David Obey explains why the economy is still shitty

Rep. David R. Obey (D-WI), the chairman of the House Appropriations Committee, discusses the economy and how our stupid government works in an interview lovingly titled I Leave More Discontented Than I Started.

The problem for Obama, he wasn’t as lucky as Roosevelt, because when Obama took over we were still in the middle of a free fall. So his Treasury people came in and his other economic people came in and said "Hey, we need a package of $1.4 trillion." We started sending suggestions down to OMB waiting for a call back. After two and a half weeks, we started getting feedback.

We put together a package that by then the target had been trimmed to $1.2 trillion. And then [White House Chief of Staff] Rahm Emanuel said to me, "Geez, do you really think we can afford to come in with a package that big, isn’t it going to scare people?" I said, "Rahm, you will need that shock value so that people understand just how serious this problem is."

They wanted to hold it to less than $1 trillion. Then [Pennsylvania Senator Arlen] Specter and the two crown princesses from Maine [Sens. Olympia Snowe and Susan Collins] took it down to less than $800 billion. Spread over two and a half years, that’s a hell of a lot of money, but spread over two and a half years in an economy this large, it doesn’t have a lot of fiscal power.

Lesson two today in how government works: various smart people and experts come in and lay out The Smart Plan to tell you exactly what needs to be done to fix a problem, political hacks oppose The Smart Plan on the intellectual basis of "that sounds big", elected hacks take their hatchets to The Smart Plan on the intellectual basis of "that sounds big" and the added benefit of "looking like they're doing something to justify their existence to the press and voters", and then said New, Less Smart, Less Effective Plan passes to much circle jerking and back patting..... and fails to fully address all the problems. Everyone acts surprised, yet still refuses to do anything further. Wash, rinse, repeat.

Old men with beards would like to scare you about the economy

Emperor of the Economy and Grand Vichy of Loose Change, Ben Bernanke, gathered the Justice League of Economics Professors and Financial Sector Giants known as the Fed together to issue a proclamation: we're all going to die from lack of money. Extreme exposure to lack of cash elements so harsh that our bodies and minds won't be able to handle it. Oh sure, you may have your foolish optimism or some notion that "this can't happen in America", but they have charts, scholarly analysis, and beards. Oh do they have beards.

Break it to us softly, wizened elders.

Members of the Federal Reserve lowered their expectations for economic growth and raised their projections of the nation's unemployment rate, cautioning for the first time in recent memory that the low employment rate "over the next several years... would likely be below levels they consider to be consistent" with their mandate to maximize employment, according to meeting minutes released Wednesday.
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A review of minutes of the Federal Open Market Committee meetings dating back to September 2008 -- the height of the financial crisis -- reveal no other meetings in which central bank policymakers expressed such a dim view of the unemployment rate. While the minutes have expressed such caution regarding the expected inflation rate, they have not indicated that the low level of employment would be so low as to threaten their legal mandate to pursue those policies that maximize employment.

Hmm, not to nitpick while you're dropping sadness bombs, but that "mandate to maximize employment"? Yeah, that doesn't seem like something you've been too serious about over these past few years. Or ever. Yeah. You seemed to be more interested in chasing the invisible inflation dragon. See, inflation rate-> remains tame, employment rate-> DEAR GOD I CAN'T LOOK IT BURNS MY EYES!

It's nice that you pretend care about the poors and their field tilling jobs now, but it would have been appreciated during the Wall Street money orgy you were presiding over when other smart people who weren't in you special club with the offices that smell of rich mahogany were yelling bloody murder about the increasing jobless rates.

Ahh, I'm just being mean because the economy is going to be awful for a decade or more. It's not your fault, Fed guys. You have your limited set of tools and those typically do the job. But not when things are this bad and not when we have an entire branch of government that has abdicated it's duties in favor of intermittently squabbling amongst themselves and attempting to pull the country down on itself for political gain. Thanks for the concern.

The nice old man is here to tell us of our impending financial doom

We are on the verge of having tepid financial reform getting passed. Either when West Virginia's 42nd Annual Moonshinin' and Couches What Done Burn Festival ends and they appoint someone to Robert Byrd's seat or when Democrats water the bill down even more to get one other person to jump on. Oh mediocre day.

As we are close to yet another monument to our government's time wasting ineffectiveness, half measures, and total subservience to business in the face of all rational fact, the New York Times decided to interview former Fed chair and current senior White House adviser Paul Volcker to comment on the impending legislation. Try not to be bowled over by the overwhelming stream of "Meh" and the "we're probably all doomed, but I'm optimistic" vibe he exudes.

If he were a teacher, and not a senior White House adviser and the towering former chairman of the Federal Reserve, he says, he would have given the new rules just an ordinary B — not even a B-plus.

Yeah, but he's grading on a curve. So Congress' performance gets bumped up because they didn't dub Goldman Sachs CEO Lloyd Blankfein King of All Money and Jewels That He Surveys. Continue, Pauly.

For all of what he describes as the overhaul’s strengths — particularly the limits placed on banks’ trading activities — he still feels that the legislation doesn’t go far enough in curbing potentially problematic bank activities like investing in hedge funds.

No shit.

....he’s concerned that it still gives banks too much wiggle room to repeat the behavior that threw the nation into crisis in the first place.

Hmm, then it doesn't seem to me like it does its job. Maybe that curved B was a little high, no? Or were we grading for effort? That B still seems high. Anyway, any ominous statements about the future to add?

“People are nervous about the long-term outlook, and they should be,” he says.

