His Royal Highness Mitt Romney Really Cares About The Workers

His Royal Highness Mitt Romney Really Cares About The Workers

Speaking to reporters tonight in Des Moines, Iowa, a worker laid off by a company owned by Bain Capital accused former Bain Capital CEO and current Republican presidential candidate Mitt Romney of being “out of touch” with the concerns of average Americans.  Randy Johnson and more than 250 of his fellow workers at a Marion, Indiana American Pad and Paper (AMPAD) facility lost their jobs after Bain decided to close the plant amid a labor dispute.  Johnson, who noted that he personally reached out to Romney during the labor dispute, said, “I really think [Romney] didn’t care about the workers. It was all about profit over people.”  In addition to the layoffs and eventual bankrupting of AMPAD, Bain Capital under Romney’s leadership drove several other firms into bankruptcy and caused thousands of layoffs.

Conservatives and of course the radical anti-American movement known as conservatism finds nothing wrong with this kind of dog-eat-dog crony capitalism. Fair and humane capitalism in the tradition of American values is considered communism by the rabid fake patriots like Romney.

Much of the World, Including The U.S., Does Does Practice Capitalism, They Practice Greed

Much of the World, Including The U.S., Does Does Practice Capitalism, They Practice Greed

For those looking for signs of how globalization has woven the world into a web of unexpected vulnerability, 2011 offered a bumper crop.

An earthquake in Japan sent the global auto manufacturing industry into a conniption.

A flood in Thailand drastically reduced supplies of computer hard drives, forcing even a titan like Intel to swiftly reduce revenue forecasts.

State-subsidized solar panel production in China crushed a U.S.-subsidized solar start-up, thereby igniting a Washington political scandal.

It is child’s play to find further examples. The underlying reality is that unexpected consequences make everyone nervous. Sensibilities are on hair trigger. Just two weeks ago, the New York Times captured the new jitteriness in a single quote. In a story reporting how U.S. stock traders were increasingly setting their alarm clocks for the middle of the night, in order to absorb the latest news from Europe as soon as it started to break, one stock analyst, Michael Mayo, complains in a tone of bemused wonder: “Who would have thought we would have to be looking at Italian sovereign debt yields to figure out what Morgan Stanley’s stock will do?”
For those who haven’t been living and dying on every twist and turn of the European financial crisis, some unpacking of that sentence may be in order. Most modern governments routinely auction some form of state-backed bonds or other securities in order to raise cash. If the bond investors aren’t excited about the opportunity — let’s suppose, just for argument’s sake, that they’re afraid the Italian economy is about to collapse — then Italy must offer a higher interest rate, or yield, on those bonds to attract buyers. The higher the yield, the more negative the bond market’s judgment is assumed to be.

But for most of November and December, the health of Italy’s debt sales became not merely a judgment on Italy’s economic health and fiscal stability, but a swiftly translated proxy for investor sentiment about the state of all Europe. If Italy ran into real trouble, so the theory went, France and Germany would soon be swept into the vortex. And a European recession would obviously be bad news for the rest of the world. So one unsuccessful auction in Rome becomes immediate cause for bearish sentiment in New York and Tokyo and Shanghai.

And no one wants to be caught more than one nanosecond out of the loop. If the orders go out to sell or buy, you want to get there first. Since now, more than ever, bad news travels fast, everyone’s got to be quick on the trigger.

It doesn’t seem healthy, but we’re going to have to get used to it. Volatility and vulnerability are built into the infrastructure of our modern world. The jury may still out on the chaos theory question of whether a single butterfly flapping its wings in Botswana can cause a typhoon in the Philippines, but we now know without a shadow of a doubt that the relative success or failure of a troubled European government’s attempt to raise cash can send instant shock waves across financial markets across the globe.

And we know, intimately, that it doesn’t take much to set off a cascade of trouble — after the great global crash of 2008, traders everywhere are in a state of permanent PTSD. Beyond the obvious surface connections between markets — that European recession slowing U.S. economic growth — there are abundant linkages beneath the scenes that are obscure and hard to unravel, interconnections woven by complex derivatives and hedging strategies and computer-driven high-speed trading algorithms that instantly translate woe in one market to panic in another.

The inescapable conclusion: Our modern high-tech markets, in which more money than ever before swirls around the globe in a blink of an eye, are better at transmitting panic and fear than anything heretofore created by humans. If civilization is supposed to imply progress, then something has gone very awry: In the second decade of the 21st century, our infrastructure is increasingly fragile, increasingly prone to disruption. The sword of Damocles hangs above everyone’s head, and the thread that keeps it from falling is fraying perilously thin.

What is perhaps most fascinating about this state of affairs is how it has arisen as a consequence of global capital’s relentless quest for lower operating costs and greater efficiency and flexibility. The better we get at extending supply and production chains across the globe, the more vulnerable those chains become to a disruption at any given point. The faster we enable the transmission of information around the world and through the financial markets, the more volatile those markets become, as every new headline sends a different trading signal.

 If you want to fix this, guess what, according to right-wing conservatives, you're a socialist. If you want a capitalist system, a free market system that does regularly crush the middle and blue collar class, you're a stinking commie. In America we just do not have adult conversations about how to make things better because any talk of making things better, more fair, less catastrophic gets you labeled a communist. Do you hope your kids will live in a fair enlighetned societyand does not have to go through the economic insecurity you have to live with? Forget it. The powers that be have decided that greed is good. The powers that be have decided any attempt to bring back regulations like Glass–Steagall Act to protect average Americans is Marxism on wheels.

The Millionaires Who Act Like Scrooge and Those Who Act Like Patriots

The Millionaires Who Act Like Scrooge and Those Who Act Like Patriots

It's holiday season, and mean-spirited misers abound. GOP legislators have Dickensian plans for the 99 percent, aiming at shredding our social safety nets, undermining our healthcare, and making us pay for the financial crisis created by reckless financiers. Naturally, they decry even a modest income tax surcharge on millionaires, channeling Scrooge-worthy logic to justify their worship of Big Money at the expense of everyone else.

Meanwhile, JPMorgan Chase honcho Jamie Dimon, the highest paid executive among the six biggest and most dangerous banks, whines that he doesn't deserve our ire: "Acting like everyone who's been successful is bad and because you're rich you're bad, I don't understand it," said Dimon, whose 2010 take totaled $23 million.

Let us help you understand it. We don't hate you because you're rich, Mr. Dimon. Americans actually tend to admire people who make lots of money and, say, contribute useful things to society and promote the public good. Witness the recent outpouring of love for Steve Jobs. No, we itch for our pitchforks because you are greedy. You want to horde everything at the top and you refuse to acknowledge that you have any responsibility toward your fellow Americans. In fact, the way you make your money makes you look like a public menace. You dealt in risky derivatives and mortgage schemes that helped tank the global economy. You defrauded your investors. Your bank has even had the gall to foreclose on military families. Back in October, thousands of us stood outside your swank apartment on Park Avenue holding signs and telling you in plain English why your statements that bank regulations are "un-American" and such are both stupid and harmful. But apparently the message didn't get through. I guess we'll have to keep coming back until you do get it.

There are plenty of 1 percenters who support Dimon's view of the world, in which crushing ordinary people in the name of greed is something to be applauded.

But not all. And, like Warren Buffett, whose op-ed "Stop Coddling the Super-Rich" sent shockwaves through the country back in August, they are becoming more and more vocal. Philadelphia lawyer and philanthropist Dan Berger, a member of the Patriotic Millionaires for Fiscal Strength, has been hitting the airwaves and writing for months explaining why current tax policy unfairly favors the rich -- and why that's dangerous for everyone. Berger is concerned about the social pathologies and dysfunction created by the concentration of wealth at the top, and worries that we have unlearned the lessons of the Great Depression -- the last time such concentration devastated the country. "We are in a golden age of the cult of wealth," he warns. "Economic, social, and political life by, of, and for the one percent is an old story in the history of world civilization--one which inevitably ends badly."

