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The Senators Who Gave Us 15 Million Unemployed Want to Deny Them Benefits
In spite of the efforts of economists and policy types to portray the cause of the economic collapse as being complicated, it wasn't. It was really really simple. Prior to the downturn the economy was being driven by an $8 trillion housing bubble. This led to a boom in residential construction. (A separate bubble in commercial real estate led to a boom in non-residential construction.) The equity generated by the housing bubble also led to a surge in consumption, with the saving rate falling to almost zero at the peak of the bubble.
It was inevitable that the bubble burst. Bubbles do that. They lead to an over-supply and eventually we run out of suckers willing or able to pay bubble-inflated prices for houses. The collapse caused the economy to lose $1.2 trillion in annual demand from the private sector. Annual construction spending fell back by close to $600 billion and consumption fell by roughly the same amount as a result of the loss of housing wealth.
There is no mechanism that allows the economy to easily replace this much demand. Hence we were guaranteed a severe downturn, without massive amounts of spending by the government.
All of this is really simple. Any competent economist or policy analyst should have recognized the problems created by the housing bubble. Unfortunately, we did not have competent economists at the Federal Reserve Board; we had Alan Greenspan and Ben Bernanke.
But, the blame does not end there. Congress is charged with overseeing the Fed. It is their responsibility to ask Greenspan and Bernanke (who was at the Fed since 2002, apart from a brief stint in the Bush administration) about the housing bubble. Congress, and specifically the Republicans in the Senate, never raised such questions. They just looked the other way as Greenspan and Bernanke were driving the economy over a cliff.
The reason for singling out the Republicans in the Senate, among all the people whose incompetence contributed to the economic crisis, is that they have decided to obstruct the extension of unemployment benefits for the long-term unemployed. People should recognize the irony in this story.
The unemployed have the skills, the ability, and the desire to work: they had been working until the economy collapsed. They are unemployed because the people who were running the economy - including the Republican senators with oversight responsibilities -- were incompetent.
So now we have Republican senators who share the blame for an economic collapse, drawing healthy salaries and generous health care and pension benefits, telling the unemployed workers who were victims of their incompetence, that they can't get $300 a week in benefits. This is Washington at its best.
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35 Comments so far
Show AllBaker's characterization of the Senators as "incompetent" is not accurate.
The offending Senators, if not the entire Senate, is highly competent at marshalling bribes from corporations, decriminalizing corporate crime, accomodating the demands of corporations, including ever expanding corporate welfare programs and bailing corporations out with taxpayer's money when things go sideways.
It is fine that you believe that. And the mechanisn for delivering that is through a legislative process, however flawed, which you oppose. So, for practical pruposed you are opposed to relief for the worker.
Didn't Nader warn us about both parties, little difference, Democrats not the opposition party, but in bed with the Republicans?
"There is no mechanism that allows the economy to easily replace this much demand."
Sure there is; stop allowing money to be concentrated in fewer and fewer hands.
Take the money being wasted on these idiotic wars and the bank bailouts and distrbute it to the general populace, starting with the poorest.
One hundred million people spending $1000 dollars each generates infinitely more economic activity than a thousand greedy bastards NOT spending a hundred million.
q
PS I agree that the focus of this article on republicans is disingenuous.
Obama needs a sign on his desk that says: "It's The Wages, Stupid."
Rather than " overkill the messenger " here let's offer a thanks to those 60 who saw fit to say " yea " to the life sustaining extention of benefits. Until you know someone who couldn't make their rent in July and/or had to use food stamps for the first time in their adult lives please quit hammering this as " much ado about nothing ", to quote Sarah Palin. We live in very imperfect times but this is life and death to our fellow travelers in their hour of need. Think for a second of the suicides not committed, the children fed, the infected tooth treated, and the car not repossesed because of this money. The 99ers, and I know several, who have tapped out their 401Ks and savings have been declared worthless by this country. Some have paid in to UI funds since the mid-1960s. This is their money, not the gov'ts, and never forget that. Is anyone aware that to present a respectable resume to an employer costs about $2.00 a piece. Imagine what the 99er who spent $7-8000.00 just to meet their filing eligibility requirements could do with that money. I personally know people who have sent 4500 resumes and filed apps with no luck. We lived in a terribly flawed country but there is a difference between people, parties and philosophy. Just sayin.
Time for 15 million to recognize their class enemy.
"because the folks managing our economy were incompetent"
Dean Baker hasn't suggested that the people start managing their economy themselves.
Does Dean Baker not have any confidence in the people?
Does Dean Baker think that only elitevil "folks" can manage the economy?
The fact is that we don't need the elites, rather the ELITES NEED US!!
Now, everybody get out there and manage your own economy!
