Last seen: 2 years 25 weeks ago
They've got their massive piece of the pie... And they want more.
From last month: U.S. Firms Build Up Record Cash Piles,
U.S. companies are holding more cash in the bank than at any point on record, underscoring persistent worries about financial markets and about the sustainability of the economic recovery.
The Federal Reserve reported Thursday that nonfinancial companies had socked away $1.84 trillion in cash and other liquid assets as of the end of March, up 26% from a year earlier and the largest-ever increase in records going back to 1952.
The problem is reduced demand. Continuing unemployment means that the economy is not producing demand, so businesses are not willing to risk investing in meeting demand, which means they are not hiring, which means unemployment continues.
Seriously? They are already hoarding vast sums of money - probably trying to figure out how to offshore it with our jobs too - and the GOP plan, the highly desired plan of corporations and the their rich owners, is giving them more with tax cuts for the listless elites. That will just be a bigger welfare check than the ones we already floated Wall Street for doing absolutely nothing to fix the disaster they created.
Meanwhile, the screech of the typical village idiot corporate shills and deficit peacocks is getting shrill:
A quick note on David Brooks’s column today. I have no idea what he’s talking about when he says,
The Demand Siders don’t have a good explanation for the past two years
Funny, I thought we had a perfectly good explanation: severe downturn in demand from the financial crisis, and a stimulus which we warned from the beginning wasn’t nearly big enough. And as I’ve been trying to point out, events have strongly confirmed a demand-side view of the world.
But there’s something else in David’s column, which I see a lot: the argument that because a lot of important people believe something, it must make sense:
Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?
Yes, I am. It’s called looking at the evidence. I’ve looked hard at the arguments the Pain Caucus is making, the evidence that supposedly supports their case — and there’s no there there.
And you just have to wonder how it’s possible to have lived through the last ten years and still imagine that because a lot of Serious People believe something, you should believe it too. Iraq? Housing bubble? Inflation?
Those Deficit Peacocks won't dare look at what is really creating the deficits and what would really get more people back to work.
Some commentators blame recent legislation — the stimulus bill and the financial rescues — for today’s record deficits. Yet those costs pale next to other policies enacted since 2001 that have swollen the deficit. Those other policies may be less conspicuous now, because many were enacted years ago and they have long since been absorbed into CBO’s and other organizations’ budget projections.
Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs.  (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1).
Without the economic downturn and the fiscal policies of the previous Administration, the budget would be roughly in balance over the next decade. That would have put the nation on a much sounder footing to address the demographic challenges and the cost pressures in health care that darken the long-run fiscal outlook.
Figure 1 for your reference... And note the heavy costs of tax cuts for the Wall Street Welfare elites and uber rich, the cravenly irresponsible masters of economic disasters that are hiding behind political maneuvering of both parties to destroy any sense of justice in the economic system to keep their gravy train looting the nation:
A huge swath of tangerine dream green handed to them on a silver platter in tax cuts that far and away benefited the rich and the GOP side is publicly voicing support for these evident do-nothings of the economy to keep from paying their fair share at the exact time that all of America is suffering these elites' disaster. Nevermind the Pelosi's of the world pretending to be against dropping the budget hammer on you while putting in place the very real means to run over the small people's social safety nets with "procedural votes" behind closed doors.
And that is supoosed to be liberal leadership? Give me a corporatist break!
Anyone who thinks the unemployment situation is a product of poor governing on the part of this President can't recognize a class war when they see it. The real issue on the table here is corporate power and control.
Consider the recent Luntz-style attacks on the unemployed. Rather than addressing the reasons for the stubbornly high unemployment rate, they choose to demonize those who are unemployed. We're too stupid, too lazy, or we want to be paid too much to rehire.
Of course, none of these things are true, but they offer cover for CEOs to duck the true questions about why they'd rather simply sit on the cash and forego expansion for now. They'd rather do it because they can. Because they can afford to wait until they have a puppet in the oval office who will do their bidding, who will call off the regulatory dogs, and who understands unique corporate challenges.