Maybe I was giving him too much credit with the "Meh" thing. He seems to give this thing a passing grade, then goes on at length at why he should expel all the students from Chug-A-Lug House for poor academic performance and destruction of property.

At the age of 82, Mr. Volcker is from a generation of Wall Street personalities who accepted strict financial regulation as a fact of life through much of their careers.

HAH! How quaint. Volcker must feel like the last human alive wandering through a mass of zombies whenever he goes to Wall Street. But what of his proposed, and smart, Volcker Rule, which would have prevented banks from risking their funds on trading in default swaps and mortgage backed securities? You know, the one that got watered down.

Mr. Volcker thinks that Congress has watered down his trading rule...but rather than roar in protest, he has resigned himself to the present shape of the Volcker rule as well as the overall legislation.

“The success of this approach is going to be heavily dependent on how aggressively and intelligently it is implemented,” he says, emphasizing that a new, 10-member regulatory council authorized by the bill will have to be vigilant and tough to prevent the nation’s giant banks and investment houses from pulling America into yet another devastating credit crisis.

Hmm, so..... no hope at all? If elected and appointed representatives can't be tough and vigilant with banks, what are the odds the people they appoint will be? I thought so. Any statements you would like to make that unwittingly describe the shoddy means by under which we are governed?

“The thing went from what is best to what could be passed,” he says.

Another phrase that should be engraved on a plaque and hung in the halls of Congress. And really, when dealing with the fallout from one of the most massive financial crises in world history, isn't doing what's best of little concern? Close it out with a statement underlying just how underwhelmed you are.

“We have to have a regulatory system that reflects today’s problems and tomorrow’s potential problems,” he says. “This bill attempts to do that. Does it do it perfectly? Obviously it does not go as far as I felt it should go.”

You gotta love it when eminently smart men who know an issue inside out are asked about the problem they have helped Congress work on fixing for the past year plus and the best thing they can say about the legislation is that it attempts to do something. Then the eminently smart man follows that up with a statement telling you that it isn't close to what he, the eminently smart man with the experience and knowledge, would attempt to do. Spirit lifting is what it is.

He's just too nice to tell us we're all fucked and we've left the exhaust port on the Death Star wide open. Wall Street is going to slip a ship past the big guns, fire a proton torpedo into the son of a bitch sometime soon and there's nothing we can do about it. Happy days.

Jobblog

As These Bastards is the foremost economics blog on the web, it is our duty to bring you the most cutting edge economic theories going. Mostly these have to do with the flagging job market where there are somewhere in the neighborhood of five applicants for every opening.

Now most of the new economic theories from our elected betters seemed to stem from them plugging their ears and yelling "Get a job anyway you lazy wretches, stop freeloading on the less than $12 grand a year in unemployment you would be theoretically getting if we in Congress could ever pass a jobs bill. You're all probably on drugs." You know, America's lazy peasant problem.

So we feel it's necessary to highlight any new solutions to our joblessness problem, for you: the unemployed hobo reading this while eating a tin of beans underneath a highway underpass. Don't deny it; we know that's 90% of our audience. We have the Google Metrics.

First up is Minnesota GOP candidate for governor Tom Emmer, who is chuffed that some bitch waitress expected a tip last night after she slowly delivered drinks that the asshole bartender was watering down.

Tom Emmer, the GOP-endorsed candidate for governor, told reporters at the Eagle Street Grille in St. Paul on Monday that the minimum wage for service workers who earn tips should be cut. Some waiters and bartenders, he noted, can earn as much as $100,000 a year, which he said is unfair to the employers that hire them.
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Minnesota is one of few states that does not follow the federal minimum wage for tip-earners — $2.13 an hour. Instead, tip-earners make $5.25 to $7.25 an hour in addition to tips. Emmer says that hurts businesses’ bottom lines.

“Government can only inhibit business, can only keep it from growing, as opposed to creating jobs,” he said. “Right now, we have too much of it, guys. We’ve got to pull government back.”

I know. This economy would be right back on track if bartending and waitressing, two of the most lucrative and desirable jobs in America, nay, the world, we treated like the slave labor they were. I'm tired of these six figure waitresses killing businesses with their minimum wage salaries. Hasn't anyone ever heard of being grateful to be allowed inside an air conditioned building for a ten hour shift? Maybe you repay that shelter from the elements by serving a few drinks or a club sandwich or two without collapsing the world economy. Is that to much to ask, waitresses?

By the way, I'm going to need you to split this check.

On the other hand, potentially crazy... you know, what, I'm going to drop the "potentially" part. Crazy Democratic South Carolina U.S. Senate candidate Alvin Greene has another plan to help revive the job market. By employing people in what I'm sure is the seriously flagging Alvin Greene doll making industry.

"Another thing we can do for jobs is make toys of me, especially for the holidays. Little dolls. Me. Like maybe little action dolls. Me in an army uniform, air force uniform, and me in my suit. They can make toys of me and my vehicle, especially for the holidays and Christmas for the kids. That's something that would create jobs. So you see I think out of the box like that. It's not something a typical person would bring up. That's something that could happen, that makes sense. It's not a joke."

That is outside the box. Like outside of a padded box after the dose of medication they gave you didn't have any effect, then you overpowered seven guards before throwing a water fountain through the window, climbing out, and running to freedom. Luckily the reporter was able to finish the interview without being skinned and Alvin using his face as a mask.

So there you have it, the solutions to our problems: stop tipping rich waitresses and start making dolls of a weird Senate candidate. We'll be back on our feet in no time.

Cheap Blogging Crutch 06.15

Star Wars political cartoons... is that something you might be interested in?

