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So J.P Morgan Chase got screwed on our money and will now look for a new bailout…
…Perhaps we should listen to Robert Reich:
Let’s hope Morgan’s losses don’t turn into another crisis of confidence and they don’t spread to the rest of the financial sector.
But let’s also stop hoping Wall Street will mend itself. What just happened at J.P. Morgan — along with its leader’s cavalier dismissal followed by lame reassurance — reveals how fragile and opaque the banking system continues to be, why Glass-Steagall must be resurrected, and why the Dallas Fed’s recent recommendation that Wall Street’s giant banks be broken up should be heeded.
This is the end of a great column which you can read HERE.
As to resurrecting Glass-Steagall, some don’t think it is possible, but we have to get back to regulations separating investment banks from the banks Americans save their money in. We had it like that for close to eighty years without the economic catastrophes we have now.
Clips from the web
A little bit of this, a little bit of that… more than I can get around to. Click on the authors’ links to read their whole posts
Rhode Island House Republican Leader Robert Watson is the latest living example of the Republican difficulty with practicing what they preach. Watson is fervently anti-Marijuana, but last Friday night he was pulled over and arrested for DUI and marijuana possession.
According to The Providence-Journal, “After handcuffing Watson and placing him under arrest, the arresting police officer said he found “a small plastic sandwich bag containing a green leafy plant-like substance and a small wooden marijuana smoking pipe” in Watson’s right pants pocket.”
– from Politicus USA
– and –
John Boehner
Speaker Boehner says the Ryan plan “transforms Medicare into a plan that’s very similar to the President’s own healthcare bill.”
Only older people are sicker and more expensive to cover and Ryan doesn’t provide the funds for seniors to buy care. Beside that they’re identical.
– and –
The wage squeeze is putting most households in a double bind. Before the recession, they’d been able to pay the bills because they had two paychecks. Now, they’re likely to have one-and-a half, or just one, and it’s shrinking.
A quote for the morning…
“Here’s the truth: The only way America can reduce the long-term budget
deficit, maintain vital services, protect Social Security and Medicare,
invest more in education and infrastructure, and not raise taxes on the
working middle class is by raising taxes on the super rich.“Even if we got rid of corporate welfare subsidies for big oil, big
agriculture, and big Pharma – even if we cut back on our bloated
defense budget – it wouldn’t be nearly enough.”
And you can be sure, in an election year, no one is going to even whisper about this.
Related Articles
- Ryan refuses to say if new GOP budget will end corporate welfare (crooksandliars.com)
- GOP budget chief calls for $6.2 trillion spending cut (cnn.com)
- Paul Ryan’s Budget: An Act of Political Courage (and Public Amnesia) (swampland.blogs.time.com)
- Robert Creamer: Why Republicans Persist in Demanding the Elimination of 700,000 Jobs (huffingtonpost.com)
Why Bill Clinton’s Favorable View of Obama’s Tax Deal Should Be Disregarded
by Robert Reich (reproduced here in full from the Huffington Post)
Bill Clinton seems the perfect validator for Barack Obama — which is why the president is utilizing the former president for selling his tax deal. After all, the economy boomed when Clinton was president and 22 million net new jobs were created. From a more narrow political perspective — and this is important to Democrats in Washington — Bill Clinton was reelected, even though he lost both houses of Congress in the 1994 midterms.
But the analogy falls apart as soon as you realize Clinton’s economy was vastly different from Obama’s. The recession Clinton inherited was relatively small, and caused by the Fed raising interest rates too high to ward off inflation. So it could be reversed by the Fed lowering interest rates — as the Fed did in 1994. By 1995, the so-called “jobless recovery” had morphed into a full-blown jobs recovery. By 1996, at pollster Dick Morris’s urging, Clinton could proclaim to the American people “you’ve never had it so good, and you ain’t seen nothing yet.”
The Great Recession has been far larger, caused not by the Fed raising interest rates but by the bursting of a giant housing bubble. In 2008, the biggest asset of most middle-class people, upon which they borrowed and that they assumed would be their nest eggs for retirement, collapsed. Housing prices continue to fall in most parts of the country. The Fed has lowered interest rates all it can, and unemployment remains sky high.
Bill Clinton presided over an economic boom engineered by Fed chair Alan Greenspan, who felt confident he could drop interest rates far lower than anyone expected without risking inflation. The result was 4 percent unemployment in many parts of America, as well as the best jobs recovery in history.
The price Greenspan exacted from Clinton — and a resurgent Republican congress demanded — was a balanced budget. As a result, Clinton had to give up much of his “investment agenda” in education, infrastructure, and other long-neglected means of building the productivity of average working Americans. The economy enjoyed a huge cyclical recovery.
But the economy’s underlying structure remained as it had been before, including stagnant wages for most Americans. Within a few years the middle and working class was treating their homes as ATMs, borrowing trillions of dollars in order to maintain their standard of living, and at the same time demand enough goods and services to keep almost everyone in jobs.
Those days are over. The Democratic Party can no longer ignore critical investments in the productivity of average workers. Nor can it ignore the increasing concentration of income and wealth at the very top, and the inability of America’s middle and working class to get the economy moving again.
The GOP hasn’t changed their story or their strategy since the 1990s. It’s the fault of big government. That was false then, and it’s false now. The structural problems are now much worse, and the cyclical recovery from the Great Recession pathetically anemic.