And while Wall Street throws itself a faux pity party:
Anonymous bankers complain to Politico that Democrats did not do enough to soften bank reform
Imagine two alternate realities. In one universe, the bank reform bill likely to be signed into law in the United States is generally regarded by critics as not quite up to the task of delivering on its primary goal: preventing a repeat of the financial crisis that broke the global economy in 2008. In this universe, there are differences among those who believe that the bill, while manifestly imperfect, still represents an improvement on the status quo, and those who dismiss it as irredeemably irrelevant, but there is nonetheless a widespread consensus that resistance from Republicans and moderate Democrats, in combination with a cautious White House, resulted in legislation that is much milder than what would seem to have been called for under the circumstances (a devastating economic collapse precipitated by recklessly irresponsible financial institutions.)
Now let's visit another universe, one constructed from anonymous comments relayed to Politico reporters from enraged Wall Streeters. In "Wall St. Plans Payback For Reg Reform," we learn that there is a "great deal of frustration" being felt by bankers towards Democratic politicians who have the gall to come to Wall Street asking for money, after having dared to vote for bank reform.
While the final Wall Street reform bill turned out to be less onerous than banks feared, there are still hard feelings, especially over the rhetoric used to slam banks such as Goldman Sachs, Morgan Stanley and JPMorganChase...
... Still, feelings in the financial industry are very raw, especially toward moderate and New York-area Democrats who, the industry feels, did not do enough to ease the potential impact of the financial overhaul.
HTWW agrees with the bankers on one count: It is indeed "unseemly" for politicians to be soliciting Wall Street for campaign contributions while at the same time carving out the final shape of bank reform.
No kidding that it is unseemly. It is beyond obscene given that it is clear that a lot of the regulatory changes to the finanacial industries are highly illusory.
And much of the continued fight is to keep the country from sliding any faster into the corporatocracy deep end, we have to remember that we are fighting hugely powerful interests that will spend millions to fight any regulation - even the laws that have been in place for years - in order to grease the slippery slope and even if the fight's cost dwarf the minute penalties from enforcement of legislation:
The Death Star of American corporations, Wal-Mart, has decided to contest a minor fine from OSHA. In doing so, the Arkansas based company has amassed $2 million in legal fees, according to the NY Times.
The $7,000 fine from OSHA was for the trampling death of a Wal-Mart employee , crushed by a surging mob of customers outside a Long Island Wal-Mart the day after Thanksgiving, 2008.
And BTW, they are using Teabagging Konstatooshunull Lawe (sic) to argue, OSHA lacks the authority to issue fines in the first place
The people we are fighting against have the big money guns and they control the strings of every corporate puppet at every level of government, at every turn of the traditional media's corrupted phrases... And they are liars.
The only thing we do have on our side is the sheer numbers of real people to effect change. And the occasional Financial realists that are already in a position to advocate for what they know is the right thing to do, both morally and fiscally. Yves there, at Naked Capitalism, echoing thoughts of the Financial Times' Martin Wolf:
Wolf next establishes that the private sector in countries all around the world is saving. The OECD forecasts that savings in advanced economies will be 7% of GDP, or roughly $3 trillion. In theory, these savings could go to investments in emerging economies, but the private sector in those countries is projected to be saving too. The Institute for International Finance anticipates a total of $300 billion for 2010.
Wolf then explains how this all plays out:
According to the IIF, the net flow of private funds from advanced countries to emerging countries will be close to $700bn this year. But that will be almost entirely offset by an official outflow, in the form of foreign currency reserves, of close to $600bn. These huge official interventions prevent the emergence of large net capital inflows into emerging countries. Instead, the private sectors of the advanced countries accumulate net claims on the private sectors of emerging countries, while the governments of emerging countries accumulate offsetting claims on the governments of advanced countries.
