anyway.
This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.
J.A. Myerson is an independent journalist who is involved in the Media and Labor Outreach committees at Occupy Wall Street.
Wednesday 7 December 2011
http://truth-out.org/occupy-our-homes/1323268606
Yesterday, no one had lived in 702 Vermont Street for three years. Vermont Street sits in East New York, the Brooklyn neighborhood where foreclosures are five times more frequent than in the rest of the state. Today, Alfredo and Tasha and their son and daughter moved in, with the help of a number of friends whom they'd never met. Some were from the advocacy groups Picture the Homeless and Vocal New York, others were clergy or members of the city council. They had been organized and brought together by Occupy Wall Street for a national day of action to promote foreclosure resistance, an event kicking off a project they call Occupy Our Homes.
Alfredo, Tasha and the kids, way back yesterday, were homeless, having been foreclosed upon by a bank and hundreds upon hundreds of people who had never heard of them came to East New York today to get them a home. Occupy Wall Street is itself somewhat homeless these days, having been evicted from Zuccotti Park on the orders of the 12th-richest man in the United States. A few weeks ago, the media tycoon in question deployed what he openly calls his "army" to dispossess the occupation, including, naturally, everyone who called it their home. Much wondering has been going on in the press about what Occupy Wall Street would do now that it was homeless. Today's answer seems to have been: get other people homes.
The few hundred activists marched through the streets of East New York and took a tour of the foreclosed properties in the area, which is very easy to do, since they are everywhere. "On every block, we have one or two homes either for sale or in foreclosure," Lorraine, who lives in the neighborhood, told me. "I think we have three houses for sale on my block alone."
On the Upper West Side, there are always street fairs. There are museums and libraries and there are parks and concert venues. And on the Upper West Side, there are places for kids to go after school and there are places for people who want to get healthier to exercise. On the Upper West Side, there are churches made of stone. In East New York, there is a church called Hope Christian Center, which looks like an abandoned office building, the paint on the façade stripping away to reveal the brick beneath.
"There's nothing to do here," said longtime East New Yorker Corinne Gonzales, who attributes the many people who watched the march from their windows to this. Revealingly, it was at their windows where people found themselves on a chance Tuesday afternoon in this neighborhood and not, perhaps, at work. Many of them joined the march, which, at its peak, swelled to what was widely estimated to include 1,000 participants - on a Tuesday afternoon in the rain.
Corrine had never seen anything like it. News cameras and satellite vans don't come here, except, occasionally, in the case of a shooting. Now, they'd come here to document the difficulty of a life of poverty and the attempt to change that dynamic. If Occupy Wall Street had chosen to do something else today, another day would have gone by in which no one in the media or politics paid any attention to East New York.
"It's not fair to us low income families," Corrine told me. "Everybody's talking about middle class. Middle class? What about us? We got children. It's not fair to us. And I thank God that you guys came out today to represent us low income families. And I appreciate it very much."
Some activists brought housewarming gifts for the new residents of 702 Vermont Street. Yates McKee, 32, marched carrying a large houseplant. "A plant is important because it's something that helps make it a nice environment," he told me. "It's also a metaphor for sustaining life."
Lorraine had brought brownies. She started a "part-time cooking thing" to make extra money before she lost her job. "They're free," she said, offering me one. "It might energize you, with a little sugar. I have a sweet tooth." These brownies were to welcome the activists who had come to help, though the baker herself faces foreclosure. "Any person at this point is one step away from being jobless and homeless," she remarked. "It's a reality. This is the life that we're living right now. It's like this is what we worked for, all those other years. This is the point that we've come to."
If anybody wanted demands, they were clear today. As Brian Gibbs of Picture the Homeless said by way of the people's microphone, "What we need is real, affordable housing now. It has to change." Gibbs was once homeless on the street and spoke of the police harassment routinely visited upon him and others in his situation. "The problem with homelessness is that people get so desperate, they are willing to risk arrest in order to get off the streets," he told the crowd.
At one stop along the tour, a young man named Quincy, who works as a part time plumber, took the people's mike. "I was tricked into signing over my deed," he confessed. "Now I'm getting evicted. I have a loan of $475,000."
Standing beside him, his city council member, one-time Black Panther Charles Barron, announced, "We will not let this young man lose his home. We've stopped other foreclosures and we're going to stop this one." Thereupon, Quincy began to weep, the friends and comrades he never knew he had gathering around him to place their calming hands upon his shoulders and his arms and his head. He didn't know they were out there, but 1,000 people ready to protect his home happened to be around the corner the day upon which he was getting foreclosed.
As Quincy wrapped up his remarks, a cry from the crowd drew everyone's attention to another longtime resident of the neighborhood, who told the story of having bought her house in 1997, putting $80,000 down. She'd been working two jobs all of her life and had paid her mortgage responsibly, putting down months in advance when she went on vacation. Her son did four years in Kuwait and four years in Iraq and now he's dead. The Pentagon, the woman said, doesn't know whether he died by enemy bullets or friendly fire. Since then, she's become sick and the bills for her medical treatment have ruined her hopes for paying off the rest of her mortgage. Crying to the sky, she asked again and again, "How am I going to do it?"
At the march's destination, balloons announced the block party to be thrown for the incoming neighbors. A tent appeared on the roof, on which was scrawled, "You cannot evict an idea whose time has come." Remarks were shared by, among others, Alfredo, a 27-year-old community organizer around stop and frisk, and Tasha, whose shyness in the face of the people's microphone moved her to nervous giggles and a swift conclusion to her brief thanks.
I went into 702 Vermont Street with the Occupy Wall Street Sanitation Working Group, who entered before anyone else to get the house ready to be, so to speak, occupied. This was a formidable charge. It very much seemed to one as though the people who left 702 Vermont Street did so in a big hurry. Crumbled dry wall, copious mold, piles of refuse - the house might as easily have been Sarajevo in 1996 than in the same city as Wall Street in 2011.
The sun set over Vermont Street behind the clouds, steadily drizzling on the block party. Eventually, Bloomberg's army, consisting of quite a smaller number of people when there wasn't rich people's property to protect, asked the block party to stick to the sidewalk, and the event drew to a close, teams of occupiers agreeing to stay with Alfredo and Tasha and with Quincy for the night, vowing to put their bodies between the residents and anyone attempting to turn them into something else.
The police's boss has $19.5 billion. He's got places to stay all over the world, luxury townhouses in the swankiest neighborhoods in the finest cities in the world and sprawling mansions in lush paradises in the tropics. And no one ever threatens to kick him out of any of them. For the time being, anyway.
This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.
J.A. Myerson is an independent journalist who is involved in the Media and Labor Outreach committees at Occupy Wall Street.
Occupy’s next frontier: Foreclosed homes
A campaign to defend families from evictions and protest foreclosure fraud launches next week
Justin Elliott
Wednesday, Nov 30, 2011
http://www.salon.com/2011/11/30/occupys_next_frontier_foreclosed_homes
Occupy Wall Street is promising a “big day of action” Dec. 6 that will focus on the foreclosure crisis and protest “fraudulent lending practices,” “corrupt securitization,” and illegal evictions by banks.
The day will mark the beginning of an Occupy Our Homes campaign that organizers hope will energize the movement as it moves indoors as well as bring the injustices of the economic crisis into sharp relief.
Many of the details aren’t yet public, but protesters in 20 cities are expected to take part in the day of action next Tuesday. We’ve already seen eviction defenses at foreclosed properties around the country as well as takeovers of vacant properties for homeless families. Occupy Our Homes organizer Abby Clark tells me protesters are planning to “mic-check” (i.e., disrupt) foreclosure auctions as well as launch some new home occupations.
“This is a shift from protesting Wall Street fraud to taking action on behalf of people who were harmed by it. It brings the movement into the neighborhoods and gives people a sense of what’s really at stake,” said Max Berger, one of the Occupy Our Homes organizers and a member of Occupy Wall Street’s movement-building working group.
The backdrop for all this is a new study suggesting the foreclosure crisis is only half over, with 4 million homes in some stage of foreclosure. Meanwhile, reports of illegal or questionable behavior by banks and mortgage lenders continue to stream in.