Over the last decade, incomes for the richest 1 percent of Americans grew faster than that of any other group. CEO pay has soared 300 percent since 1990, while that of the average worker has risen a paltry 4 percent. If 1 percenters can't be convinced that such disparities are morally wrong, Berger suggests they conjure up some "enlightened self interest" in order to grasp what might happen if society becomes further unbalanced. He sees the Occupy Wall Street movement as the mere "tip of the iceberg."

Billionaire hedge fund manager Jim Chanos has also gone public expressing his support for Occupy Wall Street and his objection to tax policies weighted toward the 1 percent: "I have a problem with private capital asking for lower tax rates on certain forms of income that I believe are income, not returns on capital, than say teachers, soldiers, fireman and policeman.” Chanos explained to AlterNet why 1 percenters who can't see why Americans are angry are seriously out of touch: "They say we live in an 'aspirational society,' but many of those in the 1 percent accuse the Occupy Wall Street movement of class warfare and bemoan the fact that the president dubs them millionaires and billionaires. Well, I'm pretty sure most of the 99 percent would still aspire to be called the same thing!"

The aspirational dreams encoded in our American DNA have been increasingly crushed by policies and practices that channel money toward the top and leave students saddled with debt, workers struggling to support their families and elderly people unable to live in dignity.

We do live in a society that redistributes wealth. Every worker in America makes their contribution towards producing the GDP or Gross National Product. At the end of the day the pie (GDP) is divided up. The top one percent get most of the pie and the crumbs trickle down to everyone else. Conservative Republicans want you to believe that the top deserves it because they produce most of the work. Yep, hard to believe anyone would believe that mountain of BS, but many Americans do, just listen to Anti-American Fox News. They will be glad to tell you that supply-side trickle down economics is good and raising taxes just a little on the top is pure communism.

Conservative Republicans Subscribe to Trickle Down Supply-side Economics - An Economic Theory That Has Never Worked Anywhere in the World, Ever

Conservative Republicans Subscribe to Trickle Down Supply-side Economics - An Economic Theory That Has Never Worked Anywhere in the World, Ever

In 1910, former President Theodore Roosevelt gave his rousing “New Nationalism” speech in Osawatomie, Kansas, where he called for new approaches to dealing with the problems the nation faced. President Obama visited Osawatomie today, and in his own speech — his first major economic speech since Occupy Wall Street protests began highlighting income inequality and corporate greed — Obama called for a new approach to addressing America’s current economic challenges.

In the process, Obama fired a shot across the bow of 30 years of conservative economic theory, a shot that was sorely needed but has been left in the chamber by Democratic presidents and political leaders, Obama included, far too often. Trickle down economics, the conservative theory embraced by Ronald Reagan and virtually every conservative since, “doesn’t work,” Obama declared. And even as conservatives have clung to the idea in the face of overwhelming evidence against it, “it has never worked,” Obama added:

    Now, just as there was in Teddy Roosevelt’s time, there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If only we cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. And even if prosperity doesn’t trickle down, they argue, that’s the price of liberty.

    It’s a simple theory – one that speaks to our rugged individualism and healthy skepticism of too much government. And that theory fits well on a bumper sticker. Here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the 50s and 60s. And it didn’t work when we tried it during the last decade.


Obama is right. The trickle-down policies put in place since the Reagan administration haven’t brought prosperity to the middle- and working-classes; if anything, they have made prosperity an illusion for the vast majority of Americans who don’t directly benefit from them.

Tax cuts for the wealthy, primarily those passed by Republicans in 2001 and 2003, lowered rates for the richest Americans to historically low levels — but those cuts were followed by massive deficits and weak job growth, not the economic boom conservatives promised. Anti-regulatory policies helped lead to a predatory financial system that busted the housing market, nearly collapsed the financial industry, and threw America into a recession that largely spared — and even enriched — the nation’s wealthiest. At the same time, millions of lower- and middle-class Americans lost jobs, retirement funds, and any hope of economic prosperity in their lifetime. Under 30 years of trickle down policies, wage growth has stagnated even as CEO pay has boomed.

Unfortunately, Obama’s speech won’t be enough to make such policies disappear. Republicans continue to espouse the same ideas — loosening regulations and cutting taxes on the rich while slashing programs that benefit the working- and middle-classes — in their attempts to bring about recovery. If history is any indicator, however, those policies would again fail to boost job creation and economic growth. As Obama noted today, those policies don’t work, and they never have.

The Bush tax cuts were supposed to be like rocket fuel for the economy. We've had them for 10 years. Anyone from blue-collar working class to middle-class can look around and tell you those jobs were just unicorns and magic rainbows, not reality.

Wisconsin Gov. Scott Walker, Like Other Members of the Cult of Conservatism Couldn't Create a Job if His Life Depended On It

Wisconsin Gov. Scott Walker, Like Other Members of the Cult of Conservatism Couldn't Create a Job if His Life Depended On It

Gov. Scott Walker has repeatedly assured Wisconsinites that his assaults on local democracy, public services, public education and collective bargaining rights would create jobs and prosperity.

In contrast, the governor has argued, the decision of Illinois officials to tackle budget challenges with fair tax policies, respect for public employees and efforts to maintain services would cause doom and gloom for that state.

The Illinois comparison has been a constant in Walker’s speeches, media appearances and press releases since January. The governor has been unrelenting in his claim that the best measure of Wisconsin’s progress when it comes to job creation is against Illinois.

“They didn’t fix the problems,” Walker ranted in May with regard to Illinois officials. “In contrast, we’ve done that. And I believe that’s going to help us attract not only businesses coming in from Illinois (but) reassure employers here in the state of Wisconsin that this is the place, now is the time, to grow.”

This has been Walker’s steady mantra, repeated as recently as this month when he traveled to Chicago.

Unfortunately for Walker — and for the state that suffers under his misdirection — the measure has been made.

And the governor has been proven wrong. Way wrong.

The October jobs figures for the United States were just released. Illinois led the nation in job creation, adding 30,000 new jobs.

And what about Wisconsin?

Under Walker, Wisconsin now leads the nation in job losses.

In fact, of the states that the U.S. Bureau of Labor Statistics described as experiencing “statistically significant unemployment changes” in October, only one actually lost jobs: Wisconsin.

Wisconsin lost 9,700 jobs in October, almost all of them in the private sector.

But that is not the worst news. The worst news is that the job losses are part of a pattern that began around the time that Walker’s “reforms” took hold.

Wisconsin did not just lose jobs in October.

Wisconsin lost jobs in September.

Wisconsin lost jobs in August.

Wisconsin lost jobs in July.

Back in May, when Walker was bragging about how he had “fixed” Wisconsin, the latest figures put the state’s unemployment rate at 7.3 percent.

Now, the latest figures put the rate at 7.7 percent.

How does that compare with the national average? During the same period when unemployment went down one-tenth of a percentage point nationally, it rose four-tenths of a percent under Scott Walker.

Walker and conservatives on the national stage have not attacked unions because they are bad for the economy or America, Walker and his fellow cult members have attacked unions because the last thing conservatives want is individual Americans to be empowered to have more say over their lives. The less power individual Americans have and the more power government and corporations have the happier conservatives are.

