Larry Summers: Corporate Greed Apologist

Republicans Never-Ending Hypocrisy

Remember when Republicans criticized the auto industry "bailout"?

“Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the market place, this is only delaying their funeral,” said Sen. Richard Shelby, an Alabama Republican and bailout opponent.

It was a colossal waste of money and pointless.

Actually, it was a success.  The auto companies are performing well again and have paid back the "bailout".

Auto workers are union members and usually vote for Democrats, which is the real reason Republicans were against helping them out.

Farmers usually vote Republican ...

And, what most Americans probably don't know, Trump's Farm Bailout Has Cost The Taxpayers More Than Double The Auto Bailout.  (Lets also not forget that Trump's own trade policies exacerbated farmers' problems.)

As Bloomberg reported, "Doling out billions in aid to American farmers, who have become more dependent on government money than they’ve been in years. At $28 billion so far, the farm rescue is more than twice as expensive as the 2009 bailout of Detroit’s Big Three automakers."

This is what the Republican party has become - a spiteful cabal of sycophants and grifters, only concerned with power and cronyism.  Their policies have nothing to do with what is right for America, what would be good for America, but are more concerned with what will buy them votes, keep them in power, and allow them access to the trough of public dollars to reward themselves.

Weekend Reading

How Walker Cost Taxpayers $2.6 Billion
Botching The Great Recession
The Bubble And The Great Recession: The Need For Denial
The Future Of Our Public Postal Service
We're Measuring The Economy All Wrong
The Bailouts For The Rich Are Why America Is So Screwed Right Now
Putting The Con In Foxconn Wisconsin
The Science Is Clear: Dirty Farm Water Is Making Us Sick

Why Aren't We Prosecuting Wall Street?

h/t Crooks & Liars

Public Disregard

It's all a bit vexing to see misinformed citizens commenting, on the Journal website, about greedy union members, bailouts, and the public sector as the cause of all ills. The commenter even throws in 401Ks to complete the gauntlet of unintelligible proclamations.

First, union members are declared the cause of all fiscal woes for Chrysler and General Motors. Next, we are told Harley-Davidson, Mercury Marine, and Kohler were brought to their negotiating knees by the diabolically nefarious unions.

Ah, to have such ignorance fueling misplaced anger.

The only reason any private sector company pays public-equivalent salaries, offers health care, and has some sort of retirement account in place, at all, is because of the years of struggle of organized labor. You'd all still be sleeping in the factory, making widgets 16 hours a day, if it wasn't for unions.

Business owners don't dislike unions because of any true principles the owners may hold. Unions more equitably spread the gains of a business amongst it shareholders (workers), rather than allowing the productivity gains to simply be gathered by a select few at the top of the organization.

It's amazing how angry working- and middle-class people get at other low-income, working- and middle-class people. Yet, none of their vitriol and contempt is ever heaved upon the CEOs making 400 times what their shop-floor worker is making.

Even Fritz Henderson, CEO of GM, said, "They [the United Auto Workers] have been more a part of the solution than part of the problem."

The more naysayers continue to belittle union's gains - living wage, health care, and a retirement plan - the more we see those workers' rights disappearing for all workers - public or private. So, if you don't like having a health care plan at your job, if you'd rather work until you drop - without a chance at ever being able to retire, and if you're happy getting by on a minimum wage (surely buttressed with crippling credit card debt), by all means, continue to criticize unions. What a paradise it will be when we are all WalMart workers.

The 401K story is a perfect example, a microcosm, of the problem with putting our full faith into an all-knowing free market. As many have realized, more so since the Great Recession, defined contribution plans are highly volatile and a very bad vehicle to hitch one's retirement dream to.

Let's also remember some crucial facts about our much, recently, maligned unionized workers:

• They are more educated than their private sector counterparts - 48% versus 23%.
• The public sector acts as a safety cushion. During economic recessions they still spend - using restaurants, movie theaters, concerts, buying appliances, doing remodeling, etc. - enabling businesses to stay open and workers to keep their jobs.
• The total unionized workforce represents 11 percent of total employment.
• Overall, public workers total compensation is 3 percent less than their private sector counterparts. The wage penalty for working in the state-and-local sector is even higher for higher-wage workers.
• For every $1.00 invested in state and localities, $1.41 is returned. A very good bang for the buck.

These are tough times and sometimes venting and blaming the other can make us feel better for a short period. But this doesn't change the fact that unions have been more a part of the solution than the problem. To claim differently is delusion and a stubborn disregard of the evidence.