Like many of the Occupy actions that have focused on specific policy questions, this one is being organized by established progressive and labor-affiliated groups along with their allies in the movement. Among the allied groups listed on Occupy Our Homes’ website, for example, are the New Bottom Line and New York Communities for Change. On the Occupy Wall Street side of things, members of the direct action working group and the movement-building group in New York have been involved in the project.
Occupy Our Homes’ website (which was registered by a former SEIU official staffer) has the trappings of a slick professional campaign, with videos featuring the stories of families facing foreclosures and a pledge visitors are encouraged to sign stating:
… that until the banks do their part to help homeowners and to fix the economy, by writing down mortgage principal to current home values, I will:
•I will support homeowners resisting wrongful foreclosure evictions.
•I will resist any attempt by the bank to take my home.
•If they come to foreclose, I will not go.
A network of groups organized as Take Back the Land has been doing eviction defenses and related actions around the country for five years, according to organizer Max Rameau.
“Now with this Occupy movement ramping up, I think we have a significant chance to keep large numbers of people in their home,” Rameau told Democracy Now earlier this month. “[The goal is to] not only force the banks to allow the family to stay in the home. But also then force policy changes that would help thousands of other people for whom we’re not doing eviction defenses.”
We saw a similar dynamic in the preexisting campaign to extend the millionaire’s tax in New York, which has benefited from new energy and a new banner offered by the Occupy movement.
Will the new Occupy push on foreclosures pick up any steam? I’ll be covering whatever happens on Dec. 6, so stay tuned to find out.
Justin Elliott is a Salon reporter. Reach him by email at jelliott@salon.com and follow him on Twitter @ElliottJustin
Justin Elliott
Wednesday, Nov 30, 2011
http://www.salon.com/2011/11/30/occupys_next_frontier_foreclosed_homes
Occupy Wall Street is promising a “big day of action” Dec. 6 that will focus on the foreclosure crisis and protest “fraudulent lending practices,” “corrupt securitization,” and illegal evictions by banks.
The day will mark the beginning of an Occupy Our Homes campaign that organizers hope will energize the movement as it moves indoors as well as bring the injustices of the economic crisis into sharp relief.
Many of the details aren’t yet public, but protesters in 20 cities are expected to take part in the day of action next Tuesday. We’ve already seen eviction defenses at foreclosed properties around the country as well as takeovers of vacant properties for homeless families. Occupy Our Homes organizer Abby Clark tells me protesters are planning to “mic-check” (i.e., disrupt) foreclosure auctions as well as launch some new home occupations.
“This is a shift from protesting Wall Street fraud to taking action on behalf of people who were harmed by it. It brings the movement into the neighborhoods and gives people a sense of what’s really at stake,” said Max Berger, one of the Occupy Our Homes organizers and a member of Occupy Wall Street’s movement-building working group.
The backdrop for all this is a new study suggesting the foreclosure crisis is only half over, with 4 million homes in some stage of foreclosure. Meanwhile, reports of illegal or questionable behavior by banks and mortgage lenders continue to stream in.
Like many of the Occupy actions that have focused on specific policy questions, this one is being organized by established progressive and labor-affiliated groups along with their allies in the movement. Among the allied groups listed on Occupy Our Homes’ website, for example, are the New Bottom Line and New York Communities for Change. On the Occupy Wall Street side of things, members of the direct action working group and the movement-building group in New York have been involved in the project.
Occupy Our Homes’ website (which was registered by a former SEIU official staffer) has the trappings of a slick professional campaign, with videos featuring the stories of families facing foreclosures and a pledge visitors are encouraged to sign stating:
… that until the banks do their part to help homeowners and to fix the economy, by writing down mortgage principal to current home values, I will:
•I will support homeowners resisting wrongful foreclosure evictions.
•I will resist any attempt by the bank to take my home.
•If they come to foreclose, I will not go.
A network of groups organized as Take Back the Land has been doing eviction defenses and related actions around the country for five years, according to organizer Max Rameau.
“Now with this Occupy movement ramping up, I think we have a significant chance to keep large numbers of people in their home,” Rameau told Democracy Now earlier this month. “[The goal is to] not only force the banks to allow the family to stay in the home. But also then force policy changes that would help thousands of other people for whom we’re not doing eviction defenses.”
We saw a similar dynamic in the preexisting campaign to extend the millionaire’s tax in New York, which has benefited from new energy and a new banner offered by the Occupy movement.
Will the new Occupy push on foreclosures pick up any steam? I’ll be covering whatever happens on Dec. 6, so stay tuned to find out.
Justin Elliott is a Salon reporter. Reach him by email at jelliott@salon.com and follow him on Twitter @ElliottJustin
Bail-out Bombshell
Fed "Emergency" Bank Rescue Totaled $29 Trillion Over Three Years
J. Andrew Felkerson, AlterNet
Posted on December 15, 2011
http://www.alternet.org/story/153462/bail-out_bombshell%3A_fed_%22emergency%22_bank_rescue_totaled_%2429_trillion_over_three_years
Speculation about the the Fed’s actions during the financial crisis has made headlines on and off again over the last several years. The latest drama occurred on November 27 when Bloomberg published an article, “Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress," which gives an account of the news agency’s struggle to bring to light the details of the Fed’s emergency programs. Bloomberg throws out some very large numbers, revealing that as of March 2009, the Fed lent, spent, or committed $7.77 trillion worth of aid to the financial system and that banks used the low interest rates charged on these loans to make an estimated $13 billion in income.
On December 6, the Fed struck back, issuing a four page unsigned memo intended to correct recent “egregious errors and mistakes” found in various reports of its emergency lending facilities. The Fed argues that the “total credit outstanding under liquidity programs was never more than about $1.5 trillion.” While Bloomberg wasn’t mentioned explicitly in the Fed memo, it was fairly clear to whom the response was directed. The following day Bloomberg defended its reporting, and the Wall Street Journal’s David Wessel came to the Fed’s defense, characterizing Bloomberg’s methodology as a “great story,” but ultimately not “true.”
All this may sound like controversy, but it’s little more than a tempest in a teacup.
Here’s the hurricane: In reality, no less than $29.616 trillion is the total emergency assistance provided by the Fed to foreign and domestic entities during the Global Financial Crisis. Let’s repeat that: $29 trillion. This astounding number is over twice U.S. gross domestic product, the nominal value of all goods and services produced for the year 2010. This is the total of the bailout as calculated by Nicola Matthews and myself as part of the Ford Foundation project, A Research And Policy Dialogue Project On Improving Governance Of The Government Safety Net In Financial Crisis. We will be presenting the results of our analysis in a series of papers published by the Levy Economics Institute, the first of which, “29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient,” is already available here.
The results we have calculated are presented below, and it is important to note that the totals are cumulative and in billions of U.S. dollars. (The numbers in parentheses indicate amounts still outstanding as of November 10, 2011).
Facility Total Percent of Total
Term Auction Facility $3,818.41 12.89%
Central Bank Liquidity Swaps 10,057.4 (1.96) 33.96
Single Tranche Open Market Operations 855 2.89
Term Securities Lending Facility and Term Options Program 2,005.7 6.77
Bear Stearns Bridge Loan 12.9 0.04
Maiden Lane I 28.82 (12.98) 0.10
Primary Dealer Credit Facility 8,950.99 30.22
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.73
Commercial Paper Funding Facility 737.07 2.49
Term Asset-Backed Securities Loan Facility 71.09 (10.57) 0.24
Agency Mortgage-Backed Security Purchase Program 1,850.14 (849.26) 6.25
AIG Revolving Credit Facility 140.316 0.47
AIG Securities Borrowing Facility 802.316 2.71
Maiden Lane II 19.5 (9.33) 0.07
Maiden Lane III 24.3 (18.15) 0.08
AIA/ ALICO (AIG) 25 0.08
Totals $29,616.4 100.0%
I want to be clear. These are the totals of Fed lending and asset purchases actually undertaken since the bail-out began. There is no double-counting. And we do not include any credit facilities created by the Fed unless they were actually used. These figures accurately reflect the cumulative totals over the approximately three years actually used by the Fed to prop-up domestic and international banks, shadow banks, central banks, and even some non-financial institutions.