OMG, Supercommittee Republican Rep. Fred Upton (R-MI) Admits Bush Tax Cuts Didn’t Create Jobs, Can’t Explain Why

OMG, Supercommittee Republican Rep. Fred Upton (R-MI) Admits Bush Tax Cuts Didn’t Create Jobs, Can’t Explain Why

Republicans this week filibustered a Democratic plan to extend a soon-to-expire payroll tax cut, objecting to the fact that the extension was paid for by implementing a small surtax on income in excess of $1 million. To justify their objection to taxing the wealthy, Republicans have revived their false claim that taxing the rich amounts to taxing small business owners and job creators.

Bloomberg’s Al Hunt asked Rep. Fred Upton (R-MI) — who represented the GOP on the fiscal supercommittee that failed to craft a deficit reduction package — to explain this viewpoint, considering that more jobs were created under the Clinton administration and its higher taxes on the rich than were created following the Bush tax cuts. Upton admitted that “I don’t know specifically the answer to that question,” nonsensically pointing to Friday’s jobs report instead of trying to argue the premise of Hunt’s question:

    HUNT: Why under those pre-Bush tax cut tax rates did the economy do so well in the ‘90s? And why under the Bush tax rates, less for the wealthy, to do so poorly in this decade?

    UPTON: Well, a couple things. One, spending went up, Al, the wars. I mean, that’s trillions of dollars. And also there was no change in the entitlements. And we also know -

    HUNT: But that shouldn’t hurt the economy. That shouldn’t hurt economic growth.

    UPTON: Yeah, but that impacts the debt and the deficit.

    HUNT: But I’m asking, why did the economy grow a lot? Why were more jobs created in the previous decade under higher taxes than in this decade under lower taxes?

    UPTON: I don’t know specifically the answer to that question. I can – I can maybe merit a guess. But, I mean, in large part is because our job – we lost jobs. I mean, look at the jobs report that came out this last week, three-hundred- some-thousand people actually stopped looking for jobs.



As Center for American Progress Director of Tax and Budget Policy Michael Linden found, “in the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.” In fact, “if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher.” The GOP, as Upton displays, simply has no explanation for these facts.

In a Bloomberg op-ed, wealthy investor Nick Hanauer also blew a hole in the GOP’s line of thinking, writing, “I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate. That’s why I can say with confidence that rich people don’t create jobs.” The GOP would do well to take note.

This is not particularly breaking news in the sense we know that conservatives practice economics the way cults practice their beliefs. Conservatives pay no attention to evidence, they just irrationally believe in what they believe, no matter how many millions of decent hard working Americans they hurt.

America Haters at Fox News Hosts Pollster Who is Paid To Make Up Smears About Health Care Reform

America Haters at Fox News Hosts Pollster Who is Paid To Make Up Smears About Health Care Reform

You may recall GOP pollster Frank Luntz's recently released a 28-page memo, "The Language of Healthcare 2009: The 10 Rules for Stopping the 'Washington Takeover' of Healthcare," which is intended to help conservatives defeat President Obama and congressional Democrats' health-care reform initiatives.  As we've noted over the past two weeks, Fox News has provided a forum for the Luntz talking points while Politico hyped his memo and downplayed a progressive pollster’s pro-health care reform memo.

Well, now it seems Luntz doesn't want anyone asking who paid for his "10 rules" memo.  Via Huffington Post's Sam Stein:

    Conservative communications guru Frank Luntz has written the playbook for GOP opposition to the Obama administration's health care proposal. His plan, which is heavy on framing the president's proposal as a government "takeover," is already popping up in statements from top congressional Republicans and on Fox News, despite the fact that no Democratic legislation has been proposed.

    But when it comes to discussing who funded his messaging, the wordsmith Luntz is notably devoid of words. Asked about his funder in an interview with the New York Times Magazine to be published on Sunday, Luntz was close-lipped:

    Q Who paid you to write the health care memo?

    A It's not relevant.

    Q A pharmaceutical company?

    A No pharmaceutical company was involved.

Riiiiiiight, it's not relevant who paid for the memo – a memo with talking points now being parroted by Fox News and other conservative media outlets and figures.  I know it may be a bit of a stretch to expect Luntz to understand that this is an issue about his credibility as a pollster – if he has any left – but it's the right thing to do.

 Luntz was one of the so-called experts used by the anti-American conservative movement to spread the falsehood about health care reform being socialism. That was found to be one of Poltifacts lies of the year. Unfortunately or fortunately depending on your point of view, health care reform or the ACA was a free market solution.

Did Fannie Mae, Freddie Mac Or The Community Reinvestment Act Cause the Recession

Private lenders issued vast majority of sub-prime loans

Did Fannie Mae, Freddie Mac Or The Community Reinvestment Act Cause the Recession

In the four years since the housing bubble burst, triggering a collapse in global financial markets whose value had been propped up through the repackaging and trading of home loans via complex financial instruments, there's been plenty of blame to go around. The Occupy Wall Street protests have called new attention to the root causes of the crisis, and led Republicans to reiterate their claim that government-backed lenders Fannie Mae and Freddie Mac were the primary villains. The facts about the subprime mortgage market prove that claim false: Private firms dominated the subprime market boom of 2004-06, and were not even subject to the 1977 Community Reinvestment Act some Republicans vilify. Thanks to decades of financial deregulation, capped by President Bush's decision to appoint Wall Street regulators who believed their job was to help banks rather than curb banking abuses, financial giants were able to turn the mortgage market into a high-stakes casino. As investigative reporters and Congress' Financial Crisis Inquiry Commission have all shown, it was deregulation mixed with irresponsible and potentially illegal practices by private firms on Wall Street that caused both the bubble and the collapse.

Republicans Blame The Financial Crisis On Fannie Mae, Freddie Mac, And Government Policy

Facts Show Private Lenders Who Were Not Subject To CRA, Not Government-Backed Ones Who Were, Drove The Subprime Mortgage Market

Deregulation Of Financial Markets And GOP-Appointed Absentee Regulators Paved The Way For The Subprime Bubble To Cause A Broad Collapse

"Financial Crisis Inquiry Commission" Expert Panel Found Wall Street Recklessness Caused The Crisis

Author Of Top Book On Financial Crisis Says There Is No Evidence For Blaming Either The CRA Or Fannie And Freddie

Republicans Blame The Financial Crisis On Fannie Mae, Freddie Mac, And Government Policy

Speaker Boehner: "Government Mortgage Companies...Triggered The Whole Meltdown." From House Speaker John Boehner's (R-OH) May 9, 2011, speech on Wall Street: "And the government mortgage companies that triggered the whole meltdown went untouched." [Boehner Remarks, 5/9/11]

Sen. Graham: "Fannie Mae And Freddie Mac" Were Behind "The Problem That Got Us Into This Mess." On the January 2, 2011, edition of NBC's Meet the Press, Sen. Lindsey Graham (R-SC) said: "[T]he financial regulation bill really left unattended Fannie Mae and Freddie Mac, and when you have government entities this large who own this much of housing, who've been pushing mortgages on people who couldn't afford to pay them, and you do nothing about it, it's pretty hard for me to say you've reformed the problem that got us into this mess. [...] To me, [the solution] is to get Fannie Mae and Freddie Mac in a, in a more privatized environment where risk/reward is, is, is more traditionally accepted. That--the American dream is to own a home you can afford. And to look at these entities and get more private-sector involvement and control who they lend money to and basically wind them down and make them more private." [Meet the Press, 1/2/11]

Sen. DeMint: "Liberal Housing Goals...Fueled The Housing Crisis." From Sen. Jim DeMint's (R-SC) blog: "Senator McCain has offered an amendment that would repeal their liberal housing goals that encouraged more risky lending and fueled the housing crisis, as well as end their dominance of the mortgage market and let the private sector back in. While more needs to be done to quickly end the permanent bailout of these mortgage giants, the McCain amendment is an important first step. True financial reform must include Freddie Mac and Fannie Mae. Congress cannot pretend to have ended 'too big to fail' without ending these out of control institutions." [DeMint.Senate.gov, 5/11/10]