If the Democratic Party has stood for anything over the years it is to maintain and restore upward mobility for the majority of working Americans, ensure that the playing field isn’t tilted in the direction of the privileged, and limit the power of the richest among us to entrench themselves and their heirs into a semi-permanent plutocracy.
Continuing the Bush tax cuts of 2001 and 2003, including a sharp cut in the estate tax, violates these core principles. Doing so in the midst of an economic emergency that demands bold measures to rescue America’s vast middle and working class adds further insult. For President Obama and former President Clinton to tell America there’s “no other choice” or that “this is the best we can do” — when Democrats remain putatively in control of the House, Senate, and the presidency — is misleading.
I admire Barack Obama and Bill Clinton. I advised the former and worked for the latter. They are good men. But they
have either been outwitted by the privileged and powerful of America, or seduced by those on Wall Street and the executive suites of America into believing that the Republican nostrums are necessary, or succumbed Democratic advisors who think in terms of small-bore tactics rather than large and principled strategies.
I urge congressional Democrats to remember the larger principles — not in order to be purist or make the perfect the enemy of the better, but to move toward an economy and a society that we believe in, that reflects the needs of the vast majority of Americans at this difficult time.
Robert Reich is the author of Aftershock: The Next Economy and America’s Future, now in bookstores. This post originally appeared at RobertReich.org.
Related Articles
- Bill Clinton Asks Democrats To Back President Obama Tax Deal [Video] (realestateradiousa.com)
- Bill Clinton To The Rescue? (lezgetreal.com)
- Support from 42 – Bill Clinton backs Obama’s tax deal (politico.com)
Robert Reich says BP should be put under Temporary Receivership
Here’s a reprint of his column today:
Putting BP Under Temporary Receivership: Some Qs and As
Q: Is this realistic?
A: Not only realistic but it may become necessary — both operationally and politically. If the disaster continues to worsen, it’s untenable for a for-profit corporation to be in charge.
Q: But why should we expect government to do any better job than BP?
A: BP would still be at the job — and its expertise, equipment, and other assets would continue to be utilized. But the federal government would be in overall control of the operation — weighing public risks and benefits, deciding what resources are necessary, getting accurate information and disseminating it to the public.
Q: Why should we trust the government?
A: This isn’t an ideological contest about how little you trust a giant oil company versus the federal government. It’s a matter of accountability. BP’s primary responsibility is to its shareholders. And it will cut corners — as it has before — if that’s the best way to maximize the value of their shares. But only the government, through the President, is directly accountable to the American public, and responsible for protecting it.
Q: Under what legal authority could the President take control of BP’s North American operations?
A: Obama has implicit authority through laws and regulations dealing with offshore drilling, especially the Oil Pollution Act of 1990. By analogy, if a nuclear reactor were melting down, the President would use his regulatory authority over nuclear energy to take temporary control over the plant and the relevant parts of the corporation that ran it. President Truman seized the nation’s steel mills in 1952, arguing that the emergency of the Korean War necessitated it. (The Supreme Court ultimately blocked him but according to Justice Jackson, whose opinion was essentially the majority’s, that was because Truman had no statutory basis for the seizure, not even an implicit one. That isn’t the case here.)
Q: But BP is a British corporation. How can the U.S. government take control?
A: The nationality of a corporation’s shareholders has nothing to do with it. If it is operating within the jurisdiction of the United States and poses a serious and imminent threat to the health or safety of Americans, a president would take control of its operations and assets in the United States.
Q: Do you really think Obama would do this? Wouldn’t he prefer to stay away from this mess and keep the responsibility squarely on BP?
A: He may not have much of a choice. If the disaster worsens and Obama doesn’t take control he risks inheriting the mantle of Katrina.
Q: What will force his hand?
A: The White House is already inching toward control. BP’s new admission that it can’t stop the leak until August has shocked a public already deeply distrustful of it. As new evidence emerges of the scale of the disaster, the pressure on the Administration to take full and open control will only grow. Last Saturday Energy Secretary Chu asked BP to cease its so-called “top kill” effort to stop up the gush because he and his team of scientists had concluded it was too risky. Now the White House has to decide whether BP’s continued use of highly toxic dispersants poses more of a threat to the public and the environment than a help. When do these decisions tip over into control? Any time now.
A Message from Robert Reich and from MoveOn.org
Got it? Now go HERE and sign up to call your Senator.
Remember… Harry Reid has said there will be a Public Option in the Senate Bill. Don’t be confused by the State Buy Out Provision. That doesn’t happen until 4 years into the legislation after people have discovered what a good deal the P.O. is.
Robert Reich on The Future of Universal Healthcare
In his Sunday blog, Reich pointed out that if the House goes on vacation without passing ANYTHING on the health care front (the Senate has already said it won’t) then we’ll end up stuck with something called “universal health insurance” as opposed to Universal Health Care.
Check it out HERE.
At the end of the article, Reich gives us this MUST DO statement:
Finally, you, dear reader, must contact your senators and representatives and explain why you want genuine reform… Mobilize and energize others to do the same, especially residents of Blue Dog states, including Montana where Senate Finance Chief Max Baucus resides. And if you’re able and willing I’d urge you to descend on Washington the moment Congress returns from recess. There is nothing quite as persuasive to a member of Congress as real live constituent demanding real reform.
This is the kind of statement that makes me really like Reich!
