Matt Taibbi talks about the Tea Party, Palin, & the Banks

I really hope if you have an opportunity to watch Eliot Spitzer on his CNN news-talk show, Parker-Spitzer.  The man always impresses me when he's debating friend or foe, with his enormous knowledge of governance, financial affairs, and the inherent corruption that exists between government and big business.  There really isn't any other show on the MSM cable channels, in America at least, that I think is worth watching.  Even if you're into liberal talk shows, MSNBC's lineup tends to be a little repetitious and self-serving when it comes to engaging in substantive issues. 

The above video post is another with Matt Taibbi, who grouses on the media obsession with Caribou Barbie and the Tea Party movement, the criminality of the banks, and the incompetence of Tim Geithner and Alan Greenspan.  Spitzer and Taibbi unleash a real pummelling on the ass-clowns of casino-capitalism!

Eliot Spitzer on Obama's First Year

Spitzer who knows a thing or two about taking on established power, points out in the above video and in his 26-Jan. 2010 State article how Mr. Obama can re-assert the progressive liberal agenda in which he was elected to enact and save the Democrats from electoral defeat in the 2010 midterm elections.

In the article he basically calls Rahm Emanuel (WH Chief of Staff), Larry Summers (Director of the National Economic Council), and Tim Geithner (US Secretary of the Treasury) incompetent political operatives who are a liability to both the Obama presidency and the nation as a whole.

He also contends that the president's working model is useless and Obama needs to aggressively control the legislative process, rather than ceding it to congressional weaklings.

It is time for President Obama to imitate Lyndon Johnson and Franklin Roosevelt: define the progressive agenda and impose party discipline, use the 59 votes in the Senate—still an overwhelming majority—and an equally robust majority in the House to make every effort to pass the critical pieces of the Democratic agenda and then let the Republicans try to counter.

Mr. Obama has failed repeatedly over the past year to heed the criticisms of those on his left-flank.  As a result, both him and the Democrats, by underwhelming and playing footsie with K-Street, are posed to lose massively in the 2010 midterm elections to the Republicans; whose only solution to America's problems is more war and less taxes.  If he wants the Democrats to continue being an appendage of the corporate state, then he should prepare himself to vacate the White House in 2012, because few who voted for a reformist agenda, to correct the extravagances of the Bush junta, will bother to do so again with the present course of action.

How to Kill an Economy: Eliminate the Middle-Class

Elizabeth Warren, the US Chairman of the Congressional Oversight Panel overseeing the TARP, has an excellent article titled "America without the Middle Class" in the Huffington Post.

The article summarizes what many have been saying for the past thirty years; the American middle class is in serious decline. The macroeconomics should be clear to everyone. Income for middle class workers has been stagnant since the late 1970's. Permanent company jobs with lifetime employability and benefits are now non-existent, as short-term contract work and a mobile class of professional workers has become the norm. The American manufacturing base, once the envy of the world, has been hollowed out through corporate globalization reaching for the lowest common denominator. Union jobs, once the backbone of the middle class, are derided and repeatedly dismissed as inefficient and anti-capitalistic, while Wall Street's financial services as a percentage of GDP have doubled during the same period.

Warren illustrates the declining purchasing power of the middle class here:

In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.

In order to maintain their standing of living, the American family was initially forced into having two wage earners in the family. With greater credit and a variety of other quick-debt schemes in the 1980's, these same middle-class denizens were enticed into believing that they, like every Republican Administration since Nixon, could just charge their concerns away. Remember Cheney saying, "Reagan proved deficits don't matter!"

The underlying strength of the American economy this past century has been the growth of the middle class and their attendant purchasing practices. New homes were built around highways leading to factories; cars in every driveway that would ferry the masses; increased attendance at colleges and universities that spawned further innovation and technological growth; and increased consumerism created mega-malls filled with shiny-happy shoppers. However, as the demographics shifted from rural agriculture and domestic manufacturing to a service-based economy, the captains of high-capital rejected Henry Ford's axiom that workers needed a decent wage in order to buy their employers produce.

Professor Warren concludes:

America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

Indeed. Gov. Eliot Spitzer, who was on Democracy Now yesterday, also stated the obvious,

The reality is median family income has been stagnant for forty years, and the policies of what I call financialization, which is major banks trading assets back and forth, the Wall Street banks, such as Goldman, which is rightly a lightning rod right now for much of what’s going on, buying and selling, playing with tax dollars in proprietary trading—they make huge money, nothing is added to the economy, jobs are sent overseas. All of this going on simultaneously. That is what our economy has become.

The issue is simple. Government of all stripes and labels, be it Republicans or Democrats, have decided it was more important to bail out and feed the banks money borrowed by the middle-class, rather than institute policies that would nurture and enhance the middle class. As Spitzer says, "So what are the priorities, in terms of infrastructure investment, job creation, building the foundation of an economy that will permit us to be competitive so that real Americans can get jobs, not just investment bankers and lawyers?" A specific example of this short-term profit driven corporatism, is in the $12.9 Bn that was alone given to Goldman Sachs through the AIG government backed bailout. Compare that sum with the meager $4 Bn given to invest in K-12 education across the nation or the $8 Bn for high-speed trains. As usual, socialism for the rich, fuck-you-very much capitalism for the rest.

Nine Questions for Ben Bernanke

I'm not a fan of the monetary or regulatory policies advocated by the Federal Reserve. I think Alan Greenspan was a crook; although unlike the politicians and corporate yes-men he served, he never claimed he wasn't. Nassim Taleb has called for Bernake's head, as have persons on both the right and left; although for quite different reasons. It is clear that Mr. Bernanke will be confirmed without undue problem, just as Greenspan was. If the Democrats were serious (which it doesn't appear to be) or at least a few outliers, like Representatives Ron Paul (R-TX) or Gary Ackerman (D-NY), who do sit on the House Financial Services Committee were able to ask the right questions, then we might actually understand where this listing ship will finally sink.

Elliot Spitzer, former Governor of NY, has listed some decisively intelligent questions that should be asked of Mr. Bernanke when he's subjected to appointment. They are:

1. How does the Fed define economic success? If the Fed is to be the macro giant that it seeks to be, we must understand whether its metrics for success focus on GDP growth, job growth, household median income growth, inflation moderation, or some other data.

2. What industrial policy does the Fed see best fitting our macro goals?

3. How do we define and measure systemic risk? If the Fed wishes to be granted the authority to be the regulator of risk, it better be able to explain how it measures it.

4. Has the Fed found the analytical error that permitted it to believe throughout 2008 that the crisis was contained and would not jump from the sub-prime sector to the entire financial system? If we cannot locate that analytical error, how can we possibly begin to spot systemic risk in the future?

5. Has the Fed examined why it permitted the avalanche of debt to course though the financial system without one of its own analysts observing that the risk of default was not reflected in the market's pricing of risk?

6. What bank structure will best accomplish the macro goals the Fed defines? Do we desire a market dominated by several institutions that are openly "TBTF"—too big to fail—or are we going to reverse the implicit and explicit federal guarantees of the past year and cut loose the major institutions? And if we are to cut them loose, how will the market be persuaded that they really are on their own, and the Fed will not rescue them next time, too?

7. Does the Fed stand by the notion that asset bubbles are better dealt with after the fact than during their creation? Does this view, which the chairman has articulated with some frequency, doom us to the incessant cycles we have lived through over the past decade?

8. Does the Fed still have faith in "self-regulation," the concept that was used to justify the decay that set in throughout the regulatory apparatus in Washington?

9. What governance structure is appropriate for the Fed, given its new authority?

Eliot Spitzer: the FED is a fraud machine!