Rep. Hensarling: "The Financial Crisis Was Caused By Failed Federal Policies" With Fannie And Freddie "At The Epicenter." From Rep. Jeb Hensarling's (R-TX) website: "The financial crisis was caused by failed federal policies that strong-armed, incented, and cajoled financial institutions into loaning money to people to buy homes that they couldn't afford to keep.  At the epicenter of this were Fannie Mae and Freddie Mac." [Hensarling.House.gov, accessed 10/13/11]

At GOP Presidential Debate, Rep. Bachmann Blamed The Community Reinvestment Act And Fannie Mae And Freddie Mac For The Crisis. At the October 11, 2011, GOP presidential primary debate, Rep. Michele Bachmann (R-MN) said: "I think if you look at the problem with the economic meltdown, you can trace it right back to the federal government, because it was the federal government that demanded that banks and mortgage companies lower platinum-level -- level -- lending standards to new lows. [...] It was the federal government that pushed the subprime loans.  It was the federal government that pushed the Community Reinvestment Act.  It was Congressman Barney Frank and also Senator Chris Dodd that continued to push government-directed housing goals.  They pushed the banks to meet these rules.  And if banks failed to meet those rules, then the federal government said, we won't let you merge; we won't let you grow.  There's a real problem:  It began with the federal government, and it began with Feddie and -- Freddie and Fannie." [GOP Debate, 10/11/11, via CFR.org]

Facts Show Private Lenders Who Were Not Subject To CRA, Not Government-Backed Ones Who Were, Drove The Subprime Mortgage Market

Private Firms, Not Fannie And Freddie, Dominated The Subprime Mortgage Market

2007: The Collapse Of The Housing Bubble And Widespread Defaults On Subprime Loans Triggered A Banking Crisis That Led To A Massive Recession. From Slate: "The only near consensus is on the question of what triggered the not-quite-a-depression. In 2007, the housing bubble burst, leading to a high rate of defaults on subprime mortgages. Exposure to bad mortgages doomed Bear Stearns in March 2008, then led to a banking crisis that fall. A global recession became inevitable once the government decided not to rescue Lehman Bros. from default in September 2008. Lehman's was the biggest bankruptcy in history, and it led promptly to a powerful economic contraction. Somewhere around here, agreement ends." [Slate, 1/9/10, emphasis added]

The Subprime Market Surged From 2004 To 2006. As reported by McClatchy: "Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006." [McClatchy, 10/12/08]

From 2004 To 2006, Fannie And Freddie's Share Of Subprime Market Fell From Almost Half To Just Under One-Quarter. As reported by McClatchy: "But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership. Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication." [McClatchy, 10/12/08, emphasis added]

    Fannie And Freddie Faced Tougher Regulatory Standards Than The Private Firms. As reported by McClatchy: "One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble." [McClatchy, 10/12/08]

2006: Private Firms Issued About Six Out Of Every Seven Subprime Mortgages. As reported by McClatchy:

    Federal Reserve Board data show that:

        More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
        Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
        Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. [McClatchy, 10/12/08, emphasis added]

2008: The 15 Largest Subprime Servicers Were All Private Companies, Despite Large Drops In The Volume Of Their Subprime Business Compared To 2007. McClatchy prepared a graphic based on Inside Mortgage Finance data showing the 15 largest subprime service companies in 2008:

     [McClatchy, 10/12/08]

"Conservative Campaign That Blames The Global Financial Crisis On A Government Push To Make House More Affordable" Is Disproved By The Data. As reported by McClatchy: "As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail. Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems. Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis." [McClatchy, 10/12/08, emphasis added]

Fannie And Freddie Don't Issue Loans, But Buy Them From Private Banks So Banks Can Continue Lending. As reported by McClatchy: "Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages. [...] Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans. It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more." [McClatchy, 10/12/08, emphasis added]
The CRA Didn't Apply To The Private Firms That Inflated The Subprime Bubble

Conservatives Blame The Community Reinvestment Act Of 1977 (CRA) For The Subprime Boom Of The Early 2000s. From former Director of the U.S. Treasury's Office of Thrift Supervision Ellen Seidman:

    It has lately become fashionable for conservative pundits (Larry Kudlow, George Will) and disgruntled ex-bankers (Vernon Hill, for example, in his March 7 American Banker editorial) to blame the current credit crisis on the Community Reinvestment Act. This is patent nonsense. The sub-prime debacle has many causes, including greed, lack of and ineffective regulation, failures of risk assessment and management, and misplaced optimism. But CRA is not to blame.

    First, the timing is all wrong. CRA was enacted in 1977, its companion disclosure statute, the Home Mortgage Disclosure Act (HMDA) in 1975. While many of us warned against bad subprime lending before the turn of the millennium, the massive breakdown of underwriting and extension of risky products far down the income scale-without bothering to even check on income-was primarily a post-2003 phenomenon. To blame a statute enacted in 1977 for something that happened 25 years later takes a fair amount of chutzpah. [...]

    Second, CRA does not either encourage or condone bad lending. Bank regulators were decrying bad subprime lending before the turn of the millennium (see Interagency Guidance on Subprime Lending), and warning the CRA-covered institutions we regulated that badly underwritten subprime products that ignored consumer protections were not acceptable. Lenders not subject to CRA did not receive similar warnings. [New America Foundation, 9/22/08, emphasis added]

The CRA Did Not Affect The Vast Majority Of Subprime Loans. From Businessweek: "The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly.

Republican Presidential Candidates Offer America More Voodoo Economics and No Solutions

Republican Presidential Candidates Offer America More Voodoo Economics and No Solutions

Key proposals from the Republican presidential candidates might make for good campaign fodder. But independent analyses raise serious questions about those plans and their ability to cure the nation's ills in two vital areas, the economy and housing.

Consider proposed cuts in taxes and regulation, which nearly every GOP candidate is pushing in the name of creating jobs. The initiatives seem to ignore surveys in which employers cite far bigger impediments to increased hiring, chiefly slack consumer demand.

"Republicans favor tax cuts for the wealthy and corporations, but these had no stimulative effect during the George W. Bush administration, and there is no reason to believe that more of them will have any today," writes Bruce Bartlett. He's an economist who worked for Republican congressmen and in the administrations of Presidents Ronald Reagan and George H.W. Bush.

As for the idea that cutting regulations will lead to significant job growth, Bartlett said in an interview, "It's just nonsense. It's just made up."

Government and industry studies support his view.

The Bureau of Labor Statistics, which tracks companies' reasons for large layoffs, found that 1,119 layoffs were attributed to government regulations in the first half of this year, while 144,746 were attributed to poor "business demand."
Mainstream economic theory says governments can spur demand, at least somewhat, through stimulus spending. The Republican candidates, however, have labeled President Barack Obama's 2009 stimulus efforts a failure. Instead, most are calling for tax cuts that would primarily benefit high-income people, who are seen as the likeliest job creators.

"I don't care about that," Texas Gov. Rick Perry told The New York Times and CNBC, referring to tax breaks for the rich. "What I care about is them having the dollars to invest in their companies."

Many existing businesses, however, have plenty of unspent cash. The 500 companies that comprise the S&P index have about $800 billion in cash and cash equivalents, the most ever, according to the research firm Birinyi Associates.

The rating firm Moody's says the roughly 1,600 companies it monitors had $1.2 trillion in cash at the end of 2010. That's 11 percent more than a year earlier.

Small businesses rate "poor sales" as their biggest problem, with government regulations ranking second, according to a survey by the National Federation of Independent Businesses. Of the small businesses saying this is not a good time to expand, half cited the poor economy as the chief reason. Thirteen percent named the "political climate."