The programs above constitute the crisis prevention machinery rolled out by the Fed to combat the worst financial panic since 1929. All the programs above were designed and implemented to target domestic financial and nonfinancial corporations or foreign central banks or markets, or both. Only one of the facilities, the Term Auction Facility, can be viewed as being consistent with the Fed’s mandate to protect the commercial banking system from systemic failure. The rest are the result of the increasing relevance of the “shadow banking” to our economy—and of the Fed’s attempt to rescue the shadow banking sector.
Shadow banks are highly leveraged financial institutions that perform functions historically relegated to the commercial banking system. It is important to note that these financial concerns do not have access to the conventional means of Fed support. Nor were they ever really regulated or supervised by the Fed. They engaged in extremely risky behavior that in large part led to the global financial crisis. And when it hit, the Fed spent and lent $29 trillion, much of it devoted to rescuing the shadow banking system.
Thus, we see a host of unconventional programs designed to aid these institutions rather than the Fed’s traditional patrons. The information used to calculate the totals above is freely available (thanks in large part to the valiant efforts of a group of lawmakers led by Senator Bernie Sanders) as the result of an amendment inserted into the Dodd Frank bill. Moreover, this information has been freely available since December 10, 2010 on the Fed’s website.
So why didn’t someone else already put the data together in this way?
Obviously, $29 trillion is much bigger than the previous estimates of $7.77 trillion (Bloomberg) or $1.5 trillion (the Fed and the Wall Street Journal). An in-depth account of each of the facilities above is a rather lengthy process as the Levy working paper attests; therefore we will only lay out the reason for the difference between the Bloomberg and Fed numbers. So, how is it that we arrive at such a number? The main difference in our analysis is the variables we identify as essential in understanding the Fed’s response. In our paper we report three measures that we view as essential to capturing the size and magnitude of the bailout. Each of the three measures deals exclusively with programs put into place by the Fed that transcend its conventional lender of last resort function. That is, we only include the emergency facilities the Fed created. We agree with the Fed that only facilities which were actually made operational should be considered in any account of the Fed’s actions. But we take the side of Bloomberg regarding the general lack of transparency by the Fed—the Fed fought tooth and nail to keep the details of its programs secret.
At any given moment inspection of the amount owed to the Fed resulting from nonconventional lender of last resort actions provides a reasonable account of what the Fed was doing in the period leading up to that time. However, looking at this number over time and in the context of the weekly amount lent provides insight into how the Fed’s efforts evolved over the run of the crisis. These two approaches to measurement (a “stock” or outstanding balance and a “flow” or cumulated amount spent and lent weekly) only provide us with details regarding the scope of the Fed’s bailout. To get a clear picture we need some account of the magnitude. We believe that this is captured by looking at the cumulative totals of all programs.
Perhaps the largest difference in our analysis is that we learned our money and banking theory from the late Hyman Minsky. He taught us that the modern economy is essentially financial, and as such, is prone to systemic financial crises that if left unchecked can lead to “bone crunching depressions”. Therefore it is essential to have a LOLR. Thus, any transaction between the Fed and the markets which is not part of conventional monetary operations, such as lending from the discount window or open market operations, represents an instance in which private markets were not able to or were unwilling to engage in the normal financial intermediation process. If it any point in time the private markets were capable (or willing) to carry out business as usual, Fed intervention would not have been required. Thus, we need to account for each extraordinary event, and the best way that we know to do this is by summing each instance--which results in a cumulative total of over $29 trillion dollars.
A figure as large as $29.616 trillion should not be taken lightly, but focus on the specific magnitude of the figure diverts our attention from a larger issue that is at stake: how should the LOLR responsibility to be discharged in the future? With unemployment remaining persistently high and millions continuing to lose their homes to foreclosure as the result of lost income from a poor economy or outright fraud in the mortgage lending and foreclosure process, it becomes increasingly difficult to justify the ability of a single institution staffed by unelected officials to carry out such a targeted commitment of the obligations of the United States citizenry. Thanks to the actions of Senator Sanders and other individuals possessing the temerity to question the authority of the Fed we now have access to much of the data regarding what the Fed did during the recent crisis.
But we still need to go through the data from the past three years of bail-outs to answer the following questions: Who got funds from the Fed? How much did they get? And why did they get them? The Fed has not adequately explained why its emergency lending and asset purchases went on for so long and accumulated to such a large number.
J. Andrew Felkerson is a Interdisciplinary PhD student at the University of Missouri- Kansas City
J. Andrew Felkerson, AlterNet
Posted on December 15, 2011
http://www.alternet.org/story/153462/bail-out_bombshell%3A_fed_%22emergency%22_bank_rescue_totaled_%2429_trillion_over_three_years
Speculation about the the Fed’s actions during the financial crisis has made headlines on and off again over the last several years. The latest drama occurred on November 27 when Bloomberg published an article, “Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress," which gives an account of the news agency’s struggle to bring to light the details of the Fed’s emergency programs. Bloomberg throws out some very large numbers, revealing that as of March 2009, the Fed lent, spent, or committed $7.77 trillion worth of aid to the financial system and that banks used the low interest rates charged on these loans to make an estimated $13 billion in income.
On December 6, the Fed struck back, issuing a four page unsigned memo intended to correct recent “egregious errors and mistakes” found in various reports of its emergency lending facilities. The Fed argues that the “total credit outstanding under liquidity programs was never more than about $1.5 trillion.” While Bloomberg wasn’t mentioned explicitly in the Fed memo, it was fairly clear to whom the response was directed. The following day Bloomberg defended its reporting, and the Wall Street Journal’s David Wessel came to the Fed’s defense, characterizing Bloomberg’s methodology as a “great story,” but ultimately not “true.”
All this may sound like controversy, but it’s little more than a tempest in a teacup.
Here’s the hurricane: In reality, no less than $29.616 trillion is the total emergency assistance provided by the Fed to foreign and domestic entities during the Global Financial Crisis. Let’s repeat that: $29 trillion. This astounding number is over twice U.S. gross domestic product, the nominal value of all goods and services produced for the year 2010. This is the total of the bailout as calculated by Nicola Matthews and myself as part of the Ford Foundation project, A Research And Policy Dialogue Project On Improving Governance Of The Government Safety Net In Financial Crisis. We will be presenting the results of our analysis in a series of papers published by the Levy Economics Institute, the first of which, “29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient,” is already available here.
The results we have calculated are presented below, and it is important to note that the totals are cumulative and in billions of U.S. dollars. (The numbers in parentheses indicate amounts still outstanding as of November 10, 2011).
Facility Total Percent of Total
Term Auction Facility $3,818.41 12.89%
Central Bank Liquidity Swaps 10,057.4 (1.96) 33.96
Single Tranche Open Market Operations 855 2.89
Term Securities Lending Facility and Term Options Program 2,005.7 6.77
Bear Stearns Bridge Loan 12.9 0.04
Maiden Lane I 28.82 (12.98) 0.10
Primary Dealer Credit Facility 8,950.99 30.22
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.73
Commercial Paper Funding Facility 737.07 2.49
Term Asset-Backed Securities Loan Facility 71.09 (10.57) 0.24
Agency Mortgage-Backed Security Purchase Program 1,850.14 (849.26) 6.25
AIG Revolving Credit Facility 140.316 0.47
AIG Securities Borrowing Facility 802.316 2.71
Maiden Lane II 19.5 (9.33) 0.07
Maiden Lane III 24.3 (18.15) 0.08
AIA/ ALICO (AIG) 25 0.08
Totals $29,616.4 100.0%
I want to be clear. These are the totals of Fed lending and asset purchases actually undertaken since the bail-out began. There is no double-counting. And we do not include any credit facilities created by the Fed unless they were actually used. These figures accurately reflect the cumulative totals over the approximately three years actually used by the Fed to prop-up domestic and international banks, shadow banks, central banks, and even some non-financial institutions.