How little have our elected betters learned from our horrific financial apocalypse? Almost nothing. The latest example is the Herculean struggle Al Franken is currently going through to get the Senate to maybe consider the fact that the financial sector getting to choose the agency which rates its products creates rather a large conflict of interest. On the side of randomizing the selection process: people who are smart. On the side of keeping things as is and trusting our financial betters won't game a shoddy system: a probable filibuster proof majority of Senators. Remember to put on your surprised faces when our next financial collapse comes.

Comically oil executives took to the Hill today to explain all the ways in which they were not like BP in their offshore drilling practices. The main differences? Uhhh.... they aren't named BP and none of them has a drilling rig named Deepwater Horizon. One candid moment was when the executives basically admitted they had no way to handle massive offshore spills. Oh really? I think we've noticed that lo these past two months.

People have started to call bullshit and nakedly manipulative bullshit on the timing and PR strategy behind the whole "Afghanistan has trillions in resources! We'll all be rich... RICH!!" story from yesterday. C'mon. How are we supposed to feel good about this war or as if we're getting something out of it if they don't trump up old shit the Soviets were trumping up in 1985... when they we in the midst of an unproductive slog in Afghanistan? Just keep telling yourself "Just a few more years of fighting... then we'll all be rich."

Were you wondering who was cheering for North Korea today during their 2-1 defeat at the hands of Brazil? It certainly wasn't any North Koreans. No, the Chinese government flew in supporters specifically for the purpose of cheering for Kim Jong-Il's future waterslide park invitees/torture victims (depending on how the tournament goes). Commies stick together. Maybe China can fly in some soccer supporters to the US after our team invariably is eliminated before the semis and we lose interest in the sport for another 4 years.

Media Matters has gone to the trouble of picking out choice excerpts from Glenn Beck's new fiction thriller/Randian teabagging circle jerk... The Overton Window. Amongst the gems; "rule number one is, don't tease the panther", various meandering/awful sections of prose, bizarre asides about the flat tax and Bill Clinton, examples where Glenn doesn't seem to remember things his own characters have done, and a Star Wars reference so hackneyed it would make Kevin Smith cringe. Essentially it's a less funny version of his "serious" non-fiction books. Anyway, it doesn't compare to the liberal writing brilliance of Who Blog In Darkness.

In closing, your daily "Oh shit, we're fucked" oil flow estimate is 35,000 to 60,000 barrels a day. Up from the 20,000 to 40,000 from last week. It doesn't really matter; at this point it's like having third degree burns over 100% of your body and complaining about the sniffles.

Great Moments in American Business Leadership

In West Virginia the last of the bodies from the worst mining disaster in the last 40 years have finally been recovered. In the time since the tragedy began, the country has come to learn about one of the more odious shits in American business, which is saying a great deal. His name is Don Blankenship and he is the CEO of Massey Energy.

Aside from running a mine that racked up 3,000 violations and $2.2 million in fines, he is someone that virulently fought against any kind of regulation or oversight. He got stooges and cronies of his chosen by Bush to the MSHA review commission that decides all legal matters under the Federal Mine Act with predictable results, busted unions, constantly downplayed worker safety, declared it more important to "run coal" than follow things like safety regulations, derided obvious and necessary laws, decreed all his opponents were like bin Laden, threatened and assaulted reporters, and became a darling of the Fox News Hannity set. He really earned the titles "evil bastard" and "the 7th scariest person in the US" that Grist dumped on him.

So now it's kind of funny to look back and see the kinds of things he said about safety, regulation, and government oversight now that this disaster happened. Not "funny- haha", but more of a "funny- people are dead because of this man" type thing. Which is to say, not funny at all.

At his Labor Day anti-union rally last year, Massey CEO Don Blankenship attacked the Mine Safety and Health Administration (MSHA), claiming it “seeks power over coal miners.” He mocked both “Washington politicians” and local elected officials who attempt to ensure miner safety:

We also endure a Mine Safety and Health Administration that seeks power over coal miners versus improving their safety and their health. As someone who has overseen the mining of more coal than anyone else in the history of central Appalachia, I know that the safety and health of coal miners is my most important job. I don’t need Washington politicians to tell me that, and neither do you. But I also know — I also know Washington and state politicians have no idea how to improve miner safety. The very idea that they care more about coal miner safety than we do is as silly as global warming.

You really need to thee the video in the link, he literally draped himself in the American flag when he said this. But it's interesting that he says that the idea that anyone cares more about safety than him is as silly as global warming. One, literally anyone in this country could be seen as caring more about miner safety, as long as they don't end up resetting the "greatest mining tragedy" record before Blankenship does.

Secondly, as silly as global warming? You mean an easily tested a proven theory that has the almost universal support of the scientific community? You're right, Don. That sounds almost as ludicrous an idea as letting someone who won't literally exchange bodies for money look after workers. I guess it's one of those far out ideas like "venting methane gas from a mine". I bet some egghead scientist told you that'd be a problem too. You sure showed them.

Not that it's all bad news and mining tragedies for Donny. He hit a bit of good luck today as Standard and Poor upgraded Massey stock from Hold to Buy, noting that the financial impact of a mine exploding and killing 29 people would be immaterial to the bottom line. Hey, sounds like Blankenship was vindicated. He can trade lives and safety for money. Good for him. I guess everything worked out.

We're all rich

Via Clusterstock comes this look at how the US Government is set to make around an $8 billion smackeroos profit off the "bailout" of Citigroup. In fact it's also conceivable that we'll break even on our "investment" in AIG.