More small businesses complained about regulation during the administrations of Bill Clinton and George H.W. Bush, according to an analysis of the federation's data by the liberal Economic Policy Institute.

Such findings notwithstanding, further cuts in taxes and regulations remain popular with GOP voters. A recent Associated Press-GfK poll found that most Democrats and about half of independents think "reducing environmental and other regulations on business" would do little or nothing to create jobs. But only one-third of Republicans felt that way.

The GOP's presidential hopefuls are shaping their economic agendas along those lines.

Former Massachusetts Gov. Mitt Romney says his 59-point plan "seeks to reduce taxes, spending, regulation and government programs."

Businessman Herman Cain would significantly cut taxes for the wealthy with his 9 percent flat tax plan. Rep. Michele Bachmann of Minnesota said in a recent debate, "It's the regulatory burden that costs us $1.8 trillion every year. ... It's jobs that are lost."

The candidates have said little about another national problem: depressed home prices, as well as the high numbers of foreclosures and borrowers who owe more than their houses are worth.

After the Oct. 18 GOP debate in Las Vegas, a center of foreclosure activity, editors of the AOL Real Estate site wrote, "We didn't hear any meaningful solutions to the housing crisis. That's no surprise, considering that housing has so far been a ghost issue in the campaign."

To the degree the candidates addressed housing, they mainly took a hands-off approach. "We need to get government out of the way," Cain said. "It starts with making sure that we can boost this economy and then reform Dodd-Frank," which is a law that regulates Wall Street transactions.

Bachmann, in an answer that mentioned "moms" six times, said foreclosures fall most heavily on women who are "losing their nest for their children and for their family." She said Obama "has failed you on this issue of housing and foreclosures. I will not fail you on this issue." Bachmann offered no specific remedies.

Romney told editors of the Las Vegas Review-Journal: "Don't try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up."

Perry spokesman Mark Miner said the Texas governor's "immediate remedy for housing is to get America working again. ... Creating jobs will address the housing concerns that are impacting communities throughout America."

Bartlett, whose books on tax policy include "The Benefit and the Burden," recently wrote in the New York Times: "People are increasingly concerned about unemployment, but Republicans have nothing to offer them."

The candidates and their supporters dispute this, of course. A series of scheduled debates may give them chances to explain why their proposals would hit the right targets.


A recent study published by Bloomberg shows that the elitist conservative presidential candidates are either out of touch with reality or are lying to the American people about business regulation. Obama Wrote 5% Fewer Rules Than Bush

President Barack Obama’s “tsunami” of new government regulations looks more like a summer swell.

Obama’s White House has approved fewer regulations than his predecessor George W. Bush at this same point in their tenures, and the estimated costs of those rules haven’t reached the annual peak set in fiscal 1992 under Bush’s father, according to government data reviewed by Bloomberg News.

The average annual cost to businesses under Obama is higher than under his predecessors, the Bloomberg review shows. The increase is estimated to total as little as $100 million or as much as $4.1 billion, or at most three one-hundredths of a percent of the total economy.

The scope of government regulation has emerged as a major issue in the 2012 presidential race and on Capitol Hill. Republican presidential candidates have accused Obama of stifling job creation by imposing rules on businesses, and House Republicans have vowed to rein in proposed regulations on everything from the environment to health care to banking.

“This is getting picked up and talked about, but not for any good reason,” Michael Livermore, executive director of the Institute for Policy Integrity at the New York University School of Law, said in an interview. “There’s nothing new about this attack: It comes and goes in good times and in bad.”

How Obama Compares

Obama’s White House approved 613 federal rules during the first 33 months of his term, 4.7 percent fewer than the 643 cleared by President George W. Bush’s administration in the same time frame, according to an Office of Management and Budget statistical database reviewed by Bloomberg.

The number of significant federal rules, defined as those costing more than $100 million, has gone up under Obama, with 129 approved so far, compared with 90 for Bush, 115 for President Bill Clinton and 127 for the first President Bush over the same period in their first terms. In part that’s because $100 million in past years was worth more than it is now due to inflation, Livermore said.

America Hater Karl Rove and His Astroturf Group American Crossroads takes aim at union workers to stop Obama jobs bill

America Hater Karl Rove and His Astroturf Group American Crossroads takes aim at union workers to stop Obama jobs bill

Jonathan Chait looks at the polling memo produced for Karl Rove's American Crossroads on how to kill President Obama's jobs bill. Jed Lewison previously highlighted the memo's origin in fear; Chait points to two key strategies it promotes:

    The key fact to understand about the bill, delicately left unmentioned by the American Crossroads memo, is that Americans want to do all the things Obama proposes. By a twenty-point margin, they favor funding new road construction and a payroll tax cut. By a 30-point margin, they agree with higher taxes on the rich to cut the long-term deficit. They support helping stave off layoffs of police officers, firefighters, and teachers by a 50-point margin. How do you fight that?

    You redefine the issue as a generalization. People don’t like firing police officers and teachers? Fine, just call them “union workers[.]”

The memo (warning: Karl Rove PDF) found that if you describe Obama's proposal to "give billions to states to stop layoffs of teachers and firefighters," 70 percent of them favored it. But let's say you describe it as "giv[ing] billions to states to keep government union workers on the payroll." Support drops dramatically.

That's exactly why it's so important to always remind people that we're talking about police officers and teachers and nurses and firefighters and librarians and custodians and construction workers, no matter how much the repetition can make you feel like you're talking about the Village People.

Chait also highlights how the memo supports the Republican strategy of opposition to every damn thing that Obama wants or that could improve the economy:

    When one party is unanimously opposed to something, and the other party is disagreeing about it, many people figure it’s a bad idea. This was an insight Mitch McConnell grasped from the outset of Obama’s presidency, announcing that unified Republican opposition would help make the president’s policies unpopular. Accordingly, American Crossroads finds that the mere fact of Republican unanimity, and Democratic lack thereof, ranks among its most persuasive arguments against the bill[.]

They're pushing an agenda the American people do not want to see imposed. But they've got a lot of money to push it with, they're good at pushing it, and demonizing workers and obstructing progress are among their most powerful weapons.

It is no surprise that the America hating right-wing conservative movement would destroy millions of American's lives all for the sake of advancing the extremist agenda of the fake patriots who call themselves conservatives. They've been selling America their twisted brand of patriotism for years and just like those products that swear you can get rock hard abs while eating cookies and watching TV, there have always been Americans stupid enough to but into it.

Mitt Romney Used To Have a Heart Now He is Running as a Far Right Conservative - Romney Supported President Bush’s Government Program To Refinance Mortgages

Mitt Romney Used To Have a Heart Now He is Running Far Right Conservative - Romney Supported President Bush’s Government Program To Refinance Mortgages

This week, in an attempt to boost the economy without having to deal with Congress, the Obama administration announced an overhaul of its mortgage refinancing program known as HARP. The changes will allow more people to take advantage of low interest rates, freeing up more money for them to spend elsewhere.

As we noted yesterday, this idea is supported by 2012 GOP presidential hopeful Mitt Romney’s top economic adviser, Columbia University’s Glenn Hubbard. Hubbard called Obama’s refinancing plan “a big deal.” “It looks like a good plan; I’m glad they’re doing it,” he said. And as it turns out, Romney himself supported a refinancing plan when President Bush announced one in 2007.
In late August 2007, as the subprime mortgage crisis built up, Bush introduced an initiative overseen by the Federal Housing Authority to “help struggling homeowners find a way to refinance” and stem foreclosures. According to Bush, while it was “not the government’s job to bail out speculators,” there were a lot of homeowners “who could get through this difficult time with a little flexibility from their lenders or a little help from their government.”