The programs above constitute the crisis prevention machinery rolled out by the Fed to combat the worst financial panic since 1929. All the programs above were designed and implemented to target domestic financial and nonfinancial corporations or foreign central banks or markets, or both. Only one of the facilities, the Term Auction Facility, can be viewed as being consistent with the Fed’s mandate to protect the commercial banking system from systemic failure. The rest are the result of the increasing relevance of the “shadow banking” to our economy—and of the Fed’s attempt to rescue the shadow banking sector.
Shadow banks are highly leveraged financial institutions that perform functions historically relegated to the commercial banking system. It is important to note that these financial concerns do not have access to the conventional means of Fed support. Nor were they ever really regulated or supervised by the Fed. They engaged in extremely risky behavior that in large part led to the global financial crisis. And when it hit, the Fed spent and lent $29 trillion, much of it devoted to rescuing the shadow banking system.
Thus, we see a host of unconventional programs designed to aid these institutions rather than the Fed’s traditional patrons. The information used to calculate the totals above is freely available (thanks in large part to the valiant efforts of a group of lawmakers led by Senator Bernie Sanders) as the result of an amendment inserted into the Dodd Frank bill. Moreover, this information has been freely available since December 10, 2010 on the Fed’s website.
So why didn’t someone else already put the data together in this way?
Obviously, $29 trillion is much bigger than the previous estimates of $7.77 trillion (Bloomberg) or $1.5 trillion (the Fed and the Wall Street Journal). An in-depth account of each of the facilities above is a rather lengthy process as the Levy working paper attests; therefore we will only lay out the reason for the difference between the Bloomberg and Fed numbers. So, how is it that we arrive at such a number? The main difference in our analysis is the variables we identify as essential in understanding the Fed’s response. In our paper we report three measures that we view as essential to capturing the size and magnitude of the bailout. Each of the three measures deals exclusively with programs put into place by the Fed that transcend its conventional lender of last resort function. That is, we only include the emergency facilities the Fed created. We agree with the Fed that only facilities which were actually made operational should be considered in any account of the Fed’s actions. But we take the side of Bloomberg regarding the general lack of transparency by the Fed—the Fed fought tooth and nail to keep the details of its programs secret.
At any given moment inspection of the amount owed to the Fed resulting from nonconventional lender of last resort actions provides a reasonable account of what the Fed was doing in the period leading up to that time. However, looking at this number over time and in the context of the weekly amount lent provides insight into how the Fed’s efforts evolved over the run of the crisis. These two approaches to measurement (a “stock” or outstanding balance and a “flow” or cumulated amount spent and lent weekly) only provide us with details regarding the scope of the Fed’s bailout. To get a clear picture we need some account of the magnitude. We believe that this is captured by looking at the cumulative totals of all programs.
Perhaps the largest difference in our analysis is that we learned our money and banking theory from the late Hyman Minsky. He taught us that the modern economy is essentially financial, and as such, is prone to systemic financial crises that if left unchecked can lead to “bone crunching depressions”. Therefore it is essential to have a LOLR. Thus, any transaction between the Fed and the markets which is not part of conventional monetary operations, such as lending from the discount window or open market operations, represents an instance in which private markets were not able to or were unwilling to engage in the normal financial intermediation process. If it any point in time the private markets were capable (or willing) to carry out business as usual, Fed intervention would not have been required. Thus, we need to account for each extraordinary event, and the best way that we know to do this is by summing each instance--which results in a cumulative total of over $29 trillion dollars.
A figure as large as $29.616 trillion should not be taken lightly, but focus on the specific magnitude of the figure diverts our attention from a larger issue that is at stake: how should the LOLR responsibility to be discharged in the future? With unemployment remaining persistently high and millions continuing to lose their homes to foreclosure as the result of lost income from a poor economy or outright fraud in the mortgage lending and foreclosure process, it becomes increasingly difficult to justify the ability of a single institution staffed by unelected officials to carry out such a targeted commitment of the obligations of the United States citizenry. Thanks to the actions of Senator Sanders and other individuals possessing the temerity to question the authority of the Fed we now have access to much of the data regarding what the Fed did during the recent crisis.
But we still need to go through the data from the past three years of bail-outs to answer the following questions: Who got funds from the Fed? How much did they get? And why did they get them? The Fed has not adequately explained why its emergency lending and asset purchases went on for so long and accumulated to such a large number.
J. Andrew Felkerson is a Interdisciplinary PhD student at the University of Missouri- Kansas City
Thursday, December 1, 2011
FACTS ABOUT THE 99 PERCENT
FACTS ABOUT THE 99 PERCENT AND THEIR HAPPIER COUNTERPARTS, THE 1 PERCENT
Richard Metzger, DangerousMinds.net
http://www.dangerousminds.net/comments/occupy_thanksgiving
The richest 5 percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983, meaning they did not participate at all in the growth of wealth over this period.
The average wealth of the 1% is 225 times bigger than the wealth of the typical household - perhaps the highest it’s ever been. In just the last generation, the richest 1% almost quadrupled their incomes.
Three decades ago, CEOs made about 40 times as much as an average worker - now CEOs make almost 200 times as much as regular employees.
Last year, half of Americans earned less than $26,000, while CEOs at top 500 companies raked in an average of $11 million. Over the past decade, earnings for middle-class Americans actually fell. In fact, working Americans’ wages are now a lower percentage of our economy than they’ve ever been.
The divide between the richest and the poorest is worse in America than it is in nearly all of Europe and Asia and much of Africa. It’s about as bad as in Rwanda and Serbia - and it’s bad for our economy.
The 1 percent is not an accident - it is the result of policies our government chose to pursue.
For the last three years, there have been at least 4 unemployed workers for every single job opening. Right now there are 4.6 jobless workers for every job opening.
If the government doesn’t extend benefits to jobless workers in December, it will devastate millions. The unemployment rate, currently over 9 percent, includes more than six million people who have been out of work for six months or longer. Unemployed workers spend their benefit money on things like groceries, gas, rent - and other necessities that increase economic activity that saves and creates jobs (like grocery clerks, gas station attendants and real estate administrators).
(Sources: Wall Street Journal, Media Matters, Economic Policy Institute, National Employment Law Project)
COMMONLY TROTTED OUT FALSEHOODS/MYTHS/SPIN AND YOUR FACT-BASED ANSWERS
“We have serious economic problems, and that means everybody has to tighten their belts.”
Laying off nurses, teachers and firefighters doesn’t make our communities stronger - it just puts more Americans out of work and puts our safety at risk.
It is economic suicide to lay off state workers and undermine the services we rely on just to fund huge tax cuts for the wealthy.
Instead of taking away the rights of hardworking Americans to negotiate their pay and benefits - which does nothing to address deficits or create jobs - let’s start with getting rid of tax breaks to millionaires and corporations that send our jobs overseas.
Corporate profits are at an all-time high, but corporations are paying lower taxes than ever - and some aren’t paying any at all. Politicians who refuse to ask them to pay their fair share just don’t get it.
“The Occupiers are all elite anarchist vegan violent hippie communist jobless tattooed America-hating thugs.”
Um, no.
The Occupiers are part of the 99 percent, and come from all walks of life. They are teachers, nurses, jobless workers, working moms, disenfranchised people, young people, older people, working professionals, activists. They are construction workers, firefighters, artists, business owners.
They have a very clear message and that is that for too long, the 1 percent has had continual, astronomical earnings and benefits while the 99 percent suffer or are turned on one another.
This kind of public protest is part of a proud American tradition, one that is protected by the Constitution.
“Corporations should not be taxed because they create jobs.”
Tax giveaways for the rich don’t get the economy moving or create jobs because millionaires and billionaires don’t need or spend the money - they just hand it over to their hedge fund managers, send jobs overseas and continue to enjoy overseas tax shelters and other corporate loopholes.
Working people like you and me spend that money to pay bills, buy milk and bread, and see The Muppet Movie at the multiplex. Are you saying you oppose the Muppets?
CEOs are currently making an average of more than 200 times as much as the average worker. And yet they do not create jobs here at home because they are consistently rewarded for it with?more tax breaks.
“Too much government is the problem.”
Wall Street control of government is the problem. When there’s a revolving door between lobbyists on K Street and Capitol Hill, and corporate elites determine political and legislative goals, then you have total corporate control of government.