So if the net profit off both AIG and Citigroups is $8 billion... divided by... carry the one... each American stand to make $26 off the bailouts. Excuse me, $26 dollars... and five cents. Oh yeah baby, we're rich. "Going to the movies with a date and getting a small popcorn" rich! Which, comparatively, is like "owning a sports team" rich was before the economy had its throat slit.

So sit by the mailbox, I'm sure that as soon as Geithner finalizes these sales you'll have your motherfuckin' movie check sent out to you, post haste.

The entire economy collapses and we all get $26? I told you this would all work out in the end.

I bet he didn't see that coming

We all know that our investor and stockbroker class are the best and brightest in the world. I mean, they certainly won't stop telling us that. Sure they didn't foresee the problems they were creating, the money they were about to lose, and the economies they were going to toilet, but these people aren't psychics, so their failures can't be held against them.

But what about actual psychic investors? I wonder how they would do in this economic climate.

The SEC has charged Sean David Morton, a self-described "natural psychic, trained Remote Viewer, intuitive consultant, investigative reporter, and accomplished award winning director, screenwriter and film and TV producer," with securities fraud

Morton, who is known as "America's Prophet" allegedly solicited investors through a newsletter in which he claimed, "I have called ALL the highs and lows of the market giving EXACT DATES for rises and crashes over the last 14 years."

C'mon SEC, he foresaw EVERY high and low in the market! EXACT DATES! He has this picture of himself psychoflexing with a giant white cat standing on his shoulders. He runs a "specialized cattery". He wrote, directed and starred in Joe Killionaire. Triple threat! Shouldn't you be hiring him? Why arrest him? Isn't that a stellar enough resume to be allowed to handle and invest millions of dollars?

The SEC charges that Morton and his wife allegedly "diverted at least $240,000 of investor funds" to their Prophecy Research Institute. The SEC complaint charitably refers to that as a "religious organization."

Wait. So it's OK to claim you're a psychic who can foresee market changes, earthquakes, and election results and still be licensed and regulated by the SEC and allowed to take millions to "invest". But so help you God if you take some of that money really smart people have given you and divert into your prophecy research religious arm. Claiming mystical powers is allowed in this country, but you better do some damn fine accounting and bookkeeping to back it up.

So in the end, what is the difference between Morton and any of the financial geniuses who shitted the economy? Uh, he used the phrase "psychic" and gave mystical powers the credit for his nonexistent ability to see the shifts and changes in the market instead of using a phrase like "heuristic market driven analysis" or some other such professional, mathematical sounding authority to claim a nonexistent ability to see the shifts and changes in the market. I also don't think John Thain ever did a Tai-Chi pose with a cat on his shoulders. Oooh, and Morton doesn't have any friends in the Treasury Department, although he does know Adam West and Sting. Also, Morton didn't lose nearly as much money as the non psychic experts, though he will be doing considerably more jail time.

But otherwise? No real difference. Just where, towards what areas, and to what end these men were appropriating their giant balls. Hard to see why it all came toppling down.

Goldman will be keeping that money, thanks for asking

The last year or so hasn't been a great one, PR wise, for Goldman-Sachs. They've been caught up in an orgy of public hate over their actions, populist rage over bonuses, spitefully insightful Matt Taibbi articles, damning news reports, shady dealings, tone deaf behavior, and a general sense they they would steal the internal organs of children if they could just find a way to leverage it in the financial markets. On the other hand, they've also been caught up in an orgy of money and probably an actual orgy or two. Which, considering the general looks and attractiveness of your average Goldman worker, could be considered a crime against decency and taste.

They are loathed and no one there seems to understand that or want to take any real action to stop a public hatred so palpable that I'm surprised Goldman execs don't have to hack through it with machetes just to get into the office in the morning. On the other hand, their shareholders do seem to get it. Unfortunately, the board seems to think the shareholders should shut the fuck up already.

Goldman Sachs Group Inc's (GS.N) board has rejected demands from shareholders that the firm investigate recent compensation awards, recoup excessive compensation and reform pay practices.

Wall Street's dominant bank, criticized for paying billions of dollars in bonuses soon after the taxpayer bailout of the banking industry, reported the board's decision in a regulatory filing on Monday.

Goldman reported the shareholder demands last year and said at the time that its board was considering them. The firm did not name the shareholders who made the demands.

Sure their dirty dealings, shady practices, and connections to the Treasury Department and Fed have basically given them a license to print money off the backs of taxpayers. On the other hand, they did cap bonuses at $16.2 billion instead of the $20 billion their employees "earned", practically dooming their brokers to a life of poverty... all in the name of the public good.

So shouldn't we shut up already about all the stuff they did and continue to do to leverage our pain, misery and money into more money for themselves? While we and their shareholders might say no, the GS board says yes. And really, shouldn't we listen to them? After all they are pretty damned rich. Let's shut up.

Things you should read

I have some demands. Why? Because I like the mental fiction of having a supposed willing audience with which I can makes orders and demands that are carried out with brutal efficiency. What are these commands? Well, I was going to ask that someone fly a plane into an IRS building, but since someone already did that, it's just going to be reading related.

Content and demands, on a Sunday. I'm too good to you. How is this different from the Cheap Blogging Crutch? Well, it's on a weekend and this comprises articles I couldn't find a way to tack cheap dick jokes onto. More serious stuff, I guess. Onward.

For Scots, a Scourge Unleashed by a Bottle
A story of Scotland, “Wreck the Hoose Juice”, and a nation trying to come to grips with entrenched alcoholism and the specific beverage that they seem to want to blame for it: Buckfast. It may not have made me feel sympathy for Scotland, but I do want to buy a case of Buckfast.