A week later, during an interview with Hugh Hewitt, Romney professed no concerns about the program:

    Well, the President has taken action that should calm a good portion of the market, which is he said look, these people who borrowed money from the sub-prime world with these reset provisions, where the payments go up in later months, and they were told by their mortgage banker in many cases don’t worry about that, we’ll refinance it when that time comes, well, now the mortgage banker’s gone, they can’t refinance it. And so he’s saying, the President’s saying let’s have the FHA refinance these mortgages. It’s not a bailout, but it is a setting which gives people stability, and will calm the markets to a certain degree.

In an interview last week with the Las Vegas Review Journal, Mitt Romney opined that the Obama administration has no right to provide assistance to homeowners facing foreclosure, saying that the foreclosure process ought to “run its course and hit the bottom.

However, he did add, “I think the idea of helping people refinance homes to stay in them is one that’s worth further consideration.” So given his prior support for the idea, is Romney on board with the administration’s effort?

Romney keeps drifting back towards being moderate when far right-wing conservatives who control the Republican Party like a brain dead cult want absolute purity. They don't want to help people stay in their homes, but have no problem with too big to fail banks reaping near pre-recession profits. How is it that Wall Street gets government backing and homeowners - who are not responsible for losing $17 trillion of America's wealth get all the protection conservatives can provide.

Private Wall Street Companies Caused The Financial Crisis — Not Fannie Mae, Freddie Mac Or The Community Reinvestment Act

Private Wall Street Companies Caused The Financial Crisis — Not Fannie Mae, Freddie Mac Or The Community Reinvestment Act

In the four years since the housing bubble burst, triggering a collapse in global financial markets whose value had been propped up through the repackaging and trading of home loans via complex financial instruments, there's been plenty of blame to go around. The Occupy Wall Street protests have called new attention to the root causes of the crisis, and led Republicans to reiterate their claim that government-backed lenders Fannie Mae and Freddie Mac were the primary villains. The facts about the subprime mortgage market prove that claim false: Private firms dominated the subprime market boom of 2004-06, and were not even subject to the 1977 Community Reinvestment Act some Republicans vilify. Thanks to decades of financial deregulation, capped by President Bush's decision to appoint Wall Street regulators who believed their job was to help banks rather than curb banking abuses, financial giants were able to turn the mortgage market into a high-stakes casino. As investigative reporters and Congress' Financial Crisis Inquiry Commission have all shown, it was deregulation mixed with irresponsible and potentially illegal practices by private firms on Wall Street that caused both the bubble and the collapse.

...From 2004 To 2006, Fannie And Freddie's Share Of Subprime Market Fell From Almost Half To Just Under One-Quarter. As reported by McClatchy: "But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership. Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication." [McClatchy, 10/12/08, emphasis added]

    Fannie And Freddie Faced Tougher Regulatory Standards Than The Private Firms. As reported by McClatchy: "One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble." [McClatchy, 10/12/08]

2006: Private Firms Issued About Six Out Of Every Seven Subprime Mortgages. As reported by McClatchy:

    Federal Reserve Board data show that:

        More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
        Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
        Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. [McClatchy, 10/12/08, emphasis added]

2008: The 15 Largest Subprime Servicers Were All Private Companies, Despite Large Drops In The Volume Of Their Subprime Business Compared To 2007. McClatchy prepared a graphic based on Inside Mortgage Finance data showing the 15 largest subprime service companies in 2008: 

The conservative narrative that blames Fannie, Freddie and working class Americans is all about not admitting that free markets are not perfect. Free markets only work when properly regulated and that regulation enforced. Blaming anyone and any institution that was not pure free market is away to shift blame from the real constituency of the Anti-American conservative movement - the financial elite.

What Liberal Media - Most of President Obama's Accomplishments Go Unreported

What Liberal Media - Most of President Obama's Accomplishments Go Unreported

The teeming crowds of supporters who had cheered candidate Barack Obama’s agenda for “change you can believe in” receded quickly. The 2008 presidential election energized Americans who had never participated in politics before, particularly the young and minorities, and it attracted the interest and hopes of many independents, people who are usually less engaged in the political process. Once elected, the young president held to his word and pursued transformations in American social policy — healthcare reform, new tax breaks, and enhanced aid to college students — that vast majorities of Americans had long told pollsters they favored. Despite the usual travails of the legislative process, exacerbated in 2009 and 2010 by greater political polarization in Congress than at any other point in the post–World War II period, within 15 months Obama had already achieved much of what he set out to do on these issues. Yet Americans generally seemed unimpressed and increasingly disillusioned. The problem was that most of what was accomplished could not be seen: It remained invisible to average citizens.

The public had no trouble noticing the jockeying of special interests that sought favored treatment in legislation — that was plain to see — but the majority of Americans remained unaware of the contents of the president’s signature achievements, and they lacked a basic understanding of how they and their families might be affected by them. The first major piece of legislation that Obama had signed into law, the stimulus bill of February 2009, included a vast array of tax cuts: They totaled $288 billion, 37 percent of the cost of the entire bill. Among them, the Making Work Pay Tax Credit, one of his campaign promises, reduced income taxes for 95 percent of all working Americans. Yet one year after the law went into effect, when pollsters queried the public about whether the Obama administration had raised or lowered taxes for most Americans, only 12 percent answered correctly that taxes had decreased; 53 percent mistakenly thought taxes had stayed the same; and 24 percent even believed they had increased!

Healthcare reform represented Obama’s chief policy goal, and he expended a vast amount of political capital in pursuing it over his first 15 months in office. But in April 2010, just weeks after he signed the healthcare bill that extended coverage to the vast majority of working-age Americans and prohibited insurance companies from denying coverage to people who are ill, 55 percent of the public reported that they would describe their feelings about it as “confused.”

That same legislative package also contained sweeping changes in student aid policy that aimed to help more people attend college and complete degrees. Yet when Americans were asked how much they had heard about these changes, only 26 percent reported “a lot,” while 40 percent said “a little,” and fully 34 percent said “nothing at all.”

All told, the public seemed largely oblivious to the president’s major policy accomplishments.

While many who had voted for Obama grew complacent, grassroots mobilization emerged from another quarter, the insurgent Tea Party movement. Wielding placards at protests on tax day, town hall meetings and other public events, its supporters decried what they termed “government takeovers” of healthcare and student loans. At a gathering in Simpsonville, S.C., in August 2009, one man told Republican Rep. Robert Inglis, “Keep your government hands off my Medicare.” Inglis said later, “I had to politely explain that ‘Actually, sir, your healthcare is being provided by the government,’ but he wasn’t having any of it.”

While as of March 2010 only 13 percent of Americans reported that they considered themselves “part of the Tea Party movement,” nonetheless the frustration that it embodied resonated with growing numbers of Americans: 28 percent considered themselves supporters.

With the content of Obama’s legislative accomplishments appearing so opaque and incomprehensible even as the calls of opponents resonated loud and clear, most Americans registered reactions that were tepid at best, and many grew increasingly hostile. By the fall of 2010, 61 percent of likely voters told pollsters they favored a repeal of healthcare reform.

It was a sharp contrast to the warm reception given to sweeping social welfare laws achieved by earlier presidents. After Franklin D. Roosevelt signed into law the Social Security Act of 1935, 68 percent of the public voiced support for its “contributory old age insurance plan … which requires employers and workers to make equal contributions to workers’ pensions” — even though its benefits were not scheduled to begin for six years.

When Congress passed Lyndon Baines Johnson’s plan for Medicare in 1965, strong majorities repeatedly said they approved of it, as high as 82 percent in a December survey that year.