Lack of government regulations has led to unfettered Wall Street greed that continues to this day - look at Enron, the Wall Street Meltdown and the Gulf Oil spill. Nobody can say with a straight face that we need less oversight and less accountability.
Here’s a video of Jack Abramoff, a famous former lobbyist convicted of illegal activity, explaining how the revolving door of lobbyists and Capitol Hill works on 60 Minutes. Watch it with your family! (Before or after The Muppet Movie.)
“We need to balance our budget first. We need to fix the deficit before we can invest in jobs.”
Major economists agree that the WORST way to handle the deficit is to put more Americans OUT of work. We need to stop tax giveaways for millionaires who don’t create jobs and corporations that send our jobs overseas and use the money to put Americans back on the job.
“We need a free market. Government regulations destroy jobs.”
Do you want someone to make sure your food and water are safe to eat and drink? An unregulated free market creates a system that is rigged against the 99 percent. It is what paved the way for predatory, unregulated lenders and bankers to hijack our economy, and its influence is what led to the appalling bank bailouts given to the “too big to fail” 1 percent, leaving the 99 percent out in the cold - literally.
Again: an unregulated free market, crony capitalism and unfettered Wall Street greed is what caused the financial crisis.
“The reason people are struggling is their own fault. I could find a job if I wanted to right now.”
Right now there are five jobless people for every one job opening. Millions have been laid off through no fault of their own. Unable to pay for basic things like groceries, rent and bills, people are now being punished for being jobless by employers who discriminate against them and rhetoric that blames them for an economy wrecked by Wall Street greed.
“Unemployment insurance keeps people unemployed and causes unemployment to increase.”
Unemployment insurance is one of the most effective ways to help get our economy going again - economists estimate that for every dollar spent on unemployment insurance, the economy grows by one and half times as much.
People who are out of work cut back on spending - meaning less money flowing into our economy. Unemployment benefits mean people who are out of work are putting money back into the economy.
“Tax cuts increase revenue.”
That…doesn’t even make sense.
Tax breaks mean less revenue, not more, and they don’t create jobs or grow the economy - the Bush tax cuts led to record budget deficits that we’re still dealing with.
Let’s put money into the hands of the real job creators in this country - working- and middle-class Americans - and stop giving special tax breaks to millionaires and billionaires who don’t need it and don’t spend it.
“The United States has the highest corporate tax rate in the world.”
The United States has the second-lowest corporate tax rate in the developed world, and many of America’s largest corporations don’t pay any taxes at all.
The middle class has sacrificed enough. It’s time for big corporations to start paying their fair share.
“This is class warfare.”
I think it is safe to say that it wasn’t our teachers, firefighters and nurses that tanked the economy; it wasn’t the middle class or working class who gambled away people’s life savings.
No middle-class family should have to pay higher taxes than any millionaire.
America was founded as a country where we reward hard work more than how much money anyone’s family has. But right now, a paycheck earned from working in a job is taxed higher than the money that millionaires and billionaires make off money they already have.
As Warren Buffett tells it, the only “class warfare” in America is being waged by his class - and they’re winning.
“We don’t need tax increases to get our fiscal house in order.”
Experts, including conservative economists, agree that spending cuts alone are not enough. We need serious solutions, not irresponsible tax pledges.
They tried tax handouts to the richest few that never trickle down, and they tried giant tax breaks for big corporations that lay off Americans and ship our jobs overseas. We’ve all had enough of their schemes that don’t work.
We can’t afford millionaire tax giveaways when jobs are what we need.
Plus, we’re not talking about raising YOUR taxes. Unless you’re a multimillionaire, in which case, these mashed potatoes should be way better.
When Presidents Reagan, Bush Sr., and Clinton told millionaires and big corporations to pay their fair share, it was followed by millions of new jobs and strong economic growth.
“Out-of-control entitlement spending is responsible for the deficit.”
You’re going to say that with grandma sitting right there?
They’d rather gut Social Security and Medicare than make millionaires and big corporations pay a few more cents on the dollar in taxes.
Social Security doesn’t add a penny to the deficit, and Medicare is the most cost-effective way for our seniors to get health care. But Republican politicians never liked Social Security or Medicare and still want to take them away.
When Republican politicians take away the benefits our seniors have earned, they take money out of the pockets of middle-class Americans. That takes away customers from our businesses - and that means less hiring and fewer jobs.
If they were serious about deficits, they wouldn’t have fought so hard for the Bush tax cuts and two unfunded wars that led to the record deficits we’re dealing with today.
“Unions are bad for business or only care about their members.”
Today, unions across the country are on the frontlines advocating for basic workplace reforms such as increasing the minimum wage and pushing lawmakers to require paid sick leave. For all workers.
It’s easy to forget that we have unions to thank for a lot of things we take for granted today in today’s workplaces: the minimum wage, the eight-hour work day, child labor laws, health and safety standards, and even the weekend.
Studies show that a large union presence in an industry or a region raises wages even for nonunion workers. That means more consumer spending and a stronger economy for us all.
A recent Harvard University study revealed that the rising income inequality of the last three decades directly correlates to the decline in union membership.
Richard Metzger, DangerousMinds.net
http://www.dangerousminds.net/comments/occupy_thanksgiving
The richest 5 percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983, meaning they did not participate at all in the growth of wealth over this period.
The average wealth of the 1% is 225 times bigger than the wealth of the typical household - perhaps the highest it’s ever been. In just the last generation, the richest 1% almost quadrupled their incomes.
Three decades ago, CEOs made about 40 times as much as an average worker - now CEOs make almost 200 times as much as regular employees.
Last year, half of Americans earned less than $26,000, while CEOs at top 500 companies raked in an average of $11 million. Over the past decade, earnings for middle-class Americans actually fell. In fact, working Americans’ wages are now a lower percentage of our economy than they’ve ever been.
The divide between the richest and the poorest is worse in America than it is in nearly all of Europe and Asia and much of Africa. It’s about as bad as in Rwanda and Serbia - and it’s bad for our economy.
The 1 percent is not an accident - it is the result of policies our government chose to pursue.
For the last three years, there have been at least 4 unemployed workers for every single job opening. Right now there are 4.6 jobless workers for every job opening.
If the government doesn’t extend benefits to jobless workers in December, it will devastate millions. The unemployment rate, currently over 9 percent, includes more than six million people who have been out of work for six months or longer. Unemployed workers spend their benefit money on things like groceries, gas, rent - and other necessities that increase economic activity that saves and creates jobs (like grocery clerks, gas station attendants and real estate administrators).
(Sources: Wall Street Journal, Media Matters, Economic Policy Institute, National Employment Law Project)
COMMONLY TROTTED OUT FALSEHOODS/MYTHS/SPIN AND YOUR FACT-BASED ANSWERS
“We have serious economic problems, and that means everybody has to tighten their belts.”
Laying off nurses, teachers and firefighters doesn’t make our communities stronger - it just puts more Americans out of work and puts our safety at risk.
It is economic suicide to lay off state workers and undermine the services we rely on just to fund huge tax cuts for the wealthy.
Instead of taking away the rights of hardworking Americans to negotiate their pay and benefits - which does nothing to address deficits or create jobs - let’s start with getting rid of tax breaks to millionaires and corporations that send our jobs overseas.
Corporate profits are at an all-time high, but corporations are paying lower taxes than ever - and some aren’t paying any at all. Politicians who refuse to ask them to pay their fair share just don’t get it.
“The Occupiers are all elite anarchist vegan violent hippie communist jobless tattooed America-hating thugs.”
Um, no.
The Occupiers are part of the 99 percent, and come from all walks of life. They are teachers, nurses, jobless workers, working moms, disenfranchised people, young people, older people, working professionals, activists. They are construction workers, firefighters, artists, business owners.
They have a very clear message and that is that for too long, the 1 percent has had continual, astronomical earnings and benefits while the 99 percent suffer or are turned on one another.
This kind of public protest is part of a proud American tradition, one that is protected by the Constitution.
“Corporations should not be taxed because they create jobs.”
Tax giveaways for the rich don’t get the economy moving or create jobs because millionaires and billionaires don’t need or spend the money - they just hand it over to their hedge fund managers, send jobs overseas and continue to enjoy overseas tax shelters and other corporate loopholes.