When you decide to manage your own economy, you find yourself redefining your demands. Previously you demanded food, shelter, clothing, healthcare, education. But now that you are managing your own economy, you're also demanding those things be delivered in specific ways. In fact you can manage your economy "in the channel", that is, exclusively through market demand itself.
If you have any appreciation for the idea of integrity, then see if you can connect the idea of market integrity with the idea of a demand-driven market. If you find no connection, I'd be VERY curious to see an explanation.
Don't sell yourself short. When you make demands upon the market, remind the supply side that you rule the market, with your demands. Make the supplier acknowledge that demand rules, as a condition for doing business with you.
DEMAND IS THE PUPPETEER OF SUPPLY
Enough of this free-market worshiping so-caleld "libertarian" nonsense!
Demand is wholly manufactured by a hundred billion dollar PR and advertizing industry utilizing the mass-brainwashing theories of Edwrd Bernays. It is then coupled with deliberate dismantling of the infrastructure or products supporting the older way of doing things - forcing the holdouts, who never saw the sense of the new, expensive, unhealthy, environmentaly damaging gadget, to buy the new gedget against their will.
I demand the market give me cheap, clean public telephone booths on every block and at every stop on the highways, like there used to be - so I don't have to pay them $60 a month for a potentially health-damaging cell phone. I demand the market give me car-free cities supported by the seamless syatem of public transpotarion, interurban lines, and fast intercity rail, like there used to be, so I don't need a dangerous, very expensive, often inconvienient, and global environment destroying car. Is the market going to deliver these things? And no, going out and starting a popular clamor for these things won't work. Remember, all I have is a little $50 bullhorn, while the manufacturers of consent have a $100 billion bullhorn.
Um..., Baker is rewriting history. The Great Recession is/was blamed on the freeze-up of credit markets caused by gross market manipulation by Goldman Sachs and its allies as they attempted to take over the entire mortgage writing industry and the $Trillion$ it generates. The credit freeze immediately affected all businesses relying on credit lines to stay alive--well over 75% of all businesses. The sudden freeze-up caused the mass layoffs which popped the housing bubble.
For months, Baker has further discredited himself by continually NOT focussing on the primary problem that caused the Great Recession--fundamentally the SEC, but all government regulatory agencies that totally ignored their mission to regulate--preferring instead to push his own pet hypothesis. And of course, offshoring jobs pushed millions into retail and service jobs that are all too vulnerable to contractions in credit and consumer spending. Just check the list of retailers that failed from 2008-now. All failed due to the credit freeze, none to the popped housing bubble.
Please- There is currently 33% unemployment in the construction trades and a 2&1/2 yr glut in housing here. There's no credit line for new home starts on a any kind of scale because there is no need for housing; that's a bubble where I come from. P.S. You won't get me to defend the scumbags who call themselves regulators: this is the age old problem of the political " spoils system " of the 1830s. It has insinuated itself into every facet of gov't thanks to the " bundlers " who call themselves Ivy League educated lawyers.
Did I deny the facts you cite? No.
I invite anyone to review the economic events of 2006-2008. Recall the cited necessity to bail-out the Banksters because the system was broken without any explanation of who/what broke it or why. National retailers were bankrupted when their credit lines were frozen and/or they couldn't meet margin calls on same. Related was the massive short-selling of the ONLY way to assess mark-to-market valuation of MBS Bonds in an attempt to bankrupt Mortgage REITs by ruining their balance sheets while massively and illegally short-selling their stock. That tactic backfired as it attacked the whole of the international banking system which also relied on that one index--the ABX Index--for MBS Bond valuation. As a semi-insider, I saw this all unfold in realtime and have occasionally commented upon those events, obviously to no avail as I'm drowned-out by many megaphones, Baker just being one. Goldman Sachs and its allies raped not just the US populace, but the entire world. And they capped their pillage by installing Obama as the ultimate form of insurance and got emplaced to oversee the "recovery" from their brigandage.
I hear you! Not many people here know what happened to the REITS and the crushing of their real estate holdings. I will look at what you say and follow this reasoning to its' logical points. Thank you.
Even if credit had never "frozen" wouldn't we have eventually ended up with the average home price at $700,000, the average family debt astronomical, and the average wage inadequate?
We can't GROW forever. Nothing can grow forever. Even big bangs crunch...
Redistribute wealth. Why not? Take the wealth away from the rich. They didn't earn it. They don't deserve it. They are not smart as we now see clearly. They cheat and steal. The redistribution doesn't have to be violent - - laws (taxes) can be passed. The upper classes have failed and need to be replaced. Bill Gates is one example: he's not a genius; he's a crook. This has been proven in a court of law about him and MicroSoft. He bought most of his early software and then stiffeled competition and he steals others ideas. Does Goldman Sachs deserve to be rich. Many if not most could do the jobs of these clever managers and would do a better job for a lot less and be very satisfied. Congress is all rich people protecting their class. Obama and Clinton weren't born rich but they are now. So, you may say: how are we going to get that money and wealth from the rich when they make the laws and the rules and have the police and army?