Until Obama’s presidency, perhaps never before had major laws that aimed to improve the lives of vast numbers of ordinary Americans gone so unrecognized and unappreciated by so many.

What explains the public’s reticence, frustration and confusion? Certainly its reactions owe partly to the worst economic conditions since the Great Depression, with more than two years of near 10 percent unemployment. Some of the lackluster response was inevitable, furthermore, given the sheer scope and complexity of the policy tasks Obama took on. And a share of the blame belongs to his administration’s own public relations efforts, which many observers considered underwhelming. Yet while each of these commonly cited factors undeniably played a role, they do not, by themselves, explain Americans’ blasé response to major social policy accomplishments that reflected broadly shared values. Historical comparisons make this evident. The public voiced its high approval for the Social Security Act of 1935, for example, when the nation was still mired in the Great Depression and when twice the proportion of Americans, 20 percent, remained jobless. That legislation was also multifaceted and complex, and it was even more novel for the United States than the 2010 healthcare package, marking the first major involvement of the U.S. federal government in social provision for people besides veterans and their relatives.

The main difference confronted by Obama emanated from the types of policies that he sought to reform, ones that generate particularly formidable obstacles. Any leader who seeks to transform “politics as usual” is bound to confront resistance — challenges emanating from the policies, practices and institutions already in place.

But the nature and difficulty of the task vary depending on the particular goals that reformers select and the historical context in which they pursue them. Roosevelt confronted a political landscape that presented its own challenges — not least, a Supreme Court that served as a major roadblock to his policy ambitions. His administration had to attempt to fashion policies that would circumvent the court’s reach and to build as much as possible on what already existed, such as social policies adopted by some states. But Obama’s policy agenda, in the current political context, requires him to engage in a struggle more akin to that undertaken by Progressive Era reformers, who had to destroy or reconstitute deeply entrenched relationships if they were to achieve change.

He could not follow the path of Roosevelt, finding a way around political obstacles or merely building on top of what existed; rather, he had to find ways to work through them, by either obliterating them or restructuring them.

This is because Obama, given his policy agenda, had steered directly into the looming precipice of the submerged state: existing policies that lay beneath the surface of U.S. market institutions and within the federal tax system. Contrary to opponents’ charges that his agenda involved the encroachment of the federal government into private matters, Obama was actually attempting to restructure a dense thicket of long-established public policies, but ones that are largely invisible to most Americans — and that are extremely resistant to change. Efforts to transform these policies, which have become entrenched fixtures of modern governance, generate a deeply conflictual politics that routinely alienates the public, hindering the chances of success or the sustainability of the reforms.

The “submerged state” includes a conglomeration of federal policies that function by providing incentives, subsidies or payments to private organizations or households to encourage or reimburse them for conducting activities deemed to serve a public purpose. Over the past 30 years, American political discourse has been dominated by a conservative public philosophy, one that espouses the virtues of small government. Its values have been pursued in part through efforts to scale back traditional forms of social provision, meaning visible benefits administered fairly directly by government. In the case of some programs geared to the young or to working-age people, the value of average benefits has withered and coverage has grown more restrictive.

Ironically, however, the more dramatic change over this period has been the flourishing of the policies of the submerged state, which operate through indirect means such as tax breaks to households or payments to private actors who provide services. Since 1980 these policies have proliferated in number, and the average size of their benefits has expanded dramatically.

Most of these ascendant policies function in a way that directly contradicts Americans’ expectations of social welfare policies: They shower their largest benefits on the most affluent Americans. Take the Home Mortgage Interest Deduction (HMID), for example, which is currently the nation’s most expensive social tax break aside from the tax-free status of employer-provided health coverage. Let us assume that a family buys a median-value home and to finance it borrows $230,000 at an interest rate of 6.25 percent for 30 years. The richer the household, the larger the benefit: In the first year, the average family, with an income between $16,751 and $68,000, would owe around $3,619 less in taxes; those in the next income group, with earnings up to $137,300, would reap an extra $5,146; and so forth, on up to the wealthiest 2 percent of families, with incomes over $373,650, who would enjoy a savings of $6,673. Of course, in reality, these differences are likely to be much greater. Low- to moderate-income Americans usually do not have enough deductions to itemize, so they would forgo this benefit and receive instead only the standard deduction. Meanwhile, the most affluent are likely to purchase far more expensive homes; if a family in the top income category opts for a more upscale home and borrows $500,000 for a mortgage, it will reap a benefit of $14,506 from the HMID; if this family purchases a truly exclusive property and borrows $1 million for a mortgage, it will qualify to keep a whopping $29,012!

This pattern of upward redistribution is repeated in numerous other policies of the submerged state: Federal largesse is allocated disproportionately to the nation’s most well-off households. Such policies consume a sizable portion of revenues and leave scarce resources available for programs that genuinely aid low- and middle-income Americans.

Yet despite their growing size, scope and tendency to channel government benefits toward the wealthy, the policies of the submerged state remain largely invisible to ordinary Americans: Indeed, their hallmark is the way they obscure government’s role from the view of the general public, including those who number among their beneficiaries. Even when people stare directly at these policies, many perceive only a freely functioning market system at work. They understand neither what is at stake in reform efforts nor the significance of their success. As a result, the charge leveled by opponents of reforms — that they amount to “government takeovers” — though blatantly inaccurate, makes many Americans at least uncomfortable with policy changes, if not openly hostile toward them.  ***Rest of the article continues at the link.

What with internet access to many government sites and public policy think tanks if the public, especially right-wing conservatives uses the internet at all it is go to sites whose bias is evident in the serial lies that tell about Obama and Democrats. Some minds are simply closed to the truth and new ideas. The example above of the tea nut who wanted government to keep their hands off his Medicare is a good example - Medicare is a government health insurance program, what conservatives derisively call an entitlement program. It is an entitlement because individuals pay for it through their payroll taxes. It is not a government giveaway. It is not giving anyone a free ride.

The Latest Desperate Smear Of Occupy Wall Street Protests: The Nazis Like Them

The American Nazi Party put out a statement on Thursday that was supportive of the Occupy Wall Street protests. Rocky Suhayda, the party's chairman, said, "My heart is right there with these people."

The right-wing blogosphere saw an opportunity to associate the protests with Nazis, and the pile-on began. The Blaze quoted the statement, as did Fox Nation and Gateway Pundit blogger Jim Hoft.

On the Monday edition of Fox News' flagship "straight news" program Special Report, anchor Bret Baier also treated this endorsement as if it were significant:

Interesting fact about Suhayda: During the 2008 presidential campaign, he declared his preference for Barack Obama over John McCain.

In a June 2008 piece, Esquire magazine interviewed Suhayda along with three other white supremacists -- and three of the four preferred Obama. Esquire also interviewed a black nationalist who chose McCain.

Similarly, an Al Qaeda affiliate expressed its hope that George W. Bush would win re-election in 2004, and an Al Qaeda website offered its support for McCain in 2008.

So, does this mean that Obama is just like the Nazis, or that Bush shares Al Qaeda's goals, or that McCain is a black nationalist?

Of course not. These are all ridiculous associations to make. Fringe groups make provocative comments like this all the time, often in the interest of attracting publicity.

The right-wing media's promotion of Suhayda's statement reveals an agenda that is dead-set on delegitimizing the message of the protests, to the extent that they're willing to employ comically flimsy logic in an attempt to do so.

Reminder: If a Nazi says something nice about you, that doesn't make you a Nazi.