Working people like you and me spend that money to pay bills, buy milk and bread, and see The Muppet Movie at the multiplex. Are you saying you oppose the Muppets?
CEOs are currently making an average of more than 200 times as much as the average worker. And yet they do not create jobs here at home because they are consistently rewarded for it with?more tax breaks.
“Too much government is the problem.”
Wall Street control of government is the problem. When there’s a revolving door between lobbyists on K Street and Capitol Hill, and corporate elites determine political and legislative goals, then you have total corporate control of government.
Lack of government regulations has led to unfettered Wall Street greed that continues to this day - look at Enron, the Wall Street Meltdown and the Gulf Oil spill. Nobody can say with a straight face that we need less oversight and less accountability.
Here’s a video of Jack Abramoff, a famous former lobbyist convicted of illegal activity, explaining how the revolving door of lobbyists and Capitol Hill works on 60 Minutes. Watch it with your family! (Before or after The Muppet Movie.)
“We need to balance our budget first. We need to fix the deficit before we can invest in jobs.”
Major economists agree that the WORST way to handle the deficit is to put more Americans OUT of work. We need to stop tax giveaways for millionaires who don’t create jobs and corporations that send our jobs overseas and use the money to put Americans back on the job.
“We need a free market. Government regulations destroy jobs.”
Do you want someone to make sure your food and water are safe to eat and drink? An unregulated free market creates a system that is rigged against the 99 percent. It is what paved the way for predatory, unregulated lenders and bankers to hijack our economy, and its influence is what led to the appalling bank bailouts given to the “too big to fail” 1 percent, leaving the 99 percent out in the cold - literally.
Again: an unregulated free market, crony capitalism and unfettered Wall Street greed is what caused the financial crisis.
“The reason people are struggling is their own fault. I could find a job if I wanted to right now.”
Right now there are five jobless people for every one job opening. Millions have been laid off through no fault of their own. Unable to pay for basic things like groceries, rent and bills, people are now being punished for being jobless by employers who discriminate against them and rhetoric that blames them for an economy wrecked by Wall Street greed.
“Unemployment insurance keeps people unemployed and causes unemployment to increase.”
Unemployment insurance is one of the most effective ways to help get our economy going again - economists estimate that for every dollar spent on unemployment insurance, the economy grows by one and half times as much.
People who are out of work cut back on spending - meaning less money flowing into our economy. Unemployment benefits mean people who are out of work are putting money back into the economy.
“Tax cuts increase revenue.”
That…doesn’t even make sense.
Tax breaks mean less revenue, not more, and they don’t create jobs or grow the economy - the Bush tax cuts led to record budget deficits that we’re still dealing with.
Let’s put money into the hands of the real job creators in this country - working- and middle-class Americans - and stop giving special tax breaks to millionaires and billionaires who don’t need it and don’t spend it.
“The United States has the highest corporate tax rate in the world.”
The United States has the second-lowest corporate tax rate in the developed world, and many of America’s largest corporations don’t pay any taxes at all.
The middle class has sacrificed enough. It’s time for big corporations to start paying their fair share.
“This is class warfare.”
I think it is safe to say that it wasn’t our teachers, firefighters and nurses that tanked the economy; it wasn’t the middle class or working class who gambled away people’s life savings.
No middle-class family should have to pay higher taxes than any millionaire.
America was founded as a country where we reward hard work more than how much money anyone’s family has. But right now, a paycheck earned from working in a job is taxed higher than the money that millionaires and billionaires make off money they already have.
As Warren Buffett tells it, the only “class warfare” in America is being waged by his class - and they’re winning.
“We don’t need tax increases to get our fiscal house in order.”
Experts, including conservative economists, agree that spending cuts alone are not enough. We need serious solutions, not irresponsible tax pledges.
They tried tax handouts to the richest few that never trickle down, and they tried giant tax breaks for big corporations that lay off Americans and ship our jobs overseas. We’ve all had enough of their schemes that don’t work.
We can’t afford millionaire tax giveaways when jobs are what we need.
Plus, we’re not talking about raising YOUR taxes. Unless you’re a multimillionaire, in which case, these mashed potatoes should be way better.
When Presidents Reagan, Bush Sr., and Clinton told millionaires and big corporations to pay their fair share, it was followed by millions of new jobs and strong economic growth.
“Out-of-control entitlement spending is responsible for the deficit.”
You’re going to say that with grandma sitting right there?
They’d rather gut Social Security and Medicare than make millionaires and big corporations pay a few more cents on the dollar in taxes.
Social Security doesn’t add a penny to the deficit, and Medicare is the most cost-effective way for our seniors to get health care. But Republican politicians never liked Social Security or Medicare and still want to take them away.
When Republican politicians take away the benefits our seniors have earned, they take money out of the pockets of middle-class Americans. That takes away customers from our businesses - and that means less hiring and fewer jobs.
If they were serious about deficits, they wouldn’t have fought so hard for the Bush tax cuts and two unfunded wars that led to the record deficits we’re dealing with today.
“Unions are bad for business or only care about their members.”
Today, unions across the country are on the frontlines advocating for basic workplace reforms such as increasing the minimum wage and pushing lawmakers to require paid sick leave. For all workers.
It’s easy to forget that we have unions to thank for a lot of things we take for granted today in today’s workplaces: the minimum wage, the eight-hour work day, child labor laws, health and safety standards, and even the weekend.
Studies show that a large union presence in an industry or a region raises wages even for nonunion workers. That means more consumer spending and a stronger economy for us all.
A recent Harvard University study revealed that the rising income inequality of the last three decades directly correlates to the decline in union membership.
A President Who Stands for the Working Class
Thanks to Disinfo.com for the following...
The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."
Preacherlike, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"
The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"
The year was 1985. The president was Ronald Wilson Reagan.
Source: Rolling Stone
http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109
The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."
Preacherlike, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"
The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"
The year was 1985. The president was Ronald Wilson Reagan.
Source: Rolling Stone
http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109
Sunday, November 27, 2011
And that is WHY WE OCCUPY
Greg Palast and the Palast investigations team at Zuccotti Park Wall Street, Occupy Portland, Occupy Oakland, and Kinshasa, Congo exclusive for OpedNews.com
Wed, 16 Nov 2011
So big deal. They evicted us. That just means we are among five million Americans evicted from their homes this year.
Our photographer, Zach Roberts, had his camera cracked and his head whacked.
Go ahead, kick us and evict us. That won't stop us. Because it's not about the real estate. Wall Street's just an address.
Time to remind The One Percent why we occupy.
We occupy for Stanlee Ann Mattingly.
Mattingly, an Osage Indian, saw a tanker truck poaching oil from the reservation stripper wells. Our investigators tracked the truck back to a man on a platform exhorting his company truckers to steal more of the Osage's oil. The man is named Charles Koch.
And that is why we occupy.
We occupy for Jason Anderson.
Anderson worked on BP's Deepwater Horizon rig. Through bribery and beatings, BP concealed this fact: two years before the Deepwater exploded, another BP well blew out in Central Asia--and BP execs withheld the info from the US Congress to get the Gulf drilling permit. If BP hadn't lied, Anderson would not have been incinerated.
The Deepwater Horizon wasn't an accident. It was a homicide.
And that is why we occupy.
We occupy for Robert Pratt.
Pratt, a United Auto Workers member in Detroit, has a mortgage payment that tripled because of a sub-prime mortgage scam by Bank of America's Countrywide unit. Countrywide's CEO got a half billion dollar bonus, Bank of America got a $10 billion bail-out from taxpayers--and Pratt, with five kids, got a foreclosure notice.
And that is why we occupy.
We occupy for Janessa Greig.
Greig, 13-years old, and her mom, Jacqueline, were burnt to death when a gas pipeline exploded under their home in San Bruno, California. Our investigation reveals that "PIGs," pipeline inspection robots, were deliberately mis-programmed to under-report dangerous pipeline cracks ...all so gas and oil companies can save a couple bucks on repairs. The Greigs died because pipeline companies lied. And now the PIG-jackers want to build a new pipeline from Canada to Houston.