The bottom line is clear: there exists, at present, a gigantic net flow of funds into the liabilities of the governments of advanced countries. Of course, some countries can still get into difficulties. But it is quite wrong to argue that the difficulties of a Greece or a Spain entail difficulties ahead for the US, or even the UK. The opposite is far more likely: flight from risk entails flight into something less risky. What is the least perilous asset for the investment of gigantic private financial surpluses? The only answer is the public debt of the big advanced countries.
These flows of funds consist only of identities. So what are the causal factors? Maybe, the collapse in private spending in the wake of the financial crisis was caused by terror of the fiscal deficits to come. Maybe, the moon is made of green cheese, too. There is also next to no sign of crowding out in capital markets. The plausible hypothesis, then, is that the fiscal deficits were a response to the collapsing desire to spend of the crisis-hit private sector. Fiscal policy could have been tighter. But the result would have been a depression.
What then of the future? Suppose there is no significant change in policy in emerging economies. Then if a fiscal contraction in advanced countries is not to cause a slowdown, even a second recession, it must be accompanied by an upsurge in private spending.
The argument must be that improved confidence in the long-run sustainability of public finances would lead to greater private consumption and investment spending now, even if there is no significant effects on interest rates or the exchange rate. I am highly sceptical of this argument (see “Why it is right for central banks to keep printing”, Financial Times, June 22, 2010). But grant that this is true. Then the best policy is to slow the long-term growth in spending on age-related programmes. This comes out clearly from the discussion of long-term fiscal trends in the excellent new annual report from the Bank for International Settlements.
Yves here. So Wolf, and the Bank of International Settlement (hardly a bunch of socialists) think keeping old people from having to subsist on pet food would be good for economies around the world. I’d love to see Wolf up against the Social Security fear mongers from the Peterson Foundation. Fur would fly.
So I was watching a CNN panel today and the subject up for debate was something along the lines of, "Is Obama shedding constituents? Critics say he's abandoned Wall Street."
My first reaction was, "Wait, critics are saying this? Are you sure that wasn't what his allies said?" But no -- I actually had to listen to a debate over whether Obama was making a huge political mistake by "abandoning" his bestest pals in the world at the megabanks.* You know, the guys whose greed and irresponsibility caused the worst financial collapse since the Great Depression.
(*Obama hasn't actually "abandoned" the banks in the least, but that's a story for another post.)
And then I thought, "Why the hell are we the only culture in the whole goldurned world where it's seen as a political risk to abandon the people who are responsible for causing widespread economic hardship?" And all this got me thinking about the super-weird "We-Must-Be-Nice-to-Rich-People" doctrine that has run through our national discourse since the 1980s.
You see, there was a time when American politicians could say things such as "It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes" (Andrew Jackson) and "Too much cannot be said against the men of wealth who sacrifice everything to getting wealth" (Teddy Roosevelt) and "We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering... They are unanimous in their hate for me — and I welcome their hatred" (FDR) and no one thought anything of it. Indeed, as Simon Johnson and James Kwak show in their excellent book 13 Bankers, hating on financial oligarchs is as American as hating on soccer, dating all the way back to Thomas Jefferson.
Yes... Via CNN we get the ultimate circular firing squad of "Leave the rich alllooooone!"
The problem with their table talk? Joe and Suzy Sixpack's livelihoods, their ability to just scrape by during the elites disaster capitalism coupled with looting the nation crime sprees, are the roadkill carcasses they will gladly dine on to continue take their money for nothing.
I'd say that rather than giving the elites a bigger piece of the splattered, half-baked schemes of gambling casino pie in the sky... It is long passed time to let them have their own medicinal cake of austerity, tightening their fat elitist buckles.
But eating any cake is too good for the masters of economic disasters that want more welfare for the rich and consider pissing on you, the poor, as trickle down.
The slogan for today's real populism ought to be a well deserved:
Save America - Eat the rich.
Lead the financial sycophants and their listless do-nothing way of life to the slaughter. Because it is clear it is either going to be you or them... And lord knows the rich don't want to be held responsible for their gambling habits, their crimes and their their failures.
As a side note: If you aren't already mad as hell about this shit-salad-sandwich that we are being force fed daily, then I do question your sanity.