Five Myths About The Economy That Conservatives Keep Repeating

Five Myths About The Economy That Conservatives Keep Repeating

The Top Five

Here are five “conventional wisdom” doses of economic nonsense that we have been fed:

1. Business does everything better than government ?

Corporate conservatives argue that businesses and their one-dollar-one-vote system of decision-making is better and more efficient than We, the People's government and its one-person-one-vote system. They argue that constant competition, placing companies under constant fear of going under and people under constant fear of job-loss, focuses the mind like a pending execution. They say it leads them to do only what they should be doing and no more, in the best possible way, always looking for the best and most “efficient” ways, forcing innovation to occur.

But as we have seen, what actually happens in this kind of dehumanized “Force You” system (as in “F.U.”) is that businesses are forced to cut every corner, cheapen every product, cut out every service, lay people off, cut people’s wages while adding hours, gut benefits … and probably go under anyway because when every business does the same 99 percent of us can’t afford to buy or do things anymore.

The effect on people (human beings – remember them?) is worse. Stress-induced illness is rampant in our fear-based society. People do not get sufficient sleep, skip vacations, work long hours, spend less time with their families, spend very little time in nature, and the rest of the things that make us human.

This idea that people are best when operating under constant fear is similar to the conservative mantra that everyone should carry a gun because then you have “a polite society.” Perhaps constant fear and stress keeps people on their toes and makes them “behave” but in the long run it’s just no way to live.

Another “feature” of this top-down, one-dollar-one-vote, “market” system that the corporate conservatives advocate is that only those at the top levels of the corporate/financial ladder make the decisions for, and receive the benefits of, society. This is great if – and only if – you are in that 1 percent. But one-person-one-vote, democratic government decision-making means all of us have an equal say with equal access and equal opportunity, and society operates for the benefit of all of us.

2. Rich people are “job creators.”?

This is the old “trickle-down” idea -- that if you give enough money to the already-rich eventually some of that money will trickle down to the rest of us. This is also called the “getting peed on” theory of economics.

The basis of this thinking comes from the theories of Ayn Rand, who argued that society consists of “producers” and “parasites.” Rand’s fundamentally anti-democratic ideology says that democracy is a form of “collectivism” in which people who don’t want to work and produce use their numbers to steal from a gifted few who are the “producers” of goods and services. Rand’s followers claim that wealthy people are rich because they “produce.” The rest of us are “parasites” who “take money” from the productive rich, by taxing them. This revenue is “redistributed” to the parasites to pay for our “entitlements.”

They say that if wealthy people have more money they will use that money to start businesses and hire people. But anyone with a real business will tell you that people coming in the door and buying things is what creates jobs. In a real economy, people wanting to buy things – demand – is what causes businesses to form and people to be hired.

History – and a quick look around us today – shows that when all the money goes to a few at the top demand from the rest of us dries up and everything breaks down.  Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.

3. Government and taxes take money out of the economy?

Yes, they actually say that government and taxes “take money out of the economy.” They argue that the money government collects is a) pocketed by politicians; or b) stuffed under a giant mattress; or c) is just wasted.

In reality the taxes that government collects are invested in the “public structures” that create the prosperity and lifestyle we enjoy – or at least did before taxes were cut. Tax revenue builds the infrastructure of transportation, courts, schools, universities, research facilities and other institutions that enable our businesses to grow and prosper and the consumer protection, safety inspection, water and sewer, health, parks and arts that help us live and enjoy our lives.

But there is a powerful reason for people to feel the government does seem to be providing value for the money it costs us: so much of the federal budget goes to military and military-related spending. Spending on wars, the "Defense" department (military), intelligence, nuclear weapons, veterans, and related budget items (including interest on money borrowed for past military spending) is a significant portion of the budget, and people instinctively feel that the country is not getting back services that match what they are putting in.

High top tax rates also reduce the incentive to be greedy and destructive, which can overcome many of us and make us do things we shouldn’t. Cutting top tax rates in the '80s forced a change in business models away from long-term planning and building wealth by building sustainable businesses over decades. Instead, since you could take home a fortune overnight, it made more sense to go for the get-rich-quick, sell-the-farm-style schemes so prevalent today.

4. Regulations Kill Jobs?

Corporate conservatives say that “government just gets in the way” and costs money, which leaves less room for hiring. This is a corollary to the “business knows best” argument and to the idea that society consists of a few “producers” who are inherently superior to the masses of people. The thinking is that We, the People don’t know what we are doing, and businesses with their top-down structure will do the right thing more efficiently.

Those engaged in a business do know the business better than outsiders.  But regulations that protect the public, employees and the environment govern how the actions of businesses affect the rest of us.  A business wants to make a profit, and will only care how regulations affect that goal.  It makes sense for government to set up regulations because the rest of us are concerned about the larger world of the rest of us, and therefore understand more clearly how the actions of a business will affect the rest of us.

In may cases regulations keep businesses from doing things that kill jobs – and people.

5. “Protectionism” hurts the economy.

Corporate conservatives argue that “free trade” is always good under all circumstances. They say we get lower prices and our businesses are able to reach more customers. Of course trade can be a wonderful thing, increasing the standard of living on both sides of the trade border.

But the trade deals of recent decades have not been free or fair, and can’t really even be called “trade.” What has happened is countries sell to us but do not buy equally from us, causing huge trade deficits that have drained our economy and our jobs and our wages. Instead of increasing prosperity they have been used to increase exploitation of working people and the environment for the benefit of a wealthy few.

Our prosperity is the fruit of our democracy. 

Conservatives say that it is good that businesses in countries like China are more competitive because they don’t have a lot of regulations to comply with. Countries where the people have little say in things don’t have to spend the money to pay minimum wages, keep the environment clean, keep workers safe and keep products up to standard and they don’t have to worry about lawsuits. They are more “efficient.” So they can charge less.

Conservatives who argue that we should have less regulation, lower wages, fewer benefits, fewer consumer, worker and environmental protections are really arguing that we should abandon democracy. By opening our borders to goods made where people do not have a say we made democracy a competitive disadvantage.

Fed Up With the Nonsense

So as we see all around us today, the economic conventional wisdom nonsense that we were force-fed for decades didn’t work, messed things up, and people finally got fed so much if it that they are fed up. The #occupy crowd got fed up and showed up. They sleep in the park and on sidewalks, marched, and took the batons and pepper spray that seem to always come at us when we protest. They persisted, and awakened the rest of us. Now it has spread to cities across the country.

They shook loose from the shadow-fog of propaganda that shrouds us from morning to night, from radio to TV to newspaper. They didn’t prepare a media strategy with a savvy focus-group-tested message targeting key demographics. They didn’t care how they looked or how they would be seen. They didn’t care what the media would say. They certainly didn’t care what Wall Street would do. They saw clearly where the problem is, and decided to just go ahead and do something.

They said that what is going on is wrong, it is bad, it is hurting people, and that they were not going to put up with that for one more minute. They said it is time to be citizens not consumers.  They are choosing to have some meaning in their lives beyond just being worker bees helping perpetuate a destructive system.

So they decided to “occupy Wall Street” in the name of the 99 percent of us who have been losing out in this economy, and the honesty and clarity of that has caught on.

    “No one is confused about the message. Wall Street got bailed out; Main Street was abandoned. The top 1% rigs the rules and pockets the rewards. And 99% get sent the bill for the party they weren't even invited to.” – Robert Borosage

    Poets, priests and politicians
    Have words to thank for their positions
    Words that scream for your submission
    And no-one's jamming their transmission
    And when their eloquence escapes you
    Their logic ties you up and rapes you

    -“De Do Do Do De Da Da Da,” The Police

When is the last time you heard someone in big corporate media challenge any of these conservative myths. The reason we hear so much news about scandals and missing persons ( stories worthy of coverage, but not the over done exploitative coverage we get) is because those stories take up lots of air time and are easy to cover. The corporate media also tend to act like the most popular kids in school, they don't want to do or say anything that goes against the conventional wisdom because it would put a dent in their popularity.