And that is why we occupy.
We occupy for Vaggelis Petrakis.
For a decade, Goldman Sachs worked a scheme with Greek politicians to manipulate currency reserves to hide big deficits. The fraud netted Goldman a secret fee of over a quarter billion dollars; and netted the Greek people, when the scam blew up, a destroyed economy and a debt--to Goldman and cronies--of $14,000 per year per family. When the debts bankrupted fruit-seller Petrakis, he committed suicide.
And that is why we occupy.
We occupy for our nation and our kids and this wounded planet.
It's not about the real estate, the tents or tarps.
It's about Them, the 1%, and Us, the 99%.
THEY get homes bigger than Disneyland, WE get foreclosure notices.
THEY get private jets to private islands, WE get tar balls and lost futures, and pay their gambling debts with our pensions.
THEY get the third trophy wife and a tax break, WE get sub-primed.
THEY get two candidates on the ballot and WE are told to choose.
THEY get the gold mine, WE get the shaft.
And that is why we occupy.
These investigative findings, the evidence and the story of the cover-ups of the evidence are all contained in Vultures' Picnic, an investigation of The One Percent, Greg Palast's new book, released this week. Go to VulturesPicnic.org to download the first chapter.
Palast's investigation of finance vultures is featured on the front page of today's Guardian (London) and tonight on BBC Television Newsnight.
A report from Congo, Bosnia and New York.
- UK urged to prevent vulture funds preying on world's poorest countries
- Vultures feed when economies are turned into rotting carcasses
Vultures' Picnic: in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters.
Subscribe to Palast's Newsletter and podcasts.
Follow Palast on Facebook and Twitter.
GregPalast.com
Wed, 16 Nov 2011
So big deal. They evicted us. That just means we are among five million Americans evicted from their homes this year.
Our photographer, Zach Roberts, had his camera cracked and his head whacked.
Go ahead, kick us and evict us. That won't stop us. Because it's not about the real estate. Wall Street's just an address.
Time to remind The One Percent why we occupy.
We occupy for Stanlee Ann Mattingly.
Mattingly, an Osage Indian, saw a tanker truck poaching oil from the reservation stripper wells. Our investigators tracked the truck back to a man on a platform exhorting his company truckers to steal more of the Osage's oil. The man is named Charles Koch.
And that is why we occupy.
We occupy for Jason Anderson.
Anderson worked on BP's Deepwater Horizon rig. Through bribery and beatings, BP concealed this fact: two years before the Deepwater exploded, another BP well blew out in Central Asia--and BP execs withheld the info from the US Congress to get the Gulf drilling permit. If BP hadn't lied, Anderson would not have been incinerated.
The Deepwater Horizon wasn't an accident. It was a homicide.
And that is why we occupy.
We occupy for Robert Pratt.
Pratt, a United Auto Workers member in Detroit, has a mortgage payment that tripled because of a sub-prime mortgage scam by Bank of America's Countrywide unit. Countrywide's CEO got a half billion dollar bonus, Bank of America got a $10 billion bail-out from taxpayers--and Pratt, with five kids, got a foreclosure notice.
And that is why we occupy.
We occupy for Janessa Greig.
Greig, 13-years old, and her mom, Jacqueline, were burnt to death when a gas pipeline exploded under their home in San Bruno, California. Our investigation reveals that "PIGs," pipeline inspection robots, were deliberately mis-programmed to under-report dangerous pipeline cracks ...all so gas and oil companies can save a couple bucks on repairs. The Greigs died because pipeline companies lied. And now the PIG-jackers want to build a new pipeline from Canada to Houston.
And that is why we occupy.
We occupy for Vaggelis Petrakis.
For a decade, Goldman Sachs worked a scheme with Greek politicians to manipulate currency reserves to hide big deficits. The fraud netted Goldman a secret fee of over a quarter billion dollars; and netted the Greek people, when the scam blew up, a destroyed economy and a debt--to Goldman and cronies--of $14,000 per year per family. When the debts bankrupted fruit-seller Petrakis, he committed suicide.
And that is why we occupy.
We occupy for our nation and our kids and this wounded planet.
It's not about the real estate, the tents or tarps.
It's about Them, the 1%, and Us, the 99%.
THEY get homes bigger than Disneyland, WE get foreclosure notices.
THEY get private jets to private islands, WE get tar balls and lost futures, and pay their gambling debts with our pensions.
THEY get the third trophy wife and a tax break, WE get sub-primed.
THEY get two candidates on the ballot and WE are told to choose.
THEY get the gold mine, WE get the shaft.
And that is why we occupy.
These investigative findings, the evidence and the story of the cover-ups of the evidence are all contained in Vultures' Picnic, an investigation of The One Percent, Greg Palast's new book, released this week. Go to VulturesPicnic.org to download the first chapter.
Palast's investigation of finance vultures is featured on the front page of today's Guardian (London) and tonight on BBC Television Newsnight.
A report from Congo, Bosnia and New York.
- UK urged to prevent vulture funds preying on world's poorest countries
- Vultures feed when economies are turned into rotting carcasses
Vultures' Picnic: in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters.
Subscribe to Palast's Newsletter and podcasts.
Follow Palast on Facebook and Twitter.
GregPalast.com
Saturday, November 26, 2011
Move over, Frank Miller
"Frank Miller is encouraging the Occupy movement to enlist ‘for the real thing’? Maybe he should show them by example then? Will Eisner did."
Gary Erskine
Picture via BleedingCool.com
Move over, Frank Miller: or why the Occupy Wall Street kids are better than #$%! Spartans
David Brin
November 13, 2011
http://davidbrin.wordpress.com/2011/11/13/move-over-frank-miller-or-why-the-occupy-wall-street-kids-are-better-than-spartans
A few days ago, the famous comic book writer and illustrator Frank Miller issued a howl of hatred toward the young people in the Occupy Wall Street movement. Well, all right, that’s a bowdlerization. After reading even one randomly-chosen paragraph, I’m sure you’ll agree that “howl” understates the red-hot fury and scatalogical spew of Miller’s lavishly expressed hate: “Occupy” is nothing but a pack of louts, thieves, and rapists, an unruly mob, fed by Woodstock-era nostalgia and putrid false righteousness. These clowns can do nothing but harm America.“
In fact, I need do nothing more — in order to reduce that individual’s public esteem — than simply point you all to his bile-drenched missive. Please. If you must choose between reading that or my detailed, cogently-argued response (below), by all means let his words suffice! I cede the floor. Let him express the maturity and thoughtfulness of his side.
Well, well. I’ve been fuming silently at Frank Miller for a years. The time’s come, so get ready for steam! Because the screech that you just read – Miller’s attack on young citizens, clumsily feeling their way ahead toward saving their country – is only the latest example of Frank’s astonishing agenda. One that really needs exposure to light.
I’ll do it by dissecting – calmly and devastatingly – his most famous and lucrative piece of modern propaganda. The comic book and movie tale about Spartans at the Battle of Thermopylae.
A tale called – “300.”
== Leni Riefenstahl would be proud
Though I’m not best-known for graphic novels, I’ve done a few. I’ve been sketching out a script about one of the greatest heroes of western civilization – Themistocles – the man who actually defeated Xerxes. the Persian emperor, during his brutal invasion of Greece, after the Spartans failed so miserably at Thermopylae. In part, this would be an answer to Frank Miller’s “300?… a book and film that I find both visually stunning and morally disturbing.
For one thing, “300? gave all credit to the Spartans, extolling them as role models and peerless examples of manhood. Adorably macho defenders of freedom.
Uh, right. Freedom. Sorry, but the word bears a heavy burden of irony when shouted by Spartans, who maintained one of the worst slave-states ever, treating the vast majority of their people as cattle, routinely quenching their swords in the bodies of poor, brutalized helots… who are never mentioned, even glimpsed, in the romanticized book or movie. Indeed, the very same queen who Frank Miller portrayed as so-earthy, so-kind, was said to be quite brutal with a whip, in real life.