Boy am I with you on this. There is nothing special about our leaders ,or corporate managers. They are not Gods, or smarter than the average person. They are just crooks, liars and thieves. Why should we stay back from them, and let them keep screwing with our lives. I say tax the hell out of them. Change the way they can get paid. "Let them do whatever they want, and it will trickle down to everyone else"...didn't work..bad idea..gotta go...I will march,or sign whatever to stop that delusion.
I am not saying anything about someone making a very sweet living, but on honest terms, and paying taxes, that reflect how much you get, because you live in America.
You can earn all you want but it better be honest and a good job, not these half ass jobs and then you get a $20 million bonus that shit has got to go....
This redistribution of wealth (that is from the rich to the not rich, not the way it is now from the not rich to the rich) would be extremely difficult if not impossible; however we should talk about it, make some noise - - maybe scare some people. We're talking class warfare here - - it's already here and the rich are winning. We should talk about it openly, without any qualms. We've got the numbers. The police and military are not rich people. They've got the media, the courts, the politicians, education system and, of course, lots of money to bribe and entice people to do their dirty work but this may not be insurmountable. The situation is starting to get serious.
Both major parties have huge responsibilities in the condition or our economy today....but, don't forget the people!
How much greed was there to pass around while the "bubble" was being blown???? Can anyone answer that????
Ordinary folk have to educate themselves on what it means to live in a country that takes "the greater fool theory" to heart......everyone is a capital target for money grubbing, greedy financial houses (and yes, individuals).
This crisis has been coming on since the Ford administration....thru both major parties into a totally corrupt system that will play itself out.
It's good that the extension for long term unemployment benefits passed, BUT, somewhere along the line in the near future those benefits will cease...they have to. What's to come about then?
The real good middle class jobs, unionized, organized and that has paid for so many of our social good are gone; they ARE NOT COMING BACK. Period.
We can rail all we want and have continuous illusions about what's just down the pike but the reality is we face some very arduous times...that means many homeless, increase in poverty etc.
That may bring on revolutionary tendencies, social unrest, etc....the rich will just move farther into their "barricades" with their offshore accounts etc...and the rest of us will have to fight for what's left.
Not pretty, but I don't see any alternative. We face social unrest because we the people have let this country sink into chaos...the rich can't get rich if we don't over consume with the same greed that they seek more money. The last bubble wouldn't have been blown up if more people had declined to get so greedy along with the banks and politicians. What ever happened to common sense?
It's that simple.
Stop consuming. Period. Think small. Think community. And stop paying any taxes that produce more wars....we are spending an incredible amount of money of two illegal wars (plus whatever is in the black budget to monetize other illegal covert ones).....
Come November vote all incumbents out the door. That will really reflect "change." And then pay attention to what any politician does....
I remember the last Great Depression and the life my parents and their families had to lead....We face maybe more dire times.....
And, remember all those financial laws and regulations that were passed worked for more than 70 years before politicians and presidents of both parties started to take apart and that's one of the reasons we are int he pickle today.
There's no integrity left and too much greed in our system.
gnken
And the same B&*^%$D's that helped drive the economy over a cliff are now attacking Govt. Services employees. I have worked for 26 years for my State and was granted 4 years military towards my retirement. Our state Pension systems is funded and able to cover retirements. I m starting to see articles and spots on CNBC about workers like myself being paid to much and want to cut future, current employees future pensions, and retirees already receiving a pension. Go figure.
They have been working at this for years. The attack on your state's pension plan is a coordinated effort with the people who are going after social security and medicare.
If you go to Counterpunch.org, read Shamus Cooke's article "Labor Fights Back" (it should be the 9th article down on the left side) pay particular attention to the quotes from the New York Times, after you are done reading Mr. Cooke's article, Google "CNNMoney.com Americans are overpaid." It will take you to an article on the CNNMoney website dated September 11, 2009, and yes, the article is entitled Americans are overpaid! If you read that article you will find that the quotes from the NYT in Mr. Cooke's article were taken verbatim from the CNNMoney article from September of last year. More than likely these are just talking points that were put out by the Heritage Foundation or the American Enterprise Institute from last year and the idiots at the Times were too lazy to write it in their own terms! Can you say plagiarize?
Unfortunaetly for us, it's not just the Wall St. types, Bankers and Republicans that are doing this. Barack Obama and a majority of the Democrats in the House and Senate have bought into and are on board with tearing apart the American middle class and working people in this country. So it is up to us to convince the people that support these jerks to throw there support behind true far left progressives in the primaries. You are going to have to get used to the fact that voting Democratic now is no different than voting for a Republican!