The Substitute
Brad Plumer looks at the fading possibilities for climate change reform and how successful the EPA can be trying to regulate pollution and emissions now that it is likely to be the only entity capable of doing so, what with the Senate deciding to become irrelevant. Now you know what those lawsuits from Texas and Virginia are meant to do: pretty much make sure we don't do anything to avoid catching our death of heat and flooding.

Sticker Shock
John Cohn looks at the methods and madness of health insurance companies and why they jack rates. In addition he lays out why this means reform needs to be passed (as if you already didn't understand that) and further explains why piecemeal legislation will not work to reform the problem and stop the rate jacking.

After Summer Olympics, Empty Shells in Beijing
The New York Times looks at Beijing and the massive Olympic structures they built for the 2008 games. The verdict? They pretty much got used that week and haven't been touched since. Most striking is the status of the Bird's Nest stadium. It has no tenant, no real future events scheduled, and is right now a de facto gift shop and is packed with snow so children can sled down the aisles. The 2004 Athens games probably bankrupted Greece. I'm sure that bodes well for Vancouver, London, Sochi, and Rio.

How Christian Were the Founders?
The New York Times explores the radical, purely politically motivated attempts that the Texas education board is taking up in an attempt to rewrite textbooks to push Christianity and conservatism at the expense of science, known verifiable history, and common sense, and how they're decisions will likely affect the textbooks of around 40+ states. I bet you didn't know that Phyllis Schlafly, the Moral Majority, and the Contract With America were some of the most integral events in American history. Well now they are. Just one of the great ways in which this country is being destroyed from the inside in the name of cheap politics.

Roger Ebert: The Essential Man
Esquire magazine's story about the life of film critic Roger Ebert now that he has lost most of his jaw, the ability to eat, the ability to speak thanks to cancer, and how his outlook and life have changed since. One of the best profile pieces you're likely to read this year.

Roger Ebert's Last Words, con't.
Roger Ebert responds to the article on his own blog, musing on the tone, the shock of seeing the photo they used, how he doesn't want people to get the idea that he's dying, and what he wants people to take away from the article.

McDonald's Has a Chef?
TIME follows around McDonald's head chef, Daniel Coudreaut, and looks at just what exactly it is he does in a job that most people expect is an attempt at irony. It's an interesting portrait at just what a man who graduated from the Culinary Institute of America and ran the kitchen at the Four Seasons does at McDonald's and the arduous, creatively crushing nature, and logistical nightmare coming up with food ideas for Mickey D's is when the sheer size and food production timetables, schedules, and production lines of an organization with as many restaurants as McDonald's has have to be taken into account.

Wall Street's Bailout Hustle
Matt Taibbi comes back for one more shot at Wall Street and the financial wizards who destroyed the economy. This time he focuses on all the various cons, grifts, scams, and outright thefts the financial and banking sector has engaged in since the global meltdown and how they haven't really learned anything.

Where Have the Populists Gone?

The next time you find yourself lamenting the utter inability of Democrats to gain any traction whatsoever with a slightly more progressive economic agenda, feel free to bring up this piece by Ryan J. Donmoyer of Business Week. That is, if you can remember to mention it after having slammed your head against the wall so many times.

Feb. 17 (Bloomberg) -- The average income reported by the 400 highest-earning U.S. households grew to almost $345 million in 2007, up 31 percent from a year earlier, Internal Revenue Service statistics show.

The figures for 2007, the last year of an economic expansion, show that average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by then-President George W. Bush that Democrats say disproportionately benefits the wealthy.

On the upside, much of this wealth was likely devoured by the recession. On the downside, this probably only translated into fired groundskeepers and kitchen staff. Here's hoping the top 400 find a way to muddle through.

Further reading HERE from Ryan Avent at The Economist, who rightly calls this trend of unsustainable divergence "a massive populist backlash waiting to explode."

Heresy

Sure the stimulus was too small. It wasn't focused enough on jobs. It wasted to much of it's girth on tax cuts that don't stimulate and economy. Tons of truly useful ideas were hacked out in the name of Ben Nelson and the Maine Senators looking like they were doing something. The bill still hasn't given us the free candy and blowjob we were explicitly promised.

Still, when it comes down to it, the bill that should have been better and our elected betters should have taken more seriously, largely did the job it was designed to do. Or should I say, did it's job as well as possible given the moronic confines the Senate placed on it. So sayeth economic experts.

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.
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For that, the stimulus package, flaws and all, deserves a big heaping of credit. “It prevented things from getting much worse than they otherwise would have been,” Nariman Behravesh, Global Insight’s chief economist, says. “I think everyone would have to acknowledge that’s a good thing.”

Acknowledging basic reality? Nariman my man, have you met this country or it's political leaders?

But there's a nice bit of news that while good, still doesn't make anyone feel better about the economy or it's prospects for the future. Somehow "When faced with the greatest economic crisis in our lifetimes, government struggled to enact a party line vote on a watered down measure that eventually ended up stemming the tide" doesn't engender Carnivale type celebrations. There's that.

And although our elected betters have seen the successes and learned from a rash of experts how the failure to make the bill big enough hindered making real headway into job and economic numbers, they're still going with small bore economic measures, cheap gamesmanship, obstruction, zero sum politics, lying, and minuscule bills in an attempt to address the jobs issue. Given a spot of good weather and large sections of the government growing a conscience, some of those bills might make it far enough to fall just short of getting the required votes to end a filibuster in the Senate. There's also that.

But hey, an additional 2 million of you would be unemployed and the economic numbers would still be flailing if not for the stimulus. I guess that's something.