Miller’s Spartan warriors honestly and openly conveyed the contempt for civilians that was felt across the ages by all feudal warrior castes. An attitude in sharp contrast to American sympathies, which always used to be about Minuteman farmers and shopkeepers – citizen soldiers – the kind who bravely pick up arms to aid their country, adapting and training under fire. Alas, Frank Miller’s book and movie “300? ridiculed that kind of soldier…
…even though the first invasion by Persia, ten years earlier – under Xerxes’s father – had been defeated by just such a militia army… from Athens… made up of farmers, clerks, tradesmen, artists and mathematicians. A rabble of ill-disciplined “brawlers” who, after waiting in vain for promised help from Sparta, finally decided to handle the problem alone. On that fateful day that citizen militia leveled their spears and their thin blue line attacked a professional Persian force many times their number, slaughtering them to the last man on the legendary beach of Marathon.
== The inconvenient truth of Marathon
Think about that for a moment. Can you picture it? Damn. Please pause here and Wiki “Marathon.” Even better, watch it computer dramatized. Prepare to be amazed there were once such men. Go on… I’ll wait!
Frank Miller rails against effete, pansy-boy militias of amateur, citizen soldiers. But funny thing, none of his Spartan characters ever mentions those events, just a decade earlier! How bakers, potters and poets from Athens – after vanquishing one giant invading army, then ran 26 miles in full armor to face down a second Persian horde and sent it packing, a feat of endurance that gave its name to the modern marathon race. A feat that goes unmatched today. Especially by Spartans.
That Athenian triumph deserves a movie! And believe me, it weighed heavily on the real life Leonidas, ten years later. “300? author Frank Miller portrays the Spartans’ preening arrogance in the best possible light, as a kind of endearing tribal machismo. Miller never hints at the underlying reason for Leonidas’s rant, a deep current of smoldering shame over how Sparta sat out Marathon, leaving it to Athenian amateurs, like the playwright Aeschelus, to save all of Greece. The “shopkeepers” whom Leonidas outrageously and ungratefully despises in the film.
With that shame over Marathon fresh in memory, Leonidas was eager to prove Spartan mettle when Persia invaded a second time, even though he could find just three hundred volunteers. That much, “300? gets right. Alas, truth is rare in that book and film. Like the notion that Xerxes cared a whit about rustic Sparta in the first place. Athens was always his chief target. It was the heart of the West.
Even when it comes to the Battle of Thermopylae itself, “300? tells outright lies. For example, 1,000 Artemesians refused to leave their comrades at the end. They stayed in the pass and died next to Leonidas’s 300 Spartans. More shopkeepers. Their valor was inconvenient to Miller’s narrative, So he just wrote them out. Worse, he slandered them, depicting them running away.
Oh, remember those helots? As slavemasters, Spartans made the later Romans seem positively goody-two-shoes, by comparison. In his book and movie “300? Frank Miller never shows the two thousand helot luggage-bearers who Leonidas’s gang of bullies whipped before them into the pass at Thermopylae, carrying their masters’ gear and food and wine and shields.
Where were those slaves during the battle? Why, in the front line! Handed spears but no armor, they slowed down the Persians with their bodies, then made the ground conveniently slippery with their blood. Huh, funny how that got left out! I’m sure it was just an oversight.
== Thermopylae: what was going on in plain view
But the worst slander of all is one of glaring, outrageous omission and tunnel vision. It is what “300? might have shown happening just offstage, simply by turning the camera! Indeed, Leonidas could see it with his own eyes, in plain view throughout the fight, if only he chose to swivel his head. (Alas, Frank Miller doesn’t let him turn, in the comic and film.)
The Athenian navy, hard-pressed and outnumbered, guarding his flank in the nearby Artemisium Straits. Again, a citizen militia of fishermen, merchants, blacksmiths and philosophers, they too were at Thermopylae! A few miles out to sea, they battled odds no less desperate than Leonidas faced, without the convenient cliff and wall, against vastly superior Persian forces. Only with this one important difference.
Where Leonidas failed to hold for more that a day or so, the Athenians kept firm! They only retreated when the Spartans let them down!
The commander of that brave flotilla, Themistocles, is a hero far more in keeping with American traditions. A Washington-like commander who makes good use of volunteers – plus new technology and brains – to stave off hordes of arrogant, professional conquerors. Less interested in pompous bragging and macho preening, he cared about his men, striving to achieve both victory and survival. He despised “bold gestures.” What mattered were results. Saving his country. His civilization. His men.
Forced to give way when Leonidas failed to hold a narrow pass, the Athenians kept up a fighting retreat, survived the burning of their city, (where their courageous women handled a skillful evacuation)… till Themistocles finally drew the vast Persian navy into a trap at a little island called Salamis… glorious Salamis…
…where outnumbered Athenians utterly crushed their Persian foe, sending Xerxes fleeing for his life. THAT was what saved Greece, not futile boasting and choreographed prancing on the bluffs of Thermopylae. (And again, what a movie someone might make out of the true story!)
As for the later land battle at Platea – glorified by the book and film “300” – it was mopping-up, slaughtering a demoralized and starving Persian force that Xerxes had already abandoned. And even at Platea, there were more Athenians than Spartans!
Oh, one more thing. The very same day as Platea, Themistocles and his volunteers were also finishing off the rest of the Persian navy, at Mycale.
Do the Spartans at least get credit for commanding Greek armies ashore? A couple of years after Platea, repelled by Spartan arrogance and brutality, the Greek cities dumped Sparta from any further leadership role as they spent the next thirty years pushing Persia ever further back, expelling them entirely from Europe and liberating enslaved populations. Led by the democratic rabble from Athens.
In other words. History wasn’t at all like the book, or the movie “300.” It was much, much better!
== Artistic license? Or goddam evil-batshit lying?
Look, artists get a lot of leeway. At least in this society of freedom they do. (They sure didn’t get any slack in feudal times, dominated by warrior-caste bullies.) Miller and the makers of the 300 flick were entitled to emphasize the Spartans and their martial spirit, even though their brave “sacrifice” at Thermopylae accomplished absolutely nothing, except to make a fine tale of futile bravado. A one-day delay? We’re supposed to be impressed by a one-day delaying action?
(I’ll admit, it certainly offered a great excuse for ninety minutes of homoerotic prancing! In fact, 300 gets full marks as a lavishly choreographed dance number. And for terrific painted-on abs.)
But there comes a point when artistic emphasis turns into deliberate, malicious omission. And then omission becomes blatant, outright-evil lying propaganda. “300? not only crosses that line, it forges into territory that we haven’t seen since the propaganda machine of 1930s Germany. White is black. Black is white. Good is defined by the triumph of will.
I might have just sat and glowered, if they simply omitted the Athenians. But to sneer at them and call them effeminate cowards? After Athens’ citizen soldiers accomplished epic triumphs the Spartans never imagined and that they would never, ever come remotely close to equaling? At battles whose names still roll off our tongues today? Achieved by the same kind of “cincinnatus” militias that propelled both Republican Rome and the United States to unparalleled heights, during their time of vigor?
The kind of soldiers who make up our U.S. military today! Citizens-first, despite their vaunted professionalism.
No, this is not just artistic license. “300? idolizes the same arrogant contempt for citizenship that eventually ruined classical Greece and Republican Rome, and that might bring the same fate to America.
My own graphic novel “The Life Eaters” never sold as well as Miller’s. Heck, that’s not my expertise. With gorgeous art by Scott Hampton, “The Life Eaters” tells a vivid story of rebellion and resistance to a very Spartan-like oppression.
What I do suggest is this: use your own imagination! Picture an answer to “300,” told from the point of view of an escaped Spartan helot-slave serving aboard one of Themistocles’s ships, staring up at the frenetic death-prancing of his former masters on the cliff of Thermopylae, shaking his head over their futile, macho posturing, then turning to help the amateur fighters of Athens and Miletus and Corinth get on with the real job of saving civilization.
Doing it without boasting — or painted-on abs — but with wit, courage, comradeship, skill and the one thing that matters most. Something Leonidas never came close to achieving. The only truly indispensable accomplishment!
Something that is often best won by citizen soldiers - victory.
For further viewing:
The Battle of Marathon
http://www.youtube.com/watch?v=ot4PusEalnA
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