For Further Reading:

The Humbug Express

Some Rights, Some Wrongs On State Budgets

Unemployment: A Jobs Deficit Or A Skills Deficit

What Does It Mean To Be Pro-labor When Labor Is In Decline?

Fuzzy Math

Dean Baker makes an excellent correction to the mainstream media storyline which claims Citigroup has paid back the government. And, that the government will actually make a profit from the bailout of Citigroup.

Banks & Bailouts

The New York Times reports As Biggest Banks Repay Bailout Money, U.S. Sees Profit. Matt Taibbi and Max Keiser offer some perspective on the Times somewhat fanciful narrative.

Financial Double-Standards

Another example of the double-standard our country and economic system has between labor and capital. The auto industry better beg, grovel, and whimper for the $28 billion they received. Wall Street can have their $5.7 trillion without stipulations, no questions asked. WTF?!

Let's not forget about our, what seems to be, never-ending $5 trillion war(s).

For Further Reading:
Class Warfare
Correction To The $70-Per-Hour Myth
Failure Bonuses
Foreign-owned: Yes. American-owned: No.
Republican War Against U.S. Workers

What About Us?

We have to bail out banks, we have to bail out insurers of bad bank bets, and on and on.

Why can't the "bailout" money be used to insure most Americans in a simple, straightforward manner? Couldn't we just insure pension and retirement plans (to cover loses), nationalize banks to get lending going again, and employee people with government programs to repair infrastructure during this period of depressed demand?

How about we garnish or seize the ill-gotten gains of all these trouble-makers? This really isn't their money and they shouldn't be allowed to keep it.

Also, there better be plenty more following Madoff to jail.

Let the bankers, the hedge fund managers, the AIGs, all of them, let them go down. Get the regulations back in place and the institutional capacity back up to snuff so we have transparency and lawful, efficiently operating markets. There will be plenty of smart entrepreneurs willing to step in to fill the void and do things legally.

As Ralph Nader has said, "Sometimes you have to prune the tree for it to grow healthy."

We talk about this using rhetoric -- concern for the unemployed and the American workers -- but our actions are the most roundabout way to relieving their troubles. Why can't we use a more direct approach as mentioned above? I still haven't heard an answer to this.

Bailout Bewilderment

Rachel Maddow explains more on the double-standard of the bailouts and exposes the backroom shenanigans whereby Wall Street is stealing, in collusion with the Treasury, more of our money. Laura D'Andrea Tyson, in usual economic jargon, tries to placate Rachel's questions/concerns. It was the usual - don't worry, we've gotten everyone into this mess, we know the best way out, there should be some strings attached, but we must lend billions quickly without too many questions. Tyson learned all too well, during her time in the Clinton administration how to appease the bond traders.

Maddow follows up on her discussion with Laura D'Andrea Tyson (whom provided excuses for the firms involved and blamed the Treasury for the lack of transparency) the next day. As a professor she knows about ethics in disclosure and research. Her action would be similar to a journalist writing a glowing piece on Apple without disclosing that he/she has millions in that company's stock. The problem isn't that she didn't know enough to disclose the connection. The problem is that all the major players in our society have entanglements and connections, which rarely any of them reveal, nor are there legal repercussions for such indiscretions. This cronyism and opaqueness throughout the system are glaring factors in the culmination of the current crisis (and throughout our country's history of class warfare).

The Treasury assuredly deserves some blame. But when all we've heard for the last thirty years is, "leave he market alone" and "the market knows best," it's difficult not to fall back on those bad habits, give firms the money they claim they need, and believe they can straighten up the mess. It's especially hard when the characters running the Treasury and their advisers are former investment bankers, Wall-Streeters, and hedge fund managers.

The CEOs, managers, brokers, and their ilk should be stripped of a major percentage of their assets (which are ill-gotten gains) to help pay for their mess. The private jets should be sold and their options given to the Treasury (to cash-in when the companies stock prices increase). Salaries and bonuses, going back years, will be automatically turned over to the Treasury.

If this were Joe Sixpack caught in illegal activities swindling money in nefarious ways, he would, no doubt, be stripped of all of his assets and face jail time. Just for good behavioral economics sake, the fine should fit the crime. Removing even ninety percent of hedge fund managers, and the other bozos, wealth still leaves them with an absurd amount of wealth to operate from...when they get out of jail.

Fed Funny Business

Fed Refused To Disclose Recipients Of $2 Trillion