Your new lies

There's got to be a sort of sad realization about your life when you realize that all you do is take large sums of corporate money to help politicians find the best poll-tested ways to lie about something hat could benefit Americans. But such is the life of Frank Luntz. First he partnered up with health giants and the GOP to take on health care, but with Democrats willingly giving up that fight the new battlefront is financial reform.

And because not enough House members and Senators are completely owned by the banking and finance lobby, he's devised a series of dishonest new talking points that will soon drive you crazy with the repetitive frequency with which you hear them and by the sheer, ball out dishonesty of them. Here are the words he advises be used by people seeking to kill any financial reform. Because doing things as they've been done for the past decade is the only way forward.

ACCOUNTABILITY, TRANSPARENCY & OVERSIGHT, LOBBYIST LOOPHOLES, ENFORCEMENT OF CURRENT LAWS, BUREAUCRATS, WASTEFUL WASHINGTON SPENDING, NEVER AGAIN, GOVERNMENT FAILURES AND INCOMPETENCE, LET’S HELP SMALL BUSINESSES, BIG BANK BAILOUT BILL, BLOATED BUREACRACY, FINE PRINT, UNINTENDED CONSEQUENCES, SPECIAL INTERESTS, HARD WORKING TAXPAYERS, ANOTHER WASHINGTON AGENCY, UNLIMITED REGUATORY POWERS, DEVIL IS IN THE DETAILS, RED TAPE

Bold print for bold words. Some of them are also an alliterative delight. We'll ignore the spelling errors on 'bureaucracy' and 'regulatory', because who cares about spelling if you aren't going to care about basic truth? Yes, that's right, a bill which intends to put new restrictions of credit card companies, banks, financial institutions, mortgage companies, and all the other groups that shitted the world economy and provide new protections to consumers is going to be attacked as something that will “punish taxpayers" while rewarding “big banks and credit card companies.” Creating a strong Consumer Financial Protection Agency, which smart people like Elizabeth Warren feel is absolutely integral to getting real reform and real protection for citizens, is creating an “unaccountable czar.”

Just like health reform, where anything and everything that could conceivably be proposed was going to be knocked as a socialist government takeover/Bolshevik plot, anything that attempts to look at the last few years, the state of the economy, and effect it has had on the country and go "Hey, wait a minute, maybe we should do something" is going to get accused of bailing banks out and stealing taxpayer money to give to Goldman-Sachs. So a quick round of applause for men like Frank Luntz and the country we live in that enables their cheap bullshit. I know you probably didn't have high hopes for financial reform, I didn't either, but you really need to lower those hopes. A lot.

Asshole advocates for asshole

With the confirmation of Ben Bernanke seeming to take a happy little detour into the bottomless canyon of failure that is the United States Senate, a stifled yawn and cries of "No really, that's a shame, awwwwwwww" are coming up from most casual observers and critics of the Fed Chairman. Mostly that stems from the fact that he either completely failed to see or completely failed to act on the large housing bubble, seems intent on ignoring his mandate to attempt to get this country to full employment, and that his sole claim to fame as Fed Chairman seems to be that he hasn't fucked up during this recession. Which, seeing as how things are still shitty, isn't much of an endorsement.

But there are people coming to Ben's defense. It's just a shame it's another guy everyone thinks is fucking up.

Treasury Secretary Timothy Geithner warned that the financial markets would view a Senate rejection of Ben Bernanke's renomination as "very troubling" but said he's sure the embattled Federal Reserve chairman will prevail.
...
"He's done a remarkable job of helping steer this economy out of the great recession. And I think he'll play a very important role in helping in the success of our efforts to try to make sure we are bringing this economy back to durable growth."

Asked about possible market reaction to a defeat, Geithner said: "I think the markets would view that as a very troubling thing to the economy as a whole."

First off? This country: not steered out of a recession. Point of fact: still in recession. Point of other fact: looks to be in recession for foreseeable future. Second point: country is not being brought back to durable growth.

And threats of a Wall Street tantrum, also echoed in this Washington Post editorial that echoes the same line of bullshit Geithner is slinging? Well I imagine they would be pretty pissed off if a guy who has been looking out for them and only them was suddenly out of a job, but I'm not that concerned about their feelings. I have this bizarre idea that the economy isn't some GDP number or stock market number; that the economy is about the relative financial health and stability of the people in the economy.

Now I know when Bernanke was made our Infallible Money Jesus he, like those who came before him, ceased to be a mere mortal as his brain became attuned to what our financial Gods wanted and his proclamations became unerring law. But people seem to look at the results of his tenure, not like what they see, and want a guy who was, you know, ahead of the curve and maybe interested in their problems. 10% unemployment does irrational things like that. It's this foreign concept some refer to as "holding people responsible for their performance." We don't do it too often with financial leaders, so I can see why it's such a shock it might be happening to Benny.

I know it's hard to understand, but there was a time in this country when Ben Bernanke wasn't the head of the Fed. Time still flowed forwards and the fabric of the universe was still held together. I'm just saying I think it might be possible, nay probable, that the universe won't compress itself into a singularity if Ben Bernanke has to return to Princeton and he gets replaced by someone who gives a fuck about things that aren't massively giant financial corporations. But, then again, I've been wrong before.

Awwww

Senate Dems Not Sure They Can Get Enough Votes to Reconfirm Bernanke

Amidst the voter anger at Wall Street and Washington, D.C., ABC News has learned that the Senate Democratic leadership isn't sure there are enough votes to re-confirm Ben Bernanke for another term as chairman of the Federal Reserve.