Z1: Thank you for sharing this information. Great post.
They are talented at diverting the working people to scrapping amongst themselves.
Well, I for one am happy the Dems decided to do one thing that distinguishes from the GOP, so hats off to them. Not to worry, that'll last a few weeks..:)
Agree with the posters who point out, however, that this wasn't the result of incompetence. Bubble economies are almost always engineered, usually in the world of finance.
While I do think Greenspan is pretty much the Chauncey the Gardener of economics, Bernanke's smart, so one has to conclude that they were acting as savvy operators for their true masters (as well as probably their own portfolios).
"The reason for singling out the Republicans in the Senate, among all the people whose incompetence contributed to the economic crisis, is that they have decided to obstruct the extension of unemployment benefits for the long-term unemployed. People should recognize the irony in this story."
I'll go a step further: the Republicans caused the mess. This is the result of 30 years under their grip. Now, all the country needs is another 4-year term and it will finally all be over. No more USan Empire, no more warmongering, no more MIC, no more banksters, no more "terrorism," no more corporatism.
Unemployment and the Depression was caused by Nafta and the outsourcing of our industrial base to China. It was Dodd, Lieberman, Kennedy, Kerry and Gore who promoted and voted for Nafta under the leadership of Slick Willie. The New York Times will not permit comments on this subject. The Hartford Courant leads one into a complicated Google system if you choose to Comment on any subject in an attempt to discourage comments.
The Hartford Courant runs {for free} pictures of Dodd and Lieberman every day in their paper in order to Suck-up to the established order. The press has become enablers of the derpression that we find ourselves in.
President Obama speaks about how the denial of unemployment benefits will hurt the middle class. Come to think of it can't recall when he's ever referred to the working class. Given his alleged community organizer background, it's unlikely that he's unaware there's a working class. More likely he's afraid to say working class lest the MSM jump on him, claiming that his use of that word proves he's promoting class warfare. Which, of course, is what the Senate's denial of benefits is all about. So what's the answer? That we rise up en masse and change the world. And there is no alternative, what with time running out and perpetual war + global warming + economic collapse = doomsday.
Yes we rise up ! We go by the millions, if we build it, they will come. People need direction it is just the way they are. The goverment counts on this. We must count on it too. I am willing, I just have not found one group that is organizing anything of any magnitude. We need to put together our demands and take them to the Capitol.
The Constitution allows for us to do this. Sounds silly, well it is not.... If we don't do something soon it will be to late, if it is not already.
I would like anyone who is interested in organizing a Countrywide march. Hell millions are out of work, they have nothing better to do ! We can get busses, and carpools. Of course we must get our PERMIT lolololololol
Assuming that Vision + Plan + Spirit = Change, with a just and peaceful world as the VISION, the PLAN having to be a work in progress, and the SPIRIT being the all for one and one for all in pursuit of a better world, here's the outline of a possible start-up right here on CD......
step 1 - CDers circulate the following message as widely as possible - We request that recipients wear an armband &/or carry a bumper sticker* which reads - "Build a better world? Count Me In!" Recipients of this email are urged to forward it through their contact list, and so on and so forth, chain style. The bumper sticker approach will allow the heretofore sympathetic but for whatever reason uninvolved to make their opening activist move with litte or no risk to themselves or their families.
step 2 - As the number of automobiles toting the above bumper sticker increases, activists will have the feeling of not being alone, an early expression of solidarity.
step 3 - When the density of bumper-sticker toting cars reaches, say, one in fifty to a hundred cars, online discussions lead to mobilizations at the district offices of every congressperson and senator.
step 4 - After the mass mobilizations begin and the public can't help but be aware of them, another online message is circulated, calling for all those who support the mobilization to express their solidarity by participating (with family & neighbors) in a weekly candlelight (or flashlight) half-hour vigil at 7 pm outside their residence.
step 5 - As the candlelight vigil catches on, arrangements are made for aerial photographers to capture the magnitude of these vigils. Should people in other countries join in, there's the possibility of sattelite (google?) pictures showing the sweep of these vigils as night moves westward.
step 6 - A march on Washington.
*hand-made or made available on CD or other progressive sites
Just as George W. Bush created and signed an executive order that gives congress and other government employees "automatic" pay increases without debate,
Barak Obama can create and sign an exectuve order that extends unemployment benefits.
Keep in mind that Congress never voted to bail out the too-big-to-fail banksters; neither did they vote to invade Iraq. In short, they abdicated their responsibility to the executive branch on both issues that required taxpayers' money to execute.
Basically, the majority of them are not upholding their sworn duty to the constitution and the people of this country.
An exective order from Obama to extend benefits for "The People" would be seen as taking this country in a positive direction.
Get a job lazy ass welfare queens.