Bernanke's term expires on Jan. 31.

What a shame. I just can't believe that in this day an age an ostensible agent of government who feels it is his duty to look out for financial and banking giants at the expense of people, completely neglects the bolded large print declaration that the central bank is supposed to be committed to enacting polices that promote full employment, tilts at windmills and the imaginary dragons of inflation, presided over a disaster, did nothing to stop it or foresee it, and is unpopular with the American people, isn't finding much support in Congress.

As an added bonus, it seems that Geithner is on the outs as well. Hey, I guess better late than never. Sad that it has to take months and months of deeply unpopular toadying to the people who ruined the economy before someone speaks up and says "Maybe... this is a... bad... idea?" while someone else tentatively nods in agreement. Or as Matt Taibbi puts it "the government only starts listening to its voters once the more corrupt option turns out to be untenable."

So soon we might have a new head of the FED and, if Obama seems to be moving away from his ideas, a new head of the Treasury. Hah! Just kidding. Did you see the confirmation rate in the Senate for Presidential appointees? Even if he dumps the both of them, it'll be years before both positions were filled. I'm not sure if those would be bad things at this point, but that's where we are. That is unless Senate Democrats are able to muster some sort of unified and bipartisan support for something supported by the President. LOLersaktes!

So sorry Ben. Bitches will eventually know about your rate cuts and we all appreciate your rocket cycle heroics, but we just can't let you run things anymore. I guess it's back to Princeton to boss around Krugman. That might be as fun as swimming in the Fed's money vault. Fare thee well.

These guys get it

You know to some, the fact that a company like Morgan Stanley would hand out $14.4 billion dollars in bonuses (62 cents of every dollar of revenue they earned) to their employees during what they describe as "a lean year" is yet another sign that the financial wizards on Wall Street just don't get it.

All that means is you haven't heard about Morgan Stanley CEO Jimmy "Common Man" Gorman

Still, in a gesture to the public mood, Morgan Stanley’s new chief executive, James P. Gorman, said Wednesday that his entire bonus would be paid in the form of deferred stock, with no cash at all.

See? That's exactly what we wanted. We didn't want you to take no bonuses in return for shitting the world economy and building your businesses back up off the backs of free taxpayer money and government loans and guarantees that have artificially inflated your bottom lines and allowed you to show a "profit". No, we just wanted you to award bonuses in a form that was deferred and dished out in a manner that, because of government guarantees, made it certain that you would actually get a bigger bonus than what you had claimed you were getting.

Thanks for finally getting it, Morgan Stanley.

New rules

Today has come the announcement that the Obama Administration will, just for the hell of it, decide to propose some new limits on the size and risks taken by banks. I don't know, that sounds dangerous. Isn't it the fundamental capitalist right of banks to be so goddamn large and complex that even the slightest mistake could send our economy into the toilet and everyone into the breadlines? In any event, in conjunction with the These Bastards junior news gathering arm, the Wall Street Journal, we have endeavored to uncover some of the new proposals that will be... proposed.

• deter banks from becoming so large they put the broader economy at risk and prevent banks from becoming so large they distort normal competitive forces
• place restrictions on the proprietary trading done by commercial banks by limiting the way banks bet with their own capital
• place "firewalls" between different divisions of financial companies to ensure banks don't indirectly subsidize "speculative" trading through other subsidiaries that hold federally insured deposits
• perhaps keep banks out of the business of running hedge funds, investing in real estate or private equity
• seek to return the "spirit of Glass Steagall," meant to limit large banks from becoming too big and complex that create enormous risk
• no CEO of a financial company is allowed to refer to Tim Geithner as "bitch", "bitch boy", "our little bitch", "bitch tits", "that goofy fuck who does everything we want", "Bitchothy Bitchner", "get us our money, bitch", or any other phrase that uses the word "bitch"
• no CEO is allowed to tell a Treasury or Fed official to "get their fuckin' shinebox" unless said official actually has a shinebox
• at the next meeting between the Obama Administration and financial leaders, Paul Volcker gets to "cold cock a random motherfucker in the face, just for the hell of it"
• all bankers and Wall Street employees have to sign a pledge to conduct themselves as rational humans and not like rabid, money hungry lunatics at an Atlantic City craps table
• Goldman-Sachs employees may order gold plated Bugatti Veyron's, but are only allowed to drive them on their sprawling estates and private highways
• All major banks must chip in to hire a distinguished actor who pretend to be the head of a bank and will stand in front of the media and humbly apologize for the economic and financial crises. We'll say he's the CEO of Ameribank.... yeah, that sounds like a real bank. I think they'll buy that.
• they must swear, legally swear, to never do this again, no crossed fingers
• attempts must be made to not so egregiously and obviously buy Senators and House members
• more toaster giveaways for opening new accounts
• do something that shuts Arianna Huffington up about that goddamn "move your money" campaign. Christ that's annoying
• fuck the fuck off and make sure we don't hear a goddamn economic peep out of your bank holes for the next fuckin' decade
  

So those are just some of the proposals that Obama and Paul Volcker hope to get passed. I'm sure the Senate and House will get right on that and Republicans will be eager to help.

As an aside, a fuckload of Bothans were harmed to get this information. So to help out text either "BOTHAN" to 990999 or "GUNDARK" to 550555 in order to donate $10 to the Red Cross Bothan Relief efforts.

Unhappy new year

Ahhh, it's a new year and a new decade and things feel wonderful. That sense of new possibilities and opportunities permeating the air. What makes it great is... oh, what's that? Every economist in America, did you have something to add?

Speaking at American Economic Association's mammoth yearly gathering, experts from a range of political leanings were in surprising agreement when it came to the chances for a robust and sustained expansion:

They are slim.

Many predicted U.S. gross domestic product would expand less than 2 percent per year over the next 10 years. That stands in sharp contrast to the immediate aftermath of other steep economic downturns, which have usually elicited a growth surge in their wake.

Well fuck you too.

Sure the article quotes Martin Feldstein, Joseph Stiglitz, and Kenneth Rogoff, but who are they any way? Other than the former head of the National Bureau of Economic Research, a Nobel laureate, and a former IMF economist/Fed Board member respectively? Just a bunch of gainsayers who can't let us get four days into a new year and decade without yelling about how shitty it's going to be, just because American's primary source of wealth, their homes, has been severely weakened, consumer debt is staggeringly high, there's nothing in place to replace the housing boom and consumer spending that previously drove growth, the banks are reliant on Fed funding and Treasury backing, and finance companies are artificially padding their bottom lines with zero cost government loans.

But what about America's undying sense of optimism, freedom, and, uh... wishing none of this had happened? Apparently none of these things count.

Even the relentlessly cheery, gumdrops and sunshine musings of the affable optimist Paul Krugman are filled with ill omens he's reading after consulting the bones and the increased swelling he's feeling in his pessimism gland. He says he's getting that 1937 feeling, where government and the Fed declared the Great Depression fixed and all over, cut spending, tightened monetary policy... and dove back into a depression. He sees the same signs and notes the fact that the Fed is already taking steps to tighten monetary policy.

So... happy new year. I know you were hoping for some fresh start, but the best and brightest economists in the country say no. Don't get mad at me. I wanted you to have a good economy, but they said no. Something about "the facts saying otherwise". The bright side? Well... I guess if you were an economist you could make a lot of money making economic predictions. For the rest of us though, it looks like a meandering decade of stagnant growth followed by a slow descent into the long awaited hobo economy. Sorry. I was going to let you bask in the optimism of a new year for a few more days, but the American Economic Association wanted to do it their way. I guess it's for the best.

The goodness of their hearts

You know, when Matt Taibbi said that Obama's financial and economic policy had been "hijacked by sniveling, low-rent shitheads", it was hard to believe. I mean they all wear such nice suits and have such large bank accounts. Surely it was hijacked by high-rent shitheads. But to the degree we're squabbling over the level of shitheadedness, we are in agreement: they're shitheads. So that's why it was nice to see Senior White House economic adviser Lawrence Summers make that case so eloquently this weekend.

Summers defended Obama's attempts to persuade banks to increase lending.

"The country did incredible things for the banking industry. Those things had to be done to save the economy, but no major bank would be intact, in a position to pay bonuses, if that extraordinary support had not been provided. The bankers need to recognize that. They need to recognize that they've got obligations to the country after all that's been done for them, and there is a lot more they can do, and President Obama is going to be talking with them about what they can do to support enhanced lending to customers across the country. We were there for them."

Dear sweet fucking baby Jesus, that's the way we're going to get credit flowing, taxpayer funded bonuses curbed, and better regulations and oversight? Obama's going to go jawbone with them and they'll do it out of a sense of duty and obligation because "we were there for them"? A sense of duty wasn't enough for them not to set everyone's money of fire and gamble with the world's financial stability, why would it compel them to act rationally now, especially when "they got theirs..." and we're clearly in the "...so fuck everyone else" phase. "We" are going to be there for them the next time they do this, by which I mean "you" and all your Wall Street buddies in government.

So that's the big plan for trying to make sure that this doesn't happen again: hoping that Wall Street wants to change things out of the goodness of it's heart. Actually, now that I've seen the lengths that our elected betters will go to kill meaningful regulatory reform of Wall Street and the difficulty of getting good legislation through the House and Senate, perhaps wishing that banks and financial giants have a change of heart is the most viable course of action. I guess it's the season for miracles.

Everything's OK now

I know some of you are worried about the state of the economy, the jobs market, and the rampant inequalities and failings within our system of government, oversight, and regulations that allowed banks and financial giants to set fire to everyone's money. But that's all better now. Why? No, it's not because someone invented a time machine to go back and kill Phil Gramm and it's definitely not because things got fixed and the economy a job markets are back on track. No, the Chairman and CEO of Goldman-Sachs toddled up to the front of the class and apologized like a big boy. Everything's OK now.

Lloyd Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc., apologized for the firm’s role in some of the activities leading to the financial crisis.

“We participated in things that were clearly wrong and have reason to regret,” Blankfein, 55, said at a conference in New York hosted by the Directorship magazine. “We apologize.”

Are you happy now, America and Matt Taibbi? Do you see what you've reduced this man to? He's apologizing for the things his company did and enabled! It's sickening that this country is so vindictive that we'd actually ask that of our financial betters.

I'm just glad that the apology is the only thing he's doing. I mean of course he's not going to actually give back the close to $50 billion he ratfucked out of our pockets during this whole post-apocalypse period, and he's certainly not going to think of not paying out the billions in bonuses to the people who helped set everyone's money on fire, nor is he going to renounce all the billions upon billions that they raked in while they were ensuring a global economic collapse, nor the billions they made betting on the housing crash while they simultaneously boot people out of their homes. They're keeping that money and you'll have to live with all the damage they helped cause, but he's sorry.

And while he isn't promising they won't do it again, you can rest assured that they help toilet the economy again, you'll get another nice apology. So go away and stop bothering your money emperors with your "complaints" about their "deeply unethical business practices."